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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 exeented, with the insurance commissioner. En. March 21, 1872.

PROPERTY WHICH MAY BE INSURED.

Sec. 426, C. C. 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. En. March 21, 1872.

Insurable interest defined: See post, sec. 2546, C. C.

Annotation.

The officers of an insurance company have no power, as agents of an applicant, to apply to another insurer for a policy as such agent, so as to make the corporation or its stockholders liable to the insurer for the premium. (Hutchinson v. s. I. & I. Co., 53 Cal. 622.)

FUNDS MAY BE INVESTED, HOW.

Sec. 427, C. C. Corporations organized subsequent to April first, eighteen hundred and seventy-eight, under the laws of this state, for the transaction of business in any kind of insurance, may invest their capital and accumulations in the following named securities :

1. In the purchase of or loans upon interest-bearing bonds of the United States government.

2. In the purchase of or loans upon interest-bearing bonds of any of the states of the United States, not in default for interest on such bonds.

3. In the purchase of or loans upon interest-bearing bonds of any of the counties and incorporated cities and towns of the states of California and Oregon, not in default for interest on such bonds.

4. In loans upon unencumbered real property, worth at least one hundred per cent more than the amount loaned; or upon

or

merchandise or cereals in warehouse, but in no instance shall such loan be made in excess of seventy-five per cent of the security taken.

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. Corporations organized for and engaged in the business of fire and marine insurance may, after the investment of two hundred thousand dollars, and corporations formed or ganized for the transaction of business in any kind of insurance not enumerated in section four hundred and nineteen of the Civil Code 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 interest-bearing first mortgage bonds of any corporations (except mining companies), not in default of interest, organized and carrying on business under the laws of any state of the United States; 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, on the first days 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. En. March 21, 1872. Amd. 1873-74, 210; 1877-78, 81; 1887, 22; 1899, 66.

Legislative History.

The original section is as follows: “Sec. 427. Every fire and marine insurance corporation may, by its board of directors, or as the by. laws direct, invest its funds in loans upon real or personal property, or in the purchase of stocks, bonds or other securities, but no loan must be made on the stock of the corporation, as security.

The amendment of 1873-74 put in place of the words “ as security' the words " or on the notes or obligations of any of its stockholders."

The amendment of 1877.78, is as follows: “Corporations hereafter organized under the laws of this state for the transaction of business in any kind of insurance, may invest their capital and accumulations in the following named securities:

“One-In the purchase of, or loans upon, interest bearing bonds of the United States government.

“Two-In the purchase of, or loans upon, interest bearing bonds of any of the states of the United States not in default for interest on such bonds.

“Three-In the purchase of, or loans upon, interest bearing bonds of any of the counties and incorporated cities and towns of the state of California, not in default for interest on such bonds.

"Four-In loans upon unencumbered real property, or upon merchandise in warehouse, worth at least one hundred per cent more than the amount loaned. But no investment in the sureties named in subdivisions one, two, and three, of this section, must be made in amount exceeding the par value of such securities, nor exceeding their market value."

The section as amended in 1887 is the same as now, except that it did not contain in subdivision 6 the words and corporations formed or organized for the transaction of business in any kind of insurance not enumerated in section four hundred and nineteen of the Civil Code may.'

Section Cited.

Sun Insurance Co. v. White, 123 Cal. 203, 55 Pac. 902.

Annotation.

A finding that moneys loaned by an insurance company, under this section, “constituted parts of its capital and accumulations," satisfies the requirement that such loans must be made out of its ** capital and accumulations.” (Sun Insurance Co. v. White, 123 Cal. 203, 55 Pac. 902.)

LIMIT OF ONE RISK.

Sec. 428, C. C. Fire and marine insurance corporations must never take, on any one risk, whether it is a marine insur

ance 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 reinsuring the excess above onetenth. En. March 21, 1872. Amd. 1873-74, 210.

Legislative History.

The original section did not contain the words “and intact at the time of taking such risk.'

AMOUNTS TO BE RESERVED BEFORE MAKING DIVIDENDS.

Sec. 429, C. C. 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 enake 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 of 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. En. March 21, 1872. Amd. 1877-78, 81; 1887, 23.

Declaring dividends generally: See ante, sec. 309, C. C.; see, also, ante, sec. 417, C. C., as to declaring dividends by insurance companies generally.

Legislative History.

The original section is as follows:

“No corporation transacting fire or marine insurance business under the laws of this state 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 cr inland risks, except marine time risks;

“3. A fund equal to one-half of 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.'

The amendment of 1877-78 is as follows:

“No corporation, formed hereafter under the laws of this state, and transacting fire, marine, inland navigation insurance business, or insurance provided for by section four hundred and twenty of this code, inust make any dividends, except from profits remaining on hand after retaining unimpaired

“One-The entire subscribed capital stock.

“Two-All the premiumrs received or receivable on outstanding Varine or inland risks, except marine time risks.

“Three-A fund equal to one-half of the amount of all premiums on all other risks not terminated at the time of making such dividend.

"Four-A sum sufficient to pay all losses reported, or in course of settlement, and all liabilities for expenses and taxes.”

RESERVATION BY COMPANIES WITH LESS THAN TWO HUN.

DRED THOUSAND DOLLARS CAPITAL. Sec. 130, C. C. 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. En. March 21, 1872.

AMOUNTS TO BE RESERVED BY LIFE INSURANCE COM

PANIES. Sec. 431, C. C. 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 re taining unimpaired

1. The entire capital stock.

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