§ 27-25-19 - The benefit contract.
SECTION 27-25-19
§ 27-25-19 The benefit contract. –(a) Every society authorized to do business in this state shall issue to eachowner of a benefit contract a certificate specifying the amount of benefitsprovided by the contract. The certificate, together with any riders orendorsements attached to it, the laws of the society, the application formembership, the application for insurance and declaration of insurability, ifany, signed by the applicant, and all amendments to each, shall constitute thebenefit contract, as of the date of issuance, between the society and theowner, and the certificate shall state this. A copy of the application forinsurance and declaration of insurability, if any, shall be endorsed upon orattached to the certificate. All statements on the application shall berepresentations and not warranties. Any waiver of this provision shall be void.
(b) Any changes, additions, or amendments to the laws of thesociety duly made or enacted subsequent to the issuance of the certificate,shall bind the owner and the beneficiaries, and shall govern and control thebenefit contract in all respects the same as though those changes, additions,or amendments had been made prior to and were in force at the time of theapplication for insurance, except that no change, addition, or amendment shalldestroy or diminish benefits which the society contracted to give the owner asof the date of issuance.
(c) Any person upon whose life a benefit contract is issuedprior to attaining the age of majority shall be bound by the terms of theapplication and certificate and by all the laws and rules of the society to thesame extent as though the age of majority had been attained at the time ofapplication.
(d) A society shall provide in its laws that if its reservesas to all or any class of certificates become impaired its board of directorsor corresponding body may require that there shall be paid by the owner to thesociety the amount of the owner's equitable proportion of the deficiency asascertained by its board, and that if the payment is not made either: (1) itshall stand as an indebtedness against the certificate and draw interest not toexceed the rate specified for certificate loans under the certificates; or (2)in lieu of or in combination with subdivision (1) of this subsection, the ownermay accept a proportionate reduction in benefits under the certificate. Thesociety may specify the manner of the election and which alternative is to bepresumed if no election is made.
(e) Copies of any of the documents mentioned in this section,certified by the secretary or corresponding officer of the society, shall bereceived in evidence of the terms and conditions of the documents.
(f) No certificate shall be delivered or issued for deliveryin this state unless a copy of the form has been filed with the commissioner ofinsurance in the manner provided for like policies issued by life insurers inthis state. Every life, accident, health, or disability insurance certificateand every annuity certificate shall meet the standard contract provisionrequirements not inconsistent with this chapter for like policies issued bylife insurers in this state, except that a society may provide for a graceperiod for the payment of premiums of one full month in its certificate. Thecertificate shall also contain a provision stating the amount of premiums whichare payable under the certificate and a provision reciting or setting forth thesubstance of any sections of the society's laws or rules in force at the timeof issuance of the certificate which, if violated, will result in thetermination or reduction of benefits payable under the certificate. If the lawsof the society provide for expulsion or suspension of a member, the certificateshall also contain a provision that any member so expelled or suspended, exceptfor nonpayment of a premium or within the contestable period for materialmisrepresentations in the application for membership or insurance, shall havethe privilege of maintaining the certificate in force by continuing payment ofthe required premium.
(g) Benefit contracts issued on the lives of persons belowthe society's minimum age for adult membership may provide for the transfer ofcontrol or ownership to the insured at an age specified in the certificate. Asociety may require approval of an application for membership in order toeffect this transfer, and may provide in all other respects for the regulation,government, and control of the certificates and all of the rights, obligations,and liabilities incident to and connected with the certificates. Ownershiprights prior to the transfer shall be specified in the certificate.
(h) A society may specify the terms and conditions on whichbenefit contracts may be assigned.