Chap. 229.—An ACT to amend and re-enact chapter 5 of an act entitled 22
act concerning the bureau of insurance, and insurance, guaranty, truit.
indemnity, fidelity, security, and fraternal benefit companies, associations,
societies and orders, and imposing penalties for its violation, approved
March 9, 1906, and acts amendatory thereof. (CS. B. 40.)

Approved March 24, 1914.

1. Be it enacted by the general assembly of Virginia, That
chapter five of an act entitled an act concerning the bureau of in
surance, and insurance, guaranty, trust, indemnity, fidelity, securits.
and fraternal benefit companies, associations, societies, and orders.
and imposing penalties for its violation, approved March ninth.
«i: nineteen hundred and six, and acts amendatory thereof, be amended ~
and re-enacted so as to read as follows:

Cuaprer V.

Sec. 1. Fraternal benefit societies defined.—Any corporation,
“society, order or voluntary association, without capital stock, pr-
ganized 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 representative form of govern-
‘ment, and which shall make provisions for the payment of benefits
in accordance with section five hereof, is hereby declared to be a
fraternal benefit society.

Sec. 2. Lodge system defined.—Any society having a supreme
,€0overning or legislative body and subordinate lodges or branches by
_ Whatever name known, into which members shall be elected, in-
_ dtiated and admitted in accordance with its constitution, laws, rules,
regulations, and prescribed ritualistic ceremonies, which subordinate
ludges 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.

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 constitution and laws for a supreme
legislative or governing body, composed of representatives elected
ul aither by the members or by delegates elected directly or indirectly by
“the members, together with such other members as may be pre-
“scribed by its constitution and laws; provided, that the elective
“members shall constitute a majority in number and have not less
v!'than two-thirds of the votes, nor less than the votes required to
amend its constitution and laws; and provided, further, that the
c’meetings of the supreme or governing body, and the election of
“officers, representatives or delegates shall be held as often as once
pee four years. The members, officers, representatives or delegates

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{\of a fraternal benefit society shall not vote by proxy.

Sec. 4. Exemptions.—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 rela-
sions with the State, but for every other purpose, and no law here- .

af Be

iter enacted shall apply to them, unless they be expressly designated

‘herein.

Sec. 5. Benefits—Sub-section 1. Every society transacting busi-
yess under this act shall provide for the payment of death benefits,
ind may provide for the payment of benefits in case of temporary
or permanent physical disability, either as the result of disease,

._ccident or old age; provided, the period of life at which the pay-
"nent of benefits for disability on account of old age shall commence,
gt ‘Shall not be under seventy years, and may provide for monuments

“yy tombstones to the memory of its deceased members und fo. che

5avment of funeral benefits. Such society chall have the nower to

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
benefit certificates for a term of years less than the whole of life
which are payable upon the death or disability of the member o-
curring within the term for which the benefit certifiate 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 percentum
per annum; provided, that this privilege shall not be granted except
to societies which have readjusted or may hereafter readjust ther
rates of contribution and to contracts affected by such readjustment.

Sub-section 2. Any society which shall show by the annual valua-
tion hereinafter provided for that it is accumulating and maintain-
ing the reserve not lower than the usual reserve computed by the
American experience table and four percentum 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.

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, step-
father, stepmother, stepchildren, children by legal adoption, or te
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 in-
stitution his beneficiary. Within the above restrictions each men-
ber shall have the right to designate his beneficiary, and, from tim
to time, have the same changed in accordance with the laws, rule
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 ant
- society may, by its laws, limit the scope of beneficiaries within the
above classes.

