Code of the District of Columbia

Chapter 53. Fraternal Benefit Societies.


§ 31–5301. Definitions.

For the purposes of this chapter, the term:

(1) “Benefit contract” means the agreement for provision of benefits authorized by § 31-5313, as that agreement is described in § 31-5316(a).

(2) “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.

(3) “Certificate” means the document issued as written evidence of the benefit contract.

(4) “Commissioner” means the Commissioner of the Department of Insurance, Securities, and Banking.

(5) “District” means the District of Columbia.

(6) “Fraternal benefit societies” means any incorporated society, order or supreme lodge, without capital stock, including one exempted under the provisions of § 31-5333(a)(2), whether incorporated or not, 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 which provides benefits in accordance with this chapter.

(7) “Laws” means the society’s articles of incorporation, charter, constitution and bylaws, however designated.

(8) “Lodge” means subordinate member units of the society, known as camps, courts, councils, branches or by any other designation.

(9) “Lodge System” means a society that 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 periodically in furtherance of the purposes of the society. A society may, at its option, organize and operate lodges for children under the minimum age for adult membership, but 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.

(10) “Premiums” means premiums, rates, dues, or other required contributions by whatever name known, which are payable under the certificate.

(11) “Representative form of government” means a society in which:

(A) There is a supreme governing body constituted in one of the following ways:

(i) By assembly if the supreme governing body is 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 a majority of the votes and not less than the number of votes required to amend the society’s laws. The assembly shall be elected and shall meet at least once every 4 years and shall 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; or

(ii) By direct election if 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 4 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;

(B) The officers of the society are elected either by the supreme legislative or governing body or by the board by whatever name known, as provided in the society’s constitution and bylaws;

(C) The members, officers, representatives, or delegates shall not vote by proxy; and

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

(12) “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.

(13) “Society” means fraternal benefit society, unless otherwise indicated.


(Apr. 29, 1998, D.C. Law 12-86, § 1202, 45 DCR 1172; June 11, 2004, D.C. Law 15-166, § 4(ff), 51 DCR 2817.)

Prior Codifications

1981 Ed., § 35-1231.

Effect of Amendments

D.C. Law 15-166, in par. (4), substituted “Commissioner of the Department of Insurance, Securities, and Banking” for “Commissioner of Insurance of the District of Columbia”.

Cross References

Authority of Council to regulate, modify, or eliminate license requirements and to promulgate regulations, see §§ 47-2842 and 47-2844.

Exemption of fraternal benefit associations from provision of general law governing taxes and license fees for insurance companies, see § 47-2611.

Inspection and examination of insurance companies, see §§ 31-208, 31-5201, and 31-5202.

Quo warranto proceedings to question right to corporate rights and franchises, see § 16-3501 et seq.

Emergency Legislation

For temporary (90 day) amendment of section, see § 4(ff) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653).

Short Title

Fraternal Benefit Societies Act of 1998: Section 1201 of D.C. Law 12-86 provided that title XII of the act may be cited as the “Fraternal Benefit Societies Act of 1998.”


§ 31–5302. Operation for benefit of members and their beneficiaries; bylaws.

(a)(1) A society shall operate for the benefit of its members and their beneficiaries by:

(A) Providing benefits as specified in § 31-5313; and

(B) 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.

(2) The purposes of paragraph (2) of this subsection 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 other powers as are necessary and incidental to carrying into effect the objects and purposes of the society.


(Apr. 29, 1998, D.C. Law 12-86, § 1203, 45 DCR 1172.)

Prior Codifications

1981 Ed., § 35-1232.

Section References

This section is referenced in § 31-5309.


§ 31–5303. Qualifications for membership.

(a) A society shall specify in its laws or rules:

(1) Eligibility standards for each class of membership, provided that if benefits are provided on the lives of children, the minimum age for adult membership shall be set at not less than age 15 and not greater than age 21;

(2) The process for admission to membership for each membership class; and

(3) The rights and privileges of each membership class, provided that only benefit members shall have the right to vote on the management of the insurance affairs of the society.

(b) A society may also admit social members who shall have no voice or vote in the management of the insurance affairs of the society.

(c) Membership rights in the society are personal to the member and are not assignable.


(Apr. 29, 1998, D.C. Law 12-86, § 1204, 45 DCR 1172.)

Prior Codifications

1981 Ed., § 35-1233.


§ 31–5304. Location of office.

(a) The principal office of any domestic society shall be located in the District. The meetings of its supreme governing body may be held in any state, district, province, or territory wherein such society has at least one subordinate lodge, or in any other location as determined by the supreme governing body, and all business transacted at the meetings shall be as valid in all respects as if the meetings were held in the District. The minutes of the proceedings of the supreme governing body and of the board of directors shall be in the English language.

(b)(1) A society may provide in its laws for an official publication in which any notice, report, or statement required by law to be given to members, including notice of election, may be published. The required reports, notices, and statements shall be printed conspicuously in the publication. If the records of a society show that 2 or more members have the same mailing address, an official publication mailed to one member is deemed to be mailed to all members at the same address unless a member requests a separate copy.

