Code of Virginia

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Code of Virginia
Title 38.2. Insurance
Chapter 41. Fraternal Benefit Societies
8/7/2022

Article 1. Structure and Purpose.

§ 38.2-4100. Fraternal benefit societies.

Any society, order or supreme lodge without capital stock, including one exempted under the provisions of subdivision 6 of subsection A of § 38.2-4135 of this chapter, conducted solely for the benefit of its members and their beneficiaries and not for profit, operated on a lodge system with ritualistic form of work, having a representative form of government, and providing benefits in accordance with this chapter, is hereby declared to be a fraternal benefit society.

Code 1950, §§ 38-254, 38.1-569; 1952, c. 317, § 38.1-638.1; 1968, c. 654; 1986, c. 562.

§ 38.2-4101. Lodge system.

A. A society is operating on the lodge system if it has a supreme governing body and subordinate lodges into which members are elected, initiated or admitted in accordance with its laws, rules and rituals. Subordinate lodges shall be required by the laws of the society to hold regular meetings at least once each month in furtherance of the purposes of the society.

B. A society may, at its option, organize and operate lodges for children under the minimum age for adult membership. Membership and initiation in local lodges shall not be required of such children, nor shall they have a voice or vote in the management of the society.

Code 1950, §§ 38-255, 38.1-570; 1952, c. 317, § 38.1-638.2; 1968, c. 654; 1986, c. 562.

§ 38.2-4102. Representative form of government.

A society has a representative form of government when:

1. It has a supreme governing body constituted in one of the following ways:

a. Assembly. -- The supreme governing body is an assembly composed of delegates elected directly by the members or at intermediate assemblies or conventions of members or their representatives, together with other delegates as may be prescribed in the society's laws. A society may provide for election of delegates by mail. The elected delegates shall constitute a majority in number and shall not have less than two-thirds of the votes and not less than the number of votes required to amend the society's laws. The assembly shall be elected, meet at least once every four years, and elect a board of directors to conduct the business of the society between meetings of the assembly. Vacancies on the board of directors between elections may be filled in the manner prescribed by the society's laws.

b. Direct election. -- The supreme governing body is a board composed of persons elected by the members, either directly or by their representatives in intermediate assemblies, and any other persons prescribed in the society's laws.

A society may provide for election of the board by mail. Each term of a board member may not exceed four years. Vacancies on the board between elections may be filled in the manner prescribed by the society's laws. Those persons elected to the board shall constitute a majority in number and not less than the number of votes required to amend the society's laws. A person filling the unexpired term of an elected board member shall be considered to be an elected member. The board shall meet at least quarterly to conduct the business of the society.

2. The officers of the society are elected either by the supreme governing body or by the board of directors.

3. Only benefit members are eligible for election to the supreme governing body, the board of directors or any intermediate assembly.

4. Each voting member shall have one vote; no vote may be cast by proxy.

Code 1950, §§ 38-256, 38.1-571; 1952, c. 317, § 38.1-638.3; 1968, c. 654; 1986, c. 562.

§ 38.2-4103. Definitions.

As used in this chapter:

"Benefit contract" means the agreement for provision of benefits authorized by § 38.2-4116, as that agreement is described in § 38.2-4119.

"Benefit member" means an adult member who is designated by the laws or rules of the society to be a benefit member under a benefit contract.

"Certificate" means the document issued as written evidence of the benefit contract.

"Laws" means the society's articles of incorporation, constitution and bylaws, however designated.

"Lodge" means subordinate member units of the society, known as camps, courts, councils, branches or by any other designation.

"Premiums" means premiums, rates, dues or other required contributions by whatever name known, which are payable under the certificate.

"Rules" means all rules, regulations or resolutions adopted by the supreme governing body or board of directors which are intended to have general application to the members of the society.

"Society" means fraternal benefit society, unless otherwise indicated.

1986, c. 562.

§ 38.2-4104. Purposes and powers.

A. A society shall operate for the benefit of members and their beneficiaries by:

1. Providing benefits as specified in § 38.2-4116; and

2. Operating for one or more social, intellectual, educational, charitable, benevolent, moral, fraternal, patriotic or religious purposes for the benefit of its members, which may also be extended to others. Such purposes may be carried out directly by the society, or indirectly through subsidiary corporations or affiliated organizations.

B. Every society shall have the power to adopt laws and rules for the government of the society, the admission of its members, and the management of its affairs. It shall have the power to change, alter, add to or amend such laws and rules and shall have any other powers necessary and incidental to effecting the objects and purposes of the society.

Code 1950, §§ 38-277, 38.1-593; 1952, c. 317, § 38.1-638.25; 1968, c. 654, § 38.1-638.36; 1986, c. 562.