Sec. 7. Qualifications for membership.—Any society may admit
to beneficial membership any person not less than sixteen and n0
more than sixty years of age, who has been examined by a legallt
qualified physician and whose examination has been supervised ani
approved in accordance with the laws of the society; provided, that
any beneficiary member of such society who shall apply for a cer-
tificate providing for disability benefits, need not be required tt
pass an additional medical examination therefor. Nothing herei!
contained shall prevent such society from accepting general o
social members. |
: Sec. 8. Certificate—Every certificate issued by any such society
- Shall specify the amount of benefit provided thereby, and shall pro-
. Vide that the certificate, the charter or articles of incorporation, or,
-if a voluntary association, the articles of association, the consti-
- tution and laws of the society and the application for membership
. and medical examination, signed by the applicant, and all amend-
. ments 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
.1n 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.
; Sec. 9. Funds.—Sub-section 1. Any society may create, main-
_ tain, invest, disburse and apply an emergency, surplus or other
" similar fund in accordance with its laws. Unless otherwise pro-
. vided in the contract, such funds shall be held, invested, and dis-
’ bursed .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 of the surrender of any part thereof,
" except as provided in sub-section two of section five of this chapter.
‘ 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 society shall here-
‘ after be incorporated which does not provide for stated periodical
* contributions sufficient to provide for meeting the mortuary obliga-
‘ tions contracted, when valued upon the basis of the national fra-
- ternal congress table of mortality as adopted by the national fra-
‘ ternal congress, August twenty-third, eighteen hundred and ninety-
; nine, or any higher standard with interest assumption not more than
* four percentum 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 mor-
tuary obligations contracted when valued upon one of the bases
‘ ramed in section twenty-three-a of this bill and applicable there-
« under to such society. No society, domestic or foreign, shall here-
- after be incorporated or admitted to write or accept members for
* permanent disability benefits except upon tables based upon reliable
; experience with an interest assumption not higher than four per-
+ centum.
: Sub-section 2. Deferred payments or installments of claims
; shall be considered as fixed liabilities on the happening of the con-
, tingency 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 main-
tain a fund sufficient to meet such liability, regardless of proposed
future collections to meet any such liabilities.

Sec. 10. Investments.—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 in-
vests its funds in accordance with the Jaws of the State in which
it is incorporated, shall be held to meet the requirements of this
ect for the investment of funds.

Sec. 11. Distribution of funds.—Every provision of the laws
of the scciety 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 or any of said funds shall be used _ for
expenses.

Sec. 12. Organization.—F raternal benefit societies, as defined by
this chapter, may be incorporated under the provisions of chapter
four of the act entitled an act concerning corporations, which be-
came a law May twenty-first, nineteen hundred and three, except that
such fraternal benefit societies shall be subject to all the restrictions
and shall have all the powers in this chapter provided. The articles
cf incorporation and duly certified copies of the constitution and
laws, rules and regulations, and copies of all proposed forms of
benefit certificates, applications therefor and circulars to be issued
by such society, and a bond in the sum of two thousand five hun-
dred dollars, with sureties approved by the commissioner of in-
surance, conditioned upon the return of the advanced payments, as
provided in this section, to applicants, if the organization is not
completed within one year, shall be filed with the commissioner of
insurance, who may require such further information as he deems
necessary, and if the purposes of the society conform to the require-
ments of this chapter, and all-provisions of law have been complied
with, the commissioner of insurance shall so certify and retain and
record (or file) the articles of incorporation, and furnish the in-
corporators a preliminary certificate authorizing said society to
solicit members as hereinafter provided.

Upon receipt of said certificate from the commissioner of in-
surance, said society may solicit members for the purpose of com-
pleting its organization and shall collect from each applicant the
amount of not less than one regular monthly payment, in accordance
with its table of rates as provided by its constitution and laws, and
shall issue to each such applicant a receipt for the amount so col-
lected. But no such society shall incur any liability other than
for such advanced payments, nor issue any benefit certificate nor
pay or allow, or offer or promise to pay or allow, to any person any
death or disability benefit, until actual bona fide applications for
death benefit certificates have been secured upon at least two hundred
and fifty lives for at least one hundred thousand dollars of insurance
each, and all such applicants for death benefits shall have been
regularly examined by legally qualified practicing physicians, and
certificates of such examinations have been duly filed and approved
by the chief medical examiner of such society, nor until there shall
be established six subordinate lodges or branches into which said
two hundred and fifty applicants have been initiated, nor until there
has been submitted to the commissioner of insurance, under oath
of the president and secretary, or corresponding officers of such
society, a list of such applicants, giving their names, addresses,
date examined, date approved, date initated, name and number of
the subordinate branch of which each applicant is a member, amount
of benefits to be granted, rate of stated periodical contributions
which shall be sufficient to provide for meeting the mortuary obli-
gation, contracted, when valued for death benefits upon the basis of
the national fraternal congress table of mortality as adopted by the
national fraternal congress, August twenty-third, eighteen hundred
and ninety-nine, or any higher standard at the option of the society,
and for disability benefits by tables based upon reliable experience
and for combined déath and permanent total disability benefits by
tables based upon reliable experience, with an interest assumption
not higher than four percentum per annum, nor until it shall be
shown to the commissioner of insurance by the sworn statement of
the treasurer, or corresponding officer of such society, that at least
two hundred and fifty applicants have each paid in cash at least one
regular monthly payment as herein provided, which payments in the
aggregate shall amount to at least twelve hundred and fifty dollars,
all of which shall be credited to the mortuary or disability fund
on account of such applicants, and no part of which may be used
for expenses. .

