tion of insurance business in this state, and file and safely keep the same in his office, or deposit them as provided in this article. He must examine and inspect the financial condition of all persons engaged or who desire to engage in the business of insurance; issue a certificate of authority to transact insurance business in this state to any persons in a solvent condition who have fully complied with the laws of this state and are in no wise in arrears to the state or to any county or city of the state for fees, licenses, taxes, or penalties accrued upon business previously transacted in the state; determine the sufficiency and validity of all bonds and other securities required to be given by persons engaged, or to be engaged, in insurance business, and cause the same to be renewed in case of the insufficiency or invalidity thereof; and perform all other duties imposed upon him by the laws regulating the business of insurance in this state, and enforce the execution of such laws; prepare and furnish on demand, to all persons engaged in the insurance business, blank forms for such statements or reports as may by law be required of them; make, on or before the first day of August in each year, a report to the governor of this state, containing a tabular statement and synopsis of the reports. which have been filed in his office, showing, generally, the condition of the insurance business and interests in this state, and other matters concerning insurance, and a detailed statement, verified by oath, of the moneys and fees of office received by him, and for what purpose; and whenever any insurance company doing business in this state shall voluntarily surrender to the insurance commissioner its certificate of authority previously granted, thereby withdrawing from business in this state, the commissioner must make due publication of such surrender and withdrawal daily for the period of one week, in each of two daily newspapers, the one published in the city of San Francisco, and the other in the city of Sacramento. It is further enacted, That if any action hereafter commenced in any district court of this state, by a citizen thereof, against a foreign corporation or company doing insurance business in this state, such corporation or company shall transfer, or cause to be transferred, such action to the United States circuit court, the right of such corporation or company to transact insurance business in this state shall thereupon and thereby cease and de

termine; 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 each of some two daily newspapers, the one published in the city of San Francisco, and the other in the city of Sacramento. En. March 12, 1872. Amd. 1873-74, 8; 1877-78, 13.

Insurance corporations: See C. C., secs. 414-451.

Legislative History.

This section is based on section 4 of the insurance commissioner's act of 1868, page 337. The original section did not contain the provision for the voluntary surrender of a certificate by an insurance company and its withdrawal from business. The amendment of 187778 added, "It is further enacted," etc., to the end of section.

Section Cited.

99.

Harrigan v. Home Life Ins. Co., 128 Cal. 539, 58 Pac. 180, 61 Pac.

Annotation.

Certificate to do Business-Prima Facie Evidence.-When the certificate provided for in this section has been issued by the insurance commissioner, it is prima facie evidence of the compliance of the company with provisions of the law. (Harrigan v. Home Life Ins. Co., 128 Cal. 539, 58 Pac. 180, 61 Pac. 99. To same effect: Gutzeil v. Pennie, 95 Cal. 600, 30 Pac. 936.)

BUSINESS OF INSURANCE NOT TO BE TRANSACTED WITHOUT CERTIFICATE.

Sec. 596, Pol. C. No person or company must transact insurance business in this state without first procuring from the insurance commissioner a certificate of authority, as in this chapter provided; and all policies issued or renewed and all insurances taken before obtaining such certificate of authority, are null and void; and any person who as agent or pretended agent of any insurance company, or other person, shall, without the possession of such certificate of authority, solicit, issue or procure to be issued in this state any policy of insurance, shall forfeit to the people of this state the sum of two hundred dollars for each and every policy so issued, or procured to be issued. But any company or corporation belonging to any other state.

or country, having policies of life insurance outstanding in this state, and that were issued in accordance with the laws of this state, shall have the right to maintain a special agent in this state, for the collection of renewal premiums on such policies, and the commissioner is hereby authorized to issue to the duly appointed special agent of such company or corporation, a certificate authorizing him to collect such renewal premium; such certificate to be issued on the production to the commissioner of satisfactory evidence that such company or corporation is authorized to transact life insurance business in the state or country to which it belongs. And any person who, as agent of either the insured or insurer, shall collect such renewal premiums, must, on or before the tenth day of January, annually, file with the commissioner a statement, under oath, showing the gross amount of such annual premiums, collected by him during the year ending on the thirty-first day of December, next preceding, and pay into the office of the commissioner the sum of twenty dollars, gold coin of the United States. Failing to make such statement and payment within the time named, such person shall forfeit to the people of the state of California the sum of one hundred dollars for each and every policy so renewed by the payment to him of such renewal premium. All penalties and forfeitures under this section must be collected by the insurance commissioner, and for the purposes of such collections suits may be instituted by him, in the name of the people of the state of California, in any court of competent jurisdiction. En. March 12, 1872. Amd. 1873-74, 9; 1873-74, 61; 187778, 13; 1880, 89.

