614.02(2)
(2) Purposes. The purposes of this chapter are:
614.02(2)(a)
(a) To provide a complete, self-contained procedure for the formation of fraternals.
614.02(2)(b)
(b) To assure the solidity of fraternals by providing an organizational framework to facilitate sound management, sound operation and sound regulation.
614.02(2)(c)
(c) To strengthen internal fraternal democracy through as much member participation as is practicable.
614.02(2)(d)
(d) To encourage the fulfillment of the special purposes of fraternals.
614.02 History
History: 1975 c. 373.
614.03
614.03
Orders imposing and relaxing restrictions. 614.03(2)
(2) Orders eliminating restrictions. The commissioner may free a new fraternal from any or all of the restrictions generally applicable only to new fraternals under the provisions enumerated in
sub. (1) if satisfied that its financial condition, management or other circumstances give assurance that the interests of insureds and the public will not be endangered thereby.
614.03 History
History: 1975 c. 373,
421.
614.05
614.05
Applicability of other insurance laws to fraternals. 614.05(1)(1)
Chapters 611 and 619. No section of
ch. 611 or
619 applies to fraternals unless it is specifically made applicable by this chapter.
614.05(2)
(2) Applicable portions. Each other section of
chs. 600 to
646 that applies to mutuals subject to
ch. 611 also applies to domestic and nondomestic fraternals unless:
614.05(2)(a)
(a) This chapter or the particular section provides otherwise; or
614.05(2)(b)
(b) The particular section is inconsistent with a provision applying explicitly to fraternals, in this chapter or elsewhere.
614.07
614.07
General corporate powers and procedures.
ORGANIZATION OF FRATERNALS
614.09
614.09
Reservation of corporate name. Sections 181.0402 and
181.0403 (2),
(3) and
(3m) apply to fraternals, except that "department" shall be read "commissioner".
614.10
614.10
Members and applicants in fraternals. 614.10(1)(1)
Membership. A fraternal may admit any natural person to membership under such conditions and for such insurance and other benefits as its laws prescribe, subject to this chapter and other applicable laws. Members not having insurance cease to be members if the fraternal is converted to a mutual.
614.10(2)
(2) Applicants authorized. Subject to
s. 631.07, a fraternal may do any of the following:
614.10(2)(a)
(a)
In general. Provide insurance benefits to its members and, on the application of members, to others.
614.10(2)(b)
(b)
Children. Insure the lives or disability of children younger than the minimum age for membership in the fraternal but otherwise eligible for membership, on the application of some adult person.
614.10(2)(c)1.1. In this paragraph, "employee" includes a former employee who is classified as a retired employee under a retirement plan or other written policy of a fraternal or of a subsidiary or other affiliate of a fraternal.
614.10(2)(c)2.
2. Notwithstanding
s. 614.01 (1) (a) 2., provide insurance benefits to its employees and to employees of the fraternal's subsidiaries or other affiliates.
614.10(2)(c)3.
3. Notwithstanding
s. 614.01 (1) (a) 2., on the application of an employee specified in
subd. 2., provide insurance benefits to the employee's spouse or a child of the employee who receives financial services or support from the employee.
614.10(3)
(3) Children's lodges. A fraternal may organize lodges for children covered by insurance but not old enough for membership. Membership in local lodges is not required for such children, and they have no voting rights.
614.10(4)
(4) Benefits pending membership. A fraternal may extend temporary or conditional insurance coverage to a nonmember who has applied for membership in the fraternal.
614.11
614.11
Incorporators. Any number of corporate or adult natural persons may organize a fraternal under this chapter.
614.11 History
History: 1975 c. 373.
614.12
614.12
Articles of incorporation and bylaws. 614.12(1)
(1)
Articles. The articles of incorporation shall set forth:
614.12(1)(a)
(a) The name of the corporation, which shall include the word "fraternal" or words of equivalent meaning if the corporation was organized after June 19, 1976.
614.12(1)(b)
(b) The location of the principal office of the fraternal, which shall be in this state.
614.12(1)(c)
(c) The purposes of the corporation, which shall include one or more of the purposes specified in
s. 614.01 (1) (a) 2. b., but shall otherwise be restricted to those permitted by
s. 610.21.
614.12(1)(d)
(d) The classes of members and the qualifications and rights of the members of each class.
614.12(1)(e)
(e) A description of the fraternal's representative form of government, conforming to
s. 614.42.
614.12(1)(f)
(f) The manner in which local lodges or branches may be formed and the powers they shall have, or a statement that the formation and powers of local lodges or branches shall be provided for in the bylaws.
614.12(1)(g)
(g) A provision for fraternal bonds if any are to be authorized, which shall conform to
s. 614.33.
614.12(1)(h)
(h) A provision for amendment of the articles, which shall conform to
s. 614.29.
614.12(3)
(3) Principal officers. Sections 181.0840 and
181.0841 apply to fraternals. The articles or bylaws shall specifically designate 3 or more offices, the holders of which shall be the principal officers of the fraternal. The principal offices shall be held by at least 3 separate natural persons. The articles of incorporation or the bylaws may provide that any one or more officers of the fraternal shall be members of the board of directors. The officers of a fraternal may be designated by such titles as may be provided in the articles of incorporation or the bylaws. Any document required or permitted by this chapter to be signed by the president, vice president, secretary or assistant secretary may be signed by such officer as may be stated in the articles of incorporation or bylaws to correspond to the officer so required or permitted to sign.
614.12(4)
(4) Bylaws. The bylaws shall comply with the provisions of this chapter, and a copy of the bylaws and any amendments to them shall be filed with the commissioner promptly after adoption, and notice of amendments to the bylaws shall be given promptly to members. Subject to this chapter,
ss. 181.0206 and
181.1021 apply to fraternals.