Said advanced payments shall, during the period of organization,
be held in trust, and, if the organization is not completed within
one year as hereinafter provided, returned to said applicant.

The commissioner of insurance may make such examination and
require such further information as he deems advisable, and upon
presentation of satisfactory evidence that the society has complied
with all the provisions of law he shall issue to such society a cer-
tificate to that effect. Such certificate shall be prima facie evidence
of the existence of such society at the date of such certificate. The
commissioner of insurance shall cause a record of such certificate
to be made and a certified copy of such record may be given in evi-
dence with like effect as the original certificate.

No preliminary certificate granted under the provisions of this
section shall be valid after one year from its date, or after such
further period, not exceeding one year, as may be authorized by the
commissioner of insurance, upon cause shown, unless the two hun-
dred and fifty applicants herein required have been secured and the
organization has been completed as herein provided, and the article
of incorporation and all proceedings thereunder shall become nul!
und void in one year from the date of said preliminary certificate.
or at the expiration of said extended period, unless such society shal!
have completed its organization and commenced business as herein
provided.

The supreme legislative or governing body shall elect all the
cfficers, trustees, directors or other persons who are to have and
exercise the general control and management of the affairs ani
funds of the society, and the first election of such officers shall be
held not later than one year from the date of the issuance of the
permanent certificate.

Every such society shall have the power to make a constitution
and by-laws for the government of the society, the admission of it:
members, the management of its affairs and the fixing and readjust-
ing of the rates of contribution of its members from time to time:
and it shall have the power to change, alter, add to or amend such
constitution and by-laws and shall have such other powers as ar
necessary and incidental to carrying into effect the objects and pur-
poses of the society.

Sec. 18. Powers retained; reincorporation amendments.—Any
society now engaged in transacting business in this State may
exercise after the passage of this act, all of the rights conferred
thereby, and all of the rights, powers and privileges now exercised
or possessed by it under its charter or articles of incorporation not
inconsistent with this act, if incorporated; or, if it be a voluntary
association, it may incorporate hereunder. But no society already
organized shall be required to reincorporate hereunder. And sucl
society may amend its certificate of incorporation from time te
time in the manner provided by law, and a copy of all such amend-
ments shall be filed with the commissioner of insurance after the
same shall have been secured from the State corporation commission.

Sec. 14. Mergers and transfers.—No domestic society shall merg
with or accept the transfer of the membership or funds of any other
society unless such merger or transfer is evidenced by a contract
in writing, setting out in full the terms and conditions of such
merger or transfer, and filed with the commissioner of insurance of
this State, together with a sworn statement of the financial condi-
tion of each of said societies, by its president and secretary, or
. corresponding officers, and a certificate of such officers, duly verified
under oath of said officers of each of the contracting societies, that
such merger or transfer has been approved by a vote of two-third
of the members of the supreme legislative or governing body of eacli
of said societies.

Upon the submission of said contract, financial statements and
certificates, the commissioner of insurance shall examine the same.
said contract to be in conformity with the provisions of this section,
and that such merger or transfer is just and equitable to the members
of each of said societies, he shall approve said merger or transfer,
issue his certificate to that effect and thereupon the said contract of
merger or transfer shall be of full force and effect.

In case such contract is not approved, the fact of its submission
and its contents shall not be disclosed by the commissioner of in-
surance.

Sec. 15. Annual license.—Societies which are now authorized to
transact business in this State may continue such business until the
first day of May next succeeding the passage of this act, and the
authority of such societies may thereafter be renewed annually, but
in all cases to terminate on the first day of the succeeding May,
provided, however, the license shall continue in full force and effect.
until the new license be issued or specifically refused. For each such
license or renewal the society shall pay the commissioner of in-
surance twenty dollars. A duly certified copy or duplicate of such
license shall be prima facie evidence that the license is a fraternal
benefit society within the meaning of this chapter.

