2023 Maryland Statutes › Insurance › Title 8 - Entities That Act as Insurers › Subtitle 4 - Fraternal Benefit Societies › Part I - Definitions; General Provisions › Section 8-402 - Society Deemed Fraternal Benefit Society

(a)    (1)    An incorporated society, order, or supreme lodge without capital stock is deemed to be a fraternal benefit society if it:
(i)    is conducted solely for the benefit of its members and their beneficiaries;
(ii)    is not conducted for profit;
(iii)    is operated on a lodge system with ritualistic form of work;
(iv)    has a representative form of government; and
(v)    provides for benefits to be paid in accordance with this subtitle.
(2)    An incorporated or unincorporated society, order, or supreme lodge without capital stock that is exempted under § 8-404(a)(2) of this subtitle is deemed to be a fraternal benefit society.
(b)    A society is deemed to be operating on a lodge system if it operates under a system by which the society:
(1)    has a supreme legislative or governing body and subordinate lodges or branches, by whatever name known;
(2)    by its laws, requires the subordinate lodges or branches to hold regular meetings at least once each month in furtherance of the purposes of the society; and
(3)    elects, initiates, or admits members in accordance with its laws, rituals, and rules.
(c)    A society is deemed to have a representative form of government if:
(1)    (i)    the society provides in its laws for a supreme legislative or governing body composed of:
1.    representatives elected by the members of the society or by delegates elected directly or indirectly by the members; and
2.    any other individuals required by the laws of the society;
(ii)    election of delegates may be accomplished by mail;
(iii)    the elected representatives of the society:
1.    are a majority of the supreme legislative or governing body;
2.    have at least two-thirds of the votes; and
3.    have at least the number of votes required to amend the laws of the society;
(iv)    at least once every 4 years:
1.    the supreme legislative or governing body of the society meets; and
2.    officers, representatives, or delegates of the society are elected;
(v)    each insured member is eligible for election to act or serve as a delegate to the meeting;
(vi)    the society has a board of directors that:
1.    is responsible for the management of the affairs of the society between meetings of the supreme legislative or governing body;
2.    is subject to control by the supreme legislative or governing body;
3.    except when a vacancy is filled between meetings of the supreme legislative or governing body, is elected by the supreme legislative or governing body; and
4.    has powers and duties delegated by the laws of the society;
(vii)    the officers of the society are elected by the supreme legislative or governing body or by the board of directors; and
(viii)    the members, officers, representatives, or delegates of the society may not vote by proxy; or
(2)    (i)    the society provides in its laws for a supreme legislative or governing body composed of:
1.    a board composed of individuals elected by the members, either directly or by their representatives in intermediate assemblies; and
2.    any other individuals required by the laws of the society;
(ii)    election of the board may be accomplished by mail;
(iii)    the term of an elected board member may not exceed 4 years;
(iv)    the individuals elected to the board:
1.    are a majority of the board; and
2.    have at least the number of votes required to amend the laws of the society;
(v)    vacancies on the board between elections are filled as prescribed by the laws of the society;
(vi)    an individual filling the unexpired term of an elected board member is considered to be an elected member; and
(vii)    the board meets at least quarterly to conduct the business of the society.