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and a certificate from the Insurance Commissioner of the State in which such company is incorporated, in which certificate the Insurance Commissioner must certify that such company's annual statement is correct. Any mutual insurance company incorporated under the laws of any other State, after complying with the provisions of this section shall be granted a license by the Insurance Commissioner of this State, granting such company full power to transact business under this Act. SEC. 8. Each policyholder shall be liable to pay his proportionate part of any assessment which may be levied by the company, in accordance with the law and his contract, on account of losses and expenses incurred while he is a member. Mutual insurance companies shall charge and collect upon its policies the full premium in cash or notes, absolutely payable, and may, in its by-laws, fix the liability of its members for the payment of the losses and expenses not provided for by its cash funds; provided, that the liability of a member shall not be less than a sum equal to the cash premium written in his policy. The total amount of the liability of a policyholder shall be plainly and legibly stated upon the back of each policy.


SEC. 9. Whenever such company is not possessed of cash funds above its permanent cash reserve fund hereinafter provided, sufficient for the payment of accrued losses and expenses, it shall make an assessment for the amount needed to pay such losses and expenses, upon its members liable to assessment therefor, in proportion to their several liabilities. The company shall cause to be recorded in a book kept for that purpose, the order for such assessment, together with a statement which shall set forth the condition of the company at the date of the order, the amount of its cash assets and of its premium notes, or other contingent funds liable to assessment and the amount the assessment calls for. Such record shall be made and signed by the directors who voted for the order, before any part of the assessment is collected, and any person liable to assessment may inspect and take a copy of the


SEC. 10. Any member of any such corporation may withdraw at any time by surrendering his policy or certificate of insurance to the corporation, and giving thirty days' written notice of his intention to withdraw and by paying his share of all losses which shall have accrued by the end of the time

specified in the notice, and all assessments due, accrued, or pending at the time of his withdrawal, but the company may retain the rate usually charged by standard insurance companies for a short-term policy; provided, also, that the corporation shall have power to cancel or determine any policy by giving the insured five days' written notice to that effect, and returning to the insured his pro rata of the unearned premium.

SEC. 11. No mutual fire insurance corporation formed under this Act may make any dividend except from profits in hand after retaining unimpaired:

1. The sum of fifty thousand dollars.

2. A fund equal to one half the amount of all premiums on risks not terminated at the time of making such dividend. 3. A sufficient sum to pay all losses reported, or in course of settlement, and all liabilities for expenses and taxes.

SEC. 12. Nothing in this Act shall be construed to restrict or affect the provisions of "An Act to provide for the organization and management of county fire insurance companies," . approved April 1st, 1897.

SEC. 13. The general provisions applicable to all corporations as expressed in part four of division first of the Civil Code of the State of California, also all provisions of the Political Code so far as compatible with the provisions of this Act, are hereby made applicable to corporations provided for by this Act.



The following Act was codified by the Legislature of 1905 (see Sections 452a to 453 of the Civil Code), but is placed herein for the reason that, under Section 288 of the Civil Code, it is applicable to all corporations formed under its provisions:

An Act relating to mutual beneficial and relief associations.

[Approved March 28, 1874.]

The people of the State of California, represented in Senate and Assembly, do enact as follows:


Associations may be formed for the purpose of paying to the nominee of any member a sum upon the death of said member, not exceeding three dollars for each member

of such association. No such association shall exceed in number three thousand persons. [Amendment approved February 14, 1901.]

SEC. 2. Such association shall be formed by filing a verified certificate in the office of the Clerk of the county in which the principal place of business shall be situated, and filing a like certificate in the office of the Secretary of State; such certificate shall state the general objects of the association, its principal place of business, and the names of the officers selected to hold office for the first three months, and shall be signed by said officers, and verified by at least three of them.

SEC. 3. Said associations, upon the death of each member, may levy an assessment upon each member living at the time of the death, not exceeding three dollars for each member, and collect the same, and pay the same to the nominee of such deceased; and may also provide the payment of such annual payments of members as may be deemed best, such annual assessment upon any one member not to be raised above the annual assessment established at the time such member joined such association.

