sand 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, life, health, accident and marine insurance, may, after the investment of two hundred thousand dollars, 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, 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.

7. Life insurance companies, or corporations, no matter when organized, may loan upon their own policies, provided that the amount so loaned upon each policy shall not exceed the reserve against said policy at the time said loan is made; provided further, that no policy loans whatever shall ever be used as security which may be deposited with the insurance commissioner under section six hundred and thirty-four of the Political Code; and provided further, that whenever any such loan.

in any amount is made on a policy registered with the insur ance commissioner under said section six hundred and thirtyfour of the Political Code, such registration shall be forthwith canceled.

Nothing in this section contained shall be construed as in anywise affecting the provisions of section four hundred and forty-four of this code. En. Stats. 1905, 34.

Legislative History.

This section was adopted March 3, 1905.

There was also another section 421 adopted March 21, 1905, as follows:

CORPORATIONS, INSURANCE, IN GENERAL; HOW CAPITAL AND ACCUMULATIONS MAY BE INVESTED BY.

Sec. 421, C. C. Corporations 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:

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 any state or territory of the United States not in default for interest on such bonds.

4. In loans upon unincumbered real property, which shall be worth, at the time of the investment, at least, forty per cent more than the sum loaned, or upon merchandise or cereals warehouse, but in no instance shall such loan be made in exces 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, life, health, accident and marine insurance, may, after the investment of two hundred thousand dollars, 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, after the investment of one hundred thousand dollars, in the manner provided in subdivision one, two, three and four of this section, invest the balance of their capital and any accumulations in the purchase of : or loans upon the stock of any corporation (except mining companies, organized and carrying on business under the laws of the State of California which have at the time of investment a market value of not less than their paid-in value, and which are rated as first-class securities, or in interest-bearing first mortgage bonds of same not in default of interest; 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 during the months 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.

7. Life insurance corporations may loan upon their own policies provided that the amount so loaned upon each policy shall not exceed the reserve against said policy at the time said loan is made; provided further, that no policy loans whatever shall ever be used as security which may be deposited with the insurance commissioner under section six hundred and thirty-four of the Political Code; and provided further, that whenever any such loan in any amount is made on a policy registered with the insurance commissioner under said section six hundred and thirty-four of the Political Code, such registration shall be forthwith canceled.

8. Nothing in this section contained shall be construed as in anywise affecting the provisions of section four hundred and forty-four of this code. En. 1905, 628.

FUNDS, HOW INVESTED.

Sec. 427, C. C. En. March 21, 1872. Amd. 1873-74. 210. 1877-78, 81; 1887,22; 1899, 66. Rep. 1905, 34; 1905, 628. Legislative History.

See page 315 of "Corporation Laws of California."

CORPORATIONS, FIRE AND MARINE; AMOUNT OF RISK TO BE TAKEN BY.

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 at once reinsuring the excess abore one-tenth. En. March 21, 1872. Amd. 1873-74, 210; 1905. 570.

Legislative History.

The change consists in the insertion of the words "at once" before reinsuring."-Code Commissioner's Note.

AMOUNTS TO BE RESERVED BY LIFE INSURANCE COM

PANIES.

Sec. 431, C. C. En. Stats. 1877-78, 81. Rep. 1905, 571.

Legislative History.

Section 431, which deals with the amounts to be received by life insurance companies, now stands in a chapter entitled "Fire, Marite and Title Insurance Corporations. 99 It is transferred to a more appropriate chapter, and numbered 452. See section 452, Civil Code, post.

MUTUAL LIFE INSURANCE COMPANIES; CAPITAL STOCK OF CAPITAL STOCK TO BE PAID UP; GUARANTEE FUND. Sec. 437, C. C. Every corporation formed for the purpose of mutual insurance on the lives or health of persons, or against

accidents to persons for life or any fixed period of time, or to purchase and sell annuities, must have a capital stock of not less than two hundred thousand dollars. It must not make any insurance upon any risk or transact any other business as a corporation until its capital stock is fully paid up in cash, nor until it has also obtained a fund, to be known as a "guarantee fund," of not less than two hundred and fifty thousand dollars, as is hereinafter provided. If more than the requisite amount is subscribed, the stock must be distributed pro rata among the subscribers. Any subscription may be rejected by the board of directors or the committee thereof, either as to the whole or any part thereof, and must be, so far as rejected, without effect, nothing in this section shall be deemed to contravene any of the provisions of section four hundred and fiftycne. En. March 21, 1872. Amd. 1905, 183.

Legislative History.

The capital stock required is changed from one to two hundred thousand dollars and the last sentence is added.

STAMP DUTIES.

Sec. 448, C. C. En. March 12, 1872. Rep. 1905, 571.

Legislative History.

This section exempts accident insurance companies from stamp duties, but as there are no such duties under the law as it now stands the section is unnecessary.-Code Commissioner's Note.

Nielsen v. Provident Sav. etc. Soc., 139 Cal. 335, 96 Am. St. Rep. 146, 73 Pac. 168.

Additional Annotation.

Similarity in Statutes. Similarity between this section and a New York law on same subject noted. (Nielsen v. Provident Sav. etc. Soc., 139 Cal. 335, 96 Am. St. Rep. 146, 73 Pac. 168.)