38.2-4109 - Organization of domestic society on or after October 1, 1986.
§ 38.2-4109. Organization of domestic society on or after October 1, 1986.
A. On or after October 1, 1986, seven or more citizens of the United States,a majority of whom are citizens of this Commonwealth, who desire to form afraternal benefit society, may make, sign and acknowledge before some officercompetent to take acknowledgement of deeds, articles of incorporation, whichshall state:
1. The proposed corporate name of the society, which shall not so closelyresemble the name of any other society or insurer as to be misleading orconfusing;
2. The purposes for which it is being formed and the mode in which itscorporate powers are to be exercised. Such purposes shall not include moreliberal powers than are granted by this chapter;
3. The names and residences of the incorporators and the names, residencesand official titles of all officers, trustees, directors, or other personswho are to have and exercise the general control of the management of theaffairs and funds of the society for the first year or until the ensuingelection at which all such officers shall be elected by the supreme governingbody, which election shall be held not later than one year from the date ofissuance of the permanent certificate of authority.
B. Such articles of incorporation, duly certified copies of the society'sbylaws and rules, copies of all proposed forms of certificates, applicationstherefor, and circulars to be issued by the society and a bond conditionedupon the return to applicants of the advanced payments if the organization isnot completed within one year shall be filed with the Commission, which mayrequire any further information it deems necessary. The bond, with suretiesapproved by the Commission, shall be not less than $50,000 nor more than$200,000, as required by the Commission. All documents filed are to be inthe English language. If the purposes of the society conform to therequirements of this chapter and all provisions of the law have been compliedwith, the Commission shall so certify, retain, and file the articles ofincorporation and furnish the incorporators a preliminary certificate ofauthority authorizing the society to solicit members as hereinafter provided.
C. No preliminary certificate of authority granted under the provisions ofthis section shall be valid after 1 year from its date or after such furtherperiod, not exceeding one year, as may be authorized by the Commission uponcause shown, unless the 500 required applicants have been secured and theorganization has been duly completed. The articles of incorporation and allother proceedings under those articles shall become void in one year from thedate of the preliminary certificate of authority, or at the expiration of theextended period, unless the society has completed its organization andreceived a certificate of authority to do business.
D. Upon receipt of a preliminary certificate of authority from theCommission, the society may solicit members for the purpose of completing itsorganization, shall collect from each applicant the amount of not less thanone regular monthly premium in accordance with its table of rates, and shallissue to each such applicant a receipt for the amount collected. No societyshall incur any liability other than for the return of such advance premium,nor issue any certificate, nor pay, allow, or offer or promise to pay orallow, any benefit to any person until:
1. Actual bona fide applicants for benefits have been secured on not lessthan 500 applicants, and any necessary evidence of insurability has beenfurnished to and approved by the society;
2. At least ten subordinate lodges have been established into which the 500applicants have been admitted;
3. There has been submitted to the Commission, a list of such applicants,giving their names, addresses, date each was admitted, name and number of thesubordinate lodge of which each applicant is a member, amount of benefits tobe granted and their premiums; and
4. It has been shown to the Commission, by sworn statement of the treasurer,or corresponding officer of such society, that at least 500 applicants haveeach paid in cash at least 1 regular monthly premium, which shall total atleast $150,000. Advance premiums shall be held in trust during the period oforganization and, if the society has not qualified for a certificate ofauthority within one year, such premiums shall be returned to the applicants.
E. The Commission may examine and require any further information it deemsadvisable. Upon presentation of satisfactory evidence that the society hascomplied with all the provisions of law, the Commissioner shall issue to thesociety a certificate of authority to that effect and that the society isauthorized to do business pursuant to the provisions of this chapter. Thecertificate of authority shall be prima facie evidence of the existence ofthe society at the date of such certificate. The Commission shall cause arecord of such certificate of authority to be made. A certified copy of suchrecord shall have the same effect as the original certificate of authority.
F. Any incorporated society authorized to do business in this Commonwealth atthe time this chapter becomes effective shall not be required toreincorporate.
(Code 1950, §§ 38-264 through 38-268, 38.1-582 through 38.1-587; 1952, c.317, §§ 38.1-638.14 through 38.1-638.19; 1968, c. 654; 1975, c. 262; 1986, c.562.)