215 ILCS 5/296.1
2021 Illinois Compiled Statutes|Chapter 215 - INSURANCE|215 ILCS 5/ - Illinois Insurance Code.|Article XVII - Fraternal Benefit Societies

 (from Ch. 73, par. 908.1)(Section scheduled to be repealed on January 1, 2027)Sec. 296.1.     Conversion of fraternal benefit society to mutual life  insurance company.(a) Any society subject to the provisions of this  amendatory Act possessed of admitted assets in excess of all liabilities at least  equal  to the minimum surplus required of a new mutual legal reserve life  company under Section 43 of this Code transacting the same kind or kinds of  business may, at its option, without reincorporation, adopt and become  subject to the provisions of Article III of this Code, in lieu  of this amendatory Act.(b) The board of directors of the society shall approve such proposed  amendments to the articles of incorporation, the constitution and bylaws  of the society as may be necessary or desirable to make the same conform to  the articles of incorporation and bylaws of a mutual legal reserve life  company, in accordance with the requirements of Article III of this Code.(c) The board of directors of the society shall then submit such  proposed amendments to the Director together with: (1) a copy of the notice  to be given to members and lodges as herein provided; (2) a current  financial statement of the society showing assets, liabilities and surplus  valued in accordance with the requirements of Article III; and (3) the  proposed plan for transition from a fraternal society to a mutual legal  reserve company, including, if pertinent, the following: dissolution of the  lodge system; disposition of property held for the benefit of lodges;  changes in the amount, calculation and collection of future premiums on  policies; the method of selection of officers and board of directors or  trustees to manage and control the mutual company until the regular annual  meeting of its members; and such other changes as may be necessary to an  orderly transition. If the Director finds that: (a) the amendments, notice  and plan are in accordance with the provisions of this amendatory Act and not  inconsistent with the laws and the Constitutions of this State and the  United States; (b) the society has a surplus which, when calculated in  accordance with the requirements of Article III of this Code, is at least  equal to the original surplus required under Article III of a mutual legal  reserve life company transacting the same kind or kinds of business; and (c)  no reasonable objection exists to such conversion, the Director shall,  within a reasonable time, authorize the sending of notices and further  proceedings hereunder.(d) After the Director has given such authority, the board of directors  of the society shall then submit the proposed amendments and plan of  transition, as so approved, to the supreme governing body of such society at  any regular or special meeting thereof, provided a copy of such amendments  and plan have been included in or enclosed with the notice of such meeting,  which notice shall be given as provided in the laws of the society for the  convening of such supreme governing body in regular or special session as  the case may be. At least 90 days prior to the date of such regular or  special meeting, as the case may be, a notice describing the purpose of  the proposed amendments, and including therein or enclosing therewith a  copy of such amendments and plan of transition, all as approved by the  Director, shall be mailed to each lodge or local body of the society  qualified to choose a delegate or delegates to said meeting and also to  each member of the society; for the purpose of this notice the lodges or  local bodies and the members and the addresses of same shall be taken as  those shown by the records of the society as of a date not earlier than 120  days prior to the date set for such meeting. The affidavit of  any officer, clerk or agent of the company, or of anyone authorized to mail  such notices, that the notices required by this Section bearing the required  postage have been duly addressed and mailed shall, upon final approval by  the Director of the proceedings hereunder, constitute conclusive evidence  that such notice has been duly given in accordance herewith.(e) The affirmative votes of 2/3 of the members of such supreme  governing body present at such meeting shall be necessary for the adoption  of amendments and the plan of transition under  this Section, provided,  however, that 2/3 of the elective members present shall vote in  favor thereof; the amendments and plan adopted shall be submitted to the  Director for his final approval. If the Director shall find that the  amendments and plan and the adoption thereof are in accordance with this  Section he shall approve the same, and, not less than 30 days nor more  than 60 days after such approval, he shall issue a certificate of  authority authorizing the company to do business subject to and entitled to  the benefits of Article III of this Code. Upon issuance of such  certificate, any right in the society to assess its members shall expire and  any provision for an assessment contained in the policies issued by the  society shall become thenceforth unenforceable, null and void.    (Source: P.A. 84-303.)