Chapter 378 Fraternal Benefit Societies
378.645 - Review of director's decisions, how.
All decisions and findings of the director made under the provisions of this chapter shall be subject to review by proper proceedings in any court of competent jurisdiction in this state.
378.614 - Merger or consolidation, allowed when — requirements — approval of director required — effects.
1.A domestic society may consolidate or merge with any other society by complying with the provisions of this section.It shall file with the director:
(1)A certified copy of the written contract containing in full the terms and conditions of the consolidation or merger;
(2)A sworn statement by the president and secretary or corresponding officers of each society showing the financial condition thereof on a date fixed by the director, but not earlier than December thirty-first next preceding the date of the contract;
(3)A certificate of such officers, duly verified by their respective oaths, that the consolidation or merger has been approved by a two-thirds vote of the supreme governing body of each society, such vote being conducted at a regular or special meeting of each such body, or, if the society's laws so permit, by mail; and
(4)Evidence that at least sixty days prior to the action of the supreme governing body of each society, the text of the contract has been furnished to all members of each society either by mail or by publication in full in the official publication of each society.
2.If the director finds that the contract is in conformity with the provisions of this section, that the financial statements are correct, and that the consolidation or merger is just and equitable to the members of each society, the director shall approve the contract and issue his certificate to such effect.Upon such approval, the contract shall be in full force and effect unless any society which is a party to the contract is incorporated under the laws of any other state or territory.In such event the consolidation or merger shall not become effective unless and until it has been approved as provided by the laws of such state or territory and a certificate of such approval filed with the director of this state, or if the laws of such state or territory contain no such provision, then the consolidation or merger shall not become effective unless and until it has been approved by the insurance supervisory official of such state or territory and a certificate of such approval filed with the director.
3.Upon the consolidation or merger becoming effective as herein provided, all the rights, franchises and interests of the consolidated or merged societies in and to every species of property, real, personal or mixed, and things in action thereunto belonging shall be vested in the society resulting from or remaining after the consolidation or merger without any other instrument, except that conveyances of real property may be evidenced by proper deeds, and the title to any real estate or interest therein, vested under the laws of this state in any of the societies consolidated or merged, shall not revert or be in any way impaired by reason of the consolidation or merger, but shall vest absolutely in the society resulting from or remaining after such consolidation or merger.
4.The affidavit of any officer of the society or of anyone authorized by it to mail any notice or document, stating that such notice or document has been duly addressed and mailed, shall be prima facie evidence that such notice or document has been furnished the addressees.
378.610 - Organization of, how — articles of incorporation, contents — filing — membership requirements.
1.A domestic society organized on or after January 1, 1993, shall be formed when seven or more citizens of the United States, a majority of whom are citizens of this state, who desire to form a fraternal benefit society, may make, sign and acknowledge before some officer competent to administer oaths, articles of incorporation, in which shall be stated:
(1)The proposed corporate name of the society, which shall not so closely resemble the name of any society or insurance company as to be misleading or confusing;
(2)The purposes for which it is being formed and the mode in which its corporate powers are to be exercised.Such purposes shall not include more liberal powers than are granted by this chapter;
(3)The names and residences of the incorporators and the names, residences and official titles of all the officers, trustees, directors, or other persons who are to have and exercise the general control of the management of the affairs and funds of the society for the first year or until the ensuing election at which all such officers shall be elected by the supreme governing body, which election shall be held not later than one year from the date of issuance of the permanent certificate of authority.
2.Such articles of incorporation, duly certified copies of the society's bylaws and rules, copies of all proposed forms of certificates, applications therefor, and circulars to be issued by the society and a bond conditioned upon the return to applicants of the advanced payments if the organization is not completed within one year shall be filed with the director, who may require such further information as the director deems necessary.The bond with sureties approved by the director shall be in such amount, not less than three hundred thousand dollars, nor more than one million five hundred thousand dollars, as may be required by the director.All documents filed are to be in the English language.If the purposes of the society conform to the requirements of this chapter and all provisions of the law have been complied with, the director shall so certify, retain and file the articles of incorporation and shall furnish the incorporators a preliminary certificate of authority authorizing the society to solicit members as hereinafter provided.
3.No preliminary certificate of authority granted under the provisions of this section shall be valid after one year from its date or after such further period, not exceeding one year, as may be authorized by the director upon good cause shown, unless the five hundred applicants hereinafter required have been secured and the organization has been completed as herein provided.The charter and all other proceedings thereunder shall become null and void in one year from the date of the preliminary certificate of authority, or at the expiration of the extended period, unless the society shall have completed its organization and received a certificate of authority to do business as hereinafter provided.
