83-29-21 - Organization.
§ 83-29-21. Organization.
Seven or more persons, citizens of the United States and a majority of whom are citizens of this state, who desire to form a fraternal benefit society, as defined by this chapter, may make, sign, giving their addresses, and acknowledge, before some officer competent to take acknowledgment of deeds, article of incorporation in which shall be stated:
(a) The proposed corporate name of the society, which shall not so closely resemble the name of any society or insurance company already transacting business in this state as to mislead the public or to lead to confusion;
(b) The purpose for which it is formed-which shall not include more liberal powers than are granted by this chapter, provided that any lawful social, intellectual, educational, charitable, benevolent, moral, or religious advantages may be set forth among the purposes of the society-and the mode in which its corporate powers are to be exercised;
(c) The names, residences, and official titles of all the officers, trustees, directors, or other persons who are to have and exercise the general control and management of the affairs and funds of the society for the first year or until the ensuing election at which all such officers shall be elected by the supreme legislative or governing body, which election shall be held not later than one year from the date of the issuance of the permanent certificate.
Such articles of incorporation, duly certified copies of the constitution and laws, rules and regulations, copies of all proposed forms of benefit certificates, applications therefor, circulars to be issued by such society, and a bond in the sum of five thousand dollars ($5,000.00), with sureties approved by the commissioner of insurance, conditioned upon the return, as provided in this section, of the advance payments 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. If the purposes of the society conform to the requirements 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 incorporators a preliminary certificate authorizing said society to solicit members as hereinafter provided.
Upon receipt of said certificate from the commissioner of insurance, said society may solicit members for the purpose of completing 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 collected. 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 five hundred lives for at least one thousand dollars 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 ten subordinate lodges or branches into which said five hundred 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 initiated, 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 meet the requirements of subsection 1 of Section 83-29-19, 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 five hundred applicants have each paid in cash at least one regular monthly payment as herein provided for one thousand dollars of indemnity to be effected, which payments in the aggregate shall amount to at least twenty-five hundred 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 applicants.
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 certificate 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 evidence 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 five hundred applicants herein required have been secured and the organization has been completed as herein provided. The articles of incorporation and all proceedings thereunder shall become null and void in one year from the date of said preliminary certificate, or at the expiration of said extended period, unless such society shall have completed its organization and commenced business as herein provided. When any domestic society shall have discontinued business for the period of one year, or has less than 400 members, its charter shall become null and void.
Every such society shall have the power to make a constitution and bylaws for the government of the society, the admission of its members, the management of its affairs, and the fixing and readjusting 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 bylaws and have such other powers as are necessary and incidental to carrying into effect the objects and purposes of the society.
Sources: Codes, 1930, § 5241; 1942, § 5755.