(2) Not later than June 1st of each year, a synopsis of the society’s annual statement providing an explanation of the facts concerning the condition of the society thereby disclosed shall be printed and mailed to each benefit member of the society or, in lieu thereof, the synopsis may be published in the society’s official publication.

(c) A society may provide in its laws or rules for grievance or complaint procedures for members.


(Apr. 29, 1998, D.C. Law 12-86, § 1205, 45 DCR 1172.)

Prior Codifications

1981 Ed., § 35-1234.


§ 31–5305. Liability of officers and members.

(a) The officers and members of the supreme governing body or any subordinate body of a society shall not be personally liable for any benefits provided by a society.

(b) Any person may be indemnified and reimbursed by any society for expenses reasonably incurred by, and liabilities imposed upon, such person in connection with or arising out of any action, lawsuit, or proceeding, whether civil, criminal, administrative, or investigative, or threat thereof, in which the person may be involved by reason of the fact that he or she is or was a director, officer, employee, or agent of the society or of any firm, corporation, or organization which he or she served in any capacity at the request of the society. A person shall not be so indemnified or reimbursed:

(1) In relation to any matter in such action, lawsuit, or proceeding as to which he or she shall finally be adjudged to be, or have been guilty of, breach of a duty as a director, officer, employee or agent of the society; or

(2) In relation to any matter in such action, lawsuit, or proceeding, or threat thereof, which has been made the subject of a compromise settlement.

(c) A society may indemnify or reimburse a person in relation to any matter specified in subsection (b)(1) and (2) of this section if the person acted in good faith for a purpose the person reasonably believed to be in or not opposed to the best interests of the society and, in a criminal action or proceeding, in addition, had no reasonable cause to believe that his or her conduct was unlawful. The determination whether the conduct of the person met the standard required in order to justify indemnification and reimbursement in relation to any matter described in subsection (b)(1) and (2) of this section may only be made by the supreme governing body or board of directors by a majority vote of a quorum consisting of persons who were not parties to the action, lawsuit, or proceeding or by a court of competent jurisdiction. The termination of any action, lawsuit, or proceeding by judgment, order, settlement, conviction, or upon a plea of no contest, as to the person shall not in itself create a conclusive presumption that the person did not meet the standard of conduct required in order to justify indemnification and reimbursement.

(d) The right to indemnification and reimbursement shall not be exclusive of other rights to which such person may be entitled as a matter of law and shall inure to the benefit of his or her heirs, executors, and administrators.

(e) A society shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, or agent of the society, or who is or was serving at the request of the society as a director, officer, employee, or agent of any other firm, corporation, or organization against any liability asserted against such person and incurred by him or her in any such capacity or arising out of his or her status as such, whether or not the society would have the power to indemnify the person against such liability under this section.

(f) No director, officer, employee, member, or volunteer of a society serving without compensation, shall be liable, and no cause of action may be brought, for damages resulting from the exercise of judgment or discretion in connection with the duties or responsibilities of such person for the society unless such act or omission involved willful or wanton misconduct.


(Apr. 29, 1998, D.C. Law 12-86, § 1206, 45 DCR 1172.)

Prior Codifications

1981 Ed., § 35-1235.


§ 31–5306. Waiver of laws.

The laws of the society may provide that no subordinate body, nor any of its subordinate officers or members, shall have the power or authority to waive any of the provisions of the laws of the society. Such provision shall be binding on the society and every member and beneficiary of a member.


(Apr. 29, 1998, D.C. Law 12-86, § 1207, 45 DCR 1172.)

Prior Codifications

1981 Ed., § 35-1236.


§ 31–5307. Organization of societies.

(a) A domestic society organized on or after April 29, 1998, shall be formed as follows:

(1) Seven or more citizens of the United States, a majority of whom are residents of the District, 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 resemble the name of any society or insurance company already authorized to transact business in the District so as to be misleading or confusing;

(B) The place where its principal office shall be located within the District;

(C) 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; and

(D) The names and residences of the incorporators and the names, residences, and official titles of all the officers, trustees, directors, or other persons who will manage 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. The ensuing election shall be held no later than one year from the date of issuance of the permanent certificate of authority.

(2) Duplicate originals of the articles of incorporation, certified copies of the society’s bylaws and rules, copies of all proposed forms of certificates, applications and rates 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 Commissioner, who may require such further information as the Commissioner deems necessary. The bond with sureties approved by the Commissioner shall be in such amount, not less than $50,000, nor more than $500,000, as required by the Commissioner. All documents filed are to be in the English language. If the Commissioner finds that the purposes of the society conform to the requirements of this chapter and all provisions of the law have been complied with, the Commissioner shall approve the articles of incorporation and issue the incorporators a preliminary certificate of authority authorizing the society to solicit members as hereinafter provided.

(b) 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 Commissioner upon cause shown, unless the 100 applicants hereinafter required have been secured and the organization has been completed as herein provided. The charter and all other proceedings thereunder shall become null and void in one year from the date of the preliminary 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 as hereinafter provided.

