|Posted:||March 13, 2019 11:48 AM|
|From:||Representative Anthony M. DeLuca and Rep. Tina Pickett|
|To:||All House members|
|Subject:||Common Sense Regulation of Fraternal Benefit Societies|
|Fraternal benefit societies (fraternals) are not-for-profit membership organizations that help secure their members’ financial future by providing them a variety of life insurance and retirement income products. Fraternal members share a common bond such as faith, ethnicity, gender, occupation, or shared values and operate through a system of local chapters that combine to form one of the most cost-effective grassroots volunteer networks in the nation.
There are more than a dozen fraternals domiciled in Pennsylvania with 493,000 members, more than any other state. These organizations use the proceeds from their financial services operations to help their members improve the quality of life in the communities where they live and work by facilitating volunteerism and providing direct financial assistance to programs and projects that reflect their members shared values.
Under existing provisions in the Insurance Code, fraternals are authorized to offer a limited variety of insurance products to members - primarily life and annuity products. And while all of these organizations are currently financially sound, an increasingly competitive insurance marketplace and a more complex regulatory environment, may present some societies with significant financial challenges in the future.
These amendments to existing law enhance regulatory oversight of fraternal solvency and mitigate the potential for future insolvencies by facilitating mergers with other fraternals or insurers (if, and when appropriate) and better protect the members of these societies from the financial burden and legal complexities of the receivership and liquidation process.
This bill contains the following key provisions addressing solvency:
Please join us in sponsoring this legislation making certain that Fraternal Benefit Societies can better serve their members and the communities they assist.
Introduced as HB1016