Article XVIII - Mutual Benefit Associations
(215 ILCS 5/316) (from Ch. 73, par. 928) Sec. 316. Scope of article. (1) This article shall apply to (a) all companies incorporated under "An Act to incorporate mutual benefit associations on the assessment plan, intended to benefit the widows, orphans, heirs and legatees of deceased members thereof and members who have received a permanent disability and to provide for and regulate the control of such associations and to provide penalties for violation of the provisions thereof," approved June 27, 1927; and (b) all associations or corporations not organized under the act mentioned in clause (a), transacting business in this State and insuring the lives of its members and providing money benefits payable on the death or permanent disability of its members and which provide for the payment of death or disability benefits and the expenses of the management of the business by payments to be made upon assessments as required, by members holding similar contracts and where the members' liability to contribute to the payment of losses, accrued or to accrue, is not a fixed sum. (2) Each company, association or corporation referred to in subsection (1) shall be deemed to be a mutual benefit association engaged in the business of life and disability insurance upon a mutual benefit assessment plan and is referred to in this article as a "mutual benefit association" or as an "association." (Source: P.A. 84‑549.) |
(215 ILCS 5/317) (from Ch. 73, par. 929) Sec. 317. Present authorized associations may transact business. Every association organized prior to the effective date of this Code and which association on said effective date is transacting business under a certificate of authority issued by the Director may continue to transact such business subject to the provisions of this article. (Source: Laws 1937, p. 696.) |
(215 ILCS 5/318) (from Ch. 73, par. 930) Sec. 318. No new mutual benefit associations may be organized. No mutual benefit association shall be formed after the effective date of this Code nor shall the Director after said effective date issue a permit to organize such an association to, or approve any articles of incorporation of, any group of individuals desiring to do a mutual benefit business. (Source: Laws 1937, p. 696.) |
(215 ILCS 5/319) (from Ch. 73, par. 931) Sec. 319. Principal office and place of business. Every association, within thirty days after the effective date of this Code, shall file with the Director a declaration in writing sworn to by one of its officers setting forth the address, including street and number, if any, of its principal office and place of business at the effective date of this Code. (Source: Laws 1937, p. 696.) |
(215 ILCS 5/320) (from Ch. 73, par. 932) Sec. 320. Amendment of charter. The articles of incorporation of any association may be amended by proper resolution adopted by the board of directors and approved by the Director. The location of the principal place of business of any association shall not be changed, except in cases of merger or consolidation, to any county other than the county or adjoining county in which the principal place of business of the association is located at the effective date of this Code. (Source: Laws 1937, p. 696.) |
(215 ILCS 5/321) (from Ch. 73, par. 933) Sec. 321. Service of process‑Director as attorney. (1) Every association within thirty days after the effective date of this Code, shall file with the Director a duly executed instrument whereby the association shall appoint and constitute the Director and his successor or successors in office the true and lawful attorney of such association upon whom all lawful process in any action or legal proceeding against it may be served and shall agree that any lawful process against it which may be served upon its said attorney as provided in this section shall be of the same force and validity as if served upon the association and that the authority thereof shall continue in force irrevocably so long as any liability of the association shall remain outstanding. (2) Service upon such attorney shall be made and the effect of such service shall be the same as in cases of service upon the Director as attorney for a reciprocal authorized to transact business in this State. (Source: Laws 1937, p. 696.) |
(215 ILCS 5/322) (from Ch. 73, par. 934) Sec. 322. Power of association. Every association shall have the power by the name stated in its certificate of authority to sue and be sued, make contracts, have a common seal, and to change or alter said seal at pleasure. It may, by its board of directors adopt by‑laws not inconsistent with the Constitution and laws of this State or of the United States, which by‑laws shall define the manner of electing directors and officers of the association and their duties and terms of office, and the qualifications and privileges of the members thereof. Such by‑laws may or may not require a medical examination of an applicant for membership. (Source: Laws 1937, p. 696.) |
(215 ILCS 5/323) (from Ch. 73, par. 935) Sec. 323. Directors. (1) The affairs of all associations shall be governed by not less than three nor more than seven directors, residents of the State of Illinois, who shall be elected from and by the members at such time and place and for such period not exceeding three years, as may be provided in the by‑laws. Such directors may be eligible for reelection. As near as practicable an equal number of directors shall be elected each year. Vacancies in the board of directors shall be filled in the manner provided in the by‑laws. (2) Within fifteen days after any director shall be elected, a certificate under the seal of the association giving the name and residence of the person elected and the term of his office, shall be filed in the office of the Director. (Source: Laws 1937, p. 696.) |
(215 ILCS 5/324) (from Ch. 73, par. 936) Sec. 324. Membership. Every mutual benefit association shall have and maintain a membership of at least five hundred members. If any association shall not have collected any one assessment levied pursuant to this article from at least five hundred members, after the levy of such assessment, it shall be subject to liquidation and the Director may proceed against such association under Article XIII. (Source: Laws 1937, p. 696.) |
