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2019 Florida Statutes
Chapter 632
FRATERNAL BENEFIT SOCIETIES
FRATERNAL BENEFIT SOCIETIES
CHAPTER 632
FRATERNAL BENEFIT SOCIETIES
632.601 “Fraternal benefit society” defined.
632.602 “Lodge system” defined.
632.603 “Representative form of government” defined.
632.604 Terms used.
632.605 Purposes and powers.
632.606 Qualifications for membership.
632.607 Location of office; meetings; communications to members; grievance procedures.
632.608 No personal liability.
632.609 Waiver prohibited.
632.611 Organization.
632.612 Amendments to laws.
632.613 Institutions.
632.614 Reinsurance.
632.615 Consolidations and mergers.
632.616 Conversion of fraternal benefit society into mutual life insurance company.
632.617 Benefits.
632.618 Beneficiaries.
632.619 Benefits not attachable.
632.621 The benefit contract.
632.622 Nonforfeiture benefits, cash surrender values, certificate loans, and other options.
632.623 Investments.
632.624 Funds.
632.625 Exemptions.
632.626 Taxation.
632.627 Valuation.
632.628 Reports.
632.629 Annual license.
632.631 Examination of societies; no adverse publications.
632.632 Foreign or alien society; admission.
632.633 Additional grounds for suspension, revocation, or denial of certificate of authority; receivership; insolvency.
632.634 Licensing and appointment of agents.
632.635 Unfair and deceptive acts and practices.
632.636 Violations; penalties.
632.637 Exemption of certain societies.
632.638 Applicability of other code provisions.
632.601 “Fraternal benefit society” defined.—Any incorporated society, order, or supreme lodge, without capital stock, including one exempted under the provisions of s. 632.637(1)(b), whether incorporated or not, conducted solely for the benefit of its members and their beneficiaries and not for profit, operated on a lodge system with ritualistic form of work, having a representative form of government, and which makes provision for the payment of benefits in accordance with this chapter, is hereby declared to be a “fraternal benefit society.”
History.—ss. 4, 6, ch. 86-140; s. 4, ch. 91-429.
632.602 “Lodge system” defined.—
(1) A society is operating on the lodge system if it has a supreme governing body and subordinate lodges into which members are elected, initiated, or admitted in accordance with its laws, rules, and ritual. Subordinate lodges shall be required by the laws of the society to hold regular meetings at least once in each month in furtherance of the purposes of the society.
(2) A society may, at its option, organize and operate lodges for children under the minimum age for adult membership. Initiation in lodges shall not be required of children, nor shall they have a voice or vote in the management of the society.
History.—ss. 4, 6, ch. 86-140; s. 4, ch. 91-429.
632.603 “Representative form of government” defined.—A society has a “representative form of government” when:
(1) It has a supreme governing body constituted in one of the following ways:
(a) Assembly.—The supreme governing body is an assembly composed of delegates elected directly by the members, or at intermediate assemblies or conventions of members or their representatives, together with other delegates as may be prescribed by the society’s laws. A society may provide for election of delegates by mail. The elected delegates shall constitute a majority in number and shall not have less than two-thirds of the votes and shall not have less than the number of votes required to amend the society’s laws. The assembly shall be elected and shall meet at least once every 4 years and shall elect a board of directors to conduct the business of the society between meetings of the assembly. Vacancies on the board of directors between elections may be filled in the manner prescribed by the society’s law.
(b) Direct election.—The supreme governing body is a board composed of persons elected by the members, either directly or by their representatives in intermediate assemblies, and any other persons prescribed in the society’s laws. A society may provide for election of the board by mail. Each term of a board member may not exceed 4 years. Vacancies on the board between elections may be filled in the manner prescribed by the society’s laws. Those persons elected to the board shall constitute a majority in number and not less than the number of votes required to amend the society’s laws. A person filling the unexpired term of an elected board member shall be considered to be an elected member. The board shall meet at least quarterly to conduct the business of the society. And
(2)(a) The officers of the society are elected either by the supreme governing body or by the board of directors;
(b) Only benefit members are eligible for election to the supreme governing body, the board of directors, or any intermediate assembly; and
(c) Each voting member shall have one vote; no vote may be cast by proxy.
History.—ss. 4, 6, ch. 86-140; s. 4, ch. 91-429.
632.604 Terms used.—Whenever used in this chapter:
(1) “Benefit contract” means the agreement for provision of benefits authorized by s. 632.617, as that agreement is described in s. 632.621(1).
(2) “Benefit member” means an adult member who is designated by the laws or rules of the society to be a benefit member under a benefit contract.
(3) “Certificate” means the document issued as written evidence of the benefit contract.
(4) “Premiums” means premiums, rates, dues, or other required contributions, by whatever name known, which are payable under the certificate.
(5) “Laws” shall mean the society’s articles of incorporation, constitution and bylaws, however designated.
(6) “Rules” shall mean all rules, regulations, or resolutions adopted by the supreme governing body or board of directors which are intended to have general application to the members of the society.
(7) “Society” shall mean fraternal benefit society, unless otherwise indicated.
(8) “Lodge” shall mean subordinate member units of the society, known as camps, courts, councils, branches, or by any other designation.
History.—ss. 4, 6, ch. 86-140; s. 4, ch. 91-429.
