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the Commissioner within thirty days after the issuance of the first registered policy, and must contain all such policies issued up to date of filing. After that date, the company must, within three days after the first day of each calendar month, file a statement embracing all its registered policies issued since the filing of its last preceding list. Upon filing such lists of policies, from time to time, the company must deposit with the Commissioner, as a special deposit for the benefit of such registered policies, securities of the denominations stated in section four hundred twenty-one of the Civil Code as permissible for the investment of the capital and accumulations of insurance companies. Such deposits must be in an amount equal to the full net value of all policies registered up to the time of making the deposit, and must, at all times, be equal to such net value of all registered policies. Upon receipt of such securities the Commissioner must immediately deposit them in the State treasury, in accordance with the provisions of section six hundred and eighteen of the Political Code, where they must remain as a special security for the benefit of such registered policies. Such company may, at any time, withdraw any excess of securities above the net present value hereinbefore specified, upon satisfying said Commissioner by written proof that such excess exists, and shall be allowed to receive the interest on all securities deposited and to exchange such securities by substituting other securities of the character in which, by the laws of this State, it may invest its funds. [Amendment approved March 18, 1905 ; in effect in sixty days.]

128 Cal. 537.


An Act to provide for the organization and management of

county fire insurance companies. [Approved April 1, 1897. As amended, approved March 23, 1907.) The people of the State of California, represented in Senate

and Assembly, do enact as follows: SECTION 1. Any number of persons, not less than twentyfive, residing in any county in this State, owning insurable property aggregating not less than fifty thousand dollars in value, which they desire to have insured, may incorporate for the purpose of mutual insurance against loss or damage by fire.

SEC. 2. Such persons shall file with the Insurance Commissioner a declaration of their intention to incorporate for the purposes expressed in section one of this Act, which declaration shall be signed by all of the incorporators, and shall contain a copy of the articles of incorporation proposed to be adopted. The Insurance Commissioner shall examine the proposed articles of incorporation, and, if they conform to this Act, he shall deliver to such persons a certificate permitting them to incorporate as such insurance company. Such certificate shall be directed to the Clerk of the county in which such corporation is proposed to be organized, and shall contain a copy of the proposed articles of incorporation. Upon filing with the Secretary of State the certified copies of the duly executed articles of incorporation, as required by section two hundred and ninety of the Civil Code of the State of California, and of the certificate above provided for, the Secretary of State shall thereupon issue a certificate of incorporation to such county insurance company, and, upon organizing under such articles of incorporation, such county fire insurance company may carry on a fire insurance business as hereinafter provided. The articles of incorporation and the charter or certificate obtained by any county fire insurance company operating under the provisions of this Act shall be subject to the control and modification by the Legislature of the State of California. The by-laws and all amendments thereto shall be filed with the Insurance Commissioner within sixty (60) days after their adoption.

SEC. 3. The number of directors shall not be less than seven (7), nor more than eleven (11), a majority of whom shall constitute a quorum to do business. These directors shall be elected from the members of the association by ballot, and shall hold office for one year, or until their successors are elected and qualified. The annual meeting of the members of the company shall be on the second Monday in January of

In the election of the first board of directors each member shall be entitled to one vote. At every subsequent election, every person insured shall be entitled to as many votes as there are directors to be elected, and an equal additional number for every risk or risks he holds in the company, and he may cast the same in person or by proxy, distributing

each year.

them among the directors to be elected, or among a less number of directors, or cumulating them upon one candidate, as he shall see fit.

SEC. 4. The directors shall elect, from their own number, a president and a vice-president, and shall also elect a treasurer and a secretary, who may or may not be members of the company.

All of such officers hold their office for one year from the date of their election, and until their successors are elected and qualified.

SEC. 5. The treasurer and secretary shall give bonds to the company for the faithful performance of their duties, in such amounts as shall be prescribed by the board of directors.

SEC. 6: Such corporation and its directors shall possess the usual powers, and be subject to the usual duties of corporations and directors thereof, and may make such by-laws, not inconsistent with the Constitution and the laws of this State, as may be deemed necessary for the management of its affairs, in accordance with the provisions of this Act.

Also to prescribe the duties of its officers and to fix their compensation, and to alter and amend its by-laws, when necessary.