(215 ILCS 5/325) (from Ch. 73, par. 937) Sec. 325. Officers bonds. The officer or officers of the association entrusted with the custody of its funds shall within thirty days after the effective date of this Code file with the Director a bond in favor of the association in the penalty of double the amount of its benefit account, as defined in the act mentioned in section 316, as of the end of a preceding calendar year, exclusive of such amount as the association may maintain on deposit with the Director, (but in no event a bond in a penalty of less than $2,000) with such officer or officers as principal and a duly authorized surety company as surety, conditioned upon the faithful performance of his or their duties and the accounting of the funds entrusted to his or their custody. If the penalty of any bond filed pursuant to this section shall at any time be less than twice the largest amount in the benefit fund of the association not maintained on deposit with the Director during the preceding calendar year, a new bond in the penalty of double the largest amount in the benefit fund during said preceding calendar year, with such officer or officers as principal and a duly authorized surety company as surety, conditioned as aforesaid, shall be filed with the Director within sixty days after the end of such calendar year. (Source: P.A. 93‑32, eff. 7‑1‑03.) |
(215 ILCS 5/326) (from Ch. 73, par. 938) Sec. 326. Membership fees. The association shall charge all applicants for membership a membership fee of not more than six dollars nor less than one dollar and shall place at least one dollar of such membership fee in the benefit fund of the association. (Source: Laws 1937, p. 696.) |
(215 ILCS 5/327) (from Ch. 73, par. 939) Sec. 327. Benefit fund. (1) An association shall maintain a benefit fund which shall be used solely for the payment of claims of members and no part thereof shall be used for defraying the expenses of the association. Such fund, any portion of which may be deposited with the Director, may be held in cash or invested in securities of the United States Government or of the State of Illinois, and not otherwise. All moneys or other assets of the benefit account, as defined in the Act mentioned in Section 316, of any association shall upon the effective date of this Code be deemed transferred to and become a part of its benefit fund. The minimum amount of such benefit fund at all times after one year from the effective date of this Code shall be $1,000, plus the sum of $200 for each 100 members in excess of 500. If the benefit fund of any association at any time after one year from the effective date of this Code shall be less than the minimum amount required by this Section and is not increased to such minimum within 90 days, the association shall be deemed insolvent and the Director shall proceed against it under Article XIII. The Director may release any required benefit fund deposit upon receipt of an order of a court having proper jurisdiction or upon: (i) certification by the association that it has no outstanding member creditors, member certificates, or member obligations in effect and no plans to engage in the business of insurance; (ii) receipt of a lawful resolution of the association's board of directors effecting the surrender of its charter and articles of incorporation for administrative dissolution by the Director; and (iii) receipt of the name and forwarding address for each of the final officers and directors of the company, together with a plan of dissolution approved by the Director. (2) Whenever the association shall have been notified of any loss under its certificate of membership, which exceeds in amount the benefit fund of the association, the president shall convene the directors of the association who shall levy an assessment against all members for an amount sufficient to pay all such losses of the association at the time said assessment is made and for an amount in excess thereof sufficient to maintain the minimum amount of the benefit fund as provided in this Section. Assessments provided for in this section shall be distributed equally against all members of the association except for children under 16 years of age. The board of directors shall assess each such child an amount not to exceed one half of the amount levied against each other member. (3) In order to provide for an unexpected number of deaths, an association shall have the right to levy additional assessments whenever in the discretion of the board of directors the same shall be deemed advisable except that no assessment may be levied if the amount in the benefit fund exceeds, or if such assessment will increase the amount of the benefit fund in excess of a sum equal to $25 per member in good standing. The entire proceeds of all such additional assessments shall be placed in the benefit fund. (Source: P.A. 92‑75, eff. 7‑12‑01.) |
(215 ILCS 5/328) (from Ch. 73, par. 940) Sec. 328. Expense fund. Every mutual benefit association shall keep an expense fund out of which all salaries, fees, taxes, costs of defending or prosecuting suits and all other expenses relating to the management of the association shall be paid, and for the purpose of maintaining such fund each member may be assessed not to exceed 50 cents per month except on benefit certificates on lives of children under 16 years of age. The expense assessed against each such child shall be not more than one‑half of the amount assessed against each other member. (Source: Laws 1959, p. 619.) |
(215 ILCS 5/329) (from Ch. 73, par. 941) Sec. 329. Record of assessments. A record of all assessments provided for by this article shall be entered in the minutes of the meetings of the board of directors and such record shall show the amounts assessed for the benefit fund and the expense fund separately. (Source: P.A. 83‑343.) |
