PARRIS N. GLENDENING, Governor                          H.B. 1022

(D) NOTWITHSTANDING THE LIMITATIONS IN THIS SECTION, A SOCIETY MAY
REINSURE THE RISKS OF ANOTHER SOCIETY IN A CONSOLIDATION OR MERGER
APPROVED BY THE COMMISSIONER UNDER § 8-438 OF THIS SUBTITLE.

8-442.

(a)     (1) All assets of a society shall be held, invested, and disbursed for the use
and benefit of the society.

(2) A society member or beneficiary of a member does not have and may not
acquire individual rights in the assets of the society and is not entitled to any
apportionment or the. surrender of any, part of the assets except as provided in the
insurance contract.

(b)    A society may create, maintain, invest, disburse, and apply special funds as
necessary to carry out any purpose allowed by the laws of the society.

(c)     (1) This subsection applies only to a society with admitted assets that are
less than the sum of its accrued liabilities and reserves under all of its certificates when
valued according to standards required for certificates issued after December 31, 1963.

(2)     A society described in paragraph (1) of this subsection shall state
distinctly, in each law of the society regarding payments by members, the purpose of the
payments and the proportion of the payments that may be used for expenses.

(3)     A society described in paragraph (1) of this subsection may not use any
money collected for mortuary or disability purposes, or its net earnings, for expenses.

(D) (1) A SOCIETY, PURSUANT TO RESOLUTION OF^: ITS SUPREME
GOVERNING BODY, MAY ESTABLISH AND OPERATE ONE OR MORE SEPARATE
ACCOUNTS AND ISSUE CONTRACTS ON A VARIABLE BASIS, SUBJECT TO THE
PROVISIONS OF LAW REGULATING LIFE INSURERS ESTABLISHING SUCH ACCOUNTS
AND. ISSUING SUCH CONTRACTS.

(2) TO THE EXTENT THE SOCIETY CONSIDERS IT NECESSARY IN ORDER
TO COMPLY WITH ANY APPLICABLE FEDERAL OR STATE LAWS, OR' ANY RULES
ISSUED UNDER APPLICABLE FEDERAL OR STATE LAWS, THE SOCIETY:

(I)      MAY ADOPT SPECIAL PROCEDURES FOR THE CONDUCT OF THE
BUSINESS AND AFFAIRS OF A SEPARATE ACCOUNT;

(II)    FOR PERSONS HAVING BENEFICIAL INTERESTS IN AN
ACCOUNT, MAY PROVIDE SPECIAL VOTING AND OTHER RIGHTS, INCLUDING
SPECIAL RIGHTS AND PROCEDURES RELATING TO INVESTMENT POLICY,
INVESTMENT ADVISORY SERVICES, SELECTION OF CERTIFIED PUBLIC
ACCOUNTANTS, AND SELECTION OF A COMMITTEE TO MANAGE THE BUSINESS AND
AFFAIRS OF THE ACCOUNT; AND

(III)   MAY ISSUE CONTRACTS ON A VARIABLE BASIS TO WHICH §§
8-432(C) AND 8-446 OF THIS SUBTITLE SHALL NOT APPLY.

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