§ 8-402
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/md/insurance/8-402A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
§8–402.
(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:
(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
(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.