Page images
PDF
EPUB

six hundred and two of the Political Code of this state. Nor must any person, corporation, or association, organized or formed under the laws of any other state of country as a mutual insurance company, transact any such insurance business in this state, unless such person, corporation, or association possesses available cash assets equal to at least two hundred thousand dollars, over and above all liabilities for losses reported, expenses, taxes, and reinsurance of all outstanding risks, as provided in said section six hundred and two of the Political Code of this state. En. March 21, 1872. Amd. 1873-74, 269; 1877-78, 80.

Legislative History.

The original section is as follows: “Sec. 419. No company, corporation, or association, shall hereafter be formed or organized under the laws of this state, for the transaction of business in any kind of insurance, except on livestock, without a subscribed capital equal at least to one hundred thousand dollars in United States gold coin, twenty-five per cent whereof must be paid in previous to the issue of any policy, and the remainder by monthly or quarterly installments within twelve months from the day of filing the certificate of incorporation. Nor must any individual or person bo permitted to transact business as agent of any nonresident person or corporation, whether foreign or domestic, in any kind of insurance. except on livestock, unless such person or corporation possesses avail. able cash assets, exclusive of stock notes, to the amount of at least one hundred thousand dollars in United States gold coin, over and above all liabilities.

The amendment of 1873-74 is substantially the sanre, except that it required a subscribed capital of two hundred thousand dollars.

Section Cited.

People v. Flint, 64 Cal. 49, 28 Pac. 495.

Annotation.

Without statement in articles of incorporation of insurance comjany of (1) amount of stock actually subscribed, and (2) that it equals one hundred thousand dollars, such articles do not form a corporation. (People v. Flint, 64 Cal. 49, 28 Pac. 495.)

For requisites of articles of incorporation generally, and effect of failure to comply therewith, see sec. 290, C. C., and notes, ante.

EXCEPTION, CAPITAL OF ONE HUNDRED THOUSAND DOL

LARS. Sec. 420, C. C. Every company, corporation, or association, hereafter formed or organized under the laws of this state for the transaction of business in any kind of insurance not enumerated in section four hundred and nineteen of the Civil Code must have a subscribed capital stock equal to at least one hundred thousand dollars, which must be paid in at the times and in the manner prescribed for the payment of the capital stock of a corporation organized under section four hundred and nineteen of said Civil Code. No company, corporation, or association, formed or organized under the laws of any other state or country as a stock company, must transact any such insurance business in this state without a paid-up capital stock of not less than one hundred thousand dollars in available cash assets, over and above all liabilities for losses reported, expenses, taxes, and reinsurance of all outstanding risks, as provided in section six hundred and two of the Political Code of this state. Nor must any company, corporation, or association, formed or organized under the laws of any other state or country as a mutual insurance company, transact any such insurance business in this state unless such company, corporation, or association possesses available cash assets equal to at least one hundred thousand dollars over and above all liabilities for losses reported, expenses, taxes, and reinsurance of all outstanding risks, as provided in said section six hundred and two of the Political Code of this state. En. Stats. 1877-78, 80.

CHAPTER II. .

FIRE, MARINE, AND TITLE INSURANCE CORPORATIONS. § 424. Payment of subscriptions— Capital to be all paid in twelve

months. § 425. Certificate of capital stock paid up to be filed, and when. § 426. Property which may be insured. § 427. Funds may be invested, how. § 428. Limit of one risk. § 429. Amounts to be reserved before making dividends. § 430. Reservation by companies with less than two hundred thou

sand dollars capital. § 431. Amounts to be reserved by life insurance companies. § 432. Corporations for insuring titles to real estate.

PAYMENT OF SUBSCRIPTIONS-CAPITAL TO BE ALL PAID

IN TWELVE MONTHS. Sec. 424, C. C. The entire capital stock of every fire or marine insurance corporation must be paid up in cash within twelve months from the filing of the articles of incorporation, and no policy of insurance must be issued or risk taken until twenty-five per cent of the whole capital stock is paid up. En. March 21, 1872.

