Nothing contained in this chapter is considered to prohibit a life insurer from issuing life, term, and endowment insurance on the franchise plan, with or without annuities. The insurance under a franchise agreement or upon a wholesale basis may be written under rates less than the usual rates for the insurance. This insurance is subject to the following provisions:

(1) The term "franchise" or "wholesale" insurance means a life insurance plan under which a number of individual life insurance policies are issued at special rates to a selected group. A special rate is any rate lower than the rate shown in the issuing insurer’s manual for individually issued policies of the same type and to insureds of the same class.

(2) No franchise or wholesale life insurance plan may be entered into in this State unless the individuals to whom the insurance is made available are members of a professional association, employees of a common employer or affiliated employers, or unless the insurance is made available in connection with an indebtedness or a contract of sale. The word "employees", as used herein, is considered to include the individual proprietors or partners who constitute the employer or affiliated employers and may include retired employees of any employer or affiliated employer.

(3) The association may not be formed, exist, or be continued for the sole or primary purpose of obtaining such insurance.

(4) For purposes of this section, a professional association means an association whose membership is restricted to one or more of the licensed professions such as medicine, dentistry, pharmacy, law, and accountancy.

(5) Each plan must have an eligibility period for the initial enrollment and for any new employees or members entering, and during this time insurance must be obtained without the requirement of statement of health.