sixty-seven of the acts of the year eighteen hundred and ninety-four and acts amendatory thereof, and except companies formed under or subject to chapter four hundred and twenty-one of the acts of the year eighteen hundred and ninety and acts amendatory thereof, may exercise the powers and shall be subject to the duties and liabilities General court provided by this act. And the general court may, for any cause it deems sufficient, annul or dissolve any such corporation or revoke its charter, and may amend or repeal the laws affecting the powers and obligations of such corporations. may dissolve corporation or revoke its char ter, etc. Definition of insurance. Unlawful to make, etc., con ance otherwise than as herein authorized; exceptions. Provisos. SECTION 3. A contract of insurance is an agreement by which one party for a consideration promises to pay money or its equivalent or to do some act of value to the assured upon the destruction or injury of something in which the other party has an interest, and it shall be untracts for insur lawful for any company to make any contract of insurance upon or concerning any property or interests or lives in this Commonwealth, or with any resident thereof, or for any person as insurance agent or insurance broker to make, negotiate, solicit, or in any manner aid in the transaction of such insurance, unless and except as authorized under the provisions of this act: provided, that corporations formed under chapter three hundred and sixty-seven of the acts of the year eighteen hundred and ninety-four and acts amendatory thereof may make provision for and pay benefits to their members and to the widows, orphans, relatives and other dependents of deceased members in the mode provided in said chapter; and also provided, that nothing herein shall affect the rights or powers of corporations engaged in the transaction of life and casualty insurance upon the assessment plan, under the authority of chapter four hundred and twenty-one of the acts of the year eighteen hundred and ninety, to transact the business authorized by said chapter. All contracts of insurance on property, lives or interests in this Commonwealth shall be deemed to be made therein. Insurance commissioner, appointment, term, bond, etc. DEPARTMENT AND COMMISSIONER OF INSURANCE. SECTION 4. The department of insurance shall remain as now established. Its chief officer, appointed by the governor with the advice and consent of the council, shall be styled the Insurance Commissioner for the Com monwealth, and shall hold his office for the term of three years from the date of his commission and until his successor is appointed and qualified, unless sooner removed by the governor. He shall give bond with sureties in the sum of ten thousand dollars, to be approved by the treasurer of the Commonwealth, for the faithful discharge of his duties, and shall receive in full compensation for his services an annual salary of thirty-five hundred dollars. POWERS AND DUTIES OF THE COMMISSIONER. duties of com. SECTION 5. The commissioner shall exercise the pow- Powers and ers and perform the duties conferred and imposed upon missioner. him by this act or by any other law of the Commonwealth. He may with the approval of the governor and council appoint, and with their consent remove, a deputy commis- Deputy. sioner to assist him in his duties, who shall receive an annual salary of twenty-five hundred dollars. In the event of a vacancy in the office of commissioner or during the absence or disability of that officer the deputy commissioner shall perform the duties of the office. The com- Clerks and missioner may employ in his department a chief clerk with assistants. an annual salary of two thousand dollars, a second clerk with an annual salary of fifteen hundred dollars, a third clerk with an annual salary of twelve hundred dollars, and such additional clerks and assistants as the public business in his charge may require, at an expense not to exceed such sum as the general court may appropriate each year. QUALIFICATION AND EXAMINATION OF COMPANIES. examined as to SECTION 6. Before granting certificates of authority to Companies to be an insurance company to issue policies or make contracts qualifications, of insurance he shall be satisfied, by such examination and etc. evidence as he sees fit to make and require, that such company is otherwise duly qualified under the laws of the Commonwealth to transact business therein. domestic As often as once in three years he shall personally or by Examination of his deputy or chief clerk visit each domestic insurance companies. company, and thoroughly inspect and examine its affairs, especially as to its financial condition and ability to fulfil its obligations and whether it has complied with the laws. He shall also make an examination of any such company whenever he deems it prudent to do so or upon the request of five or more of the stockholders, creditors, policy hold Examination of foreign com. panies. Expenses. Examination of books and papers, etc. ers or persons pecuniarily interested therein who shall make affidavit of their belief, with specifications of their reasons therefor, that such company is in an unsound condition. Whenever he deems it prudent for the protection of policy holders in this Commonwealth, he shall in like manner visit and examine or cause to be visited and examined by some competent person or persons he may appoint for that purpose any foreign insurance company applying for admission or already admitted to do business by agencies in this Commonwealth, and such company shall pay the proper charges incurred in such examination, including the expenses of the commissioner or his deputy and the expenses and compensation of his assistants employed therein. For the purposes aforesaid the commissioner or his deputy or person making the examination shall have free access to all the books and papers of an insurance company that relate to its business, and to the books and papers kept by any of its agents, and may summon and qualify as witnesses under oath and examine, the directors, officers, agents and trustees of any such company, and any other persons, in relation to its affairs, transactions and condition. May revoke or suspend author. ity of certain foreign companies to do business, etc. Proviso. UNSOUND