State RegulationsFL specificDifficulty 1/5
Under Florida law, on what basis does a fraternal benefit society provide insurance benefits to its members?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
A fraternal benefit society provides insurance to its members on a fraternal basis: it operates on a lodge system with a representative form of government, and its contracts insure members and their families rather than the general public. Fraternal societies are governed by Chapter 632, Florida Statutes, rather than by the ordinary commercial insurance code, and they are organized without private profit to members, officers, or directors.
Why the other options are wrong
- A) Fraternal benefit societies have no stockholders and do not distribute stockholder dividends.
- B) Fraternals operate not-for-profit under a lodge system, unlike a commercial stock insurer.
- C) Coverage extends to the membership generally, not just to lodge officers and their immediate families.
Memory hook
Fraternal = lodge + members + not-for-profit.