HERALD Official Organ Of The Slavonic Benevolent Order Of The State Of Texas. Founded 1697. BENEVOLENCE VOLUME 54 — NO. 49
HUMANITY
BROTHERHOOD
Postmaster: Please Send Form 3579 with Undeliverable Copies to: SUPREME LODGE, SPJST, FOB 100, TEMPLE, TEX. 76501
DECEMBER 7, 1966
GOALS OF FRATERNAL SOCIETIES
(Editor's Note: The following is the slightly abridged text of the address given by the Honorable Frank J. Barnett, at the recent plenary session of the National Fraternal Congress in Minneapolis. Mr. Barnett is president of the National Association of Insurance Commissioners, and Director of Insurance, State of Nebraska. His speech was allegedly the "talk of the convention." It behooves us all to read his address several times and weigh his words very carefully. We take the text from the latest issue of THE FRATERNAL MONITOR). Defining "Fraternal Benefit Society" The topic I chose to discuss with you today is the "Goals of the Fraternals." Before going into what I consider some of the goals of fraternals, it would be beneficial to dwell for just a moment on the definition of a fraternal benefit society. "A fraternal benefit society is any corporation, society or voluntary association, without capital stock, organized and carried on solely for the mutual benefit of its members and their beneficiaries and not for profit, and having a lodge system with ritualistic form of work and representative form of government." This language was taken from the Nebraska Insurance Code. Of all the
definitions found in our laws this is the most interesting and if I take a certain liberty I can even say it contains the most beautifully descriptive language in our insurance laws. In the main, fraternal benefit societies have been extremely careful in conducting their affairs in such a manner as to comply with the above language. This is shown quite vividly when you review the 1965 Report of the National Fraternal Congress and other available data as to the tremendous amount of activity outside the realm of insurance being performed by fraternals. However, as a goal for each society I recommend that at every board meeting, every major meeting within your organizations that this definition be read. The reading in and of itself is not important but to remember that your whole existence must be for the exclusive mutual benefit of your members and their beneficiaries is important. So as a goal — as a fraternal goal — you should bear in mind, each and every one of you involved in the workings of your individual societies, that your organization's primary reason for being is to serve your members. Don't for a minute forget this. What to Avoid Perhaps out of necessity, fraternals are emphasizing the insurance aspect of their operations to the public. More and more field representatives are viewing themselves as insurance
agents. This trend has caused a great deal of misunderstanding, this trend has caused a great deal of misinformation and this trend has caused many to view fraternals as insurance companies exclusively. This you can avoid, this you must avoid if you are to accomplish your objectives and retain your statutory recognition — which we all know to be quite favorable. Thus another goal of the fraternal benefit societies must be to be fraternal benefit societies. Don't Jeopardize Favo ed Tax Position If you do not wish to perform as fraternals then I suggest you mutualize or stock or do whatever is necessary to become a commercial insurance company. If you do not wish to be a fraternal benefit society both in name and spirit then don't use the name as a protective shield. As a regulator and administrator of laws dealing with fraternals I can tell you your status may very well be in jeopardy unless as a group you act as fraternals. In this regard benefit societies favored tax position should be discussed. What Makes Fraternals Different? What makes you different from a mutual insurance company has always been that you have performed services not embodied in an insurance contract for the benefit of your members. The argument that to tax fraternals