Sec. 51.3. Exemptions

This Part shall not apply when:

(a) the application for the new life insurance policy or new annuity contract is made to the same insurer that issued the existing life insurance policy or annuity contract or to any authorized life insurer in such insurer’s holding company system, and the new life insurance policy or new annuity contract is being issued in accordance with the terms of a contractual conversion privilege in the existing life insurance policy or annuity contract or is being issued pursuant to a plan approved by the superintendent for the insurer to meet its obligations under Insurance Law section 3220(a)(6);

(b) a policy change customarily granted by the insurer is being exercised, provided such change results in no additional surrender or expense charge or suicide or contestable restrictions, and only to the extent that the change is approved by the superintendent;

(c) the new coverage is provided under:

(1) a group life insurance policy or group annuity contract, except when an insurance agent or broker or insurer directly solicits the certificateholder for the new coverage and a portion of the premium or consideration is borne, directly or indirectly, by the certificateholder;

(2) an individual life insurance policy or individual annuity contract where the cost of the policy or contract is borne wholly by the applicant's employer or by an association of which the applicant is a member; or

(3) individual life insurance policies or individual annuity contracts covering employees of an employer, debtors of a creditor, or members of an association, that are distributed on a mass merchandising basis and administered by group-type methods, except when an insurance agent or broker or insurer directly solicits the applicant for the new coverage and a portion of the premium or consideration is borne, directly or indirectly, by the applicant; or

(d) the existing life insurance is a nonrenewable, nonconvertible term policy with five years or less to its expiration date.