1856, 252, § 14. See $$ 56, 60, 66. Risks to be taken. Policies, how executed. Limitation of risks. See § 56. mortgaged, or in bonds of railroad corporations in this state; or it may be loaned on mortgages of real estate therein, or on pledges of any of the stocks or bonds named in this section: provided, that no insurance company shall own more than one-fourth of the capital of any one bank, nor invest in nor loan on the stocks and bonds both included of any one railroad company, more than one-tenth of its own capital, nor in the aggregate shall the investment in and loan on all railroad property exceed one-fifth of its capital. Not more than half of its capital shall be loaned on mortgage of real estate, and not more than one-tenth part of the capital actually existing of any company shall be invested in a single mortgage. If any investment or loan is made in a manner not authorized by this chapter, the directors making or authorizing the same shall be personally liable to the stockholders for any loss occasioned thereby; but insurance companies chartered by this state now doing business, shall not be compelled to change any investment that was originally legally made. SECT. 32. Companies thus organized may insure vessels, freights, goods, money, effects, and money lent on bottomry or respondentia, against the perils of the sea and other perils usually insured against by marine insurance; and dwelling-houses and other buildings, merchan1856, 252, § 15. dise and other personal property, against loss by fire, according to their respective charters. But no stock company shall hold, on any one risk, a sum exceeding one-tenth part of the capital existing, and surplus, after deducting all losses, claims, liabilities, and debts due from the company. All policies shall be signed by the president and secretary; or in the absence of the president by two directors, and in the absence of the secretary by a secretary pro tem. Risks to be re duced on reduc Liability of president and directors. ers. 1856, 252, § 16. SECT. 33. When the capital shall have been reduced by losses or from tion of capital. any other cause, the amount thereafter to be taken on any one risk shall correspondingly be reduced to the limitation in the preceding section. If the directors allow more to be insured on any one risk, they shall be of stockhold liable for a loss on any amount exceeding one-tenth the existing capital. If any company is under liability for losses actually sustained equal to the capital, and the president and directors knowing it make insurance or assent thereto, they shall be personally liable for the loss if any under such insurance. When the charter permits the capital stock to be paid by instalments, if the capital is lessened by losses before all instalments are paid in, each stockholder shall be liable for the instalments unpaid on his shares at the time of such loss; and no dividend shall be made until the capital is restored to its original amount. Directors to make annual statement to stockholders. Basis of dividends. SECT. 34. At each annual meeting the directors shall cause to be furnished to the stockholders a statement of the condition of the company, and in making dividends shall not consider any part of the premium money divisible until the risks for which the same was paid have 1856, 252, § 16. absolutely been terminated. But in making up their annual statement they shall be required to charge the company only such portions of the cash or notes received on policies which are unexpired, as would be required to reinsure all outstanding risks. MUTUAL MARINE AND MUTUAL FIRE AND MARINE COMPANIES. SECT. 35. Mutual marine and mutual fire and marine insurance companies established by the laws of this state shall be subject to the provisions of sections forty-three, forty-four, and forty-five, relating to mutual fire insurance companies, and shall before commencing business have an agreement substantially as follows, viz.: "The subscribers, members of the insurance company, severally agree to pay said company on demand the sums set against our names, or such part thereof as may be called in for the use of the company, in money or promissory notes." Policies of insurance may be issued by such company when two hun- When policies dred thousand dollars, if the company is in Boston, or one hundred may be issued. thousand dollars, if the company is in any other city or town in the state, has been subscribed and paid in cash or notes payable on time not exceeding twelve months; and the president and a majority of the directors have certified that the subscribers are known to them, and they believe them solvent and able to pay their subscriptions; and a copy of the certificate has been deposited with the insurance commissioners and approved by them. Subsequent subscriptions shall be made and certified in like manner; and a like copy shall annually on or before the first day of November be filed with the commissioners. but persons 1856, 252, § 19. SECT. 36. Each subscriber during the term of his subscription, and Membership. each person insured, shall be a member of the company; insured shall not remain members after the termination of the risk and the payment of the loss, if any thereon. how held, used, 1856, 252, § 20. SECT. 37. The subscriptions provided for in section thirty-five shall Subscriptions, constitute a permanent fund, to be used when