Sec. 16. Admission of foreign society——No foreign society now
transacting business, organized prior to the passage of this act,
which is not now authorized to transact business in this State, shall
transact any business herein until it has complied with the provisions
of the general law of this State in regard to the admission of for-
eign corporations, and has procured a license from the commissioner
of insurance. Any such society, having complied with such general
law in regard to the admission of foreign corporations, shall be en-
titled to a license to transact business within this State upon filing
with the commissioner a duly certified copy of its charter or articles
of association; a copy of its constitution and laws, certified by the
secretary or corresponding officer, a power of attorney to the commis-
sioner, as’ hereinafter provided; a statement of its business under
cath of its president and secretary, or corresponding officers, in the
form required by the commissioner, duly verified by an examina-
tion made by the supervising insurance official of its home State or
other State satisfactory to the commissioner of insurance of this
State; a certificate from the proper official in its home State, prov-
ince or country, that the society is legally organized; a copy of its
contract, which must show that benefits are provided for by periodi-
cal, or other payments by persons holding similar contracts, and
upon furnishing the commissioner such other information as he may
deem necessary to a proper exhibit of its business and plan of work-
ing, and upon showing that its assets are invested in accordance
with the laws of the State, territory, district, province or country
where it is organized he shall issue a license to such society to do
business in this State until the first day of the succeeding May, and
such license shall, upon compliance with the provisions of this act,
the succeeding May, provided, however, that license shall continue 1n
full force and effect until the new license be issued or specifically re-
fused. Any foreign society desiring admission to this State shall have
the qualifications required of domestic societies organized under this
chapter, upon a valuation by any one of the standards authorized in
section twenty-three-a of this act, and have its assets invested as
required by the laws of the State, territory, district, country or
province where it is organized. For each such license or renewal
the society shall pay the commissioner twenty dollars. When the
commissioner refuses to license any society, or revokes its authority
to do business in this State, he shall reduce his ruling, order or
decision to writing and file the same in his office, and shall furnish a
copy thereof, together with a statement of his reasons, to the officers
of the society, upon request, and the action of the commissioner shall
reviewable by the State corporation commission, and should the
State corporation conimission sustain the action of the commissioner
of insurance, the said society shall have the right of appeal to the
supreme court of appeals of this State; provided, however, that
nothing contained in this or the preceding section shall be taken or
construed as preventing any such society from continuing in good
faith all contracts made in this State during the time such society
was legally authorized to transact business herein.

Sec. 17. Power of attorney and service of process.—Every
society, whether domestic or foreign, now transacting business in this
State shall, within thirty days after the passage of this act, and
every such society hereafter applying for admission, shall, before
being licensed, appoint in writing the commissioner of insurance
and his successors in office to be its true and lawful attorney, upon
whom all legal process in any action or proceeding against it shall
be served, and in such writing shall agree that any lawful process
against it which is served upon such attorney shall be of the same
legal force and validity as if served upon the society and that the
authority shall continue in force so long as any liability remains
outstanding in this State.

Copies of such appointment, certified by said commissioner of
insurance, shall be deemed sufficient evidence thereof and shall be ad-
mitted in evidence with the same force and effect. as the original
thereof might be admitted. Service shall only be made upon such
attorney, must be made in duplicate upon the commissioner of in-
surance, or in his absence upon the person in charge of his office,
and shall be deemed sufficient service upon such society; provided,
however, that no such service shall be valid or binding against any
society when it is required thereunder to file its answer, pleading
or defense in less than thirty days from the date of mailing the
copy of such service to such society. When legal process against
any such society is served upon said commissioner of insurance he
shall forthwith forward by registered mail one of the duplicate
Legal process shall not be served upon any such society except in
the manner provided herein.

Sec. 18. Place of meeting; location of office—Any domestic
society may provide that the meetings of its legislative or governing
body may be held in any State, district, province or territory
wherein such society has subordinate branches, and all business
transacted at such meetings shall be as valid in all respects as if
such meetings were held in this State. But its principal office shall
be located in this State.

Sec. 19. No personal liability—Officers and members of the
supreme, grand or any subordinate body of any such incorporated
society shall not be individually liable for the payment of any dis-
ability or death benefit: provided for in the laws and agreements
of such society, but the same shall be payable only out of the funds
of such society and in the manner provided by its laws.

Sec. 20. Waiver of the provisions of the laws.—The constitution
and laws of the society may provide that no subordinate body, nor
any of its subordinate officers or members shall have the power or
authority to waive any of the provisions of the laws and constitu-
tion of the society, and the same shall be binding on the society and
each and every member thereof and on all beneficiaries uf men.vers.

