PRIOR PRINTER'S NOS. 656, 3636, 4107, PRINTER'S NO. 4166
4110
No. 599 Session of 2001
INTRODUCED BY MICOZZIE, PIPPY, FICHTER, MELIO, BELARDI,
CALTAGIRONE, CAWLEY, FRANKEL, GEORGE, HARHAI, HERMAN, KAISER,
LEH, LESCOVITZ, LEVDANSKY, S. MILLER, PRESTON, ROONEY,
SAINATO, SAYLOR, SCRIMENTI, STABACK, STERN, E. Z. TAYLOR,
TIGUE, TRELLO, WALKO, WILT, WOJNAROSKI, YOUNGBLOOD, YUDICHAK,
DeLUCA, CIVERA, THOMAS, BELFANTI, SOLOBAY, ADOLPH,
WASHINGTON, DALEY AND MAHER, FEBRUARY 8, 2001
SENATE AMENDMENTS TO HOUSE AMENDMENTS, JUNE 27, 2002
AN ACT
1 Amending the act of May 17, 1921 (P.L.682, No.284), entitled "An
2 act relating to insurance; amending, revising, and
3 consolidating the law providing for the incorporation of
4 insurance companies, and the regulation, supervision, and
5 protection of home and foreign insurance companies, Lloyds
6 associations, reciprocal and inter-insurance exchanges, and
7 fire insurance rating bureaus, and the regulation and
8 supervision of insurance carried by such companies,
9 associations, and exchanges, including insurance carried by
10 the State Workmen's Insurance Fund; providing penalties; and
11 repealing existing laws," further providing for requisites
12 for foreign companies to do business; deleting provisions
13 relating to admitted assets; providing for cancellation of <--
14 casualty or property insurance for mining damage; further
15 FURTHER providing for standard nonforfeiture law for <--
16 individual deferred annuities and for title insurance agents;
17 further defining "wet marine and transportation insurance";
18 further providing for placement of surplus lines insurance,
19 for requirements for eligible surplus lines insurers, for
20 surplus lines licensee's duty to notify insured, for
21 declarations, for licensing of surplus lines licensee, for
22 records of surplus lines licensee, for suspension, revocation
23 or nonrenewal of surplus lines licensee's license and for
24 service of process in actions against surplus lines insurer;
25 providing for fraternal benefit societies; and making a
26 repeal.
27 The General Assembly of the Commonwealth of Pennsylvania
1 hereby enacts as follows:
2 Section 1. Section 301(d) of the act of May 17, 1921
3 (P.L.682, No.284), known as The Insurance Company Law of 1921,
4 is amended to read:
5 Section 301. Requisites for Foreign Companies To Do
6 Business.--No stock or mutual insurance company or association
7 of any other State or foreign government shall be admitted and
8 authorized to do business until:
9 * * *
10 [(d) It shall file in the office of the Auditor General a
11 statement showing: (I) The name of the company or association;
12 (II) the date of incorporation or organization; (III) the act of
13 Assembly or authority under which incorporated or organized;
14 (IV) the place of business; (V) the post office address and
15 names of the president, secretary, and treasurer; (VI) the
16 amount of capital authorized by its charter; and (VII) the
17 amount of capital paid into the treasury of the company.
18 Any company or association which shall neglect or refuse to
19 file such statement shall be subject to a penalty of five
20 hundred dollars ($500.00), which penalty shall be collected, on
21 an account settled by the Auditor General and State Treasurer,
22 in the same manner as taxes on stock are settled and collected.]
23 * * *
24 Section 2. Section 320.1 of the act is repealed.
25 Section 2.1. The act is amended by adding a section to read: <--
26 Section 358. Cancellation of Casualty or Property Insurance
27 for Mining Damage.--A company may not refuse to issue, cancel or
28 refuse to renew a policy of casualty or property insurance
29 because of underground mining damage under the act of April 27,
30 1966 (1st Sp.Sess., P.L.31, No.1), known as "The Bituminous Mine
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1 Subsidence and Land Conservation Act," as long as repairs are
2 made within a reasonable time after the mining, as determined by
3 the mine operator and the landowner.
4 Section 3. Section 410C of the act is amended by adding a
5 subsection to read:
6 Section 410C. Standard Nonforfeiture Law for Individual
7 Deferred Annuities.--* * *
8 (m) Notwithstanding the provisions of subsection (d), for
9 any contract issued on or after July 1, 2002, and before January
10 1, 2005, the interest rate at which minimum nonforfeiture
11 amounts, partial withdrawals and partial surrenders shall be
12 accumulated shall be one and one-half per centum (1.5%) per
13 annum.
14 Section 4. Section 724(b) of the act, amended December 21,
15 1995 (P.L.714, No.79), is amended to read:
16 Section 724. Agents; Defined.--* * *
17 [(b) No bank, trust company, bank and trust company or other
18 lending institution, mortgage service, mortgage brokerage or
19 mortgage guaranty company or any officer or employe of any of
20 the foregoing shall be permitted to act as an agent for a title
21 insurance company.] The word "agent" shall not include approved
22 attorneys, nor shall it include officers and salaried employes
23 of any title insurance company authorized to do a title
24 insurance business within this Commonwealth.
25 Section 5. The definition of "wet marine and transportation
26 insurance" in section 1602 of the act, added December 18, 1992
27 (P.L.1519, No.178), is amended to read:
28 Section 1602. Definitions.--As used in this article the
29 following words and phrases shall have the meanings given to
30 them in this section:
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1 * * *
2 "Wet marine and transportation insurance." Any of the
3 following:
4 (1) Insurance upon vessels, crafts or hulls and of interests
5 therein or with relation thereto.
6 (2) Insurance of marine builder's risks, marine war risks
7 and contracts of marine protection and indemnity insurance.
8 (3) Insurance of freights and disbursements pertaining to a
9 subject of insurance coming within this definition.
10 (4) Insurance of personal property and interest therein, in
11 the course of exportation from or importation into any country,
12 or in the course of transportation coastwise or on inland
13 waters, including transportation by land, water or air from
14 point of origin to final destination, in connection with any and
15 all risks or perils of navigation, transit or transportation,
16 and while being prepared for and while awaiting shipment, and
17 during any delays, transshipment or reshipment [incident
18 thereto]. Insurance of personal property and interests therein
19 shall not be considered wet marine and transportation insurance
20 if:
21 (i) the property has been transported solely by
22 land;
23 (ii) the property has reached its final destination
24 as specified in the bill of lading or other shipping
25 document; or
26 (iii) the insured no longer has an insurable
27 interest in the property.
28 Section 6. Section 1604 of the act, added December 18, 1992
29 (P.L.1519, No.178), is amended to read:
30 Section 1604. Placement of Surplus Lines Insurance.--
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1 Insurance may be procured through a surplus lines licensee from
2 nonadmitted insurers if the following requirements are met:
3 (1) Each insurer is an eligible surplus lines insurer.
4 (2) The placement satisfies the criteria set forth in at
5 least one of the following subparagraphs:
6 (i) The full amount or kind of insurance cannot be obtained
7 from admitted insurers. Such full amount or kind of insurance or
8 any portion thereof may be procured from eligible surplus lines
9 insurers, provided that a diligent search is made among the
10 admitted insurers who are writing, in this Commonwealth,
11 coverage comparable to the coverage being sought.
12 (ii) The full amount or kind of insurance cannot be obtained
13 from any admitted insurers because [no such insurers are
14 writing] coverage comparable to the coverage being sought
15 generally is not available in the authorized market.
16 (iii) The kind of insurance sought to be obtained from
17 admitted insurers requires a unique form of coverage not
18 available in the admitted market.
19 (3) [The] With respect to personal lines policies or
20 contract forms, the policy or contract form used by the insurer
21 does not differ materially from policies or contracts
22 customarily used by admitted insurers for the kind of insurance
23 involved. [Coverage] Personal lines coverage may be placed in an
24 eligible surplus lines insurer using a unique form or policy
25 designed for the kind of insurance only if a copy of such form
26 is first filed with the department by the surplus lines licensee
27 desiring to use it [simultaneously with the affidavit required
28 by section 1609]. The form shall be deemed approved by the
29 commissioner unless within ten (10) days after receipt of the
30 same, the commissioner shall find that the use of such form will
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1 be contrary to law or public policy.
2 (4) All other requirements of this article are met.
3 Section 7. Section 1605 of the act, amended or added
4 December 18, 1992 (P.L.1519, No.178) and February 17, 1994
5 (P.L.92, No.9), is amended to read:
6 Section 1605. Requirements for Eligible Surplus Lines
7 Insurers.--(a) No surplus lines licensee shall place any
8 coverage with a nonadmitted insurer unless, at the time of
9 placement, such nonadmitted insurer:
10 (1) Is of good repute and financial integrity.
11 (2) Qualifies under any of the following subparagraphs:
12 (i) Has policyholder surplus equal to or greater than two
13 times the minimum capital and surplus required to be fully
14 licensed in this Commonwealth. Two (2) years from the effective
15 date of this article is granted to allow those nonadmitted
16 insurers which are eligible surplus lines insurers on the
17 effective date of this article to achieve this capital and
18 surplus requirement. If an alien insurer, as defined by the act
19 of December 10, 1974 (P.L.804, No.266), referred to as the Alien
20 Insurer Domestication Law, it shall maintain in the United
21 States an irrevocable trust fund in either a national bank or a
22 member of the Federal Reserve System, in an amount not less than
23 that currently required by the National Association of Insurance
24 Commissioners' [Nonadmitted Insurers Information Office]
25 International Insurers Department or its successor for the
26 protection of all of its policyholders in the United States, and
27 such trust fund consists of cash, securities, letters of credit
28 or investments of substantially the same character and quality
29 as those which are eligible investments for admitted insurers
30 authorized to write like kinds of insurance in this
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1 Commonwealth. Such trust fund will be in addition to the capital
2 and surplus required in this subparagraph and shall have an
3 expiration date which at no time shall be less than five (5)
4 years.
