An Act to provide for the incorporation of a mutual benefit society in the county of Mason, state of Michigan.

[Act 71, P. A. 1907.]

The People of the State of Michigan enact:

may incor

(170) SECTION 1. Any society heretofore or hereafter When society organized, the membership in which, at the time of becoming porate. members, is confined to the residents of Mason county, and having for its object the payment of a sum or sums of money to designated beneficiaries, on the death of a member, or the payment of sick or funeral benefits, or all or any one of such objects, may become a body corporate in the following manner: At any regular meeting of such society, due notice Manner of having been given at the preceding regular meeting, a vote incorporation. shall be taken on the question, "Shall this society become a body corporate?" and when said question shall have been adopted by a vote of two-thirds of the members present and voting thereon, said society shall file in the office of the secretary of state, and also in the office of the county clerk, a copy of the constitution and by-laws of said society, and also a copy of the above vote, certified to by the president and secretary of said society, and said society shall thereupon become a body corporate and may sue and be sued.

corporation.

(171) SEC. 2. No corporation formed in accordance with Rights of the provisions of this act, shall issue stock or borrow money, or hold invested funds, or acquire or hold real estate, except such as may be necessary for the transaction of its business. (172) SEC. 3. The funds of such corporation shall be Funds. derived from assessments upon its members and shall be collected and applied only as prescribed in its constitution and by-laws.

fund.

(173) SEC. 4. Such corporation may provide, in its con- Mortuary stitution and by-laws, and in its certificates of membership, that each person, upon becoming a member of such society, shall pay an equal and stipulated sum, into its mortuary fund, to be deposited in a savings or other bank, and that such fund so accumulated, with its own earnings, shall constitute the amount of benefits to be paid to the beneficiary or beneficiaries of the member first dying, and that upon the death of a member, a new mortuary fund shall be created by a like assessment upon each of said members remaining and each new member upon becoming a member, so that the amount of death benefits to be paid by such society shall be governed by the number of members in good standing, and the amount earned by such fund, so deposited in such bank.

surance com

(174) SEC. 5. Every such corporation shall, when by him Report to inrequested to do so, and upon blanks, by him furnished, re- missioner. port to the insurance commissioner, all facts concerning its business, which he may require, and shall be subject to the supervision of said commissioner, according to the provisions

Former corporations may

of this act

of sections fifteen and twenty-two of act one hundred eightyseven of the public acts of eighteen hundred eighty-seven, so far as the same may be applicable and not in conflict with the provisions of this act.

(175) SEC. 6. Any society, coming within the purview receive benefit of this act, that may have heretofore become incorporated under and by virtue of any other law, may secure the benefits and provisions of this act, by filing in the office of the secretary of state and also in the office of the county clerk of said Mason county, notice in writing, signed by its president and secretary, of its desire so to do.

[CHAPTER V. FRATERNAL BENEFICIARY SOCIETIES.

An Act to define what shall constitute fraternal beneficiary societies, orders or associations; to provide for their incorporation and the regulation of their business, and for the punishment for violations of this act, and to repeal all existing acts or parts of acts inconsistent therewith.

Fraternal benefit societies.

Proviso.

Lodge

system defined.

Representative form of government defined.

[Act 169, P. A. 1913.]

The People of the State of Michigan enact:

(176) SECTION 1. Fraternal benefit societies defined. Any corporation, society, order or voluntary association, without capital stock, organized and carried on solely for the mutual benefit of its members and their beneficiaries, and not for profit, and having a lodge system with ritualistic form of work and representaive form of government, and which shall make provision for the payment of benefits in accordance with section five hereof, is hereby declared to be a fraternal benefit society: Provided, That the provision of this section requiring a ritualistic form of work shall not apply to any society heretofore organized under the provisions of act number one hundred nineteen of the public acts of eighteen hundred ninety-three, as amended.

(177) SEC. 2. Lodge system defined. Any society having a supreme governing or legislative body and subordinate lodges or branches by whatever name known, into which members shall be elected, initiated and admitted in accordance with its constitution, laws, rules, regulations and prescribed ritualistic ceremonies, which subordinate lodges or branches shall be required by the laws of such society to hold regular or stated meetings at least once in each month, shall be deemed to be operating on the lodge system.

(178) SEC. 3.

Representative form of government defined. Any such society shall be deemed to have a representative form of government when it shall provide in its con

stitution and laws for a supreme legislative or governing body, composed of representatives elected either by the members or by delegates elected directly or indirectly by the members, together with such other members as may be prescribed by its constitution and laws: Provided, That the elective Proviso. members shall constitute a majority in number and have not less than two-thirds of the votes, nor less than the votes required to amend its constitution and laws: And provided Further further, That the meetings of the supreme or governing body, and the election of officers, representatives or delegates shall be held as often as once in four years. The members, officers, representatives or delegates of a fraternal benefit society shall not vote by proxy.

proviso.

(179) SEC. 4. Exemptions. Except as herein provided, Exemptions. such societies shall be governed by this act, and shall be exempt from all provisions of the insurance laws of this state, not only in governmental relations with the state, but for every other purpose, and no law hereafter enacted shall apply to them, unless they be expressly designated therein.

