SB510,1,7
1An Act to renumber 614.10 (2) (c);
to renumber and amend 614.19 (3) (a) and
2632.91;
to amend 614.19 (3) (b), 623.15 (1) (b), 632.93 (1), 632.93 (2), 632.93 (5),
3632.93 (6) and 632.96 (1);
to repeal and recreate 623.15 (1) (a); and
to create
4614.10 (2) (c) 1., 614.10 (2) (c) 3., 614.19 (3) (a) 2. and 632.91 (2) of the statutes;
5relating to: defining employes of fraternals to include retired employes and
6providing insurance for the spouses and minor children of employes of
7fraternals.
Analysis by the Legislative Reference Bureau
Under current law, a fraternal is defined as a corporation with a lodge system
that operates for social, intellectual, educational, charitable, benevolent, patriotic or
religious purposes for the benefits of its members or the public. A fraternal may
provide insurance benefits to its members, to others on the application of a member,
to children who would be eligible for membership except that they are too young on
the application of an adult and to employes of the fraternal. This bill authorizes a
fraternal to provide insurance benefits, on the application of an employe, to the
employe's spouse or to a child of the employe who receives financial services or
support from the employe. The bill specifies that, for purposes of receiving insurance
benefits or making application to the fraternal to provide a spouse or child with
insurance benefits, an employe includes a former employe.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB510, s. 1
1Section
1. 614.10 (2) (c) of the statutes is renumbered 614.10 (2) (c) 2.
SB510, s. 2
2Section
2. 614.10 (2) (c) 1. of the statutes is created to read:
SB510,2,53
614.10
(2) (c) 1. In this paragraph, "employe" includes a former employe who
4is classified as a retired employe under a retirement plan or other written policy of
5a fraternal or of a subsidiary or other affiliate of a fraternal.
SB510, s. 3
6Section
3. 614.10 (2) (c) 3. of the statutes is created to read:
SB510,2,97
614.10
(2) (c) 3. Notwithstanding s. 614.01 (1) (a) 2., on the application of an
8employe specified in subd. 2., provide insurance benefits to the employe's spouse or
9a child of the employe who receives financial services or support from the employe.
SB510, s. 4
10Section
4. 614.19 (3) (a) of the statutes is renumbered 614.19 (3) (a) (intro.)
11and amended to read:
SB510,2,1212
614.19
(3) (a) (intro.) In this subsection
, "insured:
SB510,2,15
131. "Insured employe" means an employe of a fraternal or of a subsidiary or other
14affiliate of a fraternal who is provided insurance benefits by the fraternal under s.
15614.10 (2) (c)
2. but is not a member of the fraternal.
SB510, s. 5
16Section
5. 614.19 (3) (a) 2. of the statutes is created to read:
SB510,2,1817
614.19
(3) (a) 2. "Owner" means the owner of a policy or certificate issued by
18a fraternal in accordance with s. 614.10.
SB510, s. 6
19Section
6. 614.19 (3) (b) of the statutes is amended to read:
SB510,3,1220
614.19
(3) (b) Except as provided in s. 614.24 (1m), every fraternal shall contain
21in its laws and in each certificate of insurance it issues, a provision, to which every
1certificate of insurance issued by the fraternal shall be subject, that if the financial
2position of the fraternal becomes impaired, the board of directors or the supreme
3governing body may
determine, on an equitable basis
the proportionate share of,
4apportion the deficiency
of each member among the members of the fraternal
and 5each insured employe. The, the insured employes or the owners, or any combination
6thereof. A member
or, insured employe
or owner may then either pay the member's
7or, insured employe's
or owner's share of the deficiency, or accept the imposition of
8a lien on the certificate of insurance, to bear interest at the rate charged on policy
9loans under the certificate, compounded annually until paid, or may accept a
10proportionate reduction in benefits under the certificate. The fraternal may specify
11the manner of the election and which alternative is to be presumed if no election is
12made.
