State RegulationsNC specificDifficulty 2/5
A North Carolina organization wants to qualify as a fraternal benefit society under Article 24 (G.S. 58-24-1 and following). Which description fits a fraternal benefit society?
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 D is correct
Under Article 24 (G.S. 58-24-1 and following), a fraternal benefit society is a nonprofit organization operating on a lodge system, with a representative form of government, that provides insurance benefits to its members and their dependents rather than to the general public. Because it has no capital stock and exists for member benefit, it is governed by the fraternal article rather than the provisions applicable to regular insurers.
Why the other options are wrong
- A) A stock corporation exists to earn returns for shareholders, the opposite of a nonprofit fraternal society without capital stock.
- B) Fraternal societies are member-owned and nonprofit; they are governed by Article 24, not merely by the unfair trade practices article.
- C) A self-funded employer plan is an uninsured arrangement outside the guaranty and fraternal frameworks; it is not a fraternal benefit society.
Memory hook
Lodge system, no stock, members only — that is fraternal.