Chap. 320.—An ACT to define and regulate fraternal beneficiary associa
tions, orders, or societies.

Approved March 17, 1906.

1. Be it enacted by the general assembly of Virginia, That a fraternal
heneficiary association, order, or society is hereby declared to be a cor-
poration, society, order, or voluntary association which is formed or
organized for the purpose of providing benefits, charity, relief, or insur-
ance for its members and their beneficiaries, such insurance being issued
in the form of certificates of membership therein, which provide for- the
payment of a specified or other sum of money to the beneficiary on the
death of the member in consideration of the payment by the member of
tixed sums at fixed periods, or of any sums in the form of dues or other
assessments as may be provided in its constitution and by-laws: provided.
such corporation, society, or voluntary association shall have no capital
stock, and has a representative form of government and a lodge system.
with ritualistic form of work for the meetings of its lodges, chapters,
councils, or other designated subordinate bodies, and the benefits, charity,
relief and insurance shall be payable by a grand or supreme body of the
same, excepting sick benefits, which may also be paid by local or subordi-
nate bodies of such order: and provided, further, that every such associa-
tion may provide in its constitution or by-laws that if such regular pav-
ments are insufficient to pay all matured death and disability claims in
full and provide for the creation and maintenance of the funds required
hy its constitution and by-laws, extra assessments or other payments may
be levied upon the members: provided further, that orders or socictics
operating upon the plan of levying and collecting post-mortem assess-
ments shall indicate this provision on the face of certificate. Such grand
or supreme bodies may be composed of its officers, incorporators, repre-
sentatives elected by local, district, or grand bodies, past officers, and
standing committeee. Such orders or associations may make a constitu-
tion and by-laws, alter and amend the same from time to time, and adopt
such other rules and regulations consistent with the existing laws of the
State. for the government of all under its authority, for the management
of its properties and the due and orderly conduct of its affairs. Said
<onstitution and by-laws when so made, or as changed, altered or amended.
shall be the law governing the said association and its officers, and su-
hordinate branches or lodges, and all members and beneficiaries in their
beneficial, financial, and social relations to such association. Except, as
provided in section eleven of this act no such association or order shall
admit to beneficial membership any person less than sixteen nor more
than sixty years of age. Such orders or associations shall make pro-
vision for the payment of benefits in case of death, and may make pro-
vision for the payment of benefits in case of sickness, and temporary or
permanent physical disability, either as a result of disease, accident, or
old age: provided, the period of life at which the payment for old age
commences shall not be under seventy years. Any such order or associa-
tion may also accumulate, maintain, apply, and disburse among its mem-
bership a reserve or surplus fund as may be provided in its constitution
and laws.

The funds from which the payment of benefits shall be made, and the
fund from which the expenses shall be defrayed, shall be derived from as-
sessinents, dues, or other payments collected from its members, as may be
provided by the constitution or by-laws of such order or association.
Payment of death benefits shall be to families, heirs, blood relatives.
affianced husband or affianced wife of, or to persons dependent upon the
member, as may be designated by the member, or to such other bene-
ficiaries as may be permitted by the laws of the State or province in
which such order or association is chartered.

Each member shall have the right to designate his beneficiary and from
time to time have the same changed in accordance with the by-laws, rules.
or regulations of the order or associations, and no beneficiary shal] have
any vested interest in the said benefit until the same has become due and
pavable upon the death of the member.

All such fraternal orders, associations, or societies shall be governed by
this act, and shall be exempt from the provisions of section twelve hun-
dred and seventy-one of the Code, relating to securities to be deposited
with the treasurer of this State, and shall be exempt from all other laws
of this State, relating to corporations organized and doing business under
the system of life or casualty insurance, known as either the old line or
legal reserve plan, or the co-operative or assessment plan: provided, how-
ever, that nothing in this section shall be construed to exempt such or-
ders, associations, or societies from the operation of any laws governing
pleading, and evidence, the jurisdiction of courts, and the limitations of
actions in suits or actions on insurance policies and certificates, nor to
exempt such orders, associations, or societies from the jurisdiction of any
insurance department which may hereafter be established.

