Friendly society

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The club secretary calling the roll of the Harting Old Club, one of the oldest friendly societies in England The Old Club Roll is called - geograph.org.uk - 599681.jpg
The club secretary calling the roll of the Harting Old Club, one of the oldest friendly societies in England

A friendly society (sometimes called a benefit society, mutual aid society, benevolent society, fraternal organization or ROSCA) is a mutual association for the purposes of insurance, pensions, savings or cooperative banking. It is a mutual organization or benefit society composed of a body of people who join together for a common financial or social purpose. Before modern insurance and the welfare state, friendly societies provided financial and social services to individuals, often according to their religious, political, or trade affiliations. These societies are still widespread in many parts of the developing world, where they are referred to as ROSCAs (rotating savings and credit associations), ASCAs (accumulating savings and credit associations), burial societies, chit funds, etc.

Contents

Character

Before the development of large-scale government and employer health insurance and other financial services, friendly societies played an important part in many people's lives. Many of these societies still exist. In some countries, some of them developed into large mutually-run financial institutions, typically insurance companies, and lost any social and ceremonial aspect they may have had; in others they continue to have a role based on solidarity and democracy without an objective to make profit. The current position of the mutual benefit society in Europe is well described in a report from 2012, commissioned by the European Commission. [1] Healthcare mutuals worldwide are coming together in Association Internationale de la Mutualité, a Brussels-based association of healthcare mutuals.

United Kingdom

Friendly societies in countries such as the United Kingdom were subject to prudential regulation to safeguard the financial interests of their members and secure the benefits promised to them, but the legislation (see for example Friendly Societies Act 1875) was separate from that applicable to insurance companies. In other countries friendly societies have no specific legal status, which means that they have to comply to the same rules and regulations as for-profit insurance companies. [2]

In some cases, especially in America, members typically paid a regular membership fee and went to lodge meetings to take part in ceremonies. If members became sick, they would receive an allowance to help them meet their financial obligations. The society might have a doctor whom the member could consult for free. Members of the lodge would visit to provide emotional and other support (and possibly to verify that the sick member was not malingering). When a member died, the funeral would be paid for and the members of the lodge might attend in ceremonial dress. Often, there was some money left over for the next of kin.

Friendly societies might also organize social functions such as dances, and some had sports teams for members. They occasionally became involved in political issues that were of interest to their members. Others were purely financial, with little or no social side, from their foundation—this was more typical in Britain. The first mutual savings bank, founded in Scotland in 1810, was called the "Savings and Friendly Society". Credit unions and other types of organization are modern equivalents.

Friendly society brasses were the emblems of village friendly societies or clubs common in the west of England between the late 18th and early 20th centuries. The use of brasses as emblems was particularly prevalent in Somerset and the surrounding counties. [3] The Museum of English Rural Life has a collection of over 900 Friendly Society Brasses aka poleheads. The design of the brasses was sometimes conventional or sometimes represented an interest of the club such as the inn in which the meetings were held. [4]

Female friendly societies

Female friendly societies became a common form of friendly society in England during the 19th century e.g. the York Female Friendly Society, founded in 1788 by Faith Gray and Catherine Cappe. Grey and Cappe ran schools for girls and this society was intended to assist them. [5] Another early Female Society was the Wisbech Female Friendly Society instituted on 1 February 1796. [6]

Registration and regulation

Australia

In Australia, friendly societies are regulated under the Life Insurance Act 1995 (C'th) [7] and registered with APRA. [8]

Friendly societies were first established in Australia by community groups in the 1830s and have evolved into member-focused providers of financial services, healthcare, retirement living, aged and home care services, transport, pharmacies and other fraternal services to over 800,000 members. They typically provide savings, investment and insurance products. [9]

Republic of Ireland

In Ireland, friendly societies are registered with the Registrar of Friendly Societies under the Friendly Societies Acts 1896–2014 (the Registrar for Companies is also the Registrar for Friendly Societies, Industrial and Provident Societies and Trade Unions). [10]

In 2014 the Friendly Societies and Industrial and Provident Societies (Miscellaneous Provisions) Act, 2014, provided for the cessation of new friendly societies; as a result no new societies may be registered. [11] It was felt that the form of organisation had outlived its usefulness, largely for reasons mentioned above. When the minister's staff examined the register, it was found that only three new societies had registered in the previous nine years, as the use of the traditional friendly society types of business had become regulated elsewhere and a 'rump', which on examination are largely public-service types, remain (mainly army, customs, gardaí, and prison officers). Many of the others could expect to cease to trade if additional, or a normal regulatory environment was required (similar to companies, health and other business (loan organisations). [12] The 2014 Act also provided that existing societies may not establish a 'loan fund' from the commencement of the Act (July 28, 2014). [13]

