Goruell Gaw School Library
“Hiv
INSURANCE LAW

Being Chapter 28 of the Consolidated Laws

and

Chapter 33 of 1909

Including all amendments of 1914, with notes and annotations

By ,
wivs

AMASA J. PARKER, Jr.

of Albany, N. Y.

THE BANKS LAW PUBLISHING COMPANY
23 PARK PLACE
NEW YORK, N. Y.
1914
(24-7 0F,

 

CoPYRIGHT, 1906
BY
THE BANKS LAW PUBLISHING

 

CopyRieHT, 1907 *
BY

THE BANKS LAW PUBLISHING

co.

 

Copyricnt, 1908
BY
THE BANKS LAW PUBLISHING

CO.

 

Coprrient, 1909
BY
THE BANKS LAW PUBLISHING

CO.

 

CoPyRIGHT, 1910
BY
THE BANKS LAW PUBLISHING

CO.

 

CopYyRIGHT, 1911
BY
THE BANKS LAW PUBLISHING

Co.

 

CopyrigHT, 1912
BY
THE BANKS LAW PUBLISHING

CO.

 

CoPpyRiaHit, 1913
BY

THE BANKS LAW PUBLISHING

CO.

 

CopyRrigHT, 1914
BY :
THE BANKS LAW PUBLISHING

CO.
Insurance Law of
New York.

CHAPTER 33 OF 1909.

AN ACT in relation to insurance corporations, constituting chap-
ter twenty-eight of the consolidated laws.
APPROVED by the Governor February 17, 1909. Passed, three-fifths being
present.
The People of the State of New York, represented in Senate and
Assembly, do enact as follows:

CHAPTER 28 OF THE CONSOLIDATED LAWS.

Insurance Law.

ARTICLE 1. General provisions. (§§ 1-67.)
2. Life, health and casualty insurance corporations. (§§ 70-108.)
3. Fire insurance corporations. (§§ 110-149c.)
4, Marine insurance corporations. (§§ 159-162.)
5. Title and credit guaranty corporations. (§§ 170-183.)
5a. Mutual Employers’ Liability and Workmen’s Compensation
Corporations. (§§ 185-194.)

6. Life or casualty insurance corporations upou the co-operative or
assessment plan. (§§ 200-220.)

7. Fraternal benefit societies. (§§ 230-249.)
8. Corporations for insurance of domestic animals. (§§ 250-254.)
9. Co-operative Fire Insurance Corporations. (§§ 260-269.)
-10. Lloyds and inter-insurers. (§§ 300-305.)
10a. State Fire Marshal. (§§ 350-379.)
11. Laws repealed; construction; when to take effect. (§§ 360-361.)

I
2 Tue Insurance Law.

ARTICLE I.

GENERAL PROVISIONS.

Section. 1. Short title and application.
2. The superintendent of insurance.
3. Offices for insurance department.

. Seal; and certificate, when evidence.

. Deputy superintendent and clerks.

Fees.

. Expenses of examinations.

. Expenses of department, how defrayed.

. Certificate of authorization of superintendent.

10. Certificate of attorney-general; corporate names; number of
directors.

11. Examination by superintendent.

12. Minimum capital stock.

13. Deposit of securities.

14, Exchange of securities; interest.

15. State treasurer to countersign transfers of securities.

16. Investment of capital and surplus.

17. Securities must be interest or dividend-paying.

18. Stocks, bonds and other evidences of debt.

19. Lien on stock and profits.

20. Restrictions as to real property.

21. When corporation to be deemed insolvent.

22. Reinsurance. :

23. Reinsurance by receiver.

24, Limitation of risk.

25. Jurisdiction of superintendent over foreign corporations.

26. Deposits by insurance corporations of other states.

27. Funds and capital of insurance corporations incorporated outside
of the United States.

28. Special deposit required in certain cases,

29. Copy charter and verified statement to be filed.

30. Appointment of attorney; removal of cause to federal courts.

31. Certified copy of superintendent’s certificate to be filed in the

" clerk’s office.

32. Renewal of certificate of authority; revocation.

33. Reciprocal requirements.

34, Taxation of foreign corporations.

35. Superintendent to forward process.

36. Officers and directors not to be pecuniarily interested in
transactions.

37. Corporations heretofore named.

38. Fiduciary capacity of agents.

39. Examiners and examinations.

OANA M HP
§§ 1, 2.
SECTION 40.

41.
42.
43.
44,
45.
46.
47.
48.
49.
50.
51.
52.

53.
54.
55.
56.
57.

58.

59.
60.
61.
62.
63.

64.
65.
66.
67.

GENERAL Provisions. 3

Examination by superintendent upon request of stockholder,
policyholder or creditor.

Impairment of capital.

Stockholders to make good impairment or deficiency.

Impaired mutual insurance corporations.

Reports of corporations.

Forms of report to be furnished by superintendent.

Annual report of superintendent.

Deceptive statements prohibited.

Contents of advertisements.

Agents.

Agents’ certificate of authority.

Examination of securities deposited by officers of corporation.

Reorganization of existing corporations and amendment of cer-
tificates.

General penalties,

Conduct of insurance business by persons not incorporated.

Insurance without the consent of the insured prohibited.

Foreign insurauce companies.

Application of article limited.

Policy to contain the entire contract; statements of insured to
be representations and not warranties.

Certain provisions in policies prohibited.

Estimates ‘and misrepresentations prohibited.

Receiver to make assessment on premium notes.

Surrender of policies to receiver.

Proceedings against and liquidation of delinquent insurance cor-
porations.

Provisions of insurance law not to apply to religious orders.

Rebating and discriminating prohibited.

Promotion of insurance corporations; sale of securities.

Approval of premium rates.

Section 1. Short title and application.

This chapter shall be known as the “Insurance Law,” and
shall be applicable to all persons, partnerships, corporations, associ-

ations and

societies and to associations operating as Lloyds, inter-

insurers or individual underwriters, authorized by law to make

insurances.

Source.—Former § 1 (LL. 1892, chap. 690).
Amended by L, 1912, chap. 265.

§ 2. The superintendent of insurance.

There shall continue to be a separate and distinct department
charged with the execution of the laws relating to insurance, to
4 Tuer Insurance Law. § 2.

be known as the insurance department, the chief officer of which
shall be the superintendent of insurance, who shall be appointed
by the governor, by and with the advice and consent of the senate,
and, unless appointed to fill a vacancy, shall hold his office for the
term of three years, beginning on the first day of July succeeding
his appointment, and ending on the first day of July in the third
calendar year thereafter; provided that the term of office of the
superintendent appointed to succeed the superintendent who was
in office on the first day of January, nineteen hundred and twelve,
shall continue until the first day of July, nineteen hundred and
fifteen. A vacancy in such office shall be filled only for the balance
of the unexpired term. The superintendent shall receive an annual
salary of ten thousand dollars, which shall be in full of all services
performed by him in any capacity.

The superintendent and his deputies shall take and subscribe
and file in the office of the secretary of state the constitutional
oath of office within fifteen days from the time of notice of their
appointments respectively. The superintendent shall, within the
same time, give an official undertaking in the sum of twenty-five
thousand dollars, with two good sureties to be approved by the
comptroller. Neither the superintendent nor any deputy nor
employee shall be directly or indirectly interested in any insur-
ance corporation, except as an ordinary policy-holder.

Source——Former § 2, as amended by L. 1906, chap. 326; originally revised
from L. 1859, chap. 366, § 1, § 2, as amended by L. 1873, chap. 593, § 5, and L.
1868, chap. 732, § 5.

Amended by L. 1912, chap. 265.

The superintendent of insurance has no authority to regulate amount of
commissions or counsel fees of receivers of insolvent corporations. Attorney- ,
General Rep., 1893, page 78.

Letters of the superintendent are not public documents; access to them
is discretionary with the superintendent. Attorney-General Rep., March 1,
1897.

During the absence and inability of the superintendent, the deputy becomes
at once acting superintendent and his acts are to all intents and purposes
those of the superintendent and he is entitled to the salary of that office while
he so continues to act. People ex rel. Church v. Hopkins, 55 N, Y., 74.
§§ 3,5. GeNnERAL PRoVISIONS. 5

§ 3. Offices for insurance department.

There shall be assigned to the superintendent of insurance, by
the trustees of the capitol, suitable offices in the city of Albany
for conducting the business of the insurance department. The
superintendent shall, from time to time, furnish the necessary
furniture, stationery, fuel, lights and other proper conveniences
for the transaction of such business, the expenses of which, and
the rent of such offices, if any, shall be paid on the certificate of
the superintendent and the warrant of the comptroller.

Source—Former § 3, originally revised from L. 1859, chap. 366, § 6, as
amended by L. 1877, chap. 423.

§ 4. Seal and certificate, when evidence.

The seal of office now used by the superintendent of insurance
shall continue to be the seal of his office and may be renewed
whenever necessary. Every certificate, assignment, conveyance
or other paper executed by him in pursuance of any authority
conferred by law and sealed with such seal of office, shall be
received as evidence and‘may be recorded in the proper recording
offices in the same manner and with the like effect as a deed regu-
larly acknowledged or proved before an officer authorized by law
-to take the proof or acknowledgment of deeds.

Source.—Former § 4, originally revised from L. 1859, chap. 366, § 4.

§ 5. Deputy superintendent and clerks.

The superintendent of insurance shall employ from time to time
the necessary clerks to discharge such duties and to be paid such
compensation as he shall prescribe. He shall appoint one or more
of such clerks to be his deputies. In case of the absence of the
superintendent or his inability from any cause to discharge the
powers and duties of his office, the powers and duties of the office
shall devolve upon his first deputy; and in the absence of both the
superintendent and his first deputy or their inability from any
cause to discharge the powers and duties of the office, the powers
and duties of the office shall devolve upon his second deputy.

The compensation of the clerks of the department shall be paid
to them monthly on the. certificate of the superintendent and on
the warrant of the comptroller.
6 Tue Insurance Law. § 6.

Source.—Former § 5, originally revised from L. 1859, chap. 366, § 2, as
amended by L. 1873, chap. 593.

Service of a summons and complaint on a deputy is good service on the
superintendent in the absence of the superintendent. Quinn v. Royal Ins.
Co., 81 Hun, 207.

During the absence and inability of the superintendent, the deputy becomes
at once acting superintendent and his acts are to all intents and purposes
those of the superintendent and he is entitled to the salary of that office
while he so continues to act. People ex rel. Church v. Hopkins, 55 N. Y., 74.

During a vacancy in the office of superintendent, the deputy has power to
bring an action as acting superintendent. Smyth v. Lombardo, 15 Hun, 415.

§ 6. Fees.

Every corporation or person to whom this chapter shall be
applicable shall pay the following fees to the superintendent,
unless remitted by him. For filing the declaration and certified
copy of the charter required by law, thirty dollars. For filing the
annual report required by law, twenty dollars. For each certifi-
cate of authority and certified copy thereof, and for each certificate
of deposit, valuation or compliance, not exceeding five dollars.
For every copy of any paper filed in his office, ten cents per folio;
and for affixing the official seal on such copy and certifying the
same, one dollar. Ail fees, perquisites and moneys received by
the insurance department, or any officer thereof, shall be paid
into the state treasury as required by the state finance law.

Source——Former § 6, as amended by L. 1893, chap. 725; originally revised
from L. 1859, chap. 366, § 7, as amended by L. 1871, chap. 709; L. 1853, chap.
466, § 27; L. 1853, chap. 463, § 16; L. 1865, chap. 328, § 3; L. 1868, chap. 732,
§ 5; L. 1883, chap. 175, § 15; L. 1885, chap. 538, § 7; L. 1889, chap. 454, § 9.

Amended by L. 1913, chap. 304.

Note.—The purpose of the amendment of this section by chapter 304 of

1913 was to compel payment of all reccipts of the department and other
receipts to the State Treasurer.—Ed.

Under the provisions of chap. 492 of 1870 requiring companies transferring
securities on deposit with the superintendent of the insurance department
to pay to him one-fifth of one per cent of the amount transferred, the
percentage was designed as a compensation to the superintendent fos his
services in effecting the transfer, and he was entitled to the same.

People v.
Miller, 56 N. Y., 448. ae
§ 7. GeneRAL Provisions. 7

§ 7. Expenses of examinations.

The expense of every examination or other investigation of
the affairs of an insurance corporation, pursuant to the authority
conferred by the provisions of this chapter, shall be borne and
paid by the corporation so examined, unless remitted by the
superintendent.

No charge shall be made for any examination of an insurance
corporation by the superintendent or his deputy personally, or by
one or more of the regular clerks of the department except for
necessary traveling and other actual expenses. All charges for
making any examination and all charges against an insurance cor-
poration by an attorney or appraiser of the department shall be
presented in the form of an itemized bill approved by the superin-
tendent, audited by the comptroller, and paid on his warrant drawn
in the usual manner on the state treasurer, to the person making
the examination.

The corporation examined on receiving a certified copy of such
bill so approved, audited and paid, shall repay the amount thereof
to the superintendent of insurance, to be by him paid into the state
treasury to replace the money drawn out as above provided. No
insurance corporation, or any officer or director thereof, shall either
directly or indirectly pay by way of gift, credit or otherwise, any
sum of money or other valuable thing to the superintendent or any
clerk or employe of the insurance department or any examiner for
extra service or for purposes of legislation, or by way of a loan, or
on any other pretense whatsoever. '

Source—Former § 7, as amended by L. 1898, chap. 171; L. 1906, chap. 326;
originally revised from L. 1853, chap. 463, § 17, as amended by L. 1879, chap.
161; L. 1859, chap. 366, § 2, as amended by L. 1873, chap. 593.

Amended by L. 1909, chap. 301, and L. 1910, chap. 634.

The approval of a bill by the superintendent is not conclusive upon the
comptroller, but the latter has power to examine and pass upon and readjust
a bill approved by the superintendent and presented to him for audit and
payment as prescribed in this section. Matter of Murphy, 24 Hun, 592, aff’d
86 N. Y., 627.

The superintendent has the right to refuse to renew the license of a foreign
company unless it complies with the statute. In re General I. Co., Attorney-
General Rep., Jan. 8, 1906.
8 Tue Insurance Law. §§ 8, 9.

§ 8. Expenses of department; how defrayed.
Repealed by chap. 301 of 1909.

§ 9. Certificate of authorization of superintendent.

No corporation, nor any individual, as principal, shall transact
the business of insurance within this state without the certificate
of the superintendent of insurance, certifying under his hand
and official seal that such corporation or individual has complied
with all the requirements of law to be observed by such corpora-
tion or individual and that such corporation or individual is
authorized to transact the business of insurance specified therein
in this state. Such certificate shall be recorded in the office of
the superintendent in a book to be kept by him for that purpose.
No corporation or individual shall transact in this state any
insurance business not specified in the certificate of authority
granted by she superintendent. The superintendent may refuse
to issue any such certificate to a domestic or foreign corporation,
if, in his judgment, such refusal will best promote the interests
of the people of the state. Nothing in this section contained
shall apply to any insurance company organized prior to the first
day of October, eighteen hundred and ninety-two, under any gen-
eral or special law of this state and carrying on business on said
date, but every such corporation is hereby recognized as an existing
corporation and is hereby authorized to continue as such corpora-
tion and to continue such business until the legislature shall other-
wise provide, subject to such of the provisions of this chapter as
are made applicable to such corporations.

Source.—Former § 9, as amended by L. 1893, chap. 725; originally revised
from L. 1849, chap. 308, § 11; L. 1853, chap. 463, § 7; L. 1853, chap. 466, § 23,
as amended by L. 1875, chap. 555; I. 1871, chap. 888, § 5; L. 1883, chap. 175,
§ 3, as amended by L. 1887, chap. 285,

Amended by L. 1910, chap. 634,

See § 1192, Penal Law. Acting as agent of life insurance i ith-
out certificate of authority. eee

See § 1197, Penal Law. Misconduct of officers a

P : gents of co-operative
insurance companies.

See § 1198, Penal Law. Agents issuing policy after i :
to do business. nee revocation of certificate
§ 9. GENERAL PROVISIONS. 9

CONDITIONS.— A state has the right to impose conditions, not in conflict
with the constitution or the laws of the United States, to the transaction of
business within its territory by an insurance company chartered by another
state, or to exclude such company from the territory, or, having given a
license, to revoke it with or without cause. Doyle v. Continental Ins. Co.,
94 U. S., 535.

A state statute which requires a foreign corporation, as a condition of
transacting business in such state, to stipulate that it will not remove suits
to the federal courts, which otherwise it would have a right to remove, is
unconstitutional. Barron v. Burnside, 121 U. &., 186.

FOREIGN CORPORATION.— Within the meaning of the Insurance Law, a
foreign corporation is one incorporated under the laws of another state of
the United States. In re Penn. Fire Ins. Co., Attorney-General Rep., 1895,
page 56.

Certain charitable associations organized under chap. 256 of 1881 are
required to file the certificate provided by this section. Supreme Council of
Chosen Friends v. Fairman, 10 Abb. N. C., 162.

LODGE SYSTEM.— The fraternal insurance associations organized on the
lodge system which are exempted from the operations of section 9 are such
fraternal insurance associations organized on the lodge system as are provided
for in article 7 of the insurance law. Attorney-General Rep., 1906, page 553.

BURIAL CONTRACTS.— Corporations issuing contracts to furnish burials
for contract holders upon payment of stipulated sum at execution of contract,
and a like sum upon death of the contract holder, are “transacting the
business of insurance.” In re Barrett Co., Attorney-General Rep., 1903,
page 258.

The adjustment of a loss by an agent is not transacting business in this
state. People ex rel. McCall v. Gilbert, 44 Hun, 522.

If a foreign corporation not authorized to transact business in this state
makes out policies in Jersey City upon applications received in New York
and delivers the policies in New York, such transactions constitute doing
business in that state and such acts are unlawful. Employers’ Assur. Corp.
v. Employers’ Ins. Co., 61 Hun, 552; 41 St. Rep., 390; 16 N. Y. Supp., 397.

A citizen of this state is not prohibited from applying for insurance to a
foreign corporation which is not authorized to transact business in this state,
nor from receiving the policy here by mail; but an agent of the foreign com-
pany is prohibited from making the delivery. People v. Imlay, 20 Barb., 68.

A corporation, contracting with families or individuals whereby for an
annual sum, the company agrees to supply a coffin, etc., would be transacting
the business of insurance. Ruling Ins. Dept., Aug. 4, 1911.

VALIDITY OF ORGANIZATION.— Persons who have given premium notes
to a mutual insurance company, and have thus become members of the
corporation, are not in a condition to assail the organization of the company.
Cooper v. Shaver, 41 Barb., 151.
10 Tue Insurance Law. § 9.

If the company has, in form, a charter authorizing it to act as a body
corporate, and is in fact in the exercise of corporate powers at the time of tak-
ing a promissory note from an individual, it is, as to him and all third persons,
a corporation de facto, and the validity of its corporate existence can only
be tested by proceedings in behalf of the people. Jones v. Dana, 24 Barb., 394,

ORGANIZATION.— One who has contracted with an insurance company
as an existing corporation, and has executed a promissory note to it, and
received a policy of insurance from it, of which he has enjoyed the benefit
and protections, is not in a condition to object to the regularity and validity
of the organization of the company. Hyatt v. Esmond, 37 Barb., 601.

Parties who have contracted with a corporation as such cannot afterwards
raise the objection that the company was not legally incorporated; if there
are any defects in the organization of a company, they will be cured by a
subsequent act of the legislature, which treats it as an existing corporation
and changes its name. White v. Coventry, 29 Barb., 305.

DISCRETION OF SUPERINTENDENT.— Under the provisions of chap.
593 of 1873, the superintendent had the right to refuse to permit any foreign
corporation to transact business in this state, whenever, in his judgment,
such refusal to admit it would best promote the interests of the people;
« similarity of name as would likely lead to confusion between the business
of a foreign corporation and another company is a sufficient ground for
refusal. Employers’ Assur. Corp. v. Employers’ Ins. Co., 78 Hun, 446.

The superintendent of the insurance department may, in his discretion,
issue to a foreign credit guarantee insurance company a certificate authoriz-
ing it to transact business in this state. Attorney-General Rep., 1892, page
375.

UNAUTHORIZED CONTRACTS.— Although the authority of a company
organized under the act of 1849, to commence business and issue policies,’ is
by that act made to depend upon the making and filing of certificates of
the comptroller and secretary of state as mentioned in the eleventh section
of that act, the statute contemplates that the corporation shall enter into
contracts, before the certificates are made, or filed. Williams v. Babcock,
23 Barb., 109.

Where the receiver of an insurance company, dissolved by an order of the
court, entered into a contract with a foreign insurance company for reinsur-
ance, which contract was approved by an order of the court, the foreign
corporation is estopped from alleging, in its own defense, that the contract
was made in violation of the laws of this state. Jay v. De Groot, 2
Hun, 205.

An insurance policy is not void because, by its terms, it extends beyond a
time limited by the charter of the company for its corporate existence.
Huntley v. Merrill, 32 Barb., 626.

An agreement for reinsurance with a foreign unauthorized company is not
void if executed. Casserly v. Manners, 9 Hun, 695.

Where the president of an insurance company, knowing that the statutory
prerequisites to its organization have not been complied with, issues and
§ 10. GENERAL PROVISIONS. 11

signs policies and places them in the hands of agents, who, to his knowledge,
induce people to take them, representing that the laws authorizing the
company to transact business have been complied with, he is guilty of a

fraud, and an action lies against him to recover back the money so paid
Belding v. Floyd, 17 Hun, 208.

DEMURRER.— A complaint in an action brought by a foreign insurance
company is not demurrable for its failure to show that it has been duly
authorized to do business in this state, the failure to comply being a matter
of defense. Thompson v. Colonial Assur. Co., 33 Mise., 37.

POWERS.— An insurance company, in the absence of a restriction imposed
by statute, have the power necessary to enable them to transact the business
authorized by their charter; they may borrow money for the purposes of
their business, and for like purposes may procure sureties whose contracts
of indemnity are valid, the same as if made with individuals. Hope Ins.
Co. v. Perkins, 38 N. Y., 404.

DEPOSIT.— Foreign life insurance companies seeking to do business here
must deposit with the superintendent of insurance at least $200,000, but
are not required to have their capital fully paid in. In re North Amer.
Life Ins. Co., Attorney-General Rep., 1900, page 178.

MANDAMUS.— Mandamus will not lie to compel the superintendent to do
an act regarding the admission to this state of a foreign insurance company.
People ex rel. Equitable Ins. Co. v. Fairman, 12 Abb. N. C., 268.

Mandamus will not lie to compel the superintendent to issue a renewal
certificate to a foreign company. People ex rel. Hartford Ins. Co. v. Fairman,
12 Abb. N. C., 252.

AGENTS.— Corporations may act as agents for insurance companies when
expressly authorized so to do by their charters, and not otherwise. In re
Carpenter & Co., Attorney-General Rep., 1893, page 369.

§ 10. Certificate of attorney-general; corporate names;
number of directors.

When application is made to the superintendent of insurance
by any persons desiring to become incorporated as an insurance
corporation, or for authority to transact the business of insurance
in this state, under or pursuant to any declaration and charter
presented for filing in the insurance department, or any amended
declaration or charter required by law to be filed, or to be approved
by the superintendent, the superintendent shall not file such decla-
ration and charter or grant such certificate of authority until
such declaration and charter shall have been examined by the
attorney-general; and certified by him to the superintendent to
be in accordance with the requirements of law. No certificate
12 ‘or Insurance Law. § 10.

of authority to transact the business of insurance in this state,
shall be granted by the superintendent of insurance to any insur-
ance corporation hereafter applying therefor, if such corporation
has the same name as another corporation authorized to transact
such business in. this state at the time of granting such certificate,
or a name so nearly resembling it as to be calculated to deceive.
The certificate of incorporation of a domestic insurance corpora-
tion hereafter organized shall contain a provision that the number
of directors shall in no case be less than the minimum number of
incorporators required under this chapter to organize such a cor-
poration. The number of directors of a domestic insurance
corporation heretofore organized shall not be less than the number
specified in the certificate of incorporation, except that the number
of directors of such domestic insurance corporation may be reduced
to the minimum number of incorporators required under this
chapter to organize such corporation; such reduction to be made
pursuant to the provisions of the stock corporation law relating
to the proceedings to be taken for the reduction of the number of
directors of any stock corporation.

Source.—Former § 10, as amended by L. 1893, chap. 725; L. 1898, chap. 171,
and L. 1900, chap. 366; originally revised from L. 1849, chap. 308, § 11; L.
1853, chap. 468, § 4; L. 1853, chap. 466, § 10; L. 1883, chap. 175, § 3, as
amended by L. 1887, chap. 285; L. 1889, chap. 454, § 3.

See § 60, General Corporation Law. Change of name of corporation.
See § 6, Gencral Corporation Law, chap. 28 of 1909. Similarity of corporate
names.

SAME NAME.— The superintendent of insurance may issue a certificate of
authority to do business to a stock corporation having the same name as a
mutual corporation, theretofore authorized to do business, on the surrender
and cancellation of the certificate issued to the mutual corporation. In re
Life Assn. of America, Attorney-General Rep., 1901, page 187.

MANDAMUS.— Mandamus will not lie to compel the attorney-general to’
certify the charter and declaration of a proposed insurance company when
the declaration stated the proposed business of the company, among other
things, to be “the inspection and certification as to the sanitary conditions of
buildings and premises,’ as such business is not insurance.
Woodward v. Rosendale, 142 N. Y., 126, aff’g 76 Hun, 103.

CHANGE OF NAME.—In re Locomotion F, B. H. & A. Assn. Attorney-
General Rep., 1903, page 402.

An insurance company is not authorized to change its name except by

amended certificate. In re Hoosick Fall Mut. R. Soc., Attorney-General Rep
1892, page 419. 3

People ex rel.

>
§ 11. GENERAL PRovIsIons. 13

Where it appears that a foreign corporation has been doing an unauthorized
business in this state under a name similar to that of a domestic corporation,
the court will restrain the foreign corporation from continuing its business
in this state. Kmployers’ Assur. Corp. v. Employers’ Ins. Co., 61 Hun, 552.

Before one insurance company can recover in an action brought against
another insurance company to restrain the use of certain words as a part of
its corporate name by the latter company or in its business, the plaintiff must
show that the defendant was issuing policies in violation of the law of the
State, and that its acts had actually caused some special injury, or would
necessarily cause injury, to the plaintiff’s business. Employers’ Assur. Corp.
v. Employers’ Ins. Co., 78 Hun, 446.

COPARTNERSHIPS.—The Insurance Department does not issue certificates of
authority to copartnerships for life agents. Hach one of the persons compos-
ing the firm must make an individual application. Ruling Ins. Dept. July
18, 1913.

§ 11. Examination by superintendent.

If the declaration and charter specified in the preceding section
shall be approved by the attorney-general, the superintendent
shall thereupon cause an examination to be made by himself or
by one or more competent and disinterested persons specially
appointed by him for that purpose, into the affairs of the corpora-
tion or proposed corporation. If such persons, after examination
made, shall certify under oath, if it be a stock corporation, that
the amount of capital required by law has been paid in and is pos-
sessed by it in cash, or is invested in the manner required by law;
or if a mutual or co-operative corporation, that it has received and
is in actual possession of the capital, premiums or engagements of
insurance to the full extent required by law, the superintendent
shall file such certificate in his department. Every such insur-
ance corporation shall also deposit with the superintendent of
insurance, before receiving authority to transact business in this
state, such sums of money or securities as may be required by law.

Source.— Former § 11, as amended by L. 1893, chap. 725, and L. 1906,
chap. 326; originally revised from L. 1849, chap. 308, § 11.

See § 28, post. Special deposit required by certain foreign insurance
companies before receiving authority to transact business in this state.

DEPOSIT.— It is the policy of our Insurance Law to require foreign
insurance companies to deposit approved securities with the Superintendent
of Insurance, as a condition precedent to the transaction of business here.
Attorney-General Rep., 1894, page 201.
14 Tur Insurance Law. § 12.

A foreign life insurance company may deposit with the superintendent of
insurance bonds of the government under which it is organized, provided
such government accepts from our insurance companies seeking to do business
there government bonds of the United States or of this state. In re Holland,
ete. Bonds. Attorney-General Rep., 1893, page 242.

CAPITAL STOCK.— The capital stock of foreign credit guarantee com-
panies must be paid in in cash, one-third thereof within one year, and the
other two-thirds thereof within two years from their incorporation. In re
Nat. Credit Ins. Co., Attorney-General Rep., 1893, page 164.

CERTIFICATE OF EXAMINERS.— A certificate of examiners appointed
by the comptroller under the act of 1849, that an insurance company is in
possession of the requisite capital and premium notes, is final, so far as the
existence or non-existence of the corporation is concerned, until impeached
by a proceeding instituted by the people. Jones v. Dana, 24 Barb., 395.

The examiners are not compelled to do more than to state the facts in their
report on which the superintendent is to determine whether the assets of the
corporation are sufficient to justify its continuance in business. People ex rel.
Long Island Mutual v. Payn, 26 App. Div., 584; 50 N. Y. Supp., 334.

A certificate of persons appointed by the comptroller under the act of 1853,
stating that the company has its capital in cash and bonds and mortgages,
“as appears to our satisfaction by the evidence of the fact produced to us,”
is insufficient. In the Matter of World’s Safe Ins. Co., 40 Barb., 499.

A certificate of examiners appointed by the comptroller under the act of
1849 stating that they have made an examination and found that a company
“has received, and is in actual possession of capital, consisting of premium
notes, to an amount at least equal to the amount required by said act, to
wit, the sum of $100,000,” and that from the best information they are able
to obtain they are “satisfied that the said notes are valid for the purposes
specified in the fifth section of said act,” is sufficient. Hart v. Achilles, 28
Barb., 576.

WITHDRAW ALS.— Insurance companies retiring trom business may with-
draw from deposit with the superintendent of insurance all securities in
excess of an amount sufficient to secure policyholders in the United States.
In re Fire Ins. Assn. Attorney-General Rep., 1893, page 216.

A deposit of funds with the superintendent cannot be assigned. In re
Cred. Guar. Co., Attorney-General Rep., 1894, page 223.

§ 12. Minimum capital stock.

No domestic fire or marine stock insurance corporation shall be
hereafter organized with a smaller capital stock than two hundred
thousand dollars fully paid in in cash, but nothing in this section
contained shall be understood to relate to the class of corporations
provided for in articles nine or ten of this chapter.

A domestic stock insurance corporation having the power to
transact the kind of insurance business described in subdivisions
§ 12. GerneraL Provistons. 15

one, two, five, six, seven, eight, nine and ten of section seventy
of this chapter shall not be hereafter organized with a smaller
capital stock than one hundred thousand dollars fully paid in
in cash. A domestic stock insurance corporation having the
power to transact any kind of insurance business described in
subdivisions three or four of section seventy of this chapter shall
not be hereafter organized with a smaller capital stock than two
hundred and fifty thousand dollars fully paid in in cash if
authorized to transact any kind of insurance business described in
one of such subdivisions or a smaller capital stock than five
hundred thousand dollars fully paid in in cash if authorized to
transact the kinds of insurance business described in both such
subdivisions. Except as to the requirements of a minimum
capital stock for the transaction of the kinds of insurance business
described in subdivisions three or four of section seventy of this
chapter every domestic stock insurance corporation hereafter
organized having’ power to transact business under more than one
subdivision of such section shall, in addition to the minimum
capital stock prescribed in this section, have an additional capital
stock of fifty thousand dollars fully paid in in cash, for every
kind of insurance business more than one which it is authorized
to transact. Any corporation to which this section is applicable
shall also, at the time of its organization, have a surplus equal to
fifty per centum of its capital stock, which surplus shall also be
fully paid in in cash; provided that this requirement shall not
apply to existing corporations reincorporated.

Source.—Former § 12, and L. 1899, chap. 85, § 1; originally revised from L.
1849, chap. 308, § 5; L. 1853, chap. 463, § 6, as amended by L. 1881, chap. 560;

L. 1853, chap. 466, § 6, as amended by L. 1862, chap. 367; L. 1865, chap. 328,
“§ 2; L. 1877, chap. 209, § 1, as amended by L. 1878, chap. 337.

Amended by L. 1910, chap. 634, and L. 1913, chap. 92.

Note.—The purpose of the amendment of this section by chapter 92 of 1913
was to compel companies carrying on the business of employer's liability in-
surance, or fidelity and surety insurance to possess a minimum capital of
$250,000.— Ed.

This section, before it was amended by L. 1913, chap. 92, was intended to be
a consolidation of former § 12 of the Insurance Law (L. 1892, chap. 690). and
L. 1889, chap. 85, § 1. The latter act was repealed by the present Insurance
Law, and was a separate statute relating to the minimum capital stock re-
quired for the organization of Fire or Marine Insurance Corporations. It was
supposed to supersede § 111 of this Law, at least as to Fire or Marine Com-
panies, and does not seem to ‘have been replaced by any provision of the Con-
solidated Laws, but as there was some question whether said L. 1889, chap.
16 Tue Insurance Law. § 138.

85, was repealed by the present Insurance Law, because of the enactment of L.
1909, chap. 596, it was specifically repealed by L. 1913, chap. 27, and as a
result § 111 of the Insurance Law, relating to the incorporation of Mutual
Fire Insurance Companies is unquestionably in force.

CAPITAL STOCK.— As the law of this state requires that a domestic fire
and marine insurance company shall have at least $200,000 capital stock, it
would be unjust to permit a foreign company to do such business here with
less capital. Attorney-General Rep., 1897, page 112.

Foreign life insurance companies seeking to do business here must deposit
with the superintendent of insurance at least $200,000, but are not required
to have their capital fully paid in. In re North Amer. Life Ins. Co., Attorney-
General Rep., 1900, page 178.

' A foreign fire insurance company need not have its maximum capital stock
paid before it is allowed to do business in this state. In re Nat. Fire Ins.
Co., Attorney-General Rep., 1897, page 224. :

The capital stock of fire insurance companies of other states must be fully
paid up before such companies can be authorized to do business here.
Attorney-General Rep., 1893, page 336.

§ 13. Deposit of securities.

Every deposit made with the superintendent of insurance by
any domestic or foreign insurance corporation, shall be in the
stocks or bonds of the United States or of this state or in the bonds
of a county or incorporated city in this state, authorized to be
issued by the legislature, not estimated above their par or their
current market value. Such deposit may be made by an insurance
corporation incorporated under the laws of another state of the
United States in the stocks or bonds of such state or in the bonds
of a county or incorporated city therein authorized to be issued
by the legislature, not estimated above their par or their current
market value; provided that similar domestic insurance corpora-
tions doing business in such state are authorized by the laws
thereof to deposit or hold as, security therein for the benefit or
security of their policyholders and creditors in such state like
securities of this state. Such deposit may be made by an insur-
ance corporation incorporated under the laws of a country outside
of the United States authorized to do business in this state in the
stocks or bonds of such country or of any province or city therein,
or, if any securities other than those above named are offered as
a deposit, they may be accepted at such valuation and on such con-
ditions as the superintendent of insurance may direct, provided
that similar domestic insurance corporations doing business in
such country outside of the United States are authorized by the
laws thereof to deposit or hold as security therein for the benefit
§ 13. GENERAL Provisions. 17

or security of their policyholders and creditors in such country
the stocks or bonds of the United States, the stocks or bonds of
this state or of any county or incorporated city in this state and
securities of the same general character as those which are offered
for deposit in the insurance department; and provided, further,
that if any country makes a deduction from the value of the
securities deposited by similar domestic corporations a similar
deduction shall be made from the securities deposited in the insur-
ance department by corporations incorporated under the laws of
such country. If the market value of any of the securities which
have been deposited by any company shall decline below that at
which they were deposited, the superintendent of insurance shall
call upon the company: to make a further deposit, so that the
market value of all securities deposited by any such company
shall be equal to the amount which it is required to deposit.

All deposits heretofore made pursuant to this chapter, and all
deposits which shall or may hereafter be made pursuant thereto,
and the proceeds thereof, shall be held in trust according to the
law relating thereto without preference or priority for or on
account of any cause or causes whatsoever to any beneficiary en-
titled to share therein.

Source.—Former § 13, as amended by L. 1893, chap. 725; originally revised
from L. 1851, chap. 95, §§ 1, 2; L. 1853, chap. 453, § 14, as amended by L. 1862,

chap. 300; L. 1877, chap. 439, § 1, as amended by L. 1881, chap. 628; L. 1881,
chap. 600, § 1; L. 1888, chap. 517, § 1.

Amended by L. 1910, chap. 634, and L. 1914, chap. 102. In effect April 3,
1914. é

The amendment of this section by chapter 102 of 1914 added the last
paragraph.

See §§ 17, 27, 28, post. As to deposit of securities.

FOREIGN CORPORATION.— Within the meaning of the insurance law a
foreign corporation is one incorporated under the laws of another state of the
United States. In re Penn. Fire Ins. Co., Attorney-General Rep., 1895,
page 56.

It is the policy of our insurance law to require foreign insurance companies
to deposit approved securities with the superintendent of insurance, as a
condition precedent to the transaction of business here. Attorney-General
Rep., 1894, page 201.

GOVERNMENT BONDS.— The superintendent may take on deposit United
States bonds at a valuation not to exceed their, current market value. In re
London Guar., ete., Co., Attorney-General Rep., 1892, page 289.

A foreign life insurance company may deposit with the superintendent
of insurance bonds of thee government under which it is organized, provided
such government accepts from our insurance companies seeking to do busi-
ness here government bonds of the United States or of this state. In re Hol-
land, ete., Bonds, Attorney-General Rep., 1893, page 242.
18 Tur Insurance Law. § 18.

MORTGAGES.— Farm mortgages considered as mortgages on “ improved
real property.” Attorney-General Rep., 1904, page 426.

Real property charged with ground rent is incumbered and an insurance
company is not permitted to invest in a mortgage on such property. In re
Hunter, Attorney-General Rep., Jan. 24, 1906.

IMPROVED LANDS.— Lands made more valuable or more marketable by
the employment of capital or labor thereon are ‘“‘ improved lands” within
the meaning of the insurance law. In re Mut. Life Ins. Co., Attorney-General
Rep., 1892, page 338.

INVESTMENTS.— Investment of the surplus assets and funds may be
made in dividend-paying stock of solvent trust companies in this or other
states. Attorney-General Rep., 1896, page 278.

Under the provisions of section 13 of the insurance law, the deposit
required to be made by section 71 must be of the class of securities set forth
in said section 18 and not in cash, and the superintendent of insurance is not
authorized to retain the accrued interest in order to make good any impair-
ment in the amount of the deposit required. Attorney-General Rep., 1906,
page 537.

An insurance company of this state cannot invest in bond and mortgage in
the state of Pennsylvania on property with outstanding ground rents.
Attorney-General Rep., 1906, page 532. “i

Investment of reserve fund of domestic insurance company in stocks and
bonds. Attorney-General Rep., 1901, page 240.

Investments made by foreign insurance corporations must be of the same
class and kind required of domestic companies. In re Guar. Finance Co.,
Attorney-General Rep., 1897, page 325.

EXCHANGE OF SECURITIES.— In the exchange of securities, those should
only be accepted at their par value or of equal par and market value with
those exchanged for. In re Continental Ins. Co., Attorney-General Rep.,
1896, page 279.

SURRENDER OF SECURITIES.— Superintendent of insuranee should not
surrender the securities on deposit in insurance department for the benefit
of policyholders in the United States. In re Baloise Fire Ins. Co., Attorney-
General Rep., 1903, page 424.

RECEIVER.— A receiver of an insolvent insurance company is not entitled
‘0 have transferred to him the securities deposited by the company with
she superintendent of the insurance department. Matter of Guardian Mut,
Life Ins. Co., 13 Hun, 115; affirmed, 74 N. Y., 617.

An order directing the issuing of a writ of mandamus requiring the super-
intendent to deliver to a receiver of an insolvent insurance corporation the
securities in his hands, was improperly granted; the distribution is to be
made by the superintendent himself. People ex rel. Ruggles v, Chapman,
64 N. Y., 557.

The receiver of an insolvent life insurance® corporation, appointed in an
action brought by a creditor and stockholder, under the provisions of the
Revised Statutes, to procure its dissolution and a distribution of its assets
has no authority to require from the superintendent the securities deposited
with him. Ruggles v. Chapman, 59 N. Y., 163.
§ 14. GenrRaL Provisions. 19

EXCESS DEPOSIT'S.— Excess deposits, form of delivery of, to surety
companies by superintendert of imsurance. Attorney-General Rep., 1903,
page 489.

Excess deposits should not be withdrawn “ until all the conditions of the
trust have been complied with.” Attorney-General Rep., 1903, page 476.

When a greater sum than $200,000 is deposited, it is held by the super-
intendent on the same terms as the $200,000, and the excess over that amount
cannot be withdrawn until all the conditions of the trust have been com-
plied with. L. Ins. Co. v. Maxwell, 131 N. Y., 286.

ESTOPPEL.— Where the superintendent has accepted trom an insurance
company an assignment of a mortgage as a part of the deposit, on the faith
of a representation on the part of the mortgagor that there is no legal or
equitable defense to the same, he can avail himself of the doctrine of
estoppel prohibiting a debtor, upon the faith of whose statements an assign-
ment of his obligation has been accepted, from disputing such statements.
Smyth v. Munroe, 84 N. Y., 354; afi’g 19 Hun, 550.

An offer of a mortgagor to prove, under his answer in foreclosure, that
at the time the mortgagee, a domestic insurance company, made the loan
on his premises; they were incumbered and not worth fifty per centum more
than the loan, presents no defense to the action. Washington L. Ins. Co. v.
Clason, 162 N. Y., 305.

The superintendent has power to foreclose a mortgage deposited with him;
if, at the time of the assignment of the mortgage, the mortgagor signed a
certificate consenting to the assignment, stating that the whole principal
sum, with interest, is due and that there was no defense against the mort-
gage, such mortgagor will be estopped from setting up the defense of
usury. Smyth v. Lombardo, 15 Hun, 415.

RETURN OF SECURITIES.— In the matter of returning to the depositors
the securities which were deposited with the superintendent of insurance
as condition precedent to insurance business. In re People’s Life Insurance
Company, Attorney-General Rep., 1896, page 133.

ASSIGNMEN'T.— A deposit of funds with the superintendent cannot be
assigned. In re Cred. Guar. Co., Attorney-General Rep., 1894, page 223.

§ 14. Exchange of securities; interest.

The stocks and securities deposited with the superintendent of
insurance, pursuant to the provisions of this chapter, or heretofore
deposited with him, may be exchanged from time to time for other
securities receivable as provided in this chapter, and so long as
the corporation depositing the securities shall continue solvent and
comply with the laws of the state it shall be permitted by the
superintendent to collect the interest or dividends on such deposits.

Source.—Former § 14, originally revised from L. 1851, chap. 95, § 2; L. 1853,
chap. 463, § 6, as amended by L. 1881, chap. 560; L. 1853, chap. 466, § 28, as
amended by L. 1875, chap. 555; L. 1888, chap. 517, § 2.
20 Tuer Insurance Law. §§ 15,16.

The interest collected upon the securities follows the principal, and as a
receiver of an insolvent insurance corporation cannot take possession of the
principal, he cannot obtain possession of the interest collected thereon.
People v. Insurance Co., 147 N. Y., 25; rev’g 87 Hun, 229.

§ 15. State treasurer to countersign transfers of securities

No transfer of securities held by the superintendent of insur-
ance shall be valid unless countersigned by the treasurer of
the state or his deputy, and upon notice of at least five days to the
corporation depositing such securities. The treasurer shall keep
in his office or in the office of the superintendent a book in which
shall be entered the name of the corporation from whose account
such transfer of securities is made by the superintendent, the
name of the transferee unless made in blank, the par value of the
securities transferred, the amount for which every mortgage trans-
ferred is held by the superintendent; and within five days after
countersigning ‘and entering the same, the treasurer shall advise
by mail the corporation from whose account such transfer is made,
of the kind of security and the amount of the same thus
transferred.

The treasurer shall have access at all times during office hours,
to the books of the superintendent of insurance for the purpose of
ascertaining the correctness of any transfer or assignment pre-
sented to him to countersign and the superintendent shall have
access during office hours to the book herein mentioned kept by the
treasurer to ascertain the correctness of the entries upon the same.

The treasurer shall state in his annual report to the legislature
the total amount of such transfer or assignment countersigned
by him.

Source.—Former § 15, as amended by JL. 1906, chap. 326; originally revised
from L, 1868, chap. 732.

§ 16. Investment of capital and surplus.

The cash capital of every domestic insurance corporation re-
quired to have a capital, to the extent of the minimum capital
required by law, shall be invested and kept invested in the stocks
or bonds of the United States or of this state, not estimated above
their current market value, or in the bonds of a county or incor-
porated city in this state authorized to be issued by the legislature,
not estimated above their par value or their current market value,
or in bonds and mortgages on improved unencumbered real prop-
erty in this state worth fifty per centum more than the amount
loaned thereon. The cash capital of every foreign insurance cor-
§ 16. GENERAL Provisions. 21

poration to the extent of the minimum capital required of a like
domestic corporation shall be invested and kept invested in the
same class of securities specified for domestic insurance corpora-
tions, except that like securities of the home state or foreign
country shall be recognized as legal investments for the amount of
the minimum capital required. The residue of the capital and
the surplus money and funds of every domestic insurance corpora-
tion over and above its capital, and the deposit that it may be
required to make with the superintendent, may be invested in or
loaned on the pledge of any of the securities in which deposits
are required to be invested or in the public stocks or bonds of any
one of the United States, or in bonds and mortgages on improved
unéncumbered real property in this state worth fifty per centum
more than the amount loaned thereon, or except as in this chap-
ter otherwise provided, in the stocks, bonds or other evidence
of indebtedness of any solvent institution incorporated undcr the
laws of the United States or of any state thereof; or in such real
estate as it is authorized by this chapter to hold; but no such funds
shall be invested in or loaned on its own stock or the stock of any
other insurance corporation carrying on the same kind of insurance
business, except that any such company organized under section
seventy of this chapter for the purpose of engaging in business
principally as a surety company may, subject to the consent of
the superintendent of insurance, invest such funds in or loan such
funds on the stock of any other corporation carrying on the same
kind of business outside of but not within the United States; pro-.
vided, however, that the superintendent in determining the condi-
tion of any such corporation so loaning or investing such funds
shall not allow it as an asset the amount of the funds so loaned or
invested ; and, provided that, if a stock life insurance corporation
shall determine to become a mutual life insurance corporation, it
may, in carrying out any plan to that end under the provisions of
section ninety-five of this chapter, acquire any shares of its own
stock by gift, bequest or purchase. Any domestic insurance
corporation may, by the direction and consent of two-thirds of its
board of directors, managers or finance committee, invest, by loan
or otherwise, any such surplus moneys or funds in the bonds issued
by any city, county, town, village or school district of this state,
pursuant to any law of this state. Any corporation organized
under subdivision one-a, section one hundred and seventy of this
99 Tue Insurance Law. § 16.

chapter, for guaranteeing the validity and legality of bonds issued
by any state, or by any city, county, town, village, school district,
municipality or other civil division of any state, may invest by
loan or otherwise any of such surplus moneys or funds as provided
in section one hundred of this chapter. Every such domestic cor-
poration doing business in other states of the United States or in
foreign countries may invest its funds in the same kind of securi-
ties in such other states or foreign countries. as such corporation is
by law allowed to invest in, in this state. Any life insurance com-
pany may lend to any policyholder upon the security of the value
of his policy a sum not exceeding the lawful reserve which it holds
thereon, and such loan shall become due and payable and be
satisfied as provided in the loan agreement or policy. But noth-
ing in this section shal! be held to authorize one insurance corpora-
tion to obtain, by purchase or otherwise, the control of any other
insurance corporation.

Source.—Former § 16, as amended by L. 1893, chap. 112; L. 1895, chap. 917;
L. 1897, chap. 218; L. 1906, chap. 326; L. 1907, chap. 239; originally revised
from L. 1840, chap. 287, §§ 1, 2; L. 1849, chap. 308, § 8, as amended by L. 1857,
chap. 469; 'L. 1853, chap. 463, § 6, as amended by L. 1881, chap. 560, § 8, as
amended by L. 1868, chap. 318; L. 1853, chap. 466, § 8, as amended by L. 1871,
chap. 608; L. 1868, chap. 482, § 1; L. 1875, chap. 423, § 2, as amended by L.
1886, chap. 394; L. 1885, chap. 538, § 14; L. 1886, chap. 611, § 7.

Amended by L. 1909, chap. 240 and chap. 302; L. 1910, chap. 634; L. 1911,
chap. 150; L. 1912, chap. 233, and L. 1913, chap. 304.

SPECIAL RESERVE.— The second sentence of § 16 applies to investment
of the special reserve fund, as provided for by § 130 in excess of one-half
of its capital stock. Attorney-General Rep., 1901, page 240.

BORROW MONEY.— An insurance corporation, in the absence of any
statutory restriction, has the power to borrow money, and, as an incident
thereto, the power to transfer its assets in trust for the security of the
lenders. Nelson v. Eaton, 26 N. Y., 410.

An insurance company may borrow money to pay losses, and it may
borrow u note upon which to raise money for that purpose. Furniss v. Gil-
christ & Co., 1 Sandf., 53.

NOTES.— A mutual insurance company may, in the ordinary prosecution

of its business, indorse its notes to creditors in lieu of cash. Marine Bank
v. Vail, 6 Bosw., 421.
: A fire insurance company has no right under the law to place its funds
in the hands of an agent for the purpose of leaning the same upon call in
conjunction with the funds of other parties. Attorney-General Rep.,
April 20, 1911.

MORTGAGE.— An offer of wu mortgagor to prove that at the time the
mortgagee, a domestic imsurance corporation, made him the loan on_ his
premises they were incumbered and not Worth fifty per centum more than
the loan, presents no defense to an action on the mortgage. Washington
Life Ins. Co. v. Clason, 162 N. Y., 305.
§ 17. GeEnreRAL Provisions. 23

Real property charged with ground rent is incumbered and an insurance
company is not permitted to invest in a mortgage on such property. In re
Hunter, Attorney-General Rep., Jan. 24, 1906.

A life insurance company issuing policies on the tontine or “ten years
dividend system,” is in no sense a trustee of any particular fund for the
holder of such a policy; their relations are simply that of debtor and
creditor, and the policyholder at the expiration of the ten years is not
entitled to an accounting, in the absence of any evidence of misappropriation,
wrongdoing or mistake on the part of the company. ‘Uhiman v. N. Y. L.
Ins. Co., 109 N. Y¥., 421; Simons v. N. Y. L. Ins. Co., 38 Hun, 309; Bogardus
v. N. ¥. L. Ins. Co., 101 N. Y., 328.

When investments in mortgages of another state may be made by a
domestic insurance company. Attorney-General Rep., 1896, page 145.

SURPLUS.— Investment of the surplus assets and funds may be made
in dividend-paying stock of solvent trust companies in this or other states.
Attorney-General Rep., 1896, page 278. ,

The capital stock of an insurance company may be invested in bonds and
mortgages executed directly to the company or obtained by assignment,
where the charter does not provide the mode of investment, but impliedly
gives the power to invest in stocks. Mann v. Eckford’s, 15 Wend., 502.

An insurance company of this state cannot invest in a bond and mortgage
on property in the state of Pennsylvania with outstanding ground rents.
Attorney-General Rep., 1906, page 532.

Insurance companies may invest their assets other than their capital in
bonds of the Canadian Southern Railway Company, guaranteed by the Mich-
igan Central Railroad Company. Attorney-General Rep., 1912, page 573.

A domestic life insurance company may invest its surplus moneys in car
trust certificates of Pennsylvania Steel Freight Car Trust. Attorney-General
Rep., 1906, page 577.

Every domestic life insurance corporation doing business in other states of
the United States or in foreign countries, may invest the funds required to
meet its obligations incurred in such other states or foreign countries and in
conformity to the laws thereof, in the same kind of securities in such other
states or foreign countries that such corporation is by law allowed to invest
in, in this state.

A reasonable discretion is given by the statute to a board of directors of a
domestic life insurance company doing business in a foreign country to invest
such part of its funds as may be required to meet its obligation under the
laws of such foreign country, in lawfully prescribed securities at such times
and in such amounts as will best subserve and protect the business interests
of the company from year to year. A board of directors in authorizing trans-
actions under this provision of the Insurance Law will be held to a strict
account for any abuse of its discretionary powers. Ruling Ins. Dept., October

15, 1908.

§ 17. Securities must be interest or dividend-paying.
The superintendent of insurance shall not credit any insurance
corporation transacting business in this state with any security as
94 Tur Insurance Law. § 18.

a part of its capital or as an investment of any part of its capital,
or receive any security as a deposit, unless the security is interest
or income-bearing or dividend-paying.

Source.—Former § 17; originally revised from L. 1886, chap. 207, § 2.

Foreign corporations must comply with the conditions imposed upon
domestic corporations im regard to the class of securities which they may
hold. Attorney-General Rep., 1894, page 201.

§ 18. Stocks, bonds and other evidences of debt.

If any domestic insurance corporation shall have invested any
of its funds in or loaned any of its funds upon the stock, bonds or
other evidences of debt of other corporations or of any nation, state,
county, city, town, village, school district, municipality, or other
civil division of any state, pursuant to the laws of this state, and
the superintendent shall have reason to believe that such stock,
bonds or other evidences of debt are not amply secured or are not
yielding an income he may direct it to report to him under oath
the amount thereof, the security therefor and its market value.
No stock and no bond or other evidence of debt if in default as to
principal or interest, or if not amply secured, shall be valued as an
asset of the corporation above its market value. All bonds or
other evidences of debt held by any life insurance corporation
authorized to do business in this state shall, if amply secured and if
not in default as to principal or interest, be valued as follows: If
purchased at part, at the par value; if purchased above or below
par, on the basis of the purchase price adjusted so as to bring the
value to par at maturity and so as to yield meantime the effective
rate of interest at which the purchase was made; provided that the
purchase price shall in no case be taken at a higher figure than the
actual market value at the time of purchase, and provided further
that the superintendent of insurance shall have full discretion in
determining the method of calculating values according to the
foregoing rule, and the values found by him in accordance with
such method shall be final and binding; provided, also, that any
such corporation may return such bonds or other evidences of debt
at their market value or their book value, but in no event at an
aggregate value exceeding the aggregate of the values calculated
according to the foregoing rule. The superintendent of insurance
§§ 19, 20. GeneERAL Provisions. 95

may, at any time, in his discretion, require any insurance corpora-
tion, other than a life insurance corporation, authorized to do
business in this state to value its bonds or other evidences of debt
in accordance with the foregoing rule.
Source.—Former § 18; originally revised from L. 1875, chap. 423, § 1.
Amended by L. 1909, chap. 301, and L. 1910, chap. 634.

NOTES.— An insurance company, with a clause in the act incorporating it,
enumerating the kind of securities upon which it can loan moneys, but not
including promissory notes, has no power to loan money on promissory notes,
or on any other security other than those specially enumerated. N. Y. lire-
man Ins. Co. v. Ely, 2 Cow., 678.

SURPLUS.— The surplus assets and fund of the domestic insurance com-
panies may be invested in, the dividend-paying stock of solvent trust com-
panies in this and other states. Attorney-General Rep., 1896, page 278.

ADVANCEMENT.— An insurance corporation has no power to advance its
money or other obligations to sustain another corporation engaged in a
similar business; an insurance company is not authorized to subscribe to
the capital stock of a mutual insurance company, and to agree to give its
notes in advance for premiums on insurance to be subsequently effected.
Berry v. Yates, 24 Barb., 199.

REINSURANCE.— One insurance company cannot acquire the property
of another insurance company and reinsure its risks merely as an incident
to the transaction. Pierson v. McCurdy, 33 Hun, 520; afi’d 100 N. Y., 608

§ 19. Lien on stock and profits.

Any domestic fire or marine insurance corporation may in its
by-laws, prescribe that it shall have a lien upon the stock or cer-
tificates of profits of any stockholder or member for any debt
thereafter becoming due to such corporation for premiums from
him, but a copy of such by-laws shall be indorsed upon the certif-
cate of stock or profits, and the lien may be waived by the written
consent of the president of the corporation upon any transfer of
such stock or certificate.

Source.—Former § 19; originally revised from L. 1862, chap. 367, § 6.

§ 20. Restrictions as to real property.

Every insurance corporation transacting business in this state
may purchase, hold and convey real property only for the following
purposes and in the following manner:

1. The building in which it has its principal office and the land
upon which it stands. °
26 1. Tus Insurance Lew. § 20.

2. Such as shall be requisite for its convenient accommodation

in the transaction of its business.
3. Such as shall have been acquired for the accommodation of

its business.

4, Such as shall have been mortgaged to it in good faith by way
of security for loans previously contracted or for moneys due.

5. Such as shall have been conveyed to it in satisfaction of
debts previously contracted in the course of its dealings.

6. Such as shall have been purchased at sales upon judgments,
decrees or mortgages obtained or made for such debts.

7. Such as shall have been acquired under sections thirteen and
fourteen of the general corporation law.

All such real property specified in subdivisions three, four, five,
six and seven of this section, as shall not be necessary for its
accommodation in the convenient transaction of its business, shall
be sold and disposed of within five years after it shall have
acquired title to the same, or within five years after the same
shall have ceased to be necessary for the accommodation of its
business, and it shall not hold such property for a longer period
unless it shall procure a certificate from the superintendent of
insurance that its interests will suffer materially by the forced
sale thereof, in which event the time for the same may be extended
to such time as the superintendent shall direct in such certificate.

If it is a domestic marine insurance corporation, it may alsc
acquire and hold such real property within the state or upon or
in its waters as is or may be adapted to or available for use in
protecting, storing and caring for wrecked vessels or cargoes, or
in protecting, storing and caring for such vessels and appliances as
are or may be employed for assisting the same, or is or may
be adapted to or available for other purposes of or incident to
marine salvage service, and may manage and dispose of such real
property in the same manner and with like effect as if it were an
unincorporated owner thereof.

No real property shall be acquired by any domestic life insur-
ance corporation under subdivisions one or two hereof or under
section fourteen of the general corporation law and no real property
within the state shall be acquired by any foreign life insurance
§§ 21, 22. GrneraL Provisions. 27

corporation under subdivision two hereof, except with the approval
of the superintendent of insurance. No real property shall be
.disposed of by any domestic life insurance corporation and no real
property within the state shall be disposed of by any foreign life
insurance corporation, by exchange for other real property,
wherever situated, as the consideration for the transfer in whole
or part yaless the acquisition of the latter shall be requisite for
the convenient accommodation of the corporation in the transac-
tion of its business and shall be approved by the superintendent.

Source.—Former § 20, as amended by L. 1906, chap. 326; originally revised
from L. 1849, chap. 308, § 9; L. 1853, chap. 463, § 9, as amended by L. 1876,
chap. 357; L. 1853, chap. 466, § 9; L. 1881, chap. 484; L. 1885, chap. 538, § 2;
L. 1886, chap. 611, § 8; L. 1887, chap. 481, § 1.

See § 53, post. Penalties for violation of any provision of the insurance
law.

CERTIFICATE.— The failure of an insurance company, which has pur-
chased real estate upon the foreclosure of a mortgage thereon owned by it,
and has held the same for more than five years, to procure within such five
years the certificate of the superintendent does not affect or divest its
rights in such real estate, and it may still sell and convey a good title to a
purchaser. Home Ins. Co. v. Head, 30 Hun, 405.

REAL PROPERTY.— A life insurance corporation has a right to purchase
lands on which to erect a hospital for the care and treatment of its employees
affected with tuberculosis. People ex rel. Metropolitan Life Ins. Co. v. Hotch-
kiss, 186 App. Div., 150.

A policyholder, without proof of special damage, cannot restrain the insur-
ance company from purchasing lfand for building purposes. Levy v. Mutual
Life Ins. Co., 54 Hun, 315.

§ 21. When corporation to be deemed insolvent.

Every insurance corporation specified in articles two, three, four
and five of this chapter, whose assets and credits are not sufficient
to reinsure its outstanding risks in a solvent insurance corporation,
shall be deemed insolvent and may be proceeded against as an

insolvent corporation.

Source.—Former § 21; originally revised from L. 1851, chap. 95, § 6; L.
1853, chap. 463, § 17, as amended by L. 1879, chap. 161.

See § 101 et seq. General Corporation Law, Action to dissolve a corporation.

§ 22. Reinsurance.
Every insurance corporation doing business in this state may
reinsure the whole or any part of any policy obligation in any
28 Tux Insurance Laws. § 22.

other insurance corporation; provided that if any domestic insur-
ance corporation, other than a life insurance corporation, shall re-
insure or determine to reinsure substantially all its risks, such
reinsurance shall be submitted in advance to and have the approval
of the superintendent of insurance, and provided further, that no
domestic life insurance company shall reinsure its whole risk on
any individual life except-by permission of the superintendent of
insurance, but may reinsure any portion of an individual risk and
receive credit for the reserve on any policy covering a risk rein-
sured if the reinsuring corporation is authorized to transact busi-
ness in this state, and may also receive credit for taxes on the
premiums paid on any such policy. Nothing in this chapter con-
tained shall be construed as permitting the reinsurance of a life
insurance corporation having over two hundred and fifty million
dollars of insurance outstanding and in force.

When a reinsurance agreement is made between other than life
insurance corporations, the parties to such agreement shall, upon
the policies involved, compute their unearned premium funds as
follows: The reinsuring or ceding corporation shall, upon the por-
tion of its liability not reinsured maintain a reserve to be computed
in accordance with section 118 of the insurance law; the corpora-
tion assuming liability by reinsurance from the corporation issuing
the original policy shall maintain a reserve equal to that which the
reinsuring corporation would have been required to maintain upon
the amount reinsured had it retained the liability ceded by it. No
eredit of any kind shall be allowed or given, either as a reduction
of taxes or of liabilities, to any corporation transacting business in
this state, for reinsurance made in corporations not authorized to
issue policies in this state. The superintendent of insurance shall
require schedules of reinsurance to be filed by each corporation at
the time of making its annual report to the department.

Source.—Former § 22, as amended by L. 1904, chap. 759; originally revised

from L. 1871, chap. 888, § 6; L. 1877, chap. 229, §§ 1, 2; L. 1879, chap. 489,
§§ 3, 4, as amended by L. 1885, chap. 276.

Amended by L. 1909, chap. 301; L. 1910, chap. 168, and L. 1911, chap. 369.

See § 240, post. Reinsurance of fraternal beneficiary Societies, ete.

See § 1196, Penal Law. Transfers to and reinsurance of risks in unau-
thorized foreign corporations prohibited to co-operative associations

REINSURANCE.— Risks held by foreign insurance companies may be rein-
sured by domestic insurance companies. Attorney-General Rep., 1896 page 145.
a. os he
§ 22. GreneraL Provisions. 29

The fact that a life insurance company is authorized to reinsure its risks

does not release it from any of its existing obligations. People ex rel. Mut.
Ins. Co., 92 N. Y., 108.

A contract by a life insurance company to pay a sum certain on a future
day or on the death of a party before that day, on condition that the
other party shall pay to it a certain sum annually, is violated by the com-
pany when it transfers all its assets to another company and ceases to do
business. Meade v. St. Louis Life Ins. Co., 51 How. Pr., 1.

A transfer of assets of one insurance company to another, the latter assum-
ing the liability of the former on its outstanding policies, is not reinsurance.
Raymond v. Security Ins. Co., 44 Mise., 31.

The word “reinsurance” as used in the statute means premiums collected
by such company for reinsuring the risks of other companies, and such
premiums are included in the term “gross premiums received;” the sum
paid out by such company to other companies for reinsuring its own risks
is also included and cannot be deducted from the amount thereof, since such
sum is an expense of the business. People ex rel. Continental Ins. Co. v.
Miller, 177 N. Y., 515.

Reinsurance should be made in the name of and for the benefit of the
company, and not for individual policyholders. Casserly v. Manners, 48 How.
Pr., 219.

A corporation organized under § 70, subd. 4, may insure entire risks of a
foreign surety company. Attorney-General Rep., 1896, page 145.

A foreign marine insurance company transacting business in the state of
New York is entitled, under this section, to exemption from taxation upon
premiums paid by it for reinsurance in companies authorized to issue policies
in this state after October 1, 1892, the date at which the Insurance Law took
effect; but the act is not retroactive and does not relate to premiums paid
for reinsurance prior to that date. People v. Reliance Marine Ins. Co., 70
Hun, 554.

TRANSFERRING BUSINESS.— A live stock insurance company organized
under the provisions of article VII of the Insurance Law cannot transfer
its property, franchises and business through an individual to a businesr
corporation of a foreign state. Attorney-General Rep., 1896, page 276.

An insurance company is not entitled to a deduction on account of reinsur-
ance made by it in Lloyds, which is not amenable, and has not paid the
tax provided for by § 34. In re Standard Marine Insurance Company,
Attorney-General Rep., 1896, page 151.

PRO RATA.— The words “ pro rata” in « policy of reinsurance of a fire
insurance company mean according to the proportion which the amount of
the policy of reinsurance bears to the amount of original insurance — that
proportion remains fixed and cannot be changed by any act of the reinsured.
Home Ins. Co. et al. v. Continental Ins. Co., 180 N. Y., 389; aff’g 89 App.
Div., 1.

REINSURANCE.— The authority given to insurance companies to rein-
sure policies or to take the risks of other companies does not justify sub-
scriptions by them to the capital stock of a mutual insurance company.
Berry v. Yates, 24 Barb., 199.
30 Tur Insurance Law. . §§ 28, 24.

§ 23. Reinsurance by receiver.

The receiver of any domestic insurance corporation may rein-
sure, upon the written consent of the superintendent of insurance
and the attorney-general, all of the,policy obligations of the corpo-
ration in any solvent corporation authorized to do business in this
state, if the assets of the corporation of which he is receiver are
sufficient to effect such reinsurance. If such assets are insufficient
for that purpose, the receiver, upon the like consent, may reinsure
a percentage of each policy obligation on such corporation out-
standing to the extent that its assets may be sufficient for that
purpose. No contract of reinsurance shall be entered into by
the receiver, except in pursuance of an order of the court in which
the receiver was appointed directing the reinsurance and estab-
lishing the general form of the contract for the same.

Source.—Former § 28; originally revised from L. 1877, chap. 229, § 3.

REINSURANCE.— The court, in directing a receiver of an insurance com-
pany to reinsure for the benefit of policyholders, should give a preference to
domestic companies, and to the one which will afford the best security, not-
withstanding many policyholders unite in preferring another company.
Mooney v. British Com. Life Ins. Co., 9 Abb. Pr., N. 8., 103.

The receiver of an insolvent fire insurance company is justified in using the
unearned premium fund for purposes of reinsurance or of restoring to the
policyholders upon cancellation of their outstanding policies that part of the
unearned premium applicable to such cancelled policies; policyholders are
preferred creditors to the extent of the unearned premium; a corporation, in
contemplation of insolvency, may use its unearned premium fund in the acquir-
ing of reinsurance as to all outstanding fire policies. Attorney-General Rep.,
1906, page 558.

The fact that a life insurance company is authorized to reinsure its
risks does not release it from any of its existing obligations. People v.
Empire Mut. Ins. Co., 92 N. Y., 1085.

Where the receiver of an insurance company entered into a contract in
the state of New Jersey with a foreign insurance company for reinsurance,
which contract was ratified and approved by order of the court, the foreign
company was estopped from setting up the defense that the contract was in
violation of the laws of this state. Jay v. De Groot, 2 Hun, 205.

§ 24. Limitation of risk.

No domestic insurance corporation, nor any insurance corpora-
tion organized under the laws of any country outside of the United
States, doing business in this state, shall expose itself to any loss
§ 25. GrneRaL Provisions. 31

on any one risk or hazard to an amount exceeding ten per centum
of its capital and surplus. No insurance corporation incorporated
under the laws of any other state of the United States, doing
business in this state, shall expose itself to any loss on any one
risk or hazard within this state to an amount exceeding ten per-
centum of its capital and surplus. No portion of any such risk
or hazard which shall have been reinsured in a corporation author
ized to do insurance business in this state shall be included in
determining the limitation of risk prescribed in this section.
This section shall not apply to life insurance corporations, nor to
marine insurance corporations authorized to do business in this
state, nor to the certificates of title guarantee corporations,
guaranteeing the correctness of searches for ail instruments.
liens or charges affecting titles to real property and chattels real,
or guaranteeing and insuring the owners of real property and
chattels real and others interested therein against loss by reason
of defective titles thereto and incumbrances thereon.

Source.—Former § 24, as amended by L. 1906, chap. 326; originally revised
from L. 1849, chap. 308, § 5; L. 1853, chap. 466, § 6, as amended by L. 1862,
chap. 367; L. 1871, chap. 888, § 1; L. 1879, chap. 489, §§ 1, 2.

Amended hy L. 1910, chap. 634, ana L. 1911, chap. 595.

FOREIGN LAWS.— Every person who deals with a foreign corporation
impliedly subjects himself to such laws of its own country affecting its power
and obligations as the known and established policy of that government
authorizes. Canada Southern R. Co. v. Gebhard, 109 U. 8., 527.

RISKS.— A surety company is not exempt from section 24 of the Insur-
ance Law, limiting the amount of any one risk; the section was not rendered
inapplicable by chap. 720 of 1893, as amended by chap. 178 of 1895; the value
of collaterals taken by the company are to be deducted from the amount.
Ind. and Gen. Trust Co. v. Tod, 56 App. Div., 39. The interpretation and
effect of all contracts is governed by the law of the place where made.
Smith v. Mutual Life, 14 Allen, 336; Wayman v. Southard, 10 Wheat., 1.

§ 25. Jurisdiction of superintendent over foreign cor-

porations.

The superintendent of insurance shall have the same super-
vision and make the same examination of the business and affairs
of every foreign insurance corporation doing business in this state,
as of domestic insurance corporations, doing the same kind of busi-
ness, and of its assets, books, accounts and general condition.
Every such foreign corporation and its agents and officers shall
82 Tur Insurance Law. § 25.

always be subject to and be required to make the same statements
and answer the same inquiries and be subject to the same examina-
tions, and, in case of default therein, to the same penalties and
liabilities as domestic insurance corporations doing the same kind
of business, or any of the agents:or officers thereof, are or may
be liable to under the laws of this state or the regulations of the
insurance department.

The superintendent may, whenever he deems it necessary, either
in person or by a proper person appointed by him, repair to the
general office of such foreign corporation, wherever the same may
be, and make an investigation and examination of its affairs and
condition. He may cancel and revoke the certificate of any such
foreign corporation refusing or unreasonably neglecting to comply
with the provisions of this section, or to allow the examination
herein provided for to be made, and prevent such corporation from
further continuance in business in this state.

A foreign insurance corporation may transact in this state only
such kind of business as, under the laws of this state, a like
domestic insurance corporation is authorized to transact.

No such corporation shall transact any business in this state
not specified in the certificate of authority granted by the
superintendent.

Source.—Former § 25, as amended by L. 1896, chap. 845; or S078 roa
from L. 1869, chap. 902, § 14; L. 1871, chap. 888, § 8; L. 1873, chap. 593, § 2;
L. 1881, chap. 484, § 2; L. 1882, chap. 235, § 2.

Amended by L. 1910, chap. 168.

CONDITIONS.— A state has the right to impose conditions, not in con-
flict with the Constitution or the laws of the United States, to the trans-
action of business within its territory by an insurance company chartered
by another state, or to exclude such company from its territory, or, having
given a license, to revoke it, with or without cause. Doyle v. Continental
Ins. Co., 94 U. S., 535.

A corporation organized in one State can transact business in another only
with the consent, express or implied of the latter, and this consent may be
accompanied by such conditions as the latter State may think fit to impose,
which do not conflict with the Constitution or laws of the United States.

The Lafayette Ins. Co. v. French, 18 How, (U. 8.), 409; Bank v. Earl, 13
Pet., 519.

The business of a foreign insurance company writing marine insurance is
not protected by the interstate commerce clause of the Constitution 3 a State
may exclude a foreign insurance company or impose conditions upon its doing
business within such State. Hooper v. State of California, 155 U. S., 648.
§ 26. GENERAL Provisions. 33
This section applies to all corporations authorized by law to make insur-

ance. In re National Credit Insurance Company, Attorney-General Rep.,
1893, page 164.

As the legislature did not repeal sections 25 and 29, foreign companies are
compelled to comply with the terms of section 101 reiating to standard policy
forms. Attorney-General Rep., 1906, page 541.

DEPOSIT.— An insurance company, organized under the laws of another
state of the United States, for the transaction of business specified in § 70
of the Insurance Law, must make the same deposit of securities that is
required from a domestic company. Attorney-General Rep., 1897, page 169.

CAPITAL.— A foreign insurance corporation doing business under a special
charter granted in the state of Maryland or under the general law of that
state need not have its maximum capital stock paid up before it shall be
allowed to do business in this state. In re National Fire Insurance Company,
Attorney-General Rep., 1897, page 234.

FOREIGN CORPORATION.— Within the meaning of the Insurance Law, a
foreign corporation is one incorporated under the laws of another state of
the United States. In re Penn. Fire Ins. Co., Attorney-General Rep., 1895,
page 56.

_ CAPITAL STOCK.— The capital stock of fire insurance companies of other
states must be fully paid up before such companies can be authorized to do
-usiness here. Attorney-General Rep., 1893, page 336.

WHEN NOT ADMITTED.— A foreign corporation combining the business
€ building associations, life insurance and savings funds cannot be admitted
in this state. In re United Security Life Insurance and Trust Co., Attorney-
General Rep., 1896, page 153.

SEVERAL KINDS OF INSURANCE.— A foreign corporation, like a domestic
insurance company, cannot combine different kinds of insurance specified in
this section. Attorney-General Rep., 1896, page 196.

A foreign corporation must limit itself to the kinds of insurance specified
in the article of the insurance law under which domestic corporations are
organized. In re Ocean Accident and Guaranty Corporation of London,
England, Attorney-General Rep., 1897, page 2380.

A foreign fire insurance company cannot now be admitted to do marine
insurance business in this state. Attorney-General Rep., 1893, page 402.

MANDAMUS.— A mandamus will not lie to compel the superintendent of
insurance in this state to do an act regarding the admission to this state
of an insurance company of another state. People ex rel. Equitable Fire Co.
v. Fairman, 12 Abb. N. C., 268.

§ 26. Deposits by insurance corporations of other states.

Every insurance corporation incorporated under the laws of any
other state of the United States, and doing business in this state,
shall keep on deposit with the superintendent of insurance of this
84 Tur Insurance Law. § 26,

the state by whose laws it is incorporated, the same amount and
character of securities which a like domestic insurance corporation
is required to deposit with the superintendent of insurance of this
state, but a corporation of another state, depositing with its home
state authorities bonds and mortgages on improved unencumbered
real property located in the home state or in this state worth fifty
per centum more than the amount loaned thereon, shall be allowed
credit for such deposits covered by any certificate of deposit fur-
nished the superintendent of insurance as hereinafter required.
The superintendent of insurance shall be furnished with the certifi-
cate of such auditor, comptroller or general fiscal officer, under his
hand and official seal, that he, as such auditor, comptroller or gen-
eral fiscal officer of such state, holds in trust and on deposit, for
the benefit of all the policy-holders of the corporation, such stocks
and securities. Such certificate shall embrace the items of the
securities so held, and shall state that the officer making it is satis-
fied that the securities are worth the amount required by law.

Source.—Former § 26; originally revised from L. 1853, chap. 466, § 23, as
amended by L. 1875, chap. 555; L. 1853, chap. 463, § 14, as amended by L. 1862,
chap. 300; L. 1877, chap. 439, § 1, as amended by L. 1881, chap. 628.

Amended by L. 1910, chap. 634.
See § 28, post. Special deposit required in certain cases.

FOREIGN CORPORATILON.— Within the meaning of the Insurance Law, a
foreign corporation is one incorporated under the laws of another state of
the United States. In re Penn. Fire Ins. Co., Attorney-General Rep., 1895,
page 56.

DEPOSIT.— It is the policy of our Insurance Law to require foreign insur-
ance companies to deposit approved securities with the superintendent of
insurance as « condition precedent to the transaction of business here.
Attorney-General Rep., 1894, page 201.

The deposit of $200,000 with the treasurer of the state of Maryland as
“security for all the holders of policies or guarantees of said corporation,” is
not a compliance with this section. Attorney-General Rep., 1906, page 526.

A foreign company must deposit in home state $100,000 for each kind of
insurance which it is organized to transact under § 70, or $250,000 if for
three or more kinds. In re General I. Co., Attorney-General Rep., Jan. 8, 1906.

An insurance company, organized under the laws of another state of the
United States, for the transaction of business specified in § 70 of the Insur-
ance Law, must make the same deposit of securities that is required from a
domestic company. Attorney-General Rep., 1897, page 169.

A foreign life insurance company may deposit with the superintendent
of insurance bonds of the government under which it is organized, provided
%
§ 27. Grnerat Provisions. 35

such government accepts from our insurance companies seekiing to do
business there government bonds of the United States or of this state.
Attorney-General Rep., 1893, page 242.

BANKING.— A corporation is not entitled to admission in this state for
the purpose of transaction of a business which includes a species of ‘banking
business in connection with insurance. In re United Security Life Insurance
and Trust Co., Attorney-General Rep., 1896, page 153.

WITHDRAWING DEPOSIT.— When a greater sum than the minimum
required is deposited, the superintendent holds the excess in trust, and the
excess cannot be withdrawn until the conditions of the trust have been com-
plied with. L. Ins. Co. v. Maxwell, 131 N. Y., 286. ¢

Insurance companies retiring from business may withdraw from deposit
with the superintendent of insurance all securities in excess of an amount
sufficient to secure policyholders in the United States. Attorney-General
Rep., 1893, page 216.

ASSIGNING DEPOSIT.— An insurance company, having made a deposit ot
funds with the superintendent of insurance, for the security of policyholders,
pursuant to law, has no right to make an assignment of the same, or any
part thereof. Attorney-General Rep., 1894, page 223.

NUMBER OF DIRECTORS.— The phrase in this section which reads, “ the
consent of the superintendent shall be first obtained to such increase or reduc-
tion of the number of directors,’ may be construed to mean, must be ob-
tained as a condition precedent to its going into effect. Attorney-General
Rep., February 6, 1914.

§ 27. Funds and capital of insurance corporations incorpo-
rated outside of the United States.

A foreign insurance corporation incorporated by or existing
under the government or laws of any country outside of the United
States, and admitted to do business in this state, shall not
transact any business of insurance in this state, unless it shall
have within the United States, deposited with insurance depart-
ments or held in trust as hereinafter provided, not less than five
hundred thousand dollars, if a fire insurance corporation, and not
less than two hundred thousand dollars if a life or casualty insur-
ance corporation, invested in like manner as the capital of a similar
domestic insurance corporation is required to be invested.

The capital of such foreign fire insurance corporation, doing fire
insurance business in this state, or of any such company hereafter
admitted to’such business in this state, shall, for the purposes of
this chapter, be the aggregate value of such sums or securities as
such corporation shall have on deposit in the insurance department
of this state, and of the other states of the United States, for the
36 Tux Insurance Law. § 24.

benefit of policy holders in any of such states or in the United
States, and of all bonds and mortgages for money loaned on real
estate in this state or in any state of the United States, if such
loans shall be made in conformity with the laws of such state pro-
viding for the incorporation of insurance companies therein and
the investment of their capital, and of all other assets and property
in the United States, in which fire insurance companies may
invest under the provisions of sections thirteen and sixteen, if
such bonds and mortgages, assets and property shall be hela
in the United States by trustees, approved by the superin-
tendent of insurance and citizens of the United States, or deposited
with a trust company to be approved by him, for the general
benefit and security of all its policy holders in the United
States after taking from such aggregate value the same deductions
for losses, debts and liabilities in this and the other states of the
United States, and for premiums upon risks therein not yet
expired, as is authorized or required by the laws of this state, or
the regulation of its insurance department with respect to fire
insurance companies organized under the laws of this state.

In addition to the reports required by law of any such foreign
fire insurance corporation, it shall annually, in the month of Jan-
uary, render to the superintendent a detailed statement of the
items making up such capital, and the deductions to be made there-
from, signed and verified by the manager and a majority of the
trustees (or if a trust company, by the proper officers thereof) of
the corporation residing in the United States, and the superintend-
ent shall, thereupon, and from such examinations as he may make
of the affairs of the corporation, determine the amount of such
capital as of the first day of January, and issue to such corpora:
tion his certificate of the amount of its capital so determined; and
if it shall at any time appear that the net capital for which the
last certificate shall be outstanding has been materially reduced,
the superintendent may call in such certificate and issue another,
corresponding to such reduced capital, providing the capital is not
reduced below the sum of two hundred thousand dollars.

he capital of any such foreign fire insurance company, so de
termined and certified, shall be subject to taxation as provided |
for in section thirty-four of this chapter, {
§ 27, GrneraL Provisions. 37

When any part of its capital is held by trustees or by a trust
company, pursuant to the provisions of this section, such trustees
state, or with the auditor, comptroller or general fiscal officer of
or trust company shall be appointed by the board of managers or
directors of such foreign insurance corporation, and a duly certi-
fied copy of the vote or resolution creating the trust shall, with a
certified copy of such trust deed, be filed in the office of the super.
intendent of. insurance; and the superintendent may examine
such trustees or the agent or attorney of the corporation in the
same manner as he is authorized by this chapter to examine the
affairs and funds of any domestic insurance corporation, but the
superintendent of insurance shall, upon the written request of any
such foreign fire insurance company, transfer to trustees duly ap-
pointed by it under the provisions of this section any excess of
securities which it shall have deposited with him above the sum
of two hundred thousand dollars. The deposit required of such
corporation shall be reckoned and considered as the sum of two
hundred thousand dollars, which shall be deposited with the super-
intendent of insurance in the securities authorized by law. The
said superintendent may also receive such additional amounts as
said foreign insurance commpany shall deposit with him, but any
additional amounts now on deposit, or which may hereafter be
deposited with the said superintendent, shall be received and held
by him as a voluntary deposit, in trust for all the policy holders
of said foreign insurance company in the United States, and any
securities in excess of said two hundred thousand dollars as afore-
said, shall on the written request of said foreign insurance com-
pany, be transferred to the trustees appointed by said company, as
in this section provided.

Source.—Former § 27; originally revised from R. §., chap. 20, tit. 21, §§ 1, 2;
L. 1853, chap. 466, § 23, as amended by L. 1875, chap. 555; L. 1871, chap. 888,
§§ 2-4; L. 1877, chap. 209, § 2, as amended by L. 1881, chap, 671.

Amended by L. 1910, chap. 634.

FOREIGN CORPORATION.— Within the meaning of the insurance law, a
foreign corporation is one incorporated under the laws of another state of
the United States. In re Penn. Fire Ins. Co., Attorney-General Rep., 1895,
page 56.

APPLICATION.— This section applies to all corporations authorized by
law to make insurance. In re National Credit Insurance Company, Attorney-

General Rep., 1893, page 164.
38 Tue Insurance Law. § 27.

CHANGE OF NAME.— An insurance company is not authorized to change
its name, except by amended certificate. Attorney-General Rep., 1892, page 418.

EXCESS DEPOSITS.— Deposits made by foreign insurance companies in
excess of the amount required by statute may be withdrawn from the insurance
department and placed in the hands of trustees. Attorney-General Rep.,
1892, page 348. s

When a greater sum than the minimum required is deposited, the super-
intendent holds the excess in trust, and the excess cannot be withdrawn
until the conditions of the trust have been complied with. L. Ins. Co. v,
Maxwell, 131 N. Y., 286.

The securities deposited by a foreign insurance company with the insur-
ance department are to be held for the benefit of those policyholders insured
in the same class or classes of insurance which the company is authorized
to write in this state. Attorney-General Rep., 1892, page 389.

Foreign life insurance companies seeking to do business here must deposit
with the superintendent of insurance at least $200,000, but are not required
to have their capital fully paid in. Attorney-General Rep., 1900, page 178.

ASSIGNMENT.— An insurance company, having made a deposit of funds
with the superintendent of insurance, for the security of policyholders, pur-
suant to law, has no right to make an assignment of the same or any part
thereof. Attorney-General Rep., 1894, page 223.

A deposit made by foreign insurance company with the insurance depart-
ment cannot be transferred to be held as a deposit for another company
formed by consolidation of the depositor company and another foreign
insurance company. Attorney-General Rep., 1892, page 76.

A policy written by the depositing company after withdrawal from busi-
ness in this state is protected by the deposit. Attorney-General Rep., 1892,
page 121.

Insurance companies retiring from business may withdraw from deposit
with the superintendent of insurance all securities in excess of an amount
sufficient to secure policyholders in the United States. Attorney-General
Rep., 1893, page 216.

CAPITAL STOCK.— The capital tock of fire insurance companies of other
states must be fully paid up before such companies can be authorized to do
business here. Attorney-General Rep., 1893, page 336.

Departmental and United States trustee deposits made by a foreign corpo-
ration, although transferred to Royal Company by indenture may not lawfully
be included as a part of the United States capital of the Royal Company for

protection of its United States policyholders. Attorney-General Rep., 1904,
page 331.

A foreign life insurance company may deposit with the superintendent of
insurance bonds of the government under which it is organized, provided
such government accepts from our insurance companies seeking to do business
there government bonds of the United States or of this state.
General Rep., 1893, page 242.

A foreign fire insurance company cannot now be admitted to do marine
insurance business in this state. Attorney-General Rep., 1893, page 402.

Deposits made by a foreign company which failed to obtain a renewal are
held as security only for policies issued during the period the company was

Attorney:
§ 28. GENERAL Provisions. 39

authorized to do business, and when such risks have been liquidated the
deposits should be returned. Attorney-General Rep., 1902, page 174.

§ 28. Special deposit required in certain cases.

No insurance corporation, incorporated by or existing under the
government or laws of other countries than the United States,
except co-operative life and fraternal beneficiary insurance cor-
porations, shall transact any business of insurance in this state,
unless, if it transact fire or marine insurance business in this state,
it has deposited with the superintendent of insurance, for the
benefit and security of its policy holders in the United States, a
sum not less than two hundred thousand dollars invested as in
this chapter required, or if it transact in this state one or more of
the kinds of insurance business specified in section seventy of this
chapter, it has deposited with the superintendent of insurance, for
like purposes such amount as may be required of domestic insur-
ance corporations doing the same kinds of business. A foreign
insurance corporation incorporated by or existing under the gov-
ernment or laws of any country outside of the United States,
authorized to transact the business of fire insurance in this state,
may be authorized to transact the business of ocean marine insur-
ance, provided it makes an additional deposit with the superin-
tendent of insurance of two hundred thousand dollars in deposit
securities, and files with the insurance department annually a sep-
arate financial statement for each class of business.

Source.—Former § 28; originally revised from L. 1849, chap. 308, § 7; L.
1853, chap. 463, § 15, as amended by L. 1862, chap. 300; L. 1853, chap. 466,
§ 23, as amended by L. 1875, chap. 555; L. 1877, chap. 439, § 1, as amended by
L. 1881, chap. 628; L. 1880, chap. 428, § 1.

Amended by L. 1910, chap. 634.

See § 11, ante. Examination into affairs of corporation by superintendent
of insurance.

General Accident Insurance Company of Philadelphia must deposit the same
amount in the state of Pennsylvania as is required of a similar domestic cor-
poration in this state, in order to secure renewal of licence to do business
within this State. Attorney-General Rep., 1906, page 529.

The protection afforded by a deposit made by a foreign insurance company
with the Superintendent of Insurance for the benefit and security of its
policyholders in the United States, includes policyholders in Porto Rico.
Attorney-General Rep., March 27, 1912.
40 Tue Insurance Law. § 29,

WITHDRAWAL OF DEPOSIT.— Insurance companies retiring from busi-
ness may withdraw from deposit with the superintendent of insurance all
securities in excess of an amount sufficient to secure policyholders in the
United States which are held in trust for all such policyholders. Attorney-
General Rep., 1893, page 216.

An insurance company, having made a deposit of funds with the super-
intendent of insurance, for the security of policyholders, pursuant to law,
has no right to make an assignment of the same, or any part thereof.
Attorney-General Rep., 1894, page 223.

Deposits made by a foreign company which failed to obtain a renewal
are held as securities only for policies issued during the period the company
was authorized to do business, and when such risks have been liquidated the
deposits should be returned. Attorney-General Rep., 1902, page 174.

The Superintendent of Insurance should not surrender to a foreign fire in-
surance company the securities on deposit for the benefit of policyholders in
the United States, until he is satisfied that every policy in any of the posses-
sions of the United States has run out by expiry or cancellation. Attorney-
General Rep., 1903, page 424.

TAXATION.— Where a foreign insurance company deposits with the comp-
troller of this state, for the benefit of policyholders, the securities required
to enable it to do business in this state, the securities so deposited are
liable to assessment and taxation. International L. Assur. Soc. v. Com-
missioners, 28 Barb., 318.

ESTOPPEL.— If, at the time of an assignment of a mortgage to the super-
intendent as a part of the deposit, the mortgagor states that the whole
sum is due and that there is no legal or equitable defense to the mortgage,
the mortgagor is estopped from setting up the defense of usury. Smyth v.
Lombardo, 15 Hun, 415.

Where the superintendent has accepted from a company an assignment
of a mortgage as a part of the deposit, on the faith of a representation on
the part of the mortgagor that there is no legal or equitable defense to the
same, the mortgagor is estopped from setting up such a defense. Smyth
vy. Munroe, 84 N. Y., 354.

EXCESS.— When a greater sum than the minimum required is deposited,
the superintendent holds the excess in trust and the excess cannot be with-
drawn until the conditions of the trust have been complied with. L. Ins.
Co. v. Maxwell, 1381 N. Y., 286.

§ 29. Copy charter and verified statement to be filed.

No foreign insurance corporation shall transact any business of
insurance in this state until it has filed in the office of the super-
intendent of insurance a certified copy of its charter or deed of
settlement with a verified detailed statement of all the items,
matters and other information in regard to its affairs required
by law to be stated in the annual report of a similar domestic
§ 30. GENERAL PROVISIONS. 41

insurance corporation, made as of such date as the superintendent
may require, and an agreement under its corporate seal that it will
not, while authorized to do business in this state, transact any busi-
ness therein which a similar domestic insurance corporation is pro-
hibited from transacting.

Source.—Former § 29; originally revised from ‘L. 1853, chap. 463, § 15, as

amended by L. 1862, chap. 300; L. 1853, chap. 466, § 23, as amended by L. 1875,
chap. 555; L. 1880, chap. 428, § 2.

See § 9, ante. No foreign corporation to transact business in this state
without certificate of authorization by superintendent.

See § 31, post, Agent not to transact business until certificate is filed
in county clerk’s office.

See § 32, post. Renewal of certificate.

See § 49, post. Any person aiding in the transaction of business of foreign
corporation is deemed an agent thereof.

See § 50, post. Agent’s certificate of authority.

See § 53, post. Penalty for violation of Insurance Law.

See § 54, post. Agents not to act for unauthorized corporations.

See § 91, post. Certificate of authority of agents.

See § 137, post. License to agents in certain cases.

FOREIGN CORPORATION.— Within the meaning of the Insurance Law, a
foreign corporation is one incorporated under the laws of another state of
the United States. In re Penn. Fire Ins. Co., Attorney-General Rep., 1895,
page 56.

CAPITAL STOCK.— The capital stock of foreign credit guarantee com-
panies must be paid in, in cash, one-third thereof within one year and the
other two-thirds thereof within two years from their incorporation. Attor-
ney-General Rep., 1893, page 164.

As the legislature did not repeal sections 25 and 29, foreign companies are
compelled to comply with the terms of section 101 relating to standard policy
forms. Attorney-General Rep., 1906, page 541.

§ 30. Appointment of Attorney.

No foreign insurance corporation shall transact any business of

‘insurance in this state until it has executed and filed in the office
of the superintendent of insurance a written appointment of the

superintendent to be the true and lawful attorney of such corpora-
tion in and for this state, upon whom all lawful process in any
action or proceeding against the corporation may be served with
the same effect as if it was a domestic corporation. Service upon
such attorney shall thereafter be deemed service upon the corpo
ration.
42 Tue Insurance Law. § 30.

Source.—Former § 30; originally revised from L. 1853, chap. 463, §§ 14, 15,
as amended by L. 1862, chap. 3005 L. 1853, chap. 466, § 28, as amended by L.
1875, chap. 555; L. 1884, chap. 346, § 1.

Amended by L. 1910, chap. 634.

See § 1199, Penal Code. Acting for foreign insurance company which has
not designated superintendent of insurance as attorney.

Within the meaning of the Insurance Law, a foreign corporation is one
incorporated under the laws of another state of the United States; if such
companies were admitted to do business in this state prior to May 17, 1887,
they are entitled to immunity from the penalty prescribed in section 30.
In re Penn. Fire Ins. Co., Attorney-General Rep., 1895, page 56.

The words “remove into the United States” courts do not apply to cases on
appeal, but to cases removed on petition of defendant before pleading is
filed. Ruling Ins. Dept., Apr. 27, 1910.

LABOR DAY.— The superintendent in receiving and admitting service of
process acts as au agent of the corporation and not as an officer of the state;
and service upon him on Labor Day is valid. Flynn v. Union Surety and
Guar. Co., 170 N. Y., 145.

JUSTICE’S COURT.—In justice’s court a summons may be served on the
local agent, provided no other person resides in the county on whom service
might be made and no person has been designated to accept service. Murray
v. Am. Casualty Co., 88 App. Div., 224.

SERVICE BY MAIL.—Service by mail upon the superintendent. Farmer
v. Nat. Life Assn., 188 N. Y., 265.

Service of 4 summons upon the superintendent of insurance as the attorney
of a life insurance company organized in another state, must be made by
delivering a copy to the superintendent; sending him a copy by mail is
insufficient. Farmer v. Nat. Life Ass’n., 28 Abb. N. C., 421; aff’d 188
N. Y., 265.

CITY COURT OF NEW YORK.— The summons in an action in the City
Court of New York against a foreign insurance company may be served in
the city of Albany on the superintendent of insurance at his office. People
v. Justices of City Court, 25 Abb. N. C., 403.

INSUFFICIENT APPOINTMENT.— A certificate of appointment, not giv-
ing the individual name of the superintendent is sufficient. Lafflin v. Trav-
elers’ Ins. Co., 121 N. Y., 713.

DEPUTY.— A service of a summons and complaint upon a life insurance
company upon the deputy at the office of the superintendent is good although
it is not shown that such deputy was specifically designated as a person
upon whom service could be made. Quinn vy. Royal Ins. Co., 81 Hun, 207;
30 N. Y. Supp., 714; 62 St. Rep., 738. ;

EFFECT OF SERVICE ON SUPERINTENDENT.-— For the purposes of
an action brought to enforce a policy of a foreign corporation it is deemed
an inhabitant of this state, and service upon it by delivering the summons
to the superintendent is as effective as though made on the defendant
personally. Steele v. Conn. Gen. Life Ins. Co., 31 App. Div., 389.
§ 30. GENERAL Provisions. 43

Where a foreign fire insurance company has designated an agent in con-
formity with this section, it thereby submits itself to the jurisdiction of
the state courts having authority to act, and a valid judgment may be
rendered capable of being enforced upon any property of the insurance com-
pany within this state. Gibbs v. Queens Ins. Co., 63 N. Y., 114.

While a state may authorize the seizure and sale by means of appropriate
legal proceedings, of property of a foreign insurance company within
ita jurisdiction, it cannot subject to its laws the property of the company
out of its jurisdiction. Douglass v. Phenix Ins. Co., 138 N. Y., 209.

A State may designate the officer or agent on whom service of process may
be made within such State, in actions or proceedings against a foreign corpora-
tion doing business within such State, and service upon such person is as
valid as service upon the corporation. The Lafayette Ins. Co. v. French, 18
How. (U. 8.), 404.

SECTION 16, GENERAL CORPORATION LAW.— This section does not
preclude, even where there has been a written appointment of the superin-
tendent of insurance, any other legal methods of service upon it, and where
service has been made upon it under subd. 3 of § 432 of the Code of Civil Pro-
cedure, such service is good. Howard v. Prudential Ins. Co., 1 App. Div., 135.

This section requiring a designation of the superintendent of insurance
does not preclude service under § 432 of the Code of Civil Procedure. Silver
v. Western Assur. Co., 3 App. Div., 573.

CONSTITUTIONALITY.— An agreement of an insurance company, as a
condition of transacting business in a certain state, to abstain in all cases
from resorting to the federal court is void as against public policy and in
conflict with the constitution of United States; but a state has the right
to impose conditions, not in conflict with the constitution or the laws of
United States, to the transaction of business within its territory by an
insurance company organized under the laws of another state, or if such
company has been given a license, to revoke it, with or without cause.

Doyle v. Continental Ins. Co., 94 U. S., 535; Insurance Company v. Morse,
20 Wall., 445; Barron v. Burnside, 121 U. S., 186; Hooper v. California,
155 N. Y., 652.

Statutes requiring foreign corporations, as a condition of doing business
within a State, to stipulate not to remove into the courts of the United
States suits brought against them in the courts of the State, have been
adjudged to be unconstitutiona] and void. Blake v. McClung, 172 U. &., 239;
see also Commonwealth v. E. Tenn. Coal Co., 97 Ky., 224; People, ete. v.
Payson, 151 Ill, 101.

An agreement to abstain in all cases from resorting to the courts of the
United States is void as against public policy and in conflict with the United
States Constitution. Doyle v. Continental Ins. Co., 94 U. S., 535.

The superintendent should not file the designation by a foreign insurance
corporation not authorized to transact business in this state, until such cor-
poration shall have received the certificate of authorization of the superin-
tendent of insurance as specified in § 9 of the Insurance Law, which could
only be issued after deposit of securities with the superintendent or the fur-
nishing to him of the statutory certificate of the due deposit of the proper
44 Tur Insurance Law. § 31.

amount (and class of character) of securities with the proper public official in
the home state, as required by §§ 11 and 26 herein.

§ 31. Certified copy of superintendent’s certificate to be
filed in the clerk’s office. ‘

No agent of any foreign insurance corporation for the first
year it is admitted to transact business in this state shall transact
any business of insurance in this state until he has filed in the
office of the clerk of the county where he resides, a certified copy
of the superintendent’s certificate of authority to do business,
and until there has been published in a paper at Albany, in which
notices by officers are authorized by law to be published for four
successive weeks after such filing, a copy of such certificate and
of the statement required by this chapter to be filed in the office
of the superintendent and proof of such publication shall be filed
in the. office of the superintendent within thirty days thereafter,
by an affidavit of the publisher of the newspaper, his foreman or
clerk.

Source.—Former § 31, as amended by L. 1907, chap. 285; originally revised

from L. 1853, chap. 463, §§ 14, 15, as amended by L. 1862, chap. 300; L. 1853,
chap. 466, § 23, as amended by L. 1875, chap. 555.

See § 9, ante. No foreign corporation to transact business in this state
without certificate of authorization by superintendent.

See § 29, ante. Copy of charter and veritied statement to be filed in
office of superintendent of insurance.

See § 32, post. Renewal of certificate.

See § 49, post. Any person aiding in the transaction of business of foreign
corporation is deemed an agent thereof.

See § 50, post. Agent’s certificate of authority.

See § 53, post. Penalty for violation of Insurance Law.

See § 54, post. Agents not to act for unauthorized corporations.

See § 91, post. Certificate of authority of agents.

See § 137, post. License to agents in certain cases.

See §§ 82, 83. Executive Law, chap. 23 of 1909. Designation of state paper.

FOREIGN CORPORATION.— Within the meaning of the Insurance Law a
foreign corporation is one incorporated under the laws of another state of
the United States. In re Penn. Fire Ins. Co., Attorney-General Rep., 1895,
page 56.

The Superintendent of Insurance may dispense with the publishing of the
certificate of authority to do business issued by him, as required by section
31 of the Insurance Law, to an insurance corporation incorporated under the
laws of the State of Iowa and authorized since February 24, 1885, to transact
§ 32. Grnerat Provisrons. 45

business in this State, as an assessment life insurance company of the charac-
ter referred to in Article VI of the Insurance Law, where it appears that
said corporation has amended its charter pursuant to the laws of the State
of Iowa so that it becomes a mutual life insurance company, such as is
described in Article II of the Insurance Law of this State, upon permitting
it to continue the transaction of business under its amended charter here.
Attorney-General Rep., Nov. 9, 1911.

MARINE INSURANCE.—A foreign fire insurance company cannot now be
admitted to do marine insurance business in this state. Attorney-General
Rep., 1893, page 402.

DELIVERY OF THIS POLICY.— A citizen of this state is not prohibited
from making an application to a foreign insurance company not authorized
to do business in this state for insurance, nor from receiving the policy here
by mail, but an agent of the foreign company is prohibited from making a
delivery of such policy. People v. Imlay, 20 Barb., 68.

BROKERS.— A policy of insurance in a Canadian company, which has
never been licensed under § 50 of the Insurance Law to do business in
this state, and which had no business existence in Canada when application
for the policy was made, procured by insurance brokers doing business in
the city of New York, is void, and the act of the brokers procuring it is,
under § 1199 of the Penal Law, a misdemeanor, and renders them liable
to the party insured for the injury sustained by him. Burges v. Jackson,
18 App. Div., 296.

PENALTY.— One acting within this state as the agent in receiving and
procuring applications for insurance for a foreign company which has not
filed proper certificates is liable to a penalty. People v. McCann, 67 N. Y., 506.

POLICY NOT VOID.— The failure on the part of a foreign insurance com-
pany to do the acts required urider this section does not-render the policy
issued by it void. Marshall v. Reading Fire Ins. Co., 78 Hun, 83.

GENTS.— Corporations may act as agents for insurance companies when
expressly authorized so to do by their charters, and not otherwise. Attorney-
General Rep., 1893, page 369.

§ 32. Renewal of certificate of authority; revocation.

The certificate of authority granted by the superintendent of in-
surance, pursuant to the provisions of this chapter, to a foreign in-
surance corporation to do business in this state, shall not remain
in force for a longer period than one year, and all such certifi-
eates shall expire on the thirtieth day of April of the year
next following the date of issue. The statements and evi-
dences of investment required by this chapter to be filed in the
office of the superintendent before a certificate of authority is
granted to a foreign corporation, shall be renewed from year to
year, in such manner and form as the superintendent may require,
with an additional statement of the amount of premiums received
46 Tur Insurance Law. § 32.

and losses sustained in this state during the preceding year so long
as such authority continues. If the superintendent is satisfied that
the capital, securities and investments remain secure, and that it
may be safely intrusted with a continuance of its authority to do
business, he shall grant a renewal of such certificate of authority.
Whenever in the judgment of the superintendent of insurance it
will best promote the interests of the people of this state, he may,
after a hearing on notice, revoke the certificate of authority of a
foreign corporation to do business in this state, prior to its expira-
tion under this section. The action of the superintendent of in-
surance in revoking the certificate of authority of a foreign cor-
poration shall be subject to review by writ of certiorari.

Source.—Former § 32, as amended by L. 1893, chap. 725; originally revised
from L. 1853, chap. 463, §§ 14, 15, as amended by L. 1862, chap. 300; L. 1853,
chap. 466, § 23, as amended by L. 1875, chap. 555.

Amended by L. 1909, chap. 301, and L. 1913, chap. 9.

Note.—The purpose of the amendment of this section by chapter 9 of 1913
was to give the Superintendent of Insurance the power to revoke the eer-
tificate of authority of a foreign corporation whenever in his judgment the
best interests of the people would be promoted.—Ed.

See § 9, ante. No foreign corporation to transact business in this state
without certificate of authorization by superintendent.

See § 29, ante. Copy of charter and verified statement to be filed in
office of superintendent of insurance.

See § 31, ante. Agent not to transact business until certificate is filed
in county clerk’s office.

See § 49, post. Any person aiding in the transaction of business of foreign
corporation is deemed an agent thereof.

See § 50, post. Agent’s certificate of authority.

See § 53, post. Penalty for violation of Insurance Law.

See § 54, post. Agents not to act for unauthorized corporations,
See § 91, post. Certificate of authority of agents.

See § 137, post. License to agents in certain cases.

FOREIGN CORPORATION.— Within the meaning of the Insurance Law a
foreign corporation is one incorporated under the laws of another state of
the United States. In re Penn. Fire Ins. Co., Attorney-General Rep., 1895,
page 56.

MANDAMUS.— The court will not, on mandamus to the superintendent
of insurance, direct him to file the annual statement of an insurance com-
pany of another state, and issue a renewal certificate to its agent, if it
appear that he has received and examined the annual statement, and has
§ 33. GenrraL Provisions. AT

disapproved the condition of the company exhibited thereby. People ex rel.
Hartford Co. v. Fairman, 12 Abb. N. C., 252.

The superintendent has the right to refuse to renew the license of a foreign
company unless it complies with the statute. In re General 1. Co., Attorney-
General Rep., Jan. 8, 1906.

§ 33. Reciprocal requirements.

If, by the existing or future laws of any state, an insurance cor-
poration of this state having agencies in such other state or the
agents thereof, shall be required to make any deposit of securities
in such other state for the protection of policy holders or otherwise,
or to make payment for taxes, fines, penalties, certificates of author-
ity, license fees or otherwise, greater than the amount required by
this chapter from similar corporations of such other state by the
then existing laws of this state, then and in everv such case,
all insurance corporations of such state, established or heretofore
having established an agency in this state shall be and they are
hereby required to make the like deposit for the like purposes
in the insurance department of this state, and to pay the super-
intendent of insurance for taxes, fines, penalties, certificates
of authority, license fees and otherwise, an amount equal to the
amount of such charges and payments imposed by the laws of such
other state upon the insurance corporations of this state and the
agents thereof.

The superintendent of insurance may remit any of the fees and
charges which he is required by law to collect, except such as he is
required to collect by virtue of this section; but no discrimination
shall be made in favor of one corporation over another from the
same state or country.

Whenever it shall appear to the superintendent of insurance that
permission to transact business within any state of the United
States or within any foreign country is refused to a company organ-
ized under the laws of this state, after a certificate of the solvency
and good management of such company has been issued to it by the
said superintendent and after such company has complied with
any reasonable laws of such state or foreign country requiring de-
posits of money or securities with the government of such state or
country, then and in every such case, the superintendent may forth-
48 Tue Insurance Law. § 34.

with cancel the authority of every company organized under the
laws of such state or foreign government, and licensed to do busi-
ness in this state, and may refuse a certificate of authority to every
such company thereafter applying to him for authority to do busi-
ness in this state, until his certificate shall have been duly recog-
nized by the government of such state or country.

Source— Former § 33, as amended by IL. 1896, chap. 23, and L. 1906,
chap. 326; originally revised from L. 1865, chap. 694, as amended by L. 1875,
chap. 60.

FOREIGN CORPORATION.— Within the meaning of the Insurance Law a
foreign corporation is one incorporated under the laws of another state of
the United States. In re Penn. Fire Ins. Co., Attorney-General Rep., 1895,
page 56.

CONSTITUTIONALITY.— Chapter 694 of 1865, providing that an insur-
ance corporation of another state seeking to do business here shall pay to
the superintendent for taxes, fines, etc., an amount equal to that imposed
by the existing or future laws of the state of its origin, upon companies
of this state seeking to do business there, when such amount is greater than
that required for such purposes by the then existing laws of this state, is
not an unlawful delegation of legislative power. People v. Fire Ass’n of
Philadelphia, 92 N. Y., 311; aff’g 29 Hun, 205; aff’d in 119 U. S., 110.

An act requiring foreign insurance companies doing business in the city
of New York to pay to.it a percentage of premiums is constitutional.
Trustees of Exempt Firemen’s B. Fund v. Roome, 93 N. Y., 313; aff’g 29
Hun, 391.

§ 34. Taxation of foreign corporations.

The capital of an insurance corporation incorporated under the
laws of any state or country outside of the United States, to the ex-
tent employed in the transaction of business in this state, and as
determined and certified as prescribed by section twenty-seven of
this chapter, shall be subject to taxation the same as the capital of a
like domestic insurance corporation, to be levied, assessed and col-
lected, as prescribed by law, at such place in the state as it shall
have its principal office. Upon satisfactory proof to the superin-
tendent of insurance that any foreign insurance corporation has
neglected or refused to pay any tax levied and assessed under the
laws of this state, he shall revoke any certificate of authority
granted by him to such corporation to do business in this state, and
it shall thereafter be precluded from doing business herein. Every
health or casualty insurance corporation incorporated by or organ-
§ 34. GenrraL Provisions. 49

ized under the laws of any government outside the United States
engaged in the transaction of the business of health or casualty
insurance in this state under a certificate of authority from the
superintendent of insurance shall annually on or before the first
day of March, pay to the superintendent of insurance a tax of
two per centum on all premiums received in cash or otherwise by
its attorneys or agents in this state during the year ending on the
preceding thirty-first day of December, for business done at any
time in this state on risks resident therein. Every life insurance
corporation incorporated by or organized under the laws of any
government outside of the United States engaged in the transac-
tion of the business of life insurance in this state under a cer-
tificate of authority from the superintendent of insurance’ shall
annually on or before the first day of March, pay to the superin-
tendent of insurance a tax of one per centum on all premiums re-
ceived in cash or otherwise by its attorneys or agents in this state
during the year ending on the preceding thirty-first day of De-
cember, for business done at any time in this state on risks resident
therein. If any such corporation shall neglect or refuse to pay
such tax, the superintendent shall collect the same out of the in-
terest on the stocks or securities deposited in the insurance depart-
ment. The agent of every corporation, association or individual
not incorporated by the laws of this state to effect insurances
against marine risks shall annually, on or before the first day of
February, pay to the superintendent of insurance a tax of two per
centum upon the amount of all premiums upon insurances against
marine risks which have been received by such agent or any per-
son for him or have been agreed to be paid for any such insurance
affected or agreed to be affected or procured by him, within this
state, for the year ending the thirty-first day of December pre-
ceeding. In ascertaining the amount of premiums upon which
said two per centum tax is to be levied, there shall be deducted
from the premiums aforesaid, on account of reinsurances, such
portion of the premiums upon said reinsurances as may have been
paid to companies that are subject to the payment of the tax
hereby provided for, but no credit or deduction shall be allowed
on account of such reinsurances where any part of the risk
50 Tur Insurance Law. § 34,

insured against is reinsured in a corporation authorized to effect
insurances against fire or in the fire insurance branch of a cor-
poration authorized to effect insurances against both marine and

fire risks.

Source.— Former § 34, as amended by L. 1893, chap. 725, and L. 1904,
chap. 708; originally revised from R. S., pt. 1, chap. 22, tit. 21, § 3, as
amended by L. 1837, chap. 30; L. 1853, chap. 463, § 15, as amended by L. 1862,
chap. 300; L. 1871, chap. 888, § 7; L. 1882, chap. 371.

Amended by L. 1910, chap. 634, and 1. 1911, chap. 766.

FOREIGN CORPORATION.— Within the meaning of the insurance law, a
foreign corporation is one incorporated under the laws of another state of
the United States. In re Penn. Fire Ins. Co., Attorney-General Rep., 1895,
page 56.

DOING BUSINESS.— Receiving renewal premiums on policies already in
force, by mail, directly from the policy holders, under provisions in the
policies that the premiums were payable in another State, is not “doing
business ” within a State. State v. Conn. Mut. Life Ins. Co., 61 8. W. Rep.,
75.

FRANCHISE TAX.—A foreign marine insurance company doing business
in this state must pay the annual tax imposed by § 187 of the: tax law
and is not entitled to have it deducted from other taxes paid by the com-
pany under the provisions of this section of the Insurance Law. People v.
Thames & Mersey M. Ins. Co., 176 N. Y., 531.

The franchise tax assessed pursuant to § 187 is not to be deducted

from the tax assessed pursuant to § 32. Attorney-General Rep., 1902,
page 164.

TAX.— Section 187 of the tax law, authorizing an annual tax upon the
gross amount of premiums received during the preceding calendar year by
every domestic insurance company, for the privilege of exercising corporate
franchises and carrying on business in this state, to be paid over before
the first day of June in each year, is not retroactive, but prospective in its
operation, and imposes a tax not upon premiums derived from contracts
made prior to the time the statute took effect, but upon future businese
only. People ex rel. Assur. Soe. v. Miller, 179 N. Y., 227. ;

MARINE INSURANCE.— A foreign marine insurance company is entitled
by virtue of § 22 of the Insurance Law to exemption from taxation
upon premiums paid by it for reinsurance. People v. Reliance Marine Ins.
Co., 70 Hun, 554.

The taxes paid by a foreign marine insurance corporation to the super-
mtendent of insurance are based, not upon the residence of the owner of the
hulls or the merchandise insured, nor upon the particular point at which
the insurance “commences to attach,” but wholly upon the * premiums
upon insurances against marine risks which have been received by the agent
of such company, or any person for him, or have been agreed to be paid
for any such insurance, effected or agreed to be effected or procured by him
within this state.” Attorney-General Rep., 1904, page 250.

DEDUCTION.— An insurance company is not entitled to a deduction on
account of reinsurance made by it in Lloyds which is not amenable and

 
§ 35. GENERAL Provisions. 51

has not paid the tax provided for by § 34. In re Standard Marine
Insurance Company, Attorney-General Rep., 1896, page 151.

LLOYDS.— The agent of the United States Lloyds underwriting marine
insurance in this state are liable to the payment of the tax of two per
eent imposed by § 34 of the Insurance Law. Prior statutes imposing a
similar tax are probably applicable to them, but cannot be enforced by
superintendent of insurance. Attorney-General Rep., 1899, page 379.

The provisions of § 523 of the New York Consolidation Act apply to
an unincorporated association known under the name of the American
Lloyds. Fire Department vy. Stanton, 177 N. Y., 51.

REINSURANCE.— The word “reinsurance” means premiums collected by
such company for reinsuring the risks of other companies, and such pre-
miums are included in the term “gross premiums received;” the sum paid
out by such company to other companies for reinsuring its own risks is
also included and cannot be deducted from the amount thereof, since such
sum is an expense of the business. People ex rel. Continental Co. v. Miller,
177 N. Y., 515.

TAX.— Foreign marine insurance companies must pay a tax on policies
of reinsurance. Attorney-General Rep., 1893, page 116.

