1. (a)

   1. (1) An incorporated society, order, or supreme lodge without capital stock is deemed to be a fraternal benefit society if it:

      1. (i) is conducted solely for the benefit of its members and their beneficiaries;
      2. (ii) is not conducted for profit;
      3. (iii) is operated on a lodge system with ritualistic form of work;
      4. (iv) has a representative form of government; and
      5. (v) provides for benefits to be paid in accordance with this subtitle.
   2. (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.

2. (b) A society is deemed to be operating on a lodge system if it operates under a system by which the society:

   1. (1) has a supreme legislative or governing body and subordinate lodges or branches, by whatever name known;
   2. (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. (3) elects, initiates, or admits members in accordance with its laws, rituals, and rules.

3. (c) A society is deemed to have a representative form of government if:

   1. (1)

      1. (i) the society provides in its laws for a supreme legislative or governing body composed of:

         1. 1. representatives elected by the members of the society or by delegates elected directly or indirectly by the members; and
         2. 2. any other individuals required by the laws of the society;
      2. (ii) election of delegates may be accomplished by mail;

      3. (iii) the elected representatives of the society:

         1. 1. are a majority of the supreme legislative or governing body;
         2. 2. have at least two-thirds of the votes; and
         3. 3. have at least the number of votes required to amend the laws of the society;

      4. (iv) at least once every 4 years:

         1. 1. the supreme legislative or governing body of the society meets; and
         2. 2. officers, representatives, or delegates of the society are elected;
      5. (v) each insured member is eligible for election to act or serve as a delegate to the meeting;

      6. (vi) the society has a board of directors that:

         1. 1. is responsible for the management of the affairs of the society between meetings of the supreme legislative or governing body;
         2. 2. is subject to control by the supreme legislative or governing body;
         3. 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. 4. has powers and duties delegated by the laws of the society;
      7. (vii) the officers of the society are elected by the supreme legislative or governing body or by the board of directors; and
      8. (viii) the members, officers, representatives, or delegates of the society may not vote by proxy; or

   2. (2)

      1. (i) the society provides in its laws for a supreme legislative or governing body composed of:

         1. 1. a board composed of individuals elected by the members, either directly or by their representatives in intermediate assemblies; and
         2. 2. any other individuals required by the laws of the society;
      2. (ii) election of the board may be accomplished by mail;
      3. (iii) the term of an elected board member may not exceed 4 years;

      4. (iv) the individuals elected to the board:

         1. 1. are a majority of the board; and
         2. 2. have at least the number of votes required to amend the laws of the society;
      5. (v) vacancies on the board between elections are filled as prescribed by the laws of the society;
      6. (vi) an individual filling the unexpired term of an elected board member is considered to be an elected member; and
      7. (vii) the board meets at least quarterly to conduct the business of the society.

Added by Acts 1995, c. 36, § 1, eff. Oct. 1, 1997. Amended by Acts 1997, c. 183, § 1, eff. Jan. 1, 1998.

Formerly Art. 48A, §§ 302, 303, 304.