                                 CODE OF VIRGINIA

ORGANIZATION OF DOMESTIC SOCIETY ON OR AFTER OCTOBER 1, 1986 (§ 38.2-4109)

A. On or after October 1, 1986, seven or more citizens of the United States, a
majority of whom are citizens of this Commonwealth, who desire to form a
fraternal benefit society, may make, sign and acknowledge before some officer
competent to take acknowledgement of deeds, articles of incorporation, which
shall state:

   1. The proposed corporate name of the society, which shall not so closely
   resemble the name of any other society or insurer as to be misleading or
   confusing;

   2. The purposes for which it is being formed and the mode in which its
   corporate powers are to be exercised. Such purposes shall not include more
   liberal powers than are granted by this chapter;

   3. The names and residences of the incorporators and the names, residences and
   official titles of all 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 year from the date of issuance of
   the permanent certificate of authority.

B. Such articles of incorporation, duly certified copies of the society&#8217;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 year shall be filed with the Commission, which may require
any further information it deems necessary. The bond, with sureties approved by
the Commission, shall be not less than $50,000 nor more than $200,000, as
required by the Commission. All documents filed are to be in the English
language. If the purposes of the society conform to the requirements of this
chapter and all provisions of the law have been complied with, the Commission
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 as hereinafter provided.

C. No preliminary certificate of authority granted under the provisions of this
section shall be valid after one year from its date or after such further
period, not exceeding one year, as may be authorized by the Commission upon
cause shown, unless the 500 required applicants have been secured and the
organization has been duly completed. The articles of incorporation and all
other proceedings under those articles shall become void in one year from the
date of the preliminary certificate of authority, or at the expiration of the
extended period, unless the society has completed its organization and received
a certificate of authority to do business.

D. Upon receipt of a preliminary certificate of authority from the Commission,
the society may solicit members for the purpose of completing its organization,
shall collect from each applicant the amount of not less than one regular
monthly premium in accordance with its table of rates, and shall issue to each
such applicant a receipt for the amount collected. No society shall incur any
liability other than for the return of such advance premium, nor issue any
certificate, nor pay, allow, or offer or promise to pay or allow, any benefit to
any person until:

   1. Actual bona fide applicants for benefits have been secured on not less than
   500 applicants, and any necessary evidence of insurability has been furnished
   to and approved by the society;

   2. At least 10 subordinate lodges have been established into which the 500
   applicants have been admitted;

   3. There has been submitted to the Commission, a list of such 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 their premiums; and

   4. It has been shown to the Commission, by sworn statement of the treasurer,
   or corresponding officer of such society, that at least 500 applicants have
   each paid in cash at least one regular monthly premium, which shall total at
   least $150,000. Advance premiums shall be held in trust during the period of
   organization and, if the society has not qualified for a certificate of
   authority within one year, such premiums shall be returned to the applicants.

E. The Commission may examine and require any further information it 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 do business pursuant to the provisions of this chapter. The
certificate of authority shall be prima facie evidence of the existence of the
society at the date of such certificate. The Commission shall cause a record of
such certificate of authority to be made. A certified copy of such record shall
have the same effect as the original certificate of authority.

F. Any incorporated society authorized to do business in this Commonwealth at
the time this chapter becomes effective shall not be required to reincorporate.

G. The provisions of this section shall not apply in any instance in which the
provisions of this section are inconsistent or in conflict with a provision of
Article 6 (&#xA7; 38.2-3438 et seq.) of Chapter 34.

HISTORY: Code 1950, §§ 38-264 through 38-268, 38.1-582 through 38.1-587; 1952,
c. 317, §§ 38.1-638.14 through 38.1-638.19; 1968, c. 654; 1975, c. 262; 1986,
c. 562; 2013, c. 751.