(c) Upon receipt of a preliminary certificate of authority from the Commissioner, 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 so 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 applications for benefits have been secured aggregating at least $100,000 on not less than 100 applicants, and any necessary evidence of insurability has been furnished to and approved by the society;

(2) At least 5 subordinate lodges have been established into which the 100 applicants have been admitted;

(3) There has been submitted to the Commissioner, under oath of the president or secretary, or corresponding officer of the society, 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 premiums therefor; and

(4) It shall have been shown to the Commissioner, by sworn statement of the treasurer, or corresponding officer of such society, that at least 100 applicants have each paid in cash at least one regular monthly premium as herein provided, which premiums in the aggregate shall amount to at least $50,000. Advance premiums shall be held in trust during the period of organization. If the society has not qualified for a certificate of authority within one year, as herein provided, advance premiums shall be returned to applicants.

(d) The Commissioner may make such examination and require such further information as the Commissioner deems necessary. 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 this chapter. The certificate of authority shall be prima facie evidence of the existence of the society at the date of such certificate of authority to be made and filed with the Recorder of Deeds of the District. A certified copy of such record may be given in evidence with like effect as the original certificate of authority.

(e) Any incorporated society authorized to transact business in the District at the time this chapter becomes effective shall not be required to reincorporate.

(f) No unincorporated or voluntary association shall be permitted to transact business in the District as a fraternal benefit society.


(Apr. 29, 1998, D.C. Law 12-86, § 1208, 45 DCR 1172.)

Prior Codifications

1981 Ed., § 35-1237.


§ 31–5308. Laws; amendments.

(a) A domestic society may amend its laws in accordance with the provisions of its laws by action of its supreme governing body at any regular or special meeting or, if its laws so provide, by referendum. The referendum may be held in accordance with the provisions of its laws by the vote of the voting members of the society, by the vote of delegates or representatives of voting members, or by the vote of local lodges. A society may provide for voting by mail. No amendment submitted for adoption by referendum shall be adopted unless, within 6 months from the date of submission, a majority of the members voting shall have signified their consent to such amendment by one of the methods herein specified. Any such amendment shall be filed with the Commissioner.

(b) Within 90 days from the filing of any such amendment, a copy or synopsis thereof shall be furnished to all members of the society either by mail or by publication in full in the official publication of the society. The affidavit of any officer of the society or of anyone authorized by it to mail any amendments or synopsis thereof, stating facts which show that same have been duly addressed and mailed, shall be prima facie evidence that the amendments or synopsis, have been furnished to the addressee.

(c) Every foreign or alien society authorized to do business in the District shall file with the Commissioner a duly certified copy of all amendments of, or additions to, its laws within 90 days after enactment.

(d) Printed copies of the laws as amended, certified by the secretary or corresponding officer of the society shall be prima facie evidence of the legal adoption thereof.


(Apr. 29, 1998, D.C. Law 12-86, § 1209, 45 DCR 1172.)

Prior Codifications

1981 Ed., § 35-1238.


§ 31–5309. Operations of nonprofit institutions.

A society may create, maintain, and operate, or may establish organizations to operate, not-for-profit institutions to further the purposes permitted by § 31-5302(a)(2). Such institutions may furnish services free of charge or at a reasonable charge. Any real or personal property owned, held, or leased by the society for this purpose shall be reported in every annual statement.


(Apr. 29, 1998, D.C. Law 12-86, § 1210, 45 DCR 1172.)

Prior Codifications

1981 Ed., § 35-1239.


§ 31–5310. Reinsurance.

A domestic society may enter into reinsurance transactions only in accordance with Chapter 5 of this title. Notwithstanding that law, a society may reinsure the risks of another society in a consolidation or merger approved by the Commissioner under § 31-5311.


(Apr. 29, 1998, D.C. Law 12-86, § 1211, 45 DCR 1172.)

Prior Codifications

1981 Ed., § 35-1240.


§ 31–5311. Consolidations and mergers.

A domestic society may enter into agreements of consolidation or merger in accordance with § 31-4443.


(Apr. 29, 1998, D.C. Law 12-86, § 1212, 45 DCR 1172.)

Prior Codifications

1981 Ed., § 35-1241.

Section References

This section is referenced in § 31-5310.


§ 31–5312. Conversion of fraternal benefit society into a mutual life insurance company.

Any domestic fraternal benefit society may be converted and licensed as a mutual life insurance company by compliance with all the applicable requirements of the laws of the District with respect to similar mutual legal reserve life insurance corporations if the plan of conversion has been approved by the Commissioner. A plan of conversion shall be prepared in writing by the board of directors setting forth in full the terms and conditions of conversion. The affirmative vote of 2/3 of all members of the supreme governing body at a regular or special meeting shall be necessary for the approval of the plan. No such conversion shall take effect unless approved by the Commissioner who may grant approval if the Commissioner finds that the proposed change is in conformity with the requirements of law and not prejudicial.


(Apr. 29, 1998, D.C. Law 12-86, § 1213, 45 DCR 1172.)

Prior Codifications

1981 Ed., § 35-1242.


§ 31–5313. Benefits.

(a) A society may provide the following contractual benefits in any form:

(1) Death benefits;

(2) Endowment benefits;

(3) Annuity benefits;

(4) Temporary or permanent disability benefits;

(5) Hospital, medical, or nursing benefits;

(6) Monument or tombstone benefits to the memory of deceased members; and

(7) Such other benefits as authorized for life insurers and which are not inconsistent with this chapter.

