1 May 1876 § 10. P. L. 53. Transfers. Certificate of organization. VI. Capital stock. 34. As soon as the whole amount of the capital stock of a joint-stock company, or fifty per centum of the guaranty-capital of a mutual life or accident company, Stock to be issued. duly incorporated under this act, has been paid in, certificates shall be issued therefor to the persons entitled to the same, which certificates shall be transferrible at any time upon the books of the company; and the president or secretary of the company shall notify the insurance commissioner that the capital of the company has been paid in, and that it is ready to commence business; whereupon the insurance commissioner shall, in person or by deputy, examine the assets of the company, and in case he finds that it is possessed of money or assets invested in the manner hereinafter specified, equal to the amount of its capital stock, less the necessary expenses of organization, he shall issue to said company a certificate, showing that it has been organized in accordance with the provisions of this act, and that it has the requisite amount of capital for the transaction of business in the state; which certificate shall empower the company to issue policies and otherwise do the business of insurance for which it was organized. Ibid. § 11. Amount of capital stock of fire-insurance companies. When mutual companies may take risks. Ibid. § 12. 35. Joint-stock companies organized under this act, for any of the purposes of insurance mentioned in the first division of the first section, shall have a capital stock of not less than one hundred thousand dollars. Mutual companies, for any of the purposes aforesaid, may accept risks and issue policies whenever applications be made for insurance to the amount of two hundred thousand dollars, and authority to commence business has been granted in the manner hereinbefore provided. 36. Joint-stock companies organized to insure lives, as specified in the second division of the first section of this act, must have a capital stock of at least three Capital of life and hundred thousand dollars. Joint-stock companies organized to insure health or against accidents, as specified in the third paragraph of the first section of this act, must have a capital stock of at least one hundred thousand dollars. health insurance companies. Ibid. § 13. Capital of livestock insurance companies. 15 April 1891. P. L. 11. stock. Voting. 37. Joint-stock companies organized for any of the purposes of insurance mentioned in the fourth division of the first section of this act, must have a capital stock of at least one hundred thousand dollars, invested as required in this act for fire and marine companies. Mutual companies, organized for any of the purposes mentioned in said division, may accept risks and issue policies, upon complying with all the conditions hereinbefore prescribed for mutual fire-insurance companies. 38. Any existing fire or fire and marine insurance company, and any stock company formed under this act, may at any time increase the amount of its capital Increase of capital stock, or alter and change the par value of the shares thereof, if authorized so to do by the stockholders holding the larger amount in value of the stock, at a meeting specially called for that purpose, of which at least sixty days' previous public notice shall have been given. At such meeting of the stockholders, and at all other meetings thereof, each stockholder shall be entitled to cast, either in person or by proxy, subject to such regulations as to voting by proxy as the by-laws of the company may prescribe, one vote for each share of stock that shall have stood in his or her name on the books of the company for at least three months previous thereto. Increase of capital stock, as aforesaid, may be made by increasing the number of the shares of stock or by increasing the par value of the same, and such increased shares or increased par value shall be allotted, pro rata, to the stockholders of said company according to their interest, and may be paid, in whole or in part, out of the accumulated reserve of the company, in case the condition of the company warrants such allotments, or the same may be disposed of as is provided in this act for the organization of stock companies.(w) The stockholders Sale of new stock. may direct the sale of the new stock by auction or otherwise, and for such price per share as they may designate, or may require the payment of any sum they may see fit for the right to subscribe for the increased stock to be issued: Provided, That new stock shall never be disposed of for less than the par value to be received by the company and constitute capital, and that every stockholder shall be entitled to a like option with all other stockholders of taking the new shares in proportion to his interest in the company, and that all moneys thus received, beyond the amount contributed for capital, shall be applied as directed by the stockholders; and the company may direct the sale of options not taken, after a reasonable time shall have been given for electing to take or refuse the same. No portion of the funds of a company shall be regarded as accumulated reserve, subject to allotment under this section, except such amounts as may remain after changing the entire amount of premium receipts on undetermined policies, in addition to capital stock and all other liabilities. Manner of increase. Option. Accumulated reserve. Ibid. 39. Before any such company as aforesaid shall be authorized to increase its Company to first capital stock, or alter and change the par value of the shares thereof, as herein file certificate with provided, it shall file with the insurance commissioner a certificate setting forth the amount and manner of such desired increase, or of such desired alteration insurance commissioner. (w) Stockholders cannot be charged a bonus for the privilege of subscribing. Cunningham's Appeal, 108 P. S. 546. 