The total amount of premiums received by a foreign corporation by its
agents in this State, less such part thereof as may have paid a tax to any
other State, are subject to taxation under § 34, Attorney-General Rep.,
February 17, 1911.

§ 35. Superintendent to forward process.

Whenever lawful process against an insurance corporation or
one or more persons shall be served upon the superintendent of
insurance under the provisions of this chapter, he shall forthwith
forward a copy of such process by mail, prepaid and directed to
the secretary of the corporation or to the attorney-in-fact for such
person or persons, or, in the case of corporations incorporated
under the laws of any foreign government, to the resident
manager or last appointed general agent of the corporation in
this country.

For each copy of process the superintendent shall collect the
sum of two dollars, which shall be paid by the plaintiff at the time
of such service, to be recovered by him as part of the taxable dis-
bursements if he succeeds in the suit. Provided, however, that
when one or more underwriters of the same group of Lloyds or
inter-insurance associations are joined in the same suit or pro-
seeding but one copy of such process shall be served.

Source.—Former § 35; originally revised from L. 1884, chap. 346, § 2.
52 Tur Insurance Law. 8§ 36, 37,

§ 36. Officers and directors not to be pecuniarily interested
in transactions.

No director or officer of an insurance corporation doing busi-
ness in’ this state shall receive any money or valuable thing for
negotiating, procuring, recommending or aiding in, any purchase
by or sale to such corporation of any property, or any loan from
such corporation, nor be pecuniarily interested, either as prin
cipal, coprincipal, agent, or beneficiary, in any such purchase, sale
or loan; provided that nothing herein contained shall prevent a
life insurance corporation from making a loan upon a policy held
therein by the borrower not in excess of the net value thereof.

Any person violating any provision of this section shall be guilty
of a misdemeanor.

Source.— Former § 36, as amended by L. 1906. chap. 326.

See § 53, post. Penalty imposed for violation of Insurance Law.

See §§ 664, 665, 667, Penal Law. General provisions relating to officers
and directors.

See § 1191, Penal Law. Discriminations by insurance corporations and
officers.

See § 1197, Penal Law. Misconduct of officers and agents of co-operative:
insurance companies.

See § 297, Penal Law. Misconduct of directors of monied corporations.

Section 36 of the Insurance Law and § 297 of the Penal Law are complete
and independent provisions and are not required to be construed together,
and § 21 of the Penal Law is not applicable to the construction of said’
section of the Insurance Law; the deposit of moneys belonging to an insur-
ance corporation in a bank returnable upon demand in accordance with the
terms of certificates of deposits issued at the time is not a loan within the
meaning of said § 36; nor will a mere verbal promi3ze not shown to be
binding upon the bank that the deposit should remain until a loan had

been liquidated bring the transaction within said section. People v. Thomas,
71 Mise., 339.
It is a violation of the spirit of § 36 for a director of a company to draw

plans and supervise the construction of a building for his company. Ruling
Ins. Dept., Oct. 8, 1919.

§ 87. Corporations heretofore formed; exemption of corpo-
rations subject to supervision of banking department.

Any domestic insurance corporation heretofore incorporated or
extended under the provisions of any general or special law of
the state is hereby brought under all of the provisions of this
chapter relating to such corporation, except that its capital may
continue of the amount named in its charter during the existing.
term thereof, unless it extends its business to other kinds of insur
ance, and it shall be entitled to all privileges granted by such
3§ 38, 39. GENERAL PROVISIONS. 53

charter not authorized by this chapter. A greater number than a
majority of the directors of any such specially chartered corpora-
tion shall not be required to be residents of this state notwithstand-
ing the provisions of any special law. The provisions of this
article shall not apply to any corporation subject to the supervision
of or required by or in pursuance of law to report to the superin-
tendent of banks, but any such corporation shall be subject to
examination by the superintendent of insurance and shall make
such report to him as he shall require.

Source.—Former § 37; new.

Amended by L. 1910, chap. 634.

See § 52, post. Reorganization of existing corporations and amendments
of certificates.

_SPECIAL CHARTERS.— Mutual fire insurance companies doing business
in this state under special laws passed prior to chap. 308 of 1849 have the
right to transact business under their original charters until the same
expires by lapse of time. Attorney-General Rep., 1897, page 148.

A company, incorporated by special act before the passage of the first
general insurance law in 1849, may extend its charter in accordance with
section 158 of the Insurance Law and continue to operate under its original
charter, subject to the limitations contained in section 37 of the Insurance
Law. Attorney-General Rep., March 21, 1912.

§ 88. Fiduciary capacity of agents.

Every person appointed or acting in this state as agent of any
insurance corporation who receives or collects any moneys as such
agent, shall be responsible in a trust or fiduciary capacity to such
corporation therefor.

Source.—Former § 38; originally revised from L. 1873, chap. 688, § 1.

RATE.— A representation that the rate charged by a board of under-
writers of the city where the property to be insured is situated is less
than it really is, the insuring company treating the regular board rate as
important, and delivering its policy on the express agreement that it should
be null and void in case the rate was higher than represented, is a material
misrepresentation and renders the policy void. Armour v. Transatlantic
Fire Ins. Co., 15 J. & S., 352.

§ 39. Examiners and examinations.

The superintendent of insurance shall, as often as he deems it
expedient, and, if a domestic life or casualty insurance corpora-
tion, at least once in three years, or, if any other
domestic insurance corporation, association, society or order,
at least once in five years, examine into the affairs of
any insurance corporation doing business in this state,
Bz Tur Insurance Law. § 39.

and into the affairs of any corporation organized under any
law of this state or having an office in this state, which corporation
is engaged in or is claiming or advertising that it is engaged in

organizing or receiving subscriptions for or disposing of stock of,

or in any manner aiding or taking part in the formation or busi-

ness of, an insurance corporation or corporations, or which is hold-

ing the capital stock of one or more insurance corporations for the

purpose of controlling the management thereof as voting trustee or

otherwise. For such purpose he may appoint as examiners one or

more competent persons not officers of or connected with or inter

ested in any insurance corporation other than as policy holders;

and upon such examination he, his deputy or any examiner author-

ized by him may examine under oath the officers and agents of

such corporation and all persons deemed to have material informa-

tion regarding the company’s property or business. Every such

corporation, its officers and agents, shall produce its books and all

papers in its or their possession relating to its business or affairs,

and any other person may be required to produce any book or

paper in his custody deemed to be relevant to the examination, for

the inspection of the superintendent, his deputies or examiners

whenever required; and the officers and agents of such corporation

shall facilitate such examination and aid the examiners in making

the same so far as it is in their power to do so. Every such exam-

iner shall make a full and true report of every examination made

by him, verified by his oath, which shall comprise only facts’
appearing upon the books, papers, records or documents of such

corporation, or ascertained from the testimony, sworn to, of its

officers or agents or other persons examined under oath concerning

its affairs, and such conclusions and recommendations as may

reasonably be warranted from such facts so disclosed, and said

report so verified shall when filed be presumptive evidence in any

action or proceeding in the name of the people against the corpora-

tion, its officers or agents, of the facts stated therein. The super-

intendent shall grant a hearing to the corporation examined before
filmg any such report; and may withhold any such report from |
public inspection for such time as he may deem proper and may,

if he deems it for the interest of the public to do so, publish any

such report or the result of any such examination as contained

therein, in one or more newspapers of the state.

Source.—Former § 39, as amended by L. 1906, chap. 326; originally revised
from L, 1849, chap. 308, § 23, as amended by L. 1866, chap. 577; L. 1851, chap.
§§ 40, 41. GrneraL Provisions. 55

95, § 5; L. 1853, chap. 463, § 17, as amended by L. 1866, chap. 577; L. 1851,
chap. 95, § 5; L. 1853, chap. 463, § 17, as amended by L. 1879, chap. 161; L.
1853, chap. 466, § 24; L. 1869, chap. 902, § 15; L. 1886, chap. 611, § 15.

Amended by L. 1910, chap. 634, and L. 1913, chap. 304.

Note—The purpose of the amendment of this section by chapter 304 of
1913 was to require examinations of casualty companies at least once in three
years instead of once in five years as formerly.

See § 843, Code Civ. Proc. Examiner may administer oath.

See § 1197, subd. 3, Penal Code. Refusal to permit superintendent to make
examination is misdemeanor.

See § 665, subd. 3, Penal Code. False statement of affairs of corporation.

OATH.— Under the provisions of § 39 of the Insurance Law, and § 843
of the Code of Civil Procedure, examiners have the power to administer
oaths to the officers and agents of any corporation subject to examination.
Attorney-General Rep., 1900. page 259.

FOREIGN OFFICIALS.— Officials of foreign states have no legal right to
examine into the affairs of a domestic insurance company. Attorney-
General Rep., 1894, page 196.

§ 40. Examination by superintendent upon request of
stockholder, policyholder or creditor.

The superintendent shall make an examination into the affairs
of any insurance corporation doing business in this state, whenever
any stockholder, policyholder or judgment creditor of any such
corporation shall, by a declaration subscribed and sworn to by him,
notify the superintendent of facts within the knowledge of the
person making the declaration, and stated therein, or within the
knowledge of persons whose affidavits stating the same are pre-
sented therewith, which in the judgment of the superintendent
makes such an examination advisable.

Source——Former § 40, as amended by ‘L. 1906, chap. 326; originally revised
from L. 1873, chap. 851, § 2.

INSOLVENT COMPANY.— The Supreme Court has power to entertain pro-
ceedings to close up the affairs of an insolvent life insurance company, on
the petition of policyholders, when the superintendent of the insurance
department does not institute proceedings. Mooney v. British Com. Life
Ins. Co., 9 Abb. Pr., N. 8., 103.

§ 41. Impairment of capital.

Whenever it appears to the superintendent, from any state-
ment made to him or from an examination made by him or by
any examiner appointed by him, that the capital stock of any
domestic insurance corporation, except a life insurance corporation,
56 Tur Insurance Law. § 41,

is impaired to the extent of twenty-five per centum thereof or
that its assets are insufficient to justify its continuance in business,
he shall determine the amount of such impairment or deficiency,
and issue a written requisition to the corporation to require its
stockholders to make good the amount of the impairment or
deficiency within such period as he may designate, not less than
thirty nor more than ninety days from the service of the requisi-
tion. If the amount of any such impairment or deficiency shall
not be made good within the time specified in such requisition,
and proof thereof filed with the superintendent of insurance, the
corporation shall be deemed insolvent and shall be proceeded
against a8 an insolvent corporation, by the attorney-general in
the manner authorized by law. If the capital stock of any foreign
insurance corporation, except a life insurance corporation, doing
business in this state is so found impaired the superintendent
shall revoke the certificate of authority issued to such corporation
and shall cause a notice thereof to be published in the state paper
for four weeks and such corporation, its agent or agents, shall
discontinue the issuing of any new policies within this state

‘ Source.—Former § 41, as amended by L. 1904, chap. 451; originally revised
from L. 1849, chap. 308, § 13, as amended by L. 1864, chap. 425, and § 23 as
added by L. 1866, chap. 577; L. 1851, chap. 95, § 7; L. 1853, chap. 463, § 17, as
amended by L. 1879, chap. 161; L. 1853, chap. 466, § 24.

See § 12, ante. Minimum capital stock of marine or fire stock company.

MUTUAL INSURANCE COMPANIES.—The question as to the continu-
ance in business of a mutual insurance company is to be determined by the
superintendent under § 43 of the Insurance Law, and § 41 of that act does
not apply to such companies. People ex rel. Long Island Mut. v. Payn, 26
App. Div., 584; 50 N. Y. Supp., 334.

EXAMINERS.— It is erroneous for the official examiners of the insurance
department’ to omit to credit the corporation with capital stock notes when
such notes are in the possession of the company, unincumbered at the time
when the examination is made. People v. Equitable Mut. Ins. Co., 1 App.
Div., 84; aff’g 12 Misc., 556.

CAPITAL STOCK.— The capital stock of fire insurance companies of other
states must be fully paid up before such companies can be authorized to
do business here. Attorney-General Rep., 1893, page 336.

REQUISITION.— The superintendent of insurance having made requi-
sition upon a fire insurance company to make good an impairment of its
capital cannot withdraw the same. Attorney-General Rep., 1897, page 254.

SPECIAL RESERVE FUND.— Special reserve fund should not be with-
drawn where the surplus fund is impaired. In re Amer. Fire Ins. Oo.,
Attorney-General Rep., 1896, page 237.
§ 42. Grnrerat Provisions. 57

PUBIIC POLICY.— Where the board of directors of an insolvent fire
insurance company having creditors passes a resolution to reinsure its risks,
liquidate its affairs, or sell a majority of its stock, and thereafter accepts
a proposition from another company to buy a majority of the stock and
liquidate its affairs, the agreement is void as against public policy as a
scheme to annihilate the fire insurance company without dissolution pro-
ceedings as required by this section. Gerrett Co. v. Morton, 35 Mise., 10.

INSOLVENCY.— An insurance company cannot be said to be insolvent, or
to act in contemplation of insolvency, merely because the sums insured
greatly exceed its capital; nor when its assets are more than sufficient to
meet all losses of which the company has any notice, information or
suspicion. Holbrook v. Basset, 5 Bosw., 147.

It is enough to prevent the dissolution of the company if the assets are
sufficient at the time of the hearing before the referee though insufficient
at the time when the application for dissolution was presented. In the
Matter of World’s Safe Ins. Co., 40 Barb., 499.

FRAUDULENT TRANSFER.— Where an insurance company, being insolv-
ent, distributes its capital among its stockholders, thus placing the fund
beyond the reach of its creditors, the fund may be recovered back from those
who received it, by a proper action. Osgood v. Laytin, 3 Abb. Ct. of App.;
3 Keyes, 521; aff’g 48 Barb., 463.

§ 42. Stockholders to make good impairment or deficiency.

Upon the receipt of the requisition of the superintendent of
insurance specified in the last preceding section, the directors of
the corporation shall forthwith call upon its stockholders ratably
for such amounts as will make up such impairment or deficiency.

If any stockholder refuses or neglects to pay the amount called
for after notice, personally given or by advertisement, in such time
and manner as the superintendent shall approve, the directors may
require the return of the certificate of stock held by the stock-
holder, and in lieu thereof issue to him new certificates for such
number of shares as he may be entitled to in the proportion that
the ascertained value of the assets of the corporation as determined
by the superintendent bears to its original capital, the corporation
paying for any fractional parts of shares.

The directors may create new stock and issue certificates there-
for and dispose of the same at not less than par for an amount
sufficient to make up the original capital of the corporation.

For any losses accruing upon new risks taken after the expira-
tion of the period limited by the superintendent in any such
requisition and before such impairment or deficiency shall be
58 Tur Insurance Law. § 48.

made up, the directors of the corporation shall be jointly and
severally individually liable to the extent thereof.

Any transfer of stock made during the pendency of any such
examination or after any such report shall have been made and
before any impairment or deficiency specified in any such requisi-
tion shall be made good, shall not release the person making the
transfer from his liability for losses accrued previous to such
transfer.

Source—Former § 42; originally revised from L. 1849, chap. 308, § 13, as
amended by L. 1864, chap. 425, and § 23 as added by L. 1866, chap. 577; L.
1853, chap. 466, § 24.,

IMPAIRMENT OF CAPITAL.— The superintendent of insurance having
made requisition upon a fire insurance company to make good an impairment
of its capital, cannot withdraw the same. Attorney-General Rep., 1897,
page 254.

§ 48. Impaired mutual insurance corporations.

If it appears to the superintendent from an examination made
by him or by an examiner appointed by him that the assets or cap-
ital of any mutual insurance corporation are insufficient to justify
its continuance in business, he shall determine the amount of such
deficiency and issue a written requisition to the officers of the
corporation requiring them to make it good within a time to be
specified therein, not less than thirty nor more than ninety days
from the service of such requisition. Such service may be made
by mail, directed to the corporation at its place of business in this
state specified in its charter. Upon the service of such requisition
the directors of the corporation shall forthwith cause such
deficiency to be made good, and proof to be filed with the superin-
tendent within the time specified in the requisition that the sume
has been made good.

For any losses accruing upon new risks taken after the expira-
tion of such time, and before such deficiency shall be made good,
the directors of the corporation shall jointly and severally be
personally liable therefor. If such deficiency shall not be made
good within the time specified in such requisition and satisfactory.
proof thereof filed with the superintendent, the corporation shall
be deemed insolvent and may be proceeded against by the attorney-
§ 44. GENERAL Provisrons. 59

general as an insolvent corporation in the manner authorized
by law.
Source.—Former § 43; originally revised from L. 1849, chap. 308, § 13, as

amended by L. 1864, chap. 425, and § 23, as added by LL. 1866, chap. 577; L.
1853, chap. 466, § 24.

CONTINUANCE OF BUSINESS.— The question as to the continuance in
business of a mutual insurance company is to be determined by the super-
intendent under this section; § 41 does not apply at all, and § 118 applies
only in part to a mutual insurance company. People ex rel. Long Island
Mut. v. Payn, 26 App. Div., 584; 50 N. Y. Supp., 334.

The provisions of this section do not operate as « limitation upon those
provisions of the Code of Civil Procedure defining the cases in which the
attorney-general may institute an action of this character; cases might
arise where the delay of thirty days contemplated by § 43 might work
irreparable injury and where immediate action is called for. People v.
Equitable Mut. Ins. Co., 1 App. Div., 85.

§ 44. Reports of corporations.

Every corporation, engaged wholly or in part:in the transaction
of the business of insurance in this state, whether heretofore or
hereafter incorporated by a general or special law, shall annually,
on the first day of January, or within two months thereafter, if a
corporation under article two of this chapter, and on or before the
fifteenth day of February, if a corporation under the other articles
of this chapter, file in the office of the superintendent of insurance
a statement verified by the oath of at least two of the principal
officers of such corporation, showing its condition on the thirty-
first day of December then next preceding which shall be in such
form and shall contain such matters as the superintendent shall
prescribe. If a foreign corporation incorporated under the laws
of a state or country outside of the United States such oath may be
made by the manager thereof within the United States.

The superintendent may also address any inquiries to any such
insurance corporation or its officers in relation to its doings or
condition, or any other matter connected with its transactions.
Every corporation so addressed shall promptly and truthfully reply
in writing to any such inquiries, and such reply shall be verified,
if required by the superintendent, by such officer of the corporation
as he shall designate.

Source.—Former § 44, as amendcd by L. 1897, chap. 493; originally revised
from L. 1849, chap. 308, § 7, and § 13, as amended by L. 1864, chap. 125; L.
60 Tue Insurance Law. § 45.

1851, chap. 95, § 4; L. 1853, chap. 463, § 12 and §§ 14 and 15, as amended by
L. 1862, chap. 300; L. 1853, chap. 466, § 22, as amended by L. 1854, chap. 369;
L. 1861, chap. 326, § 2; L. 1861, chap. 334, § 1; L. 1865, chap. 199, § 2, as
amended by L. 1867, chap. 709; L. 1865, chap. 328, § 3; L. 1866, chap. 843;
L. 1869, chap. 902, § 14; L. 1885, chap. 538, § 18; L. 1886, chap. 611, § 16.

Amended by L. 1910, chap. 634. «

See § 665, Penal Law. Misconduct of officers and employes.

‘See §§ 1194, 1195, 1197, Penal Law. Misconduct of agents in certain insur-
ance companies.

FOREIGN CORPORATION.— Within the meaning of the insurance law a
foreign corporation is one incorporated under the laws of another state of
the United States. In re Penn. Fire Ins. Co., Attorney-General Rep., 1895,
page 56.

REPORTS.— Reports should follow the statutory requirement, and unless
they do they should be returned and the corrections made by the officers
and only by them. Attorney-General Rep., December 20, 1894,

Section 44 does not require that statements or reports of Lloyds associations
be inserted in the annual report of the State Superintendent of Insurance.
Atty.-Gen. Rep., June:15, 1909.

The requirement of the charter of a company, incorporated before the
passage. of first general insurance law in 1849, as to a general balance state-
ment, is not in conflict with sections 44 and 45 of the Insurance Law, impos-
ing the duty of filing reports with the Superintendent of Insurance. Attor-
ney-General Rep., March 21, 1912.

VERIFICATION.— It is not necessary that the oath of the officers of
insurance companies should precede the preparation of their annual state-
ment, but after it has been prepared it should be verified with their oaths.
Case v. People, 6 Abb. N. C., 151.

FALSE STATEMENT.— An action does not lie by a stockholder of a
mutual insurance company to declare the franchise forfeited, and enjoin ita
exercise, and have a receiver appointea, on the ground that the defendants
made a false annual statement. Fisher v. World Mut. Life Ins. Co., 15

Abb. Pr., N. 8., 363.

§ 45. Forms of report to be furnished by superintendent.

The superintendent shall cause to be prepared and furnished to
every corporation required by the provisions of this chapter to
report to him, printed forms of the reports and statements required
of such corporations. He may. make such changes from time to
time in the form of the same as shall seem to him best adapted to
elicit from such corporations a true exhibit of their condition in
respect to the several matters which they are required to report,
or in respect to any other matters which he may deem material.
The report of any corporation, the capital of which is composed
in whole or in part of notes, shall, in addition to the foregoing,
§ 46. GENERAL Provisions. 61

exhibit the amount of notes originally forming its capital, and also
what proportion of such notes is still held by the corporation and
considered capital.

If a corporation, incorporated under the laws of any state or
country outside of the United States, such report with respect to
the business done and assets held by or for the corporation, shall
only contain a statement of the business done and assets held by
or for it within the United States for the protection of all policy
holders residing within the United States, and shall not contain
any statement in regard to its assets and business elsewhere. In
addition to any other penalty prescribed by law, every insurance
corporation failing to make and file the reports and statements
required by this chapter or to reply to any inquiry of the super-
intendent, shall forfeit to the people of the state five hundred
dollars for the first offense, and an additional five hundred dollars
for every month that such corporation shall thereafter continue
to transact any business of. insurance in this state.

Source.—Former § 46, as amended by L. 1906, chap. 326; originally revised
from L. 1849, chap. 308, § 13, as amended by L. 1864, chap. 425; L. 1853, chap.
463, § 12; L. 1853, chap. 466, § 22, as amended by L. 1854, chap. 369; L. 1861,

chap. 334, § 2; L. 1880, chap. 110, § 2; L. 1882, chap. 235, § 1; L. 1885, chap.
538, § 18; L. 1886, chap. 611, § 16.

See § 665, Penal Law. Refusal or neglect of officer of corporation to make
any report is a misdemeanor.

FOREIGN OORPORATION.— Within the meaning of the Insurance Law, a
foreign corporation is one incorporated under the laws of another state of
the United States. In re Penn. Fire Ins. Co., Attorney-General Rep., 1895,
page 56.

Where certain foreign ocean marine insurance companies doing business
within this state collect the premiums within the state though losses upon
which the certificates are made are payable abroad, the annual report of such
companies should contain a statement of its losses paid abroad when such
losses are upon policies written in this state. Attorney-General Rep.
Feb. 20, 1911.

The requirement of the charter of « company, incorporated before the
passage of first general insurance law in 1849, as to a general balance state-
ment, is not in conflict with sections 44 and 45 of the Insurance Law, impos-
ing the duty of filing reports with the Superintendent of Insurance. Attor-
ney-General Rep., March 21, 1912.

§ 46. Annual report of superintendent.

The superintendent of insurance shall annually transmit to the
legislature at the opening Of its session, or within ninety days
thereafter, a report containing the statements and reports made
62 Tur Insurance Law. § 47.

to him pursuant to the provisions of section forty-four of this
chapter, as such statements and reports shall be audited and cor-
rected by him, all arranged in tabular form, or in abstracts, in
classes according to the kind of insurance made by the corporation,
which report shall also contain:

1. A statement of all insurance corporations authorized to do
business in this state during the year ending the thirty-first day
of December next preceding, with their names, locations, amounts
of capital, dates of incorporation, and of the commencement of
business, and kinds of insurance in which they are engaged
respectively.

2. A statement of the insurance corporations whose business
has been closed during such year and the reasons for closing the
same, with the amount of their assets and liabilities so far as the
same are known, or can be ascertained by him.

3. Any amendments to this chapter which in his judgment
may be desirable.

4, The names and compensation of the clerks employed by him,
and the whole amount of the expenses of the department.

In addition to the usual number of copies for the use of the
legislature, there shall be printed and in readiness for distribution
by the printer employed to print legislative documents, two thou-

sand copies of such report for the use of the department.
Source.—Former § 46; originally revised from L. 1849, chap. 308, § 13, as
amended by LL, 1864, chap. 425; L. 1853, chap. 463, § 13, as amended by L. 1873,
chap. 849; L. 1853, chap. 466, § 22, as amended by L. 1854, chap. 369; L. 1859,
chap. 366, § 3, as amended by 1. 1866, chap. 514; I. 1885, chap. 538, § 18; L.
1886, chap. 611, § 16. a

Amended by L. 1909, chap. 301; L. 1910, chap. 634, and L. 1912, chap. 89.

REPORTS.— Reports should follow the statutory requirement, and unless
they do they should be returned and the corrections made by the officers, and
only by them. Attorney-General Rep., Dec. 20, 1894.

§ 47. Deceptive statements prohibited.

No insurance corporation doing business in this state, or agent
thereof, shall state or represent by advertisement in any newspaper,
periodical or magazine, or by any sign, circular, card, policy of
insurance or certificate of renewal thereof or otherwise, that any
funds or assets are in possession of any such corporation not
§ 48. Grnerat Provisions. 63

actually possessed by it and available for the payment of losses
and claims, and held for the protection of its policy holders or
creditors.

Source.—Former § 47; originally revised from L. 1877, chap. 241, § 1.

See §§ 1194, 1195, 1197, Penal Law. Misconduct of agents in certain insur-
ance companies.

See § 665, Penal Law. Misconduct of officers and employees of corporations
as to making reports.

§ 48. Contents of advertisements.

Every advertisement or public announcement, and every sign,
cireular or card issued by any insurance corporation or association
incorporated by or existing under the laws of this state or of any
other state of the United States and doing business in this state
purporting to make known its financial standing, shall exhibit the
amount of the capital actually paid in in cash, the assets owned,
the liabilities, including therein the premium and loss reserves re-
quired by law, and the amount of net surplus of assets over all its
liabilities actually available for the payment of its losses and
claims, and held for the protection of its policy holders, and shall
correspond with the verified statement made by it to the insurance
department next preceding the making or issuing of the same.
Every advertisement or public announcement, and every sign,
circular or card issued by any insurance corporation or association
incorporated by or existing under the government or laws of a
country outside of the United States and doing business in this
state, purporting to make known its financial standing, shall
exhibit as capital and as assets only the capital and assets held by
its United States branch, the liabilities, including therein the
premium and loss reserves required by law, and the amount of net
surplus of assets over all its liabilities actually available for the
payment of its losses and claims and held for the protection of its
policyholders in the United States, and shall correspond with the
verified statement made by it to the insurance department next
preceding the making or issuing of the same.

For every violation of this and the preceding section by any
such corporation, it shall forfeit for the first offense to the people
of the state the sum of five hundred dollars, and for every subse-
64 Tur Insurance Law. § 49.

quent offense the sum of one thousand dollars, which sums, when
recovered, shall be paid into the treasury of the state. This sec-
tion shall not apply to any life insurance corporation nor to any
domestic or foreign insurance corporation or association engaged
solely in the business of marine or transportation insurance or in
such business in connection with the business of automobile
insurance.

Source—Iormer § 48; originally revised from L. 1877, chap. 241, §§ 2-4.

Amended by L. 1918, chap, 205.

Note—The purpose of the amendment of this section by chapter 205 of
1913 was to compel foreign fire or casualty companies in every advertisement
or public announcement to give a statement of the capital and assets held by
the United States branch.—Ed.

See § 665, Penal Law. Misconduct of officers and employees of corpora-
tions as to making or publishing false statement.

ADVERTISEMENT.— Every advertisement made by an insurance company
as to the amount of its resources must state the amount of its capital paid
up in cash. Attorney-General Rep., 1892, page 269.

§ 49. Agents.

Every agent of any insurance corporation doing business in
this state shall, in all advertisements of such agency, publish the
location of the corporation, giving the name of the city, town or
village in which it has its principal business office, and the state
or government under the laws of which it is organized.

The term, “agent,” in this chapter shall include an acknowl-
edged agent or surveyor or any other person who shall in any
manner aid in transacting the insurance business of any insurance
corporation not incorporated by the laws of this state, and any
broker whose business, in whole or in part, is to negotiate for and
place risks, deliver the policies covering the same and collect
premiums therefor.

Source.—Former § 49; originally revised from L. 1849, chap. 308, § 7; L. |”

1853, chap. 466, § 23, as amended by L. 1875, chap. 555.

See § 9, ante. No foreign corporation to transact business in this state
without certificate of authorization by superintendent.

See § 29, ante. Copy of charter and verified statement to be filed in office
of superintendent of insurance.

See § 31, ante. Agent not to transact business until certificate is filed in
county clerk’s office.
§ 49. GewneRaL Provisions. 65

See § 32, ante. Renewal of certificate.

See § 50, post. Agent’s certificate of authority.

See § 58, post. Penalty for violation of Insurance Law.

See § 54, post. Agents not to act for unauthorized corporations.

See § 91, post. Certificate of authority of agents.

See § 137, post. License to agents in certain cases.

The general superintendent of agencies of an insurance company assisting
an agent in closing difficult cases is within the meaning of “agent” in § 49.
Ruling Is. Dept., Dec. 23, 1910.

REVOCATION.— Where an insurance company, at the time of the revoca-
tion of an existing agency, gave no public notice of the same, and left with
the former agent policies in blank, signed by the company, such revocation
1s not effective as against a person subsequently insured in such company
by such agent, in the absence of any proof that such revocation of authority
was known to him at the time of the issuance to him of the policy. Mar-
shall v. Reading Fire Ins. Co., 78 Hun, 83.

DEFINITION.— The detinition of an agent as contained in this section
will not be imported into chap. 641 of 1892 in order to bring agents of the
insured within the penalty of that statute and defeat a recovery by them
on the agreement. Romberg v. Kouther, 27 Mise., 227.

ENTIRE MANAGEMEN'I.— There is no warrant in law for the making
of a contract which substantially places the entire management of the busi-
ness of the company in the hands of a general agent. Attorney-Ueneral Rep.,
1897, page 114.

There is no provision in the insurance law which warrants tie transfer
of corporate rights and franchises to an individual acting as general agent
in another state. Attorney-General Rep., 1896, page 276.

LIMITATION OF AUTHORITY.— The powers possessed by agents of
insurance companies are to be interpreted in accordance with the general
law of agency. Where restrictions upon the agent’s authority appear in a
policy the insured is bound to take notice of them, and in the absence of
evidence tending to show that his powers have been enlarged by the usage
of the company, its course of business or by consent, express or implied,
the policy must control, and the authority, as limited, must be regarded
as the measure of the agent’s power. Quinlan v. P. W. Ins. Co., 1383 N. Y., 356.

In determining the authority of agents, their instructions are not neces-
sarily controlling, and, although an agent be instructed to do one thing or
to exercise only a limited authority, if he is knowingly habitually suffered
to exercise a greater authority, the principal is bound by the authority he
has allowed his agent to exercise, notwithstanding his instructions to the
eontrary. Powers v. Prudential Ins. Co., 83 Hun, 254; afi’d 145 N. Y., 654.

Where the power of an agent is apparently limited, a person dealing with
him is bound to inquire concerning the extent of his authority before acting
upon the faith of its existence; and a principal who has not clothed an
agent with either real or seeming authority is not bound by the simple
declaration of such agent that the principal is bound by his acts or state-
ments. Allen v. St. Lawrence F. Ins. Co., 88 Hun, 461.

Authority to an agent to solicit applications for life insurance does not
give him authority to collect premiums. Howell v. Charter Oak Ins. Co.,
2 Wk. Dig., 383.
66 Tue Insurance Law. § 50.

AGENT’S CONTRACT.— When a contract between an agent and insur-
ance company is entered into without any fraud or misrepresentation on
the part of the company, the agent is bound by its terms, even though it be
a hardship. Levitt v. Prudential Ins. Co., 39 St. Rep., 91.

Where the contract of employment of a life insurance agent requires him
to devote his entire time and energies for a term of years in procuring applica-
tions for insurance in the company so employing him and to act exclusively for
such company, and his compensation depends upon the premiums on policies
issued through his instrumentality, he is entitled to have applications offered
by him treated in good faith, and cannot be deprived of his compensation by
an arbitrary rejection of a claim procured by him. Madden v. Equitable Life
Assur. Soc., 11 Mise., 540.

FIRM.— Where a firm is appointed to an agency, such agency ceases upon
the death of one of the members of the firm, and the principal is not bound
by the subsequent acts of the surviving member. Martine v. International
L. Ins. Soe., 538 N. Y., 339.

CLERKS.— An ordinary agent of an insurance company has power to hire
as many clerks as may be necessary to do the business of the agency,
and a provision in an insurance policy that no one not holding a commission
shall be considered as its agent, does not prevent the employment by a com-
missioned agent of the usual and necessary clerical and other assistants to
enable him to properly perform his duties. Arif v. Star Ins. Co., 125
N. Y., 57.

§ 50. Agent’s certificate of authority.

No person or corporation shall act as agent for any foreign
insurance corporation in the transaction of any business of insur-
ance within this state, or negotiate for or place risks for any such
corporation, or in any way or manner aid such corporation in
effecting insurances or otherwise in this state, unless such corpo-
ration shall have fully complied with the provisions of this chapter.
Every such agent shall, annually, on the first day of January, or
within six months thereafter, procure a certificate of authority
from the superintendent of insurance, who shall file in his office
evidence of the issuance of such certificate to the agent aforesaid.
Any person or corporation violating the provisions of this section
shall forfeit to the people of the state the sum of five hundred
dollars for the first offense, and an additional sum of one hun-
dred dollars for each month during which any such person or
corporation shall continue to act in violation of this section. This
section shall not apply to the agents of corporations transacting
business under the provisions of article six of this chapter.
§ 50. GrweRaL Provisrons. 67

Source.—Former § 50, as amended by L. 1893, chap. 725; originally revised
from L. 1853, chap. 466,4 23, as amended by L. 1875, chap. 555.

Amended by L. 1909, chap. 301.

See § 9, ante. No foreign corporation to transact business in this state
without certificate of authorization by superintendent.

See § 29, ante. Copy of charter and verified statement to be filed in office
of superintendent of insurance.

See § 31, ante. Agent not to transact business until certificate is filed
in county clerk’s office.

See § 32, ante. Renewal of certificate.

See § 49, ante. Any person aiding in the transaction of business of foreign
corporation is deemed an agent thereof.

See § 53, post. Penalty for violation of Insurance Law.

See § 54, post. Agents not to act for unauthorized corporations.

See § 91, post. Certificate of authority of agents.

See § 137, post. License to agents in certain cases.

See § 1192, Penal Law. Overcharges by marine insurance agents.

See § 1197, Penal Law. Acts as agent of foreign corporation which failed
to obtain certificate to do business in this state.

See §§ 1198, 1199, Penal Law. Misconduct of agents.

FOREIGN CORPORATION.— Within the meaning of the insurance law, a
foreign corporation is one incorporated under the laws of another state of
the United States. In re Penn. Fire Ins. Co., Attorney-General Rep., 1895,
page 56.

AGENTS.— Corporations may act.as agent for insurance companies when
expressly authorized so to do by their charters, and not otherwise. In re
Carpenter & Co., Attorney-General Rep., 1893, page 369.

The superintendent of agencies of a foreign corporation coming into the
state and assisting and co-operating with agents in closing difficult cases
should have an agent’s license. Ruling Ins. Dept., Dec. 23, 1909.

DISCRETION.— The superintendent of insurance has discretionary power
to issue a certificate of authority to a foreign corporation to act as the
general agent of an insurance company in this state. In re Michigan Mut.
Life Ins. Co., Attorney-General Rep., 1897, page 216.

DEMURRER.— A complaint in an action brought to recover for services
rendered in placing insurance for the defendant, a foreign insurance corpora-
tion, in the state of New York, is not demurrable because it fails to allege
affirmatively that the defendant has complied with the provisions of the
Insurance Law, and that consequently the agreement of the plaintiff to act as
its agent was not unlawful under this section. Crichton v. Columbia Ins.
Co., 81 App. Div., 614.

ADJUSTMENT.— An agent of a foreign insurance company can adjust a
loss without procuring a certificate. People ex rel. McCall v. Gilbert, 44
Hun, 522.

POLICY VALID.— The failure of a foreign insurance corporation to do
the acts required by this section does not avoid a policy issued by it. Mar-
shall v. Reading Fire 1ns. Co., 78 Hun, 83; aff'd 149 N. Y., 617.
68 Tue Insurance Law. §§ 51, 52.

§ 51. Examination of securities deposited by officers of
corporation.

Every insurance corporation having securities deposited in the
otfice of the superintendent of insurance, shall, once or more
during each calendar year, and at sucli time or times during the
ordinary business hours as the corporation may select, cause such
securities to be examined by its president, secretary, actuary, or
other officer or agent whom it may designate for that purpose,
to be compared with the books of the insurance department, and
if found correct, to execute to the superintendent of insurance a
receipt or certificate setting forth in the same the different kinds
of such securities and the amounts thereof, and that the same are
in the possession and custody of the superintendent at the date of
such receipt.

Source.—Former § 51; originally revised from L. 1869, chap. 902, § 16,

§ 52. Reorganization of existing corporations and amend-
ment of certificates.

Any domestic corporation existing or doing business on October
first, eighteen hundred and ninety-two, may, by a vote of a ma-
jority of its directors or trustees accept the provisions of this chap-
ter and amend its charter to conform with the same, upon obtaining
the consent of the superintendent of insurance thereto in writing;
and thereafter it shall be deemed to have been incorporated under
this chapter, and every such corporation in reincorporating under
this provision may for that purpose so adopt in whole or in part a
new charter, in conformity herewith, and include therein any or all
provisions of its existing charter, and any or all changes from its
existing charter, to cover and enjoy any or all the privileges and
provisions of existing laws which might be so included and
enjoyed if it were originally incorporated thereunder, and it shall,
upon such adoption of and after obtaining the consent, as in this
section before provided, to such charter, and filing the same and
the record of adoption and consent in the office of the superin-
tendent of insurance, perpetually enjoy the same as and be such
corporation, which is declared to be a continuation of such
corporation which existed prior to such reincorporation; and the
offices therein which shall be continued shall be filled by the
respective incumbents for the periods for which they were elected,
and all others shall be filled in the same manner by such amended
§ 52. GENERAL Provisions. 69

charter provided. Every domestic insurance corporation may
amend its charter or certificate of incorporation by inserting
therein any statement or matter which might have been originally
inserted therein; and may also eliminate therefrom unnecessary
words or verbiage, or any powers which have never been exercised
or are not at the time being exercised, provided that proof of the
non-exercise of powers, satisfactory to the superintendent of insur-
ance, shall be filed in the insurance department, and, if any busi-
ness has been written under the powers proposed to be eliminated,
the fact that all liability incident to such powers has been fully
terminated shall be shown to the satisfaction of such superin-
tendent through an examination of such corporation or otherwise
as he may require; and may likewise amend its charter or certifi-
cate of incorporation, by inserting therein or adding thereto any
powers which, at the time of such amendment, may have been con-
ferred by law upon domestic insurance corporations engaged in a
business of the same general character, or which might be in-
cluded in the certificate of incorporation of a domestic insurance
company organized under any general law of this state for a busi-
ness of the same general character; and the same proceedings
shall be taken upon the presentation of such amended charter or
certificate or amendment to such charter or certificate, to the super-
intendent of insurance, as are required by this chapter to be taken
with respect to an original charter or certificate, except that no
examination of the condition and affairs of such corporation shall
be required unless so ordered by the superintendent, and if
the amended charter or certificate or amendment be approved by
the superintendent of insurance, and his certificate of authority to
do business thereunder is granted, the corporation shall there-
after be deemed to possess the same powers and be subject to the
same liabilities as if such charter or certificate as so amended had
been its original charter or certificate of incorporation, but without
prejudice to any pending action or proceeding or any rights
previously accrued. Upon the reincorporation or upon the
amendment of the charter of any life insurance corporation, hav-
ing a capital stock, in accordance with the provisions of this
section, it may by a vote of a majority of its directors confer
upon its policy holders or upon such policy holders as may have
a prescribed amount of insurance upon their lives the right to vote
for all or any less number of the directors in such manner not
inconsistent with any provision of this chapter as may be author-
70 Tue Insurance Law. § 52.

ized by a vote of the stockholders representing at least a majority
of the capital stock at a meeting of stockholders called for tho
purpose. Section eighteen of the stock corporation law shall
not apply to such a corporation. This section shall apply to
insurance corporations organized under or subject to article six
of this chapter as well as to insurance corporations organized
under a special act or any general law or article two of this chapter.
In the case of any corporation organized under or subject to
article six of this chapter, which corporation has amended its
charter and is now operating under article two of this chapter,
all contracts, policies and certificates issued prior to its reincorpo-
ration, shall be valued as one year term insurance at the ages
attained excepting when such contracts, policies or certificates shall
provide for a limited number of specified premiums or for specified
surrender values, in which case they shall be valued as provided
in article two, section eighty-four of this chapter.

But no life insurance corporation shall hereafter be permitted
to avail itself of the provisions of this section unless it shall hold
for all its outstanding policies or certificates assets equal in value
to the minimum reserve required by section eighty-four of this
chapter. Whenever any domestic insurance corporation changes
the number of its directors or increases or reduces the amount of
its capital stock, pursuant to and in conformity with the pro-
visions of the stock corporation law, it may file in the office of
the superintendent of insurance a complete copy of its charter,
duly authenticated, containing the changes of its capital stock or
its directors, or both, as the case may be. Such charter shall
not be filed until it has attached thereto the certificate of approval
of the attorney-general, as provided in section ten of this chapter. ‘

Source.— Former § 52, as amended by L. 1893, chap. 725; L. 1901, chap. 722;

L. 1905, chap. 574, and L. 1906, chap. 326; originally revised from L. 1860,
chap. 328, § 3.

. Amended by L. 1910, chap. 634; L. 1911, chap. 47, and L. 1913, chap. 48.

Note.—The purpose of the amendment of this section by chapter 48 of 1913
was to remove from the law certain unnecessary and cumbersome procedures
in relation to the reorganization of existing corporations and the amendment .
of the certificates —Ed.

See § 206, post. Reincorporation of co-operative insurance companies.

TRANSFER.—There is no provision in the Insurance Law which warrants
the transfer of corporate rights and franchises to an individual acting as
general agent in another state. Attorney-General Rep., 1896, page 276.
§ 52. Generar Provisions. TA

The provision of this section that “this section shall apply to insurance
companies organized under or subject to article VI” was not intended to
prevent insurance companies organized under the other articles of the Insur-
ance Law from amending their charters by inserting therein any statement
or matter which might have been originally inserted therein. In re Lawyers’
Mort. Co., Attorney-General Rep., 1905, page 453.

AMENDMENT OF OHARTER.— Every domestic insurance corporation,
without reference to the date of its incorporation, may amend its charter
“by inserting therein any statement or matter which might have been
originally inserted therein.” Under this provision a charter may not be
amended generally. No part of the old charter can be eliminated. The
power of amendment is limited to the insertion of new matter. Attorney-
General Rep., 1904, page 429. ,

When the legislature reserves the right to amend or repeal charters, a
law permitting mutual life associations to reincorporate as regular life insur-
ance companies is not unconstitutional as impairing the obligations of con-
tracts or depriving the policy holders of property without due process of law.
Wright v. Minn. Mut. Life Ins. Co., 193 U. S., 657.

The right to repeal or amend charters is equally effectual whether it be
reserved in the original act of incorporation, the articles of association under
a general law, or in the Constitution of the state. Polk v. Mut. Reserve
Fund, 207 U. &., 310.

Amendments to charter of an insurance company, which do not enlarge
its franchises, do not render necessary a republication of the notice of inten-
tion to organize.

An insurance company whose charter and declaration were filed and
approved, but which was not organized under the former law, may be
organized under the present Insurance Law without republication of notice.
In re Great Eastern Gas, etc., Co., Attorney-General Rep., 1892, page 394.

Section 52, as amended by chap. 722 of 1901 (and since this decision
amended by chap. 326 of 1906), when taken together with the charter of
the defendant, incorporated under chap 463 of 1853, cannot be construed as
an act of the legislature authorizing the board of directors to alter the
corporate control of the company by giving to policyholders power to partici-
pate in the election of directors, and in the absence of express legislation
permitting it said directors have no such power. Lord v. Equitable Life
Assur. Soc., 109 App. Div., 253, below; 47 Misc., 187.

The legislature by the amendment of § 52 by chap. 326 of 1906. enfranchised
policyholders with the consent of stockholders holding a majority of the stock,
to vote for directors and had the power to do so; while the directors had the
right to limit the powers of the policyholders to vote for only a part of the
directors, they had no right to thus limit the power of the stockholders. Lord
v. Equitable Life Assur. Soc., 194 N. Y., 212, rev’g 126 App. Div., 937.

The provisions of chap. 326 of 1906, although they take from the stock-
holders of an existing corporation the right to vote for all of the directors and
give to the policyholders an exclusive right to vote for a majority of them,
are not for that reason unconstitutional. Lord v. Equitable Life Assurance
Society, 57 Misc., 417.
72 Tue Insurance Law. § 53,

BOARD OF DIRECTORS.— Section 52, in regard to the amendment of a
charter of a corporation, contemplates corporate action by the board of
directors only and not the corporate action of the stockholders. Lord v
Equitable Life Assur. Soc., 47 Misc., 187; aff’d 109 App. Div., 252.

ASSESSMENT LIFE INSURANCE.— A company formed for the purpose
of transacting the business of assessment life insurance cannot alter its
charter to include casualty insurance if thereby the acquired rights and
liabilities of existing policyholders are altered. Attorney-General Rep., 1892,
page 293.

TAX.— A corporation formed by the consolidation of previously existing
corporations is liable to a tax of one-eighth of one per cent on the amount
of its capital stock required to be paid on filing incorporation papers, though
each of the corporations so consolidated paid such tax on its own incorpora-
tion. People v. Rice, 11 N. Y. Supp., 249.

VALUATION.— When an insurance company originally organized as a
fraternal organization has thereafter successively incorporated as a mutual
company and as a stock company, under chapter 690 of the Laws of 1893,
the valuation of policies issued when the corporation was a mutual company
for the purpose of ascertaining the amount of reserve, should be made under
§ 52 of the Insurance Law, if such valuation does not violate any provision. '
express or implied, of the original contract of insurance; the reserve need
not be determined by valuing such policies as whole life policies under § 86
of the Insurance Law. Elder v. Bankers’ Life Insurance Co., 117 App. Div.,
722,

§ 53. General penalties.

Any corporation or person violating any provision of this
chapter, except where such violation constitutes a felony, shall
in addition to any penalty otherwise prescribed for such violation,
be guilty of a misdemeanor.

Source.—Former § 53, as amended by L. 1906, chap. 326; originally revised
from I. 1851, chap. 95, § 9; L. 1853, chap. 463, § 18; L. 1871, chap. 888, § 9;
L. 1877, chap. 439, § 3, as amended by L. 1881, chap. 628; L. 1879, chap. 489,
§ 5; L. 1880, chap. 110, § 5; L. 1880, chap. 428, § 3.

See § 9, ante. No foreign corporation to transact business in this state
without certificate of authorization by superintendent,

See § 29, ante. Copy of charter and verified statement to be filed in
office of superintendent of insurance.

See § 31, ante. Agent not to transact business until certificate is filed
in county clerk’s office.

See § 32, ante. Renewal of certificate.

See § 49, ante. Any person aiding in the transaction of business of
foreign corporation is deemed an agent thereof.

See § 50, ante. Agent’s certificate of authority.

See § 54, post. Agents not to act for unauthorized corporations.

See § 91, post. Certificate of authority of agents.

See § 137, post. License to agents in certain cases.
§ 54, Gewnerat Provisions. 73

PENALTY.— To maintain an action to recover the penalty imposed by
the act of 1853 it is not necessary to set forth the statute in the complaint;
it is sufficient to state that the acts complained of were in violation of the
insurance statutes of the state. People v. McCann, 67 N. Y., 506.

LLOYDS.— Lloyds associations cannot engage in the business of insurance
in this state except as agents of persons or corporations so authorized unless
possessed of capital required of insurance corporations doing the same kind
of business in this state and invested in the same manner; a violation of
the provisions of § 54 of the Insurance Law is not a criminal offense; the
only remedy is by an action for a penalty under § 53. In re Derrick,
Attorney-General Rep., 1903, page 277.

§ 54. Conduct of insurance business by persons not incor-
porated.

No person, partnership, or association of persons shall engage
in the business of insurance in this state except as agent of a
person or corporation authorized to do the business of insurance
in the state, unless possessed of the capital required of an insurance
corporation doing the same kind of business in the state and
invested in the same manner; nor unless he or they shall have
made and deposited with the superintendent of insurance securities
of the same amount required of an insurance corporation doing
business in this state, nor unless the superintendent of insurance
shall have granted to him or them a certificate to the effect that
he or they have complied with all the provisions of law which an
insurance corporation doing business in this state is required to
observe, and that the business of insurance specified therein may
be safely intrusted to the person, partnership or association of
persons to whom the certificate is granted.

Every person, partnership or association receiving any such cer-
tifieate of authority shall be subject to the insurance laws of the
state and to the jurisdiction and supervision of the superintendent
of insurance in the same manner as if an insurance corporation
authorized by the laws of the state to engage in the business of
insurance specified in the certificate.

No such person, partnership or association shall transact busi-
ness under a corporate or fictitious name or under any name, style
or title other than the true name of such person, or of the persons
comprising such partnership or association.

Source—Former § 54; originally revised from L. 1853, chap. 463, §§ 14, 15,
as amended by L. 1863, chap. 300; L. 1877, chap. 489, § 2, as amended by L.
1881, chap. 628.
74 Tue Insurance Law. § 55.

See § 9, ante. No foreign corporation to transact business in this state
without certificate of authorization by superintendent.

See § 29, ante. Copy of charter and verified statement to be filed in
office of superintendent of insurance.

See § 31, ante. Agent not to transact business until certificate is filed
in county clerk’s office. *

See § 32, ante. Renewal of certificate.

See § 50, ante. Agent’s certificate of authority.

See § 53, ante. Penalty for violation of insurance law.

See § 91, post. Certificate of authority of agents.

See § 137, post. License to agents in certain cases.

DISCRETION.— The superintendent of insurance has discretionary power
to issue a certificate of authority to a foreign corporation to act as the
general agent of an insurance company in this state. In re Michigan Mut.
Life Ins. Co., Attorney-General Rep., 1897, page 216.

CORPORATIONS.— Corporations may act as agents for insurance com-
panies when expressly authorized so to do by their charters, and not other-
wise. In re Carpenter & Co., Attorney-General Rep., 1893, page 369.

DEMURRER.—A complaint in an action by a foreign corporation is
not demurrable for its failure to show that they have been duly authorized
to do business within the state of New York as the fact of compliance is
not a necessary part of the complaint, the failure to comply being a matter
of defense. Thompson v. Colonial Assur. Co., 33 Misce., 37.

Where a tailor is hired to make up into trousers material supplied by the
employers, and the latter agree to pay the tailor the value of his labor put
upon the material, although it should be damaged or destroyed by fire, in
consideration of the deduction of ‘one per cent of the agreed price of the
labor, the contract is one of employment and not of insurance within
the meaning of the Insurance Law, ‘and is not invalid under the provisions
of §§ 54, 58 and 59 of that law. Stern v. Rosenthal, 71 Misc., 422.

LLOYDS.— Lloyds associations cannot engage in the business of insurance
in this state except as agents of persons or corporations so authorized unless
possessed of capital required of insurance corporations doing the same kind
of business in this state and invested in the same manner; a violation of
the provisions of § 54 of the Insurance Law is not a criminal offense; the
only remedy is by an action for a penalty under § 53. In re Derrick,
Attorney-General Rep., 1903, page 277.

§ 55. Insurance without the consent of the insured
prohibited.

No policy of insurance shall be issued upon any property
except upon the application and in the name of some person having
an interest in the property. No policy or agreement for insurance
shall be issued upon the life or health of another or against loss
by disablement by accident except upon the application of the
person insured; but a wife may take a policy of insurance upon
§ 55. ‘GENERAL Provisions. 75

the life or health of her husband or against loss by his disablement
by accident; an employer may take out a policy of insurance cover-
ing his employees collectively for the benefit of such as may suffer
loss from injury, death or disablement resulting from sickness,
and a person liable for the support of a child of the age
of one year and upward may take a policy of insurance
thereon, the amount payable under which may be made to increase
with advancing age and which shall not exceed the sums specified
in the following table, the ages wherein specified being the ages at
time of death, for an araount not exceeding the sum specified in the
table:

Between the ages of one and two years, thirty dollars.

Between the ages of two and three years, thirty-four dollars.

Between the ages of three and four years, forty dollars.

Between the ages of four and five years, forty-eight dollars.

Between the ages of five and six years, fifty-eight dollars.

Between the ages of six and seven years, one hundred and forty
dollars.

Between the ages of seven and eight years, one hundred and
sixty-eight dollars.

Between the ages of eight and nine years, two hundred dollars.

Between the ages of nine and ten years, two hundred and forty
dollars.

Between the ages of ten and eleven years, three hundred dollars.

Between the ages of eleven and twelve years, three hundred and
eighty dollars.

Between the ages of twelve and thirteen years, four hundred and
sixty dollars.

Between the ages of thirteen and sixteen years, five hundred
and twenty dollars.

Between the ages of sixteen and seventeen years, six hundred
and twelve dollars.

Between the ages of seventeen and eighteen years, seven hundred
dollars.

Between the ages of eighteen and nineteen years, seven hundred
and eighty-four dollars.

Between the ages of nineteen and twenty years, eight hundred
and fifty-five dollars.

Between the ages of twenty and twenty-one years, nine hundred
and thirty dollars.
"6 Ture Insurance Law. § 55,

In respect of insurance heretofore or hereafter, by any person
not of the full age of twenty-one years but of the age of fifteen:
years or upwards, effected upon the life of such minor, for the
benefit of such minor or for the benefit of the father, mother,
husband, wife, brother or sister of such minor, the assured shall
not, by reason only of such minority, be deemed incompetent to
contract for such insurance or for the surrender of such insurance,
or to give a valid discharge for any benefit accruing, or for money
payable under the contract.

Source.—Former § 55, as amended by L. 1902, chap. 437; new.

Amended by L. 1910, chap. 634, and L. 1913, chap. 519. In effect May li,
1913.

Note.—The purpose of the amendment of this section by chap. 519 of 1913
was to authorize employers to take out policies covering employees col-
lectively for the benefit of such as might suffer loss from death or disable-
ment resulting from sickness; formerly such policies were limited to accident
insurance.—Ed.

See § 52, Domestic Relation Law, chap. 19 of 1909. Insurance by wife of
husband’s lifew4 Ftd v Phat. 1€? Mira i ¥Y.

A policy issued prior to the enactment of this section insuring a manu-
facturing company against loss to property from an explosion or rupture
of boilers, “also against loss of human life or injury to person, whether to
the assured, the employees, or to any other person or persons, caused by such
explosion or rupture, payable to the assured for the benefit of the injured
person or persons, or their legal representatives in case of death, and not
contingent upon the legal liability of the assured,” is to be deemed as having
been intended at most as a pecuniary indemnity to the legal representatives
of an employee for the loss sustained by them in consequence of his death,
Embler v. Hartford Steam Boiler Ins. Co., 158 N. Y., 431.

There is no provision of the Insurance Law, that prohibits the issuing of
a life insurance policy, having an institution the beneficiary instead of ag
person, but if the application were made by the institution, it would fall
within the prohibition of section 55. Ruling Ins. Dept., Aug. 10, 1911.

CREDITOR’S LIEN.— A surrogate has no jurisdiction to enforce a cred:
itor’s lien against insurance moneys under § 22 of the Domestic Relations
Law, chap. 272 of 1896; the proper course is by a representative a
to establish and enforce the lien after the assets of the estate have been*
exhausted. Matter of Thompson, 184 N. Y., 36; rev’g 102 App. Div., 617.

INFANTS.— Co-operative insurance companies cannot insure the lives of
infants. In re Mut. Life Assn., Attorney-General Rep., 1892, page 366.

This section, providing ‘that a minor shall not be deemed incompetent f
contract for insurance, is not declaratory of the common law, but in con-
travention thereto; it is immaterial that the policy 'sought to be rescinded was
an endowment policy, as the infant may make a valid contract in any of
the common'forms. Hamm v. Prudential Insurance Co., 187 App. Div., 504
2

§ 55. Generat Provistons. ea

If the personal contract of an infant, beneficial to himself, is fair and rea-
sonable and free from fraud and has been wholly or partly executed on both
sides and the infant has disposed of what he has received, or the benefits
received by him are such that they cannot be restored as in a contract of
insurance, he cannot recover back what he has paid. Johnson v. North West-
arn Mutual Life Ins. Co., 56 Minn., 365; 45 Am. St. Rep. 473.

Co-operative or assessment companies have no power to receive, as mem-
bers, infants of such tender years that they are unable to exercise any
choice in becoming members or to exercise the powers with which members
are invested under the act. Matter of G. M. B. Ass’n, 135 N. Y., 280.

This section, permitting the insurance of the lives of infants, so far as
it limits the amount of insurance to be carried, is in derogation of the
rights of parents, at common law, to effect insurance on the life of a minor
child, and, therefore, should receive a strict construction. O’Rourke v. John
Hancock L. Ins. Co., 10 Mise., 405; 63 St. Rep., 522; 31 N. Y. Supp., 130.

The general provisions of this section providing that a person liable for
the support of a child of the age of one year and upward may take a yearly
renewal term policy of insurance upon the life of such child, does not
extend the scope of article 6 of the Insurance Law, which forbids a life insur-
ance company, conducted upon the assessment plan, from issuing such a
policy. People v. Industrial Benefit Ass’n., 92 Hun, 311; aff’d 149 N. Y., 606.

The insuring of infants by assessment life and casualty insurance corpora-
tions doing business under the provisions of article 6 of the Insurance Law is
not permitted. Atty..Gen. Dec., March 23, 1910.

The provisions of § 55 fixing the amount of insurance which may be taken
on the life of a child by a person liable for its support does not alone restrict
the amount of insurance by a single policy, but limits the total amount of
such insurance. Flynn v. Prudential Ins. Co., 207 N. Y., 315, rev’g 145.

As this section makes an infant over fifteen years of age competent to con-
tract for life insurance, a person whe thas paid the premiums for the infant
at his request can recover the amount from the infant the same as he might
recover for necessaries furnished. Equitable Trust Co. v. Moss, 149 App.
Div., 615.

ASSIGNMENT OF POLICY.— <A policy of insurance for the benefit of a
wife upon the life of her husband is not assignable except in the cases where
assignments are authorized by statute, and an assignment thereof cannot be
sompelled by a decree of the court, nor can the avails thereof be appro-
priated in advance by operation of law to the payment of debts, or sub-
jected to the lien of creditors either of herself or her husband. Baron v.
Brummer, 100 N. Y., 372.

The provisions of chap. 248 of 1879, providing that policies of life insur-
ince issued “upon the lives of husbands for the benefit and use of their
wives” shall be assignable by said wife, with the written consent of the
iusband do not require the written consent of the wife to a transfer by
‘he husband of his interest, arising out of his option to convert the policy
nto cash. Travelers’ Insurance Co. v. Healey, 25 App. Div., 53.

An assignment of a policy in a foreign life insurance company, issued upon
ihe life of a husband, in which the wife is the beneficiary, is valid, where
78 Tur Insurance Law. § 55,

the assignment is made by the wife with the written consent of her husband,
although the assignee has no interest in the life of the husband, and merely
takes the assignment upon an agreement that he shall have an interest of
two-thirds in the policy, provided he pays the premiums upon it and prevents
it from lapsing. Fuller v. Kent, 13 App. Div., 529. :

Where a person takes out a policy of insurance upon his own life, and the
amount is made payable to another having no interest in the life, or where
the insured assigns his policy to one having no such interest, the beneficiary °
or the assignee may hold or enforce the policy, if it was valid in its inception,
and was procured or the assignment made in good faith. Olmstead v. Keyes,
85 N. Y. 593.

It is the doctrine of this state, that a policy of life insurance taken out by
the insured himself or by another having an insurable interest in his life, in
good faith and not for the mere purpose of assignment, may be lawfully
assigned to one having no insurable interest in the life of the one insured;
and that the assignee, when the assignment is general and absolute, will be
entitled to the entire proceeds of the policy; the fact that the insured’s con-
dition of health has failed does not deprive him of the right to realize on his
policy by its assignment. Steinback v. Diepenbrock, 158 N. Y., 24.

Evidence that a husband delivered a policy of insurance upon his life to his
wife as a gift, and that she thereafter paid all the premiums thereon, is
sufficient to warrant a jury in finding both a gift and an assignment of the
policy to the wife, vesting her with the legal title thereto, although the policy
contained a provision that it should not be assigned unless in writing. Griffin
vy. Prudential Ins. Co., 43 App. Div., 499.

A policy of insurance contained a clause declaring that it could be assigned
only on the written approval of the company; it did not declare that a viola-
tion of the provision would avoid the policy; in an action thereon it was held
that a violation of this provision did not involve a forfeiture, and that an
assignee could enforce the policy, although the insurer had not consented to
the assignment. Marcus v. St. Louis Mut. L. Ins. Co., 68 N. Y. 625.

Stipulation in a policy of insurance, issued upon the life of a husband for
the benefit of his wife, against the assignment thereof, inserted solely for
the advantage of the company, cannot avail the wife as against one to whom
she has assigned the policy under the statute, where the company has declined
to take advantage of the stipulations and has paid the proceeds of the policy
into court. Spencer v. Myers, 150 N. Y., 269.

The statutes relating to life insurance issued for the benefit of a married
woman, refer to a contract made by her in her own name, or in the name of
a third person with his assent as her trustee, for insurance upon the life of
her husband, and not to a contract made by him for her benefit. Bradshaw v.
Mutual Life Ins. Co., 187 N. Y., 347; rev’g 109 App. Div., 375.

A married woman as a beneficiary in a policy of insurance on the life of
her husband is entitled to the proceeds of the policy notwithstanding 4
divorce obtained by her before his death. Overhiser, Adm’x. v. Overhiser et
al., 63 Ohio St., 77.

Under a so called “beneficiary clause ” by which it is provided that the
beneficiary named in the policy as well as the ‘person insured by the policy;
is also covered in case such beneficiary is injured by accident, a writtet
§§ 56, 57. GENERAL PRovIsIons. 79

application should ‘be signed by the proposed insured and also by the
beneficiary, subject to the exception specified under § 55. Attorney-General
Rep., Sept. 19, 1910.

This section does not prohibit the issuing of several policies, each for the
amount specified in the section. O’Rourke v. John Hancock Mut. Life Ins.
Co., 30 N. Y. St. Rep., 205; 31 N. Y. Supp. overruled; Flynn v. Prudential In-
surance Co., 207 N. Y., 315.

§ 56. Foreign insurance companies.

Companies from other states and countries hereafter applying
for admission to this state shall be possessed of at least the amount
of capital required ‘for companies organized under the laws
of this state, which amount of capital of such companies
must be fully paid in cash. It shall be the duty of the super-
intendent of the insurance department to refuse admission to any
such company unless its assets are of the same general character
that companies of this state are permitted to hold, nor shall any
such | company be admitted to transact business in {his state unless
it shall file in the office of the superintendent of the insurance
department an agreement under its corporate seal that it will not
transact in this state any business which any fire insurance com-
panies of this state, organized under the general act, are pro-
hibited from transacting; and any company violating the pro-
visions of said agreement shall have its certificate of authority
revoked by the said superintendent forthwith, provided the assent
of the attorney-general shall be previously obtained.

Source.—L. 1881, chap. 671, as amended by L. 1892, chap. 654, § 1.

Amended by L. 1910, chap. 168.

L. 1892, chap. 654, having been passed at the same session as the Insurance
Law (L. 1892, chap. 690) was in force and effect under former § 33 of the

Statutory Construction Act, notwithstanding that L. 1881, chap. 671, § 2, which
it purported to amend, was repealed by L. 1892, chap. 690.

§ 57. Application of article limited.

The provisions of this article shall not apply to any indi-
vidual or partnership or association of underwriters known
as Lloyds or as individual underwriters which, on the first
day of October, eighteen hundred and ninety two, was law-
fully engaged in the business of insurance within this state,
and not required by law to report to the superintendent of insur-
ance or the insurance department or subject to their supervision
or examination, nor to any such association, notwithstanding any
change hereafter made therein by the death, retirement or with-
80 Tue Insurance Law. § 57.

drawal of any such underwriters or by the admission of others to
such association, except, however, that every such individual, part-
nership or association of underwriters shall, on or before the first
day of February of each year, make and file with the superin-
tendent of insurance a statement of its affairs during the year
ending on the thirty-first day of December immediately preceding,
which statement shall be verified by the accredited attorney of the
underwriters of the association and shall be in such form and
contain such matter as the superintendent of insurance shall
prescribe.

No partnership or association of underwriters known as Lloyds
or as individual underwriters which was lawfully engaged
or was lawfully entitled to engage in the business of insurance
in this state on April first, nineteen hundred and two, and
which failed to file with the superintendent of insurance, on or
before September first, nineteen hundred and two, a copy of its
original articles of aysociation or co-partnership agreement, to-
gether with any amendments thereto, duly verified by one of
the members thereof by affidavit to the effect that it is a true copy,
and stating where the principal office of such partnership or
association is located, the kind of business in which it was engaged
and the name under which it did business, shall be permitted to
engage in or transact the business of insurance.

Source.— Former § 57, as amended by L. 1894, chap. 684; L. 1902, chap. 297;
L. 1903, chap. 471; new.

Amended by L. 1909, chap. 240; L. 1910, chap. 634.

Repealed by L. 1910, chap. 638 (in effect Jan. 1, 1911.)

Note.— Section 57 was affected by two laws, chaps. 634 and 638 of 1910.
The first of these chapters struck from such section the excepting clauses as
to fraternals, ete., but left in the clauses as to Lloyds. This law went into
effect July Ist. Hence, section 57 had reference to Lloyds; but the Lloyds

eee

bill proper — chap. 638 of 1910 — repealed section 57 in toto, such repeal, how- | | |

ever, not going into effect until January 1, 1911. The purpose of this peculiar

method of legislation was to prevent a repetition of what happened in 1892 ,
by keeping up the bars against Lloyds until the new Lloyds article shall be
put into full effect on January 1, 1911. The governor signed the life article |

bill on June 23d, and the Lloyds bill on the 24th. Hence, the Lloyds bill is
the later of the two executive acts and thus controls—Editor.

LLOYDS.— The Columbia Fire Lloyd’s, an association organized prior to : :
October 1, 1892, and whose existence terminated September 30, 1897, is not:

empowered to continue business as a “Lloyd’s” association under section 57

of the Insurance Law. Attorney-General Rep., 1867, page 175.
§ 57. GryERaL Provisions. 81

An agent of the “American Lloyds,” an association of individual fire under-
‘writers not incorporated by the laws of this state, is not exempted from the
application of section 523 of the New York City Consolidation Act by the
fact that ne such association was in existence when the section was framed,
or by the tact that the association was authorized to do business by a subse-
quent law of the state. Fire Department v. Stanton, 159 N. Y., 225.

Lloyds, not engaged in insuring against loss by theft or burglary prior to
October 1, 1892, cannot now engage in such business. Attorney-General Rep.,
1899, page 329.

The present Insurance Law does not apply to Lloyd companies organized
before said law went into effect, October 1, 1892, although organized subse-
quently to the passage of said law, May 18, 1892. Attorney-General Rep.,
1893, page 232.

Failure to file the annual report with the superintendent as required by
section 57 does not work a forfeiture of the right of Lloyds to transact
business, since they are expected from its operation. Such reports may,
however, be required under section 63. Attorney-General’s Rep., June 15, 1909.

A Lloyds association actually engaged in the business of insurance on
October 1, 1902, so that it was expressly exempted from the prohibition of
the statute, does not forfeit its right by subsequent nonuser. Attorney-
General’s Rep., July 21, 1909. ;

ACTION.— An action may be maintained under section 1948 of the Code of
‘Civil Procedure against underwriters carrying on a Lloyds insurance. People
v. Loew, 19 Misc., 248.

PARTIES TO ACTION.— An action upon a contract to reinsure the risks
of underwriters operating under the Lloyds system, must be brought by all
of them, or by those officers, if there be such, who, under section 1919 of the
Code of Civil Procedure, may sue for an unincorporated association of more
than seven persons; and, therefore, where less than all of the underwriters sue,
their complaint is demurrable for defect of parties plaintiff. Thompson v.
Colonial Assur. Co., 33 Mise., 37.

ENGAGED IN BUSINESS.— The phrase, “engaged in busiaess,” as used
in the Insurance Law, has reference to such associations as were actually
doing business in this state, having outstanding policies and contingent
liabilities, at the date when the Insurance Law took effect. Attorney-General
Rep., 1894, page 99.

PURPOSE.— Associations incorporated, not to engage in business under
this section, but merely for purposes of sale, cannot lawfully transact the
business of insurance in this state. People v. Loew, 23 Mise., 574.

FRATERNAL BENEFICIARY SOCIETIES.— Section 63 extends the juris-
diction of the Superintendent of Insurance to insurance corporations of every
character and, by implication to authorize him to examine the affairs and
question under oath the officers of any fraternal beneficiary society or town
and county co-operative insurance corporation notwithstanding the previous
exemption under section 57; the false swearing of any officer on such examina-
tion is perjury. People v. Reed, 66 Mise., 425.
82 Tuer Insurance Law. §§ 58, 59.

.§ 58. Policy to contain the entire contract; statements of
insured to be representations and not warranties.

Every policy of insurance issued or delivered within the state
on or after the first day of January, nineteen hundred and seven,
by any life insurance corporation déing business within the state
shall contain the entire contract between the parties and nothing
shall be incorporated therein by reference to any constitution, by-
laws, rules, application or other writings unless the same are
endorsed upon or attached to the policy when issued; and all state-
ments purporting to be made by the insured shall in the absence
of fraud be deemed representations and not warranties. Any
waiver of the provisions of this section shall be void.

Source.—Former § 58, as added by L. 1906, chap. 326.

Section 58 of the Insurance Law will permit the indorsement upon or the
attachment to a deferred annuity contract by annual premiums of additional
options not conflicting with any provision of law. Ruling Ins. Dept., March
4th, 1909.

This section applies only to policies issued on or after January 1, 1907.
Perry v. Prudential Insurance Co., 144 App. Div., 780.

Where a tailor is hired to make up into trousers material supplied by the |
employers and the latter agree to pay the tailor the value of his labor put
upon the material, although it should 'be damaged or destroyed by fire, in
consideration of the deduction of one per cent of the agrecd price of the labor,
the contract is one of employment and not of insurance within the meaning
of the Insurance Law, and is not invalid under the provisions of §§ 54, 58 and
59 of that Law. Stern v. Rosenthal, 71 Mise., 422.

Where a policy states that the consideration therefor is the application of
the insured, which is made part of the contract and annexed to the policy,
the insurer cannot set out other alleged misrepresentations as an inducing
cause of the policy, for the reason that section 58 requires that every such
policy shall contain the entire contract and nothing shall be incorporated
therein by reference to other writings not indorsed upon or attached to the
policy; so where the insurer in its answer sets out alleged misrepresentations
made by the insured to its examining physician; said allegations should be
stricken out where the questions of the physician and the answers were not
attached to the policy. Becker v. Colonial Life Insurance Co., 153 App. Div.,
382.

Under § 58, which provides that every policy of life insurance issued after
January 1, 1907, shall contain the entire contract, statements of the insured
in ‘his application which were neither indorsed on, nor attached to, the
policy may not be considered in an action thereon. ‘Murphy v. The Colonial
Life Ins. Co. of America, 83 Misc., 475.

§ 59. Certain provisions in policies prohibited.

No corporation issuing policies of insurance upon the lives of
persons, whether such corporation is a domestic one, existing under
§ 60. GenEraL Provisions. 83

the laws of the state, or a foreign one which has become entitled to
do business within the state, shall provide in any application,
policy or certificate of insurance, that the person-soliciting such in-
surance, or any person who is engaged in the business of soliciting
insurance for the company issuing such policy, or certificate, and
whose compensation is either paid by said company, or is contin-
gent upon the issuing of such policy, is the agent of the person
insured under said policy or certificate, or shall insert in said
policy or certificate any provision to make the acts or representa-
tions of such person binding upon the person so insured under
said policy or certificate.

Source.—Former § 59, as added by L. 1905, chap. 568, and amended by L.
1906, chap. 326.

Where a tailor is hired to make up into trousers material supplied by
the employers, and the latter agree to pay the tailor the value of his labor
put upon the material, although it should be damaged or destroyed by fire, in
consideration of the deduction of one per cent of the agreed price of the labor,
the contract is one of employment and not of insurance within the meaning of
the Insurance Law, and is not invalid under the provisions of §§ 54, 58 and 59
of that Law. Stern v. Rosenthal, 71 Mise., 422.

§ 60. Estimates and misrepresentations prohibited.

No life, health or casualty insurance corporation, including
corporations operating on the co-operative or assessment plan
doing business in this state and no officer, director cr
agent therefor or any other person, co-partnership cr
corporation shall issue or circulate, or cause or permit to be
issued or circulated, any illustration, circular or statement of any
sort misrepresenting the terms of any policy issued by any such
corporation or the benefits or advantages promised thereby, or
any misleading estimate of the dividends or share of surplus to
be received thereon, or shall use any name or title of any policy
or class of policies misrepresenting the true nature thereof. Nor
shall any such corporation or agent thereof or any other person,
co-partnership or corporation make any misleading representation
or incomplete comparison of policies to any person insured in
any such corporation for the purpose of inducing or tending to
induce such person to lapse, forefeit, or surrender his said in-
surance. The superintendent of insurance may in his discretion
revoke the certificate of authority issued to any corporation or
agent on his being satisfied that such corporation or agent has
violated any of the provisions of this section. Any violation of
this section shall constitute a misdemeanor, and it shall be the duty
84 Tue Insurance Law. 8§ 61, 62.

of the superintendent of insurance to revoke the certificate of
authority of the corporation or agent on a conviction for so
offending. ;

Source.—Former § 60, as added by LL. 1906, chap. 326, and amended by L.
1908, chap. 347. :

Amended by L. 1911, chap. 533, and L. 1913, chap. 47.

Note.—The amendment by L. 1913, chap. 47, included health, casualty and
co-operative companies within the provisions of the section. Hd.

Note.—The purpose of the amendment of this section by chapter 47 of 1913
was to extend the law in regard to misrepresentation and estimates so as to
include health and casualty insurance companies, and co-operative or assess-
ment associations. Ed.

A writ of prohibition does not lie to restrain the Superintendent of Insur-
ance from proceeding with the hearing of one charged with a violation of § 60;
such a proceeding by the Superintendent is judicial in its nature and subject
to review. People ex rel. Burr v. Kelsey, 129 App. Div., 399.

The prohibition in this section applies to false estimates only, “ misrepre-
sentations;” so held in relation to so-called partnership proposition of North-
Western Mutual Life Insurance Co. Ruling Ins. Dept., Oct. 31, 1910.

§ 61. Receivers to make assessment on premium notes.

In case the corporation, in regard to which a receiver has been
or shall hereafter be appointed, is or shall be a mutual insur
ance company, such receiver shall have full power under the
authority and sanction of the court appointing him, to make all
such assessments on the premium notes belonging to such corpora-
tion as may be necessary to pay the debts of such corporation, as
by the charter thereof the directors of such corporation have au-
thority to make; and the notice of such assessment may be given
in the same manner as is provided in the charter of said company
for the directors of said company to give; and the said receiver
shall have like rights and remedies, upon and in consequence of

the non-payment of such assessments, as are given to the corpora: -

tion or the directors thereof by the charter of such corporation.
Source.— L. 1852, chap. 71, § 2.

§ 62. Surrender of policies to receiver.

Such receiver is authorized to receive a voluntary surrender of
all policies issued by such corporation, or to cancel the policies
issued by such corporation, in all cases where by the charter of
such corporation, the directors thereof are authorized to receive

the surrender of, or cancel the policies issued by such corporation.
Source.— L. 1852, chap. 71, § 3.

 
§ 63. GeNERAL Provisions. 85

§ 63. Proceedings against and liquidation of delinquent in-
surance corporations.

This section shall apply to all corporations, associations,
societies and orders to which any article of this chapter is
applicable, and to all corporations, associations, societies and
orders which are subject to examination under any section of this
chapter, or which are doing or attempting to do or representing
that they are doing the business of insurance in this state, or
which are in process of organization intending to do such business
therein, anything as to any such corporations, associations,
societies or orders provided in this article to the contrary not-
withstanding; and the words “corporation” or “ corporations ”
herein shall also include all such associations, societies and orders
as well as all voluntary or unincorporated associations.

1. Whenever any domestic corporation (a) is insolvent; or (b)
has refused to submit its books, papers, accounts or affairs to the
reasonable inspection of the superintendent, or his deputy or ex-
aminer; or (c) has neglected or refused to observe an order of
the superintendent to make good within the time prescribed by
law any deficiency, whenever its capital, if it be a stock corpora-
tion, or its reserve, if it be a mutual corporation, shall have become
impaired; or (d) has, by contract of reinsurance or otherwise,
transferred or attempted to transfer substantially its entire prop-
erty or business, or entered into any transaction the effect of
which is to merge substantially its entire property or business in
the property or business of any other corporation, association,
society or order, without having first obtained the written approval
of the superintendent; or (e) is found, after an examination, to be
in such condition that its further transaction of business will be
hazardous to its policyholders, or to its creditors, or to the public;
or (f) has wilfully violated its charter or any law of the state; or
(g) whenever any officer thereof has refused to be examined under
oath touching its affairs; or (h), if such corporation be organized
under article six, seven or eight of this chapter, its condition is
found, after examination, to be such that it could not meet the re-
quirements for incorporation and authorization specified in such
articles respectively—the superin‘endent may, the attorney-general
representing him, apply to the supreme court or any justice
thereof in the judicial district in which the principal office of such
corporation is located for an order directing such corporation to
86 Tue Insurance Law. § 63,

show cause why the superintendent should not take possession of
its property and conduct its business, and for such other relief
as the nature of the case and the interests of its policyholders,
creditors, stockholders or the public may require.

2. On such application, or at any time thereafter, such court
may, in its discretion, issue an injunction restraining such corpo
ration from the transaction of its business or disposition of its
property until the further order of the court. On the return of
such order to show cause, and after a full hearing, the court shall
either deny the application or direct such superintendent, or his
successor in office, forthwith to take possession of the property and
conduct the business of such corporation, and retain such possession
and conduct such business until, on the application either of the
superintendent, the attorney general representing him, or of such
corporation, it shall, after a like hearing, appear to the court that
the ground for such order directing the superintendent to take
possession has been removed and that the corporation can properly
resume possession of its property and the conduct of its business.

3. If, on a like application and order to show cause, and after
a full hearing, the court shall order the liquidation of the business
of such corporation, such liquidation shall be made by and under
the direction of such superintendent, and his successors in office,
who may deal with the property and business of such corporation
in their own names as superintendents or in the name of the coy-
poration, as the court may direct, and shall be vested by operation
of law with title to all of the property, contracts and rights of
action of such corporation as of the date of the order so directing
them to liquidate. The filing or recording of such order in any
record office of the state shall impart the same notice that a deed,
bill of sale or other evidence of title duly filed or recorded by,
such corporation would have imparted. The rights and liabilities
of any such corporation, and of its creditors, policyholders, stock-
holders and members, and of all other persons interested in its
assets, shall, unless otherwise directed by the court, be fixed as of
the date of the entry of the order directing the liquidation of such —
corporation in the office of the clerk of the county wherein such
corporation had its principal office for the transaction of business
upon the date of the institution of proceedings under this section.
§ 63. GENERAL Provisions. 87

4, Whenever any of the grounds of jurisdiction over domestic
corporations specified in subdivisions (a), (b), (c), (4), (e), (f)
and (g) of subsection one of this section exist or arise with refer-
ence to any corporation incorporated by or existing under the
government or laws of any country outside of the United States
and authorized to transact the business of insurance and having
assets in this state; or whenever any foreign corporation
so authorized and having assets in this state has been placed in
the hands of a receiver or had its property sequestrated in its
domiciliary state or country or in any other state or country, the
superintendent may, the attorney-general representing him, ap-
ply to the supreme court or any justice thereof in the judicial
district in which such corporation has its principal office for the
transaction of business in this state, for an order directing such
corporation to show cause why the superintendent should not take
possession of its property and conserve its assets for the benefit
of its creditors, and for such other relief as the nature of the case
and the interests of its policyholders, creditors, stockholders or
the public may require.

5. On such application, or at any time thereafter, such court
may, in its discretion, issue an injunction restraining such corpo-
ration and its officers, agents and employees from the transaction
of its business or disposition of its property until the further order
of the court. On the return of such order to show cause, and after
a full hearing, the court shall either deny the application or direct
the superintendent forthwith to take possession of the property and
conserve the assets of such corporation, and retain such possession
until, on the application either of the superintendent, the attorney-
general representing him, or of such corporation, it shall, after a
like hearing, appear to the court that the ground for such order
directing the superintendent to take possession has been removed
and that the corporation can properly resume possession of its
property and conduct its business. If, on such application, the
court shall direct the superintendent to take possession of the prop-
erty and conserve the assets of such corporation, the rights and
duties of the said superintendent with reference to such corpora-
tion and its said assets shall be those heretofore exercised by and
imposed upon anciliary receivers of foreign corporations in this
state.
88 Tur Insurance Law. § 63,

6. For the purposes of this section, the superintendent shall
have power to appoint, under his hand and official seal, one or
more special deputy superintendents of insurance, as his agent or
agents, and to employ such counsel, clerks and assistants as may
by him be deemed necessary, and give each of such persons such
powers to assist him as he may consider wise. The compensation
of such special deputy superintendents, counsel, clerks and assist-
ants, and all expenses of taking possession of and conducting the
business of liquidating any such corporation shall be fixed by the
superintendent, subject to the approval of the court, and shall,
on certificate of the superintendent, be paid out of the funds or
assets of such corporation. During the progress of any proceed-
ings taken under this section, the superintendent, his deputies or
any examiner authorized by him and the special deputy superin-
tendent of insurance acting for the said superintendent therein
shall have all of the powers given to the superintendent, his
deputy or any examiner authorized by him, by section thirty-nine
of this chapter, including the power to examine under oath the
persons specified in such section, and to compel the production of
books and papers as therein provided. \

7. For the purposes of this section, the superintendent shall
have power, subject to the approval of the court, to make and pre
scribe such rules and regulations as to him shall seem proper.

8. The superintendent shall transmit to the legislature, in his
annual report, the names of the corporations so taken possession
of, whether the same have resumed business or have been liqui-
dated, and such other facts as shall acquaint the policyholders,
creditors, stockholders and the public with his proceedings under
this section; and, to that end, the special deputy superintendent
in charge of any such corporation shall file annually with the
superintendent a report of the affairs of such corporation.

Ns
9. All acts of the superintendent of insurance in taking or con-
tinuing in possession of any property, or in the regulation, con-
duct or liquidation of the business, of any corporation to which
this section is applicable, since the first day of January, nineteen
hundred and nine, whether such taking possession, continuing in
possession, regulation, conduct or liquidation was in pursuance of

a contract, by mutual consent or otherwise, are hereby ratified,
legalized and confirmed.
§ 63. GENERAL Provisions. 89

10. At any time after the court shall order the liquidation of the
business of any such corporation, as provided in paragraph num-
bered three of this section, the superintendent of insurance may
apply for the dissolution of such corporation, and the same, after
due notice and hearing and such other procedure as to the court
shall seem proper, shall be dissolved.

11. The order to show cause and the papers upon which the
same is made in any proceeding instituted under the provisions
of this section shall be served upon the corporation named in such
order in the manner prescribed for personal service of summons
upon a domestic corporation by section four hundred and thirty-
one of the code of civil procedure. When it is satisfactorily
proved by affidavit that the officers of the corporation named in
the said order to show cause, upon whom service is required to be
made as above provided, or, if a Lloyds association be named in
the order to show cause, the duly designated attorney-in-fact, have
departed from the state or keep themselves concealed therein
with intent to avoid service, such order to show cause may
provide for service thereof in such manner as the court or justice
by whom the same is made, shall direct.

12. At any time after the commencement of proceedings under
an order of liquidation made pursuant to this section, the said
superintendent may remove the principal office of the corporation
in liquidation to the county of Albany. In event of such removal
the court shall, upon the application of the superintendent, direct
the clerk of the county wherein such proceeding was commenced to
transmit all of the papers filed therein with such clerk to the clerk
of the county of Albany, and the proceeding shall thereafter be
conducted in the same manner as though it had been commenced
in the county of Albany.

Source.—Added by L. 1909, chap. 300.

Amended by L. 1910, chap. 634; L. 1911, chap. 366; L. 1912, chap. 217, and
L. 1913, chap. 29.

Note——The purpose of the amendment of this section by chapter 29 of 1913 '
was to permit the transfer of all liquidation proceedings brought by the Sup-
erintendent of Insurance to the county of Albany.—Ed.

The jurisdiction of the superintendent of insurance is extended over all
fraternal beneficiary societies, and town and county co-operative insurance
corporations to examine their affairs and question their officers under oath,
by section 63 of the Insurance Law. People v. Reed, 66 Misc., 425.
90 Tue Insurance Law. 8§ 64, 65,

Lloyds associations known as Lloyds or individual underwriters are included
within the broad scope of section 63, and materially extends tne authority of
the Superintendent of Insurance over such companies, since application may
be made to the court, where such associations “ have refused to submit books”
or “an officer thereof has refused to be examined,” for an order to show
cause why the superintendent should not» take possession of its property;
such application may also be made where an association has willfully violated
any law of the state. Attorney-General’s Rep., June 15, 1909.

§ 64. Provisions of insurance law not to apply to religious
orders.

None of the provisions of this chapter shall apply to any corpo-
ration, organized under the laws of any state or territory of the
United States solely for the purpose of providing for the support
or relief of the priests, clergy or ministers of any religious denomi-
nation, or for the support or relief of those dependent on them.

Source.—Added by L. 1910, chap. 615.

§ 65. Rebating and discriminations prohibited.

No insurance corporation, association, partnership, Lloyds or
individual underwriters authorized or permitted to do any insur- -
ance business within this state, or any officer, agent, solicitor or
representative thereof, shall make any contract for such insur-
ance, on property or risk located within this state, or against
liability, casualty, accident or hazard that may arise or occur
therein or agreement as to such contract, other than as plainly
expressed in the policy issued or to be issued thereon; nor shall
any such corporation, association, partnership, Lloyds or in-
dividual underwriters, or officer, agent, solicitor ur represent-
ative thereof, directly or indirectly, in any manner whatsoever,
pay or allow or,offer to pay or allow as inducement to such in-
surance, or after the insurance shall have been effected, any
rebate from the premium which is specified in the policy or any
special favor or advantage in the dividends or other benefit to
accrue thereon, opr any valuable consideration or inducement
whatever, not specified in the policy or contract of insurance, or
give, sell or purchase, or offer to give, sell or purchase, ag in-
ducement to such insurance, or in connection therewith, any
stock, bonds or other securities of ahy insurance company, or
other corporation or association, or any dividends or profits
accrued thereon, or anything of value whatsoever, not specified
§ 65. Generat Provisions. 91

in the policy, nor shall any insurance broker, his agent or
representative, or any other person, directly or indirectly, either
by sharing commissions or in any manner whatsoever pay
or allow or offer to pay or allow as inducement to such insur-
ance, or after the insurance shall have been effected, any rebate
from the premium which is specified in the policy; nor shall
the insured, his agent or representative, directly or indirectly
accept or knowingly receive any such rebate from the premium
specified in the policy; this section shall not prevent any cor-
poration, person, partnership or association lawfully doing such
insurance business in this state from the distribution of surplus
and dividends to policyholders after the first year of insurance
nor prevent any member of an inter-insurance or Lloyds associa-
tion from receiving the profit of his or its underwriting; nor
shall this section prevent any such corporation or other insurer,
or his or its agent, from paying commissions to the broker who
shall have negotiated for the insurance, nor shall this section pre-
vent any licensed broker from sharing or dividing a commission
earned or received by him with any other licensed broker or
brokers who shall have aided him in respect to the insurance for
the negotiation of which such commission shall have been earned
or paid, and nothing herein contained shall be held to prevent the
covering of risks by temporary binders or such other memoranda
as do not conflict with the provisions of this chapter. Nor shall
this section prevent any such corporation or other insurer, or any
agent or insurance broker, from distributing or presenting to any
person or corporation any article of merchandise not exceeding one
dollar in value, which shall have conspicuously stamped or printed
thereon the advertisement of such insurance corporation, agent or
broker.

No person shall be excused from attending and, when ordered
so to do, from testifying or producing any books, papers or other
documents before any court or magistrate, upon any investiga-
tion, proceeding or trial for a violation of any of the provisions
of this section, upon the ground or for the reason that the testi-
mony or evidence, documentary or otherwise, required of him
may tend to convict him of a crime or subject him to a penalty
or forfeiture, but no person shall ‘be prosecuted or subjected to
92 Tue Insurance Law. § 66.

any penalty or forfeiture for or on account of any transaction,
matter or thing concerning which he may have been required so
to testify or to produce evidence, documentary or otherwise, and
no testimony so given or produced shall be received against him
upon any criminal investigation or “proceeding. Any person or
corporation violating the provisions of this section shall be guilty
of a misdemeanor and shall forfeit to the people of the state the
sum of five hundred dollars for each such violation. This section
shall not apply to any contract of life insurance nor to any con-
tract of insurance upon or in connection with marine or trans-
portation risks or hazards other than contracts for automobile
insurance, nor to contracts made by persons, associations or cor-
porations authorized to do business under articles five, seven and
nine of this chapter.

Added by L. 1911, chap. 416

Amended by L. 1912, chap. 225, and L. 1913, chap. 25.

Note.—The purpose of the amendment of this section by chapter 25 of
1913 was to bring Assessment Insurance Associations within the prohibition
against rebates and discrimination. Ed.

Commissions paid by the Fidelity and Casualty Company of New York city
to the New York State Bankers’ Association on insurance placed by its mem-
bers with the company amount to rebates and discriminations as defined in
the Insurance Law although the funds over are used for association purposes.
Attorney-General Rep., 1912, page 535.

§ 66. Promotion of insurance corporations; sale of
securities.

1. As the terms are used in this section “ promoting corpora-
tion” means a corporation or joint stock association, engaged in
the business of organizing or promoting or endeavoring to
organize or promote the organization of an insurance corporation
or corporations, or in any way assisting therein; “ holding cor-
poration” means a corporation or joint stock association, which;
holds or is engaged in the acquisition of the capital stock or a
major portion thereof of one or more insurance corporations for
the purpose of controlling the management thereof, as voting
trustees or otherwise ; and “ securities ” means the shares of capital
stock, subscription certificates, debenture bonds and any and all
other contracts or evidences of ownership of or interest in in

surance corporations, or in promoting or holding corporations a8
defined in this section.
§ 66. GENERAL PRovISIONS. 93

2. No individual, partnership, association or corporation, as
the agent of another or as broker, shall sell or offer for sale or in
any way assist in the sale in this state of the securities of any
promoting or holding corporations, as defined in this section, or of
any insurance corporation which is not at the time of such sale
or offer for sale, lawfully engaged or authorized to engage in the
transaction of the business of insurance in this state, without first
procuring, as hereinafter provided, a certificate of authority from
the insurance department to sell such securities; nor shall any
individual, partnership, association or corporation sell or offer for
sale in this state the securities of any promoting or holding cor-
poration as defined in this section, or of any insurance corpora-
tion which is not at the time of such sale or offer for sale, lawfully
engaged or authorized to engage in the transaction of the business
of insurance in this state, unless such corporation shall have first
procured from the superintendent of insurance, as hereinafter
provided, a certificate that said corporation has fully complied
with the provisions of this section and is authorized to sell such
securities. Every certificate issued by the superintendent of in-
surance pursuant to the provisions of this section shall state in
bold type that the superintendent in no way recommends the
securities thereby authorized to be sold, and shall be renewable
annually, upon written application, filed on or before the first
day of January of each year, and may be revoked for cause at any
time by such superintendent. The superintendent shall prepare
and furnish upon request suitable blank forms of application for
the certificates required by this section.

3. Every individual, copartnership, association or corporation
who or which desires or intends to sell or to offer for sale in this
state, the securities of any insurance corporation or of any pro-
moting or holding corporation as defined in this section, shall file
with the superintendent of insurance an application for a cer-
tifieate of such authority. Such application shall contain a state-
ment, verified by oath, setting forth the name and address of the
applicant, previous business experience, date and place of birth or
organization, and such other and further information as the said
superintendent may require. It shall be the duty of the superin-
tendent of insurance to examine the application so filed, and to
make any further inquiry or examination of any such applicant
as he may deem advisable. If upon such examination the super-
intendent shall find that the applicant, or applicants, or if a cor-
94 Tur Insurance Law. § 66.

poration, the officers and directors thereof, is or are all trust-
worthy persons of good business credit, the superintendent may
issue to such applicant a certificate of authority to sell or offer
for sale in this state, the securities of any insurance corporation
or corporations and of any promoting or holding corporation
previously authorized under this section which shall be mentioned

therein.

4, Every such unauthorized insurance corporation, and every
promoting or holding corporation, as defined in this section, whose
securities are to be offered for sale in this state, shall file with
the superintendent of insurance copies of all securities to be
offered for sale, and an application for a certificate of authority
under this section which shall contain a statement in detail of the
plans and purposes of such corporation, the amount and par
value of the securities to be offered for sale and the selling price
thereof, the manner in which the moneys paid in therefor are to
be spent or employed, the rate of commissions to be paid for
the sale of such securities, the salaries to be paid to the officers
of such corporation, and such other and further information as
the said superintendent may require. No change shall thereafter
be made in the form or character of the securities to be offered
for sale, or in the plans or purposes of any such corporation with-
out. the approval thereof in writing by the said superintendent.
Tt shall be the duty of the superintendent of insurance to examine
the application and other documents so filed, and to make any
further inquiry or examination of any such corporation as he may
deem advisable. If upon such examination the superintendent
shall find that the plans and purposes of such corporation are
proper, that its condition is satisfactory, that the amount of its
securities is reasonable, that the price at which such securities
are to be sold is adequate, and that the manner in which the
moneys paid in therefor, the rate of commissions to be paid and
‘the salaries of officers are fair, the superintendent may issue a
certificate that such corporation has complied with all the pro-
visions of this section and is authorized to sell or offer its securi-
ties for sale in this state. ;

5. The superintendent of insurance may refuse to issue or re-
new any certificate provided for by this section, if, in his judg-
ment, such refusal will best promote the interest of the people of
the state. No individual whose certificate of authority granted
under this section is revoked, nor any copartnership of which he
§ 67. GrenrraL Provisions. 95

is a member, nor any corporation of which he is an officer or
director, shall be entitled to any certificate of authority under
this section for a period of five years after such revocation; and
if any such certificate held by a copartnership or corporation is so
revoked, no member of such copartnership or officer or director
of such corporation shall be entitled to any such certificate for
the same period of time.

6. No printed matter shall be used in connection with the sale
of securities of any such promoting, holding or insurance cor-
poration, for advertising purposes, or in the dissemination of in-
formation with reference thereto, unless such printed matter
shall first be submitted to the superintendent of insurance and
approved by him in writing. No such corporation and no offi-
cer, director or agent thereof, or any other person, copartnership,
association or corporation shall -issue, circulate or employ or
cause or permit to be used, issued, circulated or employed any
circular or statement, whether printed or oral, of any sort, mis-
representing or exaggerating the earnings of insurance corpora-
tions or the value of their corporate stock, or other securities or
the profits to be derived either directly or indirectly from the
ofitamizdtion! and management of insurance corporations or of
organizing or holding corporations as defined in this section.
No insurance or other corporation, and no individual, copartner-
ship or association, transacting business in this state shall place
or offer to place insurance in any corporation in connection with
the sale or purchase of the securities of any insurance corpora-
tion or of any promoting or holding corporation as defined in
this section.

Added by L. 1913, chap. 52.

Note.—The purpose of the addition of this section by chapter 52 of 1913
was to bring all promotions of insurance corporations under the immediate
supervision of the Insurance Department. Id.

§ 67. Approval of premium rates.

Every insurance corporation or association, except the state
insurance fund as administered by the state workmen’s compen-
sation commission, authorized to transact business in this state,
which insures employers against liability for compensation under
the workmen’s compensation law, shall file with the superintend-
ent of insurance its classification of risks and premiums relating
96 Tur Insurance Law. § 67.

thereto, and any subsequent proposed classification of risks and
premiums, together with basis rates and schedules, if a system of
schedule rating be in use, none of which shall take effect until the
superintendent of insurance shall have approved the same as ade-
quate for the risks to which they respectively apply. The super-
intendent of insurance may withdraw his approval of any premium
rate or schedule made by any insurance corporation or association
if, in his judgment, such premium rate or schedule is inadequate
to provide the necessary reserves.
Added by L. 1914, chap. 16. In effect March 4, 1914.
Lirz, Heautu, Casuatty Corporations. 97

ARTICLE IL

Lirz, Hearty anp Casvarry Insurance Corporations.

SECTION 70.
71,
72.
73.
74,

75.
76.
77.
78.
79.

80.
81.
82.
83.
84.

85

87.
88.
89.
90.
91.

Incorporation.

Completion of organization.

Withdrawal of securities upon relinquishment of business.
Special deposits to secure registered policies and annuity bonds.

Annual report of corporation of registered policies and annuity
bonds.

Registration of policies and annuity bonds.

When depositing corporations to be deemed insolvent.
Proceedings by receiver.

Additional duties of receiver.

Annual investigation of affairs of such corporations; disposition
of surplus.

Existing corporations.

Powers of receiver.

When receiver shall not be appointed or new policies issued.
Distribution of surplus to policy holders.

Valuation of policies.

. When actual premium is less than net premium.
86.

Assets and liabilities of life and casualty insurance corporations;
method of computation; procedure in case of impairment;
reserve.

Contingency reserve.

Surrender value of lapsed or forfeited policies.
Discriminations prohibited.

Discriminations against colored persons prohibited.
Certificate of authority of agents.

9l-a. Agents for health or accident insurance.

92:
93.
94,
95.

96.

: 97.
98.

1 99.
100.

101.

No forfeiture of policy without notice.

Valuation of policies of health insurance.

Election of directors.

Conversion of a stock life insurance corporation into a mutual
life insurance corporation.

Limitation of new business.

Limitation of expenses.

Salaries of officers and agents; when fixed by board of directors,

Vouchers.

Investments.

Standard forms of policies.
98 Tue Insurance Law. § 70,

SEcTIoN 102. Companies issuing participating policies not to do a non-partici-
pating business. 3
103. Annual reports of life insurance corporations.
104. Transfer of deposits by superintendent of insurance to receiver,
105. Powers of certain existing corporations increased.
106. Boards of directors to be divided into classes.
107. Standard provisions for accident and health policies.
108. Discriminations under accident or health policies prohibited.
Szcrron 70. Incorporation.
Thirteen or more persons may become a corporation for the
purpose of making any of the following kinds of insurance:
1. Upon the lives or the health of persons and every insur-
ance appertaining thereto, and to grant, purchase or dispose of
annuities.

2. Against injury, disablement or death resulting from travel- |
ing or general accident, and against disablement resulting from
sickness, and every insurance appertaining thereto.

3. Insuring any one (a) against loss or damage resulting from |
accident to or injury suffered by an employee or other person, and
for which the person insured is liable, and, (b) against loss or
damage to property caused by horses or by any vehicle drawn by
animal power, and for which loss or damage the person insured is
liable. :

4, Guaranteeing the fidelity of persons holding places of public
or private trust. Guaranteeing the performance of contracts other
than insurance policies; guaranteeing the performance of insur
ance contracts where surety bonds are accepted by states or munici-
palities; and executing or guaranteeing bonds and undertakings
required or permitted in all actions or proceedings or by law
allowed.

4-a. Guaranteeing and indemnifying merchants, traders and
those engaged in business and giving credit from loss and damage
by reason of giving and extending credit to their customers and
those dealing with them; and corporations authorized to do such
last named business in this subdivision mentioned shall have all
the powers conferred by section one hundred and seventy-eight
of this chapter.

5. Against loss by burglary, theft or forgery or any one or
more of such hazards,
§ 70. Lirz, Heauttu, Casuatty Corporations. 99

6. Upon glass against breakage.

7. Upon steam boilers and pipes, fly-wheels, engines and machin-
ery connected therewith or operated thereby, against explosion and
accident and against loss or damage to life or property resulting
therefrom, and against loss of use and occupancy caused thereby,
and to make inspection of and to issue certificates of inspection
upon such boilers, pipes, fly-wheels, engines and machinery.

8. Upon the lives of horses, cattle and other live stock or
against loss by the theft of any of such property or both.

9. Against loss or damage to automobiles (except loss or damage
by fire, or while being transported in any conveyance by land or
water), including loss by legal liability for damage to property
resulting from the maintenance and use of automobiles.

10. Against loss or damage by water to any goods or premises,
arising from the breakage or leakage of sprinklers, pumps or
other apparatus erected for extinguishing fires, and of water pipes,
and against accidental injury to such sprinklers, pumps or other
apparatus, and against damage from loss of use or occupancy of
premises by reason of such breakage or leakage.

11. Against loss or damage to elevators or other property, ex-
cepting loss or damage by fire, caused by the maintenance, opera-
tion or use of elevators, and including loss by legal liability for
damage to property resulting from such operation, maintenance
or use of elevators; by making and filing in the office of the super-
intendent of insurance a certificate signed by each of them, stating
their intention to form a corporation for the purpose or purposes
named in some one of the foregoing subdivisions specifying the
subdivisions; and setting forth a copy of the charter which they
propose to adopt, which shall state the name of the proposed cor-
poration, the place where it is to be located, the kind of insurance
to be undertaken, and under which of the foregoing subdivisions
it is authorized, the mode and manner in which its corporate
powers are to be exercised, the manner of electing its directors and
officers, a majority of whom shall be citizens and residents of this
state, the time of such elections, the manner of filling vacancies,
the amount of its capital, if any, and such other particulars as
may be necessary to explain and make manifest the objects and

purposes of the corporation.
100 Tur Insurance Law. § 70.

‘

Such certificate shall be proved or acknowledged and recorded -
in a book to be kept for that purpose, and a certified copy thereof
delivered to the persons executing the same. A mutual company,
without capital stock, may be organized for the purposes either
separately or taken together, specified in the first and second sub
divisions of this section. Except as above provided, no such
corporation shall be formed under this article for the purpose
of undertaking any other kind of insurance than that specified
in some one of the foregoing subdivisions, or more kinds of insur-
ance than are specified in a single subdivision; but a corpo-
ration other than a mutual corporation may be formed for all
the purposes combined, or any two or more of them, specified in
the first and second subdivision and clause (a) of the third sub-
division, or for all the purposes combined, or any two or more of
them specified in the second, third, fourth, fifth, sixth, seventh,
eighth, ninth, tenth and eleventh subdivisions; provided, however,
that policies under subdivision nine shall be issued only by com-
panies authorized to issue policies under subdivisions two, three or
five. No corporation or association shall transact, in connection
with any other kind of insurance mentioned in the foregoing sub-
divisions, the business of guaranteeing and indemnifying mer-
chants, traders and those engaged in business and _ giv-
ing credit from loss and damage by reason of giving
and extending credit to. their customers and those deal-
ing with them, except such corporation or association as
was authorized to transact such business before June first, nine-
teen hundred and five; but such corporation or association may
continue to transact such business with all the powers and privi-
leges theretofore possessed or enjoyed by it. No one policy issued
by any one corporation shall embrace more kinds of insurance than
are specified in one of such subdivisions, except that a policy may
embrace risks specified in subdivisions one and two, and in sub
division two and clause (a) of subdivision three, and also that
companies electing to issue policies under subdivision nine may
embrace in one policy risks under subdivision two, clause (a) of
subdivision three, and subdivisions five and nine, or either of
them, and also that companies electing to issue policies on resi-
§ 70. Lirr, Heautu, Casuattry CorpoRations,, 101

dences and private apartments may embrace in‘eie policy risks
under subdivisions three, five, six, seven, ten and eleven of this
section, or any or either of them.

Source.— Former § 70, as amended by L. 1895, chap. 917; L. 1899, chap. 693;
L. 1901, chap. 634; L. 1905, chap. 573; L. 1906, chap. 326; L. 1907, chap. 206;
originally revised from L. 1853, chap. 463, § 1, as amended by L. 1889, chap.
338, and §§ 2, 8, as amended by L. 1879, chap. 485; L. 1869, chap. 634.

Amended by L. 1909, chap. 302; L. 1910, chap. 637; L. 1911, chap. 324; L.

1912, chaps. 231 and 232; L. 1913, chap. 304, and L. 1914, chap. 204. In
effect April 7, 1914.

Note—The purpose of the amendment of this section by chapter 304 of
1913 was to clarify the language in relation to surety bonds; subdividing the
previous provision relating to credit bonds by making it a new subdivision—
4-a; in subdivision 5 to give additional power of insuring against forgery
and in subdivision 8 to correct error of last year’s legislation in relation to
livestock companies.

Notr.— The purpose of the amendment of this section by chapter 204 of
1914, was to provide for the incorporation of companies to insure against loss
or damage to elevators or other property, excepting loss or damage by fire,
caused by the maintenance, operation or use of elevators, and to include loss
by legal liability for damage to property resulting from such operation; and
against damage from loss of use or occupancy of premises by reason of the
breakage or leakage of sprinklers, pumps or water pipes; and to provide
that companies electing to issue policies on residences and private apart-
ments may embrace in one policy risks under subdivisions three, five, six,
seven, ten and eleven of section seventy, or any or either of them.

Note, Subd. 8 of this section was amended by chap. 231 of 1912 by adding
the words “or against loss by the theft of any such property, or both.” The
section was amended by chap. 232 of 1912 which amended the last paragraph
by adding “in subdivisions one and two, and” but which left subd. 8 as it
was before passage of chap. 231 of 1912. The amendment of 1913 clarifies
this situation brought about as above.—Ed.

See § 10, ante. Number of directors. ;

See § 71, post. Deposit must be made with superintendent of insurance
before any business is done.

See § 4, General Corporation Law, chap. 28 of 1909. Qualifications of
incorporators.

See chap. 733 of 1900. Reincorporation of foreign moneyed corporations in
this state.

NATURE OF LIFE INSURANCE.— Life insurance is not regarded as a
contract of indemnity merely; policies are governed by the same principles
applicable to other agreements involving pecuniary obligations. St. John v.
Am. Mut. L. Ins. Co., 13 N. Y¥., 39.

The relations between a life insurance company and its policyholders are
those of contractors, the contract being the policy, by which the liabilities of
the company are to be determined. Hencken v. United States Life Ins. Co.,
11 Daly, 289; aff'd 98 N. Y., 627.
102. Tur Insurance Law. § 70.

No trust is created between the stockholders and the insurance company or
its directors. Bewley v. Equitable Life Assur. Soc., 61 How. Pr., 344.

The business of physicians’ liability insurance is authorized by the laws of
this state, provided that no insurance can be written against liability for
criminal acts. Attorney-General Rep., 1906, page 552.

There is nothing in sec. 70, subd. 10, which prevents the selection of a per-
son as trustee of the Mutual Life Ins. Co. who is not a policyholder of the
company. Matter of Mutual Life Ins. Co., 73 Mise., 536.

CONSTRUCTION OF POLICY.— An insurance policy is to be construed like
other contracts with the view to arrive at the intent of the parties; the rule
that an insurance policy shall be construed most strongly against the insurer,
can be resorted to only when, after using such helps as are proper to arrive
at the intent of the parties, some of the language used, or some phrase
inserted in the policy, is of doubtful import, in which case the rule should be
applied because the insurer wrote the policy. Foot v. Aetna Life Ins. Co.,
61 N. Y., 575.

NAME.— A life insurance company is not prohibited from adopting a name
formerly used by a fire insurance company. Commercial Union Assur. Co. v.
Smith, 2 N. Y. Supp., 296; 18 St. Rep., 151.

CHARTER.— The charter of a proposed insurance company should state
specifically the casualty against which insurance is contemplated, else the
superintendent of insurance is justified in refusing his certificate thereto.
Attorney-General Rep., 1894, page 357.

A certificate of incorporation must set forth the time when the directors and
officers of a company are to be elected; a statement in the charter of such pro-
posed corporation that the annual meeting of the stockholders shall be held
on a date in January to be fixed by the by-laws is not sufficient. Attorney- i
General Rep., May 26, 1911.

UNAUTHORIZED CORPORATIONS.— Nothing can lawfully become the’
subject of casualty insurance unless specified in one of the subdivisions of
section 70 of the Insurance Law. Attorney-General Rep., 1893, page 89.

Insurance against loss from imperfect sanitary conditions is not within tbe
purview of the Insurance Law. Attorney-General Rep., 1893, page 335.

A corporation, organized for the purpose of guaranteeing payment of losses
under insurance policies, cannot do business under the Insurance Law. It
seems that such corporations are prohibited from operating under the Business
Corporation Law. Attorney-General Rep., 1894, page 65.

Corporations to indemnify physicians and surgeons against liability for
damages for malpractice, not authorized by subdivision 8 of section 70.
Attorney-General Rep., 1904, page 436.

A corporation should not be invested with the power of doing both savings,
loan and insurance business. In re United Security Life Insurance and Trust .
Company, Attorney-General Rep., 1896, page 153.

An insurance company and a savings and loan company cannot issue a joint
certificate to a proposed policyholder. Attorney-General Rep., 1898, page 259.

A company organized to provide medical attendance, in case of sickness to
one for w premium paid, and to furnish a coffin in case of death, cannot do
business under the provisions of the Business Corporation Law, but may under
§ 70. Lirz, Heautu, Casvarry CorporaTions. 103

the Insurance Law. In re U. & M. Supply Co., Attorney-General Rep., 1896,
page 217.

An insurance company cannot be incorporated to carry on the business
specified in subdivision 4 of section 70 of the Insurance Law, in addition to
the business specified in article VIIL. Attorney-General Rep., 1897, page 230.

SURETY COMPANIES.— Surety companies have a legal right to insure
the payment of deposits in banks. Attorney-General Rep., 1893, page 266.

A corporation organized under section 70, subdivision 4, may insure entire
risks of a foreign surety company. Attorney-General Rep., 1896, page 145.

FOREIGN COMPANY.— An insurance company of a sister state doing
ousiness here under a special statute applicable thereto has no greater rights
than those conferred by the statute in question. Attorney-General Rep., 1892,
page 392.

A foreign casualty insurance company may be authorized to transact four
kinds of casualty insurance business in this state on deposit of $250,000,
although its charter authorizes it to do all kinds of casualty insurance.
Attorney-General Rep., 1893, page 249.

DEPOSIT.— An insurance company, organized under the laws of another
state of the United States, for the transaction of business specified in section
70 of the Insurance Law, must make the same deposit of securities that is
required from a domestic company. Attorney-General Rep., 1897, page 169.

A foreign company must deposit in home state $100,000 for each kind of
insurance which it is organized to transact under § 70, or $250,000 if for
three or more kinds. In re General I. Co., Attorney-General Rep., Jan. 8, 1906.

The superintendent of insurance may return to the depositors the securities
which were deposited as a condition precedent to insurance business where
the corporation determined not to start in business and there were no liabilities
against said corporation. In re People’s Life Insurance Company, Attorney-
General Rep., 1896, page 133.

REINSURANCE.— An insurance company is not entitled to a deduction on
account of reinsurance made by it in Lioyds which is not amenable and has
not paid the tax provided for by section 34. In re Standard Marine Insurance
Company, Attorney-General Rep., 1896, page 151.

DECLARATION.— in a declaration presented to the superintendent of
insurance by persons applying for incorporation as a casualty insurance
company, the business proposed to be carried on was stated, among other
things, to be “the inspection and certification as to the sanitary conditions
of buildings and premises.” In pursuance of the requirements of the
Insurance Law, under section 70, the superintendent submitted the declaration
‘and charter to the attorney-gereral for certification. That officer refused to
certify. In proceedings by mandamus to compel the certification, held, that
the business so stated in the declaration was not insurance in any legal
sense, but an entirely different kind of business not within the purview of
the Insurance Law, and so the declaration was not entitled to be filed in the
office of the superintendent, and the attorney-general properly refused to
attach his certificate of approval thereto. People ex rel. Woodward v. Rosen-
dale, 142 N. Y., 126; aff’g 76 Hun, 103.

BONDS.—A domestic insurance corporation organized under subdivision 4
of section 70 of the Insurance Law, can issue bonds and undertakings for bail
in proceedings of a criminal nature. Attorney-General Rep., 1901, page 257.
104: Tue Insurance Law. § 71.

QUORUM.—A quorum of directors must be a majority of all the directors
unless otherwise provided in charter or other law; by-laws cannot change
this rule. Boards of directors of insurance companies are subject to the pro-
visions of section 34 of the General Corporation Law. Matter of New Amster-
dam Casualty Company, Attorney-General Rep., 1900, page 253.

GLASS BREAKAGE.— A company may not extend its liability upon glass
against breakage under subdivision 6 to include property injured by such
breakage. Attorney-General Rep., Oct. 15, 1903.

Subdivision 8 does not extend the purposes of the section except as speci-
fied otherwise in the other subdivisions of this section. U. S. Baggage &
Freight Ins. Co.; Attorney-General Rep., May 16, 1905.

Under this section there is no power to insure repairs of injuries to vehicles,
and the purchase and sale of same. Vehicle Repair Co., Attorney-General
Rep., March 26, 1896.

INSURING PROPERTY OF ANOTHER.— Insurance companies cannot in-
sure a person against loss or damage resulting from accident to the property
as well as to the person of another for which the person insured is liable.
Attorney-General’s Rep., July 9, 1909.