Fire insurance: See sec. 2752, C. C.
Marine insurance: Sec. sec. 2655 et seq., C. C.

Act conferring power to establish fire patrol: See post, Appendix, title “Fire Patrol.'

County fire insurance companies, act providing for: See post, Appendix, title “Insurance."

CERTIFICATE OF CAPITAL STOCK PAID UP TO BE FILED,

AND WHEN. Sec. 425, C. C. The president and a majority of the directors must within thirty days after the payment of the twentyfive per cent of the capital stock, and also within thirty days after the payment of the last installment or assessment of the capital stock limited and fixed, prepare, subscribe, and swear to a certificate setting forth the amount of the fixed capital and the amount thereof paid up at the times respectively in this section named, and file the same in the office of the county clerk of the county where the principal place of business of the corporation is located, and a duplicate thereof, similarly execated, with the insurance commissioner. En. March 21, 1872.

PROPERTY WHICH MAY BE INSURED.

Sec. 426, C. C. Every corporation formed for fire or marine insurance, or both, may make insurance on all insurable interests within the scope of its articles of incorporation, and may cause itself to be reinsured. En. March 21, 1872.

Insurable interest defined: See post, sec. 2546, C. C.

Annotation.

The officers of an insurance company have no power, as agents of an applicant, to apply to another insurer for a policy as such agent, so as to make the corporation or its stockholders liable to the insurer for the premium. (Hutchinson v. 8. I. & I. Co., 53 Cal. 622.)

FUNDS MAY BE INVESTED, HOW.

Sec. 427, C. C. Corporations organized subsequent to April first, eighteen hundred and seventy-eight, under the laws of this state, for the transaction of business in any kind of insurance, may invest their capital and accumulations in the following named securities :

1. In the purchase of or loans upon interest-bearing bonds of the United States government.

2. In the purchase of or loans upon interest-bearing bonds of any of the states of the United States, not in default for interest on such bonds.

3. In the purchase of or loans upon interest-bearing bonds of any of the counties and incorporated cities and towns of the states of California and Oregon, not in default for interest on such bonds.

4. In loans upon unencumbered real property, worth at least one hundred per cent more than the amount loaned; or upon merchandise or cereals in warehouse, but in no instance shall such loan be made in excess of seventy-five per cent of the security taken.

5. Corporations engaged in the business of insuring titles to real estate may, after the investment of one hundred thousand dollars in the manner provided for in subdivisions one, two, three, and four of this section, invest an amount not exceeding fifty per cent of their subscribed capital stock in the preparation or purchase of the materials or plant necessary to enable them to engage in such business; and such material or plant shall be deemed an asset, valued at the actual cost thereof, in all statements and proceedings required by law for the ascertainment and determination of the condition of such corporations.

6. Corporations organized for and engaged in the business of fire and marine insurance may, after the investment of two hundred thousand dollars, and corporations formed or organized for the transaction of business in any kind of insurance not enumerated in section four hundred and nineteen of the Civil Code may, after the investment of one hundred thousand dollars in the manner provided in subdivisions one, two, three, and four of this section, invest the balance of their capital, and any accumulations, in interest-bearing first mortgage bonds of any corporations (except mining companies), not in default of interest, organized and carrying on business under the laws of any state of the United States; provided, that a two-thirds vote of all the directors of such corporations shall approve such investment. It shall be the duty of the officers of such corporation to report quarterly, on the first days of January, April, July, and October of each year, to the insurance commissioner, a list of such investments so made by them; and the insurance commissioner may, if such investments, or any of them, seem injudicious to him, require the sale of the same. But no investment in the securities named in subdivisions one, two, three, and six of this section, must be made in an amount exceeding the market value of such securities at the date of such investment. En. March 21, 1872. Amd. 1873-74, 210; 1877-78, 81; 1887, 22; 1899, 66.

« PreviousContinue »