Section 1705.10  Application

 

This Part shall apply to:

 

a)         Life Certificates, endorsement, rider and application forms filed with the Department by foreign, alien and domestic societies as required by Section 143 of the Illinois Insurance Code (Ill. Rev. Stat. 1981, ch. 73, par. 755), and

 

b)         Accident and health certificates, endorsement, rider and application forms filed with the Department by foreign, alien and domestic societies as required by Section 355 of the Code (Ill. Rev. Stat. 1981, ch. 73, par. 967).

 

Section 1705.20  Construction of Life Certificate Forms

 

a)        

 

1)         Fraternal Benefit Societies "Societies" may issue certificates providing for the payment of death benefits as authorized by the Code.

 

2)         Section 288(1) of the Illinois Insurance Code, insofar as it authorizes additional benefits, permits Societies to provide in the life certificate, or supplemental thereto, for the following:

 

A)        Additional accidental death benefits;

 

B)        Waiver of premium disability benefits due to accident or sickness;

 

C)        Benefits or an annuity in case a member becomes totally and permanently disabled from accident or sickness; without including Accident and Health Policy Provisions required by Section 357.1 et seq. of the Code (Ill. Rev. Stat. 1981, ch. 73, par. 969.1).  All other accident and health benefits included in the life certificates or supplemental thereto must conform to Article XX of the Code and of Department Rules and Regulations pertaining to construction and filing of accident and health forms, in the same manner as though those benefits were provided under separate certificates.

 

b)         If the Director finds that the interests of present and future certificate holders of a Society are not adversely affected, he may authorize the Society to use the Commissioners' 1958 Standard Ordinary Mortality Table for ordinary insurance, and a rate of interest not to exceed 3½ percent per annum for calculating reserves and nonforfeiture values, if:

 

1)         The Society files with the Department comparative figures showing the attained age and the actual mortality loss for the previous two years together with expected losses on the mortality table then in use and on the Commissioners' 1958 Standard Ordinary Mortality Table.  This information will be acceptable if set out in five year age groups.

 

2)         Notice of Election by the Society to comply with Section 229.2 of the Code (Ill. Rev. Stat. 1981, ch. 73, par. 841.2)  after a certain specified date, must be in the form of a certified copy of the Resolution of the governing body, or the Board of Directors authorizing such Election.

 

3)         Basis of reserves should be stated in the certificate.

 

4)         The following, which may be in substance, must be in the certificate:  "The reserve and nonforfeiture values under this certificate are not less than the minimum values required by the Standard Nonforfeiture laws as adopted by the State of Illinois for use by legal reserve life insurance policies."

 

5)         After the date selected, all certificates issued by the Society must be on the Commissioners' 1958 Standard Ordinary Mortality Table.

 

6)         Sections 229.2 and 229.3 and other applicable provisions of the Code must be complied with.

 

Section 1705.30  Construction of Accident and Health Forms

 

a)         A separate certificate which provides for the payment of benefits as a result of bodily injury, disablement or death by accident and against disablement resulting from sickness or old age, and every benefit appertaining thereto, as provided for by subsection (2) of Section 288 of the Illinois Insurance Code, must be issued in accordance with Article XX of the Code and of Rules and Regulations pertaining to construction and filing of Accident and Health forms issued by the Department.  (See Section 1705.10(b) of this Part relative to accident and health benefits provided in or supplemental to life certificates.)

 

b)         Section 306 of the Illinois Insurance Code (Ill. Rev. Stat. 1981, ch. 73, par. 918) may not be interpreted so as to allow an accident and health certificate to require that the insured must first seek the services of a Society's hospital before benefits of a certificate will be paid for expenses incurred and services rendered.

 

c)         Societies issuing accident and health certificates under the authority of Section 288 of the Code are not qualified to issue the types of accident and health certificates authorized by Section 367 of the Code (Ill. Rev. Stat. 1981, ch. 73, par. 979) except that type described in paragraph (4) of Section 367 and commonly known as "Family Group Accident and Health"; nor is any Society qualified to issue the types of certificates authorized by Section 367(a) of the Code.

