(a) As used in this Code section, the term "small group" means a group or subgroup of 50 or fewer employees, members, or enrollees.

(b) The claims experience produced by small groups covered under group life insurance for each insurer shall be fully pooled for rating purposes. Except to the extent that the claims experience of an individual small group affects the overall experience of the small group pool, the claims experience produced by any individual small group of an insurer shall not be used in any manner for rating purposes or solely as a reason for termination of any individual small group.

(c) Each insurer's small group pool shall consist of each insurer's total claims experience produced by all small groups in this state, regardless of the marketing mechanism or distribution system utilized in the sale of the group life insurance. The pool shall include the experience generated under separate group contracts; contracts issued to trusts, multiple employer trusts, or association groups or trusts; or any other group-type coverage. The experience produced under multiple employer trusts or arrangements through contracts issued in this state or provided by solicitation and sale to Georgia residents through an out-of-state multiple employer trust or arrangement for all the Georgia small groups shall be fully pooled for rating purposes. Multiple employer trusts or arrangements shall include any group or group-type coverage issued to a trust or association or to any other group policyholder where such group or group-type contract provides coverage, primarily or incidentally, for sole proprietors, employers, or both.

(d) Notwithstanding subsection (b) of this Code section, age, sex, area, industry, occupational, and avocational factors may be considered in the initial and renewal rating of each small group. Durations since issue and tier factors may not be considered. Substandard rating in accordance with recognized underwriting practices may be applied to each employee, member, or enrollee and to each dependent member of the small group in the initial underwriting of a new or replacement group or when the member or dependent enters the small group for the first time but shall not be used for renewal rating purposes. Notwithstanding subsection (b) of this Code section, the total premium calculated for any individual small group may deviate from the pool rate by not more than plus or minus 25 percent based upon individual small group experience factors. The direct premium result of select or substandard underwriting practices shall not be considered a deviation from the pool rate.

(e) If standard or substandard rating cannot be offered to any individual according to recognized underwriting practices, coverage may be declined if the balance of the small group is accepted.

(f) This Code section shall not apply to:

(1) Policies issued to an employer in another state which provides coverage for employees of this state employed by such employer policyholder;

(2) Policies issued to true association groups, which shall be defined as an association of governmental or public employees, an association of employees of a common employer, or an organization formed and operated in good faith for purposes other than that of procuring insurance and composed of members engaged in a common trade, business, or profession; or

(3) A policy negotiated in connection with a collective bargaining agreement.