Sec. 21. Benefits not attachable—No money or other benefit,
charity or relief or aid to be paid, provided or rendered by any
such society shall be liable to attachment, garnishment or other
process, or be seized, taken, appropriated or applied by any legal
or equitable process or operation of law to pay any debt or liability
of a member or beneficiary, or any other person who may have a
right thereunder, either before or after payment.

Sec. 22. Constitution and laws; amendment.—Every society
transacting business under this chapter shall file with the commis-
sioner of insurance a duly certified copy of all amendments of or
addition to its constitution and laws within ninety days after the
enactment of the same. Printed copies of the constitution and laws
as amended, changed or added to, certified by the secretary or cor-
responding officer of the society shall be prima facie evidence of the
legal adoption thereof.

Sec. 23. Annual reports——Every society transacting business
in this State shall annually, on or before the first day of March,
file with the commissioner of insurance, in such form as he may
require, a statement under oath of its president and secretary or
corresponding officers, of its condition and standing on the thirty-
first day of December next preceding, and of its transactions for the
year ending on that date, and also shall furnish such other informa-
tion as the commissioner may deem necessary to a proper exhibit
of its business and plan of working. The commissioner may at
cther times require any further statement he may deem necessary
report herein required, each society shall annually report to the
commissioner a valuation of its certificates in force on December
thirty-first, last preceding excluding those issued within the year
for which the report is filed, in cases where the contributions for
the first year in whole or in part are used for current mortality and
expenses, provided the first report of valuation shall be made as
of December thirty-first, nineteen hundred and fourteen. Such
report of valuation shall show, as contingent liabilities, the present
mid-year value of the promised benefits provided in the constitution
and laws of such society under certificates then subject to valuation:
and, as contingent assets, the present mid-year value of the future
net contributions provided in the constitution and laws as the same
are in practice actually collected. At the option of any society, in
lieu of the above, the valuation may show the net value of the cer-
tificates subject to valuation hereinbefore provided and said net
value, when computed in case of monthly contributions, may be
the mean of the terminal value for the end of the preceding and
of the current insurance years.

Such valuation shall be certified by a competent accountant or
actuary, or at the request and expense of the society, verified by the
actuary of the department of insurance of the home State of the
society, and shall be filed with the commissioner within ninety days
after the submission of the last preceding annual report. The legal
minimum standard of valuation for all certificates, except for dis-
ability benefits, shall be the national fraternal congress table of
mortality as adopted by the national fraternal congress, August
twenty-third, eighteen hundred and ninety-nine, or, at the option of
the society, any higher table, or, at its option, it may use a table
based upon the society’s own experience of at least twenty years
and covering not less than one hundred thousand lives with interest
assumption not more than four percentum per annum. Each such
valuation report shall set forth clearly and fully the mortality and
interest basis and the method of valuation. Any society providing
for disability benefits shall keep the net contributions for such bene-
fits in a fund separate and apart from all other benefit and expense
funds and the valuation of all other business of the society; pro-
vided that here a combined contribution table is used by a society
for both death and permanent total disability benefits, the valuation
shall be according to tables of reliable experience and in such case
a separation of the funds shall not be required.

The valuation herein provided for shall not be considered or
regarded as a test of the financial solvency of the society, but each
society shall be held to be legally solvent so long as the funds in its
possession are equal to or in excess of its matured liabilities.

Beginning with the year nineteen hundred and fifteen a report,
of such valuation and an explanation of the facts concerning the
condition of the society thereby disclosed shall be printed and mailed
to each beneficiary member of the society not later than June first
of each year, or in lieu thereof, such report of valuation and show-
ing of the society’s condition as thereby disclosed may be published
in the society’s official paper and the issue containing the same
mailed to each beneficiary member of the society. The laws of such
society shall provide that if the stated periodical contributions of
the members are insufficient to pay all matured death and dis-
ability claims in full and to provide for the creation and mainte-
nance of the funds required by its laws, additional. increased or
extra rates of contribution shall be collected from the members to
meet such deficiency and such laws may provide that, upon the
written application or consent of the member, his certificate may
be charged with its proportion of any deficiency disclosed by valua-
tion, with interest not exceeding five percentum per annum.