 

d)         A certificate issued by Societies of the type authorized by paragraph (4) of Section 367 of the Code may insure, either originally or by subsequent amendment, and only upon the application of an adult member of a family, who is deemed the certificateholder and beneficial member of the Society, any two or more eligible members of that family.  Eligible members of a family include a husband, a wife, dependent children or any children under a specified age which may not exceed 19 years, and any other person dependent upon the certificateholder.

 

e)         Societies issuing accident and health certificates under Section 288 of the Code are qualified to issue the type of accident and health certificate authorized by Section 368 of the Code, (Ill. Rev. Stat. 1981, ch. 73, par. 980) but such certificates may be issued only upon the signed application of a person who is deemed to be the certificateholder and beneficial member of the Society.

 

Section 1705.40  Construction of All Forms Issued by Fraternal Benefit Societies

 

a)         Certificates issued under Section 288(2) of the Illinois Insurance Code may be issued in connection with or separate from life certificates issued under Section 288(1).  Because such certificates must conform, as far as practical, to Article XX and Department Rules and Regulations pertaining to Accident and Health Benefits, (50 Ill. Adm. Code Subchapter z) it is urged that they not be issued as a part of, supplemental to, or attached to life certificates.

 

b)        

 

1)         Societies may provide for only one application to be made for both the life and the accident and health insurance, a copy of the application is made a part of each certificate.  This procedure may be used only when the life and the accident and health certificates are to be issued concurrently.

 

2)         A combined application must set forth the amount of life insurance and the amount of the accident and health insurance in addition to the contribution for each class of insurance.

 

c)         Societies must state on the face of the certificate, in addition to the name of the Society, "Fraternal Benefit Society".

 

d)        

 

1)         Riders, endorsements or supplemental agreements, must contain the name of the Society, a descriptive title, the date of execution, the signature of at least one officer of the Society, and a statement indicating the form is attached to and made a part of certificate number _______, issued on the life of ___________________.

 

2)         Endorsements printed or rubber stamped on the policy do not require the name of the Society or a statement with reference to the endorsement being attached to and made a part of the policy.  Such imprinted or stamped endorsements must receive approval by this Department.

 

e)         Application questions:

 

1)         Applications must be composed of questions by the Society in the form of clear and direct interrogatories permitting the answers by the applicant only in the form of direct statements and may not contain any questions or representations based upon indefinite or ambiguous terms.

 

2)         Questions in the application must be broken down so that each answer thereto pertains to related disease or conditions.

 

f)         All forms submitted to the Department for approval must be submitted in duplicate with illustrative data filled in as when prepared for issue and must be accompanied by a "Certificate of Compliance" in substantially the form appended hereto as Exhibit A.

 

g)         The Certificate must have a copy of the application, including evidence of insurability, attached to the form when submitted.  Where provisions of the constitution or by-laws will affect the status of the members, in respect to his insurance, and those provisions are not contained in the certificate, reference to the constitution and/or by-laws must be made in the letter of transmittal in order that the Department may properly determine the effect of those provisions on the certificate.

 

h)         Each form submitted to the Department must contain a form number which is to appear in the lower left corner of the first page and the filing back in addition to a descriptive title to be imprinted thereon.  The form number may appear in as many additional places on the form as the Society may desire.

 

i)          The letter of submission for new forms should include the form number and approval date of any form being discontinued or being replaced.

 

j)          All copies of forms submitted to the Department will be retained by the Department.  Under no circumstances will copies of forms be returned to Societies with the Department stamp of approval thereon.  Notice of approval will be given by letter only.

Section 1705.EXHIBIT A   Certificate of Compliance

 

STATE OF

)

)

SS

COUNTY OF

)

(Official's name)

, being first duly sworn, deposes and says that:

1.  He is the

(Official title)

of the

(Name of fraternal benefit society)

,

a fraternal benefit society formed under the laws of the State of

;

2.  He is the duly appointed official custodian of the Articles of Incorporation or Association, Constitution, By-laws, Rules and Regulations of said Society; and

3.  The certificate(s) rider(s) or endorsement(s) hereto and filed for approval herewith are in full compliance with the provisions and requirements of those Articles of Incorporation or Association, Constitution, By-laws, Rules and Regulations.

(Official Title)

Subscribed and sworn to

before me this

day of

,

19

.

Notary Public

My Commission expires

,

19

.