15 April 1891. P. L. 11. value received. and change in the par value of the shares thereof and the proceedings of the stockholders authorizing the same, and thereafter such company shall be entitled to have the increased amount of capital or the alterations and changes in the par value thereof, fixed by said certificate, and the examination of securities composing the capital stock thus increased, or the par value of which has been so altered and changed, shall be made in the same manner as is provided in this act for capital stock originally paid in: Provided further, That no incorporated Stock not to be company, working under the provisions of this act, shall issue stock except for issued except for value received, and unless such stock actually represents cash in the reserve fund accumulated for the payment of policies issued by such corporations or on property owned by said corporations and necessary for the transaction of its business. Whenever any existing fire or fire and marine insurance company Existing compashall, by a resolution of its board of directors, accept of the provisions of this pies may accept provisions of this section of this act as a part of the charter of said company, and a duly certified section. copy of such resolutions shall have been filed in the office of the insurance commissioner, the charter of said company shall be deemed and taken to have been amended by the addition thereto of this section, which shall have the same force and effect as if a part of the company's original charter constituting a supplement thereto.(x) P. L. 61. companies. 40. Any joint-stock fire-insurance company, heretofore organized under any law 1 May 1876 § 29. of this state, which has taken notes or obligations of its stockholders for any portion of the amount subscribed by them to its capital stock, shall require the Payment of notes makers of such notes or obligations to pay twenty per centum of the same, during given to existing the year 1876, and twenty per centum per annum thereafter, until paid. Every joint-stock fire-insurance company heretofore organized in the city of Philadelphia, with a less capital than one hundred thousand dollars, or elsewhere, shall, Certain companies within five years from the passage of this act, increase its capital stock to at least to increase their capital. the amount required of companies hereafter organized, and the same shall be paid up and invested in the manner herein before prescribed; and any company failing to comply with the provisions of this section shall thereafter cease issuing policies of insurance. Ibid. § 28. 41. Whenever the capital stock of any joint-stock fire or marine insurance company, heretofore or hereafter organized, becomes impaired, it shall be lawful Reduction of for its board of directors, by a resolution approved by at least two-thirds of the capital. directors, to reduce the capital stock of said company in proportion to the extent of impairment, but to an amount not less than that required by this act for the organization of such company, the assent of the insurance commissioner having first been obtained to said reduction, as provided in the act of the fourth of April 1873, establishing an insurance department. VII. Stockholders. 42. The restriction in the charters of the various insurance companies of this 1 April 1836 § 4. commonwealth, providing that none but the citizens of this state and of the United States, shall be stockholders therein, be and the same is hereby repealed. VIII. Investments. P. L. 422. Foreigners may hold stock. 1 May 1876 § 18. P. L. 58. 43. It shall be unlawful for any fire, or fire and marine, insurance company, organized under this act, to invest its capital, or any part thereof, otherwise than in bonds and first mortgages on improved and unincumbered real estate, within the Investments. state of Pennsylvania, worth fifty per centum more than the sum loaned thereon, exclusive of buildings, unless such buildings are insured and the policy transferred to said company, or in ground-rents, or bonds of the United States, or of the state of Pennsylvania, or the bonds of any other state that may be par at the time of the purchase thereof, or in the bonds of any county, city or municipality in the state, authorized to be issued by law, and upon which no default in interest has been made, or in the first mortgage-bonds of solvent railroad corporations upon which no default in interest has been made; and to lend the same, or any part thereof, on the security of such bonds or evidences of indebtedness, and to change and re-invest the same as occasion may from time to time require; but any money over and above the capital stock of any such company, may be invested in the securities above enumerated, or in the stock or other evidences of indebtedness of any solvent dividend-paying corporations created under the laws of this state or the United States, or loaned upon the pledge of the same, except their own stock: Provided, That the current market value of such securities shall be at least twenty per centum more than the sum loaned thereon. Ibid. § 19. Payment and 44. The whole capital of a joint-stock life-insurance company, organized under this act, shall be paid in and invested in bonds or notes of the United States, or in bonds of the state of Pennsylvania, or in first mortgages on improved and un- investiment of incumbered real estate within this state, worth double the amount loaned thereon, capital. (2) This is an amendment of the act 1 May 1876, § 27, P. L. 60, as originally amended by the act 29 June 1881, P. L. 121. P. L. 58. Investment of surplus. 