BENEFICIARY.— The beneficiary under a policy issued by a casualty com-
pany, doing business under article 2 of the Insurance Law, and which contains
no provision permitting the insured to change the beneficiary named, has a
vested interest in the policy and not a mere expectancy or inchoate right.
Dunn v. Amsterdam Casualty Co., 67 Misc., 109.

CONTINUOUS POLICY.—In a “continuous policy” of accident insurance
a clause providing against the payment of benefits “for illness or death
occurring before the policy has been in force two months” applies only to the
first two months following the issuance of the policy. Turner v. New York
Safety Reserve Fund, 158 App. Div., 835.

§ 71. Completion of organization.

Upon receipt of the certified copy of the certificate of incor-
poration from the superintendent, the persons signing such certifi-
cate shall publish notice of their intention to form such corporation
in a paper designated by the superintendent for six successive
weeks, upon expiration of which time they may open books to
receive subscriptions if a stock corporation, to the capital stock,
or if a mutual corporation, for life insurance, and keep them
open until the whole of such stock or the minimum amount of
life insurance has been subscribed for and collect such subserip-
tions to the capital stock or the annual premiums payable upon
such insurance; and may invest such capital or moneys in the
manner prescribed in this chapter.-

No such corporation shall transact any business of insurance
until, if a stock corporation, the capital has been fully paid in
in cash, or, if a mutual corporation, at least five hundred persons
§ 71. Lirz, Heanrx, Casvatty Corporations. 105

have subscribed in the aggregate for at least one million dollars
of insurance upon their lives and shall each have paid in one full
annual premium in cash upon the insurance subscribed for, nor
in either case until it shall have deposited with the superintendent
of insurance one hundred thousand dollars in the securities
required by law. If organized for purposes mentioned in two or
more of the subdivisions of section seventy, it shall deposit with
the superintendent the same amount in securities in the aggregate
not exceeding two hundred and fifty thousand dollars, as if
corporations had been separately formed for such purposes.

The securities deposited pursuant to this section shall be held
by the superintendent in trust for the benefit. and protection of
and as security for the policy holders of the corporation.

A mutual corporation may borrow or assume liability ror the
repayment of a sum of money sufficient to defray the reasonable
expenses of its organization and to provide the amount to be
deposited with the superintendent as aforesaid upon an agreement
that the same with interest at a rate not exceeding eight per
centum per annum shall be repaid only in the event that after
such repayment with interest the corporation shall be left possessed
of sufficient assets to meet all its liabilities and to maintain a full
legal reserve against its policies and not until said reserve shall
be equal to at least one hundred thousand dollars; and such agree-
ment shall provide that the corporation shall have the option to
make such repayment whenever it shall be able to do so in
accordance with the aforesaid conditions.

Source.—Former § 71, as amended by L. 1906, chap. 326; originally revised
from L. 1851, chap. 95, § 1; L. 1853, chap. 463, § 5, and § 6, as amended by L.
1881, chap. 560; L. 1865, chap. 328, § 2; L. 1877, chap. 439, § 1, as amended by
L. 1881, chap. 628.

See § 13, ante. Deposit of securities.

See § 16, ante. Investment of capital and surplus.

See § 17, ante. Securities must be interest or dividend paying.

See § 18, ante. Stocks in other corporations.

See § 26, ante. Deposits by insurance corporations of other states.

See § 50 et seq., ante. Stock Corporation Law, chap. 61 of 1909, as to issue
and transfer of stock.

An insurance company of a sister state, doing business here under a specias
statute applicable thereto, has no greater rights than those conferred by the
statute in question. Attorney-General Rep., 1892, page 392.

DEPOSIT.— The securities deposited by a foreign insurance company with
the insurance department are to be held for the benefit of those policyholders
insured in the same class or classes of insurance which the company is author-
ized to write in this state. Attorney-General Rep., 1892, page 389.
106 Tue Insurance Law. § 72.

A foreign company must deposit in home state $100,000 for each kind of
insurance which it is organized to transact under § 70, or $250,000 if for
three or more kinds. In re General I. Co., Attorney-General Rep., Jan. 8, 1906.

The superintendent may take on deposit United States bonds at a valuation
not to exceed their current market value. Attorney-General Rep., 1892, page
289. ’

Section 71 only requires that the superintendent of insurance shall compel
life insurance companies to keep on deposit with him securities to the value
of $100,000. Raymond v. Sec. Trust & Life Ins. Co., 111 App. Div., 191.

A foreign life insurance company may be admitted to do business in this
state on making the deposit of $200,000 required by section 27 of the Insurance
Law, although the entire capital stock of such company is not paid up.
Attorney-General Rep., 1893, page 280.

Only securities to the extent of the amount specified in the statute are to
be held by the superintendent of insurance in trust for the benefit of policy-
holders. Attorney-General’s Rep., July 1, 1909.

AMENDMENTS TO CHARTER.— Amendments to charter of an insurance
company, which do not enlarge its franchises, do not render necessary a repub-
lication of the notice of intention to organize.

An insurance company whose charter and declaration were filed and
approved, but which was not organized under the former law, may be organ-
ized under the present Insurance Law without republication of notice. Attor-
ney-General Rep., 1892, page 394.

REDUCTION OF STOCK.— Capital stock may be reduced without payment
of the full amount of stock named in original certificate, and the filing of said
certificate of reduction of stock and the endorsement thereon of the superin-
tendent of insurance operates as an amendment to the original certificate.
Attorney-General Rep., 1903, page 249.

All deposits made by a surety company with the Superintendent: of Insur-
ance constitute a single fund, which is impressed with the trust for the benefit
of all the policyholders of the depositing corporation. The words “as if cor-
porations had been separately formed for such purposes,” as used in § 71, do
not change this proposition, as such words are used merely to determine the

aggregate amount of the deposit required. Attorney-General Opinion, August
14, 1908.

§ 72. Withdrawal of securities upon relinquishment of
business.

When any such corporation shall desire to relinquish its busi-
ness, the superintendent shall, on the application of such corpora
tion under the oath of its president or principal officer and secretary
or actuary give notice of such intention in a paper at Albany in
which notices by state officers are required by law to be published
at least twice a week for six months. After such publication, he
shall deliver up to such corporation the securities held by him
§ 72. Lirz, Hearty, Casuatty CorPoRATIONs. 107

belonging to it, upon being satisfied by an exhibition of the books
and papers of such corporation and on examination made by him-
self or by some competent person to be appointed examiner by
him, and upon the oath of the president or principal officer and
the secretary or actuary of such corporation that all its debts and’
liabilities of every kind are paid and extinguished that are due
or may become due, upon any contract or agreement made within
the United States.

The superintendent may also, from time to time, deliver up to
such corporation, or its assignees, any portion of such securities
on being satisfied, in the manner and form hereinbefore required,
or upon any other competent proof, that all the debts and liabili-
ties of every kind that are due, or may become due, within the
United States are less than the amount of the portion of such
securities he shall still retain.

Any foreign life insurance corporation desiring to discontinue
business in this country and having made the publication hereinbe-
fore required, may, in the discretion of the superintendent of insur-
ance withdraw one-half of its deposits on registering, according
to the provisions of law for the registry of policies, all its out-
standing policies issued to citizens or residents of the United
States, and covenanting to maintain unimpaired the reinsurance
deposit for such registered policies for all future time, and spe
cially pledging for their security all future premiums payable on
American policies. a

Source.—Former § 72; originally revised from L. 1851, chap. 95, § 8; L. 1853,
chap. 463, § 19, as amended by ‘L. 1869, chap. 829.

EXCESS DEPOSITS.—Excess deposits should not be withdrawn “until all
the conditions of the trust have been complied with.” Attorney-General
Rep., 1903, page 476.

Excess deposits, form of delivery of, to surety companies by superintendent
of insurance. Attorney-General Rep., 1903, page 489.

RETURN OF SECURITIES.— The superintendent of insurance may return
to the depositors the securities which were deposited as a condition precedent
to insurance business where the corporation determined not to start in busi-
ness and there were no liabilities against said corporation. In re People’s Life
Insurance Company, Attorney-General Rep., 1896, page 133.

In the matter of returning to the depositors the securities which were
deposited with the superintendent of insurance as condition precedent to
insurance business. Attorney-General Rep., 1896, page 133.
108 Tue Insurance Law. § 73.

Superintendent of insurance should not surrender the securities on deposit
in insurance department for the benefit of policyholders in the United States.
fn re Baloise Fire Ins. Co., Attorney-General Rep., 1903, page 424.

{msurance companies retiring from business may withdraw from deposit
with the superintendent of insurance all securities in exceess of an amount
sufficient to secure policyholders in the United States. Such deposits aré
held in trust for all such policyholders. Attorney-General Rep., 1893, page 216.

The provisions of § 72, relating to the withdrawal of securities deposited,
apply only to such corporations as shall desire to relinquish all business in
this state. The Superintendent of Insurance holds the securities as trustee
for the policyholders and he should not surrender ary part of such deposit
except by express direction either of the legislature or the court. Attorney-
General’s Opinion, August 14, 1908.

§ 73. Special deposits to secure registered policies and
annuity bonds.

Any domestic life insurance corporation may deposit with the
superintendent of insurance securities of the kinds and in addition
to the amount now required and authorized by law to be deposited
with him, to any amount not less than twenty-five thousand dollars,
which shall be legally transferred by it to the superintendent for
the common benefit of all the holders of its registered policies and
annuity bonds issued under the provisions of this article, and he
shall hold the same in trust for the purposes and objects specified
in this article; provided that no policies shall be registered or
annuity bonds issued under the provisions of this section after the
thirty-first day of December, nineteen hundred and ten.

Such securities shall not be alienated from the purposes of such
trust, nor transferred except in the manner provided in this article,
and such transfer must be made by the superintendent under his
seal of office upon the written application, under its corporate seal,
of the corporation making the deposit, or of the receiver of such
corporation, and in compliance with the laws of the state relating
to such transfers. When such securities shall have been legally
transferred to the superintendent, he shall issue to such corpora-
tion registered policies of insurance or annuity bonds of such
denominations or amounts as the corporation may require. Such
policies or bonds shall bear upon the face thereof the words “ the
reserve on this policy (or bond) is secured by pledge of public
stock or bonds and securities” with the seal of the department,
§ 74. Lire, Heattru, Casvatty Corporations. 109

and shall be countersigned by the superintendent or his authorized
deputy.

The corporation shall be charged by the superintendent upon
the delivery of such policies or bonds with the amounts of the net
value thereof at the end of the policy year, valued according to
the provisions of section eighty-four of this chapter, making proper
allowances for semi-annual, quarterly or monthly premiums, but
in no case shall the amount of securities deposited under the
provisions of this section be less than the amount of such aggregate
values.

Source.—Former § 73, as amended by L. 1906, chap. 326; originally revised
from L. 1869, chap. 902, §§ 2-4.

Amended by L. 1910, chap. 697.

See § 13 et seq., ante. Deposit of securities.

CONSTITUTIONAL.— An act authorizing deposit with superintendent is not
unconstitutional under article 8, section 1, New York State Constitution.
Attorney-General v. North Amer. L. Ins. Co., 82 N. Y., 172.

COMMISSIONS.— The proceeds of the securities deposited with the super-
intendent are assets in the hands of the receiver, and he is entitled to com-
missions thereon. Attorney-General v. North Am. Life Ins. Co., 89 N. Y., 94.

RECEIVER.— Under the provisions of chapter 902 of 1869, relative to
deposits with the superintendent of insurance, it was held that it was the duty
of the superintendent, where a receiver of such a company has been appointed,
to convert the securities deposited with him into cash and pay over to the
receiver the proceeds, to be applied by such receiver in payment of registered
policies and annuities. Attorney-General v. North Am. Life Ins. Co., 85 N. Y.,
485.

§ 74. Annual report of corporation of registered policies and
annuity bonds.

Every such corporation shall annually on July first or within
sixty days thereafter report to the superintendent of insurance
under the oath of the president and actuary the exact condition
of the registered policies received from the superintendent and
of the premium account of such policies, and shall deposit with
the superintendent additional securities of the kind in which the
minimum amount of cash capital of domestic insurance corpora-
tions is required to be invested by the provisions of section sixteen
of article one of this chapter, to an amount equal to any increase
in value of the policies heretofore issued and which shall remain in
force, valued by the same rule as upon the issue thereof. No
110 Tue Insurance Law. § 74,

one bond or mortgage so deposited shall be for a less sum than five
thousand dollars. The securities thus from time to time depos-
ited, or so large an amount thereof as may be necessary to equal
at all times, the net value of all the outstanding registered policies
and annuity bonds of such corporatioh, shall be held by the super-
intendent in trust, as provided in the preceding section, until the
obligations of such corporation under such registered policies and
annuity bonds, shall, to the satisfaction of the superintendent, be
fully liquidated, canceled and annulled.

The state shall not be deemed to have incurred any obligation
to pay the policies and annuity bonds so issued, beyond the proper
application of the securities so deposited towards their liquidation,
as in this article provided.

The treasurer of the state, and any person duly authorized by
the depositing or reinsuring corporation, shall, at all times, in the
usual office hours, have access to the books and other documents
in the insurance department relating to the deposits made, and
policies and annuity bonds issued, under the provisions of this
article, and to such securities as may be necessary for the
examination thereof.

The treasurer shall for the services required by this chapter
receive an annual salary of two hundred and fifty dollars to be
paid by the corporations availing themselves of the provisions of
this and the preceding section.

Any such depositing corporation may at any time withdraw any
excess of securities above the net present value hereinbefore speci-
fied, upon satisfying the superintendent by written proof to be filed
in the department 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 kind in which the
minimum amount of cash capital of domestic insurance corpora-
tions is required to be invested by the provisions of section sixteen
of article one of this chapter.

Source.—Former § 74; originally revised from L. 1869, chap. 902, §§ 4-5.

Amended by L. 1911, chap. 325.

See § 297, Penal Law. Misconduct of officers as to report,

See § 665, Penal Law. Misconduct of officers and employees as to written
statement or report.
§§ 75, 76. Lire, Hearts, Casvatty Corporations. 1d

§ 75. Registration of policies and annuity bonds.

Such corporation shall deliver to the superintendent of insurance
the policy and annuity bonds engraved and printed or printed and
written in such manner as the superintendent shall direct, with
duplicate originals of the same duly signed. On their receipt by
the superintendent he shall cause them to be duly registered in
proper books kept for that purpose, in consecutive numbers, corre-
sponding to the numbers on such policies and bonds, and shall
cause his name or the name of his deputy to be inscribed on the
policies and bonds and affix the seal of the department to the same,
and shall return the original policies to the depositing corporation.
The expenses necessarily incurred in registering, countersigning
and sealing such policies and annuity bonds, and in otherwise
executing the provisions of this article, including the salary of the
treasurer, shall be audited and paid out of any moneys in the
treasury not otherwise appropriated. For the purpose of reim-
bursing the same the superintendent shall charge against the depos-
iting corporations respectively an amount sufficient for such pur-
poses as may be just and reasonable. The superintendent shall
receive mutilated policies and annuity bonds issued to any such
corporation and deliver in lieu thereof other policies and bonds
of like tenor and date, and, in case of lost policies or bonds, furnish
certified copies of the duplicates on file in his office.

Source.—Former § 75; originally revised from L. 1869, chap. 902, § 6.

§ 76. When depositing corporation to be deemed insolvent.

If at any time the affairs of any such depositing corporation
shall, in the opinion of the superintendent of insurance, appear
to be in such a condition as to render the issuing of additional
policies and annuity bonds by the corporation injurious to the
public interests, such corporation shall be deemed insolvent and
the superintendent shall report the fact to the attorney-general,
who shall bring such action or institute such proceedings as may
be authorized by law to be taken against an insolvent insurance
corporation. If in any such action or proceeding it shall appear
to the satisfaction of the court that the assets and funds of the
corporation are not sufficient to justify its further continuance of
112 Tus Insurance Law. § 76.

the business of insuring lives, granting annuities and incurring
new obligations as authorized by its charter, it shall enjoin and
restrain the corporation from the further transaction of its business
and appoint a receiver of its assets and credits, who, upon filing
his bond to the people of the state in an amount and with sureties
approved by the court, conditioned for the faithful performance
of his duties, shall take possession of all such assets and credits,
including the securities deposited in the insurance department.

Source.—Former § 76; originally revised from L. 1869, chap. 902, § 7.

See § 297, Penal Law. When insolvency of a monied corporation is deemed
fraudulent.

RECEIVER.— Where the company has been declared to be insolvent and
its affairs put into the hands of a receiver, judicial action thereafter must
follow the statute; where the actuary’s report shows that the company is not
able to go on with its business, the assets must be turned into money,
liabilities paid, and the corporate affairs closed up; the Supreme Court cannot
order the receiver to call for premiums and keep up the business of the
company, nor can it discharge the receiver and give back the property to the
corporation. Attorney-General v. At. Mut. Ins. Co., 77 N. Y., 336.

SUFFICIENT CAUSE.— Where it appeared by the proofs that the assets
of the company were less than the amount of the values of the outstanding
policies by about one-tenth of that amount; that the capital stock was
entirely sunk; that the assets were of a kind not readily convertible or avail-
able; that a large share of the assets had been kept as a cash deposit with a
private banker, who was an officer of the company, without any agreement
as to interest and without security as to loss; that the trustees were not in
the practice of holding regular meetings, or of supervising the affairs of the
company; that the dividends were paid without a regular meeting or a vote
of the board of trustees, when there had been losses and a depreciation in the
value of the assets, and when it was impossible to know whether or not the
eapital had been impaired, held that there was sufficient cause for interference.
People v. Atlantic Mut. Ins. Co., 74 N. Y., 177; aff’g 53 How. Pr. 300.

The Supreme Court has no power to review the preliminary action of the
superintendent in making his report; if an error has been committed or mis-
take made by the superintendent, the hearing, and that alone, will remedy it;
but it must be proved to the satisfaction of the court, upon the investigation,
that there is danger to the public interests by the continuance of the business
of the company, before it would be warranted in making the final order,

arresting future operations and appointing a receiver. Attorney-General v.
At. Mut. Ins. Co., 53 How. Pr., 227.

TITLE OF RECEIVER.— Assets means all the property, real and personal,
of the company, and the receiver, upon his appointment, becomes vested with
the title to all the property of the company, including its real estate, and no

formal conveyance to him thereof is requisite. Matter of Attorney-General v.
Ins. Co., 100 N. Y., 279.
§ 76. Lire, Heattu, Casuartry CorPoraTIoNs. 113

A decree dissolving a company and appointing a receiver vests in the receiver
all the property of the company; a receiver may maintain an action to set
aside fraudulent transfers of property by the company; the Supreme Court,
having acquired jurisdiction of proceedings for winding up a corporation, and
having appointed a receiver, has jurisdiction to stay the suit of a creditor
brought to recover assets to which the creditor is entitled, in whatever court
such suit may be pending. Attorney-General v. Guard. Mut. L. Ins. Co., 77
N. Y., 272; rev’g 15 Hun, 18.

Where a receiver has been appointed of a registered policy life insurance
company, and the superintendent has sold the securities deposited with him
to secure such policies, the receiver is entitled to have the proceeds immedi-
ately paid over to him; the superintendent has no right to retain the fund
until the receiver is ready to distribute it. Matter of Attorney-General v.
North Am. Ins. Co., 80 N. Y., 152.

The provision of this section which empowers receivers to take possession
of the assets of the company, including the securities deposited in the state
insurance department, refers only to companies issuing registered policies and
annuity bonds. People v. Insurance Co., 147 N. Y., 25.

STAY OF PROCEEDINGS.— The statute does not authorize the court to
stay proceedings by creditors, pending an application to wind up the affairs of
the company. Whritner v. Universal Ins. Co., 4 Abb. N. C., 23.

OTHER ACTIONS.— The fact that the affairs of a life insurance company
are being wound up and adjusted in proceedings under the care of a receiver,
will not prevent the court from entertaining an equitable action to ascertain
and enforce the rights of policyholders in the company, either on the ground
that there is a conflict of jurisdiction nor on the ground that a multitude of
suits may be brought. Bedell v. North Am. Ins. Co., 7 Daly, 273.

PARTIES.— In proceedings by the attorney-general for the appointment of
a receiver of a life insurance company, the court has jurisdiction to permit
parties interested in the administration of the assets of the corporation to
appear and represent their own ‘interests, and to be made parties to all pro-
ceedings taken by or against the receiver by which their rights may be
affected. Attorney-General v. North Am. Life Ins. Co., 77 N. Y., 297.

EXCEPTIONS.— The receiver of an insolvent insurance company, appointed
under the insurance act of 1869, could file exceptions to the report of the
referee appointed to take proof of claims. Attorney-General v. North Am.
Ins. Co., 82 N. Y., 172.

INVESTMENT OF FUNDS.— The receiver has no authority without the
direction or consent of the court, to invest the money in his hands; in the
absence of directions it is his duty simply to keep and protect the trust fund,
and hold it ready for distribution. Attorney-General v. North Am. Ins. Co.
89 N. Y., 95.

FOREIGN COMPANY.— An insolvent life insurance company organized
under the laws of this state, may be dissolved and its affairs wound
up at the instance of a single stockholder. Masters v. Eclectic Life Ins. Co.,
6 Daly, 455.

FORFEITURE OF POLICY.— One holding a policy of life insurance does not
forfeit his policy by omitting to pay annual premiums thereon after the com-
114 Tue Insurance Law. § 77.

pany issuing the policy has ceased to do business, transferred all its assets
and become insolvent. People v. Empire Mut. Ins. Co., 92 N. Y., 105.

CONTRACTS OF COMPANY.—When a registered policy life insurance com-
pany which has entered into a contract with a general agent for his services
for a specified term at a stipulated salary, before any breach of the contract
on its part, is restrained from further prosecuting its business or exercising
its corporate franchises by order of the court, and a receiver of its assets is
appointed, the agent has no valid claim upon the fund in the hands of the
receiver for damages for alleged breach of contract, because of the discontinu-
ance of the employment; there is in such case, no breach on the part of the
company, as performance is prevented and the contract dissolved by the action
of the state. People v. Globe Mut. Life Ins. Co., 91 N. Y., 174.

SERVICES OF ATTORNEY.—An action is not maintainable against the
receiver of an insolvent life insurance company, to recover for services ren-
dered by an attorney to the corporation after the appointment of a receiver;
the company or its agents cannot, after such an appointment, subject the
funds in the receiver’s hands to any legal liability. Barnes v. Newcomb, 89
N. Y., 108.

In a suit to distribute the assets of a defunct insurance company, no allow-
ances should be granted to the counsel of the intervening creditors payable
out of the fund, whether such allowance be claimed under the Code or whether
they are claimed as reasonable counsel fees earned by the counsel of these
creditors. Attorney-General v. Continental Ins. Co., 63 How. Pr., 129.

§ 77. Proceedings by receiver.

Such receiver shall immediately, on entering upon the dutics
of his office, appoint a competent actuary, approved by the super-
intendent of insurance, who shall make a careful investigation
according to the standard fixed by the laws of this state into the
condition of the corporation, and report thereon in writing, under
oath, to the court, the superintendent and the receiver. If it shall
be found by such report that the securities deposited by such cor-
poration in the insurance department and its assets and credits,
including the future premiums that will mature on outstanding
policies and other obligations, are sufficient under the laws of the
state to pay all the policies, annuities and other obligations of
the corporation as they may mature by the terms thereof and the
legal costs and expenses incident to the business, and if, upon
due notice to the superintendent, such actuary’s report shall be
confirmed by the court, the receiver shall be discharged and all
the properties and effects of the corporation shall be immediately
returned to the same.
§ 77. Lirzr, Heattu, Casvarty Corporations. 115

If the report of the actuary shall show that such securities,
assets, credits and premiums are not sufficient under the laws of
the state to pay all the policies, annuities and other obligations
of the corporation as they may mature by the terms thereof, and
the legal costs and expenses of the receivership, and the report
shall, upon due notice to the superintendent, be confirmed by the
court, the court may direct the conversion of the securities held
by the superintendent into money for the purpose of distribution,
and the superintendent shall, thereupon, with the consent and
advice of the treasurer of the state, and in such manner as the
receiver, superintendent and treasurer, or a majority of them,
shall determine, sell and convert such securities into money. The
proceeds of such securities, when required for distribution, and
when the court shall make an order for that purpose, with suitable
provision for the safety of the moneys, shall be paid to the receiver
on his giving his receipt to the superintendent and shall be applied
by the receiver, under the direction of the court, to the payment
of the registered policyholders of the corporation dn proportion to
the net value of their policies respectively, and to the registered
annuities of the corporation, in proportion to the then present
value of their respective annuities, as estimated by the legal
standard for valuing life insurance and annuity obligations within
this state. The surplus of the proceeds of such securities, if any
there be, with all the other assets of the corporation, shall then
be applied to the payment of all the just debts of the corporation
incurred in continuing and carrying on its lawful business.

Source.—Former § 77; originally revised from L. 1869, chap. 902, § 8, as
amended by L. 1880, chap. 168.

See § 79, post. Annual investigation of affairs of company.

POWERS OF RECEIVER.— The receiver of a dissolved insolvent insurance
company primarily represents the company, as well as all persons interested in
the assets, including the policyholders, and possesses whatever rights the cor-
poration possessed and might have enforced against its trustees for mis-
feasance in office; the receiver of an insolvent corporation may enforce the
liability of its trustees or directors to make good the loss occasioned by the
company by their misapplication of assets, either by an action at law for
damages or by an action in equity for an accounting. Mason v. Henry, 152
N. Y., 529.

The right of action, if any, against the directors of a co-operative and
assessment life insurance association, arising out of their diversion and mis-
116 Tur Insurance Law. § UT.

application of its safety fund, inheres in the receiver of the association
appointed in an action for its dissolution. Gifford v. Clapp, 44 App. Div., 192.

A promissory note given upon an agreement for insurance to be consum-
mated upon the organization of a mutual insurance company may be collected
by the receiver upon the insolvency of the company. White v. Haight, 16
N. Y., 310; Hart v. Achilles, 28 Barb., 576. *

A receiver, so far as relates to his conduct, the distribution of assets, or any
of the proceedings subsequent to his appointment, is governed by the pro-
visions of the statutes in relation to corporations, and by the practice of
courts of equity. People v. Security Life Ins. Co., 78 N. Y., 114.

‘The receiver of an insolvent insurance company may, at any time, apply
to the court for instructions in regard to any matter touching the fund
placed in his custody. People v. Security L. Ins. Co., 79 N. Y., 267.

Before amendment of this section, the receiver had no authority to require
from the superintendent the securities deposited with him, and the court had
no power to compel the superintendent to transfer the trust imposed upon
him. Ruggles v. Chapman, 59 N. Y., 163; People ex rel. Ruggles v. Chapman,
64 .N. Y., 557.

ACTION, BY WHOM BROUGHT.— A stockholder or a creditor of a life
insurance company cannot bring an action for the dissolution of the company
and the distribution of its assets. Attorney-General v. Continental L. Ins.
Co., 53 How. Pr., 16.

ACTUARY’S REPORT.— Practice on motion to confirm actuary’s report.
People v. Globe Mut. L. Ins. Co., 60 How. Pr., 57.

The duties of the actuary terminate with his report, unless such duties are
continued by the court, and the compensation which is to be paid must be
fixed by the court, and is not under the control of the receiver, superintendent
of insurance or actuary. Matter of North Am. Ins. Co., 55 How. Pr., 465.

in case the actuary’s report sustains the solvency of the company, it must
be confirmed by the court before the business can be continued as the statute
directs; such confirmation is not required when the actuary’s report is adverse
to the company’s solvency. Matter of Atlantic Mut. Ins. Co., 55 How. Pr., 77.

Where the company has been declared to be insolvent and its affairs put
into the hands of a receiver, judicial action must thereafter follow the statute;
where the actuary’s report shows that the company is not able to go on with
its business, the assets must be turned into money, liabilities paid, and the
corporate affairs closed up; the Supreme Court cannot order the receiver to
call for premiums, and keep up the business of the company, nor can it dis-
charge the receiver and give back the property to the corporation. Attorney-
General v. At. Mut. Ins. Co., 77 Hun, 336.

PARTIES DEFENDANT.— Parties claiming interest in funds in hands of
2 receiver should not be made parties defendant. People v. Family Fund Soc,
31 App. Div., 627.

PREFERENCE.—A creditor of an insolvent corporation whose debt accrued
by reason of a loan to the company to pay a loss which had occurred previous
to the calamity which rendered the company insolvent, is not entitled to a
preference in payment out of the funds which the company held beyond their
i
§ 78. Lire, Hearty, Casvarty Corporations. 117

capital stock at the time of such calamity. De Peyster v. Am. Fire Ins. Co., 6
Paige, 486.

Holders for claims for death losses, and the holders of assignments of such
claims, are to be first paid by the receiver, and the balance remaining in his
hands is to be divided pro rata among all the other creditors. Kitchen v.
Conklin, 51 How. Pr., 308.

RESERVE FUND.—As to right of policyholders and claimants to share in
the reserve fund. Matter of Equitable Reserve Fund Ass’n, 131 N. Y., 354.

SALARIES OF OFFICERS.— The officers of an insolvent corporation are
not entitled to have their salaries paid in full in preference to the debts of
other creditors; they are only entitled to be paid their ratable proportion of
the assets of the company as between them and other creditors. Matter of
Croton Ins. Co., 3 Barb. Ch., 642.

UNEARNED PREMIUMS.— The unearned premiums received in advance
upon policies of insurance are not surplus profits which the directors are
authorized to distribute as dividends among the stockholders of the company,
but are the ordinary means, or primary fund, out of which the losses upon
such policies should be paid. Scott v. Eagle Fire Co., 7 Paige, 198.

PAYMENT OF PREMIUMS.—At the time of the appointment of a receiver,
certain policies were running upon which premiums had been paid to some
time subsequent to that date; the receiver gave notice that he would receive
no more premiums; the persons insured died after the time to which premiums
had been paid; the referee allowed the claims on these policies. Held, no
error; that further payments of premiums were excused by the failure of the
eompany, as well as by the express notice of the receiver; also, that the
claimants were entitled each to be allowed the present value of the policy at
the time of the dissolution of the company and the appointment of the
receiver, deducting the amount of premiums unpaid at the time of death.
Attorney-General v. Guardian Mut. L. Ins. Co., 82 N. Y., 336.

§ 78. Additional duties of receiver.

Whenever the business of any such corporation shall be continued
under the provisions of the next preceding section, if the receipts
for premiums and from all other sources shall at any time be in
excess of the sums required to meet the policy and other obligations
of the corporation, such receiver, whenever such excess shall amount
to twenty-five thousand dollars, shall invest the same in such
securities as are authorized to be deposited in the insurance depart-
ment, and shall deposit such securities with the superintendent of
insurance in the manner herein provided.

Source.—Former § 78; originally revised from L. 1869, chap, 902, § 9.

The receiver has no authority without the direction or consent of the court
to invest the money in his hands; in the absence of directions it is his duty
simply to keep and protect the trust fund, and hold it ready for distribution.
Attorney-General v. North Am. Ins. Co., 89 N. Y., 94.
118 Tue Insurance Law. § 79.

§ 79. Annual investigation of affairs of such corporation;
disposition of surplus.

An investigation shall annually be made on the first day of
January, or within thirty days thereafter, by a competent actuary
approved by the superintendent of inSurance, into the affairs of
such corporation. If, upon such investigation, it shall be found
that a surplus of its assets, not less in amount than ten thousand
dollars, exists, after making adequate provision for meeting after
maturity all the obligations of the corporation and all the legal
expenses of the receivership, and in case of a joint-stock corpora-
tion, over and above the amount of its capital, such portion of such
surplus as may, under the charter of the corporation, if a stock
corporation, belong to its stockholders, shall be set aside and
invested by the receiver in such securities as are authorized to be
deposited by life insurance corporations in the insurance depart-
ment as a contingent fund, and scrip therefor shall be issued by
the receiver to such stockholders, respectively, in proportion to
their respective shares bearing six per cent. interest, and payable
on the final settlement of the affairs of the corporation as herein
provided. The remainder of such surplus, if the corporation be
a stock corporation, and the whole of such surplus, if it be a
mutual corporation, shall be disposed of as follows: One-quarter
thereof shall be reserved by such receiver and invested by him in
such securities as a contingent fund, for which scrip shall be
issued by such receiver to all policy holders entitled under their
policies to share in the surplus of the corporation. Such scrip
shall bear interest at the rate of six per cent., payable annually,
and shall be redeemable on the maturity of the policy on account
of which the scrip was issued.

The remaining three-fourths of such surplus shall be paid by
the receiver within one year from such first day of January, to
such policy holders respectively in lawful money of the United
States. No scrip shall be issued for any fractional part of a dol-
lar, and any scrip so issued may at any time be called in and
canceled by the receiver without payment, if necessary, to better
secure the remaining obligations of the corporation, and all the
scrip so issued shall have printed thereon a clause to the following:
§ 79. Lirz, Heatru, Casvatty Corporations. 119

effect: If, on the final accounting of the receiver, after the liqui-
dation of all the obligations of the corporation as herein provided,
and in case of a joint-stock corporation the return to the respective
stockholders of their respective amounts of stock and the scrip
issued to them under this section, there shall remain a surplus in
the hands of the receiver, it shall be divided by him among the
stockholders, if in a stock corporation, proportionately to their
respective shares, as provided by the charter of the corporation,
and the balance of such surplus, if any, among the last ten policy
holders of the corporation or their legal representatives in propor-
tion to the amounts of their respective policies, and if not a stock
corporation, among the holders of the last ten policies issued by the
corporation or their legal representatives in proportion to the
amount of their respective policies.

Source.—Yormer § 79; originally revised from L. 1869, chap. 902, § 10.

See notes and annotations under §§ 76 and 77.

VALUATION OF POLICIES.— The damages for every policy of insurance
should be computed according to the facts as they existed upon the last day
of the presentation of claims to the receiver, and that in the exercise of a
sound discretion the court should not take into consideration the fact that
death had subsequently occurred in making such valuation; when the policies
have been valued and a dividend made which was ascertained and computed
upon the facts as they existed on the day when claims were required to be
presented, they should not be revalued because a death had since occurred.
Matter of Attorney-General v. Continental Ins. Co., 64 How. Pr., 73.

Claims under policies of a life insurance company which has been dissolved
for insolvency and placed in the hands of a receiver, in an action instituted
by the attorney-general, must be valued and determined, and their status
fixed as of the date of the commencement of the action for dissolution, and
are not affected by the death of the insured after that date and before the
distribution of assets. Attorney-General v. Guard. Life Ins. Co., 82 N. Y., 336.

REVALUATION.— When a claim will not be revalued on account of the
uninsurable condition of the assured at the time of the valuation. People v.
Knickerbocker Ins. Co., 38 Hun, 601.

Where, after the expiration of the time specified in the published notice for
the presentation of claims to a receiver of an insolvent life insurance corpora-
tion, certain policyholders, whose claims had been presented and allowed, died,
the court held that it had power to direct a revaluation of such policies, and
the exercise of this power was within its discretion; and that therefore an
order denying an application for such revaluation on the ground solely of lack
of power was error. Matter of Attorney-General v. Continental Ins. Co., 88
N. Y., 77.

DEATH CLAIMS.— An order was made directing a claim, under a policy
issued by defendant, to be filed with the receiver as of August 15, 1883, and
120 Tur Insurance Law. § 80,

directing a reference for its valuation; before the hearing the person upon
whose life the policy was issued died, and evidence was given tending to show
that at the time when the company became insolvent and suspended its
business he had attained an age and had become subject to a mortal disease
which would have precluded a reinsurance or further insurance of his life
by any life insurance company in good standing; the disease continued until
the time of his death, and was in part the cause of that event; it was shown
upon the hearing that no disturbance in the accounts or dividends of the
receiver would be made by valuing this as a death claim, and that it could
be provided for and disposed of as such without substantial injustice to other
claimants. People v. Knickerbocker Ins. Co., 40 Hun, 44.

When, after a policy in an insolvent insurance company has been valued
and placed upon the receiver’s dividend list, the holder thereof dies, the court
will not, upon the application of his executor, direct that the policy be
revalued as a death claim and order the receiver to pay dividends thereon
upon the basis of the latter valuation. People v. Sec. Ins. Co., 23 Hun, 601.

Where the insured died after the claim on the policy was presented to the
receiver and the proofs required by the policy were afterward filed and
retained by the receiver, the wife was entitled to have her policy valued upon
the basis of her husband’s death, and not as an existing and continuing insur.
ance. People v. Knickerbocker Life Ins. Co., 34 Hun, 476.

COUNTERCLAIM.— Where, at the time of the appointment of the receiver,
the insurance company held certain claims against the defendant and the
defendant held two endowment policies not yet due, issued by the company,
the defendant was not entitled to offset the reserve value of the policies
Newcomb v. Almy, 96 N. Y., 308.

ACCOUNTING OF RECEIVER.— Where, during the pendency of proceedings
for an accounting instituted by the receivers of an insolvent insurance com-
pany, one of the receivers dies, the court has power to make an order reviving
and continuing the accounting against his executors and directing them to
come into such accounting and stand by such orders and decrees ag may be
made therein. Matter of Columbian Ins. Co., 30 Hun, 342.

§ 80. Existing corporations.

Any life insurance corporation which by virtue of any law was
making deposit of securities and receiving registered policies on
the eighteenth day of May, eighteen hundred and ninety-two, shall
make such deposits and receive such policies in accordance with this
chapter, and not otherwise. Such corporation shall be authorized
to issue such policies and annuity bonds as shall be registered
under this article, and shall, whenever required by the holders of
its unregistered policies and annuity bonds, issued previous to
the passage of this chapter, upon their compliance with the terms
and conditions of such corporation for registered policies and annu-
ity bonds, issue to them respectively, registered policies and annuity |
§ 81. Lire, Hearty, Casvarty Corporations. 121

bonds in exchange for and in value equal to those previously issued
to them. Any corporation availing itself of the provisions of this
article, may issue unregistered policies and annuity bonds as here-
tofore authorized by its charter, but subject to the provisions of
this article in relation to the distribution of its assets.

Source.—Former § 80; originally revised from L. 1853, chap. 463, § 21, as
amended by L. 1880, chap. 427; L. 1869, chap. 902, § 11.

§ 81. Powers of receiver.

The receiver of any such corporation shall have all the powers in-
cident to the successful management of its affairs, and, to that end,
authority to purchase policies issued by the corporation, to make
any other compromise or settlement of its outstanding obligations,
and to use the corporate seal of the corporation whenever necessary
to the transaction of the business of his receivership.

The receiver may employ such clerks and actuaries as he may
deem necessary for the proper conduct of his business as such
receiver, and such clerks and actuaries shall be paid such reason-
able compensation as he may determine, subject, however, to the
approval of the superintendent of insurance. The compensation
of such receiver, clerks and actuaries shall be a charge upon the
funds of such corporation and paid out of such funds.

Source.—Former § 81; originally revised from L. 1869, chap. 902, §§ 12, 138.

FEES.— The Supreme Court has power in the first instance to order the
fees of a referee, appointed to take proofs and report as to the claims of a
receiver of an insolvent life insurance company for compensation and expenses,
to be paid out of the fund. Attorney-General v. Continental Life Ins. Co,
93 N. Y., 45.

Where a receiver has advanced money to pay taxes on lands covered by
mortgages in the hands of the superintendent then being foreclosed, which
advances were repaid from the proceeds of the foreclosure, the receiver is not
entitled to commissions upon the sum so refunded. Attorney-General v.
North Am. Ins. Co., 89 N. Y., 94.

SERVICES OF ATTORNEY.— An attorney who, upon the retainer of cer-
tain of the policyholders in an insolvent insurance company, has appeared
and resisted improper claims made by the receiver against the assets in his
hands, has no legal claim to be compensated for such services by the receiver
out of the assets of the corporation. Attorney-General v. Continental Life
Ins. Co., 31 Hun, 623.

An action is not maintainable against the receiver of an insolvent life
insurance company to recover for services rendered by an attorney to the
122 Tue Insurance Law. §§ 82, 83,

corporation after the appointment of the receiver; the company or its officers
eannot, after such an appointment, subject the funds in the receiver’s hands
to any legal liability. Barnes v. Newcomb, 89 N. Y., 108.

SPECIAL COUNSEL.— The attorney-general has no authority to appoint
special counsel to act generally for him in the conduct of suits or proceedings
in which the state is interested; and no authority exists to employ counsel
to aid him, save where it is expressly authorized by statute. Matter of
Attorney-General v. Continental Ins. Co., 88 N. Y., 571.

§ 82. When receiver shall not be appointed, or new policies
issued.

No receiver for any life insurance corporation shall be appointed
if such corporation has actual funds invested according to law, of
a net cash value equal to its outstanding liabilities, exclusive of
any contingent liability incurred under the provisions of section
seventy-one of this chapter relating to the organization of a mutual
corporation, and a sufficient reserve on policies and claims not
matured, calculated according to the American experience table of
mortality, with interest at four and onehalf per centum per
annum, and in computing such liabilities, capital stock shall be
considered as a liability of the corporation. But no such corpo
ration shall issue new policies if its capital stock is impaired to
the extent of fifty per centum thereof, after charging said corpora-
tion with a reserve liability calculated according to the provisions
of section eighty-four of this chapter, until such impairment is
made good; in the case of a corporation having no capital stock, :
it shall not issue new policies if its assets are less than its liabili-
ties as above defined and upon the basis last before mentioned, until
such deficiency is made good.

Source—Former § 2, as amended by L. 1901, chap. 514, and L. 1906,
chap. 326; originally revised from L. 1884, chap. 341, § 2; L. 1887, chap. 328.

§ 83. Distribution of surplus to policy holders.

Except as herein provided, every domestic life insurance cor-
poration heretofore or hereafter organized, whether incorporated
by special act or under a general statute, anything in its charter or
certificate of incorporation or in such special act or general statute
to the contrary notwithstanding, shall provide in every policy issued
on or after the first day of January nineteen hundred and seven,
§ 83. Lire, Heautu, Oasvarty Corporations. 123

that the proportion of the surplus accruing upon said policy shall
be ascertained and distributed annually and not otherwise. Upon
the thirty-first day of December of each year, or as soon thereafter
as may. be practicable, every such corporation shall well and truly
ascertain the surplus earned by such corporation during said year.
After setting aside from such surplus such sums as may be re-
quired for the payment of authorized dividends upon the capital
stock, if any, and such sums as may properly be held for account of
existing deferred dividend policies, and for a contingency reserve
not in excess of the amount prescribed in this article, every such
corporation shall apportion the remaining surplus equitably to
all other policies entitled to share therein. Except in the case
of a term or an industrial policy, the share of surplus so appor-
tioned in the case of a policy issued on or after the first day of
January, nineteen hundred and seven shall, at the option of the
owner of the policy, be payable in cash, or shall be applicable to
the payment of any premium or premiums upon said policy or to
the purchase of a paid-up addition thereto or shall be permitted to
accumulate to the credit of the policy at such rate of interest
as shall be allowed by the company, and with such interest shall be
payable upon the maturity of the policy or shall be withdrawable
in cash by the owner of the policy on any anniversary of the
date of issue thereof. Such corporation may require the owner of
the policy to elect the manner in which said.dividends shall be
applied as above provided by mailing a written notice of the
amount of the said dividends and the options available as afore-
said in a sealed envelope in the manner required by the provisions
of this chapter for notices of premium payments, and in case the
owner shall fail to notify the company in writing of his election
within three months after the date of the mailing of said notice,
the surplus shall be applied by the company to the purchase of a
paid-up addition to the sum insured. In the case of a term or in-
dustrial policy issued on or after the first day of January, nineteen
hundred and seven the share of surplus so apportioned shall be
payable to the owner of the policy in cash or shall be applicable
to the payment of any premium or premiums upon said policy, or
if so provided in the policy shall be permitted to accumulate to the
x

124 Tue Insurance Law. § 83,

credit of the policy at such rate of interest as shall be allowed
by the company and in such case shall be payable upon the
maturity or expiration of the policy or shall be withdrawable in
cash by the holder of the policy on any anniversary of the date of
issue thereof. The dividends declared as aforesaid in the case of
a policy issued on or after the first day of January, nineteen hun-
dred and seven, shall be payable respectively either upon the anni-
versary of the policy next after said thirty-first day of December
or upon a day certa‘n in the year following said date, according
to the rules of the corporation or the terms of the policy, and upon
the sole condit:»n that the premium payments for the policy year
current upon said thirty-first day of December shall have been
completed.

 

This section shall not apply to any stock life insurance corpora: .
tion which on or after the first day of January, nineteen hundred
and seven, shall transact and shall represent itself as transacting
its business exclusively upon a nonmutual basis and shall after
said date issue only nonparticipating policies. Nor shall this sec-
tion apply to paid-up or temporary and pure endowment insurance
issued or granted in exchange for lapsed or surrendered policies.
A foreign life insurance corporation which shall not provide in
every participating policy issued or delivered in this state on or
after the first day of January, nineteen hundred and seven, that
the proportion of the surplus accruing upon said policy shall be
ascertained and distributed annually and not otherwise, and which
shall not ascertain and distribute the surplus accruing upon said
policies annually either by providing for their payment in cash or
their application to the payment of premiums or to the purchase 4 | i
of paid-up additions or for their accumulation as above provided

in the case of domestic corporations shall not be permitted to do
business within this state.

Source.—Former § 83, as amended by L. 1906, chap. 326; originally revised
from L. 1872, chap. 100.
See § 87, post. Restrictions as to dividends removed.

See § 664, Penal Law, which makes it a misdemeanor for a director to make
a dividend except from surplus profits.

; EQUITY.— A complaint in an action by the holders of a policy of life |
Insurance against the insurance company, which alleges that the action 18
§ 83. Lire, Heattru, Casvatty Corporations. 125

brought “as well in behalf of these plaintiffs as of all other -policyholders
similarly situated who may choose to come in,” etc., is necessarily limited
to equitable relief. Taylor v. Charter Oak Ins. Co., 9 Daly, 489.

An action by the holder of a policy in a mutual life insurance company
for equitable relief cannot be maintained upon an alleged trust in the defend-
ants for the benefit of the plaintiff; the relations between the company and
its policyholders are those of contractors, the contract being the policy, by
which the liabilities of the company are to be determined. Hencken v. United
States Life Ins. Co., 11 Daly, 282.

TONTINE POLICY.— An action on a tontime policy is premature if brought
before the tontine period has expired. Simons v. N. Y. Life Ins. Co., 38
Hun, 309.

A life insurance company issuing policies on the tontine or “ten years
dividend system,” is in no sense a trustee of any particular fund for the
holder of such a policy; their relations are simply that of debtor and creditor,
and the policyholder at the expiration of the ten years is not entitled to an
accounting in the absence of any evidence of misappropriation, wrongdoing
or mistake on the part of the company. Uhlman v. N. Y. Life Ins. Co., 109
N. Y., 421.

It was held in Illinois that companies deing business on the tontine savings
fund plans do not come within a statute providing for distribution of surplus
to policyholders. Romer v. Equitable Life, 101 Ill. App. Ct. Rep., 621.

SURPLUS.— Where, under a contract of life insurance, only the propor-
tion of the company’s surplus which equitably belonged to the policy was
to be credited to it and paid to the policyholder, an ascertainment and deter-
mination of that proportion is a condition precedent to the poticyholder’s
right of recovery of any portion of the surplus in an action at law. Greeff
v. Equitable Life Assur. Soc., 160 N. Y., 19.

DIVIDENDS.— An insurance company can only pay dividends out of
surplus and profits; they canrot lawfully be paid out of capital contributed
by shareholders for the purpose of carrying on the company’s business and
for the protection of its creditors; such dividends are prohibited by § 594
of the Penal Code and § 83 of the Insurance Law. Berryman v. Bankers’
Life Insurance Co., 117 App. Div., 730.

An insurance company cannot lawfully pay dividends out of capital con-
tributed by shareholders for the purpose of carrying on the company’s busi-
ness for the protection of its creditors, and such dividends are prohibited by
section 664 of the Penal Law and section 83 of the Insurance Law. Berryman
y. Bankers’ Life Ins. Co., 117 App. Div., 730.

POLICIES.— A life insurance company, originally organized on a non-
participating basis, which has afterwards elected to do a participating busi-
ness cannot thereafter return to a nonparticipating basis. Attorney-General’s
Opinion, Sept. 24, 1909.

Application of Dividend.—.A policyholder under this section may give notice
as to his selection of the manner he wishes his dividend applied, such
selection to hold good until further notice, the change, if any, to take effect
on an anniversary of the date of issue of the policy. Ruling of Ins. Dept.,
February 26, 1914.
126 Tur Insurance Law. § 84,

§ 84. Valuation of policies.

The superintendent of insurance shall annually make valuations
of all outstanding policies, additions thereto, unpaid dividends,
and all other obligations of every life insurance corporation doing
business in this state. All valuations made by him or by his
authority shall be made upon the net premium basis. The legal
minimum standard for contracts issued before the first day of
January, nineteen hundred and one, shall be the actuaries’ or com-
bined experience table of mortality with interest at four per
centum per annum, and for contracts issued on or after said day
shall be the American experience table of mortality with interest
at three and one-half per centum per annum; provided that the
legal minimum valuation of all contracts issued on or after the first
day of January, nineteen hundred and seven, shall be in accord-
ance with the select and ultimate method, and on the basis that the
rate of mortality during the first five years after the issuance of
said contracts respectively shall be calculated according to the
following percentages of the rates shown by the American experi-
ence table of mortality, to wit, first insurance year fifty per
centum thereof, second insurance year sixty-five per centum
thereof, third insurance year seventy-five per centum thereof,
fourth insurance year eighty five per centum thereof, and fifth
insurance year ninety-five per centum thereof. The super
intendent may vary the standards of interest and mortality in the
case of corporations from foreign countries as to contracts issued
by such corporations in other countries than the United States;
and in particular cases of invalid lives and other extra hazards,
and value policies in groups, use approximate averages for frac
tions of a year and otherwise, and accept the valuation of the
department of insurance of any other state or country if made upon
the basis and according to the standards herein required in place
of the valuation herein required. No policy issued after the thirty-
first day of December, nineteen hundred and six, shall be valued as
term insurance unless premiums are based upon net term rates}.
and no policy with level premiums issued after said date shall be
valued as term insurance for the first policy year. The legal
minimum standard for the valuation of annuities issued after
§ 84. Lirr, Heattru, Casuatty Corporations. 127

January first, nineteen hundred and seven, shall be McClintock’s
“Tables of Mortality among Annuitants” with interest at three
and one-half per centum per annum, but annuities deferred ten
or more years and written in connection with life or term insur-
ances shall be valued on the same mortality table from which the
consideration or premiums were computed, with interest not higher
than three and one-half per centum per annum. The legal mini-
mum standard for the valuation of industrial policies issued after
the first day of January, nineteen hundred and seven, shall be the
American experience table of mortality with interest at three and
one-half per centum per annum, provided, that any life insurance
corporation may voluntarily value its industrial policies written
on the weekly premium payment plan according to the standard
industrial mortality table or the substandard industrial mortality
table. Any life insurance corporation may voluntarily value its
policies, or any class thereof, according to the American experi-
ence table of mortality, or if industrial, at its option, according to
the standard industrial mortality table or substandard industrial
mortality table, at a lower rate of interest that that above pre-
scribed, but not lower than three per centum per annum, and with
or without reference to the select and ultimate method of valuation,
and in every such case shall report the standards used by it in
making the same to the superintendent of insurance in its annual
statement, provided that no such standards if adopted shall be
abandoned without the consent of the superintendent of insurance
first obtained in writing.

Source.— Former § 84, as amended by L. 1893, chap. 147; L. 1901, chap. 346;
L, 1906, chap. 326, and L. 1909, chap. 301; originally revised from L. 1853, chap.
463, § 13, as amended by L. 1873, chap. 849; L. 1884, chap. 341, §§ 1, 2.

Amended by L. 1910, chap. 616, and L. 1913, chap. 304.

Note.—The purpose of the amendment of this section by chapter 304 of
1913 was to broaden the powers of the superintendent in reference to receipts
of certificates of valuation of life insurance policies made by other state de-
partments and by eliminating the words —“ any excess of its valuation over
those computed by the said legal minimum standard and also,” and to relieve
companies not using select and ultimate valuation from unnecessary labor and
expense.—Ed.

VALUATION OF POLICIES.— The superintendent of insurance, in making
a valuation of the policies of a foreign fire insurance company, should value
128 Tue Insurance Law. §§ 85, 86.

only such policies as are issued by said company and are outstanding and
in force in this country. Attorney-General Rep., 1893, page 417.

An insurance company, originally organized as a fraternal organization,
thereafter reorganized under the assessment plan and later as a stock com-
pany, maintains a sufficient reserve on the policies of former Class A when
it provides that members of the former Class A should be assessed one dollar
for each death, and that there should be set aside a fund of one dollar per
1,000 on all insurance issued on the new Class B, which fund should go to
meet any deficit in assessments of Class A when the membership dropped
below 1,000, and the mortuary fund was continued until the corporation
organized as a stock company when it was discontinued, because no longer
required, and when upon the last reorganization the company carried a reserve
figured under § 84 of the Insurance Law, the reserve being applicable to
all classes of policies. Kelshaw v. Bankers’ Life Insurance Co., 117 App. Div.,
726.

In view of the change in this section omitting “any excess of its valuations
over those computed by the said legal minimum standard and also,” it will
not be necessary to prepare a valuation for 1913 on the “ Select and Ultimate”
basis. Ruling of Ins. Dept., July 8, 1913.

§ 85. When actual premium is less than net premium.

When the actual premium charged for an insurance by any life
Insurance corporation doing business in this state is less than the
net premium for such insurance computed according to the table
of mortality and rate of interest prescribed in this article, such
corporation shall be charged as a separate liability with the value
of an annuity, the amount of which shall equal the difference
between such premiums and the term of which in years shall
equal the number of future annual payments due on such insurance
at the date of the valuation.

Source.—Former § 85; originally revised from L. 1884, chap. 341, § 1.

§ 86. Assets and liabilities of life and casualty insurance
corporations; method of computation; procedure in case of
impairment; reserve.

1. In estimating the condition of any life insurance corporation,
under the provisions of this chapter, or in any examination made
by him, or by an examiner appointed by him, the superintendent
shall allow as assets only such investments as are author.
ized by the laws of this state, and shall charge as
liabilities, in addition to the capital stock, all outstanding
indebtedness of the corporation, and the premium reserve on poli-
§ 86. Lirzr, Hearty, Casuanry Corporations. 129

cies, and additions thereto in force computed according to the table
of mortality and rate of interest prescribed in this article. Any
assets or securities lawfully held or acquired for the satisfaction,
reduction or guaranty of any indebtedness to the corporation shall
be allowed as assets at their just value in the judgment of the
superintendent, but the total assets invested and otherwise of every
domestic life insurance corporation shall be held to be aceumula-
tions for the exclusive benefit of policy holders, and no payment to
stockholders shall be made therefrom until all obligations to policy
holders and creditors have been fully provided for, including the
reserve required by section eighty-four of this chapter to be deter-
mined by the superintendent of insurance. Whenever it shall
appear to the said superintendent from the statement of any life
insurance corporation made to the insurance department, or from
an examination of the affairs of any such corporation, if a stock
corporation, that its capital stock is impaired to the extent of
fifty per centum thereof upon the basis of such reserve liability
for policies and annuities in force as may be the standard used
within this state at the time of ascertaining such impairment, it
shall be the duty of said superintendent, if the corporation is
organized under the laws of any other state or country, to revoke
the certificate of authority issued to the agent or agents of such
corporation, and cause a notice thereof to be published in the state
paper for four weeks, and the agent or agents of such corporation
are, after such notice, required to discontinue the issuing of any
rew policies. If the corporation so impaired is organized under
the laws of this state, it shall be the duty of said superintendent
to direct the officers thereof to require the stockholders to make
good in cash the amount of such deficiency within ninety days
after the date of his requisition. And upon the failure of the
stockholders to make good such deficiency within the time specified
in such requisition, the corporation shall then be subject to the
provisions of section twenty-one of this chapter. Provided that
any corporation organized under the laws of this state, whose
zapital is impaired as above fifty per centum, may by a vote of a
majority of its directors at a meeting called for that purpose
reduce its capital stock to an amount not less than one hundred
130 ‘THE INSURANCE Law. § 86.

thousand dollars; and the said directors are hereby empowered to
issue new certificates of stock to the stockholders for the amount
of the reduced capital, and require in return all certificates pre-
viously issued.

2. In estimating the condition’ of any casualty insurance
corporation, under the provisions of this chapter, the super-
intendent shall allow as assets only such investments as are
authorized by the existing laws of this state, at the date of its
investigation; and shall charge as liabilities, in addition to the
capital stock, all outstanding indebtedness of the corporation, and
the premium reserve on policies in force, equal to the unearned
portions of the gross premiums charged for covering the risks,
computed on each respective risk from the date of the issuance of
the policy. The indebtedness for outstanding losses under insur-
ance against loss or damage resulting from accident to or injuries
suffered by an employee or other person and for which the
insured is liable, and under insurance against loss from liability
on account of the death of or injury to an employee not caused
by the negligence of the employer, shall be determined as follows:
Each corporation which writes policies covering any of the said
kinds of insurance shall include in the annual statement required
by section forty-four of this chapter a schedule of its experience
thereunder, in the United States and foreign countries in the
case of corporations organized in the United States, and in the
United States only in the case of corporations organized outside
of the United States, giving each calendar year’s experience sep-
arately, and crediting or charging each item to the year in which
the policy to which it relates was written, as follows: (1) the
earned premiums on all such policies written during the period of
ten years immediately preceding the date as of which the state
ment is made, being the gross premiums on all such policies
including excess and additional premiums and premiums in course
of collection, less return premiums and premiums on canceled
policies, and less the unearned premiums on policies in force as
shown in such annual statement; (2) the amount of all pay-
ments of whatsoever nature made by reason or on account of
injuries covered by such policies written during said period. This
§ 86. Lirz, Heattru, Casuatry Corporations. 131

amount shall include medical and surgical attendance, payments
to claimants, legal expenses, salaries and expenses of investigators,
adjusters, and field men, rents, stationery, telegraph and telephone
charges, postage, salaries and expenses of office employees, home
office expenses, and all other payments made on account of such
injuries, whether such payments are allocated to specific claims
or are unallocated; (3) the number of suits being defended at
the date as of which the statement is made under policies written
during said period, except suits in which liability is not dependent
upon negligence of the insured, and a charge of seven hundred
and fifty dollars for each suit; (4) the number of deaths for
which the insured are liable without proof of negligence, covered
by policies written during said period, and not paid for at the
date as of which the statement is made and a charge of the amount
necessary to pay for such deaths; (5) the number of unpaid claims
at the date as of which the statement is made on account of nonfatal
injuries for which the insured are liable ‘without proof of negli-
gence, covered by policies written during said period, and a charge
equal to the present value of the estimated future payments; (6)
the loss ratio determined from the foregoing as to each year
separately using as the divisor the earned premiums shown in
item (1) and as the dividend the amount of payments shown in
item (2) plus the amounts charged in items (3), (4), and (5);
(7) the number of suits being defended at the date as of which
the statement is made under policies written more than ten years
prior to such date, except suits in which liability is not dependent
upon negligence of the insured; (8) the number of deaths for
which the insured are liable without proof of negligence, covered
by policies written more than ten years prior to the date as of
which the statement is made, and not paid for at such date;
(9) the number of unpaid claims at the date as of which the state-
ment is made on account of nonfatal injuries for which the insured
are liable without proof of negligence, covered by policies written
more than ten years prior to such date. All unallocated pay-
ments in item (2) made in a given calendar year subsequent to
the first four years in which a corporation has been issuing such
policies shall be distributed as follows: Thirty-five per centum
shall be charged to the policies written in that year, forty per
132 Tur Insurance Law. § 86.

centum to the policies written in the preceding year, ten per
centum to the policies written in the second year preceding, ten
per centum to the policies written in the third year preceding,
and five per centum to the policies written in the fourth year pre-
ceding, and such payments made in the first four calendar years
in which a corporation has been issuing such policies shall be
distributed as follows: in the first calendar year one hundred per
centum shall be charged to the policies written in that year, in
the second calendar year fifty per centum shall be charged to
policies written in that year and fifty per centum to the policies
written in the preceding year, in the third calendar year forty
per centum shall be charged to the policies written in that year,
forty per centum to the policies written in the preceding year,
and twenty per centum to the policies written in the second year
preceding, and in the fourth calendar year thirty-five per centum
shall be charged to the policies written in that year, forty per
centum to the policies written in the preceding year, fifteen per
centum to the policies written in the second year preceding, and
ten per centum to the policies written in the third year preceding,
and a schedule showing such distribution shall be ineluded in such
annual statement. Each such corporation shall be charged with
indebtedness for outstanding losses upon such policies determined
as follows: (10) for all suits being defended under policies written
more than ten years prior to the date as of which the statement
is made, except suits in which liability is not dependent upon
negligence of the insured, one thousand dollars for each suit;
(11) for all suits being defended under policies written more
than five years and less than ten years prior to the date as of
which the statement is made, except suits in which liability is not
dependent upon negligence of the insured, seven hundred and
fifty dollars for each suit; (12) for all deaths for which the
insured are liable without proof of negligence, covered by policies
written more than five years prior to the date as of which the
statement is made, the amount necessary to pay for such deaths;
(18) for all unpaid claims on account of nonfatal injuries for
which the insured are liable without proof of negligence under
policies written more than five years prior to the date as of which
the statement is made, the present value of the estimated future
§ 86. Tire, Hratrn, Casuaury CorPoRations. 133

payments; (14) for the policies written in the five years imme-
diately preceding the date as of which the statement is made an
amount determined as follows: Multiply the earned premiums
of each of such five years as shown in item (1) by the loss ratio
ascertained as in item (6) on all the policies written in the first
five years of the said ten-year period using as the divisor the sum
of the earned premiums shown in item (1) for such first five years,
and as the dividend the sum of the payments shown in item (2)
for such first five years plus the sum of the charges in items (8),
(4) and (5) for such first five years, but the ratio to be used shall
in no event be less than fifty per centum at and after December
thirty-first, nineteen hundred and eleven, nor less than fifty-one
per centum at and after December thirty-first, nineteen hundred
and twelve, nor less than fifty-two per centum at and after Decem-
her thirty-first, nineteen hundred and thirteen, nor less than fifty-
Seree per centum at and after December thirty-first, nineteen hun-
dred and fourteen, nor less than fifty-four per centum at and after
December thirty-first, nineteen hundred and fifteen, nor less than
fifty-five per centum at and after December thirty-first, nineteen
hundred and sixteen, and from the amount so ascertained in each
of the last five years of said ten-year period deduct all payments
made under policies written in the corresponding year as shown
in item (2), and the remainder in the case of each year shall be
deemed the indebtedness for that year, provided, however, that
if the remainder in the case of any year of the first three years of
the five years immediately preceding the date as of which the
statement is made shall be less than the sum of the three following
items for that year at that date — (a) the number of suits, except
suits in which liability is ret dependent upon negligence of the
insured, being defended under policies written in that year and
a charge of seven hundred and fifty dollars for each suit, (b) the
amount necessary to pay for all deaths for which the insured are
liable without proof of negligence, covered by policies written in
that year, and (c) the present value of estimated unpaid claims
on account of nonfatal injuries for which the insured are liable
without proof of negligence, covered by policies written in that
year — then the sum of said items (a), (b) and (c) shall be the
indebtedness for that year. A corporation which has been issuing
134 Tuer Insurance Law. . § 87.

such policies for a period of less than ten years shall nevertheless
include in its annual statement, a schedule as hereinbefore re-
quired for the years in which it shall have issued such policies,
and shall be charged with an indebtedness determined in the same
manner, but in determining the indebtedness for policies written
in the five years immediately preceding the date as of which the
statement is made, the minimum ratio hereinbefore prescribed
shall be used subject to the same deductions and provisions as in
the case of corporations that have been issuing such policies for
ten years or more.

Source.— Former § 86, as amended by L. 1901, chap. 514; L. 1903, chap. 566;
L. 1904, chap. 486; L. 1905, chap. 113; originally revised from L. 1853, chap.
463, § 17, a8 amended by L. 1879, chap. 161.

Amended by L. 1911, chap. 183, and L. 1913, chap. 304.

Note.—The purpose of the amendment of this section by chapter 304 of
1913 was to eliminate a previous ambiguity regarding allowance of assets
in the examination of a life company.—Ed.

REAL ESTATE.— Investments may be made in real estate mortgages of
another state under § 16 by an insurance company of this state which rein
sures the risks held by a company of that state. Attorney-General Rep.,
1896, page 145.

VALUATION.— When an insurance company originally organized as a
fraternal organization has thereafter successively incorporated as a mutual
company and as a stock company, under chapter 690 of the Laws of 1893,
the valuation of policies issued when the corporation was a mutual company
for the purpose of ascertaining the amount of reserve, should be made under
§ 52 of the Insurance Law, if such valuation does not violate any provision,
express or implied, of the original contract of insurance; the reserve need not
be determined by valuing such policies as whole life policies under § 86 of
the Insurance Law. Elder v. Bankers’ Life Insurance Co., 117 App. Div., 722.

Liquor tax certificates are issued as of October first in each year, and per-
sons taking out such liquor tax certificates file surety company bonds for the
year. The financial statements of surety companies uniting in such bonds
should carry as unearned premium reserve for such bonds seventy-five per cent
of the premium receipts, such financial statements dating as of December
thirty-first, and, therefore, at the date of such financial statement, such bonds
would have been in existence three months. Chapter 720 of Laws 1893 does
not expressly repeal or amend the provisions of section 86 of chapter 690 of
Laws 1892, which has been re-enacted and amended in the years 1901, 1903,
1904 and 1905. Thus it may be assumed that the legislature intended both
statutes to remain in force, and it is therefore desirable to so construe them
that both may be given effect. Attorney-General’s Opinion, December 14, 1908.

§ 87. Contingency reserve.

Any domestic life insurance corporation may accumulate and
maintain in addition to an amount equal to the net values of its
§ 87. Lirz, Huautru, Casvarry Corporations. 135

policies computed according to the standard adopted by it under
section eighty-four of this chapter a contingency reserve not
exceeding the following respective percentages of said net values,
to wit: When said net values are less than one hundred thousand
dollars, twenty per centum thereof or the sum of ten thousand
dollars, whichever is the greater; when said net values are greater
than one hundred thousand dollars, the percentage thereof
measuring the contingency reserve shall decrease one-half of one
per centum for each one hundred thousand dollars of said net
values up to one million dollars; one-half of one per centum for
each additional one million dollars up to ten million dollars; one-
half of one per centum for each additional two million five hun-
dred thousand dollars up to twenty million dollars; one-half of
one per centum for each additional five million dollars up to fifty
million dollars; one-half of one per centum for each additional
twenty-five million dollars up to seventy-five million dollars; and
if said net values equal or exceed the last mentioned amount, the
contingency reserve shall not exceed five per centum thereof; pro-
vided that as the net values of said policies increase and the maxi-
mum percentage measuring the contingency reserve decreases such
corporation may maintain the contingency reserve already accumu-
lated hereunder, although for the time being it may exceed the
maximum percentage herein prescribed, but may not add to the
contingency reserve when the addition will bring it beyond the
maximum percentage. Provided however that nothing herein con-
tained shall be construed to affect any existing surplus or con-
tingency reserves held by any such corporation save that when-
ever the existing surplus and contingency reserves, exclusive of
said net values and of all accumulations held on account of
existing deferred dividend policies or groups of such policies, shall
exceed the limit above mentioned it shall not be entitled to main-
tain any additional contingency reserve. Provided further that
for cause shown the superintendent of insurance may at any time
and from time to time permit any corporation to accumulate and
maintain a contingency reserve in excess of the limit above men-
tioned for a prescribed period, not exceeding one year under any
one permission, by filing in his office a decision stating his reasons
therefor and causing the same to be published in his next annual
136 Tue Insurance Law. § 88,

report. This section shall not apply to any corporation doing
exclusively a non-participating business.

Source.—Former § 87, as added by L. 1906, chap. 326.

See § 83, ante. Distribution of surplus to, policyholders.

See § 664, Penal Law. Misconduct of directors of monied corporations as

to loans, ete.
See § 28, Stock Corporation Law, chap. 61 of 1909. ie oe of directors for
making unauthorized dividends.

§ 88. Surrender value of lapsed or forfeited policies.

Whenever any policy of life insurance issued after January
first, eighteen hundred and eighty, and before January first nine-
teen hundred and seven, by any domestic life insurance corpora-
tion after being in force three full years, shall, by its terms,
lapse or become forfeited for the non-payment of any premium or
any note given for a premium or loan made in’ cash on such policy
as security, or of any interest on such note or loan, the reserve on
such policy computed according to the American experience table
of mortality at the rate of four and one-half per centum per annum
shal, on demand made, with surrender of the policy within six
months after such lapse or forfeiture, be taken as a single premium
of life insurance at the published rates of the corporation at the
time the policy was issued, and shall be applied, as shall have been
agreed in the application or policy, either to continue the insurance
of the policy in force at its full amount so long as such single
premium will purchase temporary insurance for that amount, at
the age of the insured at the time of lapse or forfeiture, or to
purchase upon the same life at the same age paid up insurance
payable at the same time and under the same conditions. except as
to payments of premiums, as the original policy. If no such agree-
ment be expressed in the application or policy, such single
premium may be applied in either of the modes above specified
at the option of the owner of the policy, notice of such option to
be contained in the demand hereinbefore required to be made to
prevent the forfeiture of the policy.

The reserve hereinbefore specified shall include dividend addi-
tions calculated at the date of the failure to make any of the
payments above described according to the American experience
§ 88. Lire, Hratte, Casuattry Corporations. 137

table of mortality with interest at the rate of four and one-half
per centum per annum after deducting any indebtedness of the
insured on account of any annual or semi-annual or quarterly
premium then due, and any loan made in cash on such policy,
evidence of which is acknowledged by the insured in writing.

The net value of the insurance given for such single premium
under this section, computed by the standard of this state, shall in
no case be less than two-thirds of the entire reserve computed
according to the rule prescribed in this section after deducting the
indebtedness as specified; but such insurance shall not participate
in the profits of the corporation.

If the reserve upon any endowment policy applied according to
the provisions of this section as a single premium of temporary
insurance be more than sufficient to continue the insurance to the
end of the endowment term named in the policy, and if the
insured survive that term, the excess shall be paid in cash at the
end of such term, on the conditions on which the original policy
was issued.

This section shall not apply to any case of a policy issued
before January first, nineteen hundred and seven, where the
provisions of the section are specifically waived in the applicatior
and notice of such waiver is written or printed in red ink on
the margin of the face of the policy when issued. If any policy
of. life insurance (other than a term policy for twenty years o1
less), issued on or after January first, nineteen hundred and
seven, by any domestic life insurance corporation, after being in
force three full years shall by its terms lapse or become forfeited
by the nonpayment of any premium or any note therefor or any
loan on such policy or of any interest on such note or loan, the
reserve on such policy computed according to the standard adopted
by said company in accordance with section eighty-four of this
chapter, together with the value of any dividend additions upon
said policy, after deducting any indebtedness to the company and
one-fifth of the said entire reserve, or the sum of two and fifty one-
hundredths dollars for each one hundred dollars of the face of said
policy if said sum shall be more than the said one-fifth, shall upon
demand not later than three months after the date of lapse
138 Tue Insurance Law. § 88,

with surrender of the policy be applied as a surrender value as
agreed upon in the policy, provided that if no other option expressed
in the policy be availed of by the owner thereof, and if the policy
itself does not direct what option-shall become operative in default
of selection by the owner, the same shall be applied to continue
the insurance in force at its full amount including any outstanding
dividend additions less any outstanding indebtedness on the policy
but without future participation and without the right to loans,
so long as such surrender value will purchase nonparticipating
temporary insurance at net single premium rates by the
standard adopted by the ‘company, at the age of the insured
at the time of lapse or forfeiture, provided in case of
any endowment policy if the sum applicable to the purchase
of temporary insurance shall be more than sufficient to con-
tinue the insurance‘to the end of the endowment term named
in the policy, the excess shall be used to purchase in the same
manner pure endowment insurance payable at the end of the
endowment term named in the policy on the conditions on which
the original policy was issued, and provided further that any
attempted waiver of the provisions of this paragraph in any
application, policy or otherwise, shall be void, and provided
further that any value allowed in lieu thereof shall be at least
equal to the net value of the temporary insurance or of the
temporary and pure endowment insurance herein provided for.
The term of temporary insurance herein provided for shall include
the period of grace, if any. In every case where a contract pro-
vides for both’ insurance and annuities, the foregoing provisions
shall apply only to that part of the contract which provides for
insurance, but every such contract containing a provision for a
deferred annuity on the life of the insured only (unless paid
for by a single premium) shall provide that in the event of the
nonpayment of any premium after three full years’ premiums —
shall have been paid, the annuity shall automatically become |
converted into a paid-up annuity for such a proportion of the
original annuity as the number of completed years’ premiums

paid bears to the total number of premiums required under the
contract.

Source—Former § 88, as amended by L. 1906, chap. 326; originally revised
from L., 1879, chap. 347, §§ 1, 2.
§ 88. Lirz, Heauru, Casvaury Corporations. 139

Amended by L. 1909, chap. 301; L. 1909, chap. 595 and L. 1910, chap. 614.

FORFEITURE.—The rule that a strict construction is to be given to a
provision of forfeiture in a policy of insurance, and that it may not be
extended for the purpose of working a forfeiture beyond the strict and literal
meaning of the words used, applies only where the meaning is doubtful and
the words capable of two constructions; where the language is plain and
unequivocal and the meaning not in doubt, in the absence of fraud or mistake,
the contract must be enforced as it reads. Holly v. Metropolitan Life Ins.
Co., 105 N. Y., 487.

The provision in the statutes of New York that “no life insurance com-
pany doing business in the state of New York shall have power to declare
forfeited or lapsed any policy hereafter issued or renewed, by reason of non-
payment of any annual premium, or interest, or any portion thereof, except
as hereinafter provided,” does not apply to or control such w policy issued by
a eorporation of New York in another state, in favor of a citizen of the
latter state, but is applicable only to business transacted within the state of
New York; and in such case the rights of the parties are measured by the
terms of the contract. Mut. Life Ins. Co. v. Cohen, 179 U. S., 262.

Where it is expressly provided that the premium on a life insurance policy
shall be paid on or before a certain day, and in default thereof the policy shall
be void, that the non-payment of the premium upon the day named works a
forfeiture. Fowler v. Metropolitan L. Ins. Co., 116 N. Y. 389.

One holding a policy of life insurance does not forfeit his policy by omitting
to pay annual premiums thereon after the company issuing the policy has
ceased to do business, transferred all of its assets and become insolvent.
People v. Empire Mut. Life Ins. Co., 92 N. Y., 105.

Where the defendant in its answer alleges a forfeiture of the policy by
reason of the non-payment of a single specified premium, it cannot, upon the
trial, assert a forfeiture because of the non-payment of subsequent premiums.
Meeder v. Provident Sav. Soc., 58 App. Div., 80.

A paid-up policy may only be demanded within six months after default,
and if the time has been extended by any act or omission of the company,
that fact should be pleaded as one essential to the plaintiff’s right to the relief
sought. Stayner v. Equitable L. Assur. Soc., 22 Misc., 53.

Where a policy of insurance contains a provision that if it should become
void, after the payment of the premiums for three years, because of a default
in the payment of any subsequent premium, the insurer would issue in lieu
thereof, a new paid-up policy, “ provided that said policy shall be surrendered
duly receipted within six months of the date of default in payment of premium
on said policy,” the fact that the policy sought to be exchanged had been
stolen, and that it is impossible for the policyholder to surrender the identical
instrument, does not excuse him from his duty to deliver to the insurer a
sufficient surrender of the policy and a sufficient receipt of all liability thereon.
Wilcox v. Equitable L. Assur. Soc., 55 App. Div. 529.

An agreement of insurance for one year with provisions for re-insurance is
within the section. Nielson v. Provident Sav. Life Assur. Soc., 73 Pac. Rep., 168.

After a new policy is issued, the insured has no further right or claim under
the old policy, and whatever claim he has, he must base upon the new policy.
Matter of Attorney-General v. Continental Ins. Co., 91 N. Y., 647.
140 Tue Insurancu Law, § 88

The provisions of the statutes of New York relative to forfeiture of policies
by insurance companies doing business therein, for nonpayment of premiums
or interest, does not control policies issued by a New York corporation in
another State to residents of that state. Mut. Life Ins. Co. of New York

v. Cohen.

Where an insurance company doing business within a state issues its policlos
to residents of that state, the validity of clauses in its policios must be deter.
mined by the laws of that state. Price v. Conn. Mut. Lifo Ins, Oo., 48 Mo,
App., 281; Equitable Life Society v. Clemonts, 110 U, &., 226. :

As § 88 provides in substance that if a premium bo not paid whan due, the
insured is entitled to have his policy extended for tho full amount !rom the
date it lapses for such time as the reserve on the policy taken as a single
premium at the age of the insured at the time of forfeiture would purchase
temporary insurance, aller deducting any indebtedness of tho insured on ac
eount of premiums due, the benefleiary of one holding a policy contuining a
similar provision inserted pursuant to said statute is entitled to recovor tho
full amount of the policy on the death of the insured whore, having beon un-
able to pay the full amount of a certain premium, ‘ho gave the insurance
company a six months’ note for the balance, which was accoptod by it as
payment of the premium and on maturity of the note, made anolher part
paymgnt, giving a similar note for the balance, even though the lttor note
was not paid when due, if in fact at the death of the insured the dilleranca
between the part payments and the amount of the second note was sufficient
to purchase continuing insurance for a period extending beyond the doath of
the insured. Taylor vy. New York Life Insurance Co., 148 App. Div., 815.

An insured paid premiums on his policy for threo years and gave a note the
fourth year, and thereafter wholly defaulted; the insurer rightfully deducted
the amount due on the note in computing the timo for which the insured waa
entitled to continued insurance, and as such period expired before hig death
the personal representatives are entitled to nothing. Taylor v. Now York
Life Ins. Co., 197 N. Y., 324; rev’g 131 App. Diy., 922.

A life insurance company which accepts a premium note under an agreement
that the policy shall become void if the note is not paid, after having given
notice of the date when the premium becamo due, is not obliged to give o
similar notice respecting the maturity of the note in order to declare a for *
feiture of the policy; where an insured dics within six months after his poliey
lapsed, the beneficiary is entitled to the protection of § 88 of the Insurance
Law, which provides for the continuation of the policy for such period of insur:
ance as may be purchased by any reserve without making the domand men
tioned in said law, or exercising the option to continue the policy; a domand
and the exercise of the option provided for by tho policy is necessary only
where the insured lives for the six months following tho forfeiture, Bar-
tholomew v. Security Mutual Life Insurance Co., 140 App. Div., 88.

The options granted the insured under this section for the poriod of aix
months may be exercised by the insured during his life and by the benef
eiary after the death of the insured, if any part of suid six months thas not
expired. Bartholomew v. Security Mul. Life Ins, Co., 204 N, Y., 03. (Mem)
§ 89. Lire, Hearty, Castatty CorporaTions. 141

§ 89. Discriminations prohibited.

No life insurance corporation doing business in this state shall
make or permit any discrimination between individuals of the
same class or of equal expectation of life, in the amount or pay-
ment or return of premiums or rates charged for policies of
insurance, or in the dividends or other benefits payable thereon,
or in any of the terms and conditions of the policy; nor shall any
such company permit or agent thereof offer or make any contract
of insurance or agreement as to such contract other than as
plainly expressed in the policy issued thereon; nor shall any such
company or any officer, agent, solicitor or representative thereof
pay, allow or give, or offer to pay, allow or give, directly or
indirectly, as inducement to any person to insure, or give, sell or
purchase, or offer to give, sell or purchase as such inducement
or in connection with such insurance, any stocks, bonds or other
securities of any insurance company or other corporation, asso-
ciation or partnership, or any dividends or profits accruing
thereon, or any valuable consideration or inducement whatever
not specified in the policy, nor shall any person knowingly receive
as such inducement, any rebate of premium, or any special favor
or advantage in the dividends or other benefits to accrue thereon,
or any paid employment or contract for services of any kind or
any valuable consideration or inducement whatever, not specified
in the policy. No person shall be excused from attending and
testifying or producing any books, papers or other documents
before any court or magistrate, upon any investigation, proceed-
ing or trial for a violation of any of the provisions of this section,
upon the ground or for the reason that the testimony or evidence,
documentary or otherwise, required of him may tend to convict
him of a crime or subject him to a penalty or forfeiture; but
no person shall be prosecuted or subjected to any penalty or
forfeiture for or on account of any transaction, matter or thing
eoncerning which he may so testify or produce evidence, docu-

mentary or otherwise, and no testimony so given or produced
"shall be received against him upon any criminal investigation or
ae proceeding. No premium upon any policy of life insurance
— issued on or after January first, nineteen hundred and seven,

shall be charged for term insurance for one year, higher in
., amount than the premium for term insurance for one year at
the same age under any other form of policy issued by such

 
142 Tue Insurance Law. § 89.

corporation; provided, that nothing in this chapter shall be so con-
strued as to forbid a company, transacting industrial insurance
on a weekly payment plan, from returning to policyholders, who
have made premium payments for a period of at least one year,
directly to the company at its home or district offices, a percentage
of the premium which the company would have paid for the
weekly collection of such premium.

Source.—Former § 89; originally revised from L. 1889, chap. 228, § 1, as
amended by L. 1890, chap. 401.

Amended by L. 1911, chap. 249.

See § 1191, Penal Law. Discriminations and rebates by life insurance com.
panies prohibited.

Section 89 is not limited to the issues m this state of a life insurance cor-
poration doing business in this state. Ruling Ins. Dept., Nov. 16, 1909.

For the purposes of § 89 annuities are to be considered as insurance. Rul-
ing Ins. Dept., May 1, 1912.

LOTTERY.— An insurance company cannot issue policies payable in an
order to be determined by lot. Attorney-General Rep., 1892, page 231.

Chap. 282 of 1889, from which this section is in part derived, was held to be
constitutional. People v. Formosa, 131 N. Y., 478.

COMMISSION.— As neither section 89 of the Insurance Law nor section
1200 of the Penal Law contains an exception in favor of agents of life insur-
ance corporations, a life insurance agent cannot lawfully receive a brokerage
commission on a premium on his own life insurance policy. Ruling Ins. Dept,
July 7, 1908.

A bona, fide agent taking out a policy of insurance on his own life in good
faith is entitled to commissions thereon. Ruling Ins. Dept., Nov. 22, 1909.

A general agent may not legally appoint as agent a man in another line of
business, at the same time write his application for insurance, apply for state
license, and allow the applicant and prospective agent the full first year com-
mission on his policy. Ruling Ins. Dept., January 18, 1909.

The object of § 89 is to require life insurance companies to give equal terms
to be fixed in the policies to insurers of the same class, and to give special
favor to no one, and its operation is directly against considerations and induce-
ments to a contract of insurance which are not specified in the policy. McGee
v. Felter, 75 Misc., 349.

REBATE.— A note accepted in payment of a life insurance policy without
the legal interest charge is equivalent to a rebate. Ruling Ins. Dept., May
28, 1909.

The act of an authorized agent to send circular letters to members of 4
church and solicit insurance on the condition that part of his commissions will
be turned back to the church is a violation of the spirit if not the letter of
§ 89. Ruling Ins. Dept., Oct. 24, 1910.

It would be a violation of § 69 either (1) for a life insurance agent to sell a
policy of life insurance to a person at the rate stipulated by the company and
§ 89. Lire, Hearty, Casvatty Corporations, 1438

to collect the entire premium and in addition to give without cost a building
lot valued at $50 or (2) to sell a policy and to sell such lot for the nominal
charge of $1.00. Ruling Ins. Dept., June 30, 1910.

‘This section does not provide a specific penalty for giving rebate which
should be considered exclusive, but simply provides the manner in which the
Superintendent of Insurance may restrain future disobedience. Equitable
Trust Co. v. Newman, 72 Misc., 52.

A reduction in the rate of premiums charged by a company is not a
rebate, so long as it applies to all applicants for insurance; the prohibition
of section 89 is against discriminations. Ruling Ins. Dept., May 9, 1911.

It is not a violation of this section for a life insurance agent, in writing a
new policy, to advance and pay to the insuring company out of his own funds,
the full first year premium when be delivers the policy to the insured —
taking in exchange therefor a three months note of the insured, to the agent
individually, for the full amount advanced with interest —the same being
done in good faith and without any qualifying agreement. Ruling Ins.
Dept., March 15, 1912.

If a person on a salary such as wu clerk or Supervisor of Agents is allowed
a commission on a policy on their own life, it is a rebate unless the com-
mission is determined in advance and that if it will exceed $5,000 for any
one year, the contract for such commission is passed upon ‘by the board of
directors. Ruling of Ins. Dept., December 11, 1913.

DATING BACK.—A new policy may be issued in place of one allowed to
lapse and may be dated back as many years as premiums were paid on the
original policy. Ruling Ins. Dept., May 19, 1910.

Dating back of a policy, to give the insured the benefit 6f a younger age,
is clearly discriminating and falls within the prohibition of § 89. Ruling
Ins. Dept., Oct. 27, 1909.

Section 89 does not prohibit dating back atedlimaly but does prohibit dis-
criminations. Ruling Ins. Dept., Nov. 11, 1909.

If A should now apply to Company B for the cancellation of his five-year
old policy, and the issue of a new one in lieu thereof on the company’s new
form with same date of entry as the ola policy, and the company should grant
his request and give him the new policy on the new form at age 40, at the old
date of five years ago, it would be a violation of § 89. Ruling Ins. Dept.,
Sept. 9, 1910.

SPECIAL CONTRACTS.—“ Special contracts,” frequently described as
“board contracts,” are prohibited by section 89 of the Insurance Law as
amended by Laws 1906, chapter 326. Ruling Ins. Dept., November 6, 1908.

The employment of a person for the bona fide purpose of procuring prospects
would not in itself be a violation of § 89. Ruling Ins. Dept., Jan. 4, 1910.

INTEREST ON CHECKS.—In regard to requiring interest on checks
tendered in payment of premiums with a request that they be held,
Insurance Companies should be governed by the terms of the grace clause
contained in the policy on which a premium is to be paid. Ruling of Ins.
Dept., April 7, 1914.
144 : Tue Insurance Law. 8§ 90, 91.

§ 90. Discriminations against colored persons prohibited.

No life insurance corporation doing business within this state
shall make any distinction or discrimination between white persons
and colored persons, wholly or partially of African descent, as to
the premiums or rates charged for policies upon the lives of such
persons, or in any other manner whatever; nor shall any such
corporation demand or require a greater premium from such
colored persons than is at that time required by such corporation
from white persons of the same age, sex, general condition of
health and prospect of longevity; nor shall any such corporation
make or require any rebate, diminution or discount upon the
amount to be paid on such policy in case of the death of such
colored persons insured, nor insert in the policy any condition,
nor make any stipulation whereby such person insured shall bind
himself, or his heirs, executors, administrators and assigns to
accept any sum less than the full value or amount of such policy
in case of a claim accruing thereon by reason of the death of such
person insured, other than such as are imposed upon white persons
in similar cases; and any such stipulation or condition so made or
inserted shall de void.

Source.—Former § 90; originally revised from L. 1891, chap. 119, § 1.

See § 1191, Penal Law. Discriminations and rebates by life insurance cor-
porations prohibitea.

§ 91. Business to be accepted from licensed agents only;
agents’ certificate of authority.

No life insurance corporation doing business within this state,

or agent thereof, shall pay any commission or other compensation
to any person for services in obtaining new insurance, unless such
person shall have first procured from the superintendent of insur-
ance a certificate of authority to act as an agent of such company

as hereinafter provided. No person shall act as agent, sub-agent :

or broker, in the solicitation or procurement of applications for

insurance, or receive for services in obtaining new insurance any °

commission or other compensation from any life insurance corpo-

ration doing business in this state, or agent thereof, without first ’

procuring a certificate of authority so to act from the superin-

tendent of insurance, which must be renewed annually on the first :

day of January, or within six months thereafter. Such certificate
shall be issued by the superintendent of insurance only upon the
§ 91. , Irn, Hearre, Casvarty Corporations. 145
written application of persons desiring such authority, such appli-
cation being approved and countersigned by the company such per-
son desires to represent, and shall be upon a form approved by the
superintendent of insurance, giving such information as he may
require. ‘[he superintendent of insurance shall have the right to
retuse to issue or renew any such certificate in his discretion. No
such certificate shall be valid, however, in any event after the first
day of July of the year following the issuing of such certificate.
Renewal certificates may be issued upon the application of the com-
pany. Such certificate of authority shall be executed in tripli-
cate; one copy thereof shall be filed in the office of the superin-
‘tendent, and two copies thereof shall be issued to such agent,
subagent or broker, one of which copies such agent, subagent or
broker shall, within thirty days after such certificate is issued,
cause to be filed in the office of the county clerk of the county in
which such agent, subagent or broker resides, or, if a non-resident,
in the office of the county clerk of the county in this state in
which he has an office for the transaction of business. Agents
operating solely for companies transacting industrial or prudential
insurance on the weekly-payment plan of insurance are exempted
from the provisions of this section, and nothing contained herein
shall be construed as prohibiting any corporation transacting in-
dustrial or prudential insurance on the weekly-payment plan from
accepting business on the plan from unlicensed agents. Any per-
son or corporation violating the provisions of this section shall
forfeit to the state the sum of five hundred dollars. On the con-
viction of any person acting as agent, subagent or broker, of the
commission of any act which is a violation of any of the provisions
of this chapter the superintendent of insurance shall immediately
revoke the certificate of authority issued to him and no such cer-
tificate shall thereafter be issued to such convicted person by the
superintendent within three years from the date of his conviction.

Source.—Former § 91, as amended by L. 1895, chap. 995; LL. 1907, chap. 623;
originally revised from L. 1851, chap. 95, § 3; L. 1889, chap. 282, §§ 1, 2, as
amended by L. 1890, chap. 401.

Amended by L. 1909, chap. 301.

See § 9, ante. No foreign corporation to transact business in this state
without certificate of authorization by superintendent.

See § 29, ante. Copy of charter of verified statement to be filed in the office
of superintendent of insurance.

See § 31, ante. Agent not to transact business until certificate is filed
in county clerk’s office.
146 Tue Insurance Law. § 91-a.

See § 32, ante. Renewal of certificate.

See § 49, ante. Any person aiding in the transaction of business of foreign
corporation is deemed an agent thereof.

See § 50, ante. Agent’s certificate of authority.

See § 54, ante. Agents not to act for unauthorized corporations.

See § 137, post. License to agents in certain cases.

See § 1192, Penal Law. Acting as agent of life insurance corporation with-
out certificate of authority.

AGENT’S AUTHORITY.—It was apparently the legislative intent that
agents soliciting insurance, other than industrial or prudential, on the weekly
payment plan, should secure a certificate of authority therefor from the
superintendent of insurance. Attorney-General Rep., 1897, page 207.

The payment by a company of a commission on account of business secured
in the State, to a manager, who does not hold a New York life agent’s cer-
tificate of authority, and who does not participate in any way in securing
the application for insurance, is a violation of this section. Ruling Ins. Dept.,
Feb. 17, 1912.

ANNUITIES.—Annuities may be issued without the services of a licensed
agent on the application of any person interested so long as no commission
is allowed for the consideration received. Ruling Ins. Dept., July 29, 1909.

There is no prohibition in the Insurance Law against an insurance com-
pany or other corporation authorized to do an annuity business from paying
commissions or compensation for such business to persons not licensed. Ruling
Ins. Dept., March 7, 1912.

COMMISSION.— A person cannot accept lawfully commission on a life
insurance policy on his own life which is written by a company which he
does not represent. Ruling Ins. Dept., July 8, 1913.

If the contracts of the members of a corporation with the corporation
provide for the turning in of commissions on life business produced, there is
no reason why such commissions on such business may not be turned over
to such corporation, provided, however, that this would not apply to business
written on the life of any member of the corporation. Ruling Ins. Dept.,
July 1, 1913.

§ 91-2. Agents for health or accident insurance.

No corporation transacting the business of health and accident
insurance within this state, or agent thereof, shall pay any commis-
sion or other compensation to any person, partnership, association
or corporation, except to a broker duly authorized under the pro-
visions of section one hundred and forty-three of this chapter,
for services in obtaining new insurance or in collecting premiums
from policyholders in this state, unless such person, partnership,
‘association or corporation shall have first procured from the
superintendent of insurance a certificate of authority to act as an
agent of such corporation as hereinafter provided. No person,
§ 91a. Lrre, Heatru, Casrantry Corporations. , 147

partnership, association or corporation shall act as agent in the
solicitation or procurement in this state of applications for health
and accident insurance or in the collection of premiums for such
insurance, or receive for such services any commission or other
compensation from any corporation transacting the business of
health and accident insurance in this state, or agent thereof. with-
out first procuring a certificate of authority so to act from the
superintendent of insurance which must be renewed annually.

Before any agent’s certificate of authority shall be issud by
the superintendent of insurance pursuant to this section, there
shall be filed in his office: (1) A written application by the
person, partnership, association or corporation desiring such au-
thority which shall be in the form or forms and supplements
thereof prescribed by the superintendent of insurance and con-
tain such information as he.may require. (2) <A certificate by
the corporation desiring to employ the applicant as agent. duly
verified by one of its executive officers or managing agents, that
such corporation has duly investigated the character and record
of the applicant and has satisfied itself that he is trustworthy and
competent to act as its agent. The superintendent of insurance
may refuse to issue or renew and may revoke any such certificate
for cause, which shall include violations of the insurance law
and fraudulent practices. provided that no such action shall be
taken without an investigation and a hearing either before the
superintendent or before a salaried employee of the insurance
department designatd for that purpose, whose report the super-
intendent may adopt. Every such corporation shall, upon the
termination of the employment of any agent for the solicitation
of health and accident insurance in this state or the collection
of premiums therefor, forthwith file with the superintendent of
insurance a statement of the facts relative to the employment of
such agent and the termination of such employment and the cause
thereof.

Every such certificate shall expire upon the termination of the
employment of the agent by the corporation for which he is
authorized to act as agent, or in any event, on the thirty-first
day of December of the calendar year in which the same shall
have been issued, provided, however, if an application for the
148 Tue Insurance Law. § 92.

renewal of any such certificate shall have been filed with the
superintendent of insurance before January first of any year,
such agent may continue to act as such under such expired cer-
tificate until the issuance to him by the superintendent of insur-
ance of a new certificate or until five days after the superintendent
of insurance shall have refused to issue such certificate and shall
have served notice of such refusal on such agent. Service of such
notice may be made either personally or by mail, and, if by mail,
shall be deemed complete if such notice is deposited in the post-
office, postage prepaid, directed to the applicant at the place of
residence or business specified in his application.
Added by L. 1914, chap. 14. In effect February 26, 1914.

Note.—Section 2 of chap. 14, L. 1914, further provides:

This act shall take effect on the first day of July, nineteen hundred and
fourteen, provided that any person, partnership, association or corporation,
acting as the agent in this state of any corporation transacting the business
of health and accident insurance, who or which shall or may-have procured a
certificate of authority to act as agent of such corporation under and pur-
suant to the provisions of section one hundred and forty-two of this chapter
prior to the said first day of July, nineteen hundred and fourteen, shall not
be required to make application for a certificate of authority hereunder for
the year nineteen hundred and fourteen, and that, if such agent, so
authorized, shall apply for a certificate of authority to act as agent pursuant
to this section prior to the first day of January, nineteen hundred and fifteen,
such agent may continue to act as such under such expired certificate until
the issuance to him or it by the superintendent of insurance of a certificate '
thereunder or until five days after the superintendent of insurance shall
have refused to issue such certificate and shall have served notice of such
refusal in the manner above provided.

§ 92. No forfeiture of policy without notice.

No life insurance corporation doing business in this state shall
within one year after the default in payment of any premium,
installment or interest declare forfeited, or lapsed, any policy here-
after issued or renewed, and not issued upon the payment of
monthly or weekly premiums, or unless the same is a term insur
ance contract for one year or less, nor shall any such policy be
forfeited, or lapsed, by reason of nonpayment when due of any
premium, interest or installment or any portion thereof required
by the terms of the policy to be paid, within one year from the
failure to pay such premium, interest or installment, unless a writ-:
ten or printed notice stating the amount of such premium, interest,

3
§ 92. Lire, Heattru, Casvatty Corporations. 149

installment, or portion thereof, due on such policy, the place where
it shall be paid, and the person to whom the same is payable, shal!
have been duly addressed and mailed to the person whose life is
insured, or the assignee of the policy, if notice of the assignment
has been given to the corporation, at his last known post-
office address in this state, postage paid by the corporation, or by
any officer thereof, or person appointed by it to collect such pre-
mium, at least fifteen and not more than forty-five days prior to
the day when the same is payable. The notice shall also state that
unless such premium, interest, installment or portion thereof, then
due, shall be paid to the corporation, or to the duly appointed agent
or person authorized to collect such premium by or before the day
it falls due, the policy and all payments thereon will become for-
feited and void except,as to the right to a surrender value or
paid-up policy as in this chapter provided. If the payment de-
manded by such notice shall be made within its time limited there-
for, it shall be taken to be in full compliance with the requirements
of the policy in respect to the time of such payment; and no such
policy shall in any case be forfeited or declared forfeited, or lapsed,
until the expiration of thirty days after the mailing of such notice.
The affidavit of any officer, clerk, or agent of the corporation, or of
any one authorized to mail such notice that the notice required
by this section, has been duly addressed and mailed by the corpo-
ration issuing such policy shall be presumptive evidence that such
notice has been duly given. No action shall be maintained to
recover under a forfeited policy, unless the same is instituted
within two years from the day upon which default was made in
paying the premium, installment, interest or portion thereof for
which it is claimed that forfeiture ensued.

Source.— Former § 92, as amended by L. 1897, chap. 218, and L. 1906,
chap. 326; originally revised from L. 1876, chap. 341, § 1, as amended by L.
1877, chap. 321, and § 2.

See § 210, post. Notice of assessment by co-operative companies.

See Personal Property Law, § 15, as amended by L. 1911, chap. 327, as to
proceeds of life insurance policy under a trust with an insurance company.

EFFECT OF SECTION.— This section allows to the holder of a policy of life
insurance, who has defaulted in the payment of his premiums, a year of
grace during which to pay the premiums and become reinstated, only where
the insurance company has neglected, before the due day, to give the statutory
150) Tu Insurance Law. § 92.

notice of the time when the premium became due, or, after the due day, has
failed to require payment at a fixed date within the year; if the insurance
company gives the necessary notice no grace is allowed. Schnell v. Mut. L.
Ins. Co., 53 App. Div.,, 172.

The mailing of the notice of forfeiture may be shown by the direct testi.
mony of agents authorized to mai! such notice, although there were many
agents engaged in the various steps of mailing notices; the requirement of
section 92 is satisfied if the notice be mailed whether actually received by the
insured or not. Wolarsky v. N. Y. Life Ins. Co., 120 App. Div., 99.

Section 92, forbidding forfeiture of policies within one year from default
unless notice has been mailed to the insured at his last known post-office
address in this state, is applicable only to persons having a known post-office
address in this state; § 312 (now repealed), requiring notice to the insured,
applied only to “stipulated premium” policies or to companies incorporated
as stipulated premium companies and was not to be read in connection with
§ 92 or to be taken as extending its provisions. Napier v. The Bankers’
Life Ins. Co., 51 Mise., 283.

The provisions of § 92 apply to and govern a policy issued and to be per-
formed in New York, though the assured resides in another state. Equitable
Life Assur. Soc. v. Nixon, 81 Fed. Rep., 796.

The provisions of § 92 do not apply to nor control a policy issued by a cor-
poration of New York in another state, in favor of a citizen of the latter
state. Mut. Life Ins. Co. of New York v. Cohen, 179 U. 8., 262.

SUBSTANTIAL COMPLIANCE.— To enable a life insurance company to
avail itself of the provisions of section 92, permitting the forfeiture of a
policy, it must substantially comply with all the terms of the statute though
the notice to be mailed need not literally follow the words of the statute.
The failure to state in said notice that the person named therein as defend-
ant’s general agent was the duly appointed agent to collect the premium, and
that it should be paid before a certain date is not a substantial compliance
with the statute. Flint v. Provident Life & Trust Co., 76 Misc., 673.

PAYMENTS.— The duration and validity of a policy, whatever may be ita
terms, is not dependent upon payment of premium on the day named, but upon
payment within thirty days after notice is given; the statute is part of the
contract, and governs the rights and obligations of the parties, the same as if
all its terms and conditions had been incorporated therein. Baxter v. Brooklyn
L. Ins. Co., 119 N. Y., 450.

When one holding a term life insurance policy has an option to change it
for a straight life insurance policy at a different rate, on failure of the
insured to pay three premiums on the new policy, it lapses. McGuire v.
Union Mut. Life Ins. Co., 114 App. Div., 344.

Mere proof of non-payment of premiums when due will not defeat an action
upon a policy, unless coupled with proof of the service of the notice of for-
feiture required by section 92. Auspitz v. Equitable Life Assurance Co., 62
Mise., 469. ep Po pat Oh

Where a life insurance policy for one month provides for its renewal for
each successive month upon payment of premiums provided to be paid, viz., 00
the first day of each year from the date of the policy of an expense premium,
§ 92. lire, Heatru, Casuatry Corporations. 151

and also for the payment, within thirty days after the notice of a demand
therefor, of mortuary premiums, the timely payment of the expense premium
does not operate to continue the policy in force to the end of the month in
which a mortuary premium not paid falls due; the payment of such mor-
tuary premium is not simply a condition precedent to the right to renew
the policy for the succeeding month; such a policy falls within the exception
stated in this section, requiring that notice be given to the insured before his
policy can be forfeited. Baldwin v. Provident Life Assur. Soc., 23 App. Div., 5.

FRATERNAL BENEFIT SOCIETY.— Chap. 341 of 1876, as amended by
chap. 321 of 1877, requiring notice to be given of the time when assessments
are payable, was repealed by chap. 690 of 1892, and, by virtue of the provi-
sions of § 233 of that act, fraternal benefit societies are now exempted from
the necessity of giving such a notice. Bopple v. Supreme Tent of Macabees,
18 App. Div., 488.

ASSESSMENT COMPANY.— This section does not apply to assessments of
an assessment insurance company, but such assessments are governed by § 210
of the Insurance Law. Greenwald v. United L. Ins. Assn., 18 Mise., 91.

RENEWAL.— The payment of each annual premium constitutes a
“renewal” of a policy within the meaning of this section; this section, there-
fore, applies to u policy issued before the passage of the act, but renewed
thereafter by the payment of premiums as they fell due. Carter v. B. L.
Ins. Co., 110 N. Y., 15.

When the insurance company accepts a premium after it has become due
and payable, the company revives and reinstates the policy from the time the
payment is made. Wyman v. Phoenix Mut. L. Ins. Co., 45 Hun, 184.

MORTALITY ASSESSMENTS.— Under chap. 321 of 1877, providing that
before a forfeiture of a life policy can be declared for non-payment of principal
or interest, notice must be mailed to the holder, it was held that it applied
only to premiums or interest payable at stated intervals, not to mortality
assessments. Merriman v. K. M. B. Ass’n, 138 N. Y., 116.

NOTICE.— Notice to the person insured is sufficient; notice need not be
given to a beneficiary. Rowe v. Brooklyn L. Ins. Co., 11 App. Div., 532.

A notice which contains statements reminding the assured of the time and
place when and where to make any payments requiréd by the terms of the
contract, the amount thereof and the effect of non-payment, is sufficient,
although it does not follow literally the words of the statute. McDougall v.
Provident Sav. Soc., 135 N. Y., 551.

Where the notice, after stating the amount of the premium, the time when
it would fall due, where it was to be paid, and that the conditions of the
policy required payment to be made on or before the premium is due, added,
“and members neglecting so to pay are carrying their own risks,” and, as a
postscript, “ prompt payment is necessary to keep your policy in force,” and
there was no statement that if payment was not made the policy would
“become forfeited and void,’ such notice was not a compliance with the
requirements of the statute and was insufficient to work a forfeiture. Phelan
vy. Northwestern Mut. L. Ins. Co., 113 N. Y., 147.

Although § 92 of the Insurance Law makes the affidavit of the person
mailing the notice of forfeiture of the policy presumptive evidence of such
152 Tuz Insurance Law. § 92.

mailing, such affidavit made in a foreign state is insufficient to establish
the mailing of the notice in opposition to testimony that it was never
received, unless the official character of the notary is authenticated; § 92
prevents the forfeiture of the policy during the thirty-day period. Carr v,
Prudential Ins. Co., 115 App. Div., 755.

A notice which states, “if your payment, should not be made when due,
your policy will cease to be in force” is not sufficient; unless good reasons
for « departure therefrom appear, a strict compliance on the part of insur-
ance corporations with the words of the statute is necessary to legalize the
forfeiture or lapse of a policy. Schad v. Security Mut. Life Assoc., 11 App.
Div., 487.

When the notice required by the statute is served before the premium is
due, no further notice is required. Conway v. P. M. 1.. Ins. Co., 140 N. Y., 79.

It is an essential prerequisite for a life insurance company, which seeks to
declare forfeited a policy issued by it, to establish that the notice required
by § 92 was mailed to the insured. Howell v. Hancock Mut. Life Ins, Co.,
107 App. Div., 200.

The holder of a life or accident policy held not to be entitled to the sick
indemnity when he had paid the premium when it was past due. Greenwaldt v.
U.S. H. & A. Ins. Co., 52 Mise., 353.

A life insurance company which accepts a premium note under an agreement
that the policy shall become void if the note is not paid, after having given
notice of the date when the premium became due, is not obliged to give a
similar notice respecting the maturity of the note in order to declare a for-
feiture of the policy; where an insured dies within six months after his policy
lapsed, the beneficiary is entitled to the protection of § 88 of the Insurance
Law, which provides for the continuation of the policy for such period of insur-
ance as may be purchased by any reserve without making the demand men-
tioned in said law, or exercising the option to continue the policy; a demand
and the exercise of the option provided for by the policy is necessary only
where the insured lives for the six months following the forfeiture. Bar-
tholomew v. Security Mutual Life Insurance Co., 140 App. Div., 88.

Notice is not required under § 92 of the Insurance Law, prior to notes
becoming due which are given for a premium, when the statutory notice has
been given as required thereby prior to the premium becoming due. O’Brien
v. Union Central Life Ins. Co., 207 N. Y., 180; aff’g 140 App. Div., 362.

INSUFFICIENT NOTICE.— A notice under this section is insufficent where
its form, its verbiage, its surplusage, its suggestions, intimations and advice,
intermingled with the language of the statute, are all repugnant to directness
and simplicity. The notice is intended to be a “danger signal” but here it
is confused with a dozen other signals. McCormack v. Securities Mutual Life
Insurance Co., 161 App. Div., 33.

CONTENTS OF AFFIDAVIT.— The affidavit which this section declares
shall be presumptive evidence that the notice has been duly given, should
show to the court the contents of the notice in order that the court may
determine whether the notice sent complied with the requirements of the
statute; an affidavit which does not identify the particular policy to which
§ 92. Lire, Heatru, Casuatrry CorproraTions. 158

the notice related is ineffective. McCall v. Prudential Ins. Co., 98 App.
Div., 225. :

QUESTION OF FACT.— What proof as to the mailing of such notice pre-
sents a question of fact for the jury. Howell v. Hancock Mut. L. Ins. Co.,
107 App. Div., 201.

PLEADING.— Evidence of service of the notice required by this section is
inadmissible unless service of notice is pleaded. Tischer v. Met. L. Ins.
Co., 167 N. Y., 178.

When, in an action on a policy, the insurance company seeks to interpose
he defense that the policy is forfeited for non-payment: of premiums, it is
dound to allege and prove both that the premium was not paid, and that the
notice required by the statute had been served more than thirty days before
the policy had been declared forfeited. Fischer v. Metropolitan L. Ins.
Co., 37 App. Div., 575.

BURDEN OF PROOF.— The burden of proving that the notice has been
served rests upon the insurance company, and the insured is not required
to allege the failure of the insurance company to serve it in the complaint.
Baxter v. Brooklyn L. Ins. Co., 44 Hun, 184.

WAIVER OF FORFEITURE.—In the absence of any agreement a waiver
of forfeiture of a policy of life insurance results only from negotiations or
transactions with the insured, by which the insurer, after knowledge of the
forfeiture, recognizes the continued existence of the policy, or does acts based
thereon, or requires the insured by virtue thereof to do some act or incur
some expense or trouble. Ronald v. M. R. F. L. Assn., 132 N. Y., 378.

It is within the general powers of the secretary of a life insurance company
to waive prompt payment of premiums about to fall due on one of its policies,
and the valid exercise of his power in this respect does not depend upon the
particular place where he may be at the time. Hastings v. B. I. Ins. Co.,
138 N. Y., 473.

The statute of New York prescribing the condition upon which a life
insurance policy may be forfeited for the non-payment of a premium is man-
datory, and its provisions may not be waived by either or both parties.

MODIFICATION OF TERMS.— It is competent for the parties to modify
the terms of the original contract with respect to the time of payment and
the effect of a failure to make punctual payments, and when such an agree-
ment exists a forfeiture does not work on account of it. DeFrece v. Nat. L.
Ins. Co., 1386 N. Y., 144.

DEATH OF MEMBER.— Where the holder of « mutual benefit certificate
dies after he has been notified of an assessment, but before the time allowed
for its payment, his failure to pay does not forfeit the certificate; though the
holder may have failed to pay an assessment which he was notified to pay,
the certificate is not forfeited if the notice did not state that unless it was
paid the certificate would be forfeited. Elmer v. Mut. Benefit L. Assn.,
19 N. Y. Supp., 289.

NOTE.— A foreign life insurance company, which has due notice of the
assignment .of a policy issued by it in this state, cannot forfeit the policy
for a failure to pay the premium, without giving the assignee the notice to
pay and of the intention to forfeit if not paid; and the fact that part of the
154 Tuer Insurance Law. §§ 93, 94,

premium when due was paid in cash and the balance by the assignee’s note,
reciting that default in payment would render the policy void, does not, in
the absence of the statutory notice of the maturing premium, entitle the
company to insist upon a forfeiture for the non-payment of the note at
maturity. Strauss v. Union Cen. L. Ins. Co., 170 N. Y., 349.

*

§ 93. Valuation of policies of health insurance.

The superintendent of insurance shall make annual valuations
of the policies of any company, insuring against disablement be
cause of sickness, on the net premium basis, according to the
British Friendly Society Tables (eighteen hundred and seventy-
six, eighteen hundred and eighty) and with interest at three and
one-half per centum per annum. He may in his discretion vary
the standard in particular cases and may also require additional
reserves because of hazardous occupations, impairment of the lives
of the insured or insufficient net premiums. This provision shall
not apply to policies insuring against specified diseases only and
for not longer than one year without privileges or renewal.

Source.—Former § 93, as added by L. 1901, chap. 635.

§ 94. Election of directors. Ts
The following provisions are hereby established for the election

of directors:

1. At every election of directors in any domestic mutual life
insurance corporation, whether incorporated by special act or un-
der general law and anything to the contrary in its charter, cer
tificate of incorporation or by-laws notwithstanding, every policy:
holder whose insurance shall be in force and shall have been in
force for at least one year prior thereto shall be entitled to vote
without other qualification.

2. Every such policyholder, and every other person having ¢
right to vote by virtue of any contract made prior to the enact
ment of this section which shall remain in force until the date o:
such election. sha]l be entitled to vote in person or by proxy or by
mail, as herein provided.

3. Except as otherwise now provided with reference to exist
ing policies, every policyholder shall be entitled to one vote onl:
irrespective of the number of policies or the amount of insurance
held by him; and unless a policv shall hiave been assigned mor
than six months prior to the election by an assignment absolut
§ 94, Lire, Heattu, Casuatty Corprorations. 155

on its face to an assignee other than the corporation whlich shall
have issued the policy the person upon whose application the
policy shall have been issued, or if the application be signed by
more than one person, the person whose life is insured shall be
deemed to be a policyholder entitled to vote as aforesaid; in case
a policy shall have been assigned as aforesaid, the assignee shall
be deemed to be a policyholder entitled to vote, provided his sig-
nature, either attested by the assignor or acknowledged in like
manner as in case of a deed to be recorded in this state, shall have
been filed at the home office of the corporation which shall have
issued the policy. ,

4, At least six months prior to every such election every such
corporation shall file with the superintendent of insurance two
full and correct lists of the names and last known post-office
addresses of all policyholders whose insurance was in force twelve
months prior to the date fixed for such election, and all other
policyholders entitled to vote by virtue of contracts made prior
to April twenty-seven, nineteen hundred and six. The names of
said policyholders shall be arranged on said lists alphabetically,
placed in separate volumes containing not to exceed three thou-
sand names, and shall be classified by states, territories and pos-
sessions of the United States and by foreign countries. Such
sorporation shall also maintain two similar lists at its home office;
and these lists shall be corrected from the records of the home
office so that a list as nearly correct as may be shall be on file to
within three months of such an election.

5. All said lists shall be subject to inspection and copy under
regulations prescribed by the superintendent of insurance at any
time during business hours by any policyholder in said corpora-
tion or by his authorized representative during the six monthls
prior to such election; provided, however, that after such elec-
tion, or, if no candidate shall have been nominated otbler than
those nominated by the board of directors, then after the time for
such independent nominations shiall have expired, such lists may
be withdrawn by the corporation filing and maintaining the same
as aforesaid; and thereafter, prior to the next election, new lists
shall be filed and maintained, subject to inspection and copy, as
above provided, which may be similarly withdrawn.

6. Where policyholders of any domestic stock life insurance
corporation have become or shall become entitled to vote for di-
156 Taz Insurance Law. § 94,

rectors, they shall be entitled to vote in person, by proxy or by
mail, as herein provided and two similar lists of policyholders,
qualified to vote, in accordance with the charter or by-laws of
such corporation, except the holders of industrial policies, shall
be filed and maintained in the office of the superintendent of
insurance and at the home office respectively, similarly arranged
and similarly subject to inspection and copy and withdrawal as
in the case of mutual corporations as above provided.

