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been taken, has been conducting an industrial life insurance business without first having complied with the laws of Louisiana and with this Act, and without having obtained a certificate of authority and license from the Secretary of State, the court shall make said rule absolute and every violation of the order and judgment of the court shall be considered as a contempt thereof and punished according to law.
Act Has No Retroactive Effect.
3712. [Sec. 7.] This Act shall have no retroactive effect as to industrial life insurance corporations already organized in conformity with law and holding certificates of the Secretary of State.
Fraternal Benefit Society Defined.
3713. [Sec. 1, Act 256, 1912, p. 565.] 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 and ritualistic form of work and representative form of government, and which shall make provisions for the payment of benefits in accordance with Section 5 hereof, is hereby declared to be a Fraternal Benefit Society.
Must Hold Monthly Meetings.
3714. [Sec. 2.] Any society having a supreme governing or legislative body and subordinant lodge or branches by whatever name known, into which members shall be elected, initiated and admitted in accordance with its constitution, laws, rules and 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.
Representative Form of Government.
3715. [Sec. 3.] Any such society shall be deemed to have a representative form of government when it shall provide in its constitution 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 members shall
constitute a majority in number and have not less than twothirds of the votes, nor less than the votes required to amend its constitution and laws; and provided 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.
Exempt From General Insurance Laws.
3716. [Sec. 4.] Except as herein provided, 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.
May Provide for Disability Benefits.
3717. [Sec. 5.] Every society transacting 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 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 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 be so construed as to prevent the issuing of benefits 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 certificates with interest payable or compounded annually at a rate not lower than four per cent per annum; provided, 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 readjustments.
Any society which shall show by the annual valuation hereinafter provided for that it is accumulating and maintaining the reserve not lower than the usual reserve computed by the American Experience Table and four per cent. interest, any 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. Death Benefits Limited to Whom.
3718. [Sec. 6.] 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 said benefit until the same has become due and payable upon the death of said member; provided, that any society may, by its laws, limit the scope of beneficiaries within the above classes. Limit of Insurable Age.
3719. [Sec. 7.] Any society 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.
What Certificate Shall Specify.
3720. [Sec. 8.] 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 asso ciation, 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. May Maintain Reserve.
3721. [Sec. 9.] 1. Any society may create, 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 before entitled to any apportionment or the surrender of any part thereof, except as provided in sub-section 2 of section 5 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 fund; provided, that no society, domestic or foreign, shall hereafter be incorporated or 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 the basis of the National Fraternal Congress Table of Mortality as adopted by the National Fraternal Congress, August 23rd, 1899, or any higher standard, with interest assumption not more than four per cent per annum, 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.
Deferred Payment is a Fixed Liability.
2. Deferred payment or installments of claims shall be considered as fixed liabilities on the happenings of the 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 the society for valuation, and every society shall maintain a fund sufficient to meet such liability regardless of proposed future collection to meet any such liabilities. How Funds May Be Invested.
3722. [Sec. 10.] Every society shall invest 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 seeking to do business in this State, which invests its funds in accordance with the laws of the State in which it is incorporated, shall be held to meet the requirements of this act for the investment of funds.
Expense Must Be Limited to What.
3723. [Sec. 11.] Every provision of the law of the society for payment by members of such society, in whatever form made, shall distinctly state the purpose of the same and the proportion thereof which may be used for expenses, and no part of the money collected for mortuary or disability purposes or the net accretions of either of any of said funds shall be used for expenses.
What Charter Must Contain; Preliminaries Requisite to Organization.
3724. [Sec. 12.] Seven or more persons, citizens of the United States, and a majority of whom are citizens of this State, who desire to form a Fraternal Benefit Society, as defined by this Act, may make and sign (giving their addresses) and acknowledge before some officer competent to take acknowledgement of deeds, articles of incorporation, in which shall be stated:
First. The proposed corporate name of the society, which shall not so closely resemble the name of any society, or insurance company already transacting business in this State as to mislead public or to lead to confusion.
Second. The purpose for which it is formed which shall not include more liberal powers than are granted by this Act, provided that any lawful social, intellectual, educational, charitable, benevolent, moral or religious advantages may be set forth