Chapter 748 Fraternal Benefit Societies

GENERAL PROVISIONS

748.103 Definitions

As used in this chapter: “Benefit contract” means the agreement for provision of benefits authorized by ORS 748.201, as that agreement is described in ORS 748.211 (1). “Benefit member” means an adult member who is designated by the laws or rules of the society to be a benefit member under a benefit contract. “Certificate” means the document issued as writ…

748.105 [Formerly 740.010; repealed by 1987 c.490 §58]

748.106 Description of fraternal benefit society

Any corporation, society, order, supreme lodge or voluntary association, without capital stock, conducted solely for the benefit of its members and their beneficiaries and not-for-profit, operated on a lodge system with ritualistic form of work, having a representative form of government and which provides benefits in accordance with this chapter is hereby d…

748.109 Conditions constituting “operating on a lodge system.”

A society is operating on the lodge system if it has a supreme governing body and subordinate lodges into which members are elected, initiated or admitted in accordance with its laws, rules and ritual. Subordinate lodges shall be required by the laws of the society to hold regular meetings at least once each month in furtherance of the purposes of the societ…

748.110 [Formerly 740.020; repealed by 1987 c.490 §58]

748.112 Conditions constituting “representative form of government.”

A society has a representative form of government when: It has a supreme governing body constituted as: An assembly composed of delegates elected directly by the members or at intermediate assemblies or conventions of members or their representatives, together with other delegates as may be prescribed in the society’s laws. A society may provide for electi…

748.115 [Formerly 740.030; repealed by 1987 c.490 §58]

748.120 [1967 c.359 §601; repealed by 1987 c.490 §58]

SOCIETIES GENERALLY

748.121 Purposes, operation and powers

The purposes of a society, as specified in subsection (2) of this section, may be carried out directly by the society, or indirectly through subsidiary corporations or affiliated organizations. A society shall operate for the benefit of members and their beneficiaries by: Providing benefits as specified in ORS 748.201; and Operating for one or more social…

748.123 Membership; eligibility; admission process; privileges

A society shall specify in its laws or rules: Eligibility standards for each and every class of membership, provided that, if benefits are provided on the lives of children, the minimum age for adult membership shall be set at not less than 15 years of age and not greater than 21 years of age; The process for admission to membership for each membership cla…

748.125 [1987 c.490 §42; 1989 c.413 §18; repealed by 1991 c.182 §20]

ORGANIZATIONAL AND ADMINISTRATIVE PROVISIONS

748.130 Principal office; publications; annual statement synopsis; complaints

The principal office of any domestic society shall be located in this state. The meetings of its supreme governing body may be held in any state, district, province or territory in which the society has at least one lodge or in any other location as determined by the supreme governing body, and all business transacted at the meetings shall be as valid in all…

748.133 Formation

A domestic society organized on or after January 1, 1988, shall be formed as follows: Seven 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 and sign articles of incorporation. The articles shall be acknowledged before some officer competent to take acknowledgment …

748.135 [Formerly 740.090; repealed by 1987 c.490 §58]

748.136 Officers, governors, directors; exemption from liability; indemnification; insurance

The officers and members of the supreme governing body or any subordinate body of a society shall not be personally liable for any benefits provided by a society. Any person may be indemnified and reimbursed by any society for expenses reasonably incurred by, and liabilities imposed upon, the person in connection with or arising out of any action, suit or p…

748.139 Waiver of provisions by subordinate body

The laws of the society may provide that no subordinate body, nor any of its subordinate officers or members shall have the power or authority to waive any of the provisions of the laws of the society. This provision shall be binding on the society and every member and beneficiary of a member.

748.140 [Formerly 740.100; repealed by 1987 c.490 §58]

748.142 Amendment of society laws

A domestic society may amend its laws in accordance with the provisions thereof by action of its supreme governing body at any regular or special meeting thereof or, if its laws so provide, by referendum. The referendum may be held in accordance with the provisions of its laws by the vote of the voting members of the society, by the vote of delegates or repr…

748.144 Creation and operation of other organizations and entities

A society may create, maintain and operate, or may establish organizations to operate, not-for-profit institutions to further the purposes permitted by ORS 748.121 (2)(b). Such institutions may furnish services free or at a reasonable charge. Any real or personal property owned, held or leased by the society for this purpose shall be reported in every annual…

748.145 [Formerly 740.110; repealed by 1987 c.490 §58]

