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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.
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(2) (2)Powers not enumerated. Section 181.0202 (2), (3) and (4) applies to fraternals.
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(1)(1)Section 611.13 applies to fraternals except that the word “mutual" shall be read “fraternal" and “s. 611.19" in s. 611.13 (4) shall be read “s. 614.19".
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 percent 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)(a) In this subsection:
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. No assessment of shares of a deficiency under this paragraph may take effect until 90 days after the date the commissioner is notified of the assessment, unless the commissioner approves an earlier effective date. The commissioner may disapprove the assessment of shares of a deficiency under this paragraph if the commissioner finds that the assessment is not adopted in conformity with this chapter or is contrary to the interests of the members of the domestic fraternal.
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(1)(1)General. Sections 611.24 to 611.26 apply to fraternals.
614.24(1m) (1m)Variable benefits.
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) (2)Special affiliates.
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.
614.28 614.28 Changes in business plan. Section 611.28 applies to fraternals.
614.28 History History: 1975 c. 373.
614.29 614.29 Amendment of articles of incorporation.
614.29(1)(1)Right to amend articles. The articles of a fraternal may provide for amendment by the supreme governing body or by the board of directors, and may provide also for amendment by the members by referendum. If amendment is by referendum, a majority of those members who vote must vote affirmatively. Votes cast within 60 days from the date of mailing of the ballots by the fraternal shall be counted. The timeliness of a vote is determined by the date of its mailing as proved by its postmark or other suitable evidence.
614.29(2) (2)Filing. For 5 years after the initial issuance of a certificate of authority, proposed amendments of the articles which are not changes in the business plan shall be filed with the commissioner at least 30 days before the amendment is submitted for approval to the members or to the supreme governing body, or if neither is required, at least 30 days before its effective date.
614.29(3) (3)Filing of articles of amendment. No amendment is effective until the articles of amendment are filed with the commissioner, together with a statement of the results of the voting on the amendment.
614.29(4) (4)Publication to members. Within 4 months after the filing of the articles of amendment with the commissioner, they shall be furnished to all members either by mail or under s. 614.41 (1).
614.29 History History: 1975 c. 373; 1979 c. 102; 2009 a. 342.
subch. III of ch. 614 SUBCHAPTER III
SECURITIES OF FRATERNALS
614.31 614.31 Securities regulation. Section 611.31 applies to fraternal bonds but does not apply to contribution notes, as they are defined in s. 611.33 as incorporated by s. 614.33.
614.31 History History: 1975 c. 373.
614.33 614.33 Authorized securities. Section 611.33 (2) applies to fraternals, except that the words “mutual" and “nonassessable mutual" shall be read “fraternal".
614.33 History History: 1975 c. 373.
subch. IV of ch. 614 SUBCHAPTER IV
MANAGEMENT OF FRATERNALS
614.41 614.41 Communications to members.
614.41(1)(1)Official publications. A fraternal 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. It shall be printed conspicuously in the publication.
614.41(2) (2)Copies to commissioner. The commissioner may by rule prescribe that copies of specified classes of communications published generally to members, including the official publication, shall be communicated to the commissioner at the same time they are sent to the members.
614.41(3) (3)Duplicate publications. If the records of a fraternal 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.
614.41 History History: 1975 c. 373, 421.
614.42 614.42 Representative form of government.
614.42(1)(1)Supreme governing body. The fraternal shall have a supreme governing body consisting either of:
614.42(1)(a) (a) Board of directors. A board with some directors elected directly by the members or by their representatives in intermediate assemblies under sub. (2), and other directors prescribed in the fraternal's laws. The elected directors shall constitute a majority in number and not less than the number of votes required to amend those articles or bylaws of the fraternal that can be amended without consent of the members. The board shall meet at least quarterly to conduct the business of the fraternal. The elected directors shall be elected on a plan that ensures equal weight to each fraternal member's vote. Voting may be conducted by mail, by electronic means, or by any other method or combination of methods approved by the board and prescribed in the fraternal's bylaws.
614.42(1)(b) (b) Assembly. Delegates elected directly by the members or at intermediate assemblies or conventions of members or their representatives, together with other delegates prescribed in the fraternal's laws. The elected delegates shall constitute a majority in number and shall not have less than two-thirds of the votes and not less than the number of votes required to amend the articles or bylaws that can be amended without consent of the members. The assembly, whatever designated, shall meet at least once every 4 years and shall elect a board of directors to conduct the business of the fraternal between meetings of the assembly. The delegates making up the supreme governing body shall be elected on a plan that ensures equal weight to each fraternal member's vote.
614.42(2) (2)Intermediate assemblies. The laws of a fraternal may provide that delegates to intermediate assemblies may represent geographical districts or lodges or represent the members in defined classes determined on a reasonable basis and that the vote of a representative to an intermediate assembly shall be treated as the vote of the members represented.
614.42(3) (3)Voting procedure. No votes may be cast by proxy.
614.42 History History: 1975 c. 373, 421; 2009 a. 342.
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