Chap. 207.—An ACT relating to the reorganization of fraternal benefit societies
into mutual life insurance companies. [S B 9]

Approved March 14, 1928

1. Be it enacted by the general assembly of Virginia, That any
domestic fraternal benefit society organized or operating under the
laws of this State providing for the regulation and control of frater-
nal benefit societies, may, upon a two-thirds vote of its supreme
legislative and governing body, amend its articles of incorporation
and laws if already incorporated, or, if not incorporated, may in-
corporate, in such manner as to transform itself into a mutual life
insurance company with the name by which it is already known,
or another name, as its supreme legislative and governing body
shall determine, provided that the proposed plan for reorganiza-
tion or reincorporation shall be submitted to and approved by the
State corporation commission of this State; and upon so doing, and
upon procuring from the State corporation commission a certificate
of authority as prescribed by law to transact business in this State
as a mutual life insurance company, it shall incur the obligations
and enjoy the benefits thereof the same as though originally thus
incorporated; and such corporation under its articles and by-laws
as so framed or amended shall be a continuation of the original
organization, and the officers thereof shall serve through their re-
spective terms as provided in the original articles and laws, but their
successors shall be elected and serve as the laws of this State and
the articles of incorporation, and/or by-laws of such company as
thus reorganized provide; but such incorporation, amendment or
reincorporation shall not affect existing suits, rights or contracts.
The organization so reorganized shall have the power, after re-
organization, to transact business of the same nature transacted
1928] ACTS OF ASSEMBLY 702

bv it before reorganization, as well as the powers conferred hereby
and contemplated by its articles of incorporation, in order to pro-
tect and perform rights and contracts existing before reorganiza-
tion, but all new business written shall be as a mutual life insur-
ance company.

2. All assets, other than general or expense fund assets, belong-
ing to-any such company so reorganized, prior to reorganization or
arising or accruing from benefit certificates issued prior to such
reorganization, shall be used only for the benefit of the holders of
such benefit certificates and/or their beneficiaries. If at the time of
reorganization, or at any time thereafter, it shall appear from the
last preceding annual report of any such organization, filed with
the State corporation commission, or as the result of any investiga-
tion made by said State corporation commission, that the present
value of the contributions to be received from the holders of such
benefit certificates, together with all assets, other than general or
expense fund assets, owned by the company that have been ac-
cumulated from payments made by members holding such certi-
ficates, are not equal to the present value of the benefits thus
promised to be paid, including all matured liabilities on any such
benefit certificates, then, the company so reorganized shall estab-
lish, provide for, and maintain a fund, which with said present
value of contributions and assets will equal the present value of
said benefits, together with all matured liabilities. Said fund shall
be used for the payment of matured liabilities arising on said bene-
fit certificates when other assets applicable thereto are exhausted.
Said fund need not be maintained when not required by conditions
as herein expressed. Members in good standing in any such society
prior to reorganization, shall have the right after reorganization
to transfer their insurance in said company to the mutual life plan
without further medical examination for the same or a less amount,
and at legal reserve or level premium rates. The interest in the
assets of the company of any person so transferring, as determined
by the board of directors, trustees or corresponding body, shall be
transferred to, and be a part of, the assets of such company on
the legal reserve or level premium plan.

3. The company so reorganized, and its officials, shall exercise
all the rights and powers and perform all the duties conferred or
imposed by law upon organizations writing the kinds of insurance
written by said company so reorganized. Such organization and its
officials shall exercise all the rights and powers and have full au-
thority to perform all the duties necessary to protect rights and
contracts existing prior to reorganization. The State corporation
commission shall exercise the powers and discharge the duties con-
cerning any such company so reorganized that are applicable to
companies writing insurance or issuing policies of the same class,
organized or operating in this State. The State corporation com-
mission shall issue a certificate of authority to any such company
so reorganized which is in a solvent condition and has fully com-
plied with the laws of this State, to transact such insurance busi-
ness in this State.

4. Any fraternal benefit society reorganized to transact a mutual
life insurance business as above provided, shall value its beneft
certificates according to the standard of valuation for fraternal bene-
fit societies used in this State, and its legal reserve or level premium
policies according to the standard of valuation thereof in this State.
The various kinds of insurance shall be governed by the law ap-
plicable thereto.

5. The expense of operation and maintenance of a company so
reorganized shall be apportioned between those holding benefit
certificates issued before such reorganization and those holding
policies issued after such reorganization as may be determined from
time to time by the board of directors, trustees or corresponding

ody.