Sec. 23-a. Provisions to insure future security——If the valua-
tion of the certificates, as hereinbefore provided. on December
thirty-first, nineteen hundred and seventeen, shall show that the
present value of future net contributions, together with the ad-
mitted assets, is less than the present value of the promised benefits
and accrued liabilities, such society shall thereafter maintain said
financial condition at each succeeding triennal valuation in respect
of the degree of deficiency as shown in the valuation as of December
thirty-first, nineteen hundred and seventeen. If at any succeeding
triennial valuation such society does not show at least the same con-
dition, the commissioner shall direct that it thereafter comply with
the requirements herein specified. If the next succeeding triennial
valuation after the receipt of such notice shall show that the society
has failed to maintain the condition required herein, the commis-
sioner may, in the absence of good cause shown for such failure,
institute proceedings for the dissolution of such society, in accord-
ance with the provisions of section twenty-four of this act, or in
the case of a foreign society, its license may be cancelled in the
manner provided in this act.

Any such society, shown by any triennial valuation, subsequent
to December thirty-first, nineteen hundred and seventeen, not to
have maintained the condition herein required shall, within two
years thereafter, make such improvement as to show a percentage of
deficiency not greater than as of December thirty-first, nineteen
hundred and seventeen, or thereafter, as to all new members ad-
mitted, be subject, so far as stated rates of contributions are con-
cerned, to the provisions of section twelve of this act, applicable in
the organization of new societies; provided that the net mortuary
or beneficiary contributions and funds of such new members shall
be kept separate and apart from the other funds of the society. If
such required improvement is not shown by the succeeding triennial
valuation, then the said new members may be placed in a separate
class and their certificates valued as an independent society, in
respect of contributions and funds.
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Sec. 23-b. In lieu of the requirements of section twenty-three
and twenty-three-a any society accepting in its laws the provisions
of this section may value its certificates on a basis, herein designated
“accumulation basis,” by crediting each member with the net annual
contributed for each year and with interest at approximately the
net rate earned and by charging him with his share of the losses
for each year, herein designated “cost of insurance” and carrying
the balance, if any, to his credit. The charge for the cost of in-
surance may be according to the actual experience of the society
applied to a table of mortality recognized by the law of this State,
and shall take into consideration the amount at risk during each
year, which shall be the amount payable at death less the credit to
the member. Except as specifically provided in its articles or laws
cr contracts no charge shall be carried forward from the first valua-
tion hereunder against any member for any past share of losses
exceeding tNe contributions and credit. If, after the first valuation
any member’s share of losses for any year exceeds his credit includ-
ing the contribution for the year, the contribution shall be increased
to cover his share of the losses, and if the credit at the time any
benefit becomes payable during the life time of the member, includ-
ing any available funds, does not equal such benefit, the contribu-
tions to be made by him or on his behalf shall be increased by the
difference. Any such excess share of losses chargeable to any mem-
ber may be paid out of a fund or contributions especially created
or required for such purpose.

Any member may transfer to any plan adopted by the society
with net rates on which tabular reserves are maintained and on
such transfer shall be entitled to make such application of his
credit as provided in the laws of the society.

Certificates issued, rerated or readjusted on a basis providing
for adequate rates with adequate reserves to mature such certificates
upon assumption for mortality and interest recognized by the law
of this State shall be valued on such basis, herein designated the
“tabular basis,” provided that if on the first valuation under this
section a deficiency in reserve shall be shown for any such certifi-
cate, the same shall be valued on the accumulaticn basis.

Whenever in any society having members upon the tabular basis
and upon the accumulation basis, the total of all costs of insurance
provided for any year shall be insufficient to meet the actual death
and disability losses for the year, the deficiency shall be met for
the year frcm the available funds after setting aside all credits in
the reserve; or from increased contributions, or by an increase in
the number of assessments applied to the society as a whole or to
classes of members as may be specified in its laws. Savings from a
lower amount of death losses may be returned in like manner as
may be specified in its laws.

If the laws of the society so provide, the assets representing the
reserves of any separate class of members may be carried separately
for such class as if in an independent society, and the required re-
serve accumulation of such class so set apart shall not thereafter
be mingled with the assets of other classes of the society.

A table showing the rates being paid by and the credits to in-
dividual members at each age and year of entry, and showing op-
posite each credit the tabular rates and the tabular reserve required,
or at the option of the society the required reserve on a level rate
equivalent to that being paid, according to assumptions for mortal-
ily and interest recognized by the laws of this State and adopted
by the society, and, in either case, including any benefit payable at
a specified age or on account of old age disability, shall be filed by
the society with each annual report and also be furnished to each
member before July first of each year.

