Ins. Code, § 11013

Upon receipt of a preliminary certificate from the commissioner, the society may solicit members for the purpose of completing its organization, shall collect from each applicant the amount of not less than one semiannual payment or six monthly payments, in accordance with its table of rates as provided by its constitution and laws, and shall issue to each such applicant a receipt for the amount so collected. No society shall incur any liability other than for the return of such advance payment, nor issue any certificate, nor pay, allow, or offer or promise to pay or allow any death or disability benefit to any person until:

(a) Actual bona fide applications for death benefits have been secured aggregating at least five hundred thousand dollars ($500,000) on not less than 500 lives.

(b) All such applicants for death benefits shall have been regularly examined by qualified practicing physicians or shall have made acceptable declarations of insurability.

(c) Certificates of examinations or acceptable declarations of insurability meeting the established underwriting standards of the society have been duly filed and approved by the society.

(d) Ten subordinate lodges or branches have been established into which the 500 applicants have been admitted.

(e) There has been submitted to the commissioner, under oath of the president or secretary, or corresponding officer of the society, a list of such applicants, giving their names, addresses, date each was admitted, name and number of the subordinate branch of which each applicant is a member, amount of benefits to be granted and rates therefor.

(f) It shall have been shown to the commissioner, by sworn statement of the treasurer, or corresponding officer of such society, that at least 500 applicants have each paid in cash at least one semiannual payment or six monthly payments as herein provided, which payments in the aggregate shall amount to at least five thousand dollars ($5,000), all of which shall be credited to the fund or funds from which benefits are to be paid, and no part of which may be used for expenses. Said advance payments shall be held in trust during the period of organization and if the organization has not qualified for a certificate of authority within one year or within the extended period, as provided in Section 11012, such payments shall be returned to said applicants.