748.148 Consolidation and merger

A domestic society may consolidate or merge with any other society by complying with the provisions of this section. It shall file with the Director of the Department of Consumer and Business Services: A certified copy of the written contract containing in full the terms and conditions of the consolidation or merger; A sworn statement by the president and …

748.150 [Formerly 740.120; repealed by 1987 c.490 §58]

748.155 [Formerly 740.140; repealed by 1987 c.490 §58]

748.160 [Formerly 740.040; repealed by 1987 c.490 §58]

748.165 [Formerly 740.510; repealed by 1987 c.490 §58]

748.170 [1967 c.359 §609; repealed by 1987 c.490 §58]

LICENSING AND REINSURANCE

748.171 Certificate of authority

A fraternal benefit society must obtain and maintain a certificate of authority in the manner provided for insurers in the Insurance Code. A certified copy or duplicate of the certificate of authority shall be prima facie evidence that the holder thereof is a fraternal benefit society within the meaning of this chapter.

748.174 Certificate of authority for foreign or alien society

No foreign or alien society shall transact business in this state without a certificate of authority issued by the Director of the Department of Consumer and Business Services. Any foreign or alien society desiring admission to this state shall comply substantially with the requirements and limitations of this chapter applicable to domestic societies. Any fo…

748.175 [1967 c.359 §610; repealed by 1987 c.490 §58]

748.177 Authorization as mutual life insurance company

Any domestic fraternal benefit society may be converted and authorized as a mutual life insurance company by compliance with all the requirements of the insurance laws of this state for mutual life insurance companies. A plan of conversion shall be prepared in writing by the board of directors setting forth in full the terms and conditions of conversion. The…

748.181 Insurance producers; licensing

Insurance producers of societies shall be licensed in accordance with the provisions of ORS chapter 744 regulating the licensing, revocation, suspension or termination of license of resident and nonresident insurance producers.

748.184 Reinsurance

A domestic society may, by a reinsurance agreement, cede any individual risk or risks in whole or in part to an insurer, other than another fraternal benefit society, having the power to make reinsurance and authorized to do business in this state, or if not authorized, one which is approved by the Director of the Department of Consumer and Business Services…

748.185 [Formerly 740.160; repealed by 1987 c.490 §58]

748.190 [1967 c.359 §612; repealed by 1987 c.490 §58]

BENEFITS, BENEFICIARIES AND CONTRACTS GENERALLY

748.201 Benefits

A society may provide in any form the following contractual benefits: Death benefits; Endowment benefits; Annuity benefits; Temporary or permanent disability benefits; Hospital, medical or nursing benefits; Monument or tombstone benefits to the memory of deceased members; and Such other benefits as authorized for life insurers and which are not incons…

748.204 Beneficiaries

The owner of a benefit contract shall have the right at all times to change the beneficiary or beneficiaries in accordance with the laws or rules of the society unless the owner waives this right by specifically requesting in writing that the beneficiary designation be irrevocable. A society may, through its laws or rules, limit the scope of beneficiary desi…

748.205 [1967 c.359 §613; repealed by 1987 c.490 §58]

748.207 Benefits exempt from execution

No money or other benefit, charity, relief or aid to be paid, provided or rendered by any society, shall be liable to attachment, garnishment or other process, or to be seized, taken, appropriated or applied by any legal or equitable process or operation of law to pay any debt or liability of a member or beneficiary, or any other person who may have a right …

748.210 [1967 c.359 §614; repealed by 1987 c.490 §58]

748.211 Benefit contract; certificate

Every society authorized to do business in this state shall issue to each owner of a benefit contract a certificate specifying the amount of benefits provided. The certificate, together with any riders or indorsements attached to it, the laws of the society, the application for membership, the application for insurance and declaration of insurability, if any…

748.215 [1967 c.359 §615; repealed by 1987 c.490 §58]

748.216 [Formerly 740.740; repealed by 1969 c.336 §21]

748.220 [1967 c.359 §616; repealed by 1987 c.490 §58]

748.225 [Formerly 740.640; repealed by 1987 c.490 §58]

748.230 [Formerly 740.200; repealed by 1987 c.490 §58]

748.235 [Formerly 740.650; repealed by 1987 c.490 §58]

748.240 [Formerly 740.660; repealed by 1987 c.490 §58]

748.305 [1967 c.359 §621; repealed by 1987 c.490 §58]

GROUP BENEFITS

748.306 Authority for group benefit certificates

A fraternal benefit society may provide in its laws, in addition to other benefits provided, for the issuance of group benefit certificates if on the date when it enters upon business it has admitted assets which are greater than the sum of its accrued liabilities and reserves under all of its certificates when valued according to standards required for cert…

