A fraternal benefit society wants to issue life insurance certificates in Texas. Under TIC 885.001-.706, to whom may the society's benefits be payable?

Why D is correct

Under TIC 885.001-.706, a fraternal benefit society provides benefits to its members and to the members' beneficiaries through its lodge system; it does not sell insurance to the general public. Membership is the gateway to coverage. Practically, an agent writing fraternal certificates must confirm that the applicant is in fact a member of the society, because a certificate issued to a nonmember is outside the fraternal's lawful scope and the certificate is a membership benefit rather than a commercial policy offered to any applicant who can pay.

Why the other options are wrong

• A) A fraternal does not offer coverage to the general public on request; membership in the society is required before benefits may be issued.
• B) A fraternal has members, not shareholders, so share ownership can never be the test for receiving benefits.
• C) There is no county restriction on fraternal membership or coverage; the society's own membership rules and its Texas authority govern who may join.

Memory hook

No lodge membership, no fraternal certificate.