Chap. 420.—An ACT to provide whole family protection for members of
fraternal benefit societies. [li B 174]

Approved March 27, 1918.

1. Be it enacted by the general assembly of Virginia, That
any fraternal benefit society authorized to do business in this State
and operating on the lodge plan, may provide in its constitution
and by-laws, in addition to other benefits provided for therein, for
the payment of death or annuity benefits upon the lives of children
between the ages of two and eighteen years at next birthday, for
whose support and maintenance a member of such society is re-
sponsible. Any such society may at its option organize and operate
branches for such children and membership in local lodges and
initiation therein shall not be required of such children, nor shall
they have any voice in the management of the society. The total
benefits payable as above provided shall in no case exceed the follow-
ing amounts at ages at next birthday at time of death, respectively,
as follows: two, thirty-four dollars; three, forty dollars; four, forty-
eight dollars; five, fifty-eight dollars; six, one hundred and forty
dollars; seven, one hundred and sixty-eight dollars; eight, two
hundred dollars; nine, two hundred and forty dollars; ten, three
hundred dollars; eleven, three hundred and eighty dollars; twelve,
four hundred and sixty dollars; thirteen to fifteen, five hundred and
twenty dollars; and sixteen to eighteen, where not otherwise au-
thorized by law, six hundred dollars.

Sec. 2. No benefit certificate as to any child shall take effect
until after medical examination or inspection by a licensed medical
practitioner, in accordance with the laws of the society, nor shall
any such benefit certificate be issued unless the society shall simul-
taneously put in force at least five hundred such certificates, on each
of which at least one assessment has been paid, nor where the
number of lives represented by such certificate falls below five hun-
dred. The death benefit contributions to be made upon such certi-
ficate shall be based upon the “Standard industrial mortality table”
or the English life table number “six” and a rate of interest not
greater than four per centum per annum or upon a higher standard;
provided, that no contributions may be waived or returns may be
made from any surplus held in excess of reserve and other liabili-
ties, as provided in the by-laws; and provided further, that extra
contributions shall be made if the reserves hereafter provided for
become impaired.

Sec. 3. Any society entering into such insurance agreements
shall maintain on all such contracts the reserve required by the
standard of mortality and interest adopted by the society for com-
puting contributions as provided in section two, and the funds
representing the benefit contributions and all accretions thereon
shall be kept as separate and distinct funds, independent of the
other funds of the society, and shall not be liable for nor used for
the payment of the debts and obligations of the society other than
the benefits herein authorized; provided, that a society may provide
that when a child reaches the minimum age for initiation into mem-
bership in such society, any benefit certificate issued hereunder may
be surrendered for cancellation and exchanged for another form of
certificate issued by the society, provided that such surrender will
not reduce the number of lives insured in the branch below five
hundred, and upon the issuance of such new certificate any reserve
upon the original certificate herein provided for shall be transferred
to the credit of the new certificate. Neither the person who originally
made application for benefits on account of such child, nor the bene-
ficlary named in such original certificate, nor the person who paid
the contribution, shall have any vested right in such new certificate,
the free nomination of a beneficiary under the new certificate being
left to the child so admitted to benefit membership.

Sec. 4. An entirely separate financial statement of the busi-
ness transactions and of assets and liabilities arising therefrom shall
be made in its annual report to the insurance commissioner by any
society availing itself of the provisions hereof. The separation of
assets, funds and liabilities required hereby shall not be terminated,
rescinded or modified, nor shall the funds be diverted for any use
other than as specified in section three, as long as any certificates
issued hereunder remain in force, and this requirement shall be
recognized and enforced in any liquidation, reinsurance, merger or
other change in the condition or the status of the society.

Sec. 5. Any society shall have the right to provide in its
laws and the certificate issued hereunder for specified payments on
account of the expense or general fund, which payments shall or
shall not be mingled with the general fund of the society as its con-
stitution and by-laws may provide.

Sec. 6. In the event of the termination of membership in the
society by the person responsible for the support of any child on
whose account a certificate may have been issued, as provided herein,
the certificate may be continued for the benefit of the estate of the
child, provided the contributions are continued, or for the benefit of
any other person responsible for the support and maintenance of such
child, who shall assume the payment of the required contributions.