SEC. 4. Such association, by its name, may sue and be sued, and may loan such funds as it may have on hand, and may own sufficient real estate for its business purposes, and such other real estate as it may be necessary to purchase on foreclosure of its mortgages; provided, such real estate so obtained through foreclosure shall be sold and conveyed within five years from the day title is obtained, unless the Superior Court of the proper county shall, upon petition and good cause shown, extend the time. [Amendment approved April 6, 1880.]

SEC. 5. Such association may make such by-laws, not inconsistent with the laws of this State, as may be necessary for its government and for the transaction of its business, and shall not be subject to the provisions of the general insurance laws.

SEC. 6. All associations heretofore formed for the objects contemplated in this Act, and now in operation, may avail themselves of its provisions by filing the certificate provided for in section one; provided, that such societies shall not have a greater membership than three thousand.

SEC. 7. This Act shall take effect immediately.


The following Act was codified by the Legislature of 1905 (see Sections 453d to 453p of the Civil Code), but is placed herein for the reason that, under Section 288 of the Civil Code, it is applicable to all corporations formed under its provisions :

An Act relating to life, health, accident, and annuity or endowment insurance on the assessment plan, and the conduct of the business of such insurance.

[Approved March 19, 1891.]

The people of the State of California, represented in Senate and Assembly, do enact as follows:

SECTION 1. Every contract whereby a benefit may accrue to a party or parties therein named upon the death or physical disability of a person insured thereunder, or for the payment of any sums of money dependent in any degree upon the collection of assessments or dues from persons holding similar contracts, shall be deemed a contract of mutual insurance upon the assessment plan. Such contracts must show that the liabilities of the insured thereunder are not limited to fixed premiums. SEC. 2. Corporations may be formed under the general laws of this State to carry on the business of mutual insurance upon the assessment plan, and shall be subject only to the provisions of this Act. No such corporation shall issue contracts of insurance until at least two hundred (200) persons have applied, in writing, for membership or insurance therein, and have paid to the treasurer of such corporation the sum of five thousand (5,000) dollars. This sum shall be invested in bonds or securities, approved by the Insurance Commissioner of this State, or deposited in some bank in this State where it will earn interest. Said bonds or securities, or evidences of such deposit, shall be placed, through the Insurance Commissioner of this State, with the State Treasurer, and the principal sum shall be held in trust for the contract holders of such corporation, with the right in the corporation to exchange said bonds, securities, or evidence of bank deposit for others of like value. Such corporation shall also, as a condition precedent to issuing any contracts of insurance, obtain the written

certificate of the Insurance Commissioner that it has complied with the requirements of this Act; and that the name of the corporation is not the same as that of any other corporation of this or other States, as indicated by the Insurance Department reports in his office; nor shall the Commissioner approve any name or title so closely resembling another as to mislead the public. No corporation formed hereunder shall have legal existence after one year from the date of its articles, unless its organization has been completed, and business commenced; nor shall any corporation or individual solicit, or cause to be solicited, any business, until such corporation shall have complied with the provisions of section six hundred and thirtythree of the Political Code of this State.

SEC. 3. Any existing corporation engaged in transacting the business of life, health, accident, or endowment insurance on the assessment plan, may reincorporate under the provisions of the Civil Code of this State, and under the provisions of this Act; provided, that it shall not be obligatory upon such corporation to reincorporate; and any such existing corporation may continue to exercise all rights, powers, and privileges conferred by this Act, the same as if incorporated hereunder.

SEC. 4. The contracts of insurance issued by such corporations shall specify the sum or sums to be paid upon the happening of the contingency insured against, and when such payments will be made. Unless the contract shall have been invalidated by fraud or by breach of its conditions, the corporation shall be obligated to pay the beneficiary the amount or amounts specified in its contract at the time or times therein named, and such indebtedness shall be a lien upon all the property of such corporation, with priority over all indebtedness thereafter incurred, except as hereinafter provided in case of insolvency. Failure to make such payment within thirty days after notice, at the home office, by mail, as provided by law, of final judgment, unless waiver is made by the beneficiary, shall constitute a forfeiture of the right to do business.

SEC. 5. Every domestic corporation organized or doing business under this Act shall accumulate a reserve or emergency fund, which shall at all times be not less than the largest benefit contracted to be paid by it to any one person. Every existing domestic corporation must accumulate such fund

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