632.605 Purposes and powers.—
(1) A society shall operate for the benefit of members and their beneficiaries by:
(a) Providing benefits as specified in s. 632.617; and
(b) Operating for one or more social, intellectual, educational, charitable, benevolent, moral, fraternal, patriotic, or religious purposes for the benefit of its members, which may also be extended to others; provided that such purposes do not endanger the solvency of the society. Such purposes as set forth in this paragraph may be carried out directly by the society or indirectly through subsidiary corporations or affiliated organizations.
(2) No subsidiary corporation or affiliated organization shall transact insurance or engage in any other activity regulated under the Florida Insurance Code or other Florida law unless the subsidiary corporation or affiliated organization complies with all provisions of the applicable law. No society or subsidiary corporation or affiliated organization through which a society carries out its purposes shall own or operate a funeral home or undertaking establishment.
(3) Every society shall have the power to adopt laws and rules for the government of the society, the admission of its members, and the management of its affairs. The society shall have the power to change, alter, add to, or amend such laws and rules and shall have such other powers as are necessary and incidental to carrying into effect the objects and purposes of the society.
History.—ss. 4, 6, ch. 86-140; s. 4, ch. 91-429.
632.606 Qualifications for membership.—
(1) A society shall specify in its laws or rules:
(a) Eligibility standards for each and every class of membership, provided that if benefits are provided on the lives of children, the minimum age for adult membership shall be set at not less than age 15 and not greater than age 21;
(b) The process for admission to membership for each membership class; and
(c) The rights and privileges of each membership class, provided that only benefit members shall have the right to vote on the management of the insurance affairs of the society.
(2) A society may also admit social members who shall have no voice or vote in the management of the insurance affairs of the society.
(3) Membership rights in the society are personal to the member and are not assignable.
History.—ss. 4, 6, ch. 86-140; s. 4, ch. 91-429.
632.607 Location of office; meetings; communications to members; grievance procedures.—
(1) The principal office of any domestic society shall be located in this state. The meetings of its supreme governing body may be held in any state, district, province, or territory wherein such society has at least one subordinate lodge, and all business transacted at such meetings shall be as valid in all respects as if such meetings were held in this state. The minutes of the proceedings of the supreme governing body and of the board of directors shall be in the English language.
(2)(a) A society may provide in its laws for an official publication in which any notice, report, or statement required by law to be given to members, including notice of election, may be published. Such required reports, notices, and statements shall be printed conspicuously in the publication. If the records of a society show that two or more members have the same mailing address, an official publication mailed to one member is deemed to be mailed to all members at the same address unless a member requests a separate copy.
(b) Not later than June 1 of each year, a synopsis of the society’s annual statement providing an explanation of the facts concerning the condition of the society thereby disclosed shall be printed and mailed to each benefit member of the society or, in lieu thereof, such synopsis may be published in the society’s official publication.
(3) A society shall provide in its laws or rules for grievance or complaint procedures for members.
History.—ss. 4, 6, ch. 86-140; s. 4, ch. 91-429.
632.608 No personal liability.—
(1) The officers and members of the supreme governing body or of any subordinate body of a society shall not be personally liable for any benefits provided by the society.
(2)(a) Any person may be indemnified and reimbursed by any society for expenses reasonably incurred by, and for liabilities imposed upon, such person in connection with or arising out of any action, suit, or proceeding, whether civil, criminal, administrative, or investigative, or threat thereof, in which the person may be involved by reason of the fact that she or he is or was a director, officer, employee, or agent of the society or of any firm, corporation, or organization which she or he served in any capacity at the request of the society.
(b) A person shall not be so indemnified or reimbursed:
1. In relation to any matter in such action, suit, or proceeding as to which she or he shall finally be adjudged to be or have been guilty of breach of a duty as a director, officer, employee, or agent of the society, or
2. In relation to any matter in such action, suit, or proceeding, or threat thereof, which has been made the subject of a compromise settlement,
unless in either such case the person acted in good faith for a purpose the person reasonably believed to be in, or not opposed to, the best interests of the society and in addition, in a criminal action or proceeding, had no reasonable cause to believe that her or his conduct was unlawful.
(c) The determination as to whether the conduct of such person met the standard required in order to justify indemnification and reimbursement in relation to any matter described in subparagraph (b)1. or subparagraph (b)2. may only be made by the supreme governing body or board of directors by a majority vote of a quorum consisting of persons who were not parties to such action, suit, or proceeding or by a court of competent jurisdiction. The termination of any action, suit, or proceeding as to such person by judgment, order, settlement, or conviction, or upon a plea of no contest, shall not in itself create a conclusive presumption that the person did not meet the standard of conduct required in order to justify indemnification and reimbursement. The foregoing right of indemnification and reimbursement shall not be exclusive of other rights to which such person may be entitled as a matter of law and shall inure to the benefit of her or his heirs, executors, and administrator.
(3) A society shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, or agent of the society, or who is or was serving at the request of the society as a director, officer, employee, or agent of any other firm, corporation, or organization, against any liability asserted against such person and incurred by her or him in any such capacity or arising out of her or his status as such, whether or not the society would have the power to indemnify the person against such liability under this section.
History.—ss. 4, 6, ch. 86-140; s. 4, ch. 91-429; s. 419, ch. 97-102.
632.609 Waiver prohibited.—The laws of the society shall provide that no subordinate body, nor any of its subordinate officers or members, shall have the power or authority to waive any of the provisions of the laws or rules of the society. Such provision shall be binding on the society and every member and beneficiary of a member.
History.—ss. 4, 6, ch. 86-140; s. 4, ch. 91-429.
