"Commissioner of insurance."-See note to section 14 of this compilation. Mich. Mut. Ins. Co. v. Detroit Com. Council, 133 / 411.

missioner of

examine a company.

license.

of investiga

(24) § 7201. SEC. 12. Whenever the secretary of state When com[commissioner of insurance] shall have reason to suspect the insurance to correctness of any annual statement, or that the affairs of the company making the same are in an unsound condition, it shall be his duty to cause an examination to be made into the books, papers, and securities of such company, at its expense, and for that purpose he shall be vested with power to examine under oath any of the officers or agents of such company, relative to the business and assets thereof, and to make any other or further inquiries necessary for obtaining full information of its condition; and if in his opinion the condition May revoke of the company is such as to render it improper that it should continue to issue policies in this state, he shall have the power to revoke the license of such company; and whenever he shall Publish result deem it for the public interest so to do, he shall publish the tion. result of such investigation in such newspaper as he shall select, or if the company is one organized under the laws of this state, then in some newspaper published in the county where the principal business office of the company is located, and he shall call the attention of the attorney general to the Attorney general to apply information obtained, whose duty it shall be to apply to the for order to supreme court for an order requiring the company to show show cause. cause why their business within the state should not be closed, and such court may give direction for the hearing of the proofs and allegations of the parties; and in case it shall When suappear to the satisfaction of the court, from said proofs and to issue order. allegations, that the assets and funds of the company are not sufficient to warrant its continuing to issue policies, the said court shall make an order prohibiting such company from issuing any further policies, and it shall thereupon become unlawful for the company, or any of its agents or officers, to receive any further applications or to issue any further policies, or make any further contracts of insurance. The Securities to securities so deposited with the state treasurer shall remain state treasin his hands, notwithstanding the company may cease or be urer. prohibited to do business within the state, and shall only be How same withdrawn on the order of the supreme court, or when the withdrawn. officers of the company shall show by affidavit to the satisfaction of the secretary of state [commissioner of insurance] and state treasurer that the risks for which the company remains liable, and for the security of which the same are held, are less than the securities so deposited, in which case · the company may be permitted to withdraw the surplus securities over and above the risks which then remain.

"Commissioner of insurance."-See note to section 14 of this compilation. The legislature may provide for an examination into the affairs of insurance companies doing business in this state and may enforce such examination by mandamus.--l'eople v. State Ins. Co., 19/392. The commissioner can revoke a license only upon the investigation and proceedings, and in the particular cases, fixed by the statutes.-Nat'l Life Ins. Co. v. Commissioner, 25 / 321. After the commissioner has revoked the authority of a foreign insurance company, it cannot recover upon premium notes, upon

preme court

remain with

may be

How corporate franchises or right to do

Supreme court may declare such forfeiture.

Penalty for false statement.

which, by the terms of its policies, payments fall due in advance.-American Ins. Co. v. Stoy, 41/385. The state treasurer will not be required to permit the withdrawal of securities, when the condition of a company's affairs are such as to render further business imprudent, and when the death claims and policies outstanding approximate the deposit; nor unless such application therefor, as the statute contemplates, has been made.-Imperial Life Ins. Co. v. State Treasurer, 95/513.

(25) § 7202. SEC. 13. Any false statement in any report required to be made under this act, or any statement so business may made as fraudulently to conceal the real facts, if intentionally so made, shall, if the company be organized under the laws of this state, be cause of forfeiture of the corporate franchises; and if the company be organized under the laws of any other state or government, be cause of forfeiture of the right to transact business within this state, and such forfeitures may be declared by the supreme court, in any proper proceeding instituted by the attorney general for the purpose; and any officer or agent guilty of any such false or fraudulent statement, or of any intentional violation of the provisions of this act, or who shall aid or abet others in any such violation, shall be deemed guilty of a misdemeanor, and upon conviction thereof, shall be punishable by fine not exceeding one thousand dollars, or by imprisonment in the county jail not exceeding three months, or by both such fine and imprisonment; and it shall be the duty of the secretary of state [commissioner of insurance] to notify the prosecuting attorney of the proper county, of any offense under this act which may come to his knowledge, and it shall thereupon become the duty of such prosecuting attorney to cause proceedings to be taken for the punishment thereof.

Duty of commissioner thereunder.

Companies

to be bodies

politic.