(b) A society shall specify in its rules those persons who may be issued, or covered by, the contractual benefits in subsection (a) of this section, consistent with providing benefits to members and their dependents. A society may provide benefits on the lives of children under the minimum age for adult membership upon application of an adult person.


(Apr. 29, 1998, D.C. Law 12-86, § 1214, 45 DCR 1172.)

Prior Codifications

1981 Ed., § 35-1243.

Section References

This section is referenced in § 31-5301 and § 31-5302.


§ 31–5314. Beneficiaries.

(a) The owner of a benefit contract shall have the right at all times to change the beneficiary or beneficiaries in accordance with the laws or rules of the society unless the owner waives this right by specifically requesting in writing that the beneficiary designation be irrevocable. A society may, through its laws or rules, limit the scope of beneficiary designations and shall provide that no revocable beneficiary shall have or obtain any vested interest in the proceeds of any certificate until the certificate has become due and payable in conformity with the provisions of the benefit contract.

(b) A society may make provision for the payment of funeral benefits to the extent the portion of any payment under a certificate as might reasonably appear to be due to any person equitably entitled thereto by reason of having incurred expense occasioned by the burial of the member. The portion so paid shall not exceed $2,000.

(c) If, at the death of any person insured under a benefit contract, there is no lawful beneficiary to whom the proceeds shall be payable, the amount of the benefit, except to the extent that funeral benefits may be paid as provided in subsection (b) of this section, shall be payable to the estate of the deceased insured in the same manner as other property not exempt. If the owner of the certificate is other than the insured, the proceeds shall be payable to the owner.


(Apr. 29, 1998, D.C. Law 12-86, § 1215, 45 DCR 1172.)

Prior Codifications

1981 Ed., § 35-1244.


§ 31–5315. Benefits not attachable.

No money or other benefit, charity, relief, or aid to be paid, provided, or rendered by any society, shall be liable to attachment, garnishment, or other process, or to be seized, taken, appropriated, or applied by any legal or equitable process or operation of law to pay any debt or liability of a member or beneficiary, or any other person who may have a right thereunder, either before or after payment by the society.


(Apr. 29, 1998, D.C. Law 12-86, § 1216, 45 DCR 1172.)

Prior Codifications

1981 Ed., § 35-1245.


§ 31–5316. Benefit contracts.

(a) Every society authorized to do business in the District shall issue to each owner of a benefit contract a certificate specifying the amount of benefits provided thereby. The certificate, together with any riders or endorsements attached thereto, the laws of the society, the application for membership, the application for insurance and declaration of insurability, if any, signed by the applicant, and all amendments to each thereof, shall constitute the benefit contract, as of the date of issuance, between the society and the owner, and the certificate shall so state. A copy of the application for insurance and declaration of insurability, if any, shall be endorsed upon or attached to the certificate. All statements on the application shall be representations and not warranties. Any waiver of this provision shall be void.

(b) Any changes, additions, or amendments to the laws of the society duly made or enacted subsequent to the issuance of the certificate, shall bind the owner and the beneficiaries, and shall govern and control the benefit contract in all respects the same as though the changes, additions, or amendments had been made prior to, and were in force at the time of, the application for insurance. No change, addition, or amendment shall destroy or diminish benefits which the society contracted to give the owner as of the date of issuance.

(c) Any person upon whose life a benefit contract is issued prior to attaining the age of majority shall be bound by the terms of the application and certificate and by all the laws and rules of the society to the same extent as though the age of majority had been attained at the time of application.

(d) A society shall provide in its laws that if its reserves as to all or any class of certificates become impaired, its board of directors or corresponding body may require the owner to pay to the society the amount of the owner’s equitable proportion of the deficiency as ascertained by its board, and that if the payment is not made either: (i) it shall stand as an indebtedness against the certificate and draw interest not to exceed the rate specified for certificate loans under the certificates; or (ii) in lieu of or in combination with clause (i), the owner may accept a proportionate reduction in benefits under the certificate. The society may specify the manner of the election and which alternative is to be presumed if no election is made.

(e) Copies of any of the documents mentioned in this section, certified by the secretary or corresponding officer of the society, shall be received in evidence of the terms and conditions thereof.

(f) No certificate shall be delivered or issued for delivery in the District unless a copy of the form has been filed with the Commissioner in the manner provided for like policies issued by life, accident, and health insurers in the District. Any certificate issued prior to one year after April 29, 1998 shall conform to the requirements provided by the laws applicable immediately prior to April 29, 1998. Every life, accident and health or disability insurance certificate and every annuity certificate issued on or after one year from April 29, 1998 shall meet the standard contract provision requirements not inconsistent with this chapter for like policies issued by life, accident, and health insurers in the District, except that a society may provide for a grace period for payment of premiums of one full month in its certificates. The certificate shall also contain a provision stating the amount of premiums which are payable under the certificate and a provision reciting or setting forth the substance of any sections of the society’s laws or rules in force at the time of issuance of the certificate which, if violated, will result in the termination or reduction of benefits payable under the certificate. If the laws of the society provide for expulsion or suspension of a member, the certificate shall also contain a provision that a member so expelled or suspended, except for nonpayment of a premium or within the contestable period for material misrepresentation in the application for membership or insurance, shall have the privilege of maintaining the certificate in force by continuing payment of the required premium.

