The origin of the American fraternal benefit system, which LCBA is a part of, is recognized as October 27, 1868. On that date, John Jordan Upchurch, a railroad master mechanic, organized the first lodge of a fraternal benefit society in Meadville, Pennsylvania. He was anxious to provide the working class with greater privileges and opportunities that were available in the usual trade unions.

Upchurch gathered 14 men, workers in local railroad shops, and formed the Ancient Order of United Workmen. He believed that although some existing organizations provided marvelous funerals for dead members, they didn't provide enough, if any, help for the surviving spouses of the departed members. At the time, there were relatively few companies that sold life insurance. Even when insurance was available, the exorbitant cost removed it from the reach of most Americans.

Upchurch convinced 14 friends to combine the elements of existing fraternal orders and insurance companies. Upon the death of any member, each would be assessed one dollar, to be given to the spouse of the deceased. Thus, affordable insurance protection in the context of fraternalism was born.

Ethnic fraternals were formed to help immigrants learn the language, customs and the trades necessary for assimilation. Religious fraternals were started to provide low-cost life insurance and other peer support among like-minded parishioners. Still other fraternals were based geographically or by occupation. The idea of fraternal protection was novel, because it was born of a need for insurance protection among the working class at rates that they could afford.

The insurance concept proposed by Upchurch and adopted by many other fraternals was a formalized way of "passing the hat" to raise needed funds. This assessment plan kept costs low but was a financially unsound way of doing business. As members grew older and hat-passing more frequent, there was less of an incentive for younger members to join. The average age of the membership climbed while the number of members declined. It was a formula for failure.

The answer was for fraternals to charge adequate rates based on sound actuarial principles in existence today. The legal reserve system mandates that insurance providers protect a portion of regularly collected premiums to pay long-term commitments. When the legal reserve system was wedded to fraternalism, fraternal benefit societies were guaranteed a long, productive life.

Each member has an important voice