632.611 Organization.—A domestic society organized on or after June 24, 1986, shall be formed as follows:
(1) Seven or more citizens of the United States, a majority of whom are citizens of this state, who desire to form a fraternal benefit society, shall make, sign, and acknowledge before some officer competent to take acknowledgment of deeds, articles of incorporation, in which shall be stated:
(a) The proposed corporate name of the society, which shall not so closely resemble the name of any society or insurance company as to be misleading or confusing;
(b) The purposes for which it is being formed and the mode in which its corporate powers are to be exercised. Such purposes shall not include more liberal powers than are granted by this chapter; and
(c) The names and residences of the incorporators and the names, residences, and official titles of all the officers, trustees, directors, or other persons who are to have and exercise the general control of the management of the affairs and funds of the society for the first year or until the ensuing election at which all such officers shall be elected by the supreme governing body, which election shall be held not later than 1 year from the date of the issuance of the permanent certificate of authority.
(2) Such articles of incorporation; duly certified copies of the society’s bylaws and rules; copies of all proposed forms of certificates, applications therefor, and circulars to be issued by the society; and a bond, conditioned upon the return to the applicants of the advanced payments if the organization is not completed within 1 year, shall be filed with the office, which may require such further information as it deems necessary. The bond with sureties approved by the office shall be in such amount, not less than $300,000 nor more than $1.5 million, as required by the office. All documents filed are to be in the English language. If the purposes of the society conform to the requirements of this chapter and all provisions of the law have been complied with, the office shall so certify, retain, and file the articles of incorporation and shall furnish the incorporators a preliminary certificate authorizing the society to solicit members as hereinafter provided.
(3) No preliminary certificate granted under the provisions of this section shall be valid after 1 year from its date or after such further period, not exceeding 1 year, as may be authorized by the office upon cause shown. The articles of incorporation and all other proceedings thereunder shall become null and void in 1 year from the date of the preliminary certificate, or at the expiration of the extended period, unless the society shall have completed its organization and received a certificate of authority to do business as hereinafter provided.
(4) Upon receipt of a preliminary certificate of authority from the office, the society may solicit members for the purpose of completing its organization, shall collect from each applicant the amount of not less than one regular monthly premium in accordance with its table of rates, and shall issue to each such applicant a receipt for the amount so collected. No society shall incur any liability other than for the return of such advance premium, nor issue any certificate, nor pay, allow, or offer or promise to pay or allow, any benefit, to any person until:
(a) Actual bona fide applications for benefits have been secured on not less than 500 applicants, and any necessary evidence of insurability has been furnished to and approved by the society;
(b) At least 10 subordinate lodges have been established into which the 500 applicants have been admitted;
(c) There has been submitted to the office, under oath of the president or secretary, or corresponding officer of the society, a list of such applicants, giving their names, addresses, date each was admitted, name and number of the subordinate lodge of which each applicant is a member, amount of benefits to be granted and the premiums therefor; and
(d) It shall have been shown to the office, by sworn statement of the treasurer or corresponding officer of such society, that at least 500 applicants have each paid in cash at least one regular monthly premium as herein provided, which premiums in the aggregate shall amount to at least $150,000. Such advance premiums shall be held in trust during the period of organization and if the society has not qualified for a certificate of authority within 1 year, as herein provided, such premiums shall be returned to said applicants.
(5) The office may make such examination and require such further information as it deems advisable. Upon presentation of satisfactory evidence that the society has complied with all the provisions of law, the office shall issue to the society a certificate of authority to that effect and to the effect that the society is authorized to transact business pursuant to the provisions of this chapter. The certificate of authority shall be prima facie evidence of the existence of the society at the date of such certificate. The office shall cause a record of such certificate of authority to be made. A certified copy of such record may be given in evidence with like effect as the original certificate of authority.
(6) Any incorporated society authorized to transact business in this state on June 24, 1986, shall not be required to reincorporate.
History.—ss. 4, 6, ch. 86-140; s. 4, ch. 91-429; s. 1377, ch. 2003-261.
632.612 Amendments to laws.—
(1) A domestic society may amend its laws in accordance with the provisions thereof by action of its supreme governing body at any regular or special meeting thereof or, if its laws so provide, by referendum. Such referendum may be held in accordance with the provisions of its laws by the vote of the voting members of the society, by the vote of delegates or representatives of voting members, or by the vote of local lodges. A society may provide for voting by mail. No amendment submitted for adoption by referendum shall be adopted unless, within 6 months from the date of submission thereof, a majority of the members voting shall have signified their consent to such amendment by one of the methods herein specified.
(2) No amendment to the laws of any domestic society shall take effect unless approved by the office, which shall approve such amendment if it finds that the amendment has been duly adopted and is not inconsistent with any requirement of the laws of this state or with the character, objects, and purposes of the society. Unless the office shall disapprove any such amendment within 90 days after the filing of same, the amendment shall be considered approved. The approval or disapproval of the office shall be in writing and mailed to the secretary or corresponding officer of the society at its principal office. In case the office disapproves the amendment, the reasons therefor shall be stated in the written notice.
(3) Within 90 days from the approval thereof by the office, all such amendments or a synopsis thereof shall be furnished to all members of the society either by mail or by publication in full in the official publication of the society. The affidavit of any officer of the society or of anyone authorized by it to mail any amendments or a synopsis thereof, stating facts which show that same have been duly addressed and mailed, shall be prima facie evidence that such amendments or a synopsis thereof have been furnished the addressee.