necessary for payment of the losses and expenses of the company; but shall not be applied to pay cancelled. the premiums for insurance effected by the subscribers. The subscription notes as they mature shall be paid in or other notes substituted therefor, so that the amount of the original fund shall not be reduced. The subscription notes or any pro rata portion thereof may be cancelled whenever the net profits of the business are sufficient to replace the same; and such profits shall then be invested as prescribed in section thirty, thereafter to be held as the permanent fund in place of said notes. All payments made on subscription notes and all cash funds not required for the current uses of the company shall be invested in the same manner. If any subscriber fails to pay his subscription, and it is proved that the president or a director knowingly certified falsely in regard to such subscriber, the person certifying shall be liable to the company for such sum as the subscriber fails to pay. SECT. 38. No company shall hold on one risk more than ten per cent. Limitation of single risks. of its subscriptions and invested funds, not pledged, and premium notes Reinsurance. on risks absolutely terminated, after deducting therefrom all losses and Liability of president and claims for losses, or cash received for risks not terminated, and all debts. directors for Whenever by means of open policies or indorsements thereon more than over-insurance. ten per cent. is so at risk, the directors shall as soon as may be obtain reinsurance for the amount of such excess. If a company is at any time liable for losses beyond the amount of its cash fund, legal investments, /2 premium notes received from risks terminated, and subscription notes, 202 335 the president and directors, knowing the condition of the company, shall be personally liable for all losses occurring on insurance effected during such state of the company. 1856, 252, § 21. ment. 1856, 252, § 22. operation one annual state SECT. 39. The directors shall require the president to make a monthly Monthly statestatement to them of the assets and liabilities of the company; which statement shall be entered upon their records or in a book kept for that purpose. SECT. 40. Mutual marine insurance companies incorporated in this Mutual marine state which have been in operation not less than twelve months shall companies in cause an annual dividend statement to be made up in each year, con- year, to make taining a fair estimate of the net profits of the company not before di- ment. vided, taking into view the probable amount to be paid on all claims, Directors may outstanding risks, and demands, against the company, and including dend on premi expenses, interest, and allowances for previous deficiencies. After ascer- scriptions to taining in this mode the net profits of the year on the risks terminated, safety fund, and the directors may declare a dividend of such profits of a certain per cates. cent. on the premiums received for such terminated risks and the sub- 1852, 137, § 1. scriptions made to the safety fund in that year, and may issue certificates representing said dividend to the persons in whose names the declare divi ums, and sub issue certifi Six per cent. interest may be cates, and excess of profits applied to redemption. 1852, 137, §2. policies of insurance and subscriptions for the year in conformity to the provisions of section thirty-five were originally made, or to their legal representatives. The certificates shall be transferable only on the books of the company under regulations to be prescribed by the by-laws, shall contain a provision declaring the same to be subject to future losses and expenses of the company until they are redeemed as hereinafter provided, and subject to be reduced by the directors in case of losses and expenses in any subsequent year exceeding the estimated profits of such year. But such original certificate need not be issued for a less sum than ten dollars. All such sums may be passed to the contingent ac counts of the company. SECT. 41. Such companies may pay on the certificates issued in conpaid on certifi- formity with the preceding section, from the accrued income of their invested funds, interest not exceeding six per cent. per annum; and whenever the net profits of any such company exceed the sum of two hundred and fifty thousand dollars, the excess may be applied from year to year thereafter to the redemption of the certificates of the previous years in such manner as the directors determine; but no certificates of any year shall be redeemed while certificates of previous years remain unredeemed. When the accumulations of net profits of such company exceed the sum of five hundred thousand dollars, such excess shall be so applied. Debt due from to certificate may be deducted. SECT. 42. When a person entitled to a certificate of profits is inpersons entitled debted to such company for any sum past due, the company may withhold the certificate and deduct such sum from the amount thereof, and reduce or cancel the same; but persons holding policies of the company or entitled to certificates shall not be answerable by reason thereof, or for any thing contained therein, except for the payment of their premium or other notes in advance for premiums. 1852, 137, § 3. Election of di rectors. Proxies. 