Legislative History.

This section is based on section 9 of the insurance commissioner's act of 1868, page 339. The original section read as follows:

"No person must transact insurance business in this state without first procuring from the insurance commissioner a certificate of authority as in this chapter provided; and all policies issued or renewed and all insurances taken before the issuance of such certificate, are null and void.''

The amendments of 1873-74, 1877-78, imposed additional requirements and penalties. As those amendments have no relation to the present conduct of insurance business, they are omitted.

Section Cited.

Thomas v. Justice's Court, 80 Cal. 40, 22 Pac. 80; Wilmington Trans. Co. v. O'Neil, 98 Cal. 7, 32 Pac. 705.

Annotation.

Action in Justice's Court to Recover Penalty.-The justice's court has jurisdiction of an action commenced under this section to recover a penalty under three hundred dollars. (Thomas v. Justice's Court, 80 Cal. 40, 22 Pac. 80.)

Contract of Insurance-Compliance With Sections 2587 and 2596, Civil Code. Notwithstanding a company may be authorized to carry on an insurance business under this section, its contract is not a contract of insurance unless it complies with section 2587 of the Civil Code. (Wilmington Trans. Co. v. O'Neil, 98 Cal. 7, 32 Pac. 705.)

TO EXAMINE AFFAIRS OF COMPANIES, WHEN.

Sec. 597, Pol. C. The commissioner, whenever necessary, or whenever he is requested by verified petition, signed by three persons interested, either as stockholders, policy holders, or creditors of any person engaged in insurance business, showing that such person is insolvent under the laws of this state, must make examination of the business and affairs relating to the insurance business of such person; and for such purpose has free access to all the books and papers of such person, and must thoroughly inspect and examine all his affairs, and ascertain his condition and ability to fulfill his engagements, and whether he has complied with all the provisions of law applicable to his insurance transactions. Such person and his officers and agents must open his books and papers for the inspection of the commissioner, and otherwise facilitate such examination; and the commissioner may administer oaths and examine under oath, any persons relative to the business of such person; and if he finds the books to have been carelessly or improperly kept or posted, he must employ sworn experts to rewrite, post, and balance the same at the expense of such person. Such examination must be conducted in the county where such person has his principal place of business, and must be private, unless the commissioner deems it necessary to publish the result of such investigation, in which case he may publish the same in two of

the public newspapers of this state, one of which must be published in the city of San Francisco. En. March 12, 1872.

Legislative History.

This section is based on section 6 of the insurance commissioner's act of 1868, page 337.

FINES IMPOSED IF COMPANIES REFUSE.

Sec. 598, Pol. C. The commissioner may collect the sum of five hundred dollars from any person engaged in the business of insurance for each refusal to give full and truthful information and response in writing to any inquiry in writing by the commissioner relating to the business of insurance as carried on by him; and for that purpose suits may be instituted by the commissioner, in the name of the people of the state of California, in any court of competent jurisdiction. En. March 12, 1872.

Legislative History.

This section is based on sections 5 and 10 of the insurance commissioner's act of 1868, page 337. The following section is based on section 10 of said act.

MAY ISSUE SUBPOENAS.

Sec. 599, Pol. C. The commissioner may issue subpoenaz for witnesses to attend and testify before him on any subject touching insurance business, or in aid of his duties, which must be served, obeyed, and enforced as provided in the Code of Civil Procedure for civil cases, the commissioner to issue attachments and impose the penalty for disobedience; and, in addition, the defaulting witness may be punished as provided in the Penal Code. En. March 12, 1872.

Legislative History.

See sec. 598, Pol. C. supra.

PROCEEDINGS ON INSOLVENCY OF COMPANIES.

Sec. 600, Pol. C. Whenever the commissioner ascertains that any person engaged in the insurance business is insolvent within the meaning of this chapter, he must revoke the certificate granted, and send by mail to such person, addressed to him at