(215 ILCS 5/284.1) (from Ch. 73, par. 896.1)
(Section scheduled to be repealed on January 1, 2027)
Sec. 284.1.
Representative form of government.
A society has a
representative form of government when:
(a) It has a supreme governing body constituted in |
| one of the following ways:
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(1) Assembly. The supreme governing body is an
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| assembly composed of delegates elected directly by the members or at intermediate assemblies of members or their representatives, together with other delegates as may be prescribed in the society's laws. A society may provide for election of delegates by mail. The elected delegates shall constitute a majority in number and shall not have less than 2/3 of the votes and not less than the number of votes required to amend the society's laws. The assembly shall be elected and shall meet at least once every 4 years and shall elect a board of directors to conduct the business of the society between meetings of the assembly. Vacancies on the board of directors between elections may be filled in the manner prescribed by the society's laws; or
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(2) Direct Election. The supreme governing body
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| is a board composed of persons elected by the members, either directly or by their representatives in intermediate assemblies, and any other persons prescribed in the society's laws. A society may provide for election of the board by mail. Each term of a board member may be filled in the manner prescribed by the society's laws. However, those persons elected to the board shall constitute a majority in number and not less than the number of votes required to amend the society's laws. A person filling the unexpired term of an elected board member shall be considered to be an elected member. The board shall meet at least quarterly to conduct the business of the society;
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(b) The officers of the society are elected either by
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| the supreme governing body or by the board of directors;
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(c) Only benefit members are eligible for election to
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| the supreme governing body, the board of directors or any intermediate assembly; and
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(d) Each voting member has one vote; no vote may be
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(Source: P.A. 84-303 .)
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(215 ILCS 5/286.1) (from Ch. 73, par. 898.1)
(Section scheduled to be repealed on January 1, 2027)
Sec. 286.1. Purposes and powers. (a) A society shall operate for the
benefit of members and their beneficiaries by:
(1) Providing benefits as specified in Section 297.1 |
| of this amendatory Act; and
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(2) Operating for one or more social, intellectual,
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| educational, charitable, benevolent, moral, fraternal, patriotic or religious purposes for the benefit of its members, which may also be extended to others. Such purposes may be carried out directly by the society or indirectly through subsidiary corporations or affiliated organizations.
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(b) Every society shall have the power to adopt laws and rules for the
government of the society, the admission of its members and the management
of its affairs. It shall have the power to change, alter, add to or amend
such laws and rules and shall have such other powers as are necessary and
incidental to carrying into effect the objects and purposes of the society.
(c) A domestic society that provides any of the benefits specified in Section 297.1 of this Code must be governed by a board of directors and managed by qualified officers subject to the following requirements:
(1) The laws of a society must provide that:
(i) the board of directors shall have the powers
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| and perform the duties ordinarily possessed and exercised by a board of directors under this Code, including, but not limited to, the authority and responsibility for the hiring and the discharge of a president, chief executive officer, or an equivalent position, except that a society that elects its president, chief executive officer, or equivalent position pursuant to its by-laws, as of the effective date of this amendatory Act of the 98th General Assembly, may continue to do so if it elects a president, chief executive officer, or equivalent position that meets qualifications set forth in a rule adopted by the Director; and
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(ii) the board of directors may remove a director
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| for cause and replace the director with another qualified director.
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After the effective date of this amendatory Act of
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| the 98th General Assembly, a domestic society shall amend its laws, as necessary, to comply with this paragraph (1) as soon as reasonably practicable, but in no event later than January 1, 2019.
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(2) A person convicted of a felony may not be a
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| director or an officer of a domestic society.
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(3) A society shall provide information regarding
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| qualifications of board candidates to voting members prior to the time of election.
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(4) Each newly elected director of a domestic society
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| shall participate in a board training or orientation program within 6 months after their election to the board that includes information regarding board duties and responsibilities.
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(5) At least annually, the board of directors shall
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| conduct a self-assessment.
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(6) Each domestic society shall establish an audit
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| committee. The composition and responsibilities of the audit committee shall comply with the Illinois Administrative Code provisions relating to annual financial reporting.
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(Source: P.A. 98-814, eff. 1-1-15 .)
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(215 ILCS 5/289.1) (from Ch. 73, par. 901.1)
(Section scheduled to be repealed on January 1, 2027)
Sec. 289.1.
Personal liability.
(a) The officers and members of the
supreme governing body or any subordinate body of a society shall not be
personally liable for any benefits provided by a society.
(b) Any person may be indemnified and reimbursed by any society for
expenses reasonably incurred by, and liabilities imposed upon, such person
in connection with or arising out of any action, suit or proceeding,
whether civil, criminal, administrative or investigative, or threat
thereof, in which the person may be involved by reason of the fact that he
or she is or was a director, officer, employee or agent of the society or
of any firm, corporation or organization which he or she served in any
capacity at the request of the society. A person shall not be so
indemnified or reimbursed (1) in relation to any matter in such action,
suit or proceedings as to which he or she shall finally be adjudged to be
or have been guilty of breach of a duty as a director, officer, employee or
agent of the society; or (2) in relation to any matter in such action, suit
or proceeding, or threat thereof, which has been made the subject of a
compromise settlement; unless in either such case the person acted in good
faith for a purpose the person reasonably believed to be in or not opposed
to the best interests of the society and, in a criminal action or
proceeding, in addition, had no reasonable cause to believe that his or her
conduct was unlawful. The determination whether the conduct of such person
met the standard required in order to justify indemnification and
reimbursement in relation to any matter described in subpoints (1) or (2)
of the preceding sentence may only be made by the supreme governing body or
board of directors by a majority vote of a quorum consisting of persons who
were not parties to such action, suit or proceeding or by a court of
competent jurisdiction. The termination of any action, suit or proceeding
by judgment, order, settlement, conviction or upon a plea of no contest
as to such person shall not in itself create a conclusive presumption that
the person did not meet the standard of conduct required in order to
justify indemnification and reimbursement. The foregoing right of
indemnification and reimbursement shall not be exclusive of other rights to
which such person may be entitled as a matter of law and shall inure to the
benefit of his or her heirs, executors and administrators.
