2023 New York Laws › ISC - Insurance › Article 45 - Fraternal Benefit Societies › 4515 - Conditions for Avoiding Separate Funds.

§  4515.  Conditions  for  avoiding separate funds. (a) Any authorized
society which maintains reserves, including deficient premium  reserves,
at  least  equal to those required by the minimum standards of valuation
hereinafter specified and which  does  not  exceed  the  expense  limits
hereinafter  specified  shall  not  be  required, if its constitution or
by-laws so permit, to create or maintain a separate fund or  funds,  for
the  payment  of  insurance  benefits  as  required by subsection (a) of
section four thousand five hundred  fourteen  of  this  article  nor  to
comply  with  the  provisions of subsections (b) and (d) of such section
and subsection (d) of section four thousand five hundred seven  of  this
article.
(b) (1)  Such minimum standards of valuation shall be:
(A)  as  to  all contracts for life insurance benefits issued prior to
January first, nineteen hundred  forty-eight,  the  American  Experience
Table  of Mortality or the American Men Ultimate Table of Mortality with
interest at three and one-half per centum,
(B) as to all contracts for life  insurance  benefits  issued  on  and
after  January first, nineteen hundred forty-eight, and prior to January
first, nineteen hundred fifty-six,  the  American  Experience  Table  of
Mortality  or the American Men Ultimate Table of Mortality with interest
at three per centum, and
(C) as to all contracts for life  insurance  benefits  issued  on  and
after   January   first,  nineteen  hundred  fifty-six,  the  applicable
mortality tables as specified in subsection (c) of section four thousand
five hundred seventeen of this article.
(2) The deficient premium reserve as  to  all  such  contracts  issued
prior   to   January  first,  nineteen  hundred  forty-eight,  shall  be
determined in the manner prescribed in subsection (b)  of  section  four
thousand  five  hundred  seventeen  of  this  article and as to all such
contracts  issued  on  and  after  January   first,   nineteen   hundred
forty-eight,  shall  be  determined  in the manner prescribed in section
four thousand two hundred eighteen of this chapter.
(3) Such minimum standard of valuation as to all contracts for annuity
benefits  issued  on  and  after   January   first,   nineteen   hundred
forty-eight,  shall  be  the  1937 Standard Annuity Mortality Table with
interest at three per centum.
(c) No such society shall, except as provided for  in  subsection  (f)
hereof,  make  or  incur  in  any calendar year, or permit to be made or
incurred on its behalf or  under  any  agreement  with  it,  total  life
insurance  expenses as defined in subsection (d) hereof in excess of the
total life insurance expense limit as defined in subsection (e) hereof.
(d) The total life insurance expenses of any such society  within  the
meaning of this section, shall include all expenses, made or incurred on
its  behalf  with  its permission or under any agreement with it, in the
business of fraternal life insurance, except:
(1) taxes, licenses and fees,
(2)  disbursements   for   altruistic,   educational,   fraternal   or
recreational  activities  which are made from funds collected solely for
such purposes and in addition thereto disbursements for like purposes in
an amount not exceeding one and one-half  per  centum  of  the  premiums
received for life insurance contracts during such calendar year,
(3)  that  portion  of  its  total  investment  expenses not exceeding
one-fourth of one per centum of the mean amount of  its  total  invested
assets during such calendar year,
(4) taxes and other outlays exclusively in connection with real estate
and  commissions,  or  salaries  and expenses in lieu of commissions, on
mortgage loans, and
(5) outlays representing the accrued liability for  services  rendered
by  the  society's  employees  prior to coverage under employees pension
plans.
(e) The total life insurance expense limit, within the meaning of this
section, shall be the sum of the following items:
(1)  seven  per centum of all life insurance premiums received by such
society during such calendar year,
(2) thirty-five per centum of all first year life  insurance  premiums
received by such society during such calendar year,
(3)  one hundred seventy-five one thousandths of one per centum of the
aggregate amount of life insurance of  such  society  in  force  at  the
beginning  of  such  calendar  year  and of the aggregate amount of such
insurance issued during, and in force at the end of, such calendar year,
(4) three-tenths of one per centum of the  aggregate  amount  of  life
insurance  of  such  society  in force at the beginning of such calendar
year and of the aggregate amount of such insurance issued during, and in
force at the end of, such calendar year, and
(5) thirty-five one hundredths of one  per  centum  of  the  aggregate
amount  of life insurance of such society issued during, and is in force
at the end of, such calendar year,  exclusive  of  additional  insurance
purchased by the application of certificate dividends.
(f)  The  total life insurance expense limit of any such society which
has in force at the end of the next preceding calendar  year  less  than
one  million dollars of life insurance shall be increased by one hundred
per centum; and for  any  other  such  society,  such  limits  shall  be
increased  by  one  hundred per centum less two-tenths of one per centum
for each one million dollars of life insurance in excess of one  million
dollars  of life insurance until the extra margin is sixty per centum of
said limit, and thereafter said extra margin shall decrease by one-third
of one per centum for each ten million  dollars  of  life  insurance  in
force  at  the  end  of the next preceding calendar year until the extra
margin is fifty per centum;  and  thereafter  said  extra  margin  shall
decrease  by  one-half of one per centum for each ten million dollars of
life insurance in force at the end of the next preceding  calendar  year
until such extra margin is reduced to zero.
(g)  The  amounts  of life insurance referred to in this section shall
not include additional benefits payable  for  accidental  death  or  for
total and permanent disability.
(h) No such society, and no person, firm or corporation, on its behalf
or under any agreement with it, shall pay or allow to any agent, broker,
employee  or  other person, for services in procuring an application for
life insurance, for collecting any premium  thereon  or  for  any  other
service performed in connection therewith, any compensation greater than
that  which  has  been  determined  by  agreement made in advance of the
rendering of such service.
(i) The superintendent may, in  his  discretion,  accept  satisfactory
approximations  of  the  figures  required  in this section. If any such
society shall in any calendar year make or incur  total  life  insurance
expenses  in  excess  of  the  total  life  insurance expense limit, the
superintendent may, upon written application of  such  society,  suspend
such  limit  for such society for the calendar year in which such excess
was incurred.
(j) Notice of intention to comply with the provisions of this  section
shall  be  given  in  writing to the superintendent by any such society,
accompanied by a certified copy of the  authorizing  resolution  of  the
board of directors.