4.Upon receipt of a preliminary certificate of authority from the director, the society may solicit members for the purpose of completing its organization, shall collect from each applicant the amount of not less than one regular monthly premium in accordance with its table of rates, and shall issue to each such applicant a receipt for the amount so collected.No society shall incur any liability other than for the return of such advance premium, nor issue any certificate, nor pay, allow, or offer or promise to pay or allow, any benefit to any person until:
(1)Actual bona fide applications for benefits have been secured from not less than five hundred applicants, and any necessary evidence of insurability has been furnished to and approved by the society;
(2)At least ten subordinate lodges have been established into which the five hundred applicants have been admitted;
(3)There has been submitted to the director, under oath of the president or secretary, or corresponding officer of the society, a list of such applicants, giving their names, addresses, date each was admitted, name and number of the subordinate lodge of which each applicant is a member, amount of benefits to be granted and premiums therefor; and
(4)It shall have been shown to the director, by sworn statement of the treasurer, or corresponding officer of such society, that at least five hundred applicants have each paid in cash at least one regular monthly premium as herein provided, which premiums in the aggregate shall amount to at least one hundred fifty thousand dollars.Said advance premiums shall be held in trust during the period of organization and if the society has not qualified for a certificate of authority within one year, as herein provided, such premiums shall be returned to said applicants.
5.The director may make such examination and require such further information as the director deems advisable.Upon presentation of satisfactory evidence that the society has complied with all the provisions of law, the director shall issue to the society a certificate of authority to that effect and that the society is authorized to transact business pursuant to the provisions of this chapter.The certificate of authority shall be prima facie evidence of the existence of the society at the date of such certificate.The director shall cause a record of such certificate of authority to be made.A certified copy of such record may be given in evidence with like effect as the original certificate of authority.
6.Any incorporated society authorized to transact business in this state at the time this act becomes effective shall not be required to reincorporate.
378.604 - Definitions.
As used in this chapter, the following terms shall mean:
(1)"Benefit contract", the agreement for provision of benefits authorized by section 378.616, as that agreement is described in subsection 1 of section 378.619;
(2)"Benefit member", an adult member who is designated by the laws or rules of the society to be a benefit member under a benefit contract;
(3)"Certificate", the document issued as written evidence of the benefit contract;
(4)"Director", the director of the department of insurance, financial institutions and professional registration;
(5)"Laws", the society's articles of incorporation, constitution and bylaws, however designated;
(6)"Lodge", subordinate member units of the society, known as camps, courts, councils, branches or by any other designation;
(7)"Premiums", premiums, rates, dues or other required contributions by whatever name known, which are payable under the certificate;
(8)"Rules", all rules, regulations or resolutions adopted by the supreme governing body or board of directors which are intended to have general application to the members of the society;
(9)"Society", a fraternal benefit society, unless otherwise indicated.
378.608 - Liability, immunity from, when — indemnification, when — insurance, purchase of for officers allowed.
1.The officers and members of the supreme governing body or any subordinate body of a society shall not be personally liable for any benefits provided by a society.
2.Any person may be indemnified and reimbursed by any society for expenses reasonably incurred by, and liabilities imposed upon, such person in connection with or arising out of any action, suit or proceeding, whether civil, criminal, administrative or investigative, or threat thereof, in which the person may be involved by reason of the fact that he is or was a director, officer, employee or agent of the society or of any firm, corporation or organization which he served in any capacity at the request of the society.A person shall not be so indemnified or reimbursed:
(1)In relation to any matter in such action, suit or proceeding as to which he shall finally be adjudged to be or have been guilty of breach of a duty as a director, officer, employee or agent of the society; or
(2)In relation to any matter in such action, suit or proceeding, or threat thereof, which has been made the subject of a compromise settlement.
Unless in either such case the person acted in good faith for a purpose the person reasonably believed to be in or not opposed to the best interests of the society and, in a criminal action or proceeding, in addition, had no reasonable cause to believe that his conduct was unlawful.The determination whether the conduct of such person met the standard required in order to justify indemnification and reimbursement in relation to any matter described in subdivision (1) or (2) of this subsection may only be made by the supreme governing body or board of directors by a majority vote of a quorum consisting of persons who were not parties to such action, suit or proceeding or by a court of competent jurisdiction.The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of no contest, as to such person shall not in itself create a conclusive presumption that the person did not meet the standard of conduct required in order to justify indemnification and reimbursement.The foregoing right of indemnification and reimbursement shall not be exclusive of other rights to which such person may be entitled as a matter of law and shall inure to the benefit of his heirs, executors and administrators.
3.A society shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the society, or who is or was serving at the request of the society as a director, officer, employee or agent of any other firm, corporation or organization against any liability asserted against such person and incurred by him in any such capacity or arising out of his status as such, whether or not the society would have the power to indemnify the person against such liability under this section.
378.624 - Taxation of societies, exemptions.
Every society organized or licensed under this chapter is hereby declared to be a charitable and benevolent institution, and all of its funds shall be exempt from all and every state, county, district, municipal and school tax other than taxes on real estate and office equipment.
378.620 - Cash surrender value of certificate, computation of.
1.For certificates issued prior to one year after January 1, 1993, the value of every paid-up nonforfeiture benefit and the amount of any cash surrender value, loan or other option granted shall comply with the provisions of law applicable immediately prior to January 1, 1993.