United Kingdom

Friendly Societies Act 1974
Act of Parliament
Royal Coat of Arms of the United Kingdom (variant 1, 1952-2022).svg
Long title An Act to consolidate the Friendly Societies Acts 1896 to 1971 and certain other enactments relating to the societies to which those Acts apply with amendments to give effect to recommendations of the Law Commission and the Scottish Law Commission.
Citation List of acts of the Parliament of the United Kingdom from 1974
Dates
Royal assent 31 July 1974
Text of statute as originally enacted
Text of the Friendly Societies Act 1974 as in force today (including any amendments) within the United Kingdom, from legislation.gov.uk.
Friendly Societies Act 1992
Act of Parliament
Royal Coat of Arms of the United Kingdom (variant 1, 1952-2022).svg
Long title An Act to make further provision for friendly societies; to provide for the cessation of registration under the Friendly Societies Act 1974; to make provision about disputes involving friendly societies or other bodies registered under the Friendly Societies Act 1974 and about the functions of the Chief Registrar of friendly societies; and for connected purposes.
Citation 1992 c. 40
Dates
Royal assent 16 March 1992
Text of statute as originally enacted
Text of the Friendly Societies Act 1992 as in force today (including any amendments) within the United Kingdom, from legislation.gov.uk.

Friendly societies are registered under either the Friendly Societies Act 1974 or the Friendly Societies Act 1992. [14] There are the following types of society registered under the Friendly Societies Act 1974:

The activities of these societies varies, but includes:

Some friendly societies are still governed by the 1974 act, although no new societies can be registered under that act. [14] Friendly societies registered under the Friendly Societies Act 1992 are incorporated entities and are registered for effecting and carrying out contracts of insurance.

Similar organisations were called industrial and provident societies. They are trading businesses or voluntary organisations. Recent legal developments in Great Britain include the Co-operative and Community Benefit Societies Act 2014, which has renamed these societies as co-operative or community benefit societies. Examples include co-operatives for consumers, workers, agriculture and housing, working men's clubs, Women's Institute markets, allotment societies, mutual investment companies, housing associations and some social enterprises. Many sports clubs are registered under these provisions.

Friendly societies, alongside other mutual societies, are registered with the Financial Conduct Authority. [15] Until December 2001, the regulator was the Registrar of Friendly Societies, and from then until April 2013 the Financial Services Authority. [16]

See also

Related Research Articles

The Independent Order of Foresters, operating as Foresters Financial, is a fraternal benefit society headquartered in Toronto, Ontario, Canada that provides life insurance and other financial solutions in Canada, the United Kingdom, and the United States. As of 2022, Louis Gagnon has served as the company's president and CEO.

<span class="mw-page-title-main">Independent Order of Rechabites</span> Fraternal organisation and friendly society, 1835-

The Independent Order of Rechabites (IOR), also known as the Sons and Daughters of Rechab, is a fraternal organisation and friendly society founded in England in 1835 as part of the wider temperance movement to promote total abstinence from alcoholic beverages. The Order has been active in Australia from 1843, promoting temperance and as a benefit society. A branch was established in the United States in 1842, and also flourished for a time. In the United Kingdom, the Order trades under the name of Healthy Investment, being well connected in upper society and involved in financial matters; there it gradually transformed into a financial institution which promotes teetotalism.

A mutual organization, or mutual society is an organization based on the principle of mutuality and governed by private law. Unlike a true cooperative, members usually do not contribute to the capital of the company by direct investment, but derive their right to profits and votes through their customer relationship. A mutual organization or society is often simply referred to as a mutual.

<span class="mw-page-title-main">Benefit society</span> Organization formed to provide mutual aid

A benefit society, fraternal benefit society, fraternal benefit order, friendly society, or mutual aid society is a society, an organization or a voluntary association formed to provide mutual aid, benefit, for instance insurance for relief from sundry difficulties. Such organizations may be formally organized with charters and established customs, or may arise ad hoc to meet unique needs of a particular time and place.

<span class="mw-page-title-main">Industrial and provident society</span> Type of corporate entity originating in Britain

An industrial and provident society (IPS) is a body corporate registered for carrying on any industries, businesses, or trades specified in or authorised by its rules.

A mutual insurance company is an insurance company owned entirely by its policyholders. It is a form of consumers' co-operative. Any profits earned by a mutual insurance company are either retained within the company or rebated to policyholders in the form of dividend distributions or reduced future premiums. In contrast, a stock insurance company is owned by investors who have purchased company stock; any profits generated by a stock insurance company are distributed to the investors without necessarily benefiting the policyholders.

<span class="mw-page-title-main">Sons of Temperance</span> Brotherhood of men who promoted the temperance movement

The Sons of Temperance was and is a brotherhood of men who promoted the temperance movement and mutual support. The organization was started in New York City in 1842. In the 1840s, it spread quickly across the United States and some of Canada before reaching the UK, Australia and New Zealand.