AND DELINQUENT COMPANIES. SECTION 7. If he is of opinion upon examination or other evidence that a foreign insurance company is in an unsound condition, or if a life insurance company, that its actual funds exclusive of its capital are less than its liabil ities; or if a foreign insurance company has failed to comply with the law, or if it, its officers or agents refuse to submit to examination or to perform any legal obligation in relation thereto, he shall revoke or suspend all certificates of authority granted to it or its agents, and shall cause notifications thereof to be published in the newspaper in which the general laws are published, and no new business shall thereafter be done by it or its agents in this Commonwealth while such default or disability continues, nor until its authority to do business is restored by the commissioner: provided, however, that unless the ground for revocation or suspension relates only to the financial condition or soundness of the company, or to a deficiency in its assets, he shall notify the company not less than ten days before revoking its authority to do business in this Commonwealth; and he shall specify in the notice the particulars of the supposed violation. The supreme judicial court upon petition of said company, brought within the ten days aforesaid, shall summarily hear and determine the question whether such violation has been committed, and shall make any proper order or decree therein and enforce the same by any appropriate process. If the order or decree is adverse to the petitioning company, an appeal therefrom may be taken to the full court; and in the case of such appeal the commissioner may issue his order revoking the right of said petitioning company to do business in this Commonwealth until the final determination of the question by the full court aforesaid. Neither this Not to affect act nor any proceedings thereunder shall affect any crim- prosecutions, inal prosecution or proceeding for the enforcement of any fine, penalty or forfeiture. certain criminal etc. injunction in vency, etc., of a If, upon examination, he is of opinion that any domes- To apply for tic insurance company is insolvent, or has exceeded its case of insolpowers, or has failed to comply with any provision of law, domestic comor that its condition is such as to render its further pro- pany. ceedings hazardous to the public or to its policy holders, he shall apply to a justice of the supreme judicial court to issue an injunction restraining it in whole or in part from further proceeding with its business. Such justice Powers of court. may, in his discretion, issue the injunction forthwith, or upon notice and hearing thereon, and after a full hearing of the matter may dissolve or modify such injunction or make it perpetual, and may make all orders and decrees needful in the premises, and may appoint agents or receivers to take possession of the property and effects of the company and to settle its affairs subject to such rules and orders as the court may from time to time prescribe, according to the course of proceedings in equity. domestic capital when SECTION 8. Whenever it appears to him that the cap- To notify a ital of a domestic insurance company is impaired to the company to extent of one fourth or more, on the basis fixed in section make good its eleven, he shall notify the company that its capital is legally impaired, etc. subject to be made good in the mode provided by section thirty-five, and if such company shall not within three months after such notice satisfy him that it has fully repaired its capital, or reduced its capital, as provided in section thirty-seven, he shall institute proceedings against it in accordance with the preceding section. To notify domestic life business when its funds are deficient. SECTION 9. When the actual funds of a domestic life company to cease insurance company, exclusive of its capital, are not of a net cash value equal to its liabilities, including the net value of its policies computed by the rule of valuation established by section eleven, he shall notify such company and its agents to issue no new policies until its funds become equal to its liabilities. To report viola. tions of law to attorneygeneral. SECTION 10. If upon examination or other evidence exhibited to him he is of opinion that any insurance company, or an officer or agent thereof, has violated any provision of this act, he shall report the facts to the attorney-general, who shall cause such company, officer or agent to be prosecuted therefor. VALUATION OF LIFE POLICIES. REINSURANCE RESERVE. ASSETS. To value policies of life companies annually. tion. SECTION 11. He shall each year compute the net value on the thirty-first day of December of the preceding year of all outstanding policies of life insurance in companies authorized to make insurance on lives in this Commonwealth upon the basis of the "Combined Experience" or "Actuaries' Table" rate of mortality, with the interest at four per cent. per annum, and the aggregate net value so Rule of valua. ascertained, of the policies of any such company shall be deemed its liability on account of its policy obligations, other than accrued claims, to provide for which it shall hold funds in secure investments of an amount equal to such net value above all its other liabilities. When the actual premium charged by a company for an insurance is less than the net premium for such insurance, computed according to the table of mortality and rate of interest aforesaid, then, and in every such case, the company shall be charged as a separate liability with the value of an annuity, the amount of which shall equal the difference between the premiums aforesaid, and the term of which in years shall equal the number of future annual payments due on said insurance at the date of the valuation. Rule for com. putation of reserves for reinsurance or To determine the liability upon its contracts of insurance of an insurance company, other than life and real policy liability. estate title insurance, and thence the amount such company shall hold as a reserve for reinsurance, he may take fifty per cent. or the actual unearned portion of the premiums written in its policies; but in respect to marine risks he shall compute the liability thereon by charging |