CO Code § 10-14-404 (2021)
2021 Colorado Code|Title 10 - Insurance|Article 14 - Fraternal Benefit Societies|Part 4 - Contractual Benefits|§ 10-14-404. Benefit Contract

  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 provided pursuant thereto. The certificate, together with any riders or endorsements attached thereto, the governing documents 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 thereof 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 shall be representations and not warranties. Any waiver of this provision shall be void.    Any changes, additions, or amendments to the governing documents of the society duly made or enacted subsequent to the issuance of the certificate shall bind the owner and the beneficiaries and shall govern and control the benefit contract in all respects as though such changes, additions, or amendments had been made prior to and were in force at the time of the application for insurance; except that no change, addition, or amendment shall 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 prior to attaining the age of majority shall be bound by the terms of the application and certificate and by all the governing documents 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 governing documents that if its reserves as to all or 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 such deficiency as ascertained by its board, and that if the payment is not made it shall stand as an indebtedness against the certificate and draw interest not to exceed the rate specified for certificate loans under the certificates or in lieu of or in combination therewith; however, 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 specified in this section, certified by the secretary or corresponding officer of the society, shall be received as evidence of the terms and conditions thereof.    No certificate shall be delivered or issued for delivery in this state unless a copy of the form has been filed with the commissioner in the manner provided for like policies issued by life insurers in this state. Every life, accident, health, or disability insurance certificate and every annuity certificate issued on or after July 1, 1994, shall meet the standard contract provision requirements not inconsistent with this article for like policies issued by life, sickness, and accident insurers in this state; except that a society may provide in its certificates for a grace period for payment of premiums of one full month. 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 governing documents in force at the time of issuance of the certificate which, if violated, will result in the termination or reduction of benefits payable under the certificate. If the governing documents of the society provide for expulsion or suspension of a member, the certificate shall also contain a provision that any member so expelled or suspended, except for nonpayment of a premium or within the contestable period for material misrepresentation in the application for membership or insurance, shall have the privilege of maintaining the certificate in force by continuing payment of the required 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, but no less than the legal age of majority. A society may require approval of an application for membership to effect this transfer and may provide in all other respects for the regulation, government, and control of such certificates and all rights, obligations, and liabilities incident thereto and connected therewith. Ownership rights prior to such transfer shall be specified in the certificate.    A society may specify the terms and conditions on which benefit contracts may be assigned.     History. Source: L. 93: Entire article amended with relocations, p. 599, § 1, effective July 1.    Editor's note:   This section is similar to former § 10-14-109 as it existed prior to 1993.   ANNOTATION   Annotator's note. Since § 10-14-404 is similar to § 10-14-109 as it existed prior to the 1993 amendment to article 14 which resulted in the relocation of provisions, a relevant case construing that provision has been included in the annotations to this section.   This section does not validate every bylaw that might be adopted. For example, it could not render effective a bylaw which would change the contract so as to impair vested rights or deprive a member of substantial rights conferred expressly or impliedly by the contract itself. The reason is that “the obligation of every contract is protected from the state interference by the federal constitution”. Modern Woodmen of Am. v. White, 70 Colo. 207 , 199 P. 965 (1921).   It contemplates only bylaws or amendments thereto that are reasonable, and does not intend to make valid any amendment which otherwise would be void on the ground of being unreasonable. Modern Woodmen of Am. v. White, 70 Colo. 207 , 199 P. 965 (1921).   Bylaw requiring actual proof of death for recovery is unreasonable. A bylaw of a fraternal insurance society providing that the absence or disappearance of a member without proof of actual death shall not entitle his beneficiary to recover on a benefit certificate, is unreasonable, and invalid as to a beneficiary under a certificate issued before the adoption of the bylaw. Modern Woodmen of Am. v. White, 70 Colo. 207 , 199 P. 965 (1921).