Chapter 614

614.55   Continuity of management in emergencies.

614.56   Committees of directors.

614.57   Interlocking directorates and other relationships.

614.60   Transactions with affiliates and in which directors and others are interested.

614.62   Directors’ liability and indemnification.

614.63   Executive compensation.

614.66   Exclusive agency contracts and management contracts.

SUBCHAPTER V

CORPORATE REORGANIZATION

614.73   Merger and consolidation of fraternals.

614.74   Voluntary dissolution of solvent domestic fraternals.

614.76   Voluntary conversion of fraternals to mutuals.

614.77   Rehabilitation or involuntary conversion.

614.78   Maintenance of solvency.

614.79   Rehabilitation and liquidation.

SUBCHAPTER VI

MISCELLANEOUS PROVISIONS

614.80   Tax exemption.

614.82   Fraternal expenditures and activities.

614.94   Fraternals as fundholders.

614.96   Exemption of fraternal benefits.

Ch. 614 Cross-reference Cross-reference: See definitions in ss. 600.03, 610.01 and 628.02.

Ch. 614 Cross-reference Cross-reference: See also ch. Ins 1, Wis. adm. code.

Ch. 614 Note NOTE: Chapter 373, laws of 1975, which created this chapter, contains explanatory notes.

subch. I of ch. 614 SUBCHAPTER I

GENERAL PROVISIONS

614.01 614.01 Definitions.

614.01(1) (1) In this chapter:

614.01(1)(a) (a) A “fraternal”, also called a “fraternal benefit society” or “mutual benefit society” is a corporation organized or operating under this chapter that:

614.01(1)(a)1. 1. Has no capital stock;

614.01(1)(a)2. 2. Exists solely for:

614.01(1)(a)2.a. a. The benefit of its members and their beneficiaries; and

614.01(1)(a)2.b. b. Any lawful social, intellectual, educational, charitable, benevolent, moral, fraternal, patriotic or religious purposes for the benefit of its members or the public, carried on through voluntary activity of its members in their local lodges or through institutional programs of the fraternal or its local lodges;

614.01(1)(a)3. 3. Has a lodge system;

614.01(1)(a)4. 4. Has a representative form of government; and

614.01(1)(a)5. 5. Provides insurance benefits authorized under this chapter.

614.01(1)(b) (b) The “laws” of a fraternal include its articles of incorporation and bylaws, however designated.

614.01(1)(c) (c) A “lodge system” exists only if all of the following conditions are met:

614.01(1)(c)1. 1. There is a supreme governing body.

614.01(1)(c)2. 2. Subordinate to the supreme governing body, there are local lodges, whatever the local lodges are called, into which natural persons are admitted as members in accordance with the laws of the fraternal.

614.01(1)(c)3. 3. The local lodges are required by the laws of the fraternal to hold regular meetings at least once every 3 months.

614.01(1)(c)4. 4. The local lodges engage regularly in programs involving member participation to implement the purposes of par. (a) 2. b.

614.01(1)(d) (d) A “representative form of government” exists if and only if the fraternal complies with s. 614.42.

614.01(5) (5) In any section of the statutes made applicable to fraternals by this chapter, the technical terms used in those statutes are applicable to fraternals despite the customary use of other parallel terms by fraternals.

614.01(6) (6) The definitions in ss. 181.0103 (3), (17) and (18), 600.03 and 610.01 (1), (2) and (4) apply to fraternals.

614.01 History History: 1975 c. 373; 1979 c. 102; 1983 a. 189 ss. 297, 329 (22), (25); 1997 a. 79; 2001 a. 103; 2003 a. 60.

614.02 614.02 Scope and purposes.

614.02(1) (1) Scope.

614.02(1)(a) (a) Domestic fraternals. This chapter applies to all fraternals organized under the laws of this state.

614.02(1)(b) (b) Nondomestic fraternals. Except as expressly provided in this chapter and in s. 618.26, this chapter does not apply to nondomestic fraternals.

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(1) (1) Imposing restrictions. The commissioner may subject any fraternal not otherwise subject thereto to some or all of the restrictions of s. 611.28 (1) as incorporated by s. 614.28, s. 611.33 (2) (a) 1. and 2. as incorporated by s. 614.33, and s. 611.54 (1) (b) as incorporated by s. 614.54, and s. 614.29 (2).

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.

614.05 History History: 1975 c. 373; 1979 c. 89; 1995 a. 27; 1997 a. 27.

614.07 614.07 General corporate powers and procedures.

614.07(1) (1) Powers. Section 181.0302 applies to fraternals.

614.07(2) (2) Effect of unauthorized corporate acts. Section 181.0304 (1) and (2) applies to fraternals.

614.07(4) (4) Waiver of notice and informal action. Sections 181.0704, 181.0706, 181.0821 and 181.0823 apply to fraternals.

614.07 History History: 1975 c. 373; 1979 c. 110; 1987 a. 13; 1997 a. 79.

subch. II of ch. 614 SUBCHAPTER II

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”.

614.09 History History: 1975 c. 373; 1995 a. 27; 1997 a. 79.

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) (c) Employees.

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 domestic partner under ch. 770 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.

614.10 History History: 1975 c. 373; 1989 a. 336; 1997 a. 177; 2009 a. 28.

614.11 614.11 Incorporators. Any number of corporate or adult natural persons may organize a fraternal under this chapter.