§ 27-25-10. Organization.
A domestic society shall be formed as follows:
(1) Seven (7) or more citizens of the United States, a majority of whom are citizens of this state, who desire to form a fraternal benefit society, may make, sign, and acknowledge before some officer competent to take acknowledgment of deeds, articles of incorporation, in which shall be stated:
(i) The proposed corporate name of the society, which shall not so closely resemble the name of any society or insurance company as to be misleading or confusing;
(ii) The purposes for which it is being formed and the mode in which its corporate powers are to be exercised. Those purposes shall not include more liberal powers than are granted by this chapter; and
(iii) The names and residences of the incorporators and the names, residences, and official titles of all the officers, trustees, directors, or other persons who are to have and exercise the general control of the management of the affairs and funds of the society for the first year or until the ensuing election at which all of the officers shall be elected by the supreme governing body, which election shall be held not later than one year from the date of the issuance of the permanent certificate of authority;
(2) The articles of incorporation, duly certified copies of the society's bylaws and rules, copies of all proposed forms of certificates, applications for them, and circulars to be issued by the society and a bond conditioned upon the return to applicants of the advanced payments if the organization is not completed within one year, shall be filed with the commissioner of insurance, who may require any further information the commissioner deems necessary. The bond with sureties approved by the commissioner of insurance shall be in an amount, not less than three hundred thousand dollars ($300,000) nor more than one million five hundred thousand dollars ($1,500,000), as required by the commissioner of insurance. All documents filed are to be in the English language. If the purposes of the society conform to the requirements of this chapter and all of the provisions of the law have been complied with, the commissioner of insurance shall certify, retain, and file the articles of incorporation and furnish the incorporators with a preliminary certificate of authority authorizing the society to solicit members;
(3) No preliminary certificate of authority granted under the provisions of this section shall be valid after one year from its date or after a further period, not exceeding one year, as may be authorized by the commissioner of insurance upon cause shown, unless the five hundred (500) applicants have been secured and the organization has been completed as provided in this section. The articles of incorporation and all other proceedings under the articles shall become null and void in one year from the date of the preliminary certificate of authority, or at the expiration of the extended period, unless the society shall have completed its organization and received a certificate of authority to do business;
(4) Upon receipt of a preliminary certificate of authority from the commissioner of insurance, the society may solicit members for the purpose of completing its organization, shall collect from each applicant the amount of not less than one regular monthly premium in accordance with its table of rates, and shall issue to each applicant a receipt for the amount so collected. No society shall incur any liability other than for the return of the advance premium, nor issue any certificate, nor pay, allow, or offer or promise to pay or allow, any benefit to any person until:
(i) Actual bona fide applications for benefits have been secured on not less than five hundred (500) applicants, and any necessary evidence of insurability has been furnished to and approved by the society;
(ii) At least ten (10) subordinate lodges have been established into which the five hundred (500) applicants have been admitted;
(iii) There has been submitted to the commissioner of insurance, under oath of the president or secretary or corresponding officer of the society, a list of the applicants, giving their names, addresses, date each was admitted, name and number of the subordinate lodge of which each applicant is a member, amount of benefits to be granted and premiums for the benefits; and
(iv) It shall have been shown to the commissioner of insurance, by sworn statement of the treasurer or corresponding officer of the society, that at least five hundred (500) applicants have each paid in cash at least one regular monthly premium as provided in this section, which premiums in the aggregate shall amount to at least one hundred and fifty thousand dollars ($150,000). The advance premiums shall be held in trust during the period of organization and if the society has not qualified for a certificate of authority within one year, the premiums shall be returned to the applicant;
(5) The commissioner of insurance may make any examination and require any further information as the commissioner deems advisable. Upon presentation of satisfactory evidence that the society has complied with all of the provisions of law, the commissioner shall issue to the society a certificate of authority to that effect and that the society is authorized to transact business pursuant to the provisions of this chapter. The certificate of authority shall be prima facie evidence of the existence of the society at the date of the certificate. The commissioner of insurance shall cause a record of the certificate of authority to be made. A certified copy of the record may be given in evidence with like effect as the original certificate of authority; and
(6) Any incorporated society authorized to transact business in this state at the time this chapter becomes effective shall not be required to reincorporate.
(P.L. 1984, ch. 201, § 2; P.L. 2002, ch. 292, § 58.)