§ 1528.Unclaimed Funds Held By Domestic Fraternal Benefit Society

Fraternal benefit societies operate life insurance programs for their members while also funding scholarships and similar community purposes, and Section 1528 recognizes that dual role by carving out a specific exemption. This chapter does not apply to unclaimed funds held by a life insurance corporation organized or admitted as a domestic fraternal benefit society under the Insurance Code, provided those funds are used for scholarship funds.

The exemption comes with a built-in limit. It excludes the costs of administering the scholarship program itself, meaning the society cannot stretch this exemption to cover unclaimed funds it spends on overhead rather than on the scholarships the exemption is meant to support. Funds that do not meet that scholarship-use condition fall back under this chapter's ordinary rules rather than escaping escheat altogether.