20-878. Benefit contract

A. A society shall issue to each owner of a benefit contract a certificate that specifies the amount of benefits provided under the certificate. The certificate shall state that it constitutes the benefit contract as of the date of issuance of the certificate, together with any riders or endorsements attached to the certificate, the laws of the society, the application for membership, the application for insurance and declaration of insurability, if any, signed by the applicant and all amendments to any of these. A copy of the application for insurance and declaration of insurability, if any, shall be endorsed on or attached to the certificate. All statements on the application are representations and not warranties. Any waiver of this provision is void.

B. Any amendments to the laws of the society that are made or enacted after the certificate is issued are binding on the owner and beneficiaries and govern and control the benefit contract in all respects as if the amendments were made and in force before the time of the application for insurance. An amendment does not destroy or diminish any benefits that the society contracted to give the owner as of the date of issuance.

C. A person on whose life a benefit contract is issued before the person attains the age of majority is bound by the terms of the application.

D. The laws of the society shall provide that if the society's reserves as to any or all classes of certificates become impaired, the board of directors or other corresponding body may require that the owner pay to the society the amount of the owner's equitable proportion of the deficiency as ascertained by the board or other corresponding body. If the payment is not made the payment stands as an indebtedness against the certificate and draws interest in an amount not exceeding the rate specified for certificate loans under the certificate or the owner may accept a proportionate reduction in benefits under the certificate, or both. The society may specify the manner of the election and which alternative is presumed if no election is made.

E. Copies of any documents under this section that are certified by the secretary or other corresponding officer of the society shall be received in evidence on the terms and conditions of those documents.

F. A certificate shall not be delivered or issued for delivery in this state unless a copy of the form is filed with and approved by the director in the manner provided for like policies issued by life and disability insurers in this state. Every life, accident and sickness, health or disability insurance certificate and every annuity certificate that is issued on or after January 1, 1996 shall be filed with and approved by the director and shall meet the standard contract provision requirements that are not inconsistent with this title for like policies issued by life and disability insurers in this state. A society may provide a grace period for the payment of premiums of one full month in its certificates. The certificate shall state the amount of premiums that are payable under the certificate and shall recite or prescribe the substance of any of the society's laws or rules in effect at the time of issuance of the certificate that, if violated, will result in the termination of or reduction of benefits payable under the certificate. If the laws or rules of the society provide for the expulsion or suspension of a member, the certificate shall state that a member who is expelled or suspended may maintain the certificate in force by continuing to pay the required premium, unless the member was expelled or suspended for the nonpayment of premium or during the contestable period for material misrepresentation in the application for membership or insurance.

G. Benefit contracts that are issued on the lives of persons who are under the society's minimum age for adult membership may provide for the transfer of control of ownership to the insured at an age specified in the certificate. The society may require that an application for membership be approved in order to effect this transfer and may provide for the regulation, government and control of the certificates and all rights, obligations and liabilities incident to and connected with the certificate. The certificate shall specify ownership rights before the transfer.

H. A society may specify the terms and conditions on which benefit contracts may be assigned.