2.For certificates issued on or after one year from January 1, 1993, for which reserves are computed on the Commissioner's 1941 Standard Ordinary Mortality Table, the Commissioner's 1941 Standard Industrial Table or the Commissioner's 1958 Standard Ordinary Mortality Table, or the Commissioner's 1980 Standard Mortality Table, or any more recent table made applicable to life insurers, every paid-up nonforfeiture benefit and the amount of any cash surrender value, loan or other option granted shall not be less than the corresponding amount ascertained in accordance with the laws of this state applicable to life insurers issuing policies containing like benefits based upon such tables.
378.628 - Examination, director may conduct — expenses.
1.The director, or any person he may appoint, may examine any domestic, foreign or alien society transacting or applying for admission to transact business in this state in the same manner as authorized for examination of domestic, foreign or alien insurers.Requirements of notice and an opportunity to respond before findings are made public as provided in the laws regulating insurers shall also be applicable to the examination of societies.
2.The expense of each examination and of each valuation, including compensation and actual expense of examiners, shall be paid by the society examined or whose certificates are valued, upon statements furnished by the director.
378.638 - Fraudulent acts, penalties.
1.A person who shall knowingly make any false or fraudulent statement or representation in or relating to any application for membership, or for the purpose of obtaining money from or a benefit in any society, shall be guilty of a class A misdemeanor.
2.Any person who willfully makes a false or fraudulent statement in any verified report or declaration under oath required or authorized by this chapter, or of any material fact or thing contained in a sworn statement concerning the death or disability of an insured for the purpose of procuring payment of a benefit named in the certificate, shall be guilty of perjury and shall be subject to the penalties therefor prescribed by law.
3.Any person who knowingly solicits membership for, or in any manner assists in procuring membership in, any society not licensed to do business in this state, or who shall solicit membership for, or in any manner assist in procuring membership in any such society not authorized as provided in this chapter, shall be guilty of an infraction.
4.Any person guilty of a knowing violation of, or neglect or refusal to comply with, the provisions of this chapter for which a penalty is not otherwise prescribed shall be guilty of an infraction.
378.634 - Unfair practices and frauds, subject to law — exception.
Every society authorized to do business in this state shall be subject to the sections of chapter 375 relating to unfair practices and frauds; provided, however, that nothing therein shall be construed as applying to or affecting the right of any society to determine its eligibility requirements for membership, or be construed as applying to or affecting the offering of benefits exclusively to members or persons eligible for membership in the society by a subsidiary corporation or affiliated organization of the society.
378.630 - Powers of director to order changes, when — may enjoin further business, when, duration — liquidation, effect.
1.When the director upon investigation finds that a domestic society:
(1)Has exceeded its powers;
(2)Has failed to comply with any provision of this chapter;
(3)Is not fulfilling its contracts in good faith;
(4)Has a membership of less than four hundred after an existence of one year or more; or
(5)Is conducting business fraudulently or in a manner hazardous to its members, creditors, the public or the business,
the director shall notify the society of such deficiency or deficiencies and state in writing the reasons for his dissatisfaction.The director shall at once issue a written notice to the society requiring that the deficiency or deficiencies which exist are corrected.After such notice the society shall have a thirty-day period in which to comply with the director's request for correction, and if the society fails to comply, the director shall notify the society of such findings of noncompliance and require the society to show cause on a date named why it should not be enjoined from carrying on any business until the violation complained of shall have been corrected, or why an action in quo warranto should not be commenced against the society.
2.If on such date the society does not present good and sufficient reasons why it should not be so enjoined or why such action should not be commenced, the director may commence an action to enjoin the society from transacting business or in quo warranto.
3.The court shall thereupon notify the officers of the society of a hearing.If after a full hearing it appears that the society should be so enjoined or liquidated or a receiver appointed, the court shall enter the necessary order.No society so enjoined shall have the authority to do business until:
(1)The director finds that the violation complained of has been corrected;
(2)The costs of such action shall have been paid by the society if the court finds that the society was in default as charged;
(3)The court has dissolved its injunction; and
(4)The director has reinstated the certificate of authority.
4.If the court orders the society liquidated, it shall be enjoined from carrying on any further business, whereupon the receiver of the society shall proceed at once to take possession of the books, papers, money and other assets of the society and, under the direction of the court, proceed forthwith to close the affairs of the society and to distribute its funds to those entitled thereto, as provided by sections 375.1150 to 375.1246.
5.The provisions of this section relating to hearing by the director, hearing by the court, injunction and receivership shall be applicable to a society which shall voluntarily determine to discontinue business.
378.631 - Foreign society, director may enjoin business, when.
