2014 -- S 2786

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LC004227

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2014

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A N   A C T

RELATING TO INSURANCE - RHODE ISLAND FRATERNAL CODE

     Introduced By: Senators Bates, and Picard

     Date Introduced: March 25, 2014

     Referred To: Senate Commerce

     (Business Regulation)

It is enacted by the General Assembly as follows:

     SECTION 1. Section 27-25-38 of the General Laws in Chapter 27-25 entitled "Rhode

Island Fraternal Code" is hereby amended to read as follows:

     27-25-38. Exemption of certain societies. -- (a) Nothing contained in this chapter shall

be construed as to affect or apply to:

      (1) Grand or subordinate lodges of societies, orders, or associations now doing business

in this state which that provide benefits exclusively through local or subordinate lodges;

      (2) Orders, societies, or associations which admit to membership only persons engaged

in one or more crafts or hazardous occupations, in the same or similar lines of business, insuring

only their own members and their families, and the ladies' societies or ladies' auxiliaries to those

orders, societies, or associations;

      (3)(2) Domestic societies which that limit their membership to employees of a particular

city or town, designated firm, business house, or corporation which that provide for a death

benefit of not more than fifteen hundred dollars ($1500) or disability benefits of not more than

twelve hundred dollars ($1200) to any person in any one year, or both; or

      (4)(3) Domestic societies or associations of a purely religious, charitable, or benevolent

description, which that provide for a death benefit of not more than fifteen hundred dollars

($1500) or for disability benefits of not more than twelve hundred dollars ($1200) to any one

person in any one year, or both.

      (5)(4) Any association, whether a fraternal benefit society or not, which that was

organized before 1880 and whose members are officers or enlisted, regular or reserve, active,

retired, or honorably discharged members of the Aarmed Fforces or Ssea Sservices of the United

States, and a principal purpose of which is to provide insurance and other benefits to its members

and their dependents or beneficiaries.

      (b) Any society or association described in subdivision (a)(3) or (a)(4) of this section

which that provides for death or disability benefits for which benefit certificates are issued, and

any society or association included in subdivision (a)(4) of this section which that has more than

fifteen hundred (1500) members, shall not be exempted from the provisions of this chapter, but

shall comply with all of its requirements.

      (c) No society which that, by the provisions of this section, is exempt from the

requirements of this chapter, except any society described in subdivision (a)(2) of this section,

shall give or allow, or promise to give or allow, to any person any compensation for procuring

new members.

      (d) Every society which that provides for benefits in case of death or disability resulting

solely from accident, and which that does not obligate itself to pay natural death or sick benefits,

shall have all of the privileges and be subject to all the applicable provisions and regulations of

this chapter, except that the provisions of this chapter relating to medical examination, valuations

of benefit certificates, and incontestability, shall not apply to the society.

      (e) The commissioner of insurance may require from any society or association, by

examination or otherwise, any information that will enable the commissioner to determine

whether the society or association is exempt from the provisions of this chapter.

      (f) Each association that is exempted from insurance regulation under subdivision (a)(5)

of this section shall annually, on or before the first day of May, file with the commissioner a true

and complete financial statement, audited by an independent, certified public accountant or

accounting firm, of its financial condition, transactions, and affairs for the preceding calendar

year and pay a fee of ten dollars ($10.00) for filing the same. Such an association may be required

to file quarterly financial statements upon request by the insurance commissioner, due on or

before forty-five (45) days after the quarter ending. Annual and quarterly statements shall be

available for inspection by the public. If, in the opinion of the commissioner, such an association

has not maintained assets sufficient to meet its liabilities and the minimum capital and surplus

requirements set forth in section §27-2-5, the commissioner may order such association to

increase its capital and surplus. If the association is unable to satisfy such order, the

commissioner may order such association to cease and desist from assuming any additional

liabilities in this state until such time as the association is able to satisfy the capital and surplus

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requirements ordered by the commissioner. Such orders shall be subject to judicial review

pursuant to section §27-25-36.

      (g) Societies exempted under the provisions of this section shall also be exempt from all

other provisions of the insurance laws of this state.

     SECTION 2. This act shall take effect upon passage.

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LC004227

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO INSURANCE - RHODE ISLAND FRATERNAL CODE

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     This act would remove the exemption to the provisions of the Rhode Island Fraternal

Code granted to orders, societies, or associations which admit to membership only persons

engaged in one or more crafts or hazardous occupations, in the same or similar lines of business,

insuring only their own members and their families, and the ladies' societies or ladies' auxiliaries

to those orders, societies, or associations.

     This act would take effect upon passage.

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LC004227

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