2. Any fraternal beneficiary order, association, or society of this or any
other State, district, province, or territory, now having members, or any
lodge, chapter, council, or subordinate branch duly established and or-
ganized in this State, may continue its operations and business in this
State: provided, that it hereafter complies with the provisions of this
act.

3. Any fraternal beneficiary order, association, or society coming with-
in the description as set forth in section one of this act, organized under
the laws of any other State, province, district, or territory, not now hav-
ing lodges, councils, or other subordinate bodies, or members in this State
shall be permitted to do business within this State, in accordance with
this act, when it shall have filed with the auditor of public accounts a
certificate from the official in charge of fire insurance matters in its home
State of incorporation that it is authorized to transact business therein as
a fraternal beneficiary order or association, also a duly certified copy of
its charter and articles of association, and a copy of its constitution and
laws, certified to by its secretary or corresponding officer, together with
an appointment of the auditor of public accounts as the person upon
whom legal process may be served, as hereinafter provided.

4. Each such corporation, society, order, or association doing business
in this State, shall, on or before the first day of March of each year, make
and file with the auditor of public accounts, a report of its affairs and
operations during the year ending the thirty-first day of December im-
mediately preceding. Such report shall be made on blanks provided by
the auditor of public accounts, under oath by the duly authorized officers
of any such order or association, and shall be published, or the substance
thereof, in the annual report of the auditor of public accounts, and shall
be in the following form:

Annual Statement.
For the year ending December 31, 190....

Of the condition and affairs of the .................008. -» organized
under the laws of the State of .............-.-ee cease , made to the
auditor of public accounts of ............ sees eee , president, or corre-
sponding title, ..........2seeeeeee eens first vice-president, or corre-
sponding title, ........... eee reece eee eee , Secretary, or corresponding
title, 2... ccc eee eee ee , treasurer, or corresponding title (state
what law), .......e-seeeeeeeee Incorporated, ...........0eeee eee
nineteen hundred and ...........eeseeeeeee Under wo eee creo wees
Approved .......-+++- , nineteen hundred and .... Chapter........
Organized ......-.--+05 , Dineteen hundred and .... Voluntary as-
sociation .........ee cece eens Commenced business, 190.... ,

Home office (give street and number).........-... eee esse eeeeeee

One. Balance Sheet.

Amount of net ledger assets, December thirty-one, of previous year,
As shown by the books at the home office at cle
thirty-one, nineteen hundred and .............
paid by members to the society as follows:

One. Dues for expenses, per capita tax, etceter

Two. Assessments: Mortuary, $...........
Expenses, $............

Three. Total received from members, $.......

Four. Interest, $........... Rent, $.......

Five. From all other sources—viz.:

Ce ey

ey

Total income during the year
Sum of both amounts..............

Three. Disbursements During th
As shown by the books at home office at c!
December 31, 190....

One. Death claims, $........... Permanent
disability claims, $................e eee §.

Two. Temporary disability, $......... Old
age benefits, $......... 0.0 cece eee eeee §.

Three. Payments returned to applicants or
MEMbVETS, Kes vi wae wi waa Hew We wow Dew OE wae $.
Total paid to members and beneficiaries. .$.
Four. Commissions, fees, salaries paid or al-
lowed to agents for organization of subordi-

nate bodies and upbuilding of same........ $.
Five. Salaries paid to officers............... 8.
Six. Salaries paid to office employees........ §.
Seven. Salaries or fees paid supreme or medi-
cal supervisOrs 1.2.0... 0. cece eee e eee e eee $.
Eight. Rent, $........ Taxes, $..........
Advertising, official publication, and print-
ing, Bo... cece ese sere c wee nese eeees $.
Nine. Postage, express, and telegraph, $......
Legal expenses, $.......... Governing
bodies, $........ Insurance department,
$i siewans Miscellaneous, $............. $.
Ten. All other items—viz.:.............05.

come ee wee rere eee eee eer eer eres eaersreeseree
Pe ee er ee ee

Pee ee ee

(Total expenses, footings of items four to ten,
| ee ). Total disbursements........ §.
Balance ai sca wes oa iw bo Wee wie vinnie cree wt Sis nse oreo os
Invested as follows:

Four. Ledger Assets.
As shown by the books at home office at close of business.
December 31, 190....