1.When the director upon investigation finds that a foreign or alien society transacting or applying to transact business in this state:
(1)Has exceeded its powers;
(2)Has failed to comply with any of the provisions of this chapter;
(3)Is not fulfilling its contracts in good faith; or
(4)Is conducting its business fraudulently or in a manner hazardous to its members or creditors or the public,
the director shall notify the society of such deficiency or deficiencies and state in writing the reasons for his or her dissatisfaction.The director shall at once issue a written notice to the society requiring that the deficiency or deficiencies which exist are corrected.After such notice the society shall have a thirty-day period in which to comply with the director's request for correction, and if the society fails to comply, the director shall notify the society of such findings of noncompliance and require the society to show cause on a date named why its license should not be suspended, revoked or refused.If on such a date the society does not present good and sufficient reason why its authority to do business in this state should not be suspended, revoked or refused, the director may suspend or refuse the license of the society to do business in this state until satisfactory evidence is furnished to the director that such suspension or refusal should be withdrawn or the director may revoke the authority of the society to do business in this state.
2.Nothing contained in this section shall be taken or construed as preventing any such society from continuing in good faith all contracts made in this state during the time such society was legally authorized to transact business herein.
378.635 - Service of process, director to be agent for.
Every society authorized to do business in this state shall appoint the director to be its true and lawful attorney upon whom all lawful process in any action or proceeding against it shall be served, as provided in section 375.906.
378.621 - Investment of funds.
A society shall invest its funds only in such investments as are authorized by the laws of this state for the investment of assets of life insurers and subject to the limitations thereon.Any foreign or alien society permitted or seeking to do business in this state which invests its funds in accordance with the laws of the state, district, territory, country or province in which it is incorporated, shall be held to meet the requirements of this section for the investment of funds.
378.625 - Valuation of certificates, standards — reserves, excess permitted.
1.Standards of valuation for certificates issued prior to one year after January 1, 1993, shall be those provided by the laws applicable immediately prior to January 1, 1993.
2.The minimum standards of valuation for certificates issued on or after one year from January 1, 1993, shall be based on the following tables:
(1)For certificates of life insurance the Commissioner's 1941 Standard Ordinary Mortality Table, the Commissioner's 1941 Standard Industrial Mortality Table, the Commissioner's 1958 Standard Ordinary Mortality Table, the Commissioner's 1980 Standard Ordinary Mortality Table or any more recent table made applicable to life insurers;
(2)For annuity and pure endowment certificates, for total and permanent disability benefits, for accidental death benefits and for noncancelable accident and health benefits such tables as are authorized for use by life insurers in this state.
All of the above shall be under valuation methods and standards, including interest assumptions, in accordance with the laws of this state applicable to life insurers issuing policies containing like benefits.
3.The director may, in his discretion, accept other standards for valuation if the director finds that the reserves produced thereby will not be less in the aggregate than reserves computed in accordance with the minimum valuation standard herein prescribed.The director may, in his discretion, vary the standards of mortality applicable to all benefit contracts on substandard lives or other extra hazardous lives by any society authorized to do business in this state.
4.Any society, with the consent of the insurance regulatory official of the state of domicile of the society and under such conditions, if any, which the director may impose, may establish and maintain reserves on its certificates in excess of the reserves required thereunder, but the contractual rights of any benefit member shall not be affected thereby.
378.629 - Foreign society to have license, requirements.
No foreign or alien society shall transact business in this state without a license issued by the director.Any such society desiring admission to this state shall comply substantially with the requirements and limitations of this chapter applicable to domestic societies.Any such society may be licensed to transact business in this state upon filing with the director:
(1)A duly certified copy of its chapters of incorporation;
(2)A copy of its bylaws, certified by its secretary or corresponding officer;
(3)A power of attorney to the director as prescribed in section 378.635;
(4)A statement of its business under oath of its president and secretary or corresponding officers in a form prescribed by the director, duly verified by an examination made by the insurance supervisory official of its home state or other state, territory, province or country, satisfactory to the director;
(5)Certification from the proper official of its home state, territory, province or country that the society is legally incorporated and licensed to transact business therein;
(6)Copies of its certificate forms;
(7)A showing that its assets are invested in accordance with the provisions of this chapter; and
(8)Such other information as the director may deem necessary.
378.601 - Fraternal benefit society, defined.
Any incorporated society, order or supreme lodge, without capital stock, including one exempted under the provisions of subdivision (1) of subsection 1 of section 378.640* whether incorporated or not, conducted solely for the benefit of its members and their beneficiaries and not for profit, operated on a lodge system with ritualistic form of work, having a representative form of government, and which provides benefits in accordance with this chapter, is hereby declared to be a fraternal benefit society.
378.605 - Operation, purpose — laws and rules, power to adopt.
1.A society shall operate for the benefit of members and their beneficiaries by:
(1)Providing benefits as specified in section 378.616; and
(2)Operating for one or more social, intellectual, educational, charitable, benevolent, moral, fraternal, patriotic or religious purposes for the benefit of its members, which may also be extended to others.Such purposes may be carried out directly by the society, or indirectly through subsidiary corporations or affiliated organizations.
2.Every society shall have the power to adopt laws and rules for the government of the society, the admission of its members and the management of its affairs.It shall have the power to change, alter, add to or amend such laws and rules and shall have such other powers as are necessary and incidental to carrying into effect the objects and purposes of the society.
378.609 - Waiver of laws, restriction on, when.
