US Laws, Codes, Statutes & Cases

                                  TITLE  41
                                  INSURANCE
                                  CHAPTER 32
                         FRATERNAL BENEFIT SOCIETIES
    41-3219.  THE BENEFIT CONTRACT. (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: (a) 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
(b) in lieu of or in combination with (a), 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 the director in the manner
provided for like policies issued by life and disability insurers in this
state.  Every life, accident and sickness, health or disability insurance
certificate and every annuity certificate issued on or after one (1) year from
the effective date of this act must be filed with the director and shall meet
the standard contract provision requirements not inconsistent with this
chapter for like policies issued by life and disability insurers in this
state, except that a society may provide for a grace period for payment of
premiums of one (1) 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. Any filing made hereunder shall be deemed approved
unless disapproved within sixty (60) days from the date of such filing.
    (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.