7. Where policyholders in any company shall have made nom-
inations as hereinafter prescribed, they, or a committee repre
senting them, shall upon demand, with the approval of the super-
intendent of insurance and the payment to the company of the
actual cost of making such copies, be furnished by such company
with a copy of such list of policyholders or with a copy therefrom
of the list for a separate jurisdiction. A copy of a list so taken,
or of any part thereof, shall be held by persons receiving the same
inviolate for the purposes of said nominators in a pending election
and shall not be transferred to other persons for any other use
whatever. At the close of the canvass of the votes all copies of
such lists shall be returned to the company.

8. At least seven months prior to the date of any election of
directors in any such corporation, the board of directors shal]
nominate candidates for every vacancy to be filled at such election
and shall also appoint three persons, jointly or severally, to re
ceive proxies to be voted for said nominees, and shall also file
with the superintendent of insurance and at its home office a
certificate of the names of the candidates so nominated and of
the persons so designated to receive said proxies which shall be
described as the “ administration ticket.”

9. Any one hundred or more qualified voters of such corpo
ration may make other nominations for one or more vacancies to
be filled at any such election by filing with the superintendent
of insurance at least five months before the election a certificate
signed and acknowledged, giving the names and addresses of the
candidates nominated, the names and addresses of three persons,
jointly or severally, designated to receive proxies to be voted for
said nominees, and an appropriate name or title designated by
the superintendent of insurance to distinguish the ticket from
the administration ticket and other nominations. Such nominat-
ors must also file a copy of said certificate, certified by said super-
§ 94. Lire, Hrattru, Casuattry Corporations. 157

intendent, at the home office of the company at least five months
before such election.

10. All certificates of nomination shall be accompanied by a
written acceptance of such nomination by each nominee thereon.
A court of record may for cause shown direct the name of any
candidate to be stricken from a ticket on file and may authorize
the nominators of such ticket to substitute th name of another
person to fill the vacancy so made.

11. If no independent nomination shall have been made as
hereinbefore provided, then and in that case all further proceed-
ings in connection with such election as provided by this section
may be omitted, and said election shall then be conducted and
held under such rules and regulations as the superintendent of
insurance may prescribe; but no votes shall be cast or counted
except for said candidates nominated by the board of directors,
or for such candidates as the board of directors may have nom-
inated to fill vacancies among said candidates caused by the death,
disability or refusal to stand as candidates of any one or more of
those so nominated.

12. At least three months prior to any such election the cor-
poration shall cause to be mailed, in a serially numbered sealed
- envelope with postage prepaid, to each policyholder whose name
shall be upon said list and whose policy shall still be in force,
at his last known post-office address, a corresponding serially
numbered official ballot in a form approved by the superintendent
of insurance and containing the respective tickets nominated as
hereinbefore provided and the names and addresses of the persons
so appointed to receive proxies. A corresponding serially num-
bered stub or card containing the name and address of the policy-
holder to whom each ballot is sent shall be retained at the home
office of the company for the purpose of identifying said ballot
when returned. Such official ballot shall be conveniently ar-
ranged under the names or titles by which the nominations have
been designated and shall have printed upon it the name of the
company, the post-office address of its home office, the number
of directors to be elected and the names of those whose terms
158 Tur Insurance Law. 8 94,

expire, the date of the election and instructions as herein pro-
vided for executing such official ballot or for the use of a proxy
as herein provided and a designated space for the signature of
the policyholder, the number of one of his policies and the signa-
ture of a subscribing witness.

13. No other or different ballot shall be used, except that a
duplicate ballot or ballots may be supplied to any policyholder
and voter or to the holder of his proxy, for his own use, pursuant
to rules and regulations prescribed by the superintendent of
insurance.

14. There shall be enclosed in such sealed envelope with such
official ballot a suitable returned gummed envelope having
thereon the name and post-office address of the home office of the
corporation and the words “ballot for directors.” There shall
also be enclosed in such sealed envelope a suitable blank proxy
upon which shall be printed a statement of the right of the policy-
holder to vote either by mail or by proxy as herein provided or
in person.

15. No other papers or written or printed matter shall be
enclosed in such sealed envelope. Specimen copies of such sealed
envelope and enclosures shall be approved by the superintendent
of insurance before being so mailed.

16. A policyholder desiring to vote by mail must indicate the
name of the nominee or nominees for whom he desires to vote or
strike out the name or names of those for whom he does not
desire to vote upon the official ballot so provided or must other
wise suitably indicate in the blank space thereon the nominee or
nominees for whom he desires to vote, and must sign the said
official ballot in his own handwriting in the presence of a sub
scribing witness, and place or cause to be placed thereon the num-
ber of at least one policy held by him. Failure to state or to
correctly state such policy. number shill not render a ballot void
or subject the policyholder to any penalty.

17. Such policyholder must enclose the official ballot so
marked in such return envelope or in a similarly inscribed en-
velope. Such envelope containing the ballot sealed and postpaid,
§ 94. Lirz, Heatrn, Casvarty Corporations. 159

shall be mailed by the policyholder to the home office of the com-
pany. No policyholder may vote for more than the number of
directors so to be elected and all ballots upon which the intent of
the policyholder does not fairly appear shall be void.

18. Any policyholder may vote by proxy executed to any per-
son, whether designated in the certificates filed as aforesaid or
otherwise. The execution of a proxy shall be attested by a sub-
scribing witness and the proxy shall set forth the number of
at least one policy held by the person giving it. A proxy shall
not be valid unless executed within three months prior to the
election and shall be used only at such election or any adjourn-
ment thereof and may be revoked by the policyholder giving the
same at any time prior to the opening of the polls upon the day
of such election. In exercising such proxy the holder or holders
thereof shall vote only upon the official ballot, or the duplicate
thereof, furnished to such policyholder as hereinbefore provided,
to which such party shall be attached. In so voting the proxy
holder shall sign said ballot in the name of the policyholder, and
shall also sign his own name as proxy. Ballots voted by proxy
holders shall be mailed to the home office, or voted in person by
said proxy holder, in the same manner as herein provided for
ballots voted directly by policyholders.

19. The votes cast at such election shall be limited to the candi-
dates nominated as aforesaid except that in case of a vacancy
occurring upon any ticket so nominated the board of directors of
such corporation, if the candidate was upon the administration
ticket, and a majority of the nominators if the candidate was
upon an independent ticket, shall nominate another candidate in
his place by filing a certificate of said nomination with the super-
intendent of insurance and a certified copy thereof at the home
office of the company if such| vacancy occurs more than five
months prior to the day set for the election, and the name of the
candidate so selected shall be set forth in the official ballots sent
out by the company. If such vacancy occurs within five months
prior to such election then the directors elected at such election

shall have power to fill such vacancy.
160. Tur Insurance Law. _ § 94,

20. All ballots by mail shall be received at the home office of
a company holding an election by two or more persons, one-half
of whom shall be appointed for that purpose by the superintend-
ent of insurance and one-half by the directors of the company.
The compensation of the custodians so appointed shall be paid by
the company. Such custodians shall keep a daily record of the
envelopes marked as containing ballots for directors which are
received at the home office, and shall securely retain them in thleir
joint custody in safety vaults or compartments accessible only to
such custodians and not to either of them separately, under regu-
lations prescribed by the superintendent of insurance. Prior to
the closing of the polls election day said custodians shall deliver
all ballots so received by them to the inspectors of election.

21. The election shall be held at the home office of the com-
pany. The polls shall be opened at ten o’clock in the forenoon
and remain open until four o’clock in the afternoon of the day
of election, at which time they shall be closed. All votes cast at
such election shall be by ballot as hereinbefore provided. .

22. The superintendent of insurance shall appoint an ade
quate number of inspectors of election who may employ expert
accountants and assistants and may procure stationery and sup-
plies for conducting the election and canvassing the votes. Their
compensation and necessary disbursements shall be paid by the
company. Such inspectors shall have power to determine all
questions concerning the verification of the ballots, the ascertain
ment of the validity thereof, the qualifications of the voters and
the canvass of the vote; and with respect thereto shall act under
such rules and regulations as shall be prescribed by the superin-
tendent of insurance.

23. All envelopes marked substantially as hereinbefore pre
scribed received by mail at the home office of the company at any
time prior to the day of election or on that day before the polls
are closed shall be forthwith delivered intact without opening to
the custodians appointed as hereinbefore ‘provided and before the
polls are closed shall be delivered to the inspectors of election.

24. No person shall conceal or withhold or aid or abet any
other person in concealing or withholding from the custodians
§ 94. Lire, Hearty, Casvarty Corporations, 161

or inspectors any such envelope; nor shall any person, other than
an inspector, open or aid or abet any person to open any such
envelopes.

25. No ballots received by mail at the office of the company
or offered personally or by proxy after the polls are closed shall
be counted. All ballots offered personally or under proxies and
all ballots received by mail at the office of the company as afore-
said before the polls are closed shall be received by the inspectors
subject to verification and ascertainment of the validity thereof
and of the qualifications of the voter.

26. Immediately upon the closing of the polls the inspectors
shall proceed to the examination of the ballots and shall canvass
the votes lawfully cast. The canvass shall proceed from day to
day and the inspectors shall certify the result to the company
and to the superintendent of insurance as soon as it is completed.

27. Representatives designated by a majority of each three
persons who shall have been appointed to receive proxies to be
voted for tickets nominated as aforesaid may, in such number as
shall be approved by the superintendent of insurance, be present
during the casting, verification and canvass of the votes. The
compensation of such) representatives shall not be a charge upon
or raid from the funds of the company.

28. All ballots and proxies received by the inspectors of elec-
tion shall immediately upon the completion of the canvass be
placed in sealed packages and shall be preserved by the said
inspectors for a period of four months subject to the order of any
court having jurisdiction of any proceedings relating thereto.

29. The superintendent of insurance shall have power to
supervise and direct the methods and procedure of all elections
herein provided for and to make all further needful rules and
regulations concerning the same. All bills for or on account of
the custodians of ballots and inspectors of election, their
employees, assistants, necessary expenses or disbursements, dur-
ing the conduct of such election, and the canvass of the votes,
shall be approved by the superintendent of insurance before

payment by the company.
162 Tut Insurance Law. § 94,

30. The said elections and the conduct thereof shall at all
times be subject to the supervision and control of the courts in
like manner as elections for state, county and municipal officers
so far as applicable.

31. The including by any corporation of the name of any per
son in any list of policyholders required by this section shall not
be construed as an admission by the corporation of the validity
of any policy, and no such list shall be competent evidence against
the corporation in any action or proceeding in which the question
of the validity of any policy or of any claim under it is involved,

32. No insurance company, and no officer, agent or employee
thereof shall knowingly omit the name of a policyholder and
voter from the lists herein required to be filed, or shall knowingly
omit to give the correct name and address of such policyholder
and voter, or knowingly give a wrong address, or shall expend,
advance or loan any money of the company contrary to the
provisions of this section.

38. Except where such expenditure is authorized or required
by this section, no money of the company shall be expended in
connection with such election or in canvassing therefor, and no
officer or agent of the company shall directly or indirectly maxe
any advance or loan of such moneys to any person in connection
with or for the purpose of such election or canvass.

34. No officer, salaried agent or employee shall, within the
period between the filing of the nominations and the election,
during business hours, devote any of his time in soliciting votes
in support of or in opposition to any candidate or list of candi-
dates in connection with any such election. No officer, agent or
employee shall compel or coerce any other officer, agent or em-
ployee to support, work for, or oppose any candidate or any list
of candidates. The stationery or supplies of the company or
office space devoted to the conduct of its business shall not be used
for furthering the interest of any ticket or candidate thereon.

35. No person, whether connected with the company or other-
wise, shall issue or cause to be issued any circular or other written
or printed communication either in behalf of or in opposition to
any ticket or any candidate thereon containing any false
statement.

Source.—Former § 94, as added by L. 1906, chap. 326, and amended by L.
1907, chap. 623.
§ 95. Lire, Hrattu, Casuatty Corporations, 163

Policyholders of a domestic life insurance company may vote for directors
nominated by such policyholders; a stockholder may vote as such or as &
policyholder, but not as both. Attorney-General Rep., 1906, page 563.

The provision requiring a certificate of nomination to be filed, etc., does
not authorize the superintendent of insurance to change the nominations or
make any different certificate of the nominees from that filed; after the filing
of such record the court will not compel the superintendent of insurance to
change the record or compel the insurance company to send a different state-
ment of nominations. People ex rel. Shook v. Kelsey, 114 App. Div., 888.

§ 95. Conversion of a stock life insurance corporation into
a mutual life insurance corporation.

Any domestic stock life insurance corporation, whether incor-
porated under a general law or by special act, may become
a mutual life insurance corporation, and to that end may
carry out a plan for the acquisition of shares of its capital
stock, provided, however, that such plan: (1) Shall have been
adopted by a vote of a majority of the directors of such cor-
poration; (2) shall have been approved by a vote of stockholders
representing a majority of the capital stock at a meeting of stock-
holders called for the purpose; (8) shall have been approved Ly a
majority vote at a meeting called for the purpose, in such manner
as shall be provided for in such plan, of policyholders each insured
in at least one thousand dollars and whose insurance shall then
be in force and shall have been in force for at least one year prior
to such meeting; and (4) shali save been submitted to the super-
intendent of insurance and shall have been approved by him in
writing, provided that such plan shall not be approved by the
superintendent unless at the time of such approval the corpora-
tion, after deducting the aggregate sum appropriated by such plan
for the acquisition of all of its capital stock, shall be possessed
of assets sufficient to maintain its deposit theretofore made with
the superintendent and not less than the entire liabilities of the
corporation, including the net values of its outstanding contracts
computed according to the standard adopted by the corporation
under section eighty-four of this chapter, and also all funds, con-
tingent reserves and surplus save so much of the latter as shall
have been appropriated under such plan.

Source—Former § 95, as added by L. 1906, chap. 326.

Amended by L. 1911, chap. 150. (
164 Tue Insurance Law. § 96.

§ 96. Limitation of new business.

No domestic life insurance corporation shall issue in any year
new policies for a larger amount in the aggregate than as follows,
to wit: If the total amount of insurance by said corporation
in force on the thirty-first day of December of the preceding
year is more than fifty million dollars, and not in excess of one
hundred million dollars, not more than thirty per centum thereof;
if more than one hundred million dollars, and not in excess of
three hundred million dollars, not more than twenty-five per
centum thereof, or thirty million dollars, whichever is the larger;
if more than three hundred million dollars, and not in excess of
six hundred million dollars, not more than twenty per centum
thereof, or seventy-five million dollars, whichever is the larger;
if more than six hundred million dollars, not more than one hun-
dred and fifty million dollars, or it may increase its new business
over the largest amount issued in any one of the three years
immediately preceding in the proportion in respect to said amount
which the difference between twenty-five per centum of its net
renewal premiums computed according to the bases of mortality
and interest assumed in calculating its liabilities, and its total
expenses for such preceding year, after deducting from said total
expenses (1), the items of first year expenditure specified in the
first sentence of section ninety-seven of this chapter, (2) its actual
investment expenses (not exceeding one-fourth of one per centum
of the mean invested assets) and (3) taxes on real estate and other
outlays exclusively in connection with real estate, bears to said
net renewal premiums; provided, that in determining the amount
of insurance in force and the amount of new insurance issued,
policies of reinsurance and industrial policies issued upon the
weekly premium plan and all premiums on such policies and the
expenses in connection with such policies, shall be excluded and
there shall be included only that insurance upon which the first
premium or instalment thereof has actually been received. If
it appear that in the ordinary course of its business for any
calendar year the amount of insurance issued by any corporation
will probably exceed the limitation imposed by this section, the
superintendent of insurance may before the expiration of such
year authorize such corporation in writing to issue additional
insurance not to exceed ten per centum of the limitation for
such year; but such additional insurance shall be charged as
§ 97%. Lirr, Hearty, Casuauty Corporations, 165

a part of the new policies for the next succeeding year, in accord-
ance with the limitations of this section. A foreign life insur-
ance corporation, which shall not conduct its business within
the limitation and in accordance with the requirements imposed
by this section upon domestic corporations, shall not be permitted
to do business within this state.

Source—Former § 96, as added by L. 1906, chap. 326.

Amended by L. 1910, chap. 697; L. 1911, chap. 369, and L. 1913, chap. 304.

Note—The purpose of the amendment of this section by chapter 304 of
1913 was to allow the superintendent to authorize the issuing of additional
insurance in excess of limitation to amount of ten per centum of limitation;
but such additional insurance is charged as a part of the new policies for the
next succeeding year.—Ed.

Section 96 is not a local or private bill and does not violate § 16 of article 3
of the State Constitution providing that no such bill shall be expressed in
the title; nor is it unconstitutional under § 18 of article 3, because corpora-
tions with a certain kind of insurance are excepted. Bush v. New York Life
Ins. Co., 185 App. Div., 447.

Annuity contracts, whether survivorship annuities or not, do not come
within the provisions of §§ 96, 97, except as to the provisions of the letter
relating to expenses other than investments. Ruling Ins. Dept., Aug. 2, 1909.

Only policies actually paid for and which the company has received proper
advice so as to make the proper entries on its books prior to December first
in any given year are contemplated by the word “issue” in §97. Ruling
Ins. Dept., July 23, 1909.

The words “ policies of re-insurance” as used in section 96 cover the case
of the assumption by one company of the policies of another. Ruling Ins.
Dept., Nov. 9, 1911.

§ 97. Limitation of expenses.

No domestic life insurance corporation shall in any calendar
year, after the year nineteen hundred and six, expend or become
liable for, including any and all amounts which any person, firm or
corporation is permitted to expend on its behalf or under any agree-
ment with it (1) for commissions on first year’s premiums, (2) for
compensation, not paid by commission, for services in obtain-
ing new insurance exclusive of salaries paid in good faith
for agency supervision either at the home office or at branch
offices, (3) for medical examinations and inspections of pro-
posed risks, and (4) for advances to agents, a total amount exceed-
ing in the aggregate (a) the loadings upon the premiums for
the first year of insurance received in said calendar year (caleu-
166 Tue Insurance Law. § 97.

lated on the basis of the American experience table of mortality
with interest at the rate of three and one-half per centum per
annum) and (b) the present values of the assumed mortality gains
for the first five years of insurance on policies in force at the end
of said calendar year on which the first premium, or instalment
thereof, has been received during said calendar year, as ascertained
by the select and ultimate method of valuation as provided in sec-
tion eighty-four of this chapter; and (c) on policies issued and
terminated in said calendar year the full gross premiums received,
less the net cost of insurance for the time the insurance was in
force, computed by the American experience select and ultimate
table, three and one-half per centum. No such corporation
shall make or incur any expense or permit any expense
to be made or incurred upon its behalf or under any agree
ment with it, except actual investment expenses (not exceeding
one-fourth of one per centum of the mean invested assets) and also
except taxes on real estate and other outlays exclusively in connec-
tion with real estate, in excess of the aggregate amount of the
actual loadings upon premiums received in said year calculated
according to the standards adopted by the company under section
eighty-four of this chapter, and the present values of the assumed
mortality gains hereinbefore mentioned. Provided, however, that
any such corporation having less than eighty millions.of insurance
in force, may incur a total expenditure exceeding the limits of
expenditure as herein defined by an amount not greater than the
following percentages of its loadings for the preceding calendar
year, to wit: having at the end of such year less than ten millions,
forty per centum; having twenty but less than thirty millions,
thirty-five per centum; having thirty but less than forty millions,
thirty per centum; having forty but less than fifty millions,
twenty-five per centum; having fifty but less than sixty millions,
twenty per centum; having sixty but less than seventy millions,
fifteen per centum; having seventy but less than seventy-five mil-
lions, ten per centum ; having seventy-five but less than eighty mil-
lions, five per centum. No such corporation, nor any person,
firm or corporation on its behalf or under any agreement
with it shall pay or allow to any agent, broker or other
person, firm or corporation for procuring an application for life
§ 97. Lire, Heattu, Casvatry Corporations, 167

insurance, for collecting any premium thereon or for any other
service performed in connection therewith any compensation other
than that which has been determined in advance. Except as
hereinafter provided all bonuses, prizes and rewards, and all
increased or additional commissions or compensation of any sort
based upon the volume of any new or renewed business or the
aggregate of policies written or paid for, are prohibited. Noth-
ing herein contained is to. be construed as prohibiting the institu-
tion of contests or competitions among agents, and the recognition
of success in such competitions by the awarding of ribbon deco-
rations, medals, pins, buttons or other tokens of small intrinsic
value, given not as compensation but as a bona fide recognition of
merit. No such corporation shall pay commissions upon
renewal premiums received upon policies issued after the year
nineteen hundred and six, in excess of five per centum of the pre-
mium annually for fourteen years after the first year of insurance
in the case of endowment policies providing for less than twenty
annual premiums, nor in excess of seven and one-half per centum
of the premium annually for the first nine years after the first
year of insurance and five per centum of the premium annually
for the next ensuing five years in the case of other forms of poli-
cies; provided that an amount found to be equivalent to the aggre-
gate amount so payable by a calculation approved by the super-
intendent of insurance and based upon mortality, interest and lapse
rates, may be distributed through three or more years, or through
a period exceeding fourteen years, but not more than two-fifths of
such amount shall be payable for any one year; provided further
that in any agency district subject to the supervision of a local sala-
ried representative the renewal commission payable to agents of
such district shall not exceed two-thirds of the foregoing rates annu-
ally for fourteen years, subject to the calculation as aforesaid; pro-
vided further that any such corporation may condition the allow-
ance or payment in whole or in part of any of the renewal
commissions allowed to be paid as aforesaid upon the efficiency of
service of the agent receiving the same or upon the amount and
quality of the business renewed under his supervision; and also
provided that a fee not exceeding three per centum may be paid
for the collection of premiums which shall be received for any
168 Tux Insurance Law. § 97.

year after the fifteenth year of insurance. If any such corporation
shall compensate its agents, or any of them, after the first insur-
ance year, in whole or in part, upon any other plan than commis-
sions and collection fees, the aggregate sum so paid shall in no year
exceed the limitations herein imposed‘and the schedule and plan of
such compensation shall be submitted to and approved by the super-
intendent of insurance. No such corporation, nor any person, firm
or corporation on its behalf or under any agreement with it, shall
make any loan or advance to any person, firm or corporation solicit-
ing or undertaking to solicit applications for insurance without ad-
equate collateral security, nor shall any such loan or advance be
made upon the security of renewal commissions, or of other compen-
sation earned or to be earned by the borrower except advances
against compensation for the first year of insurance. A foreign life
insurance corporation which shall not conduct its business within
the limitations and in accordance with the requirements imposed
by this section upon domestic corporations shall not be permitted to
do business within the state. This section shall not apply to ex-
penses made or incurred in the business of industrial insurance
nor, except as to the limitation of expenses for the first year of
insurance and as to compensation of and loans and advances to
agents or solicitors, to stock corporations issuing and representing
themselves as issuing nonparticipating policies exclusively.

Source.—Former § 97, as added by L. 1906, chap. 326.

Amended by L. 1909, chap. 301; L. 1910, chap. 697; L. 1913, chap. 304, and
L. 1914, chap. 1038. In effect April 3, 1914.

Note.—The purpose of the amendment of this section by chapter 304 of
1913 was to clarify it as to giving of prizes and tokens of merit.—Kd.

The amendment of this section by chapter 103 of 1914 added the third
sentence, “ Provided, however, that any such corporation.................000:
but less than eighty millions, five per centum.—Ed.

Salaries based on the premiums or on account of new business issued are
commissions and must be charged to the cost of new business. Ruling Ins.
Dept., Nov. 9, 1911.

Where a five-year non-renewable term policy under the standard policy form
of the State of New York is exchanged for an ordinary life, limited payment
life or endowment policy after the frst policy year and within five years from
date of issue in accordance with the provision in said standard policy forms,
the policy issued in accordance with such provision may be considered “new
insurance,” and to the agent who effects the change may be paid a regular

first year commission and allowed nine renewals. Ruling Ins. Dept., June 9,
1908.
§ 97. Lirr, Hearty, Casvauty Corporations, 169

Policies actually issued in 1906, not paid for, however, until after January
1, 1907, should not be included in the calculations as to the expense limitation
as provided in section 97. Attorney-General Rep., 1906, page 539.

If a general agent make a loan or advance on behalf of an insurance com-
pany, or under any agreement with it, it is within the prohibition of the
statute. Attorney-General Rep., 1906, page 648.

Foreign life insurance corporations must conform with the provisions of
section 97 in regard to limitation of expenses. Attorney-General Rep., 1906,
page 549.

This section does not apply to a contract with an agent entered into before
its passage and should not be construed as retroactive. Boswell v. Security
Mutual Life Ins. Co., 119 App. Div., 723.

Annuity contracts, whether survivorship annuities or not, do not come
within the provisions of §§ 96, 97, except as to the provisions of the latter
relating to expenses other than investments. Ruling Ins. Dept., Aug. 2, 1909.

An insurance company may lawfully issue a policy containing a clause “ upon
default of payment of premium this policy will be binding upon the company
as participating paid-up insurance of reduced amount, payable at the same
time and on the same conditions as under the original contract.” Ruling Ins.
Dept., Aug. 16, 1910.

§ 22 of the Domestic Relations Law, providing that the portion of insurance
on a husband’s life purchased by the excess of an annual premium over $500
shall be liable for his debts, applies to a policy negotiated by a husband and
payable to his wife as well as to policies which are negotiated by the wife her-
self. Guardian Trust Co. v. Straus, 139 App. Div., 884.

SINGLE AGENT.— This section added by chap. 328 of 1906, limits payment
to any single agent, and not merely the total expenditure of the corporation;
the statute deals with agents’ compensation and the expenses of procuring
new insurance; the contract of the agent is subject to the condition that the
corporation shall continue to transact business and section 97 although having
the effect of reducing an agents’ commissions is not unconstitutional. Boswell
v. Security Mutual Life Ins. Co., 119 App. Div., 723.

NYLIC.— The legal relation created between a company and the soliciting
agent by membership in “ Nylic for Agents” is contractual; prior to the act
of 1906 there was no legal obstacle in the way of “Nylic for Agents; ”
“Nylic” made prior to April 27, 1906, is not subject to the provisions of
_ chapter 326 of 1906; “ Nylic ” expense should be classified as a general expense;
since the amendments of sections 97 and 98 by chapter 326 of 1906 “ Nylic”
cannot be continued for agents employed after April 27, 1906. Attorney-
General Rep., 1906, page 565.

ADDITIONAL COMMISSION.— Section 97 will not permit “the drafting of
a contract to provide that the agent shall receive five per cent additional com-
mission upon first annual premium, provided he secures a certain amount of
paid-for business annually, providing the maximum commission comes within
the provisions of the law.” Ruling Ins. Dept., June 3, 1908.
170 Tur Insurance Law. § 97.

It would be unlawful under § 97 for managers of a company in various
States to organize an association to contribute a general fund and offer prizes
to managers for the largest volumes of business written. Ruling Ins. Dept,
Oct. 17, 1910.

It would be a violation of § 97, relating to rebates, to offer any sum to an
agent to write business for ten consecutive weeks and to remit with the
application the net for the premium. Ruling Ins. Dept., May 4, 1911.

The amendment to § 97 increasing the number of renewals that may be paid
to agents is not retrospective. Ruling Ins. Dept., Feb. 14, 1911.

COMMUTATION OF RENEWALS.— Where an agent has a guarantee of
two years’ renewals on business written since January 1, 1907, and desires te
commute such renewals, also a small amount of commissions on deferred first
premiums, if his proposition is made in good faith and he is desirous of sever-
ing his relations with his company, the renewals may be purchased provided
the limitations of section 97 of the Insurance Law of this state be not exceeded.

If, however, such plan be proposed as a method of commuting renewals it
would fall within the prohibition of the statute. Ruling Ins. Dept., November
16, 1908.

The commutation of nine renewals of seven and one-half per cent. each into
three renewals of fifteen per cent, each, with a further commuted amount of
thirteen per cent. of the fourth renewai in lieu of the five extra renewals of
five per cent. from the tenth to the fourteenth inclusive, is allowable. Ruling
Ins. Dept., Sept. 14, 1909.

‘Where an insurance company’s contract with its agents provides that in case
their contracts are terminated the company will pay certain net renewal com-
missions, the company may purchas2 in one sum the said renewal commissions
provided the total amount is within the limitation of § 97. Ruling Ins. Dept.,
March 27, 1911.

The provisions of § 97 which relate to the commutation of commissions is
permissive and not mandatory. Ruling Ins. Dept., Feb. 18, 1911.

There is nothing in the statute prohibiting companies endorsing the contract
of a special agent with a manager to guarantee carrying out the renewal agree
ment if same is conditional on the amount of business written provided the
limitations of § 97 be not exceeded. Ruling Ins. Dept., July 27, 1910.

COMMISSIONS.— Where a company has made a saving each month during
the first nine months of the year and proposes to pay out the accumulation
on business written and paid for, for the tenth month, thus making the com-
mission from seventeen per cent to twenty-two per cent higher than regular.
first year commissions, such proposition is in conflict with that provision of
section 97 which prohibits the payment to any agent, broker, etc. of “any
compensation other than that which has been determined in advance.” Rul-
ing Ins. Dept., November 4, 1908.

Where a company which made « saving under the law of $150,000 on new
business during the first nine months of the year, it cannot lawfully pay out
that saving during the balance of the year by increasing the commission to
agents, even providing the total expended in that year for new business is not
in excess of the amount allowed by law. Such savings in expenses as a com-
§ 97. Lire, Hearty, Casvarty Corporations, 171

pany might be able to make should inure to the benefit of the policyholders.
Ruling Ins. Dept., November 4, 1908.

The provisions of section 97 of the Insurance Law governing payments for
new business to agents of life insurance companies apply to the payments
made for the new business procured by such agents. The restrictions apply
to each agent separately and by himself, irrespective of whether the aggregate
payments by the company to all its agents do or do not exceed the statutory
limitations. The compensation of an. agent may not exceed that which haa
been determined in advance, any increased or additional compensation based
upon the aggregate of policies written or paid for is prohibited. Ruling Ins.
Dept., July 29, 1908.

A saving made by a company under the law should insure to the benefit ot
the policyholders and may not be paid out to agents in increased commis-
sions. Ruling Ins. Dept., Nov. 4, 1908.

COMMISSIONS — TERM — RATED POLICY.— “To the sum of the loading
on the term premium and the mortality gain on the term insurance, add the
loading on the premium for the succeeding contract also the present value of
the assumed mortality gains for the first five years of insurance on such con-
tract (its first premium or an instalment thereof having been received during
the calendar year for which the computation is made) the result will be the
total margins allowed by section 97 of the Insurance Law for commissions, etc.,
on the term-rated policy.” Ruling Ins. Dept., May 26, 1908.

TRAVELING EXPENSES.— Traveling expenses paid to soliciting agents
are not to be charged against the margin allowed, for the expenses of first
year’s business, but from part of the expenses to be taken out 4 the actual
loading on the total premiums received.” Ruling Ins. Dept., June 11, 1908.

COMMISSIONS.— The amendments to section 97 of the insurance Law
which took effect May 7, 1909, permit the company to pay ttese additional
commissions on all business written since that date only and does not permit
the company to pay these additional commissions on all brsiness written
under the Armstrong Law since January 1, 1907. Ruling Ins. Dept., May
14, 1909. ;

Under section 97 three per cent of the extra renewal commissions allowed
from the tenth to the fourteenth year, inclusive, cannot be commuted into an
extra four and one-half per cent payable on the first renewal (making twelve
per cent on such renewal) nor can such three per cent renewal commissions be
commuted into an extra two and one-half per cent on both the first and second
renewals (making ten per cent on the first and second renewals). This would
mean that seven and one-half per cent in each case would be paid on the bal-
ance of the first nine renewals and two per cent commission or collection
fee beginning with the tenth renewal. Ruling Ins. Dept., May 14, 1909.

Section 97 limits the rate and number of renewal commissions which may
be paid to agents by life insurance companies; it does not require that the
full number of renewals allowed by law be paid in each case. Ruling Ins.
Dept., Dec. 27, 1909.

Renewal commissions of seven and one-half per cent. on life policies and
endowments, providing for twenty or more premiums, and five per cent. on
172 Tue Insurance Law. § 97,

endowments, providing for less than twenty premiums during the eleventh and
twelfth year, and a collection fee of three per cent. thereafter is allowable.
Ruling Ins. Dept., Sept. 17, 1909.

The temporary enjoyment of a reward of efficiency that brings no pecuniary
return to an agent does not come within the prohibition of this section. Ruling
Ins. Dept., Dec. 19, 1910. :

Under § 97, a company may not offer an honor prize of $250 in gold to be
awarded upon the persistence of effort and continuity of purpose as evidenced
by an agent and not dependent on the volume of policies wrilten. Ruling Ins,
Dept., Dec. 30, 1910.

A corporation cannot in addition to the renewal commissions provided for in
§ 97 for the first 14 policy years allow the agent a c.liection fee not exceeding
three per cent. Ruling Ins. Dept., Feb., 1911.

It is not objectionable under § 97 to, award a button of trifling cost to
agents who write a certain amount of ordinary business within a year or to
make them members of a club under a denomination indicating the amount
of business written, such membership to involve only public mention, the
award of a certificate and the giving of a button of small cost. Ruling Ins.
Dept., April 28, 1911.

Where under a contract for commissions, the same are payable to the estate
of the agent in case of death, the bank exchange in collecting renewal pre-
miums should not be paid by the insurer but should be made a charge against
the renewals to be paid to the estate. Ruling Ins. Dept., March 4, 1911,

NEW BUSINESS.— Under § 97 the limitation as to expenses for new busi-
ness applies to the aggregate of total loadings under the premiums for the
first year and the available margins prescribed and does not apply to indi-
vidual agents or individual policies. Ruling Ins. Dept., Dec. 29, 1908.

The first payment of renewal commissions may not be added to the first
year’s commissions. Ruling Ins. Dept., July 8, 1909.

EXPENDITURES.— Expenses of examination of a life insurance company
by the state examiners are not such as are limited by § 97. Ruling Ins. Dept.,
Feb. 4, 1910.

Section 97 limits the expenditure of a life insurance company for new
business, but does not require the payment of any certain part or the whole
of the largest commission which may be found permissible under the section
referred to. Ruling Ins. Dept., Sept. 29, 1909.

Section 97 is not a limitation of the aggregate expenditure which can be
made by life insurance companies, but applies to each particular agent and
limits the amount which may be paid to him to a certain proportion of the
first premiums received by him. This does not limit the amount which may
be paid to agents acting under contracts executed prior to the enactment of
the section which have a definite period to run. Attorney-General’s Rep.
June 10, 1909.

The limitation upon the expenditure of insurance companies for new busi-
ness does not authorize the superintendent of insurance to forbid an expendi-
ture by a company in obtaining non-participating policies of the full value of
the assumed mortality gains for the first five years and to restrict it to such
§§ 98, 99. Lire, Hearty, Casuvarty Corporations. 173

part thereof as is represented by the margin of that premium over and above
loading and one-half the one year term premium. Travelers’ Insurance Co.
v. Kelsey, 134 App. Div., 89.

SERVICES.— The services rendered by @ tarmer in driving an agent about
soliciting insurance are not such as are comprehended in § 97; where a policy-
holder refers to some friend wanting insurance and is paid a bonus for the
information, such service is comprehended in the statute. Ruling Ins. Dept.,
Jan. 24, 1910.

§ 98. Salaries of officers and agents; when fixed by board
of directors.

No domestic life insurance corporation shall pay any salary,
compensation or emolument to any officer, trustee or director
thereof, nor any salary, compensation or emolument amounting in
any year to more than five thousand dollars to any person, firm or
corporation unless such payment be first authorized by a vote of
the board of directors of such life insurance corporation. No
such life insurance corporation shall make any agreement with
any of its officers, trustees or salaried employees whereby it agrees
that for any services rendered or to be rendered he shall receive
any salary, compensation or emolument that will extend beyond
a period of twelve months from the date of such agreement. No
such corporation shall grant any pension to any officer, director
or trustee thereof or to any member of his family after his death.

Source.—Former § 98, as added by L. 1906, chap. 326.

Since the amendments of sections 97 and 98 by chapter 326 of 1906, “ Nylic”
rannot be continued for agents employed after April 27, 1906. Attorney-
General Rep., 1906, page 565.

Under section 98, a domestic life insurance company may establish a pension
fund for its employees other than officers and directors, but there must not be
any contractual relations between the company and the employees as to a
pension fund, that is, no contract may be made or extended with any pro-
vision to the effect that the employee shall participate in the pension fund as a
consideration for his employment. The pension fund must be voluntary on
the part of the company, and established in such manner that it can be dis-
continued or terminated at any time, and that if so discontinued or termi-
nated, the employee shall have no cause of action against the company. Rul-
ing Ins. Dept., September 30, 1908.

§ 99. Vouchers.
No domestic life insurance corporation shall make any disburse-
ment of one hundred dollars or more unless the same be evidenced
174 Tur Insurance Law. § 100.

by a voucher signed by or on behalf of the person, firm or corpo-
ration receiving the money and correctly describing the consider-
ation for the payment, and if the same be for services and dis-
bursements setting forth the services rendered and an itemized
statement of the disbursements made, and if it be in connection
with any matter pending before any legislative or public body or
before any department or officer of any government, correctly
describing in addition the nature of the matter and of the inter-
est of such corporation therein, or if such a voucher cannot be
obtained by an affidavit stating the reasons therefor and setting
forth the particulars above mentioned.
Source.—Former § 99, as added by L. 1906, chap. 326.

§ 100. Investments.

No domestic life insurance corporation, whether incorporated
by special act or under a general law, shall invest in or loan upon
any shares of stock of any corporation, other than a municipal cor-
poration, nor, excepting government, state or municipal securities,
shall it invest in, or loan upon, any bonds or obligations which shall
not be secured by adequate collateral security or where more than
one-third of the total value of the collateral security therefor shall
consist of shares of stock. Every such corporation which on the
first day of June, nineteen hundred and six, owned any shares of
stock other than public stocks of municipal corporations when-
ever the same were acquired, or any bonds or obligations of
the kinds above described where said bonds or obligations were
acquired after the first day of March, nineteen hundred and
six, shall dispose of the said shares of stock and of said bonds
and obligations within ten years from the thirty-first day of De-
cember, nineteen hundred and six, and in each year prior to the
expiration of said ten years shall make such reduction of its hold-
ings of said securities as may be approved in writing by the super-
intendent of insurance. No investment or loan shall be made by
any such life insurance corporation unless the same shall first
have been authorized by the board of directors or by a committee
thereof charged with the duty of supervising such investment or
loan. No such corporation shall subscribe to or participate in
§ 100. Lirn, Heattu, Casvarty Corporations, 175

any underwriting of the purchase or sale of securities or prop-
erty, or enter into any transaction for such purchase or sale on
account of said corporation jointly with any other person, firm
or corporation; nor shall any such corporation enter into any
agreement to withhold from sale any of its property, but the
disposition of its property shall be at all times within the con-
trol of its board of directors. Any such corporation, in addition
to other investments allowed by law, may invest any of its funds
in any duly authorized bonds or evidences of debt of
any government in which such corporation is transacting
business, or of any state, or of any city, county,
town, village, school district, municipality or other civil
division of any state and may loan upon the security of improved
unencumbered real property in any state worth fifty per centum
more than the amount loaned thereon. Provided, however, that
nothing in this section contained shall be construed as prohibiting
a life insurance company from entering into an agreement for the
purpose of protecting the interests of the company in securities
lawfully held by it, or for the purpose of reorganization of a cor-
poration which issued securities so held, and from depositing such
securities with a committee or depositaries appointed under such
agreement; but such agreement and the deposit of securities there-
under must first be approved in writing by the superintendent
of insurance with a statement of his reasons for such approval.
Nor shall this section be construed as preventing such company
from accepting corporate stock or bonds or other securities, which
may be distributed pursuant to any such agreement approved as
aforesaid or to any plan of reorganization approved in writing
by the superintendent of insurance with a statement of his reason
for such approval. But if any securities so received shall consist
in whole or in part of stock in any corporation or of bonds or
obligations which shall not be secured by adequate collateral
security or where more than one-third of the total value of the
collateral security therefor shall consist of shares of stock, then
any stock and any such bond or obligation so received shall be
disposed of within five years from the time of their acquisition
or before the expiration of such further period or periods of time
176 Tur Insurance Law. § 101,

as may be fixed in writing for that purpose by the superintendent
of insurance.

Source.—Former § 100, as added by L. 1906, chap. 326, and amended by L,
1908, chap. 9.

Amended by L. 1911, chap. 767, and L. 1913, chap. 596. In effect May 17,
1913.

Note.—The purpose of the amendment of this section by chap. 596 of 1913
was to authorize domestic insurarce companies to invest their funds in the
bonds of any government in which said corporation is transacting business or
of any State and the amendment is in harmony with the general investment
section of the Insurance Law (section 16) as amended by chap. 304 of 1913.—
Ed.

’ A domestic life insurance company may invest its surplus moneys in car
trust certificates of Pennsylvania Steel Freight Car Trust. Attorney-General
Rep., 1906, page 577.

An insurance company holding the stock of two trust companies acquired
before chapter 326 of 1906 went into effect, may vote upon the stock so held
upon a proposition for the merger of the trust companies; during the period
of ownership permitted by section 100 the title of an insurance company to
the stock is perfect and confers upon it the same privileges, responsibilities
and duties as those of any other stockholder. Morse v. Equitable Life Ass,
Soc., 124 App. Div., 235.

Although section 100, as amended by chapter 326 of 1906, requires life insur-
ance companies to sell their stocks in any corporation before December 31,
1911, yet before that time an insurance company may vote on the stock of two
trust companies owned by it. Morse v. Equitable Life Assur. Soc., 124 App.
Div., 235.

An insurance company may take a purchase-money mortgage for more than
fifty per cent of the value of the real estate sold. Attorney-General’s Opinion,
April 10, 1909.

The acquisition by a company, as a consequence of a sale of securities,
which must be sold, of certain other securities in which the company must
not invest, is an investment under section 100 and rests in the administrative
discretion of the Superintendent. Attorney-General Rep., Dec. 16, 1911.

§ 101. Standard provisions.

On and after January first, nineteen hundred and ten, no
policy of life or endowment insurance shall be issued or delivered
in this state unless and until a copy of the form thereof has been
filed with the superintendent of insurance and approved by him;
nor shall such policy, except policies of industrial insurance where
the premiums are payable weekly, be so issued or delivered unless
it contains in substance the following provisions:

1. A provision that the insured is entitled to a grace either of
thirty days or of one month within which the payment of any
§ 101. Lire, Hearru, Casvatty Corporations, 177

premium after the first year may be made, subject at the option
of the company to any interest charge not in excess of six per
centum per annum for the number of days of grace elapsing
before the payment of the premium, during which period of grace
the policy shall continue in full force, but in case the policy be-
comes a claim during the said period of grace before the overdue
premium or the deferred premiums of the current policy year
if any are paid, the amount of such premiums, with interest on
any overdue premium, may be deducted from any amount pay-
able under the policy in settlement.

2. A provision that the policy shall be incontestable after two
years from its date of issue except for nonpayment of premiums
and except for violation of the conditions of the policy relating
to military or naval service in time of war.

3. A provision that the policy shall constitute the entire con-
tract between the parties, but if.the company desires to make the
application a part of the contract it may do so provided a copy
of such application shal] be indorsed upon or attached to the
policy when issued, .and in such case the policy shall contain a
provision that the policy and the application therefor shall con-
stitute the entire contract between the parties.

4. A provision that if the age of the insured has been misstated
the amount payable under the policy shall be such as the premium
would have purchased at the correct age.

5. A provision that the policy shall participate in the surplus
of the company annually.

6. A provision specifying the options to which the policy-
holder is entitled in the event of default in a premium payment
after three full annual premiums shall have been paid.

7. A provision that after three full years’ premiums have been
paid, the company at any time, while the policy is in force, will
advance, on proper assignment or pledge of the policy and on the
sole security thereof, at a specified rate of interest, a sum equal
to, or at the option of the owner of the policy less than, the reserve
at the end of the current policy year on the policy and on any
dividend additions thereto, less a sum not more than two and one-
half per centum of the amount insured by the policy and of any
dividend additions thereto; and that the company will deduct
178 Tue Insurance Law. § 101.

from such loan value any existing indebtedness on the policy and
any unpaid balance of the premium for the current policy year,
and may collect interest in advance on the loan to the end of the
current policy year; which provision may further provide that
such loan may be deferred for not exceeding six months after the
application therefor is made. A company may, in lieu of the pro-
vision hereinabove permitted for the deduction from a loan on the
policy of a sum not more than two and one-half per centum of
the amount insured by the policy and of any dividend additions
thereto, insert in the policy a provision that one-fifth of the entire
reserve may be deducted in case of a loan under the policy, or
may provide therein that the deduction may be the said two and
one-half per centum or the one-fifth of the said entire reserve at
the option of the company.

8. A table showing in figures the loan values, if any, and the
options available under the poliey each year upon default in pre-
mium payments, during at least the first twenty years of the
policy.

9. In case the proceeds of a policy are payable in installments
or as an annuity, a table showing the amounts of the installments
or annuity payments.

10. A provision that the holder of a policy shall be entitled to
have the policy reinstated at any time within three years from the
date of default unless the cash value has been duly paid, or the
extension period expired, upon the production of evidence of in-
surability satisfactory to the company and the payment of all over-
due premiums and any other indebtedness to the company upon
said policy with interest at a rate not exceeding six per centum
per annum payable annually.

Any of the foregoing provisions or portions thereof not appli-
cable to single premium or nonparticipating or term policies shall
to that extent not be incorporated therein; and any such policy
may be issued or delivered in this state which in the opinion of
the superintendent of insurance contains provisions on any one or
more of the several foregoing requirements more favorable to the
policyholder than hereinbefore required. The provisions of this
section shall not apply to policies of reinsurance.
§ 102. Lirz, Heautu, Casuvatty Corrorations, 179

Source.—Former § 101, as added by L. 1906, chap. 326, and amended by L.
1907, chap. 714.

Added by L. 1909, chap. 301, and amended by L. 1911, chap. 369.

FORMER RULINGS UNDER STANDARD POLICY OF 1907, 1908 AND 1909.

As the legisiature did not repeal sections 25 and 29, foreign companies are
compelled to comply with the terms of section 101 relating to standard policy
forms. Attorney-General Rep., 1906, page 541.

Foreign life insurance corporations are not compelled to conform with the
standard forms of policy provided for in the act. Attorney-General Rep.,
1906, page 549.

Every life insurance company authorized to transact business in this state
must file for approval copies of every form of policy contract which it pur-
poses to issue or deliver in this state. Ruling Ins. Dept., July 27, 1909.

The line “New York Standard Life Insurance Policy’? may be eliminated
from policies issued in other states without violating the law of this state.
Ruling Ins. Dept., June 4, 1908.

Domestic company may issue or deliver within this state a standard policy
only, but for delivery without the state they may issue any form not incon-
sistent with the Insurance Law. Ruiing Ins. Dept., January 15, 1908.

Column of days may not be omitted from table of surrender values. Ruling
Ins. Dept., April 17, 1908.

This section does not apply to corporations of other states. Ruling Ins.
Dept., January 15, 1908.

“Automatic” paid-up clause of standard form of policy issued in New
York state for delivery in a foreign state may be made to conform to the
requirements of the law of such state. Ruling Ins. Dept., January 10, 1908.

It is not permissible for an insurance company to charge or collect interest
in advance on a loan made on a New York standard policy. Ruling Ins. Dept.,
March 31, 1908.

A company cannot lawfully issue a policy containing automatic paid-up
surrender values differing in form from that set forth in the standard form of
policies. Ruling Ins. Dept., January 22, 1908.

§ 102. Companies issuing participating policies not to do a
nonparticipating business.

No domestic mutual life insurance corporation and no do-
mestic stock life insurance corporation hereafter issuing or pro-
fessing to issue any participating policies, shall issue any policies,

except annuities, which do not by their terms give to the holders
thereof full right to participate in the accumulations of said cor-
poration as provided in this chapter. This section shall not apply
to paid-up or temporary and pure endowment insurance issued
or granted in exchange for lapsed: or surrendered policies, nor to
policies of reinsurance.
180 Tue Insurance Law. § 108.

Source.—Former § 102, as added by L. 1906, chap. 326.

Amended by L. 1911, chap. 369

A company can do wu participating and non-participating business up to
January 1, 1907, and thereafter can only do one form; the company, how-
ever, may change from one class of business to another. Attorney-General
Rep., 1906, page 539.

Foreign life insurance corporations heretofore licensed may hereafter be
licensed: if they do both a participating and non-participating business,
Attorney-General Rep., 1906, page 549.

Under section 102 of the Insurance Law, “ foreign life insurance corporations
heretofore licensed may hereafter be licensed if they do both a participating
and non-participating business.” Ruling Ins. Dep., May 4, 1908.

A domestic stock life insurance company can change from a non-participat-
ing to a participating business, but at any particular time must be one or the
other. Ruling Attorney-General, June 20, 1906.

Foreign life insurance corporations of other states, heretofore licensed, need
not comply with the provisions of this section. Ruling Ins. Dept., January
22, 1908.

There is no distinction in law between a mutual life insurance company
doing participating business exclusively and a stock company doing a non-
participating business exclusively. Opinion of Attorney-General, January 27,
1908.

Where a life insurance company having exercised its option and elected to
go exclusively on a non-participating business, it is incompetent for that com-
pany to take over and assume participating contracts issued by other com-
panies. Attorney-General’s Opinion, July 20, 1907; October 19, 1908.

A life insurance company which issued non-participating policies up to
August 11, 1908, at which time it elected to do only a participating business
and since that time has issued only participating policies, cannot change from
a participating to a non-participating business. Attorney-General’s Dec., Sept.
24, 1909.

A stock life insurance corporation of another State, transacting its business
exclusively upon a non-mutual basis may be licensed to do business in this
State, and thereafter shall issue only non-participating policies. Ruling Ins.
Dept., Feb. 1, 1911.

§ 103. Annual reports of life insurance corporations.

In addition to any other matter which may be required by law
or pursuant to law by the superintendent of insurance to be stated
therein every annual report of every life insurance corporation
doing business in the state of New York, made pursuant to sec-
tion forty-four of this chapter, shall contain an accurate, concise
and complete statement of the following matters, to wit: (1)
All the real property held by the corporation, the dates of acqui-
sition, the names of the vendors, the actual cost, the value at
§ 108. Lirz, Heautu, Casvatty CorroraTions, 181

which it is carried on the company’s books, the market value, the
amounts expended during the year for repairs and improvements,
the gross and net income from each parcel, and if any portion
thereof be occupied by the company the rental value thereof, a
statement of any certificate issued by the superintendent extending
the time for the disposition thereof, and all purchases and sales
made since the last annual statement, with particulars as to dates,
names of vendors and vendees, and the consideration. (2) The
amount of existing loans upon the security of real property, stat-
ing the amount loaned upon property in each state and foreign
country. (3) The moneys loaned by the corporation to any per-
son other than loans upon the security of real property above men-
tioned and other than loans upon policies the actual borrowers
thereof, the maturity and rate of interest of such loans, the
securities held therefor, and all substitutions of securities in con-
nection therewith, and the same particulars with reference to any
loans made or discharged since the last annual statement. (4)
All other property owned by the company or in which it has any
interest including all securities, whether or not recognized by
the law as proper investments, the dates of acquisition, from
whom acquired, the actual cost, the value at which the property
is carried upon the books, the market value, the interest or divi-
dends received thereon, during the year; also all purchases and
sales of property other than real estate made since the last annual
statement, with particulars as to dates, names of purchasers and
sellers, and the consideration; and also the income received and
outlays made in connection with all such property. (5) All
commissions paid to any persons in connection with loans or pur-
chases or sales of any property, and a statement of all payments
for legal expenses, giving particulars as to dates, amounts and
names and addresses of payees. (6) All moneys expended in con-
nection with any matter pending before any legislative body or
any officer or department of government, giving particulars as to
dates, amounts, names and addresses of payees, the measure or pro-
ceeding in connection with which the payment was made, and the
interest of the corporation therein. (7) The names of the officers
and directors of the company, the proceedings at the last annual
election, giving the names of candidates and the number of
votes cast for each and whether in person, by proxy or by mail.
(8) The salary, compensation and emoluments received by officers
or directors and where the same amounts to more than five thou-
182 Tur Insurance Law. § 108.

sand dollars that received by any person, firm or corporation, with
particulars as to dates, amounts, payees and the authority by
which the payment was made; also all salaries paid to any repre-
sentative either at the home office, or at any branch office, or agency,
for agency supervision. (9) The largest balances carried in
each bank or trust company during each month of the year. (10)
All death claims resisted or compromised during the year, with
particulars as to sums insured, sums paid and reasons assigned
for resisting or compromising the same in each case. (11) A
complete statement of the profits and losses upon the business
transacted during the year and the sources of such gains and
losses, and a statement showing separately the margins upon
premiums for the first year of insurance ascertained according
to the select and ultimate method of valuation as provided in
section eighty-four of this chapter and the actual expenses charge-
able to the procurement of new business incurred since the last
annual statement, as enumerated in section ninety-seven of this
article. A foreign corporation, issuing both participating and
nonparticipating policies, shall make a separate statement of
profits and losses, margins and expenses, as aforesaid, with refer
ence to each of said kinds of business, and also showing the manner
in which any general outlays of the company have been appor
tioned to each of such kinds of business. (12) A statement
separately showing the amount of the gains of the company fot
the year attributable to policies written after December thirty-first,
nineteen hundred and six, and the precise method by which the cal
culation has been made. (13) The rates of annual dividends de
clared during the year for all plans of insurance and all durations
and: for ages at entry, twenty-five, thirty-five, forty-five and fifty:
five, and the precise method by which such dividends have been cal-
culated. (14) A statement showing the rates of dividends declared
upon deferred dividend policies completing their dividend periods
for all plans of insurance and the precise methods by which said
dividends have been calculated. (15) A statement showing any
and all amounts set apart or provisionally ascertained or calcu-
lated or held awaiting apportionment upon policies with deferred
dividend periods longer than one year for all plans of insurance
-

§ 104. Lire, Hearty, Casuatty Corporations, 183

and all durations and for ages of entry as aforesaid, together with
the precise statements of the methods of calculation by which the
same have been provisionally or otherwise determined. (16) A
statement of any and all reserve or surplus funds held by the com-

pany and for what purpose they are claimed respectively to be
held.

(17.) A statement showing all sums of money expended in, or
in any way connected with, the election of directors or trustees,
with a statement when expended, by whom expended, to whom
paid and for what purpose.

Source—Former § 103, as added by L. 1906, chap. 326, subd. 17, and
amended by L. 1907, chap. 623.

Under section 103 the provisions concerning the annual report of an insur-
ance company may not be disregarded, and this section is a direct instruction
that every annual statement under this provision shall be complete in itself and
without reference to details contained in any prior annual statement. Ruling
Ins. Dept., September 23, 1908.

The Superintendent of Insurance has not made and does not contemplate
making a rule on the subject of division of expenses under subdivision 12 of
this section, it being assumed that the insurance companies will comply with
the statute. Ruling Ins. Dep., February 10, 1908.

§ 104. Transfer of deposits by superintendent of insurance
to receiver.

In every case where life insurance or annuity companies, or
any corporation of either of the classes provided for by this article
and article five of this chapter, whether formed under said articles
or prior thereto, has been or hereafter may be dissolved, and a re-
ceiver thereof appointed, upon the application of the attorney-
general, or by action begun in the name of the people of
the state of New York, each and every security and fund which
shall have been deposited by such company prior to its dissolu-
tion, with the superintendent of the insurance department, for
the security and protection of its policyholders or any class of
such policyholders, under the statutes in such cases made and
provided, may, by an order of the supreme court, made at a
special term thereof held within the judicial district in which
the principal office of such company was located, prior to its dis-

- solution, upon the application of the attorney-general, after service
184 Tue Insurance Law. § 104.

of eight days’ written notice of such application upon the super-
intendent of the insurance department, be transferred from the
said superintendent of the insurance department to the receiver
of such company; and thereupon the said superintendent shall
deliver such funds and securities to such receiver, and in him
the title thereto shall immediately vest. Such receiver shall
thereupon convert such securities and funds into money, and
shall distribute the proceeds thereof, and of each and every
class of such funds or securities among the respective holders
of valid policies of such company for whose benefit and security
the deposit or deposits were originally made proportionately to the
respective valuation of such policies, as shall be ascertained in
proceedings taken by such receiver for the valuation of policies,
and the determination of the liabilities of such company under
the statutes in such cases made and provided, and the course and
practice of the supreme court in cases of insolvent corporations,
until such valuation shall have been paid in full. If any portion
of such proceeds shall then remain, such balance may, under an
order of the supreme court in such behalf duly made at special
term, be made a part of the general assets of such receivership,
and thereupon be distributed by said receiver in payment of or
upon the general liabilities of such dissolved company according
to law. And in case of a corporation formed under the laws of
any other state, doing insurance business in this state of the nature
of that done by the corporations above mentioned, in case of any
action or proceeding brought or hereafter to be brought in this
state by the attorney-general, or in the name of the people of the
state of New York, for the winding up of its business in this state,
or for or involving distribution of its assets therein, the same pro-
ceedings may be had with reference to any securities and funds
deposited by such corporation with the superintendent of the in-
surance department of this state under the statutes in such case
made and provided, as are hereinbefore provided with reference to
deposits of corporations of this state, save only that the order for
transfer of the deposit may be made in the judicial district in
which the principal office of the corporation in this state was
located at the commencement of the action or proceedings, or in
the third judicial district.

Source.— L, 1884, chap. 285, § 2, as amended by L. 1902, chap. 162, § 1.
§§ 105, 106. Lire, Heatru, Casvarty Corporations, 185

§ 105. Powers of certain existing corporations increased.

Every health or casualy company, existing on May thirty-first,
eighteen hundred and eighty-nine, formed under the provisions of
the second department of section one of chapter four hundred
and sixty-three of the laws of eighteen hundred and fifty-three,
shall possess the same powers as though it were formed pursuant
to said act as amended by chapter three hundred and thirty-eight of
the laws of eighteen hundred and eighty-nine.

Source.— L. 1889, chap. 338, § 2.

Section 2 of Laws 1889, chapter 338, was not repealed by the repealing sec-
tion of the former Insurance Law (L. 1892, chap. 690, § 290), but was spe-
cially excepted from repeal. The section conferred upon insurance companies
additional powers. It was consolidated and made a part of Article 3 of the
present Insurance Law relating to life, health and casualty insurance
corporations.

§ 106. Boards of directors to be divided into classes.

Boards of directors of every domestic mutual life insurance cor-
poration, elected under and pursuant to the provisions of laws of
nineteen hundred and:six, chapter one hundred and twenty-three,
as amended by laws of nineteen hundred and six, chapter three
hundred and fifty-four, shall divide themselves by lot into two
classes as nearly equal as may be, one class to hold office until
the annual meeting of the company to be held in accordance with
its charter or by-laws in the year nineteen hundred and eight,
and the other class to hold office until the annual meeting to be so
held in the year nineteen hundred and nine. There shall be no
election of directors at the annual meeting in nineteen hundred
and seven. In case of the death or resignation of any director
elected in nineteen hundred and six his successor shall be chosen
by the board of directors to hold office only until the next election
of directors. At the annual meeting in nineteen hundred and
eight directors shall be elected for a term of one year in the place
of those whose terms of office then expire. At the annual meeting
to be held in nineteen hundred and nine, and biennially thereafter,
an entire new board of directors shall be elected for the term of
two years. The election of directors of every domestic mutual
life insurance corporation, whether incorporated by a special act
186 . Tuer Insurance Law. § 107%,

or under a general law, which according to its charter or by-laws
would be held prior to the month of April, nineteen hundred and
eight, shall be postponed and held on the day in that month cor-
responding to the day of the month when it would otherwise occur;
and the directors of said corporations’ whose terms would other-
wise earlier expire shall continue to hold office until such time
and until their.successors are elected.
Source.— L. 1906, chap. 123, § 3, as amended by L. 1907, chap. 625, § 1.

Laws 1906, chapter 123, as amended by Laws 1906, chapter 354, provided for
the election of new boards of directors of mutual life insurance companies on
December 18, 1906. As the object of the act has been attained and the time
limited in the first two sections has expired, those sections were eliminated
and are repealed as obsolete, but section 3, which provides for 4 continuance
in office of the directors elected under said act until 1908 and 1909, respectively,
is consolidated in this section.

§ 107. Standard provisions for accident and health policies.

Subdivision (a). On and after the first day of January, nine
teen hundred and fourteen, no policy of insurance against loss or
damage from the sickness, or the bodily injury or death of the
insured by accident shall be issued or delivered to any person
in this state by any corporation organized under article two of
this chapter, or, if a foreign corporation, authorized to do busi-
ness in this state, until a copy of the form thereof and of the
classification of risks and the premium rates pertaining thereto
have been filed with the superintendent of insurance; nor shall
it be so issued or delivered until the expiration of thirty days
after it has been so filed unless the said superintendent shall
sooner give his written approval thereto. If the said superin-
tendent shall notify, in writing, the company, corporation,
association, society or other insurer which has filed such form
that it does not comply with the requirements of law, speci-
fying the reasons for his opinion, it shall be unlawful thereafter
for any such insurer to issue any policy in such form. The
action of the said superintendent in this regard shall be subject
to review by any court of competent jurisdiction, provided, how-
ever, that nothing in this section shall be so construed as to give
jurisdiction to any court not already having jurisdiction.
§ 107. Lirz, Hearty, Casvatty Corporations, 187

Subd. (b). No such policy shall be so issued or delivered
(1) unless the entire money and other considerations therefor
are expressed in the policy; nor (2) unless the time at which
the insurance thereunder takes effect and terminates is stated in
a portion of the policy preceding its execution by the insurer;
nor (8) if the policy purports to insure more than one person;
nor (4) unless every printed portion thereof and of any endorse-
ments or attached papers shall be plainly printed in type of
which the face shall be not smaller than ten point; nor (5) unless
a brief description thereof be printed on its first page and on its
filing back in type of which the face shall be not smaller than
fourteen point; nor (6) unless the exceptions of the policy be
printed with the same prominence as the benefits to which they
apply, provided, however, that any portion of such policy which
purports, by reason of the circumstances under which a loss is
incurred, to reduce any indemnity promised therein to an amount
less than that provided for the same loss occurring under ordinary
circumstances, shall be printed in bold face type and with greater
prominence than any other portion of the text of the policy.

Subd. (c). Every such policy so issued shall contain certain
standard provisions, which shall be in the words and in the order
hereinafter set forth and be preceded in every policy by the
caption, “Standard Provisions.” In each such standard pro-
vision wherever the word “ insurer” is used, there shall be sub-
stituted therefor “ company ” or “ corporation ” or “ association ”
or ‘society ” or such other word as will properly designate the
insurer. Said standard provisions shall be:

(1) A standard provision relative to the contract which may
be in either of the following two forms: Form (A) to be used in
policies which do not provide for reduction of indemnity on
account of change of occupation, and Form (B) to be used in
policies which do so provide. If Form (B) is used and the
policy provides indemnity against loss from sickness, the words
188 Tue Insurance Law. § 107,

“ or contracts sickness” may be inserted therein immediately after
the words “ in the event that the insured is injured”:

(A): 1. This policy includes the endorsements and attached
papers, if any, and contains the entire contract of insurance.
No reduction shall be made in any indemnity herein provided
by reason of change in the occupation of the insured or by reason
of his doing any act or thing pertaining to any other occupation.

(B): 1. This policy includes the endorsements and attached
papers, if any, and contains the entire contract of insurance
except as it may be modified by the insurer’s classification of
risks and premium rates in the event that the insured is injured
after having changed his occupation to one classified by the in-
surer as more hazardous than that stated in the policy, or while
he is doing any act or thing pertaining to any occupation so
classified, except ordinary duties about his residence or while
engaged in recreation, in which event the insurer will pay only
such portion of the indemnities provided in the policy as the pre-
mium paid would have purchased at the rate but within the
limits so fixed by the insurer for such more hazardous occupation.

If the law of the state in which the insured resides at the time
this policy is issued requires that prior to its issue a statement of
the premium rates and classification of risks pertaining to it shall
be filed with the state official having supervision of insurance in
such state, then the premium rates and classification of risks men-
tioned in this policy shall mean only such. as have been last filed
by the insurer in accordance with such law, but if such filing is
not required by such law then they shall mean the insurer’s
premium rates and classification of risks last made effective by
it in such state prior to the occurrence of the loss for which the
insurer is liable.

(2) A standard provision relative to changes in the contract,
which shall be in the following form:

2. No statement made by the applicant for insurance not in-
cluded herein shall avoid the policy or be used in any legal pro-
§ 107. Lirz, Heattu, Casuatty Corporations, 189

ceeding hereunder. No agent has authority to change this policy
or to waive any of its provisions. No change in this policy shall
be valid unless approved by an executive officer of the insurer
and such approval be endorsed hereon. '

(8) A standard provision relative to reinstatement of policy
after lapse which may be in either of the three following forms:
Form (A) to be used in policies which insure only against loss
from accident; Form (B) to be used in policies which insure only
aguinst loss from sickness; and Form (C) to be used in policies
which insure against loss from both accident and sickness.

(A): 38. If default be made in the payment of the agreed pre-
mium for this policy, the subsequent acceptance of a premium by
the insurer or by any of its duly authorized agents shall reinstate
the policy, but only to cover loss resulting from accidental injury
thereafter sustained.

(B): 3. If default be made in the payment of the agreed pre-
mium for this policy, the subsequent acceptance of a premium by
the insurer or by any of its duly authorized agents shall reinstate
the policy but only to cover such sickness as may begin more than
ten days after the date of such acceptance.

(C): 3. If default be made in the payment of the agreed pre-
mium for this policy, the subsequent acceptance of a premium by
the insurer or by any of its duly authorized agents shall reinstate
the policy but only to cover accidental injury thereafter sustained
and such sickness as may begin more than ten days after the date
of such acceptance.

(4) A standard provision relative to time of notice of claim
which may be in either of the three following forms: Form (A)
to be used in policies which insure only against loss from accident ;
Form (B) to be used in policies which insure only against loss
from sickness, and Form (C) to be used in policies which insure
against loss from both accident and sickness. If Form (A) or
Form (C) is used the insurer may at its option add thereto the fol-
lowing sentence, “In event of accidental death immediate notice
thereof must be given to the insurer.”
190 Tue Insurance Law. § 107.

(A): 4. Written notice of injury on which claim may be based
must be given to the insurer within twenty days after the date of
the accident causing such injury.

(B): 4. Written notice of sickness on which claim may be
based must be given to the insurer within ten days after the con-
mencement of the disability from such sickness.

(C): 4. Written notice of injury or of sickness on which claim
may be based must be given to the insurer within twenty days after
the date of the accident causing such injury or within ten days
after the commencement of disability from such sickness.

(5) A standard provision relative to sufficiency of notice of
claim which shall be in the following form and in which the in-
surer shall insert in the blank space such office and its location as
ut may destre to designate for such purpose of notice:

5. Such notice given by or in behalf of the insured or bene-
ficiary, as the case may be, to the insurer at..............0006
or to any authorized agent of the insurer, with particulars suffi-
cient to identify the insured, shall be deemed to be notice to the
insurer. Failure to give notice within the time provided in this
policy shall not invalidate any claim if it shall be shown not to
have been reasonably possible to give such notice and that notice
was given as soon as was reasonably possible.

(6) A standard provision relative to furmshing forms for the
convenience of the insured in submitting proof of loss as follows:

6. The insurer upon receipt of such notice, will furnish to the
claimant such forms as are usually furnished by it for filing proofs
of loss. If such forms are not so furnished within fifteen. days
after the receipt of such notice, the claimant shall be deemed to
have complied with the requirements of this policy as to proof of
loss upon submitting within the time fixed in the policy for filing
proofs of loss, written proof covering the occurrence, character and
extent of the loss for which claim is made.
4
§ 107. Lirzt, Hratru, Casuatry Corporations, 191

(7) A standard provision relative to filing proof of loss which
shall be in such one of the following forms as may be appropriate
to the indemnities provided:

(A): 7. Affirmative proof of loss must be furnished to the in-
surer at its said office within ninety days after the date of the loss
for which claim is made.

(B): 7. Affirmative proof of loss must be furnished to the in-
surer at its said office within ninety days after the termination of
the period of disability for which the company is liable.

(C): 7. Affirmative proof of loss must be furnished to the in-
surer at its said office in case of claim for loss of time from dis-
ability within ninety days after the termination of the period for
which the insurer is liable, and in case of claim for any other loss,
within ninety days after the date of such loss.

(8) A standard provision relative to examination of the person
of the insured and relative to autopsy which shall be in the fol-
lowing form:

8. The insurer shall have the right and opportunity to ex-
amine the person of the insured when and so often as it may rea-
sonably require during the pendency of claim hereunder, and also
the right and opportunity to make an autopsy in case of death
where it is not forbidden by law.

(9) A standard provision relative to the time within which
payments other than those for loss of tume on account of disability
shall be made, which provision may be in either of the following
two forms and which may be omitted from any policy providing
only indemnity for loss of time on account of disability. The in-
surer shall insert in the blank space either the word “ immedi-
ately” or appropriate language to designate such period of time,
not more than sixty days, as it may desire; Form (A) to be used
in policies which do not provide indemnity for loss of time on ac-
count of. disability and Form (B) to be used in policies which do
so provide.
192 Tur Insurance Law. § 107,

(A): 9. All indemnities provided in this policy will be paid
Shes sacarromd es acer Seatac ta after receipt of due proof.

(B): 9. All indemnities provided in this policy for loss other
than that of time on account of disability will be paid..........
after receipt of due proof.

(10) A standard provision relative to periodical payments of
indemnity for loss of time on account of disability, which pro-
vision shall be in the following form, and which may be omitted
from any policy not providing for such indemnity. The insurer
shall insert in the first blank space of the form appropriate
language to designate the proportion of accrued indemnity it may
desire to pay, which proportion may be all or any part not less
than one-half, and in the second blank space shall insert any
period of time not exceeding sixty days:

10. Upon request of the insured and subject to due proof of
OSS: cevdeniewve sees accrued indemnity for loss of time on ac-
count of disability will be paid at the expiration of each ......
during the continuance of the period for which the insurer is
liable, and any balance remaining unpaid at the termination of
such period will be paid immediately upon receipt of due proof.

(11) A standard provision relative to indemnity payments
which may be in either of the two following forms: Form (A) to
be used in policies which designate a beneficiary, and Form (B)
to be used in policies which do not designate any beneficiary
other than the insured.

(A): 11. Indemnity for loss of life of the insured is payable
to the beneficiary if surviving the insured, and otherwise to the
estate of the insured. All other indemnities of this policy are
payable to the insured.

(B): 11. All the indemnities of this policy are payable to the
insured.

(12) A standard provision providing for cancellation of the
policy at the instance of the insured which shall be in the follow-
ing form:
§ 107. Lirs, Heauru, Casuatry Corporations, 193

12. If the insured shall at any time change his occupation to
one classified by the insurer as less hazardous than that stated
in the policy, the insurer, upon written request of the insured
and surrender of the policy, will cancel the same and will return
to the insured the unearned premium.

(18) A standard provision relative to'the rights of the bene-
ficiary under the policy which shall be in the following form and
which may be omitted from any policy not designating a
beneficiary:

18. Consent of the beneficiary shall not be requisite to sur-
render or assignment of this policy, or to change of beneficiary,
or to any other changes in the policy.

(14) A standard provision limiting the time within which sust
may be brought upon the policy as follows:

14, No action at law or in equity shall be brought to recover
on this policy prior to the expiration of sixty days after proof
of loss has been filed in accordance with the requirements of
this policy, nor shall such action be brought at all unless brought
within two years from the expiration of the time within which
proof of loss is required by the policy.

(15) A standard provision relative to time limitations of the
policy as follows:

15. If any time limitation of this policy with respect to giving
notice of claim or furnishing proof of loss is less than that
permitted by the law of the state in which the insured resides
at the time this policy is issued, such limitation is hereby ex-
tended to agree’ with the minimum period permitted by such law.

Subd. (d). No such policy shall be so issued or delivered
which contains any provision (1) relative to cancellation at the
instance of the insurer; or, (2) limiting the amount of indemnity
to a sum less than the amount stated in the:policy and for which
the premium has been paid; or, (3) providing for the deduction
194 Tur Insurance Law. § 107,

of any premium from the amount paid in settlement of claim;
or, (4) relative to other insurance by the same insurer; or, (5)
relative to the age limits of the policy; unless such provisions
which are hereby designated as optional standard provisions, shall
be in the words and in the order in which they are hereinafter
set forth, but the insurer may at its option omit from the policy
any such optional standard provision. Such optional standard
provisions if inserted in the policy shall immediately succeed
the standard provisions named in subdivision (¢) of this section.

(1) An optional standard provision relative to cancellation of
the policy at the instance of the insurer as follows:

16. The insurer may cancel this policy at any time by written
notice delivered to the insured or mailed to his last address, as
shown by the records of the insurer, together with cash or the
insurer’s check for the unearned portion of the premiums actu-
ally paid by the insured, and such cancellation shall be without
prejudice to any claim originating prior thereto.

(2) An optional standard provision relative to reduction of
the amount of indemnity to asum less than that stated in the
policy as follows:

17. If the insured shall carry with another company, corpora-
tion, association or society other insurance covering the same loss
without giving written notice to the insurer, then in that case
the insurer shall be liable only for such portion of the indemnity
promised as the said indemnity bears to the total amount of like
indemnity in all policies covering such loss, and for the return
of such part of the premium paid as shall exceed the pro rata
for the indemnity thus determined.

(3) An optional standard provision relative to deduction of
premium upon settlement of claim as follows:

18. Upon the payment of claim hereunder any premium then
due and unpaid or covered by any note or written order may be
deducted therefrom.
§ 107. Lire, Hrauru, Casvatty Corporations. 195

(4) An optional standard provision relative to other insurance
by the same insurer which shall be in such one of the following
forms as may be appropriate to the indemnities provided, and in.
the blank spaces of which the insurer shall insert such upward
lumits of indemnity as are specified by the insurers’ classification

of risks, filed as required by this section.

(A): 19. If a like policy or policies, previously issued by the
insurer to the insured be in force concurrently herewith, making
the aggregate indemnity in excess of $.............0.0e eee ee ;
the excess insurance shall be void and all premiums paid for
such excess shall be returned to the insured.

(B): 19. If a like policy or policies, previously issued by the
insurer to the insured be in force concurrently herewith, making
the aggregate indemnity for loss of time on account of disability
in excess of $.............. weekly, the excess insurance shall
be void and all premiums paid for such excess shall be returned
to the insured.

(C): 19. If a life policy or policies, previously issued by the
insurer to the insured be in force concurrently herewith, making
the aggregate indemnity for loss other than that of time on account
of disability in excess of $........ , or the aggregate indemnity
for loss of time on account of disability in excess of $........
weekly, the excess insurance of either kind shall be void and all
premiums paid for such excess shall be returned to the insured.

(5) An optional standard provision relative to the age limats
of the policy which shall be in the following form and in the
blank spaces of which the insurer shall insert such number of
years as it may elect:

20. The insurance under this policy shall not cover any per-
son under the age of .............. years nor over the age of
years. Any premium paid to the insurer for any

period not covered by this policy will be returned upon request.
196 Tur Insurance Law. § 10%,

Subd. (e). No such policy shall be so issued or delivered if it
contains any provision contradictory, in whole or part, of any of
the provisions hereinbefore in this section designated as “ Stand-
ard Provisions ” or as “ Optional Standard Provisions; ” nor shall
any endorsements or attached papers vary, alter, extend, be used
as a substitute for, or in any way conflict with any of the said
“Standard Provisions” or the said “ Optional Standard Pro-
visions; nor shall such policy be so issued or delivered if it con-
tains any provision purporting to make any portion of the charter,
sconstitution or by-laws of the insurer a part of the policy unless
such portion of the charter, constitution or by-laws shall be set
forth in full in the policy, but this prohibition shall not be deemed
to apply to any statement of rates or classification of risks filed
with the superintendent of insurance in accordance with the pro-
visions of this section.

Subd. (f). The falsity of any statement in the application for
any policy covered by this section shall not bar the right to re-
covery thereunder unless such false statement was made with
actual intent to deceive or unless it materially affected either the
acceptance of the risk or the hazard assumed by the insurer.

Subd. (g). The acknowledgment by any insurer of the receipt
of notice given under any policy covered by this section, or the
furnishing of forms for filing proofs of loss, or the acceptance of
such proofs, or the investigation of any claim thereunder shall
not operate as a waiver of any of the rights of the insurer in de-
fense of any claim arising under such policy.

Subd. (h). No alteration of any written application for insur-
ance by erasure, insertion or otherwise, shall be made by any
person other than the applicant without his written consent, and
the making of any such alteration without the consent of the
applicant shall be a misdemeanor. If such alteration shall be
made by any officer of the insurer, or by any employee of the
insurer with the insurer’s knowledge or consent, then such, act
§ 107. Lire, Hearrn, Casvarry Corporations, 197

shall be deemed to have been performed by the insurer thereafter
issuing the policy upon such altered application.

Subd. (i). A policy issued in violation of this section shall be
held valid but shall be construed as provided in this section and
when any provision in such a policy is in conflict with any pro-
vision of this section, the rights, duties and obligations of the
insurer, the policyholder and the beneficiary shall be governed by
the provisions of this section.

Subd. (j). The policies of insurance against accidental bodily
injury or sickness issued by an insurer not organized under the
laws of this state may contain, when issued in this state, any
provision which the law of the state, territory or district of the
United States under which the insurer is organized, prescribes
for insertion in such policies, and the policies of insurance against
accidental bodily injury or sickness issued by an insurer organized.
under the laws of this state may contain, when issued or delivered
in any other state, territory, district or country, any provision re-
quired by the laws of the state, territory, district or country in
which the same are issued, anything in this section to the contrary

notwithstanding.

Subd. (k). (1) Nothing in this section, however, shall apply
to or affect any policy of liability or workmen’s compensation
insurance or any general or blanket policy of insurance issued to
any municipal corporation or department thereof, or to any corpo-
ration, copartnership, association or individual employer, police
or fire department, underwriters’ corps, salvage bureau, or like
associations or organizations, where the officers, members or em-
ployees or classes or departments thereof are insured for their
individual benefit against specified accidental bodily injuries or
sickness while exposed to the hazards of the occupation or other-
wise in consideration of a premium intended to cover the risks of

all the persons insured under such policy.
198 Tur Iysurancz Law. § 107.

(2) Nothing in this section shall apply to or in any way affect
contracts supplemental to contracts of life or endowment insur-
ance where such supplemental contracts contain no provisions
except such as operate to safeguard such insurance against lapse
or to provide a special surrender value therefor in the event that
the insured shall be totally and permanently disabled by reason
of accidental bodily injury or by sickness; provided that no such
supplemental contract shall be issued or delivered to any person
in this state unless and until a copy of the form thereof has been
submitted to and approved by the superintendent of insurance,
under such reasonable rules and regulations as he shall make con-
cerning the provisions in such contracts and their submission to
and approval by him. ,

(8) Nothing in this section shall apply to or in any way affect
fraternal benefit societies.

(4) The provisions of this section contained in clause (5) of
subdivision (b) and clauses (2), (38), (8) and (12) of subdivision
(c) may be omitted from railroad ticket policies sold only at rail-
road stations, or at railroad ticket offices by railroad employees.

Subd. (I). Any company, corporation, association, society or
other insurer or any officer or agent thereof, which or who issues
or delivers to any person in this state any policy in willful viola-
tion of the provisions of this section shall be punished by a fine of
not more than five hundred dollars for each offense, and the super-
intendent of insurance may revoke the license of any company,
corporation, association, socicty or other insurer of another state
or country, or of the agent thereof, which or who willfully violates
any provision of this section.

Subd. (m). The term “indemnity” as used in this section
means benefits promised.

Added by L. 1913, chap. 155. In effect October 1, 1913.

Note.—Any policy covered by this act, the form of which has received the
approval of the superintendent of insurance may be issued or delivered in this
State on and after the said date.

Note——The amendment of this section by chapter 155 of 1913 repealed
former section 107 and inserted two new sections, numbers 107 and 108, pre-
scribing standard provisions for health and accident policies and prohibiting
§ 108. Lirz, Heautu, Casusatty Corporations, 199

discriminations. By the terms of section 107, certain standard provisions
which must be used by all corporations of this character are made part of the
statute, such provisions having been prepared for the purpose of correcting
certain practices found to exist in health and accident insurance business.
This law thas been approved by the National Convention of Insurance Com-
missioners.—Ed.

Former § 107, added by L. 1910, chap. 636, repealed by L. 1913, chap. 155.

Note.—The purpose of the addition of sections 107 and 108 by chapter 155
of L. 1913, was to correct certain practices found to exist in the ‘health and
accident insurance business and to meet some objectionable features of the
policy contracts used by this class of corporations by compelling certain
standard provisions to be used by all corporations of this character.—Ed.

§ 3. Provides; that the superintendent of insurance shall have power to
call for the filing, not later than the first day of September, nineteen hundred
and ten, of all the forms and the tables or manuals of rates to be used by any
such corporation, in accordance with the terms of this act, on or after the
first day of January, nineteen hundred and eleven, and may approve or dis-
approve any of such forms so filed at any time prior to the last mentioned
date.

Under a so-called “beneficiary clause” by which it is provided that the
beneficiary named in the policy as well as the person insured by the policy, is
also covered in case such beneficiary is injured by accident, a written applica-
tion should be signed by the proposed insured and also by the the beneficiary,
subject to the exception specified in § 55. Attorney-General Rep., Sept. 19,
1910.

§ 108. Discriminations under accident or health policies pro-
hibited. No insurance corporation authorized to make insurance
in this state under subdivision two of section seventy of this chap-
ter, nor any agent of such corporation, shall make or permit any
discrimination between individuals of the same class in the ammount
of premiums, policy fees, or rates charged for any policy of acci-
dent or health insurance, or in the benefits payable thereunder,
or in any of the terms or conditions of such insurance contract,
or in any other manner whatsoever. Any person or corporation
violating any provision of this section shall be guilty of a misde-
meanor, and shall forfeit to the people of the state the sum of
five hundred dollars for each such violation.

Added by L. 1913, chap. 155. In effect October 1, 1913.

Note.—Any policy covered by this act, the form of which has received the
approval of the superintendent of insurance, may be issued or delivered in
this State on and after the said date.

Note.—For purpose of addition of this section see note to § 107 ante.
200

Section 110.
111.
112.
113.
114.
115.

116.
11%.
118.

119.
120.
121.

Tur Insurance Law.

ARTICLE IIL

Fire Insurance CORPORATION.

Incorporation, :

Mutual fire insurance corporations:

Subscriptions to capital.

Capital stock notes and deposit notes.

May unite cash capital as an additional security.

Deposit notes and cash payments by members of mutual cor
porations.

Assessments in mutual corporations.

How surplus profits to be estimated.

Allowance of assets and estimation of liabilities upon exami
nations.

Liability of directors and corporators.

What to appear on face of policy.

Standard fire insurance policy to be prescribed and used.

121-a. Appointment of umpire by court.

122.
123.

124.
125,
126.
127.
128.
129.
130.
131.

132.

133.

134.
135.
136.
137.
138.

Payment of return premiums on cancellation of policy.

Cancellation of policies by receiver and issue of certificates of
indebtedness.

Extension of joint-stock corporations.

Mutual may become stock corporations.

Extension of term of charter of mutual corporations.

Existing corporations may reincorporate.

Duration of charter.

Merger or consolidation of fire insurance corporations.

Guaranty and special reserve funds.

Funds, how invested.

Proceedings in case of extensive conflagrations.

Payment of tax by agents of foreign fire insurance corporations
to fire departments.

Undertaking of agent.

Penalty for refusal to pay.

Penalty for refusal to exhibit foreign fire policies.

License to agents in excepted cases

License to pezsons, partnerships, associations and corporations in
excepted cases.

138-a. Public adjusters; certificate of authority.

139.

140.
141.
142.
143.
144.
145.
146.

Organizations for assisting underwriters in insurance business
generally. i

Organizations for assisting in establishing insurance rates.

Rate-making associations.

Agent’s certificate of authority.

Broker’s certificate of authority.

Fee not to be included in consideration for fire insurance.

Report of consideration to company.

Fees and charges to be indorsed on policy.
§ 110. Finz Insurance CorporaTion. 201

Section 147, Penalty for violation by company.
148. Penalties for violations by officers and agents.
149. Authorization of foreign mutual fire insurance corporations.
149a, Premium or assessment tax.
149b. Agents.
°149e. Distribution of annual tax.

Section 110. Incorporation.

Thirteen or more persons may become a corporation for the
purpose of making insurances on dwelling-houses, stores and all
kinds of buildings and household furniture, and other property
against loss or damage, including loss of use or occupancy, by fire,
lightning, windstorm, tornado, cyclone, earthquake, hail, frost or
snow, and by explosion whether fire ensues or not, except explo-
sion on risks specified in subdivision seven of section seventy of
this chapter, and also against loss or damage by water to any goods
or premises arising from the breakage or leakage of sprinklers,
pumps or other apparatus erected for extinguishing fires, and of
water pipes, and against accidental injury to such sprinklers,
pumps or other apparatus, and upon vessels, boats, cargoes, goods,
merchandise, freights and other property against loss or damage by
all or any of the risks of lake, river, canal and inland navigation
and transportation, as well as by any or all of the risks specified in
section 150 of this chapter, including insurances upon automobiles,
whether stationary or being operated under their own power,
which shall include all or any of the hazards of fire, -explosion,
transportation, collision, loss by legal liability for damage to prop-
erty resulting from the maintenance and use of automobiles, and
loss by burglary or theft or both, but shall not include insurance
against loss by reason of bodily injury to the person, and to
effect reinsurance of any risks taken by it, by filing in the office of
the superintendent of insurance a declaration signed by all of
them of their intention to form a corporation for the purpose of

“transacting the business of making any or all of such insurances,
which shall comprise a copy of the charter proposed to be adopted
by them, setting forth the name of the corporation, the place of
location of its office, the mode in which its corporate powers are to
be exercised and its directors elected, a majority of whom shall
be citizens of this state, and if a stock corporation, the owner in
his own right of at least five hundred dollars of the stock of the
corporation at its par value, the mode of filling vacancies in the
office of director, the period for the commencement and termina-
202 Tur Insurance Law. § 110.

tion of its fiscal year and the amount of capital to be employed
in the transaction of its business; provided that a corporation
including in its charter a provision to assume any of the risks of
ocean marine insurance as specified in section 150 of this chapter
must have a capital, paid in in cash, of at least $400,000.’

No such declaration shall be filed, unless the persons signing the
same shall have previously published for at least two weeks succes-
sively a notice of their intention to form such a corporation in a
public newspaper in the county where its office is to be located.

Every such corporation shall be known as a fire insurance cor-
poration. No such corporation shall directly or indirectly deal or
trade in buying or selling any goods, wares, merchandise or other
commodities whatever, except such articles as may be insured by it,
and are claimed to be damaged by any cause so insured against.

Source.—Former § 110, as amended by L. 1907, chaps. 206 and 503; L. 1908,
chap. 346; originally revised from L. 1853, chap. 466, §§ 1-2, 4-5, 3, as amended
by L. 1873, chap. 851; L. 1861, chap. 92, §§ 1, 2; L. 1880, chap. 452; L. 1882,
chap. 218.

Amended by L. 1910, chap. 168; L. 1911, chap. 126 and L. 1913, chap. 296.

Note.—The purpose of the amendment of this section by chapter 296 of
1913 was to give fire insurance corporations all the corporate rights belonging
to this class of corporations which are already accorded to them under the
laws of other states by adding to those they already possess the right to in-
sure against cyclone, hail, frost, snow and by explosion whether fire ensues
or not.—Ed.

The amendment by chap. 206 of 1907 added the words “ including insurances
upon automobiles whether stationary or being operated under their own
power; ” the subsequent amendment by chap. 503 of 1907 struck out these
words and added the word “earthquakes.” The words “ including insurances

upon automobiles, etc.,” were also added to § 150 post by said chap. 206 of
1907.

See § 6, ante. Tees for filing declaration, etc., with superintendent.

See § 10, ante. Certificate of attorney-general; corporate names; number
of directors.

See § 11, ante. Examination by superintendent as to capital stock, ete.

See § 12, ante. Minimum capital stock of fire or marine company.

See chap. 733 of 1900. Reincorporation of foreign moneyed corporation.

See chap. 205 of 1903. Fire insurance company for Roman Catholic Diocese
of Brooklyn.

FOREIGN CORPORATION.—A foreign fire insurance company cannot now
be admitted to do marine insurance business in this state. Attorney-General
Rep., 1893, page 402.

A foreign corporation cannot be allowed to transact both fire and marine
insurance. Attorney-General Rep., 1896, page 196.
§ 111. Fire Insurancn Corporation. 203

DOMESTIC ANIMALS.— Only legally organized fire insurance companies
can Insure against loss of domestic animals by fire. Attorney-General Rep.,
1893, page 317.

LLOYDS.—Action against Lloyds under § 1948 of the Code of Civil Procedure
for carrying on business. People v. Loew, 19 Misc., 248.

SUBSCRIPTIONS.— Section 110 does not require organization papers of a
stock insurance company to be accompanied by any subscription for capital
stock, and as section 112 provides for opening books for stock subscription, the
corporation is created before subscriptions are invited; subscriptions are gov-
erned by section 53 (formerly section 51), Stock Corporatior Law..and are void
unless ten per cent be paid. Van Schaick vy. Mackin, 129 App. Div., 335.

§ 111. Mutual fire insurance corporations.

No domestic mutual fire insurance corporation shall commence
business if located in the city of New York, as said city existed
on the first day of October, eighteen hundred and ninety-two, or
in the county of Kings, nor establish any agency for the trans-
action of business in either New York or Kings county, until
agreements have been entered into for insurance with four hundred
applicants, citizens of this state and frecholders, each owning real
estate within this state to the value of at least five thousand dollars,
the premiums on which insurance shall amount to two hundred
thousand dollars, of which forty thousand dollars shall have been
paid in, in cash, and notes of solvent parties, founded on actual
and bona fide applications for insurance, shall have been re-
ceived for the remainder. No such corporation in any
other county of the state shall commence business until agree
ments have been entered into for insurance with at least two hun-
dred applicants, citizens of this state and freeholders, each owning
real estate within this state to the value of at least two thousand
five hundred dollars, the premiums on which insurance shall
amount to one hundred thousand dollars, of which twenty thou-
sand dollars shall have been paid in in cash, and notes of solvent
parties, founded on actual and bona fide applications for insur-
ance, shall have been received for the remainder. No one of such
notes shall amount to more than five hundred dullars. No two
shall be given for the same risk, or be made by the same person or
firm, except where the whole amount of such notes shall not exceed
five hundred dollars. No such note shall be represented as capital
stock unless 2 policy be issued upon the same within thirty days
after the organization of the corporation upon a risk located within
204 Tur Insurance Law. § 111,

this state, and such policy shall be for no shorter period than one
year. Such notes shall be called capital stock notes and shall be
payable, in part or whole, at any time when the directors shall
deem the same requisite for the payment of losses and such inci-
dental expenses as may be necessary for transacting the business
of the corporation. The solvency of each of the makers of such
notes shall be examined into by the superintendent of insurance,
or by one or more competent and disinterested persons specially
appointed by him for that purpose. No note shall be received
as a capital stock note unless the maker thereof shall be approved
by the superintendent of insurance, or by the person or persons ap-
pointed by him for that purpose, as being pecuniarily good and re-
sponsible for the same, and is also owner of real estate as required
by this section, nor until such note has been finally approved by
the superintendent of insurance. No such note shall be valid as a
capital stock note, unless the corporators or officers of such corpora-
tion shall certify under oath that it is the bona fide property of the
corporation. No domestic mutual fire insurance corporation trans-
acting business with capital stock notes or deposit notes shall
underwrite any property not located within this state, or reinsure
policies written upon such property by other insurance corpora-
tions.

Source—Former § 111, as amended by L. 1898, chap. 147; originally revised
from L. 1853, chap. 466, § 6, as amended by L. 1862, chap. 367.

See § 12, ante. Minimum capital stock of fire and marine companies. And

note that this section, because of the enactment of L. 1913, ch. 92, is now
undoubtedly in force.

VIOLATION.— A company which had, when it began business, $40,000
in cash in the bank, the proceeds of certain sight drafts deposited by it with
the bank, being 20 per cent of the $200,000 worth of premiums referred to
in this section, and made by statute a preliminary requirement to the trans-
action of any business, has not in any manner violated this section. People v.
Equitable Mut. Ins. Corp., 1 App. Div., 84.

SPECIAL CHARTERS.— Mutual fire insurance companies doing business
in this state under special laws passed prior to chap. 308 of 1849 have the
right to transact business according to the terms of their original charter until
the same expires. Attorney-General Rep., 1897, page 148.

NOTE GIVEN FOR INSURANCE.— A note given to a mutual insurance
tompany, for premiums in advance, payable “in such portions, and at such
time or times, as the directors of the company may, agreeably to their
charter and by-laws require,” is in effect payable on demand. Hill v. Reed,
16 Barb., 280.
§ 111. Fire Insurance Corporation. 205

A note constituting part of the capital stock of a mutual insurance com-
pany is payable absolutely, may be indorsed and transferred by the corpora-
tion at its pleasure, an? upon the insulvency of the company may be
collected by its receiver. White v. Haight, 16 N. Y., 310.

An incorporator of an equitable mutual fire insurance company who gives
to the company a capital-stock note, the payment of which is made subject
to the conditions of the Insurance Law, and who, upon the incorporation of
the company, receives the benefit of the note in the form of a policy of
insurance, and becomes one of the directors of the company, and acts in that
capacity until the corporation, becoming insolvent, passes into the hands
of a receiver, is not in a position to interpose, as a defense to an action
brought by the receiver to enforce payment of such note, that because of a
failure to comply with the condition imposed by § 111 of the Insurance Law,
requiring a specified amount to be paid in in ‘cash by the incorporators before
the corporation was authorized to commence business, the incorporation was
illegal. Raegener v. McDougall, 33 App. Div., 231.

The promise to pay expressed in the note and the requirement of § 111
that a policy must be issued within thirty days after the organization of
the corporation are independent covenants, and the issuance of the policy
within the required time is not a conJition precedent to a recovery upon
the note. Raegener v. Hubbard, 167 N. Y., 301.

A person who agrees with the promoters of a mutual fire insurance com-
pany to become a member thereof and delivers a capital-stock note to them
may, unless estopped from so doing, withdraw his proposal for insurance and
secure the return of his note at any time before the company is actually
incorporated and has accepted his proposition. Raegener v. Brockway, 52
App. Div., 166.

All the notes of a mutual insurance company constitute its capital stock.
White v. Ross, 15 Abb. Pr., 66.

An insurance company is not authorized to subscribe to the capital stock
of a mutual insurance company, and to agree to give its notes in advance
for premiums on insurances to be subsequently effected. Berry v. Yates, 24
Barb., 199.

DIVISION OF BUSINESS.— A mutual insurance company may divide ite
business and risks into distinct departments, or classes, pledging the pre-
miums received in each department as the primary fund for the payment
of losses in that department. Sands v. Boutwell, 26 N. Y., 233.

CAPITAL. A mutual fire insurance company cannot insure property in
the counties of New York and Kings unless it has complied with the pro-
visions of § 180 of the Insurance Law and has organized with a capital of
$200,000. Attorney-General Rep., 1896, page 190.

INCORPORATION.— Persons who have contracted with a corporation, as
such, cannot afterwards raise the objection that the company was not legally
incorporated. White v. Coventry, 29 Barb., 305.

This section is construed by § 113 as solicitous only that the $200,000
capital be adequately secured and does not insist that the precise provisions
precedent in this section as to doing business in New York and Kings Counties
continue in force in «a case where $200,000 is already held in accumulated
profits. Attorney-General’s Rep., October 15, 1913,
906 Tur Insurance Law. §§ 112, 133, *

§ 112. Subscriptions to capital.

Upon filing in the office of the superintendent of insurance the
declaration and copy charter and proof of publication of notice of
intention to form a corporation as hereinbefore required, which
proof of publication shall be made by the affidavit of the publisher
of the newspaper in which the notice was published, or his foreman
or clerk, such corporation, if a stock corporation, may open books
for subscription to its capital stock and keep the same open
until the full amount specified in the charter is subscribed. If
it is a mutual insurance corporation, it may open books to receive
propositions and enter into agreements and receive capital stock
notes in the manner and to the extent specified in this article.

Source.—Former § 112; originally revised from L. 1853, chap. 466, § 7.

See § 53, Stock Corporation Law, chap. 564 of 1890. Subscriptions to
capital stock.

See § 660, Penal Law. Frauds in the organization of corporations.

See § 662 et seq., Penal Law. Fraudulent issue of stock, ete.

§ 118. Capital stock notes and deposit notes.

All capital stock notes of any domestic mutual fire insurance
corporation shall remain as security for all losses and claims, until
the accumulation of profits invested as required by law shall equal
the amount of cash capital required to be possessed by stock fire
insurance corporations, the liability of each note decreasing pro-
portionately as the profits are accumulated. Any note which may
have been deposited with any mutual fire insurance corporation
subsequent to its organization in addition to the cash premium on
any insurance affected with such corporation, may, at the expira-
tion of the time of such insurance, be relinquished and given
up to the maker thereof or his representative, upon his paying
his proportion of all losses and expenses which may have accrued
thereon during such term. The directors of any such corporation
shall have the right to determine the amount of the note to be
given in addition to the cash premium by any person insured
therein, but in no case shall the note be more than five times
the whole amount of the cash premium, and every person affect;
ing insurance in any mutual fire insurance corporation, and his
§ 114, Firr Insurance Corporation. 207

ot heirs, executors, administrators and assigns continuing to be so
insured, shall thereby become members of the corporation during
the period of insurance, and shall be bound to pay for losses and
necessary expenses accruing in and to such corporation im
proportion to the amount of his deposit note or notes.

Source.—Former § 113; originally revised from L. 1853, chap. 466, § 13, as
amended by L. 1854, chap. 369.

PRIVILEGES.— In the matter of certain rights and privileges of mutual
fire insurance companies, organized under article III of th Insurance Law of
this state, in regard to capital stock and policies. Attorney-General Rep.,
1896, page 190.

STATUTE OF LIMITATIONS.— The statute of limitations is not a defense
to the makers of a capital-stock note given to a mutual fire insurance
company where the statute under which it was given was incorporated in
the note by reference thereto. Raegener v. Medicus, 32 Misc., 591.

AS BONA FIDE HOLDERS.— Parties receiving from the company capital-
stock notes given for the purpose of paying claims and transferred as
collateral security are entitled to be protected as bona fide holders to the
same extent and under the same circumstances as parties who become
owners of such paper. Brockman v. Metcalf, 32 N. Y., 591.

NEGOTIABILITY OF NOTES.— The notes are in the hands of the com-
pany valid binding notes which the company has a right to negotiate for
the purpose of paying claims, or otherwise, in the course of 1ts business,
notwithstanding it ultimately appears that some of the subscriptions were
not valid binding subscriptions. Holbrook v. Basset, 5 Bosw., 147.

Holders of policies in a mutual fire insurance company, who paid their
premiums in cash, occupy similar positions to holders of policies who gave
deposit notes for such premiums, and under § 115 such policyholder is
entitled, upon the cancellation of the policy, to the return of such cash
premium. Raegener v. Willard, 44 App. Div., 41.

INCORPORATION.— This section construes § 111 as solicitous only that
the $200,000 capital be adequately secured and does not insist that the pre-
cise provisions precedent in § 111 as to doing business in New York and
Kings Counties continue in force in a case where $200,000 is already held in
accumulated profits. Attorney-General’s Rep., October 15, 1913.

§ 114. May unite cash capital as an additional security.

Any domestic mutual fire insurance corporation may unite a
eash capital to any extent as an additional security to its members,
over and above their cash premiums and premium notes. Such cash
capital shall not be less than thirty thousand dollars, and shall be
invested as capital of stock fire insurance corporations is required to
be invested. The corporation may allow interest on such cash
capital, and a participation in its profits, and prescribe the liability
of the owners thereof to share in the losses of the corporation, and
208 Tur Insurance Law. § 115.

such cash capital shall be liable as the cash capital of the corpora-
tion in the payment of its debts. Such cash capital shall in all
eases be paid in at the organization of the corporation, and satis-
factory evidence of that fact furnished to the superintendent be
fore it shall be authorized to do business.

Any existing joint-stock fire insurance corporation, and any cor-
poration formed under this article, may, upon obtaining the writ-
ten consent of the holders of three-fourths in amount of its stock,
permit the insured to participate in the profits of the business of
such corporation, and provide how far any scrip issued to the
insured for such profits shall be liable for the losses to be sustained.
Whenever an amount not less than one hundred thousand dollars
has been accumulated, and scrip issued therefor, the corporation
may, with the written consent of the holders of three-fourths in
amount of its stock, pay off and cancel an amount of the original
cash capital equal to one-half of the accumulated profits, and so
may continue from time to time until the whole amount of the
original cash capital is paid off. Before any portion of such capi-
tal stock shall be so paid off, proof shall be made to the superinten-
dent and certified by him to be satisfactory, that an amount of
accumulated profits has been realized, scrip issued therefor, and
investments made thereof in the manner required in this chapter,
at least equal to double the amount so desired to be paid off and
canceled.

Source.—Former § 114; originally revised from L. 1853, chap. 466, § 14.

§ 115. Deposit notes and cash payments by members of
mutual corporations.

Every person becoming a member of any domestic mutual fire
insurance corporation by affecting insurance therein, shall, before
he receives his policy, deposit his promissory note for such a sum
of money as shall be determined by the directors of the corpora-
tion. Such part of such note, not exceeding twenty per cent, as
shall be required by the by-laws of the corporation, shall be im-
mediately paid, and the remainder of such deposit note shall be
payable in whole or in part, as the exigencies of the corporation
shall require for the payment of losses by fire and incidental ex-
penses of the corporation. At the expiration of the term of insur-

A
§ 115. Fire Insurance Corporation. 209

ance such note, or the part thereof which shall remain unpaid after
receiving thereon from the maker a proportionate share for all
losses or expenses occurring during such term, shall be relinquished
by the corporation to the maker, and the corporation may loan such
portion of the money received upon any such note or from any such
members as may not be immediately wanted for its use, if the same
shall be secured by a bond and a mortgage on unincumbered real
property of double the value of the sum loaned.

Source.—Former § 115; originally revised from L. 1848, chap. 205.

PREMIUM NOTES.— A note made and delivered to persons organizing a
mutual insurance company, for the purpose of being presented to the com-
missioners appointed by the comptroller to examine the capital and securities
of such company, is a premium note. Sands v. Campbell, 31 N. Y., 345.

A note given for premiums on an open policy of insurance to the makers,
and afterwards substituted for notes which had been negotiated by the
company to the plaintiffs, for the purpose of paying claims, or otherwise, in
the course of its business, must be regarded as « note of the character
specified in the charter, and the transfer thereof to the plaintiffs by the com-
pany was lawful, and the title of the plaintiffs is indisputable. Wood v.
Wellington, 30 N. Y., 218.

Where the company has negotiated a premium note in the usual course
of business, the title thereto is vested absolutely in the indorsee; and any
subsequent arrangement which the company may make with the maker of
the note in respect to its payment without the assent or knowledge of the
indorsee thereof, will not affect his rights, or the rights of a bona fide holder
of the same. Farmer’s Bank v. Maxwell, 32 N. Y., 579.

Where a premium note in advance for the security of dealers was given to
a mutual insurance company, at its outset in business, and was renewed at
its maturity, the makers were held liable to the receivers of the company
in the same manner as if the occasion for its use had arisen during the
currency of the original note. Hone v. Folger, 1 Sandf., 474.

It is exceedingly doubtful whether the directors of the company, or any
agent with authority from them, has power to dispense with a compliance,
on the part of persons seeking insurance, of the statutory provisions requir-
ing the giving of deposit or premium notes. Gibbs v. Richmond Mut. Ins.
Co., 9 Daly, 203.

The premium note is part and parcel of the contract of insurance, and,
with the policy, constitutes the whole of the transaction. One part cannot
be cancelled and the other remain in full force, without the consent of both
parties. Campbell v. Adams, 38 Barb., 132.

A note given to the company for premiums in advance is a valid security,
and may be transferred to a party who has insured in the company, on
account of a claim for a loss. Howland v. Myer, 3 N. Y., 290.
210 ‘Tur Insuranon Law. § 115.

A provision in the policy of a marine insurance company that the amount
of the premium note and all other debts to the company should be first
paid or secured, before anything should be due upon a loss to the insured,
was intended primarily for the protection and security of the company; but
that it also created the reciprocal obligation that the company should not
demand payment of the note until they had paid losses. Osgood v. De
Groot, 36 N. Y., 348.

A note is valid by force of the statute authorizing it to be taken and,
therefore, that w partial failure of consideration cannot be set up to defeat
a recovery of the full amount. Deraismes v. Merchants’ Mut. Ins. Co., 1
N. Y., 371.

Holders of policies in a mutual fire insurance company, who paid their
premiums in cash, occupy similar positions to holders of policies who gave
deposit notes for such premiums, and under § 115, providing that the maker
of a deposit note shall be only liable for losses occurring during the term
of the insurance, a policyholder who has paid the premium in cash is entitled,
upon the cancellation of the policy, to the return of a proportion of such
cash premium. Raegener v. Willard, 44 App. Div., 41.

PREMIUM NOTES; STATUTE OF LIMITATIONS.— A premium note is
to be regarded according to its legal import, and not according to its form;
the statute of limitations applies to such a note according to its legal import
and, if a note is made payable at the end of or within twelve months from
its date, will commence running at the end of a year from the date thereof.
Bell v. Yates, 33 Barb., 627; Sands v. St. Johns, 36 Barb., 628.

The fact that an assessment has already been made upon a premium note
which still remains unenforced, will not render a second assessment upon the
note, embracing the former one, and designed to accomplish the same pur-
pose, invalid, where no question arises as to the statute of limitations.
Sands v. Sweet, 44 Barb., 108; overruling Campbell v. Adams, 38 Barb., 132.

A note ae to a mutual insurance company to make up its capital is, in
legal effect, payable on demand, i. v., at its date, though by its terms pay-
ment was to be made at such times and in such portions as the directors
might require; no actual demand is necessary in respect to such a note; the
statute of limitations begins to run against such a note at the time it is
given. Howland v. Edmonds, 24 N. Y., 307; Osgood v. Straus, 55 N. Y., 672,

On a promissory note given as a contingent guaranty and payable accord-
ing to assessments to be made after other assets are exhausted, the statute
of limitations does not begin to run until that contingency occurs. Hope
Ins. Co. v. Perkins, 2 Abb. Ct. of App., 383.

DEFENSE TO PAYMENT OF NOTE.— It is no defense to an action on a
note that the losses, to the payment of which the money may be applied
when collected, have occurred after the expiration of the period for which the
maker of the note was insured, or that no assessment was made in respect
to such losses upon other notes given to the i White v. Haight,
16 N. Y., 310.
§ 116. Free Insurance Corporation. 211

Where a stock subscription note, payable to the order of a mutual insurance
company, is indorsed by its president and negotiated, and before its maturity
is taken by a third person in good faith, and for full value in the usual
course of business, and it appears that this is 4 common mode of negotiating
its notes, such holder acquires a good title. Merchants’ Bank v. McColl,
6 Bosw., 473.

Where, in an action by a foreign insurance corporation upon a note, it
only appears that it was created to effect insurance upon lives, and that the
note was executed to it for the premium on a policy of insurance issued
by it, it will be presumed that the insurance was such as the company
was authorized to make and that the note was legal, until the contrary
appears. Mut. Benefit L. Ins. Co. v. Davis, 12 N. Y., 569.

y

§ 116. Assessments in mutual corporations.

The directors shall, as often as they deem necessary, after re-
ceiving notice of any loss or damage by fire sustained by any mem-
ber, and ascertaining the same, or after the rendition of any judg-
ment against the corporation for loss or damage, settle and deter-
mine the sums to be paid by the several members thereof as their
respective portion of such loss, and publish the same in such man-
ner as they shall see fit or as the by-laws shall have prescribed.
The sim to be paid by each member shall always be in proportion
to the original amount of his note or notes, and shall be paid to the
officers of the corporation within thirty days next after the publi-
cation of such notice. If any member shall, for the space of thirty
days after such publication and after personal demand for payment
shall have been made, neglect or refuse to pay the sum so assessed
upon him, the directors may sue for and recover the whole
amount of his note or notes, with costs of suit, but execution shall
only issue for assessments and costs as they accrue, and every such
execution shall be accompanied by a list of the losses for which the
assessment is made.

If the whole amount of notes shall be insufficient to pay the loss
occasioned by any fire or fires, in such case the sufferers insured by
the corporation shall receive, toward making good their respective
losses, a proportional share of the whole amount of such notes ac-
cording to the sums by them respectively insured. No member
shall ever be required to pay for any loss occasioned by fire or in-
land navigation more than the whole amount of his note. Any
such corporation may receive from any person applying for insur-
219 Tur Insurance Law. § 116.

ance, in lieu of a deposit note, the whole amount in cash for the
premium therefor, without subjecting such person to any other or
additional liability. or in any way impairing or changing the obli-
gation of the corporatio1. or affecting the rights of any person in-
terested therein. ‘

Source—Former § 116; originally revised from L. 1853, chap. 466, § 13, as
amended by L. 1854, chap. 369; L. 1890, chap. 302.

OBLIGATION OF MEMBER.—The obligation imposed by the statute
upon a member is merely that he shall pay his pro rata share of any losses,
and he does not indemnify the insured against a deficiency arising out of
the insolvency of « member, nor does he incur any obligation to pay the
proportion of any other member who has become insolvent, or who is, from
any cause, unable to pay his proportionate share of the loss. Pratt v.
Dwelling House Mut. Co., 7 App. Div., 544.

A member of a mutual company is liable upon his deposit note for losses
in the proportion which the amount of his note bears to the aggregate of
deposit notes which are collectible and legally subject to assessments for
such losses. Bangs v. Gray, 12 N. Y., 477.

One insured in a mutual company continues liable to assessment upon his
premium note for any losses incurred during the term specified in his policy,
although his property insured be destroyed long previous to its expiration
Bangs v. Skidmore, 2i N. Y., 136.

Notwithstanding that a policy be regarded as absolutely void by reason
of an unauthorized assignment, the assured is not released from the obli-
gations of his deposit or premium note until all assessments are paid
Hyatt v. Wait, 37 Barb., 29.

Besides his indebtedness for the amount of an assessment already made,
the maker of a premium note is also liable to pay his just proportion of
the losses of the company occurring while his policy is in force, for which
no assessment has yet been made. Sands v. Hill, 42 Barb., 651.

ASSESSMENT.— The fact that an assessment made upon a premium note
includes ten per cent for expenses, besides losses, does not render the assess-
ment irregular and void. Hyatt v. Esmond, 37 Barb., 601.

The assessment of a premium note is but the performance of a ministerial
duty, and is therefore not final; the fact that an assessment has already been
made upon a premium note, which still remains unenforced, will not render
a second assessment upon the note, embracing the former one, and designed
to accomplish the same purpose, invalid. Sands v. Sweet, 44 Barb., 108.

The power of the receiver of a mutual fire insurance company to levy an
assessment upon the makers of capital stock notes, to meet the company’s
fiabilities, is not judicial in its nature, and can be exercised only where the

circumstances render it necessary and proper. Raegener v. Willard, 44 App.
Div., 41.
Q ‘é
§ 116. Fine Insurance Corrorarion,. 218

The directors of a mutual insurance company do not act judicially in
making assessments upon premium notes; the directors have no right to take
into consideration the length of time any person has been a member, in
determining the amount of his assessment, or whether he shall be assessed
at all. Herkimer Co. Mut. Ins. Co. v. Fuller, 14 Barb, 373; 7 How. Pr., 210.

An assessment is a necessary condition to the maintenance of an action
by the receiver of a mutual insurance company upon a premium note, where
the charter and by-laws do not otherwise provide. Savage v. Medbury, 19
NL Y., 32.

A generai assessment. and notice that each premium note of every class
is assessed for the full amount thereof, is sufficient where the losses in the
class to which the note belonged exceed the amount of all the notes received
upon that class of risks, and the losses of the company exceed what is col-
lectible on all the notes of all classes and dates; it is unnecessary that the
assessment should state the particulars of the assets and debts upon which
it is founded. Sands v. Sanders, 26 N. Y., 239.

NON-ASSESSABLE POLICY— A mutual company may issue a non-
assessable policy for cash and the insured may recover thereon against a per-
manent receiver of the company for a loss which occurred after the
appointment of a temporary receiver. People v. Highland Mut. Co. 26
Mise., 205.

All parties insured are members of the corporation and entitled to share
in its profits of its business; the contingent benefit thus secured by taking
out a policy for a cash premium is sufficient to constitute the insured an
insurer to the extent of his interest, and to bring the transaction within
the principle of mutuality. Mygatt v. N. Y, Prot. Ins. Oo., 21 N. Y., 52.

Holders of policies in a mutual fire insurance company, who have paid
a certain definite sum of money in full for insurance therein, in lieu and in
place of a premium note therefor, are as fully and effectively insured as those
who have given a premium note for insurance, and are members of the com-
pany and entitled to vote at any election of its directors equally with note
policyholders. Matter of Mut. Fire Ins. Co., 164 N. Y., 10.

INSUFFICIENT NOTICE.— Where the notice of assessment specified dif-
ferent rates of assessment for “small notes” and “large notes,” without
showing in any manuer how a given note was distinguishable as belonging
to one or the other class, and there was no evidence of any rule on the
subject contained in the charter or by-laws, the notice was held inoperative
for uncertainty. Bangs v. Duckinfield, 18 N. Y¥., 592.

The notice of assessment should state the amount which each member is
to pay; otherwise it will be insufficient and defective, and will not oblige the
members to pay, or subject them to a suit upon the premium note. Bangs
v. McIntosh, 28 Barb., 591.

Where the by-laws of the company require a notice of the assessment to
be published, unless such publication is shown a failure to pay an assess-
ment is unavailable as a defense to an action on a policy. Bodle v. Chenango
Co. Mut. Ins. Co. 2 N. Y., 53.
914 Tus Insurance Law. § 116.

