SB 3404 Summary

• Amends the Illinois Insurance Code to modify governance requirements for domestic fraternal benefit societies, requiring a board of directors with authority to hire/fire executive officers and the ability to remove directors for cause by January 1, 2019.

• Prohibits persons convicted of felonies from serving as directors or officers and requires societies to provide candidate qualifications to voting members before elections.

• Mandates newly elected directors participate in board training within 6 months, annual board self-assessments, and establishment of audit committees complying with Illinois Administrative Code provisions.

• Requires societies to disclose to applicants that fraternal benefit societies are not included in the Illinois Life and Health Guaranty Association and that certificate holders may be assessed for reserve impairments.

• Establishes minimum $2,000,000 surplus requirement for newly organized societies and creates procedures for voluntary dissolution, including authority for the Director to issue limited certificates to successor organizations managing transferred member obligations.