(g) Benefit contracts issued on the lives of persons below the society’s minimum age for adult membership may provide for transfer of control of ownership to the insured at an age specified in the certificate. A society may require approval of an application for membership in order to effect this transfer, and may provide in all other respects for the regulation, government and control of the certificates and all rights, obligations, and liabilities incident thereto and connected therewith. Ownership rights prior to the transfer shall be specified in the certificate.

(h) A society may specify the terms and conditions on which benefit contracts may be assigned.


(Apr. 29, 1998, D.C. Law 12-86, § 1217, 45 DCR 1172.)

Prior Codifications

1981 Ed., § 35-1246.

Section References

This section is referenced in § 31-5301 and § 31-5319.


§ 31–5317. Nonforfeiture benefits, cash surrender values, certificate loans, and other options.

(a) For certificates issued prior to one year after April 29, 1998, the value of every paid-up nonforfeiture benefit and the amount of any cash surrender value, loan, or other option granted shall comply with the provisions of law applicable immediately prior to April 29, 1998.

(b) For certificates issued on or after one year from April 29, 1998 for which reserves are computed on the Commissioner’s 1941 Standard Ordinary Mortality Table, the Commissioner’s 1941 Standard Industrial Table, the Commissioner’s 1958 Standard Ordinary Mortality Table, the Commissioner’s 1980 Standard Mortality Table, or any more recent table made applicable to life insurers, every paid-up nonforfeiture benefit and the amount of any cash surrender value, loan, or other option granted shall not be less than the corresponding amount ascertained in accordance with the laws of the District applicable to life insurers issuing policies containing like benefits based upon such tables.


(Apr. 29, 1998, D.C. Law 12-86, § 1218, 45 DCR 1172.)

Prior Codifications

1981 Ed., § 35-1247.


§ 31–5318. Investments.

A domestic society shall invest its funds only in investments authorized by the laws of the District for the investment of assets of life insurers and subject to the limitations therein. Any foreign or alien society permitted or seeking to do business in the District which invests its funds in accordance with the laws of the state, district, territory, country or province in which it is incorporated, shall be held to meet the requirements of this section for the investment of funds.


(Apr. 29, 1998, D.C. Law 12-86, § 1219, 45 DCR 1172.)

Prior Codifications

1981 Ed., § 35-1248.


§ 31–5319. Funds.

(a) All assets shall be held, invested and disbursed for the use and benefit of the society and no member or beneficiary shall have or acquire individual rights therein or become entitled to any apportionment on the surrender of any part thereof, except as provided in the benefit contract.

(b) A society may create, maintain, invest, disburse and apply any special fund or funds necessary to carry out any purpose permitted by the laws of the society.

(c) A society may, pursuant to resolution of its supreme governing body, establish and operate one or more separate accounts and issue contracts on a variable basis, subject to the provisions of law regulating life insurers establishing such accounts and issuing such contracts. To the extent the society deems it necessary in order to comply with any applicable federal or state laws, or any rules issued thereunder, the society may adopt special procedures for the conduct of the business and affairs of a separate account, may, for persons having beneficial interests therein, provide special voting and other rights, including without limitation special rights and procedures relating to investment policy, investment advisory services, selection of certified public accountants, and selection of a committee to manage the business and affairs of the account, and may issue contracts on a variable basis which § 31-5316(b) and (d) shall not apply.


(Apr. 29, 1998, D.C. Law 12-86, § 1220, 45 DCR 1172.)

Prior Codifications

1981 Ed., § 35-1249.


§ 31–5320. Taxation.

Every society organized or licensed under this chapter is hereby declared to be a charitable and benevolent institution, and all of its funds shall be exempt from all and every state, county, district, municipal and school tax other than taxes on real estate and office equipment.


(Apr. 29, 1998, D.C. Law 12-86, § 1221, 45 DCR 1172.)

Prior Codifications

1981 Ed., § 35-1250.


§ 31–5321. Applicability of provisions.

Except as herein provided, societies shall be governed by this chapter and shall be exempt from all other provisions of the insurance laws of the District unless they are expressly designated therein, or unless they are specifically made applicable by this chapter.


(Apr. 29, 1998, D.C. Law 12-86, § 1222, 45 DCR 1172.)

Prior Codifications

1981 Ed., § 35-1251.


§ 31–5322. Valuation standards for certificates.

(a) Standards of valuation for certificates issued prior to one year after April 29, 1998 shall be those provided by the laws applicable immediately prior to April 29, 1998.

(b)(1) The minimum standards of valuation for certificates issued on or after one year from April 29, 1998 shall be based on the following tables:

(A) For certificates of life insurance, the Commissioner’s 1941 Standard Ordinary Mortality Table, the Commissioner’s 1941 Standard Industrial Table, the Commissioner’s 1958 Standard Ordinary Mortality Table, the Commissioner’s 1980 Standard Mortality Table, or any more recent table made applicable to life insurers in the District; and

(B) For annuity and pure endowment certificates, for total and permanent disability benefits, for accidental death benefits, and for noncancelable accident and health benefits, such tables as are authorized for use by life insurers in the District.