5 (ii) Is any Lloyd's or other similar group of insurers which
6 includes unincorporated individual insurers that maintains a
7 trust fund of not less than fifty million ($50,000,000) dollars
8 as security to the full amount thereof for all policyholders and
9 creditors in the United States of each member of the group. Such
10 trust funds shall likewise comply with the terms and conditions
11 established in subparagraph (i) for alien insurers.
12 (iii) Is an insurance exchange created by the laws of
13 individual states that maintains capital and surplus or the
14 substantial equivalent thereof of not less than fifteen million
15 ($15,000,000) dollars in the aggregate. For insurance exchanges
16 which maintain funds for the protection of all insurance
17 exchange policyholders, each individual syndicate shall maintain
18 minimum capital and surplus or the substantial equivalent
19 thereof of not less than one million five hundred thousand
20 ($1,500,000) dollars. In the event the insurance exchange does
21 not maintain funds for the protection of all insurance exchange
22 policyholders, each individual syndicate shall meet the minimum
23 capital and surplus requirements of subparagraph (i).
24 (3) Has provided to the department a copy of its current
25 annual financial statement certified by such insurer, such
26 statement to be provided no more than thirty (30) days after the
27 date required for filing an annual financial statement in its
28 domiciliary jurisdiction and which is either:
29 (i) certified by the regulatory authority in the domicile of
30 the insurer; or
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1 (ii) certified by an accounting or auditing firm licensed in
2 the jurisdiction of the insurer's domicile.
3 In the case of an insurance exchange, the statement may be an
4 aggregate statement of all underwriting syndicates operating
5 during the period reported.
6 (b) In addition to meeting the requirements in subsection
7 (a), a nonadmitted insurer shall be an eligible surplus lines
8 insurer if it appears on the most recent list of eligible
9 surplus lines insurers published by the department from time to
10 time but at least semiannually. Nothing in this section shall
11 require the department to place or maintain the name of any
12 nonadmitted insurer on the list of eligible surplus lines
13 insurers.
14 Section 8. Sections 1608, 1609, 1615, 1619, 1623 and 1624 of
15 the act, added December 18, 1992 (P.L.1519, No.178), are amended
16 to read:
17 Section 1608. Surplus Lines Licensee's Duty to Notify
18 Insured.--At the time of presenting a quotation to the insured,
19 the surplus lines licensee shall present to the insured or to
20 the producing broker written notice that the insurance or a
21 portion thereof involves placement with nonadmitted insurers.
22 The licensee shall, either directly or through the producing
23 broker, give notice to the insured that:
24 (1) the insurer with which the licensee places the insurance
25 is not licensed by the Pennsylvania Insurance Department and is
26 subject to its limited regulation; and
27 (2) in the event of the insolvency of an eligible surplus
28 lines insurer, losses will not be paid by the Pennsylvania
29 Property and Casualty Insurance Guaranty Association.
30 Section 1609. Declarations.--(a) In the case of each
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1 placement of insurance in accordance with this article:
2 (1) Within thirty (30) days after the surplus lines licensee
3 has placed insurance with an eligible surplus lines insurer, the
4 producing broker must execute and forward to the surplus lines
5 licensee a written statement, in a form prescribed by the
6 department, declaring that:
7 (i) A diligent effort to procure the desired coverage from
8 admitted insurers was made.
9 (ii) The insured was expressly advised in writing prior to
10 placement of the insurance that:
11 (A) the insurer with whom the insurance is to be placed is
12 not admitted to transact business in this Commonwealth and is
13 subject to limited regulation by the department; and
14 (B) in the event of the insolvency of the insurer, losses
15 will not be paid by the Pennsylvania Property and Casualty
16 Insurance Guaranty Association.
17 This written declaration shall be open to public inspection.
18 (2) Within forty-five (45) days after insurance has been
19 placed in an eligible surplus lines insurer, the surplus lines
20 licensee shall file with the department a written declaration of
21 his lack of knowledge of how the coverage could have been
22 procured from admitted insurers. The surplus lines licensee
23 shall simultaneously file the written declaration of the
24 producing broker, as set forth in paragraph (1).
25 (3) In a particular transaction where the producing broker
26 and surplus lines licensee are one in the same entity, he shall
27 execute both declarations.
28 (b) Subsection (a) shall not apply to any insurance which
29 has been placed continuously with an eligible surplus lines
30 insurer for a period of at least three (3) consecutive years
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1 immediately preceding the current placement. However, within
2 forty-five (45) days after insurance has been placed with an
3 eligible surplus lines insurer, the surplus lines licensee shall
4 file with the department his written declaration on a form
5 prescribed by the department.
6 Section 1615. Licensing of Surplus Lines Licensee.--(a) No
7 agent or broker licensed by the department shall transact
8 surplus lines insurance with any nonadmitted insurer unless such
9 agent or broker possesses a valid surplus lines agent's license
10 issued by the department.
11 (b) The department shall issue a surplus lines agent's
12 license to any resident or nonresident of this Commonwealth who
13 is a qualified holder of a current property and casualty
14 broker's license, but only when the broker has complied with the
15 following:
16 (1) Remitted the license fee to the department.
17 (2) Submitted a properly completed license application on a
18 form supplied by the department.
19 (3) Passed a qualifying examination approved by the
20 department, except that all holders of a license prior to the
21 effective date of this article shall be deemed to have passed
22 such an examination.
23 [(4) Filed with the department and maintained concurrent
24 with the term of the license, in force and unimpaired, a bond in
25 favor of the Commonwealth of Pennsylvania in the penal sum of at
26 least fifty thousand ($50,000) dollars, aggregate liability,
27 with corporate sureties approved by the department. The bond
28 shall be conditioned that the surplus lines licensee will
29 conduct business in accordance with the provisions of this
30 article and will promptly remit the taxes as provided by law. No
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1 bond shall be terminated except for nonpayment of premiums.
2 Termination notice shall be given to the surplus lines licensee
3 and to the department at least thirty (30) days prior to the
4 termination date.]
5 (c) Corporations and partnerships shall be eligible to be
6 resident or nonresident surplus lines licensees, upon the
7 following conditions:
8 (1) The corporation or partnership licensee shall list all
9 employes, including at least one active officer or partner, who
10 have satisfied the requirements of this article to become
11 surplus lines licensees.
12 (2) Only those employes [resident in this Commonwealth]
13 holding a certificate of eligibility may transact surplus lines
14 insurance.
15 (d) Each surplus lines license shall expire on the last day
16 of February of each year and shall be renewed before March 1 of
17 each year upon payment of the annual fee, in compliance with
18 other provisions of this section. Any surplus lines licensee who
19 fails to apply for renewal of a license before expiration of the
20 current license shall pay a penalty of two times the license fee
21 and be subject to other penalties as provided by law before his
22 license will be renewed.
23 Section 1619. Records of Surplus Lines Licensee.--(a) Each
24 surplus lines licensee shall keep in its office [in this
25 Commonwealth] a full and true record of each surplus lines
26 insurance contract placed by or through it, including a copy of
27 the policy, certificate, cover note or other evidence of
28 insurance, showing such of the following items as may be
29 applicable:
30 (1) Amount of the insurance and perils insured.
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1 (2) Brief description of the risk insured and its location.
2 (3) Gross premium charged.
3 (4) Any return premium paid.
4 (5) Rate of premium charged for each risk insured.
5 (6) Effective date and terms of the contract.
6 (7) Name and address of the insured.
7 (8) Name and address of the eligible surplus lines insurer
8 and any nonadmitted insured involved pursuant to section 1606.
9 (9) Amount of tax and other sums to be collected from the
10 insured.
11 (10) Identity of the producing broker, any confirming
12 correspondence from the insurer or its representative and the
13 application.
14 (11) A copy of the written notice required by section 1408.
15 (b) The record of each contract shall be kept open at all
16 reasonable times to examination by the department without notice
17 for a period of not less than five (5) years following
18 termination of the contract.
19 Section 1623. Suspension, Revocation or Nonrenewal of
20 Surplus Lines Licensee's License.--The department may suspend,
21 revoke or refuse to renew the license of a surplus lines
22 licensee after notice and a hearing, as provided under the
23 applicable provision of the laws of this Commonwealth, upon any
24 one or more of the following grounds:
25 [(1) Removal of the resident surplus lines licensee's office
26 from this Commonwealth.
27 (2) Removal of the resident surplus lines licensee's
28 accounts and records from this Commonwealth during the period
29 during which such accounts and records are required to be
30 maintained under section 1619.]
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1 (3) Closing of the surplus lines licensee's office for a
2 period of more than thirty (30) business days, unless permission
3 is granted by the department.
4 (4) Failure to make and file required reports.
5 (5) Failure to transmit required tax on surplus lines
6 premiums.
7 [(6) Failure to maintain required bonds.]
8 (7) Failure to remit premiums due insurers or return
9 premiums due insureds in the normal course of business and
10 within reasonable time limits.
11 (8) Violation of any provision of this article.
12 (9) For any other cause for which an insurance agent's or
13 broker's license could be denied, revoked or suspended or
14 refused upon renewal.
15 Section 1624. Service of Process in Actions Against Surplus
16 Lines Insurer.--(a) An eligible surplus lines insurer may be
17 sued upon any cause of action arising in this Commonwealth under
18 any surplus lines insurance contract made by it or evidence of
19 insurance issued or delivered by the surplus lines licensee.
