§ 44-1090 — Benefit contract; contents

(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 by the contract. The certificate, together with any riders
or endorsements attached thereto, the laws 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 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 of the contract.
(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 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 subdivision (a) of this subsection, 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) A domestic society
may assess owners as described in subsection (4) of this section only after
such assessment is filed with the Director of Insurance and approved by him
or her. In the case of a foreign or alien society, notice of an assessment
shall be provided to the director at least thirty days before the effective
date of the assessment. The director shall have the authority to prohibit
any foreign or alien society that has assessed its owners from issuing any
new contracts of insurance in this state.
(6) 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.
(7) No certificate shall be
delivered or issued for delivery in this state unless a copy of the form has
been filed with the Director of Insurance 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 September 6, 1985, shall meet the standard contract
provision requirements not inconsistent with sections 44-1072 to 44-10,109
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 one 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.
(8) Benefit contracts issued
on the lives of persons younger than 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 may require approval of an application
for membership in order 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.
(9) A society may specify
the terms and conditions on which benefit contracts may be assigned.

Legislative History

Source: Laws 1985, LB 508, § 19; Laws 2013, LB426, § 1.