(2) The valuation methods and standards (including interest assumptions) set forth in paragraph (1) of this subsection shall be in accordance with the laws of the District applicable to life insurers issuing policies containing like benefits.

(c) The Commissioner may, in his or her discretion, accept other standards for valuation if the Commissioner finds that the reserves produced thereby will not be less in the aggregate than reserves computed in accordance with the minimum valuation standard herein prescribed. The Commissioner may, in his or her discretion, vary the standards of mortality applicable to all benefit contracts on substandard lives or other extra hazardous lives by any society authorized to do business in the District.

(d) Any society, with the consent of the Commissioner of the state of domicile of the society and under such conditions, if any, which the Commissioner may impose, may establish and maintain reserves on its certificates in excess of the reserves required thereunder, but the contractual rights of any benefit member shall not be affected thereby.


(Apr. 29, 1998, D.C. Law 12-86, § 1223, 45 DCR 1172.)

Prior Codifications

1981 Ed., § 35-1252.

Section References

This section is referenced in § 31-5323.


§ 31–5323. Reports.

(a) Every society transacting business in the District shall annually, on or before March 1, unless for cause shown the time has been extended by the Commissioner, file with the Commissioner a true statement of its financial condition, transactions, and affairs for the preceding calendar year and pay a filing fee of $50. The statement shall be in general form and context as approved by the National Association of Insurance Commissioners for fraternal benefit societies and as supplemented by additional information required by the Commissioner.

(b) As part of the annual statement, each society shall, on or before March 1, file with the Commissioner a valuation of its certificates in force on the preceding December 31. The Commissioner may, in his or her discretion for cause shown, extend the time for filing the valuation for not more than 2 calendar months. The valuation shall be done in accordance with the standards specified in § 31-5322. The valuation and underlying data shall be certified by a qualified actuary or, at the expense of the society, verified by the actuary of the department of insurance of the state of domicile of the society.

(c) A society neglecting to file the annual statement in the form and within the time provided by this section shall forfeit $100 for each day during which the neglect continues, and, upon notice by the Commissioner to that effect, its authority to do business in the District shall cease while the default continues.


(Apr. 29, 1998, D.C. Law 12-86, § 1224, 45 DCR 1172.)

Prior Codifications

1981 Ed., § 35-1253.


§ 31–5324. Annual license.

Societies which are now authorized to transact business in the District, and all societies hereafter licensed, may continue such business until March 1 next succeeding April 29, 1998. The authority of the societies and all societies hereafter licensed, may thereafter be renewed annually, but in all cases to terminate on the succeeding March 1. However, a license so issued shall continue in full force and effect until a renewal of the license has been specifically refused. For each such license or renewal the society shall pay the Commissioner a fee of $50. A duly certified copy or duplicate of the license shall be prima facie evidence that the licensee is a fraternal benefit society within the meaning of this chapter.


(Apr. 29, 1998, D.C. Law 12-86, § 1225, 45 DCR 1172.)

Prior Codifications

1981 Ed., § 35-1254.


§ 31–5325. Examination of societies; no adverse publications.

(a) The Commissioner, or any person he or she may appoint, may examine any domestic, foreign, or alien society transacting or applying for admission to transact business in the District in the same manner as authorized for examination of domestic, foreign, or alien insurers. Requirements of notice and an opportunity to respond before findings are made public as provided in the laws regulating insurers shall also be applicable to the examination of societies.

(b) The expense of each examination and of each valuation, including compensation and actual expense of examiners, shall be paid by the society examined or whose certificates are valued, upon statements furnished by the Commissioner.


(Apr. 29, 1998, D.C. Law 12-86, § 1226, 45 DCR 1172.)

Prior Codifications

1981 Ed., § 35-1255.


§ 31–5326. Foreign or alien society; admission.

No foreign or alien society shall transact business in the District without a certificate of authority issued by the Commissioner in accordance with §§ 31-4501 and 31-4502 and § 31-2502.21.


(Apr. 29, 1998, D.C. Law 12-86, § 1227, 45 DCR 1172.)

Prior Codifications

1981 Ed., § 35-1256.


§ 31–5327. Injunction; liquidation; receivership of domestic society.

(a) When the Commissioner, upon investigation, finds that a domestic society has exceeded its powers; has failed to comply with any provision of this chapter; is not fulfilling its contracts in good faith; has a membership of less than 90 after an existence of one year or more; or is conducting business fraudulently or in a manner hazardous to its members, creditors, the public, or the business, the Commissioner shall notify the society of such deficiency and state in writing the reasons for his or her dissatisfaction. The Commissioner shall immediately issue a written notice to the society requiring that the deficiency be corrected. After such notice the society shall have a 30-day period in which to comply with the Commissioner’s request for correction. If the society fails to comply, the Commissioner shall notify the society of such findings of noncompliance and require the society to show cause on a date named why it should not be enjoined from carrying on any business until the violation complained of shall have been corrected, or why an action in quo warranto should not be commenced against the society.

