US Laws, Codes, Statutes & Cases

                                  TITLE  41
                                  INSURANCE
                                  CHAPTER 32
                         FRATERNAL BENEFIT SOCIETIES
    41-3229.  INJUNCTION -- LIQUIDATION -- RECEIVERSHIP OF DOMESTIC SOCIETY.
(1) When the director upon investigation finds that a domestic society:
    (a)  Has exceeded its powers;
    (b)  Has failed to comply with any provision of this chapter;
    (c)  Is not fulfilling its contracts in good faith;
    (d)  Has a membership of less than four hundred (400) after an existence
    of one (1) year or more; or
    (e)  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 (30) 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:
    (a)  The director finds that the violation complained of has been
    corrected;
    (b)  The costs of such action shall have been paid by the society if the
    court finds that the society was in default as charged;
    (c)  The court has dissolved its injunction; and
    (d)  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.
    (5)  No action under this section shall be recognized in any court of this
state unless brought by the director.  Whenever a receiver is to be appointed
for a domestic society, the court shall appoint the director of insurance as
such receiver.
    (6)  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.