§ 10-14-404 — Benefit contract

Colorado § 10-14-404

• Jurisdiction: Colorado
• Title 10: Insurance
• Art.: Fraternal Benefit Societies

Text

(1) Every society authorized to do business in
this state shall issue to each owner of a benefit contract a certificate specifying the
amount of benefits provided pursuant thereto. The certificate, together with any
riders or endorsements attached thereto, the governing documents of the society,
the application for membership, the application for insurance and declaration of
insurability, if any, signed by the applicant, and all amendments to each thereof
shall constitute the benefit contract, as of the date of issuance, between the
society and the owner, and the certificate shall so state. A copy of the application
for insurance and declaration of insurability, if any, shall be endorsed upon or
attached to the certificate. All statements on the application shall be
representations and not warranties. Any waiver of this provision shall be void.

(2) Any changes, additions, or amendments to the governing documents 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 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 governing documents 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 governing documents 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, and that if the payment is not made 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 in lieu of or in combination therewith;
however, 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 specified in this section, certified by the
secretary or corresponding officer of the society, shall be received as 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 commissioner 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 July 1,
1994, shall meet the standard contract provision requirements not inconsistent with
this article for like policies issued by life, sickness, and accident insurers in this
state; except that a society may provide in its certificates for a grace period for
payment of premiums of one full month. 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 governing documents 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 governing documents 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 of
ownership to the insured at an age specified in the certificate, but no less than the
legal age of majority. A society may require approval of an application for
membership to effect this transfer and may provide in all other respects for the
regulation, government, and control of such certificates and all rights, obligations,
and liabilities incident thereto and connected therewith. Ownership rights prior to
such transfer shall be specified in the certificate.

(8) A society may specify the terms and conditions on which benefit
contracts may be assigned.

Legislative History

Source: L. 93: Entire article amended with relocations, p. 599, � 1, effective July 1.