In lieu of the aforesaid statement there may be furnished to each
member within the same time a statement giving the data aforesaid
for such member. No table or statement need be made or furnished
when the reserves are maintained on the tabular basis.

Nothing herein contained shall prevent the maintenance of such
surplus over and above the credits on the accumulation basis, and
the society may prescribe by or pursuant to its laws, and the reserve
on the tabular basis; nor be construed as giving to the individual
member any right or claim to any such reserve or credit other than
in manner as expressed in the contract and in its laws; nor as mak-
ing any such reserve or credits a liability in determining the legal
solvency of the society.

Sec. 24. Examination of domestic societies——The commissioner
cf insurance, or any person he may appoint, shall have the power
of visitation and examination into the affairs of any domestic
society. He may employ assistants for the purpose of such exam-
ination, and he, or any person he may appoint, shall have free access
to all the books, papers and documents that relate to the business of
the society and may summon and qualify as witness under oath and
examine its officers, agents and employees or other persons in rela-
tion to the affairs, transactions and condition of the society.

The expense of such examination shall be paid by the society
examined, upon statement furnished by the commissioner of in-
surance, and the examination shall be made at least once in three
years.

Whenever after examination the commissioner of insurance is
satisfied that any domestic society has failed to comply with any
provisions of this chapter, or is exceeding its powers, or is not
carrying out its contracts in good faith, or is transacting business
fraudulently, or whenever any domestic society, after the existence
of two years or more, shall have a membership of less than four
hundred (or shall determine to discontinue business), the commis-
sioner of insurance may present the facts relating thereto to the
attorney general, who shall, if he deem the circumstances warrant,
commence an action in quo warranto in a court of competent juris
diction, and such court shall thereupon notify the officers of such
society of a hearing, and if it shall then appear that such society
should be closed, said society shall be enjoined from carrying on
any further business and some person shall be appointed receiver
of such society, and shall proceed at once to take possession of the
books, papers, moneys and other assets of the society and shall
forthwith, under the direction of the court, proceed to close the
affairs of the society and to distribute its funds to those entitled
thereto.

No such proceedings shall be commenced by the attorney general
against any such society until after notice has been duly served on
the chief executive officers of the society and a reasonable oppor-
tunity given to it, on a date to be named in said notice, to show
cause why such proceedings should not be commenced.

Sec. 25. Application for receiver, et cetera.—No application for
injunction against or proceedings for the dissolution of or the ap-
pointment of a receiver for any such domestic society or branch
thereof shall be entertained by any court in this State unless the
same is made by the attorney general.

Sec. 26. Examination of foreign societies—The commissioner
of insurance, or any person whom he may appoint, may examine any
foreign society transacting or applying for admission to transact
business in this State. The said commissipner may employ as-
sistants, and he, or any person he may appoint, shall have free
access to all the books, papers and documents that relate to the
business of the society, and may summon and qualify as witness
under oath and examine its officers, agents and employees and other
persons in relation to the affairs, transactions and conditions of the
society. He may, in his discretion, accept in lieu of such examina-
tion the examination of the insurance department of the State,
territory, district, province or country where such society is or-
ganized. The actual expenses of examiners making any such ex-
amination shall be paid by the society upon statement furnished
by the commissioner of insurance.

If any such society or its officers refuse to submit to such exam-
ination or to comply with the provisions of the section relative
thereto, the authority of such society to write new business in this
State shall be suspended or license refused until satisfactory evi-
dence is furnished the commissioner relating to the condition and
affairs of the society, and during such suspension the society shall
not write new business in this State.

Sec. 27. No adverse publications.—Pending, during or after an
examination or investigation of any such society, either domestic or
foreign, the commissioner of insurance, shall make public no finan-
- cial statement, report or finding, nor shall he permit to become public
any financial statement, report or finding affecting the status, stand-
ing or rights of any such society, until a copy thereof shall have
been served upon such society, at its home office, nor until such
society shali have been afforded a reasonable opportunity to answer
any such financial statement, report or finding and to make such
showing in connection therewith as it may desire.