9

The publication in the absence of by-laws is to be made according to the
discretion of the directors; but where by-laws prescribe the method of publi-
cation their directions must be followed, and a defect therein is not aided
by proof of a personal demand. Sands v. Shoemaker, 4 Abb. Ct. of App.,
149; 2 Keyes, 268.

The publishing of the sotic2 is not merely directory, and personal notice
to w party assessed is not equivalent to, nor does it dispense with publica-
tion. Sands vy. Groves, 58 N. Y., 94.

COUNTERCLAIM.— A member of a muvual marine insurance company
cannot, upon its insolvency, set off against his indebtedness for premiums
due upon policies a loss sustained by him, adjusted and payable by the
company. Laurence v. Nelson, 21 N. Y., 158.

ACTION ON NOTE.— In an action upon a premium note is it unnecessary
to show the particular loss for the payment of which the assessment is
made. Jackson v. Roberts, 31 N. Y., 304.

The premium notes given to and held by a mutual insurance company are
liable to pay losses arising under cash policies issued by the company. White
v. Havens, 20 How. Pr., 177.

DISCRIMINATION.— In making an assessment no discrimination is to be
made between notes given when higher rates of insurance existed and those
under reduced rates. Shaughnessy v. Rensselaer Ins. Co., 21 Barb., 605.

RECEIVER.— A receiver, in making an assessment upon premium notes
held by the company, is the actor, and his authority depends, not upon the
order of the court, but upon the existence of facts rendering an assessment
necessary and proper. Thomas v. Whallon, 31 Barb., 172.

INTEREST.— A personal demand of the amount assessed upon a premium
note must be made before an action can be brought against the maker;
upon a recovery on such a aote, for the non-payment of assessments, the
plaintiff is entitled to interest from the time when the assessments became
payable. Sands v. Annesley, 56 Barb., 598.

In an action to recover an assessment on a premium note given on effecting
an insurance, the plaintiff is not entitled to’interest on the amount of the
note. Bangs v. Bailey, 37 Barb., 630.

REVIVAL OF POLICY.— In an action on a policy issued by a mutual com-
pany it appeared that the company, with full knowledge that the policy
had become void by an alienation of the property insured, assessed the
plaintiff’s premium note on account of losses which occurred after the aliena-
tion, and collected the assessment; held, that this did not revive the policy,
but was consistent with the right of the company to treat it as void. Neely
v. Onondaga Co. Mut. Ins. Co., 7 Hill, 49.

When a policy has become void by reason of an unlawful assignment it
will not be revived because the company, with full knowledge, assessed
the assured for losses. Smith v. Saratoga Co. Mut. Fire Ins. Co., 3 Hill, 508.

FORCE OF ADJUSTMENT.— The amount to be paid by the insured, if
anything, toward previous losses on a surrender of a deposit note is a subject
§ 117. Fire Insurance Corporation. 215

of adjustment between him and the company, and when the adjustment is
made and the policy and note are surrendered the settlement is binding un-
less impeached on the ground of fraud or mistake. Hyde v. Lynde, 4 N. Y., 387.

TERMINATION OF CHARTER. The fact that a charter of an insurance
company expires, by its own limitation, within the period during which a
policy is by its terms to continue will not avoid the policy, and discharge
the insured from his liability upon his premium note; the policy is valid
for the unexpired term of the charter. Huntley v. Beecher, 30 Barb., 580.

EXECUTION.— In an action on a premium note a recovery may be had
for its full amount although that exceeds the assessment levied against it,
but execution can only issue for the amount due thereon. Taylor v. Port
Jefferson Mill. Co., 84 Hun, 610; 32 N. Y. Supp., 307; 65 St. Rep., 542.

§ 117. How surplus profits to be estimated.

In estimating the surplus profits of a fire insurance corporation
for the purpose of making any dividend upon its capital stock,
there shall be reserved from such profits a sum equal to the
amount of all unearned premiums on unexpired risks and policies,
and all sums due the corporation on bonds and mortgages, bonds,
stocks and book accounts, of which no part of the principal or in-
terest thereon has been paid durig the last year, and for which
foreclosure or suit has not been commenced for collection or which,
after judgment obtained thereon, shall have remained more than
two years unsatisfied, and on which interest shall not have been
paid, and all interest due or accrued and remaining unpaid. But
no corporation may declare dividends exceeding ten per centum
on its capital stock in any one year unless, in addition to the
amount. of its capital stock such dividend, all outstanding liabilities
and the amount of all unearned premiums on unexpired risks and
policies as aforesaid, it shall have and be in possession of surplus
profits to anamount equalling thirty per centum of its unearned
premiums.

Any dividend made contrary to the provisions of this section
shall work a forfeiture of the charter of the corporation, and each
stockholder receiving any such dividend shall be liable to the cred-
itors of the corporation to the extent of the dividend received in
addition to the other penalties and punishments prescribed by law.
This section shall not apply to the declaration of scrip dividends by
participating corporations. No such scrip dividends shall be paid,
except from the surplus profits, after reserving all sums as ahove
216 Tur Insurance Law. § 118.

provided, including the whole amount of unearned premiums on
unexpired risks. And whenever any fire insurance corporation
shall have accumulated and be in possession of a fund in addition to
the amount of its capital stock, and all actual outstanding liabilities
in excess of one-half of the amount of all premiums on risks not
not terminated such corporation may increase its capital stock from
such fund; and distribute such increase pro rata to the stockhold-
ers of such corporation, provided, always, that such increase shall
be equal to at least twenty-five per centum of the original capital
stock of said corporation and shall have been approved by the su-
perintendent of the insurance department and authorized by at
least three-fourths of the board of directors of such corporation,
and provided, also, that any such corporation may hereafter make
and declare a dividend as provided by this chapter.

Source.—Former § 117, as amended by L. 1905, chap. 251; originally revised
from L. 1853, chap. 466, § 12, as amended by L. 1867, chap. 91.

See § 28, Stock Corporation Law, chap. 61 of 1909. Liability of directors
for making unauthorized dividends.

See § 664, Penal Law. Misconduct of directors in making dividend except
from surplus profits.

DIVIDENDS.— Dividends upon the capital stock of a fire insurance cor-

poration can only be paid from surplus earnings. Attorney-General Rep..
1894, page 212.

Section 117 of the Insurance Law does not prohibit all insurance companies
from declaring dividends exceeding ten per centum. Attorney-General Rep.,
1901, page 148.

The provision of this section declaring, in effect, that moneys received for
premiums upon unexpired fire insurance policies shall not be deemed surplua
profits, but shall be considered as “unearned premiums” in making dividends,
does not affect the status of such receipts, as property, for the purposes of
taxation, and in no way interferes with or affects the statute in relation to
taxation. People ex rel. M. F. Ins. Co. v. Commissioners, 76 N. Y., 64.

§ 118. Allowance of assets and estimation of liabilities upon
examinations.

When an examination is made by the authority of the superin-
tendent of insurance into the affairs of any fire insurance cor-
poration doing business in this state, or when such corporation
renders a statement to the insurance department, there shall not
be allowed as assets any investments which are not held as pre
§ 119. Fire Insurance Corporation. 217

scribed by law at the date of such examination or rendering such
statement; but unpaid premiums on policies written within three
months shall be admitted as available resources. In estimating
its liabilities, there shall be charged, in addition to the capital stock
and all outstanding claims, a sum equal to the total unearned pre-
miums on the policies in force, calculated on the gross sum with-
out any deduction on any account, charged to the policyholder on
each respective risk from the date of the issue of the policy. In
the case of an examination into the condition of any mutual fire
insurance corporation with capital stock notes, the value of such
notes shall be ascertained and the responsibility of the makers
thereof certified to in the same manner as is required by section
one hundred and eleven of this chapter.

Source.—Former § 118, as amended by L. 1898, chap. 465; originally revised
from L. 1880, chap. 110, § 1.

See § 130, post. Guaranty and special reserve funds.

FUNDS.— Guarantee surplus funds and special reserve funds are to be
regarded as liability only in the sense that surplus is a liability. Attorney-
General Rep., 1904, page 413.

CONTINUANCE IN BUSINESS.— The question as to the continuance in
business of a mutual insurance company is to be determined by the super-
intendent under § 43 of the Insurance Law, and § 118 applies only in part
to a mutual insurance company. People ex rel. Long Island Mut. v. Payn, 26
App. Div., 584; 50 N. Y. Supp., 334.

§ 119. Liability of directors and corporators.

The directors and corporators of any corporation organized
under this article, and those entitled to a participation of the
profits of such corporation, shall be jointly and severally liable
for all debts or liabilities of such corperation, until the whole
amount of the capital of the corporation shall have been paid in
in cash, and a certificate has been issued to it by the superintendent
authorizing it to do business in this state.

Source.—Former § 119; originally revised from L. 1853, chap. 466, § 17.

DIRECTOR.— It seems that a director of a fire insurance company has no
right to approve of his own application. Pratt v. D. H. M. F. Ins. Co., 130
N. Y., 206.

CORPORATIONS.—- Corporators, as used in this section, does not include
stockholders; corporators are the associates engaged in organizing the com-
pany, whose functions cease with its organization, then stockholders come
218 Tu» Insurance Law. §§ 120, 121.

in; after their functions thus cease the corporators cannot be further held
liable; where a corporator is liable under this section the cause of action,
upon his death, survives against his estate. Chase v. Lord, 77 N. Y., 1.

§ 120. What to appear on face of policy.

Every domestic mutual fire insurance corporation shall embody
. the word “ mutual” in its title, which shall appear on the first
page of every policy and renewal receipt. Every fire insurance
corporation doing business as a cash stock corporation shall upon
the face of its policy in some suitable manner express that such
policy is a policy in a stock corporation.

Source—Former § 120; originally revised from L. 1853, chap. 466, § 15.

§ 121. Standard fire insurance policy to be prescribed and
used.

The printed blank form of a contract or policy of fire insurance,
with such provisions, agreements or conditions as may be indorsed
thereon or added thereto and form a part of such contract or policy,
heretofore filed in the office of the secretary of state by the super-
intendent of insurance or by the New York board of fire under-
writers pursuant to the provisions of chapter four hundred and
eighty-eight of the laws of eighteen hundred and eighty-six shall
be transferred by the secretary of state to the office of the superin-
tendent of insurance and, together with such provisions, agree
ments or conditions as may be filed by the New York board
of fire underwriters in the office of the superintendent of insur-
ance and approved by him, which provisions, agreements or condi-
tions shall be void if they are inconsistent with the standard fire
insurance policy heretofore filed in the office of the secretary of
state, shall be known and designated as the “ standard fire insurance
policy of the state of New York.” No fire insurance corporation,
its officers or agents, shall make, issue, or deliver for use, any fire
insurance policy or the renewal of any such policy on property in
this state, other than such as shall conform in all particulars as to
blanks, size of type, context, provisions, agreements and conditions
with such printed blank form of contract or policy; and no other
§ 121. Fire Insurance Corporation. 219

or different provision, agreement, condition or clause shall be in
any manner made a part of such contract or policy or indorsed
thereon or delivered therewith, except as follows, to wit:

First. The name of the corporation, its location and place of
business, date of its incorporation or organization, whether it is a
stock or mutual corporation, the names of its officers, the number
and date of the policy, and if issued through a manager or agent
the words “ this policy shall not be valid until countersigned by the
duly authorized manager or agent of the corporation at........ -

Second. Printed or written forms of description and specifica-
tion, or schedules of the property covered by any particular policy,
and any other matter necessary to clearly express all the facts and
conditions of insurance on any particular risk not inconsistent with
or a waiver of any of the conditions or provisions of the standard
policy herein provided for.

Third. With the approval of the superintendent of insurance, if
the same is not already included in such standard form, any pro-
vision which any such corporation is required by law to insert in its
policies, not in conflict with the provisions of such standard form.
Such provisions shall be printed apart from the other provisions,
agreements or conditions of the policy under a separate title as
follows: “ Provisions required by law to be stated in this policy.”

After the first day of January, 1911, such policy or contract
may be printed, written or typewritten with any size of type or on
any size or shape of paper which shall have the written approval
of the superintendent of insurance.

The name, with the word “agent” or “agents,” and place of
business, of any insurance agent or agents, either by writing, print-
ing, stampirg or otherwise, may be indorsed on the outside of such
policies

Two or more fire insurance corporations, authorized to transact
business in this state, may issue a combination standard forre of
policy, using a distinctive title therefor, which title shall appear
at the head of such policy followed by the titles of the several
corporations obligated thereupon, and which policy shall be exe-
cuted by the officers of each of such corporations; provided, that
220 Tur Insurance Law. § 121.

before such corporation shall issue such combination policy, they
shall have received the express permission of the superintendent of
insurance to issue the same, and the title of such proposed policy
and the terms of the additional provisions thereof, hereby author-
ized, shall have been approved by him, ‘which terms, in addition to
the provisions of the standard policy and not inconsistent there
with, shall provide substantially under a separate title therein, to
be known as “ Provisions specially applicable to this combination
policy,” as follows: (a) That each corporation executing such
policy shall be liable for the full amount of any loss or damage,
according to the terms of the policy, or a specific percentage
thereof; (b) that service of process, or of any notices required by
the szid policy, upon any of the corporations executing the same
shall be deemed to be service upon all; and provided, further, that
the unearned premium liability on each policy so issued shall be
maintained by each of such corporations on the basis of the liability
of each to the insured thereunder.

Source.—Former § 121, as amended by L. 1901, chap. 513; L. 1903, chap. 106;
originally revised from L. 1886, chap. 488, §§ 1, 2, 4, as amended by L. 1887,
chap. 429.

Amended by L. 1909, chap. 240; L. 1910, chaps. 168, 638 and 668, and L. 1913,
chap. 181. In effect June 30, 1913.

Note.—The purpose of the amendment of section 121 and addition of see-
tion 12l-a by chapter 191 of 1913 was to require after June 30, 1913, every
fire insurance policy to have « notice attached to it providing for appeal, and
also to allow the New York Board of Fire Underwriters to submit to the
superintendent new riders which if approved can be used in connection with
the standard fire policy.—Ed.

Note.— The Lloyds bill — chap. 638 of 1910 —and the combination standard
fire policy bill— chap. 668 of 1910— both amend § 121. The amendment, as
found in the latter bill, is the more comprehensive and is in accordance with
the Department’s desires. The Lloyds bill was signed June 24th, and the com-
bination standard fire policy bill June 25th, Though both statutes go into
effect on the same day, the intent of the legislature and the Executive will
doubtless be determined by these dates, The section is here printed as
amended by chap. 668 of 1910.—Kditor.

Laws 1903, chapter 106, section 1, by its terms purported to amend section
190 of Laws 1892, chapter 690. This was an error, as there was no section 190
in the latter act. The substance of the amending act shows clearly that it
was intended to amend section 121.

See § 1193, Penal Law. Fire insurance corporations to use standard
policy only.
S 121, Frre Insurance Corporation. 221

VERBAL CONTRACT.— Where a local agent of a fire insurance company,
after a conversation with an applicant for fire insurance in which the sum
for which the property was to be insured, the premium and the period of
insurance were discussed and fixed, stated to the applicant that “You are
insured from noon of the 30th day of December, 1893, to noon of December
30, 1894,” a complete and binding contract for insurance for the period stated
is created, and the law reads into the contract the standard fire insurance

policy of the state of New York, whether it was referred to in terms or not.
Hicks v. British Am. Assur. Co., 162 N. Y., 284.

CONTRACTUAL LIMITATION.— The contractual limitation is 1 part of
the standard form of insurance policies issued in this state pursuant to
statute, and unless the defendant has waived the limitation or it is estopped
from asserting the same it is a complete defense to an action; an insurance
company may waive the limitation or estop itself from asserting it. McArdle
v. German All. Ins. Co., 98 App. Div., 594.

INDORSEMENT.— The standard form cannot properly contain or bear upon
its face an indorsement in the form of an agreement signed by the agent
undertaking to relieve the assured from any and all assessments which may
be made by the company against the assured under said policy. In re
Mutual Fire Ins. Co., Attorney-General Rep., 1902, page 234.

The indorsement upon or delivery with a standard fire insurance policy
of a notice to the effect that unless the premium is paid on or before a
specified date, the company will exercise its rights of cancellation as pro.
vided by the policy, is not a violation of the provisions of § 121 of the
Insurance Law or of § 577d of the Penal Code. In re Clinton, Attorney-
General Rep., 1902, page 241.

DEPOSIT OF PROOFS.— Depositing proofs of loss by fire in the post-office
aixty days after the fire, which proofs are not received by the company
until the sixty-second day, is not a compliance with the conditions of a
policy requiring that the insured shall render a statement to the attorneys
of underwriters within sixty days. Peabody v. Satterlee, 166 N. Y., 174.

There is a sufficient compliance with the provisions of a fire insurance policy
requiring the insured to give the insure~ “immediate” notice of a loss if the
insured, using due diligence, serves the notice within a time which is reason-
able under the circumstances; the question of due diligence under the circum-
stances of the case is for the jury. Will & Baumer Co. v. Rochester German
Insurance Co., 140 App. Div., 691.

* CHANGE OF INTEREST.— Where a policy contained a condition declar-
ing it void in case of any change of interest, title or possession, whether
by legal process or voluntary act, the issuing of an execution and a levy
thereunder does not work a change of interest within the meaning of the
policy. Walradt v. Phoenix Ins. Co., 136 N. Y., 375.

NON-OCCUPANCY.— Permit for non-occupancy limiting company’s lia-
bility to two-thirds of the amount insured in the policy, etc. not “incon-
sistent with” nor “a waiver of any of the conditions or provisions of the
standard policy.” Attorney-General Rep., 1903, page 281.

COLD STORAGE RIDERS.—§ 121 prohibits the making of a policy
which would insure against indirect loss or consequential damages; “cold
storage” riders are not permissible. Attorney-General Rep., 1902, page 351.
999 Tur Insurance Law. § 121.

A rider attached to a policy of insurance, stating that it is issued upon
the understanding and warranty by the insured that another certain company
has a policy in force insuring the identical property in identically the same
proportions and at no hhigher rate of premium is within the second exception
of section 121; where the policy referred to in the rider was in fact written
at a higher rate of premium and the proportions were not identical, the
policy to which the rider is attached is void for the breach of the warranty;
an insurance broker, procuring the policy to which the rider it attached, is
liable to the insured where its invalidity arose from his negligence. Scharles
v. N. Hubbard, Jr. & Co., 74 Mise., 72.

BINDING SLIP.— Where defendant, in order to provide temporary insur-
ance pending an inquiry as to the character of the risk, delivered to plain-
tiff a “binding slip,” containing none of the conditions found in the policies,
the plaintiff was not entitled to recover when the loss occurred two hours
after plaintiff had been notified that defendant would not accept tne risk;
the contract evidenced by the “binding slip” was one subject to the con-
ditions contained in an ordinary policy, and the notice terminated the con.
tract pursuant to such a condition in the policy. Lipman v. N. F. Ins. Co.,
121 N. Y., 454.

When a fire insurance company signs and delivers to an insurance broker
employed to procure insurance what is known as a “binding slip,” agreeing
to make the insurance, the slip to be binding until a regular policy is made
cut and delivered, the contract evidenced by the slip is the ordinary policy
issued by the company. Karelsen v. Sun Fire Off., 122 N. Y., 545.

It is proper to issue a binder for temporary insurance pending an inquiry
by the company as to the character of the risk or during any delay in
issuing the policy. In re N. Y. Fire Ins. Exchange, Attorney-General Rep.,
1904, page 416.

SURRENDER OF CERTIFICATE.— It is not a violation of the provisions
of § 121 to issue a policy that the applicant has insurance “Loss, if any,
in conformity with the conditions of said policy to be adjusted on presenta-
tion and surrender of this certificate.” Attorney-General] Rep., 1904, page 430.

MORTGAGED PREMISES.— When, by a policy of fire insurance issued to
the owner of mortgaged premises, loss, if any, is made payable to the mort-
gagee, as his interest may appear, the undertaking so to pay is collateral
and dependent upon the principal undertaking, and if there is a breach of
conditions in the policy by the assured, which by its terms renders it void,
his defeats a recovery thereon by the mortgagee. Moore v. H. F. Ins. Co.,
141 N. Y., 219.

Adding to mortgagee clause the words “guarantors of the mortgagee,”
immediately after the name of beneficiary, is allowable under § 121 of the
Insurance Law. Attorney-General Rep., 1903, page 331.

The insertion of the words “or any of its assigns” in the ‘mortgagee
clause of a standard fire insurance policy after the name of the mortgagee
is a violation of the provisions of § 121 of the Insurance Law. Attorney-
General Rep., 1902, page 272.
§ 121-a. Firr Iysurance Corporation. 223

GASOLINE.— Certain permits for the use and storage of gasoline may be
inserted in the standard policy but it should not be changed so as to place
limitations on the company’s liability. In re Nat. Bd. of Fire Underwriters,
Attorney-General Rep., 1902, page 315.

PRESUMPTION.— The court will not presume that a policy of insurance
which covers property in the state of Missouri is a New York standard
policy. Loomis v. Lewis, 62 App. Div., 433.

A provision in the standard form of fire insurance that the insured shall
uot be liable for a greater proportion of any loss than the amount insured
shall bear to the whole insurance covering the property, ete., does not permit
the insurer to figure its proportion of liability upon other insurance held
under a floating policy which provided that it did not cover merchandise on
which “there was any specific insurance except on the excess of value above
such specific insurance when it was exhausted.” Klotz Tailoring Co. v. Eastern
Fire Ins. Co., 116 App. Div., 723.

SAFE DEPOSIT.— The provisions of section 121 of the Insurance Law
prohibit not only the issuance of a policy insuring against loss by fire of
coupon bonds and other negotiable securities, but also the issuance of a policy
covering the liability of a safe deposit and storage company for loss thereof
by fire. Attorney-General Rep., February 8, 1912.

INSPECTION.— The words “ within sixty days after the fire” as used in
the standard fire insurance policy means within sixty days after the fire has
terminated or abated to such an extent that an inspection of the damaged
property may be had; the ommission of the venue from w proof of loss may
be supplied by amendment. Slocum v. Saratoga & Washington Fire Ins. Co.,
149 App. Div., 867.

§ 121-a. Appointment of umpire by court.

When, in the event of any loss or damage to property in this
state described in any policy of fire insurance and covered thereby,
the ascertainment of the amount of any such loss or damage is,
as provided in the policy, to be determined by appraisers, one
selected by the company, the other by the insured, and the two
so chosen shall have failed or neglected, for a space of ten days
after both have been chosen, to agree upon and select an umpire,
it shall be lawful for either the insured or the company to apply
to any court of record in the county in which the property is or
was located, on five days’ notice in writing, to the other party of
his or its intention so to do, to appoint a competent and disinter-
ested umpire. Any such notice in writing, when served by the
insured, may be served upon any local agent of the company;
and the said court shall, on proof by affidavit of the failure or
neglect of the said appraisers to agree upon and select an umpire
within the time aforesaid, and of the service of notice aforesaid,
294 Tue Insurance Law. § 129.

forthwith appoint a competent and disinterested person to act
as umpire in the ascertainment of the amount of said loss or
damage; and the acts of the umpire so appointed shall be binding
upon the insured and the company to the same extent as if such
umpire had been selected in the manner provided for in said
policy of insurance.

No policy of fire insurance shall be hereafter issued on property
located in this state, unless the foregoing provisions of this section
shall be printed on or attached thereto under the following title:
“ Provisions required by law to be stated in this policy.”

Added by L. 1913, chap. 181. In effect June 30, 1913.
Note.—For purpose of addition of this section see note to § 121, ante.

g 122. Payment of return premiums on cancellation of
policy.

Any corporation, person, company or association transacting the
business of fire insurance in this state shall cancel any policy of
insurance upon the request of the insured or his Jegal representa-
tives, and shall return to him or to such representative the amount
of premium paid, less the customary short rate premium for the
expired time of the full term of which the policy has been issued
or renewed, notwithstanding anything in the policy to the contrary.
Where the laws of any state permit corporations organized under
its laws to cancel policies of insurance upon different terms than
hereiz set forth, corporations organized under the laws of this state
may cancel policies upon risks in any such state upon the same
terms as are provided for corporations organized under its laws.

Source.—Former § 122; originally revised from L. 1880, chap. 110, § 3 as
amended by L. 1886, chap. 612.

Where the charter and by-laws of a mutual insurance corporation exclude
from membership persons who effect insurance with it upon a cash basis,
w receive: may properly levy an assessment upon capital stock notes in
order to pay back unearned premiums upon cash policies which have been
duly canceled under the Insurance Law, as the holders of such policies
sustain no relation to the corporation other than that of mere contractors
with it. Regener v. Phillips, 26 Misc., 311.

An insurance company, when cancelling a policy before maturity, has no
right to deduct anything from the unearned premium beyond what is.
admissible under the short-rate system; and a further deduction, through
which it seeks to get back what it has paid brokers to place the risk, is
wholly unauthorized and may be recovered of the company by an assignee of
the insured. McKenna v. Fireman’s Ins. Co., 30 Mise., 727.

The withdrawal of a policy before it becomes operative is not a cancellation
within the meaning of the Insurance Law so as to require notice to the insured.
Walrath v. Hanover Fire Insurance Co., 139 App. Div., 407.
§§ 123, 124. Fire Insurance Corporation. 225

§ 123. Cancellation of policies by receiver and issue of cer-
tificates of indebtedness.

Tne receiver of any domestic fire insurance corporation, on the
receipt by him of any policy of the corporation in force, and upon
the written request of the policy holder, shall cancel such policy
anc. issue in lieu thereof, a certificate of indebtedness as such re-
ceiver to the policy holder for the amount of the premium paid
less the proportion of premium for the expired time of the full
term for which the policy had been issued or renewed, and upon
the receipt of such certificate by the policy holder, the policy shall
become null and void, notwithstanding anything in the policy te
the contrary. The receiver, in his report of the liabilities of the
corporation to the insurance department, shall state the total
amount of such outstanding certificates of indebtedness not can-
celed at the date of the report.

Source-—Former § 123; originally revised from L. 1880, chap. 110, § 4.

§ 124. Extension of joint-stock corporations.

Any existing domestic joint-stock fire insurance corporation and
any corporation organized under this article, having a capital of at
least two hundred thousand dollars may, without increasing its
capital, at any time within two years previous to the termination
of its charter, after giving notice at least once a week for six weeks
successively in a newspaper published in the county where such
corporation is located ot such intention, and with a declaration
under its corporate seal, signed by the president and two-thirds
of its directors, of their desire for such extension, extend the term
of its original charter for a period of thirty years, by altering and
amending the same so as to accord with the provisions of this ar-
ticle, and filing a copy of such amended charter with such declara-
tion in the office of the superintendent of insurance; whereupon
the same proceedings shall be had as are required upon the incor-
poration of a corporation under this article.

Source.—Former § 124; originally revised from L. 1853, chap. 466, § 18, as
amended by L. 1862, chap. 367.

See § 37, General Corporation Law, chap. 28 of 1909. Extension of cor-
porate existence. :

A fire insurance company may extend its corporate existence when under
section 124 or under section 32, General Corporation Law. Attorney-General’s
Opinion, February 1, 1909.
296 Tue Insurance Law. -§ 195,

§ 125. Mutual may become stock corporations.

Any domestic mutual fire insurance corporation having surplus
assets aside from premium and capital stock notes sufficient to re-
insure all its outstanding risks, may, providing the superinten-
dent of insurance give his consent thereto, and the president and
directors thereof, by three-fourths vote decide to so do, so amend
the charter thereof as to convert the same into a stock corpora-
tion. Such amended charter shall specify the name by which the
corporation has been known, and also the name by which it desires
to be known in the future, the location of its principal office; the
amount of its capital stock, and the number of shares into which
the same: shall be divided, and the par value of each; but the
umount of its capital stock shali not be less than two hundred thou-
sand dollars. Directors and officers of such corporation shall hold
their said positions respectively until the expiration of the terms
for which they were elected. Their successors shall be elected
as if said corporation had been originally incorporated as a stock
corporation in accordance with the provisions of this chapter.
When any change shall have been decided upon by three-fourths
of the directors, and the consent of the superintendent shall have
been given thereto, then the directors shall open books of subscrip-
tion to the capital stock, and give notice of the change and that
said books have been opened, and that the members of such cor-
poration on the day when such changed charter or articles were
made and filed, and the consent of the superintendent thereto
granted, shall be entitled to priority in subscribing to the capi-
tal stock of such corporation as hereinafter specified, by publica-
tion once a week for six successive weeks in a newspaper published
in the county where said corporation shall have its principal office
and also in the state paper at Albany. If three-fourths of the
directors of such corporation shall not give their consent thereto,
such corporation, after having given notice once a week for six
weeks, of its intention to do so, and of the meeting hereinafter
provided for, in the state paper and in a newspaper published in
the county where such corporation is located, may, with the consent
of two-thirds of the members present at any regular annual meet-
ing, or at any special meeting duly called for the purpose, or with
§ 125. Fire Insurance Corporation. 227

‘the consent in writing of two-thirds of the members of such cor-
poration, unless otherwise provided in its charter, become a joint
stock corporation by conforming its charter to and otherwise pro-
ceeding in accordance with this chapter. Every member of such
corporation on the day of such annual or special meeting, or the
date of such written consent, or the date of the filing of the
amended articles of incorporation and of the consent of the super-
intendent thereto, shall be entitled to priority in subscribing to
the capital stock of such corporation for one month after the open-
ing of the books of subscription, in proportion to the amount of
cash premiums paid in by such member on unexpired risks in
force on the day of such annual or special meeting, or the date of
such written consent, or the date of the filing of such amended char-
ter or articles and of the consent of the superintendent thereto, at
the expiration of such month, then the board of directors shall sell
and dispose of the capital stock which shall not have been taken by
the members aforesaid, to such persons as may subscribe to the
same; and when the capital stock shall have been fully subscribed
to and paid in, the directors shall notify the superintedent of that
fact, and thereupon the superintendent shall make or cause to be
made an examination of the affairs of the said company, and if he
shall find that the proceedings for the charge thereof from a do-
mestic mutual fire insurance corporation to an insurance stock cor-
poration, have been regularly taken in conformity with this section,
and that the capital stock shall have been fully subscribed for, and
the amount thereof paid in, in cash, or in such securities as stock
insurance corporations are entitled to hold under the provisions of
this chapter for capital investments, then the superintendent shall
certify that such examination has been made, and that the proceed-
ings have been regularly taken, the capital stock paid in and
the said corporation recognized as an insurance stock corporation,
and thereupon said corporation shall come under the provisions of
this chapter in the same manner as if it had been incorporated
thereunder.

Source.—Former § 125, as amended by L. 1896, chap. 850; originally revised
from L. 1853, chap. 466, § 18, as amended by L. 1862, chap. 367.

INTEREST.— Right of the joint stock corporation, out of the assets of

the mutual company, to pay receipts bearing ten per cent interest issued by
it. Manhattan Fire Ins. Co. v. Fox; 74 App. Div., 271.
298 Tue Insurance Law. § 126.

CONSENT.— Since the amendment of this section by chap. 850 of the
Laws of 1896, it is no longer necessary to obtain the consent of two-thirds
of the members to change a mutual company to a stock corporation; the
change made by this amendment does not violate the constitutional rights
of the members or policyholders in such a company. Grobe v. Erie Co.
Mut. Ins. Co., 39 App. Div., 183. ‘

RIGHT TO SUBSCRIBE.— Where a mutual fire insurance company pro-
poses to convert itself into a stock corporation, the right to subscribe is
dependent upon the amount of cash paid in premiums on policies. outstanding.
The term “unexpired risks in force,” applies to policies outstanding and not
to property insured. Attorney-General’s Rep., July 2, 1913.

§ 126. Extension of term of charter of mutual corporations.

Every domestic mutual fire insurance corporation, having a capi-
tal in premium notes of an amount required of such corporation in-
corporated under this article, may at any time within two years
previous to the termination of its charter, after giving notice once a
week for six weeks successively in a newspaper published in the
county where such corporation is located of such intention, and
with a declaration, under its corporate seal, signed by its president
and two-thirds of its directors, of their desire for such extension,
extend the term of its original charter for a period of thirty years,
by altering and amending the same so as to accord with the pro
visions of this chapter, and filing a copy of such amended charter
and declaration in the office of the superintendent of insurance;
whereupon the same proceedings shall be had as are required upon
the formation of a corporation under this article, except as to its
capital, which shall be certified to be in accordance with the pro-
visions of this section. Every corporation so extended shall come
under the provisions of this chapter in the same manner as if it had
been incorporated originally thereunder. Every fire insurance
corporation which has heretofore changed from a mutual to a joint
stock corporation, pursuant to the provisions of law, shall be deemed
and be held by such change to have continued and extended its
charter for the period named therein, not exceeding thirty years
from the time of such change.

Source.—Former § 126; originally revised from L. 1853, chap. 466, § 18, a8
amended by L. 1862, chap. 367; L. 1882, chap. 243.

See § 37, General Corporation Law, chap. 28 of 1909. Extension of cor-
porate existence.
§§ 127, 128. Fire Insurance Corporation. 229

§ 127. Existing corporations may reincorporate.

Any domestic fire insurance corporation may change its name,
increase the amount of its capital, or avail itself of any powers con-
ferred by the provisions of this chapter upon filing with the super-
intendent of insurance proof of publication of a notice of its inten-
tion to do so once a week for six successive weeks in the state paper
and in a newspaper published in the county where its office is lo-
eated, and if a stock corporation, the written consent of three-
fourths in amount of its stockholders; or, if a mutual corporation,
the unanimous consent of its directors unless otherwise provided in
its charter; and a declaration under its corporate seal, signed by
its president and directors, of its desire to do so, and upon obtain-
ing and filing with the superintendent his consent thereto. It shall
thereupon file with the superintendent and in the office of the clerk
of the county where its office is located a copy of its charter so al-
tered or amended, and upon the same proceedings being thereafter
had as are required by this chapter upon the formation and organ-
ization of an insurance corporation under this article, it shall be
deemed and be held to be incorporated under the provisions of this

article.

Source.—Former § 127; originally revised from L. 1853, chap. 466, § 19, as
amended by L. 1875, chap. 208.

See § 37, ante. Corporations heretofore formed brought within the pro-
visions of the-Insurance Law.

See § 106, Statutory Construction Law, chap. 27 of 1909, as to effect of
repeal and re-enactment of prior statutes.

See § 60 et seq., General Corporation Law. Proceedings to change the name
of a corporation.

§ 128. Duration of charter.

Every fire insurance corporation incorporated or extended under
this chapter shall continue in existence for the term specified in its

charter, not exceeding thirty years.

Source.—Former § 128; originally revised from L. 1853, chap. 466, § 19, as
amended by L. 1875, chap. 208.

See § 124, ante. Extension of charter of joint stock corporation.

See § 126, ante. Extension of term of charter of mutual corporation.

See § 37, General Corporation Law, chap. 28 of 1909. Extension of cor-
porate existence.

CHARTER EXPIRED.— The fact that the charter of an insurance com-
pany expires, by its own limitation, within the period during which a policy
230 Tue Insurance Law. § 129,

by its terms is to continue, will not avoid the policy and discharge the
insured from his liability upon his premium note; the policy is valid for the
unexpired term of the charter. Huntley v. Beecher, 30 Barb., 580; Huntley v,
Merrill, 32 Barb., 626.

§ 129. Merger or consolidation ‘of fire insurance cor-
- porations.

Any two fire insurance corporations organized under any iaw
of this state may merge or consolidate such corporations into one
corporation under the name of one or more of the corporations. The
corporations may enter into and make an agreement for such mer-
ger or consolidation under their respective corporate seals, prescrib-
ing its terms and conditions; the amount of its capital, which shall
not be larger in amount than the aggregate amount of capital of
the merged or consolidated corporations and the number of shares
into which it is to be divided. Such agreement must be assented
to by a vote of the majority of the number of directors of each cor-
poration prescribed in its charter and must be approved by the
votes of stockholders owning at least two-thirds of the stock of each
corporation represented and voted upon in person or by proxy ata
meeting, called separately for that purpose, upon a notice stating
the time, place and object of the meeting served at least thirty days
previously upon each personally or mailed to him at his last known
post office address and also published at least once a week for four
weeks successively in some newspaper printed in the state, town or
county where such corporation has its principal office and there
shall be endorsed upon the agreement the certificate of the secre-
taries of the respective corporations under the seals thereof to the
effect that the same has been assented to by such votes of the di-
rectors and approved by such votes of the stockholders. The agree-
ment shall contain a copy of the charter under which the business
is to be conducted, which shall conform to the provisions of either
one or more of the charters of the merging or consolidating corpo-
rations; and, the continuation of said charter shall be for the time
therein stated, not exceeding the longest unexpired time of the
charter of one of the merging or consolidating corporations. Every
such agreement must have the approval of the superintendent of
insurance. Upon filing such agreement, with such certificate of
§ 129. Fire Insurance Corporation. 231

the secretaries and approval of the superintendent of insurance
endorsed thereon in the office of the superintendent of insurance
and a duplicate or certified copy thereof in the office of the clerk
of the county where the office of the contracting corporation, is
located, the details of such agreement may be carried into effect
as provided therein. ‘The corporation may require the return of
the original certificates of stock held by each stockholder in each
of the corporations to be merged or consolidated, and issue in lieu
thereof new certificates for such number of shares of its own stock
as such stockholders may be entitled to receive. Upon such merger
or consolidation all the rights, franchises and interests of the cor-
porations so merging or consolidating in and to every species of |
property and things in action belonging to them, or either of them,
shall be deemed to be transferred to and vested in the new cor-
poration, without any other deed or transfer, and the new corpora-
tion shall hold and enjoy the same to the same extent as if the
old corporations, or either of them, should have continued to retain
their titles and transact business. The new corporation shall
succeed to all the obligations and liabilities of the old corporations,
or any of them, and shall be held liable to pay and discharge all
such debts and liabilities in the same manner as if they had been
ineurred or contracted by it. The stockholders of the old corpo-
ration shall continue subject to all the liabilities, claims and
demands existing against them, or either of them, at or before such
merger or consolidation. No action or proceeding pending at the
time of the consolidation in which any or all of the old corpora-
tions, may be a party, shall abate or discontinue by reason of the
merger or consolidation, but the same may be prosecuted to final
judgment in the same manner as if the merger or consolidation
had not taken place, or the new corporation may be substituted
in place of any corporation so merged or consolidated by order
of the court in which the action or proceeding may be pending.
So far as they may be applicable, the provisions of this section

shall apply to all corporations heretofore merged or consolidated.
Source.—Former § 129, as amended by L. 1899, chap. 165; originally revised
from L. 1878, chap. 98.
See § 42, General Corporation Law, chap. 28 of 1909. Stockholder may

waive notice.
232 Tue Insurance Law. § 130.

See § 180, Tax Law, chap. 62 of 1909. Consolidating corporation to pay
organization tax upon amount of capital in excess of the aggregate capital
of the consolidating companies.

APPLICATION OF SECTION.— This section has no application to a
change from a mutual to a stock corporation. Manhattan Fire Ins. Co. vy.
Fox, 74 App. Div., 271. ‘

'

§ 130. Guaranty and special reserve funds.

Any domesti fire insurance corporation may create a guaranty
surplus fund and a special reserve fund upon the adoption of a
resolution by its board of directors at a regular meeting, and
upon filing with the superintendent of insurance a copy thereof,
declaring their desire and intention to create such funds and to
do business under this and the two following sections. The super-
intendent shall thereupon make or cause to be made an examina-
tion of such corporation, and he shall make a certificate of the
result thereof, which shall particularly set forth the amount of
surplus funds held by it at the date of the examination, which,
under the provisions of this section may be equally divided be-
tween and set apart to constitute guaranty surplus and special re-
serve funds, which certificate shall be recorded in the insurance
department.

Thereafter all policies and renewals of policies issued by such
corporation shall have printed thereon by it a notice that they
are issued under and in pursuance of this and the two following
sections of this chapter referring to the same by the numbers
of sections, and all such policies and renewals shall be subject to
the provisions of such sections. After the passage and filing of
such resolution, the corporation shall not make, declare or pay in
any form any dividend upon its capital stock exceeding seven per
centum per annum thereon, and upon the surplus funds to be formed
thereunder, until after its guaranty surplus fund and its special
reserve fund shall have together accumulated to an amourt equal
to its capital stock; and until such funds shall together amount
to a sum equal to its capital stock, the entire surplus pr. fits of
the corporation above such annual dividend of seven per centum
shall be equally divided between and be set apart to constitute
such guaranty surplus and special reserve funds, which funds shall
be held and used as hereinafter provided and not otherwise. Any
§ 130. Fire Insurance Corporation. 233

such corporation which shall declare or pay any dividend contrary
to the provisions herein contained, shall be deemed to have forfeited
its charter.

In estimating the profits of any such corporation for the purpose
of:making a division thereof between the guaranty surplus fund
and the special reserve fund, until such funds shall together
amount to a sum equal to its capital stock, there shall be deducted
from the gross assets of the corporation, including for this purpose
the amount of the special reserve fund, the sum of the following
items:

1. The amount of all outstanding claims.

2. An amount sufficient to meet the liability of the corporation
for the unearned premiums upon its unexpired policies, which shall
be at least equal to the unearned premiums on policies having one
year or less to run, and a pro rata proportion of the premiums
received on the policies having more than one year to run, and
shall be known as the reinsurance liability.

3. The amount of its guaranty surplus fund and its special
reserve fund.

4, The amount of its capital.

5. Interest at the rate of seven per centum per annum upon the
amount of its capital and of such funds for whatever time shall
have elapsed since the last preceding cash dividend.

The balance shall constitute the net surplus of the corporation
subject to the equal division between the funds as herein provided.
When the corporation shall notify the superintendent of insurance
that it has fulfilled the requirements of this section, and that its
guaranty surplus fund and its special reserve fund, taken together,
equal its capital stock, he shall make an examination of the corpo-
ration and make a certificate of the result thereof; and thereafter
such corporation may continue, out of any subsequent profits of
its business, to add to such funds, either the whole or only a part
thereof, but when any addition is made to the special reserve fund,
an equal sum shall be carried to the guaranty surplus fund.

Source.—Former § 130; originally revised from L. 1874, chap. 189, §§ 1-3,
§ 6, as amended by L. 1878, chap. 282.

See § 118, ante. Allowances of assets and estimation of liabilities upon
examination.
234 Tue Insurance Law. § 131.

LIABILITIES.— The guaranty surplus fund and the special reserve fund
constitute liabilities of the corporation, and must be so regarded in any
statement purporting to show the true financial condition of the company;
the special reserve fund cannot be said to be depleted as it remains intact
in the vaults of the insurance department; policyholders holding policies
under §§ 130, 131 and 132 have the special reserve fund as wu special trust for
their protection until it is used as capital stock because the latter is
depleted; the extinguishment of the guaranty surplus fund does not limit
the right of the company to do business. Attorney-General Rep., 1904,
page 262.

Guarantee surplus fund and special reserve funds are to be regarded as
a liability only in the sense that surplus is a liability. Attorney-General
Rep., 1904, page 413.

INVESTMENT.— The second sentence of § 16 applies to investment of the
special reserve fund, as provided for by § 1380, in excess of one-half of its
capital stock. Attorney-General Rep., 1901, page 240.

REDUCTION OF FUND.— An insurance company retiring from business
may reduce its “ guaranty and special reserve fund” with the superintendent
of insurance by withdrawals and exchanges to an amount sufficiently large
to secure its outstanding liabilities. In re Standard Fire Insurance Com-
pany, Attorney-General Rep., 1893, page 392.

WITHDRAWAL OF FUNDS.—Funds cannot be withdrawn from the
special reserve fund when the guaranty surplus fund is impaired. In re
American Fire Ins. Co., Attorney-General Rep., 1896, page 25.

§ 131. Funds; how invested.

Such guaranty surplus fund shall be held and invested by such
corporation in the same manner as its capital stock and surplus
accumulations, and shall be liable and applicable in the same
manner as the capital of the corporation to the payment generally
of its losses. Such special reserve fund, until it shall amount to
a sum equal to one-half of the capital stock, shall be invested in
the same manner as the capital of the corporation, and any addi-
tional sum added to such fund shall be invested in any securities
in which the corporation is by law authorized to invest its capital
or its surplus accumulations, and shall be deposited from time to
time, as the same shall accumulate and be invested, with the
superintendent of insurance.

Such special reserve fund shall be deemed a fund contributed by
the stockholders to protect such corporation and its policy holders
other than claimants for losses already existing or then occurred,
in case of any extraordinary conflagration or conflagrations as
hereinafter mentioned, and shall not be regarded as any part or
§ 182. Fire Insurance Corporation. 235

portion of the assets of the corporation so as to be liable for any
claim for loss by fire or otherwise, except as herein provided.

Source—Former § 131; originally revised from L. 1874, chap. 189, § 4, § 5,
as amended by L. 1878, chap. 282.

See § 16, ante. Investment of capital and surplus.

FUNDS.— The guaranty surplus fund and the special reserve fund con-
stitute liabilities of the corporation and must be so regarded in any state-
ment purporting to show the true financial condition of the company; the
special reserve fund cannot be said to be depleted as it remains intact
in the vaults of the insurance department; policyholders holding policies
under §§ 130, 131 and 132 have the special reserve fund as a special trust
for their protection until it is used as capital stock because the latter is
depleted; the extinguishment of the guaranty surplus fund does not limit
the right of the company to do business. Attorney-General Rep., 1904, page 262.

INVESTMENT.— Until the special reserve fund amounts to one-half the
capital stock it should be invested as provided by § 13; when in excess
of such amount it is to be invested as provided by § 16. Attorney-General
Rep., 1901, page 240.

EXCHANGE OF SECURITIES.— The deposit for a special reserve fund
is intended to protect policyholders from future losses in the event of
extraordinary conflagrations; in the exchange of securities of such fund
they should only be accepted at their par value, or of equal par and market
value with those exchanged for. In re Continental Ins. Co., Attorney-General
Rep., 1896, page 279.

§ 132. Proceedings in case of extensive conflagrations.

When any extensive conflagration or conflagrations shall occur
whereby the claims upon the corporation shall exceed the amount
of its capital stock and of the guaranty surplus fund hereinbefore
provided, the corporation shall notify the superintendent of
insurance of the fact, who shall then make or cause to be made,
an examination of the corporation, and shall issue his certificate
in duplicate of the result, showing the amounts of capital, of
guaranty surplus fund, of special reserve fund, of reinsurance
liability, and all other assets.

One of such certificates shall be given the corporation, and the.
other shall be recorded in the insurance department. Such special
reserve fund shall be immediately held to protect all policy holders
of the corporation other than such as are claimants upon it at the
time, or such as become claimants in consequence of such con
flagration or conflagrations.

The amount of such special reserve fund, and an amount equal
to the unearned premiums of such corporation, to be ascertained
as hereinbefore provided, shall constitute the capital and assets of
such corporation for the protection of policy holders other than
236 Tue Inscrayce Law. § 132.

such claimants, and for the further conduct of its business. Such
certificate of the superintendent shall be binding and conclusive
upon all parties interested in the corporation, whether stockholders,
creditors or policy holders. Upon the payment to the claimants
for losses or otherwise, existing at the time of or caused by such
general conflagration or conflagrations, of an amount to which they
are respectively entitled in proportion to their several claims, of
the full sum of the capital of the corporation and of its guaranty
surplus fund, and of its assets, except only such special reserve
fund and an amount of its assets equal to the liability of the cor-
poration for unearned premiums, as so certified by the superin-
tendent, such corporation shall be forever discharged from any
and all further liability to such claimants and to each of them.
The superintendent shall, after issuing such certificate, upon the
demand of the corporation, transfer to it all such securities as shall
have been deposited with him by it as such special reserve fund.
If the amount of such special reserve fund shall be less than fifty
per centum of the full amount of the capital of the corporation, a
requisition shall be issued by the superintendent upon the stock-
holders to make up the capital to that proportion of its full amount,
in the manner now provided by law in the case of a corporation
with impaired capital. Any capital so impaired shall be so made
up to at least the sum of two hundred thousand dollars. If the
corporation, after such requisition, shall fail to make up its capital
to at least such amount as herein directed such special reserve fund
shall be held as security and liable for all losses occurring upon
policies of such corporation after such conflagration or conflagra-
tions. If any amount greater than a sum equal to one-half of its
capital stock shall by such corporation, under the provisions of the
two preceding sections, have been deposited with such superin-
tendent, he shall retain of such securities a sum equal to one-half
of the amount he sha‘l so hold thereof in excess of such one-half of
the capital stock, and transfer the balance thereof to the corpora-
tion as herein provided. The amount so transferred to the
corporation shall, from the time of such transfer, if not less than
two hundred thousand dollars, constitute the capital stock of the
corporation for the further conduct of its business as hereinbefore
§ 132. Frre Insurance Corporation. 237

provided. The sum so retained by the superintendent shall
thenceforth constitute the special reserve fund of the corporation,
to which additions may be made as herein provided, and shall be
held in the same manner, for the same purposes and under the
same conditions as the original special reserve fund of the cor-
poration was held. The corporation shall in its annual statement
to the insurance department set forth the amount of such special
reserve fund and of its guaranty surplus fund. If in consequence
of the payment of losses by fires, or of the expenses of the business,
or of the interest payable under the provisions of this chapter to
stockholders, or from any cause, the guaranty surplus fund shall be
reduced in amount below the amount of the special reserve fund,
the directors of the corporation shall have the right, at their
option, at the time of making any division of the net profits as
herein provided, to carry a larger sum to the guaranty surplus fund
than to the special reserve fund; but this privilege shall cease
when the two funds are made equal in amount.

The policy registers, insurance maps, books of record and other
books in actual use by the corporation in its business, are not to be
considered as assets, but shall be held by it for its use in the pro-
tection of its policyholders not claimants for losses at the time of
such general conflagration. If after the accumulation of such
special reserve fund, it shall appear upon examination by the
superintendent that the capital of the corporation has, in the
absence of any such extensive conflagration, become impaired, he
shall order a call upon the stockholders to make up such impair-
ment, and the board of directors may either comply with such
order and require the necessary payments of the stockholders, or,
at their option, they may apply for that purpose so much of such
special reserve fund as will make such impairment good. No cor-
poration doing business under this and the two preceding sections
shall insure any larger amount upon any single risk than is per-
mitted by law to a corporation possessing the same amount of
capital irrespective of the funds hereinbefore provided for.

Source.—Former § 132; originally revised from L. 1874, chap. 189, §§ 7, 8,
as amended by L. 1878, chap. 282.

LIABILITIES.— The guaranty surplus fund and the special reserve fund
constitute liabilities of the corporation, and must be so regarded in any
a3 Tre Insvraner Law, § 1a,

So

statement purporting to show the true financial condition of the company;
the special reserve fund cannot be said to be depleted os it remains intact
in the vaults of the insurance department; policyholders holding policies under
§§ 130, 131 and 132 have the special reserve fund as a special trust for their
protection until it is used as capital stock because the latter is depleted;
the extinguishment of the guaranty surplus fund does not limit the right
of the company to do business. Attorney-General Rep., 1904, page 262.

WITHDRAWAL OF FUNDS.— Funds cannot be withdrawn from the special
reserve fund when the guaranty surplus fund is impaired. In re American
Fire Ins. Co., Attorney-General Rep., 1896, page 26.

Special reserve fund should not be withdrawn where the surplus fund is
impaired. In re Amer. Fire Ins. Co., Attorney-General Rep., 1896, page 237,

The statute does not contemplate the maintenance of the so-called guaranty
surplus fund at a parity with the special reserve fund, but the provisions of
section 182 indicate that the legislature expressly contemplated that the guar-
anty surplus fund might fall below the special reserve fund. Attorney-Gen-
eral’s opinion, December 3, 1908.

§ 183. Payment of tax by agents of foreign fire insurance
corporations to fire departments.

Except in the cities of New York and Buffalo there shall be
paid to the treasurer of the fire department of every city or village
of this state, whether incorporated or unincorporated, having a fire
department, company or organization, for the use and benefit of
such department, or to the treasurer of such fire department within
the fire limits, as established by law, of an unincorporated village,
and when no treasurer of a fire department exists, then to the
treasurer or other fiscal officer of such city or village, or in case
of an unincorporated village to the supervisor of the town in which
such village is situated who, for the purpose of this chapter, shall
have the same powers as the treasurers of fire departments, on the
first day of February of each year, by every person who shall act as
agent for or on behalf of any foreign fire insurance corporation,
association or individuals which insure property against Joss or
injury by fire, the sum of two dollars upon the hundred dollars,
and at that rate, upon the amount of all premiums which during
the year or part of a year ending on the last preceding thirty-first
day of December shall have been received by such agent or person,
or received by any other person for him, for any insurance effected
or procured by him as such agent or broker against loss or injury
by fire upon property situate within the corporate limits of such
§ 133. Frre Insurance Corporatioy. 239

city or village, or within the fire limits of such unincorporated
village. Every city, except the city of New York, village, fire
department, fire, hose or hook and ladder company, fire district, or
fire district association, firemen’s benevolent associations, exempt
or veteran firemen’s associations, and every officer, board of
officers and associations receiving any portion of the tax directed
to be paid by this section or any similar provision of law shall
within ten days after the receipt of the same, pay to the treasurer
of the firemen’s association of the state of New York, ten per
centum of the amount so received by it or him, for the support
or maintenance of the Volunteer Firemen’s Home at Hudson,
New York. On or before the first day of April in each year every
such city, village, fire department, fire, hose or hook and ladder
company, fire district, or fire district association, firemen’s
_ benevolent associations, exempt or veteran firemen’s associations,
officer, board of officers and association, shall, by its chief fiscal
officer, treasurer, or other officer whose duty it may be to receive
such funds, deliver to the treasurer of the Firemen’s association
of the state of New York a statement showing the name of each
person or corporation from whom any such tax shall have been
received and the amount paid by each, which statement shall be
verified by the officer making the same to the effect that the same
is correct and true and that such statement correctly shows the
amount of such tax received by such city, village, fire department,
fire, hose, or hook and ladder company, fire district, or fire district
association, firemen’s benevolent associations, exempt or veteran
firemen’s associations, officer, board of officers and association
since the first day of April in the preceding year. Any such city,
village, fire department, fire, hose or hook and ladder company, fire
district, or fire district association, firemen’s benevolent associa-
tions, exempt or veteran firemen’s associations, officer, board of
officers and association receiving any portion of such tax and
failing to make and deliver such verified statement as herein pro-
vided or omitting to pay ten per centum thereof to the treasurer
of the Firemen’s association of the state of New York as provided
herein within the time above allowed shall forfeit the sum of fifty
dollars in addition to the amount of such tax to be recovered in an
940 Tue Insurance Law. § 134,

action which may be maintained by said Firemen’s association of
the state of New York in any of the courts of this state.

Source.—Former § 133, as amended by L. 1901, chap. 726; originally revised
from R. §., pt. 1, chap. 20, tit. 21, § 3, as amended by L. 1837, chap. 30; L.
1849, chap. 178, § 1; L. 1875, chap. 465, § 1, as amended by L. 1890, chap. 406;
L. 1886, chap. 604, § 5, as amended by L. 1887, chap. 520.

FIRST CLAIM.— Section 133, in regard to the percentage tax collected from
foreign fire insurance companies in cities, seems to provide that the first
claim upon such monies is for the relief of exempt or veteran volunteer fire-
men, administered through organized firemen’s relief or benevolent societies
having requisite authority. Exempt Firemen’s Assn. v. City of Little Falls,
148 App. Div., 440.

CONDITIONS.— A state may prohibit a foreign corporation from trans-
acting business in this state, or may impose conditions, on compliance of which
it may come. People v. Fire Assn. of Philadelphia, 92 N. Y., 311.

§ 523 of the New York Consolidation Agt, requiring every person who
shall act in the county and city of New York as agent for any association
of individuals, not incorporated by the laws of this state, in effecting insur-
ance against loss or injury by fire in that county and city, to pay annually
to the city fire department two per cent of the amount of premiums received
by him, extends to the agent of domestic or resident non-incorporated asso-
ciations of individual underwriters. Fire Department v. Stanton, 159 N. Y., 229.

APPORTIONMENT.—Moneys paid by agents of foreign fire insurance com-
panies, pursuant to requirements of § 133, should be apportioned among the
several companies which have been recognized by the common council of the
city of Oneida as members of the fire department of said city. Volunteer

companies have no preference under the statute over paid companies. Cary
v. City of Oneida, 158 App. Div., 773.

§ 134. Undertaking of agent.

No person shall, as agent for any such foreign insurance corpo-
ration, association or individuals, effect any insurance upon any
property situate in any city or village of this state upon which the
sums specified in the preceding section are required to be paid, or
as such agent procure such insurance to be effected, until he shall
have executed and delivered to the officer to whom such account is
to be rendered and such payments to be made, a bond to such fire
department in the penal sum of five hundred dollars, with such
sureties as such treasurer, supervisor or other fiscal officer shall
approve, with a condition that he will annually render to such
treasurer, supervisor or other fiscal officer, on the first day of
February in each year a just and true account, verified by his oath
that the same is true, of all premiums which, during the year
ending on the thitty-first day of December preceding such report,
shall have been received by him or any other person for him, for
any insurance against loss or injury by fire upon property situ-
§ 135. Fire Insurance Corporation. 241

ated in such city or village, which shall have been effected or
procured by him to have been effected by any such corporation,
association or individuals, and that he will annually, on the first
day of February in each year, pay to such treasurer or supervisor
or other fiscal officer two dollars upon every hundred dollars, and
at that rate upon the amount of such premiums. If any such
agent shall desire to transact business in more than one city,
town or village, he may, instead of executing and delivering a
separate bond for each such city, town or village, as required by
this section, execute and file with the superintendent of insur-
ance a bond in the penal sum of fifteen hundred dollars, with
such sureties as the superintendent shall approve, conditioned
that he will make his account and pay the sums so required to
be paid in each city, town or village in which he shall effect
insurance. Any such corporation, association or individual, hay-
ing authority to transact business in this state, on filing a bond
in the penal sum of two thousand five hundred dollars with the
superintendent of insurance that it will make its account and
pay the sums so required to be paid, may effect such insurance in
-any city, town or village wherein it has no agent.

Source—Former § 134; originally revised from R. S., pt. 1, chap. 20, tit. 21,
§ 4; L. 1849, chap. 178, §§ 2-3; L. 1875, chap. 465, § 2, as amended by L. 1890,
chap. 406.

Amended by L. 1913, chap. 304.

Note.—The purpose of the amendment of this section by chapter 305 of
1913 was to relieve agents of foreign fire insurance companies, who wish to do
business in several different towns or cities, from executing and delivering a
separate bond for each such city or town by executing and filing with the
superintendent a bond in the penal sum of one thousand five hundred dollars
with such sureties as the superintendent shall approve, conditioned that he
shall make his account and pay the sums so required to be paid in each city,
town or village in which he shall effect insurance.—Ed.

The provisions of this section are not limited in their application to local
resident agents but apply to all agents of insurance companies writing con-
tracts of insurance within the State. Fire Dept. of East Rochester v. Bar-

ley, 73 Mise., 628.
SEPARATE BOND.— It is not necessary that a separate bond should be

filed for each company represented by an agent, for the single bond will
furnish adequate security for the payment of the tax in section 133. Attor-
ney-General’s Rep., October 30, 1913.

§ 135. Penalty for refusal to pay.

Every such person who shall effect any such insurance without
having executed and delivered such bond, shall for each offense, for-
feit two hundred dollars, for the use and benefit of the fire depart-
949 Tue Insurance Law. § 136.

ment of such city or village, to be collected by and in the name of
the fire department, treasurer or chief fiscal officer of the city or
village in which the property insured is situated. The treasurer or
chief fiscal officer of any city or village having no incorporated
firemen’s relief or benevolent society receiving any money under
the laws of this state, shall, on or before the fifteenth day of
February in each year, apportion and pay over all such moneys so
received to the treasurers of such of the several fire companies as
are duly recognized by the common council, trustees or supervisors
of such city or village.

Tf he shall neglect or refuse to perform any or all of the duties
required by this section, he shall forfeit the sum of two hundred
dollars for every such neglect or refusal for the use and benefit
of the fire department of such city or village, and the foreman of
any fire company may sue for and maintain an action in the name
of and for the benefit of such company for its proportion of the
penalties prescribed by this section.

Source.—Former § 135; originally revised from L. 1875, chap. 465, § 3, as
amended by L. 1886, chap. 604.

ACTION FOR PENALTY.— A person seeking to maintain an action for
a statutory penalty must state every fact required to enable the court to
judge whether he has a cause of action under the statute; a penalty under
§ 135 of the Insurance Law does not relate to an act done outside of the
state of New York. Ithaca Fire Dept. v. Rice, 108 App. Div., 100.

§ 136. Penalty for refusal to exhibit foreign fire policies.

Every person whose property shall be insured in violation of
section 185 of this chapter, and every person having the care or
charge of property so insured, or of policies of insurance placed in
violation of such section, as agent or trustee for another, who shall
refuse or neglect to exhibit to the officer, entitled by section 134 of
this chapter to receive the per centum of premium in such section
provided, all policies so placed upon such property, or shall neglect
or refuse to give such officer full information as to when, by whom,
and in what corporation or corporations such property shall be so
insured, and the name of the agent, broker or other person con-
nected with the effecting of such insurance, upon demand being
duly made by such officer shall become liable to an action by and in
the name of the fire department, organization or company of which
such officer shall be the treasurer, for the sum of one hundred
dollars for each such neglect or refusal.
§ 187. Fire Insurance Corporation. 243

All persons acting as brokers between any such agent or any such
corporation and the assured, shall, within ten days after effecting
any insurance specified in section 135, notify the officer entitled
to receive the tax upon the premium upon such insurance of the
fact of such insurance, together with the precise location of the
property, the name of the insurer and the amount of the premium
to be paid by the assured. Any broker willfully neglecting or
refusing to comply with the provisions of this section, shall be
liable to a like action and like penalty brought in the like manner
hereinbefore provided. Actions brought under this section must
be tried in the county in which the property alleged to be so
insured is situated. /

All moneys received pursuant to this section shall be appor-
tioned and paid over in the same manner as provided in the
preceding section of this chapter for the apportionment and pay-
ment of moneys received pursuant to such section and under a
like penalty.

Source.—Former § 136; originally revised from L. 1886, chap. 60, § 4.

§ 137. License to agents in excepted cases.

The superintendent of insurance, in consideration of the yearly
payment of two hundred dollars, except in counties having less
than one hundred thousand inhabitants, in which case the fee shall
not exceed twenty-five dollars, may issue to citizens, firms or cor-
porations having places of business in this state, not exceeding two
hundred in number, a license revocable at any time, permitting the
party named in such license to act as agent to procure policies of
fire insurance from corporations, persons, partnerships and associa-
tions which are not otherwise authorized to do business in this
state. When any policies of fire insurance shall be procured under
or by virtue of said license, there shall be executed
by the licensed agent and by the party desiring an
insurance, an affidavit in duplicate, one of which shall
be filed in the insurance department and the other in
the clerk’s office of the county in which the property pro-
posed to be insured is located, within thirty days after the pro-
curing of such insurance. Such affidavits shall set forth that the
944 Tur Insurance Law. § 137,

party desiring insurance is, after diligent effort, unable to procure
the amount required to protect the property owned or controlled
by him from the insurance corporations duly authorized to transact
business in this state. The agent procuring policies in such unau-
thorized corporations or with persons, partnerships and associa-
tions, shall keep a separate account thereof, open at all times to the
inspection of the superintendent, showing, first, the exact amount
of such insurance placed for any party ; second, the gross premiums
charged thereon; third, in what corporation, or with what persons,
partnerships or associations; fourth, the date of the policy; fifth,
the term thereof, and sixth, the cities and villages within this
state in which the insured property is located. Each party re-
ceiving such license shall, before transacting business thereunder,
execute and deliver to the superintendent a bond to the people
of the state, in the penal sum of two thousand dollars, with such
sureties as the superintendent shall approve, conditioned that the
said agent will faithfully comply with all the requirements of this
chapter, and will pay to the treasurer of the Firemen’s Association
of the state of New York, to be expended for the use and support
of the Firemen’s Home, located at Hudson, Columbia county,
New York, for the uses and purposes of said association, or, where
such policies cover risks in cities of over one million inhabitants,
having a fire patrol or salvage corps, to the treasurer of such fire
patrol or salvage corps, in January and July of each year, a sum
equal to three per cent. upon the amount of the gross premiums
charged to policy holders less the amount of the gross premiums
returned to the insured upon all policies procured by him during
the preceding six months, pursuant to this article; and in default
of payment to the treasurer of any fire patrol or salvage corps
of any sum to which it may be entitled pursuant to the pro-
visions of this section, or the treasurer of the said Firemen’s
Association of the sum due them, the treasurer of said fire patrol,
salvage corps or association may sue for the same in any court of
record in this state. All fire insurance policies issued to residents
of this state on property located herein by companies that have
not complied with the requirements of the general insurance laws

of the state shall be void, except as shall have been procured as
herein set forth.
§ 187. Fire Insurance Corporation. 245

Source.—Former § 137, as amended by L. 1894, chap. 611; originally revised
from L. 1884, chap. 346, § 4, as amended by L. 1890, chap. 552.

Amended by L. 1911, chap. 322.

See § 9, ante. No foreign corporation to transact business in this state
without certificate of authorization by superintendent.

See § 29, ante. Copy of charter and verified statement to be filed in office
of superintendent of insurance.

See § 31, ante. Agent not to transact business until certificate is filed in
county clerk’s office.

See § 32, ante. Renewal of certificate.

See § 49, ante. Any person aiding in the transaction of business of foreign
corporation is deemed an agent thereof.

See § 50, ante. Agent’s certificate of authority.

See § 53, ante. Penalty for violation of Insurance Law.

See § 54, ante. Agents not to act for unauthorized corporations.

See § 91, ante. Certificate of authority of agents.

APPLICATION.— § 137 relates entirely to fire insurance corporations,
persons, partnerships and associations which are not authorized to do busi-
ness in this state. Attorney-General Rep., 1896, page 190.

A foreign fire insurance company should not be permitted to execute s
contract without the state of New York which contains a clause providing
that the policy shall not apply until accepted by the insured by endorsement
on the face of the policy. Attorney-General Rep., 1906, page 555.

Procuring insurance from foreign corporations not admitted to do business
in this state is in violation of § 137. In re Johnson et al., Attorney-General
Rep., 1899, page 197.

This section does not apply to a policy of insurance, not procured as set
forth in this section, issued to a resident of the state of New York on
property located in the state of New York by a Massachusetts mutual fire
insurance company not authorized to do business in the state of New York,
where it appears that the contract was made, and was to be performed, in
the state of Massachusetts, and was valid under the laws of that state.
Western Mass. Ins. Co. v. Hilton, 42 App. Div., 52.

FOREIGN LLOYDS.— Special agents, licensed by the superintendent ot
the insurance department, cannot, under such license, place policies of insur-
ance in “ Foreign Lloyds.” Attorney-General Rep., 1894, page 104.

Residents of New York, who have received certificates under § 137 authoriz-
ing them to write surplus lines, may place such insurance in foreign or unau-
thorized Lloyds without becoming liable under § 300. Attorney-General Rep.,
August 26, 1910.

This section in relation to “ surplus line ” does not have the effect of author-
izing foreign companies to transact business in this State, but allows brokers
to procure such insurance from a foreign country; when an agreement of the
insured to procure other insurance is conditioned upon the fact that the insurer
is not authorized to do business in this State, it canno: contend that it had a
limited authority to do business in this State, by force of § 187, so as to make
the contract one which was perfected here. Friedland v. Commonwealth Fire
Insurance Co., 143 App. Div., 570.
246 Tue Insurance Law. § 138.

AGENTS OF INSURED.— Agents authorized under the provisions of the
Insurance Law to effect insurance with unauthorized companies, are the
agents of the insured, and cannot act as agents for the insuring companies.
Attorney-General Rep., 1893, page 388.

Agents authorized under this section to procure insurance are the agents of
the insured and not of the insurers, and where the insurance was actually pro-
cured though afterwards cancelled, the agent should be required to pay the tax
of three per cent. Attorney-General Rep., Nov. 23, 1910.

INSURANCE BROKERS.— Clients may properly suppose that an insurance
broker employed by them will perform their duty, and will not, without
inquiry, give them a policy issued by an insolvent or irresponsible company,
or by one not authorized to do business in the state of New York, and whose
policies have no substantial support behind them. Shepard v. Davis, 42 App.
Div., 462.

WAIVER BY AGENT.— Power of agent to waive condition as to other
insurance. Lewis v. Guardian F. & L. Assur. Co., 181 N. Y., 392; aff’g 93
App. Div., 157.

FORFEITURE.— One obtaining a policy of insurance in a foreign company
having no office in this state, with a clause forfeiting the policy unless the
premium is paid in a certain time must go to the company or its duly
commissioned agent and make the payment within the time specified, to
prevent a forfeiture. Redfield v. Patterson Fire Ins. Co., 6 Abb. N. C., 456.

AFFIDAVIT.— The affidavit required as a prerequisite to the effecting of
insurance with a company not authorized to do business in the state, must
be made by the owner or person having control of the property and not by
his agent. In re Peaseley, Attorney-General Rep., 1892, page 320.

DEPOSITS.— Deposits previously made by a foreign corporation under
§§ 27 and 28 of the Insurance Law are only held for policies issued while
the company has the right to do business in the state, and not for policies
subsequently issued by licensed agents. In re Helvetia Swiss Fire Ins. Co.,
Attorney-General Rep., 1902, page 174.

Insurance cannot be written unless at the time of such writing the property
ia actually located within the limits of the state. Attorney-General’s Opinion,
February 24, 1909.

POLICY IS VALID.— The failure on the part of the insurance company
to comply with the provisions of §§ 37 and 137 does not render a policy
issued by it void. Marshall v. Reading Ins. Co., 78 Hun, 83.

A policy of insurance signed and sealed in Massachusetts by a corporation
organized and doing business in that state, and mailed to the insured in this
state pursuant to an order by mail, is a Massachusetts contract and not void
under § 137. Hammond v. International Railway Co., 63 Misc., 487.

Corporations are not citizens within the meaning of this section. Attorney-
General Rep., 1905, page 457.

§ 188. License to persons, partnerships, associations and
corporations in excepted cases.

The superintendent of insurance in his discretion may issue to
any person, partnership, association or corporation complying with
§ 138. Fire Insurance Corporation. 247

the requirements of this section, a certificate permitting the holder
thereof to issue policies of fire insurance within this state, upon
applications made to it or them, under the conditions as set forth
in section one hundred and thirty-seven by agents licensed there-
under but not otherwise.

Such certificates shall be granted only upon the filing with the
superintendent of insurance of an application therefor signed and
acknowledged by the persons, partnership or the proper attorneys
or officers of the associations or corporations desiring same and
such applications shall contain the name and address in each
instance of the agent or agents through whom the applicant pro-
poses to conduct the business herein permitted. Such certificate
when granted shall specify that the insurer or insurers named
therein may issue in this state policies of fire insurance through
the agent or agents named in such certificates, upon the applica-
tion of agents licensed under section one hundred and thirty-seven
but not otherwise. The sum of twenty-five dollars shall be paid
to the superintendent of insurance for each certificate so issued
and such certificate shall remain in force for the period of one
year from the date thereof unless sooner revoked by the said
superintendent, provided, however, that whenever the holder of
any such certificate desires to substitute the name of any new
agent in place of the agent named in the certificate, the super-
intendent may if he approves of the change, issue a new certificate
for the unexpired term of the original certificate in which shall
appear the name of such agent so substituted. Any certificate
granted under this section shall be revoked upon proof to the
satisfaction of the said superintendent that the holder thereof
either ‘directly or through any ‘agent or attorney in fact has vio-
lated any provision of this chapter, or is in such condition that the
further transaction of business by it or them would be hazardous
to the people of the state.

Every policy issued in this state by any person, partnership,
association or corporation to whom a certificate under this section
shall be granted (a) shall be countersigned by the agent named in
the certificate; and (b) shall contain the provisions of the standard
policy provided for by section one hundred and twenty-one of this
chapter, or an agreement that the policy so issued shall be subject
248 Tue Insurance Law. § 188-a.

to such provision and that any condition thereof inconsistent with
or contrary to the provisions of the standard policy shall be null
and void; and (c) shall contain a further provision that service or
a summons or other legal process relative to any claim under such
policy may be made on the agent issuing or countersigning the
same and that such service shall be equivalent to the personal
service within this state of such process on the persons, associa-
tions or corporations obligated thereupon; and (d) shall have
printed in red ink upon the outside cover thereof, under the name
of the corporation or association issuing the same, in plain type,
the words: Surplus line insurance only; this company (person,
partnership or association, as the case may be) is not under the
supervision of the New York state insurance department; issued
DY sayeus axe eateauiaveccese dire agent, address ...........eeeeeeee

The books and records of every agent within this state for such
corporations, persons, partnerships and association shall be open
at all times to the inspection of the superintendent of insurance,
and must show, first the exact amount of insurance written;
second, the gross premiums charged thereon; third, the date of
the policy; fourth, the term thereof; fifth, the location of the
property; and, sixth, the names of those licensed agents upon
whose applications the insurance was issued.

Nothing herein contained shall be held to prevent any agent
licensed under the provisions of section one hundred and thirty-
seven from acting as the agent of any corporation, person, pari-
nership or association to whom a certificate has been granted
under this section.

Source—Former § 138, repealed by L. 1909, chap. 286; added by L. 1911,
chap. 322.

§ 138-a Public adjusters; certificate of authority.

The term “public adjuster” in this section shall include
every person, partnership, association or corporation advertising, -
soliciting business or holding himself or itself out to the public
as an adjuster of loss or damage by fire, or receiving any com-
pensation or reward for the giving of advice or assistance to the
assured in the adjustment of claims for loss or damage by fire,
and all persons who for compensation or reward, whether by way
of salary or commission or otherwise, solicit business, investigate
§ 1388-a. Fire Insurance Corporation, 249

or adjust losses or advise the assured with reference to claims for
loss or damage by fire, on hehalf of any other person, partner-
ship, association or corporation engaged in the business of adjust-
ing loss or damage by fire.

No person, partnership, association or corporation shall act as a
public adjuster, or receive for or because of services rendered in
the adjustment of any claim or claims for loss or damage by fire
under a policy or policies of insurance upon property within this
state, any money or commission or other thing of value, without
first procuring a certificate of authority to act as a public adjuster
from the superintendent of insurance.

The superintendent of insurance shall issue adjusters’ certifi-
cates of authority to persons, partnerships, associations or corpo-
rations, applying therefor, whom he deems to be trustworthy and
competent to transact business as public adjusters in such manner
as to safeguard the interests of the public.

A certificate of authority issued to a corporation, partnership or
association shall authorize only the officers and directors of the
corporation, or the members of the partnership or association,
specified in the certificate. The fee to be paid to the
superintendent of insurance by the applicant for such adjuster’s
certificate at the time the application is made, and annually for
the renewal thereof, shall be twenty-five dollars. If the applicant
be a corporation, partnership or association such fee shall be paid
for each person specified in the certificate.

Every adjuster’s certificate of authority shall expire on the
thirty-first day of December of the calendar year in which the same
shall have been issued, but if an application for the renewal of any
such certificate shall have been filed with the superintendent of
insurance before January first of any year the certificate of author-

‘ity sought to be renewed shall continue in full force and effect
until the issuance by the superintendent of insurance of the new
certificate applied for or until five days after the superintendent of
insurance shall have refused to issue such new certificate and shall
have served notice of such refusal on the applicant therefor. Serv-
ice of such notice may be made either personally or by mail, and,
if by mail, shall be deemed complete if such notice is deposited in
the post-office postage prepaid, directed to the applicant at the
place of business specified in the application.
250 Tue Insurance Law. § 138-a.

Before any adjuster’s certificate of authority shall be issued by
the superintendent of insurance there must be filed in his office a
written application therefor. Such application shall be in the
form or forms and supplements thereof prescribed by the superin-
tendent of insurance and must set forth (1) the name and address
of the applicant, and if the applicant be a partnership or associa-
tion, the name and address of each member thereof, and if the
applicant be a corporation, the name and address of each of its
officers and directors; (2) whether any certificate of authority as
agent, broker or adjuster has been issued theretofore by the super-
intendent of insurance to the applicant, and, if the applicant be an
individual, whether any such certificate has been issued thereto-
fore to any partnership or association of which he was or is a
member or to any corporation of which he was or is an officer or
director, and, if the applicant be a partnership or association,
whether any such certificate has been issued theretofore to any
member thereof, and, if the applicant be a corporation, whether
any such certificate has been issued theretofore to any officer or
director of such corporation; (3) the business in which the appli-
cant has been engaged for the year next preceding the date of the
application, and, if employed by another, the name or names and
address or addresses of such employer or employers; (4) such
information as the superintendent of insurance may require of
applicants to enable him to determine their trustworthiness and
competency to transact the business of adjuster in such manner
as to safeguard the interests of the public.

An application for an adjuster’s certificate of authority must be
signed and verified by the applicant and, if made by a partnership
or association, by each member thereof and if made by a corpora-
tion by each officer and director thereof to be authorized thereby
to act as an adjuster.

A corporation, association or partnership to which a certificate
of authority shall have been issued by the superintendent of
insurance under this section may at any time make an application
to the superintendent of insurance for the issuance of a supple-
mental certificate of authority authorizing additional officers or
directors of the corporation or. members of the partnership or
§ 1388-a. Fire Insurance Corporation. 251

association to act as adjusters, and the superintendent of insur-
ance may thereupon issue to such corporation, association or part-
nership a supplemental certificate accordingly upon the payment
of an additional fee for each member or officer or director thereby
authorized to act as an adjuster.

A certificate issued under this section shall be revoked by the
superintendent, if, after due investigation, he determines that the
holder of such certificate (1) has violated any provision of this
chapter; or (2) has made a material misstatement in the applica-
tion for such certificate; or (3) has been guilty of fraudulent
practices; or (4) has demonstrated his incompetency or untrust-
worthiness to transact the business of a public adjuster.

If an application for a certificate of authority under this section
be rejected or such a certificate be revoked by the superintendent
of insurance notice thereof shall forthwith be served on the appli-
cant or on the holder of such certificate either personally or by
mail, and, if by mail, such service shall be complete if such notice
be deposited in the post-office postage prepaid, directed to the appli-
cant or the holder of such certificate, as the case may be, at the
place of business specified in the application or certificate.

This section shall not apply to an agent or employee of an under-
writer by whom a policy of insurance against loss or damage by
fire shall have been written upon property within this state, in
adjusting loss or damage under such policy nor to a broker acting
as adjuster without compensation for a client for whom he is
acting as broker, nor to contracts made by persons, partnerships,
associations or corporations authorized to do business under article
nine of this chapter.

Any person, partnership, association or corporation violating
any of the provisions of this section shall, in addition to any other
penalty in this chapter provided, forfeit to the people of the state
five hundred dollars.

Added by L. 1913, chap. 22.

Amended by L. 1913, chap. 522, and L. 1914, chap. 108. In effect April 3,
1914.

Note—The purpose of the addition of this section by chapter 22 of 1913
was to require adjusters of loss or damage by fire to procure a certificate of
authority from the superintendent.—Ed.

The purpose of the amendment of this section by chapter 108 of 1914 was
to give the Superintendent of Insurance absolute discretion in the matter of
licensing public adjusters of loss or damage by fire, and to take away the
right to a writ of certiorari to review the action of the Superintendent of

Insurance, provided for in the present law.
252 Tue Insurance Law. § 139,

§ 139. Organizations for assisting underwriters in insurance
business generally.

Every corporation, association, bureau or board which now
exists or hereafter may be formed, and every person who maintains
or hereafter may maintain a bureau or office, located within or
without this state, for the purpose of inspecting risks, adjusting
losses, testing appliances, formulating rules or establishing stand-
ards for the information or benefit of underwriters in the trans-
action within this state of the business of insurance and which
corporation, association, bureau or person receives contributions
from or is financially aided directly or indirectly, wholly or
partially or in any manner by any person, association or corpora-
tion authorized to transact the business of insurance within this
state, shall file on demand with the superintendent of insurance a
copy of the articles of agreement, association or incorporation and
the by-laws and all amendments thereto under which such person,
association, corporation, board or bureau operates or proposes to
operate, together with his or its business address as well as such
other information concerning such organization and its operation
as may be required by the superintendent. Every such person,
corporation, association, bureau or board, whether before or after
filing of the information specified in the last preceding paragraph,
shall be subject to the visitation and examination of the
superintendent of insurance, who shall cause to be made an ex-
amination thereof whenever he deems it expedient. For this
purpose he may appoint as examiners one or more competent per-
sons, and upon such examinations, he, his deputy or any examiner
authorized by him shall have all the powers given to the superin-
tendent, his deputy or any examiner authorized by him by section
thirty-nine of this chapter, including the power to examine under
oath the officers or agents and all persons deemed to have material
information regarding the business of or manner of operation —
by every such person, corporation, association, bureau or board.
No person, association or corporation authorized to transact the
business of insurance within this state shall be a member or sub-
scriber to any corporation, association, bureau, board or person
referred to in this section nor shall it contribute to or financially
aid any such corporation, association, bureau, board or person
who shall fail to comply with the provisions of this section. Upon
notice furnished by the superintendent of insurance every per-
§ 140. Fire Insurance Corporation. 253

son, corporation or corporation authorized to transact the business
of insurance within this state, shall terminate immediately its
subscription or membership and shall cease to make further con-
tributions directly or indirectly or in any manner to such cor-
poration, association, bureau, board or person.

This section shall not apply to any contract of life insurance,
nor to any contract of insurance upon or in connection with
marine or transportation risks or hazards other than contracts for
automobile insurance, nor to contracts of insurance upon prop-
erty or risks located without this state, nor to contracts made by
persons, partnerships, associations or corporations authorized to
do business under articles five, six, seven and nine of this chap-
ter, but it shall apply to all other forms of insurance mentioned
in any article of this chapter,

Source—Former § 139, repealed by L. 1909, chap. 286.

Added by L. 1913, chap. 23.

Note.—The purpose of the addition of this section by chapter 23 of 1913 was
to bring under supervision of department all bodies which are maintained

for the purpose of assisting underwriting organizations in fixing, formulating,
promulgating, applying or maintaining rates.—Ed.

§ 140. Organizations for assisting in establishing insurance
rates.

Every corporation, association, bureau or board which now
exists or hereafter may be formed, and every person who maintains
or hereafter may maintain a bureau or office, for the purpose of
assisting any underwriting corporation, association, bureau or per-
son in formulating, fixing, promulgating, applying or maintaining
a rate on property or risks of any kind located in this state, shall
file with the superintendent of insurance a copy of the articles of
agreement, association or incorporation and the by-laws and all
amendments thereto under which such person, association, bureau
or board operates or proposes to operate, together with his or its
business address, as well as such other information concerning
such organization and its operations as may be required by the
superintendent. Every such person, corporation, association,
bureau or board, whether before or after filing of the information
specified in the last preceding paragraph, shall be subject to the
visitation, supervision and examination of the superintendent of
insurance, who shall cause to be made an examination thereof as
often as he deems it expedient. or this purpose he may appoint
254 Tur Insurance Law. § 141.

as examiners one or more coinpetent persons, and upon such ex-
amination, he, his deputy or any examiner authorized by him
shall have all the powers given to the superintendent, his deputy
or any examiner authorized by him by section thirty-nine of this
chapter, including the power to examine under oath the officers or
agents and all persons deemed to have material information re-
garding the business of or manner of operation of every such
person, corporation, association, bureau or board.

This section shall not apply to any contract of life insurance,
nor to any contract of insurance upon or in connection with
marine or transportation risks or hazards other than contracts .for
automobile insurance, nor to contracts of insurance upon property
or risks located without this state, nor to contracts made by per:
sons, partnerships, associations or corporations authorized to do
business under articles five, six, seven and nine of this chapter,
but it shall apply to all other forms of insurance mentioned in
any article of this chapter.

Source.—Former § 140, repealed by L. 1909, chap. 286.

Added by L. 1913, chap. 21.

Note.—The purpose of the addition of this section by chapter 21 of 1913
was to bring under the supervision of the insurance department all corpora-
tions, associations, bureaus, etc., which are conducted for the purpose of in-
specting risks, adjusting losses, testing appliances, formulating rules, or estab-
lishing standards for the information or benefit of underwriters.—Ed.

§ 141. Rate-making associations.

Every corporation, association or bureau which now exists or
hereafter may be formed, and every person who maintains or
hereafter may maintain a bureau or office, for the purpose of
suggesting, approving or making rates to be used by more than
one underwriter for insurances, including surety bonds, on prop-
erty or risks of any kind located in this state, shall file with the
superintendent of insurance a copy of the articles of agreement,
association or incorporation and the by-laws and all amendments
thereto under which such person, association or bureau operates
or proposes to operate, together with his or its business address
and a list of the members or insurance corporations repre-
sented or to be represented by him or it, as well as such other
information concerning such rating organization and its opera-
tions as may be required by the superintendent.

Every such person, corporation, association or bureau, whether
before or after the filing of the information specified in the last
§ 141. Fire Insurance Corporation. 255

preceding paragraph, shall be subject to the visitation, supervision
and examination of the superintendent of insurance, who shall
cause to be made an examination thereof as often as he deems it
expedient and at least once in three years. For such purpose
he may appoint as examiners one or more competent persons, and
upon such examination, he, his deputy or any examiner author-
ized by him shall have all the powers given to the superintendent,
his deputy or any examiner authorized by him by section thirty-
nine of this chapter, including the power to examine under oath
the officers or agents and all persons deemed to have material in-
formation regarding the business of or manner of operation by
every such person, corporation, association, bureau or board. The
superintendent shall make public the results of such examination
and shall report to the legislature in his annual report on the
methods of such rating organization and the manner of its
operation.

Each such person, corporation, association or bureau shal)
file with the superintendent of insurance whenever he may call
therefor any and every schedule of rates or such other infor-
mation concerning such rates as may be suggested, approved or
made by any such rating organization for the purposes specified
in the first paragraph of this section.

No such person, corporation, association or bureau shall fix or
make any rate or schedule of rates which is to or may apply to
any risk within this state, on the condition that the whole amount
of insurance on such risk or any specified part thereof shall be
placed at such rates, or with the members of or subscribers to
such rating organization; nor shall any such person, corporation,
association or bureau, or any person, association or corporation
authorized to transact the business of insurance within this state,
fix or make any rate or schedule of rates or charge a rate which
discriminates unfairly between risks within this state of essen-
tially the same hazard or, if such rate be a fire insurance rate,
which discriminates unfairly between risks in the application of
like charges or credits or which discriminates unfairly between
risks of essentially the same hazards and having substantially the
same degree of protection against fire. Whenever it is made to
appear to the satisfaction of the superintendent of insurance that
such discrimination exists, he may, after a full hearing either
before himself or before any salaried employee of the insurance
department whose report he may adopt, order such discrimina-
256 Tue Insurance Law. § 141.

tion removed; and all such persons, corporations, associations or
bureaus affected thereby shall immediately comply therewith;
nor shall such persons, corporations, associations or bureaus re-
move such discrimination by increasing the rates on any risk
or class of risks affected by such order unless it is made to
appear to the satisfaction of the superintendent of insurance that
such increase is justifiable.

No such person, corporation, association or bureau or any
other person, corporation, association or bureau, shall charge any
licensing, registration, certification or membership fee to brokers
who shall have been or hereafter may be licensed or authorized
as such pursuant to the provisions of this chapter; nor shall any
such rating organization or any other person, corporation, asso-
ciation or bureau or any two or more persons, associations
or corporations authorized to transact the business of in-
surance within this state, acting in agreement, refuse to do busi-
ness with or to pay commissions to any person who may be
licensed or authorized as an insurance broker, pursuant to the
provisions of this chapter, because such a broker will not agree
to secure insurance only at the rates of premium fixed by such
rating organization or the parties to such agreement.

Every such rating organization shall keep a careful record of
its proceedings and shall furnish upon demand to any person
upon whose property or risk a rate has been made, or to his
authorized agent, full information as to such rate, and, if such
property or risk be rated by a schedule, a copy of such schedule;
it shall also provide such means as may be approved by the
superintendent of insurance whereby any person or persons
affected by such rate or rates may be heard, either in person or
by agent, before the governing or rating committee or other
proper executive of such rating organization on an application
for a change in such rate or rates.

This section shall not apply to any contract of life insurance,
nor to any contract of insurance upon or in connection with
marine or transportation risks or hazards other than contracts
for automobile insurance, nor to contracts of insurance upon
property or risks located without this state, nor to contracts made
by persons, partnerships, associations or corporations authorized
to do business under articles five, six, seven and nine of this
chapter, but it shall apply to all other forms of insurance men-
tioned in any article of this chapter.
§ 142. Firt Insurance Corporation. 257

Source.—Former § 141, repealed by L. 1909, chap. 286.

Added by L. 1911, chap. 460, amended by L. 1912, chap. 175, and L. 1913,
chap. 26.

Note.—The purpose of the amendment of this section by chapter 26 of 1913
was to enlarge the supervision of the superintendent in relation to examina-
tion of rate making associations, giving him powers the formerly had in con-
nection with the examination of insurance companies, and to give better pro-
tection to the insured in regard to fixing and maintaining rates or schedules
of rates.—Ed.

§ 142. Agent’s certificate of authority.

The term “ agent ” in this section shall include an acknowledged
agent or any person, partnership, association or corporation who,
shall in any manner aid in transacting the insurance business of
any underwriter, incorporated or unincorporated, by negotiating
for or placing risks or delivering policies or collecting premiums,
but shall not include the officers and salaried employees of any
such underwriter, who do not receive commissions. Every under-
writer, incorporated or unincorporated, engaged in the transaction
of any business of insurance within this state, upon the employ-
ment or termination of the employment of any person, partner-
ship, association or corporation to act as its agent within this state,
shall certify such fact together with the name and address of such
agent to the superintendent of insurance; and shall also annually
during the month of January, in such form as the superintendent
of insurance shall prescribe, file with him a list of the names and
addresses of all its agents authorized to act as such within the
state. No person, partnership, association or corporation shall as
agent act for any such underwriter in this state, unless such under-
writer shall have fully complied with the provisions of this
chapter nor unless such agent shall have procured an agent’s cer-
tificate of authority from the superintendent of insurance. The
superintendent of insurance shall file in his office evidence of the
issuance of every such certificate to an agent, together with evi-
dence of such agent’s authority from each underwriter for whom
he is to act. An agent’s certificate of authority shall be issued
only upon application filed with the superintendent of insurance,
in such form as the superintendent of insurance shall prescribe.
Every such certificate shall expire on the thirty-first day of
December of the calendar year in which the same shall have been
issued, but if the application for the renewal of any such certifi-
cate shall have been filed with the superintendent of insurance
258 Tur Insurance Law. § 142,

before January first of any year such agent may continue to act
as such under such expired certificate until the issuance to him
by the superintendent of insurance of a new certificate or until
five days after the superintendent of insurance shall have refused
to renew such certificate and shall have served notice of such re-
fusal on such agent. Service of such notice may be made either
personally or by mail, and, if by mail, shall be deemed complete if
such notice is deposited in the post office, postage prepaid, directed
to the applicant at the place of residence or business specified in
his application. An underwriter, authorized to transact the in-
surance business within this state, who shall employ as agent
any person, partnership, association or corporation not having an
agent’s certificate of authority from the superintendent of insur-
ance authorizing him to act as agent shall not authorize or permit
such agent under his contract of employment to solicit insurance
or issue policies for such underwriter until such agent shall have
procured a certificate of authority as required by this section.
An agent’s certificate of authority shall be revoked, or the issue or
renewal thereof refused, by the superintendent of insurance if,
after due investigation and a hearing either before himself or
before any salaried employee of the insurance department desig-
nated by him whose report he may adopt, he determines that the
holder of such certificate, or the applicant therefor, as the case
may be, has violated any provision of this chapter, or has been
guilty of fraudulent practices. No individual, corpora-
tion, partnership or association whose certificate of au-
thority is so revoked, nor any partnership, or association
of which such individual is a member, nor any cor-
poration of which he is an officer, shall be entitled to any
certificate of authority under this section for one year after such
revocation, or, if such revocation be reviewed by certiorari pro-
ceedings, for one year after the final determination thereof affirm-
ing the action of the superintendent in revoking such certificate.
If any such certificate held by a partnership, association or cor-
poration be so revoked, no member of the partnership or associa-
tion or officer of the corporation shall be entitled to any such
certificate for the same period of time, if the superintendent of
insurance determine that such member or officer was personally
at fault in the matter on account of which the certificate was re-
voked. The action of the superintendent of insurance in grant-
ing or refusing to grant or renew a certificate of authority or in
§ 142. Fire Insurance Corporation. 259

revoking or refusing to revoke such certificate under this section
shall be subject to review by writ of certiorari, at the instance of
the applicant for such certificate, the holder of a certificate so re-
voked or the holder of any certificate or the person aggrieved. It
the superintendent of imsurance shall revoke or shall refuse to
renew the certificate of authority of any agent issued under this
section and such agent shall apply for a writ of certiorari to re-
view such action, the certificate of authority of such agent shall
be deemed to be in full force and effect for all purposes including
the right to renewal until the final determination of such cer-
tiorari proceedings and all appeals therefrom.

This section shall not apply to any contract of life insurance,
nor to any contract of health or accident insurance nor
to any contract of insurance upon or in connection with
marine or transportation risks or hazards other than contracts for
automobile insurance, nor to contracts of insurance upon prop-
erty located without this state, nor to contracts made by persons,
partnerships, associations or corporations authorized to do busi-
ness under articles five, six, seven and nine of this chapter.

Any person, partnership, association or corporation violating
any provision of this section shall, in addition to any other
penalty in this chapter provided, forfeit to the people of the state
five hundred dollars.

Nothing in this chapter shall be so construed as to prevent any
underwriter authorized to do business within this state from au-
thorizing a broker to whom a certificate of authority has been
issued under this chapter to act as agent of such underwriter for
the collection of premiums.

Added by L. 1913, chap. 7.

Amended by L. 1914, chap. 13. In effect July 1, 1914.

The purpose of the amendment of this section by chapter 13 of 1914 was to
broaden the powers of the Superintendent so as to permit him to reject
applications for agents’ certificates. The law provided that the Superin-
tendent had the right to revoke a license which had already been issued,
after due investigation and a thearing, but he had not the right to exclude
unworthy applicants for licenses by the same means. The amendment also
exempts agents of health and accident companies from the operation of this
section; conditions in the health and accident agency field requiring special
treatment, which are provided for by new section 91-a.

Source.—Former § 138, as added by L. 1905, chap. 566. Former § 142, added
by L. 1911, chap. 748, as amended by L. 1912, chaps. 1, 172, repealed by L.

1913, chap. 7.
UNCONSTITUTIONAL.—Section 142 inserted by chapter 748 of 1911, as
amended by chapter 1 of 1912, the purpose of which is to confine the business
260 Tue Insurance Law. § 148.

of brokers in procuring insurance to those who should make their principal
business, or who should be real estate agents or brokers, is unconstitutional.
Hauser v. North British & Mer. Ins. Co., 206 N. Y., 455, aff?g 152 App. Div., 91.

Note.——The purpose of the amendment of this section by chapter 7 of 1913
was to make it applicable to agents only, providing for the revocation of an
agent’s certificate of authority after due ihvestigation and a hearing; the
brokers are now brought in under a separate section —Kd.

§ 143. Broker’s certificate of authority.

The term “broker” in this section shall include any person,
partnership, association or corporation who, for money, commis-
sion or anything of value, acts or aids in any manner on behalf
of the insured in negotiating contracts of insurance or placing
risks or taking out insurances, including surety bonds. No under-
writer, authorized or permitted to do business in this state, or
agent thereof, shall pay any money or commission or give or’ allow
anything of value to any person, partnership, association or cor-
poration not a duly authorized agent of such underwriter for or
because of his or its negotiating a contract of insurance or placing
a risk or taking out insurance or a surety bond, unless such person,
partnership, association or corporation is authorized to act as a
broker. No person, partnership, association or corporation shall,
after July first, nineteen hundred and thirteen, act as broker in
the solicitation or procurement of applications for insurance or
receive for or because of negotiating a contract of insurance or
placing a risk or taking out insurance including a surety bond any
money or commission or other thing of value from any underwriter
authorized or permitted to do an insurance business iri this state,
or from an agent of any such underwriter, without first procuring
a certificate of authority so to act from the superintendent of
insurance.

The superintendent of insurance shall issue such broker’s cer-
tificate of authority to a person, partnership, association or corpo-
ration, applying therefor, who is trustworthy and is competent to
transact an insurance brokerage business in such manner as to
safeguard the interests of the insured.

A certificate of authority issued to a corporation, partnership
or association shall authorize only the officers and directors of the
corporation, or the members of the partnership or association,
specified in the certificate, each of whom must be qualified to
obtain a certificate to act as brokers. The fee to be paid to the
superintendent of insurance by the applicant for such broker's
certificate at the time the application is made, and annually for
§ 143. Firt Insurance Corporation. 261

the renewal thereof, shall be ten dollars, if the applicant’s prin-
cipal place of business is in a city and two dollars if not in a city.
If the applicant be a corporation, partnership or association such
fee shall be paid for each person specified in the certificate.

Every broker’s certificate of authority shall expire on the thirty-
first day of December of the calendar year in which the same shall
have been issued, but if an application for the renewal of any
such certificate shall have been filed with the superintendent of
insurance before January first of any year the certificate of au-
thority sought to be renewed shall continue in full force and
effect until the issuance by the superintendent of insurance of
the new certificate applied for or until five days after the super-
intendent of insurance shall have refused to issue such new cer-
tificate and shall have served notice of such refusal on the appli-
cant therefor. Service of such notice may be made either per-
sonally or by mail, and, if by mail, shall be deemed complete if
such notice is deposited in the post office postage prepaid, directed
to the applicant at the place of business specified in the
application.

Before any broker’s certificate of authority shall be issued by
the superintendent of insurance there must be filed in his office a
written application therefor. Such application shall. be in the
form or forms and supplements thereof prescribed by the super-
intendent of insurance and must set forth (1) the name and
address of the applicant, and if the applicant be a partnership
or association, the name and address of each member thereof, and
if the applicant be a corporation, the name and address of each
of its officers and directors; (2) whether any certificate of au-
thority as agent or broker has been issued theretofore by the
superintendent of insurance to the applicant, and, if the applicant
be an individual, whether any such certificate has been issued
theretofore to any partnership or association of which he was
or is a member or to any corporation of which he was or is an
officer or director, and, if the applicant be a partnership or asso-
ciation whether any such certificate has been issued theretofore
to any member thereof, and, if the applicant be a corporation,
whether any such certificate has been issued theretofore to any
officer or director of such corporation; (3) the business in which
the applicant has been engaged for the year next preceding the
date of the application, and, if employed by another, the name
or names and address or addresses of such employer or employers;
(4) such information as the superintendent of insurance may
262 Tre Insurance Law. § 143,

require of applicants to enable him to determine their trustworthi- |
ness and competency to transact the insurance brokerage business
in such manner as to safeguard the interests of the assured.

An application for a broker’s certificate of authority must be
signed and verified by the applicant and, if made by a partner-
ship or association, by each member thereof and if made by a
corporation by each officer and director thereof to be authorized
thereby to act as a broker.

If an application for a certificate of authority under this sec-
tion be filed in the year nineteen hundred and thirteen within
sixty days after this section takes effect the applicant and the
persons named in the application may, notwithstanding the pro-
visions of this section, act as brokers until notice of rejection of
the application shall have been served as herein provided with
respect to renewal applications.

A corporation, association or partnership to whom a certificate
of authority shall have been issued by the superintendent of in-
surance under this section may at any time make an application
to the superintendent of insurance for the issuance of a supple-
mental certificate of authority authorizing additional officers or
directors of the corporation or members of the partnership or
association to act as brokers, and the superintendent of insurance
may thereupon issue to such corporation, association or partner-
ship a supplemental certificate accordingly upon the payment of
an additional fee for each member or officer or director thereby
authorized to act as a broker.

A certificate issued under this section shall be revoked by the
superintendent, if after due investigation and a hearing either
before him or before any salaried employee of the insurance de-
partment designated by him whose report he may adopt, he de-
termines that the holder of such certificate (1) has violated
any provision of the chapter by any act or thing done in respect
to insurance for which such certificate is required; or (2)
has made a material misstatement in the application for such cer-
tificate; or (3) has been guilty of fraudulent practices; or
(J) has demonstrated his incompetency or untrustworthiness
to transact the insurance brokerage business for which such cer-
tificate of authority shall have been granted by reason of any-
thing done or omitted in or about such business under the au-
thority of such certificate.

No individual, partnership, association or corporation whose
certificate of authority is so revoked nor any partnership or asso-
§ 148. Fire Insurance Corporation. 963

ciation of which such individual is a member, nor any corpora-
tion of which he is an officer or director shall be entitled to any
certificate of authority under this section for a period of one year
after such revocation, or, if such revocation be reviewed by
certiorari proceedings, for one year after the final determination
thereof affirming the action of the superintendent in revoking
such certificate. If any such certificate held by a partnership,
association or corporation be so revoked, no member of the part-
nership or association or officer or director of the corporation shall
be entitled to such a certificate for the same period of time, if the
superintendent of insurance determines and finds that: such mem-
ber or officer or director was personally at fault in the matter on
account of which the certificate was revoked. The holder of any
such certificate or any person aggrieved may file with the superin-
tendent of insurance a verified complaint setting forth facts from
which it shall appear that any such certificate ought to be revoked.
The superintendent must thereupon, after investigation and a
hearing as herein provided, determine whether such certificate
shall be revoked.

If an application for a certificate of authority under this sec-
tion be rejected or such a certificate be revoked by the superin-
tendent of insurance notice thereof shall forthwith be served on
the applicant or on the holder of such certificate either personally
or by mail, and, if by mail, such service shall be complete if
such notice be deposited in the post-office postage prepaid, directed
to the applicant or the holder of such certificate, as the case may
be, at the place of business specified in the application or
certificate.

The action of the superintendent of insurance in granting or
refusing to grant or to renew a certificate of authority or in
revoking or refusing to revoke such a certificate shall be subject
to review by writ of certiorari, at the instance of the applicant
for such certificate, the holder of a certificate so revoked or the
holder of any such certificate or the person aggrieved. If the
superintendent of insurance shall revoke or shall refuse to renew
the certificate of authority of any broker issued under this sec-
tion and such broker shall apply for a writ of certiorari to review
such action, the certificate of authority of such broker shall be
deemed to be in full force and effect for all purposes, including
the right to renewal, until the final determination of such cer-
tiorari proceedings and all appeals therefrom, provided the fee
for such certificate be paid.
264 Tue Insurance Law. §§$ 144-146.

This section shall not apply to any contract of life insurance
nor to any contract of insurance upon or in connection with
marine or transportation risks or hazards other than contracts
for automobile insurance, nor to contracts of insurance upon
property located without this state, nor to contracts made by per-
sons, partnerships, associations or corporations authorized to do
business under articles five, six, seven and nine of this chapter.

Any person, partnership, association or corporation violating
any of the provisions of this section shall in addition to any other
penalty in this chapter provided, forfeit to the people of the state
five hundred dollars.

Source.—Former § 139, as added by L. 1905, chap. 566, repealed by L. 1910,
chap. 638.

Amended by L. 1913, chap. 12. In effect March 5, 1913.

Note.—The purpose of the addition of this section by chapter 12 of 1913 was
to compel all applicants, for certificates of authority to do business as in-
surance brokers to meet the test of trustworthiness and competency proposed
by the insurance department as a condition to receiving their license; this
section takes the place of one, declared unconstitutional.—EKd;

§ 144. Fees not to be included in consideration for fire
insurance.

It shall not be lawful hereafter for any fire insurance com-
pany, or for any officer, manager, agent or other representative of
any such company, to include in the sum charged or designated in
any policy, as the consideration for insurance, any fee, compensa-
tion, charge or perquisite whatsoever.

Source.— L. 1892, chap. 641, § 1.

A person who agrees to procure insurance for another, but who is not con-
nected with the company issuing the policy, does not come within the pro-
visions of this section. Tanenbaum v. Rosenthal, 44 App. Div., 431.

Brokers for the insured are not subject to the prohibition of section 1.
Romberg v. Kouther, 27 Misc., 227.

§ 145. Report of consideration to company.

Every agent or other representative of any fire insurance com-
pany, issuing a policy on its behalf, on property in this state, shail
report to the company the exact consideration charged and written

in the policy, as a premium for the risk assumed.
Source.— L. 1892, chap. 641, § 2.

§ 146. Fees and charges to be indorsed on policy.

In all cases where a policy fee, survey fee, or other fee or
charge in addition to the consideration as premium written
8§ 147-149. Fine Insurance Corporation. 265

in the policy, is made against, or collected from the assured by

the agent, or other representative of any .fire insurance company,

such agent or representative shall indorse the amount of such fee

or charge, and the nature and particulars thereof, upon the policy,

and shall report the amount and particulars of any such fee or

charge to the company on behalf of which such policy is issued.
Source.— L. 1892, chap. 641, § 3.

§ 147. Penalty for violation by company.

Any fire insurance company violating the provisions or failing to
comply with the requirements of section one hundred and forty-
four, shall upon complaint made by the superintendent of the
insurance department or any citizen of this state, be liable to a
fine of not less than twenty-five dollars nor more than one hun-
dred dollars for the first offense, and of not less than one hundred
dollars nor more than two hundred and fifty dollars for each sub-
sequent offense.

Source.— L. 1892, chap. 641, § 4.

§ 148. Penalties for violation by officers and agents.

Any officer, manager, agent or other representative or either
of them of any fire insurance company violating any of the
provisions or failing to comply with any of the requirements of
the last four sections is guilty of a misdemeanor, and upon com-
plaint made by the superintendent of the insurance department,
or any citizen of this state, upon conviction thereof, shall be liable
to a fine of not more than fifty dollars for the first offense, and
not more than one hundred dollars for each subsequent offense or
to imprisonment for not exceeding three months, or both.

Source.— L, 1892, chap. 641, § 5, as amended by L. 1896, chap. 841, § 1.

§ 149. Authorization of foreign mutual fire insurance
corporations. :

Every mutual fire insurance company or association incor-
porated under the laws of any other state of the United States
may be permitted to do business in this state by the superintendent
of insurance on filing with him the following:

a. A certified copy of its articles of incorporation or association
and of its by-laws.
266 Tur Insurance Law. § 149,

b. A consent, duly executed, appointing the superintendent of
insurance to be the true and lawful attorney for such company or
association in and for this state, upon whom all legal process in
any action or proceeding against the company or association may
be served with the same effect as if it was a domestic company
or association. Service upon such attorney shall thereafter be
deemed service upon the company or association.

ce. An agreement that it will pay the taxes provided for in sec-
tion one hundred and forty-nine-a of this chapter, and that it will
furnish any further information as to its financial condition, as
the superintendent of insurance shall require.

d. And each such company shall pay to the superintendent of in-
surance the fees required by section six of this chapter.

Provided, that no such certificate of authority shall be granted
unless such company shall (a) have at least five million dollars of
insurance in force in not less than two hundred separate risks;
and (b) shall have transacted a fire insurance business in its home
state for at least ten years; and (c) shall have had insurance in
force in at least the amount of five million dollars in each of the
five years immediately preceding its application for admission to
do business in this state; and (d) shall have and maintain a reserve
fund equal to the total unearned premiums on the policies in
force calculated on the gross sum without any deduction on any
account charged to policyholders on each respective risk from the
date of the issue of the policy; and (e) in addition to maintaining
such unearned premium reserve fund, shall either keep on deposit
for the benefit of all its policyholders with the superintendent
of insurance of this state or with the auditor, comptroller or
general fiscal officer of the state under the laws of which it is
incorporated, the sum of two hundred thousand dollars, or shall
have a surplus or other net assets of at least fifty thousand dollars
and in addition contingent assets of at least fifty thousand dollars
in the form of the obligations of policyholders to pay such amount
when lawfully assessed therefor; and (f) shall have net and con-
tingent assets which together with the unearned premium fund
shall equal one per centum of the total insurance in force; and
(g) in the event that such company does not keep on deposit the
$i. . Fire Insurance Corporation. 267

sum of two hundred thousand dollars as in “e” aforesaid it shall
provide in all policies issued by it that the policyholder is liable,
in addition to the original premium paid, to assessment in an
amount at least equal to one year’s premiums; provided, further,
that no such company shall be exposed to loss to an amount
exceeding ten per centum of its actual net and contingent assets
upon property not protected by automatic sprinkiers situated
within the boundaries of one city block or on one group of
buildings composed of attached or adjacent buildings which have
less than sixty feet of clear space at all points between such
buildings and other buildings; provided, further, that the certi-
ficate of authority granted by the superintendent of insurance
pursuant to the provisions of this act to such insurance corporation
to do business in this state shall not remain in force for a longer
period than one year and that whenever the condition of any
such corporation 40 which a certificate of authority has been
granted is such that it cannot meet all the requirements of this
section the superintendent of insurance shall forthwith revoke
such certificate. The deposit or the surplus of any such company
so authorized to do business in this state, to the extent of the
minimum amount thereof required by this section shall be in-
vested and kept invested in securities of the kind and character
in which domestic or foreign companies are required to invest as
minimum capital investments by section sixteen of this chapter,
except that bonds and mortgages on real estate shall not be
accepted as deposit securities to be held by the superintendent of
insurance of this state. Any such company so admitted to do
business may in addition to insuring property against loss or
damage by fire also insure any goods or premises against loss or
damage by water caused by the breakage cr leakage »f sprinklers,
pumps, water pipes, or plumbing and its fixtures and against acci-
dental injury from other cause than fire or lightning to such
sprinklers, pumps, water pipes, plumbing and fixtures.
Source.—Added by L. 1909, chap. 286.
Amended by L. 1911, chaps. 161 and 765.
268 Tur Insurance Law. § 149a,

§ 1492. Premium or assessment tax.

Every mutual fire insurance company or association authorized
to do business in this state pursuant to section one hundred and
forty-nine of this chapter shall, in lieu of all other taxes on
premiums, annually, on or before the first day of February of
each year, pay a tax of one per centum on all gross premiums or
assessments collected or received by it or them for such insurance
upon property situate within this state during the preceding year
ending the thirty-first day of December to the superintendent of
insurance, except that any company so authorized to do business
in this state which is incorporated under the laws of any other
state, which taxes such company therein upon the gross premiums
or assessments collected by it less that portion of said gross
premiums or assessments returned on policies expired or can-
eeled, shall not be required to pay under this section any
different or higher rate, provided, however, that in no event
shall such tax be less than three per centum of the net cost of
insurance to the policyholder. On or before the first day
of February of each year every such company or association
shall file with said superintendent a detailed statement showing
the gross amount of premiums and assessments collected during
the preceding year, for insurance upon property located in this
state and specifying the amounts of premiums and assessments so
collected by city, town, village or fire district in which the prop-
erty covered by such insurance is located. In case any such com-
pany or association shall neglect or refuse to make and file such
report, or pay the tax imposed by this section, its certificate of
authority to do business in this state shall be revoked by the super-
intendent of insurance and it shall forfeit the sum of one hun-
dred dollars for each day after the first day of February of each
year that it shall omit to make and file such report, or shall neglect
to pay the tax imposed by this section, which sum shall be col-
lected in an action in the name of the people of the state of New
York to be prosecuted by the superintendent of insurance and col-
lected by him. After the neglect or refusal of such company or
association to make and file such report, or pay such tax, such
§§ 149b, 149¢, Fire Insurance Corporation. 269

company or association or its agents shall not effect any insurance
on any property in this state.

Source.—Added by L. 1909, chap. 286.
Amended by L. 1911, chap. 161.

§ 149b. Agents.

No person shall act within this state for any mutual fire insur-
ance company or association, organized under the laws of any
other state of the United States, in placing risks, adjusting losses,
fixing rates, or inspecting risks, unless such company or association
is authorized to do business within this state. Any person vio-
lating the provisions of this section shall be guilty of a
misdemeanor.

Source.—Added by L. 1909, chap. 286.

§ 149¢. Distribution of annual tax.

All moneys received by the superintendent of insurance under
the provisions of section one hundred and forty-nine-a of this
chapter shall be distributed by him on April first of each year
after deducting the expenses of the collection and distribution
thereof, as follows: Ten per centum thereof to the Firemen’s
Association of the State of New York for the support and main-
tenance of the Firemen’s Home at Hudson, New York, and the
balance to the various associations, cities, villages and fire districts
in the same manner and to the same extent as the tax imposed
by section one hundred and thirty-three of this chapter is now
received by them, except that in the cities of New York and
Buffalo, he shall pay the same to the officers and associations now
receiving the tax imposed on foreign fire insurance companies
under the provisions of the charters of said cities. The superin-
tendent of insurance shall appoint, for a term not exceeding his
own term of office, a suitable and competent person to collect and .
distribute the tax imposed by section one hundred and forty-nine-a j
of this chapter. The person so appointed shall receive such com-
pensation for his services and disbursements as the superintendent
of insurance shall fix, but the same shall be payable only from
the morteys which the said superintendent shall receive under the
provisions of said last mentioned section.

Source,—Added by L. 1909, chap. 286.
270 Tur Insurance Law. § 150.

ARTICLE IV.

Marine INsuRANCE CORPORATIONS.

SEcTIon 150. Incorporation.
151. Subscriptions to stock.
152. Restrictions as to capital stock and premium notes.
153. Increase of capital by mutual corporations.
154, Cash capital of mutual corporations.
155. Rights and liabilities of holders of cash capital.
156. Certificates convertible into stock.
157. Amendment of charter.
158. Extension of charter.
159. Change in plan of insurance.
160. Charges for insurance upon canals of the state.
161. Agencies beyond the United States.
162. Lloyds or individual underwriters.

s

Section 150. Incorporation.

