§ 291.1

Illinois § 291.1

• Jurisdiction: Illinois
• Topic: REGULATION
• Ch. 215: INSURANCE
• Act 215 ILCS 5/: Illinois Insurance Code.
• Art.: Article XVII - Fraternal Benefit Societies

Text

(Section scheduled to be repealed on January 1, 2027) Sec. 291.1. Organization. A domestic society organized on or after January 1, 1986 (the effective date of Public Act 84-303) shall be formed as follows: (a) 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 may make, sign and acknowledge, before some officer competent to take acknowledgement of deeds, articles of incorporation, in which shall be stated: (1) The proposed corporate name of the society, which shall not so closely resemble the name of any society or insurance company already authorized to transact business in this State as to be misleading or confusing; (2) The place where its principal office shall be located within this State; (3) 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 amendatory Act; and (4) 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 one year from the date of issuance of the permanent certificate of authority; (b) Duplicate originals of the articles of incorporation, certified copies of the society's bylaws and rules, copies of all proposed forms of certificates, applicants and rates therefor, and circulars to be issued by the society and a bond conditioned upon the return to applicants of the advanced payments if the organization is not completed within one year shall be filed with the Director, who may require such further information as the Director deems necessary. The bond with sureties approved by the Director shall be in such amount, not less than $300,000 nor more than $1,500,000, as required by the Director. All documents filed are to be in the English language. If the Director finds that the purposes of the society conform to the requirements of this amendatory Act and all provisions of the law have been complied with, the Director shall approve the articles of incorporation and issue the incorporators a preliminary certificate of authority authorizing the society to solicit members as hereinafter provided; (c) No preliminary certificate of authority issued under the provisions of this Section shall be valid after one year from its date of issue or after such further period, not exceeding one year, as may be authorized by the Director, upon cause shown, unless the 500 applicants hereinafter required have been secured and the organization has been completed as herein provided. The articles of incorporation and all other proceedings thereunder shall become null and void in one year from the date of the preliminary certificate of authority or at the expiration of the extended period, unless the society shall have completed its organization and received a certificate of authority to do business as hereinafter provided; (d) Upon receipt of a preliminary certificate of authority from the Director, 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: (1) 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; (2) At least 10 subordinate lodges have been established into which the 500 applicants have been admitted; (3) There has been submitted to the Director, 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 premiums therefor; (4) It shall have been shown to the Director, 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. Said advance premiums shall be held in trust during the period of organization, and, if the society has not qualified for a certificate of authority within one year unless extended by the Director, as herein provided, such premiums shall be returned to said applicants; and (5) In the case of a domestic society that is organized after January 1, 2015 (the effective date of Public Act 98-814), the society meets the following requirements: (i) maintains a minimum surplus of $2,000,000, or such higher amount as the Director may deem necessary; and (ii) meets any other requirements as determined by the Director. (e) The Director may make such examination and require such further information as the Director deems necessary. Upon presentation of satisfactory evidence that the society has complied with all the provisions of law, the Director shall issue to the society a certificate of authority to that effect and that the society is authorized to transact business pursuant to the provisions of this amendatory Act; and (f) Any incorporated society authorized to transact business in this State at the time Public Act 84-303 becomes effective (January 1, 1986) shall not be required to reincorporate.

Legislative History

(Source: P.A. 102-558, eff. 8-20-21.)