The laws of the society may provide that no subordinate body, nor any of its subordinate officers or members shall have the power or authority to waive any of the provisions of the laws of the society.Such provision shall be binding on the society and every member and beneficiary of a member.
378.640 - Law not applicable to certain societies, when — specific exemptions.
1.Nothing contained in this chapter shall be so construed as to affect or apply to grand or subordinate lodges of societies, orders or associations now doing business in this state which provide benefits exclusively through local or subordinate lodges, or to:
(1)Orders, societies or associations which admit to membership only persons engaged in one or more crafts or hazardous occupations, in the same or similar lines of business; and the ladies societies or ladies auxiliaries to such orders, societies or associations;
(2)Domestic societies which limit their membership to employees of a particular city or town, designated firm, business house or corporation which provide for a death benefit of not more than five hundred dollars or disability benefits of not more than three hundred fifty dollars to any person in any one year, or both;
(3)Domestic societies or associations of a purely religious, charitable or benevolent description, which provide for a death benefit of not more than five hundred dollars or for disability benefits of not more than three hundred fifty dollars to any one person in any one year, or both.
2.Any such society or association described in subdivisions (2) and (3) of subsection 1 of this section which provides for death or disability benefits for which benefit certificates are issued, and any such society or association included in subdivision (3) of subsection 1 of this section which has more than two thousand members, shall not be exempted from the provisions of this chapter but shall comply with all requirements thereof.
3.No society which, by the provisions of this section, is exempt from the requirements of this chapter, except any society described in subdivision (1) of subsection 1, shall give or allow, or promise to give or allow to any person any compensation for procuring new members.
4.Any society whose membership is confined to any religious denomination shall not be required to have ritualistic ceremonies.
5.Every fraternal benefit society heretofore organized and incorporated and which provides exclusively for benefits in case of death or disability resulting solely from accident, and which does not obligate itself to pay natural death or sick benefits, may be relicensed under the provisions of this chapter, if heretofore authorized, and shall have all of the privileges, and be subject to all the applicable provisions and regulations of this chapter, except that the privileges thereof relating to medical examination, valuations of benefit certificates, and requirements that the certificate shall specify the amount of benefits shall not apply to such society.
6.The director may require from any society or association, by examination or otherwise, such information as will enable the director to determine whether such society or association is exempt from the provisions of this chapter.
378.619 - Certificate of ownership, issued to owner, when, contents — life benefit contract, minor effects — impairment of class of certificates, effects — filing with director, when — minor, transfer of control of contract to, when.
1.Every society authorized to do business in this state shall issue to each owner of a benefit contract a certificate specifying the amount of benefits provided thereby.The certificate, together with any riders or endorsements attached thereto, the laws of the society, the application for membership, the application for insurance and declaration of insurability, if any, signed by the applicant, and all amendments to each thereof, shall constitute the benefit contract, as of the date of issuance, between the society and the owner, and the certificate shall so state.A copy of the application for insurance and declaration of insurability, if any, shall be endorsed upon or attached to the certificate.All statements on the application shall be representations and not warranties.Any waiver of this provision shall be void.
2.Any changes, additions or amendments to the laws of the society duly made or enacted subsequent to the issuance of the certificate shall bind the owner and the beneficiaries, and shall govern and control the benefit contract in all respects the same as though such changes, additions or amendments had been made prior to and were in force at the time of the application for insurance, except that no change, addition or amendment shall destroy or diminish benefits which the society contracted to give the owner as of the date of issuance.
3.Any person upon whose life a benefit contract is issued prior to attaining the age of majority shall be bound by the terms of the application and certificate and by all the laws and rules of the society to the same extent as though the age of majority had been attained at the time of application.
4.A society shall provide in its laws that if its reserves as to all or any class of certificates become impaired, its board of directors or corresponding body may require that there shall be paid by the owner to the society the amount of the owner's equitable proportion of such deficiency as ascertained by its board, and that if the payment is not made either:
(1)It shall stand as an indebtedness against the certificate and draw interest not to exceed the rate specified for certificate loans under the certificates; or
(2)In lieu of or in combination with (1), the owner may accept a proportionate reduction in benefits under the certificate.The society may specify the manner of the election and which alternative is to be presumed if no election is made.
5.Copies of any of the documents mentioned in this section, certified by the secretary or corresponding officer of the society, shall be received in evidence of the terms and conditions thereof.
6.No certificate shall be delivered or issued for delivery in this state unless a copy of the form has been filed with and approved by the director in the manner provided for like policies issued by life insurers in this state.Every life, accident and sickness, health or disability insurance certificate and every annuity certificate issued on or after one year from January 1, 1993, must be approved by the director and shall meet the standard contract provision requirements not inconsistent with this chapter for like policies issued by life insurers in this state, except that a society may provide for a grace period for payment of premiums of one full month in its certificates.The certificate shall also contain a provision stating the amount of premiums which are payable under the certificate and a provision reciting or setting forth the substance of any sections of the society's laws or rules in force at the time of issuance of the certificate which, if violated, will result in the termination or reduction of benefits payable under the certificate.If the laws of the society provide for expulsion or suspension of a member, the certificate shall also contain a provision that any member so expelled or suspended, except for nonpayment of a premium or within the contestable period for material misrepresentation in the application for membership or insurance, shall have the privilege of maintaining the certificate in force by continuing payment of the required premium.
