Group, employer-paid coverages have traditionally been managed using a self-administrative process. This system works well for these cases, and typically requires the employer to keep the records on who is covered, for how much, etc. The insurer in these situations keeps no individual records.
The employer is the client and all the employees (almost) who are eligible receive coverage, at least up to the GI limits. As a result, there is almost no concern about an unscrupulous HR staff person declaring that an uninsured employee has coverage (moral hazard). In addition, although a claim requires the employer to verify coverage (because only it has the records), a typical group life case, even in a large company, will have a relatively small number of claims per year.
The system works, causes no undue hardship, and serves the employer-client, the broker, and the insurer well.
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