From the Tribune-Review: Fraternal society puts $12 million lien on policies reflecting a issue confronting many of the country’s fraternal organizations. Pennsylvania has placed particularly stringent requirements on fraternal organizations and in particular on their operational liquidity. It should be noted that most, if not all are completely secure in terms of their death benefit funding.

The PNCC’s fraternal, the Polish National Union (Spójnia), which also includes the Russian Orthodox Catholic Mutual Aid Society (ROCMAS) is quite secure. The PNU was founded because Polish-American organizations acceded to Roman Catholic demands to exclude PNCC members.

Beaver-based Greek Catholic Union —” the state’s largest fraternal-benefit society —” has placed $12 million in liens on members’ policies in an unusual bid to shore up a capital base wracked by financial markets.

The balance-sheet maneuver equals an average $300 off the cash-surrender value, or 2 percent, of each member’s life insurance or annuity contract. The society explained the liens in letters sent to its roughly 40,000 members within the last month.

“As long as they don’t cash the policy, they don’t see any reduction in the value” of the insurance policy or annuity contract, GCU national President George Juba said Tuesday. Only those who cash in while the lien is still in effect are affected.

How soon the lien may be lifted, “only time will tell,” said Juba, “but as soon as possible.” He added “it depends on “economic and investment market conditions.”

The society’s surplus has dwindled from $23.2 million in March 2008 to $5.1 million this past March, according to the most recent data from the local organization.

GCU’s stock and bond investments have declined in value. The organization posted net income of $349,000 in the quarter ended March 31, according to the most recent data. It had a net loss of $858,000 the year earlier.

The Greek Catholic Union issues insurance and annuities products in 17 states. It was organized in 1892 by immigrants from the Carpathian Mountain region of the former Austro-Hungarian empire.

Fraternal benefit societies are nonprofit organizations that provide life insurance, annuities and health insurance to members. They are linked by a common ethnic or religious background, such as the Polish Women’s Alliance of America or the Mennonite Mutual Aid Association. More than 70 such groups in the United States and Canada sponsor a range of social- and community-service events.

Juba said “less than 3 percent” of members, or about 1,000 people, had contacted the society about the liens.

“They seem to be understanding of the current condition,” he said…