It s just a discussion, JD.
Ohio requires anyone buying from a Fraternal sign a statement that in part reads: "If there is an impairment of reserves, a certificate holder may be assessed a proportionate share of the impairment."
From DOI: Fraternal benefit society insurance benefits are legally required to be assessable. In the event that a society's claims paying ability becomes impaired, the members may be required to pay their proportional share of the deficiency. This is in keeping with the longstanding traditional status of fraternal benefit societies as charitable and benevolent organizations, as to which the members are both recipients of and providers of mutual benefits among the membership as a whole.
Fraternal benefit societies are subject to significantly reduced capital and surplus requirements, and are not rated by A.M. Best or an equivalent.
So how do they assess a cert holder? How do they collect it?
What has you thinking the law changed in the last 100 years so they can't raise premiums now?
I was always under the impression they do it by raising premiums and want to know if that is not the case. And as I have and do sell Fraternals I want to know what is fact.
It is a matter of semantics.. They do not "raise" the premium but levy an "assessment" .. They are not the same thing but they have the same result.. The certificate holder (not policy holder) pays more.. either in cash, or by having the assessment withheld from non forfeiture values when accessed or being withheld form the death benefit. Yes, cash values and death benefits are guaranteed but that doesn't mean the certificate holder will actually receive them since they are subject to an assessment levy. Has it ever happened? Yes but rarely and most were years ago but it seems that I remember a small Catholic Fraternal that levied and assessment not too many years ago.