exceed sixty per cent of the market value of any piece of real estate to be taken as security. 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. Companies organized for and engaged in the business of fire, life, health, accident and marine insurance, may, after the investment of two hundred thousand dollars, and companies duly formed or organized for the transaction of business in any other kind of insurance 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 the purchase of or loans upon the stock of any corporation (except mining companies) organized and carrying on business under the laws of the State of California which have at the time of investment a market value of not less than their paid-in value, and which are rated as first-class securities, or in interest-bearing bonds of any corporation of any State or Territory of the United States not in default of interest; 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 during the months 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. 7. Life insurance companies may loan upon their own policies; provided, that the amount so loaned upon each policy shall not exceed the reserve against said policy at the time said loan is made; provided further, that no policy loans whatever shall a ever be used as security which may be deposited with the Insurance Commissioner under section six hundred and thirtyfour of the Political Code; and provided further, that whenever any such loan in any amount is made on a policy registered with the Insurance Commissioner under said section six hundred and thirty-four of the Political Code, such registration shall be forthwith canceled. [Amendment approved March 22, 1907; in effect in sixty days.] CHAPTER II. FIRE AND MARINE INSURANCE CORPORATIONS. SEC. 424. 425. 426. 427. 428. 429. 430. 431. 432. Payment of subscriptions. in twelve months. Capital to be all paid up Certificate of capital stock paid up to be filed, and when. Property which may be insured. Funds may be invested, how. [Repealed March 3 and 21, 1905; in effect in sixty days.] Rate of risk. Amounts to be reserved before making dividends. Reservation by companies with less than $200,000 capital. Amounts to be reserved by life insurance companies. [Repealed March 21, 1905; in effect in sixty days.] Corporations for insuring titles to real estate. § 424. 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. § 425. The president and a majority of the directors must, within thirty days after the payment of the twenty-five 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 executed, with the Insurance Commissioner. § 426. 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. § 427. days.] [Repealed March 3, and 21, 1905; in effect in sixty See § 421. 123 Cal. 203. § 428. Fire and marine insurance corporations must never take, on any one risk, whether it is a marine insurance or an insurance against fire, a sum exceeding one tenth part of their capital actually paid in, and intact at the time of taking such risk, without at once reinsuring the excess above one tenth. [Amendment approved March 21, 1905; in effect in sixty days.] Note.-§ 428. The change consists in the insertion of the words "at once" before "reinsuring." $429. No corporation formed subsequent to April first, eighteen hundred and seventy-eight, under the laws of this State, and transacting fire, marine, inland navigation insurance business, or insurance provided for by section four hundred and twenty (420) of this code, except insurance of the title to real property, must make any dividends except from profits remaining on hand after retaining unimpaired: 1. The entire subscribed capital stock; 2. All the premiums received or receivable on outstanding marine or inland risks, except marine time risks; 3. A fund equal to one half the amount of all premiums on all other risks not terminated at the time of making such dividend; 4. A sum sufficient to pay all losses reported or in course of settlement, and all liabilities for expenses and taxes. [Amendment in effect March 5, 1887.] § 430. No fire or marine insurance corporation, with a subscribed capital of less than two hundred thousand dollars, must declare any dividends, except from profits remaining on hand after reserving: 1. A sum necessary to form, with the subscribed capital stock, the aggregate sum of two hundred thousand dollars; 2. All the premiums received or receivable on outstanding marine or inland risks, except marine time risks; 3. A fund equal to one half the amount of all premiums on fire risks and marine time risks not terminated at the time of making such dividend; 4. A sum sufficient to pay all losses reported or in course of settlement, and all liabilities for expenses and taxes. § 431. [Repealed March 21, 1905; in effect in sixty days.] See note following § 452. § 432. Corporations transacting business in insuring titles to real estate shall annually set apart a sum equal to twentyfive per cent of their premiums collected during the year, which sum shall be allowed to accumulate until a fund shall have been created amounting to ten per cent of the subscribed capital stock. Such fund shall be maintained as a further security to policyholders, and shall be known as the surplus fund; and if at any time such fund shall be impaired by reason of a loss, the amount by which it may be impaired shall be restored in the manner hereinabove provided for its accumulation. The reporting of a loss shall be deemed an impairment of such fund for the purposes of this section. Such corporation must not make any dividends except from profits remaining on hand after retaining unimpaired: 1. The entire subscribed capital stock; 2. The amount owing to the surplus fund, under the provisions of this section; 3. A sum sufficient to pay all losses reported, or in course of settlement, which shall be in excess of the surplus fund, and all liabilities for expenses and taxes. [New section, in effect March 5, 1887.] CHAPTER III. MUTUAL LIFE, HEALTH, AND ACCIDENT INSURANCE CORPORATIONS. Capital stock. Guarantee fund. What constitutes, and deficiency in fixed capital. Guarantee notes and interest, how disposed of. SEC. 437. 438. Of what guarantee fund shall consist. 439. 440. 441. 442. 443. 444. 445. 446. 447. 448. 449. 450. 451. 452. May invest in what securities. Investment of capital stock, in what securities. Limitations to the holding of stock and in other par- Valuation of policies outstanding, when; how esti- No stamp required on accident insurance contracts. [Repealed March 21, 1905; in effect in sixty days.] Valuation of policies. Retaliatory provision. Policy to contain what evidence. Fraternal societies exempt from insurance laws. § 437. Every corporation formed for the purpose of mutual insurance on the lives or health of persons, or against accidents to persons for life or any fixed period of time, or to purchase and sell annuities, must have a capital stock of not less than two hundred thousand dollars. It must not make any insurance upon any risk or transact any other business as a corporation until its capital stock is fully paid up in cash, nor until it has also obtained a fund, to be known as a "guarantee fund," of not less than two hundred and fifty thousand dollars, as is hereinafter provided. If more than the requisite amount is subscribed, the stock must be distributed pro rata among the subscribers. Any subscription may be rejected by the board of directors or the committee thereof, either as to the whole or any part thereof, and must be, so far as rejected, without effect. Nothing in this section shall be deemed to contravene any of the provisions of section four hundred and fiftyone. [Amendment approved March 18, 1905; in effect in sixty days.] 121 Cal. 320. |