§432:2-404  The benefit contract.  (a) Every society authorized to do business in this State shall issue to each ownerof a benefit contract a certificate specifying the amount of benefits providedthereby.  The certificate, together with any riders or endorsements attachedthereto, the laws of the society, the application for membership, theapplication for insurance and declaration of insurability, if any, signed bythe applicant, and all amendments to each thereof, shall constitute the benefitcontract, as of the date of issuance, between the society and the owner, andthe certificate shall so state.  A copy of the application for insurance anddeclaration of insurability, if any, shall be endorsed upon or attached to thecertificate.  All statements on the application shall be representations andnot warranties.  Any waiver of this provision shall be void.

(b)  Any changes, additions or amendments tothe laws of the society duly made or enacted subsequent to the issuance of thecertificate, shall bind the owner and the beneficiaries, and shall govern andcontrol 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 ofthe application for insurance, except that no change, addition or amendmentshall destroy or diminish benefits which the society contracted to give theowner as of the date of issuance.

(c)  Any person upon whose life a benefitcontract is issued prior to attaining the age of majority shall be bound by theterms of the application and certificate and by all the laws and rules of thesociety to the same extent as though the age of majority had been attained atthe time of application.

(d)  A society shall provide in its laws thatif its reserves as to all or any class of certificates become impaired itsboard of directors or corresponding body may require that there shall be paidby the owner to the society the amount of the owner's equitable proportion ofsuch deficiency as ascertained by its board, and that if the payment is notmade either:

(1)  It shall stand as an indebtedness against thecertificate and draw interest not to exceed the rate specified for certificateloans under the certificates; or

(2)  In lieu of or in combination with paragraph (1),the owner may accept a proportionate reduction in benefits under thecertificate.

The society may specify the manner of theelection and which alternative is to be presumed if no election is made.

(e)  Copies of any of the documents mentionedin this section, certified by the secretary or corresponding officer of thesociety, shall be received in evidence of the terms and conditions thereof.

(f)  No certificate shall be delivered orissued for delivery in this State unless a copy of the form has been filed withthe commissioner.  Each filing shall be accompanied by a $20 fee payable to thecommissioner, which fee shall be deposited in the commissioner's education andtraining fund.  Every life, accident, health, or disability insurancecertificate and every annuity certificate issued on or after July 1, 1989,shall meet the standard contract provision requirements not inconsistent withthis article for like policies, except that a society may provide for a graceperiod for payment of premiums of one full month in its certificates.  Thecertificate shall also contain a provision stating the amount of premiums whichare payable under the certificate and a provision reciting or setting forth thesubstance of any sections of the society's laws or rules in force at the timeof issuance of the certificate which, if violated, will result in thetermination or reduction of benefits payable under the certificate.  If thelaws of the society provide for expulsion or suspension of a member, thecertificate shall also contain a provision that any member so expelled orsuspended, except for nonpayment of a premium or within the contestable periodfor material misrepresentation in the application for membership or insurance,shall have the privilege of maintaining the certificate in force by continuingpayment of the required premium.

(g)  Benefit contracts issued on the lives ofpersons below the society's minimum age for adult membership may provide fortransfer of control or ownership to the insured at an age specified in thecertificate.  A society may require approval of an application for membershipin order to effect this transfer, and may provide in all other respects for theregulation, 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.

(h)  A society may specify the terms andconditions on which benefit contracts may be assigned. [L 1987, c 347, pt of §2;am L 1988, c 363, §2(6); am L 2004, c 122, §90]