(26) § 7203. SEC. 14. All companies formed under this corporate and act shall be deemed bodies corporate and politic, and shall be subject to all the provisions of the general laws of this state regarding corporations, so far as the same may be applicable; and they may maintain all proper suits at law and in equity against their members and stockholders, or any other person or persons, and be liable to be sued on any obligation they may have assumed, or for any loss which may have occurred, if payment for such loss is withheld more than sixty days after proofs thereof are furnished.

Amendments to articles.

Notice of meeting.

(27) § 7204. SEC. 15. Any company formed under this act shall have the power to amend its articles of association, at any regular meeting of the stockholders or members. called by the directors for that purpose. But notice of such meeting and of the purpose for which it is called shall be served on each of the stockholders, or, if it is a mutual company, on each of the members, either personally or by directing the same through the postoffice, to the last known postoffice address of such stockholder or member, at least three weeks Amendments previous to such meeting. But such amendments shall not to attorney take effect until submitted to the attorney general, and certified by him not to conflict with the constitution or laws of this state, nor until a copy thereof, signed by the president

submitted

general.

filed.

and secretary of the company, shall be filed in the office of the Where to be commissioner of insurance and of the county clerk where the original articles were filed; and any company organized to transact the business of life insurance or insurance against Companies formerly organaccident or sickness under any laws of this state, may re- ized to have organize under this law, and have the benefit of all its pro- benefits of act. visions, by a vote of the stockholders, or, if it be a mutual company, then by a vote of the members called for that purpose, in pursuance of its present articles, on entering into new articles of association, signed by its charter officers. setting forth the particulars required by the second section of this act, and filing a copy of such articles with the commissioner of insurance and the proper county clerk, after such a certificate of the attorney general has been obtained as is required when articles are amended; and such company, in so reorganizing, shall be at liberty to make any change in its mode of doing business, not inconsistent with the provisions of this act, and to increase its capital stock, or to retire any guaranteed capital stock, as the stockholders or members may deem proper; but in so reorganizing they shall be subject to all the provisions of this act in regard to the deposit of securities, and to all its other provisions in the same manner and to the same extent as if such company had not previously had a corporate existence.

Am. 1899, Act 177.

two per cent to

foreign

companies.

treasurer may

(28) § 7205. SEC. 16. All insurance companies insuring Specific tax of life within this state, and not deriving corporate existence be paid by from its laws, shall annually, at the time of filing their annual report with the commissioner of insurance, pay to the state treasurer a tax of two per centum on all premiums received in cash or otherwise, by such companies or their agents within this state, or from insured parties residing therein during the preceding year; and in case of neglect or refusal When state of such company to pay such tax within ten days after the collect tax. filing of such report, the state treasurer may proceed to collect the same out of the interests or dividends on any securities that such company may have deposited with him, as hereinafter provided; and in case no such securities are deposited, then it shall not be lawful for the company in default to receive any application for insurance, or to issue any policy, until such tax is paid; and any agent or officer receiving any such application, or issuing such policy, while such default continues, shall be liable to a penalty of one hundred dollars, to be collected in the same manner with the other penalties herein before provided; and the specific tax herein provided for shall be in lieu of all other taxes in this state.

Construction of this section, prior to the amendment of 1875, with section 7 of this compilation.-Conn. M. L. Ins. Co. v. State Treasurer, 31 / 6.

(29) § 7206. SEC. 17. No policy of insurance on life Forfeiture of issued after this act shall take effect, by any company or

policy.

Company to furnish data annually.

est, etc.

ganized under the laws of this state, shall be forfeited or become void by the non-payment of any premium thereon, after the third, any further than as follows: The net value of the policy when the premium becomes due and is not paid shall be ascertained according to the "American experience table" rate of mortality, with interest at four per centum per annum. A surrender charge shall be first deducted from such net value on the following basis, to wit: From policies that have paid three full years' premiums, forty per cent; from policies that have paid four full years' premiums, thirty-six per cent; from policies that have paid five full years' premiums, thirty-two per cent; and so on in like manner decreas ing the discount four per centum for each full year's premium paid until the discount is exhausted, when no render charge shall be made. After deducting the surrender charge from the net value, the remainder shall be considered a net single premium of whole life non-participating insurance, and the amount it will insure shall be determined according to the age of the party at the time when the unpaid premium became due and the assumptions aforesaid in regard to rate of interest and table of mortality. In case of any indebtedness on any policy, such indebtedness shall be first deducted from the net value remaining after deducting the discount, and the remainder, if any, shall be used as the net single premium as aforesaid.