Thirteen or more persons may become a corporation for the pur-
pose of making insurance upon vessels, freights, goods, wares,
merchandise, specie, bullion, jewels, profits, commissions, bank-
notes, bills of exchange, and other evidences of debt, bottomry and
respondentia interests, and every insurance appertaining to or
connected with marine risks and risks of transportation and
navigation, including the risks of lake, river, canal and inland
transportation and navigation, insurances upon automobiles,
whether stationary or being operated under their own power,
which shall include all or any of the hazards of fire, explosion,
transportation, collision, loss by legal liability for damage to
property resulting from the maintenance and use of automobiles,
and loss by burglary or theft or both, but shall not include
insurances against loss by reason of bodily injury to the person,
and of reinsuring any risks taken by it, by making,
acknowledging and filing in the office of the superintendent of
insurance a declaration signed by all of them, stating their inten-
tion to form a corporation for one or more or all of such pur-
poses, with a copy of the charter proposed to be adopted by it,
which charter shall set forth the name of the corporation, the
place where its principal office shall be located, the mode in which
its corporate powers are to be exercised, aud of electing directors,
§ 150. Marine, Iysurance Corporation. 271

each of whom, if a stock corporation, shall be the owner in his own
right of five hundred dollars par value of its stock and a majority
of whom shall be citizens of this state, the mode of filling vacan-
cies in the office of director, the period for the commencement and
termination of its fiscal year, the amount of its capital or capital
stock and the number of shares into which it shall be divided, if a
stock corporation. Thereupon such persons and all others who
shall become stockholders or members thereof, shall be a corpora-
tion by the name expressed in the charter.

No such corporation shall commence the transaction of the busi-
ness of insurance until after publication of a notice of its inten-
tion to do so, once a week for at least six weeks, in a public news-
paper in the county in which it is proposed to be located, nor if a
stock corporation, until its capital stock shall all have been paid
in in cash. Every such corporation shall continue in existence for
thirty years, or for such less time as may be specified in its charter.
No such corporation shall directly or indirectly deal or trade in
buying or selling goods, wares or merchandise, or other commodi-
ties, except such as may have been insured by it, and such as may
be sold under judicial process or otherwise in which or in the
profits of the sale of which it may be interested by reason of having
previously become insurers of the same or of some share or portion
thereof.

Source.—Former § 150, as amended by L. 1907, chap. 206; originally revised
from L. 1849, chap. 308, §§ 1-3, 10, as amended by L. 1867, chap. 574 and §§ 15,
18; L. 1867, chap. 442, § 1.

Amended by L. 1909, chap. 240; L. 1910, chap. 168, and L. 1911, chap. 126.

See § 6, ante. Fees to superintendent for filing declaration.

See § 9, ante. Certificate of authorization of superintendent.

See § 10, ante. Certificate of attorney-general; corporate names.

See § 12, ante. Minimum capital stock of marine stock company.

See § 13, ante. Deposit of securities with superintendent.

See chap. 733 of 1900. Reincorporation of foreign moneyed corporations.

Companies doing business under this article can insure automobiles against
collisions. In re Ins, Co. of N. A., Opinion of Attorney-General, March 4, 1908,
overruling In re Ins. Co. of N. A., Opinion of Attorney-General, August 6, 1907.

FIRE AND MARINE. A foreign corporation cannot be admitted to do
both fire and marine insurance upon its making separate deposits of funds
under §§ 27 and 28 of the Insurance Law. Attorney-General Rep., 1896,
page 196. : ;

A foreign fire insurance company cannot now be admitted to do marine
insurance business in this state. In re St. Paul Fire and Marine Ins. Co.,
Attorney-General Rep., 1893, page 402.
O72 Tur Insurance Law. §§ 151, 152.

A corporation under § 150 relating to marine insurance corporations is not
authorized to insure a pier in the North river, or structures thereon. . Attor-
ney-General Rep., May 6, 1911.

QUORUM.— A quorum of directors must be a majority of all the directors,
unless otherwise provided in charter or special law. By-laws cannot change
this rule. In re New Amsterdam Cas. Cg., Attorney-General Rep., 1900,
page 253.

§ 151. Subscription to stock.

After the publication of such notice and the filing of such
declaration and charter, the corporation may open books for sub-
scription to its capital stock and keep the same open until the
full amount specified in the charter is subscribed; or, if its busi-
ness is to be conducted on the plan of mutual insurance, it may
open books to receive propositions and enter into agreements for
insurance in the manner and to the extent hereinafter specified.

Source—Former § 151; originally revised from L. 1849, chap. 308, § 4.

See § 53, Stock Corporation Law, chap. 61 of 1909. Subscription to capital
stock.

See § 660, Penal Law. Frauds in organization of corporations.
See § 662 et seq., Penal Law. Fraudulent issue of stock.

§ 152. Restrictions as to capital stock and premium notes.

No such corporation shall be organized in the county of New
York, or in the county of Kings, with a smaller capital than
fifty thousand dollars, nor shall any such corporation formed for
the purpose of doing business on the plan of mutual insurance, com-
mence business if located in the county of New York, or county
of Kings, until agreements have been entered into for insurance
with at least one hundred applicants, the premiums on which shall
amount to at least three hundred thousand dollars, and notes have
been received in advance for the premiums on such risks, payable
at the end of or within twelve months from the date thereof, which
notes shall be considered as a part of its capital, and shall be
known as capital stock notes and shall be valid, negotiable and
collectible for the purpose of paying any losses which may occur
or otherwise.

No such mutual insurance corporation shall in any other county
of the state commence business until such agreements have been
entered into, the premiums on which shall amount to one hundred

 
§§ 153, 154. Marine Insurance Corporation. 273

thousand dollars and notes received therefor, which notes shell be
payable and shall be liable for and used as above specified,

Any such mutual insurance corporation heretofore or hereafter
organized may issue policies providing that the assured in such
policies shall not participate in the profits of the corporation, and
that in lieu of scrip the corporation may stipulate for and take a
net premium, or may make a cash deduction from the premiums
paid on such non-participating policies, though such mode of doing
business may not be declared in its charter.

Source.—Former § 152; originally revised from L. 1849, chap. 308, § 5 and
§ 10, as amended by L. 1867, chap. 574.

See § 12, ante. Minimum capital stock of marine insurance corporations.

§ 153. Increase of capital by mutual corporations.

Any domestic mutual marine insurance corporation having its
principal office in the city of New York may increase its capital
or fund on the amount of accumulated net profits, which it is
permitted to retain for the benefit and security of its policyholders,
to any amount which shall be deemed expedient by its board
of directors, but if there is in the charter of such corporation any
limitation of its capital or fund, or the amount of net profits which
it has the power to accumulate and retain, such increase shall not
be made unless a written consent thereto under the seal of the
corporation, by a resolution of the board of directors, certified hy
the secretary, shall first be filed in the office of the superintendent
of insurance, and the privilege of retaining profits over one million
dollars shall not be exercised by any corporation availing itself of
the provisions of this section, until a sufficient sum shall be applied
by such corporation according to the provisions of its charter,
towards the redemption of all certificates or premiums heretofore
issued and now outstanding.

Source.—Former § 153; originally revised from L. 1849, chap. 308, § 22, as
added by L. 1855, chap. 292.

§ 154. Cash capital of mutual corporations.

Any domestic mutual marine insurance corporation may create
or unite with its existing corporate funds, if it has any such funds,
a cash capital of not less than three hundred thousand dollars, to
O74 Tur Insurance Law. § 155,

be divided into shares of one hundred dollars each, to be issued iu
such persons as shall subscribe and pay for the same, which shall
be transferable only on the books of the corporation, subject to
such regulations as the directors shall from time to time prescribe.

The profits of the business of such corporation, after setting
apart a sufficient sum to pay six per cent per annum upon the
cash capital and the interest accruing upon any outstanding scrip
or certificates, shall be divided between the stockholders and others
entitled by its charter or articles of association to participate in
its profits in the following manner, viz.: One-third thereof, or
such other proportion not exceeding that rate as may be deter-
mined and agreed upon at the time when the subscriptions to
the cash capital thereof are made, to the stockholders in cash, and
the remainder thereof to the persons entitled by its charter or
articles of association to participate in its profits, to whom scrip
certificates therefor shall be issued as provided in such charter or
articles. The corporation may exclude from the computation of
premiums entitled to participate in such profits, premiums or
risks on which loss shall have happened.

The fund represented by the scrip shall constitute a surplus or
reserve for the security and payment of losses, and be liable for
any excess of losses and expenses above the earned premiums of
any year. Each later annual issue of scrip ‘shall be first reduced
and wholly canceled before any previous annua] issue is at all
reduced, and all issues of scrip shall be liable to reduction and
cancellation before the capital stock shall be encroached upon.

The provisions of this section and of the two following sections
shall not be considered to extend the original charter of any cor-
poration created by a special act of the legislature, or to apply to
or revive any charter under which any corporation is not actually
transacting business.

Source.—Former § 154; originally revised from L. 1849, chap. 308, § 21, as
amended by L. 1857, chap. 38; L. 1857, chap. 28, §§ 1, 2, 7.

§ 155. Rights and liabilities of holders of cash capital.

The holders of the cash capital paid in shall be entitled to one
vote either in person or by proxy at all elections of the corporation
for each share of stock held by them respectively. No person
§ 156. Marine Insurance Corporation. OT5

shall be entitled to vote at any election by reason of being the
holder of a policy issued after such cash capital is paid in, or of
being the holder of any scrip or certificate of profits of such cor-
‘poration issued after that time, unless otherwise provided for in
the articles of subscription to such cash capital. Each subscriber
to the cash capital shall be individually liable to the extent of his
subscription for the debts of the corporation until the shares of
stock subseribed for by him shall have been paid in eash to the
corporation.

Source.—Former § 155; originally revised from L. 1849, chap. 308, § 19; L.
1857, chap. 28, §§ 4, 6; L. 1884, chap. 95, § 2.

See § 25 et seq., Stock Corporation Law, chap. 564 of 1890. Directors and
officers and their election.

See § 56 et seq., Stock Corporation Law, chap. 61 of 1909. Liability of
stockholders and the limitation of their liability.

§ 156. Certificates convertible into stock.

Whenever the cash stock paid in, as provided in section one hun-
dred and fifty-four, shall amount to three hundred thousand dollars
or more, the directors may, by a vote of three-fourths of the whole
number, convert the certificates of profits, in whole or in part, into
cash stock; commencing, if in part, with the certificates of the year
of earliest issue outstanding, and so on in succession, upon applica-
tion therefor being made to the corporation by the holders thereof,
within such period of time and at such a price not exceeding its
par value, and under such conditions and regulations as the
trustees may prescribe for that purpose. Whenever the cash stock
shall amount to five hundred thousand dollars er more, the
directors may, by a like vote, call in and redeem and cancel the
outstanding certificates of profits and make the corporation wholly
a cash stock corporation, dividing all its profits to the cash stock-
holders; and the directors shall have power to make all necessary
by-laws and regulations to conform to such changes in the business
of the corporation.

Such corporation shall not apply any of its funds or profits to
the redemption or payment of any certificate of profits, if by such
payment the aggregate of its cash capital and its accumulated
profits together shall be reduced below the amount which shall be
246 _ Tur INSURANCE Law. §§ 157, 158.

fixed by its by-laws or articles of association, and such aggregate
amount shall not be fixed below the sum of one million dollars, in
addition to the amount of cash stock thereof.

Source.—Former § 156; originally revised from L. 1857, chap. 28, §§ 3, 5.

§ 157. Amendment of charter.

Any domestic marine insurance corporation may: amend its
charter so as to enable it to transact all such business as can be
transacted by marine insurance corporations under the laws of the
state, by filing in the office of the superintendent of insurance a
copy of its charter as amended, with the written consent thereto
of three-fourths in amount of its stockholders, if a stock corpora-
tion, or, if a mutual corporation, of two-thirds of its directors.
Thereupon such proceedings shall be had as are required by law to
be taken upon the filing of an original declaration and charter, and
such corporation shall not transact any business under such amended
charter until it shall have obtained the certificate of authority
required by law from the superintendent of insurance.

Source.—Former § 157; originally revised from L. 1880, chap. 222, § 1.

See § 37, ante. Corporations heretofore formed brought within the pro-
visions of the Insurance Law.

See § 100, Statutory Construction Law, chap. 27 sf 1909, as to effect of
repeal and re-enactment of prior statutes.

§ 158. Extension of charter.

Any domestic marine insurance corporation may at any time
have its original charter extended for a period not exceeding thirty
years, by filing in the office of the superintendent of insurance a
copy of such charter as amended and a consent thereto signed by
all of its directors or by two-thirds of them, and not less than thir-
teen in number. It shall not be authorized to transact any busi-
ness under its extended charter until the same proceedings have
been taken as are required by law upon the filing of an original
declaration and charter, and until the certificate of the superin-
tendent required by law shall have been obtained authorizing it
to transact business thereunder. ;

Any corporation whose charter has been so amended and which :
has obtained the authority of the superintendent to transact busi- -

 
§ 159. ‘Marine Insurance Corporation. 277

ness thereunder may continue its business upon the same plan, and
without any interruption of its business or distribution of its
assets, as fully and with like effect as if it had been originally
incorporated for the extended period.

Source.—Former § 158; originally revised from L. 1849, chap. 308, § 14, as
amended by L. 1889, chap. 424; L. 1867, chap. 442, § 2, as amended by L. 1868,
chap. 731.

See § 37, General Corporation Law, chap. 28 of 1909. Extension of cor-
porate existence.

A company, incorporated by special act before the passage of the first
general insurance law in 1849, may extend its charter in accordance with sec-
tion 158 of the Insurance Law and continue to operate under its original
charter, subject to the limitations contained in section 37 of the Insurance
Law. Attorney-General Rep., March 21, 1912.

§ 159. Change in plan of insurance.

Any domestic mutual marine insurance corporation may, by
conforming its charter and otherwise proceeding in accordance
with the laws of the state, with the consent of three-fourths of
the whole number of its directors and with the written consent
of three-fourths of the whole amount of the outstanding scrip, after
giving notice once a week for six weeks of its intention in two
newspapers, to be designated by the superintendent of insurance,
change the plan of its business from that of a mutual insurance
corporation to that of a capital stock corporation, by converting
the outstanding certificates of profits of those so consenting into
eapital stock in shares of not less than fifty dollars each, in such
period of time and at such price not exceeding its par value and
under such conditions and regulations as such directors may fix and
establish for that purpose; and, may, upon application therefor
being made to the corporation by the holders thereof, convert the
remaining outstanding certificates of profits in whole or in part
into capital stock, or, at the option of the holders, redeem the same
at the market price or value thereof. to be determined by a dis-
interested person appointed by a judge of a court of record of
this state. The capital stock thus created shall in no case exceed
the cash value of the assets of the corporation, which shall not be
less than two hundred and fifty thousand dollars.
278 Tue Insurance Law. § 160.

No such corporation shall change the plan of its business to that
of a capital stock corporation until the superintendent of insurance
shall first have examined into the cash value of its assets and shal]
have issued his certificate that the corporation has complied with
the provisions of this section and is in a safe and proper condition
to continue the business of marine insurance, a copy of which cer-
tifieate shall be recorded in the office of the superintendent and in
the clerk’s office of the county where its principal office is located.

Source.—Former § 159; originally revised from L. 1884, chap. 95, § 1.

§ 160. Charges for insurance upon canals of the state.

No marine insurance corporation doing business in this state
shall demand or receive upon any policy of insurance issued by ii
upon property in transit upon the canals of the state, for the pre-
mium on such policy, any sum of money as compensation, which
shall include in any case over fifteen per cent thereof, as a price or
remuneration of agents of the corporation for the business of ob-
taining such insurance on a salary or commission, or in any capac-
ity whatever. No such corporation shall pay beyond the amount
of fifteen per centum of the premiums so reccived on account of any
such policy as the commission or remuneration of the agent or
agents obtaining the insurance, and no part of the eighty-five per
centum of the premium retained by the corporation shall be paid to
any one except to the regular officers of the corporation for its
benefit, and no shipper or middleman or other person shall either
directly or indirectly be paid or receive any portion of such
premium.

An agent of any such corporation, or other person, shall not
charge or receive, directly or indirectly, from any person or persons
for insurance of such property, any more than the regular rates of
premium fixed by the corporation for the insurance of such prop-
erty, or charge or receive any other or greater sum for such insur-
ance than the amounts payable to the corporation and its agents as
provided in this section. In all reports to the superintendent of in-
surance required by law every such corporation shall verify under
oath to such superintendent in such form as he may prescribe, that
the corporation has performed and fully carried out the provisions
of this section.

Any agent, shipper or other person who shall violate any of the
provisions of this section shall forfeit to the people of the state the
sum of one hundred dollars, one-half of which shall be paid to the
§§ 161, 162. Marine Insurance Corporation. 279

person injured, if he shall complain; the other half, or the whole
thereof when any other than the injured person shall complain,
shall be paid to the treasury of the county in which the offense was
committed, for the benefit of the poor of the city or town in which
such offense was committed. Any corporation violating the pro-
visions of this section shall be deemed to have forfeited its charter,
and the attorney-general, upon information from the superintend-
ent of insurance, or upon the complaint of any individual who shall
give security, to be approved by the superintendent, for the pay-
ment of any costs or expenses on the part of the state, shall proceed
against any such corporation so violating the provisions of this
section to enforce the forfeiture of its charter. The court in which
any such suit or proceeding may be instituted may, upon final judg-
ment instead of decreeing the dissolution of the corporation, require
it to pay such sum as a penalty for such violation not less than
five hundred dollars, nor more than five thousand dollars, as the
court may in its discretion impose, and direct in the judgment that
in case such penalty is not paid within a time therein specified the
corporation shall be dissolved.

Source.—Former § 160; originally revised from L. 1881, chap. 471, as
amended by L. 1883, chap. 455.

§ 161. Agencies beyond the United States.

Any domestic marine insurance corporation may establish and
maintain one or more agencies beyond the United States for the
transaction of its lawful business upon such terms and conditions
as it may prescribe, and may omit from its annual report the
transactions at any such agency in Asia or Europe for five months
previous to the time when the report is made, but such omitted
transactions shall be included in the next annual report.

/ Source.—Former § 161; originally revised from L. 1852, chap. 123.

§ 162. Lloyds or individual underwriters.
Source.—Former § 162, as amended by L. 1905, chap. 566.
Repealed by U. 1910, chap. 638 (in effect Jan. 1, 1911).
280 Tne Insurance Law. § 170.

ARTICLE V.

Tirtte AND CREDIT GuaRANTY CORPORATIONS.

SEcTIoN 170. Incorporation.

171. Subscriptions to capital stock. «

172. By-laws.

173. Certificate of superintendent.

174. Certificate of payment of capital stock.

175. Directors.

176. Investment of capital and funds of a title guarantee corporation.

177. Conditions requisite to commencing business of a credit guaranty
corporation.

178. Powers of credit guarantee corporations.

179. Merger.

180. Additional powers of certain title guaranty companies.

181. May execute bonds and undertakings.

182. Issuance of certificate of solvency by superintendent of in-
surance.

183. Supreme court may require statement to be filed.

Section 170. Incorporation.

Five or more persons may form a corporation for one of the
following purposes:

1. To examine titles to real property and chattels real, to pro-
cure and furnish information in relation thereto, make and guar-
antee the correctness of searches for all instruments, liens or charges
affecting the same, guarantee or insure the payment of bonds and
mortgages, or notes of individuals or partnerships secured by
mortgages upon real property situated in this or any other state,
and. bonds, notes, debentures and other evidences of indebted-
ness of solvent corporations secured by deed of trust or mortgage
upon real property situated in this or any other state, invest in,
purchase and sell, with such guarantee or with guarantee only
against loss by reason of defective title or incumbrances, bonds
and mortgages, and notes of individuals or partnerships secured
by mortgages upon improved and unincumbered real property
situated in this or any other state worth fifty per centum more
than the amount loaned thereon, and bonds, notes, debentures
and other evidences of indebtedness of solvent corporations se-
cured by deed of trust or mortgages upon improved and unin-
cumbered real property situated in this state or outside of this:
§ 170. Trriz any Creprr Guaranry Corvorarrons. 281

state worth fifty per centum more than the amount loaned thereon,
and guarantee and insure the owners of real property and chattels
real and others interested therein against the loss by reason of
defective titles thereto and other incumbrances thereon which shall
be known as a title guaranty corporation; or

lJ-a. To guarantee the validity and legality of bonds or other
evidences of indebtedness issued by any state or by any city,
county, town, village, school district, municipality or other civil
division of any state, or by any private or public corporation; to
act as registrar or transfer agent, but not fiscal of any such corpo-
ration, and to transfer and countersign its certificates of stocks,
honds or other evidences of indebtedness. Such corporation shali
be known as a securities guaranty corporation and shall be gov-
erned by and subject to the provisions of law applicable to a title
guaranty corporation organized under this article; or

2. To guarantee and indemnify merchants, traders and those
engaged in business and giving credit from loss and damage by
reason of giving and extending credit to their customers, and those
dealing with them, which shall be known as a credit guaranty cor-
poration, by making, acknowledging and filing a certificate stating:

1. The name of the proposed corporation.

The kind of corporation to be formed and its purposes.
The amount and description of the capital stock.

The location of its office.

The duration of the corporation, not exceeding fifty years.

De (oe jbo

No credit guaranty corporation or securities guaranty corpora-
tion shall be formed for the transaction of business in this state,
with a smaller capital than two hundred and fifty thousand
dollars. No title guaranty corporation shall be formed with a
smaller capital than one hundred and fifty thousand dollars, which
shall be divided into shares of one hundred dollars each. Such
certificate shall be filed in the office of the superintendent of in-
surance, who shall thereupon issue a license to the persons making
such certificate, empowering them as commissioners to open books
of subscription to the capital stock of the corporation at such times
and places as they may determine.
282 Tur Insurance Law. § 170.

Any corporation heretofore organized under subdivision one
of this section shall have all the powers conferred by such sub-
division as amended hereby.

Source.—Former § 170, as amended by L. 1900, chap. 266; L. 1901, chap. 677;
L. 1904, chap. 543; originally revised from Is. 1885, chap. 538, §§ 1, 3, 4, 10,
28; L. 1886, chap. 611, §§ 1, 2, 3, 5, 14.

Amended by L. 1909, chap. 302; L. 1911, chap. 525; L. 1918, chaps. 81 and
215.

Note.—This section was amended by chapters 81 and 215 of 1913. ‘The
amendment by chapter 81 went into effect March 15, 1913, and consisted of
adding the words “or securities guaranty corporation ” in subdivision 5, in-
creased the capital from $150,000 to $250,000 and in the same subdivision
struck out the words “ or with a larger capital than $10,000,000.” The amend-
ment by chapter 215 of 1913 went into effect April 4, 1913, and amended sub-
division 1 by permitting insurance on notes secured by mortgages, made the
same changes in subdivision 5 as were made by chapter 81 and added the
last paragraph.—Ed.

See § 6, ante. Fees to superintendent for filing declaration.

See § 9, ante. Certificate of authorization of superintendent.

See § 10, ante. Certificate of attorney-general; corporate names.

See § 11, ante. Examination by superintendent as to capital.

See § 13, ante. Deposit of securities with superintendent.

See § 174, post. Certificate of payment of capital stock.

See § 177, post. Conditions requisite to commencing business.

See chap. 733 of 1900. Reincorporation of foreign moneyed corporations.

A corporation may not be organized under the Business Corporations Law
to engage in the business of examining and certifying the titles to real prop-
erty. Attorney-General Rep., 1912, page 345.

TITLES.— A corporation organized for the purpose of examining and
guaranteeing titles to real estate, which, in all matters relating to convey-
ancing and searching titles assumes to discharge the same duties as an
individual conveyancer or attorney, is subject to the same responsibilities,
and its duty to its employer is governed by the principles applicable to
attorney and client. Ehmer v. Title G. & T. Co., 156 N. Y., 10.

A policy of insurance issued by a title guarantee corporation containing
a provision “that defects and incumbrances arising after the date of this
policy, or created or suffered by the insured, and assessments not confirmed
at the date of this policy, are not to be deemed covered by it,” covers a
confirmed assessment existing at the date of the policy, although the con-
firmation took place after the grantee took possession under his deed.
Trenton Co. v. Title Guarantee Co., 50 App. Div., 490.

A company “to guarantee and indemnify banks from loss and damage by
reason of their having given an extended credit to customers in the regular
course of business,” is authorized under this section. Attorney-General Rep.,
1906, page 554,

A title company, organized to do business specified in § 170, subd. 1, cannot
accept deposits of money from individuals and issue in exchange therefor cer-
§ 171. Tirte anp Creprr Guaranty Corporations. 283

tificates of indebtedness, which will provide that the moneys received shall be
merged with the general funds and invested in mortgage “oans, the holders of
the certificate to receive 4 per cent interest and the company to have the
option to give the holder at any time a guaranteed mortgage at 51% per cent
equal tc the amount of such deposit, or a certificate giving the holder an inter-
est in a larger guaranteed mortgage at the same rate, which interest shall be
equal to the amount of such deposit. Attorney-General Rep., Dec. 6, 1910.

CERTIFICATE.— The superintendent of the insurance department may, in
his discretion, issue to, a foreign credit guarantee insurance company a
certificate authorizing it to transact business in this state. Attorney-
General Rep., 1892, page 375. ;

INOORPORATION.— Two-thirds of the persons executing a certificate of
incorporation of a eredit guarantee company must be citizens of the United
States, and a majority of them residents of this state. In re Com. Credit
Guar. Co., Attorney-General Rep., 1893, page 139.

BUSINESS.— A foreign company should not be allowed to do business,
both as provided by art. V and by § 70, subd. 4 of the Insurance Law.
In re Ocean Acc. & Guar. Co., Attorney-General Rep., 1897, page 230.

A proposed mortgage insurance company, licensed by the superintendent
of insurance to open stock subscription books, cannot organize on a smaller
capital than that specified in the license. Reduction of capital stock can be
effected only in the manner specified in §§ 45 and 46 of the Stock Corpora-
tion Law. In re N. Y¥. Mortgage Ins. Co., Attorney-General Rep., 1893,
page 84.

CREDIT COMPANY.— Credit guaranty companies are moneyed corpora-
tions, and cannot be formed under the provisions of the Business Corporation
Law. In re Com. Guar. Co., Attorney-General Rep., 1893, page 308.

TITLE COMPANY.— A foreign title-searching company is a moneyed cor-
poration, and cannot be authorized by the secretary of state to do business in
this state. In re New Jersey Title, etc., Co., Attorney-General Rep., 1893,
page 92.

§ 171. Subscriptions to capital stock.

Such commissioners shall open books for subscription to the
capital stock of the corporation. No subscription shall be received
unless at the time of making it, the person so subscribing shall pay
to the commissioners ten per cent of the par value of the stock
subscribed for in cash.

Whien one-third of the capital stock has been subscribed the
commissioners shall call a meeting of the subscribers to adopt by-
laws for the corporation and elect directors thereof. Notice of
such meeting shall be given to every subscriber by depositing in
the post-office properly addressed to him at his last known place of
residence and postage prepaid, at least five days bofore the time
284 Tur Insurance Law. § 172.

fixed, a written or printed notice stating the time, place and object
of the meeting.

Source.—Former § 171; originally revised from L. 1885, chap. 538, § 5; L.
1886, chap. 611, § 6.

See § 23, General Corporation Law, chap.*563 of 1890. Qualifications of
voters.

See § 53, Stock Corporation Law, chap. 61 of 1909. Subscriptions to capital
stock. 2

See § 660, Penal Law. Frauds in the organization of corporations.
See § 662 et seq. Fraudulent issue of stock.

CAPITAL.— A proposed mortgage insurance company, licensed by the
superintendent of insurance to open stock subscription books, cannot organize
on a smaller. capital than that specified in the license. In re New York
Mortgage Insurance Co., Attorney-General Rep., 1893, page 84.

§ 172. By-laws.

The by-laws of every corporation created under the provisions
of this article shall be deemed and taken to be its law, and shall
provide:

1. The number of its directors.

2. Their terms of oflicc, so arranged that at least one-fourth in
number of all the directors shall be elected annually.

3. The manner of filling vacancies among directors and officers.

4, The time and place of the annual meeting.

5. The manner of calling and holding special meetings of
stockholders.

6. The number of stockholders who shall attend either in person
or by proxy at every meeting to constitute a quorum.

7. The officers of the corporation and manner of their election
by the directors, and their powers and duties. Such officers shall
always include a president, secretary, treasurer, and a general man-
ager. The president must be elected from among the directors.

8. The manner of electing or appointing inspectors of election.

9. The manner of amending or repealing the by-laws.

Source.—Former § 172, as amended by L. 1903, chap. 135; originally revised
from L. 1885, chap. 538, § 6.

Amended by L. 1913, chap, 49.

Note.—The purpose of the amendment of this section by chapter 49 of 1913
was to require title. credit and securities guaranty corporations to elect their
§$ 173,174. Trirtr anp Creprr Guaranty Corporations. 285

directors in such a manner that at least one-fourth of all such directors shall
be elected annually.—Ed.

See § 175, post. Directors, number, quorum, ete.

See § 11, subd. 5, General Corporation Law, chap. 563 of 1890. By-laws to
control action of directors.

§ 173. Certificate of superintendent.

‘Within ten days after such meeting the: commissioners shall
file in the office of the superintendent of insurance a verified rec-
ord of the proceedings thereof, containing a copy of the subscrip-
tion list, a copy of the by-laws adopted, and the names of the
directors chosen. Thereupon the superintendent shall issue to such
directors the certificate required by this chapter, which shall in-
clude a copy of the original certificate provided in section. 170, the
date and place of the subscribers’ meeting the names of the
directors elected and a statement that all the provisions of this
article have been fully observed in the organization of the
corporation.

Upon every amendment of the by-laws of such corporation, a
copy of the amended by-laws, duly certified under the seal of the
corporation, shall be filed in the office of the superintendent of in-
surance and of such county clerk, and shall not take effect until su
filed. Unless such corporation shall be fully organized as provided
in this section within one year after the issuing of the license to
the commissioners to open books, such license shall be deemed to
be revoked and all proceedings thereunder shall be void.

Source.—Former § 173; originally revised from L. 1885, chap. 538, §§ 7, 8.

§ 174. Certificate of payment of capital stock.

The capital stock of every corporation organized under this
article shall be paid in, one-third thereof within one year and the
other two-thirds thereof within two years from its incorporation,
or such corporation shall be dissolved. The directors of every
such corporation, within thirty days after the payment of the last
installment of the capital stock, shall make a certificate stating the
amount of the capital so paid in, which shall be signed and
sworn to by the president and a majority of the directors, and
shall be recorded in the office of the superintendent of insurance
286 Tur Insurance Law. SS 175, 176,

and of the clerk of the county in which the principal office of the
corporation is situated.
Source.—Former § 174; originally revised from L. 1885, chap. 538, § 24.

CAPITAL.— The capital stock of foreign credit guarantee companies must
be paid in in cash, one-third thereof within one year, and the other two-
thirds thereof within two years from their incorporation. Attorney-General
Rep., 1893, page 164.

§ 175. Directors.

Every director of any such corporation shall be a stockholder
to the extent of at least five shares of stock. The corporation shall
have such offices as shall be prescribed in its by-laws. There shall
not be less than five nor more than twenty directors, and the num-
ber originally fixed by the by-laws of the corporation mav be
changed at a special meeting of the owners of a majority of the
whole amount of the capital stock of the corporation, called pur-
suant to notice specifying the purpose of the meeting, which shall
be served in the manner prescribed in section one hundred and
seventy-one. The vote of a majority of the stockholders in person
or by attorney duly authorized for that purpose shall be necessary
to such change. A majority of the whole number of directors shall
be necessary to constitute a quorum. The secretary shall record
all the votes of the corporation and the minutes of its transactions
and of the board of directors, in a book to be kept for that purpose.
The treasurer shall give bonds in such sum and with such sureties
as are required by the by-laws for the faithful discharge of his
duties.

Source.—Former § 175, us amended by L. 1903, chap. 135; originally revised
from L. 1885. chap. 538, § 3; L. 1886, chap. 611, § 9, as amended by L. 1891,
chap. 80.

See § 34, General Corporation Law, chap. 28 of 1909. Quorum of directors
and powers of majority.

See §§ 25-31, Stock Corporation Law, chap. 61 of 1909. Directors and offi-
cers, their election and powers.

§ 176. Investment of capital and funds of a title guaranty
corporation.
The capital and funds accumulated in the course of its business

of every such title guaranty corporation shall be invested in the
same kind of securities as the capital and stock of insurance cor-
§ 176. Tirtz ann Orrprr Guaranty Corporations. 98%

porations are required by this chapter to be invested. Every such
corporation shall set apart a sum not less than two-thirds of the
amount of its capital stock as a guaranty fund, and shall invest the
same in the kinds of securities in which it is permitted to invest its
capital.

No such corporation shall issue any guaranty or policy of insur-
ance upon bonds and mortgages or to owners of real property and
others interested therein against loss by reason of defective titles
and other incumbrances, until such sum has been so set apart and
invested.

Such fund shall be kept and applied for the security and pay-
ment of losses and expenses which may be incurred by reason of
the guaranty or insurance made as aforesaid, and shall not be sub-
ject to other liabilities of the corporation to the extent of and so
long as any such guaranty or insurance is outstanding. If an in-
erease of its capital stock is made by any such corporation, two-
thirds of such increase shall be set apart and added to the guar-
anty fund thereof and kept and invested as above provided. When,
on account of losses or otherwise, the amount of the guaranty fund
of any such corporation shall fall below such sum as was required
to be set apart and invested by this section, no further guaranty
or insurance shall be issued until the deficiency below the amount
so required has been supplied. Every corporation organized un-
der the provisions of subdivision one of section one hundred and
seventy of this chapter shall make and file with the superin-
tendent of insurance on or before the thirty-first day of January
of each year, a report in writing, setting forth the aggregate
‘amount of the bends and mortgages outstanding on the thirty-first
day of the preceding December the payment of the principal and
interest of which has been guaranteed by such corporation.

Source.—Former § 176, as amended by I. 1904, chap. 543; originally revised
from L. 1886, chap. 611, § 11. Pp “

See § 16, ante. Investment of capital and surplus.

CAPITAL. A sum of money used in acquiring a plant, consisting of
abstract of title, documents, copies from records and other property necessary
to the transaction of the business of the title guaranty company is in
accordance with the provisions of the Insurance Law. Matter of Long Island
Title Guaranty Company, Attorney-General Rep., 1897, page 210.
288 Tur Insurance Law. 8§ 177, 178.

§ 177. Conditions requisite to commencing business of a
credit guaranty corporation.

No credit guaranty corporation shall commence business before
twenty-five per centum of its capital shall be paid in, nor until it
shall have deposited with the superintendent of insurance the sum
of one hundred thousand dollars as security for its policy holders.

Source——Former § 177; originally revised from L. 1886, chap. 611, § 11.

See § 13. Deposit of securities with superintendent before commencing
business.

DEPOSIT.— A foreign credit guaranty company, in order to do business
in this state, must keep on deposit with a fiscal officer of the state in which
it is incorporated the same amount of securities as a like domestic corpora-
tion is required to deposit with the superintendent of this state. Attorney-
General Rep., 1893, page 75. ;

§ 178. Powers of credit guaranty corporations.

Any such credit guaranty corporation shall have the right, power
and authority to guaranty from loss, and to agree to pay to mer-
chants, manufacturers, dealers and persons engaged in business and
giving credit, the debts owing to them, and to indemnify
them from loss, and to charge or receive therefor such a sum or
percentum as the consideration for such agreement, guaranty and
indemnity as shall be agreed upon between such corporation and
the persons guaranteed, and to buy, hold, own and take an assign-
ment of any and all claims, accounts and demands so guaranteed,
and to hold, own and collect the same, and to enforce the collection
thereof by action the same as the original holder and owner thereof
might or could do; also to insure the payment gf money for pet-
sonal services under contract of hiring. No corporation transact-
ing credit guaranty business in this state shall advertise any assets
or capitalization which are not held at the sole and exclusive risk
of such business. Any such corporation may use its capital stock
or its funds accumulated in the course of its business to purchase
or pay for any claim or demand, the payment of which it has guar-
anteed or does guarantee; and such of its capital stock or tunds as
may not be so used shall be invested in the securities in which the
capital and funds of insurance corporations are required by the pro-
visions of this chapter to be invested. When an examination is
§ 179. Trrzz ann Orepir Guaranry Corporations. 289

made by the authority of the superintendent of insurance into the
affairs of any credit guaranty corporation doing business in this
state, or when such corporation renders a statement to the insurance
department, there shall not be allowed as assets any investments
which are not held as prescribed by law at the date of such exami-
nation or rendering such statement; but unpaid premiums on poli-
cies written within three months shall be admitted as available re-
sources. In estimating its liabilities, there shall be charged, in
addition to the capital stock and all outstanding claims, a sum
equal to the total unearned premiums on the policies in force, cal-
culated on the gross sum without any deduction on any account,
charged to the policy holders on each respective risk from the date
of the issue of the policy.

Source.—Former § 178, as amended by L. 1897, chap. 387, and L. 1898, chap.
140; originally revised from L. 1886, chap. 611, §§ 4, 7.

See § 70, subd. 4, ante. Corporations may be incorporated under this
section to guarantee fidelity of persons, ete.

CAPITAL.— The Insurance Law does not authorize the issuing of stock
as “paid up” where such stock is exchanged for copyrights, plans, forms,
blanks and statistical tables upon which the company operates and con-
ducts its business. In re National Credit Company, Attorney-General Rep,
1893, page 164.

§ 179. Merger.

Any two or more corporations organized under subdivision one
of section one hundred and seventy of this chapter, or organized
under the laws of this state for the purposes or either of them
mentioned in subdivision one of section one hundred and seventy
of this chapter; or any one or more corporations organized
under subdivision one of section one hundred and seventy of
this chapter, or organized under the laws of this state for the
purposes or either of them mentioned in subdivision one of sec-
tion one hundred and seventy of this chapter, and any one or more
corporations organized under article five of the banking law or
under the laws of this state for the purposes or either of them men-
tioned in article five of the banking law, are hereby authorized to
merge one or more of said corporations into another in the manner
following: The respective boards of directors of such corporations
may enter into and make an agreement under their respective cor-
290 Tuer Insurance Law. § 179,

porate seals for the merger of one or more of said corporations into
another of them, prescribing the terms and conditions thereof and
the mode of carrying the same into effect, and may provide that
such corporations upon and after such merger shall have the name
of any one of the corporations merged or any other lawful name to
be specified in said agreement, and may name the persons, not less
than thirteen nor more than twenty-four, who shall constitute the
board of directors of such corporation after its merger, or may pro-
vide for a meeting of stockholders within sixty days after the
merger to elect a board of directors with such temporary provision
for conducting the affairs of the corporation meanwhile as shall be
agreed upon; and said directors so named or elected, after qualify-
ing, may divide themselves into classes in manner and with effect
as provided in section one hundred and ninety-five of the bank-
ing law, and may adopt new by-laws for said corporation.
The agreement shall be subject to the approval of the superinten-
dent of insurance, and if either of the parties to the agreement is a
corporation organized under article five of the banking’ law, or
under the laws of this state, for the purposes or either of them men-
tioned in article five of the banking law, the agreement shall also
be subject to the approval of the superintendent of banks. Such
agreement shall be submitted to the stockholders of each of such
corporations at a meeting thereof to be called upon notice of at least
two weeks, specifying the time, place and object thereof, addressed
to each stockholder at his last known post-office address and de
posited in the post-office, postage prepaid, and published for at least
two successive weeks in one of the newspapers in each of the coun-
ties of this state in which either of such corporation shall have its
principal place of business, and if such agreement shall be approved
at each of such meetings of the respective stockholders separately,
by the vote or ballot of the stockholders owning at least two-
thirds of the stock, the same shall be the agreement of such corpora-
tions. A sworn copy of the proceedings of such meetings, made by
the secretaries thereof, respectively, shall be presumptive evidence
of the holding and action of such meetings. Such agreement and
certified copy of proceedings of such meetings shall be made in
duplicate and filed in the office of the superintendent of insurance,
§ 179. Tirte ann Crepir Guaranty Corporations, 291

and in the office of the clerk of the county in which the principal
place of business of the corporation into which such corporation or
corporations shall be merged is located ; and if one of the parties to
such agreement be a corporation organized under article five of the
banking law or under the laws of this state for the purposes or
either of them mentioned in article.five of the banking law,
a third copy thereof shall be filed in the office of the superin-
tendent of banks; and the corporation into which the other, or
others, are merged, shall thereafter have the new name, if any,
specified in the aforesaid agreement, and the provisions of such
agreement shall be carried into effect as therein provided; and it
shall be lawful for said corporation into which the others shall have
been merged, to require the return of the original certificate of stock
held by each stockholder in each or either of the corporations, and
in lieu thereof, to issue new certificates for each number of shares
of its own stock as under the agreement of merger the said stock-
holder may be entitled to receive. If any stockholder not voting
in favor of such agreement of merger shall, at such meeting or
within twenty days thereafter, object to such merger and demand
payment for his stock, he may, at any time, within sixty days after
such merger, apply to the supreme court at any special term thereof,
held in the district in which the county is situated, in which such
corporation into which the others may be merged may have
its principal place of business, upon at least eight days’ notice to
said corporation, for the appointment of three persons to appraise
the value of his stock, and the court shall appoint such appraisers °
and designate the time and place of their first meeting, with such
directions in regard to their proceedings as shall be deemed proper.
The court may fill any vacancies in the board of appraisers oceur-
ring by refusal or neglect to hold such office. The appraisers shall
meet at the time and place designated and after being duly sworn,
shall honestly and faithfully discharge their duties and estimate
and certify the value of such stock, and deliver one copy to such
corporation and another to such stockholder, if demanded; the
charges and expenses of the appraisers shall be paid by the corpo-
ration. When the corporation shall have paid the appraised value of
such stock, as directed by the court, said stock shall be cancelled
992 Tue Insurance Law. § 179.

and such stockholder shall cease to be a member of said corporation
or to have any interest in such stock and in the corporate property,
and such stock may be held and disposed of by the corporation for
its own benefit. Upon the merger of any corporation in the man-
ner herein provided, all and singular the rights, franchises and
interests of the said corporation so merged in and to every species
of property, real, personal and mixed, and things in action there-
unto belonging, shall be deemed and transferred to and vested in
such corporation into which it has been merged, without any other
deed or transfer; and the said last named corporation shall hold
and enjoy the same and all rights of property, franchises and in-
terests in the same manner and to the same extent as if the said cor-
poration so merged had retained the title and continued to
transact the business of such corporation; and the corporation
into which merger has been made shall acquire, possess and retain
all rights and privileges belonging to either of said corporations at
the time of such merger and may increase its capital stock on com-
pliance with the provisions of law in that regard to a sum not ex-
ceeding the limit permitted at the time of such merger to either of
the corporations so merged; and the title and real estate acquired
by such corporation so merged shall not be deemed to revert by
means of such merger or anything relating thereto. The rights of
ereditors of any corporation that shall be so merged shall not in any
manner be impaired by any such merger, nor shall any liability or
obligation for the payment of any money due or to become due, or
* any claim, guaranty or demand, in any manner or for any cause
existing against such corporation, or against any stockholder
thereof, be in any manner released or impaired, and all the rights,
obligations and relations of all the parties, creditors, depositors,
trustees and beneficiaries of trusts, shall remain unimpaired by the
merger; but such corporation into which the others shall
be merged shall succeed to such relations, obligations, trusts and
liabilities and be held liable to pay and discharge all such debts
and liabilities and perform all such trusts of the merged corpo
ration in the same manner as if such corporation into which
the other shall become merged had itself incurred the obliga-
tion or liability or assumed the relation or trust, and the stock
§ 180. Trrtz anp Crepir Guaranty Corporations. 293

holders of the respective corporations so entering into such
agreement, shall continue subject to all the liabilities, claims and
demands existing against them as such at or before such merger,
and no suit, action or other proceeding then pending before any
court or tribunal in which any corporation that may be merged is
a party, shall be deemed to have abated or discontinued by reason
of any merger, but the same may be prosecuted to final judgment
in the same manner as if the said corporation had not entered intc
the said agreement, or the said last named corporation may be sub
stituted in the place of any corporation so merged as aforesaid by
order of the court in which such action, suit or proceeding may be
pending.
Source.—Former § 179, as added by L. 1901, chap. 657.

§ 180. Additional powers of certain title guaranty com-
panies.

Each title guaranty corporation organized under the general
statutes of this state, and. having its principal place of business
within a county containing upwards of one hundred thousand and
less than two hundred and fifty thousand inhabitants, as appears
by the last state enumeration of its inhabitants, may, within the
judicial department where it shall have its principal place of:
business, possess and exercise, in addition to the powers conferred
upon it by this chapter, the power to act as agent for any individual
in the care and management of real or personal property; the
power to guarantee the fidelity of persons holding places of public
or private trust; the power to guarantee the performance of con-
tracts other than insurance policies, and the power to execute or
guarantee bonds and undertakings required or permitted in all
actions or proceedings or by law allowed.

Source.— L. 1896, chap. 38, § 1.

A guaranty company not within a county containing upwards of one
hundred thousand and less than two hundred and fifty thousand inhabitants,
has no power to guarantee that a building shall be completed within a cer-
tain time and according ‘to certain plans. Attorney-General Rep., Feb. 28,
1912.
294 Tne Insurance Law. §§ 181, 182.

§ 181. May execute bonds and undertakings.

Whenever a bond, undertaking, recognizance, guaranty or other
obligation is required, permitted, authorized or allowed; or when-
ever the performance of any act, duty or obligation, or the re-
fraining from any act, is required, permitted, authorized or al-
lowed to be secured or guaranteed, such bond, undertaking,
recognizance or other obligation, or such security or guaranty,
may be executed by a corporation authorized by the laws of this
state and by its charter to execute such instrument; and such
corporations are authorized and empowered to execute all such
instruments; and the execution by any such corporation of such
bond, undertaking, recognizance, guaranty or other obligation by
an officer, attorney in fact or other authorized representative
shall be sufficient and be accepted as and be a full compliance
with every law or other requirement now in force or that may
hereafter be enacted or made that such bond, undertaking, recog-
nizance, guaranty or like obligation be required or permitted or be
executed by a surety or sureties, or that such surety or sureties be
residents, householders or freeholders, or possess any other
qualifications.

Source.—L. 1893, chap. 720, § 1, as amended by L. 1895, chap. 178, § 1.
Amended by L. 1913, chap. 182. In effect July 1, 1918.

Note.—The purpose of the amendment of sections 181, 182 and 183 by chap-
ter 182 of 1913 was to correct an obvious defect in the former law, to simplify
procedure and work for economy by providing that the court in passing upon
the sufficiency of a surety bond or undertaking shall accept the certificate of
the superintendent as to the solvency of the surety.—Hd.

§ 182. Issuance of certificate of solvency by superintendent
of insurance.

The superintendent of insurance shall on application issue to
any such corporation his certificate that it is qualified to become
and be accepted, subject to the limitations specified in section
twenty-four of this chapter, as surety or guarantor on all bonds,
undertakings, other obligations or guaranties specified in section
one hundred and eighty-one of this chapter or under any other
§ 183. Tire anp.Crepir Guaranty Corporations. 295
’

law or requirement which certificate or a copy thereof certified to
be such by the superintendent, shall be conclusive evidence of the
solvency of such corporation and of its sufficiency as such surety
or guarantor, and of the propriety of accepting and approving it as
such, and be in lieu of any justification required of such corpora-
tion by any law or requirement. The superintendent may at any
time after the issuance of a certificate of solvency, upon notice to
and hearing of such corporation, revoke such certificate by filing a
revocation thereof in his office and serving a copy on the corpora-
tion to which such certificate was. issued. The superintendent
may publish notice of such revocation in such newspapers as he
deems proper.

Source.—L. 1893, chap. 720, § 2.
Amended by L. 1913, chap. 182. In effect July 1, 1913.

Note.—The purpose of the amendment of sections 181, 182 and 183 by chap-
ter 182 of 1913 was to correct an obvious defect in the former law, to simplify
procedure and work for economy by providing that the court in passing upon
the sufficiency of a surety bond or undertaking shall accept the certificate of
the superintendent as to the solvency of the surety.—Ed.

§ 183. Supreme court may require statement to be filed.

If a certificate of solvency shall not have been issued by the
superintendent of insurance to any such corporation, or if such
certificate shall have been revoked, the supreme court in the ju-
dicial department which includes the county in which the princi-
pal place of business in this state of any such corporation shall
be located, may, at any time, and as frequently as said court shall
deem requisite, require such corporation to file with the clerk
of said county a sworn statement of its condition, and may also
require such corporation, through one or more of its officers, to
submit to an examination as to its solvency. Such statement and
examination, when filed with said clerk, or a certified copy thereof
filed with the clerk of any other county, may be received and
considered as justification upon any and all bonds, undertakings
or other instruments executed or guaranteed by such corporations,
which shall thereafter be presented for approval.
296 Tux Insurance Law. § 183,
Source.—L. 1893, chap. 720, § 4, as amended by L. 1895, chap. 178, § 2. For-
mer § 183, of L. 1893, chap. 720, § 3, repealed by L. 1913, chap. 182.

Amended by L. 1913, chap. 182 and number changed from 184 to 183. In
effect July 1, 1913.

Note.—The purpose of the amendment of sections 181, 182 and 183 by chap-
ter 182 of 1913 was to correct an obvious defect in the former law, to simplify
procedure and work for economy by providing that the courts in passing upon
the sufficiency of a surety bond or undertaking shall accept the certificate of
the superintendent as to the solvency of the surety.—Kd.

RISKS.— A surety company is not exempt from section 24 of the Insurance
Law, limiting the amount of any one risk; the section was not rendered inap-
plicable by chapter 720 of 1893, as amended by chapter 178 of 1895; the value
of collaterals taken by the company are to be deducted from the amount. Ind.
and Gen. Trust Co. v. Tod, 56 App. Div., 39.
§ 185. Murvat Emprtoyers’ Liasiniry Corporations. 297

ARTICLE 5-A.

Murvat Emproyers’ Liasinrry anp WorxMeEn’s CoMPENSATION
CorroRaTIons.

Section 185. Incorporation.
186. Completion of organization.
187. Directors and officers.
188. Meetings.
189. Assessments.
190. Dividends.
191. Reserves; suspension; cancellation and reinstatement of
certificate.
192. Reports to and examinations by superintendent.
193. Prevention of accidents.
194. Authorization of foreign mutual insurance corporations.

§ 185. Incorporation.

Thirteen or more persons may become a corporation for the
purpose of insuring on the mutual plan against loss or damage
resulting from accident to or injury suffered by an employee
or other person and for which the person insured is liable, or
the liability of the employer to pay compensation to his em-
ployees, or the compensation of employees under any workmen’s
compensation law, or against loss or damage caused by a truck,
wagon or other vehicle propelled by steam, gas, gasoline, electric,
mechanical or other power or drawn by horses or mules, used in
trade or manufacture and owned by any such person to the prop-
erty of another for which loss or damage the person insured is
liable, by making and filing in the office of the superin-
tendent of insurance a certificate to be signed by each of them,
stating their intention to form a corporation for the pur-
pose named, and setting forth a copy of the charter which they
propose to adopt, which shall state the name of the proposed
corporation, the place where it is to be located, the mode and
manner in which its corporate powers are to be exercised, the
number of directors, the manner of electing its directors and
officers, the time of such elections, the manner of filling vacancies,
the names and post office addresses of the directors who will serve
until the first annual meeting of such corporation, and such fur-
298 Tur Insurance Law. § 186.

ther particulars as may be necessary to explain and make manifest

the objects and purposes of the corporation. Such certificate shal]

be proved or acknowledged and recorded in a book kept for that

purpose by the superintendent of i insurance and a certified copy

thereof shall be delivered to the persons executing the same.
Added by L. 1913, chap. 832. In effect December 23, 1913.

§ 186. Completion of organization.

Upon receipt of a certified copy of the certificate of incorpora-
tion from the superintendent of insurance, the persons signing
such certificate may open books to receive applications for mem-
bership therein. No such corporation shall transact any business
of insurance unless and until at least forty employers employ-
ing not less than twenty-five hundred employees have become
members of such corporation and applied for and agreed to take
insurance therein, covering the liability of such employers to
their employees for accidents to or injuries suffered by such em-
ployee nor until the facts specified in this section have been
certified under oath by at least three of the persons signing the
original certificate, to the superintendent of insurance, and the
superintendent of insurance has issued a license to such corpo-
ration authorizing such corporation to begin writing the insurance
specified in this article. The superintendent of insurance must
be satisfied that the membership list of the corporation is genuine,
and that every member thereof will take the policics as agreed by
him within thirty days of the granting of the license to the cor-
poration by the superintendent of insurance to issue policies. If
at any time the number of members falls below forty or the
number of employees who are employed by the members of the
corporation falls below twenty-five hundred, no further policies
shall be issued by the corporation until other employers have made
bona fide applications for insurance therein, who, together with
the existing members, amount to not less than forty employers
who employ not less than twenty-five hundred employees, and in
the event that such applications for insurance shall not be ob-
tained within a reasonable time, to be fixed by the superintend-
ent of insurance, such superintendent may take the proceedings
against such corporation under section sixty-three of this chapter
§§ 187, 188. Murua, Empioyers’ Lrasinrry Corporations. 299

to the same effect as if clause h of subdivision one of such section
was specifically applicable to corporations organized under this
article.

The members of the corporation shall be policyholders therein,
and when any member ceases to be a policyholder he shall cease,
at the same time, to be a member of the corporation. A corpora-
tion, partnership, association or joint-stock company may become
a member of such insurance corporation and may authorize an-
other person to represent it in such insurance corporation, and
such representative shall have all the rights of any individual
member. Any person acting as employer in the capacity of a
trustee may Insure in such corporation and as such trustee may
assume the liabilities and be entitled to the rights of a member,
but shall not be personally liable upon such contract of insurance.

Such corporation may borrow money or assume liability in a
sum sufficient to defray the reasonable expenses of its organization.

Added by L. 1913, chap. 832. In effect December 23, 1913.

§ 187. Directors and officers.

Any such corporation shall have not less than thirteen directors,
and such officers as shall be provided in the certificate of incorpo-
ration or by the by-laws made by the members. The directors
shall be elected annually by the votes of the members. All ex-
cept two of the directors of the corporation elected after the or-
ganization of the corporation is completed and it is authorized to
begin to isstte insurance policies shall be members of the corpora-
tion. All the officers except the secretary, assistant secretary and
the actuary must be members of the board of directors.

Added by L. 1913, chap. 832. In effect December 28, 1913.

§ 188. Meetings; basis of right to vote.

At all meetings of the members of the corporation cach member
shall have one vote and one additional vote for every five hundred
employees or major fraction thereof, covered by the policy held
by such member in the corporation, provided that no member
shall have more than twenty votes. The number of votes of a
member shall be determined by the average number of employees
at work and covered by said member’s policy in the corporation
300 Tur Insurance Law. §§ 189, 190.

during the last six months from a date not less than ten days

immediately prior to the date of any such meeting. Before any

member shall be permitted to cast more than one vote at any

meeting of members he shall file with the secretary an affidavit

showing the average number of employees at work during the pre-

ceding six months covered by the employer’s policy of insurance.
Added by L. 1913, chap. 832. In effect December 23, 1918.

§ 189. Assessments.

The corporation may in its by-laws and policies fix the con-
tingent mutual liability of the members for the payment of losses
and expenses not provided for by its cash funds; but such con-
tingent liability of a member shall not be less than an amount
equal to and in addition to the cash premium written in the
policy. If the corporation is not possessed of cash funds above
its unearned premium sufficient for the payment of incurred
losses and expenses, it shall make an assessment for the amount
needed to pay such losses and expenses upon the members liable
to assessment therefor, in proportion to their several liability.
Every member shall be lable to pay and shall pay his propor-
tionate part of any assessment which may be laid by the corpora-
tion in accordance with law and his contract, on account of losses
and expenses incurred while he was a member, if he is notified
of such assessment within one year after the expiration of his
policy. All assessments shall be based upon present values of all
future payments, and all proposed premium assessments shall be
filed in the insurance department and shall not take effect until
approved by the superintendent of insurance, after such investi-
gation as he may deem necessary. All funds of the corporation
and the contingent liability of the members thereof shall be avail-
able for the payment of any claim against the corporation.

Added by L. 1913, chap. 832. In effect December 23, 1913.

§ 190. Dividends.

The board of directors may, from time to time, fix and deter-
mine the amount to be paid as a dividend upon policies expiring
during each year after retaining sufficient sums to pay all the
compensation and other policy obligations which may be payable
§§ 191, 192. Murvat Emptoyers’ Liasrtrry Corporations. 301

on account of the injuries sustained and expenses incurred. Any

such corporation may hold cash assets in excess of its liabilities,

but such excess shall be limited to one hundred per centum of its

reserves for losses and expenses incurred, and may be used from

time to time in payment of losses, dividends and expenses.
Added by L. 1913, chap. 832. In effect December 23, 1913.

§ 191. Reserves; suspension; cancellation and reinstate-
ment of certificate.

Such corporation shall be required to maintain the same re-
serves for the protection of policyholders and employees who may
have a, right of action directly against such corporation as are
required to be maintained by stock insurance corporations in
relation to the same class of insurance, except that reserves for
liability for insurance of compensation under the workmen’s com-
pensation law shall be the same reserves as provided by the work-
men’s compensation commission for the state insurance fund pur-
suant to such chapter, and the superintendent of insurance may
suspend or cancel the certificate issued by him authorizing said
corporation to transact such insurance business at any time when
in the judgment of the superintendent of insurance the reserves
of said corporation are insufficient to insure and secure the pay-
ment of its policy obligations, and the superintendent of insur-
ance may reinstate or renew said certificate whenever by assess-
ment or otherwise said reserves have been increased to a sum suffi-
cient in the judgment of the superintendent of insurance to insure
and secure the payment of the policy obligations of such cor-
poration.

Added by L. 1913, chap. 832. In effect December 23, 1913.

§ 192. Reports to and examinations by superintendent of
insurance.

Every such corporation shall make reports to the superintendent
of insurance at the same times and in the same manner as are
required from stock insurance companies transacting the same
kind of business, and the superintendent of insurance may ex-
amine into the affairs of such corporation at any time, cither
personally or by any duly authorized examiner appointed by him,
302 Tue Insurance Law. §$§ 198, 194.

and the superintendent of insurance must make such an examina-
tion into the affairs of said corporation at least once in every two
years.

Added by L. 1913, chap, 832. In effect December 23, 1913.

§ 193. Prevention of accidents.

The board of directors shall make and enforce reasonable rules
and regulations not in conflict with the laws of the state for the
prevention of accidents to the employees on the premises of mem-
bers, and for this purpose the inspectors of the corporation shall
have free access to all such premises during regular working
hours. The policy of any member neglecting to provide suitable
safety appliances as provided by law or as required by the board
of directors may be canceled and terminated by the board of
directors after giving to such member notice of cancellation ten
days prior to its becoming effective.

Added by L. 1913, chap. 832. In cffect December 28, 1918.

§ 194. Authorization of foreign mutual insurance corpora-
tions.

After January first, nineteen hundred and seventeen, the super-
intendent of insurance may, in his discretion, issue a certificate of
authority to a mutual corporation organized under the laws of
another state to do such insurance in this state; provided that, in
no event, shall authority be given to any such mutual corporation
to do other kinds of business than those specified in this article.
Such corporation shall be required to maintain the same reserves
for the protection of members and employees as are required for
domestic corporations authorized to transact the same kind of
insurance.

Added by L. 1918, chap. 832. In cffect December 23, 1913.
§ 200. Lire or Casuattry Insurancy Corporations. 303

ARTICLE VI.

Lire or Casuarty Insurance Corporations Upon TIF Co-oP-

SECTION 200.
201.
202.
203.

204.
205.
206.
207.

208.
209.

210.

211.
212.
213.
214.

215.

216.
217.
218.
219.
220.

SECTION

ERATIVE OR ASSESSMENT PLAN.

Incorporation.

What corperations to be subject to this article.

Annual report. .

Designation of principal office, and-of persos upin whom pro-
cess may be served.

Foreign corporations.

Reserve or emergency fund.

Reincorporation of existing societies.

Visitation by superintendent; proceedings to restram corpora-
tion from doing business.

Hearing thereon.

Corporations subject to this article; annual meetings; examina-
tions; transfers of risk; reinsurance.

Payment of maximum amoua: of policy; agreements for
benefits; notice of assessment.

Change of beneficiary.

Exemption from execution.

Penalties.

Exemption of certain societies and of subordinate lodges, of Odd
Fellows and Masons, from the provisions of this article.

Corporations may deposit securities with che superintendent of
insurance.

Quorum.

Reincorporation

Admission + minors.

Policy to indicate assessment plan.

Forms of policies or certificates must be filed and approved.

200. Incorporation.

Nine or more persons may become a corporation for the purpose
of transacting the business of life or casualty insurance, or both,
upon the co-operative or assessment plan, fraternal or non-frater-
nal, by filing in the office of the superintendent of insurance a dec-
laration signed by each of them and duly acknowledged, setting

forth their

intention to form a corporation for the transaction of

life or casualty insurance, or both, upon the co-operative or assess-
ment plan, the name of the proposed corporation, the place where
its principal office shall be located within the state, the mode in
which its corporate powers are to be exercised and of electing
directors or other persons, by whatsoever name or title designated,
304 Tre Insurance Law. § 200.

who are to have and exercise the general control and management
of its affairs and of its funds, which election shall be in such manner
as shall be prescribed by its by-laws, or in case of fraternal socie-
ties, by representatives chosen by subordinate lodges, councils or
bodies, who shall be members of suclt societies and a majority of
them citizens of this state. Such declaration shall have endorsed
thereon or annexed thereto and as a part thereof, the sworn state-
ment of three of such persons that at least two hundred persons
eligible under the proposed laws of the corporation to membership
therein have in good faith made applications in writing for
membership.

If all the requirements cf this chapter have been complied with,
the superintendent shall file such declaration and record it with the
certificate of the attorney-general, in a book to be kept for that pur-
pose, and deliver to the corporation a certified copy of the papers so
filed and recorded, with his license in writing to the corporation to
engage in the business proposed in the declaration, which certified
copy and license shall be filed in the office of the clerk of the county
where the office of the corporation is to be located. Such corpora-
tion shall not commence the business of insurance until at least
two hundred persons have subscribed in writing to be insured
therein in the aggregate amount of at least four hundred thousand
dollars, and have each paid in two per centum on the amount of the
insurance severally subscribed for in cash, and the same is deposited
in bank to the credit of the mortuary fund to be held in trust for
the benefit of the beneficiaries, and the superintendent of insurance
shall have further certified that it has complied with the provisions
of this chapter, and is authorized to transact business.

Provided, however, that no such corporation other than a frater-
nal corporation shall be formed nor any such license or certificate
oe granted or issued by the superintendent of insurance after June
first, nineteen hundred and six.

Source.—Former § 200, as amended by L. 1906, chap. 326; originally revised
from L. 1883, chap. 175, §§ 1, 2, and § 3, as amended by L. 1887, chap. 285.

See § 6. Fees to superintendent for filing declaration.

See § 9. Certificate of authorization of superintendent.

See § 10, ante. Certificate of attorney-general; corporate names; number
of directors.
§ 201. Lire or Casvanry Insurance Corvorations. 305

See § 60, General Corporation Law. Proceedings to change name of cor-
poration.

See § 1197, Penal Luw. Failure of officer to designate persons upon whom
process may be made, a misdemeanor.

INFANTS.— A corporation organized under this section has no power to
receive, as members, infants of such tender years that they are unable to
exercise any choice in becoming members, or to exercise the powers with
which members are invested under the act. Matter of G. M. B. Assn., 135
N. Y., 280.

Co-operative insurance companies cannot insure the lives of infants. Attor-
ney-General Rep., 1892, page 366.

Fraternal beneficiary societies cannot be formed for the insurance of per-
sons under full age. Attorney-General Rep., 1893, page 91.

CONTRACT.— The contract between a member of a corporation organized
under this section and the corporation is contained in its constitution and
by-laws, and they should be considered together, the corporation has the
right to change the amount allowed to sick members, even after a member
has become sick. Poultney v. Bachman, 31 Hun, 62.

Companies organized as co-operative insurance companies have no authority
to contract with merchants, newspapers or periodicals for the delivery of
coupons to purchasers entitling the holder, under certain conditions, to an
indemnity insurance. Attorney-General Rep., 1893, page 200.

A quorum of directors must be a majority of all the directors, unless
otherwise provided in charter or special law. By-laws cannot change this
rule. Attorney-General Rep., 1900, page 253.

By-laws are not a part of the policies issued unless expressly referred to
and incorporated therein. Kingsley v. N. E. Mut. Life Ins. Co., 8 Cushing, 393,

SUBSCRIPTION.— A casualty insurance association cannot do business
until at least 200 persons have subscribed in writing to be insured therein
in the aggregate of $400,000, and have each paid in two per centum on the
amount subscribed for, and the same is deposited as provided in § 200 of the
Insurance Law. Attorney-General Rep., 1895, page 76.

MORTUARY FUND.— Casualty insurance companies must have a mortuary
fund. They cannot be organized for the payment of sick benefits only. In re
Stevens, Attorney-General Rep., 1893, page 294.

An insurance company and a savings and loan company cannot issue a
joint certificate to a proposed policyholder. Attorney-General Rep., 1893,
page 259.

Discrimination between members of a co-operative insurance company is
not permissible. Attorney-General Rep., 1892, page 303.

A certificate of authority cannot be granted to a non-fraternal company
after June 1, 1906, although some steps toward incorporation have been per-
formed before that date. Opinion of Attorney-General, August 10, 1907.

§ 201. What corporations to be subject to this article.

Any corporation, association or ,society which issues any
certificate, policy or other evidence of interest to, or
306 Tur Insurance Law. § 201.

makes any promise or agreement with its members,
whereby, upon the decease of a member any money
or other benefit, charity, relief or aid it to be paid,
provided or rendered by such corporation, association or society to
his legal representatives, or to the beneficiary designated by him,
which money, benefit, charity, relief or aid is derived from volun-
tary donations or from admission fees, dues or assessments, or any
of them, collected or to be collected from the members thereof, or
members of a class therein, or interest, or accretions thereon, or ac-
cumulations thereof, or rebates from amounts payable to benefi-
ciaries or heirs; and wherein the money or other benefit, charity,
relief or aid, so realized, is applied to or accumulated for the uses
and purposes herein specified, or of such corporation, association or
society, and the expenses of the management and prosecution of its
business, shall be deemed to be engaged in the business of life in-
surance upon the co-operative or assessment plan, and shall be sub-
ject to the provisions of this article.

Any such corporation, association or society, which issues any
certificate, policy or other evidence of interest to, or makes any
promise or agreement with, its members, whereby, upon the sick-
ness or other physical disability of a member, and not by reason of
having attained a certain age, any money or other benefit, charity,
relief or aid is to be paid, provided or rendered by such corporation,
association or society to such member or beneficiary designated by
him, which money, benefit, charity, relief or aid is derived from
voluntary donations or assessments or admission fees, dues or as-
sessments, or any of them, collected or to be collected from the mem-
bers thereof, or members of a class therein, and interest and accre-
tions thereon; and wherein the money or other benefit, charity, re
lief or aid is applied to or accumulated for the uses and purposes
herein specified or of such corporation, association or society, and
the expenses of the management and prosecution of its business,
shall he deemed to be engaged in the business of casualty insurance
upon the co-operative or assessment plan and shall be subject to the
provisions of this article. Notwithstanding anything to the con-
trary contained in the charter or certificate of incorporation of
any corporation, association or society subject to the provisions
§ 202. Lire on Casvarry Insurance Corporations. 307

of this section, such corporation, association or society may, by
its by-laws, determine and designate the class or classes of persons
who may be named and designated by a member as beneficiary
in any certificate of membership to be issued to him and to whom
the moneys payable under such certificate upon the death of such
member shall be payable. Any corporation, association or society
subject to the provisions of this section, notwithstanding anything
in its charter. or certificate of incorporation to the contrary, may,
by its by-laws in force at the time of the death of a member,
designate and determine the class or classes of persons to whom,
and in what order, shall be paid, any moneys payable under any
certificate of membership issued by said corporation, association
or society, upon the death of a member in good standing, in
default of a designation made by such member and in force at
the time of his death. A member of such corporation, associa-
tion or society may designate or name as his beneficiary or
beneficiaries any one or more of the persons within such desig-
nated class. Nothing herein contained shall be construed to limit
the right of such member to change the designation of any
beneficiary named by him as at present provided by law.

Source.—Former § 201, as amended by L. 1907, chap. 273; originally revised
from L. 1883, chap. 175, §§ 5, 6.

BURIALS.— Corporations issuing contracts to furnish burials for contract
holders upon payment of stipulated sum at execution of contract, and a like
sum upon death of the contract holder, are “transacting the business of
insurance.” In re Barrett Company, Attorney-General Rep., 1903, page 258.

Burial associations come within this section. Opinion of Attorney-General,
March 5, 1908.

By sections 201 and 209 co-operative life and casualty companies are made
aubject to the provisions of Article 6, herein. Opinion of Attorney-General,

August 29, 1907.

§ 202. Annual report.

Every such corporation, association or society doing a life or
casualty insurance business, or both, upon the co-operative or as-
sessment plan, as herein defined, shall, on or before the first day
of March in each year, make and file with the superintendent of
insurance a report of its affairs and its operations during the year
ending on the thirty-first day of December immediately preceding,
308 Tur Insurance Law. § 209.

which report shall be in lieu of all other reports required by this
dbapter. Such reports shall be verified by such of the officers of the
corporation, association or society as the superintendent may
require and shall contain answers to the following questions:

1. Number of certificates or policies issued during the year or
members admitted.

2. Amount of indemnity effected thereby.

3. Number of death losses.

4. Number of death losses paid.

5. The amount received from each assessment in each class for
the year.

6. Total amount paid policy-holders, beneficiaries, legal repre-
sentatives or heirs.

7. Number of death claims for which assessments have been
made.

8. Number of death claims compromised or resisted, and brief
statement of reason.

9. Does society charge annual dues ?

10. How much on each one thousand dollars annually or per
capita, as the case may be?

11. Total amount received and the disposition thereof.

12. Does society use moneys received for payment of death
claims to pay expenses of society, in whole or in part, and if so,
site the amount so used ?

13. State total amount of salaries paid to officers.

14. Does society guarantee fixed amount to be paid, regardless
of amount realized from assessments, dues, admission fees and
donations ?

15. If so, state amount guaranteed and the security of such guar
anty.

16. Has the society a reserve fund ?

17. If so, how is it created, and for what purpose, the amount
thereof and how invested.

18. Has the society more than one class ?

19. If so, how many, and the amount of mndemnity in each.

20. Number of members in each class.
§ 203. Tare on Casuatty Insurance Corporations. 309

21. If organized under the laws of this state, state under what
law and at what time. :

22. If organized under the laws of any other state, state such
fact and the date of organization.

23. Number of policies of membership lapsed during the year.

24. Number in force at beginning and end of year in each class,
if more than one class.

25., Aggregate maximum, minimum and average age of member-
ship in each class in the society.

26. The assets applicable to life or casualty insurance other than
reserve fund, and how invested.

27. Amount received from all sources for life or casualty insur-
ance and the disposition thereof.

No deposit of securities with the superintendent shall be required
from such corporation, association or society. Any corporation,
association or society refusing or neglecting to make such report, or
to make payment of any of the fees required by law, may, upon the
suit of the superintendent, be enjoined by the supreme court from
carrying on any business until such report and payment shall be
made and until the costs of such action be paid.

Source.—Former § 202; originally revised from L. 1883, chap. 175, §§ 7, 8.

TAXATION.— Co-operative, life, and casualty insurance companies organ-
ized under chap. 175 of the Laws of 1885, are not deprived of the exemptions
from taxation, ete., provided for by that act, by reincorporating under chap.
690 of Laws of 1892. Attorney-General Rep., 1892, page 425.

§ 203. Designation of principal office and of person upon
whom process may be served.

Every such corporation doing business within this state, except
such as have already made such designation, and every such cor-
poration hereafter formed under this article, shall, before doing
any business in this state, designate some place within the state
as the principal office in this state of such corporation, and some
person residing in the same city, village or town where such office
is located as a person upon whom service of legal process and
papers may be made as upon such corporation. Such designation
310 Toe Insurance Law. § 204.

shall be made by an instrument under the hand of the president and
secretary or other duly authorized officers of the corporation, and
shall be filed in the office of the superintendent of insurance. If
the person so designated shall die or remove from such place an-
other person shall be appointed in his place within thirty days;
and such attorney or location of principal office may, at the option
of the corporation, be changed at any time. Notice of such change
or of a new designation of a person upon whom service may be
made as herein provided, under the hand of such president and
secretary or other officer, shall be filed with the superintendent
within thirty days after such change or new designation is made.
Upon failure to comply with any of the provisions of this section
within thirty days after written notice by the superintendent of
such default and requiring such compliance, the corporation shall
cease to do business in the state until it has complied therewith.
Source.—I'ormer § 203; originally revised from L. 1883, chap. 175, § 9.
PROCESS.— A certificate filed by an association in attempted compliance

with section 16, General Corporation Law, which does not designate the place
where the service can be made, and is not accompanied by the consent of the
person designated, nor filed in the secretary of state’s office, is fatally
defective. McClure v. Supreme Lodge, 41 App. Div., 131.

§ 204. Foreign corporations.

No such corporation, association or society organized under the
laws of any other state or territory of the United States or District
of Columbia, or foreign countries, except such secret fraternal
societies having subordinate lodges or councils as are now author-
ized to transact business within this state with the consent of the
superintendent, shall transact business herein until its has received
from the superintendent of insurance a certificate of authority to
do business in this state, a duplicate of which shall be filed in his
office. The superintendent shall annually issue to such foreign
corporation, association or society renewal certificates of authority
to continue its business, if its annual report is satisfactory to him,
which certificate shall be filed in the office of the clerk of the county
where its principal office is located within this state, within sixty
days after filing such annual report, and no such foreign corpo-
ration, associations or society, except secret fraternal societies
§ 204. Lire or Casuatty Insurance Corporations, 311

above specified, shall be authorized to continue such business after
the expiration of such sixty days unless such certificate shall have
been so receivea and filed. The superintendent shall refuse a cer-
tificate of authority or a renewal of the same to any such foreign
corporation, association or society, except such secret fraternal so-
cieties, when, in his judgment, such refusal will best promote the
public :nterests, or when by the laws of the state or territory under
which the same is organized, the corporations, associations or
societies of this state doing a life or casualty business upon the
co-operative or assessment plan are not permitted to transact such
business in such other state or territory. Provided, however, that
except in the case of fraternal organizations, no certificate of au-
thority to do business in this state except renewal certificates of
authority to such corporations, associations or societies as were on
April twenty-sixth, nineteen hundred and six, authorized to trans-
act business within the state, shall be issued by the superintendent
of insurance after June first, nineteen hundred and six.

When any other state or territory shall impose any obligation
upon such corporation, association or society of this state, or their
agents transacting business in such other state or territory, the like
obligations are hereby imposed upon similar corporations, associa-
tions or societies of such other state or territory and their agents or
representatives transacting business in this state, and such corpo-
ration, association or society of such other state or territory, and
their agents and representatives shall pay all licenses, fees or pen-
alties to, and make deposits with, the state treasurer imposed by
the laws of such other state or territory upon any such corporation,
association or society of this state doing business therein; sand in
case of failure to pay the same, the superintendent shall refuse the
certificate of authority herein provided for, or cancel such certifi-
cate in case one shall have previously been issued.

Source.—Former § 204, as amended by L. 1906, chap. 326; originally revised
from L. 1883, chap. 175, § 10.

AGENT.— Foreign corporations, upon complying with the laws of this state,
may act as the agent of another corporation under a contract properly
executed. In re U. S. Mut. Ace. Assn., Attorney-General Kep., 1894, page 96.

A company organized as a mutual life insurance company should not be
allowed to do business in this state whose by-laws restrict the exercise of
ite corporate powers to its incorporators and such persons only as they may
312 Tue Insurance Law. § 205.

permit to share therein, to the exclusion of the membership generally. In
such case it seems that the co-operation or mutual principle is eliminated, and
is contrary to the Insurance Law. In re Boston Mutual Life Assn., Attorney-
General Rep., 1897, page 133.

ADDITIONAL ASSESSMENTS.— Policies or certificates of insurance issued
by foreign corporations should contain an’ expressed provision authorizing
additional assessments, and providing for additional payments, in case the
sums provided for in the certificate contract become inadequate, for any
reason, to meet losses by death or otherwise as they may accrue. In re
Springfield Mutual Life Assn., Attorney-General Rep., 1896, page 161.

§ 205. Reserve or emergency fund.

Every such corporation, association or society, except casualty
associations or societies, shall accumulate and maintain at ail
times a reserve or emergency fund of an amount not less than the
proceeds of one deati or disability assessment, or periodical call
on all policy or certificate holders thereof, and at least equal to the
amount of its maximum certificate or policy, and also at least
equal to the cost of insurance for all policies in accordance with
the American experience table of mortality until the next call or
assessment is due and payable over and above all liabilities, includ-
ing existing death claims. Such fund shall be held for the benefit
or protection of its members, their legal representatives or bene-
ficiaries. If such fund is in excess of the reserve or emergency
fund required by this section, the excess, or any portion thereof,
may be used in reduction of assessments or premium calls upon
policy or certificate holders; and if in excess of double such reserve
or emergency fund and not less than the sum of one hundred thou-
sand dollars, the pro rata excess on any policy or certificate ter-
minated by death or surrender may be refunded to the holder or
beneficiary provided that nothing contained in this article shall
be construed to permit any contract promising any fixed cash pay:
ment to any living certificate or policy holder, and provided fur-
ther that any reserve provided for by the articles of association,
constitution or by-laws or by any contract with members shall not
be used in violation thereof and shall be treated as a liability.
Every such casualty association or society shall maintain a
reserve or emergency fund of at least eight thousand dollars, if the
maximum policy issued by such association or society be for five
§ 205. Lire or Oasuatry Insurance Corporations. 3813
thousand dollars or more or a reserve or emergency fund of two
dollars for each five thousanc dollars of insurance in force, if the
maximum policy issued by such association or society be for less
than five thousand dollars, and thereafter five per cent of the
amount realized on each periodical call shall be set apart and added
thereunto, unless the same be already accumulated, until such fund
shall be equal to two dollars on each five thousand dollars of insur-
ance in force. In case such reserve or emergency fund or any
portion thereof shall have been used by any such corporation or
society for the purpose for which the same was created or main-
tained, the amount so used shall be made up and restored to said
fund within six months thereafter. Such fund may be held in
cash, or invested in the same class of securities required for the
investment of funds by domestic life insurance corporations.

No foreign corporation, association or society shall be author-
ized to transact any business authorized by this article within this
state unless it furnishes evidence satisfactory to the superintendent
of insurance that it has accumulated a fund equal in amount to
that required by this section, and that such accumulation is per-
mitted by the laws of the state or country where it is incorporated
and that it is held for the benefit of policy or certificate holders
only and invested as required by such laws. If any such corpora-
tion, association or society is authorized by the law under which it
is incorporated to issue contracts of insurance not authorized by
this article, it may be permitted to transact in this state the kind
of business authorized by this article upon complying in all other
respects with the requirements of this chapter and filing with the
superintendent of insurance an agreement duly executed by its
proper officers that such corporation, association or society will not
enter into or issue within the state of New York any contract of
insurance, policy or agreement not authorized by this article.
Upon a breach of said agreement by any such corporation, associa-
tion or society, the superintendent of insurance shall forthwith
revoke and cancel its authority to transact business in this state.

The annual report to the superintendent of insurance required
in section 202 of this article shall be in lieu of all other reports
required by law.

Source.—Former § 205, as amended by L. 1906, chap. 326; new.
314 Tur Insurance Law. § 205:

ACCUMULATION OF RESERVE FUND.— This section, authorizing the
creation of a reserve fund to be used for the payment of death losses, is not
to be construed so as to permit such associations to accumulate a reserve
fund wholly from the contributions of one class of members and then devote
it to the payment of death losses of another class who in no way contributed
to it. People ex rel. Atty.-Gen. v. L. R. Assn., 150 N. Y., 94.

USE OF RESERVE FUND.— Where the reserve fund was to be invested
and could not be used to pay death or indemnity claims of holders of certifi-
cates, except an increase thereof over $100,000, which might be credited to
the mortuary fund for the payment and adjustment of claims, such fund,
although not distributable while under $100,000 to the beneficiary of an
insured in w department of the insurance business of the company, which,
at the time of his death, was continued in its business, was yet available as
regards the amount payable under a certificate issued to « member in a
department of the business which had subsequently been discontinued, and
from which some members had been transferred to another department,
where such certificate holder, without notice of any change in the business,
had continued thereafter to pay his monthly assessments and the company
to receive them. Bird v. Mutual Union Assu., 30 App. Div., 346. ;

The rights and liabilities of the parties to a death claim upon the funds
of an insolvent mutual aid association in the hands of a receiver are meas-
ured by the contract created by the constitution, by-laws and certificate of
membership, provided the same were authorized by law. People v. Grand
Lodge, 156 N. Y., 533.

USE OF RESERVE FUND.— Where the constitution of the company per-
mitted its board of trustees in their discretion to use securities forming the
reserve fund “to meet any want or necessity of the association which may
hereafter arise by reason of unforeseen emergencies,” it was held that this
only applied while the company was alive and in the hands of its board
of trustees, and so had no effect upon the disposition of its funds after its
dissolution. Matter of E., R. & F. L. Assn., 131 N. Y., 354.

The reserve fund of an assessment life insurance company should be dis-
tributed by the receiver to the policyholders. Farmers’ Loan & Trust Co.
v. Aberle, 19 App. Div., 79.

The reserve fund of a mutual benefit society should not be used by the
directors for the payment of its notes. McClure v. Levy, 147 N. Y., 215.

SPECIFIC PERFORMANCE.— An action for the specific performance of
an insurance contract to divide a reserve fund cannot be maintained by a
policyholder; the action lies against the officers and not the corporation.
Swan v. Mut. Res. Fund Life Assn., 20 App. Div., 255.

EXTRA ASSESSMENTS.— The provisions relating to extra assessments
expressed in the certificate of insurance in terms should be free from ambigu-
ity. Matter of New York Casualty Company, Attorney-General Rep., 1897,
page 118.

Co-operative life and casualty insurance companies cannot issue policies
with cash surrender value. The management of such companies cannot be
confided to a portion of the membership to the exclusion of any other portion
thereof. Conn. Indem. Assn., Attorney-General Rep., 1893, page 114.
§ 206. Lire or Casuaury Insurance Corporations. 315

Waiver of all rights to the provisions of §§ 205-210 is not in accordance
with the provisions of article VI of the Insurance Law. In re Ind. Benefit
Assn., Attorney-General Rep., 1892, page 427.

By the terms of a certificate for $2,000, issued in 1884 by a relief associa-
tion to one H. as a member of Class A, the beneficiary was entitled to have an
assessment imposed upon members of ‘hat class and to receive the proceeds
not to exceed $2,000. Two years thereafter said class wrs consolidated with
two others and under the by-laws, as amenied, the beneficiary became entitled
to have an assessment made upon ali members of the association and to receive
the proceeds not to exceed $2,000. A further amendment to the by-laws in
1892, provided that no rates, terms or conditions should be changed upon
policies in force November, 1892. In 1893 the by-laws, by amendment, pro-
vided that the amount to be paid to beneficiaries under policies in force Sep-
tember 30, 1892, should be ascertained in accordance with the by-laws of 1892.
In an action to recover upon the certificate held, that the beneficiary was only
entitled to receive the amount of an assessment upon all the members of the
association at the death of H. at the rates provided by the by-laws of 1884 and
not the sum of $2,000. Heath v. New York Safety Reserve Fund, 69 Misc., 452.

RESERVE.— The fund referred to and required under § 206 is the reserve
or emergency fund specified in § 205. Attorney-General Rep., 1902, page 201.

§ 206. Reincorporation of existing societies.

Any existing domestic corporation, transacting the business of
life or casualty insurance, or both, upon the co-operative or assess-
ment plan, may reincorporate under the provisions of this article,
under its existing corporate name, by filing with the superin-
tendent the declaration, required by this article, signed and duly
acknowledged by a majority of its board of directors, with a state-
ment in like manner signed and acknowledged by them, that such
corporation has accumulated the fund required by this article of
corporations formed thereunder, and that the same is deposited in
bank or trust company, to be held and maintained for the payment
of losses by death, sickness, physical disability or other purposes
for which such fund must be held, and the certificate of the attor-
ney-general of the state, whereupon the superintendent shall record,
and deliver to such corporation, a certified copy of such declaration
and of such certificate, together with his license to transact busi-
ness, and upon filing the same in the office of the clerk of the
county wherein its principal office is located, the same shall there-
upon be deemed to be incorporated under the provisions of this
article. It shall not be obligatory upon any such existing corpora-
tion, to reincorporate hereunder, and any such domestic corporation
316 Tue Insurance Law. § 207.

may continue to exercise all the rights, powers and privileges not
inconsistent with this article, pursuant to its articles of association
or incorporation, the same as if reincorporated under this article.

Source.—Former § 206; originally revised from L. 1883, chap. 175, § 12, as
amended py L. 1887, chap. 285.

ALTERATION OF CHARTER.— A company formed for the purpose of
transacting the business of assessment life insurance cannot alter its charter
to include casualty insurance if thereby the acquired rights and liabilities
of existing policyholders are altered. In re Chenango Mut. Relief Society,
Attorney-General Rep., 1892, page 293.

When a co-operative insurance association, incorporated under chap. 175 of
1883, reincorporates under section 206, its corporate entity is not changed,
but it merely becomes entitled to the benefits and privileges of the latter act.
Matter of Empire State Supreme Lodge, 118 App. Div., 616.

Under § 209, the policyholders have the sole power to adopt by-laws gov-
erning the number of directors and fixing their term of office; the executive
committee of a co-operative assessment insurance corporation reincorporated
under § 206 of the Insurance Law cannot adopt by-laws fixing the number
and terms of office of directors without due notice to the'policyholders, and
directors elected pursuant to such by-laws are not entitled to office. The
validity of such an election may be tested in a proceeding taken under § 27
of the General Corporation Law. Matter of Empire State Supreme Lodge,
118 App. Div., 616; affi’g 53 Misc., 344.

A corporation formed under chap. 175 of 1883, and desiring to reincorporate.
under the provisions of § 204 of the Insurance Law, must file with the
superintendent the declaration required, namely, that such corporation has
accumulated the fund required by this article of corporations formed under
that article. In re Chenango Mut. Relief, Attorney-General Rep., 1893,
page 93.

The fund referred to and required under § 206 is the reserve or emergency
fund specified in § 205. Attorney-General Rep., 1902, page 201.

§ 207. Visitation by superintendent: proceedings to restrain
corporation from doing business.

All corporations, associations and societies to which this article
is applicable, with their books, papers and vouchers, shall be sub-
ject to visitation and inspection by the superintendent of insurance
or such person as he may designate. The superintendent may
address any inquiries to any such corporation, association or
society in relation to its doings or condition, or any other matter
connected with its transactions relative to the business contem-
plated by this article. All officers of such corporation, association
or society shall promptly reply in writing to all such inquiries, ©
§ 207. Lire or Casvatry Insurance Corporations. 317

under the oath of its president or secretary or other officers, if
required. Whenever it shall appear to the superintendent of in-
surance on investigation or examination that the actual expenses
of management of any corporation, association or society to which
this article is applicable, whether heretofore or hereafter author-
ized or permitted to do business within this state, for the year pre-
ceding the year in which such investigation or examination is
made, were more than thirty-five per centum of the cash income
actually received by it from premiums, assessments and member-
ship fees, the authority or renewal of authority, if it be a foreign
corporation, association or society, shall be revoked and the super-
intendent shall cause notice of such revocation to be published for
four weeks in the state newspaper published in the county of Al-
bany, and no new insurance shall thereafter be written by such
corporation, association or society within this state; and if it be a
domestic corporation, association or society, it shall be the duty of
the superintendent of insurance to cause to be served on the presi-
dent or other officer of such corporation, association or society, a
notice in writing to immediately cease the transaction of new busi-
ness and, in the event of their failure so to do, he shall report the
facts of such investigation and examination and his proceedings
thereunder, which shall be prima facie evidence of the facts therein
stated, to the attorney-general, who if he approves of the same
upon investigation by him after notice to such corporation, associ-
ation or society, is hereby authorized thereon to institute in the
same manner and to prosecute any and all like proceedings as are
now authorized or permitted against an insolvent corporation in-
cluding the appointment of a temporary and permanent receiver
or receivers of such corporation, association or society and the dis-
tribution of the assets of the same, and powers and jurisdiction to
grant like remedies are hereby conferred upon the supreme court
of this state upon his application. When the superintendent, on
investigation, shall be satisfied that any corporation organized un-
der the laws of this state, doing business in this state of the char-
acter defined in this article is insolvent because of matured death
claims or other obligations due and unpaid exceeding its assets
and death or disability assessments or periodical calls made or in
process of collection at the date of such investigation, or has ex-
318 Tue Insurance Law. § 208.

ceeded its powers, failed to comply with any provision of law, or
is conducting business fraudulently, he shall report the facts to the
attorney-general, who, if he shall be of the opinion that the facts
require such action, must thereupon apply to the supreme court,
at a special term thereof, within the judicial district in which the
principal office of such corporation, association or society within
this state is located, for an order requiring the officers of such cor-
poration, association or society to show cause, at a reasonable time
and place within such district, why such corporation, association
or society should not be restrained from continuing to transact
business, with power to the court to adjourn the hearing thereon
from time to time, not exceeding sixty days in all.

Source.—Former § 207, as amended by L. 1905, chap. 569; originally revised
from L. 1883, chap. 175, § 13, as amended by L. 1887, chap. 285, § 14.

See § 1197, Penal Law. Neglect of officers to make a report or to make a
false report, a misdemeanor.

The limitation imposed by this section applies to companies which unite
‘both life and casualty insurance in the same policy. Opinion of Attorney-Gen-
eral, August 29, 1907.

s

§ 208. Hearing thereon.

Such corporation, association or society, in case it is alleged to
be insolvent, to have exceeded its powers, failed to comply with
any other provision of law, or is conducting its business fraudu-
lently, as specified in the last paragraph of the preceding section,
shall be entitled to be heard, and to a trial by jury of the facts
stated in the report, if the same shall be traversed, and to examine
papers and witness under oath in the usual mode of trials of ae-
tions. If the trial is by jury the court shall submit to the
jury specific requests to find covering the matter in issue sepa-
rately, and the jury shall return a special verdict upon each ques-
tion submitted, and if by such verdict it shall be found that the
corporation, association or society is insolvent because of matured
death claims or other obligations due and unpaid exceeding its
assets as hereinbefore provided, or has been conducting business
fraudulently, the court may render judgment that it and each offi-
cer thereof be perpetually enjoined from exercising any corporate
rights, privileges or franchises, and that it be dissolved and that
we

§ 208. Lire or Casuatty Insurance Corporations. 319

a receiver be appointed, an account taken, and an equitable distri-
bution of its property among its creditors and members be made.
If no charge of insolvency is made in such report, or, if made, is
not established by the verdict of the jury, but it shall be found by
such verdict that the corporation, association or society has exceeded
its corporate powers or failed to comply with any provision of
this article or has conducted its business unlawfully, the court may
make and enter judgment enjoining and restraining it from the
commission of such acts or such of them as the court may deter-
mine, and in case of failure to desist therefrom within the time
to be specified in such judgment that the corporation be dissolved.

Pending the trial of the facts stated in such report, the court
may, upon motion of the attorney-general and upon notice to
the corporation, association or society, grant an injunction restrain-
ing it and its directors and other officers from collecting any debt
or demand and from paying out or in any way transferring or de-
livering to any person any money, property or effects during the
pendency of the proceedings except by direction of the court, and

may appoint one or more temporary receivers of its property, with
all the powers of temporary receivers in such cases.

Neither this nor the preceding section shall in any way apply
to or abridge any of the rights or privileges of fraternal beneficiary
societies, orders or associations, as defined and provided for by
article seven of this chapter, or to the casualty department of any
casualty insurance corporation, association or society upon the
co-operative or assessment plan as defined and provided for by
this article, or to any co-operative assessment corporation, associa-
tion or society lawfully transacting industrial or health insurance
exclusively or both exclusively but whose maximum policies there-
for do not in any case exceed the sum of two hundred dollars.

Source.— Former § 208, as amended by L. 1905, chap. 569; L. 1906, chap. 326.

Last paragraph from § 3, L. 1905, chap. 569; originally revised from L. 1883,
chap. 175, § 18, ax amended by L. 1887, chap. 285.

DEATH CLAIMS.— Holders of death claims must have their status
defined as of the date of the commencement of the proceedings. Matter of
E. R. F. L. Assn., 131 N. Y., 354.
320 Tur Insuranor Law. § 209.

§ 209. Corporations subject to this article; annual meet-
ings; examinations; transfers of risk; reinsurance.

Every corporation, company, society, organization or associa-
tion of this or any other state or country transacting the business of
life or casualty insurance upon the co-operative or assessment plan,
as defined in this article, including those heretofore organized with
a capital stock and transacting such business, but not including any
that shall hereafter be organized with a capital stock, shall be sub-
ject to all the provisions of this article, and not to the provisions of
article two, and every such corporation, company, society, organiza-
tion or association of this state, shall hold within the county in:
which its principal office is located in this state, a stated annual
meeting of their members or policy holders or representatives of
local boards of subordinate bodies, in such manner and subject te
such regulations, restrictions and provisions as the constitution and
by-laws of the same may provide. In cases of secret or fraternal
societies having a grand or supreme body, such meeting of the
supreme or grand body may be at such time and place as may be
designated by it. At such meeting a full and specific report of all
receipts and expenditures of the preceding year or since the last
meeting, as the case may be, shall be submitted. Not less than five
days’ notice of each meeting shall be given to each director and to
each member and policy holder, who shall have been such for thirty
days, in such manner as the by-laws may direct, except that in lieu
thereof such notice may be given to the subordinate body of a society
having a grand or supreme body, or to a local board subordinate
to the association. Every such association, corporation or society,
other than secret fraternal societies now authorized to do busi-
ness in this state, must hereafter, before the adoption of any by-law
or amendment thereto, cause the same to be mailed to the members
and directors of such association, society or corporation, together
with a notice of the time and place when the same shall be consid-
ered, which notice shall be the same as hereinbefore required for
stated meetings. All associations, societies, companies, corpora- -
tions or organizations now transacting or hereafter desiring to trans.

act the business of life or casualty insurance in this state upon any °°

other plan than that defined in and by this article, shall comply
if

§ 209. Lire or Oasvatry Insurance Corporations. 3821

with all the provisions of the general life and health insurance laws.
No such corporation organized under the laws of this state shall
transfer its risks to or reinsure them in any other corporation un-
less the contract or transfer or reinsurance is first submitted to and
approved by a two-thirds vote of a meeting of the insured called to
consider the same, of which meeting a written or printed notice
shall be mailed to each member, certificate holder or policy holder
at least thirty days before the day fixed for such meeting. If such
transfer or reinsurance shall be approved, every member, certificate
holder or policy holder of the corporation who shall file with the
secretary thereof within ten days after the meeting a written notice
of his preference to be transferred to some other corporation than
that named in the contract, shall be accorded all the rights and priv-
ileges, if any, in aid of such transfer as would have been accorded
under the terms of such contract had he been transferred to the cor-
poration named therein. No such corporation, association or so-
ciety organized under the laws of this state shall transfer its risks
or assets or any part thereof to, or reinsure its risks or any part
thereof in any insurance corporation or association of any other
state or country which is not at the time of such transfer or rein-
surance authorized to do insurance business in this state under the
laws thereof. No corporation, company or association, possessed
of a capital stock, as specified in this section, shall advertise such
capital stock in or on any printed matter, advertisement, policy or
certificate issued or circulated, or to be issued or circulated in this
state; nor shall any agent or broker or solicitor advertise it as a
stock company, or as possessed of a capital stock, but its total as-
sets may be advertised as assets.

Source—Former § 209, as amended by L. 1894, chap. 271; originally revised
from L. 1883, chap. 175, § 16, as amended by L. 1889, chap. 184.

See § 1196, Penal Law. Officer transferring insurance to company not
authorized to do business in this state, a misdemeanor.

See § 28 et seq., General Corporation Law, chap. 28 of 1909. Election of
directors, annual meetings.

POWERS.— A mutual assessment insurance company should not be
allowed to do business in this state, which by its by-laws absolutely restricts
its corporate powers to its incorporators and such persons only as they may
permit to share in such authority to the exclusion of the rights of the other
members. In re Boston Mutual Life Assn., Attorney-General Rep., 1897,

page 133.
322 Tue Insurance Law. § 210.

The management of such companies cannot be confided to « portion of the
membership to the exclusion of any other portion thereof. Attorney-General

Rep., 1893, page 114.

Under § 209, the policyholders have the sole power to adopt by-laws gov-
erning the number of directors and fixing their term of office; the executive
committee of a co-operative assessment insurance corporation reincorporated
under § 206 of the Insurance Law cannot ‘adopt by-laws fixing the number
and terms of office of directors without due notice to the policyholders, and
directors elected pursuant to such by-laws are not entitled to office. The
validity of such an election may be tested in a proceeding taken under § 27
of the General Corporation Law; where a co-operative insurance company
originally incorporated under chap. 175 of 1883, reincorporated under § 206
of the Insurance Law, its corporate entity is not changed, but it merely
becomes entitled to the benefits of said Insurance Law. Matter of Empire
State Supreme Lodge, 118 App. Div., 616; aff’g 53 Misc., 344.

Every insurance corporation other than secret fraternal societies, must,
before the adoption of by-laws cause the same to be mailed to the members
and directors with a notice of the time and place when the same shall be
considered. Matter of Empire State Supreme Lodge, 118 App. Div., 616.

By sections 201 and 209, co-operative life and casualty companies are made
subject to the provisions of Article 6 herein. Opinion of Attorney-General,
August 29, 1907.

§ 210. Payment of maximum amount of policy; agreements
for benefits; notice of assessment.

Every policy or certificate hereafter issued by any corporation
doing business under this article, and promising a payment to be
made upon a contingency of death, sickness or accident, shall
specify the sum of money which it promises to pay upon each con-
tingency insured against, and the number of days after receipt
of proof of the happening of such contingency on which such pay-
ment shall be made. Upon the occurrence of such contingency,
unless the contract shall have been avoided by fraud, or by breach
of its conditions, the corporation shall be obligated to the beneficiary
for such payment at the time and to the maximum amount specified
in the policy or certificate. If the superintendent of insurance
shall be satisfied upon investigation that any such corporation has
refused or failed to make such payment for thirty days after it be-
came due, and after proper demand, he shall notify the corporation
to issue no new policies or certificates until such indebtedness is
fully paid; and no officer or agent of the corporation shall make,
sign or issue any policy or certificate of insurance while such notice
is in force. ;
§ 210. Lire or Casvatry Insurance Corporations, 323

. No corporation organized or transacting the business of life or
casualty insurance under the provisions of this article shall here-
after make any promise or agreement with its policy or certi-
ficate holders or members for the payment of money upon the ex-
piration of a fixed period unless on acount of death or disability;
and no foreign corporation, association or society authorized to
transact the business of life or casualty insurance under the pro-
visions of this article, which shall hereafter make any such con-
tract, shall receive a license or the renewal of its license to
transact the business of life or casualty insurance under the pro-
visions of this article, provided that nothing in this section con-
tained shall modify or in any way limit subdivision seven of
section one hundred and seven of this chapter.

Each notice of assessment, premium or periodical call made by
any such corporation, association or society, upon its members or
any of them, shall truly state the cause and the purpose of the same,
and if the amount paid on the last death claim paid has not been
paid in full at its maximum face value, the name of the deceased
member, and the maximum face value of the certificate or policy,
and the reason why not paid in full.

An affidavit made by the officer, bookkeeper or clerk of any such
corporation, association or society, having charge of the mailing of
such notice, that such notice was mailed, stating the date of mail-
ing, shall be presumptive evidence thereof.

Source.—Former § 210, as amended by L. 1906, chap. 326; originally revised
from L. 1883, chap. 175, § 17, as amended by L. 1887, chap. 285.

Amended by L. 1911, chap. 536.

Waiver of all rights to the provisions of §§ 205-210 is not in accordance
with the provisions of article VI of the Insurance Law. In re Ind. Benefit
Assn., Attorney-General Rep., 1892, page 427.

MORTALITY ASSESSMENTS.— The provision of chap. 321 of 1877 (now
contained in § 92) providing that before a forfeiture of a life policy can be
declared for non-payment of premiums or interest, notice must be mailed
to the holder, stating that unless the premium or interest due was paid
within thirty days, the policy would be forfeited, does not apply to mortality
assessments. Merriman v. K. M. B. Assn., 1388 N. Y., 116.

Irregularities on the part of the association does not relieve members of the
payment of assessments. Ins. Co. v. Belknap, 12 Cush. (Mass.), 140.

ULTRA VIRES.— An association is not bound to accept a candidate for
‘membership, and if, in so doing, it imposes conditions beyond the constitu-
tional powers given it by its constitution, but not illegal, and these condi-
324 Tue Insurance Law. § 210.

tions are repudiated by the other party to the contract, there is no acceptance
thereof. Palmer v. Commercial Assn., 53 Hun, 601; 25 St. Rep., 243; 6 N. Y.
Supp., 870.

UNAUTHORIZED POLICIES.— Co-operative life and casualty insurance
companies cannot issue policies with cash surrender value. Attorney-General
Rep., 1893, page 114. =

Assessment insurance companies cannot issue policies, the premiums of
which are fixed and definite and payable at certain times. In re Chenango
Mutual Relief, Attorney-General Rep., 1892, page 416.

Insurance policies written by co-operative companies must be for a fixed
sum. Preferred Masonic Mutual Accident Assn., Attorney-General Rep., 1892,
page 400.

Insurance policies written by co-operative companies must be for a fixed
sum, which the companies and their members are bound to pay. In re Mer-
chants’ Life Assn., Attorney-General Rep., 1893, page 118; In re National
Life Assn., id., 104; In re Ind. Ben. Assn., id., 194.

The contract of a foreign co-operative insurance company must provide that
the insured should pay all assessments necessary to enable the company to ful-
fill its obligations. In re Masonic Mutual Accident Assn., Attorney-General
Rep., 1892, page 426.

Policies or certificates of insurance issued by foreign co-operative insurance
companies should contain an expressed provision authorizing additional assess-
ments and providing for additional payments in case the sums provided for in
the certificate contract become inadequate to immediate losses by death or
otherwise as they may accrue. In re Springfield Mut. Life Assn., Attorney-
General Rep., 1896, page 161.

CONSTRUCTION OF POLICY.— Policies of insurance are choses in action,
and are governed by the same principles applicable to other agreements
involving pecuniary obligations. St. John v. Am. Mut. Ins. Co., 13 N. Y., 31;
Olmstead v. Keyes, 85 N. Y., 593. .

The rule that an insurance contract is to be construed most strongly against
the insurer is to be resorted to only where the language or some of the
terms of the contract, after the use of such helps as are proper, remain of
doubtful import. Foot x. Aetna L. Ins. Co., 61 N. Y., 575.

The contract between a member and the corporation is contained in the
constitution and the by-laws, and they should be considered together. Poult-
ney v. Bachman, 31 Hun, 49.

The constitution, by-laws and the context of the certificate of membership
in a mutual benefit association, taken together, form the contract between
it and the members, and by it the rights of the latter must be determined.
Farmers’ Loan & T. Co. v. Aberle, 18 Misc., 257; aff'd 19 App. Div., 79.

The rights and liabilities of the parties to a death claim upon the funds
of an insolvent mutual aid association in the hands of a receiver are measured
by the contract created by the constitution, by-laws and certificate of
membership, provided the same were authorized by law. People v. Grand
Lodge, 156 N. 'Y., 533; aff’g 88 Hun, 621.

Provisions of the constitution and by-laws of a benevolent society, allowing
benefits “in case of sickness,” and providing that “when any member takes
sick,” he shall be entitled to such benefits “if it be so that he is not able to
§ 210. Lire or Casvatty Insurance Corporations, 325

attend to his daily labor,” do not extend to a case of a permanent bodily
injury which does not affect the general health of the person injured. Kelly
y. Ancient Order of Hibernians, 9 Daly, 289.

Where the constitution provided that “a total and permanent disability to
perform or direct any kind of labor or business, or upon reaching the age
of seventy years, shall entitle a member holding a certificate of endowment
so disabled or aged to the payment of one-half of the endowment to which
he would be entitled at death,” a member, who accidentally lost all the
fingers of one hand, could not recover the one-half as it was not a total
disability within the constitution. Hutchinson v. Supreme Tent, 68 Hun, 355;
52 St. Rep., 199; 22 N. Y. Supp., 801.

A provision in a certificate of membership in a mutual life association,
evidently contemplating a mortuary assessment to meet each death loss, will
prevail over a clause of the by-laws of the association tending to limit the
number and amount of the assessments to be levied, inconsistent therewith,
though the application stipulates that the by-laws shall be part of the con
tract; it not appearing that the applicant’s attention had been called to the
elause. Fitzgerald v. Equit. R. F. L. Assn., 3 N. Y. Supp., 214; 18 St. Rep., 914,

STATUTE OF LIMITATIONS.— A stipulation creating a short statute of
limitations in favor of the insured, within which period the insurer must
test, if ever, the validity of the policy, is not void as against public policy.
Wright v. Mut. Ben. Assn., 43 Hun, 61; aff’d 118 N. Y., 237.

BENEFICIARY.— In case the insured failed to designate his beneficiary,
the amount payable by the certificate is payable to the legal representatives
of the member, to be distributed according to the terms of the contract; the
insured has a vested interest in the certificate of which no one can divest
him. Simon v. O’Brien, 87 Hun, 160; 33 N. Y. Supp., 815; 67 St. Rep., 460.

Under a policy on the life of a member, his family was designated as the
beneficiary thereof. The family consisted of the wife and one daughter.
The daughter afterwards married and died. Held, that the wife and daughter
were the beneficiaries, because they constituted the family of the deceased
when the contract was consummated, and when the daughter died the
mother became entitled to the benefit of the appointment and the proceeds
of the policy. Brooklyn Masonic M. R. Assn. v. Hanson, 53 Hun, 149.

The act of incorporation of an association after declaring that one of its
objects was to assist the families of deceased members, authorized it to
accumulate a fund to be paid over to the families, heirs or representatives
of deceased memoers, or to such person or persons as such deceased members
may, while living, have directed, and the by-laws provided that in case of
failure of or imperfect designation, then the amount should be paid to the
fegal heirs of the deceased member, where the beneficiary died before the
member, it was held that the wife of the member was included in the words
“legal heirs.” Walsh v. Walsh, 66 Hun, 297.

The words “legal representatives” ordinarily mean executors or adminis-
trators, and that meaning will be given them in any instance unless there
be facts existing showing that the words were not used in their ordinary
sense. Sulz v. M. R. F. L. Assn., 145 N. Y., 563; rev’g 83 Hun, 139.

Where the charter of the insurer or the statute under which it was’
insured does not forbid the insured to make the policy payable to whomever
326 Tue Insurance Law. § 210.

he may appoint, and there is no evidence tending to impeach the good faith
of the transaction, u policy on the life of the insured made payable in case
of death to another, though not having an insurable interest, must be paid
by the insurer. Freeman v. Nat. Ben. Soc., 5 St. Rep., 82; Fulmer v. Union
Mut. Assn., 12 St. Rep., 347.

In a certificate of membership taken out by a H. M. Case, the beneficiary
was named as “Mrs. H. M. Case or lawful heirs.” Subsequently the wife of
the member dies leaving him. surviving a daughter and the said H. M. Case
was remarried. Held, that the daughter, and not the second wife, was
entitled to the benefits. Day v. Case, 43 Hun, 179.

Where the wife, under an agreement of separation, had acquired the benefit
certificate issued to her husband upon her promise to pay future assessments,
which she paid with the knowledge of the husband, she acquired thereby a
vested interest in the certificate of which her husband could not deprive her,
Conselyea v. Supreme Council, 3 App. Div., 464.

Where the right of a member of a benefit society to designate a beneficiary
is unrestricted at the time when a certificate of insurance was issued to him,
it cannot be affected, so as to defeat a recovery upon the certificate, by
by-laws subsequently enacted by the supreme lodge of the order declaring,
generally, that the beneficiary must be a member or members of his family
or must be one related to him by blood or a person who shall be dependent
upon him. Spencer v. Grand Lodge, 22 Misc., 147.

Where the member designated as beneficiaries “my Jegal heirs,” it was
held that the word “heirs,” as 1t is generally understood, means and includes
only next of kin or relations by blood, and excludes the widow, yet it may
include other than blood relations where the intention that it should is
shown. Kaiser v. Kaiser, 13 Daly, 522; 1 St. Rep., 258.

Where the company agreed to pay upon the death of a member the sum
specified in his certificate to the beneficiary named, and to the surviving
members of the class to which he belonged, “ share and share alike,” a separate
action was maintainable against the company, by one of the surviving mem-
bers of the class, to recover his proportionate share of the sum. Emmeluth
v. H. B Assn., 122 N. Y., 130.

The certificate holder has the right to name a beneficiary and is not
restricted to any particular class or relationship, and where there is nothing
in the by-laws of the insurer, or in the certificate, expressly restricting such
‘ight, the insurer had the power to issue it, and it is valid although the
seneficiary is not related to the member. Eckert v. Mut. Relief Soc, 2
N. Y. Supp., 612; 17 St. Rep., 877. ,

LIABILITY OF COMPANY.— The relations between the company and its
members are those of contractors, the contract being the policy, by which
the liabilities of the company are to be determined. Hencken yv. V. S. Life
Ins. Co., 11 Daly, 289; aff'd 98 N. Y., 627.

Upon the compliance by the applicant with the requirements of the rules
and regulations of the society they are called upon to cause an assessment to
be made and collected, and to pay to the party entitled thereto the money
due; the applicant is under no obligation, in the first place, to compel an
assessment. O’Brien v. Home Ben. Soc., 51 Hun, 495; 21 St. Rep., 640;
4.N. Y. Supp., 278.
§ 210. Lire or Casvanry Insurance Corporations, 327

An action may be maintained on a policy by which the company has under-
taken to pay a fixed sum from the “death fund,” or from moneys realized
to such fund -from mortuary assessments on all the members, though no
such assessment has been made. The omission of the company to make it,
where it is shown that there is a sufficient number of members to yield an
assessment sufficient to pay the claim, creates an obligation, the same as if
the fund were on hand from which to pay the amount of the policy, as, in
the absence of proof to the contrary, it will be presumed that the assess-
ment would have realized the full amount. Fitzgerald v. Equit. R. F. L. Assn.,
5 N. Y. Supp., 837.

The faiiure of an insurance association to assess its members when it is
bound to do so renders it liable; the member’s remedy is not limited to an
action in equity to compel the performance of that duty. Darrow v. Family
Fund Soc., 116 N. Y., 537.

By a certificate issued by the defendant, the conditions attached thereto,
and its by-laws, it agreed, upon the death of the member holding the certifi-
cate to make an assessment upon its members and pay over the proceeds,
not exceeding $2,000. In an action upon the certificate, held, that upon
refusal to make an assessment, an action at law was maintainable for
breach of the contract; that, while it seems an equity action is maintainable
to compel defendant to make and collect an assessment and pay over the
amount stipulated, plaintiff was not limited to that remedy. O’Brien v.
Home Benetit Soc., 117 N. Y., 310.

A mutual assessment company, which contracts to pay death claims from
assessments among its members, and to make such assessments upon the
occurrence of a death, cannot lie by and omit to put in operation the means
possessed by it to obtain the fund, and omit payment because of its own
neglect of duty; this would be to take advantage of its own wrong, and it
would operate as a fraud on the beneficiary under the certificate. Fitzgerald
v. Equitable Res. Fund Assoc. 15 Daly, 229; 24 St. Rep, 493; 5 N. Y.
Supp., 873.

Where the association has in its hands moneys of a member illegally
exacted, the defense of forfeiture for non-payment was not available to such
association. Knight v. Supreme Council, 24 St. Rep., 845.

BY-LAWS.— Where a mutual benefit insurance company makes « by-law
changing the contingency on which a specified payment is to be made so
that it affects a vested right of the members, such by-law is unreasonable,
and the company has no power to make it. Weiler v. Equitable Aid Union,
92 Hun, 277; 36 N. Y. Supp., 734; 71 St. Rep., 842.

LIABILITY OF MEMBER.— The liability of a member of an assessment
insurance company to pay a call issued by the receiver of such a company
must be determined by the contract between the member and the company.
Attorney-General Rep., 1897, page 93.

Members are liable to but one assessment to pay each death claim; it is
immaterial as to whether enough was realized on the assessment made to
pay the claim. People ex rel. Myers v. M. G. & B. Assn., 126 N. Y., 615.
328 Tue Insurance Law. § 210.

The neglect of a member to pay an assessment for thirty days after
notice thereof determines the membership of the delinquent; the member is
liable for the amount of all assessments previously made, and also for all
losses happening prior to the time when he ceased to be a member, though
no assessment therefor had been made. McDonald v. Ross-Lewin, 29 Hun, 87.

Where the by-laws of an assessment accident insurance association pro-
vide: “Members of this association may at any time resign, thereby relin-
quishing their claims upon, or privileges under, said association; provided,
however, that all dues and assessments shall have been paid to the date
of the resignation.” A member of the association who terminates his mem-
bership, whether by resignation or otherwise, and who pays all premiums
and assessments levied upon him up to that time, is not liable for the
amount of an assessment subsequently levied by a receiver of the associa-
tion, pursuant to an order of the court, to pay claims against the association
which accrued during his membership. Gray v. Daly, 40 App. Div., 41.

SUICIDE OF MEMBER.— The suicide of a member of a mutual benefit
association does not come within the meaning of the provision contained in
a certificate that it should be void if the assured should die “in the violation
of, or attempt to violate, any criminal law.” Darrow v. Family Fund Soe,
116 N. Y., 537; Freeman v. Nat. Benefit Soc., 42 Hun, 252.

FRAUDULENT REPRESENTATION.— In an action brought to recover an
amount alleged to be due under a mutual benefit assurance certificate, the
insurance company may show that the member made false representations
upon procuring the certificate, which representations were a part of the
contract. Mayer v. Equit. L. Assn., 42 Hun, 237.

