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INSURANCE CORPORATIONS TO FURNISH DATA TO INSUR
ANCE COMMISSIONER-EMPLOYMENT OF ACTUARY. Sec. 447, C. C. Every life insurance corporation organized under the laws of this state must, on or before the first day of February of each year, furnish the insurance commissioner the necessary data for determining the valuation of all its policies outstanding on the thirty-first day of December then next preceding. And every life insurance company organized under the laws of any other state or country, and doing business in this state, must, upon the written requisition of the commissioner, furnish him, at such time as he may designate, the requisite data for determining the valuation of all of its policies then outstanding; such valuations must be based upon the rate of mortality established by the American experience life table and interest at four and one-half per cent per annum; provided, that from and after the thirty-first day of December, A. D. one thousand eight hundred and ninety-one, such valuations must be based upon the rate of mortality established by the combined experience or actuaries' table of mortality, with interest at the rate of four per cent per annum. When the laws of any other state or territory require of a life insurance company organized under the laws of this state a valuation of its outstanding policies by any standard of valuation different from that named in this section, the insurance commissioner is hereby authorized to make such valuation for use in such other state or territory, and to issue his certificate in accordance therewith. For the purpose of making the valuations, the insurance commissioner is authorized to employ a competent actuary, whose compensation for such valuations shall be three cents for each thousand dollars of insurance, to be paid by the respective companies whose policies are thus valued. En. March 21, 1872. Amd. 1873-74, 211; 1889, 35.
The original section is as follows: "Sec. 447. Every life insurance corporation doing business in this state, or formed under the provisions of this part, must, on or before the first Monday in January of each year, furnish the insurance commissioner the necessary data for determining the valuation of all its policies outstanding on the thirty-first day of December next preceding; which valuation must be based upon the rate of mortality as established by the American experience life table. The rate of interest to be assumed must be four and one-half per cent per annum.
The amended section of 1873-74 is substantially the same as now, except that it did not contain the next to the last sentence.
NO STAMP REQUIRED ON ACCIDENT INSURANCE CONTRACT.
Sec. 448, C. C. No stamp is required nor stamp duty exacted on any contract of insurance, when such contract insures against accident which may result in injury or death. En. March 21, 1872.
See act of March 28, 1874, relative to mutual beneficial and relief associations, Appendix, title “Benefit Societies.'
VALUATION OF POLICIES, RETALIATORY PROVISIONS.
Sec. 449, C. C. When the certificate of the insurance commissioner of this state, of the valuation of the policies of a life insurance company, as provided in section four hundred and forty-seven of the Civil Code of this state, issued to any company organized under the laws of this state, shall not be accepted by the insurance authorities of any other state, in lieu of a valuation of the same, by the insurance officer of such other state, then every company organized under the laws of such other state doing business in this state, shall be required to have a separate valuation of its policies made under the authority of the insurance commissioner of this state, as provided in section four hundred and forty-seven of the Civil Code. En. Stats. 1873-74, 270.
POLICY TO CONTAIN WHAT PROVISIONS.
Sec. 450, C. C. Every contract or policy of insurance hereafter made by any person or corporation organized under the laws of this state, or under those of any other state or country, with and upon the life of a resident of this state, and delivered within this state, shall contain, unless specifically contracted between the insurer and the insured for tontine insurance, or for other term or paid-up insurance, a stipulation that when, after three full annual premiums shall have been paid on such policy, it shall cease or become void solely by the nonpayment of any premium when due, its entire net reserve, by the American experience mortality, and interest at four and one-half per cent yearly, less any indebtedness to the company on such policy, shall be applied by such company as a single premium, at such company's published rates in force at the date of original policy, but at the age of the insured at the time of lapse, either to the purchase of nonparticipating term insurance for the full amount insured by such policy, or upon the written application by the owner of such policy, and the surrender thereof to such company within three months from such nonpayment of premium, to the purchase of a nonparticipating paid-up policy, payable at the time the original policy would be payable if continued in force; both kinds of insurance to be subject to the same conditions, except as to payment of premiums, as those of the original policy. It may be provided, however, in such stipulation, that no part of such term insurance shall be due or payable, unless satisfactory proofs of death be furnished to the insuring company within one year after death, and that if death shall occur within three years after such nonpayment of premium, and during such term of insurance, there shall be deducted from the amount payable the sum of all the premiums that would have become due on the original policy if it had continued in force. If the reserve on endowment policies be more than enough to purchase temporary insurance, as aforesaid, to the end of the endowment term, the excess shall be applied to the purchase of pure endowment insurance, payable at the end of the term, if the insured be then living. If any life insurance corporation or company shall deliver to any person in this state a policy of insurance upon the life of any person residing in this state, not in conformity with the provisions of this section, the right of such corporation or company to transact business in this state shall thereupon and thereby cease and terminate, and the insurance commissioner shall immediately revoke the certificate of such corporation or company authorizing it to do business in this state, and publish such revocation, daily, for the period of two weeks, in
two daily newspapers, one published in the city of San Francisco and the other in the city of Sacramento. En. Stats. 1873-74, 271. Amd. 1877-78, 82; 1880, 91. Legislative History.