748.309 Group membership; lodges

Group benefit certificates may provide for the payment of benefits in the event of the death, or death and disability, of: Persons engaged in a common enterprise or employment. The employees of any employer. Group certificates may be issued with or without medical examination and without limitation as to age. The society shall organize the persons or emp…

748.310 [1967 c.359 §622; repealed by 1987 c.490 §58]

748.312 Membership in lodges organized under ORS 748.309

If provided in the laws of the society, other persons may become members of a lodge organized under ORS 748.309 subsequent to its organization and may be initiated into and hold membership in the lodge. Individual benefit certificates may be issued to them. The lodges shall in all other respects be subject to the laws of the society.

748.315 [1967 c.359 §623; repealed by 1987 c.490 §58]

748.316 Payments for group benefits

The monthly or other payments to be made to the society on or for any group benefit certificate may be made by the employer, or by the employer and employees jointly, or as provided in the contract. When the payments are made by the employer and the employees jointly and the benefits under the group certificate are offered to all eligible employees of the e…

748.319 Group certificates issued by foreign or alien society or by domestic society in foreign or alien jurisdiction

A group certificate, when issued in this state by any foreign or alien society, may contain, when issued, any provision required by the laws of the state or country under which the society is organized. Group certificates issued in other states or countries by a domestic society may contain any provision required by the laws of the other state or country.

748.320 [1967 c.359 §624; repealed by 1987 c.490 §58]

748.322 Continuation of membership in society after cancellation, discontinuance or nonrenewal of group certificate

If any group certificate is canceled, discontinued or not renewed, or if any individual member of a group ceases to be a member of the group, the members of the group or any individual member who ceases to be a member of the group may be permitted to continue membership in the society for the same amount of protection at the required rate of monthly or other…

748.325 [1967 c.359 §625; repealed by 1987 c.490 §58]

748.330 [1967 c.359 §626; repealed by 1987 c.490 §58]

748.335 [1967 c.359 §627; repealed by 1987 c.490 §58]

748.340 [1967 c.359 §628; repealed by 1987 c.490 §58]

748.345 [1967 c.359 §629; repealed by 1987 c.490 §58]

748.350 [1967 c.359 §630; repealed by 1987 c.490 §58]

748.355 [1967 c.359 §631; repealed by 1987 c.490 §58]

748.360 [1967 c.359 §632; repealed by 1987 c.490 §58]

748.365 [1967 c.359 §633; repealed by 1987 c.490 §58]

748.370 [1967 c.359 §634; repealed by 1987 c.490 §58]

748.375 [1967 c.359 §635; repealed by 1987 c.490 §58]

748.380 [1967 c.359 §636; repealed by 1987 c.490 §58]

FINANCIAL PROVISIONS

748.401 Value of benefit and amount of options

For certificates issued prior to January 1, 1989, the value of every paid-up nonforfeiture benefit and the amount of any cash surrender value, loan or other option granted shall comply with the provisions of law applicable immediately prior to January 1, 1988. For certificates issued on or after January 1, 1989, for which reserves are computed on the Commis…

748.403 Standards of valuation for certificates

Standards of valuation for certificates issued prior to January 1, 1989, shall be those provided by the laws applicable immediately prior to January 1, 1988. The minimum standards of valuation for certificates issued on or after January 1, 1989, shall be based on the following tables: For certificates of life insurance, the Commissioner’s 1941 Standard Ord…

748.405 [Formerly 740.810; repealed by 1987 c.490 §58]

748.406 Financial statement; filing; fee; valuation

Every society transacting business in this state shall annually file with the Director of the Department of Consumer and Business Services on or before March 1, unless the time has been extended by the director, a true statement of its financial condition, transactions and affairs for the preceding calendar year and shall pay the applicable fee established b…

748.409 Assets of society; variable contracts

All assets shall be held, invested and disbursed for the use and benefit of the society and no member or beneficiary shall have or acquire individual rights or become entitled to any apportionment on the surrender of any part, except as provided in the benefit contract. A society may create, maintain, invest, disburse and apply any special fund or funds nec…

748.410 [Formerly 740.820; repealed by 1987 c.490 §58]

748.412 Investment of funds

A society shall invest its funds only in investments that are authorized by the laws of this state for the investment of assets of life insurers and subject to the limitations thereon. Any foreign or alien society permitted or seeking to do business in this state which invests its funds in accordance with the laws of the state, district, territory, country o…

748.414 Funds exempt from certain taxes

Every society organized or licensed under this chapter is hereby declared to be a charitable and benevolent institution, and all of its funds shall be exempt from all and every state, county, district, municipal and school tax, other than taxes on real estate and office equipment.