(4) Every foreign or alien society authorized to do business in this state shall file with the office a duly certified copy of all amendments of, or additions to, its laws within 90 days after the enactment of same.
(5) Printed copies of the laws as amended, certified by the secretary or corresponding officer of the society, shall be prima facie evidence of the legal adoption thereof.
History.—ss. 4, 6, ch. 86-140; s. 4, ch. 91-429; s. 1378, ch. 2003-261.
632.613 Institutions.—A society may create, maintain, and operate, or may establish organizations to operate, not-for-profit institutions to further the purposes permitted by s. 632.605(1)(b). Such institutions may furnish services free or at a reasonable charge. Any real or personal property owned, held, or leased by the society for this purpose shall be reported in every annual statement, but shall not be allowed as an admitted asset of the society.
History.—ss. 4, 6, ch. 86-140; s. 4, ch. 91-429.
632.614 Reinsurance.—
(1) A domestic society may, by a reinsurance agreement, cede any individual risk or risks in whole or in part to an insurer, other than another fraternal benefit society, having the power to make such reinsurance and authorized to do business in this state, or if not so authorized, to an insurer which is approved by the office. However, no domestic society may reinsure 75 percent or more of its insurance in force without the written permission of the office. The domestic society may take credit for the reserves on such ceded risks to the extent reinsured, but no credit shall be allowed as an admitted asset or as a deduction from liability, to a ceding society for reinsurance made, ceded, renewed, or otherwise becoming effective after the effective date of this act, unless the reinsurance is payable by the assuming insurer on the basis of the liability of the ceding society under the contract or contracts reinsured without diminution because of the insolvency of the ceding society.
(2) Notwithstanding the limitation in subsection (1), a society may reinsure the risks of another society in a consolidation or merger approved by the office under s. 632.615.
History.—ss. 4, 6, ch. 86-140; s. 6, ch. 91-110; s. 4, ch. 91-429; s. 1379, ch. 2003-261.
632.615 Consolidations and mergers.—
(1) A domestic society may not consolidate or merge with any other insurer other than another society. It may consolidate or merge with another society by complying with the provisions of this section. It shall file with the office:
(a) A certified copy of the written contract containing in full the terms and conditions of the consolidation or merger;
(b) A sworn statement by the president and secretary or corresponding officers of each society showing the financial condition thereof on a date fixed by the office but not earlier than December 31 next preceding the date of the contract;
(c) A certificate of such officers, duly verified by their respective oaths, that the consolidation or merger has been approved by a two-thirds vote of the supreme governing body of each society, such vote being conducted at a regular or special meeting of each such body, or, if the society’s laws so permit, by mail; and
(d) Evidence that at least 60 days prior to the action of the supreme governing body of each society, the text of the contract has been furnished to all members of each society either by mail or by publication in full in the official publication of each society.
(2) If the office finds that the contract is in conformity with the provisions of this section, that the financial statements are correct, and that the consolidation or merger is just and equitable to the members of each society, the office shall approve the contract and issue a certificate to such effect. Upon such approval, the contract shall be in full force and effect unless any society which is a party to the contract is incorporated under the laws of any other state or territory. In such event the consolidation or merger shall not become effective unless and until it has been approved as provided by the laws of such state or territory and a certificate of such approval filed with the office or, if the laws of such state or territory contain no such provision, then the consolidation or merger shall not become effective unless and until it has been approved by the insurance supervisory official of such state or territory and a certificate of such approval filed with the office.
(3) Upon the consolidation or merger becoming effective as herein provided, all the rights, liabilities, franchises, and interests of the consolidated or merged societies in and to every species of property, real or personal or mixed, and things in action thereunto belonging shall be vested in the society resulting from or remaining after the consolidation or merger without any other instrument, except that conveyances of real property may be evidenced by proper deeds, and the title to any real estate or interest therein which is vested under the laws of this state in any of the societies consolidated or merged shall not revert or be in any way impaired by reason of the consolidation or merger, but shall vest absolutely in the society resulting from or remaining after such consolidation or merger.
(4) The affidavit of any officer of the society or of anyone authorized by it to mail any notice or document, stating that such notice or document has been duly addressed and mailed, shall be prima facie evidence that such notice or document has been furnished the addressees.
History.—ss. 4, 6, ch. 86-140; s. 4, ch. 91-429; s. 1380, ch. 2003-261.
632.616 Conversion of fraternal benefit society into mutual life insurance company.—Any domestic fraternal benefit society may be converted and licensed as a mutual life insurance company by compliance with all the requirements of chapter 628. A plan of conversion shall be prepared in writing by the board of directors setting forth in full the terms and conditions of conversion. The affirmative vote of two-thirds of all members of the supreme governing body at a regular or special meeting shall be necessary for the approval of such plan. No such conversion shall take effect unless and until approved by the office, which may give such approval if it finds that the proposed change is in conformity with the requirements of law and not prejudicial to the certificateholders of the society.
History.—ss. 4, 6, ch. 86-140; s. 4, ch. 91-429; s. 1381, ch. 2003-261.
632.617 Benefits.—
(1) A society may provide the following contractual benefits:
(a) Death benefits;
(b) Endowment benefits;
(c) Annuity benefits;
(d) Temporary or permanent disability benefits;
(e) Hospital, medical, or nursing benefits;
(f) Monument or tombstone benefits to the memory of deceased members; and
(g) Such other benefits as authorized for life insurers and which are not inconsistent with this chapter.
