(1) Every contract whereby a benefit is to accrue to a party named therein, upon the accidental death or physical disability from accident or sickness of a person, which benefit is in any degree conditioned upon the collection of an assessment upon persons holding similar contracts, is deemed a contract of accident or casualty insurance upon the assessment plan, and the business involving the issuance of such contract shall be carried on in this state only by duly authorized corporations, which are subject to the provisions and requirements of this section and the general laws governing insurance companies in this state, except as otherwise provided in this section; but nothing in this section shall be construed as applicable to organizations which conduct their business as fraternal societies, on the lodge system, or to organizations which do not employ paid agents in soliciting business or limit their certificate holders to a particular order or fraternity. (2) Twenty-five or more persons who are citizens of this state may form a corporation to carry on the business of casualty insurance on the assessment plan, but no such corporation shall begin to do business until a guaranty fund of at least ten thousand dollars is provided and deposited, in cash or in such securities as are permitted by law in the case of stock companies, with the commissioner under the conditions named in this title (except article 15) and article 14 of title 24, C.R.S. When this is done and at least two hundred persons have subscribed in writing to be insured, and when each has paid in at least one monthly assessment or premium, the commissioner, if the laws have been complied with, shall issue a certificate of authority for such corporation, which authorizes it to commence business. The word "association" shall be used in the title or name of all corporations organized under this section instead of the word "company". (3) Every policy or indemnity certificate issued by any casualty corporation doing business in this state shall show, in plain and legible print at the top and on the face of the same, these words: "Incorporated on the assessment plan". (4) There shall also be printed plainly and legibly in every such policy or certificate issued the minimum and maximum limits of the contingent mutual liability of the person to whom the policy is issued, which limits and the amount of liability, in the case of corporations incorporated under the Colorado laws, shall be fixed by the bylaws, and the rule shall be uniform. Such policies or certificates shall also specify the minimum sum of money to be paid upon each contingency insured against and the number of days after satisfactory proof of the happening of such contingency at which such payment shall be made. Upon the occurrence of such contingency, unless the contract has been voided by fraud or by breach of its conditions, the association is obligated to the beneficiary for such payment at the time and to the amount specified in the policy or certificate, and this indebtedness shall be a lien upon all the property, effects, and bills receivable of the association in this state, with priority over all indebtedness thereafter incurred, but the statement of said minimum sum shall not invalidate the rights of the party insured from receiving any further amount above such minimum sum that is based upon membership and to which he is entitled by the provisions of his policy. (5) Any corporation organized under the authority of any other state or government to issue policies or certificates of casualty insurance on the assessment plan, as a condition precedent to transacting business in this state, shall pay such fees and comply with the same requirements as exacted of stock casualty insurance companies of other states or countries, as provided by this title (except article 15) and article 14 of title 24, C.R.S., and thereafter be subject to the same general laws and penalties of this title, unless otherwise provided in this section, and it shall deposit with the commissioner or with the proper official of some other state, for the protection of all its policyholders, a sum not less than that required to be deposited by domestic casualty insurance companies organized upon the mutual assessment plan. Such corporation shall also file with the commissioner a copy of its policies or certificates and applications therefor, for approval by the commissioner, and a sworn statement from the proper officers of such corporation that they have received a copy of this section, and shall be governed thereby in issuing policies or certificates in this state. The commissioner may thereupon issue or renew the authority of such corporation to do business in this state. (6) The money or other benefit, charity, relief, or aid to be paid or provided or rendered by any corporation authorized to do casualty insurance on the assessment plan shall not be liable to attachment or other process and shall not be seized, taken, appropriated, or applied by any legal or equitable process, nor by operation of law, to pay any debts or liability of a policy or certificate holder, or any beneficiary named therein. (7) Any corporation doing a casualty insurance business in this state on April 15, 1913, that is incorporated to do business on the assessment plan may reincorporate under the provisions of this title (except article 15) and article 14 of title 24, C.R.S., but nothing in said references shall be construed as requiring any such corporation to reincorporate, and any such corporation may continue to exercise all rights, powers, and privileges conferred by said references, or its articles of incorporation not inconsistent with this subsection (7).
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