20 Service of process shall be made pursuant to the procedures
21 provided by 42 Pa.C.S. Ch. 53 Subch. B (relating to interstate
22 and international procedure). Any such [policy] surplus lines
23 insurance contract or evidence of insurance delivered by the
24 surplus lines licensee shall contain a provision stating the
25 substance of this section and designating the person to whom
26 process shall be mailed.
27 (b) Each nonadmitted insurer accepting surplus lines
28 insurance shall be deemed thereby to have subjected itself to
29 accepting service of process under 42 Pa.C.S. Ch. 53 Subch. B.
30 (c) The service of process procedures provided in this
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1 section are in addition to any other methods provided by law for
2 service of process upon insurers.
3 Section 9. The act is amended by adding an article to read:
4 ARTICLE XXIV
5 FRATERNAL BENEFIT SOCIETIES
6 SUBARTICLE A
7 GENERAL PROVISIONS
8 Section 2401. Scope.
9 This article deals with fraternal benefit societies.
10 Section 2402. Definitions.
11 The following words and phrases when used in this article
12 shall have the meanings given to them in this section unless the
13 context clearly indicates otherwise:
14 "Benefit contract." The agreement for provision of benefits
15 authorized by section 2431, as that agreement is described in
16 section 2434(a).
17 "Benefit member." An adult member who is designated by the
18 laws or rules of the society to be a benefit member under a
19 benefit contract.
20 "Certificate." The document issued as written evidence of
21 the benefit contract.
22 "Commissioner." The Insurance Commissioner of the
23 Commonwealth.
24 "Department." The Insurance Department of the Commonwealth.
25 "Impaired." For a society that does not write variable
26 contracts, impaired means whenever the society's assets are less
27 than its total liabilities. For a society that does write
28 variable contracts, impaired means whenever the society's assets
29 are less than its total liabilities, plus the required surplus
30 for a mutual life insurer to write such contracts.
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1 "Insurance laws." Laws and regulations pertaining to
2 insurance companies.
3 "Laws." The society's articles of incorporation,
4 constitution and bylaws, however designated.
5 "Lodge." Subordinate member units of the society, known as
6 camps, courts, councils, branches or by any other designation.
7 "Premiums." Premiums, rates, dues or other required
8 contributions by whatever name known, which are payable under
9 the certificate.
10 "Rules." Rules, regulations or resolutions adopted by the
11 supreme governing body or board of directors which are intended
12 to have general application to the members of the society.
13 "Society." Fraternal benefit society, unless otherwise
14 indicated.
15 Section 2403. Fraternal benefit societies.
16 Any incorporated society, order or supreme lodge without
17 capital stock, including one exempted under the provisions of
18 section 2466(a)(2) whether incorporated or not, conducted solely
19 for the benefit of its members and their beneficiaries and not
20 for profit, operated on a lodge system with or without
21 ritualistic form of work, having a representative form of
22 government and providing benefits in accordance with this
23 article is declared to be a fraternal benefit society.
24 Section 2404. Lodge system.
25 (a) General rule.--A society is operating on the lodge
26 system if it has a supreme governing body and subordinate lodges
27 into which members are elected, initiated or admitted in
28 accordance with its laws, rules and rituals. Subordinate lodges
29 shall be required by the laws of the society to hold regular
30 meetings at least once in each quarter in furtherance of the
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1 purposes of the society.
2 (b) Lodges for children.--A society may, at its option,
3 organize and operate lodges for children under the minimum age
4 for adult membership. Membership and initiation in local lodges
5 shall not be required of such children nor shall they have a
6 voice or vote in the management of the society.
7 Section 2405. Representative form of government.
8 A society has a representative form of government when the
9 following circumstances occur:
10 (1) It has a supreme governing body constituted in one
11 of the following ways:
12 (i) The supreme governing body is an assembly
13 composed of delegates elected directly by the members or
14 at intermediate assemblies or conventions of members or
15 their representatives, together with other delegates as
16 may be prescribed in the society's laws. A society may
17 provide for election of delegates by mail. The elected
18 delegates shall constitute a majority in number and shall
19 not have less than two-thirds of the votes and not less
20 than the number of votes required to amend the society's
21 laws. The assembly shall be elected and shall meet at
22 least once every four years and shall elect a board of
23 directors to conduct the business of the society between
24 meetings of the assembly. Vacancies on the board of
25 directors between elections may be filled in the manner
26 prescribed by the society's laws.
27 (ii) The supreme governing body is a board composed
28 of persons elected by the members, either directly or by
29 their representatives in intermediate assemblies, and any
30 other persons prescribed in the society's laws. A society
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1 may provide for election of the board by mail. Each term
2 of a board member may not exceed four years. Vacancies on
3 the board between elections may be filled in the manner
4 prescribed by the society's laws. Those persons elected
5 to the board shall constitute a majority in number and
6 not less than the number of votes required to amend the
7 society's laws. A person filling the unexpired term of an
8 elected board member shall be considered to be an elected
9 member. The board shall meet at least quarterly to
10 conduct the business of the society.
11 (2) The officers of the society are elected either by
12 the supreme governing body or by the board of directors.
13 (3) Only benefit members are eligible for election to
14 the supreme governing body, the board of directors or any
15 intermediate assembly.
16 (4) Each voting member has one vote; no vote may be cast
17 by proxy.
18 Section 2406. Purposes, powers and limitations of societies.
19 (a) Purposes.--A society shall operate for the benefit of
20 members and their beneficiaries by:
21 (1) providing benefits as specified in section 2431; and
22 (2) operating for one or more social, intellectual,
23 educational, charitable, benevolent, moral, fraternal,
24 patriotic or religious purposes for the benefit of its
25 members, which may also be extended to others.
26 These purposes may be carried out directly by the society or
27 indirectly through subsidiary corporations or affiliated
28 organizations.
29 (b) Powers.--Every society shall have the power to adopt
30 laws and rules for the government of the society, the admission
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1 of its members and the management of its affairs. The society
2 shall have the power to change, alter, add to or amend such laws
3 and rules and shall have such other powers as are necessary and
4 incidental to carrying into effect the objects and purposes of
5 the society.
6 (c) Limitations.--No society or subsidiary corporation or
7 affiliated organization through which a society carries out its
8 purposes shall own or operate a funeral home or undertaking
9 establishment.
10 SUBARTICLE B
11 MEMBERSHIP
12 Section 2411. Qualifications for membership.
13 (a) General rule.--A society shall specify in its laws or
14 rules:
15 (1) Eligibility standards for each and every class of
16 membership. If benefits are provided on the lives of
17 children, the minimum age for adult membership shall be 15
18 years and the maximum age shall be 21 years.
19 (2) The process for admission to membership for each
20 membership class.
21 (3) The rights and privileges of each membership class.
22 Only benefit members shall have the right to vote on the
23 management of the insurance affairs of the society.
24 (b) Social members.--A society may also admit social members
25 who shall have no voice or vote in the management of the
26 insurance affairs of the society.
27 (c) Membership is personal.--Membership rights in the
28 society are personal to the member and are not assignable.
29 Section 2412. Office, meetings, publications and grievance
30 procedures.
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1 (a) Office and meetings.--The principal office of any
2 domestic society shall be located in this Commonwealth. The
3 meetings of the supreme governing body of the society may be
4 held in any state or country on the North American continent or
5 in any other location determined by the supreme governing body.
6 All business transacted at such meetings shall be as valid in
7 all respects as if the meetings were held in this Commonwealth.
8 The minutes of the proceedings of the supreme governing body and
9 of the board of directors shall be in the English language.
10 (b) Publications.--
11 (1) A society may provide in its laws for an official
12 publication in which any notice, report or statement required
13 by law to be given to members, including notice of election,
14 may be published. Any required reports, notices and
15 statements shall be printed conspicuously in the publication.
16 If the records of a society show that two or more members
17 have the same mailing address, an official publication mailed
18 to one member is deemed to be mailed to all members at the
19 same address unless a member requests a separate copy. This
20 paragraph shall not apply to certificate requirements,
21 reports or notices in connection with the issuance of
22 certificates.
23 (2) Not later than June 1 of each year, a synopsis of
24 the society's annual statement providing an explanation of
25 the facts concerning the condition of the society thereby
26 disclosed shall be printed and mailed to each benefit member
27 of the society or, in lieu thereof, the synopsis may be
28 published in the society's official publication.
29 (c) Grievance procedures.--A society may provide in its laws
30 or rules for grievance or complaint procedures for members.
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1 Section 2413. Personal liability.
2 (a) General rule.--The officers and members of the supreme
3 governing body or any subordinate body of a society shall not be
4 personally liable for any benefits provided by a society.
5 (b) Indemnification and reimbursement.--
6 (1) Any person may be indemnified and reimbursed by any
7 society for expenses reasonably incurred by, and liabilities
8 imposed upon, that person in connection with or arising out
9 of any action, suit or proceeding, whether civil, criminal,
10 administrative or investigative, or threat thereof, in which
11 that person may be involved by reason of the fact that that
12 person is or was a director, officer, employee or agent of
13 the society or of any firm, corporation or organization which
14 the person served in any capacity at the request of the
15 society.
16 (2) A person shall not be so indemnified or reimbursed:
17 (i) in relation to any matter in an action, suit or
18 proceeding as to which the person shall finally be
19 adjudged to be or have been guilty of a breach of a duty
20 as a director, officer, employee or agent of the society;
21 or
22 (ii) in relation to any matter in an action, suit or
23 proceeding, or threat thereof, which has been made the
24 subject of a compromise settlement;
25 unless, in either case, the person acted in good faith for a
26 purpose the person reasonably believed to be in or not
27 opposed to the best interests of the society and, in a
28 criminal action or proceeding, in addition, had no reasonable
29 cause to believe that his conduct was unlawful.