7.Benefit contracts issued on the lives of persons below the society's minimum age for adult membership may provide for transfer of control of ownership to the insured at an age specified in the certificate.A society may require approval of an application for membership in order to effect this transfer, and may provide in all other respects for the regulation, government and control of such certificates and all rights, obligations and liabilities incident thereto and connected therewith.Ownership rights prior to such transfer shall be specified in the certificate.
8.A society may specify the terms and conditions on which benefit contracts may be assigned.
378.611 - Amendment of laws, procedures — amendments furnished to members.
1.A domestic society may amend its laws in accordance with the provisions thereof by action of its supreme governing body at any regular or special meeting thereof or, if its laws so provide, by referendum.Such referendum may be held in accordance with the provisions of its laws by the vote of the voting members of the society, by the vote of delegates or representatives of voting members or by the vote of local lodges.A society may provide for voting by mail.No amendment submitted for adoption by referendum shall be adopted unless, within six months from the date of submission thereof, a majority of the members voting shall have signified their consent to such amendment by one of the methods herein specified.
2.No amendment to the laws of any domestic society shall take effect unless approved by the director who shall approve such amendment if the director finds that it has been duly adopted and is not inconsistent with any requirement of the laws of this state or with the character, objects and purposes of the society.Unless the director shall disapprove any such amendment within sixty days after the filing of same, such amendment shall be considered approved.The approval or disapproval of the director shall be forwarded in writing, and mailed to the secretary or corresponding officer of the society at its principal office.In case the director disapproves such amendment, the reasons therefor shall be stated in such written notice.
3.Within ninety days from the approval thereof by the director, all such amendments, or a synopsis thereof, shall be furnished to all members of the society either by mail or by publication in full in the official publication of the society.The affidavit of any officer of the society or of anyone authorized by it to mail any amendments or synopsis thereof, stating facts which show that same have been duly addressed and mailed, shall be prima facie evidence that such amendments or synopsis thereof, have been furnished the addressees.
4.Every foreign or alien society authorized to do business in this state shall file with the director a duly certified copy of all amendments of, or additions to, its laws within ninety days after the enactment of same.
5.Printed copies of the laws as amended, certified by the secretary or corresponding officer of the society, shall be prima facie evidence of the legal adoption thereof.
378.615 - Conversion to mutual life insurance company, allowed when.
1.Any domestic fraternal benefit society may be converted and licensed as a mutual life insurance company by compliance with all the requirements of the insurance laws of this state for mutual life insurance companies.A plan of conversion shall be prepared in writing by the board of directors, setting forth in full the terms and conditions of conversion.The affirmative vote of two-thirds of all members of the supreme governing body at a regular or special meeting shall be necessary for the approval of such plan.
2.No such conversion shall take effect unless and until approved by the director, who may give such approval if the director finds that the proposed change is in conformity with the requirements of law and not prejudicial to the certificate holders of the society.
378.607 - Principal office, meetings, location — official publication, annual statement, requirements.
1.The principal office of any domestic society shall be located in this state.The meetings of its supreme governing body may be held in any state, district, province or territory wherein such society has at least one subordinate lodge, or in such other location as determined by the supreme governing body, and all business transacted at such meetings shall be as valid in all respects as if such meetings were held in this state.The minutes of the proceedings of the supreme governing body and of the board of directors shall be in the English language.
2.(1)A society may provide in its laws for an official publication in which any notice, report or statement required by law to be given to members, including notice of election, may be published.Such required reports, notices and statements shall be printed conspicuously in the publication.If the records of a society show that two or more members have the same mailing address, an official publication mailed to one member is deemed to be mailed to all members at the same address unless a member requests a separate copy.
(2)Not later than the first day of June of each year, a synopsis of the society's annual statement providing an explanation of the facts concerning the condition of the society thereby disclosed shall be printed and mailed to each benefit member of the society or, in lieu thereof, such synopsis may be published in the society's official publication.
3.A society may provide in its laws or rules for grievance or complaint procedures for members.
378.603 - Representative form of government, requirements.
A society has a representative form of government when:
(1)It has a supreme governing body constituted in one of the following ways:
(a)The supreme governing body is an assembly composed of delegates elected directly by the members or at intermediate assemblies or conventions of members or their representatives, together with other delegates as may be prescribed in the society's laws.A society may provide for election of delegates by mail.The elected delegates shall constitute a majority in number and shall not have less than two-thirds of the votes and not less than the number of votes required to amend the society's laws.The assembly shall be elected and shall meet at least once every four years and shall elect a board of directors to conduct the business of the society between meetings of the assembly.Vacancies on the board of directors between elections may be filled in the manner prescribed by the society's laws;
(b)The supreme governing body is a board composed of persons elected by the members, either directly or by their representatives in intermediate assemblies, and any other persons prescribed in the society's laws.A society may provide for election of the board by mail.Each term of a board member may not exceed four years.Vacancies on the board between elections may be filled in the manner prescribed by the society's laws.Those persons elected to the board shall constitute a majority in number and not less than the number of votes required to amend the society's laws.A person filling the unexpired term of an elected board member shall be considered to be an elected member.The board shall meet at least quarterly to conduct the business of the society;
(2)The officers of the society are elected either by the supreme governing body or by the board of directors;
(3)Only benefit members are eligible for election to the supreme governing body and the board of directors;
(4)Each voting member shall have one vote and no vote may be cast by proxy.