(2) A society shall specify in its rules those members and their dependents or persons in whom a member has an insurable interest who may be issued, or covered by, the contractual benefits set forth in subsection (1). A society may provide benefits on the lives of children under the minimum age for adult membership upon application of an adult person.
History.—ss. 4, 6, ch. 86-140; s. 4, ch. 91-429.
632.618 Beneficiaries.—
(1) The owner of a benefit contract shall have the right at all times to change the beneficiary or beneficiaries in accordance with the laws or rules of the society unless the owner waives this right by specifically requesting in writing that the beneficiary designation be irrevocable. A society may, through its laws or rules, limit the scope of beneficiary designations and shall provide that no revocable beneficiary shall have or obtain any vested interest in the proceeds of any certificate until the certificate has become due and payable in conformity with the provisions of the benefit contract.
(2) A society may make provision for the payment of funeral benefits to the extent of such portion of any payment under a certificate as might reasonably appear to be due to any person equitably entitled thereto by reason of having incurred expense occasioned by the burial of the member, provided the portion so paid shall not exceed the sum of $1,750.
(3) If, at the death of any person insured under a benefit contract, there is no lawful beneficiary to whom the proceeds shall be payable, the amount of such benefits, except to the extent that funeral benefits may be paid as hereinbefore provided, shall be payable to the personal representative of the deceased insured, provided that if the owner of the certificate is other than the insured, such proceeds shall be payable to such owner.
History.—ss. 4, 6, ch. 86-140; s. 4, ch. 91-429.
632.619 Benefits not attachable.—No money or other benefit, charity, relief, or aid to be paid, provided, or rendered by any society, shall be subject to attachment, garnishment, or other process, nor seized, taken, appropriated, or applied by any legal or equitable process or operation of law to pay any debt or liability of a member or beneficiary, or any other person who may have a right thereunder, either before or after payment by the society.
History.—ss. 4, 6, ch. 86-140; s. 4, ch. 91-429.
632.621 The benefit contract.—
(1) Every society authorized to do business in this state shall issue to each owner of a benefit contract a certificate with an identifying number specifying the amount of benefits provided thereby. The certificate, together with any riders or endorsements, the application for insurance and declaration of insurability, if any, signed by the applicant, and all amendments to each thereof, shall be attached to and shall constitute the benefit contract as of the date of issuance between the society and the owner, and the certificate shall so state. The certificate shall also incorporate by reference the laws of the society, and the society shall maintain for inspection by the benefit member a copy of such laws at each lodge and shall furnish a copy of such laws to each benefit member upon request. All statements on the application shall be representations and not warranties. Any waiver of the provision of this subsection shall be void.
(2) Any changes, additions, or amendments to the laws of the society duly made or enacted subsequent to the issuance of the certificate shall bind the owner and the beneficiaries and shall govern and control the benefit contract in all respects the same as though such changes, additions, or amendments had been made prior to, and were in force at the time of, the application for insurance, except that no change, addition, or amendment shall destroy or diminish benefits which the society contracted to give the owner as of the date of issuance.
(3) Any person upon whose life a benefit contract is issued prior to attaining the age of majority shall be bound by the terms of the application and certificate and by all the laws and rules of the society to the same extent as though the age of majority had been attained at the time of application.
(4) A society shall provide in its laws that if its reserves as to all or any class of certificates become impaired, its board of directors or corresponding body may require that there shall be paid by the owner to the society the amount of the owner’s equitable proportion of such deficiency as ascertained by its board or corresponding body, and that if the payment is not made, either:
(a) It shall stand as an indebtedness against the certificate and draw interest not to exceed the rate specified for certificate loans under the certificates; or
(b) In lieu of or in combination with the provisions of paragraph (a), the owner may accept a proportionate reduction in benefits under the certificate.
The society may specify the manner of the election and which alternative is to be presumed if no election is made.
(5) Copies of any of the documents mentioned in this section, certified by the secretary or corresponding officer of the society, shall be received in evidence of the terms and conditions thereof.
(6) No certificate shall be delivered or issued for delivery in this state unless a copy of the form has been filed with the office in the manner provided for like policies issued by life insurers in this state. Every life, accident, health, or disability insurance certificate and every annuity certificate issued on or after one year from June 24, 1986, shall meet the standard contract provision requirements not inconsistent with this chapter for like policies issued by life insurers in this state, except that a society may provide for a grace period for payment of premiums of 1 full month in its certificates. The certificate shall also contain a provision stating the amount of premiums which are payable under the certificate and a provision reciting or setting forth the substance of any sections of the society’s laws or rules in force at the time of issuance of the certificate which, if violated, will result in the termination or reduction of benefits payable under the certificate. If the laws of the society provide for expulsion or suspension of a member, the certificate shall also contain a provision that any member so expelled or suspended, except for nonpayment of a premium or within the contestable period for material misrepresentation in the application for membership or insurance, shall have the privilege of maintaining the certificate in force by continuing payment of the required premium.
(7) Benefit contracts issued on the lives of persons below the society’s minimum age for adult membership may provide for transfer of control or ownership to the insured at an age specified in the certificate. A society shall not require approval of an application for membership in order to effect this transfer. Ownership rights prior to such transfer shall be specified in the certificate. Nothing contained herein shall be construed to affect the right of fraternal benefit societies to determine eligibility requirements for membership.
(8) A society may specify the terms and conditions on which benefit contracts may be assigned.
History.—ss. 4, 6, ch. 86-140; s. 4, ch. 91-429; s. 1382, ch. 2003-261.
