Future security, provisions to insure.

Failure to maintain condition.

Proviso.

Proviso, assessment increase.

and maintenance of the funds required by its laws, additional, increased or extra rates of contribution shall be collected from the members to meet such deficiency; and such laws may provide that upon the written application or consent of the member, his certificate may be charged with its proportion of any deficiency disclosed by valuation, with interest not exceeding five per centum per annum.

SEC. 23a. Provisions to insure future security. If the valuation of the certificates, as herein before provided, on December thirty-first, nineteen hundred seventeen, shall show that the present value of future net contributions, together with the admitted assets, is less than the present value of the promised benefits and accrued liabilities, such society shall thereafter maintain said financial condition at each succeeding triennial valuation in respect of the degree of deficiency as shown in the valuation as of December thirty-first, nineteen hundred seventeen. If at any succeeding triennial valuation such society does not show at least the same condition, the commissioner shall direct that it thereafter comply with the requirements herein specified. If the next succeeding triennial valuation after the receipt of such notice shall show that the society has failed to maintain the condition required herein, the commissioner may, in the absence of good cause shown for such failure, institute proceedings for the dissolution of such society, in accordance with the provisions of section twenty-four of this act, or in the case of a foreign society, its license may be cancelled in the manner provided in this act.

Any such society, shown by any triennial valuation, subsequent to December thirty-first, nineteen hundred seventeen, not to have maintained the condition herein required, shall, within two years thereafter, make such improvement as to show a percentage of deficiency not greater than as of December thirty-first, nineteen hundred seventeen, or thereafter as to all new members admitted, be subject, so far as stated rates of contributions are concerned, to the provisions of section twelve of this act, applicable in the organization of new societies: Provided, That the net mortuary or beneficiary contributions and funds of such new members shall be kept separate and apart from the other funds of the society. If such required improvement is not shown by the succeeding triennial valuation, then the said new members may be placed in a separate class and their certificates valued as an independent society in respect of contributions and funds: Provided, however, That whenever the supreme body of any domestic society shall voluntarily determine that it is necessary for the future solvency of the society to increase the rate of the assessments charged by the society, then before such increase shall become effective the question shall be submitted and approved by a majority vote of the members voting thereon. The submission of such vote shall be held

at the lodge rooms of the different societies at a regular meeting thereof, after due notice to the members of such submission.

insurance,

SEC. 23b. In lieu of the requirements of sections twenty- Cost of three and twenty-three-a, any society accepting in its laws basis. the provisions of this section may value its certificates on a basis herein designated "accumulation basis," by crediting each member with the net amount contributed for each year and with interest at approximately the net rate earned, and by charging him with his share of the losses for each year, herein designated "cost of insurance" and carrying the bal ance, if any, to his credit. The charge for the cost of insurance may be according to the actual experience of the society applied to a table of mortality recognized by the law of this State, and shall take into consideration the amount at risk during each year, which shall be the amount payable at death less the credit to the member. Except as specifically provided in its articles or laws or contracts no charge shall be carried forward from the first valuation hereunder against any member for any past share of losses exceeding the contributions and credit. If, after the first valuation, any member's share of losses for any year exceeds his credit including the contribution for the year, the contribution shall be increased to cover his share of the losses. Any such excess share of losses chargeable to any member may be paid out of a fund or contributions especially created or required for such purpose. Any member may transfer to any plan adopted by the society with net rates on which tabular reserves are maintained, and on such transfer shall be entitled to make such application of his credit as provided in the laws of the society.

basis".

Certificates issued, rerated or readjusted on a basis provid- "Tabular ing for adequate rates with adequate reserves to mature such certificates upon assumptions for mortality and interest recognized by the law of this State, shall be valued on such basis, herein designated the "Tabular Basis": Provided, That Proviso. if on the first valuation under this section a deficiency in reserve shall be shown for any such certificate, the same shall be valued on the accumulation basis.

how met.

Whenever in any society having members upon the tabular Deficiency, basis and upon the accumulation basis, the total of all costs of insurance provided for any year shall be insufficient to meet the actual death and disability losses for the year, the deficiency shall be met for the year from the available funds after setting aside all credits in the reserve; or from increased contributions or by an increase in the number of assessments applied to the society as a whole or to classes of members as may be specified in its laws. Savings from a lower amount of death losses may be returned in like manner as may be specified in its laws.

Reserve assets.

Members' credits.

Surplus.

Domestic societies, examination.

Assistants.

If the laws of the society so provide, the assets representing the reserves of any separate class of members may be carried separately for such class as if in an independent society, and the required reserve accumulation of such class so set apart shall not thereafter be mingled with the assets of other classes of the society.

A table showing the credits to individual members for each age and year of entry and showing opposite each credit the tabular reserve required on the whole life or other plan of insurance specified in the contract, according to assumptions for mortality and interest recognized by the law of this State and adopted by the society, shall be filed by the society with each annual report and also be furnished to each member before July first of each year.

In lieu of the aforesaid statement there may be furnished to each member within the same time a statement giving the credit for such member, and giving the tabular reserve and level rate required for a transfer carrying out the plan of insurance specified in the contract. No table or statement need be made or furnished where the reserves are maintained on the tabular basis.

For this purpose, individual bookkeeping accounts for each member shall not be required, and all calculations may be made by actuarial methods.

