§ 27-25-19. The benefit contract.
(a) 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 to it,
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, shall constitute the benefit contract, as of the date of issuance, between
the society and the owner, and the certificate shall state this. 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.
(b) 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
those 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 that the society contracted to give the owner as
of the date of issuance.
(c) 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.
(d) 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 the deficiency as ascertained by its board, and that if the payment
is not made either: (1) 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 (2) In lieu of or in combination with subsection (d)(1), 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.
(e) 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 of the documents.
(f) No certificate shall be delivered or issued for delivery in this state unless a copy
of the form has been filed with the commissioner 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 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 the payment of premiums of one full month in its certificate. The certificate
shall also contain a provision stating the amount of premiums 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 that, 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 misrepresentations
in the application for membership or insurance, shall have the privilege of maintaining
the certificate in force by continuing payment of the required premium.
(g) Benefit contracts issued on the lives of persons below the society's minimum age for
adult membership may provide for the 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 the certificates and all of the rights,
obligations, and liabilities incident to and connected with the certificates. Ownership
rights prior to the transfer shall be specified in the certificate.
(h) A society may specify the terms and conditions on which benefit contracts may be assigned.