632.622 Nonforfeiture benefits, cash surrender values, certificate loans, and other options.—
(1) For certificates issued prior to October 1, 1982, the value of every paid-up nonforfeiture benefit and the amount of any cash surrender value, loan, or other option granted shall comply with the provisions of law applicable immediately prior thereto.
(2) For certificates issued on or after October 1, 1982, reserves shall be computed utilizing the appropriate mortality tables approved by the office for policies containing life insurance benefits made applicable to life insurers under s. 625.121.
History.—ss. 4, 6, ch. 86-140; s. 4, ch. 91-429; s. 1383, ch. 2003-261.
632.623 Investments.—A society shall invest its funds only in such investments as are authorized by the laws of this state for the investment of assets of life insurers and subject to the limitations thereon. Any foreign or alien society permitted or seeking to do business in this state which invests its funds in accordance with the laws of the state, district, territory, country, or province in which it is incorporated, shall be held to meet the requirements of this section for the investment of funds.
History.—ss. 4, 6, ch. 86-140; s. 4, ch. 91-429.
632.624 Funds.—
(1) All assets shall be held, invested, and disbursed for the use and benefit of the society, and no member or beneficiary shall have or acquire individual rights therein nor become entitled to any apportionment on the surrender of any part thereof, except as provided in the benefit contract.
(2) A society may create, maintain, invest, disburse, and apply any special fund or funds necessary to carry out any purpose permitted by the laws of such society.
(3) A society may, pursuant to resolution of its supreme governing body, establish and operate one or more separate accounts and issue contracts on a variable basis, subject to the provisions of law regulating life insurers establishing such accounts and issuing such contracts. To the extent the society deems it necessary in order to comply with any applicable federal or state laws, or any rules issued thereunder, the society may:
(a) Adopt special procedures for the conduct of the business and affairs of a separate account;
(b) Provide, with respect to persons having beneficial interests therein, special voting and other rights, including, without limitation, special rights and procedures relating to investment policy, investment advisory services, selection of certified public accountants, and selection of a committee to manage the business and affairs of the account; and
(c) Issue contracts on a variable basis to which s. 632.621(2) and (4) shall not apply.
History.—ss. 4, 6, ch. 86-140; s. 4, ch. 91-429.
632.625 Exemptions.—Societies shall be governed by the provisions of this chapter and shall be exempt from all other provisions of the Florida Insurance Code unless those other provisions are expressly applicable to societies or unless those other provisions are specifically made applicable to societies by this chapter.
History.—ss. 4, 6, ch. 86-140; s. 4, ch. 91-429.
632.626 Taxation.—Except as otherwise provided in this chapter, every society organized or licensed under this chapter is hereby declared to be a charitable and benevolent institution, and all of its funds shall be exempt from all and every state, county, district, municipal, and school tax other than taxes on real estate and office equipment.
History.—ss. 4, 6, ch. 86-140; s. 4, ch. 91-429.
632.627 Valuation.—
(1) Standards of valuation for certificates issued prior to October 1, 1982, shall be those provided by the laws applicable immediately prior to said date.
(2) The minimum standards of valuation for certificates issued on or after October 1, 1982, shall be in accordance with valuation standards utilizing the appropriate mortality tables authorized by the laws of this state for the valuation of policies issued by life insurers under s. 625.121. For annuity and pure endowment certificates, for total and permanent disability benefits, for accidental death benefits, and for noncancelable accident and health benefits, societies shall utilize those tables as are authorized for use by life insurers in this state. All of the above shall be under valuation methods and standards, including interest assumptions, in accordance with the laws of this state applicable to life insurers issuing policies containing like benefits.
(3) The office may, in its discretion, accept other standards for valuation if it finds that the reserves produced thereby will not be less in the aggregate than reserves computed in accordance with the minimum valuation standard herein prescribed. The office may, in its discretion, vary the standards of mortality applicable to all benefit contracts on substandard lives or other extra hazardous lives by any society authorized to do business in this state.
(4) With the consent of the insurance supervisory official of the state of domicile of the society and under such conditions, if any, which such official may impose, any society may establish and maintain reserves on its certificates in excess of the reserves required thereunder, but the contractual rights of any benefit member shall not be affected thereby.
History.—ss. 4, 6, ch. 86-140; s. 4, ch. 91-429; s. 1384, ch. 2003-261.
632.628 Reports.—
(1) Reports shall be filed in accordance with the provisions of this section. Every society transacting business in this state shall annually, on or before March 1, unless for cause shown such time has been extended by the office, file with the office a true statement of its financial condition, transactions, and affairs for the preceding calendar year and pay a fee for filing same, as provided in s. 624.501(4). The statement shall be in general form and context as approved by the National Association of Insurance Commissioners for fraternal benefits societies and as supplemented by additional information required by the office.
(2) As part of the annual statement herein required, each society shall, on or before March 1, file with the office a valuation of its certificates in force on December 31 last preceding, provided the office may, in its discretion for cause shown, extend the time for filing such valuation for not more than 2 calendar months. Such valuation shall be done in accordance with the standards specified in s. 632.627. Such valuation and underlying data shall be certified by a qualified actuary or, at the expense of the society, verified by the actuary of the insurance regulatory agency of the state of domicile of the society.
(3) A society neglecting to file the annual statement in the form and within the time provided by this section shall be subject to an administrative fine in an amount up to $100 for each day during which such neglect continues, and, upon notice by the office to that effect, its authority to do business in this state shall cease while such default continues.
