Annual valuation report in addition to annual statement; societies on lodge system
Section 39. (a) In addition to the annual statement required by section 38, a society on the lodge system authorized to pay benefits in the commonwealth upon the death of its members, except those societies which do not pay benefits for death from natural causes, shall annually report to the commissioner a valuation of its certificates providing for death benefits in force on December 31 of the preceding calendar year. The report shall show, as contingent liabilities, the present mid-year value of the death benefits promised in the outstanding contracts of the society, and as contingent assets, the present mid-year value of the future net mortuary contributions as provided in the constitution and by-laws as the same are in practice actually collected, not including therein any value for the right to make extra assessments.
(b) At the option of any such society, in lieu of the method in subsection (a), the valuation may show the net mid-year value of the outstanding contracts. The net value, when computed in case of monthly contributions, may be the mean of the terminal values for the end of the preceding and of the current insurance years, the right to make extra assessments being excluded from consideration. The valuation shall be certified by a competent accountant or actuary, or at the request and expense of the society, verified by the actuary of the department of insurance of the home state of the society, and shall be filed with the commissioner on or before April 30 following the submission of the most recent annual statement. The legal minimum standard of valuation shall be the National Fraternal Congress Table of Mortality as adopted by the National Fraternal Congress on August 23, 1899; or at the option of the society, any higher mortality table; or, at its option, it may use a mortality table based on the society’s own experience of at least 20 years, and covering not less than 100,000 lives with interest assumption not higher than 4 per cent per annum, whichever mortality table is adopted. Every such report shall set forth clearly and fully the mortality and interest basis and the method of valuation. A society providing for disability or accidental death benefits, or both, shall keep the net contributions for such benefits in a fund separate and apart from all other benefit funds and from expense funds. The valuation provided for in this section shall not be considered or regarded in any action that may arise as a test of the financial solvency of the society, but each society shall be held to be legally solvent so long as the funds in its possession are equal to or in excess of its liabilities, not including in the term “liabilities” any charge for reserve computed as required by this section.
(c) Such report of valuation and an explanation of the facts concerning the condition of the society thereby disclosed shall be sent to each member of the governing body of the society not later than June 1 of each year, or in lieu thereof, such report of valuation and showing of the society’s condition as thereby disclosed may be published in the society’s official paper, and the issue containing the same shall be mailed to each beneficiary member of the society.