PART III. 
GOVERNANCE



 



§432:2-301  Organization.  A domestic
society organized on or after July 1, 1988, shall be formed as follows:



(1)  Seven or more citizens of the United States, a
majority of whom are residents of this State, who desire to form a fraternal
benefit society, may make, sign and acknowledge before an officer competent to
take acknowledgements of deeds, articles of incorporation, in which shall be
stated:



(A)  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;



(B)  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 article;



(C)  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 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
commissioner, who may require such further information as the commissioner
deems necessary.  The bond with sureties approved by the commissioner shall be
in such amount, not less than $300,000 nor more than $1,500,000, as required by
the commissioner.  All documents filed are to be in the English language.  If
the purposes of the society conform to the requirements of this article and all
provisions of the law have been complied with, the commissioner shall so
certify, retain and file the articles of incorporation and 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 commissioner upon cause shown, unless the five hundred applicants
hereinafter required have been secured and the organization has been completed
as herein provided.  The articles of incorporation 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 commissioner, 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:



(A)  Actual bona fide applications for benefits
have been secured on not less than five hundred applicants, and any necessary
evidence of insurability has been furnished to and approved by the society;



(B)  At least ten subordinate lodges have been
established into which the five hundred applicants have been admitted;



(C)  There has been submitted to the
commissioner 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



(D)  It shall have been shown to the
commissioner, 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 $150,000.  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, such premiums shall
be returned to said applicants.



(5)  The commissioner may make such examination and
require such further information as the commissioner deems advisable.  Upon
presentation of satisfactory evidence that the society has complied with all
the provisions of law, the commissioner 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 article.  The certificate
of authority shall be prima facie evidence of the existence of the society at
the date of such certificate.  The commissioner 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 article becomes effective shall not be
required to reincorporate. [L 1987, c 347, pt of §2]



 



Revision Note



 



  "July 1, 1988," substituted for "the effective
date of this article".