A friendly society (sometimes called a mutual 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.
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. Healthcare mutuals worldwide are coming together in Association Internationale de la Mutualité, a Brussels-based association of healthcare mutuals.
Friendly societies in countries such as Great Britain 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 makes that they have to comply to the same rules and regulations as for-profit insurance companies.
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 members died, their funeral would be paid for and the members of their lodge might attend in ceremonial dress—often, there was some money left over from the funeral for the widow. 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 Great 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.
Female friendly societies
Female friendly societies were a common form of friendly society in England during the 19th century e.g. the York Female Friendly Society, founded in 1788. The societies were more common in areas of the country where larger proportions of the female population were in employment.
Registration and regulation
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).
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. 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). The 2014 Act also provided that existing societies may not establish a 'loan fund' from the commencement of the Act (July 28, 2014).
Most friendly societies in the UK today have become incorporated societies and are governed by the Friendly Societies Act 1992. A few are still governed under the previous provisions, contained in the Friendly Societies Act 1974, although no new societies can be registered under that act.
Friendly societies, alongside other mutual societies, are registered with the Financial Conduct Authority. Until December 2001 the regulator was the Registrar of Friendly Societies, and from then until April 2013 the Financial Services Authority.
- P.H. Gosden, The friendly societies in England, 1815-1875 (Manchester University Press, 1961).
- 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.
- Companies Registration Office, 2013. Retrieved 8 April 2015.
- Cessation of Friendly Society registration in Ireland, IrishStatuteBook.ie
- "Mutuals Public Register". Financial Conduct Authority. Retrieved 31 August 2016.
- "Particular bodies: friendly societies: meaning of friendly society (CTM40310)". Company Taxation Manual. HMRC. Retrieved 31 August 2016.
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