Sec. 28. Revocation of license—When the commissioner of in-
surance on investigation, is satisfied that any foreign society trans-
acting business under this chapter has exceeded its powers, or has
failed to comply with any provisions of this chapter, or is conduct-
ing business fraudulently, or is not carrying out its contracts in
good faith, he shall notify the society of his findings, and state in
writing the grounds of his dissatisfaction, and after reasonable
notice, require said society, on a date named, to show cause why its
license should not be revoked. If on the date named in said notice
such objections have not been removed to the satisfaction of the said
commissioner, or the society does not present good and sufficient
reasons why its authority to transact business in this State should
not at that time be revoked, he may revoke the authority of the
society to continue business in this State. All decisions and findings
of the commissioner made under the provisions of this section may
be reviewed, as provided in section sixteen of this chapter.

Sec. 29. Exemptions of certain societies—Nothing contained in
this act shall be construed to affect or apply to grand or subordinate
lodges of Masons, Odd Fellows or Knights of Pythias (exclusive
of the insurance department of the supreme lodge Knights of
Pythias) and the Junior Order of United American Mechanics
(exclusive of the beneficiary degree or insurance branch of the na-
tional council, Junior Order United American Mechanics) or so-
cieties which limit their membership to any one hazardous occupa-
tion, nor to similar societies which do not issue insurance certificates,
nor to an association of local lodges of a society now doing business
in this State, which provides death benefits not exceeding five hun-
dred dollars to any one person, or disability benefits not exceeding
three hundred dollars in any one year to any one person, or both,
nor to any contracts of reinsurance business on such plan in this
State, nor to domestic societies which limit their membership to the
employees of a particular city or town, designated firm, business
house or corporation, nor to domestic lodges, orders or associations
of a purely religious, charitable and benevolent description, which
do not provide for a death benefit of more than one hundred dollars,
or for disability benefits of more than one hundred and fifty dollars
to any one person in any one year. The commissioner of insurance
may require from any society such information as will enable him
to determine whether such scciety is exempt from the provisions of
this chapter.

Any fraternal benefit society, heretofore organized and incor-
porated and operating within the definition set forth in sections
ene, two and three of this chapter providing for benefits in case of
death or disability resulting solely from accidents, but which does
not oblicvate itself to nav death or cick henefits. mav he lieenced wndar
the provisions of this chapter, and shall have all the privileges and
shall be subject to all the provisions and regulations of this chapter,
except that the provisions of this chapter requiring medical exam-
inations, valuations of benefit certificates, and that the certificate
shall specify the amount of benefit, shall not apply to such society.

Sec. 20. Taxation—Every fraternal benefit society organized
or licensed under this chapter is hereby declared to be a charitable
and benevolent institution, and all of its funds shall be exempt from
all and every State, county, district, municipal and school tax, other
than taxes on real estate and office equipment.

Sec. 31. Penalties—Any person, officer, member or examining
physician of any society authorized to do business under this chapter
who shall knowingly or wilfully make any false or fraudulent
statement or representation in or with reference to any application
for membership, or for the purpose of obtaining money from or
benefit in any society transacting business under this chapter, shall
be guilty of a misdemeanor, and upon conviction thereof shall be
punished by a fine of not less than one hundred dollars nor more
than five hundred dollars, or imprisonment in the county jail for
not less than thirty days nor more than one year, or both, in the
discretion of the court; and any person who shall wilfully make
a false statement of any material fact or thing in a sworn statement
as to the death or disability of a certificate holder in any such so-
ciety for the purpose of procuring payment of a benefit nanied in
the certificate of such holder, and any person who shall wilfully
make any false statement in any verified report or declaration under
oath required or authorized by this chapter, shall be guilty of per-
jury, and shall be proceeded against and punished as provided by
the statutes of this State in relation to the crime of perjury.

Any person who shall solicit membership for, or in any manner
assist In procuring membership in any fraternal benefit society not
licensed to do business in this State, or who shall solicit membership
for, or in any manner assist in procuring membership in any such
society not authorized as herein provided, to do business as herein
defined in this State, shall be guilty of a misdemeanor and upon
conviction thereof shall be punished by a fine of not less than fifty
nor more than two hundred dollars. Any society or any officer,
‘ agent or employee thereof neglecting or refusing to comply with,
or violating any of the provisions of this chapter, the penalty for
which neglect, refusal or violation is not specified in this section,
shall be fined not exceeding two hundred dollars upon conviction
thereof.

* Sec. 32. All acts and parts of acts inconsistent with this act
are hereby repealed.