(b) If on such date the society does not present good and sufficient reasons why it should not be so enjoined or why such action should not be commenced, the Commissioner may present the facts relating thereto to the Corporation Counsel of the District who shall, if he or she deems the circumstances warrant, commence an action to enjoin the society from transacting business or in quo warranto.

(c) The court shall thereupon notify the officers of the society of a hearing. If after a full hearing it appears that the society should be so enjoined or liquidated or a receiver appointed, the court shall enter the necessary order. No society so enjoined shall have the authority to do business until the:

(1) Commissioner finds that the violation complained of has been corrected;

(2) Costs of such action shall have been paid by the society if the court finds that the society was in default as charged;

(3) Court has dissolved its injunction; and

(4) Commissioner has reinstated the certificate of authority.

(d) If the court orders the society liquidated, it shall be enjoined from carrying on any further business, whereupon the receiver of the society shall proceed immediately to take possession of the books, papers, money, and other assets of the society and, under the direction of the court, proceed forthwith to close the affairs of the society and to distribute its funds to those entitled thereto.

(e) No action under this section shall be recognized in any court of the District unless brought by the Corporation Counsel upon request of the Commissioner. Whenever a receiver is to be appointed for a domestic society, the court shall appoint the Commissioner as such receiver.

(f) The provisions of this section relating to hearing by the Commissioner, action by the Corporation Counsel at the request of the Commissioner, hearing by the court, injunction and receivership shall be applicable to a society which voluntarily determines to discontinue business.


(Apr. 29, 1998, D.C. Law 12-86, § 1228, 45 DCR 1172.)

Prior Codifications

1981 Ed., § 35-1257.


§ 31–5328. Suspension; revocation or refusal of license of foreign or alien society.

(a) When the Commissioner, upon investigation, finds that a foreign or alien society transacting or applying to transact business in the District has exceeded its powers; has failed to comply with any of the provisions of this chapter; is not fulfilling its contracts in good faith; or is conducting its business fraudulently or in a manner hazardous to its members, creditors, or the public, the Commissioner shall notify the society of the deficiency or deficiencies and state in writing the reasons for his or her dissatisfaction. The Commissioner shall immediately issue a written notice to the society requiring that the deficiency or deficiencies which exist are corrected. After the notice, the society shall have a 30-day period in which to comply with the Commissioner’s request for correction. If the society fails to comply, the Commissioner shall notify the society of the findings of noncompliance and require the society to show cause on a date named why its license should not be suspended, revoked, or refused.

(b) If on such date the society does not present good and sufficient reason why its authority to do business in the District should not be suspended, revoked, or refused, the Commissioner may suspend or refuse the license of the society to do business in the District until satisfactory evidence is furnished to the Commissioner that such suspension or refusal should be withdrawn or the Commissioner may revoke the authority of the society to do business in the District.

(c) Nothing contained in this section shall be taken or construed as preventing any such society from continuing in good faith all contracts made in the District during the time such society was legally authorized to transact business herein.


(Apr. 29, 1998, D.C. Law 12-86, § 1229, 45 DCR 1172.)

Prior Codifications

1981 Ed., § 35-1258.


§ 31–5329. Injunction.

No application or petition for injunction against any domestic, foreign or alien society, or lodge thereof, shall be recognized in any court of the District unless made by the Corporation Counsel upon request of the Commissioner.


(Apr. 29, 1998, D.C. Law 12-86, § 1230, 45 DCR 1172.)

Prior Codifications

1981 Ed., § 35-1259.


§ 31–5330. Licensing of agents.

(a) Agents of societies shall be licensed in accordance with the provisions of the laws regulating the licensing, revocation, suspension, or termination of license of resident and nonresident agents. No written or other examination shall be required of a person who is certified by a society as having been its full-time agent prior to April 29, 1998.

(b) No examination or license shall be required of any regular salaried officer, employee, or member of a licensed society who devotes substantially all of his or her services to activities other than the solicitation of fraternal insurance contracts from the public, and who receives for the solicitation of such contracts no commission or other compensation directly dependent upon the amount of business obtained.

(c) Any agent, representative, or member of a society who devotes, or intends to devote, less than 50% of such person’s time to the solicitation and procurement of insurance contracts for such society shall be exempt from the requirements of subsection (a) of this section. Any person who, in the preceding calendar year, has received or will receive a commission or other compensation for soliciting and procuring the type of contracts listed in paragraphs (1) through (5) of this subsection on behalf of an individual society, shall be presumed to be devoting, or intending to devote, 50% of the person’s time to the solicitation or procurement of insurance contracts for such society:

(1) Life insurance contracts that, in the aggregate, exceed $200,000 of coverage for all lives insured for the preceding calendar year;

(2) A permanent life insurance contract offering more than $10,000 of coverage on an individual life;

(3) A term life insurance contract offering more than $50,000 of coverage on an individual life;

(4) Any insurance contracts other than life that the fraternal benefit society may write that insure the individual lives of more than 23 individuals; or

(5) Any variable life insurance or variable annuity contract.


(Apr. 29, 1998, D.C. Law 12-86, § 1231, 45 DCR 1172.)

Prior Codifications

1981 Ed., § 35-1260.


§ 31–5331. Unfair methods of competition; unfair and deceptive acts and practices.

