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§27-25-10  Organization. –

Published: 2015

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Rhode Island Fraternal Code

SECTION 27-25-10

   § 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


   (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;


   (6) Any incorporated society authorized to transact business

in this state at the time this chapter becomes effective shall not be required

to reincorporate.

History of Section.

(P.L. 1984, ch. 201, § 2; P.L. 2002, ch. 292, § 58.)