CHAPTER 10. Fraternal Benefit Societies [10970. - 11165.]

Chapter 10 repealed and added by Stats. 1951, Ch. 1193.

§§ 10970–11165 · 111 sections

1. ARTICLE 1. Scope of Chapter §§ 10970–10976 · 7 sections

   • § 10970 Fraternal benefit societies shall be governed by this chapter and shall be exempt from all other provisions of this code, except: (a) Those provisions prior to…
   • § 10971 This chapter shall not, except as provided by Sections 10972 and 10974, affect: (a) A lodge operating under the lodge system, which provides in its bylaws or…
   • § 10972 (1) A lodge operating under the lodge system, as this term is used in Section 10971, shall have all of the following characteristics: (a) It is organized…
   • § 10973 The commissioner may require from any society such information as will enable him to determine whether or not such society is exempt from the provisions of…
   • § 10974 A lodge, subordinate branch thereof or association formed by the members thereof which is exempted from the requirements of this chapter by Section 10971 shall…
   • § 10975 Any fraternal benefit society organized and operating within the definition set forth in Sections 10990 to 10992 on July 29, 1911, providing benefits in case…
   • § 10976 Any incorporated fraternal benefit society engaged on July 29, 1911, in transacting business in this State may exercise all of the rights conferred by this…
2. ARTICLE 2. Definitions §§ 10990–10993 · 4 sections

   • § 10990 Any incorporated society, order or supreme lodge, without capital stock, conducted solely for the benefit of its members and their beneficiaries and not for…
   • § 10991 A society having a supreme legislative or governing body and subordinate lodges or branches by whatever name known, into which members are elected, initiated,…
   • § 10992 A society shall be deemed to have a representative form of government when: (a) It provides in its constitution or laws for a supreme legislative or governing…
   • § 10993 Every fraternal benefit society organized or admitted under this chapter is hereby declared to be a charitable and benevolent institution, and all of its funds…
3. ARTICLE 3. Organization §§ 11010–11033 · 24 sections

   • § 11010 Seven or more United States citizens, a majority of whom are citizens of this state, who desire to form a fraternal benefit society, may make, sign, and…
   • § 11011 The articles of incorporation, duly certified copies of the constitution, laws and rules, copies of all proposed forms of certificates, applications therefor,…
   • § 11012 No such preliminary certificate shall be valid after one year from its date, or after such further period, not exceeding one year, as may be authorized by the…
   • § 11013 Upon receipt of a preliminary certificate from the commissioner, the society may solicit members for the purpose of completing its organization, shall collect…
   • § 11014 The commissioner may make such examination and require such further information as he deems advisable. Upon presentation of satisfactory evidence that the…
   • § 11015 Every such society shall have the power to make a constitution and by-laws for the government of the society, the admission of its members, the management of…
   • § 11016 A society shall operate for the benefit of its members and their beneficiaries by: (a) Providing benefits under Section 11041, and (b) Operating for one or…
   • § 11017 After September 21, 1952, no unincorporated or voluntary association shall be permitted to transact business in this State as a fraternal benefit society under…
   • § 11018 Any domestic society may provide that the meetings of its legislative or governing body may be held in any state, district, province or territory wherein such…
   • § 11019 A domestic society shall not consolidate or merge with any other society unless it files with the commissioner the papers and evidence specified in this…
   • § 11020 If the commissioner finds that such contract is in conformity with the provisions of this chapter, that the financial statements are correct, that under it the…
   • § 11021 Upon the consolidation or merger becoming effective, all the rights, franchises and interests of the consolidated or merged societies in and to every species…
   • § 11022 The affidavit of any officer of the society or of any one authorized by it to mail any notice or document, stating facts which show that same has been duly…
   • § 11023 A society may admit to benefit membership any person not less than 15 years of age at nearest birthday who has been examined by a legally qualified physician,…
   • § 11024 Any person admitted to benefit membership in such society prior to attaining the full age of 21 years shall be bound by the terms of the application and…
   • § 11025 A society may accept general or social members who shall have no voice or vote in the management of its insurance affairs.
   • § 11026 A domestic society may amend its articles of incorporation, constitution, or laws, in accordance with the provisions thereof, by action of its supreme…
   • § 11027 No amendment to the articles of incorporation, constitution or laws of any domestic society shall take effect unless approved by the commissioner who shall…
   • § 11028 Within 90 days from the approval thereof by the commissioner, all such amendments, or a synopsis thereof, shall be furnished to all members of the society…
   • § 11029 Every foreign society transacting business under this chapter shall file with the commissioner a duly certified copy of all amendments of, or additions to, its…
   • § 11030 Printed copies of the constitution or laws of any domestic or foreign society as amended, certified by the secretary or corresponding officer of the society…
   • § 11031 A society may create, maintain and operate hospitals, asylums, homes, sanitariums or other charitable or benevolent institutions for the benefit of its sick,…
   • § 11032 Maintenance, treatment and proper attendance in any such institution may be furnished free or a reasonable charge may be made therefor, but no such institution…
   • § 11033 A society maintaining special funds of the nature set forth in Section 11122 may make payments from such funds to its members compatible with the type thereof;…
4. ARTICLE 4. Benefits §§ 11040–11044 · 5 sections