Every society authorized to do business in the District and its agents shall be subject to the provisions of law applicable to life, accident, and health insurers relating to unfair and deceptive practices; provided, however, that nothing in such provisions shall be construed as applying to or affecting the right of any society to determine its eligibility requirements for membership, or be construed as applying to or affecting the offering of benefits exclusively to members or persons eligible for membership in the society by a subsidiary corporation or affiliated organization of the society.


(Apr. 29, 1998, D.C. Law 12-86, § 1232, 45 DCR 1172.)

Prior Codifications

1981 Ed., § 35-1261.


§ 31–5332. Penalties.

(a) Any person who makes a false or fraudulent statement in or relating to an application for membership or for the purpose of obtaining money from a benefit in any society shall, upon conviction, be fined not less than $100 nor more than $5,000 or be subject to imprisonment not less than 30 days nor more than one year, or both.

(b) Any person who solicits membership for, or in any manner assists in procuring membership in, any society not licensed to do business in the District shall, upon conviction thereof, be punished by a fine of not less than $50 nor more than $200, or by imprisonment for not less than 30 days nor more than one year, or both, in the discretion of the court.

(c) Any person convicted of a willful violation of, or neglect or refusal to comply with, any provision of this chapter for which a penalty is not otherwise prescribed shall, upon conviction, be punished by a fine not exceeding $5,000.

(d) Any person who willfully makes a false or fraudulent statement in any verified report or declaration under oath required or authorized by this chapter, or of any material fact or thing contained in a sworn statement concerning the death or disability of an insured for the purpose of procuring payment of a benefit named in the certificate, shall be guilty of perjury and shall be subject to the penalties prescribed by law.


(Apr. 29, 1998, D.C. Law 12-86, § 1233, 45 DCR 1172.)

Prior Codifications

1981 Ed., § 35-1262.


§ 31–5333. Exemption of certain societies.

(a) Nothing contained in this chapter shall be construed as to affect or apply to:

(1) Grand or subordinate lodges of societies, orders, or associations now doing business in the District which provide benefits exclusively through local or subordinate lodges;

(2) Orders, societies, or associations which admit to membership only persons engaged in one or more crafts or hazardous occupations, in the same or similar lines of business, insuring only their own members and their families, and the ladies’ societies or ladies’ auxiliaries to such orders, societies, or associations;

(3) Domestic societies which limit their membership to employees of a particular city or town, designated firm, business house or corporation which provide for a death benefit of not more than $700 or disability benefits of not more than $650 to any person in any one year, or both;

(4) Domestic societies or associations of a purely religious, charitable or benevolent description, which provide for a death benefit of not more than $400 or for disability benefits of not more than $350 to any one person in any one year, or both; or

(5) Grand or subordinate lodges of the Independent Order of Odd Fellows, nor any grand or subordinate lodge, or other body of Free and Accepted Masons, the National Council or any subordinate council of the Junior Order United American Mechanics, the National Council or any subordinate council of the Daughters of America, the Supreme Council of the Knights of Columbus or any subordinate council thereof, or similar orders, associations, or societies that do not have as their principal object the issuance of benefit certificates of membership in case of death or the payment of sick, funeral, or death benefits exceeding in amount $100.

(b) Any such society or association described in subsection (a)(3) or (4) of this section which provides for death or disability benefits for which benefit certificates are issued, and any such society or association included in subsection (a)(4) of this section which has more than 1000 members, shall not be exempted from the provisions of this chapter but shall comply with all requirements thereof.

(c) No society which is exempt from the requirements of this chapter, except any society described in subsection (a)(2) of this section, shall give or allow, or promise to give or allow, to any person any compensation for procuring new members.

(d) Every society which provides for benefits in case of death or disability resulting solely from accident, and which does not obligate itself to pay natural death or sick benefits shall have all of the privileges and be subject to all the applicable provisions and regulations of this chapter except that the provisions thereof relating to medical examination, valuations of benefit certificates, and incontestability, shall not apply to such society.

(e) The Commissioner may require from any society or association, by examination or otherwise, such information as will enable the Commissioner to determine whether the society or association is exempt from the provisions of this chapter.

(f) Societies, exempted under the provisions of this section, shall also be exempt from all other provisions of the insurance laws of the District.


(Apr. 29, 1998, D.C. Law 12-86, § 1234, 45 DCR 1172.)

Prior Codifications

1981 Ed., § 35-1263.

Section References

This section is referenced in § 31-5301.


§ 31–5334. Review.

All decisions and findings of the Commissioner made under the provisions of this chapter shall be subject to review as provided by subchapters I and II of Chapter 2 of Title 5.


(Apr. 29, 1998, D.C. Law 12-86, § 1235, 45 DCR 1172.)

Prior Codifications

1981 Ed., § 35-1264.


§ 31–5335. Severability.

If any provision of this chapter or the application of such provision to any circumstance is held invalid, the remainder of this chapter or the application of the provision to other circumstances, shall not be affected thereby.


(Apr. 29, 1998, D.C. Law 12-86, § 1236, 45 DCR 1172.)

Prior Codifications

1981 Ed., § 35-1265.