N.Y. Insurance Law § 4502: Incorporation and licensing of domestic societies; meeting of supreme governing body

§ 4502. Incorporation and licensing of domestic societies; meeting of

supreme governing body. An authorized domestic society may be organized

and licensed in the manner prescribed in this section, and subject to

the other requirements of this chapter applicable thereto. The

successive steps shall be as follows:

(a) The proposed incorporators, who shall be natural persons,

citizens of the United States and a majority of whom shall be citizens

of this state, and who shall be not less than fifteen in number, shall

submit to the superintendent in writing the proposed name of the society

and the county in which its principal office will be located. Such name

shall contain a word or words indicating the fraternal character of such

society, and shall not contain any of the following words: "insurance",

"assurance", "life", "accident", "health", "annuity", "guaranty",

"company", "corporation", "indemnity", "endowment", "guarantee",

"casualty", "surety", "fidelity", or "underwriters", or any other word

or words which in the judgment of the superintendent would be likely to

be deceptive or misleading as to the character and purposes of such

society. Such proposal shall be subscribed with the name and address of

each such incorporator.

(b) If the superintendent approves the proposed name of the society

as conforming to the requirements of subsection (g) of section one

thousand one hundred two of this chapter and not inconsistent with other

requirements of law, he shall so notify the proposed incorporators, or

their representative, in writing. Such approval shall become void if

within six months from the date thereof the declaration and charter of

such society have not been filed pursuant to this section.

(c) The proposed incorporators shall make and subscribe (giving their

addresses) and affirm as true under the penalties of perjury, a

declaration and charter, both in the English language, and shall file

the same with the superintendent, together with duly certified copies of

the proposed constitution, by-laws, rules and regulations, all proposed

forms of certificates or other evidences of insurance or annuity

contracts, or both, all applications therefor and riders or endorsements

to be used in connection therewith, all circulars to be issued by the

society, and a table or schedule showing the rates of premium or other

periodical contribution to be charged by such society for any insurance

or annuity benefits to be provided by it. Such declaration shall state

the intention of the proposed incorporators to form a society for the

purpose of providing insurance benefits permissible under the provisions

of this article, and for other purposes not inconsistent with the

provisions of this chapter. The proposed charter shall contain the

following:

(1) the name of the proposed society, approved as aforesaid;

(2) the place where such society will have its principal office,

which shall be in this state;

(3) the general, fraternal, altruistic, educational, patriotic,

recreational and other purposes of such society, and the kinds of

insurance benefits to be provided by it, specified in accordance with

section four thousand five hundred five of this article;

(4) the mode and manner in which its corporate powers are to be

exercised;

(5) the number of directors shall not be less than nine of which at

least four must not be officers or employees of the society. The charter

of such society shall provide that the number of directors shall be

increased to not less than thirteen within one year following the end of

the calendar year in which the society exceeded five hundred million

dollars in admitted assets. "Number of directors" herein means the total

number of directors which the society would have if there were no

vacancies;

(6) the times and manner of electing its directors and officers, the

manner of filling vacancies in such offices, and a provision that at all

times a majority of the directors shall be citizens and residents of

this state or of adjoining states, and not less than five thereof shall

be residents of this state;

(7) the names and postoffice residence addresses of the directors who

shall serve until the first election in accordance with the charter and

by-laws;

(8) the duration of its corporate existence which shall be not less

than thirty years;

(9) such other particulars as may be necessary to explain the

objects, purposes, management and control of such society; and

(10) such additional information as the superintendent may by

regulation require.

(d) The superintendent shall transmit such declaration, charter and

accompanying documents to the attorney general. If the same be approved

by the attorney general, as conforming to the requirements of law, the

superintendent shall thereupon file the declaration and charter in his

office, and shall issue a certified copy of each to the proposed

incorporators. Such incorporators shall thereupon become a body

corporate which shall not be authorized to do an insurance business

until it shall have obtained a license therefor as provided in

subsection (f) hereof, but it may solicit members for the purpose of

completing its organization, collecting from each applicant for

insurance an amount not less than one regular monthly premium, in

accordance with its table or schedule of rates, issuing to each such

applicant a receipt for the amount so collected and providing for the

examination of each applicant for life insurance by legally qualified

practicing physicians with certificates of such examinations to be duly

filed and approved by the chief medical examiner of such society.

Before soliciting or receiving any premium or other contribution for

insurance benefits of any kind or character, the society shall file with

the superintendent a bond in the sum of five thousand dollars, with

sureties approved by the superintendent, conditioned upon the return to

applicants of the advanced payments, as provided in this section, if the

society does not complete its organization and obtain a license to do

business within one year from the date of incorporation or within such

further time as the superintendent may permit pursuant to subsection (g)

hereof. The society shall incur no liability except for the repayment

of such advanced payments, nor issue any certificate or other evidence

of an insurance or annuity contract, or both, unless and until it shall

have obtained a license to do business as hereinafter provided.

(e) Before obtaining a license to do business in this state, such

society shall have established not less than ten subordinate lodges or

branches, into which not less than five hundred applicants have been

initiated and shall have actual bona fide applications for life

insurance benefits upon at least five hundred lives each eligible for

such insurance, in accordance with the provisions of this article, for

at least one thousand dollars on each life and shall have received

payments thereunder in the aggregate amount of at least two thousand

five hundred dollars. Before obtaining such license such society shall

submit to the superintendent, under oath of the president and secretary,

or corresponding officers, a complete list of such applicants, giving

their names, addresses, dates of examination, approval and initiation,

the name and number of the subordinate lodge or branch of which each

applicant is a member, the amount and kinds of insurance benefits to be

granted, the rate of periodical insurance contributions of each, which

shall conform to the requirements of this article, and the bank or

banking institution in which all sums collected from such applicants

have been deposited. Such advanced payments or other insurance

contributions by applicants shall, during the period of organization and

until the issuance of a license to do business, be held in trust on

account of such applicants, and no part thereof may be used for

expenses; and if a license is not issued within one year from date of

incorporation, such advanced payments shall be returned to the

applicants who originally made the same.

(f) If the superintendent finds, from the statements of the principal

officers of such society, subscribed and affirmed by such officers as

true under the penalties of perjury, or from such investigation or

examination as he may deem expedient, that such society has complied

with the requirements of this section and that the purposes and plan of

operation of such society are in accordance with the requirements of

law, he may issue to such society a license to do business in this

state. Such license shall set forth the name of the society, the

location of its principal office, and the kind of insurance or annuity

benefits, or both, specified in section four thousand five hundred five

of this article, which it is authorized to provide in this state.

Thereupon the society shall have such powers as are necessary or

properly incidental to carry into effect the lawful objects and purposes

of the society.

(g) If any such society shall fail to obtain such license within one

year from the date of its incorporation or within such further period,

not to exceed one additional year, as the superintendent may in his

discretion permit, the superintendent may commence proceedings for the

dissolution of such society in accordance with article seventy-four of

this chapter.

(h) A domestic society may provide for the meeting of its supreme

governing body in any other state, province or territory wherein such

society has not less than five subordinate lodges or branches. In all

meetings of the supreme governing body, no member, representative or

delegate shall cast more than one vote on any question submitted.