For the purpose of this code, unless the context otherwise requires, “industrial life insurance” is that form of life insurance written under policies of face amount of two thousand dollars ($2,000) or less bearing the words “industrial policy” imprinted on the face thereof as part of the descriptive matter and under which premiums are payable monthly or more often.
The provisions of this chapter apply only to industrial life insurance policies. The following sections shall also apply to industrial life insurance:
(1) Section 23-81-114, excluded or restricted coverage;
(2) Section 23-81-115, limitation of liability;
(3) Section 23-81-129, incontestability after reinstatement;
(4) Section 23-81-120, prohibited policy plans; and
(5) Section 23-81-201, standard nonforfeiture law.
Any of the provisions required by §§ 23-82-105 — 23-82-117 or any portion thereof which are not applicable to single premium or term policies or to policies issued or granted pursuant to nonforfeiture provisions shall to that extent not be incorporated therein.
No policy of industrial life insurance shall be offered, delivered, or issued for delivery in this state on or after January 1, 1988.
(a) There shall be a provision that the insured is entitled to a grace period of four (4) weeks within which the payment of any premiums after the first may be made, except that in policies for which the premiums are payable monthly, the period of grace shall be one (1) month, but not less than thirty (30) days.
(b) If during the grace period the policy becomes a claim, then any overdue and unpaid premiums may be deducted from any settlement under the policy.
(a) There shall be a provision that the policy shall constitute the entire contract between the parties or, if a copy of the application is endorsed upon or attached to the policy when issued, a provision that the policy and the application therefor shall constitute the entire contract.
(b) If the application is so made a part of the contract, the policy shall also provide that, in the absence of fraud, all statements made by the applicant in such an application shall be deemed to be representations and not warranties.
There shall be a provision that the policy, exclusive of provisions relating to disability benefits or to additional benefits in the event of death by accident or accidental means, shall be incontestable, except for nonpayment of premiums, after it has been in force during the lifetime of the insured for a period of two (2) years from its date of issue.
(a) There shall be a provision that if it is found that the age of the individual insured or the age of any other individual considered in determining the premium has been misstated, any amount payable or benefit accruing under the policy shall be such as the premium would have been had it been purchased stating the correct age.
(b) As to overstatement of age, the policy may provide, in lieu of the provision required under subsection (a) of this section, that the insurer will refund any excess of premium collected for the amount of insurance or benefit stated in the policy, as based upon the correct age.
(a) If the industrial life insurance policy is a participating policy, there shall be a provision that the insurer shall annually ascertain and apportion any divisible surplus accruing on the policy. However, at the option of the insurer, the participation may be deferred to the end of the fifth policy year.
(b) This provision shall not prohibit the payment of additional dividends on default of payment of premiums or termination of the policy.
There shall be provisions for nonforfeiture benefits and cash surrender values as required by the Standard Nonforfeiture Law for Life Insurance, § 23-81-201 et seq.
There shall be a provision that unless the policy has been surrendered for its cash surrender value or unless the paid-up term insurance, if any, has expired, the policy will be reinstated at any time within two (2) years from the date of premium default upon written application therefor, the production of evidence of insurability satisfactory to the insurer, the payment of all premiums in arrears, and the payment or reinstatement of any other indebtedness to the insurer upon the policy, all with interest at a rate not exceeding six percent (6%) per annum, compounded annually.
There shall be a provision that when the policy becomes a claim by the death of the insured, settlement shall be made upon surrender of the policy and receipt of due proof of death.
There shall be a provision that no agent shall have the power or authority to waive, change, or alter any of the terms or conditions of any policy, except that at the option of the insurer, the terms or conditions may be changed by an endorsement or rider signed by an authorized officer of the insurer.
(a) Each policy shall have a space for the name of the beneficiary designated with a reservation of the right to designate or change the beneficiary after the issuance of the policy.
(b)(1) The policy may also provide that no designation or change of beneficiary shall be binding on the insurer unless endorsed on the policy by the insurer and that the insurer may refuse to endorse the name of any proposed beneficiary who does not appear to the insurer to have an insurable interest in the life of the insured.
(2) The policy may provide that the insurer may make payment thereunder to the executor or administrator of the insured, or to any of the insured's relatives by blood or legal adoption or connection by marriage, or to any person appearing to the insurer to be equitably entitled thereto by reason of having been named beneficiary or by reason of having incurred expense for the maintenance, medical attention, or burial of the insured if the beneficiary designated in the policy does not surrender the policy with due proof of death within the period stated in the policy, which shall be not less than thirty (30) days after the death of the insured, or if the beneficiary dies before the insured, or the beneficiary is the estate of the insured, a minor, or is not legally competent to give a valid release.
(3) The policy may also include a similar provision applicable to any other payment due under the policy.
In the case of weekly premium policies, there may be a provision that upon proper notice to the insurer, while premiums on the policy are not in default beyond the grace period, of the intention to pay future premiums directly to the insurer at its home office or any office designated by the insurer for that purpose, the insurer will, at the end of each period of a year from the due date of the first premium so paid, for which period the premiums are so paid continuously without default beyond the grace period, refund a stated percentage of the premiums in an amount which fairly represents the savings in collection expense.
(a) There may be a provision in the case of industrial policies granting to the insured, upon proper written request and upon presentation of evidence of insurability satisfactory to the insurer, the privilege of converting any industrial insurance policy to any form of life insurance with less frequent premium payments regularly issued by the insurer, in accordance with terms and conditions agreed upon with the insurer.
(b) The privilege of making the conversion need be granted only if the insurer's industrial policies on the life insured, in force as premium paying insurance and on which conversion is requested, grant benefits in event of death, exclusive of additional accidental death benefits and exclusive of any dividend additions, in an amount not less than the minimum amount of the insurance with less frequent premium payments issued by the insurer at the age of the insured on the plan of industrial or ordinary insurance desired.
There shall be a title on the face of each policy briefly describing its form.
No policy of industrial life insurance shall contain any of the following provisions:
(1) A provision by which the insurer may deny liability under the policy for the reason that the insured has previously obtained other insurance from the same insurer;
(2) A provision giving the insurer the right to declare the policy void because the insured has had any disease or ailment, whether specified or not, or because the insured has received institutional, hospital, medical, or surgical treatment or attention, except a provision which gives the insurer the right to declare the policy void if the insured has, within two (2) years prior to the issuance of the policy, received institutional, hospital, medical, or surgical treatment or attention and if the insured or claimant under the policy fails to show that the condition occasioning the treatment or attention was not of a serious nature or was not material to the risk; or
(3) A provision giving the insurer the right to declare the policy void because the insured has been rejected for insurance, unless the right is conditioned upon a showing by the insurer that knowledge of the rejection would have led to a refusal by the insurer to make the contract.