(4) The office shall deposit all fees received under this section to the credit of the Insurance Regulatory Trust Fund.
History.—ss. 4, 6, ch. 86-140; s. 4, ch. 91-429; s. 1385, ch. 2003-261.
632.629 Annual license.—
(1) A fraternal benefit society may not transact business in this state unless authorized therefor under a subsisting license issued to the society by the office.
(2) A license issued or renewed under this chapter shall continue in force as long as the society is entitled thereto under this chapter and until suspended or revoked by the office or terminated at the request of the society, provided:
(a) The society pays, prior to June 1, the annual license tax provided for in s. 624.501(3); and
(b) The office is satisfied that the society has met the applicable requirements of the Florida Insurance Code.
(3) If the license is not continued by the society, the license shall expire at midnight on May 31 following failure of the society to continue it. The office shall promptly notify the society of the impending expiration of its license.
(4) The office may reinstate a license which the society has inadvertently permitted to expire, after the society has fully cured all its failures which resulted in the expiration and upon payment by the society of the fee for reinstatement in the amount provided in s. 624.501(1)(b). Otherwise, the society shall be granted another license only after filing application therefor and meeting all other requirements for an original license in this state.
(5) A duly certified copy or duplicate of such license shall be prima facie evidence that the licensee is a fraternal benefit society within the meaning of this chapter.
History.—ss. 4, 6, ch. 86-140; s. 43, ch. 88-166; s. 4, ch. 91-429; s. 1386, ch. 2003-261.
632.631 Examination of societies; no adverse publications.—
(1) The office, or any person it may appoint, may examine any domestic, foreign, or alien society transacting or applying for admission to transact business in this state in the same manner as authorized for examination of domestic, foreign, or alien insurers. Requirements of notice and an opportunity to respond before findings are made public as provided in the laws regulating insurers shall also be applicable to the examination of societies.
(2) The expense of each examination and of each valuation, including compensation and actual expense of examiners, shall be paid by the society examined or whose certificates are valued, upon statements furnished by the office.
History.—ss. 4, 6, ch. 86-140; s. 4, ch. 91-429; s. 1387, ch. 2003-261.
632.632 Foreign or alien society; admission.—No foreign or alien society shall transact business in this state without a license issued by the office. Any such society desiring admission to this state shall have the qualifications required of domestic societies organized under this chapter. Any such society may be licensed to transact business in this state upon filing with the office:
(1) A duly certified copy of its articles of incorporation;
(2) A copy of its bylaws, certified by its secretary or corresponding officer;
(3) A power of attorney to the office;
(4) A copy of its most recent annual statement certified under oath by its president and secretary or corresponding officers in a form prescribed by the commission;
(5) A copy of an examination report conducted within the most recent 3-year period by the supervising insurance official of its home state or other state, territory, province, or country, satisfactory to the office;
(6) Certification from the proper official of its home state, territory, province, or country that the society is legally incorporated and licensed to transact business therein;
(7) Copies of its certificate forms; and
(8) Such other information as the office may deem necessary;
and upon a showing satisfactory to the office that its assets are invested in accordance with the provisions of this chapter.
History.—ss. 4, 6, ch. 86-140; s. 4, ch. 91-429; s. 1388, ch. 2003-261.
632.633 Additional grounds for suspension, revocation, or denial of certificate of authority; receivership; insolvency.—
(1) In addition to the grounds set forth in s. 624.418, the office may, in its discretion, suspend, revoke, or deny the certificate of authority of a society, if it finds that the society:
(a) Has exceeded its powers;
(b) Has failed to comply with any provision of this chapter;
(c) Is not fulfilling its contracts in good faith;
(d) Has a membership of less than 400 after an existence of 1 year or more; or
(e) Is conducting business fraudulently or in a manner hazardous to its members, creditors, the public, or the business.
(2) In addition to the grounds set forth in s. 626.9571, whenever the office has reason to believe that any society is operating in violation of this chapter or of any provision of the Florida Insurance Code applicable to societies, the provisions of ss. 626.9571, 626.9581, 626.9591, and 626.9601 shall apply.
(3) Any rehabilitation, liquidation, conservation, or dissolution of a society shall be conducted under the supervision of the department. The department and office shall have all the powers with respect to such rehabilitation, liquidation, conservation, or dissolution that are granted to the department and office under the laws governing the rehabilitation, liquidation, conservation, or dissolution of life insurance companies.
History.—ss. 4, 6, ch. 86-140; s. 4, ch. 91-429; s. 1389, ch. 2003-261.
632.634 Licensing and appointment of agents.—
(1) Agents of societies shall be licensed and appointed in accordance with the provisions of the Florida Insurance Code regulating the licensing, appointment, examination, revocation, suspension, or termination of the license of resident and nonresident life, health, and variable annuity insurance agents.
(2) No examination, license, or appointment shall be required of any regular salaried officer, employee, or member of a licensed society who devotes substantially all of her or his services to activities other than the solicitation of benefit contracts from the public and who receives no commission or other compensation directly dependent upon the amount of business obtained for the solicitation of such contracts.
(3) Any agent, representative, or member of a society who in any preceding calendar year has solicited and procured life insurance benefit contracts on behalf of any society in a total amount of insurance less than $50,000, or, in the case of any other kind or kinds of insurance benefit contracts which the society might write, on not more than 25 individuals, shall be exempt from the agent licensing and appointment requirements of subsection (1). Upon request by the department, every society shall register, on forms prescribed by the department and on or before March 1 of each year, the name and residence address of each agent, representative, or member exempt under the provisions of this subsection and shall, within 30 days of termination of employment, notify the department of the termination. Any agent, representative, or member for which an exemption is claimed due to employment by the society subsequent to March 1 shall be registered by the society with the department within 10 days of the date of employment.