1 May 1876 $ 19. exclusive of buildings, unless said buildings are insured and the policies transferred to the company, or in ground-rents, or in bonds of any city or county of this state, authorized to be issued by law and upon which there has been no default in interest; and such company shall, at all times, maintain investments of the character above enumerated, which, in addition to the real estate it is authorized to hold under this act, shall be equal to the entire legal valuation of its outstanding policies and other liabilities; but any surplus over and above capital stock and other liabilities which it may accumulate in the course of business, may be invested as is provided in this act for the investment of the surplus funds of fireinsurance companies. Ibid. § 20. Loans. 1 May 1876 § 26. P. L. 60. When dividends may be declared. Amount thereof. 6 March 1847 § 1. P. L. 222. 45. Not more than one-half its capital stock shall be loaned by any company, organized under this act, on mortgage of real estate, and not more than one-tenth of its capital stock shall be invested in a single mortgage, nor shall any portion of the funds of the company be loaned on personal security. If any investment or loan is made in a manner not authorized by this act, the directors making or authorizing the same shall be personally liable for any loss occasioned thereby. IX. Dividends. 46. No fire, or fire and marine, insurance company, organized under this act, shall make any dividend, except from the profits arising from its business, and in estimating such profits, there shall be first charged as a liability, the capital stock of the company, together with the amount of the proposed dividend, one-half of all the premiums received and receivable on undetermined fire risks, and the whole amount of premiums received and receivable on undetermined marine and inland navigation risks, and also all sums due the company on bonds and mortgages, bonds, stocks and book-accounts, of which no part of the principal or the interest thereon has been paid during the last calendar year and for which the foreclosure or suit has not been commenced for collection, or which, after judgment obtained thereon, shall have remained more than two years unsatisfied, and on which interest shall not have been paid, and also all interest due or accrued and remaining unpaid, and all other debts or obligations of the company: Provided, That it shall not be lawful for any company aforesaid to make dividends exceeding ten per centum in any one year, unless its capital stock remains unimpaired, after charging as a liability, in addition to the items above enumerated, the entire amount of net premiums received and receivable upon all risks undetermined at the time of making such dividend. 47. Each of the banks, savings-institutions, loan-companies and insurance companies, and each and every other of the companies, institutions or associations Annual statements incorporated by or under any law of this commonwealth, and legally authorized of unclaimed divi- to declare and make dividends of profits amongst the stockholders thereof, shall, dends to be published. in the month of December of the present year, and annually thereafter, cause to be published, for four successive weeks, in one or more public newspapers having the largest circulation, printed in the city or county in which such bank, savingsinstitution, loan-company, insurance company, or other company, institution or association may be located, or in which its principal office or place of business may be situated, a true and accurate statement, verified by the oath or affirmation of the cashier or treasurer thereof, of all dividends or profits declared on its capital stock, which, at the date of such settlement, shall have remained unclaimed by the person, copartnership or corporation authorized to receive the same, for the period of three years then next preceding; which said statement shall set forth the names, and if known, the residence and business of the persons, copartnerships or corporations in whose favor said dividends or profits may have been declared, the amount of such dividends or profits, and the number of shares in the capital stock upon which the same had accrued. Ibid. § 2. And of unclaimed deposits. Ibid. § 8. Penalty for neg. lect. 48. Each of the said banks, savings-institutions, and loan-companies, and each and every saving-fund society, insurance or trust-company, or other company, institution or association, incorporated as aforesaid, and legally authorized to receive deposits of money, shall, in the said month of December of the present year, and annually thereafter, cause to be published, in like manner, and for the same period, a statement, verified as aforesaid, of the names and, if known, the residence and business of all persons, copartnerships or corporations who have made deposits therein, or have balances due them, and who have not, within the three years then next preceding the date of said statement, either increased or diminished the amount of such deposits or balances, or received any interest thereon, with the dates when such deposits were made, or balances accrued, the amount thereof, and the amount of interest, if any, accruing thereon. 