(a)    (1)    An incorporated society, order, or supreme lodge without capital stock is deemed to be a fraternal benefit society if it:

(i)    is conducted solely for the benefit of its members and their beneficiaries;

(ii)    is not conducted for profit;

(iii)    is operated on a lodge system with ritualistic form of work;

(iv)    has a representative form of government; and

(v)    provides for benefits to be paid in accordance with this subtitle.

(2)    An incorporated or unincorporated society, order, or supreme lodge without capital stock that is exempted under § 8-404(a)(2) of this subtitle is deemed to be a fraternal benefit society.

(b)    A society is deemed to be operating on a lodge system if it operates under a system by which the society:

(1)    has a supreme legislative or governing body and subordinate lodges or branches, by whatever name known;

(2)    by its laws, requires the subordinate lodges or branches to hold regular meetings at least once each month in furtherance of the purposes of the society; and

(3)    elects, initiates, or admits members in accordance with its laws, rituals, and rules.

(c)    A society is deemed to have a representative form of government if:

(1)    (i)    the society provides in its laws for a supreme legislative or governing body composed of:

1.    representatives elected by the members of the society or by delegates elected directly or indirectly by the members; and

2.    any other individuals required by the laws of the society;

(ii)    election of delegates may be accomplished by mail;

(iii)    the elected representatives of the society:

1.    are a majority of the supreme legislative or governing body;

2.    have at least two-thirds of the votes; and

3.    have at least the number of votes required to amend the laws of the society;

(iv)    at least once every 4 years:

1.    the supreme legislative or governing body of the society meets; and

2.    officers, representatives, or delegates of the society are elected;

(v)    each insured member is eligible for election to act or serve as a delegate to the meeting;

(vi)    the society has a board of directors that:

1.    is responsible for the management of the affairs of the society between meetings of the supreme legislative or governing body;

2.    is subject to control by the supreme legislative or governing body;

3.    except when a vacancy is filled between meetings of the supreme legislative or governing body, is elected by the supreme legislative or governing body; and

4.    has powers and duties delegated by the laws of the society;

(vii)    the officers of the society are elected by the supreme legislative or governing body or by the board of directors; and

(viii)    the members, officers, representatives, or delegates of the society may not vote by proxy; or

(2)    (i)    the society provides in its laws for a supreme legislative or governing body composed of:

1.    a board composed of individuals elected by the members, either directly or by their representatives in intermediate assemblies; and

2.    any other individuals required by the laws of the society;

(ii)    election of the board may be accomplished by mail;

(iii)    the term of an elected board member may not exceed 4 years;

(iv)    the individuals elected to the board:

1.    are a majority of the board; and

2.    have at least the number of votes required to amend the laws of the society;

(v)    vacancies on the board between elections are filled as prescribed by the laws of the society;

(vi)    an individual filling the unexpired term of an elected board member is considered to be an elected member; and

(vii)    the board meets at least quarterly to conduct the business of the society.