(215 ILCS 5/330) (from Ch. 73, par. 942) Sec. 330. Assessment notice. Whenever any assessment shall have been levied, it shall be the duty of the association to notify immediately each member of such association by a notice, mailed to each member, setting forth the amount of his share of such losses and expenses separately. Such notice shall also state that such assessment is to be paid within thirty days from the date of the notice and the name and address of the association to which the payment is to be made. Such notice, in case of benefit assessments, shall include the name of the deceased member, the name and address of such member's beneficiary, and the amount due on his certificate. Upon failure of any member to pay any assessment levied upon him pursuant to the provisions of this article, within the time named in such notice, the association may declare the certificate of such member cancelled upon a further notice sent by first class mail addressed to such member at his last known post office address stating that his certificate will be canceled if payment is not made to the association within ten days of the mailing of such cancellation notice. (Source: Laws 1937, p. 696.) |
(215 ILCS 5/331) (from Ch. 73, par. 943) Sec. 331. Payment of claims. All claims filed with the association shall be approved or disapproved within sixty days after receipt of due proof of death or disability and if approved, shall be paid within sixty days after such approval. If a claim is disapproved, the association shall forthwith notify the beneficiary or person filing the proof of death or disability of the reasons for such disapproval. The Director shall proceed under Article XIII to liquidate any association which shall conduct its business fraudulently, or is not carrying out its contracts in good faith, or shall be sixty days or more in arrears in payment of claims after the same have been allowed by the board of directors, or has violated any of the provisions of this article. (Source: Laws 1937, p. 696.) |
(215 ILCS 5/332) (from Ch. 73, par. 944) Sec. 332. Amount of death benefit. The benefit which shall be payable by an association upon the death of a member under a certificate issued after the effective date of this Code shall be the benefit for the age at entry of such member into the association, as set forth in the standard certificate form prescribed by section 333. (Source: Laws 1937, p. 696.) |
(215 ILCS 5/333) (from Ch. 73, par. 945) Sec. 333. Membership certificate. (1) Every association shall issue a certificate of membership to each member. The form of certificate shall be submitted to the Director for his approval before same shall be issued. Each certificate issued on and after January 1, 1950, shall contain the following provisions and no others and shall be printed in clear readable type of uniform sixes, except that the words in capital letters in the following form may be in larger type, and in the case of an association issuing certificates granting only death benefits, the provisions with regard to disability may be omitted: .............................. (A Mutual Benefit Association) ..................., Illinois. IN CONSIDERATION OF the membership fee, the receipt of which is hereby acknowledged and the facts set out in the application executed by the member, and the further payment of all assessments required to be paid under the conditions of this certificate, on or before the time payable during the continuance of the certificate, the .... agrees to pay to ...., herein called the beneficiary, if living, or to a duly substituted beneficiary, otherwise to the estate of the member, upon receipt at its home office in the City of ...., Illinois, of due proof of death of ...., herein called the member, during continuance of this certificate in full force, subject, however, to the conditions and provisions hereinafter set forth, in accordance with the amounts scheduled below based on the age of the member at the time he or she became a member. In no case shall the association be liable for an amount in excess of $1 per member paying the assessment levied for a single claim, except to the extent of the amount in the benefit fund. Upon receipt of satisfactory evidence at the Home Office of the Association showing that the member has lost be severance, BOTH HANDS or BOTH FEET, or ONE HAND AND ONE FOOT, or has permanently lost the ENTIRE SIGHT OF BOTH EYES, through accidental means, independently and exclusively of all other causes, within 90 days from the date of the accident, during the continuance of this Certificate, then the sum set forth in the table of benefits herein provided to be paid and upon the same terms as above provided for a death benefit, will be paid to said member, subject to the provisions and conditions hereinafter set forth in lieu of all other benefits; and should the member lose by severance ONE HAND or ONE FOOT or permanently the ENTIRE SIGHT OF ONE EYE, through accidental means, independently and exclusively of all other causes, within 90 days from the date of the accident, during the continuance of this Certificate, then 1/2 of the sum set forth in the table of benefits herein provided will be paid to the member, subject to the provisions and conditions hereinafter set forth in lieu of all other benefits. Severance shall mean, in case of a foot, severance at or above the ankle; in case of a hand, severance at or above the wrist. TABLE SHOWING AMOUNT PAYABLE AT DEATH OF MEMBER ACCORDING TO AGE AT TIME OF BECOMING A MEMBER. | ||||||||||||||||||||||||||||||||||||||||||||||||
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The member who holds his or her certificate is subject to assessments for the payment of death claims of the association and to assessments for the payment of expenses of the association as provided for by paragraph 13 on a following page of this certificate. THE PROVISIONS under the heading "Additional Contract Provisions" (upon the following pages hereof) are a part of this contract as fully as if recited over the signature hereto affixed. IN WITNESS WHEREOF, the .... has caused this contract to be executed at its home office in the City of ...., Illinois, on (insert date). ............... (President) ............... (Secretary)Contact Us | About Us | Terms | Privacy
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