A. A health insurance policy delivered or issued for delivery in this state that provides for conversion to an individual policy by an insured on termination of membership in or employment with the group shall provide a conversion privilege to an individual policy to the spouse of the insured on death of the insured or on divorce from the insured or on termination of the insured's membership in or employment with the group for any reason including retirement. If the conversion privilege available to the insured provides for coverage of the insured's spouse, the group insurer shall not be required to issue a separate conversion policy to the spouse.

B. Subsection A of this section applies only to a spouse of an insured if the spouse is covered under the health insurance policy at the time of the insured's death or divorce from the insured or termination of the insured's coverage.

C. This act applies to all health insurance policies that are delivered or issued for delivery in this state on or after October 1, 1981. Any presently approved policy forms containing any provision in conflict with the requirements of this act may be brought into compliance with this act by the use of riders and endorsements which have been approved by the Commissioner of Insurance.

D. As used in this section:

E. The person who accepts the conversion policy shall become the insured and pay the premiums direct to the insurer.