§ 58-24-90. The benefit contract.
§58‑24‑90. The benefit contract.
(a) Every societyauthorized to do business in this State shall issue to each owner of a benefitcontract a certificate specifying the amount of benefits provided thereby. Thecertificate, together with any riders or endorsements attached thereto, thelaws of the society, the application for membership, the application forinsurance and declaration of insurability, if any, signed by the applicant, andall amendments to each thereof, shall constitute the benefit contract, as ofthe date of issuance, between the society and the owner, and the certificateshall so state. A copy of the application for insurance and declaration ofinsurability, 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.
(b) Any changes,additions or amendments to the laws of the society duly made or enactedsubsequent to the issuance of the certificate, shall bind the owner and thebeneficiaries, and shall govern and control the benefit contract in allrespects the same as though such changes, additions or amendments had been madeprior to and were in force at the time of the application for insurance, exceptthat no change, addition or amendment shall destroy or diminish benefits whichthe society contracted to give the owner as of the date of issuance.
(c) Any person uponwhose life a benefit contract is issued prior to attaining the age of majorityshall be bound by the terms of the application and certificate and by all thelaws and rules of the society to the same extent as though the age of majorityhad been attained at the time of application.
(d) A society shallprovide in its laws that if its reserves as to all or any class of certificatesbecome impaired its board of directors or corresponding body may require thatthere shall be paid by the owner to the society the amount of the owner'sequitable proportion of such deficiency as ascertained by its board, and thatif the payment is not made either (1) it shall stand as an indebtedness againstthe certificate and draw interest not to exceed the rate specified forcertificate loans under the certificates; or (2) in lieu of or in combinationwith (1), the owner may accept a proportionate reduction in benefits under thecertificate. The society may specify the manner of the election and whichalternative is to be presumed if no election is made.
(e) Copies of any ofthe documents mentioned in this section, certified by the secretary orcorresponding officer of the society, shall be received in evidence of theterms and conditions thereof.
(f) No certificateshall be delivered or issued for delivery in this State unless a copy of theform has been filed with and approved by the Commissioner in the mannerprovided for like policies issued by life insurers in this State. Every life,accident, health, or disability insurance certificate and every annuitycertificate issued on or after one year from the effective date of this Articleshall meet the standard contract provision requirements not inconsistent withthis Article for like policies issued by life insurers in this State, exceptthat a society may provide for a grace period for payment of premiums of onefull month in its certificates. The certificate shall also contain a provisionstating the amount of premiums which are payable under the certificate and aprovision reciting or setting forth the substance of any sections of thesociety's laws or rules in force at the time of issuance of the certificatewhich, if violated, will result in the termination or reduction of benefitspayable under the certificate. If the laws of the society provide forexpulsion or suspension of a member, the certificate shall also contain aprovision that any member so expelled or suspended, except for nonpayment of apremium or within the contestable period for material misrepresentation in theapplication for membership or insurance, shall have the privilege ofmaintaining the certificate in force by continuing payment of the requiredpremium.
(g) Benefit contractsissued on the lives of persons below the society's minimum age for adultmembership may provide for transfer of control of ownership to the insured atan age specified in the certificate. A society may require approval of anapplication for membership in order to effect this transfer, and may provide inall other respects for the regulation, government and control of suchcertificates and all rights, obligations and liabilities incident thereto andconnected therewith. Ownership rights prior to such transfer shall bespecified in the certificate.
(h) A society mayspecify the terms and conditions on which benefit contracts may be assigned. (1987,c. 483, s. 2; 1991, c. 720, s. 4.)