Article XII
Sec. 10: The Legislature shall provide by general law for the incorporation and regulation of fraternal benefit societies, which societies are defined as, any corporations without capital stock organized and carried on solely for the mutual benefit of its members and their beneficiaries and not for profit, and which shall make provision for the payment of death benefits. Every such society may provide for the payment of benefits in case of temporary or permanent physical disability, either as the result of disease, accident or old age, and for the payment of last sickness and funeral benefits. Any such society may at its option have a lodge system, with ritualistic form of work but neither such lodge system nor ritualistic form of work shall be compulsory.
The Legislature shall also provide by general law, the terms and conditions upon which fraternal benefit societies organized under the laws of another state may do business within this state.
No fraternal benefit society, excepting those now exempted under Section 29 of Act 169 of the Public Acts of the State of Michigan of 1913, shall be authorized to incorporate or do business in this state, unless it shall have in its laws:
(a) A representative or democratic form of self-government, with a provision for the recall of its officers by a majority vote of its members voting, upon petition of not greater than fifteen per cent of the membership;
(b) Provisions authorizing the initiation of, or a referendum upon any By-Law, upon a petition of ten per cent of the membership, the same to be decided by a majority vote of the members voting;
(c) Provisions requiring its officers, upon demand of five or more of its subordinate organizations, to furnish to such subordinate organizations a mailing list of Michigan members for use in the exercise of the initiative, referendum or recall; Provided, that it shall be a misdemeanor and punishable by imprisonment in the county jail not to exceed ninety days for any person to make use of such mailing list for any other purpose than hereinabove stated.
No law shall be valid—
(1) Which requires a valuation or inventory of any fraternal benefit society upon any basis which will show such society to be insolvent when its assets exceed its accrued liabilities, or which shall require the collection of assessments for death benefits in excess of the actual average mortuary cost per one thousand dollars ($1,000) insurance in force of the ten largest legal reserve life insurance companies of the United States of America of fifty years’ experience; Provided, that any society having a mortality higher than the average mortality of the legal reserve companies aforesaid, may be required to collect assessments on the basis of its actual average death rate experience for the previous five years; or
(2) Which denies any fraternal benefit society the right to expend its funds other than mortuary funds, for the circulating of petitions or otherwise promulgating laws and constitutional amendments for its own protection; Provided, that no such funds may be used for corrupt purposes.
Existing laws of this state governing fraternal benefit societies are not invalidated except so far as inconsistent with this section.
Any fraternal benefit society authorized to do business in this state on the taking effect of this amendment, may continue to do such business only until the next meeting of its general or supreme body unless its laws shall comply in all respects with the provisions of this amendment. Societies organized under the laws of another state, not exempt under Section 29 of Act 169 of the Public Acts of the State of Michigan of 1913, may transact business in this state by complying with the provisions of this amendment as to their business in this state; Provided, that if any society shall fail so to comply, any five hundred or more members of such society shall be entitled, upon application, to incorporate and do business under the laws of this state, as a fraternal benefit society.