378.617 - Change of beneficiary, allowed — funeral benefits, payment of, limitation — no beneficiary, effect.
1.The owner of a benefit contract shall have the right at all times to change the beneficiary or beneficiaries in accordance with the laws or rules of the society unless the owner waives this right by specifically requesting in writing that the beneficiary designation be irrevocable.A society, through its laws or rules, may limit the scope of beneficiary designations and shall provide that no revocable beneficiary shall have or obtain any vested interest in the proceeds of any certificate until the certificate has become due and payable in conformity with the provisions of the benefit contract.
2.A society may make provision for the payment of funeral benefits to the extent of such portion of any payment under a certificate as might reasonably appear to be due to any person equitably entitled thereto by reason of having incurred expense occasioned by the burial of the member, provided the portion so paid shall not exceed the sum of one thousand dollars.
3.If, at the death of any person insured under a benefit contract, there is no lawful beneficiary to whom the proceeds shall be payable, the amount of such benefit, except to the extent that funeral benefits may be paid as hereinbefore provided, shall be payable to the personal representative of the deceased insured, provided that if the owner of the certificate is other than the insured, such proceeds shall be payable to such owner.
378.613 - Reinsurance agreements, allowed — limitations.
1.A domestic society may, by a reinsurance agreement, cede any individual risk or risks in whole or in part to an insurer (other than another fraternal benefit society) having the power to make such reinsurance and authorized to do business in this state, or if not so authorized, one which is approved by the director, but no such society may reinsure substantially all of its insurance in force without the written permission of the director.It may take credit for the reserves on such ceded risks to the extent reinsured, but no credit shall be allowed as an admitted asset or as a deduction from liability, to a ceding society for reinsurance made, ceded, renewed, or otherwise becoming effective after January 1, 1993, unless the reinsurance is payable by the assuming insurer on the basis of the liability of the ceding society under the contract or contracts reinsured without diminution because of the insolvency of the ceding society.The provisions of section 375.246 shall also apply insofar as not in conflict herewith.
2.Notwithstanding the limitation in subsection 1 of this section, a society may reinsure the risks of another society in a consolidation or merger approved by the director under section 378.614.
378.642 - Severability clause.
If any provision of this chapter or the application of such provision to any circumstance is held invalid, the remainder of the chapter, or the application of the provision to other circumstances, shall not be affected thereby.
378.633 - Agents, licensing of — persons not deemed agents.
1.Agents of societies shall be licensed in accordance with the provisions of chapter 375 regulating the licensing, revocation, suspension or termination of license of resident and nonresident agents; provided, that no person who acted in the capacity as an agent of a licensed society for a period of at least six months immediately preceding October 13, 1969, shall be required to take an examination as provided for in chapter 375 as a condition for licensure as an insurance agent.
2.The following individuals shall not be deemed an agent of a fraternal benefit society within the provisions of subsection 1 of this section:
(1)Any regular salaried officer, employee or secretary of a licensed society or any subordinate lodge thereof, who devotes substantially all of his services to activities other than the solicitation of fraternal insurance contracts from the public, and who receives for the solicitation of such contracts no commission or other compensation directly dependent upon the amount of business obtained; or
(2)Any member representative of any society who devotes, or intends to devote, less than fifty percent of his or her time to the solicitation and procurement of insurance contracts for such society.Any person who in the preceding calendar year has solicited and procured life insurance contracts on behalf of any society in an amount of insurance in excess of fifty thousand dollars, or, in the case of any other kind or kinds of insurance which the society might write, on the persons of more than twenty-five individuals and who has received or will receive a commission or other compensation therefor, shall be presumed to be devoting, or intending to devote, fifty percent or more of his or her time to the solicitation or procurement of insurance contracts for such society.
378.627 - Annual renewal required.
Societies which are now authorized to transact business in this state, and all societies hereafter licensed, may continue such business until the first day of April next succeeding January 1, 1993.The authority of such societies, and all societies hereafter licensed, may thereafter be renewed annually, but in all cases to terminate on the succeeding April.However, a license so issued shall continue in full force and effect until the new license be issued or specifically refused.For each such license or renewal the society shall pay the director the required fee.A duly certified copy or duplicate of such license shall be prima facie evidence that the licensee is a fraternal benefit society within the meaning of this chapter.
378.623 - Application of law — exemption from insurance laws.
