58-37A-19Benefit certificates.

Every society authorized to do business in this state shall issue to each owner of a benefit contract a certificate specifying the amount of benefits to be provided by the benefit contract. The certificate, together with any riders or endorsements attached to it, 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 each, shall constitute the benefit contract, as of the date of issuance, between the society and the owner, and the certificate shall so state. A copy of the application for insurance and declaration of insurability, if any, shall be endorsed upon or attached to the certificate. All statements on the application are representations and not warranties. Any waiver of this provision is void.

Any changes, additions or amendments to the laws of the society made or enacted after the issuance of the certificate, bind the owner and the beneficiaries, and govern and control the benefit contract in all respects the same as though the changes, additions, or amendments had been made before and were in force at the time of the application for insurance. However, no change, addition, or amendment may destroy or diminish benefits which the society contracted to give the owner as of the date of issuance.

Any person upon whose life a benefit contract is issued before attaining the age of majority shall be bound by the terms of the application and certificate and by all the laws and rules of the society to the same extent as though the age of majority had been attained at the time of application.

A society shall provide in its laws that if its reserves as to any class of certificates become impaired its board of directors or corresponding body may require that there shall be paid by the owner to the society the amount of the owner's equitable proportion of the deficiency as ascertained by its board. If the payment is not made either it stands as an indebtedness against the certificate and shall draw interest not to exceed the rate specified for certificate loans under the certificates or in lieu of or in combination with the indebtedness, the owner may accept a proportionate reduction in benefits under the certificate. The society may specify the manner of the election and which alternative is to be presumed if no election is made.

Copies of any of the documents provided for in this section, certified by the secretary or corresponding officer of the society, shall be received in evidence of the terms and conditions thereof.

No certificate may be delivered or issued for delivery in this state unless a copy of the form has been filed with the director in the manner provided for like policies issued by life and health insurers in this state. Every life, accident, health, or disability insurance certificate and every annuity certificate issued on or after one year from January 1, 1991, shall meet the standard contract provision requirements consistent with this chapter for like policies issued by life and health insurers in this state. However, a society may provide for a grace period for payment of premiums of one full month in its certificates. The certificate shall also contain a provision stating the amount of premiums which are payable under the certificate and a provision reciting or setting forth the substance of any sections of the society's laws or rules in force at the time of issuance of the certificate which, if violated, shall result in the termination or reduction of benefits payable under the certificate. If the laws of the society provide for expulsion or suspension of a member, the certificate shall also contain a provision that any member expelled or suspended, except for nonpayment of a premium or within the contestable period for material misrepresentation in the application for membership or insurance, may maintain the certificate in force by continuing payment of the premium.

Benefit contracts issued on the lives of persons below the society's minimum age for adult membership may provide for transfer of control of ownership to the insured at an age specified in the certificate. A society may require approval of an application for membership in order to effect this transfer and may provide in all other respects for the regulation, government, and control of the certificates and all rights, obligations, and liabilities incident to and connected with the certificates. Ownership rights before this transfer shall be specified in the certificate.

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

Source: SL 1990, ch 410, § 19.