Terms and conditions of benefit contracts.
1. Every society authorized to do business in this state shall issue to each owner of a benefit contract a certificate specifying the amount of benefits provided thereby. The certificate, together with any riders or endorsements attached thereto, the laws of the society, the application for membership, the application for insurance and the declaration of insurability, if any, signed by the applicant, and all amendments to each thereof, constitute the agreement, as of the date of issuance, between the society and the member, and the certificate must so state. A copy of the application for insurance and the declaration of insurability, if any, must be endorsed upon or attached to the certificate.
2. All statements on an application for insurance are representations and not warranties. Any waiver of this provision is void.
3. Except with regard to contracts providing benefits payable in variable amounts, any changes, additions or amendments to the laws of the society duly made or enacted after the issuance of the certificate bind the owner and the beneficiaries, and govern and control the benefit contract as though the changes, additions or amendments were in force at the time of the application for insurance, except that no change, addition or amendment may destroy or diminish benefits which the society contracted to give the owner as of the date of issuance.
4. Any person upon whose life a benefit contract is issued before he attains the age of majority is bound by the terms of the application and certificate and by all the laws and rules of the society as though the age of majority had been attained at the time of application.
5. Copies of any of the documents mentioned in this section, certified by the secretary or corresponding officer of the society, must be received in evidence of the terms and conditions thereof.
6. Except with regard to contracts providing benefits payable in variable amounts, a society shall provide in its laws that if its reserves as to all or any class of certificates become impaired, its supreme governing body or board of directors may require each owner of such certificates to pay to the society the amount of his equitable proportion of such deficiency as ascertained by its board, and that if the payment is not made, the owner may elect to:
(a) Let it stand as an indebtedness against the certificate and draw interest at a rate not to exceed that specified for loans made pursuant to the certificates; or
(b) In lieu of, or in combination with paragraph (a), accept a proportionate reduction in benefits under the certificate.
ÊThe society may specify the manner of the election and which alternative is to be presumed if no election is made by the owner.
Last modified: February 27, 2006