30 (3) The determination whether the conduct of such person
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1 met the standard required in order to justify indemnification
2 and reimbursement in relation to any matter described in
3 paragraph (2) may only be made by the supreme governing body
4 or board of directors by a majority vote of a quorum
5 consisting of persons who were not parties to such action,
6 suit or proceeding or by a court of competent jurisdiction.
7 The termination of any action, suit or proceeding by
8 judgment, order, settlement, conviction or upon a plea of no
9 contest as to that person shall not in itself create a
10 conclusive presumption that the person did not meet the
11 standard of conduct required in order to justify
12 indemnification and reimbursement. The foregoing right of
13 indemnification and reimbursement shall not be exclusive of
14 other rights to which that person may be entitled as a matter
15 of law and shall inure to the benefit of that person's heirs,
16 executors and administrators.
17 (c) Insurance.--A society shall have power to purchase and
18 maintain insurance on behalf of any person who is or was a
19 director, officer, employee or agent of the society or who is or
20 was serving at the request of the society as a director,
21 officer, employee or agent of any other firm, corporation or
22 organization against any liability asserted against that person
23 and incurred in any such capacity or arising out of that
24 person's status as such, whether or not the society would have
25 the power to indemnify the person against such liability under
26 this section.
27 Section 2414. Waiver.
28 The laws of the society may provide that no subordinate body
29 nor any of its subordinate officers or members shall have the
30 power or authority to waive any of the provisions of the laws of
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1 the society. Such provision shall be binding on the society and
2 every member and beneficiary of a member.
3 SUBARTICLE C
4 GOVERNANCE
5 Section 2421. Organization.
6 (a) General rule.--A domestic society organized after
7 February 11, 1993, shall be formed as provided in this section.
8 (b) Articles of incorporation.--Seven or more citizens of
9 the United States, a majority of whom are citizens of this
10 Commonwealth, who desire to form a fraternal benefit society may
11 make, sign and acknowledge before some officer competent to take
12 acknowledgment of deeds, articles of incorporation in which
13 shall be stated:
14 (1) The proposed corporate name of the society, which
15 shall not so closely resemble the name of any society or
16 insurance company as to be misleading or confusing.
17 (2) The purposes for which it is being formed and the
18 mode in which its corporate powers are to be exercised. Such
19 purposes shall not include more liberal powers than are
20 granted by this subarticle.
21 (3) The names and residences of the incorporators and
22 the names, residences and official titles of all the
23 officers, trustees, directors or other persons who are to
24 have and exercise the general control of the management of
25 the affairs and funds of the society for the first year or
26 until the ensuing election at which all the officers shall be
27 elected by the supreme governing body, which election shall
28 be held not later than one year from the date of issuance of
29 the permanent certificate of authority.
30 (c) Filing.--Such articles of incorporation, duly certified
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1 copies of the society's bylaws and rules, copies of all proposed
2 forms of certificates and applications therefor and circulars to
3 be issued by the society and a bond conditioned upon the return
4 to applicants of the advanced payments if the organization is
5 not completed within one year shall be filed with the
6 commissioner, who may require such further information as the
7 commissioner deems necessary. The bond with sureties approved by
8 the commissioner shall be in an amount, not less than $300,000
9 nor more than $1,500,000, as required by the commissioner. All
10 documents filed shall be in the English language. If the
11 purposes of the society conform to the requirements of this
12 subarticle and all provisions of the law have been complied
13 with, the commissioner shall so certify, retain and file the
14 articles of incorporation and furnish the incorporators a
15 preliminary certificate of authority authorizing the society to
16 solicit members as provided in this section.
17 (d) Duration of preliminary certificate.--No preliminary
18 certificate of authority granted under the provisions of this
19 section shall be valid after one year from its date of issuance
20 or after a further period, not exceeding one year, as may be
21 authorized by the commissioner upon cause shown, unless the 500
22 applicants required under subsection (e) have been secured and
23 the organization has been completed as provided in this section.
24 The articles of incorporation and all other proceedings
25 thereunder shall become null and void in one year from the date
26 of the preliminary certificate of authority or at the expiration
27 of the extended period unless the society shall have completed
28 its organization and received a certificate of authority to do
29 business as provided in this section.
30 (e) Solicitation of members.--Upon receipt of a preliminary
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1 certificate of authority from the commissioner, the society may
2 solicit members for the purpose of completing its organization,
3 shall collect from each applicant the amount of not less than
4 one regular monthly premium in accordance with its table of
5 rates and shall issue to each applicant a receipt for the amount
6 collected. No society shall incur any liability other than for
7 the return of the advance premium nor issue any certificate nor
8 pay or allow or offer or promise to pay or allow any benefit to
9 any person until the following conditions are met:
10 (1) Actual bona fide applications for benefits
11 aggregating at least $500,000 have been secured on not less
12 than 500 applicants, and any necessary evidence of
13 insurability has been furnished to and approved by the
14 society.
15 (2) At least ten subordinate lodges have been
16 established into which the 500 applicants have been admitted.
17 (3) There has been submitted to the commissioner under
18 oath of the president or secretary or corresponding officer
19 of the society a list of the applicants, giving the name and
20 address of each, the date each was admitted, the name and
21 number of the subordinate lodge of which each applicant is a
22 member and the amount of benefits to be granted and premiums
23 for each applicant.
24 (4) It shall have been shown to the commissioner by
25 sworn statement of the treasurer or corresponding officer of
26 the society that at least 500 applicants have each paid in
27 cash at least one regular monthly premium as provided in this
28 subsection, which premiums in the aggregate shall amount to
29 at least $150,000. These advance premiums shall be held in
30 trust during the period of organization and if the society
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1 has not qualified for a certificate of authority within one
2 year as provided in this section the premiums shall be
3 returned to the applicants.
4 (5) The commissioner may make such examination and
5 require such further information as the commissioner deems
6 advisable. Upon presentation of satisfactory evidence that
7 the society has complied with all the provisions of law, the
8 commissioner shall issue to the society a certificate of
9 authority to that effect and to the effect that the society
10 is authorized to transact business pursuant to the provisions
11 of this subarticle. The certificate of authority shall be
12 prima facie evidence of the existence of the society at the
13 date of the certificate. The commissioner shall cause a
14 record of the certificate of authority to be made. A
15 certified copy of the record may be given in evidence with
16 like effect as the original certificate of authority.
17 (f) Limitations.--The provisions of subsection (e) shall not
18 apply to:
19 (1) Any society organized prior to April 6, 1893, under
20 any statute of this Commonwealth which was engaged in doing
21 business in this Commonwealth on that date. After February
22 12, 1993, any such society may exercise all the rights
23 conferred by this article and all the rights, powers,
24 privileges and exemptions now exercised or possessed by it
25 under its charter or articles of incorporation or articles of
26 association, and neither its existence as a corporation nor
27 its rights to exercise any corporate rights vested in it by
28 virtue of its past incorporation shall be affected by
29 anything contained in this article.
30 (2) Any fraternal benefit society incorporated under the
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1 provisions of the act of April 6, 1893 (P.L.10, No.6), the
2 act of May 20, 1921 (P.L.916, No.324), the act of July 17,
3 1935 (P.L.1092, No.357) or the act of July 29, 1977 (P.L.105,
4 No.38), relating to fraternal benefit societies. For the
5 purposes of this article, a corporation which is exempt from
6 the requirements of this section by reason of paragraph (1)
7 shall be deemed to be a holder of a certificate of authority
8 issued under this article.
9 (g) Reincorporation not required.--Any incorporated society
10 authorized to transact business in this Commonwealth on February
11 12, 1993, shall not be required to reincorporate.
12 Section 2422. Amendments to laws.
13 (a) General rule.--A domestic society may amend its laws in
14 accordance with the provisions thereof by action of its supreme
15 governing body at any regular or special meeting thereof or, if
16 its laws so provide, by referendum. The referendum may be held
17 in accordance with the provisions of its laws by the vote of the
18 voting members of the society, by the vote of delegates or
19 representatives of voting members or by the vote of local
20 lodges. A society may provide for voting by mail. No amendment
21 submitted for adoption by referendum shall be adopted unless
22 within six months from the date of submission thereof a majority
23 of the members voting shall have signified their consent to the
24 amendment by one of the methods specified in this section. A
25 society having a direct election form of organization as
26 described in section 2405(1)(ii) may amend its constitution or
27 articles of incorporation only by referendum.
28 (b) Approval of amendment.--No amendment to the laws of any
29 domestic society shall take effect unless approved by the
30 commissioner, who shall approve the amendment if the
20010H0599B4166 - 26 -
1 commissioner finds that it has been duly adopted and is not
2 inconsistent with any requirement of the laws of this
3 Commonwealth or with the character, objects and purposes of the
4 society. Unless the commissioner shall disapprove the amendment
5 within 60 days after the filing, the amendment shall be
6 considered approved. The approval or disapproval of the
7 commissioner shall be in writing and shall be mailed to the
8 secretary or corresponding officer of the society at its
9 principal office. If the commissioner disapproves the amendment,
10 the reasons for the disapproval shall be stated in the written
11 notice.
12 (c) Copies to members.--Within 90 days from the approval
13 thereof by the commissioner, the amendments or a synopsis
14 thereof shall be furnished to all members of the society either
15 by mail or by publication in full in the official publication of
16 the society. The affidavit of any officer of the society or of
17 anyone authorized by it to mail any amendments or synopsis
18 thereof, stating facts which show that same have been duly
19 addressed and mailed, shall be prima facie evidence that the
20 amendments or synopsis thereof have been furnished the
21 addressee.