1856, 252, § 23. See § 35. President, treasurer, elected and sworn. Secretary to keep record. MUTUAL AND STOCK AND MUTUAL FIRE COMPANIES. SECT. 43. Every mutual fire insurance company shall annually elect by ballot not less than seven directors, citizens of this state, and, after the first election, members of the company, who shall manage and conduct the business thereof. Every person insured by the company shall be a member, and no one member shall be allowed more than five votes in person. Members may vote by proxies dated and executed within six months and returned and recorded on the books of the company three days previously to the meeting of the company at which the same are used; but no person shall be allowed by proxy or otherwise to cast more than twenty votes; and no paid officer shall vote as proxy for any absent member. upon SECT. 44. The directors of every such company shall annually choose secretary, and by ballot one of their number as president, à secretary and treasurer, who shall annually be sworn, and a record of the oath shall be entered the books of the company. The secretary shall keep true records of the meetings of the corporation and of the directors, and of all votes passed by them; and record a copy of all policies issued by such company, and all assignments or transfers of the same, when properly assented to, which record shall be open to the inspection of any persons interested therein. 1856, 252, § 24 See § 35. Quorum of directors. Vacancies. Special meetings. 1856, 252, § 25. See § 35. SECT. 45. Not less than five directors shall constitute a quorum, and all questions shall be decided by a majority of those present. Vacancies in any office may be filled by the directors until the next annual election, or by a new election at a meeting called for that purpose. Special meetings of the members may be called when ordered by the directors, and the directors shall call such meetings when requested in writing so to do by any twenty members. rectors. antee capital to ings. SECT. 46. One-half of the directors of every mutual fire insurance Choice of dicompany with a guarantee capital shall be chosen from the holders of the guarantee stock, and the other half from the members of the mutual holders of guardepartment. The secretary shall keep a true list of stockholders of the be kept. guarantee capital, and of the number of shares held by each, and a rec- Special meetord of the transfer of shares. Special meetings may be called by the 1856, 252, § 37. directors when they think proper, and shall be called by them upon the written application of the owners of one-fifth of the guarantee stock, or of twenty members of the mutual department, setting forth the purposes of the meeting. sented in mu SECT. 47. The directors of every corporation which becomes a mem- Corporations ber of any mutual company may authorize one or more of the stock- may be repreholders of such corporation to represent the same in all meetings of tual companies. such company; and such representatives shall vote and be eligible to 1856, 252, § 20. the office of director in the company. rectors. 3 Gray, 208, 210. de 181. 1862 249 SECT. 48. When the just claims against a mutual fire insurance com- Assessments. pany exceed the funds, its directors shall assess such sums as may be liability of dinecessary upon the members in proportion to their premium and deposit, 1856, 252, § 27. no member being liable to pay in addition to his premium and deposit more than a sum equal to his said premium and deposit; and in case of classification of risks, said assessment shall be made upon such premium and deposit as were given upon hazards associated with the property upon which losses have occurred. When sufficient property of the company cannot be found to satisfy an execution issued against it, and it has property belonging to the period assessed, the proceeds of which can be applied to satisfy such execution, if the directors neglect to pay the same, or neglect for thirty days after the rendition of judgment to make an assessment and deliver the same to the treasurer for collection, or to apply such assessment when collected to the payment of the execution, they shall be personally liable for the amount of the execution. SECT. 49. If the treasurer of a mutual company unreasonably neg- Liability of lects to collect an assessment made by order of the directors and to ap- 1856, 252, § 28. ply the same to the payment of the claims for which it was made, he shall be liable in his private capacity to the party having such claims for the amount of the assessment; and he may repay himself out of any money afterwards received for the company on account of said assessment. treasurer. liable, &c. Liability of SECT. 50. When the directors of a mutual company are liable to pay when directors an execution against the company, the creditor may recover the same Remedy against by a suit in equity or by an action at law against the directors; and corporation. any director who pays an execution against the company for which he members. is personally liable, may have a suit at law with equitable remedies for 1856, 252, § 29. contribution against any of the directors for their proportion, and also a suit at law with equitable remedies against the company or the individual members thereof who are liable therefor, for money so paid for them: provided, that no member shall be liable to pay in addition to his premium and deposit