Nothing herein contained shall prevent the maintenance of such surplus over and above the credits on the accumulation basis and the reserves on the tabular basis as the society may provide by or pursuant to its laws; nor be construed as giv ing to the individual member any right or claim to any such reserve or credit other than in manner as expressed in the contract and its laws; nor as making any such reserve or credits a liability in determining the legal solvency of the society.

SEC. 24. Examination of domestic societies. The Commissioner of Insurance, or any person he may appoint, shall have the power of visitation and examination into the affairs of any domestic society. He may employ assistants for the purpose of such examination, and he, or any person he may appoint, shall have free access to all the books, papers and documents that relate to the business of the society and may summon and qualify as witness under oath and examine its officers, agents and employes or other persons in relation to Expense, who the affairs, transactions and condition of the society. The

to pay.

Action in quo warranto.

expense of such examination shall be paid by the society examined, upon statement furnished by the Commissioner of Insurance, and the examination shall be made at least once in three years.

Whenever after examination the Commissioner of Insurance is satisfied that any domestic society has failed to comply with any provisions of this act, or is exceeding its powers, or is not carrying out its contracts in good faith, or is transacting business fraudulently; or whenever any domestic

society, after the existence of one year or more, shall have a membership of less than four hundred or shall determine to discontinue business, the Commissioner of Insurance may present the facts relating thereto to the Attorney General, who shall, if he deem the circumstances warrant, commence an action in quo warranto in a court of competent jurisdiction, and such court shall thereupon notify the officers of such society of a hearing, and if it shall then appear that such society should be closed, said society shall be enjoined from carrying on any further business, and some person shall be appointed receiver of such society, and shall proceed at once to take possession of the books, papers, moneys and other assets of the society, and shall forthwith, under the direction of the court, proceed to close the affairs of the soci ety and to distribute its funds to those entitled thereto.

No such proceedings shall be commenced by the Attorney Notice, etc. General against any such society until after notice has been duly served on the chief executive officers of the society and a reasonable opportunity given to it, on a date to be named

in said notice, to show cause why such proceedings should not be commenced.

SEC. 25. Application for receiver, etc. No application for When receiver injunction against or proceedings for the dissolution of or appointed, etc. the appointment of a receiver for any such domestic society or branch thereof shall be entertained by any court in this State, unless the same is made by the Attorney General.

societies, ex

SEC. 26. Examination of foreign societies. The Commis- Foreign sioner of Insurance, or any person whom he may appoint, amination. may examine any foreign society transacting or applying for admission to transact business in this State. The said commissioner may employ assistants, and he, or any person he may appoint, shall have free access to all the books, papers and documents that relate to the business of the society, and may summon and qualify as witness under oath and examine its officers, agents and employes and other persons in relation to the affairs, transactions and conditions of the society. He may, in his discretion, accept in lieu of such examination the examination of the insurance department of the state, territory, district, province or country where such society is organized. The actual expenses of examiners making any Examiners' such examination shall be paid by the society upon statement who to pay. furnished by the Commissioner of Insurance.

expenses,

If any such society or its officers refuse to submit to such Refusal to examination or to comply with the provisions of the section submit. relative thereto, the authority of such society to write new business in this State shall be suspended or license refused until satisfactory evidence is furnished the commissioner relating to the condition and affairs of the society, and during such suspension the society shall not write new business in this State.

Adverse publications.

When license revoked.

Review of findings, etc.

Certain societies exempted.

Domestic societies.

SEC. 27. No adverse publications. Pending, during or af ter an examination or investigation of any such society, either domestic or foreign, the Commissioner of Insurance shall make public no financial statement, report or finding, nor shall he permit to become public any financial statement, report or finding affecting the status, standing or rights of any such society, until a copy thereof shall have been served upon such society, at its home office, nor until such society shall have been afforded a reasonable opportunity to answer any such financial statement, report or finding, and to make such showing in connection therewith as it may desire.

SEC. 28. Revocation of license. When the Commissioner of Insurance on investigation is satisfied that any foreign society transacting business under this act has exceeded its powers, or has failed to comply with any provisions of this act, or is conducting business fraudulently, or is not carrying out its contracts in good faith, he shall notify the society of his findings, and state in writing the grounds of his dissatisfaction, and after reasonable notice require said society, on a date named, to show cause why its license should not be revoked. If on the date named in said notice such objections have not been removed to the satisfaction of the said commissioner, or the society does not present good and sufficient reasons why its authority to transact business in this State should not at that time be revoked, he may revoke the authority of the society to continue business in this State. All decisions and findings of the commissioner made under the provisions of this section may be reviewed by proper proceedings in any court of competent jurisdiction, as provided in section sixteen of this act.

SEC. 29. Exemption of certain societies. Nothing contained in this act shall be construed to affect or apply to grand or subordinate lodges of Masons, Odd Fellows or Knights of Pythias (exclusive of the insurance department of the Supreme Lodge Knights of Pythias), and the Junior Order of United American Mechanics (exclusive of the beneficiary degree or insurance branch of the National Council Junior Order United American Mechanics), labor organizations or societies which limit their membership to any one occupation or religious denomination, nor to similar societies which do not issue insurance certificates, nor to an association of local lodges of a society now doing business in this State which provides death benefits not exceeding five hundred dollars to any one person, or disability benefits not exceeding three hundred dollars in any one year to any one person, or both, nor to any contracts of reinsurance business on such plan in this State, nor to domestic societies which limit their membership to the employes of a particular city or town, designated firm, business house or corporation, nor to domestic lodges, orders or associations of a purely relig ious, charitable and benevolent description, which do not provide for a death benefit of more than one hundred fifty