   • § 11040 All benefits provided for in the laws and agreements of a society shall be payable only out of its funds in accordance with its laws. The officers and members…
   • § 11041 An admitted society may, by the issuance of certificates, provide for payment to its members of insurance benefits contained within the following classes: (a)…
   • § 11042 A society may provide for benefits on the lives of children under 21 years of age and under the minimum age for adult membership under the laws of the society…
   • § 11043 A society may grant nonforfeiture benefits, cash surrender values, certificate loans, and other options as its laws may permit. In the case of certificates…
   • § 11044 No beneficiary shall have or obtain any vested interest in the proceeds of any certificate until the certificate has become due and payable in conformity with…
5. ARTICLE 5. Contract §§ 11060–11073 · 14 sections

   • § 11060 Every society authorized to do business in this State shall issue to each benefit member a certificate specifying the amount of benefits provided thereby. The…
   • § 11061 All statements purporting to be made by the member shall, in the absence of fraud, be representations and not warranties. Any waiver of this provision shall be…
   • § 11062 Any changes, additions or amendments to the charter or articles of incorporation, constitution or laws duly made or enacted subsequent to the issuance of the…
   • § 11063 Copies of any of the documents mentioned in Sections 11060 and 11062, certified by the secretary or corresponding officer of the society, shall be received in…
   • § 11064 A society shall provide specifically in its certificates that if its reserves become impaired, its board of directors or corresponding body may require that…
   • § 11065 Every society authorized to do business in this State shall provide in its constitution or laws that additional payments or contributions shall be required of…
   • § 11066 After the effective date of the amendments to this section made during the 1995–96 Regular Session of the Legislature, no life insurance benefit certificate…
   • § 11067 After September 21, 1952, no life insurance benefit certificate shall be delivered or issued for delivery in this State containing in substance any of the…
   • § 11068 After September 21, 1954, no life insurance benefit certificate shall be delivered or issued for delivery in this State containing in substance any provision…
   • § 11069 No domestic, foreign or alien society authorized to do business in this State shall issue or deliver in this State any certificate or other evidence of any…
   • § 11070 After September 21, 1954, no action at law or in equity shall be had or maintained on any certificate or contract issued by a society unless commenced within…
   • § 11071 The constitution and laws of the society may provide that no subordinate body, nor any of its subordinate officers or members shall have the power or authority…
   • § 11072 A domestic society may, by a reinsurance agreement, cede any individual risk or risks in whole or in part to an insurer having the power to make such…
   • § 11073 If the contract of a society entered into, amended, or renewed in this state on or after the effective date of this section provides in any manner for coverage…
6. ARTICLE 6. Powers of Commissioner §§ 11090–11112 · 23 sections

