be members of said association having property insured therein; such certificate shall be signed by said officers and verified by at least three of them.

§ 3. Limitation on insurance for members only seventy-five per cent cash value. An association formed as prescribed in sections 1 and 2 of this act may insure the property of its members against loss or damage by fire for an amount not exceeding forty-five hundred dollars on any one risk, and no risk of more than thirty-five hundred dollars shall be binding until risks to the amount of two hundred thousand dollars have been written and all premiums paid thereon, and no risk of more than fifteen hundred dollars shall be binding until risks to the amount of one hundred thousand dollars have been written and all premiums paid thereon, and no risk of any amount shall be binding until risks to the amount of seventy-five thousand dollars have been written and all premiums paid thereon. And no risk shall be written by such association except for members in good standing on the books of the order or society forming the association and a suspension or withdrawal from membership in such order or society will suspend the insurance risk until the member is restored to good standing in said order or society and in said association, provided, that a restoration to membership after suspension therefrom shall in no case be construed as extending the term of the risk. No risk written by such association shall be for an amount in excess of seventy-five per centum of the cash value of the property insured, and no concurrent or additional insurance shall be allowed.

§ 4. Powers. Such association by and in its own name may sue and be sued, may loan such funds as it may have on hand in such manner as its articles of association and its by-laws have provided for; may own sufficient real estate for its business purposes, and such other real estate as may be necessary to purchase on foreclosure of its mortgages; provided, such real estate so obtained by foreclosure shall be sold and conveyed within five years from the time title vests in said association.

§ 5. By-laws. Such association may make, such by-laws, not inconsistent with the laws of this state, as may be necessary for its government and for the transaction of its business, and such association merely creating a mutual bond and agreement of its members to participate in each other's loss by fire does not come under the insurance laws of California. Outside of the requirements of this act, their own regulations and those of the order to which they belong are sufficient.

§ 6. Obligation to pay pro rata. All persons insured shall give their obligation to the association, binding themselves, their heirs and assigns, to pay their pro rata share, proportioned to the amount of insurance in the association held by them, at the time of the loss to the association, of the necessary expenses and of loss by fire which may be sustained by any member thereof during the time for which their respective policies are written, and said policies may be canceled by either party thereto, in which case settlement or adjustment shall be made in accordance with the terms of the by-laws of the

association, and they shall also at the time of effecting the insurance pay such a percentage in cash, and such other charges, as may be required by the rules or by-laws of the association.

§7. Classification of property. Not to insure property in cities. All such associations must classify the property insured therein at the time of issuing policies thereon under different rates, corresponding as nearly as may be to the greater or less risk from fire loss which may be attached to the several kinds of property insured. No such association shall issue policies of insurance on any property within the limits of cities of the first, first and a half, second, third, fourth, fifth and sixth classes; provided, that no dwelling shall be insured within the corporate liimts of any city or town exposed by any other building within one hundred feet or by any risk other than a dwelling or private barn within two hundred feet of the risk assured.

§ 8. Ascertainment of loss. Such association shall provide in its by-laws for the ascertainment of loss or damage by fire, and for the payment thereof.

ACT 689.

An act to provide whole family protection for members of fraternal benefit societies.

[Approved April 20, 1917. Stats. 1917, p. 144. In effect July 27, 1917.] $1. Fraternal benefit society may insure children. Total benefits payable.

12. Conditions of benefit certificate.

3. Reserve required.

4. Separate financial statement.

5. Specified payments.

$6. Continuation of certificate.