The original section is follows: “Every policy of in. surance upon life issued hereafter within the limits of the state of California, whether by a person or corporation, organized under the laws of this state, or under those of any other state or country, or by the agent of such person or corporation, must contain written evidence that it was issued in this state. And any such policy issued in this state, which shall not contain such written evidence, is at the option of the holder null and void. And the person or corporation issuing such policy, without the evidence hereinbefore required, shall forfeit to the people of the state of California, for each and every policy so issued, the sum of one hundred dollars in United States gold coin, to be collected by the insurance commissioner, as provided by section 598 of the Political Code.”
The amendment of 1877-78 is as follows: “Every policy of insurance upon life, hereafter issued and delivered within the limits of the state of California, whether by a person, or corporation organized under the laws of this state or under those of any other state or country, or by the agent of such person or corporation, must contain written evi. dence that it was issued in this state. And the person or corporation, and the agent thereof, issuing and delivering such policy, without the evidence hereinbefore required, shall forfeit to the people of the state of California the sum of one hundred dollars for cash (each] and every policy so issued, to be recovered by the insurance commissioner by suit in the name of the people of the state of California, in any court of competent jurisdiction. [In effect, April 1, 1878.]”
Straube v. Pacific M. L. Ins. Co., 123 Cal. 679, 680, 56 Pac. 546; Rife v. Union Cent. Ins. Co., 129 Cal. 455, 62 Pac. 48. Annotation.
Construction of Section. The provision of this section requiring domestic companies insuring residents by policies delivered here, to contain a stipulation that after three years' annual premiunrs have been paid, the net reserve shall be applied as a premium, and imposing as a penalty for failure to do so, the cessation of the right of the company to do business in this state, is not made a part of the contract of insurance, in the absence of such stipulation, and does not make the required stipulation a part of the policy as r.atter of law. (Straube v. Pacific M. L. Ins. Co., 123 Cal. 677,56 Pac. 546. To same effect: Rife v. Union Cent. Ins. Co., 129 Cal. 458, 62 Pac. 48.)
And when such stipulations are inserted in the policy, they are Diere matters of agreement, which may be waived by the consent of the parties. After payment of more than three years' premiums where a cash loan upon the policy of nearly the full amount of the net reserve, and the note given therefor stipulates that, if the policy shall at any time thereafter lapse for nonpayment of premium, all provisions in the policy for the issue of a paid-up or a term policy stall become null and void, such stipulation is a reasonable and valid protection of the note, and operates as a waiver of the terms of the policy. (Rife v. Union Cent. Ins. Co., 129 Cal. 455, 62 Pac. 48.)
FRATERNAL SOCIETIES EXEMPT FROM INSURANCE LAWS.
Sec. 451, C. C. All associations or secret orders, and other benevolent or fraternal co-operative societies, incorporated or organized for the purpose of mutual protection and relief of its members, and for the payment of stipulated sums of money to its members, or to the family of deceased members, and not for profit, are declared not to be insurance companies in the sense and meaning of the insurance laws of this state, and are exempt from the provisions of all existing insurance laws of this state. En. Stats. 1873-74, 271. Amd. 1877-78, 82. Rep. 1880, 92. En, Stats. 1885, 221.
The original section, 451, provided for a “surrender value," and its determination and payment upon the surrender or cancellation of a policy.
Perkins v. Fish, 121 Cal. 321, 53 Pac. 901; Marshall v. Grand Lodge A. 0. U. W. of Cal., 133 Cal. 691, 66 Pac. 25.
Construction of the Section.— An insurance association formed as an association without profit of persons as members thereof, for the purpose of equalizing the risk of death, and to pay to the nominees of such members as may die, stipulated sums of money, to be collected from surviving members, is an insurance company within the provisions of the Civil Code. (Perkins v. Fish, 121 Cal. 317, 53 Pac. 201.)
A corporation organized under the laws of this state for fraternal, social, and beneficial purposes, and with subordinate lodges subject to