Section 56: Fraternal societies; reincorporation
Section 56. Any domestic corporation subject to chapter one hundred and seventy-six and confining its membership to a particular order or fraternity may by a two thirds vote of its policy or certificate holders voting thereon adopt this section at a meeting called to consider the same, of which meeting written or printed notice shall be mailed to each policy or certificate holder at least thirty days before the day fixed for the meeting, and be reincorporated under this chapter as a stock company to insure only against the disability of the insured by sickness and the bodily injury and death of the insured by accident as provided in subdivisions (a) and (d) of the sixth clause of section forty-seven. The members of such corporation may vote on this proposition by proxy, if the instrument appointing the proxy is filed with the secretary of the corporation at least five days before said meeting, and the aforesaid notice to the policy and certificate holders shall so state. A copy of such vote certified to by the president, secretary and a majority of the directors of the corporation shall be filed with the commissioner. If such vote be in the affirmative the recording officer shall cause a notice to be mailed to each policy or certificate holder at his last known address, reciting the substance of such vote, and stating that books for cash subscriptions for stock in said company have been opened in the home office and will continue open for sixty days from the date of said notice, and that a policy or certificate holder in said corporation may have a prior right within said period to subscribe for said stock; and stating also that no member shall subscribe for more than ten shares thereof, and that the par value shall be twenty-five dollars per share; and stating also, in a form satisfactory to the commissioner, the financial condition of the corporation at the time of the meeting aforesaid. If within said period of sixty days the capital, as fixed, shall be oversubscribed by policy or certificate holders, the directors shall allot to each his proportionate part of the amount subscribed. At the expiration of said period of sixty days, the said right of priority to subscribe shall cease, and subscriptions for stock then undisposed of may be received from any member or certificate holder or other person and to any amount. Within thirty days after the stock has been subscribed, a meeting of the subscribers shall be called by a notice signed by the recording officer of the corporation, stating the time, place and purpose of the meeting, a copy of which notice shall, seven days at least before the day appointed for the meeting, be given to each subscriber, or left at his usual place of business or residence, or deposited in the post office, postpaid, and addressed to him at his usual place of business or residence. Said recording officer shall make an affidavit of his doings, which, with a copy of the notice, shall be recorded in the records of the corporation. At such meeting, including any necessary or reasonable adjournment thereof, by-laws of such stock company shall be adopted, and the secretary, directors and such other officers as the by-laws require shall be chosen. The president, treasurer and other officers that the said by-laws authorize them to choose shall be elected by the directors at a meeting held directly after the adjournment of the stockholders' meeting. A certificate of organization, containing a statement that the capital stock has been paid in in cash, shall be signed and sworn to by the president, secretary and a majority of the directors of such corporation, and shall, with the records of the corporation pertaining to the reincorporation, be submitted to the commissioner. If it appears that the requirements of this section have been complied with, the commissioner shall so certify and approve the certificate by his endorsement thereon. Such certificates shall thereupon be filed with the state secretary, who, upon payment of a fee to be determined annually by the commissioner of administration under the provision of section three B of chapter seven, shall issue to such corporation a certificate of reincorporation as a stock company, with the powers retained and hereby conferred. Upon the issuance of such certificate such company shall cease to issue policies or certificates upon its former plan, and shall then be empowered to transact its business under this chapter, with all the obligations, rights and privileges that it would be subject to had it been incorporated thereunder.
The company shall be subject to all the liabilities of the former corporation, and be entitled to all its assets. All policies or certificates in force at the date of reincorporation shall continue in full force and effect in all their provisions, agreements and undertakings, and shall be construed according to the laws under which they were issued, except that the policy or certificate holder shall not be liable to any extra assessment; provided, that the rates for benefits for death from natural causes may from time to time be raised if the experience of the company shows it to be necessary. Any defences or evidence relative to such policies or certificates open under such provisions shall constitute a defence, and shall be received as evidence in any controversy between the parties to or interested in such policies or certificates. No such reincorporated company shall declare a stock dividend unless its surplus thereafter would be equal to the amount of the surplus at the time of reincorporation.
Any company reincorporated under this section may increase its capital stock in the manner provided in section seventy, and may, if it has sufficient capital, transact all the kinds of business permitted to domestic companies by section fifty-one.