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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.
INSURANCE (ASSESSMENT PLAN).
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 paymentof 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 thirtytree 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 argest benefit contracted to be paid by it to any one person. Every existing domestic corporation must accumulate such fund within one year from the date when this Act takes effect, and any corporation organized hereunder within one year from the date of its certificate of incorporation. Such fund, to the extent of the largest amount contracted to be paid by any such corporation to any one person, shall be so invested and deposited, as provided in section two hereof, with the right in the corporation to exchange any such securities for others of equal value. The deposit required by section two of this Act shall constitute a part of the reserve required by this section, at the option of such corporation. When any corporation doing business hereunder shall discontinue business, this fund shall be returned to such corporation, or so disposed of as may be determined by the Superior Court of the county, or city and county, in which is its principal place of business.
SEC. 6. Corporations organized under the laws of any other State or country to transact the business of mutual assessment insurance, must, as a condition precedent to transacting business in this State, deposit with the Insurance Commissioner of this State a certified copy of its charter, or other instrument, required by its home authorities ; a statement, under oath, of its president or secretary, of its business for the preceding year, in such form as may be required by the Insurance Commissioner of this State; an appointment of a general agent, service upon whom shall bind the corporation; a certificate that for the next preceding twelve months it has paid, in full, the maximum amount named in its contracts of insurance; a certificate from the proper officer of its State or Government that like corporations of this State are legally entitled to do business in such State or country; copies of its contracts of insurance and applications, which must show that the liabilities of its members are not limited to fixed premiums; and evidence, satisfactory to the Insurance Commissioner, that the corporation has accumulated a fund equal to that required of like corporations in this State, constituting a reserve or surplus fund, held in trust for the benefit of its contract holders, and so invested and held as required by the laws of the State or Government under which such corporation was organized. The Insurance Commissioner shall thereupon issue a license to such corporation to do business in this State. This license must be renewed annually, and may, be revoked whenever it is ascertained that the statements required to be made by this section are not true. Upon such revocation, notice thereof shall be given by the Insurance Commissioner, by publication in some newspaper published in the City and County of San Francisco, for two weeks, daily, and no new contracts shall be made by such company in this State. When any other State or country imposes any additional license, fees, taxes, or penalties upon any corporation organized or doing business under this Act, like license, fees, taxes, or penalties shall be imposed upon corporations of the same kind, and their agents, of such State or country doing business in this State.
SEC. 7. No corporation doing business under this Act (except accident or casualty corporations) shall issue a contract of insurance upon the life of any person under fifteen years of age, or after he or she has passed his or her sixtyfirst birthday. Every such contract of insurance shall be. founded upon written application therefor, and (except when the application is for health, accident, or casualty insurance only, or for one hundred dollars life insurance, or less) such application shall be accompanied by the report of a reputable physician, containing a detailed statement of his examination of the applicant, and showing the applicant to be in good health, and recommending the issuance of a contract of insurance. Any solicitor, agent, employé, examining physician, or other person making a false or fraudulent statement to any corporation doing business under this Act, with reference to any application for insurance, or for the purpose of obtaining any money or benefit from such corporation, shall be guilty of a misdemeanor, and upon conviction shall be punished by a fine of not less than one hundred dollars nor more than five hundred dollars, or by imprisonment in the county jail for not less than thirty days nor more than one year, or by both such fine and imprisonment, in the discretion of the court; and any person who shall make a false statement of any material fact or thing in a sworn statement as to the death or disability of a contract holder in any such corporation, for the purpose of procuring or aiding the beneficiary or beneficiaries, or contract holder, in procuring the payment of a benefit named in the contract, shall be guilty of perjury, and may be proceeded against and punished as provided by the statutes of this State in relation to the crime of perjury.
SEC. 8. The money, benefit, annuities, endowment, charity,