KRS 304.29-101: Organization.

A domestic society organized on or after January 1, 1989, shall be formed as follows:

(1) Seven (7) 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 acknowledgment of deeds,

articles of incorporation, in which shall be stated:

(a) The proposed corporate name of the society, which shall not so closely

resemble the name of any society or insurance company as to be misleading or

confusing;

(b) The purposes for which it is being formed and the mode in which its corporate

powers are to be exercised. The purposes shall not include more liberal

powers than are granted by this subtitle; and

(c) The names and reside nces 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 (1) year from the date of issuance of the

permanent certificate of authority;

(2) The articles of incorporation, duly certified copies of the society's bylaws and rules,

copies of all proposed forms of certificates, applications 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 (1) year shall be

filed with the commissioner, who may require further information. The bond with

sureties approved by the commissioner shall be in an amount, not less than three

hundred thousand dollars ($3 00,000) nor more than one million five hundred

thousand dollars ($1,500,000), as required by the commissioner. All documents

filed shall be in the English language. If the purposes of the society conform to the

requirements of this subtitle and all provisi ons of the law have been complied with,

the commissioner shall so certify, retain and file the articles of incorporation and

furnish the incorporators a preliminary certificate of authority authorizing the

society to solicit members;

(3) No preliminary cer tificate of authority granted under the provisions of this section

shall be valid after one (1) year from its date or after such further period, not

exceeding one (1) year, as may be authorized by the commissioner upon cause

shown, unless the five hundred (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 (1) year from the date of the prelimina ry 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;

(4) Upon receipt of a preliminary certificate of authority from the c ommissioner, the

society may solicit members for the purpose of completing its organization, shall

collect from each applicant the amount of not less than one (1) regular monthly

premium in accordance with its table of rates, and shall issue to each applic ant a

receipt for the amount so collected. No society shall incur any liability other than for

the return of advance premium, nor issue any certificate, nor pay, allow, or offer or

promise to pay or allow, any benefit to any person until:

(a) Actual bona f ide applications for benefits have been secured on not less than

five hundred (500) applicants, and any necessary evidence of insurability has

been furnished to and approved by the society;

(b) At least ten (10) subordinate lodges have been established int o which the five

hundred (500) applicants have been admitted;

(c) There has been submitted to the commissioner, under oath of the president or

secretary, or corresponding officer of the society, a list of the 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; and

(d) It shall have been shown to the commissioner, by sworn statement of the

treasurer, or correspo nding officer of the society, that at least five hundred

(500) applicants have each paid in cash at least one (1) regular monthly

premium, which premiums in the aggregate shall amount to at least one

hundred fifty thousand dollars ($150,000). The advance p remiums shall be

held in trust during the period of organization; and if the society has not

qualified for a certificate of authority within one (1) year, the premiums shall

be returned to the applicants;

(5) The commissioner may make examination and requi re further information as he or

she deems advisable. Upon presentation of satisfactory evidence that the society has

complied with all the provisions of law, the commissioner 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 KRS Chapter 304. The certificate of authority

shall be prima facie evidence of the existence of the society at the date of the

certificate. The commissioner shall cause a record of t he certificate of authority to

be made. A certified copy of the record may be given in evidence with like effect as

the original certificate of authority;

(6) Any incorporated society authorized to transact business in this state at the time this

subtitle becomes effective shall not be required to reincorporate; and

(7) No unincorporated or voluntary association shall be permitted to transact business

in this state as a fraternal benefit society.