State RegulationsTX specificDifficulty 1/5
Under TIC 885.001-.706, which of the following is a required characteristic of a fraternal benefit society?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Under TIC 885.001-.706, a fraternal benefit society is a nonprofit membership organization, without capital stock, that operates on a lodge system with a ritualistic form of work and a representative form of government, and that provides life, accident, and health benefits to its members and their beneficiaries. Practically, because it is organized for the benefit of its members rather than for profit, a fraternal is licensed and supervised under Chapter 885 rather than treated as an ordinary stock or mutual insurer, and its governing documents and lodge structure matter to its continued qualification.
Why the other options are wrong
- A) Fraternals provide life, accident, and health benefits, not property and casualty coverage, and only to their members.
- B) A fraternal benefit society has no capital stock and cannot be organized as a stock corporation offering shares to the public.
- C) A fraternal exists for the benefit of its members, not for the profit of owners; there are no shareholders to profit.
Memory hook
Lodge system, no stock, nonprofit, members only.