§ 27-25-10 - Organization.
SECTION 27-25-10
§ 27-25-10 Organization. – A domestic society shall be formed as follows:
(1) Seven (7) or more citizens of the United States, amajority of whom are citizens of this state, who desire to form a fraternalbenefit society, may make, sign, and acknowledge before some officer competentto take acknowledgment of deeds, articles of incorporation, in which shall bestated:
(i) The proposed corporate name of the society, which shallnot so closely resemble the name of any society or insurance company as to bemisleading or confusing;
(ii) The purposes for which it is being formed and the modein which its corporate powers are to be exercised. Those purposes shall notinclude more liberal powers than are granted by this chapter; and
(iii) The names and residences of the incorporators and thenames, residences, and official titles of all the officers, trustees,directors, or other persons who are to have and exercise the general control ofthe management of the affairs and funds of the society for the first year oruntil the ensuing election at which all of the officers shall be elected by thesupreme governing body, which election shall be held not later than one yearfrom the date of the issuance of the permanent certificate of authority;
(2) The articles of incorporation, duly certified copies ofthe society's bylaws and rules, copies of all proposed forms of certificates,applications for them, and circulars to be issued by the society and a bondconditioned upon the return to applicants of the advanced payments if theorganization is not completed within one year, shall be filed with thecommissioner of insurance, who may require any further information thecommissioner deems necessary. The bond with sureties approved by thecommissioner of insurance shall be in an amount, not less than three hundredthousand dollars ($300,000) nor more than one million five hundred thousanddollars ($1,500,000), as required by the commissioner of insurance. Alldocuments filed are to be in the English language. If the purposes of thesociety conform to the requirements of this chapter and all of the provisionsof the law have been complied with, the commissioner of insurance shallcertify, retain, and file the articles of incorporation and furnish theincorporators with a preliminary certificate of authority authorizing thesociety to solicit members;
(3) No preliminary certificate of authority granted under theprovisions of this section shall be valid after one year from its date or aftera further period, not exceeding one year, as may be authorized by thecommissioner of insurance upon cause shown, unless the five hundred (500)applicants have been secured and the organization has been completed asprovided in this section. The articles of incorporation and all otherproceedings under the articles shall become null and void in one year from thedate of the preliminary certificate of authority, or at the expiration of theextended period, unless the society shall have completed its organization andreceived a certificate of authority to do business;
(4) Upon receipt of a preliminary certificate of authorityfrom the commissioner of insurance, the society may solicit members for thepurpose of completing its organization, shall collect from each applicant theamount of not less than one regular monthly premium in accordance with itstable of rates, and shall issue to each applicant a receipt for the amount socollected. No society shall incur any liability other than for the return ofthe advance premium, nor issue any certificate, nor pay, allow, or offer orpromise to pay or allow, any benefit to any person until:
(i) Actual bona fide applications for benefits have beensecured on not less than five hundred (500) applicants, and any necessaryevidence of insurability has been furnished to and approved by the society;
(ii) At least ten (10) subordinate lodges have beenestablished into which the five hundred (500) applicants have been admitted;
(iii) There has been submitted to the commissioner ofinsurance, under oath of the president or secretary or corresponding officer ofthe society, a list of the applicants, giving their names, addresses, date eachwas admitted, name and number of the subordinate lodge of which each applicantis a member, amount of benefits to be granted and premiums for the benefits; and
(iv) It shall have been shown to the commissioner ofinsurance, by sworn statement of the treasurer or corresponding officer of thesociety, that at least five hundred (500) applicants have each paid in cash atleast one regular monthly premium as provided in this section, which premiumsin the aggregate shall amount to at least one hundred and fifty thousanddollars ($150,000). The advance premiums shall be held in trust during theperiod of organization and if the society has not qualified for a certificateof authority within one year, the premiums shall be returned to the applicant;
(5) The commissioner of insurance may make any examinationand require any further information as the commissioner deems advisable. Uponpresentation of satisfactory evidence that the society has complied with all ofthe provisions of law, the commissioner shall issue to the society acertificate of authority to that effect and that the society is authorized totransact business pursuant to the provisions of this chapter. The certificateof authority shall be prima facie evidence of the existence of the society atthe date of the certificate. The commissioner of insurance shall cause a recordof the certificate of authority to be made. A certified copy of the record maybe given in evidence with like effect as the original certificate of authority;and
(6) Any incorporated society authorized to transact businessin this state at the time this chapter becomes effective shall not be requiredto reincorporate.