(a)(1)(A) The trustee of any voluntary employees' beneficiary association trust, as defined in Section 501(c)(9) of the Internal Revenue Code of 1986, as from time to time amended, to provide life, health or similar benefits to employees or retired employees and acting in a fiduciary capacity with respect to those employees or retired employees may procure insurance on the lives of those employees or retired employees; (B) an employer or a trustee of a trust, other than a voluntary employees' beneficiary association trust, providing life, health, disability, retirement or similar benefits to the employer's employees or retired employees may procure insurance on the lives of those employees or retired employees; and (C) prior to procuring insurance on the lives of employees or retired employees pursuant to subparagraph (A) or (B) of this subdivision, the employer or trustee shall obtain the written consent of each employee or retired employee proposed for coverage, and such consent shall include an acknowledgment from the employee that the employer or trustee may maintain the life insurance coverage after the employee's employment has terminated.

(2) No person may retaliate against any employee or retired employee for refusing to consent to the issuance of insurance on the life of such employee.

(3) For nonkey or nonmanagerial employees, the amount of coverage shall be reasonably related to the benefits provided to those employees in the aggregate. For purposes of this section, “nonkey or nonmanagerial employees” means those employees who do not meet the criteria set forth in 29 CFR 541.1, 29 CFR 541.2 or 29 CFR 541.3.

(4) Life insurance coverage purchased to finance employer-provided pension and welfare benefit plans shall be allowed only on the lives of those employees and retirees who are eligible to participate in the plan at the time their lives are first insured under the plan.

(b) The provisions of this section shall apply to policies or contracts delivered or issued for delivery in this state.

(c) This section shall not be construed to affect or prohibit any person, trust or corporation from procuring insurance upon the life or health of another person in whom it has an insurable interest at common law.

(P.A. 92-75, S. 2; P.A. 04-24, S. 1.)

History: P.A. 04-24 designated existing provisions of Subsec. (a) as Subsec. (a)(1)(A), added new Subsec. (a)(1)(B) and (C) re employers and prior consent, added new Subsec. (a)(2) to (4), inclusive, re retaliation, nonkey and nonmanagerial employees, and insurance to finance pension and welfare benefit plans, and amended Subsec. (c) to substitute “construed” for “interpreted”.