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304.29-101 Organization.
A domestic society organized on or after January 1, 1989, shall be formed as
follows:
(1) Seven (7) or more citizens of the United States, a majority of whom are citizens
of this state, who desire to form a fraternal benefit society, may make, sign and
acknowledge before some officer competent to take acknowledgment 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. The purposes shall not include
more liberal powers than are granted by this subtitle; and
(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
(1) year from the date of issuance of the permanent certificate of
authority;
(2) The articles of incorporation, duly certified copies of the society's bylaws and
rules, copies of all proposed forms of certificates, applications therefor, 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 (1) year shall be filed with the commissioner, who may require further
information. The bond with sureties approved by the commissioner shall be in
an amount, not less than three hundred thousand dollars ($300,000) nor more
than one million five hundred thousand dollars ($1,500,000), as required by the
commissioner. All documents filed shall be in the English language. If the
purposes of the society conform to the requirements of this subtitle 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;
(3) No preliminary certificate of authority granted under the provisions of this
section shall be valid after one (1) year from its date or after such further
period, not exceeding one (1) year, as may be authorized by the commissioner
upon cause shown, unless the five hundred (500) 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 (1) 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;
(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 (1) regular
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monthly premium in accordance with its table of rates, and shall issue to each
applicant a receipt for the amount so collected. No society shall incur any
liability other than for the return of 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 (500) applicants, and any necessary evidence of
insurability has been furnished to and approved by the society;
(b) At least ten (10) subordinate lodges have been established into which the
five hundred (500) 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 the
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 the society, that at least five hundred
(500) applicants have each paid in cash at least one (1) regular monthly
premium, which premiums in the aggregate shall amount to at least one
hundred fifty thousand dollars ($150,000). The 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 (1) year, the premiums
shall be returned to the applicants;
The commissioner may make examination and require further information as
he or she 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 KRS Chapter 304.
The certificate of authority shall be prima facie evidence of the existence of the
society at the date of the certificate. The commissioner shall cause a record of
the certificate of authority to be made. A certified copy of the record may be
given in evidence with like effect as the original certificate of authority;
Any incorporated society authorized to transact business in this state at the
time this subtitle becomes effective shall not be required to reincorporate; and
No unincorporated or voluntary association shall be permitted to transact
business in this state as a fraternal benefit society.
Effective:July 15, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 1391, effective July 15, 2010. -Created 1988 Ky. Acts ch. 310, sec. 10, effective January 1, 1989.
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