History.—ss. 4, 6, ch. 86-140; s. 136, ch. 91-108; s. 4, ch. 91-429; s. 420, ch. 97-102; s. 69, ch. 2003-267; s. 60, ch. 2003-281.
632.635 Unfair and deceptive acts and practices.—Every society authorized to do business in this state shall be subject to the provisions of the Unfair Insurance Trade Practices Act as provided in part IX of chapter 626; provided, however, that nothing in such provisions shall be construed as applying to or affecting the right of any society to determine its eligibility requirements for membership, or be construed as applying to or affecting the offering of benefits exclusively to members or persons eligible for membership in the society.
History.—ss. 4, 6, ch. 86-140; s. 7, ch. 91-110; s. 4, ch. 91-429; s. 1, ch. 2001-64.
632.636 Violations; penalties.—
(1) The provisions of s. 624.15 shall apply with respect to:
(a) Any person who willfully makes a false or fraudulent statement in or relating to an application for membership or for the purpose of obtaining money from or a benefit in any society;
(b) Any person who solicits membership for, or in any manner assists in procuring membership in, any society not licensed to do business in this state;
(c) Any person guilty of a willful violation of, or neglect or refusal to comply with, the provisions of this chapter for which a penalty is not otherwise prescribed.
(2) Any person who willfully makes a false or fraudulent statement:
(a) In any verified report or declaration under oath required or authorized by this chapter, or
(b) Of any material fact or thing contained in a sworn statement concerning the death or disability of an insured for the purpose of procuring payment of a benefit named in the certificate,
shall be guilty of perjury and shall be subject to the penalties therefor prescribed by law.
History.—ss. 4, 6, ch. 86-140; s. 4, ch. 91-429.
632.637 Exemption of certain societies.—
(1) Nothing contained in this chapter shall be so construed as to affect or apply to:
(a) Grand or subordinate lodges of societies, orders, or associations now doing business in this state which provide benefits exclusively through local or subordinate lodges;
(b) Orders, societies, or associations which admit to membership only persons engaged in hazardous occupations, in the same or similar lines of business, insuring only their own members and their families, and the ladies’ societies or ladies’ auxiliaries to such order, societies, or associations;
(c) Domestic societies which limit their membership to employees of a particular city or town, designated firm, business house, or corporation which provide for a death benefit of not more than $1,000 or disability benefits of not more than $1,000 to any person in any one year, or both; or
(d) Domestic societies or associations of a purely religious, charitable, or benevolent description, which provide for a death benefit of not more than $1,000 or for disability benefits of not more than $1,000 to any one person in any one year, or both.
(e) Any entity that has existed and continuously operated a facility located on no less than 63 acres in this state providing residential lodging to members and their spouses for at least 66 years on or before July 1, 1989, and such facility has the residential capacity of 500 persons, is directly or indirectly owned or operated by a nationally recognized fraternal organization, is not open to the public, and accepts only its members and their spouses as residents.
(2) Any such society or association described in paragraph (1)(c) or paragraph (1)(d), which provides for death or disability benefits for which benefit certificates are issued, and any such society or association included in paragraph (1)(d) which has more than 1,000 members, shall not be exempted from the provisions of this chapter but shall comply with all requirements thereof.
(3) No society which, by the provisions of this section, is exempt from the requirements of this chapter, except any society described in paragraph (1)(b), shall give or allow or promise to give or allow to any person any compensation for procuring new members.
(4) Every society which provides for benefits in case of death or disability resulting solely from accident, and which does not obligate itself to pay natural death or sick benefits, shall have all of the privileges and be subject to all the applicable provisions and regulations of this chapter, except that the provisions thereof relating to medical examination, valuations of benefit certificates, and incontestability shall not apply to such society.
(5) The office may require from any society or association, by examination or otherwise, such information as will enable the office to determine whether such society or association is exempt from the provisions of this chapter.
(6) Societies exempted under the provisions of this section shall also be exempt from all other provisions of the insurance laws of this state.
History.—ss. 4, 6, ch. 86-140; s. 4, ch. 91-429; s. 1, ch. 96-363; s. 1390, ch. 2003-261.
632.638 Applicability of other code provisions.—In addition to other provisions contained or referred to in this chapter, the following chapters and provisions of this code apply to fraternal benefit societies, to the extent applicable and not in conflict with the express provisions of this chapter and the reasonable implications thereof:
(1) Part I of chapter 624;
(2) Part II of chapter 624;
(3) Sections 624.404, 624.415, 624.416, 624.418, 624.420, 624.421, 624.4211, 624.422, and 624.423;
(4) Section 624.501;
(5) Part I of chapter 626;
(6) Part III of chapter 626;
(7) Part IV of chapter 626;
(8) Sections 626.901-626.912;
(9) Part VIII of chapter 626, subject to the limitations set forth in former s. 632.341;
(10) Section 627.424;
(11) Section 627.428;
(12) Section 627.4301;
(13) Section 627.479; and
(14) Part I of chapter 631.
History.—ss. 4, 6, ch. 86-140; s. 44, ch. 88-166; s. 20, ch. 90-119; s. 184, ch. 91-108; s. 4, ch. 91-429; s. 3, ch. 97-182.