sur

Where a company takes a note for premium due and gives renewal receipts therefor, the policy continues in force and the company cannot afterward insist upon its forfeiture as for non-payment.-Mich. Mut. Life Ins. Co. v. Bowes, 42/19; Tabor v. Mich. Mut. Life Ins. Co., 44/324. And a bill in equity lies to re-establish the policy if surrendered.-Tabor v. Mich. Mut. Life Ins. Co., 44/324. What not deemed a revival of a lapsed policy.— Clark v. Metropolitan Life Ins. Co., 107 / 160. Non-forfeitable after third payment. Mich. Mut. Ins. Co. v. Detroit Com. Council, 133 / 411.

(30) § 7207. SEC. 18. Every company doing a business of life insurance within this state shall annually in the month of January, furnish the secretary of state [commissioner of insurance] the data necessary for determining the amount of its liabilities, and the valuation of all its outstanding policies to be made by the secretary of state [commissioner of insurance], or under his authority, and in making such valuation, Rate of inter- the rate of interest to be assumed shall, after and including the year eighteen hundred and ninety-six, be four per centum per annum, and at the election of any such insurance company such rate of four per centum shall be assumed any year prior to eighteen hundred and ninety-six, and the rate of mortality shall be that established by the "American experience life table," as shown in the schedule hereto annexed, and such company shall pay the secretary of state [commissioner of insurance], as a compensation for such estimate, one cent for each thousand dollars insured: Provided, That where, by the laws of any other state, an annual valuation is required to be made by an insurance commissioner or other state officer, the official certificate of any such commissioner or

Fee.

Proviso.

officer, being filed with the secretary of state [commissioner of insurance], and showing the annual official valuation of the policies of any company doing business within such state, and showing also the basis of such valuation, shall be sufficient, and stand in the place of any valuation of the policies of such company, by or under the direction of the secretary of state [commissioner of insurance] of this state; but no com- Companies pany shall be permitted to transact business within this state, transact busiunless the amount of its assets shall equal the net value of all ness, etc. its outstanding obligations, as determined according to the assumptions in regard to rates of interest and mortality as hereinbefore provided; and in case the assets of any company transacting business within this state shall at any time be

prohibited to

notice, etc.

less than is required by the provisions of this act, the secre- Commissioner tary of state [commissioner of insurance] shall serve a writ- to serve ten notice upon the person designated by such company to receive service of process under the laws of this state, or shall address such notice by mail to the principal office of such company, and publish the same at least three times in some newspaper circulated daily in this state; and if, after the Notice to be expiration of ten days from the service of publication of such published. notice, any agent or officer of such company shall receive applications for policies, or issue policies, while such deficiency of assets exists, and the cost of giving such notice remains unpaid by such company, he shall be subject to the penalties provided in section ten of this act: Provided further, That Further when the certificate of the secretary of state [commissioner proviso. of insurance] of the official valuation of the policies issued by any company organized under the laws of this state, shall not be accepted by any other state in lieu of a valuation of the same by the insurance officer of such other state, then all companies organized under the laws of such other state, shall be required to have a separate valuation made under the authority of the secretary of state [commissioner of insurance] of this state, as herein provided.

"Commissioner of insurance."-See note to section 14 of this compilation. The method of taxation provided is not obnoxious to the constitutional requirement of uniformity.-Mich. Mut. Life Ins. Co. v. Hartz, 129/104. This section clearly recognizes that, to arrive at the net assets of the company, it is necessary to deduct from its gross assets its liabilities; and it is equally clear that the property owned by an insurance company cannot be said to be more than the difference between these two sums.-Mich. Mut. Ins. Co. v. Detroit Com. Council, 133 / 411.

to amount of

(31) § 7208. SEC. 19. If any company insuring life False reprewithin this state shall, by means of any advertisement, cir- sentations as cular, notice or statement, printed or written, published, capital. posted, or circulated through and by the agency of any officer, agent, or other person, or by any other means, falsely represent or hold out to the public that the capital stock of such company is greater than its actual amount, or that the accumulation of such company is greater than its actual cash or market value, every director, officer, or agent of such company guilty of any participation therein, shall be deemed