22 (d) Filings of foreign societies.--Every foreign or alien
23 society authorized to do business in this Commonwealth shall
24 file with the commissioner a duly certified copy of all
25 amendments of or additions to its laws within 90 days after
26 their enactment.
27 (e) Certified copies as evidence.--Printed copies of the
28 laws as amended, certified by the secretary or corresponding
29 officer of the society, shall be prima facie evidence of the
30 legal adoption.
20010H0599B4166 - 27 -
1 Section 2423. Institutions.
2 A society may create, maintain and operate or may establish
3 organizations to operate not-for-profit institutions to further
4 the purposes permitted by section 2406(a)(2). These institutions
5 may furnish services free or at a reasonable charge. Any real or
6 personal property owned, held or leased by the society for this
7 purpose shall be reported in every annual statement but shall
8 not be allowed as an admitted asset of the society except as
9 provided in section 2441(b).
10 Section 2424. Reinsurance.
11 (a) General rule.--A domestic society may, by a reinsurance
12 agreement, cede any individual risk or risks in whole or in part
13 to an insurer (other than another fraternal benefit society)
14 having the power to make such reinsurance and authorized to do
15 business in this Commonwealth or, if not so authorized, one
16 which is approved by the commissioner, but no society may
17 reinsure substantially all of its insurance in force without the
18 written permission of the commissioner. It may take credit for
19 the reserves on the ceded risks to the extent reinsured, but no
20 credit shall be allowed as an admitted asset or as a deduction
21 from liability to a ceding society for reinsurance made, ceded,
22 renewed or otherwise becoming effective after February 12, 1993,
23 unless the reinsurance is payable by the assuming insurer on the
24 basis of the liability of the ceding society under the contract
25 or contracts reinsured without diminution because of the
26 insolvency of the ceding society.
27 (b) Reinsurance by another society.--Notwithstanding the
28 limitation in subsection (a), a society may reinsure the risks
29 of another society in a consolidation or merger approved by the
30 commissioner under section 2425.
20010H0599B4166 - 28 -
1 Section 2425. Consolidations and mergers.
2 (a) General rule.--A domestic society may consolidate or
3 merge with any other society by complying with the provisions of
4 this section. It shall file with the commissioner:
5 (1) A certified copy of the written contract containing
6 in full the terms and conditions of the consolidation or
7 merger.
8 (2) A sworn statement by the president and secretary or
9 corresponding officers of each society showing the financial
10 condition of the society on a date fixed by the commissioner
11 but not earlier than December 31 next preceding the date of
12 the contract.
13 (3) A certificate of the officers, duly verified by
14 their respective oaths, that the consolidation or merger has
15 been approved by a two-thirds vote of the supreme governing
16 body of each society, which vote had been conducted at a
17 regular or special meeting of each body or, if the society's
18 laws permit, by mail.
19 (4) Evidence that at least 60 days prior to the action
20 of the supreme governing body of each society, the text of
21 the contract was furnished to all members of each society
22 either by mail or by publication in full in the official
23 publication of each society.
24 (b) Approval by commissioner.--If the commissioner finds
25 that the contract is in conformity with the provisions of this
26 section, that the financial statements are correct and that the
27 consolidation or merger is just and equitable to the members of
28 each society, the commissioner shall approve the contract and
29 issue a certificate to that effect. Upon this approval, the
30 contract shall be in full force and effect unless any society
20010H0599B4166 - 29 -
1 which is a party to the contract is incorporated under the laws
2 of any other state or territory. In such event the consolidation
3 or merger shall not become effective unless and until it has
4 been approved as provided by the laws of that state or territory
5 and a certificate of the approval filed with the commissioner of
6 this Commonwealth, or, if the laws of that state or territory
7 contain no such provision, then the consolidation or merger
8 shall not become effective unless and until it has been approved
9 by the commissioner of insurance of that state or territory and
10 a certificate of the approval filed with the commissioner of
11 this Commonwealth.
12 (c) Vesting of rights and liabilities.--When the
13 consolidation or merger becomes effective as provided in this
14 section, all the rights, franchises and interests of the
15 consolidated or merged societies in and to every species of
16 property, real, personal or mixed, and things in action
17 thereunto belonging shall be vested in the society resulting
18 from or remaining after the consolidation or merger without any
19 other instrument, except that conveyances of real property may
20 be evidenced by proper deeds, and the title to any real estate
21 or interest therein vested under the laws of this Commonwealth
22 in any of the societies consolidated or merged shall not revert
23 or be in any way impaired by reason of the consolidation or
24 merger but shall vest absolutely in the society resulting from
25 or remaining after the consolidation or merger.
26 (d) Effect of affidavit.--The affidavit of any officer of
27 the society or of anyone authorized by it to mail any notice or
28 document, stating that such notice or document has been duly
29 addressed and mailed, shall be prima facie evidence that the
30 notice or document has been furnished the addressees.
20010H0599B4166 - 30 -
1 Section 2426. Conversion of fraternal benefit society into
2 mutual life insurance company.
3 Any domestic fraternal benefit society may be converted and
4 licensed as a mutual life insurance company by compliance with
5 all the requirements of this act if the plan of conversion has
6 been approved by the commissioner. A plan of conversion shall be
7 prepared in writing by the board of directors setting forth in
8 full the terms and conditions of conversion. The affirmative
9 vote of two-thirds of all members of the supreme governing body
10 at a regular or special meeting shall be necessary for the
11 approval of such plan. No conversion shall take effect unless
12 and until approved by the commissioner who may give approval if
13 the commissioner finds that the proposed change is in conformity
14 with the requirements of law and not prejudicial to the
15 certificate holders of the society.
16 Section 2427. Domestication.
17 (a) Filing requirements.--A foreign or alien society
18 authorized to do business in this Commonwealth may become a
19 domestic society by filing with the commissioner in the English
20 language:
21 (1) Articles of domestication which shall set forth the
22 name of the society, the address, including street and
23 number, of its principal office in this Commonwealth and any
24 other provisions of its current articles of incorporation
25 that the society desires to retain.
26 (2) A statement that upon domestication the society will
27 be subject to all the laws of this Commonwealth applicable to
28 domestic fraternal benefit societies.
29 (3) A brief statement of the purpose or purposes for
30 which it is to be domesticated, which shall be a purpose or
20010H0599B4166 - 31 -
1 purposes for which a domestic society may be incorporated
2 under this subarticle.
3 (4) A certificate of the president and secretary of the
4 society duly verified by their respective oaths that the
5 domestication has been approved in accordance with the
6 constitution and bylaws of the society as required by
7 applicable laws and regulations of the domiciliary
8 jurisdiction.
9 (b) Approval by commissioner.--If the commissioner finds
10 that the filing by the society is in proper order, that the
11 society complies with the requirements for issuing a certificate
12 of authority to a domestic society, that the society will
13 maintain its principal office in Pennsylvania and that the
14 domestication is in the best interest of the members of the
15 society, the commissioner shall approve the articles of
16 domestication and issue a certificate to that effect.
17 (c) Effect of domestication.--Upon approval of the articles
18 of domestication by the commissioner, the society shall
19 thereafter become a domestic society and shall be subject to all
20 the laws of this Commonwealth applicable to domestic societies.
21 SUBARTICLE D
22 CONTRACTUAL BENEFITS
23 Section 2431. Benefits.
24 (a) General rule.--A society authorized to do business in
25 this Commonwealth may provide the following contractual benefits
26 in any form:
27 (1) Death benefits.
28 (2) Endowment benefits.
29 (3) Annuity benefits.
30 (4) Temporary or permanent disability benefits.
20010H0599B4166 - 32 -
1 (5) Hospital, medical or nursing benefits.
2 (6) Other benefits which are authorized for insurers
3 licensed to write life, accident and health insurance and
4 which are not inconsistent with this subarticle.
5 (b) Eligible members.--A society shall specify in its rules
6 those persons who may be issued or covered by the contractual
7 benefits in subsection (a), consistent with providing benefits
8 to members and their dependents. A society may provide benefits
9 on the lives of children under the minimum age for adult
10 membership upon application of an adult person.
11 Section 2432. Beneficiaries.
12 (a) Designation.--The owner of a benefit contract shall have
13 the right at all times to change the beneficiary or
14 beneficiaries in accordance with the laws or rules of the
15 society unless the owner waives this right by specifically
16 requesting in writing that the beneficiary designation be
17 irrevocable. A society may, through its laws or rules, limit the
18 scope of beneficiary designations and shall provide that no
19 revocable beneficiary shall have or obtain any vested interest
20 in the proceeds of any certificate until the certificate has
21 become due and payable in conformity with the provisions of the
22 benefit contract.
23 (b) Payment of funeral benefits.--A society may make
24 provision for the payment of funeral benefits to the extent of
25 that portion of any payment under a certificate as might
26 reasonably appear to be due to any person equitably entitled
27 thereto by reason of having incurred expense occasioned by the
28 burial of the member, provided the portion so paid shall not
29 exceed the sum of $2,000.
30 (c) Absence of beneficiary.--If at the death of any person
20010H0599B4166 - 33 -
1 insured under a benefit contract there is no lawful beneficiary
2 to whom the proceeds shall be payable, the amount of the
3 benefit, except to the extent that funeral benefits may be paid
4 as provided in this section, shall be payable to the personal
5 representative of the deceased insured, or, if none, then
6 payment may be made in accordance with 20 Pa.C.S. § 3101(d)
7 (relating to payments to family and funeral directors). If the
8 owner of the certificate is other than the insured, the proceeds
9 shall be payable to the owner.