SB510, s. 7
13Section
7. 623.15 (1) (a) of the statutes is repealed and recreated to read:
SB510,3,1514
623.15
(1) (a) In this subsection, "owner" means the owner of a policy or
15certificate issued by a fraternal in accordance with s. 614.10.
SB510, s. 8
16Section
8. 623.15 (1) (b) of the statutes is amended to read:
SB510,4,217
623.15
(1) (b) A fraternal may be organized for the transaction of business on
18a plan set forth in the contract which provides for sufficient contributions by each
19member and insured employe owner in each year to pay the
member's or insured
20employe's owner's share of the actual death claims of the year through advance
21payments graded according to any mortality table approved by the commissioner,
22without any reserve, or with such reserve as may accumulate from overpayments of
23individual
members and insured employes owners, in which case each
member and
24insured employe owner shall each year be informed of the
member's or insured
1employe's owner's credit and of the cost of the
member's or insured employe's owner's 2insurance.
SB510, s. 9
3Section
9. 632.91 of the statutes is renumbered 632.91 (intro.) and amended
4to read:
SB510,4,5
5632.91 Definition. (intro.) In this subchapter
, "insured:
SB510,4,8
6(1) "Insured employe" means an employe of a fraternal or of a subsidiary or
7other affiliate of a fraternal who is provided insurance benefits by the fraternal
8under s. 614.10 (2) (c)
2. but is not a member of the fraternal.
SB510, s. 10
9Section
10. 632.91 (2) of the statutes is created to read:
SB510,4,1110
632.91
(2) "Owner" means the owner of a policy or certificate issued by a
11fraternal in accordance with s. 614.10.
SB510, s. 11
12Section
11. 632.93 (1) of the statutes is amended to read:
SB510,4,2013
632.93
(1) Issuance of certificate. A fraternal shall issue to each
benefit
14member and insured employe owner a policy or certificate specifying the benefits
15provided and containing at least in substance all sections of the laws of the fraternal
16which might result in the termination of coverage or the reduction of benefits. The
17policy or certificate, any riders or endorsements attached thereto, the laws of the
18fraternal, and the application and declarations made in connection therewith and
19signed by the applicant, constitute the agreement between the fraternal and the
20member or insured employe owner, and the policy or certificate shall so state.
SB510, s. 12
21Section
12. 632.93 (2) of the statutes is amended to read:
SB510,5,222
632.93
(2) Changes in laws of fraternals. Except as provided in s. 614.24
23(1m), any changes in the laws of a fraternal made subsequent to the issuance of a
24policy or certificate bind the
member, beneficiary and insured employe owner and
25any beneficiary under the policy or certificate as if they had been in force at the time
1of the application, so long as they do not destroy or diminish benefits promised in the
2policy or certificate.
SB510, s. 13
3Section
13. 632.93 (5) of the statutes is amended to read:
SB510,5,94
632.93
(5) Grace period. Every fraternal certificate shall contain a provision
5entitling the
member or insured employe owner to a grace period of not less than one
6month, or 30 days at the fraternal's option, for the payment of any premium due
7except the first, during which the death benefit shall continue in force. A fraternal
8may specify in the grace period provision that the overdue premium will be deducted
9from the death benefit in the event of death before it is paid.
SB510, s. 14
10Section
14. 632.93 (6) of the statutes is amended to read:
SB510,5,1811
632.93
(6) Compliance with other provisions. If a fraternal's laws provide for
12expulsion or suspension of a member for any reason other than nonpayment of
13premium or under s. 632.46, the fraternal's insurance certificate shall contain a
14provision that if a member is expelled or suspended for any reason other than
15nonpayment of premium or under s. 632.46, the expelled member
, or other owner
16who was provided insurance benefits under s. 614.10 on the application of the
17expelled member, has the right to maintain the policy in force by continuing payment
18of the required premium.
SB510, s. 15
19Section
15. 632.96 (1) of the statutes is amended to read:
SB510,5,2320
632.96
(1) Any
member or insured employe owner may designate as beneficiary
21any person permitted by the laws of the fraternal. Those laws shall authorize the
22designation of the
member's or insured employe's estate
of a member or insured
23employe as beneficiary.