§1. Fraternal benefit society may insure children. Total benefits payable. Any fraternal benefit society authorized to do business in this state and operating on the lodge plan, may provide in its constitution and by-laws, in addition to other benefits provided for therein, for the payment of death or annuity benefits upon the lives of children between the ages of two and eighteen years at next birthday, for whose support and maintenance a member of such society is responsible. Any such society may at its option, organize and operate branches for such children and membership in local lodges and initiation therein shall not be required of such children, nor shall they have any voice in the management of the society. The total benefits payable as above provided shall in no case exceed the following amounts at ages at next birthday at time of death, respectively, as follows: Two, thirty-four dollars; three, forty dollars; four, forty-eight dollars; five, fifty-eight dollars; six, one hundred forty dollars; seven, one hundred sixty-eight dollars; eight, two hundred dollars; nine, two hundred forty dollars; ten, three hundred dollars; eleven, three hundred eighty dollars; twelve, four hundred sixty dollars; thirteen to fifteen, five hundred twenty dollars; and sixteen to eighteen years, where not otherwise authorized by law, six hundred dollars.

§ 2. Conditions of benefit certificate. No benefit certificate as to any child shall take effect until after medical examination or inspection by a

licensed medical practitioner, in accordance with the laws of the society, nor shall any such benefit certificate be issued unless the society shall simultaneously put in force at least five hundred such certificates, on each of which at least one assessment has been paid, nor where the number of lives represented by such certificate falls below five hundred. The death benefit contributions to be made upon such certificate shall be based upon the "standard industrial mortality table" or the "English life table number six" and a rate of interest not greater than four per cent per annum, or upon a higher standard; provided, that contributions may be waived or returns may be made from any surplus held in excess of reserve and other liabilities, as provided in the by-laws; and provided, further, that extra contributions shall be made if the reserves hereafter provided for become impaired.

§ 3. Reserve required. Any society entering into such insurance agreements shall maintain on all such contracts the reserve required by the standard of mortality and interest adopted by the society for computing contributions as provided in section two, and the funds representing the benefit contributions and all accretions thereon shall be kept as separate and distinct funds, independent of the other funds of the society, and shall not be liable for nor used for the payment of the debts and obligations of the society other than the benefits herein authorized; provided, that a society may provide that when a child reaches the minimum age for initiation into membership in such society, any benefit certificate issued hereunder may be surrendered for cancellation and exchanged for any other form of certificate issued by the society, provided that such surrender will not reduce the number of lives insured in the branch below five hundred, and upon the issuance of such new certificate any reserve upon the original certificate herein provided for shall be transferred to the credit of the new certificate. Neither the person who originally made application for benefits on account of such child, nor the beneficiary named in such original certificate, nor the person who paid the contributions, shall have any vested right in such new certificate, the free nomination of a beneficiary under the new certificate being left to the child so admitted to benefit membership.

§ 4. Separate financial statement. An entirely separate financial statement of the business transactions and of assets and liabilities rising therefrom shall be made in its annual report to the insurance commissioner by any society availing itself of the provisions hereof. The separation of assets, funds and liabilities required hereby shall not be terminated, rescinded or modified, nor shall the funds be diverted for any use other than as specified in section three, as long as any certificates issued hereunder remain in force, and this requirement shall be recognized and enforced in any liquidation, reinsurance, merger or other change in the condition of the status of the society.

§ 5. Specified payments. Any society shall have the right to provide in its laws and the certificate issued hereunder for specified payments on account of the expense or general fund, which payments shall or shall not be mingled with the general fund of the society as its constitution and by-laws may provide.

§ 6. Continuation of certificate. In the event of the termination of membership in the society by the person responsible for the support of

any child, on whose account a certificate may have been issued, as provided herein, the certificate may be continued for the benefit of the estate of the child, provided the contributions are continued, or for the benefit of any other person responsible for the support and maintenance of such child, who shall assume the payment of the required contributions.

ACT 690.

An act providing that any domestic society, organization or company, providing life insurance for its members or their beneficiaries upon the assessment plan, including any domestic fraternal benefit society organized or operating under the act entitled "An act for the regulation and control of fraternal benefit societies," approved May 1, 1911, as amended, may change into a corporation to transact a life insurance business as a legal reserve or level premium company, not affecting existing suits, rights or contracts, for the protection of which business may be transacted of the kind transacted before reorganization, and for the protection of which a fund is to be created under conditions set forth herein.

[Approved May 21, 1919.

§1. Company transformed into legal

pany.