   • § 11090 Subject to the annual fee provisions as provided herein, every certificate of authority issued to a fraternal benefit society shall be for an indefinite term…
   • § 11091 No foreign or alien society shall transact business in this State without a certificate of authority issued by the commissioner. Any such society may receive a…
   • § 11092 The commissioner shall act as prescribed in Section 11093 when upon investigation he finds that a domestic society: (a) Has exceeded its power; (b) Has failed…
   • § 11093 (a) If the commissioner finds that any of the conditions set forth in Section 11092 exist in respect to a domestic society, he or she shall, in an order to…
   • § 11094 If the court orders the society enjoined, the commissioner shall suspend its certificate of authority. Thereafter such society shall have no authority to do…
   • § 11095 If the court orders the society liquidated, it shall be enjoined from carrying on any further business, whereupon the receiver of the society shall proceed at…
   • § 11096 The provisions of Sections 11093 to 11095 relating to hearing by the commissioner, action by the Attorney General at the request of the commissioner, hearing…
   • § 11097 The commissioner shall act as prescribed in Section 11098 when upon investigation he finds that a foreign or alien society transacting or applying to transact…
   • § 11098 If the commissioner finds that any of the conditions set forth in Section 11097 exist in respect to a foreign or alien society, he shall, in an order to show…
   • § 11099 Article 14 (commencing with Section 1010) of Chapter 1 of Part 2 of Division 1 applies to any society, except as otherwise provided in this chapter.
   • § 11100 Every society operating under the provisions of this chapter and issuing a policy or certificate of insurance may appoint agents to represent it.
   • § 11101 Except as otherwise provided in Sections 11102 and 11103, such agents and such societies are subject to Chapter 5 (commencing with Section 1621) of Part 2 of…
   • § 11102 Chapter 5 (commencing with Section 1621) of Part 2 of Division 1 does not apply to any of the following, nor shall any of the following be required to be…
   • § 11103 (a) The examination requirements of Article 7 (commencing with Section 1675) of Chapter 5 of Part 2 of Division 1 shall not apply to a license to represent a…
   • § 11104 Every society authorized to do business in this State shall appoint in writing the commissioner and each successor in office to be its true and lawful attorney…
   • § 11105 Service may be made as provided in Article 1 (commencing with Section 12919) of Chapter 2 of Division 3.
   • § 11106 An application for injunction against, proceedings for the dissolution of, or the appointment of a receiver for, any domestic society or branch thereof shall…
   • § 11107 A fraternal benefit society, its members, employees, agents, delegates, directors, and officers by whatever name known are subject to Section 12924.
   • § 11108 Any domestic society may be converted into and receive a certificate of authority as a mutual life insurance company by compliance with all of the requirements…
   • § 11109 On such conversion: (a) Except as provided in (b) hereof all funds, assets and liabilities of any nature which theretofore were the funds, assets or…
   • § 11110 In addition to any other ground for disapproving such conversion, the commissioner may refuse to give such approval unless evidence satisfactory to him is…
   • § 11111 Any society may comply with subsection (a) of Section 11110 by deducting from its surplus an amount which, when added to the reserves on certificates…
   • § 11112 All decisions and findings of the commissioner made under the provisions of this chapter shall be subject to review by proper proceedings in any court of…
7. ARTICLE 7. Financial Matters §§ 11120–11146 · 28 sections