more than a sum equal thereto. losses at expi SECT. 51. Every member of a mutual company shall at the expiration Members to of his policy have a share in the profits of the company during the time share profits or his policy was in force in proportion to the sums by him paid on account ration of policy. of said policy according to the contract or policy, after all expenses, lia- 1856, 252, § 30. bilities, and losses then incurred have been deducted. And he shall in like manner be subject to pay any assessments which may be laid by such company for the payment of losses and expenses in accordance with its charter and the laws regulating such companies. to create lien. SECT. 52. No policy shall be issued on the mutual plan for a greater Policies limited amount than three-fourths of the value of the property insured; and in amount, and every policy made by such company shall create a lien on the personal Limitation, &c., property, and on any building insured and the land under the same, for to be set forth. 1863 lien. 1856, 252, §31. Enforcement of securing the payment of the deposit note, or other liabilities, or any sums assessed upon the same: provided, that the extent of the liability and the intention of the company to rely upon the lien are set forth on the face of the policy. Upon the alienation of the property to a bona fide 4 Met. 206. 10 Met. 211. 6 Cush. 450. 12 May 114 purchaser, the lien shall cease as to all losses which thereafter occur, Directors to assessments, unless the policy is continued by consent of the purchaser and the company. If it becomes necessary to resort to such lien for the payment of the liabilities secured thereby, the treasurer shall demand payment from the insured and also from the tenant in possession, or the person having possession of the personal property, setting forth in writing the sum due; and in case of non-payment the company may sue and levy the execution upon the property or estate. The officer making the levy may sell the whole or any part thereof by auction, and apply the proceeds in the same manner, and the owner shall have the same right to redeem as in the sale of an equity of redemption of real estate. SECT. 53. The directors of mutual fire insurance companies may divide the property insured into not exceeding four classes. The policy shall designate the class, and the assessments shall be made upon ícies; expenses, premiums and deposits belonging to the class in which the loss occurs; but no policy shall be issued in a separate class, until five hundred thou sand dollars are subscribed to be insured in that class on one date, and the same is entered on the books of the company. The expenses of the company not strictly applicable to either class, shall be apportioned to each class according to the amount of premiums paid by that class for the same period; and in a division of the funds and returns of premiums and deposits, each member shall be entitled to receive his proportion of the profits belonging to the class in which he was insured. No money belonging to one class, received either as premium or assessment in said class, shall be used to pay losses or expenses or other liability of any other class. Assessments Statements sub ject to inspec- Separate state ments. 10 alle 112 Single risks 1856, 252, § 34. Policies in mu tual and stock Guarantee capi tal. SECT. 54. Mutual fire insurance companies, upon making an assessment, shall keep a record of the vote passed by the directors for making the same, with a statement of the condition of the company at the time such assessment is made. When an assessment is ordered, the whole amount to be raised and the particular losses or other liabilities of which said amount consists shall be stated. The statement shall separately show the amount of cash on hand, of deposit notes, and of liabilities subject to such assessment, and it shall be recorded in a book kept for that purpose, and signed by the directors voting for such assessment. Companies dividing their risks and insuring in separate classes shall make such statement for each class in which an assessment is ordered. Any member of the company may inspect such statement and take a copy of the same; and a person who is liable to assessment shall be considered a member. No assessment shall be collected until such statement and record are made, nor shall an assessment be laid on any member whose policy has expired or been cancelled for the period of two years. SECT. 55. No mutual fire insurance company shall contract for insurance on any one risk for a greater amount than they intend to retain; nor with the view or intention of reinsuring any part thereof. SECT. 56. No mutual fire insurance company shall issue policies on other than the mutual plan of insurance, excepting such companies any as have been chartered as stock and mutual companies; and such companies, if doing business in Boston, either directly or through agencies, Business to be before issuing policies or transacting any business in the stock department, shall have a guarantee capital of at least one hundred thousand dollars paid in and invested as required by sections thirty and thirty-one exclusive of stockholders' notes, (unless such notes are secured by mortgage or by pledges of stock or bonds, as provided in section thirty-one,) and of all debts due from the company, and such proportion of all pre kept separate. |