49. If any such bank, savings-institution, loan-company, insurance company or other banking institution or association, incorporated as aforesaid, shall neglect or refuse to publish the statement hereinbefore required to be published, the same, and the cashier or treasurer thereof, in his individual capacity, shall be liable to the party in whose name such unclaimed dividend, profit, deposit or balance may stand, or to his, her or their legal representatives for the amount thereof, with interest P. L. 222. thereon, at the rate of twelve per cent per annum from the date of such dividend, 6 March 1847 § 8. profit, deposit or balance, until paid, recoverable by action of debt, as in other cases: Provided, That nothing herein contained shall be so construed as to require the publication of any such unclaimed dividends or profits amounting to less than five dollars, nor such unclaimed deposits or balances amounting to less than ten dollars. Ibid. § 4. When unclaimed 50. At the expiration of three years after the first publication of any particular dividend or profits, balance or deposit, with the interest that has accrued thereon, as provided for by the first and second sections of this act, such dividend or profit, dividends, &c., to balance or deposit, with the interest that has accrued, if not demanded within that escheat. time by the rightful owner or owners thereof, or their legal representatives, shall escheat to the commonwealth, and shall be paid into the treasury thereof, without discount or deduction for commissions, fees or expenses of any description, by the cashier, treasurer or other proper officer of said bank, savings-institution, loan-company, insurance company, saving-fund society or other company, institution or association, in which such dividend or profit, balance or deposit shall have remained without being demanded, as aforesaid, or without being increased or diminished for the length of time aforesaid; and the said bank, savings-institution, loan-company, insurance company, saving-fund society or other company, institution or association, as the case may be, shall thereupon be discharged from any obligation or liability to pay over such dividend or profit, balance or deposit, or interest thereon, to the owner or owners thereof. The said owner or owners, or their legal representatives, May be reclaimed upon application to the state treasurer, for the time being, and producing satisfac- by the owner. tory proof to that officer of his, her or their right to such dividend or profit, balance or deposit, with the interest thereon, paid into the treasury, as aforesaid, or any part thereof, shall receive from the commonwealth the amount he, she or they shall be found legally or equitably entitled to: Provided, That the expense of the publica- On payment of tion or publications required by this act shall be paid out of such dividend or profit, expenses. balance or deposit so published. X. Insolvency and dissolution. 4 April 1878 § 5, cl. 8. P. L. 20. 51. Whenever the insurance commissioner shall have reason to believe that any insurance company of this state(y) is insolvent or fraudulently conducted, or that its assets are not sufficient for carrrying on the business of the same, or during any Proceedings in non-compliance with the provisions of this act, he shall communicate the fact to case of insolvency. the attorney-general, whose duty it shall then become, to apply to the supreme court [or the district court], or any court of common pleas in this commonwealth, or in vacation to any of the judges thereof, for an order requiring said company to Duties of attorneyshow cause why their business should not be closed; and the court or judge, as the general. case may be, shall thereupon hear the allegations and proofs of the respective parties, or appoint some suitable person as examiner to perform such duty, and report upon the facts to said court or judge; if it appears to the satisfaction of said court or judge, that such company is insolvent, or that the interests of the public so require, the said court or judge shall decree a dissolution of such corporation and a distribution of its effects; but in case it shall appear to said court or judge, that said corporation is able to comply with the provisions of this act, and that it is not insolvent, a decree shall be entered annulling the act of the commissioner in the premises, and authorizing such company to resume business. P. L. 66. 52. When an insurance corporation is dissolved, as provided in the eighth 1 May 1876 § 49. paragraph of the fifth section of the act to which this is a supplement, the court or judge decreeing such dissolution may appoint a receiver to take charge of its Appointment of estate and effects, and collect the debts and property due and belonging to it, with receiver on dissolupower to prosecute and defend suits in the name of the corporation or otherwise, tion. and to do all other acts, which might be done by such corporation, if in being, His powers. that are necessary for the final settlement of the unfinished business of the corporation. The powers of such receiver may continue as long as the court deems necessary for said purposes, and he shall be held to supersede an assignee of the company in possession. 53. The said receiver shall give such security for the faithful performance of Ibid. § 50. his duties as the court may determine. He shall pay all debts due from the company, if the funds in his hands are sufficient therefor, and if not, he shall dis. To give bond. tribute the same ratably among the creditors, in the manner directed by an order Duties of receiver. or decree of the court. If there is a balance remaining after the payment of the debts, the receiver shall distribute and pay it to and among those who are justly entitled thereto, as having been stockholders of the company, or their legal representatives; and his final account shall be subject to the approval of the court appointing him. Ibid. § 51. 