   • § 11120 When a society, or a class or section thereof, has assets equal to the reserves and credits on its policies, it may collect periodical or other contributions…
   • § 11121 Unless it operates under Section 11120, a society, or class or section thereof, shall collect from its members both stated contributions expressly segregated…
   • § 11122 Any society may create, maintain, invest, disburse and apply any special fund or funds necessary to carry out any purpose permitted by the laws of the society.…
   • § 11122.1 A society may, if authorized by a resolution of its supreme legislative or governing body, establish and operate one or more separate accounts and issue…
   • § 11123 Any such society may own real estate and buildings within or without the state of its incorporation, for any purposes for which it may use funds. It may…
   • § 11124 Unless otherwise provided in the contracts of the members, such funds shall be held, invested, and disbursed for the use and benefit of the society, and no…
   • § 11125 Every domestic society shall invest its funds only in securities permitted by the laws of this State for the investment of the assets of life insurers issuing…
   • § 11126 An admitted foreign society shall invest its funds either under the same restrictions as domestic societies or in accordance with the laws of the state in…
   • § 11127 An admitted foreign society organized under the laws of any jurisdiction other than a state of the United States shall at all times maintain with a trustee in…
   • § 11128 The value of the trusteed assets referred to in Section 11127 shall be equal to the sum of all of the following: (a) All of the indebtedness of that society in…
   • § 11129 The provisions of Sections 1596 to 1598, inclusive, shall apply to such society specified in Section 11127 and to the matters set forth in Sections 11127 and…
   • § 11130 The commissioner may require any society specified in Section 11127 to file with him annually and at such other times as he may determine, and in such form as…
   • § 11131 Every society transacting business in this state shall annually, on or before the first day of March, unless for cause shown such time has been extended by the…
   • § 11132 A synopsis of its annual statement and valuation report providing an explanation of the facts concerning the condition of the society thereby disclosed shall…
   • § 11133 In addition to the annual report required by Section 11131, each society shall annually, on or before the first day of March, file with the commissioner a…
   • § 11134 Except as otherwise provided in Section 10489.6, reserves according to the commissioners’ reserve valuation method, for the life insurance and endowment…
   • § 11135 The present value of deferred payments due under incurred claims or matured certificates shall be deemed a liability of the society and shall be computed upon…
   • § 11136 Except as otherwise provided in Section 10489.4, such valuation shall be certified by a competent actuary or, at the expense of the society, verified by the…
   • § 11137 Whenever the commissioner finds from any financial statement or valuation report made to him or her by any society authorized to do business in this state or…
   • § 11138 The commissioner, or any person he may appoint, shall have the power of visitation and examination into the affairs of any domestic society. He may employ…
   • § 11139 No report of examination shall be adopted by the commissioner or filed by him as an official document except after a notice is given and a hearing held…
   • § 11140 The commissioner, or any person whom he may appoint, may examine any foreign society, transacting or applying for admission to transact business in this State.…
   • § 11141 Pending, during or after an examination or investigation of a society, either domestic or foreign, the commissioner shall make public no financial statement,…
   • § 11142 No person shall cause or permit to be made, issued or circulated in any form: (a) Any misrepresentation or false or misleading statement concerning the terms,…
   • § 11143 A comparison of insurance contracts is incomplete if it does not compare in detail: (a) The gross rates, and the gross rates less any dividend or other…
   • § 11144 A comparison of insurance contracts is incomplete if it omits from consideration: (a) Any benefit or value provided in the contract, (b) Any differences as to…
   • § 11145 In any determination of the incompleteness or misleading character of any comparison or statement, it shall be presumed that the insured had no knowledge of…
   • § 11146 Any person who violates any provision of Sections 11142 to 11145 or knowingly receives any compensation or commission by or in consequence of such violation,…
8. ARTICLE 8. Violations and Penalties §§ 11160–11165 · 6 sections

   • § 11160 Compensation shall not be paid to any employee or officer by whatever name known of either of the parties to any contract of merger, consolidation or…
   • § 11161 Any person violating Section 11160 is guilty of a felony and punishable by a fine not exceeding ten thousand dollars ($10,000) or imprisonment pursuant to…
   • § 11162 It is a felony, punishable by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code, for any officer, director, agent or employee of any…
   • § 11163 It is a felony, punishable by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code, for any officer, trustee, agent or employee of a…
   • § 11164 Any person not authorized pursuant to Section 11013 who solicits membership for, or in any manner assists in procuring membership in, any nonadmitted fraternal…
   • § 11165 Any person who knowingly or willfully makes any false or fraudulent statement or representation in or with reference to any application for membership, or for…