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1995 SESSION

LD7991364
HOUSE BILL NO. 1421
Offered January 11, 1995
Prefiled November 15, 1994
A BILL to amend and reenact § 51.1-505 of the Code of Virginia, relating to eligibility for the group life insurance program provided by the Virginia Retirement System.
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Patrons--Morgan, Cooper, Councill, Dillard, Hargrove, Parrish and Way
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Referred to Committee on Appropriations
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Be it enacted by the General Assembly of Virginia:

1. That § 51.1-505 of the Code of Virginia is amended and reenacted as follows:

§ 51.1-505. Amounts of life and accident insurance for each employee; reduction and termination of insurance.

A. Each employee to whom this chapter applies shall, subject to the terms and conditions thereof, be eligible to be insured for an amount of group life insurance plus an amount of group accidental death and dismemberment insurance, each amount equal to twice the amount of his annual salary. If an employee's annual salary is not an even multiple of $1,000, his annual salary for purposes of this section shall be considered to be the next higher $1,000. For purposes of this section, the annual salary of a member of the General Assembly shall be his creditable compensation for his last full calendar year of service or his salary under § 14.1-17.1, whichever is greater. The annual salary for an employee retired for service or disability on an immediate retirement allowance may be adjusted by the Board in accordance with the provisions of Chapter 1 of this title.

With respect to any employee who is reemployed and insured under this chapter, the otherwise applicable amount of group life insurance shall be reduced by the amount of insurance provided by any policy issued under the conversion privilege pursuant to this chapter.

Subject to the conditions and limitations of the group insurance policy, the accidental death and dismemberment insurance shall provide payments as follows: 

Loss                    Amount Payable

For loss of life        Full amount determined in accordance with the
                        provisions of this section

Loss of one hand or     One-half of the amount
of one foot or loss     determined in accordance
of sight of one eye     with the provisions of this section

Loss of two or          Full amount determined in
more such members       accordance with the provisions of this
                        section.

For any one accident, the aggregate amount of accidental death and dismemberment insurance that may be paid shall not exceed the maximum amount of accidental death and dismemberment insurance determined in accordance with this section.

B. The amount of life insurance on an employee who retires for service on an immediate retirement allowance or who elects to postpone the receipt of his retirement allowance to some date other than his last day of service shall be the amount set forth in subsection A, reduced by an amount equal to two percent thereof for each full calendar month following the date the employee is separated from service. The amount of life insurance on an employee who retires for disability on an immediate retirement allowance shall be the amount set forth in subsection A on the date the employee last rendered service reduced by an amount equal to two percent thereof for each full calendar month following the date the employee attains age sixty-five. If the employee by statute or Board regulation has been construed to be in service to the beginning of the next school year, the reduction shall not apply until the beginning of the next school year. The reduction shall not decrease the amount of life insurance on an employee to less than twenty-five percent of the amount of life insurance to which the reduction is applied. For purposes of this subsection, an employee shall be deemed to have retired only if the employee has five or more years of continuous service as an employee prior to the date of retirement. This requirement shall not be applicable if the employee is retired for disability.

Any employee who was denied membership in the retirement system because of having attained age sixty at the time of being employed or reemployed and who has five or more years of continuous service immediately prior to separation from service shall retain the life insurance coverage as though he had retired on an immediate retirement allowance.

C. The amount of life insurance for an employee who is retired for disability on an immediate retirement allowance, who also has attained age fifty-five, and who elects to receive a retirement allowance as set forth in subsection C of § 51.1-160, shall be reduced as set forth in subsection B of this section. The reduction shall begin at the end of the first full calendar month following the date the employee elects a service retirement allowance.

D. All accidental death and dismemberment insurance on an employee shall cease upon the earliest of (i) his separation from service, (ii) his failure to pay, in the manner prescribed by the Board, the contribution required for the first twenty-four months of leave without pay, (iii) if the employee has not returned to pay status, the expiration of twenty-four months of leave without pay, or (iv) his retirement.

E. Except in case of retirement as provided in subsections B and C of this section, all life insurance on an employee shall cease upon the earliest of (i) his separation from service, or (ii) his failure to pay, in the manner prescribed by the Board, the contribution required for the first twenty-four months of leave without pay, or, (iii) if the employee has not returned to pay status, the expiration of twenty-four months of leave without pay. Except in the case of retirement, life insurance shall be subject to a temporary extension of thirty-one days. During this thirty-one-day extension, the employee may convert his life insurance into an individual policy of life insurance (without disability or other supplementary benefits) in any one of the forms, except term insurance, then customarily issued by the insuring company. The amount of life insurance which may be converted shall not exceed the amount of his life insurance under the group insurance policy at the time coverage is terminated. The insurance shall be converted to an individual policy (i) without evidence of insurability, (ii) at the premium applicable to the class of risk to which he belongs, and (iii) to the form and amount of the individual policy at his then attained age, provided application for the individual policy and payment of the first premium thereon is made to the issuing company within the thirty-one days. The right to convert to an individual policy as provided in § 38.2-3333 shall not apply upon termination of this group policy or elimination of a class of insured employees.

The amount of life insurance on each insured employee who retires shall be determined under the provisions of this chapter as it exists on the employee's date of retirement.

F. Each employee of a state institution of higher education or of a local school board who remains in service until the completion of the school year and who makes contributions required to provide insurance coverage until service normally will be resumed the beginning of the next school year shall be deemed to be in service as an employee through the period to which the payments apply. If the employee is retired for service or disability during this period, contributions made by the employee shall be accepted and retained as proper.

G. That the provisions of this section shall apply to all members of the Virginia Retirement System who, on and after July 1, 1995, are covered under the group life insurance program created pursuant to this section and whose effective date of retirement is (i) before July 1, 1970, or (ii) on and after July 1, 1970.