Except as herein provided, societies shall be governed by this chapter and shall be exempt from all other provisions of the insurance laws of this state, except chapters 374 and 375, not only in governmental relations with this state, but for every other purpose, and no law hereafter enacted shall apply to them, unless expressly designated therein.When any other law is applicable, it shall be construed in accordance with the fundamental nature of a fraternal benefit society.In the event of any conflict between such law and the provisions of this chapter, the latter shall prevail.The other law may, however, supplement or explain the provisions of this chapter, and the laws herein made applicable to fraternal benefit societies.
378.622 - Assets, use of — variable basis contracts, allowed when.
1.All assets shall be held, invested and disbursed for the use and benefit of the society and no member or beneficiary shall have or acquire individual rights therein or become entitled to any apportionment on the surrender of any part thereof, except as provided in the benefit contract.
2.A society may create, maintain, invest, disburse and apply any special fund or funds necessary to carry out any purpose permitted by the laws of such society.
3.A society may, pursuant to resolution of its supreme governing body, establish and operate one or more separate accounts and issue contracts on a variable basis, subject to the provisions of law regulating life insurers establishing such accounts and issuing such contracts.To the extent the society deems it necessary in order to comply with any applicable federal or state laws, or any rules issued thereunder, the society may adopt special procedures for the conduct of the business and affairs of a separate account, and may, for persons having beneficial interests therein, provide special voting and other rights, including without limitation special rights and procedures relating to investment policy, investment advisory services, selection of certified public accountants, and selection of a committee to manage the business and affairs of the account, and may issue contracts on a variable basis to which subsections 2 and 4 of section 378.619 shall not apply.
378.626 - Statement of financial condition, contents, filing — penalty.
1.Every society transacting business in this state shall annually, on or before the first day of March, unless for good cause shown such time has been extended by the director, file with the director a true statement of its financial condition, transactions and affairs for the preceding calendar year and pay the required fee for filing same.The statement shall be in general form and context as approved by the National Association of Insurance Commissioners for fraternal benefit societies and as supplemented by additional information required by the director.
2.As part of the annual statement herein required, each society shall, on or before the first day of March, file with the director a valuation of its certificates in force on December thirty-first last preceding, provided the director may, in his discretion for cause shown, extend the time for filing such valuation for not more than two calendar months.Such valuation shall be done in accordance with the standards specified in section 378.625.Such valuation and underlying date shall be certified by a qualified actuary or, at the expense of the society, verified by an actuary of the insurance regulatory agency of the state of domicile of the society.
3.A society neglecting to file the annual statement in the form and within the time provided by this section may be subject to a fine of one hundred dollars for each day during which such neglect continues, and its authority to do business in this state may be suspended by the director while such default continues.
378.632 - Injunction, who may file.
No application or petition for injunction against any domestic, foreign or alien society, or lodge thereof, shall be recognized in any court of this state unless made by the director.
378.612 - Society may operate nonprofit organizations — may not own funeral home.
1.A society may create, maintain and operate, or may establish organizations to operate not-for-profit institutions to further the purposes permitted by subdivision (1) of subsection 1 of section 378.605.Such institutions may furnish services free or at a reasonable charge.Any real or personal property owned, held, or leased by the society for this purpose shall be reported in every annual statement.
2. No society shall own or operate funeral homes or undertaking establishments.
378.616 - Benefits authorized — rules to specify allowable beneficiaries.
1.A society may provide the following contractual benefits in any form:
(4)Temporary or permanent disability benefits;
(5)Hospital, medical or nursing benefits; and
(6)Monument or tombstone benefits to the memory of deceased members; and
(7)Such other benefits as authorized for life insurers and which are not inconsistent with this chapter.
2.A society shall specify in its rules those persons who may be issued, or covered by, the contractual benefits in subsection 1 of this section, consistent with providing benefits to members and their dependents.A society may provide benefits on the lives of children under the minimum age for adult membership upon application of an adult person.
378.602 - Lodge system, requirements — children's wages permitted, limitation.
1.A society is operating on the lodge system if it has a supreme governing body and subordinate lodges into which members are elected, initiated or admitted in accordance with its laws, rules and ritual.Subordinate lodges shall be required by the laws of the society to hold regular meetings periodically in furtherance of the purposes of the society.
2.A society may, at its option, organize and operate lodges for children under the minimum age for adult membership.Membership and initiation in local lodges shall not be required of such children, nor shall they have a voice or vote in the management of the society.
378.606 - Laws and rules, requirements — membership rights nonassignable.
1.A society shall specify in its laws or rules:
(1)Eligibility standards for each and every class of membership, provided that if benefits are provided on the lives of children, the minimum age for adult membership shall be set at not less than age fifteen and not greater than age twenty-one;
(2)The process for admission to membership for each membership class; and
(3)The rights and privileges of each membership class, provided that only benefit members shall have the right to vote on the management of the insurance affairs of the society.
2.A society may also admit social members who shall have no voice or vote in the management of the insurance affairs of the society.
3.Membership rights in the society are personal to the member and are not assignable.