Stats. 1919, p. 759.]

reserve or level premium com

§2. Capital stock of reorganized company. Fund when contributions not equal to benefits.

§3. Powers of reorganized company. §4. Valuation of policies.

§ 1. Company transformed into legal reserve or level premium company. Any domestic society, organization or company providing life insurance for its members or their beneficiaries upon the assessment plan, including any domestic fraternal benefit society organized or operating under that certain statute entitled "An act for the regulation and control of fraternal benefit societies," approved May 1, 1911, as amended, may upon a majority vote of its trustees or directors, or in any lawful manner, amend its articles of incorporation and by-laws, if already incorporated, or if not incorporated, may incorporate, in such manner as to transform itself into a legal reserve or level premium company, with the name by which it is already known or another name as its directors or trustees shall determine; and upon so doing and upon procuring from the commissioner of insurance a certificate of authority as prescribed by law to transact business in this state as a legal reserve or level premium life insurance company it shall incur the obligation and enjoy the benefits thereof the same as though originally thus incorporated; and such corporation under its articles and by-laws as so framed or amended shall be a continuation of the original organization, society or corporation and the officers thereof shall serve through their respective terms as provided in the original articles and by-laws, but their successors shall be elected and serve as the law and its articles and by-laws provide; but such incorporation, amendment or reincorporation shall not affect existing suits, rights or contracts.

The said society, organization or company so reorganized shall have the power after reorganization to transact business of the same nature transacted by it before reorganization, as well as the powers conferred

hereby and contemplated by its articles of incorporation, in order to protect and perform rights and contracts existing before reorganization.

§ 2. Capital stock of reorganized company. Fund when contributions not equal to benefits. Any society, organization or company so reorganized shall have a capital stock of which at least two hundred thousand dollars must be paid up previous to the issuance of any policies by it as a legal reserve or level premium company. All assets belonging to any such society, organization or company so reorganized, prior to reorganization, or arising or accruing from policies, certificates or benefit certificates issued upon the assessment plan, shall be used only for the benefit of the holders of such policies, certificates or benefit certificates and no portion thereof shall be used or considered as any part of the capital stock provided for by this act. If at the time of reorganization, or at any time thereafter, it shall appear from the last preceding annual report of any such society, organization or company filed with the commissioner of insurance, or as the result of any investigation made by said commissioner, that the present value of the contributions to be received from the holders of policies or benefit certificates on the assessment plan, together with all assets owned by the company that have been accumulated from assessments paid by members on that plan, are not equal to the present value of the benefits to be derived by members under the assessment plan, including all matured liabilities; then the society, organization or company so reorganized shall set aside and maintain a fund which with said present value of contributions and assets will equal the present value of said benefits together with all matured liabilities. Said fund shall be used for the payment of matured liabilities arising under the assessment plan when other assets applicable thereto are exhausted. Said fund may be derived from the capital stock of said reorganized company; provided, however, that the paid-up capital stock other than said fund shall not be less than two hundred thousand dollars. Said fund need not be maintained when the same is not required by conditions as herein expressed. Members in good standing of any such company prior to reorganization shall have the right after reorganization to transfer their insurance in said company to the legal reserve or level premium plan for the same amount without further medical examination, and at the legal reserve or level premium rates. The interest and the assets of the company of any person so transferring shall be transferred to and be a part of the assets of such company on the legal reserve or level premium plan.

§ 3. Powers of reorganized company. The society, organization or company so reorganized and its officials shall exercise all the rights and powers and perform all the duties conferred or imposed by law upon organizations writing the kinds of insurance written by said society, organization or company so reorganized. Such organization and its officials shall exercise all the rights and powers and perform all the duties necessary to protect rights and contracts existing prior to reorganization. The commissioner of insurance shall exercise the powers and discharge the duties concerning any such society, organization or company so reorganized that are applicable to companies writing insurance or issuing policies of the same class organized or operating in the state of California. The commissioner of insurance must issue a certificate of authority to any such society, organization or company so reorganized which