One. Book value of real estate, unencumbered,

( eee Encumbered, $............. Besiemiw cums
Two. Mortgage loans on real estate, first liens,

$........ Other than first, $.......... Baws eee ws
Three. Loans secured by pledge of bonds,

stocks, or other collateral................. Bo... cee
Four. Book value of bonds (excluding inter-

est) and stocks owned absolutely.......... Biss «ts aye is fa Sd
Five. Personal agents’ debt balances, $.......

Bill receivable, $.............cce eee eeee Sicsiscsawss
Six. Cash in office, §.. ...... Deposited in

bank (name banks and amounts), $....... Bee esa ems
Seven. Total ....0...... cece eee e eee eee :

Deduct Ledger Liabilities.

Hight. Personal or agents’ credit balances,

$....... ; borrowed money, $....... All

Other, 8. sss ses wee sews coe we ow sew ere wes B......008.
Nine. Total net ledger assets as per balance on

page ...... , comprised under the follow-

Ing funds: si6ciesevisnissecswinnreee es ee
Ten. Mortuary, ....... 0. cc cece ee eee eens Disk oi ei and ba
Eleven. Reserve, $..........cececeeeeeeces :
Twelve. Emergency, $..........0--0eeeeeee Sesniewssss
Thirteen. Expense, $..........:..eeeeeeees Sica. m em ast

Five. Non-Ledger Assets.

Fourteen. Interest due, $.......... 5 accrued,

Bore ved Be ne 3 on mortgages, $............ Bissewseees
Fifteen. Interest due, $........... 3 accrued,

Poe ese as ; on other assets, $............. Be ciesevsws
Sixteen. Rents due, $............. ; accrued,

Sic evans ; on property or lease, $........8.......6.
Seventeen. Market value of real estate over

BOOK VAlUE cs esaqiuemsinwemiawew em eso we Bie cee eee
Eighteen. Market value of bonds (not includ-

ing interest) and stocks over book value....$..........
Nineteen. Assessments due on last call, made °

within sixty days, on certificates in force....$..........
Twenty. Assessments to become due on certifi-

cates not exceeding one assessment, nor the

amount of claims not assessed for per item

two of liabilities.............. sce eee eee Ginscuawies
Twenty-one. Other items .................. $i... . 8.
Total non-ledger assets .......... ccc eee Bese eswees
Gross assets 1.2.2... eee eee eee ees Bi wiw eases

(Deduct assets not admitted.)

One. Furniture, fixtures and safes, supplies,

printed matter, stationery, etcetera, $...... Sexicuceias
Two. Personal or agents’ debts debit balances

unsecured, $........ ; bills receivable unse-

cured, Be iescasecevis weve iw savexeawee Dw sa es wk
Three. Excess of items seventeen and eigh-

teen over charges in liabilities on same ac-

COUNT, bids swe a we Sas Hew ewe nd ew TRS Dog fais i a 5 Go baa bs
Four. Depreciation of ledger assets to bring

same to market value............ceeceeee $.......00.
Real estate, $............ ; bonds and stocks,

Bocce ccc cece ccc cece cece cee ec ce senee Besccececes
Five. Other items ......... 0.00 cc eee ee cece
ati sila Geet a mn cette ma masa hes A ea Bocceceeeee

Total non-admitted assets..............4. Sr

Total admitted assets..........0.e0c2000s :

Six. Non-Ledger Liabilities.

One. Losses on certificates due and unpaid,

Bans wew ve ; adjusted, not due, $.......... |
Two. Instalment of annuity benefits not due..$..........
Three. Losses on certificates not adjusted,

Sisavemiwws s resisted, $B. 6. ee. e cece nae $..........
Four. Salaries, rents, expenses, taxes, bills, ac-

counts, fees, etc., due and accrued......... :
Five. Advance assessments ............05. (Oe nie ee wees
All other liabilities—viz.: .............0005 ;

Total liabilities .......... “gin va we mee wins |

Balance to protect contracts.............. } eee
Seven. Exhibit of Certificates.

