Oklahoma § 36-2405 - Level or stipulated assessments – Definition - Policy to

§ 36-2405. Level or stipulated assessments – Definition - Policy to

specify amount payable - Refusal to pay - Solvency - Legal reserve

life insurance - Policy to make this section part thereof - Age

limits – Beneficiaries - No mutual benefit associations formed

hereafter.

Mutual benefit associations authorized to do business in this

state, may provide for a level or stipulated weekly, monthly,

quarterly, semiannual or annual assessment, and the following

provisions are made specially applicable thereto:

1. Level rate assessment associations, companies or

corporations are defined as those corporations granting insurance

benefits on the assessment plan and which collect from their

membership a level, stipulated monthly, quarterly, semiannual

Oklahoma Statutes - Title 36. Insurance

assessment or premium, which assessment or premium is not made

contingent upon the happening of a certain event but is based upon

stated periodical rates or charges estimated by the Board of

directors to be sufficient for the payment of all claims and

expenses.

2. Such associations shall specify in their policy or

membership certificate forms the sum of money they promise to pay,

which sum shall not be less than the face amount of the policy, and

the number of days after satisfactory proof is filed when such

payment will be made. Upon the occurrence of such contingency

unless the contract shall have been void by fraud or by breach of

its conditions, the corporation shall be obligated to the

beneficiary for such payment at the time and in the amount specified

in the policy or certificate. If such corporation shall refuse or

fail to make such payment, after final judgment has been obtained

upon each claim, the Insurance Commissioner shall notify the

corporation not to issue any new policies or certificates until such

indebtedness is fully paid; and no officer or agent of the

corporation shall make, sign or issue any policy or certificate of

insurance while such notice is in force.

3. Each such association or company shall be held to be legally

solvent so long as its admitted assets are equal to or in excess of

its matured liabilities.

4. Any association or company organized under the provisions of

this article having admitted assets in its mortuary or reserve fund

of at least One Hundred Thousand Dollars ($100,000.00) in excess of

its matured claim liabilities may write legal reserve life insurance

and the provisions of paragraphs numbered 1, 7 and 8 of Section

1204, Article 12; Section 4029, Article 40, and Section 3610,

Article 36 of this title shall be applicable to all insurance

written on the legal reserve basis. The reserve on such business

shall be held separate and apart from all other funds of the

association or company and shall be computed upon a calculation

which shall show a value not less than that shown in accordance with

the one-year preliminary term method based upon the American

Experience Table of Mortality and three and one-half (3 1/2%)

percent per annum, assuming an average risk exposure of six (6)

months on all new policies issued within each calendar year shall be

security for the legal reserve business only. Should such legal

reserve become impaired by reason of excessive mortality or other

cause, the board of directors of such association or company may

levy additional assessments with which to make up such impairment.

Every policy issued by reason hereof shall contain a provision

making this section a part thereof. Provided, however, that any

such association or company shall discontinue writing all types of

new insurance in Oklahoma except legal reserve insurance within five

(5) years after publishing legal reserve rates or having printed

Oklahoma Statutes - Title 36. Insurance

legal reserve policy forms. Any director, trustee, officer, or

member of any such corporation, or any other person, may advance to

the corporation any sum or sums of money necessary for the purpose

of its business, or to enable it to comply with any of the

requirements of the law, and such monies and such interest thereon

as may have been agreed upon, not exceeding ten percent (10%) per

annum, shall not be a liability or claim against the corporation or

any of its assets except as to surplus earnings of such corporations

and unless the obligation is in writing and duly acknowledged by the

corporation, and a verified copy thereof is filed with the Insurance

Commissioner. No commission or promotion expense shall be paid in

connection with the advance of any such money to the corporation and

the amount of such advance shall be reported in each annual

statement filed with the Insurance Commissioner.

5. The provisions of this article placing the extreme limit of

age of persons to whom policies may be issued at not to exceed

seventy-two (72) years of age, shall not be applicable to insurance

written upon the level rate plan outside the State of Oklahoma or

the legal reserve plan in any state; provided that if the age of the

insured has been incorrectly stated in the application for any

policy issued by such association or company the face amount of said

policy payable in event of a valid claim shall be such an amount as

the premium paid by the insured to the association or company would

have purchased at the true and correct age of the insured, at entry,

on a basis of the published rates of the company applicable thereto.

6. Any individual, person, corporation, association or

partnership with an insurable interest in the life of the insured

may be a beneficiary of insurance written on either the level rate

or legal reserve plan by an association or company operating under

this article.

7. No mutual benefit association shall be formed after June 4,

1953, nor shall the Insurance Commissioner, after said effective

date issue a permit to organize such an association to or approve

any articles of incorporation of, any group of individuals desiring

to organize an association or company under the provisions of this

article.

Added by Laws 1957, p. 317, § 2405, operative July 1, 1957. Amended

by Laws 2010, c. 215, § 3, eff. Nov. 1, 2010.