PART III. GOVERNANCE

 

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

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

(A)  The proposed corporate name of thesociety, which shall not so closely resemble the name of any society orinsurance company as to be misleading or confusing;

(B)  The purposes for which it is being formedand the mode in which its corporate powers are to be exercised.  Such purposesshall not include more liberal powers than are granted by this article;

(C)  The names and residences of theincorporators and the names, residences and official titles of all theofficers, trustees, directors, or other persons who are to have and exercisethe general control of the management of the affairs and funds of the societyfor the first year or until the ensuing election at which all such officersshall be elected by the supreme governing body, which election shall be heldnot later than one year from the date of issuance of the permanent certificateof authority.

(2)  Such articles of incorporation, duly certifiedcopies of the society's bylaws and rules, copies of all proposed forms ofcertificates, applications and circulars to be issued by the society, and abond conditioned upon the return to applicants of the advanced payments if theorganization is not completed within one year shall be filed with thecommissioner, who may require such further information as the commissionerdeems necessary.  The bond with sureties approved by the commissioner shall bein such amount, not less than $300,000 nor more than $1,500,000, as required bythe commissioner.  All documents filed are to be in the English language.  Ifthe purposes of the society conform to the requirements of this article and allprovisions of the law have been complied with, the commissioner shall socertify, retain and file the articles of incorporation and furnish theincorporators a preliminary certificate of authority authorizing the society tosolicit members as hereinafter provided.

(3)  No preliminary certificate of authority grantedunder the provisions of this section shall be valid after one year from itsdate or after such further period, not exceeding one year, as may be authorizedby the commissioner upon cause shown, unless the five hundred applicantshereinafter required have been secured and the organization has been completedas herein provided.  The articles of incorporation and all other proceedingsthereunder shall become null and void in one year from the date of thepreliminary certificate of authority, or at the expiration of the extendedperiod, unless the society shall have completed its organization and received acertificate of authority to do business as hereinafter provided.

(4)  Upon receipt of a preliminary certificate ofauthority from the commissioner, the society may solicit members for thepurpose of completing its organization, shall collect from each applicant theamount of not less than one regular monthly premium in accordance with itstable of rates, and shall issue to each such applicant a receipt for the amountso collected.  No society shall incur any liability other than for the returnof such advance premium, nor issue any certificate, nor pay, allow, or offer orpromise to pay or allow, any benefit to any person until:

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

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

(C)  There has been submitted to thecommissioner under oath of the president or secretary, or corresponding officerof the society, a list of such applicants, giving their names, addresses, dateeach was admitted, name and number of the subordinate lodge of which eachapplicant is a member, amount of benefits to be granted and premiums therefor;and

(D)  It shall have been shown to thecommissioner, by sworn statement of the treasurer, or corresponding officer ofsuch society, that at least five hundred applicants have each paid in cash atleast one regular monthly premium as herein provided, which premiums in theaggregate shall amount to at least $150,000.  Said advance premiums shall beheld in trust during the period of organization and if the society has notqualified for a certificate of authority within one year, such premiums shallbe returned to said applicants.

(5)  The commissioner may make such examination andrequire such further information as the commissioner deems advisable.  Uponpresentation of satisfactory evidence that the society has complied with allthe provisions of law, the commissioner shall issue to the society acertificate of authority to that effect and that the society is authorized totransact business pursuant to the provisions of this article.  The certificateof authority shall be prima facie evidence of the existence of the society atthe date of such certificate.  The commissioner shall cause a record of suchcertificate of authority to be made.  A certified copy of such record may begiven in evidence with like effect as the original certificate of authority.

(6)  Any incorporated society authorized to transactbusiness in this State at the time this article becomes effective shall not berequired to reincorporate. [L 1987, c 347, pt of §2]

 

Revision Note

 

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