TITLE 27
Insurance
CHAPTER 27-25
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
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.
History of Section.
(P.L. 1984, ch. 201, § 2; P.L. 2002, ch. 292, § 58.)
