New York Laws
Article 45 - Fraternal Benefit Societies
4514 - Creation and Maintenance of Separate Funds; Premiums; Assessments and Other Contributions of Members.

(b) In a provision of its by-laws relating to the payment of premiums
or other required periodical contributions by insured members, every
such society shall distinctly indicate the amount or portion of such
premium or contribution which is to be used for insurance benefits, to
be known as the insurance contribution, and the amount or portion which
may be used for expenses and other purposes. The amount of such
insurance contributions shall be not less than that required by the
standard of valuation applicable to such certificate or contract in
accordance with the provisions of this chapter. Every such insurance
contribution shall without any deduction be paid into the insurance
funds of such society.
(c) No authorized society shall issue or deliver in this state or
elsewhere any certificate which does not require stated periodical
premiums or contributions at least equal to those required according to
the minimum valuation standards set forth in subsection (c) of section
four thousand five hundred seventeen of this article; nor shall such
society insure in this state or elsewhere members for temporary or
permanent disability benefits or for hospital expense or surgical and
medical expense unless the rates thereof are adequate upon the basis of
tables based upon reliable experience with an interest assumption not
higher than three percent per annum.
(d) The insurance funds of every such society shall consist of the
insurance contributions and of all interest or other income on
investments in such funds and all other accretions to such funds. Such
insurance funds may be used for the payment of benefits under any
insurance or annuity contract and for the payment of expenses of
investment of such funds. No part of such insurance funds shall be used
for any other expenses or other purposes, except that any such society
having admitted assets, as shown by its last annual statement filed with
the superintendent, in excess of one hundred five percent of its entire
liabilities, including its required reserves computed on a net tabular
basis, may transfer or allocate such excess insurance funds to the
expense or other funds of the society, in accordance with its
constitution and by-laws; but the amount so transferred in any calendar
year shall not exceed whichever is the smaller of (i) five percent of
the total contributions to the mortuary fund or funds of such society

during the next preceding calendar year or (ii) seventy-five per centum
of the sum of
(1) the savings in mortality during the preceding calendar year under
certificates issued on rates creating and maintaining reserves in
accordance with the table of mortality used, and
(2) the excess interest earnings over and above the interest
requirements to maintain reserves, after deducting from such sum the
dividends, if any, paid to members, as determined by the valuation
report and annual statement required by this chapter, but no society
shall make any such transfer or allocation within the limits herein
described which pays or agrees to pay a first year commission in excess
of fifty-five percent of the year's premium on any life insurance
certificate or annuity contract issued by such society. In addition to
any transfer or allocation made within the limits herein described, a
society may transfer or allocate from the mortuary fund or funds to the
general or expense fund, surrender charges, if any, provided for under
terminated life insurance contracts on a legal reserve basis.
(e) Any such society may ascertain and distribute any divisible
surplus accruing under its certificates on an equitable basis, provided
that any apportionment of such surplus shall be only on an annual basis.
(f) Whenever any authorized society heretofore organized in or
licensed to do business in this state has substantially separate groups
or classes of certificates in force on which premiums or assessments are
payable according to substantially different tables of rates, the
superintendent may require such society to file a separate accounting in
its annual report of such major classifications of certificates.
(g) Any such society, for the accomplishment of any lawful purpose
provided for in its charter or constitution, may own, hold or lease
personal and real property located within or without this state, with
necessary buildings thereon; but no such personal or real property shall
be deemed an admitted asset of such society, within the meaning of this
chapter, except the home office building of such society to an amount
not exceeding that permitted by paragraph seven of subsection (a) of
section one thousand four hundred four of this chapter. Any such real or
personal property may be acquired and maintained only out of the general
or expense fund of such society, any voluntary contributions which it
may receive therefor, and such reasonable charges as may be made for the
facilities or services furnished thereby.
(h) Every authorized society shall at all times maintain a surplus not
less than the minimum amount established by rule of the superintendent.