10 Section 2433. Benefits not attachable.
11 No money or other benefit, charity, relief or aid to be paid,
12 provided or rendered by any society shall be liable to
13 attachment, garnishment or other process or to be seized, taken,
14 appropriated or applied by any legal or equitable process or
15 operation of law to pay any debt or liability of a member or
16 beneficiary, or any other person who may have a right
17 thereunder, either before or after payment by the society.
18 Section 2434. Benefit contract.
19 (a) General rule.--Every society authorized to do business
20 in this Commonwealth shall issue to each owner of a benefit
21 contract a certificate specifying the amount of benefits
22 provided by the contract. The certificate, together with any
23 riders or endorsements attached to it, the laws of the society,
24 the application for membership, the application for insurance
25 and declaration of insurability, if any, signed by the
26 applicant, and all amendments to each thereof, shall constitute
27 the benefit contract as of the date of issuance between the
28 society and the owner, and the certificate shall so state. The
29 society shall maintain a copy of its laws at each lodge for
30 inspection by the benefit member and shall furnish a copy to
20010H0599B4166 - 34 -
1 each benefit member upon request. A copy of the application for
2 insurance and declaration of insurability, if any, shall be
3 endorsed upon or attached to the certificate. All statements on
4 the application shall be representations and not warranties. Any
5 waiver of this provision shall be void.
6 (b) Effect of subsequent changes.--Any changes, additions or
7 amendments to the laws of the society duly made or enacted
8 subsequent to the issuance of the certificate shall bind the
9 owner and the beneficiaries and shall govern and control the
10 benefit contract in all respects the same as if the changes,
11 additions or amendments had been made prior to and were in force
12 at the time of the application for insurance, except that no
13 change, addition or amendment shall destroy or diminish benefits
14 which the society contracted to give the owner as of the date of
15 issuance.
16 (c) Effect on minority.--Any person upon whose life a
17 benefit contract is issued prior to attaining the age of
18 majority shall be bound by the terms of the application and
19 certificate and by all the laws and rules of the society to the
20 same extent as though the age of majority had been attained at
21 the time of application.
22 (d) Payment of deficiencies.--A society shall provide in its
23 laws that if its reserves as to all or any class of certificates
24 become impaired, its board of directors or corresponding body
25 may require that there shall be paid by the owner to the society
26 the amount of the owner's equitable proportion of such
27 deficiency as ascertained by its board, and if the payment is
28 not made:
29 (1) it shall stand as an indebtedness against the
30 certificate and draw interest not to exceed the rate
20010H0599B4166 - 35 -
1 specified for certificate loans under the certificates; or
2 (2) in lieu of or in combination with paragraph (1), the
3 owner may accept a proportionate reduction in benefits under
4 the certificate.
5 The society may specify the manner of the election and which
6 alternative is to be presumed if no election is made.
7 (e) Certified copies as evidence.--Copies of any of the
8 documents mentioned in this section, certified by the secretary
9 or corresponding officer of the society, shall be received in
10 evidence of the terms and conditions thereof.
11 (f) Content.--No certificate, application, rider or
12 endorsement used in connection therewith shall be delivered or
13 issued for delivery in this Commonwealth unless the form
14 contains provisions required for like forms issued by life,
15 accident and health insurers in this Commonwealth and a copy of
16 the form has been filed with and approved by the commissioner in
17 the manner provided for like policies issued by life, accident
18 and health insurers in this Commonwealth. Every life, accident,
19 health or disability insurance certificate, every annuity
20 certificate and every application, rider or endorsement used in
21 connection therewith approved prior to February 12, 1993, shall
22 be brought into compliance with this subarticle by February 12,
23 1994.
24 (g) Premium grace period.--The certificate may contain a
25 provision for a grace period for payment of premiums of one full
26 month in its certificates.
27 (h) Additional provisions.--The certificate shall also
28 contain the following:
29 (1) A provision stating the amount of premiums which are
30 payable under the certificate and a provision reciting or
20010H0599B4166 - 36 -
1 setting forth the substance of any sections of the society's
2 laws or rules in force at the time of issuance of the
3 certificate which if violated will result in the termination
4 or reduction of benefits payable under the certificate.
5 (2) A provision that any member expelled or suspended,
6 except for nonpayment of a premium or within the contestable
7 period for material misrepresentation in the application for
8 membership or insurance, shall have the privilege of
9 maintaining the certificate in force by continuing payment of
10 the required premium.
11 (3) A provision that in case the age or sex of the
12 member or of any other person is considered in determining
13 the premium and it is found at any time before final
14 settlement under the certificate that the age or sex has been
15 misstated, and the discrepancy and premium involved have not
16 been adjusted, the amount payable under the certificate shall
17 be such as the premium would have purchased at the correct
18 age and sex. If the correct age was not an insurable age
19 under the society's charter or laws, only the premiums paid
20 to the society, less any payments previously made to the
21 member, shall be returned, or, at the option of the society,
22 the amount payable under the certificate shall be such as the
23 premium would have purchased at the correct age according to
24 the society's promulgated rates and any extension thereof
25 based on actuarial principles.
26 (i) Transfer of control or ownership.--Benefit contracts
27 issued on the lives of persons below the society's minimum age
28 for adult membership may provide for transfer of control or
29 ownership to the insured at an age specified in the certificate.
30 A society may require approval of an application for membership
20010H0599B4166 - 37 -
1 in order to effect this transfer and may provide in all other
2 respects for the regulation, government and control of the
3 certificates and all rights, obligations and liabilities
4 incident thereto and connected therewith. Ownership rights prior
5 to the transfer shall be specified in the certificate.
6 (j) Assignment.--A society may specify the terms and
7 conditions on which benefit contracts may be assigned.
8 Section 2435. Nonforfeiture benefits, cash surrender values,
9 certificate loans and other options.
10 (a) Existing certificates.--For certificates issued prior to
11 February 12, 1994, the value of every paid-up nonforfeiture
12 benefit and the amount of any cash surrender value, loan or
13 other option granted shall comply with the provisions of law
14 applicable immediately prior to February 12, 1993.
15 (b) New certificates.--For life certificates issued after
16 February 11, 1994, for which reserves are computed on the
17 Commissioner's 1941 Standard Ordinary Mortality Table, the
18 Commissioner's 1941 Standard Industrial Table or the
19 Commissioner's 1958 Standard Ordinary Mortality Table or the
20 Commissioner's 1980 Standard Mortality Table, or any more recent
21 table made applicable to life insurers, every paid-up
22 nonforfeiture benefit and the amount of any cash surrender
23 value, loan or other option granted shall not be less than the
24 corresponding amount ascertained in accordance with the laws of
25 this Commonwealth applicable to life insurers issuing policies
26 containing like benefits based upon such tables. For annuity
27 certificates issued after February 11, 1994, every paid-up
28 annuity benefit, cash surrender value or death benefit shall not
29 be less than the corresponding amount in accordance with the
30 laws of this Commonwealth applicable to life insurers issuing
20010H0599B4166 - 38 -
1 policies containing like benefits.
2 SUBARTICLE E
3 FINANCIAL
4 Section 2441. Investments.
5 (a) General rule.--A society shall invest its funds only in
6 investments authorized by the laws of this Commonwealth for the
7 investment of assets of life insurers and subject to the
8 limitations thereon. Any foreign or alien society permitted or
9 seeking to do business in this Commonwealth which invests its
10 funds in accordance with the laws of the state, district,
11 territory, country or province in which it is incorporated shall
12 be held to meet the requirements of this section for the
13 investment of funds.
14 (b) Real estate.--In addition to the investment of assets as
15 prescribed in this section or any other laws of this
16 Commonwealth, a fraternal benefit society may purchase, receive,
17 hold and convey real estate or any interest therein for the
18 purpose of maintenance or construction of camps or recreational
19 areas with necessary facilities for all its members. These
20 assets shall be shown on the annual statement at cost in the
21 year acquired and may not exceed 5% of other admitted assets of
22 the society.
23 Section 2442. Funds.
24 (a) General rule.--All assets shall be held, invested and
25 disbursed for the use and benefit of the society, and no member
26 or beneficiary shall have or acquire individual rights therein
27 or become entitled to any apportionment on the surrender of any
28 part thereof, except as provided in the benefit contract.
29 (b) Special funds.--A society may create, maintain, invest,
30 disburse and apply any special fund or funds necessary to carry
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1 out any purpose permitted by the laws of the society.
2 (c) Separate accounts.--A society may, pursuant to
3 resolution of its supreme governing body, establish and operate
4 one or more separate accounts and issue contracts on a variable
5 basis, subject to the insurance laws regulating life insurers
6 establishing those accounts and issuing those contracts. To the
7 extent the society deems it necessary in order to comply with
8 any applicable Federal or State laws or any rules issued
9 thereunder, the society may:
10 (1) Adopt special procedures for the conduct of the
11 business and affairs of a separate account.
12 (2) For persons having beneficial interests therein,
13 provide special voting and other rights, including, without
14 limitation, special rights and procedures relating to
15 investment policy, investment advisory services, selection of
16 certified public accountants and selection of a committee to
17 manage the business and affairs of the account.
18 (3) Issue contracts on a variable basis to which section
19 2434(b) and (d) shall not apply.
20 SUBARTICLE F
21 REGULATION
22 Section 2451. Valuation.
23 (a) Existing certificates.--The minimum reserves for
24 certificates issued prior to February 12, 1994, shall be those
25 provided by the laws applicable immediately prior to February
26 12, 1993.
