Cutrona's Bill Modernizing Fraternal Benefit Societies Regulations Signed into Law

State Rep. Al Cutrona (R-Canfield) announces his legislation under House Bill 575 that modernizes regulation and oversight of fraternal benefit societies has been signed into law by the governor.

“All Ohio domiciled fraternal benefit societies are currently fiscally sound and proudly serving their members and communities,” Cutrona said. “However, this industry saw a need to proactively strengthen and modernize state solvency laws…House Bill 575 would help identify and support troubled fraternal benefit societies and protect members against financial losses.”

House Bill 575 contains the following key provisions: 

• Authorizes early regulatory intervention only when statutorily defined financial trigger points are hit.
• Requires a fraternal benefit society to provide more advanced notification to the Department prior to issuing an assessment to members and allows the Department to disapprove a financial assessment if it is not in the best interests of members.
• Creates a voluntary workout process prior to liquidation that facilitates the transfer of insurance certificates to another fraternal benefit society or to a commercial insurer.
• Creates a streamlined liquidation process to help minimize costs to members and reduce potential loss of benefits due to a member assessment.

Fraternal benefit societies are non-profit membership organizations that combine the member-owned characteristic of a mutual insurance company with the social mission of a faith-based or service organization. Fraternal benefit societies are authorized to offer a limited variety of insurance products to members, primarily life insurance and annuity products. In turn, they use the proceeds from their financial service products to help members provide charitable services in their communities.

After approval of the bipartisan bill in December, the bill was signed into law by the governor.