Total business during year. Business in Virginia during yea
Number........ Amount........ Number........ Amount...
Certificates in force December thirty-one (beginning of year) :

Ce rd

i rs

Death Losses and Claims.

No. Amount. No. Ar
Losses and claims unpaid December

thirty-one (beginning of year).... .... §$...... cwee 8
Losses and claims incurred during the
calendar year ...............-5. wees Ble. $.
TOtaL, oe 95 oe we woe ore wee oa cose Bue wens $.
Losses and claims paid during the
DL core Ble wsee $.
Losses and claims unpaid (December
thirty-one, end of year).......... sees Boe, §.

Disability Losses and Claims.
Losses and claims unpaid December

thirty-one (beginning of year).... .... $...... §
Losses and claims incurred during
the calendar year................ svee Bacwews wee 8.
Bota. oso. 5 i and ood and & gle Sed Hw ee ere eee 8.
Losses and claims paid during the
JOAl cseswscaivvscewsssvnwswwens sane Biswows cose 8.
Losses and claims unpaid December
thirty-one (end of year)......... B...... weee §,
State of .caiwscwsewiwsamsmass ; county Of. cccseeseceeeeeee,
ee ee president (or chief executive o!
ANG wicwsewewsenewaswew memos wes , secretary (or similar officer),
a: sie oe She fe en fo) oda eh «ond wi ote Leeseeeeeeesee Society, being duly sworn

for himself, deposes and says, that they are the above described «
of the said society, and that on the thirty-first day of December |
the above described assets were the absolute property of the said :
free and clear from any liens or claims thereon, except as above :
and that the foregoing statement of the assets, liabilities, income, a1
bursements, and of the condition and affairs of the said society |
said thirty-first day of December last, and for the year ending o
date, according to the best of their information, knowledge, and
respectively, are true and correct.
Cd

Ce ee cy

5. The auditor of public accounts, or the corporation commission, or
any person or persons appointed by them, shall, at the request of any
fraternal beneficiary order or association, or at their own volition, may
examine the books, accounts, and assets of any fraternal beneficiary as-
sociation, order, or society operating in this State, for the purpose of
verifying the annual report submitted, and all expenses incident thereto
as may be deemed reasonable by the auditor of public accounts, shall be
paid by such association, order, or society: provided, however, that in case
of fraternal beneficiary associations, orders, or societies organized under
the laws of another State, the auditor of public accounts may accept in
lieu of such examination, the examination of the insurance official of
said State, territory, or province, under the laws of which such associa-
tion, order, or society is organized and in which it has its home office.
In the event of examination, the auditor of public accounts shall furnish
to such association, order, or society a certificate as to the result of his
examination, and he shall furnish to domestic fraternal associations, or-
ders, or societies such certificates as may be required by the insurance
officials of other States in relation to their business with fraternal bene-
ficiary associations or orders chartered under the laws of this State.

6. Each such corporation, society, or association now doing or here-
after admitted to do business within this State, and not having its prin-
cipal office within this State, and not being organized under the laws of
this State, shall appoint, in writing, the auditor of public accounts, or
his successors in office, to be its true and lawful attorney, upon whom all
lawful process in any action or proceeding against it may be served, and
in such writing shall agree that any lawful process against it, which is
served on said attorney, shall be of the same legal force and validity as
if served upon the order or association, and that the authority shall con-
tinue in force so long as any liability remains outstanding in this State.
and such service in this State shall alone be a legal service. Copies of
such appointment, certified by said auditor of public accounts, shall be
deemed sufficient evidence thereof, and shall be admitted in evidence with
the same force and effect as the original thereof might be admitted.
Service upon such attorney shall be deemed sufficient service upon such
association. When legal process against any such order is served upon
the said auditor of public accounts, he shall immediately notify the order
of such service by letter, prepaid, and directed to its secretary or corre-
sponding officer, and he shall, within two days after such service, forward
in the same manner a copy of the process served on him to such officer.
The auditor of public accounts shall keep a record of all processes served
upon him, which record shall show the day and hour when such service
was made and by whom made.