In an application for membership the applicant stated his age to be sixty
years, and that any untrue statement therein would forfeit the applicant’s
right to any benefits. In an action upon the certificate, it appeared that it
was the custom of the order not to accept as member one over sixty, and
that the applicant was at least sixty-one. Held, that the false statement was
material, and that the action was not maintainable. Preuster v. Supreme
Council, 185 N. Y., 417.

EVIDENCE.— Where the question of membership is in issue any evidence
tending to show that deceased was not a member is admissible. Cramer v.
Masonic Life Assn., 30 St. Rep., 609; 9 N. Y. Supp., 356.

BURDEN OF PROOF.— The issue to a person by an assessment life insur.
ance association of a certificate of membership therein establishes prima facie
the fact of membership, and throws upon the ‘association the burden of
proving that the person by some act had lost such standing; such a certificate
is assignable after a refusal by the association to pay the loss. Meagher v.
The Life Union, 65 Hun, 354.

Where the policy bound the company to maintain a death fund, which, it
depleted, must be supplied by assessments, to be levied by the company, the
member was not bound, as a condition of recovery, to show that defendant
had in the death fund money sufficient to pay his claim, nor that an assess-
ment, if levied, would have produced the required amount. Cushman v.
Family Fund Soc., 36 St. Rep., 856; 13 N. Y. Supp., 428.
§ 210. Lire or Casuatty Insurance Corporations, 329

Where an action was brought on a certificate issued by the defendant by
which it agreed to pay to the beneficiary “all the amount realized from one
assessment, not exceeding $2,000,” the burden of proving that the amount
which would be raised by one assessment exceeded $2,000 rested on the
plaintiff, and that, in the absence of evidence to that effect, there was no
presumption that it would equal that amount. O’Brien v. Home Ben. Soc.,
46 Hun, 426.

NOTICE NO'l G{VEN.— The suspension of a member of a benevolent society
under a provision of its constitution providing for the suspension of a
member failing to pay an assessment levied by the society within forty
days after the date of the notice of the assessment, is illegal, where the
notice has not been served upon the member. People ex rel. Crowley v.
Supreme Council, 23 Abb. N. C., 323. ‘

Where the constitution of a mutual benefit association provides that when
an assessment is made the secretary shall at once notify the members, and
each member shall pay the same within thirty days from the date of the
_ notice, under penalty of forfeiture, the omission to pay an assessment levied
thirty-four days before the member’s death is no cause for forfeiture when
the notice was not given until thirteen days after levy of the assessment.
Knight v. Supreme Council, 6 N. Y. Supp., 427.

Under a by-law providing for the dropping of a member in case of a
neglect to pay dues for a certain time after receiving notice of his indebted-
ness, the society has no right to drop a member, unless he has received such
notice; mere proof that such notice was mailed to him properly addressed
is not sufficient to authorize such action, especially where it is shown that he
was absent from home at the time. People ex rel. MeQuien v. Theatrical
Assn., 29 St. Rep., 405; 8 N. Y. Supp., 675.

A failure to conform to the statutory provision with regard to notice will
prevent an association from declaring a forfeiture of a policy for non-payment
of assessments. Warner v. Association, 100 Mich., 157.

INSUFFICIENT NOTICE.— Where one of the rules of a company provides
that “a notice shall be sent announcing each assessment and the number
thereof to the last post-office address given to the association by each mem-
ber,” a forfeiture cannot be based upon a notice which omits the number
of the assessment. Greenwald v. United Life Ins. Co., 18 Misc., 91.

WAIVER OF PROOFS.— Refusal of an insurance society to furnish blanks
for proof of death, upon application therefor by the beneficiary, upon the
ground that the deceased had forfeited his membership by failure to pay
an assessment, is a waiver of proof and notice of death. Payn v. Mut. Relief
Soc., 17 Abb. N. C.. 53.

Where a corporation, after verbal notice of an injury to the insured, sent
one of its medical directors to examine the condition of the wound, it must
be deemed to have waived a condition of the certificate requiring written
notice to it of such injury. Martin v. Equit. Acc. Assn., 61 Hun, 167; 41
St. Rep., 77; 16 N. Y. Supp., 279.

WAIVER OF FORFEITURE.— In the absence of any agreement, a waiver of
forfeiture of a policy of life insurance results only from negotiations or
transactions with the insured, by which the insurer after knowledge of the
330 Tue Insurance Law. § 210.

forfeiture recognizes the continued existence of the policy, or does some
acts based thereon, or requires the insured by virtue thereof to do some
act or incur some expense or trouble. Ronald v. M. R. F. L. Assn., 132
N. Y., 378.

A forfeiture cannot be based upon an assessment or mortuary premium
call, of which notice is sent before, but‘ which is not payable until after
the death of the insured; a forfeiture for non-payment is waived by the
making of subsequent mortuary calls upon the person so in default. Elmer
v. Mut. Ben. Assn., 47 N. Y. St. Rep., 35; 19 N. Y. Supp., 289.

The secretary of a benevolent society, although not authorized by its con-
stitution or by-laws to accept payment of dues from members, habitually
received such dues, which he paid over to the society. Held, that the society
was thereby estopped to deny his authority to accept dues tendered by 4
member, but refused by him on the ground of want of authority; and that
such tender was legally equivalent to payment, so as to render the society
liable for the benefit payable on the death of such member, as a member
“clear on the books” under its by-laws, he having died before any subse- |
quent meeting of the society or its directors at which the dues might prop-
erly have been paid. Roeding v. Sons of Moses, 16 Daly, 417; 7 St. Rep., 13;
11 N. Y. Supp., 750.

Any agreement, declaration or course of action on the part of the insur-
ance company which leads the party insured honestly to believe that by
conforming to it a forfeiture of his policy will not be incurred, followed by
due conformity upon his part, will estop the insurance company from insist-
ing upon the forfeiture, although such forfeiture might be claimed under
the express letter of the contract. Van Bokkelen v. Mass. Ben. Assn., 90
Hun, 330.

Where an assessment company received assessments from a member after
the same were due, and by a course of such dealing established in the mind
of the member a belief that it would continue to receive his assessments
in this manner, his claim will not be cut off absolutely by the fact that he
is in arrears, under a strict construction of the by-laws, at the time of his
death. King v. Masonic L. Assn., 87 Hun, 591; 34 N. Y. Supp., 563;
68 St. Rep., 520.

A certificate of benefit insurance, which has lapsed by default in payment
of dues, is not reinstated by the payment of the dues to a receipting clerk
who has no power to make a fresh contract, and who delivers a receipt
expressed to be on condition that the insured is in good health, as originally,
ete., this not being the fact, even though the person making the payment
does not read the receipt; the fact that the association asked for proofs
of death, and gave instruction in connection therewith, is not a waiver of
the forfeiture. Ronald v. Mut Res. F. Assn., 23 Abb. N. C., 271.

Upon the trial of an action, brought to recover the amount of two life
insurance policies issued by a mutual benefit association, it was shown that
the insurer did not intend to terminate the policies by reason of the failure
of the insured to pay a certain assessment levied thereon, provided such
assessment was subsequently paid, and the insurer, by a notice to the
insured, stated that the policies might be renewed “by immediate payment,
§ 210. Lire or Casvatry Insurance Corporations. 331

if the risk is approved by the association upon receipt of said payment at the
home office.” " Immediate payment was made at the home office, the risk was
approved by the insurer and the policies were renewed by it. Held, that the
insurer expressly waived its right to insist that the policies were forfeited
and was estopped from asserting that they were not in full force at the time
of the death of the insured. Sieburg v. Mass. Ben. Assn., 87 Hun, 199.

If a promise is made by the wife of the financial secretary, who is acting
for him, to extend the time for payment of an assessment, the certificate will
not lapse if the financial secretary was authorized to extend the time of
payment. Teckmeyer v. Supreme Council, 4 App. Div., 537.

The provisions of a policy requiring a prompt payment of the stipulated
periodical payments is a condition precedent, but such prompt payment may
be waived by the insurer, and in such case the contract remains in full force.
Baker v. N. Y. Mut. Ben. Asso., 27 Wk. Dig., 91; aff’d 112 N. Y., 672.

Evidence that during a period of a year from the time of the organization
of a subordinate lodge of an assessment insurance association twenty-three
assessments had been levied on the lodge, which, with three or four excep-
tions, had been paid after they became overdue, without complaint on the
part of the supreme lodge, is sufficient to justify a jury in finding that the
officers of the supreme lodge waived prompt payment, and that they were
estopped from summarily suspending the subordinate lodge, in pursuance of
a by-law of the association, for failing to pay the twenty-fourth assessment
until seven days after it became due. McClure v. Supreme Lodge, 41 App.
Div., 131.

While the unconditional receipt by a mutual benefit association of an
assessment from ore of its members after the time had expired for its
payment, may constitute a waiver of the default of such member and operate
to reinstate him in its membership, the receipt thereof by an officer of such
association with qualified power will not, in the face of a provision in its
constitution that he should not receive such assessment, except where it is
tendered in an open meeting of the association, have that effect, unless
the payment to him is in some manner ratified by the association. McGowan
v. Cath. Mut. Ben. Assn., 76 Hun, 534.

FORFEITURE NOT WAIVED.—If the certificate of membership has
lapsed through the member’s default, it is not revived by the conditional
acceptance of dues, unless the condition be performed. May v. N. Y. Safety
Fund Soe., 13 N. Y. St. Rep., 66.

After the death of a person to whom a policy of life insurance had been
issued, proofs of death were furnished to the insurance company, and the
latter advised the administrator that upon the facts as they then appeared
the proofs were approved and the claim would be paid on a specified day, a
mortuary call was made by the insurer, assessing its members for approved
claims, among which was the claim upon the policy of decedent, and the
money was collected, but the corporation did not pay the amount of the
policy in accordance with its notice, and notified the administrator of revu-
eation of approval of the claim. Held, that a defense to the action brought on
the policy, based upon facts unknown to the insurer at the time of such
notice and assessment, had-not been waived by it. Stuart v. Mut. Res. Fund
Assn., 78 Hun, 191.
382 Tue Insurance Law. § 210,

The certificate of a benefit society provided that a failure to pay dues over
four weeks would avoid the policy, and also that collectors were not authorized
to waive forfeiture on receive payment beyond such time. At the time of
the death of the insured the dues on the certificate were four weeks in
arrears, and thereafter plaintiff paid them to a collector, but the company
refused to receive them. Held, that the failure within the time limited
caused a lapse or forfeiture of the certificate, and that the payment to the
collector did not revive it. Jackson v. Royal Benefit Soc., 15 Mise., 481;
37 N. Y. Supp., 28; 72 N. Y. St. Rep., 179.

Relator, who was a member of the defendant association, failed to pay
his annual dues at the time fixed therefor, although he had been given
two months’ notice thereof. Subsequently, in response to an inquiry as to
whether the moneys had been sent and notice that if not a reinstatement
would be necessary, he sent a check for the amount, which was deposited
in the suspense account. About the same time he received a mortuary call,
which stated that neither such notice or the acceptance of the money would
be held to waive any forfeiture by reason of non-payment of any previous
sum when due. The amount of this call was sent and placed in the suspense
account. Relator subsequently refused to sign an application for reinstate-
ment, and the association tendered back the moneys so received by it. Held,
that there was no waiver of the forfeiture on the part of the association.
People v. Mut, Res. Assn., 15 Misc., 333; 37 N. Y. Supp., 617.

REINSTATEMENT.— A certificate contained a clause which required the
members to pay an assessment withiin thirty days after notice, and pro-
viding that if not paid within such time the policy would lapse, but that be
may be reinstated for valid reasons. The member was stricken with
apoplexy shortly after the termiination of a thirty-day notice, from which
atroke he subsequently died. Held, that the question whether it was a
valid reason should have been submitted to the jury. Dennis v. Mass. Ben.
Assn., 47 Hun, 338.

An insane person cannot be deemed to be in good health within the mean-
ing of an insurance policy, where a member after paying the assessments
levied upon him for a period of twenty-two years becomes insane, and while
in that condition, which continues until his death, omits to pay an assess-
ment, notice of which is served upon him by mail, and the beneficiary of the
certificate, some six months thereafter, immediately upon learning of the
default in the payment of the assessment, notifies the association of the
member’s condition and offers to pay the assessment, the beneficiary is entitled
to recover upon the certificate, although the company has declined to rein-
state the insured, stating as the ground therefor that he was over fifty-five
years of age. McNeil v. Southern T. M. R. Assn., 40 App. Div., 581.

EXCUSE FOR NON-PERFORMANCE.— The non-payment of the premium
secured to be paid by a life policy on the day on which it falls due will avoid
the policy if by the terms of the policy it is so agreed; neither sudden illness
nor msanity will excuse the performance of the exact requirements of the
contract. Ingram v. Supreme Council, 14 N. Y. St. Rep., 600.

FORFEITURE. — The forfeiture of a policy of insurance by a mutual
insurance company does not discharge the party whose property was thereby
§ 211. Le or Casvarty Insurance Corporations. 3833

insured from his liability to pay the assessments already made upon his pre-
mium note, executed to the company in consideration of such policy. The
Iowa State Ins. Co. v. Prossee, 11 Iowa, 115,

The member is not necessarily released from liability to assessment by for-
feiture of rights under the policy. Korn v. Ins. Co., 6 Crauch, 192; Ins. Co. v.
Underwood, 3 Gray (Mass.), 210.

§ 211. Change of beneficiary.

Membership in any such corporation, association or society shall
give to any member thereof the right, at any time, with the consent
of such corporation, association, or society, to make a change in his
payee or payees or beneficiary or beneficiaries without requiring
the consent of such payee or beneficiaries.

Source—Former § 211; originally revised from L. 1883, chap. 175, § 18.

RIGHT TO CHANGE BENEFICLARY.— A member of a mutual benefit
insurance association has the right at any time to change the beneficiary
named in his certificate, by complying with the rules and by-laws of the
association. Fleeman v. Fleeman, 39 N. Y. St. Rep., 307; 15 N. Y. Supp., 838.

A recital in an indorsement made by the secretary on a certificate that,
at the written request of the holder of the certificate, the beneficiary was
changed from his brother to his wife, is sufficient evidence of a compliance
with the by-laws of the association which provide that a change of bene-
ficiary may be made on the written order of the. holder of the certificate,
signed in the presence of two witnesses. Gladding v. Gladding, 29 N. Y. St.
Rep., 485; 8 N. Y. Supp., 880.

The consent of the company to a change of beneficiaries is indispensably
necessary. Newman v. John Hancock M. L. Ins. Co., 45 Misc., 320.

A certificate issued to a member, then unmarried, was made payable to
his daughter. The member was subsequently married and inserted in the
certificate the name of his wife after the name of his daughter. The inser-
tion was made without the knowledge of the company. It was held that
there was no valid change in the beneficiary named in the application and
that the daughter was entitled to the entire fund. Thomas v. Thomas, 131
N. Y., 205.

When the certificate of membership and the rules and regulations of 4
membership life insurance association provide that a member may change
his beneficiary “as often as desired, consent of the existing beneficiaries not
being required,” etc., a beneficiary first named, and who refuses:to surrender
the policy intrusted to her, acquires no vested rights which prevent a change
of beneficiary by the member on his complying with the provisions of the
association in that respect. Martha Stronge v. The Supreme Lodge, Knights
of Pythias, 111 App. Div., 87.

When one insured in a membership corporation having under the by-laws
a right to change his beneficiary by designating the change desired, which
shall be “duly recorded and endorsed” on his certificate, has duly requested,
after the death of his wife, the first beneficiary, that the beneficiary should
be “as provided in my will,” which change was endorsed on the certificate
334 Tue Insurance Law. § 211.

by the company and recorded in its books, the trustee of the residuary
estate of the insured is entitled to recover the amount due. The Brooklyn
Trust Co. v. Seventh Regiment Veteran and Active League, 113 App. Div., 717.

The beneficiary under a policy issued by a casualty company, doing business
under article 2 of the Insurance Law, and which contains no provision permit-
ting the insured to change the beneticiary named, has a vested interest in the
policy and not a mere expectancy or inchoate right. Dunn v. Amsterdam
Casualty Co., 67 Misc., 109.

INTEREST OF BENEFICIARY.— The beneficiary named in a certificate
has an assignable interest therein, though the insured has power to change
the beneficiary; in an action against a life association to recover the amount
of a policy assigned by a beneficiary to plaintiff the assignor is not a
necessary party merely because. the assignment was made to secure a loan
from the assignee to the insured of uw less sum than the amount of the
policy. Lawler v. Nat. L. “Assn., 83 Hun, 393; 31 N. Y. Supp., 875; 64 N. Y,
St. Rep., 785.

Where the designation of the beneficiary is voluntary in the nature of a
gift, the courts will require strict compliance with the rules as to change of
beneficiary; not so, however, where there is a consideration for the transfer
and a vested interest in the fund. Tidd v. McIntyre, 116 App. Div., 602.

A person designated as beneficiary of a policy issued by a benefit society,
who voluntarily and gratuitously pays the assessments thereon, and not
under any contract with the insured, acquires no vested interest therein
as against a person afterwards named beneficiary by the insured. Nix v.
Donovan, 46 N. Y. St. Rep., 21; 18 N. Y. Supp., 435.

Plaintiff was designated by her son as beneficiary of a certificate issued
by the defendant, a mutual benefit association, to such son. Thereafter,
without plaintiffs knowledge, her son surrendered the certificate to defendant,

and received in place of it another certificate designating his wife as the - -

beneficiary. Held, that defendant was not bound to pay to plaintiff the
sum mentioned in the certificate, and that the certificate was not operative
as a contract and that the power to designate was not lost by one designa-
tion. Deady v. Bank Clerks’ Assn., 17 J. & S., 246.

A beneficiary who has neglected to obtain the consent of the insurance
company to his substitution as the beneficiary under a policy, cannot main-
tain an action against the insurance company to recover the amount thereof.
Newman v. John Hancock Mut. L. Ins. Co., 45 Mise., 320.

A-by-law of a mutual benefit insurance society, providing that the bene-
ficiary named in a certificate of membership shall only be changed upon the
return of the original certificate, is intended only for the convenience of
the society and may be waived by it; the original beneficiary is entitled
tc repayment out of the fund realized on the certificate at the death of the
insured of assessments paid by her in ignorance of the fact that a new
beneficiary had been designated. Southern T. M. R. Assn. v. Laudenbach, 5
N. Y. Supp., 901.

Where a wife who was named as beneficiary died before the insured, and
he subsequently married again, on his death the widow is entitled to the
funds where there was no subsequent designation. Matter of Rock, 49
Mise., 286.
§ 212. (Lire or Casuatty Insurance Corporations. 335

CAPACI1'Y.— In an action to set aside an instrument revoking the appoint-
ment of plaintiff as beneficiary under a life insurance policy and appointing
detendant instead, on the ground of deceased’s mental incapacity to make the
same, where the attending physician testified against her capacity, and two old
acquaintances testified that deceased was unable at the time to recognize
them, the question of capacity was for the jury, and it was error to direct
a verdict for defendant. Henken v. Monaghan, 49 N. Y. St. Rep., 358; 21 N. Y.
pupp., 235.

SURRENDER OF CERTIFICATE.— Where the first certificate has not beer
received until after the member’s death the society has no right to issue
a new certificate, as the attempted surrender was incomplete and no rights
were conferred thereby. Luhrs v. Luhrs, 6 N. Y. Supp., 51.

The “immediate family” of a member is to be determined at his death,
and not at the beginning of his membership. Davin v. Davin, 114 App.
Div., 396.

Where a widow is entitled to the death benefit, provided she did not for
any reason live separated from the deceased member, and provided she took
care of him during his last illness, the widow’s action to recover should be
dismissed where evidence shows that she had been separated from her
husband for years, and was at the time of his death. Zajie v. Elian, 50
Misc., 289. :

§ 212. Exemption from execution.

The money or other benefit, charity, relief or aid, paid or to be
paid, provided or rendered by any such corporation, association or
society shall not be liable to be seized, taken or appropriated by
any legal or equitable process, to pay any debt or liability of a mem-
ber, or any debt or liability of the widow of a deceased member of
such corporation designated as the beneficiary thereof, which was
incurred before such money was paid to her or such benefit, charity,
relief or aid was provided or rendered.

Source.—Former § 212, as amended by L. 1897, chap. 345; originally revised
from L. 1883, chap. 175, § 19; L. 1884, chap. 16.

LEGISLATIVE INTENT.—The legislative intent in the enactment of
§§ 212 and 238 of the Insurance Law, to place co-operative and assessment
insurance in a class by itself, was to relieve such insurance from the opera-
tion of § 52 of the Domestic Relations Law, making insurance money realized
by a wife on the life of her husband subject to his debts, where the annual
premium paid out of his property exceeds $500. Dominick v. Stern, 79
Mise., 271.

EXECUTION.— The provisions of § 212 of the Insurance Law apply to
all corporations, whether incorporated under article VI of the Insurance
Law or not, and moneys cannot be reached by a judgment-debtor of a
widow receiving such moneys as beneficiary. People’s Bank of Buffalo v.
Cushman, 109 App. Div., 349.
336 Tue Insurance Law. §§ 218, 214.

TAXATION.— Co-operative life and casualty insurance companies organ-
ized under chap. 175 of the laws of 1885 are not deprived of the exemptions
from taxation, ete., provided for by that act, by reincorporating under ‘chap.
690 of the Laws of 1892. Attorney-General Rep., 1892, page 425.

§ 218. Penalties. 7

Any officer or agent of any such corporation, association or so-
ciety, subject to any of the provisions of this chapter, who shall
neglect or refuse to comply with any such provision, or who shall
make in any report or statement any intentionally false or fraudu-
lent statement; or shall refuse to permit the superintendent of in-
surance or any examiner duly authorized by him for the purpose,
to make an examination of its conditions and business, books,
papers and vouchers; and any person who shall act within this
state as agent, solicitor or collector for any such corporation, as-
sociation or society, which shall have failed, neglected or refused
to comply with or violated any of the provisions of this chapter,
or shall have failed or neglected to procure from the superintendent
the certificate of authority to transact business in this state required
by law, shall forfeit to the people of the state the sum of one hun-
dred dollars for every such offense. If an examination of the con-
dition and business of any such corporation, association or society
transacting business in this state shall be prevented by such refusal,
the superintendent of insurance shall revoke the certificate of
authority issued to such corporation, association or society; and
it shall thereafter be unlawful for it to do business in this state
until it shall have submitted to an examination, and the superin-
tendent shall have issued to it a new certificate of authority author-
izing it to continue business in this state.

Source.—Former § 213; originally revised from L. 1883, chap. 175, § 20, as
amended by LL. 1889, chap. 184.

See § 1197, Penal Law. Failure to file report with superintendent a
misdemeanor.

§ 214. Exemption of certain societies and subordinate
lodges of Odd Fellows and Masons from the provisions of this
article.

No society or subordinate lodge or body of any secret, fraternal
or industrial society now organized in this state paying only sick
§ 214. Lire or Casuatty Insurance Corporations. 337

benefits, not exceeding two hundred and fifty dollars in the aggre-
gate to any one person in any one year, or a funeral benefit or relief
to those dependent on a member not exceeding three hundred and
fifty dollars, shall be required to make any report thereof under
this article. Subordinate lodges or councils or other bodies by
whatsoever name known, of fraternal, secret or industrial societies
shall not be required to make an annual report to the superintend-
ent of insurance, when the money, charity, relief or aid is payable
by the grand or supreme body of the same, and is derived from
assessments upon such subordinates or their members, but such
report shall be made and filed by such grand or supreme body.
This article shall not prevent the creation of a reserve fund by any
corporation, association or society transacting the business of life or
casualty insurance, or both, upon the co-operative or assessment
plan, where its funds or its accretions, or both are to be used for the
payment of assessments or death losses, or for benefits in case of
physical disability only. This article shall not apply to the grand
or subordinate lodges of the Independent Order of Odd Fellows as
they now exist, or to any grand or subordinate lodge of Free and
Accepted Masons, nor to any association or organization of the vet-
eran firemen of any city of the state having a population of five
hundred thousand or more. The voluntary unincorporated asso-
ciations known as the New York Stock Exchange and the ‘Con-
solidated Stock and Petroleum Exchange of New York, and the
Booksellers and Stationers’ Provident Association of the United
States are exempted from the provisions of this article. This
‘ article shall not prevent any corporation, association or society
authorized to do business hereunder from crediting on assess-
ments of its certificate holders or members such ratable sums out
of surplus accumulations or reserve funds as they may become
entitled to under the terms of their policy or certificate contracts,
provided, however, that the amount so credited in any policy
year shall not exceed one annual premium on such policy or
certificate contract.

Source.— Former § 214, as amended by L. 1894, chap. 399, and L. 1906,
chap. 326; originally revised from L. 1883, chap. 175, § 21, as amended by L.
1887, chap. 285; L. 1887, chap. 285, § 7, as amended by L. 1889, chap. 566.

Amended by L. 1911, chap. 536.
338 Tue Ivsurance Law. §§ 215-217.

DEPOSIT.— Co-operative life and casualty insurance companies cannot
issue policies with cash surrender value, at least unless such companies
comply with the provisions contained in § 214, requiring the deposit of
$100,000 with the insurance department, and the superintendent has certified
to that effect. Attorney-General Rep., 1893, page 114.

This section does not prohibit corporations, associations or societies therein
referred to from paying cash dividends. Attorney-General Rep., 1906, page 649.

§ 215. Corporations may deposit securities with the super-
intendent of insurance.

Repealed by L. 1911, chap. 536.

§ 216. Quorum.

At the stated meeting for the election of officers, trustees, direct-
ors or managers of any such corporation, association or society,
a majority of the persons entitled to vote at such meeting shall not
be necessary to a quorum.

Source—Former § 216; originally revised from L. 1883, chap. 175, § 23.

§ 217. Reincorporation.

Any corporation incorporated under chapter one hundred and
seventy-five of thé laws of eighteen hundred and eighty-three and
transacting business under this article is hereby authorized to rein-
corporate as a stock corporation under its existing corporate name,
upon compliance with the provisions of article two of this chapter.
Before the superintendent of insurance shall be required to file
and record a certificate of such reincorporation, he shall be satis-
fied that the same has been approved by a majority vote of the
members of the company present and voting at a meeting of the
insured called to consider the same, of which meeting a written or
printed notice shall have been mailed to each member who shall
have been such for thirty days directed to his address appearing
on the company’s books, at least thirty days before the day fixed
for such meeting. Upon such reincorporation said company shall
be entitled to the assets and shall be subject to the existing liabili-
ties of the present company, including all contracts, policies or cer-
tificates with its members and agreements between such members
and the subscribers to any guaranty or reserve fund heretofore
§§ 218-220. Lirz or Casuarty Insurance Corporations. 339

made or approved at an annual meeting of the members or
which may be ratified at the meeting called to consider such
reincorporation.

Source.— L. 1893, chap. 690, $§ 1, 2, 3.

§ 218. Admission of minors.

A corporation, association, organization or society transacting
the business of life or casualty insurance, or both, upon the
co-operative or assessment plan, and incorporated under or subject
to this article, may provide by its by-laws for the admission of
minors, over eighteen years of age to membership in such cor-
poration, association, organization or society and may by such
by-laws prescribe the conditions of such admission and the rights
and obligations of minors as members; and no such minor shall
by reason only of minority be deemed incompetent to become
such member, to contract for insurance provided for by the certifi-
cate of membership, or other instrument showing such member-
ship or fixing his privileges, to surrender such insurance or to give
a valid discharge for any benefit accruing or for any money pay-
able under the contract of insurance.

Added by L. 1911, chap. 176.

§ 219. Policy to indicate assessment plan.

Every policy or certificate hereafter issued by any corporation,
company, society, organization or association transacting business
under this article shall have conspicuously printed on the face
of such policy or certificate and at the top thereof in capital letters
not smaller than great primer roman condensed capitals, the words
“assessment system.”

Added by L. 1913, chap. 28.

Note.—The purpose of the amendment of this Section by chapter 28 of 1913
was to protect the public by requiring assessment associations in this State
to more clearly indicate in their contracts the precise scope and character of
such contracts.—Ed.

§ 220. Forms of policies or certificates must be filed and
approved.

On and after the first day of January, nineteen hundred and
fourteen, no policy or certificate of insurance against loss or dam-
340 Tur Insurance Law. § 220,

age from the sickness, or the bodily injury or death of the in-
sured by accident, shall be issued or delivered in this state by
any corporation authorized under this article, until copies of the
form thereof have been filed with the superintendent of insurance
and formally approved by him. On or before the first day of
October, nineteen hundred and thirteen, the superintendent shall
make and announce rules and regulations concerning the terms
and provisions of such forms of policies and certificates, the man-
ner in which they shall be printed, and the practice to be followed
in their submission and approval. ‘The superintendent may, in
his discretion, permit any such corporation to continue to use in
this state after the first day of January, nineteen hundred and
fourteen, any form of policy or certificate, which, prior to October
first, nineteen hundred and thirteen, has been duly approved for
such corporation under section one hundred and seven of this
chapter.
Added by L. 1913, chap. 51. In effect October 1, 1913.

Note.—The purpose of the addition of this section by chapter 51 of 1913
was to require that all policies or certificates issued by health and accident
corporations operating upon the co-operative or assessment plan shall be
passed upon and approved by the insurance department and that the superin-
tendent must on or before October 1, 1913, make and announce rules and
regulations concerning the terms and provisions of such forms of policies
and certificates.—Ed.
§ 230. Fraternat Benerir Socrettss. 341

ARTICLE VII.

Fraternat Brenyeritr Socreriss.

SEcTION 230. Definitions and scope of article.
231. Benefits, beneficiaries and membership. ,
232. Certificates.
233. Funds.
234. Incorporation.
235, Existing corporations and reincorporation.
236. Mergers. .
237. Foreign societies.
238. Place of meeting and liability of officers.
239. Limitation upon power to waive provisions of the society’s laws.
240, Exemption from execution.
241. Amendments to constitution and laws.
242. Reports and valuations.
243. Examinations,
244. Revocation of license.
245. Exemption of certain societies.
246. Taxation.
247, Penalties.
248. Application of other sections of this chapter.
249. Review.

\

§ 230. Definitions and scope of article.

1. Any corporation, society, order or voluntary association,
without capital stock, organized and carried on solely for the
mutual benefit of its members and their beneficiaries, but not for
profit, and having a lodge system with ritualistic form of work
and representative form of government, and which shall make
provision for the payment of benefits in accordance with section
two hundred and thirty-one hereof, is hereby declared to be a
fraternal benefit society.

2. Any society having a supreme governing or legislative body
and subordinate lodges or branches, by whatever name known,
into which members shall be elected, initiated and admitted in
accordance with its constitution, laws, rules, regulations and
prescribed ritualistic ceremonies, which subordinate lodges or
branches shall be required by the laws of such society to hold
regular or stated meetings at least once in each month, shall be
deemed to be operating on the lodge system.
342 Tur Insurance Law. § 231,

3. Any such society shall be deemed to have a representative
form of government when it shall provide in its constitution and
laws for a supreme legislative or governing body, composed of
representatives elected either by the members or by delegates
chosen directly or indirectly by the members, together with such
other members as may be prescribed by its constitution and laws;
provided that the elective members shall constitute a majority in
number and have not less than two-thirds of the votes nor less
than the votes required to amend its constitution and laws; and
provided, further, that the meetings of the supreme or governing
body and the election of officers, representatives or delegates shall
be held as often as once in four years. The members, officers,
representatives or delegates of a fraternal benefit society shall
not vote by proxy.

4, Except as herein otherwise provided, such societies shall be
governed by this article and shall be exempt from all other pro-
visions of the insurance laws of this state, not only in govern-
mental relations with the state, but for every other purpose, and
no addition thereto hereafter enacted shall apply to them unless
they be expressly designated therein.

Added by L. 1911, chap. 198.

§ 231. Benefits, beneficiaries and membership.

1. Every society transacting business under this article shall
provide for the payment of death benefits, and may provide for
the payment of benefits in case of temporary or permanent
physical disability as the result either of disease, accident or old
age, provided that the period of life at which the payment of
benefits for disability on account of old age shall commence shall
not be under seventy years; and also may provide for monuments
or tombstones to the memory of its deceased members, and for
the payment of funeral benefits. Such society shall have the
power to give a member when permanently disabled or upon
attaining the age of seventy years all or such portion of the face
value of his certificate as the laws of the society may specify; |
provided that nothing in this article contained shall be so con-
strued as to prevent the issuing of benefit certificates for a term
of years less than the whole of life, which shall be payable upon
the death or disability of the member occurring within the term
§ 231, Frarernat Benerrr Socreriss. 343

for which the benefit certificate has been issued, or so as to
permit any such society hereafter to make any promise or agree-
ment for the payment of money upon the expiration of a fixed
period, except as provided in subdivision (b) of subsection one of
this section.

(a) Such society shall, upon written application of the member,
have the power to accept a part of the periodical contributions in
cash and to charge the remainder, not exceeding one-half of the
periodical contribution, against the certificate, with interest pay-
able or compounded annually at a rate not lower than four per
centum per annum; provided that this privilege shall not be
granted except to societies which have readjusted or may here-
after readjust their rates of contributions and to contracts affected
by such readjustment.

(b) Any society which shall show, by the annual valuation
hereinafter provided for, that it is accumulating and maintaining
the full reserve required by a table of mortality not lower than
the American Experience table and four per centum interest,
may grant to its members extended and paid-up protection or
such withdrawal equities as its constitution and laws may permit;
provided that such grants shall in no case exceed in value the
portion of the reserve to the credit of the members to whom they
are made.

2. Such death benefit shall in certificates hereafter issued be
payable only to wife, husband, relative to the fourth degree of
consanguinity, father-in-law, mother-in-law, son-in-law, daughter-
in-law, stepfather, stepmother, stepchildren, children by legal
adoption, or to a person or persons dependent upon the member;
provided that, if, after the issuance of the original certificate, the
member shall become dependent upon an incorporated charitable
institution, he shall, with the consent of the society, have the
privilege of making such institution his beneficiary. Within the
above restrictions each member shall have the right to designate
his beneficiary and, from time to time, may have the same
changed in accordance with the laws, rules and regulations of the
society, and no beneficiary shall have or obtain any vested interest
in the said benefit until the same has become due and payable
344 Tue Insurance Law. § 282,

upon the death of the said member; provided that any society
may, by its laws, limit the scope of beneficiaries within the above
classes. No contract under this article shall be valid which shall
be conditioned upon an agreement or understanding that the
person to whom the death benefit is made payable shall pay the
periodical or other contribution of the member,

3. .A society may admit to beneficial membership any person
not less than sixteen and not more than sixty years of age, who
has been examined by a legally qualified physician and whose
examination has been supervised and approved in accordance with
the laws of such society; provided that any beneficiary member
of the society who shall apply for a certificate providing for
disability benefits need not be required to pass an additional
medical examination therefor. Nothing herein contained shall
prevent such society from accepting general or social members.

Added by L. 1911, chap. 198.

§ 232. Certificates.

Every certificate issued by any such society shall specify the
amount of benefit provided thereby, and shall provide that the
certificate, the charter or articles of incorporation — or, if a
voluntary association, the articles of association — the constitu-
tion and laws of the society and the application for membership
and medical examination, signed by the applicant, with all amend-
ments to each thereof, shall constitute the agreement between the
society and the member; and copies of the same, certified by the
secretary of the society or corresponding officer, shall be received
in evidence as to the terms and conditions thereof. Any changes,
additions or amendments to said charter or articles of incorpora-
tion — or, if a voluntary association, articles of association —
constitution or laws duly made or enacted subsequent to the issu-
ance of the benefit certificate, shall bind the member and his
beneficiaries, and shall govern and control the agreement in all
respects the same as though such changes, additions or amend-
ments had been made prior to and were in force at the time of the

application for membership.

Added by L. 1911, chap. 198.

This section as enacted in 1911 does not require the issuance of certificates
of membership by fraternal benefit societies. Attorney-General Rep., 1912,
page 220.
§ 232. FraternaL Benerit Societies. 345

§ 233. Funds.

1. A society may create, maintain, invest, disburse and apply
an emergency, surplus or other similar fund, in accordance with
its laws. Such funds shall be held, invested and disbursed for
the use and benefit of the society, and no member or beneficiary
shall have or acquire individual rights theréin, or become entitled
to any apportionment or the surrender of any part thereof, except
as provided in subdivision (b) of subsection one of section two hun-
dred and thirty-one of this article. The funds from which benefits
shall be paid and from which the expenses of the society shall be
defrayed shall be derived from periodical or other payments by
the members or subordinate bodies of the society, together with
accretions of such funds; provided that no society, domestic or
foreign, shall hereafter be incorporated or admitted to transact
business in this state which does not provide for stated periodical
contributions sufficient to provide for meeting the mortuary
obligations contracted, when valued upon the basis of the National
Fraternal Congress table of mortality as adopted by the National
Fraternal Congress, August twenty-third, eighteen hundred and
ninety-nine, or any higher standard, with interest assumption not
more than four per centum per annum, nor to write or accept
members for temporary or permanent disability benefits, except
upon tables based upon reliable experience, with an interest
assumption not higher than four per centum per annum.

2. Deferred payments of installments of claims shall be con-
sidered as fixed liabilities on the happening of the contingency
upon which such payments or installments are thereafter to be
paid. Such liability shall be the present value of such future
payments or installments upon the rate of interest and mortality
assumed by the society for valuation; and every society shall
maintain a fund sufficient to meet such liability, regardless of
proposed future collections to meet any such liabilities.

3. A society shall invest its funds only in securities permitted
by the laws of this state for the investment of the assets of life .
insurance companies; provided that any foreign society permitted
or seeking to do business in this state, which invests its funds in
346 Tur Insurance Law. § 234,

accordance with the laws of the state in which it is incorporated,
shall be held to meet the requirements of this article for the
investment of funds.

4. Every provision of the laws of a society for payment by
its members, in whatever form made, shall distinctly state the
purpose of the same and the proportion thereof which may be
used for expenses, and no part of the money collected for
mortuary or disability purposes, or the net accretions of either
or any of said funds, shall be used for expenses.

Added by L. 1911, chap. 198.

Amendments to the constitution or by-laws of a mutual benefit association,
which nullify or cut down benefits to which a beneficiary has become entitled
under his contract, are void and of no effect even where the right to amend
has been expressly reserved. Wright v. Knights of Maccabees, 196 N. Y., 391.

A’ mutual benefit association cannot change a constitutional provision that
a beneficiary shall be assessed according to age when admitted, without his
consent. Dowdall v. Cath. Mut. Ben. Assn., 196 N. Y., 405.

A fraternal benefit society, having classes “A” and “B,” cannot transfer
funds contributed by certificate holders in class “B” to other classes without
the consent of all the members remaining in Class “B.” Attorney-General
Rep., Nov. 28, 1911.

A member and the society cannot, by any agreement, in which all members
of the cash dividend class do not join, take out of the benefit fund any sum
as the equitable share of a member. Attorney-General Rep., Feb. 8, 1912.

The exchanging of a member, from one class to another, does not permit
the transfer of the amount, to which he would be equitably entitled in the
benefit fund of his class, to the other class, without the consent of all mem-
bers interested in the fund. Attorney-General Rep., March 22, 1912.

§ 234. Incorporation.

1. Seven or more persons, citizens of the United States and a
majority of whom are citizens of this state, who desire to form
a fraternal benefit society, as defined by this article, may make
and sign (giving their addresses), and acknowledge before some
officer competent to take acknowledgment of deeds, articles of
incorporation, in which shall be stated:

(a) The proposed corporate name of the society, which shall
not so closely resemble the name of any society or insurance
company already transacting business in this state as to mislead
the public or lead to confusion.
§ 234, Fraternat Beyerit Socrertes. 347

(b) The purpose for which it is formed — which shall not
include more liberal powers than are granted by this article,
provided that any lawful social, intellectual, educational, chari-
table, benevolent, moral or religious advantages may be set forth
among the purposes of the society — and the mode in which its
corporate powers are to be exercised.

(c) The place where its principal office shall be located within
the state.

(d) The names, residences and official titles of all the officers,
trustees, directors or other persons who are to have and exercise
the general control and management of the affairs and funds of
the society for the first year, or until the ensuing election at
which all such officers shall be elected by the supreme legislative
or governing body; which election shall be held not later than one
year from the date of the issuance of the permanent certificate.

2. Such articles of incorporation, with duly certified copies of
the constitution and laws, rules and regulations, and copies of all
proposed forms of benefit certificates, applications therefor and
circulars to be issued by such society, together with a bond in
the sum of five thousand dollars, with sureties approved by the
superintendent of insurance, conditioned upon the return to
applicants of the advanced payments, as provided in this section,
if the organization is not completed within one year, shall be
filed with the superintendent of insurance, who may require such
further information as he deems necessary; and, if the purposes
of the society conform to the requirements of this article and all
provisions of law have been complied with, such superintendent
of insurance shall so certify, retain and file the articles of incor-
poration, and furnish the incorporators a preliminary certificate
authorizing said society to solicit members, as hereinafter
provided.

3. Upon receipt of said certificate from the superintendent
of insurance, the society may solicit members for the purpose of
completing its organization, and shall collect from each applicant
the amount of not less than one regular monthly payment, in
accordance with its table of rates as provided by its constitution
348 Tue Insurance Law. § 234,

and laws, and shall issue to each such applicant a receipt for the
amount so collected. But no society shall incur any liability
other than for such advanced payments, nor issue any benefit
certificate, nor pay or allow, nor offer or promise to pay or allow,
to any person any death or disability benefit until actual. bona
fide applications for death benefit certificates have been secured
upon at least five hundred lives for at least one thousand dollars
each, and all such applicants for death benefits shall have been
regularly examined by legally qualified practicing physicians,
and certificates of such examinations have been duly filed and
approved by the chief medical examiner of such society; nor until
there shall be established ten subordinate lodges or branches,
into which said five hundred applicants have been initiated; nor
until there has been submitted to the superintendent of insur-
ance, under oath of the president and the secretary or corre-
sponding officers of such society, a list of such applicants, giving
their names, addresses, date examined, date approved, date initi-
ated, name and number of the subordinate branch of which each
applicant is a member, amount of benefits to be granted, rate of
stated periodical contributions — which shall be sufficient to pro-
vide for meeting the mortuary obligation contracted, when valued
for death benefits upon the basis of the National Fraternal Con-
gress table of mortality, as adopted by the National Fraternal
Congress August twenty-third, eighteen hundred and ninety-nine,
or any higher standard at the option of the society, and for dis-
ability benefits, by tables based upon reliable experience, and for
combined death and permanent total disability benefits by tables
based upon reliable experience, with an interest assumption not
higher than four per centum per annum; nor until it shall be
shown to the superintendent of insurance, by the sworn statement
of the treasurer or corresponding officer of such society, that at
least five hundred applicants have each paid in cash not less than
one regular monthly payment, as herein provided, per one thou-
sand dollars of indemnity to be effected, which payments in the
aggregate shall amount to at least twenty-five hundred dollars, all
of which shall be credited to the mortuary or, disability fund on
account of such applicants, and no part of which may be used for
expenses.
§ 234, Fraternat Benzrit Societies. 349

4. Such advanced payments shall, during the period of
organization, be held in trust and, if the organization is not
completed within one year, as hereinafter provided, returned to
said applicants.

5. The superintendent of insurance may make such examina
‘tion and require such further information as he deems advisable,
and, upon presentation of satisfactory evidence that the society
has complied with all the provisions of law, he shall issue to such
society a certificate to that effect. Such certifiate shall be prima
facie evidence of the existence of such society at the date thereof.
The superintendent of insurance shall cause a record of such cer-
tificate to be made, and a certified’ copy of such record may be
given in evidence with like effect as the original certificate.

6. No preliminary certificate granted under the provisions of
this section shall be valid after one year from its date or after
such further period, not exceeding one year, as may be authorized
by the superintendent of insurance, upon cause shown, unless
the five hundred applicants herein required have been secured
and the organization has been completed as herein provided; and
the articles of incorporation and all proceedings thereunder shall
become null and void in one year from the date of said preliminary
certificate, or at the expiration of said extended period, unless
such society shall have completed its organization and commenced
business as herein provided.

7. Every such society shall have the power to make a consti-
tution and by-laws for the government thereof, the admission of
its members, the management of its affairs and the fixing and
readjusting of the rates of contribution of its members from
time to time; and it shall have the power to change, alter, add to
or amend such constitution and by-laws, and shall have such other
powers as are necessary and incidental to the carrying into effect
of the objects and purposes of the society.

Added by L. 1911, chap. 198.
See § 6, ante. Fees of superintendent for filing papers.
See § 10, ante. Certificate of attorney-general.

See § 11, ante. Examination by superintendent as to payment of capital,
ete.
350 Tur Insurance Law. § 235.

See § 4, General Corporation Law, chap. 28 of 1909, as to qualifications of
ineorporators.

See chap. 733 of 1900. Reincorporation of foreign moneyed corporations.

A fraternal beneficiary society incorporated under the laws of a foreign
state and conducting a life insurance business on the co-operative or
assessment plan, and requiring by its constitution and by-laws applicants for
membership to pass a medical examination upon the result of which admission
depends, is a life insurance company or association within the meaning of the
question “ Have you ever been rejected by any life insurance company or
association? ” and where an applicant for admission to one division or tent of
such society, who had previously been rejected by another division or tent of
the same society upon medical examination, which objection was known to
him, answered “no” to such question, the answer is untruthful and fraudulent
and avoids the certificate of insurance issued to such applicant, where he
stipulated in his application therefor that any untruthful or fraudulent
answers should vitiate the certificate and forfeit all payments made thereon.
Alden v. Knights of Maccabees, 178 N. Y., 535.

A corporation organized under this section has no power to receive, as
members, infants of such tender years that they are unable to exercise any
choice in becoming members or to exercise the powers with which members are
invested. Matter of G. M. B. Assn., 135 N. Y., 280.

§ 235. Existing corporations and reincorporation.

Any such society now engaged in transacting business in this
state may exercise, after the adoption of this article, all of the
rights conferred thereby, including the powers specified in sub-
section seven of section two hundred and thirty-four of this
chapter and all of the rights, powers and privileges now exercised
or possessed by it under its charter or articles of incorporation —
if incorporated — not inconsistent with this article; or, if it be
a voluntary association, it may incorporate hereunder. But no
society already organized shall ‘be required to reincorporate here-
under, and any such society may amend its articles of incorpora-
tion from time to time, in the manner provided therein or in its
constitution and laws, and all such amendments shall be filed
with the superintendent of insurance and shall become operative
upon such filing, unless a later time be provided in such amend-
ments or in its articles of incorporation, constitution or laws.

Added by L. 1911, chap. 198.

See § 37, ante. Effect of Insurance Law on corporations previously
incorporated.
§ 236. Frarernat Benerir Societies. 351

See § 52, ante. Reorganization of existing corporations and amendment:
of certificates.

See § 100, Statutory Construction Law, chap. 27 of 1909, as to effect or
repeal and re-enactment of existing statutes. .

A fraternal beneficiary society having once re-incorporated under § 231
cannot thereafter re-incorporate again or take any other action for the pur-
pose of amending its charter, except the method, if any, authorized by law.
Attorney-General’s Decision, March 12, 1910.

§ 236. Mergers.

No domestic society shall merge with or accept, by contract of
reinsurance or otherwise, the transfer of substantially the entire
membership or funds of any other society, unless such merger,
reinsurance or transfer is evidenced by a contract in writing,
setting out in full the terms and conditions of the same, and filed
with the superintendent of insurance of this state, togetber with
a sworn statement of the financial condition of each of said socie-
ties, made by the respective presidents and secretaries, or corre-
sponding officers together with a certificate of such officers, duly
verified under oath, that such merger, reinsurance or transfer
has been approved by a vote of two-thirds of the members of the
supreme legislative or governing body of each of said societies.
Upon the submission of said contract, financial statements and
certificates, the superintendent of insurance shall examine the
same and if he shall find such financial statements to be correct
and the said contract to be in conformity with the provisions of
this section, and that such merger, reinsurance or transfer is
just and equitable to the members of each of said societies, he
shall approve the same, issue his certificate to that effect and,
thereupon, the said contract of merger, reinsurance or transfer
shall be of full force and effect; provided that no such merger,
reinsurance or transfer proposed by two societies not incorporated
in the same state shall go into effect until it is approved by the
insurance commissioner, or corresponding officer, of each state
incorporating the societies involved in the proposed transaction,
and their joint certificate of approval of the contract therefor is
issued,

Added by L. 1911, chap. 198.
352 Tue Insurance Law. § 237.

§ 237. Foreign Societies.

1. Foreign societies which are now authorized to transact
business in this state may continue such business until the first
day of April next succeeding the adoption of this article, and the
authority of such societies may thereafter be renewed annually,
to terminate in all cases on the first day of the succeeding April;
provided, however, that the license shall continue in full force
and effect until the new license shall be issued or be specifically
refused. A duly certified copy or duplicate of such license shall
be prima facie evidence that the licensee is a fraternai benefit
society, within the meaning of this article.

2. No foreign society now transacting business, organized
prior to the adoption of this article, which is not now authorized
to transact business in this state, shall transact any business
herein without a license from the superintendent of insurance.
Any such society may be licensed to transact business within this
state, upon filing with such superintendent a duly certified copy
of its charter or articles of association, a copy of its constitution
and laws, certified by its secretary or corresponding officer, a
power of attorney to such superintendent as hereinafter provided,
a statement of its business, under oath of its president and secre-
tary or corresponding officers, in the form required by the super-
intendent, and duly verified by an examination made by the
supervising insurance official of its home state or any other state
satisfactory to the superintendent of insurance of this state, a
certificate from the proper official in its home state, province or
country that the society is legally organized, a copy of its con-
tract — which must show that benefits are provided for by peri-
odical or other payments by persons holding similar contracts —
and upon furnishing the superintendent such other information
as he may deem necessary to a proper exhibit of its business and
plan of working. Upon compliance with these requirements,
such foreign society shall, subject to the provisions of section
nine of this chapter, be entitled to do business in this state until
the first day of the succeeding April, and such license shall,-upon
compliance with the provisions of this article, be renewed an-
nually, to terminate in all cases on the first day of the succeeding
§ 237, FraternaL Benerir Socreries. 353

April; provided however, that such license shall continue in full
force and effect until the new license shall be issued or be specific-
ally refused. Any foreign society desiring admission to this
state must have the qualifications required of domestic societies
organized under this article, and have its assets invested as
required by the laws of the state, territory, district , country or
province wherein it is organized. When the superintendent re-
fuses to license any society, or revokes its authority to do business
in this state, he shall reduce his ruling, order or decision to writ-
ing and file the same in his office, and shall, upon request, furnish
a copy thereof, together with a statement of his reasons, to the
officers of the society, and such action of the superintendent shall
be reviewable by proper proceedings in any court of competent
jurisdiction within the state; provided, however, that nothing
contained in this or the preceding paragraph shall be taken or
construed as preventing any such society from continuing in good
faith all contracts made in this state during the time the society
was legally authorized to transact business herein.

3. Every foreign society now transacting business in this state
shall, within thirty days after the adoption of this article, and
every such society hereafter applying for admission shall, before
being licensed, appoint in writing the superintendent of insurance
to be its true and lawful attorney, upon whom all legal process
in any action or proceeding against it shall be served, and in such
writing shall agree that any lawful process against it which is
served upon such attorney shall be of the same legal force and
validity as if served upon the society, and that the authority shall
continue in force so long as any liability remains outstanding in
this state. Copies of such appointment, certified by said super-
intendent of insurance, shall be deemed sufficient evidence thereof
and shall be admitted in evidence with the same force and effect
as would the original. Such service may be made upon such
attorney, or, in his absence, upon the person in charge of his office,
and shall be deemed sufficient service upon such society; provided,
however, that no such service shall be valid or binding against
any such society when it is required thereunder to file its answer,
pleading or defense in less than twenty days from the date of
such service of such process. When legal process against any such
354 Tur Insurance Law. §§ 238, 239.

society is served upon said superintendent of insurance, he shall
forthwith forward by registered mail, one of the duplicate copies
thereof, prepaid, directed to its secretary or corresponding officer.
Added by L. 1911, chap. 198.
Amended by L. 1914, chap. 106. In effectsApril 3, 1914.

The purpose of the amendment of this section by chap. 106 of 1914 was to
add the last part of the next to the last sentence, “ provided, however, that
TiO: Such, S€FViCe: ss... 6.0. 4deew dads of such service of such process.”

§ 238. Place of meeting and liability of officers.

1. Any domestic society may provide that the meetings of its
legislative or governing body may be held in any state, district,
province or territory wherein such society has subordinate
branches and all business transacted at such meetings shall be
as valid in all respects as if such meetings were held in this state.
But its principal office shall be located in this state.

2. Officers and members of the supreme, grand or any sub-
ordinate body of any such incorporated society shall not be in-
dividually liable for the payment of any disability or death bene-
fit provided for in the laws and agreements of such society, but
the same shall be payable only out of the funds of such society
and in the manner provided by its laws,

The legislative intent in the enactment of §§ 212 and 238 of the Insurance
Law, to place co-operative and assessment insurance in a class by itself, was
to relieve such insurance from the operation of § 52 of the Domestic Relations
Law making insurance money realized by a wife on the life of her husband
subject to his debts, where the annual premium paid out of his property
exceeds $500. Dominick v. Stern, 79 Mise., 271.

Added by L. 1911, chap. 198.

§ 239. Limitaticn upon power to waive provisions of the
society’s laws.

The constitution and laws of the society may provide that no
subordinate body, nor any of its subordinate officers or members,
shall have the power or authority to waive any of the provisions
thereof, and the same shall be binding upon the society and each
and every member thereof and on all beneficiaries of members.

Added by L. 1911, chap. 198.
oo
at
v

§$§ 240-242, Frarernat Benerir Societies.

$ 240. Exemption from execution.

No money or other benefit, charity, relief or aid to be paid,
provided or rendered by any such society shall be liable to attach-
ment, garnishment or other process, or to be seized, taken, appro-
priated or applied by any legal or equitable process or operation
of law to pay any debt or liability of a member or beneficiary, or
any other person who may have a right thereunder, either before
or after payment.

Added by L. 1911, chap. 198

§ 241. Amendments to constitution and laws.

Every society transacting business under this article shall file
with the superintendent of insurance a duly certified copy of all
amendments of or additions to its constitution and laws, within
ninety days after the enactment of the same. Printed copies of
the constitution and laws as amended, changed or added to, certi-
fied by the secretary or corresponding officer of the society, shall
be prima facie evidence of the legal adoption thereof.

Added by L. 1911, chap. 198.

§ 242. Reports and valuations.

1. Every society transacting business in this state shall,
annually, on or before the first day of March, file with the super-
intendent of insurance, in such form as he may require, a state-
ment under oath of its president and secretary, or corresponding
officers, of its condition and standing on the thirty-first day of
December last preceding, and of its transactions for the year end-
ing on that date, and shall also furnish such other information
as the superintendent may deem necessary to a proper exhibit of
its business and plan of working. Such superintendent may at
other times require any further statement he may deem neces-
sary to be made relating to such society.

2. In addition to the annual report herein required, each society
shall report, annually, to the superintendent a valuation of its
certificates in force on December thirty-first last preceding, ex-
eluding those issued within the year for which the report is filed,
in cases where the contributions for the first year, in whole or in
356 Tue Insurance Law. § 249,

part, are used for current mortality and expenses; provided the
first report of valuation shall be made as of December thirty-first,
nineteen hundred and twelve. Such report of valuation shall
show, as contingent liabilities, the present midyear value of the
promised benefits provided in the constitution and laws of such
society under certificates then subject to valuation; and, as con-
tingent assets, the present midyear value of the future net con-
tributions provided in the constitution and laws as the same are in
practice actually collected, not including therein any value for
the right to make extra assessments. Provided that any excess
of the present value of future contributions over the present value
of promised benefits under certificates providing for disability
benefits (other than total permanent disability in combination
with death benefits) shall not be allowed in reduction of the lia-
bility under other forms of certificates. At the option of any
society, in lieu of the above, the valuation may show the net value
of the certificates subject to valuation, hereinbefore provided,
and said net value, when computed in case of monthly contribu-
tions, may be the mean of the terminal values for the end of the
preceding and of the current insurance years.

3. Such valuation shall be certified by a competent accountant
or actuary, or, at the request and expense of the society, verified
by the actuary of the department of insurance of the home
state of the society, and shall be filed with the superintendent
within ninety days after the submission of the last preceding an-
nual report. The legal minimum standard of valuation for all
certificates, except those for disability benefits, shall be the
National Fraternal Congress table of mortality, as adopted by the
National Fraternal Congress, August twenty-third, eighteen hun-
dred and ninety-nine, or, at the option of the society, any higher
table, or it may use a table based upon the society’s own experi-
ence of at least twenty years and covering not less than one hun-
dred thousand lives, with interest assumption not more than four
per centum per annum. Each such valuation report shall set
forth clearly and fully the mortality and interest basis and the
method of valuation. Any society providing for disability bene-
fits shall keep the net contributions for such benefits in a fund
§ 249, Frarernat Brenerrr Socrerrs. 357

separate and apart from all other benefit and expense funds and
the valuation of all other business of the society; provided that,
where a combined contribution table is used by a society for both’
death and permanent total disability benefits, the valuation shall
be according to tables of reliable experience, and, in such case, a
separation of the funds shall not be required. The valuation
herein provided for shall not be considered or regarded as a test
of the financial solvency of the society, except as provided in sub-
section five of this section, but each society shall be held to be
legally solvent so long as the funds in its possession are equal to
or in excess of its matured liabilities,

4. Beginning with the year nineteen hundred and fourteen, a
report of such valuation and an explanation of the facts concern-
ing the condition of the society thereby disclosed shall be printed
and mailed to each beneficiary member thereof not later than
June first of each year, or, in lieu thereof, such report of valua-
tion and showing of the society’s condition as thereby disclosed
may be published in the society’s official paper and the issue con-
taining the same be mailed to each such beneficiary member. The
laws of such society shall provide that, if the stated periodical
contributions of the members are insufficient to pay all matured
death and disability claims in full and to provide for the creation
and maintenance of the funds required by its laws, or found
necessary otherwise, additional contributions, or additional,
increased or extra rates of contribution shall be collected from the
members to meet such deficiency; and such laws may provide
that, upon the written application or consent of a member his cer-
tificate may be charged with its proportion of any deficiency dis-
closed by valuation, with interest not exceeding five per centum
per annum.

5. If the valuation of the certificates, as hereinbefore vrovided,
on December thirty-first, nineteen hundred and seventeen, shall
show that the present value of future net contributions, together
with the admitted assets, is less than the present value of the
promised benefits and accrued liabilities, such society shall there-
after maintain said financial condition at each succeeding triennial
valuation in respect of the degree of deficiency as shown in the
358 Tur Insurance Law. § 242,

valuation as of December thirty-first, nineteen hundred and seven-
teen. If, at any succeeding triennial valuation, such society does
not show at least the same condition the superintendent shall
direct that it thereafter comply with the requirements herein
specified. If the next succeeding triennial valuation after the
receipt of such notice shall show that the society has failed to
maintain the said condition required herein, the  super-
intendent may, in the absence of good cause shown for
such failure, institute proceedings for the liquidation and
dissolution of such society, in accordance with the pro-
visions of section sixty-three of this chapter, or, in the case of a
foreign society, he may cancel its license to transact business in
this state; provided that nothing contained in section sixty-three
of this chapter shall be construed to authorize, prior to December
thirty-first, nineteen hundred and seventeen, any application for
the possession or liquidation of any society organized or transact-
ing business pursuant to the provisions of this article by reason of
the fact that the condition of such society is found, after examina-
tion, to be such that it could not meet the requirements for inéor-
poration and authorization specified in this article.

6. Any such society shown by any triennial valuation, subse-
quent to December thirty-first, nineteen hundred and seventeen,
not to have maintained the condition herein required shall, within
two years thereafter, make such improvement as to show a percent-
age of deficiency not greater than as of December thirty-first, nine-
teen hundred and seventeen, or, thereafter, as to all new members
admitted, be subject, so far as stated rates of contribution are con-
cerned, to the provisions of section two hundred and thirty-four of
this article applicable to the organization of new societies; pro-
vided that the net mortuary and beneficiary contributions and
funds of such new members shall be kept separate and apart from
the other funds of the society. If such required improvement is
not shown by the succeeding triennial valuation, then the said
new members may be placed in a separate class, and their
certificates valued, in respect to contributions and funds, as an
independent society.

7. In lieu of the foregoing requirements, any society may
accept in its laws the following provisions and may value its
certificates on a basis, herein designated “ accumulation basis,”
by crediting each member with the net amount contributed for
§ 242. Fraternat Benerit Societtrus. 359

each year and with interest at approximately the net rate earned,
and by charging him with his share of the losses for each year,
herein designated “cost of insurance,” and carrying the balance,
if any, to his credit. The charge for the cost of insurance may
be according to the actual experience of the society applied to a
table of mortality recognized by the law of this state, and shall
take into consideration the amount at risk during each year, which
shall be the amount payable at death less the credit to the member.
Except as specifically provided in its articles or laws or contracts
no charge shall be carried forward from the first valuation here-
under against any member for any past share of losses exceeding
the contributions and credit. If, after the first valuation, any
member’s share of losses for any year exceeds his credit, including
the contribution for the year, the contribution shall be increased
to cover his share of the losses. Any such excess share of losses
chargeable to any member may be paid out of a fund or contribu-
tions especially created or required for such purpose.

Any member may transfer to any plan adopted by the society
with net rates on which tabular reserves are maintained and on
such transfer shall be entitled to make such application of his
credit as provided in the laws of the society.

Certificates issued, rerated or readjusted on a basis providing
for adequate rates with adequate reserves to mature such certifi-
cates upon assumptions for mortality and interest recognized by
the law of this state may be valued on such basis, herein desig-
nated the “ Tabular basis;”’ provided that if on the first valua-
tion under this section, a deficiency in reserve shall be shown for
any such certificate, the same shall be valued on the accumulation
basis.

Whenever in, any society having members upon the tabular
basis and upon the accumulation basis, the total of all costs of in-
surance provided for any year shall be insufficient to meet the
actual death and disability losses for the year, the deficiency
shall be met for the year from the available funds after setting
aside all credits in the reserve; or from increased contributions
or by an increase in the number of assessments applied to the so-
ciety as a whole or to classes of members as may be specified
in its laws. Savings from a lower amount of death losses may
be returned in like manner as may be specified in its laws.

If the laws of the society so provide, the assets, representing
the reserves of any separate class of members may be carried sepa-
560 Tur Insurance Law. § 243.

rately for such class as if in an independent society, and re-
quired reserve accumulation of such class so set apart shall not
thereafter be mingled with the assets of other classes of the society.

A table showing the credits to individual members for each
age and year of entry and showing epposite each credit the tabu-
lar reserve required on the whole life or other plan of insurance
specified in the contract, according to assumptions for mortality
and interest recognized by the law of this state and adopted by
the society, shall be filed by the society with each annual report,
and also be furnished to each member before July first of each
year.

In lieu of the aforesaid statement there may be furnished
to each member within the same time a statement giving the
credit for such member and giving the tabular reserve and level
rate required for a transfer carrying out the plan of insurance
specified in the contract. No table or statement need be made or
furnished where the reserves are maintained on the tabular basis.

For this purpose individual bookkeeping accounts for each
member shall not be required and all calculations may be made by
actuarial methods.

Nothing herein contained shall prevent the maintenance of such
surplus over and above the credits on the accumulation basis and
the reserves on the tabular basis as any society may provide by
or pursuant to its laws; nor be construed as giving to the indi-
vidual member any right or claim to any such reserve or credit
other than the manner as expressed in the contract and its laws;
nor as making any such reserve or credits a liability in determin-'
ing the legal solvency of the society.

Added by L. 1911, chap. 198.

Amended by L. 1913, chap. 410, and L. 1914, chap. 203. In effect April 7,
1914.

The purpose of the amendment of subdivision 2 of this section by chapter
203 of 1914, was to provide that any excess of the present value of future
contributions over the present value of promised benefits under certificates
providing for disability benefits (other than total+permanent disability in
combination with death benefits) should not be allowed in reduction of the
liability under other forms of certificates; and to terminate the limitation in
the law of 1913, authorizing the organization of certain voluntary
associations.

§ 248. Examinations.

1. The superintendent of insurance, or any deputy, examiner
or other person whom he shall appoint, shall have the power of
§ 243, _ Frarernat Benerir Socreries. 361

visitation and examination into the affairs of any domestic
society. He may employ assistants for the purpose of such
examination, and he, or any person he may so appoint, shall have
free access to all the books, papers and documents that relate to
the business of the society, and may summon, qualify as witnesses
under oath and examine its officers, agents and employees or other
persons in relation to the affairs, transactions and condition of the
society.

2. The superintendent of insurance, or any deputy, examiner
or other person whom he shall appoint, may examine any foreign
society transacting, or applying for admission to transact busi-
ness in this state. The said superintendent may employ assist-
ants, and he or any person so appointed shall have free access
to all the books, papers and documents that relate to the
business of the society, and may summon, qualify as witnesses
under oath and examine its officers, agents and employees or other
persons in relation to the affairs, transactions and condition of the
society. Such superintendent may, in his discretion, accept, in
lieu of said examination, the examination of the insurance de-
partment of the state, territory, district, province or country
wherein such society is organized. If any such society or its
officers refuse to submit to such examination or to comply with
the provisions of the section relative thereto, the authority of such
society to write new business in this state shall be suspended or
its license refused until satisfactory evidence is furnished the
superintendent as to the condition and affairs of the society, and
during such suspension, the society shall not write new business
in this state.

3. Except for the purpose of instituting proceedings under sec-
tion sixty-three of this chapter, pending, during or after an exam-
ination or investigation of any such society, either domestic or
foreign, the superintendent of insurance shall make public no
financial statement, report or finding, nor shall he permit to be-
come public any financial statement, report or finding affecting
the status, standing or rights of any such society, until a copy
thereof shall have been mailed to such society, at its home office,
nor until such society shall have been afforded a reasonable op-
362 Tue Insurancy Law. . §§ 244, 245,

portunity to answer any such financial statement, report or find-
ing and to make such showing in connection therewith as it
may desire.

Added by L. 1911, chap. 198

§ 244. Revocation of license.

When, upon investigation, the superintendent of insurance is
satisfied that any foreign society transacting business under this
article has exceeded its powers, or has failed to comply with any
provisions of this article, or is conducting business fraudulently
or in a way hazardous to its members, creditors or the public, or
is not carrying out its contracts in good faith, he shall notify the
society of his findings, stating in writing the grounds of his dis-
satisfaction, and, after reasonable notice, require said society, on
a date named, to show cause why its license should not be re-
voked. If, on the date named in said notice, such objections have
not been removed to the satisfaction of the said superintendent,
or if the society does not present good and sufficient reasons why
its authority to transact business in this state should not at that
time be revoked, he may revoke the authority of the society to
continue business in this state.

Added by L. 1911, chap. 198.

§ 245. Exemption of certain societies.

Nothing contained in this article shall be so construed as: to
affect or apply to grand or subordinate lodges of Masons, Odd
Fellows, Knights of Pythias (exclusive of the insurance depart-.
ment of the supreme lodge Knights of Pythias), or to similar
societies, orders or associations now doing business in this state
which provide benefits exclusively through local or subordinate
lodges, or to

(a) Orders, societies or associations which limit their admission
to membership to any one hazardous occupation ;

(b) Domestic societies which limit their membership to the em-
ployees of a particular city or town, designated firm, business
house or corporation which provide for a death benefit of not more
than four hundred dollars or disability benefits of not more than
bo

§ 945. Fraternat Brenerrr Socieries. 363
three hundred and fifty dollars to any one person in aiiy one year
or both;

(ec) Domestic societies or associations of a purely religious,
charitable and benevolent description, which provide for a death
benefit of not more than four hundred dollars or for disability
benefits of not more than three hundred and fifty dollars to any
one person in any one year, or both.

Provided, however, that any such society or association de-
scribed in subdivisions b and c, which provides for death or dis-
ability benefits for which certificates are issued, and any such so-
ciety or association included in subdivision ¢ which has more than
one thousand members, shall not be exempted from the provisions
of this section or chapter, but shall comply with all the require-
ments thereof, and, provided further, that nothing in subdivisions
(a) and (b) of subsection one of section two hundred and thirty-
one of this chapter, and subsections two, three, four, five, six and
seven of section two hundred and forty-two of this chapter shall
affect or apply to the Independent Order Free Sons of Israel or
to any corporation, society, order or voluntary association, which
was, prior to the first day of March, nineteen hundred and eleven,
organized and doing business in this state on the lodge system, as
provided in subsection two of section two hundred and thirty of
this chapter which does not issue death benefit certificates in a
sum exceeding five hundred dollars to any one member and whose
membership is confined and limited exclusively to persons of one
particular faith.

No society which, by the provisions of this section, is exempt
from the requirements of this article or chapter, except any so-
ciety described in subdivision a, shall give or allow, or promise
to give or allow, to any person any compensation for procuring
new members.

The superintendent of insurance may require from any society
or association, by examination or otherwise, such information as
will enable him to determine whether such society or association is
exempt from the provisions of this article or chapter.

Any fraternal benefit society heretofore organized and. incor-
porated and operating within the definitions set forth in section
two hundred and thirty of this article providing for benefits in
ease of death or disability resulting solely from accidents, but
which does not obligate itself to pay death or sick benefits, may be
licensed under the provisions of this article and shall have all the
364 Tur Insurance Law. §§ 246, 247.

privileges and be subject to all the provisions and regulations of
this article, except that the provisions thereof requiring medical
examinations, valuations of benefit certificates, and that the cer-
tificates shall specify the amount of benefits, shall not apply to
such society. ’

Added by L. 1911, chap. 198.

Amended by L. 1913, chap. 410, and L. 1914, chap. 203. In effect April 7,
1914.

The purpose of the amendment of this section by chapter 203 of 1914 was
to provide that any excess of the present value of future contributions over
the present value of promised benefits under certificates providing for disa-
bility benefits (other then total permanent disability in combination with
death benefits) should not be allowed in reduction of the liability under other
forms of certificates; and to terminate the limitation in the law of 1918,
authorizing the organization of certain voluntary associations.

A voluntary association of a benevolent description, having less than five
hundred members, organized in this State thirteen years ago and doing busi-
ness there at the time chapter 198 of 1911 went into effect, and providing for
a death benefit of not more than one hundred dollars and « disability benefit
of not more than one ‘hundred and fifty dollars to any one person in any one
year is exempt from the provisions of article VII of the Insurance Law.
Attorney-General Rep., Oct. 31, 1911.

§ 246. Taxation.

Every fraternal benefit society organized or licensed under this
article is hereby declared to be a charitable and benevolent in-
stitution, and all of its funds shall be exempt from all and every
state, county, district, municipal and school tax, other than taxes

on real estate and office equipment.
Added by L. 1911, chap. 198.

§ 247. Penalties.

1. Any person, officer, member or examining physician of any
society authorized to do business under this article, who shall
knowingly or willfully make any false or fraudulent statement or
representation in or with reference to any application for mem-
bership, or for the purpose of obtaining money from or benefit in
any society transacting business under this article, shall be guilty
of a misdemeanor and, upon conviction thereof, shall be punished
by a fine of not less than one hundred dollars nor more than five
hundred dollars, or imprisonment in the county jail for not less
than thirty days nor more than a year, or both, in the diseretiou
of the court; and any person who shall willfully make a false
§§ 248, 249. Fraternat Buyerrr Socierres. 365

statement of any material fact or thing in a sworn statement as to
the death or disability of a certificate holder in any such society,
for the purpose of procuring payment of a benefit named in the
certificate of such holder, or any person who shall willfully make
any false statement in any verified report or declaration under
oath, required or authorized by this article, shall be guilty of per-
jury and shall be proceeded against and punished as provided by
the statutes of this state in relation to the crime of perjury.

2, Any person who shall solicit membership for, or in any man-
ner assist in procuring membership in, any fraternal benefit so-
ciety not licensed to do business in this state, or who shall golicit
membership for, or in any manner assist in procuring member-
ship in, any such society not authorized as herein provided to do
business as herein defined in this state, shall be guilty of a mis-
demeanor and, upon conviction thereof, shall be punished by a
fine of not less than fifty nor more than two hundred dollars.

3. Any society, or any officer, agent or employee thereof, neg-
lecting or refusing to comply with or violating any of the pro-
visions of this article, the penalty for which neglect, refusal or
violation is not specified in this section, shall, upon conviction

thereof, be fined not exceeding two hundred dollars.
Added by L. 1911, chap. 198.

§ 248. Application of other sections of this chapter.

Sections six, seven, nine, ten, thirty-five, thirty-six, forty-seven
and sixty-three of this chapter are hereby made specifically ap-
plicable to any corporation, society, order or voluntary associa-
tion described in, and transacting or seeking authority to trans-
act the business of insurance in this state authorized by, the pro-
visions of article seven of this chapter.

Added by L. 1911, chap. 198.

§ 249. Review.

All decisions and findings of the superintendent of insurance
made under the provisions of this article and all other sections of
this chapter made applicable thereto may be reviewed by proper
proceedings in any court, of competent jurisdiction.

Added by L. 1911, chap. 198.
366 Tur Insurance Law. § 250.

ARTICLE VIII.

Corporations ror Insurance or Domestic ANIMALS.

Section 250. Incorporation. +
251. Annual meeting; election of directors.
252. Annual report.
253. Examinations; when corporation may be restrained from doing
business.
254. Assessments.

Sxction 250. Incorporation.

Nine or more persons may become a corporation for the purpose
of insuring the lives of domestic animals, upon the co-operative or
assessment plan of insurance, by making, acknowledging and filing
in the office of the superintendent of insurance, a declaration stat-
ing their intention to form such corporation; the name by which it
shall be known; the place where its office shall be located within
this state; its particular business and objects; its duration, not
to exceed thirty years; the number of its directors, not less than
five nor more than thirteen, who shall manage its affairs, and the
names and post-oflice addresses of the directors for the first year of
its existence, with a sworn statement by two or more of such per-
sons, that at least fifty persons eligible to membership have applied
in good faith, in writing, for membership and insurance in such
corporation, to the amount of at least ten thousand dollars, anc have
severally in good faith paid in in cash the regular premiums tnere-
for, and admission or membership fees in accordance with the by-
laws of such corporation. If the requirements of this chapter have
been complied with, the superintendent shall file such declaration,
statement and certificate, and cause the same to be recorded in 4
book to be kept for that purpose, and shall deliver to such corpora-
tion a certified copy of the papers so filed and recorded, with his
license to the corporation to engage in the business proposed in
such declaration. Upon such certified copy and license being filed
in the office of the clerk of the county where the corporation is to be
located, such persons and those that may thereafter be associated
§ 250. Insurance or Domestic ANIMALS. 367

with them, or their successors, shall be a corporation and authorized
to commence and carry on such business. Provided, however, that
no such corporation shall be formed, and no such license shall be
issued by the superintendent of insurance after July first, nineteen
hundred and ten.

Source.—Former § 250; originally revised from L. 1889, chap. 454, §§ 1-3.

Amended by chapter 318 of 1910.

Section 3 of chapter 318 of 1910 provides:

§ 3. This act shall take effect immediately, provided that at any time after
the passage and approval of this act, and upon July first, nineteen hundred and
ten, the superintendent of insurance may refuse to issue any license under
section two hundred and fifty. of said chapter, if in his judgment such refusal
will promote the interest of the people of the state.

See § 6, ante. Fees to superintendent for filing papers.

See § 9, ante. Certificate of authorization by superintendent.

See § 10, ante. Certificate of attorney-general, corporate names, number of
directors.

See § 11, ante. Examination by superintendent as to payment of capital
stock, ete.

See § 60 et seq., General Corporation Law. Proceedings to change the name
of a corporation.

See § 195, Penal Law. Misconduct of agents of corporations to insure
domestic animals.

See chap. 733 of 1900. Reincorporation of foreign money’ corporations.

DIRECTORS.—- A quorum of directors must be a majority of all the directors
unless otherwise provided in charter or special law. By-laws cannot change
this rule. Attorney-General Rep., 1900, page 253.

ACKNOWLEDGMENT.— The certificate of organization of co-operative
insurance companies must be acknowledged by nine or more incorporators.
Attorney-General Rep., 1892, page 442. Ss

TRANSFER OF CORPORATE RIGHTS.— There is no provision in the
Insurance Law which warrants the transfer of corporate rights and fran-
chises to an individual acting as general agent in another state. Attorney.
General Rep., 1896, page 276.

ANIMALS LOST BY FIRE.— A co-operative live stock insurance company
organized under article VIII of the Insurance Law is liable for the death of an
animal which results from a fire. O’Grady v. N. Y. Mut. Live Stock Ins. Co.,
16 App. Div., 567; 44 N. Y. Supp., 946.

DOMESTIC ANIMALS.— A corporation authorized to insure the lives of
domestic animals may insure the lives of such animals in transportation over
the Atlantic ocean, but has no right to transfer such a policy. Attorney-
General Rep., 1897, page 114.

Fire insurance companies cannot be incorporated under article VII, but can
under article IX, to insure against loss of domestic animals by fire. Attorney-
General Rep., 1893, page 317.
368 Tue Insurance Law. 8§ 251, 259,

§ 251. Annual meeting; election of directors.

Every such corporation shall hold within the county in which
its office is located, a stated annual meeting of its members in such
manner and subject to such regulations as its constitution or by-laws
may provide. Notice of such meeting of not less than five days
shall be given in such manner as the by-laws may direct. ‘The di-
rectors named in such declaration shall hold their office for one year
and until others are elected and qualified, and directors shall be
annually elected at such stated meeting. The directors shall choose
from their number a president and secretary, and shall appoint
such other officers as their by-laws shall prescribe. At the stated
annual meeting, a majority of the persons entitled to vote thereat
shall not be necessary to a quorum, and if the meeting shall not be
held on the day designated therefor, it may be held on a subsequent
day, in such manner as may be directed by the by-laws.

Source.—Former § 251; originally revised from L. 1889, chap. 454, §§ 4, 10.

See § 11, subd. 5, General Corporation Law, chap. 28 of 1909. Powers of
corporation to pass by-laws; election of directors.

§ 252. Annual report.

Every such corporation shall annually, on or before March
first, make and file with the superintendent of insurance a report
for the year ending on the thirty-first day of December immedi-
ately preceding, verified by the duly authorized officers of such
corporation, which shall state the date of its organizatior, the
number of certificates or policies issued during the year or nem-
bers admitted, the number of losses paid and the amount paid on
each loss, the amount received from each assessment for the year,
the number of claims for which assessments have been made, the
total amount received for benefit fund and the disposition thereof,

the reserve fund, if any, and its amount, the number of policies 7

or memberships lapsed during the year, the number in force at the
beginning and the end of the year. No other report, and no
deposit of securities with the superintendent, shall be required of
the corporation. Any corporation refusing or neglecting to make
such report, or to make payment of any fees required by law,
may, upon the suit of the attorney-general, upon the recommenda-
§ 258. Insurance or Domestic ANIMALS. 369

tion of the superintendent of insurance, be enjoined by the supreme
court from carrying on any business until such report and payment
shall be made and the costs of such action be paid.

Source.—Former § 252; originally revised from L. 1889, chap. 454, §§ 6, 7.

See § 1508 of Penal Law. Failure of officers of companies to insure domestic
animals to make report, ete.

§ 253. Examinations; when corporation may be restrained
from doing business.

Every such corporation, together with its books, papers and
vouchers, shall be subject to visitation and inspection by the super-
intendent of insurance, or such person as he may designate. When
on investigation, the superintendent shall be satisfied that any
such corporation has exceeded its powers, failed to comply with
any provision of ‘aw, or is conducting business fraudulently, he
shall report the facts to the attorney-general ; who, if he shall be of
the opinion that the facts require such action, must thereupon
apply to the supreme court at a special term thereof within the
judicial district within which the office of such corporation is
located for an order requiring its officers to show cause at a time
and place within the district to be specified in the order why it
should not be restrained from continuing to transact business, and
the court may adjourn the hearing thereof from time to time not
exceeding sixty days in all. :

Upon the return of such order the corporation may be heard and
shall be entitled to a trial by jury of the facts stated in the report,
if the same shall be traversed and the corporation shall demand a
trial by jury, and to examine papers and witnesses under oath in
the usual mode of trials of actions. If the facts thus reported shall
be established by the finding of the court or verdict of the jury, the
court may thereupon make its order or decree closing the business
of the corporation and appointing a receiver for the distribution
of its assets among its members, certificate holders, policy holders
and ereditors, or may make such other order as the interests of the
corporation and the public may require.

Pending such trial the court may, upon the motion of the attor-
ney-general, grant an injunction order restraining the corporation
370 Tue Insurance Law. § 254,

and its directors or other officers from collecting any debt or de
mand, and from paying out or in any other way transferring or
delivering to any person any money or property of the corporation
during the pendency of such proceeding, except by the order of
the court; and may appoint one or more temporary receivers of
the property of the corporation, with all the powers of such re
ceivers; but no action shall be maintained to restrain or dissolve
any such corporation except by the attorney-general, in the name
and in behalf of the people.

Source.—Former § 253; originally revised from L. 1889, chap. 454, § 8.

§ 254. Assessments.

Each notice of assessment made by any such corporation upon
its members, or any of them, shall truly state the cause and pur-
poses of such assessment and the amount paid on the last loss
claim paid, the maximum face value of the policy or certificate
upon which sich claim was paid, and if not paid in full, the
reason therefor. The manner and mode of making such assess-
ments and the cost, expense and collection thereof shall be regu-
lated by the by-laws of the corporation.

Source.—Former § 254; originally revised from J. 1889, chap. 454, § 11.
§ 260. Co-oprrative Fire Insurance Corporations, 371

ARTICLE IX.

Co-oPERATIVE Fire Insurance CorPoraTIons.

SECTION 260. Existing corporations continued.
261. Voluntary associations continued and incorporated.
262. Co-operative fire insurance corporations; general provisions.
263. Incorporation and certificate of authority.
264. By-laws. ,
265. Policies.
266. General provisions affecting assessment corporations only.
267. General provisions affecting advance premium corporations only.
268. Application of other sections of this chapter.
269. Extension of corporate existence.

Section 260. Existing corporations continued.

All corporations formed pursuant to chapter seven hundred and
thirty-nine of the laws of eighteen hundred and fifty-seven, chap-
ter five hundred and seventy-three of the laws of eighteen hundred
and eighty-six or the laws of which the last mentioned chapter was
a consolidation, and article nine of chapter six hundred and ninety
of the laws of eighteen hundred and ninety-two, and the acts
amendatory of any thereof, and all co-operative fire insurance
corporations organized under special acts of the legislature which
may desire to become subject to the provisions of this article and
which have heretofore filed or shall hereafter file with the super-
intendent of insurance the papers specified in this section, are
hereby continued in existence and made subject to the provisions
of this article and not to any other provisions of this chapter, un-
less made specifically applicable thereto. Each such corporation
shall, unless it has already filed with the superintendent of insur-
ance the papers hereinafter provided, file with the superintendent
of insurance, not later than December thirty-first, nineteen hun-
dred and eleven, copies of its certificate of incorporation, or if
organized under a special act, copies of its incorporating act and
by-laws in force at the time of such filing, duly verified by its
president and secretary by affidavits to the effect that the same
are true copies. When it shall be made to appear to the satisfac-
tion of the superintendent of insurance that the certificate of in-
corporation of any such corporation has been lost or destroyed
372 Tue Insurance Law. § 260.

and that a copy thereof cannot be filed as hereinabove provided,
the superintendent of insurance may permit the filing, in lieu of
such certificate of incorporation, of a statement, verified by the
oath of its president and secretary, which shall set forth the facts
preventing the filing of a copy of such certificate of incorporation
and show the character and mode of transacting business employed
by such corporation. On the filing of such papers, so verified,
the superintendent of insurance, if in his judgment such cor-
poration will safely conduct the business of insurance in this
state, shall issue to such corporation a certificate authorizing it
to continue in the business of insurance in this state of the kind
specified in such by-laws and within the territory in which it does
business at the time of such filing, provided that such business
and territory are not in conflict or inconsistent with the terms of
this article; provided, further, that any such corporation which
has not yet received a certificate of authority as hereinabove
provided is hereby authorized to continue the business previously
conducted by it to and until December thirty-first, nineteen
hundred and eleven, but no such corporation shall continue
such business without such certificate after December thirty-first,
nineteen hundred and eleven; and provided further, that the
policies of any such corporation issued heretofore or at any time
prior to the issue of said certificate shall be as valid and the rights
and powers of the officers and members of such corporation shall
be the same in all respects as if such corporation had been origi-
nally organized under this article. All acts of the superintendent
of insurance since the first day of September, nineteen hundred
and ten, in issuing certificates of authority to co-operative fire
insurance corporations to which the provisions of this article are
applicable are hereby validated, legalized and confirmed and all
corporations which have received such certificates are hereby
made and declared to be legal corporations and subject to the
provisions of this article, notwithstanding any irregularity, infor-
mality or defect in the certificates of incorporation or other papers
filed, upon which such certificates of authority were issued,
Added by L. 1910, chap. 328, and amended by L. 1911, chap. 323.

A co-operative fire insurance company may not, prior to the issue of the cer
tificate mentioned in § 260, extend its business immediately, upon filing the
§ 261. Co-orpzrarive Fire Insurance Corporations, 373

statement mentioned in § 262, as amended by L. 1910, chap. 328. Attorney-
General Rep., Nov. 15, 1910.

§ 261. Voluntary associations continued and incorporated.

All voluntary associations which were on the first day of July,
nineteen hundred and ten, doing in this state an insusance busi-
ness of the kind and on a plan similar to those of the e>porations
specified in section two hundred and sixty of this chapter, and
which may desire to become corporations authorized to do the
business of insurance in this state of such kind and on such plan
and to become subject to the provisions of this article, shall, not
later than December thirty-first, nineteen hundred and eleven,
file with the superintendent of insurance, on blanks to
be furnished by him for that purpose, (a) an application for
the certificate hereinafter mentioned, such application to be exe-
cuted by the then officers and directors of such association, and
(b) copies of the original articles of association and of the by-laws
in force on the date of such application, duly verified by its presi-
dent and secretary by affidavits to the effect that the same are true
copies; and, thereupon, such voluntary association shall become
a corporation, having the same officers and directoré, and subject
to such articles of association and by-laws so far as the same are
not in conflict or inconsistent with the terms of this article, on the
superintendent of insurance, if in his judgment it will safely con-
duct the business of insurance in this state, issuing a certificate
authorizing it to continue in the business of insurance in this state
of the kind specified in such by-laws and within the territory in
which it does business at the time of such application, provided
that such business and territory are not in conflict or inconsistent
with the terms of this article, to the same effect as if such volun-
tary association had been formed as a corporation under section
two hundred and sixty-three of this chapter; provided that
the policies of any such association issued heretofore or at any
time prior to the issue of such certificate shall be as valid and the
rights and powers of the officers and members of such association
shall be the same in all respects as if it had been originally organ-
ized as a corporation under this article.

Added by L. 1910, chap. 328, and amended by L. 1911, chap. 323.
ST4 Tus Ixsurnance Law. § 262.

§ 262. Co-operative fire insurance corporations; general
provisions.

1. Classification of corporations. All corporations to whien
certificates of authority shall, be issued, pursuant to
sections two hundred and sixty and two hundred and
sixty-one of this chapter, or which shall hereafter be given
certificates on their due incorporation, pursuant to the provisions
of this article, shall be known as co-operative fire insurance
corporations. Co-operative fire insurance corporations may make
insurances (a) on property against loss or damage by iire,
lightning, wind storms, tornadoes or earthquakes, or (b) against
loss or damage by larceny or loss or expense in recovering the
property stolen or in apprehending the thief. Such corpora-
tions shall do business on an advance premium plan or on an
assessment plan, but no such corporation shall do business on both
such plans. Such corporations as charge or collect in advance the
estimated cost of insurance for the full term of the policy shall be
deemed to be advance premium corporations. All other co-opera-
tive fire insurance corporations shall be deemed to be assessment
corporations. Advance premium corporations shall do business in
not more than five adjoining counties until the amount of insur-
ance in force exceeds one million dollars, whereupon any such
corporation may be authorized to do business in any number
of adjoining counties, but such a corporation shall not be
authorized or permitted to begin or to do business until or unless
it shall have bona fide applications for insurance or insurance in
force in the county in which its principal office is located amount-
ing to two hundred thousand dollars. Assessment corporations
shall be either town corporations, which shall do business in
the town where the principal office is situated and, after the amount
of insurance in force exceeds fifty thousand dollars, may be
authorized to do business in any or all of the towns of a single
county; or county corporations, which shall do business in the
county in which the principal office is situated and, after the
amount of insurance in force exceeds two hundred thousand dol-
lars, may be authorized to do business in not more-than five
adjoining counties; except that such corporations as had legally
.§ 262. Co-oprrative Fire Insurance Corrorations, 3875

extended their territories to more than five counties prior to the
first day of July, nineteen hundred and ten, may continue to
transact business in all of such counties; but an assessment cor-
poration is authorized to transact business; (g) the names of the
business until or unless it shall have bona fide applications for
insurance or insurance in force amounting, if a town corporation,
to fifty thousand dollars in the town in which its principal office
is located, or, if a county corporation, to two hundred thousand
dollars in the county in which its principal office is located.

2. Extension of territorial limits. Any co-operative fire insur-
ance corporation organized under the laws of this state and sub-
ject to the provisions of this article, may extend its territory
within the limits prescribed in this section by filing with the
superintendent of insurance a statement, verified by the oath of its
president and secretary, which must set forth: (a) the purpose
for which such statement is made; (b) the name of the corpora-
tion and the town or county wherein its principal ofhce for the
transaction of business is located; (c) a copy of the resolution by
the board of directors of the said corporation authorizing: the
making of application for leave to extend its territory; (d) the
amount of insurance in force in the town or county in which its
principal office is located; (e) the total amount of insurance in
force; (f) the names of the towns or counties in which the cor-
poration is authorized to transact business; (g¢) the names of the
towns or counties in which the corporation thereafter proposed
to transact business. Upon filing such statement, so verified,
the superintendent of insurance shall, if compliance with the re-
quirements of this section for the extension of territorial limits
has been shown thereby, issue a certificate to such corporation
authorizing it.to transact the business of insurance in the terri-
tory therein stated as the territory in which it proposes thereafter
to transact business,

3. Change from town to county corporation. Any town cor-
poration which may have extended or be entitled to extend its
‘territory to all of the towns of a single county, as provided in
this section, and which shall prove to the superintendent of insur-
376 Tue Insurance Law. § 268.

ance by filing the statement herein provided for such extension
of territory that it has insurance in force amounting to at least
two hundred thousand dollars, shall thereupon receive from the
superintendent of insurance a certificate authorizing it to transact
business in the county wherein its principal office is located and
in not more than five adjoining counties, and shall thereupon
become and be a county corporation and may thereafter exercize
all the powers granted to county corporations by this article.

4. Limitation of business— No corporation, subject to the
provisions of this article, shall insure any buildings or property
out of the limits of the territory comprised in its certificate of
incorporation and the territory to which it may heretofore have
been legally extended, or to which it shall hereafter be extended
under the provisions of this article, except that when a member
of such corporation who owns or occupies premises situate in part
without such limits, has buildings or property, or pastures live
stock on that part thereof lying beyond such limits, he may insure
such property, buildings and their contents and such live stock
with such property or buildings as lie within the teritorial limits
of the corporation. Co-operative fire insurance corporations
shall not be formed by persons residing within and shall not do
business in any city having more than six hundred thousand
inhabitants.

Added by chapter 328 of 1910; as amended by L. 1911, chap. 323.

A co-operative fire insurance company may not, prior to the issue of the cer-
tificate mentioned in § 260, extend its business immediately, upon filing the
statement mentioned in § 262, as amended by L. 1910, chap. 328. Attorney-
General Rep., Nov. 15, 1910.

§ 263. Incorporation and certificate of authority.

Thirty or more persons residing in one town or in adjoining
towns in any county, if a town corporation, or in one county or
adjoining counties not exceeding five, if a county corporation or an
advance premium corporation, who shall each own in good faith
real estate not less than five hundred dollars in value, and collect-
ively own in good faith insurable real estate in such towns or
§ 263. Co-opzrative Fire Insurance Corporations, 377

counties, respectively, to the value of fifty thousand dollars or over,
may become a corporation, on filing with the superintendent of in-
surance a declaration, executed and acknowledged by each of them,
stating their intention to form a co-operative fire insurance cor-
poration for the purpose of engaging in the business of insurance,
pursuant to the provisions of this article, which declaration shall
state (a) whether such corporation will do business as a town,
a county or an advance premium corporation, (b) the town or
towns or county or counties in which it intends to do business
and the town or county in which its principal office is to be
located, (c) its corporate name, which shall include the word
“co-operative,” (d) a copy of the by-laws adopted by such persons
for the regulation of the business of such corporation, (e) the
names and post-office addresses of the officers and directors of
such corporation for the first year, and (f) such other informa-
tion as the superintendent of insurance, by general rules or on
such blanks as may be furnished by him, shall require; which
declaration shall show that such persons own in good faith real
estate in the amount hereinbefore specified. At the time of such
filing or at any time within one year thereafter, such persons,
or those who have been designated as the president and the secre-
tary of such corporation, may file with the superintendent of
insurance a statement, verified by them, to the effect that appli-
cations for insurance in the amounts respectively indicated in the
last preceding section as necessary before any such corporation can
be authorized to begin business have been in good faith made to
such corporation, such statement to give the names and addresses of
such applicants and the amount of insurance applied for by each;
provided, however, that, in case such corporation has declared
its intention to do business on the advance premium plan, such
statement shall show that the premium, specifying the amount, has
been paid in full by each such applicant. If all the requirements
of law have been complied with and thé superintendent is satis-
fied, after investigation, that such statement is true, he shall there-
upon file such declaration and cause it to be recorded in his office,
with the certificate of the attorney-general, in a book to be kept
for that purpose, and issue to such corporation a certified copy of
378 Tue Insurance Law. § 264.

the papers so recorded, together with a certificate authorizing such
corporation to carry on the business of insurance as indicated in
such declaration.

Added by chapter 328 of 1910.

§ 264. By-laws.

The by-laws of all corporations to which a certificate of authority
shall be issued, pursuant to the provisions of this article, shall
include or shall be amended | so as to include, substantially, the
following provisions:

1. Directors and annual meeting. That the corporate powers
of such corporation shall be exercised by a board of directors,
who, if of a town corporation, shall not be less than five, and if a
county or advance premium corporation, shall not be less than
eleven; that such directors shall be divided into classes and a
portion only elected each year; that they shall be elected for a term
of not more than four years; that they shall choose from their num-
ber a president, secretary and such other officers as may be deemed
necessary; and that, after the first year, the directors shall be
chosen at an annual meeting, to be held on the second Tuesday in
January in each year, unless some other day is designated in such
by-laws, at which meeting each person insured shall have one vote
and shall be entitled to vote by proxy under such rules and regu-
lations as may be prescribed by the by-laws unless prohibited by
such by-laws.

2. Records. That each such corporation shall keep proper
books (including a policy register) in which the secretary shall
enter a complete record of all of the transactions of such corpora-
tion and of its board of directors and executive committee, which
books shall at all times show fully and truly the condition, affairs
and business of such corporation, and shall be open for inspection
by every person insured each day from nine o’clock in the fore-

noon to four o’clock in the afternoon, Sundays and legal holidays
excepted.

3. Assessments. That such corporation shall have the power to
assess for the purposes specified in sections two hundred and sixty-
§ 264. Co-opyrarive Fire Insurance Corporations. 379

six and two hundred and sixty-seven of this chapter. That, in case
an assessment is made, the secretary shall, within forty-five days
thereafter, notify, by written or printed notice, every person insured
that such assessment has been made, specifying the amount due
from such person and the time when and to whom such amount
must be paid; provided that such time shall not be less than thirty
nor more than sixty days from the service of such notice, which
may be either personal or by mail, and, if by mail, shall be deemed
complete if such notice is deposited, postage prepaid, in the
post-office at the place where the principal office of the
corporation is located, directed to the person insured at
his last known place of residence or business. That any
person insured who neglects or refuses to pay his assess-
ment may, for such reason or for any other reason satisfac-
tory to the board of directors or its executive committee, be ex-
cluded from such corporation and, when thus excluded, the secre-
tary shall cancel or withdraw his policy or policies, provided that
such person shall remain liable for the payment of his pro-rata
share of losses and expenses incurred on or before the date of his
exclusion and for the penalty herein provided, in case an action
shall be brought against him. If any member of such corporation
shall be excluded and the policy issued to him cancelled, the secre-
tary shall forthwith enter such cancellation and the date thereof
on the records kept in the office of the corporation, and serve
notice of such cancellation on the person so excluded, as
provided herein for the service of notice of assessments, pro-
vided that, in that event, the person who is thus excluded
or whose policy is thus cancelled shall be entitled to the
repayment of an equitable portion of the unearned paid premium
on such policy. That the officers of such a corporation shall pro-
ceed to collect all assessments within thirty days after the- ex-
piration of the notice to pay the same, and that neglect or refusal
on their part so to proceed or to perform any of the duties im-
posed on them by this article shall render them liable, individually,
for the amount lost to any person due to such neglect or refusal,
and, to that end, an action may be maintained by such person
against such officers to collect such amount. That an action may
be brought by the corporation against any person insured therein
380 Tue Insurance Law. § 265.

to recover all assessments which he may neglect or refuse to pay,
and, if such action is brought, there may be recovered from him
both the amount so assessed, with lawful interest thereon, and, as
a penalty for such neglect or refusal, fifty per centum of such as-
sessment in addition thereto. :

4, Withdrawal of members; new members. That any person
insured by such corporation may withdraw therefrom at any time
by giving ten days’ notice in writing to the secretary and paying
his share of all claims existing against such corporation and upon
such withdrawing member surrendering his policy or policies.

5. That persons may be insured who reside or own property
within the territory in which the corporation is authorized to do
‘ business, upo’ the same terms and conditions as original mem-
bers and such other terms as may be prescribed in the by-laws of
the corporation.

6. That nonresidents, who own property within the territory
in which such corporation may do business, may be insured thereir.
and shall have all the rights and privileges of the corporation and
be accountable as are other persons insured therein, but shall not
be eligible to hold office in the corporation. The by-laws of any
such corporation may be amended at any time, subject to the writ-
ten approval of the superintendent of insurance.

Added by chapter 328 of 1910; as amended by L, 1911, chap. 323.

§ 265. Policies.

The policies of insurance issued by any such corporation shall,
if against loss or damage by fire or lightning, conform to the
standard fire policy prescribed in section one hundred and
twenty-one of this chapter, with such modifications therein as
shall be approved in writing by the superintendent of insur-
ance. Every policy issued by such a corporation shall indicate
clearly, in words prominently displayed at the top of the first page
or across the face thereof, that such policy is issued on the co-
operative plan, and shall include a provision in the body of the
policy to the effect that the acceptance of it by the person insured
§ 266. Co-oprrative Fire Insurance Corporations. 381

shall bind such person to pay all assessments which may be levied
thereon. Each such policy shall have printed on the back thereof a
copy of the by-laws of such corporation in force at the time such
policy is issued.

Added by chapter 328 of 1910.

§ 266. General provisions affecting assessment corpora-
tions only.

The following provisions shall affect corporations doing busi-
ness on the assessment plan, pursuant to the provisions of this
article:

1. Such corporations may issue policies of insurance on
detached dwelling houses, barns, hop houses, cheese factories,
creameries, school buildings and other buildings, and the con-
tents of such ‘buildings, on farm produce and other property not
more hazardous and on live stock provided that no such policy
shall be issued for more than seven thousand dollars on any one
risk, or, if such policy is against loss or damage by reason of
larceny, to the extent of not more than five hundred dollars on
any one risk.

2. Every such corporation may classify the buildings or prop-
erty insured therein at the time of the insurance and issue policies
under different rates. Every such corporation may collect at the
time of the issue of a policy such survey, policy and membership
fees, or any of them, not to exceed the sum of two dollars for
all of such fees, and such percentage of the amount insured, not
to exceed one-tenth of one per centum of the amount insured for
each year of the term of insurance, as the by-laws may provide.

3. Every such corporation may borrow, on the credit of the
corporation, sufficient to pay any joss, or make an assessment
upon all the property insured, pro rata, according to the classifica-
tion or according to the amount insured, as may be provided in the
by-laws, sufficient to pay such loss. If it is deemed to be for the
best interest of the corporation, such corporation may estimate the
amount necessary to pay all losses and expenses for the current
year and to supply any deficiency in the preceding year, and assess
and collect the same from the members of the corporation. Each
382 Tur Insurance Law. § 267.

assessment shall be made pro rata upon all the property at the
time insured, according to its classification or according to the
amount insured. The expense and cost of collection of assess-
ments may be regulated by the by-laws.

Added by chapter 328 of 1910; as amended by L. 1911, chap. 303.

§ 267. General provisions affecting advance premium cor-
porations only.

The following provisions shall affect corporations doing busi-
ness on the advance premium plan, pursuant to the provisions of
this article. ;

1. Such a corporation may issue policies of insurance on dwell-
ing houses, stores, school buildings, churches, municipal buildings
and all other kinds of buildings and on household furniture and
the other contents of such buildings, on farm produce and other
property, and on live stock, provided that no such policy shall
be issued for more than five thousand dollars on any one risk,
or in excess of fifteen thousand dollars in any one block or square
in the business portion of any city or village; and provided that
such a corporation shall not issue a policy for more than two
thousand dollars on any one risk nor aggregating more than seven
thousand dollars in any one block or square in the business por-
tion of any city or village without water protection; and provided,
further, that the total amount of insurance written by any such
corporation in the business section of any city or village shall
not exceed one per centum of the total amount of insurance in
force in such corporation.

2. The expense of management of any such corporation shall
not exceed in any one calendar year thirty-five per centum of its
premium income in such year; provided that any such corpora
tion may expend in such year an additional five per centum of
such income for expenses incurred in the inspection of risks and
the adjustment of losses and legal expenses connected therewith;
and provided further that any expenses incurred in connection
with the investment of funds, not to exceed five per centum ot
the income therefrom, may be defrayed from such income.
§ 267. Co-operative Fire Insurance Corporations, 383

3. Every such corporation shall at all times maintain a re
serve equal to eighty per centum of the unearned portion of the
premiums charged to its policy holders for all policies in force
from their dates of issue; provided, however, that any such cor-
poration, which shall or may at any time appear, by any examin-
ation made, or by any annual statement filed, subsequent to the
first day of January, nineteen hundred and thirteen, not to possess
or hold and maintain such reserve, shall reduce any deficiency in
such reserve by not less than fifteen per centum of the deficiency
on or before the filing of the annual statement required by law
to be made as of the thirty-first day of December next following
and by further amounts of not less than fifteen per centum
of such deficiency on or before the filing of the annual state-
ments required by law to be made as of the thirty-first day of
December in each and every ensuing year, until the required re-
serve has been accumulated. If by any examination thereafter
made, or by any annual statement thereafter filed, any such cor-
poration shall appear not to have made the percentage of improve-
ment herein required, the superintendent of insurance may, in the
absence of good cause shown why an assessment should not be
made, direct such corporation to make good the entire amount of
deficiency in reserve by assessment or otherwise within sixty days.

4. Such corporation shall not make any additions to its sur-
plus after the same equals one per centum of the amount of insur-
ance in force, provided that any such corporation having less
than one million dollars of insurance in force may maintain a
surplus not exceeding ten thousand dollars. Any surplus may
be distributed among the members whose policies shall expire
during the ensuing year, proportioned according to the classifica-
tion of the risks and the premiums paid thereon, such surplus
being paid in cash or applied as a rebate on the premium re-
quired to renew the insurance on the same risk; provided that
no such distribution shall be made until all sums of money which
may have been advanced to the corporation pursuant to the pro-
visions of subdivision seven of this article shall have been repaid.

5. In case any deficiency is found to exist in any such corpo-
ration, by reason of fire or other losses and expenses due and
384 Tur Insurance Law. § 267.

unpaid, the same shall be made good within sixty days thereafter,
in case the superintendent of insurance so directs, and, in case such
deficiency is not so made good, the directors shall proceed to assess
the members of the corporation a sufficient sum to make good such
deficiency. All assessments shall be made pro rata upon all of the
property insured by the corporation at the time such assessment
is made, according to its classification or according to the amount
insured; the method of computing the same to be first approved
by the superintendent of insurance.

6. ‘No such corporation shall reinsure or assume the risks of
any other corporation, except that any such corporation may, with
the approval of the superintendent of insurance, reinsure all or
any part of the outstanding risks of any other advance premium
corporation in process of or contemplating liquidation, and, with
the consent of the respective policyholders, may assume all or any
part of the outstanding policies of any such liquidating corpora-
tion. All of the provisions of subdivision three of this section with
regard to the liability of an advance premium co-operative fire
insurance corporation for unearned premiums shall apply to any
advance premium co-operative fire insurance corporation which
shall or may reinsure or assume the policy obligations of any
liquidating corporation, and the basis upon which such unearned
premiums shall be calculated shall be the original premiums paid
by the respective policyholders for the insurance of their property
by such liquidating corporation. No such corporation shall collect
any policy or survey fee, nor pay any commission to an officer or
other person whose duty it is to determine the character of the
risk.

7. <Any director, officer or membcr or members of any such
corporation, or any other person may advance to such corporation,
any sum or sums of money deemed necessary for the purposes of
its business or to enable it to comply with any requirement of the
law, which said moneys and such interest thereon as may have
been agreed upon, not to exceed six per centum per annum, shall
be repaid only out of the surplus earnings or profits of such cor-
poration, and shall not form a part of the legal liabilities of the
§§ 268, 269. Co-oprRrative Fire Insurance Corporations, 385

corporation or of its members and shall not be subject to repay-
ment except as hereinabove provided.

Added by chapter 328 of 1910; as amended by L. 1011, chap. 323, and L.
1912, chap. 90.

§ 268. Application of other sections of this chapter.

Sections six, seven, nine, ten, eleven, sixteen, twenty, thirty-six,
thirty-nine, forty, forty-four, forty-five, forty-six, forty-seven,
forty-eight, forty-nine, fifty-two, fifty-three, and sixty-three of this
chapter are hereby, to the extent that they are now or hereafter may
be applicable to corporations authorized to engage in the business
of insurance in this state, specified in section one hundred and ten
of this chapter, made specifically applicable to any corporation
to which a certificate of authority shall be issued, pursuant to the
terms of this article.

Added by L. 1910, chap. 328.

§ 269. Extension of corporate existence.

Unless otherwise provided in its certificate of incorporation or
articles of association, the corporate existence of every corporation
to which a certificate of authority shall be issued, pursuant to the
terms of sections two hundred and sixty and two hundred and sixty-
one of this chapter, is hereby extended to the end of the twenty-
fifth year from and including the year beginning the first day of
January, nineteen hundred and eleven.

Added by chapter 328 of 1910.
386 Tue Insurance Law. § 300.

ARTICLE X.

Lioyps AND INTER-INSURERS,

Sxction 300. Application of article.

301. Application, examination and certificate of authority.

302. General provisions affecting Lloyds and inter-insurers licensed
under the preceding section.

303. Application of other sections of this chapter.

304. General provisions affecting Lloyds and inter-insurance associa-
tions organized after July first, nineteen hundred and eleven.

305. Provision for the admission of Lloyds and inter-insurance asso-
ciations domiciled in other states.

§ 300. Application of article.

Notwithstanding the provisions of section fifty-four of this chap-
ter, persons, partnerships or associations which, on October first,
eighteen hundred and ninety-two, were lawfully and actually en-
gaged in the business of insurance as Lloyds or inter-insurers or
individual underwriters, may, after January first, nineteen hun-
dred and eleven, continue to do the business of insurance in this
state, provided that such persons, partnerships or associations
shall comply with the provisions of this article, but not otherwise;
and such persons, partnerships and associations as may comply
with and be licensed according to sections three hundred and four
and three hundred and five of this article may do such insurance
business as is therein permitted. Any persons, partnerships or
associations which, after January first, nineteen hundred and
eleven, shall in this state engage in the business of insurance as
Lloyds or inter-insurers, or represent or advertise that they are
so engaged, without having been authorized so to do in accordance
with the provisions of this article, and any agent, subagent, or
representative of any such persons, partnerships, or associations
not so authorized to do such business in this state, who shall after
January first, nineteen hundred and eleven, in any way represent
any such unauthorized persons, partnerships or associations,
directly or indirectly, in engaging or attempting to engage in the
§ 301. Luoyps anp [nTeR-INSURERs. 387

business of insurance in this state, shall be guilty of a
misdemeanor.
Added by L. 1910, chap. 638, and amended by L. 1911, chap. 502.

Residents of New York, who have received certificates under § 137 authoriz-
ing them to write surplus lines, may place such insurance in foreign or unau-
thorizing Lloyds without becoming liable under § 300. Attorney-General Rep., .
August 26, 1910.

§ 301. Application, examination and certificate of authority.

Not later than August first, nineteen hundred and ten, any per-
sons, partnerships or associations claiming that they were law-
fully and actually doing the business of insurance in this state
as Lloyds or inter-insurers on October first, eighteen hundred
and ninety-two, shall file with the superintendent of insurance,
on blanks furnished by him for that purpose, (a) an application
for a certificate authorizing the continuance of such business
after January first, nineteen hundred and eleven, which applica-
tion shall specify the kinds of insurance intended to be written
after the last mentioned day; (b) a verified statement of the
condition of such Lloyds or inter-insurers as of the first day of
July, nineteen hundred and ten; (c) an agreement, executed
and duly acknowledged by each and every individual under-
writer or inter-insurer or his attorney-in-fact duly authorized
thereto, providing in substance that personal service of a sum-
mons or other legal process in an action against any such Lloyds
or inter-insurers, if made upon a person specified in such agree-
ment and resident in the state of New York, shall be equivalent
to the personal service within this state of such summons or other
process on each and every of such individual underwriters or
inter-insurers; and (d) such other matters as the superintendent
of insurance may prescribe. Thereafter, and not later than Decem-
ber first, nineteen hundred and ten, the financial condition of
and the methods of doing business by the persons, partnerships
and associations so applying, shall be examined as provided in
section thirty-nine of this chapter. Thereafter, the superintend-
ent of insurance shall grant to such persons, partnerships and asso-
ciations as shall have complied with the provisions of this article
a certificate of authority to conduct the business of insurance in
388 Tue Insurance Law. § 302.

this state on and after January first, nineteen hundred and
eleven, which certificate shall be revocable or subject to suspen-
sion, if any of such persons, partnerships or associations fail to
comply with any or all of the requirements of this chapter appli-
eable thereto, or upon the happening of any event which on Jan-
uary first, nineteen hundred and eleven, would prohibit such per-
sons, partnerships or associations from transacting business in
this state as set forth in section three hundred and two. Such
certificate shall indicate the kinds of insurance which may be writ-
ten by such persons, partnerships or associations, provided that
the same are not other than those now or which may hereafter be
specified in sections one hundred and ten and one hundred and
fifty of this chapter.
Added by L. 1910, chap. 638.

§ 302. General provisions affecting Lloyds and _inter-
insurers licensed under the preceding section.

No such persons, partnerships or associations who claim
that they were lawfully and actually doing the business of
insurance in this state as Lloyds or inter-insurers on October
first, eighteen hundred and ninety-two, shall, after January
first, nineteen hundred and eleven, engage in the business of
insurance in this state as Lloyds or inter-insurers, (a) unless there
shall be on file in the office of the superintendent of insurance a
copy of the original articles of association, copartnership agreement
or inter-insurance contract, together with all amendments thereto,
accompanied by an affidavit, verified by an attorney-in-fact, to the
effect that it is a true copy, and stating where the principal office
of such persons, partnerships or associations so doing such business
is located, the kinds of insurance in which it is engaged, or in
which it lawfully claims the right to engage, the name under
which business is done and the names and post-office addresses of
all the underwriters, inter-insurers and attorneys-in-fact so doing
business as Lloyde or inter-insurers, which affidavit shall be so
verified not earlier than December fifteenth, nineteen hundred and
ten; or (b) which shall change the name under which business
is done, without first obtaining the written approval of the
§ 302. Liorps anp InTER-rNsuRERS, 389

superintendent of insurance; or (¢) which shall establish branches
under other or different names or titles; or (d) which shall have
a name so similar to that of any other Lloyds or insurance corpo-
ration as in the opinion of the superintendent of insurance is
calculated to deceive, and any existing Lloyds having such a name
may be required to change same by the superintendent of insur
ance; or (e) which does not maintain at all times, in addition
to all outstanding claims and other liabilities, a sum equal to the
total unearned premiums on the policies in force, calculated on the
gross sum without any deduction on any account, charged to the
policyholder on each respective risk from the date of the policy;
or (f) which shall not have its assets invested as prescribed by sec-
tion sixteen of this chapter; or (g) unless each of the underwriters
shall be worth in his own right not less than twenty thousand dol-
lars above all liabilities, such fact to be determined by the superin-
tendent of insurance, and in determining same he may take the
signed reports of commercial agencies having upwards of one
hundred thousand subscribers. No such persons, partnerships or
associations shall chauge the location of their principal office for
the transaction of business without first filing with the superin-
tendent of insurance the affidavit of an attorney-in-fact stating
where such office is to be located, and in no event shall such office
be located outside the state of New York. Every change in the
underwriters, inter-insurers or attorneys-in-fact, made after the
filing of the affidavit previously mentioned in this article, shall be
reported to the superintendent of insurance by a written verified
statement of an attorney-in-fact within twenty days after the same
has been made, which affidavit shall be accompanied by an agree-
ment, executed and duly acknowledged, and binding the new
underwriter or underwriters, inter-insurer‘or inter-insurers to the
original agreement between all the underwriters or inter-insurers
required to be filed by section three hundred and one of this
chapter, with regard to the service of process. The underwriters’
liability shall not be included in the statements or reports of such
persons, partnerships or associations either as an asset or a liability
and any deposit made by an underwriter with any such persons,
partnerships or associations, if treated as an asset in any statement
or report, shall also be charged as a liability.
Added by L. 1910, chap. 638, and amended by L. 1911, chap. 502.
390 Tue Insurance Law. §§ 3038, 304.