54. Receivers of insurance companies shall report to the insurance commissioner annually, in such form as the commissioner may prescribe, and oftener, in Report. (y) The jurisdiction of the court of common pleas in such cases, extends to insurance companies located in any county of the state. Mahoney Mutual Assess ment Life Association v. Commonwealth, 14 W. N. C. 370. 1 May 1876 § 51. P. L. 66. Ibid. § 52. Appeal from decree. 1 May 1876 § 34. P. L. 61. Companies to organize either on the joint-stock or mutual plan. Ibid. § 35. When to commence business. Ibid. § 36. To be subject to the act of 1878. 1 May 1876 § 21. P. L. 58. Power to hold real estate. 23 June 1885 § 1. P. L. 134. case he so directs; and such reports or abstracts thereof shall be incorporated into the annual report of the commissioner to the legislature. 55. Within three months after the date of any decree, either dissolving or continuing an insurance corporation, either party to the proceeding may take an appeal to the supreme court, which shall be heard and determined by said court as appeals in equity cases are now heard and determined. In case the appeal is taken by the company, it shall give a bond or recognizance to the commonwealth in such amount and with such sureties as may be determined and approved by the court or judge making such decree, conditioned that said company shall prosecute said appeal with effect, pay all costs that may be adjudged against them, and deliver over to the receiver duly appointed, the assets of said company unimpaired, in case a final decree be rendered against them. XI. Powers of insurance companies. 56. Companies incorporated under this act must be organized upon the joint-stock or the mutual plan; and the power to insure upon both plans shall not exist in the same corporation, except temporarily, as provided in the preceding section of this act. 57. If any corporation created under this act does not commence to issue policies within one year from the date of its letters-patent, its corporate powers and existence shall cease. 58. All insurance companies heretofore or hereafter incorporated, except those especially exempt by the terms thereof, shall be subject to the provisions and requirements of the act, approved the 4th day of April, Anno Domini 1873, entitled "An act to establish an insurance department," and the several supplements thereto. (2.) To hold real estate. 59. No company organized under this act shall purchase, hold or convey real estate, except for the purpose and in the manner herein set forth, to wit: I. Such as shall be requisite for its convenient accommodation in the transaction of its business. II. Such as shall have been mortgaged to it in good faith, by way of security for loans previously contracted, or for money due. III. Such as shall have been conveyed to it in satisfaction of debts previously contracted in its legitimate business, or for money due. IV. Such as shall have been purchased at sales upon judgments, decrees or mortgages obtained or made for such debts; and it shall not be lawful for any such company to purchase, hold or convey real estate in any other case, or for any other purpose; and all such real estate as may be acquired as aforesaid, and which shall not be necessary for the accommodation of such company in the transaction of its business, shall be sold and disposed of, within five years after such company shall have acquired title thereto. XII. Policies of insurance.(z) 60. Whenever the application for a policy of life insurance contains a clause of warranty of the truth of the answers therein contained, no misrepresentation or Untrue statements untrue statement in such application, made in good faith by the applicant, shall in good faith not to effect a forfeiture or be a ground of defence in any suit brought upon any policy of insurance issued upon the faith of such application, unless such misrepresentation or untrue statement relate to some matter material to the risk. effect forfeiture. 25 June 1887 § 2. P. L. 184. Real age to form the basis of payment. 11 May 1881 § 1. P. L. 20. Application, &c., referred to in policy, to be attached. Otherwise not to be a part of the contract. 1 May 1876 § 17. P. L. 58. Execution of policies. 61. Whenever it shall be made to appear that a wrong age has been given in good faith in any application for a policy of life insurance, the company shall not be required to pay the face value of the policy, but such sum as the premium paid would have purchased at the applicant's real age at the time of effecting the insurance. 62. All life and fire insurance policies upon the lives or property of persons within this commonwealth, whether issued by companies organized under the laws of this state, or by foreign companies doing business therein, which contain any reference to the application of the insured, or the constitution, by-laws or other rules of the company, either as forming part of the policy or contract between the parties thereto, or having any bearing on said contract, shall contain, or have attached to said policies, correct copies of the application, as signed by the applicant, and the by-laws referred to; and unless so attached and accompanying the policy, no such application, constitution or by-laws shall be received in evidence, in any controversy between the parties to, or interested in, the said policy, nor shall such application or by-laws be considered a part of the policy or contract between such parties. (a) 63. Policies of insurance made or entered into by the company, may be made either with or without the seal thereof, and they shall be subscribed by the president or such other officer as may be designated by the directors for that purpose, (z) See sub-tit. "Fire Insurance" and "Life Insurance." (a) This act does not apply where the application has not been signed by the applicant, and the purpose |