Organization: Solicitation of members; collection of advance premiums; reports to Commissioner.
1. Upon receipt of a preliminary certificate of authority from the Commissioner, the society:
(a) May solicit members for the purpose of completing its organization;
(b) Shall collect from each applicant the amount of not less than one regular monthly premium in accordance with its table of rates; and
(c) Shall issue to each applicant a receipt for the amount collected.
2. A society shall not incur any liability other than for the return of an advance premium, or issue any certificate, or pay, allow, or offer or promise to pay or allow, any death or disability benefit to any person until:
(a) Actual bona fide applications for benefits have been secured aggregating at least $500,000 on not less than 500 applicants, and all required evidence of insurability has been furnished to and approved by the society;
(b) Not less than 10 subordinate lodges have been established into which the 500 applicants have been admitted;
(c) There has been submitted to the Commissioner, under oath of the president or secretary, or corresponding officer of the society, a list of the applicants, giving their names and addresses, the date each was admitted, the name and number of the subordinate lodge of which each applicant is a member, the amount of benefits to be granted and the premiums therefor; and
(d) It has been shown to the Commissioner, by sworn statement of the treasurer or corresponding officer of the society, that at least 500 applicants have each paid in cash at least one regular monthly premium as provided in this chapter, which premiums in the aggregate must amount to at least $150,000.
3. The advance premiums provided for in subsection 2 must be held in trust during the period of organization and if the society has not qualified for a permanent certificate of authority within 1 year, as provided in this chapter, the premiums must be returned to the applicants.
Last modified: February 27, 2006