Except as provided in subsection (b) of this section, a policy of group life insurance may not be delivered in the State unless it contains in substance: the provisions of §§ 17-302 through 17-311 of this subtitle; or provisions that in the opinion of the Commissioner are: more favorable to the insureds; or at least as favorable to the insureds and more favorable to the policyholder. Sections 17-307 through 17-311 of this subtitle do not apply to policies issued to a creditor to insure debtors of the creditor. The standard provisions required for individual life insurance policies do not apply to policies of group life insurance. If a policy of group life insurance is on a plan other than the term plan, the policy: shall contain a nonforfeiture provision that in the opinion of the Commissioner is equitable to the insured and the policyholder; but need not contain the same nonforfeiture provisions required for individual life insurance policies.

Each policy of group life insurance shall contain a provision that the policyholder is entitled to a grace period of 31 days for payment of any premium due except the first premium. The death benefit coverage continues in force during the grace period unless the policyholder has given the insurer written notice of discontinuance before the date of discontinuance and in accordance with the terms of the policy. The policy may provide that the policyholder is liable to the insurer for paying a pro rata premium for the time the policy was in force during the grace period.

Each policy of group life insurance shall contain a provision that: the policy is incontestable, except for nonpayment of premiums, after the policy has been in force for 2 years after its date of issue; and a statement made by an insured under the policy about insurability may not be used to contest the validity of the insurance as to which the statement was made unless: the insurance has been in force before the contest for less than 2 years during the insured’s lifetime; and the statement is in writing and signed by the insured.

Each policy of group life insurance shall contain a provision that: requires a copy of any application of the policyholder to be attached to the policy when issued; the statements made by the policyholder or the insured are considered representations and not warranties; and a statement made by an insured may not be used in a contest unless a copy of the instrument that contains the statement is provided to the insured or, in the event of death or incapacity of the insured, to the insured’s beneficiary.

Each policy of group life insurance shall contain a provision that sets forth any conditions under which the insurer reserves the right to require an individual eligible for insurance to provide evidence of individual insurability satisfactory to the insurer as a condition to part or all of the coverage.

Each policy of group life insurance shall contain a provision that: specifies that an equitable adjustment of premiums or benefits or both will be made if the age of an insured is misstated; and clearly states the method of adjustment to be used.

Each policy of group life insurance shall contain a provision that any sum due because of the death of the insured is payable to the beneficiary designated by the insured, subject to: the provisions of the policy as to payment of all or part of the sum if a designated beneficiary is not alive at the death of the insured; and any right that the insurer reserves in the policy and sets forth in the certificate to pay at its option a part of the sum, not exceeding $2,500, to a person that the insurer considers equitably entitled to it for having incurred funeral or other expenses incident to the insured’s death or last illness.

Each policy of group life insurance shall contain a provision that requires the insurer to issue to the policyholder, for delivery to each insured, an individual certificate that states: the insurance protection to which the insured is entitled; each person to whom the insurance benefits are payable; and the rights and conditions set forth in § 17–102 of this title and §§ 17–309 through 17–311 of this subtitle.

Each policy of group life insurance shall contain a provision that if the insurance or any part of it on an insured ceases under the policy because of termination of employment or membership in the class or classes eligible for coverage under the policy, the insured is entitled to have issued by the insurer, without evidence of insurability, an individual policy of life insurance without disability or other supplementary benefits, subject to the following conditions: subject to subsection (b) of this section, application for the policy must be made and the first premium must be paid to the insurer within 31 days after the termination of employment or membership; the individual policy is, at the option of the insured, on any form, except term insurance, customarily issued by the insurer at the age and for the amount applied for; the individual policy is in an amount that does not exceed the amount of life insurance that ceases because of the termination of employment or membership, less the amount of life insurance for which the insured is eligible under the same or another group policy within 31 days after the termination of employment or membership; the premium on the individual policy is at the insurer’s customary rate applicable to: the form and amount of the individual policy; the class of risk to which the insured belongs; and the age of the insured attained on the effective date of the individual policy; and the insured is entitled to written notice of the insured’s rights under this section at least 15 days prior to the expiration of the conversion period provided for in item (1) of this subsection. If the insured is not provided with the notice required under subsection (a)(5) of this section, the insured shall have an additional 15 days from the date on which written notice is received to make application for the individual policy and pay the first premium to the insurer. In no event shall the additional period provided under paragraph (1) of this subsection extend beyond 60 days after the expiration of the conversion period provided for in subsection (a)(1) of this section. For purposes of subsection (a)(3) of this section, insurance that matures on or before the date of the termination of employment or membership as an endowment payable to the insured, whether in one sum, in installments, or in the form of an annuity, may not be included in the amount of life insurance that is considered to cease because of the termination of employment or membership.

Subject to subsection (b) of this section, each policy of group life insurance shall contain a provision that if the group policy terminates or is amended so as to terminate the insurance of a class of insureds, each insured at the date of the termination whose insurance terminates and who has been insured for at least 5 years before the termination date is entitled to have issued to that insured by the insurer an individual policy of life insurance subject to the same conditions and limitations provided in § 17-309 of this subtitle. The group policy may provide that the amount of an individual policy issued under this section may not exceed the lesser of: the amount of the insured’s life insurance protection that has terminated, less the amount of life insurance for which the insured is or becomes eligible under a group policy issued or reinstated by the same or another insurer within 31 days after the termination; and $10,000.

Each policy of group life insurance shall contain a provision that if an insured under the policy dies while entitled to an individual policy under § 17-309 or § 17-310 of this subtitle but before the individual policy becomes effective, the amount of life insurance to which the insured would have been entitled shall be payable as a claim under the group policy, whether or not application for the individual policy or payment of the first premium has been made.