A rotating savings and credit association (ROSCA) is a group of individuals who agree to meet for a defined period in order to save and borrow together, a form of combined peer-to-peer banking and peer-to-peer lending. Members all chip in regularly and take turns withdrawing accumulated sums.

The Foresters Friendly Society is a British friendly society which was formed in 1834 as the Ancient Order of Foresters. As of 31 December 2016, the society had approximately 75,000 members. Its head office is located in Southampton, England.

The Canadian Fraternal Association (CFA) was a trade association based in Waterloo, Ontario, for fraternal benefit societies in Canada which engaged in advocacy on their behalf as well as provided services.

Teachers Assurance is a friendly society in the United Kingdom. The company offers a range of savings, investment home insurance, health and life cover for individuals and their families, designed with teachers in mind.

<span class="mw-page-title-main">Co-op Insurance</span>

Co-op Insurance is the trading name of CIS General Insurance, a general insurance company, which is part of the Co-operative Group, based in Manchester, United Kingdom. Co-op Insurance Services, an insurance intermediary incorporated in 2017, is a wholly owned subsidiary of CIS General Insurance.

<span class="mw-page-title-main">UIA Mutual</span>

UIA (Insurance) Limited was a mutual insurance company in the United Kingdom, providing general insurance products to members of the trade union movement and other not-for-profit organisations. It was a member of the Association of British Insurers, authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority. UIA Limited was a wholly owned subsidiary, authorised and regulated by the Financial Conduct Authority.

<span class="mw-page-title-main">Shepherds Friendly Society</span>

Shepherds Friendly Society is a UK friendly society and one of the oldest mutual insurers in the world.

Credit unions in the United Kingdom were first established in the 1960s. Credit unions are member-owned financial cooperatives operated for the purpose of promoting thrift, providing credit and other financial services to their members.

The American Fraternal Alliance (AFA) is an umbrella group of fraternal orders in the United States. It was founded as the National Fraternal Congress of America in 1913, in Chicago and adopted its current name in 2011.

<span class="mw-page-title-main">Co-operative and Community Benefit Societies Act 2014</span> United Kingdom legislation

The Co-operative and Community Benefit Societies Act 2014 (c.14) is an Act of the Parliament of the United Kingdom. It consolidates existing legislation relating to industrial and provident societies, as well as introducing some reforms.

<span class="mw-page-title-main">Company register</span> Faomco company

A company register is a register of organizations in the jurisdiction they operate under.

References

  1. "Archived copy" (PDF). Archived from the original (PDF) on 2013-08-24. Retrieved 2015-01-23.{{cite web}}: CS1 maint: archived copy as title (link)
  2. P.H. Gosden, The friendly societies in England, 1815-1875 (Manchester University Press, 1961).
  3. Fuller, Margaret (1964). West Country Friendly Societies: An Account of Village Benefit Clubs and their Brass Pole Heads. Oakwood Press & University of Reading. p. 119.
  4. "Allen, W.A. (polehead collector) - The Museum of English Rural Life". The MERL. 2019-03-20. Retrieved 2019-09-30.
  5. "Records of the York Female Friendly Society - Archives Hub". archiveshub.jisc.ac.uk. Retrieved 2019-08-11.
  6. "Wisbech Female Friendly Society". Abe Books. Retrieved 20 October 2021.
  7. Life Insurance Act 1995 (C'th)
  8. Licensing guidelines for life insurers and friendly societies
  9. Friendly Societies of Australia 2019-20 Pre-Budget Submission
  10. Companies Registration Office Archived 2017-11-14 at the Wayback Machine , 2013. Retrieved 8 April 2015.
  11. Cessation of Friendly Society registration in Ireland, IrishStatuteBook.ie
  12. Seanad Éireann - 02/Apr/2014 Food Provenance Bill 2013: Leave to Withdraw (Continued)
  13. Bruton, Richard (28 July 2014). "S.I. No. 356 of 2014: FRIENDLY SOCIETIES AND INDUSTRIAL AND PROVIDENT SOCIETIES (MISCELLANEOUS PROVISIONS) ACT 2014 (PARTS 1, 2 AND 3) (COMMENCEMENT) ORDER 2014" (PDF). www.irishstatutebook.ie.
  14. 1 2 "Financial Conduct Authority web-site". 8 October 2015. Retrieved 18 July 2017.
  15. "Mutuals Public Register". Financial Conduct Authority. Retrieved 31 August 2016.
  16. "Particular bodies: friendly societies: meaning of friendly society (CTM40310)". Company Taxation Manual. HMRC. Retrieved 31 August 2016.