State RegulationsNC specificDifficulty 1/5
Which characteristic must a fraternal benefit society have to operate under North Carolina insurance law?
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under Article 24 of Chapter 58 (G.S. 58-24-1 and following), a fraternal benefit society must operate on the lodge system with a representative form of government and carry out fraternal purposes, and it issues its certificates only to its own members. It is not organized as a stock corporation for profit, admission of nonmembers would defeat its fraternal character, and it is chartered under state — not federal — law.
Why the other options are wrong
- A: A fraternal benefit society is not organized for profit as a stock corporation with shareholder capital; it operates for the benefit of its members under G.S. 58-24-1.
- B: Certificates may be issued only to members of the society; insuring nonmembers would defeat the fraternal character required by G.S. 58-24-1.
- D: Fraternal benefit societies are creatures of state insurance law (G.S. 58-24-1), not federally chartered entities.
Memory hook
Fraternal = lodge + votes + members only.