policies and obligations of every kind canceled or provided for; and if from any cause a deficiency at any time occurs in such fixed capital, no further division of profits must take place until such deficiency has been made up. Enacted March 21, 1872. Declaration of fixed capital to be filed. § 440. Whenever the fixed capital of the corporation is obtained as hereinbefore provided, the president of the corporation and its actuary, or its secretary if there is no actuary, must make a declaration in writing, sworn to before some notary public, of the amount of such fixed capital, and of the particular kinds of property composing the same, with the nature and amount of each kind, which must be filed with the original articles of incorporation, and a copy, certified by the county clerk, must be published for at least four successive weeks, in a newspaper published in the county where the principal business of the corporation is situated. Upon the filing of such declaration the guarantee fund is discharged of its obligations, and all notes of the fund remaining in the control of the corporation, and not affected by any lien thereon, or claim of that nature, must be surrendered by it to the makers thereof, respectively, or other parties entitled to receive the same. Enacted March 21, 1872. Guarantee notes and interest, how disposed of. § 441. Until the guarantee fund is discharged from its obligations, as provided in the preceding section, no note must be withdrawn from the fund unless another note of equal solvency is substituted therefor, with the approval of the board of directors. The corporation must allow a commission, not exceeding five per cent per annum, on all such guarantee notes while outstanding, and also interest on all moneys paid on such notes by the parties liable thereon, at the rate of twelve per cent per annum, payable half-yearly until repaid by the corporation, unless the current rate of interest is different from this amount, in which case the rate payable may, from time to time, at intervals of not less than one year, be increased or reduced by the board of directors, so as to conform to the current rate. Amended March 30, 1874; amendts. 1873-4, p. 210. Insured to be entitled to vote, when. § 442. After the filing of the declaration of the fixed capital, as in this article provided, the holders of policies of life insurance for the term of life, on which the premiums are not in default, may vote at the election of directors, and have one vote for each one thousand dollars insured by their policies, respectively. Enacted March 21, 1872. Number of directors may be altered, how. § 443. The number of directors specified in the articles of incorporation may be altered from time to time during the existence of the corporation by resolution, at the annual meeting of a majority of those entitled to vote at the election of directors, but the number must never be reduced below five. Enacted March 21, 1872. [Re Investment of capital stock, in what securities. [Repealed.] § 444. Investment of capital stock, in what securities. pealed March 22, 1907; stats. 1907, p. 889.] Limitations to the holding of stock and in other particulars may be provided for in by-laws. § 445. The corporation may, by its by-laws, limit the number of shares which may be held by any one person, and make such other provisions for the protection of the stockholders and the better security of those dealing with it as to a majority of the stockholders may seem proper, not inconsistent with the provisions of this title or part. Enacted March 21, 1872. Premiums, how payable. § 446. All premiums must be payable wholly in cash, or one half or a greater proportion in cash, and the remainder in promissory notes bearing interest, as may be provided for by the by-laws. Agreements and policies of insurance made by the corporation may be upon the basis of full or partial participation in the profits, or without any participation therein, as may be provided by the by-laws and agreed between the parties. Enacted March 21, 1872. Insurance corporations to furnish data to insurance commissioner-Employment of actuary. [Repealed.] § 447. Insurance corporations to furnish data to insurance commissioner. Employment of actuary. [Repealed March 8, 1907; stats. 1907, p. 141.] No stamp required on accident insurance contracts. [Repealed.] § 448. No stamp required on accident insurance contracts. [Repealed March 21, 1905; stats. 1905, p. 571; repealed March 8, 1907; stats. 1907, p. 141.] NOTE. § 448. This section exempted accident insurance companies from stamp duties, but as there are no such duties under the law as it now stands, the section was unnecessary. Valuation of policies-Retaliatory provisions. § 449. Valuation of policies. [Repealed.] Retaliatory provisions. [Re pealed March 8, 1907; stats. 1907, p. 141.] Policy to contain what provisions. $ 450. 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 non-payment 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 time of lapse, either to the purchase of non-participating 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 non-payment of premium, to the purchase of a non-participating 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 non-payment 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. Amended April 26, 1880; amendts. 1880, p. 91. 123 Cal. 679; 129 Cal. 459; 139 Cal. 335. Fraternal societies exempt from insurance laws. [Repealed.] § 451. Fraternal societies exempt from insurance laws. [Repealed March 8, 1907; stats. 1907, p. 141.] See Pol. C. § 630. 148 Cal. 478. Dividends, how and when made. § 452. No corporation formed under the laws of this state, and transacting life insurance business, must make any dividends, except from profits remaining on hand after retaining unimpaired : 1. The entire capital stock; 2. A sum sufficient to pay all losses reported or in course of settlement, and all liabilities for expenses and taxes; 3. A sum sufficient to reinsure all outstanding policies, as ascertained and determined upon the basis of the American Ex perience Table of Mortality, and interest at the rate of four and one half per cent per annum. Enacted March 21, 1905; stats. 1905, p. 571. NOTE.- 431, 452. Old section 431, which dealt with the amounts to be received by life insurance companies, was in a chapter entitled, "Fire, marine and title insurance corporations." It is transferred to a more appropriate chapter, and numbered 452. CHAPTER IV. [Chapter IV added March 20, 1905; stats. 1905, p. 411.] MUTUAL BENEFIT AND LIFE ASSOCIATIONS. (Mutual fire insurance companies: See "Insurance," statutes at large, Appendix.) SEC. 452a. Formation of the association. 453. Levying of assessments. Formation of the association. By-laws which may be made. § 452a. Associations of not exceeding one thousand persons may be formed for the purpose of paying to the nominee of any member a sum, upon the death of the member, not exceeding three dollars for each member of the association. Such association may be formed by filing articles of incorporation in the office of the clerk of the county in which the principal place of business is situated and a certified copy of such articles of incorporation, duly certified by the county clerk, in the office of the secretary of state. Such articles must state the name of the corporation, its general purposes, its principal place of business, its term of existence, not exceeding fifty years, the names and residences of the directors selected or appointed to serve for the first year, and must be signed and verified as required by sections two hundred and ninety-two and five hundred and ninety-four. Enacted March 20, 1905; stats. 1905, p. 411. NOTE.- 452a, 453. The statute of 1873-4, page 745, as amended by the statutes of 1880, page 25, and 1901, page 6, relating to mutual benefit associations, is codified in the above sections, and a new chapter, entitled "Mutual benefit and life associations," is added, to consist of sections 452a and 453. |