27 (b) New certificates.--The minimum reserves for certificates
28 issued after February 11, 1994, shall be based on the following
29 tables:
30 (1) For certificates of life insurance - the
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1 Commissioner's 1941 Standard Ordinary Mortality Table, the
2 Commissioner's 1941 Standard Industrial Mortality Table, the
3 Commissioner's 1958 Standard Ordinary Mortality Table, the
4 Commissioner's 1980 Standard Ordinary Mortality Table or any
5 more recent table made applicable to life insurers.
6 (2) For annuity and pure endowment certificates, for
7 total and permanent disability benefits, for accidental death
8 benefits and for accident and health benefits - such tables
9 as are authorized for use by life insurers in this
10 Commonwealth.
11 (c) Valuation methods and standards.--All of the valuations
12 under subsection (b) shall be under valuation methods and
13 interest standards in accordance with the laws of this
14 Commonwealth applicable to life insurers issuing policies
15 containing like benefits.
16 (d) Other valuation standards.--The commissioner may, in his
17 discretion, accept other standards for valuation if the
18 commissioner finds that the reserves produced thereby will not
19 be less in the aggregate than reserves computed in accordance
20 with the minimum valuation standard prescribed in this section.
21 The commissioner may, in his discretion, vary the standards of
22 mortality applicable to all benefit contracts on substandard
23 lives or other extra hazardous lives by any society authorized
24 to do business in this Commonwealth.
25 (e) Excess reserves.--Any society, with the consent of the
26 commissioner of insurance of the state of domicile of the
27 society and under such conditions, if any, which the
28 commissioner may impose, may establish and maintain reserves on
29 its certificates in excess of the reserves required thereunder,
30 but the contractual rights of any benefit member shall not be
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1 affected thereby.
2 Section 2452. Reports.
3 (a) General rule.--Reports shall be filed in accordance with
4 the provisions of this section.
5 (b) Annual statement.--Every society transacting business in
6 this Commonwealth shall annually on or before March 1, unless
7 for cause shown the time has been extended by the commissioner,
8 file with the commissioner a true statement of its financial
9 condition, transactions and affairs for the preceding calendar
10 year and shall pay the fee prescribed in section 2161 for the
11 filing. The statement shall be in general form and context as
12 approved by a national association of insurance commissioners,
13 approved by the Insurance Department, for fraternal benefit
14 societies and as supplemented by additional information required
15 by the commissioner.
16 (c) Valuation of certificates.--As part of the annual
17 statement required in this section, each society shall on or
18 before March 1 file with the commissioner a valuation of its
19 certificates in force on December 31 last preceding. The
20 commissioner may in his discretion for cause shown extend the
21 time for filing the valuation for not more than two calendar
22 months. The valuation shall be done in accordance with the
23 standards specified in section 2451. The valuation and
24 underlying data shall be certified by a qualified actuary.
25 (d) Failure to file statement.--A society neglecting to file
26 the annual statement in the form and within the time provided by
27 this section shall forfeit $100 for each day during which that
28 neglect continues and, upon notice by the commissioner to that
29 effect, its authority to do business in this Commonwealth shall
30 cease while the default continues.
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1 Section 2453. Annual license.
2 Societies which are now authorized to transact business in
3 this Commonwealth may continue such business until April 1,
4 1993. The authority of such societies and all societies
5 hereafter licensed may thereafter be renewed annually but in all
6 cases to terminate on the succeeding April 1. However, a license
7 so issued shall continue in full force and effect until the new
8 license is issued or specifically refused. For each license or
9 renewal the society shall pay the commissioner the prescribed
10 fee. A duly certified copy or duplicate of such license shall be
11 prima facie evidence that the licensee is a fraternal benefit
12 society within the meaning of this article.
13 Section 2454. Examination of societies.
14 (a) General rule.--The commissioner or any person he may
15 appoint may examine any domestic, foreign or alien society
16 transacting or applying for admission to transact business in
17 this Commonwealth in the same manner as authorized for
18 examination of domestic, foreign or alien insurers. Requirements
19 of notice and an opportunity to respond before findings are made
20 public as provided in the insurance laws regulating insurers
21 shall also be applicable to the examination of societies.
22 (b) Payment of expenses.--The expense of each examination
23 and of each valuation, including compensation and actual expense
24 of examiners, shall be paid by the society examined or whose
25 certificates are valued upon statements furnished by the
26 commissioner.
27 Section 2455. Foreign or alien society; admission.
28 No foreign or alien society shall transact business in this
29 Commonwealth without a license issued by the commissioner. Any
30 such society desiring admission to this Commonwealth shall
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1 comply substantially with the requirements and limitations of
2 this article applicable to domestic societies. Any such society
3 may be licensed to transact business in this Commonwealth upon
4 filing the following with the commissioner and upon a showing
5 that its assets are invested in accordance with the provisions
6 of this article:
7 (1) A duly certified copy of its articles of
8 incorporation.
9 (2) A copy of its bylaws, certified by its secretary or
10 corresponding officer.
11 (3) A power of attorney to the commissioner as
12 prescribed in this article.
13 (4) A statement of its business under oath of its
14 president and secretary or corresponding officers in a form
15 prescribed by the commissioner, duly verified by an
16 examination made by the supervising insurance official of its
17 home state or other state, territory, province or country,
18 satisfactory to the commissioner.
19 (5) Certification from the proper official of its home
20 state, territory, province or country that the society is
21 legally incorporated and licensed to transact business
22 therein.
23 (6) Copies of its certificate forms.
24 (7) Such other information as the commissioner may deem
25 necessary.
26 Section 2456. Injunction, liquidation and receivership of
27 domestic society.
28 (a) Notice of deficiencies and sanctions.--When the
29 commissioner upon investigation finds that a domestic society:
30 (1) has exceeded its powers;
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1 (2) has failed to comply with any provision of this
2 article;
3 (3) is not fulfilling its contracts in good faith;
4 (4) has a membership of less than 400 after an existence
5 of one year or more;
6 (5) is conducting business fraudulently or in a manner
7 hazardous to its members, creditors, the public or the
8 business; or
9 (6) has become impaired;
10 the commissioner shall notify the society of the deficiency or
11 deficiencies and state in writing the reasons for his
12 dissatisfaction. The commissioner shall at once issue a written
13 notice to the society requiring that the deficiency or
14 deficiencies which exist are corrected. After this notice the
15 society shall have a 30-day period in which to comply with the
16 commissioner's request for correction, and, if the society fails
17 to comply, the commissioner shall notify the society of the
18 findings of noncompliance and require the society to show cause
19 on a date named why it should not be enjoined from carrying on
20 any business until the violation complained of shall have been
21 corrected or why an action in quo warranto should not be
22 commenced against the society.
23 (b) Action by Attorney General.--If on that date the society
24 does not present good and sufficient reasons why it should not
25 be so enjoined or why such action should not be commenced, the
26 commissioner may present the facts relating thereto to the
27 Attorney General who shall, if he deems the circumstances
28 warrant, commence an action to enjoin the society from
29 transacting business or in quo warranto.
30 (c) Hearing and order.--The court shall thereupon notify the
20010H0599B4166 - 45 -
1 officers of the society of a hearing. If after a full hearing it
2 appears that the society should be so enjoined or liquidated or
3 a receiver appointed, the court shall enter the necessary order.
4 No society so enjoined shall have the authority to do business
5 until all of the following occur:
6 (1) The commissioner finds that the violation complained
7 of has been corrected.
8 (2) The costs of such action shall have been paid by the
9 society if the court finds that the society was in default as
10 charged.
11 (3) The court has dissolved its injunction.
12 (4) The commissioner has reinstated the certificate of
13 authority.
14 (d) Liquidation.--If the court orders the society
15 liquidated, it shall be enjoined from carrying on any further
16 business, whereupon the receiver of the society shall proceed at
17 once to take possession of the books, papers, money and other
18 assets of the society and, under the direction of the court,
19 proceed forthwith to close the affairs of the society and to
20 distribute its funds to those entitled thereto.
21 (e) Validity of action and appointment of receiver.--No
22 action under this section shall be recognized in any court of
23 this Commonwealth unless brought by the Attorney General upon
24 request of the commissioner. Whenever a receiver is to be
25 appointed for a domestic society, the court shall appoint the
26 commissioner as the receiver.
27 (f) Applicability to voluntary dissolution.--The provisions
28 of this section relating to hearing by the commissioner, action
29 by the Attorney General at the request of the commissioner,
30 hearing by the court, injunction and receivership shall be
20010H0599B4166 - 46 -
1 applicable to a society which shall voluntarily determine to
2 discontinue business.
3 Section 2457. Suspension, revocation or refusal of license of
4 foreign or alien society.
5 (a) Notice of deficiencies and sanctions.--When the
6 commissioner upon investigation finds that a foreign or alien
7 society transacting or applying to transact business in this
8 Commonwealth:
9 (1) has exceeded its powers;
10 (2) has failed to comply with any of the provisions of
11 this article;
12 (3) is not fulfilling its contracts in good faith; or
13 (4) is conducting its business fraudulently or in a
14 manner hazardous to its members or creditors or the public;
15 the commissioner shall notify the society of such deficiency or
16 deficiencies and state in writing the reasons for his
17 dissatisfaction. The commissioner shall at once issue a written
18 notice to the society requiring that the deficiency or
19 deficiencies which exist are corrected. After such notice the
20 society shall have a 30-day period in which to comply with the
21 commissioner's request for correction, and, if the society fails
22 to comply, the commissioner shall notify the society of the
23 findings of noncompliance and require the society to show cause
24 on a date named why its license should not be suspended, revoked
25 or refused. If on that date the society does not present good
26 and sufficient reason why its authority to do business in this
27 Commonwealth should not be suspended, revoked or refused, the
28 commissioner may suspend or refuse the license of the society to
29 do business in this Commonwealth until satisfactory evidence is
30 furnished to the commissioner that the suspension or refusal
20010H0599B4166 - 47 -
1 should be withdrawn or the commissioner may revoke the authority
2 of the society to do business in this Commonwealth.
