§ 26-29-219 — 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 thereby. 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 thereto, 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.
(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 the 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 amendments
shall destroy or diminish benefits which 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:
(i) 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
(ii) In lieu of or in combination with paragraph (i)
of this subsection, the owner may accept a proportionate
reduction in benefits under the certificate.
(e) The society may specify the manner of the election and
which alternative is to be presumed if no election is made
pursuant to subsection (d) of this section.
(f) Copies of any of the documents specified in this
section, certified by the secretary or corresponding officer of
the society, shall be received in evidence of the terms and
conditions thereof.
(g) No certificate shall be delivered or issued for
delivery in this state unless a copy of the form has been filed
with and approved by 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 one (1) year from
the effective date of this act 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 payment of premiums
of one (1) 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.
(h) 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. 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 rights,
obligations and liabilities incident thereto and connected
therewith. Ownership rights prior to the transfer shall be
specified in the certificate.
(j) A society may specify the terms and conditions on
which benefit contracts may be assigned.