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. En. March 21, 1872.

NUMBER OF DIRECTORS MAY BE ALTERED, HOW.

Sec. 443, C. C. 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. March 21, 1872.

En.

INVESTMENT OF CAPITAL STOCK.

Sec. 444, C. C. Life, health and accident insurance corporations may invest their capital stock as follows:

1. In loans upon unencumbered and improved real property within the state of California, which shall be worth at the time of the investment at least forty per cent more than the sum loaned.

2. In the purchase of or loans upon interest-bearing bonds, and other securities of the United States and of the state of California.

3. In the purchase of or loans upon interest-bearing bonds of any of the other states of the Union, or of any county, or incorporated city, or city and county in the state of California.

4. In the purchase of or loans upon any stocks of corporations formed under the laws of this state, except of mining corporations, which shall have, at the time of the investment, a value, in the city and county of San Francisco, of not less than sixty per cent of their par value, and shall be rated as first-class securities; but no loans shall be made on any securities specified in subdivisions three and four of this section, in any amount beyond sixty per cent of the market value of the securities, nor shall any loan be made on the stock of the corporation, or notes or other obligations of its corporators. En. March 21, 1872. Amd. 1873-74, 211.

Legislative History.

The original section is as follows: "Life, health, and accident insurance corporations may invest their capital stock as follows: "1. In loans upon unencumbered and improved real estate within the state of California, which shall be worth, at the time of the investment, at nearly fifty per cent more than the sum loaned;

"2. In the purchase of or loans upon interest-bearing stocks, bonds, and other securities of the United States, and of the states thereof; "3. In the purchase of or loans upon interest-bearing bonds of any incorporated city, or city and county, in the state of California;

"4. In the purchase of or loans upon any stocks of companies and corporations formed under the laws of this state, except mining stocks, which shall have at the time of the investment, a value, in the city and county of San Francisco, of not less than sixty per cent of their par value, and shall be rated as first-class securities.

"But no loans shall be made on any securities specified in subdivisions 2, 3, and 4 of this section, in any amount beyond sixty per cent of the market value of the securities, nor shall any loan be made on the stock of the corporation making the loan."

LIMITATIONS TO THE HOLDING OF STOCK AND IN OTHER PARTICULARS MAY BE PROVIDED FOR IN BY-LAWS.

Sec. 445, C. C. 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. En. March 21, 1872.

PREMIUMS, HOW PAYABLE.

Sec. 446, C. C. 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. En. March 21, 1872.

INSURANCE CORPORATIONS TO FURNISH DATA TO INSURANCE COMMISSIONER-EMPLOYMENT OF ACTUARY.

Sec. 447, C. C. Every life insurance corporation organized under the laws of this state must, on or before the first day of February of each year, furnish the insurance commissioner the necessary data for determining the valuation of all its policies outstanding on the thirty-first day of December then next preceding. And every life insurance company organized under the laws of any other state or country, and doing business in this state, must, upon the written requisition of the commissioner, furnish him, at such time as he may designate, the requisite data for determining the valuation of all of its policies then outstanding; such valuations must be based upon the rate of mortality established by the American experience life table and interest at four and one-half per cent per annum; provided, that from and after the thirty-first day of December, A. D. one thousand eight hundred and ninety-one, such valuations must be based upon the rate of mortality established by the combined experience or actuaries' table of mortality, with interest at the rate of four per cent per annum. When the laws of any other state or territory require of a life insurance company organized under the laws of this state a valuation of its outstanding policies by any standard of valuation different from that named in this section, the insurance commissioner is hereby authorized to make such valuation for use in such other state or territory, and to issue his certificate in accordance therewith. For the purpose of making the valuations, the insurance commissioner is authorized to employ a competent actuary, whose compensation for such valuations. shall be three cents for each thousand dollars of insurance, to be paid by the respective companies whose policies are thus valued. En. March 21, 1872. Amd. 1873-74, 211; 1889, 35.

Legislative History.

The original section is as follows: "Sec. 447. Every life insurance corporation doing business in this state, or formed under the provisions of this part, must, on or before the first Monday in January of each year, furnish the insurance commissioner the necessary data for determining the valuation of all its policies outstanding on the thirty-first day of December next preceding; which valuation must

be based upon the rate of mortality as established by the American experience life table. The rate of interest to be assumed must be four and one-half per cent per annum."

The amended section of 1873-74 is substantially the same as now, except that it did not contain the next to the last sentence.

NO STAMP REQUIRED ON ACCIDENT INSURANCE CONTRACT. Sec. 448, C. C. No stamp is required nor stamp duty exacted on any contract of insurance, when such contract insures against accident which may result in injury or death. En. March 21, 1872.

See act of March 28, 1874, relative to mutual beneficial and relief associations, Appendix, title "Benefit Societies."'

VALUATION OF POLICIES, RETALIATORY PROVISIONS.

Sec. 449, C. C. When the certificate of the insurance commissioner of this state, of the valuation of the policies of a life insurance company, as provided in section four hundred and forty-seven of the Civil Code of this state, issued to any company organized under the laws of this state, shall not be accepted by the insurance authorities of any other state, in lieu of a valuation of the same, by the insurance officer of such other state, then every company organized under the laws of such other state doing business in this state, shall be required to have a separate valuation of its policies made under the authority of the insurance commissioner of this state, as provided in section four hundred and forty-seven of the Civil Code. En. Stats. 1873-74, 270.

POLICY TO CONTAIN WHAT PROVISIONS.

Sec. 450, C. C. 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 nonpayment 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 the time of lapse, either to the purchase of nonparticipating 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 nonpayment of premium, to the purchase of a nonparticipating 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 nonpayment 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