614.13
614.13
Organization permit and certificate of incorporation. 614.13(2)
(2) The application for a permit shall include, in addition to those things required under
s. 611.13 (2), a statement of the plan for fraternal activities and for the formation of a representative government under
s. 614.42.
614.13 History
History: 1975 c. 373.
614.14
614.14
Powers under organization permit and deposit of proceeds of subscriptions. Sections 611.14 (2) and
611.15 apply to fraternals, except that the word "mutual" shall be read "fraternal" and except that there are no qualifying insurance policies as referred to in
s. 611.14 (2) (a).
614.14 History
History: 1975 c. 373.
614.16
614.16
Termination of organization permit and payment of organization expenses. Section 611.16 (1),
(2),
(3) (a) and
(b) and
(4) applies to fraternals, except that the word "mutual" shall be read "fraternal" and "
s. 611.20" shall be read "
s. 614.20".
614.16 History
History: 1975 c. 373;
1983 a. 192.
614.18
614.18
Incorporators' liability and organization expenses. Section 611.18 (1) and
(2) (b) applies to fraternals, except that the word "mutual" shall be read "fraternal".
614.18 History
History: 1975 c. 373.
614.19
614.19
Initial surplus requirements. 614.19(1)
(1)
Minimum permanent surplus. The commissioner may by rule establish the minimum permanent surplus for a fraternal organized under this chapter. In the absence of such a rule, the minimum permanent surplus shall be $2,000,000 or such greater amount as the commissioner specifies by order.
614.19(2)
(2) Initial expendable surplus. A corporation organized under this chapter shall have an initial expendable surplus, after payment of all organizational expenses, of at least 50% of the minimum permanent surplus specified under
sub. (1), or such other percentage as the commissioner specifies by order.
614.19(3)
(3) Maintenance of solvency provision. 614.19(3)(a)1.
1. "Insured employee" means an employee of a fraternal or of a subsidiary or other affiliate of a fraternal who is provided insurance benefits by the fraternal under
s. 614.10 (2) (c) 2. but is not a member of the fraternal.
614.19(3)(a)2.
2. "Owner" means the owner of a policy or certificate issued by a fraternal in accordance with
s. 614.10.
614.19(3)(b)
(b) Except as provided in
s. 614.24 (1m), every fraternal shall contain in its laws and in each certificate of insurance it issues, a provision, to which every certificate of insurance issued by the fraternal shall be subject, that if the financial position of the fraternal becomes impaired, the board of directors or the supreme governing body may, on an equitable basis, apportion the deficiency among the members of the fraternal, the insured employees or the owners, or any combination thereof. A member, insured employee or owner may then either pay the member's, insured employee's or owner's share of the deficiency, or accept the imposition of a lien on the certificate of insurance, to bear interest at the rate charged on policy loans under the certificate, compounded annually until paid, or may accept a proportionate reduction in benefits under the certificate. The fraternal may specify the manner of the election and which alternative is to be presumed if no election is made.
614.19(4)
(4) Reduction of minimum surplus. The commissioner may, by order, reduce the minimum amounts of surplus required under
subs. (1) and
(2) if in the commissioner's opinion the extent and nature of providers' contracts, financial guarantees and other support by financially sound private or public corporations, a pressing social need in a particular community for the formation of a fraternal to provide needed insurance coverage, or other special circumstances, justify the proposed reduction in the required surplus. A person who will directly compete with the proposed fraternal is aggrieved within the meaning of
s. 601.62 (3) (a).
614.19(5)
(5) Health maintenance organization insurer. This section does not apply to a health maintenance organization insurer that is subject to
s. 609.96.
614.20
614.20
Certificate of authority. Section 611.20 applies to fraternals, except that references to other sections in
ch. 611 shall be read to refer to the corresponding sections in this chapter.
614.20 History
History: 1975 c. 373;
1981 c. 390 s.
252.
614.22
614.22
Accelerated organization procedure. Section 611.22 applies to fraternals, except that the word "mutual" shall be read "fraternal".
614.22 History
History: 1975 c. 373.
614.24
614.24
Segregated accounts, variable benefits and subsidiaries. 614.24(1m)(a)(a)
Exemption to obtain federal approval. The commissioner shall issue a waiver exempting a policy, certificate of insurance or contract issued by a fraternal from
ss. 614.19 (3) and
632.93 (2), as provided in
par. (b), if all of the following conditions are satisfied:
614.24(1m)(a)1.
1. The policy, certificate of insurance or contract provides life insurance or annuity benefits in variable amounts.
614.24(1m)(a)2.
2. The fraternal submits to the commissioner written evidence that the federal securities and exchange commission will not approve the policy, certificate of insurance or contract unless it is exempt from all or part of the requirements of
ss. 614.19 (3) and
632.93 (2).
614.24(1m)(b)
(b)
Extent of exemption. A waiver issued under
par. (a) shall exempt a policy, certificate of insurance or contract from
ss. 614.19 (3) and
632.93 (2) only to the extent necessary to obtain the federal security exchange commission's approval of the policy, certificate of insurance or contract.
614.24(2)(a)(a)
Local lodges. A local lodge may incorporate under
ch. 181 or the corresponding law of the state where it is located, to carry out the noninsurance activities of the local lodge.
614.24(2)(b)
(b)
Institutions for carrying out fraternal activities. Corporations may be formed under
ch. 181 to implement
s. 614.82 (2).
614.24 History
History: 1975 c. 373;
1987 a. 361.