%. The auditor of public accounts shall, upon the application of any
order, society, or association having the right to do business in this State.
as provided by this act, issue a permit in writing, authorizing it to do
business in this State, for which certificate and all proceedings in con-
nection therewith such order or association shall pay to the said auditor
of public accounts a fee of twenty dollars, which shall be in lieu of all
fees and license taxes, whether State, county, or municipal.

8. It shall be unlawful for any such order, association, or society to do
business in this State while it is in default in making said report to the
auditor of public accounts. The said auditor shall, within sixty days
after failure to make such report, and shall, in case any such order, as-
sociation, or society conduct its business fraudulently, or in any manner
fail to comply with this act, give notice of the same in writing to the
attorney-general, who shall immediately notify such order, association.
or society of such complaint and afford it reasonable opportunity on a day
named in such notice to show cause why proceedings to exclude it from
doing business in this State should not be instituted. If, upon such
hearing before him, the attorney-general be of the opinion that such
proceedings should be instituted, he shall forthwith institute the same.
And if the court, upon hearing, shall be of the opinion that such order,
association, or society has violated the provisions of this act or has con-
ducted its business fraudulently, the court shall enjoin it from doing
business in this State or may make any other order which the court may
deem proper in the premises.

Any officer, agent, or person attempting to secure new members for
any order, association, or society which has been excluded from doing
business in this State, shall be deemed guilty of a misdemeanor, and upon
conviction thereof shall be punished by a fine of not less than one hun-
dred dollars, and each act in violation of this provision shall be con-
stituted a separate offense.

9. Any person who shall act within this State as an officer, agent, or
otherwise, for any such fraternal beneficiary order or association in so-
liciting members, which shall have neglected or refused to comply with
this act, shall be subject to the penalty provided in the last preceding
section for the misdemeanor therein specified.

10. Whenever there shall be created under the laws of this State the
office of insurance commissioner, or other insurance official, designated
by any other name, then all the duties imposed in this act on the auditor
of public accounts, relating to fraternal beneficiary orders or associations,
shall be transferred to and exercised by such insurance commissioner, or
insurance official, by whatsoever name designated under the law.

11. No domestic fraternal beneficiary association, order or society shall
transfer its membership and assets to anv association, order, or society
or insurance corporation not licensed to do business in this State; nor
shall such transfer be made to any licensed society, order, association, or
corporation unless the agreement to so transfer has been approved by a
two-thirds vote of the members of the supreme body, or any other body
competent to act during recess of the supreme body of such association,
order or society whose membership is proposed to be transferred; and by
a two-thirds vote of the supreme body or any other body competent to
act during recess of supreme body of such order, association or society
proposing to accept such membership and assets. Any domestic fraternal
beneficiary association, order, or society may accept the membership and
assets of any other such organization upon such terms and conditions as
may be agreed upon by said governing body or bodies authorized to act
under the constitution and laws of such order, association, or society.

12. Any agent, physician, or other person who shall knowingly secure
or caused to be secured a certificate of membership on any person with-
out his knowledge or consent, or by means of misrepresentations, false,
fraudulent, or untrue statements be instrumental in securing a certificate
of membership on any aged or infirm person, or restoring to membership
any person not in an insurable condition, shall be deemed guilty of a mis-
demeanor, and upon conviction thereof shall be fined in a sum not less
than one hundred dollars nor more than one thousand dollars, or to be
imprisoned in a jail not less than thirty days nor more than one year, or
bo and the said certificate or renewal so secured shall be absolutely
void.

13. Nothing in this act shall be held to effect or to apply to grand or
subordinate lodges of masons, knights of pythias (endowment rank ex-
cepted), odd fellows, red men, junior order of American mechanics,
or similar orders that do not insure the lives of their members.