(Section scheduled to be repealed on January 1, 2027) Sec. 296.1. Conversion of fraternal benefit society to mutual life insurance company.
(a)Any society subject to the provisions of this amendatory Act possessed of admitted assets in excess of all liabilities at least equal to the minimum surplus required of a new mutual legal reserve life company under Section 43 of this Code transacting the same kind or kinds of business may, at its option, without reincorporation, adopt and become subject to the provisions of Article III of this Code, in lieu of this amendatory Act.
(b)The board of directors of the society shall approve such proposed amendments to the articles of incorporation, the constitution and bylaws of the society as may be necessary or desirable to make the same conform to th
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(Section scheduled to be repealed on January 1, 2027) Sec. 296.1. Conversion of fraternal benefit society to mutual life insurance company. (a) Any society subject to the provisions of this amendatory Act possessed of admitted assets in excess of all liabilities at least equal to the minimum surplus required of a new mutual legal reserve life company under Section 43 of this Code transacting the same kind or kinds of business may, at its option, without reincorporation, adopt and become subject to the provisions of Article III of this Code, in lieu of this amendatory Act. (b) The board of directors of the society shall approve such proposed amendments to the articles of incorporation, the constitution and bylaws of the society as may be necessary or desirable to make the same conform to the articles of incorporation and bylaws of a mutual legal reserve life company, in accordance with the requirements of Article III of this Code. (c) The board of directors of the society shall then submit such proposed amendments to the Director together with: (1) a copy of the notice to be given to members and lodges as herein provided; (2) a current financial statement of the society showing assets, liabilities and surplus valued in accordance with the requirements of Article III; and (3) the proposed plan for transition from a fraternal society to a mutual legal reserve company, including, if pertinent, the following: dissolution of the lodge system; disposition of property held for the benefit of lodges; changes in the amount, calculation and collection of future premiums on policies; the method of selection of officers and board of directors or trustees to manage and control the mutual company until the regular annual meeting of its members; and such other changes as may be necessary to an orderly transition. If the Director finds that: (a) the amendments, notice and plan are in accordance with the provisions of this amendatory Act and not inconsistent with the laws and the Constitutions of this State and the United States; (b) the society has a surplus which, when calculated in accordance with the requirements of Article III of this Code, is at least equal to the original surplus required under Article III of a mutual legal reserve life company transacting the same kind or kinds of business; and (c) no reasonable objection exists to such conversion, the Director shall, within a reasonable time, authorize the sending of notices and further proceedings hereunder. (d) After the Director has given such authority, the board of directors of the society shall then submit the proposed amendments and plan of transition, as so approved, to the supreme governing body of such society at any regular or special meeting thereof, provided a copy of such amendments and plan have been included in or enclosed with the notice of such meeting, which notice shall be given as provided in the laws of the society for the convening of such supreme governing body in regular or special session as the case may be. At least 90 days prior to the date of such regular or special meeting, as the case may be, a notice describing the purpose of the proposed amendments, and including therein or enclosing therewith a copy of such amendments and plan of transition, all as approved by the Director, shall be mailed to each lodge or local body of the society qualified to choose a delegate or delegates to said meeting and also to each member of the society; for the purpose of this notice the lodges or local bodies and the members and the addresses of same shall be taken as those shown by the records of the society as of a date not earlier than 120 days prior to the date set for such meeting. The affidavit of any officer, clerk or agent of the company, or of anyone authorized to mail such notices, that the notices required by this Section bearing the required postage have been duly addressed and mailed shall, upon final approval by the Director of the proceedings hereunder, constitute conclusive evidence that such notice has been duly given in accordance herewith. (e) The affirmative votes of 2/3 of the members of such supreme governing body present at such meeting shall be necessary for the adoption of amendments and the plan of transition under this Section, provided, however, that 2/3 of the elective members present shall vote in favor thereof; the amendments and plan adopted shall be submitted to the Director for his final approval. If the Director shall find that the amendments and plan and the adoption thereof are in accordance with this Section he shall approve the same, and, not less than 30 days nor more than 60 days after such approval, he shall issue a certificate of authority authorizing the company to do business subject to and entitled to the benefits of Article III of this Code. Upon issuance of such certificate, any right in the society to assess its members shall expire and any provision for an assessment contained in the policies issued by the society shall become thenceforth unenforceable, null and void.