3 (b) Existing contracts unaffected.--Nothing contained in
4 this section shall be taken or construed as preventing any such
5 society from continuing in good faith all contracts made in this
6 Commonwealth during the time the society was legally authorized
7 to transact business in this Commonwealth.
8 Section 2458. Injunction.
9 No application or petition for injunction against any
10 domestic, foreign or alien society, or lodge thereof, respecting
11 any matter pertaining to a regulatory law administered by the
12 commissioner shall be recognized in any court of this
13 Commonwealth unless made by the Attorney General upon request of
14 the commissioner.
15 Section 2459. Licensing of agents.
16 (a) General rule.--Agents of societies shall be licensed in
17 accordance with the insurance laws regulating the licensing,
18 revocation, suspension or termination of license of resident and
19 nonresident agents.
20 (b) Exemptions from licensure.--No examination or license
21 shall be required of any regular salaried officer, employee or
22 member of a licensed society who devotes substantially all of
23 his services to activities other than the solicitation of
24 fraternal insurance contracts from the public and who receives
25 for the solicitation of such contracts no commission or other
26 compensation directly dependent upon the amount of business
27 obtained.
28 (c) Examination.--
29 (1) Any person who in the preceding calendar year has
30 solicited and procured life insurance contracts on behalf of
20010H0599B4166 - 48 -
1 any society in an amount of insurance in excess of $200,000
2 or, in the case of any other kind or kinds of insurance which
3 the society might write, on the persons of more than 25
4 individuals and who has received or will receive a commission
5 or other compensation therefor shall be required to take an
6 examination. No examination shall be required of any agent
7 who was in the service of a society on January 28, 1978.
8 (2) Beginning July 1, 2007, and every five years
9 thereafter, the commissioner shall review the monetary limit
10 contained in this subsection and may adjust the amount. The
11 adjustment shall not exceed the percentage change in the
12 Consumer Price Index for All Urban Consumers (CPI-U) for the
13 Pennsylvania, New Jersey, Delaware and Maryland area,
14 officially reported by the United States Department of Labor,
15 Bureau of Labor Statistics, for the period since the last
16 adjustment under this subsection. Any adjustment to the
17 amount shall be published as a notice in the Pennsylvania
18 Bulletin.
19 (d) Limitation.--No society doing business in this
20 Commonwealth shall pay any commission or other compensation to
21 any person for any services in obtaining in this Commonwealth
22 any new contract of life, accident or health insurance, or any
23 new annuity contract, except to a licensed fraternal insurance
24 agent of that society.
25 Section 2460. Unfair methods of competition and unfair and
26 deceptive acts and practices.
27 Every society authorized to do business in this Commonwealth
28 shall be subject to the provisions of the act of July 22, 1974
29 (P.L.589, No.205), known as the Unfair Insurance Practices Act,
30 but nothing in that act shall be construed as applying to or
20010H0599B4166 - 49 -
1 affecting the right of any society to determine its eligibility
2 requirements for membership by reason of common bond or be
3 construed as applying to or affecting the offering of benefits
4 exclusively to members or persons eligible for membership in the
5 society by a subsidiary corporation or affiliated organization
6 organized to carry out the purposes set forth in section
7 2406(a)(2).
8 Section 2461. Fees.
9 The commissioner shall charge and collect fees from fraternal
10 benefit societies as set forth in section 612-A of the act of
11 April 9, 1929 (P.L.177, No.175), known as The Administrative
12 Code of 1929. All fees collected shall be paid daily into the
13 State Treasury.
14 Section 2462. Taxation.
15 Every society organized or licensed under this article is
16 hereby declared to be a charitable and benevolent institution,
17 and all of its funds shall be exempt from all and every
18 Commonwealth, county, district, municipal and school tax other
19 than taxes on real estate and office equipment.
20 Section 2463. Review.
21 All decisions and findings of the commissioner made under the
22 provisions of this article shall be subject to review by proper
23 proceedings in any court of competent jurisdiction in this
24 Commonwealth.
25 Section 2464. Penalties.
26 (a) False statements.--It shall be prohibited for any person
27 to willfully make a false or fraudulent statement in or relating
28 to an application for membership or for the purpose of obtaining
29 money from or a benefit in any society.
30 (b) Filing of false statement.--Any person who willfully
20010H0599B4166 - 50 -
1 makes a false or fraudulent statement in any verified report or
2 declaration under oath required or authorized by this article or
3 of any material fact or thing contained in a sworn statement
4 concerning the death or disability of a member for the purpose
5 of procuring payment of a benefit named in the certificate
6 commits perjury and shall be subject to the penalties therefor
7 prescribed by law.
8 (c) Solicitation by nonlicensed society.--A person who
9 solicits membership for or in any manner assists in procuring
10 membership in any society not licensed to do business in this
11 Commonwealth commits a summary offense and shall, upon
12 conviction, be sentenced to pay a fine of not less than $500 nor
13 more than $1,000.
14 (d) Penalty for other violation.--A person who willfully
15 violates, neglects or refuses to comply with the provisions of
16 this article for which a penalty is not otherwise prescribed,
17 commits a summary offense and shall, upon conviction, be
18 sentenced to pay a fine of not more than $500. Upon satisfactory
19 evidence of a violation of any provision of this article, the
20 commissioner has the discretion, in lieu of seeking criminal
21 prosecution, to pursue any one or more of the following courses
22 of action:
23 (1) Suspend or revoke or refuse to renew the license of
24 the offending party or parties.
25 (2) Impose a civil penalty of not more than $5,000 for
26 each act in violation of the provisions of this article.
27 Section 2465. Applicability of insurance laws.
28 Except as provided in this article, societies shall be
29 governed by this article and shall be exempt from all other
30 provisions of the insurance laws of this Commonwealth unless
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1 they are expressly designated therein or unless it is
2 specifically made applicable by this article.
3 Section 2466. Exemption of certain societies.
4 (a) General rule.--Nothing contained in this article shall
5 be so construed as to affect or apply to:
6 (1) Grand or subordinate lodges of societies, orders or
7 associations now doing business in this Commonwealth which
8 provide benefits exclusively through local or subordinate
9 lodges.
10 (2) Orders, societies or associations which admit to
11 membership only persons engaged in one or more crafts or
12 hazardous occupations, in the same or similar lines of
13 business, insuring only their own members and their families,
14 and the ladies' societies or ladies' auxiliaries to such
15 orders, societies or associations.
16 (3) Domestic societies which limit their membership to
17 employees of a particular city or town, designated firm,
18 business house or corporation which provide for a death
19 benefit of not more than $400 or disability benefits of not
20 more than $350 to any person in any one year, or both.
21 (4) Domestic societies or associations of a purely
22 religious, charitable or benevolent description which provide
23 for a death benefit of not more than $400 or for disability
24 benefits of not more than $350 to any one person in any one
25 year, or both.
26 (b) Exclusions from exemption.--Any society or association
27 described in subsection (a)(3) or (4) which provides for death
28 or disability benefits for which benefit certificates are issued
29 and any society or association included in subsection (a)(4)
30 which has more than 1,000 members shall not be exempted from the
20010H0599B4166 - 52 -
1 provisions of this article but shall comply with all
2 requirements thereof.
3 (c) Limitation or compensation payments.--No society which,
4 by the provisions of this section, is exempt from the
5 requirements of this article, except any society described in
6 subsection (a)(2), shall give or allow, or promise to give or
7 allow, to any person any compensation for procuring new members.
8 (d) Accidental benefits.--Every society which provides for
9 benefits in case of death or disability resulting solely from
10 accident and which does not obligate itself to pay natural death
11 or sick benefits shall have all of the privileges and be subject
12 to all the applicable provisions and regulations of this
13 subarticle except that the provisions thereof relating to
14 medical examination, valuations of benefit certificates and
15 incontestability shall not apply to such society.
16 (e) Submission of information.--The commissioner may require
17 from any society or association, by examination or otherwise,
18 such information as will enable the commissioner to determine
19 whether the society or association is exempt from the provisions
20 of this subarticle.
21 (f) Exemption from insurance laws.--Societies exempted under
22 the provisions of this section shall also be exempt from all
23 other provisions of the insurance laws of this Commonwealth.
24 Section 10. The act of December 14, 1992 (P.L.835, No.134),
25 known as the Fraternal Benefit Societies Code, is repealed.
26 Section 11. The addition of Article XXIV of the act is a
27 continuation of the act of December 14, 1992 (P.L.835, No.134),
28 known as the Fraternal Benefit Societies Code. The following
29 apply:
30 (1) Orders, regulations and policies under the Fraternal
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1 Benefit Societies Code which are in effect on the effective
2 date of section (repeal of Fraternal Benefit Societies Code)
3 shall remain in effect until revoked, vacated, amended or
4 modified under Article XXIV of the act.
5 (2) Except as provided in paragraph (3), any difference
6 in language between Article XXIV of the act and the Fraternal
7 Benefit Societies Code is intended only to conform to the
8 style of the act and is not intended to change or affect the
9 legislative intent, judicial construction or administration
10 and implementation of the Fraternal Benefit Societies Code.
11 (3) Paragraph (2) does not apply to the following
12 provisions:
13 (i) Section 2459(c) of the act.
14 (ii) Section 2464(d) of the act.
15 Section 12. This act shall take effect as follows:
16 (1) The following provisions shall take effect
17 immediately:
18 (i) The amendment of section 410C of the act.
19 (ii) This section.
20 (2) The remainder of this act shall take effect in 60
21 days.
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