SEC. 7. Any person owning property in the county for which any such company is formed or any person owning property in any county adjoining the county wherein such company is formed as hereinafter provided may become a member of such company by insuring therein, and shall be entitled to all the rights and privileges appertaining thereto; and no person not residing in the county in which the company is formed shall become a director of such company. [Amendment approved March 23, 1907; in effect in sixty days. ]

SEC. 8. Such company may issue policies only on detached dwellings, school houses, churches, barns, (except livery barn and hotel barns), and other farm buildings, and such property

may be contained therein; also, other property on the premises owned by the insured; hay and grain in stack or in the field, and live stock on the premises of the insured, anywhere in the county, for any time not exceeding five years, and not to extend beyond the time limited for the existence of the charter, and for an amount not to exceed four thousand five hundred dollars on any one risk; provided, that no company which has been organized more than six months shall write insurance subject to one fire exceeding three per cent of the amount at risk upon the books of such company.* All persons


so insured shall give their obligation to the company, binding themselves, their heirs and assigns, to pay their pro rata share to the company of the necessary expense and of loss by fire which may be sustained by any member thereof during the time for which their respective policies are written, and they shall also at the time of effecting the insurance pay such a percentage in cash, and such other charges, as may be required by the rules or by-laws of the company.

SEC. 9. All such companies must classify the property insured therein at the time of issuing policies thereon under different rates, corresponding as nearly as may be to the greater or less risk from fire loss which may be attached to the several kinds of property insured. SEC. 10. No such company shall


any property beyond the limits of the county wherein which the company is organized, except that a company may insure in an adjoining county to the amount of fifty-five thousand dollars and no more, where no mutual company exists, or is organized therein, and as soon as a mutual company shall organize therein, said company first insuring, and with its original place of business in an adjoining county, shall, as soon as its policies originally issued expire or shall be canceled, retire therefrom. Nor shall any company issue policies of insurance on any property within the limits of any city containing over six thousand inhabitants, at the time of the organization of such company; provided, that no dwelling shall be insured within the corporate limits of any city or town exposed by any other building within one hundred feet, or by any other risk other than a dwelling or private barn within two hundred feet of the risk assumed; provided, that the amount of insurance shall not exceed seventy-five per cent of the value of the property, and that no additional insurance shall be allowed. [Amendment approved March 23, 1907 ; in effect in sixty days.]

SEC. 11. Every member of such company who may sustain loss or damage by fire shall immediately notify the president, or in his absence, the secretary thereof, stating the amount of damages or loss sustained or claimed, and if not more than five hundred dollars, then the president and secretary shall proceed to ascertain the amount of such loss or damage, and adjust the same. If the claim for damage or loss be an amount greater than five hundred dollars, then the president of such company, or in his absence, the vice-president, or in

the absence of both, the secretary thereof, shall forthwith convene the board of directors of such company, whose duty it shall be when convened to appoint a committee, of not less than three disinterested members of such company, to ascertain the amount of such damage or loss. If in either case there is a failure of the parties to agree upon the amount of such damage or loss, they shall submit the question of the amount of such loss to arbitration. The president of the company shall appoint one disinterested person to act as an arbitrator, and no claimant or insured shall appoint another, and if such two arbitrators fail to agree upon the amount of such loss, then they shall select a third disinterested person to act with them. Such arbitrators so appointed shall have full authority to examine witnesses, and shall do all other things necessary to the proper determination of the amount of loss sustained by the claimant, and shall make their award in writing to the president of the company, and such award so as aforesaid made shall be final as to the amount of the loss sustained. The pay of said committee shall be three ($3.00) dollars per day for each day's services so rendered, and five cents for each mile necessarily traveled in the discharge of their duties, which shall be paid by the claimant, unless the award of such committee shall exceed the sum offered by the company in liquidation of such loss or damage, in which case such expense shall be paid by the company. [Amendment approved March 23, 1907 ; in effect in sixty days. ]

SEC. 12. When the amount of any loss shall have been ascertained, which exceeds in amount the cash funds of the company, the president shall convene the directors of said company, who shall make an assessment upon all the property to the amount for which each several piece of property is insured, taken in connection with the rate of premium under which it may be classified; provided further, that the board of directors may at their annual meeting levy an assessment not to exceed twenty-five cents on the one hundred dollars on first class insurance and a pro rata amount on other classes and said

so raised shall constitute a reserve fund to be used in emergency cases only and another assessment for this fund shall not be made while this reserve remains intact. [Amendment approved March 23, 1907; in effect in sixty days.]

SEC. 13. It shall be the duty of the secretary, whenever such an

assessment shall have been made, to immediately


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