(180) SEC. 5. Benefits. Sub. 1. Every society transac- Benefits. ting business under this act shall provide for the payment of death benefits, and may provide for the payment of benefits in case of temporary or permanent physical disability, either as the result of disease, accident or old age: Provided, The Proviso. period of life at which the payment of benefits for disability on account of old age shall commence, shall not be under seventy years, and may provide for monuments or tombstones to the memory of its deceased members, and for the payment of last sickness and funeral benefits. Such society shall have the power to give a member, when permanently disabled or on attaining the age of seventy, all, or such portion of the face value of his certificate as the laws of the society may provide: Provided, That nothing in this act contained shall Proviso. be so construed as to prevent the issuing of benefit certificates for a term of years less than the whole of life which are payable upon the death or disability of the member occurring within the term for which the benefit certificate may be issued. Such society shall, upon written application of the member, have the power to accept a part of the periodical contributions in cash, and charge the remainder, not exceeding one-half of the periodical contribution, against the certificate with interest payable or compounded annually at a rate not lower than four per cent per annum: Provided, Proviso. That this privilege shall not be granted except to societies which have readjusted or may hereafter readjust their rates of contributions, and to contracts affected by such readjustment.

tection, when

Sub. 2. Any society which shall show by the annual valua- Paid-up protion hereinafter provided for that it is accumulating and may grant. maintaining the reserve not lower than the usual reserve computed by the American experience table and four per cent

Proviso.

Beneficiaries.

Proviso.

interest, may grant to its members extended and paid-up protection, or such withdrawal equities as its constitution and laws may provide: Provided, That such grants shall in no case exceed in value the portion of the reserve to the credit of such members to whom they are made.

(181) SEC. 6. Beneficiaries. The payment of death benefits shall be confined to wife, husband, relative by blood to the fourth degree, father-in-law, mother-in-law, son-in-law, daughter-in-law, stepfather, stepmother, stepchildren, children by legal adoption or to a person or persons dependent upon the member: Provided, That if after the issuance of the original certificate the member shall become dependent upon an incorporated charitable institution, he shall have the privilege with the consent of the society to make such institution his beneficiary. Within the above restrictions each member shall have the right to designate his beneficiary, and, from time to time, have the same changed in accordance with the laws, rules or regulations of the society, and no beneficiary shall have or obtain any vested interest in the said benefit until the same has become due and payable upon the death of the said member: Provided, That any society may by its laws limit the scope of beneficiaries within the above classes: Provided further, That where an applicant or member has no relative, as above provided, to whom he may make his certificate payable, in such case he may designate any other person or make his estate his beneficiary. Membership (182) SEC. 7. Qualifications for membership.

Proviso. Further proviso.

qualifications.

Proviso.

Certificate.

Any so

ciety may admit to beneficial membership any person not less than sixteen and not more than sixty years of age, who has been examined by a legally qualified physician, and whose examination has been supervised and approved in accordance with the laws of the society: Provided, That any beneficiary member of such society who shall apply for a certificate providing for disability benefits, need not be required to pass an additional medical examination therefor. Nothing herein contained shall prevent such society from accepting general or social members.

(183) SEC. 8. Certificate. Every certificate issued by any such society shall specify the amount of benefit provided thereby, and shall provide that the certificate, the charter or articles of incorporation, or, if a voluntary association, the articles of association, the constitution and laws of the society and the application for membership and medical examination, signed by the applicant, and all amendments to each thereof, shall constitute the agreement between the society and the member, and copies of the same certified by the secretary of the society, or corresponding officer, shall be received in evidence of the terms and conditions thereof, and any changes, additions or amendments to said charter or articles of incorporation, or articles of association, if a voluntary association, constitution or laws duly made or enacted.

subsequent to the issuance of the benefit certificate shall bind the member and his beneficiaries, and shall govern and control the agreement in all respects the same as though such changes, additions or amendments had been made prior to and were in force at the time of the application for membership.

mortuary ob

(184) SEC. 9. Funds. Sub. 1. Any society may create, Funds. maintain, invest, disburse and apply an emergency, surplus or other similar fund in accordance with its laws. Unless otherwise provided in the contract, such funds shall be held, invested, and disbursed for the use and benefit of the society, and no member or beneficiary shall have or acquire individual rights therein or become entitled to any apportionment or the surrender of any part thereof, except as provided in subsection two of section five of this act. The funds from which benefits shall be paid and the funds from which the expenses of the society shall be defrayed shall be derived from periodical or other payments by the members of the society and accretions of said funds: Provided, That no so- Proviso, ciety shall hereafter be incorporated in this state, which ligations. does not provide for stated periodical contributions sufficient to provide for meeting the mortuary obligations contracted, when valued upon the basis of the national fraternal congress table of mortality as adopted by the national fraternal congress, August twenty-third, eighteen hundred ninety-nine, or any higher standard, with interest assumption not more than four per cent per annum, nor shall any such society be admitted to transact business in this state which does not provide for stated periodical contributions sufficient to provide for meeting the mortuary obligations contracted, when valued upon one of the bases named in section twenty-three-a of this act and applicable to such society, nor write or accept members for temporary or permanent disability benefits, except upon tables based upon reliable experience, with an interest assumption not higher than four per cent per annum.

liabilities,

sidered as.

Sub. 2. Deferred payments or installments of claims shall Fixed be considered as fixed liabilities on the happening of the con- what contingency upon which such payments or installments are thereafter to be paid. Such liability shall be the present value of such future payments or installments upon the rate of interest and mortality assumed by the society for valuation, and every society shall maintain a fund sufficient to meet such liability regardless of proposed future collections to meet any such liabilities.

(185) SEC. 10. Investments. Every society shall invest Investments. its funds only in securities permitted by the laws of this state for the investment of the assets of life insurance companies: Provided, That any foreign society permitted or Proviso. seeking to do business in this state, which invests its funds in accordance with the laws of the state in which it is incor