(c) A society shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent
of the society, or who is or was serving at the request of the society as a
director, officer, employee or agent of any other firm, corporation or
organization against any liability asserted against such person and
incurred by him or her in any such capacity or arising out of his or her
status as such, whether or not the society would have the power to
indemnify the person against such liability under this Section.
(Source: P.A. 84-303 .)
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(215 ILCS 5/291.1) (from Ch. 73, par. 903.1)
(Section scheduled to be repealed on January 1, 2027)
Sec. 291.1. Organization. A domestic society organized on or after
January 1, 1986 (the effective date of Public Act 84-303) shall be formed as follows:
(a) Seven or more citizens of the United States, a |
| majority of whom are citizens of this State, who desire to form a fraternal benefit society may make, sign and acknowledge, before some officer competent to take acknowledgement of deeds, articles of incorporation, in which shall be stated:
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(1) The proposed corporate name of the society,
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| which shall not so closely resemble the name of any society or insurance company already authorized to transact business in this State as to be misleading or confusing;
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(2) The place where its principal office shall be
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| located within this State;
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(3) The purposes for which it is being formed and
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| the mode in which its corporate powers are to be exercised. Such purposes shall not include more liberal powers than are granted by this amendatory Act; and
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(4) The names and residences of the incorporators
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| and the names, residences and official titles of all the officers, trustees, directors or other persons who are to have and exercise the general control of the management of the affairs and funds of the society for the first year or until the ensuing election, at which all such officers shall be elected by the supreme governing body, which election shall be held not later than one year from the date of issuance of the permanent certificate of authority;
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(b) Duplicate originals of the articles of
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| incorporation, certified copies of the society's bylaws and rules, copies of all proposed forms of certificates, applicants and rates therefor, and circulars to be issued by the society and a bond conditioned upon the return to applicants of the advanced payments if the organization is not completed within one year shall be filed with the Director, who may require such further information as the Director deems necessary. The bond with sureties approved by the Director shall be in such amount, not less than $300,000 nor more than $1,500,000, as required by the Director. All documents filed are to be in the English language. If the Director finds that the purposes of the society conform to the requirements of this amendatory Act and all provisions of the law have been complied with, the Director shall approve the articles of incorporation and issue the incorporators a preliminary certificate of authority authorizing the society to solicit members as hereinafter provided;
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(c) No preliminary certificate of authority issued
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| under the provisions of this Section shall be valid after one year from its date of issue or after such further period, not exceeding one year, as may be authorized by the Director, upon cause shown, unless the 500 applicants hereinafter required have been secured and the organization has been completed as herein provided. The articles of incorporation and all other proceedings thereunder shall become null and void in one year from the date of the preliminary certificate of authority or at the expiration of the extended period, unless the society shall have completed its organization and received a certificate of authority to do business as hereinafter provided;
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(d) Upon receipt of a preliminary certificate of
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| authority from the Director, the society may solicit members for the purpose of completing its organization, shall collect from each applicant the amount of not less than one regular monthly premium in accordance with its table of rates and shall issue to each such applicant a receipt for the amount so collected. No society shall incur any liability other than for the return of such advance premium nor issue any certificate nor pay, allow or offer or promise to pay or allow any benefit to any person until:
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(1) Actual bona fide applications for benefits
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| have been secured on not less than 500 applicants and any necessary evidence of insurability has been furnished to and approved by the society;
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(2) At least 10 subordinate lodges have been
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| established into which the 500 applicants have been admitted;
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(3) There has been submitted to the Director,
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| under oath of the president or secretary, or corresponding officer of the society, a list of such applicants, giving their names, addresses, date each was admitted, name and number of the subordinate lodge of which each applicant is a member, amount of benefits to be granted and premiums therefor;
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(4) It shall have been shown to the Director, by
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| sworn statement of the treasurer or corresponding officer of such society, that at least 500 applicants have each paid in cash at least one regular monthly premium as herein provided, which premiums in the aggregate shall amount to at least $150,000. Said advance premiums shall be held in trust during the period of organization, and, if the society has not qualified for a certificate of authority within one year unless extended by the Director, as herein provided, such premiums shall be returned to said applicants; and
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(5) In the case of a domestic society that is
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| organized after January 1, 2015 (the effective date of Public Act 98-814), the society meets the following requirements:
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(i) maintains a minimum surplus of
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| $2,000,000, or such higher amount as the Director may deem necessary; and
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(ii) meets any other requirements as
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| determined by the Director.
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(e) The Director may make such examination and
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| require such further information as the Director deems necessary. Upon presentation of satisfactory evidence that the society has complied with all the provisions of law, the Director shall issue to the society a certificate of authority to that effect and that the society is authorized to transact business pursuant to the provisions of this amendatory Act; and
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(f) Any incorporated society authorized to transact
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| business in this State at the time Public Act 84-303 becomes effective (January 1, 1986) shall not be required to reincorporate.
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(Source: P.A. 102-558, eff. 8-20-21.)
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