748.415 [Formerly 740.840; repealed by 1987 c.490 §58]

748.420 [Formerly 740.850; repealed by 1987 c.490 §58]

748.425 [Formerly 740.860; repealed by 1987 c.490 §58]

748.430 [1967 c.359 §642; repealed by 1987 c.490 §58]

ENFORCEMENT

748.501 Examination

The Director of the Department of Consumer and Business Services, or any person the director may appoint, may examine any domestic, foreign or alien society transacting or applying for admission to transact business in this state in the same manner as authorized for examination of domestic, foreign or alien insurers. Requirements of notice and an opportunity…

748.503 Investigation of society; notice of deficiencies; action by Attorney General; hearing

The Director of the Department of Consumer and Business Services shall notify the society of any deficiency or deficiencies, and state in writing the reasons for dissatisfaction, when the director, upon investigation, finds that a domestic society: Has exceeded its powers; Has failed to comply with any provisions of this chapter; Is not fulfilling its con…

748.505 [1967 c.359 §643; repealed by 1987 c.490 §58]

748.506 Investigation of foreign or alien society; notice of deficiencies; revocation or suspension of authority

The Director of the Department of Consumer and Business Services shall notify the society of any deficiency or deficiencies, and state in writing the reasons for dissatisfaction, when the director, upon investigation, finds that a foreign or alien society transacting or applying to transact business in this state: Has exceeded its powers; Has failed to com…

748.509 Validity of petition for injunction

No application or petition for injunction against any domestic, foreign or alien society, or lodge thereof, shall be recognized in any court of this state unless made by the Attorney General upon request of the Director of the Department of Consumer and Business Services.

748.510 [1967 c.359 §644; repealed by 1987 c.490 §58]

748.515 [1967 c.359 §645; repealed by 1987 c.490 §58]

748.520 [1967 c.359 §646; 1981 c.609 §22; repealed by 1987 c.490 §58]

748.525 [1967 c.359 §647; repealed by 1987 c.490 §58]

748.530 [1967 c.359 §648; 1975 c.324 §1; repealed by 1987 c.490 §58]

748.535 [1967 c.359 §649; repealed by 1987 c.490 §58]

748.540 [1967 c.359 §650; repealed by 1987 c.490 §58]

748.545 [Formerly 740.080; repealed by 1987 c.490 §58]

748.550 [1967 c.359 §652; repealed by 1987 c.490 §58]

748.555 [1967 c.359 §653; 1971 c.231 §40; 1973 c.515 §4; 1973 c.613 §3a; 1975 c.338 §3; 1975 c.689 §3; 1979 c.708 §10; 1981 c.649 §21; 1987 c.411 §11; 1987 c.739 §4; 1987 c.838 §15; repealed by 1987 c.490 §58]

EXEMPTIONS; RELATION TO OTHER LAW

748.601 Exemptions from chapter

Except as provided in subsection (2) of this section, this chapter does not affect or apply to: Grand or subordinate lodges of orders, societies or associations that do business in this state and that provide benefits exclusively through local or subordinate lodges; Orders, societies or associations that admit to membership only persons that are engaged in…

748.603 Relationship to other insurance laws

Societies are governed by this chapter and are exempt from all other provisions of the insurance laws of this state unless expressly designated therein, or unless specifically made applicable by this chapter. ORS 705.137, 705.139, 731.004 to 731.026, 731.036 to 731.136, 731.146 to 731.156, 731.162, 731.166, 731.170, 731.216 to 731.268, 731.296, 731.324, 731…

748.605 Insurance against risk of loss under less than fully insured employee health benefit plan

Insurance issued or delivered by a fraternal benefit society against the risk of economic loss assumed under a less than fully insured employee health benefit plan is subject to ORS 742.065. Such insurance is subject to ORS 748.603 but is otherwise not subject to the provisions of ORS chapter 748. PENALTIES

748.990 Penalties

Any person who willfully makes a false or fraudulent statement in or relating to an application for membership, or for the purpose of obtaining money from or a benefit in any society, shall upon conviction be fined not less than $100 nor more than $500, imprisoned in the county jail for not less than 30 days nor more than one year, or both. Any person who w…