The term “franchise” or “wholesale” insurance shall mean a life insurance plan under which a number of individual life insurance policies are issued at special rates to a selected group. A special rate is any rate lower than the rate shown in the issuing insurance company’s manual for individually issued policies of the same type and to insureds of the same class.
After the effective date of this section no franchise or wholesale life insurance plan shall be entered into in this State unless the individuals to whom such insurance is made available are members of a professional association, employees of a common employer or affiliated employers, or unless the insurance is made available in connection with an indebtedness or a contract of sale. The word “employees” as used in this section shall be deemed to include the individual proprietors or partners who constitute the employer or affiliated employers.
In the case of any plan existing on or before the effective date of this section, any individual plan or policy then in effect shall not be changed or affected by this section, but no individual may thereafter become insured for more than twenty-five thousand dollars ($25,000), under any such plan except those written in connection with a professional association, an indebtedness, a contract of sale, or a pension plan. Nothing herein contained shall prevent any such plan so existing at the effective date hereof from being changed or modified (a) to change the insurer or insurers underwriting said plan and, to the extent necessary without affecting benefits payable, to make the plan conform to the underwriting rules and procedures of the new insurer or insurers; (b) to change rates applicable to insurance written under said plan; or (c) to add to said plan incidental benefits providing coverage on the lives of dependents of the insured individual, accidental death benefits or waiver of premiums during periods of total disability on the insured.
For purposes of this section a professional association means an association whose membership is restricted to one or more of the licensed professions such as medicine, dentistry, pharmacy, law and accountancy.
(Added by Stats. 1961, Ch. 718.)
Copyright ©2024 LegalFix. All rights reserved. LegalFix is not a law firm, is not licensed to practice law, and does not provide legal advice, services, or representation. The information on this website is an overview of the legal plans you can purchase—or that may be provided by your employer as an employee benefit or by your credit union or other membership group as a membership benefit.
LegalFix provides its members with easy access to affordable legal services through a network of independent law firms. LegalFix, its corporate entity, and its officers, directors, employees, agents, and contractors do not provide legal advice, services, or representation—directly or indirectly.
The articles and information on the site are not legal advice and should not be relied upon—they are for information purposes only. You should become a LegalFix member to get legal services from one of our network law firms.
You should not disclose confidential or potentially incriminating information to LegalFix—you should only communicate such information to your network law firm.
The benefits and legal services described in the LegalFix legal plans are not always available in all states or with all plans. See the legal plan Benefit Overview and the more comprehensive legal plan contract during checkout for coverage details in your state.
Use of this website, the purchase of legal plans, and access to the LegalFix networks of law firms are subject to the LegalFix Terms of Service and Privacy Policy.