§ 303. Application of other sections to this chapter.

After January first, nineteen hundred and eleven, sections six,
seven, nine, sixteen, twenty, twenty-one, twenty-two, thirty-six,
thirty-nine, forty, forty-four, forty-five, forty-six, forty-seven,
forty-eight, forty-nine, fifty-three, sixty-three, one hundred and
eighteen of this chapter are hereby, to the extent that they are
now or hereafter may become applicable to corporations authorized
to engage in the business of insurance in this state and specified
in sections one hundred and ten and one hundred and fifty of this
chapter, made specifically applicable to any persons, partnerships
or associations to which this article is applicable, provided that,
where any of such sections imposes a duty on or prohibits an act
by or in any way refers to the officers or directors of any such
corporation, such sections, when read in connection with this
article, shall be deemed to mean respectively the duly authorized
attorney-in-fact or attorneys-in-fact or the executive, underwriting
or managing committee of such persons, partnerships or associa-
tions, and provided, further, that where any of such sections refers
to a corporation, the same, when read in connection with this
article, shall be deemed to mean the persons, partnerships or asso-
ciations to which this article is applicable.

Added by L. 1910, chap. 638.

§ 304. General provisions affecting Lloyds and_ inter-
insurance associations organized after July first, nineteen
hundred and eleven.

On and after July first, nineteen hundred and eleven, twenty-
five or more persons, partnerships or corporations which have
the requisite authority by their charters may engage in the
business of such insurance as is specified in sections one hundred
and ten and one hundred and fifty of this chapter as Lloyds or
inter-insurers upon receiving a certificate of authority from the
superintendent of insurance so to do. The application for such
certificate of authority shall be signed by the attorney or attor-
neys-in-fact of those persons desiring such certificate and must be
accompanied by a declaration which must set forth, (a) the name
under which the business is to be conducted, which name shall not
§ 304. Lioyps anp INTER-INSURERS. 391

be so similar to any existing Lloyds, inter-insurance association or
corporation as, in the opinion of the superintendent of insurance,
is calculated to deceive; (b) the exact location of the principal
office at which the business is to be conducted, which office must be
in the state of New York; (c) the kinds of insurance intended to be
written, which must be only of those permitted by this section;
(d) an exact copy of the articles of association, copartnership
agreement or inter-insurance contract made between such under-
writers or inter-insurers; (e) the names and addresses of all of the
underwriters or inter-insurers so proposing to engage in such busi-
ness; (f) the designation and appointment of one or more attor-
neys-in-fact who shall be residents of this state, with full names
and addresses, upon whom a summons or other legal process can
be served; (g) that a fund of at least two hundred thousand dol-
lars has been contributed by the subscribers as a guaranty fund for
policy holders and is in the possession of the attorney or attorneys-
in-fact for such subscribers and is either in cash or invested in
such securities as ‘are specified in section sixteen of this chapter.
Such declaration must be signed and sworn to by all of the per-
sons, and the proper officers of the corporations so proposing to
engage in the business of insurance pursuant to this section.
After such documents specified shall be filed, the superintendent
of insurance shall cause an examination of such Lloyds or inter-
insurance association to be made, and, if he is satisfied that all of
the facts alleged in the declaration are true and that the articles
of association, copartnership agreement or inter-insurance con-
tract is of such a character that the rights of the policyholders
will be protected thereunder, he shall issue a certificate of author-
ity for such Lloyds or inter-insurance association to do such busi-
ness of insurance in this state as is specified in the declaration,
which certificate shall be issued to such Lloyds or inter-insurance
association, under the name chosen and approved, authorizing the
underwriters or inter-insurers thereof to do the business per-
mitted. Any such Lloyds and inter-insurance associations as may
be thus authorized to do business in this state (1) shall at all times
keep and maintain a fund of an amount equal to all outstanding
claims and other liabilities, plus the unearned premiums on the
policies in force, calculated on the gross sums, without any deduc-
392 Tne Insurance Law. § 304.

tion on any account, charged to the policyholder on each respective
risk from the date of the policy, and in addition the sum of
two hundred thousand dollars; (2) shall not change the name
under which business is done without first obtaining the written
approval of the superintendent of insurance; (3) shall not estab-
lish branches under other or different names or titles; (4) shall
have its assets either in cash or invested as prescribed by section
sixteen of this chapter; (5) shall notify the superintendent of in-
surance of any change in the location of its principal office for the
transaction of business, which office shall always be in the state of
New York, which said notice shall be in the form of a declara-
tion subscribed and sworn to by its attorney or attorneys-in-fact;
(6) shall notify the superintendent of insurance of any change in
its underwriters or inter-insurers, which notice shall be in the form
of a declaration subscribed and sworn to by its attorney or attor-
neys-in-fact; (7) shall not amend or change its articles of associa-
tion, copartnership agreement or inter-insurance contract without
the approval of the superintendent of insurance, and a true copy
of any amendment or change permitted shall be verified by an
torney-in-fact of such Lloyds or inter-insurance associations and
be filed with the superintendent of insurance; (8) shall notify
the superintendent of insurance of any change in its attor-
ney or attorneys-in-fact by filing with the superintendent of in-
surance an instrument revoking the designation or appointment
of any attorney or attorneys-in-fact who are no longer to act for
such underwriters or inter-insurers, and designating and appoint-
ing one or more attorneysin-fact, residents of this state, with full
names and addresses, who shall thereafter be the attorney or
attorneys-in-fact for such underwriters or inter-insurers, such in-
strument to be signed and sworn to by each and every of the un-
derwriters or inter-insurers who shall then be doing business under
such authority. After any Llovds or inter-insurance association
is authorized to do busines in this state, pursuant to this section,
it may be joined by other and additional underwriters or inter-in-
surers, but in that event such underwriters or inter-insurers who
may thereafter join such authorized Lloyds or inter-insurance asso-
ciation shall be held to be bound by the documents on file with
the superintendent of insurance concerning such Lloyds or inter-
§ 305, Luoyps anp InrER-1NsuRERs, 393

insurance association in the same manner as though they had per-
sonally signed the same, and the attorney or attorneys-in-fact then
authorized by the underwriters of such Lloyds or inter-insurance
association to act for them shall thereafter and subject to the pro-
visions of this section be the attorney or attorneys-in-fact for such
additional underwriters, and service of a summons or other legal
process on an attorney-in-fact for the underwriters of such Lloyds
or inter-insurance association whose appointment is in force and so
filed with the superintendent of insurance shall be equivalent to,
the personal service of such process on each and every of such un-
derwriters and interinsurers within this state. The funds re-
quired by this section to be held ‘by any Lloyds or inter-insurance
association and all other undistributed funds held by it shall be
liable primarily for the payment of any losses incurred under its
policies, and any judgments recovered under any such policies
against the underwriters thereon may be satisfied from such funds
without regard to the extent of the various underwriters’ interests
therein, and such funds shall not be subject to the claims of gen-
eral creditors of any of the underwriters of such Lloyds or inter-
insurance association, other than policyholder creditors whose
claims have arisen under their policies, until all policies under
which any such underwriter is obligated have been terminated,
and in that event the claims of such general creditors shall not
be paid from such fund or be a lien upon any part thereof beyond
an amount which when paid will leave intact and im the possession
of such Lloyds or inter-insurance association an amount equal to
the full unearned premiums on all policies in force and in addi-
tion the sum of two hundred thousand dollars as provided herein.
Any clause in any policy issued by any such Lloyds or inter-insur-
ance association which shall contain any provision inconsistent
with this section shall be void.
Added by L. 1911, chap. 502.

§ 305. Provisions for the admission of Lloyds and inter-
insurance associations domiciled in other states.

On and after July first, nineteen hundred and eleven, the
superintendent of insurance may in his discretion issue a cer-
tificate of authority to a Lloyds or inter-insurance association
394 Tue Insurance Law. § 305.

domiciled in another state to do such insurance business in this
state, for permission to do which application is made, and as
may be authorized by the articles of association, partnership
agreement or inter-insurance contract under which such Lloyds or
inter-insurance association is operating, providing, however, that
in no event shall authority be given to any such Lloyds or inter-
insurance association to do other kinds of insurance business than
those specified in sections one hundred and ten and one hundred
and fifty of this chapter. The application for such certificate
shall specify the kinds of business such Lloyds or inter-insurance
association desires authority to transact within this state;
it must be signed by the attorney or attorneys-in-fact for such
Lloyds or inter-insurance association and must be filed with the
superintendent of insurance together with, (a) a certificate from
the insurance department of its home state that it has and main-
tains at all times an amount equal to all outstanding claims and
other liabilities, plus the unearned premiums on all policies in
force, calculated on the gross sums, without any deduction on any
account charged to the policy holder on each respective risk from
the date of the policy, and in addition the sum of two hundred
thousand dollars; (b) a true copy of the articles of association,
partnerhip agreement, or inter-insurance contract of such Lloyds
or inter-insurance association, verified by its attorney or attorneys-
in-fact; (c) an agreement executed by an attorney or attorneys-
in-fact for such Lloyds or inter-insurance association in such form
as the superintendent of insurance may prescribe that it will not
do any business in this state which a domestic Lioyds or inter-
insurance association cannot do; (d) a declaration and agreement
duly executed and acknowledged by each of the underwriters of
such Lloyds or inter-insurance association, appointing the super-
intendent of insurance the true and lawful attorney for such
Lloyds or inter-insurance association and the underwriters thereof
in and for this state, upon whom all legal process in any action
or proceeding against the said Lloyds or inter-insurance associa-
tion or the underwriters thereof may be served and that any
service upon him shall be equivalent to the personal service within
this state of such process on each and every of such underwriters
or inter-insurers. If any such Lloyds or inter-insurance associa-
§ 305. Luioyps anp INTER-INSURERS. 395

tion is authorized to do business in this state, and, after such
authorization, other underwriters or inter-insurers desire to join
in issuing policies of insurance in this state with the underwriters
or inter-insurers who have filed such declaration and agreement,
they are authorized to so join upon filing similar declarations and
agreements with the superintendent of insurance. The certificate
of authority of any such Lloyds or inter-insurance association
shall be revoked by the superintendent of insurance if at any
time it appears that any underwriters or inter-insurers are issuing
policies of insurance within this state, under apparent authority
of such certificate without filing such declaration and agreement
as aforesaid, or if such Lloyds or inter-insurance association does
not maintain at all times the funds specified in this section, or has
violated its agreement, or the law, or is found to be in such a
condition that the further transaction of business by it will be
hazardous to its policyholders or its creditors or to the public.
Added by L. 1911, chap. 502. f
396

SEcTIon 350.

351.
352.
353.
354.

355.

Tur Insurance Law. § 350.

ARTICLE X—A.

Srate Fire Marszat.

Office of state fire marshal established; appointment; term;
salary.

Duties of the state fire marshal.

Deputies.

Assistant officers.

Duties of assistants to the state fire marshal to investigate
the cause and origin of all fires and explosions.

Duties of the state fire marshal and assistants to inspect
public buildings.

356. Duties of the state fire marshal, and assistants to inspect other

357.
358.
359.

360.
361.
362.
363.
364,
365.
366.
367.
368.
369.
370.
371.
372.
373.
374.
375.
377.
378.
379.

§ 350.

property.
Boiler Inspection.
Definition of explosives.
Regulations regarding quantity, distance from buildings, et
cetera.
Explosives, where kept.
Magazines classified.
Caps not kept in magazines.
Reports of inspection to be made and certificate of compliance.
Transportation.
Record of sales.
Exceptions.
Firearms.
Penalties regarding explosives.
Powers of state fire marshal, deputies and assistants.
Records.
Annual report.
Witnesses.
Duties of district attorney.
Compensation of assistants.
Penalties.
County clerks to furnish lists.
Reports of assistants to state fire marshal.
State fire marshal to make regulations.

Office of state fire marshal established; appoint-

ment; term; salary.

The office of state fire marshal is hereby established. The
governor is hereby authorized and empowered to appoint,
within thirty days after this act shall take effect, by and with the
advice and consent of the senate, a suitable person who shall be a
citizen of this state, as state fire marshal, who shall hold the office
for a period of five years or until his successor is appointed and
§ 351. Strate Fire Marsiat. . 397

qualified. The office of the state fire marshal shall be located
in the capitol in the city of Albany. He shall receive an
annual salary of seven thousand dollars and shall be paid, in
addition, his actual and necessary expenses incurred in the per-
formance of the duties of his office. He shall devote his whole
time to the duties of his office. Whenever there shall be a vacancy
in the office of state fire marshal, the governor shall fill the
vacancy for the unexpired term in the manner provided in this
section. The state fire marshal and his deputies shall take and
subscribe and file in the office of the secretary of state the con-
stitutional oath within fifteen days from time of notice of their
appointment respectively.

Added by L. 1911, chap. 451.
Section 2 provides that this act shall not apply to cities having more
than one million inhabitants, which maintains a municipal fire marshal except
that such municipal fire marshal shall prepare and forward such reports as to
fires, et cetera, which the state fire marshal may require and except that the
state fire marshal shall inspect all buildings, premises or institutions owned

or controlled by the state or supported in whole or in part by the funds of the
state situated within said cities.

§ 351. Duties of the state fire marshal.

It shall be the duty of the state fire marshal to enforce
all laws and ordinances of the state, and the regulations made
hereunder, except in cities having over one million inhabitants,
as follows:

1. The prevention of fires;

2. The storage, sale or use of combustibles and explosives;

3. The installation and maintenance of. automatic or other
fire-alarm systems and fire extinguishing equipment;

4, The inspection of steam boilers;

5. The construction, maintenance and regulation of fire
escapes; :

6. The means and adequacy of exit, in case of fire, from fac-
tories, asylums, hospitals, churches, schools, halls, theatres, am-
phitheaters and all other places in which numbers of persons work,

live, or congregate from time to time for any purpose and the
institution and supervision of fire drills in such premises ;
398 . Tue Insurance Law. §§ 352, 353.

7. The suppression of arson and investigations of the cause,
origin and circumstances of fires and explosions.

8. The adequacy and sufficiency of water supply and fire
apparatus and their inspection for fire fighting purposes.

Added by L. 1911, chap. 451.
Amended by L. 1912, chap. 453, and L. 1918, chap. 204.

§ 852. Deputies.

The state fire marshal shall appoint a first deputy fire marshal,
who shall receive an annual salary of five thousand dollars, and
a second deputy fire marshal who shall receive an annual salary
of five thousand dollars. Each such deputy shall also be paid
his actual and necessary expenses incurred in the performance
of the duties of his office. The state fire marshal shall also
appoint a secretary and such other clerks and assistants as shall be
needed in the performance of the duties of his office. In case of
the absence of the state fire marshal, or his inability from any
cause to discharge the duties of his office, such duties shall devolve
upon the first deputy state fire marshal; and in case of the absence
of the state fire marshal and the first deputy state fire marshal,
or their inability from any cause to discharge the duties and
powers of their office, such duties and powers shall devolve upon
the second deputy state fire marshal.

Added by L, 1911, chap. 451.
Amended by L. 1912, chap. 453.

§ 353. Assistant officers.

All municipal fire marshals in those municipalities having such
officers, and, where no such officer exists, the chief of the fire
department of every incorporated city or village in which a
fire department is established, or fire district under and pursuant
to the county, law, the president or like senior officer of each
incorporated village in which no fire department exists, the chief
of the fire department or like senior officer in an unincorporated
village in which a fire department exists, and the clerk of each
organized town without the limits of any incorporated village or
city, shall be, by virtue of such office so held by them, assistants
to the state fire marshal and subject to the duties and obligations
§ 354. Stare Fire Marsuat. 399

imposed by this article and shall be subject to the directions of
tlie state fire marshal in the execution of the provisions hereof.

Immediately upon taking office the state fire marshal shall pre-
pare instructions to the assistants designated herein and forms for
their use in the reports required by this article and cause them
to be printed! and sent, together with a copy of this article, to each
such officer located in this state. Any officer referred to in this
act who neglects to comply with any of the requirements hereof,
shall be guilty of a misdemeanor and upon conviction shall be
punished by a fine of not less than twenty-five dollars nor more
than one hundred dollars for each neglect or violation and in
default of the payment thereof shall be imprisoned not to exceed
thirty days.

Added by L. 1911, chap. 451.

Amended by L. 1913, chap. 432.

§ 354. Duties of assistants to the state fire marshal to
investigate the cause and origin of all fires and explosions.

The assistants to the state fire marshal as defined in the pre-
ceding section shall investigate the cause, origin and circumstances
of every fire or explosion occurring in any city, village or town
in this state by which life has been lost or property has been
destroyed or damaged, and, so far as it is possible, determine
whether the fire or explosion was the result of carelessness or
design. Such investigation shall be begun immediately upon the
occurrence of such fire or explosion by the assistant in whose terri-
tory it has occurred, and if it appears to the officer making such
investigation that such fire is of suspicious origin or that such
explosion has been caused by negligence or design, the state fire
marshal shall be immediately notified of such fact. Every fire
or explosion occurring in this state shall be reported in writing
to the state fire marshal within fifteen days after the occurrence
of the same by the officer designated in section three hundred
and fifty-three of this article in whose jurisdiction such fire or
explosion has occurred; such report shall be in the form prescribed
by the state fire marshal and shall contain a statement of all facts
relating to the cause and origin of such fire or explosion that
can be ascertained, the loss of life or the extent of damage, the
insurance upon the property damaged, and such other information
as may be required.
‘

400 Tue Insurance Law. § 355,

Every fire insurance company transacting business in this state
is hereby required to report to the state fire marshal, through the
secretary or other officer of the company designated by the board
of directors for that purpose, all fire losses on property within this
state, insured in such company, giving the date and location of
fire, the amount of probable loss, the character of property de-
stroyed or damaged, and the supposed cause of the fire. Such
reports shall be mailed to the state fire marshal on or before the
tenth day of each month as to all fires of which notice was received
during the preceding month, and shall include, either in the first
or subsequent monthly report, the amount of loss as adjusted.
Provided, that in all cases where such company receives evidence
or information indicating that any fire was of incendiary origin,
report of such fire and of such evidence or information shall be
immediately mailed to the state fire marshal. Such reports shall
be in addition to and not in lieu of any report or reports such
companies may be required to make by any law of the state to the
superintendent of insurance or other state officer.

Added by L. 1911], chap. 451.
Amended by L. 1912, chap. 453, and L. 1913, chap. 483.

§ 355. Duties of the state fire marshal and assistants to
inspect public buildings.

The state fire marshal and his deputies or the assistant state
fire marshals under his direction shall at least once a year make
an inspection of all the buildings, premises and institutions
wherever they may be situated which are owned or controlled by
the state of New York or supported in whole or in part by the
funds of the state of New York and all other buildings owned or
controlled by any county, town or village or other political sub-
division of the state of New York or which are supported in .
whole or in part by the funds of such counties, towns or villages
or other political subdivision except in cities having more than
one millon inhabitants. He shall cause a report of such inspec-
tion to be filed with the board, commission or officer having charge
or supervision of said buildings, premises and institutions and it
shall be the duty of said board, commission or officer to comply
as soon as possible with the recommendations made by the state
fire marshal.

Added by L. 1911, chap. 451.
Amended by L. 1912, chap. 453.
§ 356. Srate Fire Marsuat. 401

§ 356. Duties of the state fire marshal and assistants to
inspect other property.

The state fire marshal, his deputies or assistants, upon the
complaint of any person or whenever he or they shall deem
it necessary, shall inspect all buildings and premises within their
jurisdiction. Whenever any of said officers shall find any build-
ing or other structure, which, for want of repairs, lack of or in-
sufficient fire escapes, automatic or other fire-alarm apparatus or
fire extinguishing equipment, or by reason of age or dilapidated
condition or for any other cause is especially liable to fire or
to cause loss of life or damage to property, and whenever such
officer shall find in any building or other premises any
explosive materials or inflammable conditions dangerous to
life or property, he or they shall order the same to be
removed or remedied, and such order shall forthwith be
complied with by. the owner, lessee or occupant of such prem-
ises or buildings. If such order is made by any deputy or assist-
ant to the state fire marshal such owner, lessee or occupant may,
within five days, appeal to the state fire marshal, who
shall, within ten days, review such order and file his decision
thereon, and unless by his authority the order is revoked or modi-
fied it shall remain in full force and be obeyed by such owner,
lessee or occupant. Such owner, lessee or occupant may have
the order or the final determination on appeal of an order issued
by the state fire marshal reviewed by a writ or certiorari in a court
of competent jurisdiction provided proceedings for such review are
begun within ten days after such order has been served or appeal
finally determined.

The service of any such order shall be made upon the owner,
lessee or occupant of the premises to whom it is directed by either
delivering a true copy of same to such owner, lessee or occupant
personally or by delivering the same to and leaving it with any
person in charge of the premises, or in case no such person is
found upon the premises, by affixing a copy thereof in a con-
spicuous place on the door to the entrance of said premises; when-
ever it may be necessary to serve such an order upon the owner,
lessee or occupant of premises such order may be served either
402 Tue Isscrayce Law. 356.

by delivering to and leaving with the said person a true copy of
the said order, or, if such owner, lessee or occupant is absent from
the jurisdiction of the officer making the order, by mailing such
copy to the last known post-office address of said owner, lessee or
occupant. *

Any owner, lessee or occupant failing to comply with zuch
order within ten days after said appeal shall have been deter-
mined, or, if no appeal is taken, then within ten days after the
service of the said order, shall be liable to a penalty of fifty
dollars for each day’s neglect thereafter.

The penalty herein provided may be recovered in an actioz
brought in any court of the county where such property i: located,
in the name of the people of the state under the direction of the
state fire marshal or any of hi: assistants herein designated, by
an attorney specially designated therefor by the attorney-general
or by an attorney designated by the state fire marshal.

Whenever an order has been served requiring the demolitioz
of a building or other structure, or the removal of explosive ma-
terials therefrom as hereinbefore provided, and the owner, lessee
or occupant thereof has failed to comply with :uch order or failed
to apply to a court to reviéw the order within the time herein
specified, the tate fire marshal may cause :1¢* building or other
structure to be demolished or :1¢h explosive material to be re
moved and stored elsewhere or destroyed at the discretion of tke
state fire marshal and the expen: incurred by the siate fire
marshal in such demolition or in the removal of explosive materia.
and also any penalty recovered, as provided for in this section,
shall constitute a first lien upon the premise: occupied by such
building or structure or where such explosive material was stored.

Whenever an order has been served requiring the installation,
alteration or repair of fire escapes or exit: upon any building or
structure in which numbers of persons work. live or congregat2
from time to time for any purpose, and the owner, lessee or occt-
pant has failed to comply with said order within the time herein
specified, the state fire marshal may, in addition to any other
penalty mentioned in this article, prosecute such owner or occu-
pant in the criminal courts, and upon conviction such owner,
§ 357. Stare Fire Marswat. 403

lessee or occupant shall be liable to punishment as for a
misdemeanor.

Added by L, 1911, chap. 451.
Amended by L. 1912, chap. 453, and L. 1913, chap. 434.

The fire marshal ‘has power to order the demolition of dilapidated buildings
liable to cause fire, loss of life, or damage to property only when he complies
strictly with all the requirements of the Insurance Law governing the pro-
cedure in such cases. Attorney-General Rep., 1913, page 38.

§ 357. Boiler inspection.

The state fire marshal shall also cause to be inspected all boilers
in buildings and all other places where same are used for the
generation of steam and which carry a steam pressure of ten
pounds or more to the square inch, except where a certificate has
been filed in the office of the state fire marshal certifying that
such boilers have been inspected by a duly authorized insurance
company in conformity with the regulations prescribed by the
state fire marshal and that upon such inspection such boilers have
been found to be in a safe condition. Every such insurance com-
pany shall report all boilers insured by them coming within the
provisions of this section, including those rejected, together with
the reason therefor. A fee of five dollars shall be charged the
owner or lessee of each boiler inspected by the inspector of the
office of the state fire marshal, but not more than the sum of ten
dollars shall be collected for the inspection of any one boiler for
any year. Such fee shall be payable within thirty days from the
date of such inspection.

Whenever a certificate of inspection, filed in the office of the
state fire marshal, shows that a boiler is in need of repairs or is
in an unsafe or dangerous condition, the state fire marshal shall
order such repairs to be made to such boiler as in his judgment
may be necessary and he shall order the use of such boiler to be
discontinued until said repairs are made or said dangerous and
unsafe conditions remedied. ‘Such order shall be served upon the
owner or lessee of such boiler in the manner provided in section
three hundred and fifty-six of this article and any owner or lessee
failing to comply with such order within the time specified in said
section three hundred and fifty-six shall be liable to the penalties
prescribed therein. Nothing contained in this section shall apply
404 Tur Insurance Law. § 358,

to boilers used for the generation of steam on vessels, railroad
locomotives or fire engines operated by any organized fire
department, nor shall this section have any application to cities
in which boilers are regularly inspected by competent inspectors,
acting under the authority of local laws or ordinances.

Every owner or lessee of a boiler wo shall use or allow a
boiler to be used by any one in his employ after notice that such
boiler is in an unsafe or dangerous condition shall be subject to
a fine not to exceed five dollars for each day on which such boiler
is used after such notice as aforesaid.

Owners and lessees of boilers shall attach to such boilers the
numbers assigned by the state fire marshal under the like penalty
for failure to do so.

Owners and lessees of boilers within cities and incorporated
villages shall notify the chiefs of fire departments, or other as-
sistants to the state fire marshal therein, of the location of each
boiler. Such chiefs and assistants shall keep a record thereof
in their respective offices and forward a copy thereof in January
and July of each year to the state fire marshal.

In outlying districts such report shall be made to town clerks,
who shall in like manner keep records thereof and forward the
same. These provisions shall, however, only apply to boilers
used for generation of steam pressure of ten pounds or more to
the square inch.

Added by L, 1911, chap. 451.

Amended by L. 1912, chap. 453, and L. 1918, chap. 523. In effect May 15,
1913.

Note.—Chap. 523 of the L. 1913, repeals § 91, of the Labor Law in relation
ta Inspection of Boilers in Factories.

§ 858. Definition of explosives.

The term “ explosive” or “ explosives,” whenever used in this
act shall be held to mean and include any chemical compound or
any mechanical mixture that contains any oxidizing and com-
bustible units, or other ingredients, in such proportions, quanti-
ties or packing that an ignition by fire, by friction, by concussion,
by percussion or by detonator, of any part of the compound or
mixture may cause such a sudden generation of highly heated
§ 358. Strate Fire Marsnat, 405

!

gases that the resultant gaseous pressures are capable of producing
destructive effects to contiguous objects or of destroying life or
limb, but not including colloided nitro-cellulose in sheets or rods
or grains not under one-eighth of an inch in diameter, wet nitro-
cellulose containing twenty per centum or more moisture and wet
nitro starch containing twenty per centum or more moisture. For
the purposes of this act, manufactured articles shall not be held
to be explosives when the individual units contain explosives in
such limited quantity, of such nature, or in such packing, that it
is impossible to produce a simultaneous or a destructive explosion
of such units, to the injury of life, limb or property by fire, by
friction, by concussion, by percussion or by detonator, such as
‘fixed ammunition for small arms, fire-crackers, safety fuse,
matches, et cetera.

The term “highway” whenever used in this article shall be
held to mean and include any public street or public highway, or
any steam, electric or other railroad.

The term “ building” whenever used in sections three hundred
and fifty-eight to three hundred and sixty-five, inclusive, shall be
held to mean and include only any building regularly occupied
in whole or in part as a habitation for human beings, and any
church, schoolhouse, railway station or other building where people
are accustomed to assemble.

The term “ person” whenever used in this article shall be held
to mean and include corporations and joint stock associations, as
well as natural persons.

The term “factory building” whenever used in this article
shall be held to mean any building or other structure containing
explosives, in which the manufacture of explosives or any part of
the manufacture is carried on.

The term “ magazine” whenever used in this article shall be
held to mean and include any building or other structure used to
store explosives.

The term “ efficient artificial barricade ” whenever used in this
article shall be held to mean an artificial mound or properly
revetted wall of earth of a minimum thickness of not less than
three feet.
406 Tue Insurance Law. § 359,

Words used in the singular number shall include the plural and
the plural the singular.

Added by L. 1911, chap. 451.
Amended by L. 1912, chap. 453.

§ 3859. Regulations regarding quantity, distance from build-
ings, et cetera.

No person shall manufacture, have, keep’ or store explosives
except in compliance with this article. The quantity of explosives
that may be lawfully had, kept or stored in any factory building
or magazine shall depend upon the distance that such factory
building or magazine is situated from buildings and highways, and
the protection offered by natural or efficient artificial barricade
to such buildings or highways. Whenever any of the quantities
given in column one of the quantity and distance table hereinafter
set forth is had, kept or stored in any factory building or magazine
in this state, the distance that any quantity given in column one
of said table may be lawfully had, kept or stored from buildings
is the distance set opposite said quantity in column two of said
table, and the distance that any quantity given in column one of
said table may be lawfully had, kept or stored from highways is
the distance set opposite said quantity in column three of said
table. The quantity and distance table governing the making,
keeping or storing of explosives is as follows:

Column 2. Column 3.
Distance from Distance from

Column 1. Quantity that may be lawfully kept or nearest nearest

stored from nearest building or highway. building. highway.

Lbs. Lbs. Feet. Feet.

Over 100 and not over 200............ 360 220
Over 200 and not over 300............ 520 310
Over 300 and not over 400............ 640 380
Over 400 and not over 500............ 720 430
Over 500 and not over 600............ 800 * 480
Over 600 and not over 700............ 860 520
Over 700 and not over 800............ 920 550
Over 800 and not over 900............. 980 590
Over 900 and not over 1,000.......... 1,020 610

Over 1,000 and not over 1,500......... 1,060 640

x
§ 359. Stare Frre Marswat. 407

Column 2. Column 3.
Distance from Distance from

Column 1. Quantity that may be lawfully kept or nearest nearest

stored from nearest building or highway. building. highway.
Lbs. Lbs. Feet. Feet.
Over 1,500 and not over 2,000......... 1,200 720
Over 2,000 and not over 3,000......... 1,300 780
Over 3,000 and not over 4,000......... 1,420 850
Over 4,000 and not over 5,000......... 1,500 900
Over 5,000 and not over 6,000......... 1,560 940
Over 6,000 and not over 7,000......... 1,610 970
Over 7,000 and not over 8,000......... 1,660 1,000
Over 8,000 and not over 9,000......... 1,700 1,020
Over 9,000 and not over 10,000........ 1,740 1,040
Over 10,000 and not over 20,000....... 1,780 1,070
Over 20,000 and not over 30,000....... 2,110 1,270
Over 30,000 and not over 40,000....... 2,410 1,450
Over 40,000 and not over 50,000....... 2,680 1,610
Over 50,000 and not over 60,000....... 2,920 1,750
Over 60,000 and not over 70,000....... 3,180 1,880
Over 70,000 and not over 80,000....... 3,310 1,990
Over 80,000 and not over 90,000....... 3,460 2,080
Over 90,000 and not over 100,000...... 3,580 2,150
Over 100,000 and not over 200,000..... 3,670 2,200
Over 200,000 and not over 300,000..... 4,190 2,510

Maximum allowed.

No quantity in excess of three hundred thousand pounds shall
be had, kept or stored in any factory building or magazine in this
state. Whenever the building or highway to be protected is effectu-
ally screened from the factory building or magazine, where ex-

. plosives are had, kept or stored, either by natural features of the
ground or by an efficient artificial barricade of such height that
any straight line drawn from the top of any side wall of the
factory building or magazine to any part of the building to be
protected will pass through such intervening natural or efficient
artificial barricade, and any straight line drawn from the top of
any side wall of the factory building or magazine to any point
-twelve feet above the center of the highway to be protected will
pass through such intervening natural or efficient artificial barri-

.
408 Tuer Insurance Law. §§ 360, 361.

cade, the applicable distance given in columns two and three of
the quantity and distance table may be reduced one-half.

Added by L. 1911, chap. 451.
Amended by L. 1912, chap. 453.

§ 36°. Explosives kept in suitable containers.

Except only at a factory building no person shall have, keep or
store explosives at any place within this state unless such explosives
are completely enclosed and encased in tight metal, wooden or
fibre containers, and, except while being transported or in the
custody of a common carrier awaiting shipment or pending de-
livery to a consignee, shall be kept and stored in a magazine con-
structed and operated as provided in section three hundred and
sixty-one of this article, and no person having explosives in his
possession or control shall, under any circumstances, permit or
allow any grains or particles to be or remain on the outside or
about the containers in which such explosives are held. All con-
tainers in which explosives are held shall be plainly marked with
the name of the explosives contained therein.

Added by L. 1911, chap. 451.

Amended by L. 1912, chap. 453.

§ 361. Magazines classified.

Magazines in which explosives may lawfully be kept or stored
shall be of two classes, as follows:

(a) Magazines of the first class shall consist of those contain-
ing explosives exceeding fifty pounds, and shall be constructed of
brick, concrete, iron or wood covered with iron, and shall have no
openings except for ventilation and entrance. The doors of such.
magazine must at all times be kept closed and locked, except when
necessarily opened for the purpose of storing or removing explo-
sives therein or therefrom, by persons lawfully entitled to enter
the same. Every such magazine shall have sufficient openings for
ventilation thereof, which must be screened in such manner as to
prevent the entrance of sparks of fire through the same. Upen
each side and each end of such magazine, or upon its barricade,
there shall at all times be kept conspicuously posted a sign, with
§§ 362, 363, State Fire MarsHat. 409

words “ Magazine — Explosives — Dangerous” legibly printed
thereon in letters not less than six inches high. No matches or
fire of any kind shall at any time be permitted in any such
magazine. No package of explosives shall at any time be opened
in or within fifty feet of any magazine, nor shall any open pack-
age of explosives be kept therein. Magazines in which more than
fifty pounds of explosives are kept and stored must be detached,
and those where more than five thousand pounds are kept and
stored must be located at least two hundred feet from any other
magazine.

(b) Magazines of the second class shall be made of fireproof
material, or wood covered with sheet iron, and not more than fifty
pounds of explosives shall at any time be kept or stored therein,
and, except when necessarily opened for use by authorized persons,
shall at all times be kept securely locked. Upon each such maga-
zine there shall at all times be kept conspicuously posted a sign,
with words ‘“ Magazine — Explosives —— Dangerous” legibly
printed thereon, and not more than two such magazines shall be
had or kept in any building.

Added by L. 1911, chap. 451.
Amended by L. 1912, chap. 453.

§ 362. Caps not kept in magazine.

No blasting caps, or other detonating or fulminating caps or.
detonators, shall be kept or stored in any magazine in which ex-
plosives are kept or stored.

Added by L. 1911, chap. 451.
‘Amended by L. 1912, chap. 453.

§ 363. Reports of inspection to be made and certificate of
compliance.

All persons engaged in keeping or storing explosives on
the date when the provisions of this section take effect shall
within sixty days thereafter, and all persons engaging in keeping
or storing explosives after the provisions of this section take effect
shall, before engaging in the keeping or storing of explosives,
make a report to the state fire marshal on blanks to be furnished
by him stating:
410 Tus Insurance Law. § 363,

(1) The location of the magazine, if then existing, or in case
of a new magazine, the proposed location of such magazine.

(2) The kind of explosives that are kept or stored or intended
to be kept or stored and the maximum quantity that is intended
to be kept or stored thereat.

(3) The distance that such magazine is located or intended to
be located from the nearest buildings and highways.

The state fire marshal shall, as soon as may be after receiving
such report, cause an inspection to be made of the magazine, if
then constructed, and in the case of a new magazine, as soon as
may be after same is constructed. If upon such inspection the
magazine is found to be constructed in accordance with the specifi-
cations provided in section three hundred and sixty-one of this
act, the state fire marshal shall determine the amount of explosives
that may be kept or stored in such magazine by reference to the
quantity and distance table set forth in section three hundred
and fifty-nine in this act and shall issue a certificate to the person
applying therefor, showing compliance with the provisions of this
act, which certificate shall set forth the maximum quantity of
explosives that may be had, kept or stored in said magazine. Such
certificate of compliance shall be valid until cancelled for cause
as hereinafter provided. Whenever by reason of change in the
physical conditions surrounding said magazine at the time of the
issuance of the certificate of compliance therefor, such as the
erection of buildings nearer said magazine or the opening of
highways, the state fire marshal shall modify or cancel such cer-
tificate in accordance with the changed conditions. Whenever
any person to whom a certificate of compliance has been issued
keeps or stores in the magazine covered by such certificate of com-
pliance any quantity of explosives in excess of the maximum
amount set forth in such certificate of compliance issued therefor,
or whenever any person fails for thirty days to pay the annual
license fee hereinafter provided after the same becomes due, the
state fire marshal is authorized to cancel such certificate of com-
pliance and to order the removal of all explosives stored in said

magazine as provided in section three hundred and fifty-six of
this article. ee
§ 364. State Firz Marsuat. 411

Every person engaging in the keeping or storing of explosives
shall pay an annual license fee for each magazine maintained, to
be graduated by the state fire marshal according to the quantity
kept or stored therein, of not less than five dollars nor more than
twenty-five dollars. Said license fee shall be payable in advance
to the state fire marshal and by him paid to the state treasurer.

Added by L. 1912, chap. 453 (in effect Apr. 16, 1912).

§ 364. Transportation.

Every vehicle while carrying explosives shall display upon an
erect pole on the front end of such vehicle and at such height that
it shall be visible from all directions a red flag with the word
“danger ” printed, stamped or sewed thereon in white letters.
Such flag shall be at least eighteen inches by thirty inches in size,
and the letters thereon shall be at least twelve inches in height.

(a) It shall be unlawful for any person in charge of a vehicle
containing explosives to smoke in or upon such vehicle, to drive
the vehicle while intoxicated, to drive the vehicle or to conduct
himself in a careless or reckless manner or to load or unload such
vehicle in a careless or reckless manner or while smoking or
intoxicated.

(b) It shall be unlawful for any person to place or carry, or
cause to be placed or carried in or upon any vehicle containing
explosives any metal tool or other piece of metal.

(c) It shall be unlawful for any person to place or carry in or
upon a vehicle containing explosives any exploders, detonators,
blasting caps or other explosive material, or to carry in or upon
any such vehicle any matches or any mechanical device for pro-
ducing spark, flame or heat.

Nothing contained in this article shall apply to explosives while
being transported upon vessels or railroad cars in conformity with
the regulations adopted by the interstate commerce commission,
nor to the transportation or use of blasting explosives in quantities
not exceeding five pounds at any one time.

Added by L. 1912, chap. 453.
Amended by L. 1913, chap. 393.
412 Tuer Insurance Law. §§ 365-367.

§ 365. Records of sale.

Every person selling or giving away explosives within this state
shall keep at all times an accurate journal or book of record in
which must be entered from time to time, as it is made, each and
every sale made by such person in the course of business, or other-
wise, of any quantity of explosives. Such journal or record book
must show in a legible writing, to be entered therein at the time,
a complete history of each transaction stating the name and
quantity of explosives sold, name, place of residence and business
of the purchaser, name of individual to whom delivered, with his
or her address. Such journal or book of record must be kept by
the person so selling explosives in his or their principal office or
place of business, at all times subject to the inspection and ex-
amination of the state fire marshal, his deputies, and the police
authorities of the county or municipality where same is situated,
on proper demand therefor. Nothing in this section, however,
shall apply to persons selling or giving away explosives in quanti-
ties of five pounds or less at any one time. .

added by L. 1912, chap. 453 (in effect Apr. 16, 1912).

§ 366. Exceptions.

Nothing contained in this article in sections three hundred and
fifty-eight to three hundred and sixty-five, inclusive, shall be
deemed to include gasoline, kerosene, naphtha, turpentine or
benzine.

Added by L. 1912, chap. 453 (in effect Apr. 16, 1912).

§ 367. Firearms.

No person shall discharge any firearms within five hundred feet
of any magazine or factory, except that the provisions of this
section shall not apply to the testing of firearms in or upon the
premises of any manufacturing plant engaged in the manufacture
of firearms. The method of testing all firearms in any manu-
facturing plant engaged in the business of manufacturing fire-
arms shall be subject to the approval of the state fire marshal.

Added by L. 1912, chap. 453.
Amended by L. 1918, chap. 214.
§§ 368, 369. State Frre Marsa. 413

§ 368. Penalties.

Whoever fails to comply with or violates any provisions of sec-
tions three hundred and fifty-eight to three hundred and sixty-
seven, inclusive, shall be guilty of a misdemeanor.

Added by L. 1912, chap. 453 (in effect Apr. 16, 1912).

§ 369. Powers of the state fire marshal, deputies and
assistants.

The state fire marshal or his deputies may, in addition to the
investigation made by any of his assistants at any time investigate
as to the origin or circumstances of any fire or explosion occurring
in this state. The state fire marshal, his deputies and assistants
shall have the power to summon witnesses and compel them to
attend before them, or either of them, and to testify in relation to
any matter which is by the provisions of this article a subject of
inquiry and investigation, and may require the production of any
book, paper or document deemed pertinent or necessary to the
inquiry, and shall have the power to administer oaths and affirma-
tions to any person appearing as witness before them; such ex-
amination may be public or private as the officers conducting the
investigation may determine.

If after any such examination of witness, or any investigation,
the state fire marshal or any of his deputies or assistants is of the
opinion that the facts in relation to a fire or explosion indicate
that a crime has been committed, he shall present the testimony
taken on such examination, together with any other data in his
possession to the district attorney of the proper county, with a
request that he institute such criminal proceedings as such testi-
mony or data may warrant.

The state fire marshal or his deputies or any of his assistants
may at all reasonable hours enter any building or premises within
his jurisdiction for the purpose of making an inspection which,
under the provisions of this article, he or they may deem necessary
to be made.

In the absence of any local ordinance it shall be the duty of the
assistants to the state fire marshal specified in section three hun-
dred and fifty-three to inspect or cause to be inspected by fire
414 Tue Insurance Law. § 370.

department officers or members, as often as may be necessary, but
not less than twice a year in outlying districts and four times a
year in closely built portions, all buildings, premises, and public
thoroughfares, except interiors of private dwellings for the yur-
pose of ascertaining and causing to be corrected, any conditions
liable to cause fire, or any violations of the provisions or intent
of the statute and affecting the fire hazard.

Whenever any such assistant shall find any building or other
structure which for want of repairs, or by reason of age or
dilapidated condition or for any other cause, is especially liable to
fire, and which is so situated as to endanger other property, and
whenever any such assistant shall find in any building or upon any
premises or other place, combustible or explosive matter or danger-
ous accumulations of rubbish or of unnecessary accumulations of
waste paper, boxes, shavings or any other highly inflammable
materials, especially liable to fire, and which is so situated as to
endanger property, or shall find obstructions to or on fire escapes,
stairs, passageways, doors, or windows, liable to interfere with the
operations of the fire department, or egress of occupants, in case of
fire, he shall order the same to be removed or remedied and such
order shall forthwith be complied with by the owner, lessee or
occupant of such premises or buildings, and in the event of his
neglect or refusal, the provisions of section three hundred and
fifty-six are hereby made applicable.

Added by L. 1912, chap. 453.

Amended by L. 1918, chaps. 405, 520. In effect May 15, 1913.

§ 370. Records.

The state fire marshal shall keep in his office a record of all
fires and explosions occurring in the state and of all the facts
concerning the same, including statistics as to the extent of loss
of life and the damage to property caused thereby, and whether
the damages to property were covered by insurance, and if so, in
what amount. Such records shall be made daily from the reports
made to him by his assistants under the provisions of this article.
All such records shall be public except any testimony taken in
§§ 3871-373. Srate Fire Marsuat, 415

an investigation under the provisions of this article which the
fire marshal in his discretion may withhold from the public.
Added by L. 1912, chap. 453 (in effect Apr. 16, 1912).

§ 371. Annual report.

The state fire marshal shall, annually, on or before the fifteenth
day of February, transmit to the legislature a full report of his
proceedings under this article and such statistics as he may wish
to include therein; he shall also recommend any amendments to
the law which in his judgment shall be desirable.

Added by L. 1912, chap. 453 (in effect Apr. 16, 1912).

§ 372. Witnesses.

Any witness who refuses to obey a summons of the state fire
marshal, his deputies or his assistants or who refuses to be sworn
or testify, or who disobeys any lawful order of the state fire
marshal, his deputies or his assistants in relation to an investiga-
tion instituted by him or them, or fails or refuses to produce
any books, paper or document touching on any matter under in-
vestigation or examination, or who is guilty of any contemptuous
act after being summoned to appear before him, or either of them,
to give testimony in relation to any matter or subject under ex-
amination or investigation as aforesaid, may be punished as for
contempt of court. Each person summoned to appear and testify
before the state fire marshal or any of his deputies and assistants
shall receive from the state treasurer upon the audit of the state
fire marshal, for mileage and fees, such sum or sums, as provided
for witnesses in section thirty-three hundred and eighteen of the
code of civil procedure.

Added by L. 1912, chap. 452 (in effect Apr. 16, 1912).

§ 3738. Duties of district attorney.

The district attorney of any county upon request of the state
fire marshal, his deputies or assistants, shall assist such officers
upon an investigation of any fire or explosion which, in their
‘opinion, is of a suspicious origin.

Added by L. 1912, chap. 453 (in effect Apr. 16, 1912).
416 Tur Insurance Law. §§ 374-377.

§ 374. Compensation of assistants.

Except in cities having over seventy-five thousand inhabitants
all assistants of the state fire marshal not receiving a salary from
the state of New York shall receive, upon the audit of the state
fire marshal, fifty cents for each report of each separate fire or
explosion reported to the state fire marshal and fifty cents for each
order served under the provisions of this article, and in addition
there shall be paid to such assistants of the state fire marshal,
whose duty it shall have been to make and who actually made an
investigation or an inspection, the sum of fifteen cents for each
mile traveled to the place of fire or explosion or to premises in-
spected, and, in the discretion of the state fire marshal, where an
investigation has been had or an inspection has been made by his
direction a sum not to exceed two dollars for each day’s service
spent in such investigation or inspection, fifty cents for each fire
drill held under their supervision and also postage and other actual
and necessary expenses incurred in the performance of their duty
under this article.

Added by L. 1912, chap. 453 (in effect Apr. 16, 1912).

§ 875. Penalties.

All penalties, fees or forfeitures collected under the provisions
of this article shall be paid into the treasury of the state of New
York.

Added by L. 1912, chap. 453 (in effect Apr. 16, 1912).

§ 377. County clerks to furnish lists.

County clerks shall on or before January fifteenth, in each
year, forward to the state fire marshal for the purposes of his
department full and accurate lists of all municipal fire marshals,
chiefs of fire departments or like senior officers in incorporated
and unincorporated cities and villages, or fire districts under the
county law, presidents or like senior officers of each incorporated
village and clerks of each organized town without the limits of
any incoporated village or city.

Added by L. 1913, chap. 192.
§§ 378, 379. Starr Fire Marsuat. AT

§ 378. Reports of assistants to state fire marshal.

The municipal fire marshals, fire chiefs and all other assistants
under this article shall report yearly between the first days of
May and June, in detail the extent and condition of their re-
spective fire departments, apparatus or stations, water supply and
service, and any recommendation or suggestion which in their
opinion would tend to increase the usefulness of their depart-
ments or decrease the fire hazards in their respective localities.

Added by L. 1913, chap. 431.

§ 379. State fire marshal to make regulations.

The state fire marshal is hereby authorized and empowered to
formulate and adopt suitable regulations upon each of the sub-
jects enumerated in section three hundred and fifty-one of this
article, and from time to time to make amendments thereto. He
shall cause a copy of such regulations to be filed with the clerk
of each county, town or village, and it shall be the duty of mem-
bers of the fire and police departments and of the legally consti-
tuted law officers of each city, town or village to assist the state
fire marshal in the enforcement of this article and the regula-
tions made thereunder, provided, however, that nothing herein con-
tained shall be construed to confer on the state fire marshal any
authority or power to adopt such regulations upon the subjects
covered in sections three hundred and fifty-eight to three hundred
and sixty-seven both inclusive.

Added by L. 1913, chap. 308.
co a

418 Tur Insurance Law. §§ 360, 361.

ARTICLE 11.

Laws RepzaLep; Construction; WHEN to Taxe EFFEcT.

SEcTION 360. Laws repealed.
361. When to take effect.
§ 360. Laws repealed.

Of the laws enumerated in the schedule hereto annexed, that
portion specified in the last column is hereby repealed.
As renumbered by L. 1898, chap. 85, § 2.

§ 861. When to take effect.

This chapter shall take effect immediately.
As renumbered by L. 1898, chap. 85, § 2.
SCHEDULE OF

Revised Statutes.... Part 1,
Laws of Chapter

ISAs. cheeses LL ee
LST 4 es esses DL Diss ai sciea
VEU Tecate! 146........
ES DW io accsebats 148........
ODA cccicecalecw DT ile Greerae es
TVO28. eso ID Mhagata cevate oie
1829. ceca 886........
188% oc8 ese Ss] |
1840........ DBT sssicigs Sieiete
1848........ 205.....06-
LBD saw cewe LBs eecees
1849........ 308........
TSS wswewerw a
1851........ BS o oie eesareve
TBD sess eee ore TL seva Sisseans
1852... cece NDB i nec eves
1853........ AGB se oiuccse st
1853........ 466........
1853........ DDB ca ars, oas
D858 eae DDT case euaray ae
i Tse wiewens
1854 06 ssa s DIE eiecniars es
185456650 60% BBD. wee cae
W855 cca s awe T Distiicieatinaie
BSD eesccaucee DOD eis eae aia
TES (se gieuiese QBs sweeae
LO enn eer S8n¥ eee en's

LAWS REPEALED.

chapter 20, title 21,

Section
All

All

1, 1] 168, 175, 282, 328, 419
(2d Meet.)

All
420 ScuEepDULE oF Laws REPEALED,

Laws of Chapter Section
L850 6 o:ee:cce4% 469.....0.. All
1857........ 548.....04. All
IES Ts veewwee AO kdeialne All
1858 yeeros e 2D Dicsaccneretebers All
1858........ DBD 6:6 seer All
LBS 22 oie genie LOB cee tewe All
1859........ 263....008. All
1859........ 3866........ All
1860........ 158........ All
1860........ 828......05 All
1860. cesses A0B is aie ees All
1861.6 6s SOs ees All
1861........ OD ie lstetesiens All
1861........ B2G e ooe esis All
W86lew wines 384........ All
1862. eis ces Ousiceaews All
1862........ 800. oc ew cers All
1B 62) os cree BAT aw sisiecaie's All
T8602 cee cca B67 ses es All
D862. sewers AND cies eee All
1863........ DAD sees sv All
1864........ 425... ee eae All
1864,....... 563........ All
1865........ LOD sc isieaain's All
18656 cis sas 828.....40. All
IS 69\s,.6 05 ees 694........ All
1866) oss eens 298. reece All
1866........ 514........ All
L866 acces 6 ace 525........ All
866 wc anaes DN ho ceate way All
1866) os cee a COD see a ors All
L866). cose ee 825... 2. ces All
1866........ 828% aioe alas All
Scuepute or Laws Repraep.

Laws of Chapter Section
PSCTs cssaws Qlesiwedss All
1867........ 441........ All
1867........ 442... ... 00. All
1867........ BT4.....68. All
ABO Sooav ees TOS saw ewes All
1867........ 709........ All
NBO8ricisiee ces “1182s yeas All
1868........ B18. eee ews All
1868........ 482... .000e All
1868........ 623........ All
WEBB. oe cite, Telgedeeeie All
1868........ Toe Seenews All
1869........ 404........ All
1869........ 634........ All
1869........ 829........ All
1869........ 902........ All
1870........ 4T6....006. All
NST aseseuteers 608........ All
TSG yciwenes TOO seseeeos All
ESTA sao eas 888........ All
1872 wisaieis nace 100........ All
Ee esis eS ie DBD o5'eidi sais All
Eh ere 561........ All
ISIS save e bie BOS ase ekes All
1878........ 614...... io All
TS (oe% pest ee G16 ai8 os ese All
TET is seewey 688........ All
IETS eneuw cn 849.......4. All
TBO users 851........ All
IST Bs aeons i er All
LET Sasa sva ae TS9 sais ee oars All
TETAS ideas eee Au!
TES wan wee 560.....06. All
429 ScHepvuLe oF Laws Rerrarep.

Laws of Chapter Section
L875 icv cic ieie's WO i ccnvees All
LSS sacs 208........ All
BTS. ciaeees 428. wee eeee All
ABER eee e es AO bsciaia's Wire All
TOTO ac wees 555.......- All
1876. .cesves 841........ All
1876........ B57......4. All
18%6 cceaccies B59... . ee All
1807 siclescoeeie 188........ All
IB axa eves 200. savewes All
IST ése0'sasis Pl hewivaews All
TE Ceca aletee B20 is oe wes All
LOTT veei wes 24 esses anes All
LETT iarvismaias 0 ee All
FBT ssa aces 428 .....0065 All
VOT eae an’ B09 2s wikia All
LBS sis sews U8: bivwaee All
1B seca Gi wseaves All
TBTB vice wa DBD ia'cy 509 316 4s All
IS 7B sawesea's Bo lakegiedts All
1878 ssvesicia-s 41D. cc eau's All
ISTO. es vera LA e wg bea ee All
VBTD cca esvgeecesen W6Lesececa's All
1878 wane ame DBs seieeiee All
TOTO vieparee BLT. pe eaieuet All
POT eeswedes ASD o.c sede All
ISTO ee ewes BBO esis ers All
NOT Oey aaie es | ee All
1880........ BB iio ea es All
1880........ W106 ceva All
1880........ 168 ic cwacats All
1880........ 222 wees All
1880........ OO2 weet wccets All
ScHEDULE or Laws REpPrALeED. 423

Laws of Chapter Section
1880........ LO ecuece a aes All
1880........ BB ieee ceiwene All
1880........ 452... cea All
USS osawaies Liew All
1881........ 2BG. o wrsieina All
1881........ BOD ies oe ee All
TOR  ececas BG Baa, inte ies All
USB sce cla%ace AGB o focer iene gers All
BBL soe aac BION cere oeneiae All
DBS Tie iaiiei'are as ABA sd csctrtaiy All
1881. 6cc.%5% 486.2 cccas All
1881506800 G60 cee cause All
1881 6 ies BBS see e eves All
1881.5 .50055 600........ All
L881 is cones G28 wc ciecees All
1881326 scaas CTLs eeween All
1882........ OB iw ieie esha ove All
1882... s.ccea DIB. ce wae All
1882... aes D856 ects weres All
1882........ DAS se iase eee sre All
1882 ieee Q82.....66- All
1882........ B19. ee ceca All
1882........ OUL sawed ares All
1883........ DO oie ererare's All
1883 sese.u% Libiaas hanes All
18838........ ADD ceileie crane All
1884........ O4 wae ae All
18846550 seas OO iawn ees All
1884.00.60 x T1G6 vie eee All
1884........ 182 eeieciers aie All
1884........ D8B cise eek se 2, 8
1884........ BAL bcc ecnes All
1884........ BAD wy aie ic eee All
424 ScuHepuLe or Laws Repraep.

- Laws of Chapter Section
1884 i bcwies BOS se Neca wars All
TS80u es eae oaks V1Sesisnwss All
1885........ OT Geka crete ac All
TS 85 wisi shew See 82 eae es Alr
ISB Die cdswes SUB bvawev es All
TS 8D ws awn B384....006. All
LBB Drie es BOT erate toasts All
1885.5 ccs 8 as AAG ie tees All
188 east DSS awee nea All
1886 vceicsoex D0 Teac xsce aa All
1886........ OOF wiewee ek All
18866 eases 486......6. All
1886........ ASB ieiarencidie All
1886........ 566........ All
18865 640 eas Dios aawawns All
VS 86 ees eens 604........ All
1886........ GL ssacceas All
1886. os cae C1Qv.saewes All
T8876 veyeccare TAA esa eee All
1887 6 occa we NG c2ciSee sere All
188% oe saees Dee etanara da All
VSB TF ovceeeess 985.......6. All
188% oases B28 os veween All
1887 soe eek BDO oo or chavaiec's All
188 n2csceas BSL reve eas All
VEST bb gees BIO sis wes All
WOT ceimens COA atens i
USB T eevee 650.......2. All
1888........ Dill: cos hee siete All
1888........ BT cients « All
1889 nea es 184 oie aren All
1889. Sock oks DOB cee a eee All
1889........ DBD wins vais All
Scuepute or Laws Rerraen.

Laws of ‘ Chapter Section
1889. ce cee s 424........ All
1889........ ADA os cieieis wa All
1889... ccs ess 5205 se esca es All
1980 vascaees BGG. kee All
1890........ B02 eens ais All
1890 ..esaes% 7 All
1890........ AQT 3 Sassi All
1890........ AD oss essheie os All
1890........ AQG 5 seats acs All
1890........ DDD ase cearene a All
1891........ SOs ais aie All
WSO Dis css eeeis TO ie ae All
BOD iene: ieee: teres GAN eiidelo.ciata All
1892 tea arecsias GDF ease se 5 scene All
1892........ 690........ All
LE9S aes eke VD ese eves All
SOD sar aecdiess TAG ee eens All
LEO Ba iin see 687.....-.- All
1893........ 690........ All
1893........ T20 we eie weve All
1S oieeass ene Teo seeinees All
TS OS ccs DT hoc sere All
BOS ace seets B99... 00-s All
1894 oe ce iees 609........ All
1894. oc wees GAA areata All
1894........ 616........ All
18945 cis ice a 9% 684.......- All
1206 ssceeess Lies isux eee All
1895 6 icceceres DBDs ers series All
1895 cccec ee QLT cxiaeaiatee cia All
1898 o:06 ee3.8 0 9956 een eae All
1896........ Wewcaewes All
1896........ BO ws cia eye reie All
426 ScurpuLe or Laws REPEALED,

Laws of Chapter

1896........ 841.....0..
1896........ 844........
1896........ 845........
1896........, 850........
1896........ 907......6.
1897 es sin aes DDS are wiser
W897 66 canes DAB eho eehieces
1897 ne ecww ss 845.......-
V8 OY cece oka BST 6 nein less
TBO Kisis sia ieocers 448.....0..
BOT csc 498........
1B Oil oe erie ees 5038........
1898........ B85... eee
1898........ 140........
1898........ VAT cess
1898........ flies Stowe
1898........ 465........
1898........ 654......6.
1899........ BO ari eeie
1899........ 1438........
1899........ 165........
1899........ 166. cess
1899). csieaars G98 es ewes
1900. wees 266. 0.0. ee
1900... 008 B66. cs ck ees
19002 60 seca 6412 cece
1901.26 5000% V4 Dwr sieie ee
W901. cece ees 346........
WQ0N ss stewie Beara es
DOOV ce: a 2eceels BIS ss ceaees
DOOD oi sisccici STA ease erk
MOL secrases O84 ew ceed
WOOL ee saetees B30 6 verses

Section
All
ScureDuLe or Laws REpPraen.

Laws of Chapter Section
TOOT eset cuss (22 wapsieaects All
D905. 50: 5 sais WEG pian t ore All
VIO Diese iauatees TG Diao cess All
TOO 2 ene deseeias DO ataie een eles All
1902 nscm ects POT ake All
1903........ 106.0 coe All
1908........ LBS nes All
1908........ BDO io eects we All
1908. 6 veces ATL... wae All
19038........ DBO tee cai ae All
1908. 226 60-% 566 oa asaie ose All
W904 is ease 4G eee oes All
190450050005 BOT come secs All
1904..2.066.5 468 «aes os All
TQOA wien sctete 543........ All
T9048 iy pt tse DOD ise eso sts All
1904........ OS wiacnieeae All
1904. ewes DDD ataeSai All
1905........ TASS ses wes All
1905........ DT os sat ec All
1905........ DOD aecue ess All
1905........ BOG sc ce ete All
1905........ BO wie suanees All
OOS « ecciars aces DGB osicewcn as All
V9OB eco winiee O96 seee aes All
1905 sce eas Bi Bis ai areee ees All
L005 2002's BAe a stare All
1906. 5. 0.sis% 128 22s cas All
1906........ B26 css aa All
1906........ BOA eas eas All
1907........ D0G sis ers All
1907........ W890 wae i anes All
1907........ ee All
498 ScureptLe oF Laws REPEALED.

Laws of Chapter Section
190 eee B88). ose aes All
TOOT e.g esedio's 503........ All
1907........ 623........ All
1907 eoeasas G20 ccaueuas All’
1907 cacaeegs le coisas All
1907 aii eaes C29 wees All
1908 0. eas eee All
1908. DAG ewes sacs All
1908 nee D4 Ti iosa eae All
INDEPENDENT STATUTES

RELATING TO

INSURANCE COMPANIES.

ARSON IN SECOND DEGREE.
Prenat Law, § 222.
§ 222. Arson in second degree.

A person who:

1. Commits an act of burning in the day time, which, if com-
mitted in the night time, would be arson in the first degree; or,

2. Wilfully burns, or sets on fire, in the night time, a dwelling
house, wherein, at the time, there is no human being; or,

3. Wilfully burns, or sets on fire, in the night time, a building
not inhabited, but adjoining or within the curtilage of an in-
habited building, in which there is, at the time, a human being,
so that the inhabited building is endangered, even though it is
not in fact injured by the burning; or,

4. Wilfully burns, or sets on fire, in the night time, a ear,
vessel, or other vehicle, or a structure or building, ordinarily
occupied at night by a human being, although no person is within
it at the time; or

5. Wilfully burns, or sets on fire, a vessel, car, or other vehicle,
or a building, structure, or other erection, which is at the time in-
sured against loss or damage by fire, with intent to prejudice or
defraud the insurer thereof,

Is guilty of arson in the second degree.

MISCONDUCT OF OFFICERS.
Prenat Law, § 665.
§ 665. Misconduct of directors, officers, agents and em-
ployees of corporations.

A director, officer, agent or employee of any corporation or
joint-stock association who:

1. Knowingly receives or possesses himself of any of its prop-
erty otherwise than in payment for a just demand, and with
480 Prenat Law.

intent to defraud, omits to make or to cause or direct to be made
a full and true entry thereof in its books and accounts; or,

2. Makes or concurs in making any false entry, or concurs in
omitting to make any material entry in its books or accounts; or,

3. Knowingly (a), concurs in making or publishing any written
report, exhibit or statement of its affairs or pecuniary condition
containing any material statement which is false, or (b), omits
or concurs in omitting any statement required by law to be con-
tained therein; or,

4, Having the custody or control of its books, wilfully refuses
or neglects to make any proper entry in the stock book of such
corporation as required by law, or to exhibit or allow the same
to be inspected, and extracts to be taken therefrom by any person
entitled by law to inspect the same, or take extracts therefrom; or,

5. If a notice of an application for an injunction affecting the
property or business of such joint-stock association or corporation
is served upon him, omits to disclose the fact of such service and
the time and place of such application to the other directors,

officers and managers thereof; or,

6. Refuses or neglects to make any report or statement lawfully
required by a public officer,
Is guilty of a misdemeanor.

DISCRIMINATIONS AND REBATES.
Prenat Law, § 1191.

§ 1191. Discriminations and rebates by life insurance corpo-
rations prohibited.

Any life insurance corporation or corporation transacting the
business of life insurance on the co-operative or assessment plan
doing business in this state, or any officer or agent thereof, who:

1. Makes any discrimination in favor of individuals of the
same class or of the same expectation of life either in the amount
of the premium charged or in any return of premiums, dividends
or other advantages; or,
Pena Law. 431

2. Makes any contract for insurance or agreement as to such
contract other than that which is plainly expressed in the policy
issued ; or,

3. Pays or allows, or offers to pay or allow as an inducement
to any person to insure, any rebate or premium, or any special
favor or advantage whatever, in the dividends to accrue thereon
or any inducement whatever not specified in the policy; or,

4, Makes any distinction or discrimination between white
persons and colored persons, wholly or partially of African de-
scent, as to the premiums or rates charged for policies upon the
lives of such persons, or in any other manner whatever; or de-
mands or requires a greater premium from such colored persons
than is at that time required by such company from white persons
of the same age, sex, general condition of health and prospect of
longevity; or makes or requires any rebate, diminution or dis-
count upon the amount to be paid on such policy in case of the
death of such colored persons insured, or inserts in the policy
any condition, or makes any stipulation whereby such person in-
sured shall bind himself, or his heirs, executors, administrators
and assigns to accept any sum less than the full value or amount
of such policy in case of a claim accruing thereon by reason of
the death of such person insured, other than such as are imposed
upon white persons in ‘similar cases, is guilty of a misdemeanor.
Nothing in this section shall be construed to require any corpora-
tion doing business under articles six or seven of the insurance
law, which limits and confines its business or membership to the
members of a secret or fraternal order or body, to insure or accept
any individual who is not a member of such secret or fraternal
order or body.

Note.—This section is in effect Sept. 1, 1913.

ACTING FOR FOREIGN INSURANCE CORPORATION,
Prenat Law, § 1199.

§ 1199. Acting for foreign insurance corporation which has
not designated superintendent of insurance as attorney.

Any person acting for himself or for others who solicits or
procures, or aids in the solicitation or procurement of policies or
439 Pewat Law.

certificates of insurance from, or adjusts losses or in any manner
aids the transaction of any business for, any foreign insurance
corporation, which has not executed and filed in the office of the
superintendent of insurance, a written appointment of the super-
intendent to be the true and lawful attorney of such corporation
in and for this state, upon whom all lawful process in any action
or proceeding against the corporation may be served, is guilty
of a misdemeanor.

Note.—This section is in effect Sept. 1, 1913.

REBATES.
Pewat Law, § 1200.

§ 1200. Any person knowingly receiving any rebate or allow-
ance or deduction from any premium, or any valuable thing,
special favor or advantage whatever, as an inducement to take
any policy of life insurance, not specified in the policy is guilty of
a misdemeanor. No person shall be excused from attending and
testifying, or producing any books, papers or other documents
before any court or magistrate, upon any investigation, proceeding
or trial, for a violation of any of the provisions of this section,
upon the ground or for the reason that the testimony or evidence,
documentary or otherwise, required of him may tend to convict
him of a crime or to subject him to a penalty or forfeiture; but
no person shall ke prosecuted or subjected to any penalty or for-
feiture for or on account of any transaction, matter or thing con-
cerning which he may so testify or produce evidence, documentary
or otherwise, and no testimony so given or produced shall be re-

ceived against him upon any criminal investigation or proceeding. - -

FALSE LITERATURE.
Prenat Law, § 1203
§ 1203. Issue or circulation of false literature.

Any insurance corporation, or any officer, director or agent
thereof who shall issue or circulate or cause or permit to be issued
or circulated in this state any illustration, circular or statement
indicating that such corporation can transact in this state any busi-
Tax Law. 433

ness of a character other than that which it is authorized to trans-
act under the certificate of authority issued to it by the superin-
tendent of insurance, shall be guilty of a misdemeanor, and the
superintendent of insurance shall revoke the certificate of author-
ity of the corporation or agent on a conviction for so offending.

Note.—This section takes effect Sept. 1, 1913.

PERJURY.
‘Prnat Law, § 1627.

§ 1627. Contradictory statements under oath.

In any prosecution tor perjury the falsity of the testimony or
statement set forth in the indictment shall be presumptively estab-
lished by proof that the defendant has testified, declared, deposed
or certified under oath to the contrary thereof in any other written
testimony, declaration, deposition, certificate, affidavit or other
writing by him subscribed.

FRANCHISE TAX ON INSURANCE CORPORATIONS.
Tax Law, § 187.

§ 187. Franchise tax on insurance corporations.

An annual state tax for the privilege of exercising corporate
franchises or for carrying on business in their corporate or or-
ganized capacity within this state equal to one per’ centum on the
gross amount of premiums received during the preceding calendar
year for business done at any time in this state, which gross
amount of premiums shall include all premiums received during
such preceding calendar year on all policies, certificates, renewals,
policies subsequently canceled, insurance and reinsurance during
such preceding calendar year, and all premiums that are received
during such preceding calendar year on all policies, certificates,
renewals, policies subsequently canceled, insurance and reinsur-
ance executed, issued or delivered in all years prior to such pre-
ceding calendar. year, whether such premiums were in the form
of money, notes, credits or any other substitute for money, shall
434 Tax Law.

be paid annually into the treasury of the state on or before the
first day of June by the following corporations:

1. Every domestic insurance corporation, incorporated, organ-
ized or formed under, by or pursuant to a general or special law;
*

2. Every insurance corporation, incorporated, organized or
formed under, by or pursuant to the laws of any other state of
the United States, and doing business in this state, except a cor-
poration doing a fire insurance business or a marine insurance
business ;

3. Every insurance corporation, incorporated, organized or
formed under, by or pursuant to the laws of any state without the
United States, or of any foreign country, except such a corpora-
tion doing a life, health or casualty insurance business, and doing
business in this state; but the tax on gross premiums of a corpo
ration so incorporated, organized or formed and doing a fire or
marine insurance business within the state shall be equal to five-
tenths of one per centum. This section does not apply to a fra-
ternal beneficiary society, order or association, a corporation for
the insurance of domestic animals, a town or county co-operative
insurance corporation, nor to any corporation subject to the super-
vision of or required by or in pursuance of law to report to the
superintendent of banks; but this section does apply to an indi-
vidual, or partnership, or association of underwriters known as
Lloyds in so far as corporations doing the same kind’ of insurance
business are subject to its provisions. The taxes imposed by this
section shall be in addition to all other fees, licenses or taxes
imposed by this or any other law, except that in assessing taxes
under the reciprocal provisions of section thirty-four of the insur-
ance law, credit shall be allowed for any taxes paid under this
section. The term “insurance corporation ” as used in this
article, shall include a corporation, association, joint-stock com-
pany or association, person, society, aggregation or partnership by
whatever name known doing an insurance business in this state.
Tax Law. 4385

REPORTS OF CORPORATIONS.
Tax Law, § 192.
§ 192. Reports of corporations.

Corporations liable to pay a tax under this article shall report
as follows:

x x 9 «# ¥ ¥ x ¥ ¥ x *

5. Insurance corporations. Every insurance corporation liable
to pay a tax under section one hundred and eighty-seven of this
chapter, shall, on or before March first in each year, make a
written report to the comptroller of its condition at the close of
its business on December thirty-first preceding, stating the gross
amount of all premiums referred to in section one hundred and
eighty-seven of this chapter, received during the preceding calen-
dar year on business done thereby in this state during the year
ending with such day and at all times prior thereto, whether the
premiums were in money or in the form of notes, credits or other
substitutes for money.

VALUE OF STOCK TO BE APPRAISED.
Tax Law, § 193.
§ 193. Value of stock to be appraised.

If the dividend or dividends amount to less than six per cen-
tum on the par value of the capital stock, or no dividend is de-
clared, the president, treasurer or secretary of the company liable
to pay a tax under the provisions of section one hundred and
eighty-two of this chapter, shall, under oath, between the first and
fifteenth days of November in each year, estimate and appraise
the capital stock of such company at its actual value.

And shall forward the same to the comptroller with the report
provided for in the last section. If the comptroller is not satisfied
with the valuation so made and returned he is authorized and em-
powered to make a valuation thereof, and settle an account upon
the valuation so made by him, and the taxes, penalties and in-
terest to be paid the state.
436 Tax Law.

FURTHER REQUIREMENTS AS TO REPORTS OF COR-
PORATIONS.

Tax Law, § 194.

§ 194. Further requirements as to reports of corporations.

Every report required by this article shall have annexed thereto
the affidavit of the president, vice-president, secretary or treasurer
of the corporation, association or joint-stock company or of the
person or one of the persons, or the members of the nartnership
making the same, to the effect that the statements contained therein
are true. Such reports shall contain any other data, information
or matter which the comptroller may require to be included
therein, and he may prescribe the form in which such reports shall
be made and the form of oath thereto. When so prescribed such
forms shall be used in making the report. The comptroller may
require at any time a further or supplemental report under this
article, which shal] contain information and data upon such mat-
ters as the comptroller may specify.

PAYMENT OF TAX AND PENALTY FOR FAILURE.
Tax Law, § 197.
§ 197. Payment of tax and penalty for failure.

A tax imposed by section one hundred and eighty-two or one
hundred and eighty-six of this chapter. shall be due and payable
into the state treasury on or before the fifteenth day of January
in each year. A tax imposed by section one hundred and eighty-
four of this chapter on a transportation or transmission corpora-
tion, or by section one hundred and eighty-five, on elevated rail-
roads or surface railroads not operated by steam, shall be duc
and payable into the state treasury on or before the first day of
August in each year. A tax imposed by section one hundred and
eighty-seven of this chapter on an insurance corporation shall be
due and payable into the state treasury on or before the first day
of June in each year. A tax imposed by section one hundred and
eighty-eight or one hundred and eighty-nine shall be due and pay-
able into the state treasury on or before the first day of Septem-

 
Prrsonat Prorverty Law. 437

ber in each year. A tax imposed by section one hundred and
ninety-one of this chapter on a foreign banker shall be due and
payable into the state treasury on or before February first in
each year. If such tax in any case is not paid within thirty days
after the same becomes due, or if the report of any such corpo-
ration is not made within the time required by this article, the
corporation, association, joint-stock company, person or partner-
ship, liable to pay the tax, shall pay into the state treasury, in
addition to the amount of such tax, a sum equal to five per cen-
tum thereof, and one per centum additional for each month the
tax remains unpaid, which sum shall be added to the tax and
paid or collected therewith. Every corporation, association, joint-
stock company, person or partnership failing to make the annual
report required by this article or failing to make any special
report required by the comptroller, within any reasonable time to
be specified by him, shall forfeit to the people of the state the sum
of one hundred dollars for every such failure, and the additional
sum of ten dollars for each day that such failure continues. Such
tax shall be a lien upon and bind all the real and personal prop-
erty of the corporation, joint-stock company or association liable
to pay the same from the time when it is payable until the same is
paid in full.

PERSONAL PROPERTY NOT ALIENABLE IN CERTAIN
CASES.

Persona Property Law, § 15.

§ 15. Personal property not alienable in certain cases.

1. The right of the beneficiary to enforce the performance of
a trust to receive the income of personal property, and to apply
it to the use of any person, cannot be transferred by assignment
or otherwise. But the right and interest of the beneficiary of
any other trust in personal property may be transferred. Pro-
vided, however, that when the proceeds of a life insurance policy,
becoming a claim by death of the insured, are left with the in-
surance company under a trust or other agreement, the benefits
accruing thereunder after the death of the insured shall not be
438 Copr Crvit ProcepDuRE.

transferable, nor subject to commutation or incumbrance, nor to
legal process except in an action to recover for necessaries, if the -
parties to the trust or other agreement so agree.

REGULATION OF ACTION.
Cops Crvit Procepurg, § 1761.

§ 1761. Regulation when action brought by either husband
or wife..

Whenever the relation of husband and wife ceases by the entry
of a judgment dissolving the marriage, the defendant guilty
of adultery is not entitled to any interest in any policy of insur-
ance on the life of the plaintiff, wherein such defendant is named
as a beneficiary, and the plaintiff may apply to the court grant-
ing the final decree or to a special term of the supreme court on
notice to the defendant, or the attorney who appeared for defend-
ant in action for divorce, and to the insurance company issuing
the policy or policies, for an order directing the insurance com-
pany issuing the policy or policies to substitute therein such
beneficiary as the plaintiff may nominate. In case where it is
shown that the defendant has contributed from his or her separate
estate toward the payment of the premiums on such policy, the
court shall grant such order on such terms as in the discretion of
the court shall be equitable. This section shall also apply in like
manner when the defendant obtains a decree against the plain-
tiff on a counterclaim.

Note.—This section takes effect Sept. 1, 1913.

LEGISLATIVE APPEARANCES.

LeeisiaTive Law.

§ 66. Every person retained or employed for compensation as
counsel or agent by any person, firm, corporation or association to
promote or oppose directly or indirectly the passage of bills or
resolutions by either house or to promote or oppose executive
LrGistativeE Law. 439

approval of such bills or resolutions, shall, in each and every
year, before any service is entered upon in promoting or opposing
such legislation, file in the office of the secretary of state a writing
subscribed by such counsel or agent stating the name or names of
the person or persons, firm or firms, corporation or corporations,
association or associations, by whom or on whose behalf he is
retained or employed, together with a brief description of the
legislation in reference to which such service is to be rendered.
No notice so filed shall be valid for more than thirty days after
the adjournment of the session of the legislature held in the year
in which the same is filed. It shall be the duty of the secretary
of state to provide a docket to be known as the docket of legisla-
tive appearances, with appropriate blanks and indices, and to forth-
with enter therein the names of the counsel and agents so retained
or employed and of the persons, firms, corporations or associations
retaining or employing them, together with a brief description
of the legislation in reference to which the service is to be rendered,
which docket shall be open to public inspection. Upon the ter-
liination of such employment the fact of such termination, with
the date thereof, may be entered by direction of either such counsel
or agent or of the employer. No person, firm, corporation or
association shall retain or employ any person to promote or oppose
legislation for compensation contingent in whole or in part upon
the passage or defeat of any legislative measure or measures. No
person shall for compensation engage in promoting or opposing
legislation except upon appearance entered in accordance with the
foregoing provisions of this section. And no person shall accept
any such employment or render any such service for compensation
contingent upon the passage or defeat of any legislative measure or
measures. It shall be the duty of every person, firm, corporation
or association within two months after the adjournment of the legis-
lature to file in the office of the secretary of state an itemized state-
ment verified by the oath of such person, or in case of a firm of a
member thereof, or in case of a domestic corporation or association
440 LegisLative Law.

of an officer thereof, or in case of a foreign corporation or associa-
tion of an officer or agent thereof, showing in detail all expenses
paid, incurred or promised directly or indirectly ir connection
with legislation pending at the last previous session, with the names
of the payees and the amount paid to each, including all disburse-
ments paid, incurred or promised to counsel or agents, and also
specifying the nature of said legislation and the interest of the
person, firm, corporation or association therein. The provisions,
however, of this section requiring docket entries shall not apply
to duly accredited counsel or agents of counties, cities, towns, vil-
lages, public boards and public institutions. And the provisions
hereof shall not be construed as affecting professional services in
drafting bills or in advising clients and in rendering opinions as
to the construction and effect of proposed or pending legislation
where such professional service is not otherwise connected with
legislative action. Every person, every member of any firm, and
every association or corporation violating any provision of this
section and every person causing or participating in a violation
thereof shall be guilty of a misdemeanor and, in case of an indi-
vidual, shall be punishable by imprisonment in a penitentiary or
county jail for not more than one year or by a fine of not more
than one thousand dollars or by both, and, in case of an association
or corporation, by a fine of not more than one thousand dollars.
And in addition to the penalties hereinbefore imposed any corpora-
tion or association failing to file the statement of legislative ex-
penses within the time required shall forfeit to the people of the
state the sum of one hundred dollars per day for each day after
the expiration of the two months within which such statement is
required to be filed, to be recovered in an action to be brought by
the attorney-general.
Inprrenpent Statures. 441

REINCORPORATION — FOREIGN MONEYED
CORPORATION.

CHAP. 733 OF 1900.

AN ACT to provide for the reincorporation under the laws of
this state of foreign moneyed corporations.

BrcaME a law May 2, 1900, with the approval of the Governor. Passed,
three-fifths being present.

The People of the State of New York, represented in Senate
and Assembly, do enact as follows:

Sxction 1. Any moneyed corporation duly organized by or
under the laws of any state of the United States, and having an
office or doing business in this state, may file, if a banking cor-
poration or authorized to make loans upon pledges or deposits,
in the office of the superintendent of the banking department,
and if an insurance corporation .n the office of the superintendent
of the insurance department, the documents described in section
two of this act, and such documents shall be recorded as original
certificates of incorporation are required by law to be recorded.
The fees for filing and recording such documents, together with
the tax, if any, required by law to be paid before the incorpora-
tion of a domestic company of the same class, must be paid before
filing.

§ 2. The documents to be filed by any such corporation shall
include,

1A ‘copy of its charter, certificate of incorporation, or other
document constituting it a body corporate, with such amend-
ments, if any, as are desired by the corporation or are required
ty the laws of New York, authenticated as an original certificate
of incorporation is required to be authenticated.

2. A declaration of its desire to become a corporation of this
state and of its submission to the laws of this state, duly executed
by the authority of the body in which its corporate powers are
vested.
442 InpEPENDENT STAruTEs.

3. A certificate of the superintendent of that department in
which these papers are filed that the charter, certificate of incor-
poration or other constituent document, with its proposed amend-
ments, if any, as filed, is in all respects consistent with the laws
of this state relating to domestic corporations of the same class;
that the corporation applicant has complied with all conditions
imposed by its laws upon domestic corporations of the same class
beginning business in this state, with the exception of any pro-
vision concerning the residence of a majority of the corporators,
trustees, or directors of such corporation; that its name is not
the same with the name of any domestic corporation nor likely
to be confounded with any such name, and that it has paid all
fees and taxes due from it to the state, including the tax, if any,
imposed by this state upon the original incorporation of a
company of the same class.

§ 3. From the date of filing these documents the corporation
shall become and be a corporation of this state, and shall be
subject to all the laws of this state applicable to corporations of
the same class; but its existence and powers as such corporation
shall terminate if it shull fail at any time for one month to
maintain an office within the state at which an authorized officer
or agent shall be present at all reasonable business hours, pre-
pared to exhibit the books of the company to the proper authori-
ties of this state and to receive service of process; or if it shall
fail within two years to terminate its corporate existence derived
from any other state, by surrender of its charter or by dissolution.

§ 4. This act shall take effect immediately.

BAIL — AUTOMOBILES.
CHAP. 538 OF 1904. § 6, SUB. 3.

Sub. 5. Release from custody, bail, et cetera.

In case the owner of a motor vehicle shall be taken into custody
because of a violation of any provision of this act, he shall be forth-
with taken before an accessible captain or a sergeant or acting ser-
INDEPENDENT STATUTES. 443

geant of police in any city or village, or any justice of the peace or
magistrate, and be entitled to an immediate hearing; and if sucb
hearing cannot then be had be released from custody on giving a
bond or undertaking executed by a fidelity or surety company or-
ganized under the laws of this state and having a deposit of at least
two hundred thousand dollars with the superintendent of insurance
of this state, said bond or undertaking to be in an amount not
exceeding the maximum fine for the offence with which the owner
is charged and to be conditioned for the owner’s appearance in
answer for such violation, at such time and place as shall then be
indicated; or on giving his personal undertaking to appear in
answer for such violation, at such time and place as shall then be
indicated, secured by the deposit of a sum equal to the maximum
fine for the offense with which he is charged, or in lieu thereof, by
leaving the motor vehicle, being operated by such person with
such officer; or in case such officer is not accessible, be forthwith
released from custody on giving his name and address to the
officer making such arrest, and depositing with such officer . sum
equal to the maximum fine for the offense for which such arrest is
made, or in lieu thereof, by leaving the motor vehicle, being
operated by such person, with such officer, provided, that in such
case the officer making such arrest shall give a receipt in writing
for such sum or vehicle and notify such person to appear before
the most accessible magistrate, naming him, on that or the follow-
ing day, specifying the place and hour. In ease security shall be
deposited, as in this subdivision provided, it shall be returned to
the person depositing, forthwith on such person giving a bond or
undertaking of a fidelity or surety company, as in this section
provided, or on such person being admitted to bail as provided
in section five hundred and fifty-four of the code of criminal pro-
cedure, and the return of any receipt or other voucher given at
the time of such deposit. In case such undertaking of a fidelity
or surety company be not given, or such personal undertaking
with security or such deposit shall not be made by an owner so
taken into custody, the provisions of section five hundred and
fifty-four of the code of criminal procedure, shall apply.
GENERAL CORPORATION

ARTICLE

= Ae Oh

29 N

10a.

11.

12.

13.
14.

Section 1.
2.

LAW.
CHAPTER 28 of 1909.

CHAPTER 23 OF THE CONSOLIDATED Laws.

Short title; classification; definition (§§ 1-3).

General provisions (§§ 4-44).

Change of name (§§ 60-65).

Sale of corporate real property (§§ 70-76).

Judicial supervision of corporation and of the officers and mer-
bers thereof (§§ 90-92).

Action for: sequestration, action for dissolution and action
to enforce individual liability of officers and members of
eorporation (§§ 100-115).

Action to annul corporation (§§ 130-136).

Action to dissolve moneyed corporation (§§ 150-161).

Proceedings for voluntary dissolution of corporation (§§ 170-

Dissolution of steck corporation without judicial proceedings
(§§ 220, 221).

Provisions applicable to temporary. and permanent receivers of
corporations (§§ 226, 227).

Powers, duties and liabilities of receivers of corporation
(§§ 230-278).

Provisions applicable to two or more of the foregoing proceed-
ings or actions (§§ 300-316).

Alteration and repeal of charter of corporation (§§ 320, 321).

Laws repealed; construction; when to take effect (§§ 330-332).

ARTICLE 1.
Suort Tirtz; CiassiricaTion; DEFINITIons.
Short title.
Classification of corporations.
Definitions.

3.
ACTION

10.
ll.
12.

13.
14.
15.
16.
17.
18.
19.
20.

21,

23.

25.

27.
28.
29.
30.
31.
32.
33.
34,
35.
36.
37.
38.
39.
40.
41,

43.

GeveraL Corporation Law.

ARTICLE 2.

GENERAL PRovISIONS.

Qualifications of incorporators.

Filing and recording certificates of incorporation.

Corporate names.

Amended and supplemental certificates.

Lost or destroyed certificates.

Certificate and other papers as evidence; evidence of ernsolid.-
tion.

Limitation of powers; provisions of certificate.

Grant of general powers.

Enlargement of limitations upon the amount of the property
of non-stock corporations.

Acquisition of additional real property.

Acquisition of property without the state.

Certificate of authority of a foreign corporation.

Proof to be filed before granting certificate.

Reincorporation of foreign moneyed corporations.

Papers to be filed upon reincorporation.

When reincorporation effective and effect thereof.

Acquisition of real property in this state by certain foreign
corporations.

Acquisition by foreign corporation of real property in this
state.

Prohibition of banking powers.

Qualification of members as voters.

Cumulative voting.

Voting trust agreements.

Proxies.

Challenges.

Effect of failure to elect directors.

Mode of calling special election of directors.

Mode of conducting special election of directors.

Qualification of voters and canvass of votes at special election.

Powers of supreme court respecting elections,

Stay of proceedings in actions collusively brought.

Quorum of directors and powers of majority.

Directors as trustees in case of dissolution.

Forfeiture for non-user.

Extension of corporate existence.

Revival of corporate existence.

Approval of certificates of extension or revival; when required.

Extension when stock is owned by another corporation.

Effect of extension.

When notice of lapse of time unnecessary.

As to acts of directors.

Political contributions prohibited; penalty.
§§ 1, 2, 3. GrenrraL Corporation Law.

§ 1. Short title.
This chapter shall be known as the “ General Corporation Law.”

§ 2. Classification of corporations.

A corporation shall be either,
1. A municipal corporation,
2. A stock corporation, or
3. A non-stock corporation.

A stock corporation shall be either
1. A moneyed corporation,
2. A railroad or other transportation corporation, or
3. A business corporation.

A non-stock corporation shall be either,
1. A religious corporation,
2. A membership corporation, or
3. Any corporation other than a stock corporation.

A reference in a general law to a class of corporations described
in accordance with this classification shall include all corporations
theretofore formed belonging to such class.

§ 3. Definitions. “ited

1. <A ‘municipal corporation” includes a county, town, school
district, village and city and any other territorial division of the
state established by law with powers of local government.

2. A “stock corporation” is a corporation having a capital
stock divided into shares, and which is authorized by law to dis-
tribute to the holders thereof dividends or shares of the surplus
profits of the corporation. A corporation is not a stock corpora-
tion because of having issued certificates called certificates of stock,
but which are in fact merely certificates of membership, and which
is not authorized by law to distribute to its members any divi-
dends or share of profits arising from the operations of the
corporation.

>

8. The term “ non-stock corporation ” includes every corpora-

tion other than a stock corporation.
GenreraL Corporation Law. § 3.

4. A “moneyed corporation ” is a corporation formed under or
subject to the banking or the insurance law.

5. A “domestic corporation ” is a corporation incorporated by
or under the laws of the state or colony of New York. Every cor-
poration which is not a domestic cofporation is a foreign corpo-
ration, except as provided by the code of civil procedure for the
purpose of construing such code.

6. The term “ directors,” when used in relation to corporations,
shall include trustees or other persons, by whatever name known,
duly appointed or designated to manage the affairs of the
corporation.

7. The term “ certificate of incorporation ” shall include ar-
ticles of association or any other written instruments required by
law to be filed, to effect the incorporation of a corporation, includ-
ing a certified copy of an original certificate of incorporation filed
for such purpose in pursuance of law.

8. The term “member of a corporation ”’ shall include every
person having a right to vote at a meeting of the corporation for
the election of directors, other than a person having a right to vote
only upon a proxy.

9. The term “ office of a corporation ” means its principal office
within the state, or principal place of business within the state
if it has no principal office therein.

10. The term “‘ business of a corporation,” when used with ref-
erence to a non-stock corporation, includes the operations for the
conduct of which it is incorporated.

11. The term “corporate law” or “laws,” when used in any
law forming a part of the consolidation of the general laws of the
state of which this chapter is a part, means the general statutes
of this state relating to corporations included in such consolidation.

12. The existence of an easement in real property acquired or
reserved by a municipal corporation, a railroad corporation or
other transportation corporation, shall not be deemed an encum-
brance upon such real property under any law relating to invest-
ments in mortgages upon real property by corporations, trustees,
executors, administrators, guardians or other persons holding trust
§§ 4, 5. Grnerat Corporation Law.

funds, but the effect of such an easement upon the real property
which it affects, shall be taken into consideration in determining
the value thereof.

Amended by L. 1914, chap. 128. In effect April 6, 1914.
Chap. 128 of L. 1914, adds subd. 12.

§ 4. Qualifications of incorporators.

A certificate of incorporation must be executed by natural per-
sons, who must be of full age, and at least twothirds of them
must be citizens of the United States and one of them a resident
of this state. This section shall not apply to a corporation formed
by the reincorporation or consolidation of existing corporations, or
to the reorganization of a corporation upon the sale of the property
and franchises of a previously existing corporation or otherwise.

§ 5. Filing and recording certificates of incorporation.

1. Every certificate of incorporation and every amended
or supplemental certificate, and every certificate which
alters the provisions of any certificate of incorporation
or any amended or supplemental certificate hereafter ex-
ecuted, shall be in the English language, and except as
otherwise provided by law, shall be filed in the office of the
secretary of state, and shall be by him duly recorded and in-
dexed in books specially provided therefor, and a certified copy
of such certificate or amended or supplemental certificate with a
certificate of the secretary of state of such filing and record, or a
duplicate original of such certificate or amended or supplemental
certificate shall be filed and similarly recorded and indexed in
the office of the clerk of the county in which the office of the
corporation is to be located, or, if it be a non-stock corporation,
and such county be not determined upon at the time of executing
the certificate of incorporation, in such county clerk’s office as the
judge approving the certificate shall direct. Nothing herein con-
tained, however, shall be deemed to prohibit a corporation from
having and using a corporate name or title in a language other
than the English language if the same be in English letters or
characters. All taxes required by law to be paid before or upon
incorporation and the fees for filing and recording such certifi¢ate
must be paid before filing. No corporation shall exercise any cor-

!
GeyeraL Corrorarion Law. § 6.

porate powers or privileges until such taxes and fees have been
paid.

2. Whenever under any law now or heretofore in force the cer-
tificate of incorporation of any corporation other than a stock cor-
poration was or is required to be filed in more than one public
office, a certified copy of such certificate so filed in any one of
such public offices may be filed in such other office with the like
effect as if the original had been duly filed therein, provided, how-
ever, that no rights acerned prior to the filing of such copy shall be
impaired or affected thereby, provided also, that such filing of a
copy shall not cause a duplication or similarity of corporate names
in violation of the next succeeding section.

Amended by L. 1913, chap. 479.

§ 6. Corporate names.

1. No certificate of incorporation of a proposed corporation
having the same name as a corporation authorized to do business
under the laws of this state, or a name so nearly resembling it as
to be calculated to deceive, shall be filed or recorded in any office
for the purpose of effecting its incorporation, or of authorizing it
to do business in this state; nor shall any corporation except a
religious, charitable or benevolent corporation be authorized to
do business in this state unless its name has such word or words,
abbreviation, affix or prefix, therein or thereto, as will clearly in-
dicate that it is a corporation as distinguished from a natural
person, firm or copartnership; or unless such corporation uses
with its corporate name, in this state, such an affix or prefix.
\ corporation formed by the reincorporation, reorganization
or consolidation of other corporations or upon the sale of the:
property or franchises of a corporation, or a corporation acquir-
ing or becoming possessed of all the estate, property, rights,
privileges and franchises of any other corporation or corporations
by merger, may have the same name as the corporation or one
of the corporations to whose franchises it has succeeded. No
corporation shall be hereafter organized under the laws of this
state, with the word “ trust,” “ bank,” “ banking,” “ insurance,”
“assurance,” “indemnity,” ‘‘ guarantee,” “ guaranty,” “ title,”
“casualty,” “surety,” “fidelity,” “savings,” “ investment,”
“loan” or “benefit” as part of its name, except a corporation
formed under the banking law or the insurance law,
§§ 7, 8. GrveraL Corporation Law.

2. No corporation, society or association, whether now existing
or hereafter organized under or by virtue of the laws of this state,
shall ever employ the words “ Lucretia Mott” to designate, de
scribe or name any hospital, infirmary or dispensary, or any part
thereof, or any similar institution.

Amended by L. 1911, chap. 638; L. 1912, chap. 2, and L. 1913, chap. 24.

§ 7. Amended and supplemental certificates.

If in the original or amended certificate of incorporation of any
corporation, er if in a supplemental certificate of any corporation
any informality exist, or if any such certificate contain any matter
uot authorized by law to be stated therein, or if the proof or
acknowledgment thereof shall be defective, the corporators or di-
rectors of the corporation may make and file an amended certificate
correcting such informality or defect or striking out such unau-
thorized matter; and the certificate amended shall be deemed to
be amended accordingly as of the date such amended certificate was
filed, and upon the filing of such an amended certificate of incor-
poration, the corporation shall then for all purposes be deemed
to be a corporation from the time of filing the original certificate.

The supreme court may, upon due cause shown, and proof
made, and upon notice to the attorney-general, and to such other
persons as the court may direct, and upon such terms and con-
ditions as it may impose, amend any certificate of incorporation
which fails to express the true object and purpose of the cor-
poration, so as to truly set forth such object and purpose.

When an amended or supplemental certificate is filed, an entry
shall be made upon the margin of the index and record of the
original certificate of the date and place of record of every such
amended certificate.

The amendment of a certificate under this section shall be with-
out prejudice to any pending action or proceeding, or to any
rights previously accrued.

§ 8. Lost or destroyed certificates.

Tf either of the certificates of incorporation sball be lost or de-
stroyed after filing, a certified copy of the other certificate may
be filed in the place of the one so lost or destroyed and as of the
date of its original filing, and such certified copy shall have the
same force and effect as the original certificate had when filed.
GeneraL Corporation Law. § 9.

§ 9. Certificate and other papers as evidence; evidence of
consolidation.

1. The certificate of incorporation of any corporation duly
filed shall be presumptive evidence of its incorporation, and any
amended certificate or other paper duly filed or recorded relating
to the incorporation of any corporation or its existence or manage-
ment, and containing facts required or authorized by law to be
stated therein, shall be presumptive evidence of the existence of
such facts.

2. Whenever, by the laws of any other state or territory, or the
dominion of Canada, a copy of the certificate of organization or
incorporation or any other certificate, certified or exemplified by
any officer or officers in such state or territory or dominion, is or
shall be prima facie evidence of the due formation, creation,
existence, organization or capacity of any corporation or joint-
stock company, created, organized or located in such state, terri-
tory or dominion, or claiming so to be, such certificate or cer-
tificates, duly exemplified, or a duly exemplified copy thereof,
shall be received in all actions and proceedings in this state, in or
before all courts and officers, with the same force and effect in all
respects as prima facie evidence as aforesaid, as in such other
state, territory or dominion.

3. Where two or more corporations have been or shall here-
after be consolidated and merged into a new corporation, a cer-
tificate of the secretary of state under his official seal concisely
stating the names of the respective corporations consolidated, the
dates of the filing of the certificates respectively of the incorpora-
tion of such corporations in his office, the object for which they
were formed, including the nature and locality of their business
as set forth in their respective incorporation papers on file in his
office, the date of the filing of the consolidation agreement and
other proceedings in his office, the name of the new corporation
formed by such consolidation and merger, the term of its corporate
existence, the place where its principal office is situated and the
amount of its capital stock, shall be presumptive and prima facie
evidence in all actions and special proceedings for all purposes of
§§ 10, 11. GunerRaL Corporation Law.

the incorporation of the corporations so consolidated, the incor-
poration of the new corporation by such consolidation and merger
from the date of filing of said consolidation agreement and pro-
ceedings, and of the other facts so certified by him.

§ 10. Limitation of powers; provisions of certificate.

1. No corporation shall possess or exercise any corporate
powers not given by law, or not necessary to the exercise of the
powers so given.

2. The certificate of incorporation of any corporation may cou-
tain any provision for the regulation of the business and the con-
duct of the affairs of the corporation, and any limitation upon its
powers, or upon the powers of its directors and stockholders, which
does not exempt them from the performance of any obligation or
the performance of any duty imposed by Jaw.

§ 11. Grant of general powers.

Every corporation as such has power, though not specified in
the law under which it is incorporated:

1. To have succession for the period specified in its certificate
of incorporation or by law, and perpetually when no period is
specified.

2. To have a common seal, and alter the same at pleasure.

3. To acquire by grant, gift, purchase, devise or bequest, to
hold and to dispose of such property as the purposes of the cor-
poration shall require, subject to such limitations as may be pre-
scribed by law.

4. To appoint such officers sual agents as its business shall
require, and to fix their compensation, and

5. To make by-laws, not inconsistent with any existing law,
for the management of its property, the regulation of its affairs,
and the transfer of its stock, if it has any, and the calling of
meetings of its members. Such by-laws may also fix the amount
of stock, which must be represented at meetings of the stock-
holders in order to constitute a quorum, unless otherwise pro-
vided by law. By-laws duly adopted at a meeting of the mem-
GenreraL Corporation Law. §§ 12, 18, 14.

bers of the corporation shall control the action of its directors.
No by-law adopted by the board of directors regulating the elec-
tion of directors or officers shall be valid unless published for at
least once a week for two successive weeks in a newspaper in the
county where the election is to be ‘held, and at least thirty days
before such election. Subdivisions four and five of this section
shall not apply to municipal corporations.

§ 12. Enlargement of limitations upon the amount of the
property of non-stock corporations.

If any general or special law heretofore passed, or any certifi-
eate of incorporation, shall limit the amount of property a corpo-
ration other than a stock corporation may take or hold, such
corporation may take and hold property of the value of ten
million dollars or less, or the yearly income derived from which
shall be one million dollars or less, notwithstanding any such
limitations. In computing the value of such property, no in-
crease in value arising otherwise than from improvements made
thereon shall be taken into account.

Amended by L. 1909, chap. 276, and L. 1911, chap. 581.

§ 13. Acquisition of additional real property.

When any corporation, except a life insurance corporation, shall
have sold or conveyed any part of its real property, the supreme
court may. notwithstanding any restriction of a general or special
law, authorize it to purchase and hold from time to time other real
property, upon satisfactory proof that the value of the property so
purchased does not exceed the value of the property so sold and
conveyed within the three years next preceding the application.

§ 14. Acquisition of property without the state.

Any domestic corporation transacting business in other states or
foreign countries may acquire and dispose of such property as
shall be requisite for such corporation in the convenient trans-
action of its business. Any domestic corporation establishing or
maintaining a charitable, philanthropic or educational institution
within this state may also carry on its work and establish or main-
§ 15. GrveraL Corporation Law.

tain one or more branches of such institution or an additional
institution or additional institutions in any other state, the Dis
trict of Columbia or in any part of the territories or dependencies
of the United States of America or in any foreign country and for
either of said purposes may take by devise or bequest, hold, pur-
chase, mortgage, sell and convey or otherwise dispose of such real
and personal property without this state as may be requisite there-
for. But nothing in this section contained shall be construed 2-
exempting from taxation property to any additional amount than
is now allowed to such corporation under existing laws.

§ 15. Certificate of authority of a foreign corporation.

No foreign stock corporation other than a moneyed corporation,
shall do business in this state without having first procured from
the secretary of state a certificate that it has complied with all
the requirements of law to authorize it to do business in this
state. and that the business of the corporation to be carried on
in this state is such as may be lawfully carried on by a corpora-
tion incorporated under the laws of this state for such or similar
business, or if more than one kind of business, by two or more
corporations so incorporated for such kinds of business respect-
ively. The secretary of state shall deliver such certificate to
every such corporation so complying with the requirements of
law. No foreign stock corporation doing business in this state
shall maintain any action in this state upon any contract made
by it in this state, unless prior to the making of such contract
it shall have procured such certificate. This prohibition shall
also apply to any assignee of such foreign stock corporation and
to any person claiming under such assignee or such foreign
stock corporation or under either of them. No certificate of
authority shall be granted to any foreign corporation having the
same name as an existing domestic corporation, or a name so
nearly resembling it as to be calculated to deceive, nor to any
foreign corporation, other than a moneyed or insurance corpora-
tion, with the word “ trust,” “bank,” “banking,” “ insurance,”
“assurance,” “indemnity,” “guarantee,” “guaranty,” “ sav-
605

ings,” “ investment,” “loan” or “ benefit,” as a part of its name.
GreyeraL Corporation Law. § 16.

§ 16. Proof to be filed before granting certificate.

Before granting such certificate the secretary of state shall re-
quire every such foreign corporation to file in his office a sworn
copy in the English language of its charter or certificate of in-
corporation and a statement under its corporate seal, and the sig-
nature of its president, vice-president or other acting head, particu-
larly setting forth the business or objects of the corporation which
it is engaged in carrying on or which it proposes to carry on within
the state, and a place within the state which is to be its principal
place of business, and designating a person upon whom process
against the corporation may be served within the state. The person
so designated must have an office or place of business at the place
where such corporation is to have its principal place of business
within the state and such designation must specify such office or
place of business of the said person so designated, and if it is
within a city the street and street number if any, or other suitable
designation of the particular locality. Such designation shall be
accompanied with the written consent of the person designated and
shall continue in force until revoked by an instrument in writing
designating in like manner some other person upon whom process
against the corporation may be served in this state or until the fil-
ing in the same office of a written revocation of said consent
executed by the person so designated. If the person so designated
dies or removes from the place where the corporation has its prin-
cipal place of business within the state, or files such revocation of
his consent, and the corporation does not within thirty days after
such death or removal or revocation of consent designate in like
manner another person upon whom process against it may be served
within the state, the secretary of state may revoke the authority of
the corporation to do business within the state, and process against
the corporation in an action upon any liability incurred within this
state before such revocation, may, after such death or removal, or
revocation of consent, and before another designation is made, be
served upon the secretary of state. At the time of such service
the plaintiff shall pay to the secretary of state two dollars, to be
included in his taxable costs and disbursements, and the secretary
of state shall forthwith mail a copy of such notice to such corpora-
S§ 1%, 18. GrveraL Corporation Law.

tion if its address, or the address of any officer thereof, is known to
him. The secretary of state may require the execution of any
such designation, revocation or consent, to be authenticated as he
deems proper and he may refuse to file it without such
authentication.

§ 17. Reincorporation of foreign moneyed corporations.

Any moneyed corporation duly organized by or under the laws
of any state of the United States, and having an office or doing
business in this state, may file, if a banking corporation or
authorized to make loans upon pledges or deposits, in the office
of the superintendent of banks, and if an insurance corporation in
the office of the superintendent of insurance, the documents de-
scribed in section eighteen of this chapter, and such documents
shall be recorded as original certificates of incorporation are re-
quired by law to be recorded. The fees for filing and recording
such documents, together with the tax, if any, required by law to
be paid before the incorporation of a domestic company of the
same class, must be paid before filing.

§ 18. Papers to be filed upon reincorporation.
The documents to be filed by any such corporation shall include,

1. <A copy of its charter, certificate of incorporation, or other
document constituting it a body corporate, with such amend-
ments, if any, as are desired by the corporation or are required by
the laws of New York, authenticated as an original certificate of
incorporation is required to be authenticated ;

2. <A declaration of its desire to become a corporation of this
state and of its submission to the laws of this state, duly executed
by the authority of the body in which its corporate powers are
vested. ,

3. A certificate of the superintendent of that department in
which these papers are filed that the charter, certificate of incor-
poration or other constituent document, with its proposed amend-
ments, if any, as filed, is in all respects consistent with the laws
of this state relating to domestic corporations of the same class;
that the corporation applicant has complied with all conditions
GenrraL Corporation Law. §§ 19, 20.

imposed by its laws upon domestic corporations of the same class
beginning business in this state, with the exception of any pro-
visions concerning the residence of a majority of the corporators,
trustees, or directors of such corporation; that its name is not the
same with the name of any domestic, corporation, nor likely to be
confounded with any such name, and that it has paid all fees and
taxes due from it to the state, including the tax, if any, imposed
by this state upon the original incorporation of a company of the
same class.

§ 19. When reincorporation effected and effect thereof.

From the date of filing these documents the corporation shall
become and be a corporation of this state, and shall be subject
to all the laws of this state applicable to corporations of the same
class; but its existence and powers as such corporation shall termi-
nate if it shall fail at any time for one month to maintain an
office within the state at which an authorized officer or agent shall
be present at all reasonable business hours, prepared to exhibit the
books of the company to the proper authorities of this state and to
receive service of process; or if it shall fail within two years to
terminate its corporate existence derived from any other state, by
surrender of its charter or by dissolution.

§ 20. Acquisition of real property in this state by certain
foreign corporations.

Any foreign corporation doing business in this state and created
under the laws of the United States, or of any state or territory
thereof, or of any foreign state or nation which borders the
United States of America and which by its laws confers similar
privileges on corporations created by the laws of the state of New
York, may acquire and hold such real property in this state as may
be necessary for its corporate purposes in the transaction of its
business in this state, and convey the same by deed or otherwise in
the same manner as a domestic corporation.

Amended by chap. 68 of 1910.
§§ 21, 22, 23. CGrnerat Corporation Law.

§ 21. Acquisition by foreign corporation of real property in
this state.

Any foreign corporation may purchase at a sale upon the fore-
closure of any mortgage held by it, or, upon any judgment or de
eree for debts due it, or, upon any settlement to secure such debts,
any real property within this state covered by or subject to such
mortgage, judgment, decree or settlement, and may take by de-
vise any real property situated within this state and hold the
same for not exceeding five years from the date of such purchase,
or from the time when the right to the possession thereof vests in
such devisee, and convey it by deed or otherwise in the same
manner as a domestic corporation.

§ 22. Prohibition of banking powers.

No corporation, domestic or foreign, other than a corporation
formed under or subject to the banking laws of this state or of
the United States, except as permitted by such laws, shall by
any implication or construction be deemed to possess the power
of carrying on the business of discounting bills, notes or other
evidences of debt, of receiving deposits, of buying and selling
bills of exchange, or of issuing bills, notes or other evidences of
debt for circulation as money, or of engaging in any other form
of banking; nor shall any such corporation, except an express
company having contracts with railroad companies for the opera-
tion of an express service upon the lines of such railroad com-
panies, or a transatlantic steamship company, or a telegraph
company, or a corpuzation incorporated prior to the year eighteen
hundred and fifty, to promote the welfare of emigrants, possess
the power of receiving money for transmission or of transmitting
the same, by draft, traveler’s check, money order or otherwise.

Amended by L. 1911, chap. 771.

§ 23. Qualification of members as voters.

Unless otherwise provided in the certificate of incorporation,
every stockhelder of record of a stock corporation shall be entitled
at every meeting of the corporation to one vote for every share of
stock standing in his name on the books of the corporation; and at
every meeting of a non-stock corporation, every member, unless
disqualified by the by-laws, shall be entitled to one vote. The stock-
holders of a stock corporation, by a by-law adopted by a vote at any
Guwrrat Corporation Law. §§ 24, 25.

annual meeting, or at any special meeting duly called for such
purpose, may prescribe a period, not exceeding forty days prior
to meetings of the stockholders, during which no transfer of stock
on the books of the corporation may be made. Except in cases of
express trust, or in which other provision shall have been made
by written agreement between the parties, the record holder of
stock which shall be held by him as security, or which shall actually
belong to another, upon deinand therefor and payment of neces-
sary expenses thereof, shall issue to such pledgor or to such actual
owner of such stock, a proxy to vote thereon. No member of
a corporation shall sell his vote or issue a proxy to vote to any
person for any sum of money or any thing of value. The books
and papers containiug the record of membership of the corpora-
tion shall be produced at any meeting of its members upon the
request of any member. If the right to vote at any such meeting
shall be challenged, the inspectors of election, or other persons
presiding thereat, shall require such books, if they can be had, to
be produced as evidence of the right of the person challenged to
vote at. such meeting, and all persons who may appear from such
books to be members of the corporation may vote at such meeting
in person or by proxy, subject to the provisions of this chapter.

§ 24. Cumulative voting.

The certificate of incorporation of any stock corporation may
provide that at all elections of directors of such corporation, each
stockholder shall be entitled to as many votes as shall equal the
number of his shares of stock multiplied by the number of directors.
to be elected, and that he may cast all of such votes for a single
director or may distribute them among the number to be voted for,
or any two or more of them as he may see fit, which right, when
exercised, shall be termed cumulative voting. The stockholders
of a corporation heretofore formed, who, by the provisions of laws
existing on April thirtieth, eighteen hundred and ninety-one, were
entitled to the exercise of such right, may hereafter exercise such
right according to the provision of this section.

§ 25. Voting trust agreements.

A stockholder may, by agreement in writing, transfer his stock
to aiiy person or persons for the purpose of vesting in him or them
the right to vote thereon for a time not exceeding five years upon
terms and conditions stated, pursuant to which such person or
§§ 26, 27. GeneRAL Corporation Law.

persons shall act; every other stockholder, upon his. request there-
for, may, by a like agreement in writing, also transfer his stock to
the same person or persons and thereupon may participate in the
terms, conditions and privileges of such agreement; the certifi-
cates of stock so transferred shall be surrendered and canceled
and certificates therefor issued to such transferee or transferees
in which it shall appear that they are issued pursuant to such
agreement and in the entry of such transferee of transferees as
owners of such stock in the proper books of said corporation that
fact shall also be noted and thereupon he or they may vote upon
the stock so transferred during the time in such agreement speci-
fied; a duplicate of every such agreement shall be filed in the
office of the corporation where its principal business is transacted
and be open to the inspection of any stockholder, daily, during
business hours.

§ 26. Proxies.

Every member of a corporation, except a religious corporation,
entitled to vote at any meeting thereof may so vote by proxy.

No officer, clerk, teller or bookkeeper of a corporation formed
under or subject to the banking law shall act as proxy for any
stockholder at any meeting of any such corporation.

Every proxy must be executed in writing by the member him-
self, or by his duly authorized attorney. No proxy hereafter made
shall be valid after the expiration of eleven months from the date
of its execution unless the member executing it shall have speci-
fied therein the length of time it is to continue in force, which
shall be for some limited period. Every proxy shall be revocable
at the pleasure of the person executing it; but a corporation having
no capital stock may prescribe in its by-laws the persons who may
act as proxies for members, and the length of time for which

proxies may be executed.

§ 27. Challenges.

Every member of a corporation offering to vote at any election
or meeting of the corporation shall, if required by an inspector
of election or other officer presiding at such election or meeting,
or by any other member present, take and subscribe the following
oath: “I do solemnly swear that in voting at this election I have
not, either directly, indirectly or impliedly received any promise
GenrraL Corporation Law. 8§ 28, 29.

or any sum of money or any thing of value to influence the giving
of my vote or votes at this meeting or as a consideration therefor.”
Any person offering to vote as proxy for any other person shall
present his proxy and, if so required, take and subscribe the foi-
lowing oath : “ I do solemnly swear,that I have not, either directly,
indirectly or impliedly, given any promise or any sum of money
or any thing of value to induce the giving of a proxy to me to
vote at this election, or received any promise or any sum of money
or any thing of value to influence the giving of my vote at this
meeting, or as a consideration therefor.” The inspectors or per.
sons presiding at the election may administer such oath, and all
such oaths and proxies shall be filed in the office of the corporation.

§ 28. Effect of failure to elect directors.

If the directors shall not be elected on the day designated in the
by-laws, or by law, the corporation shall not for that reason be dis-
solved; but every director shall continue to hold his office and
discharge his duties until his successor has been elected.

§ 29. Mode of calling special election of directors.

If the election has not been held on the day so designated, the
directors shall forthwith call a meeting of the members of the cor.
poration for the purpose of electing directors, of which meeting
notice shall be given in the same manner as of the annual meeting
for the election of directors.

If such meeting shall not be so called within one month, or, if
held, shall result in a failure to elect directors, any member of
the corporation may call a meeting for the purpose of electing
directors by publishing a notice of the time and place of holding
such meeting at least once in each week for two successive weeks
immediately preceding the election, in a newspaper published in
the county where the election is to be held and in such other man-
ner as may be prescribed in the by-laws for the publication of
notice of the annual meeting, and by serving upon each member,
either personally or by mail, directed to him at his last known
post-office address, a copy of such notice at least two weeks before
the meeting.
§§ 30, 31, 32. Genrrat Corporation Law.

§ 30. Mode of conducting special election of directors.

Such meeting shall be held at the office of the corporation, or if
it has none, at the place in this state where its principal business
has been transacted, or if access to such office or place is denied or
can not be had, at some other place in the city, village or town
where such office or place is or was located.

At such meeting the members attending shall constitute a quo-
rum. ‘They may elect inspectors of election and directors and
adopt by-laws providing for future annual meetings and election
of directors, if the corporation has no such by-laws, and transact
any other business which may be transacted at an annual meeting
of the members of the corporation.

§ 31. Qualification of voters and canvass of votes at special
election.

In the absence at such meeting of the books of the corporation
showing who are members thereof, each person, before voting, shall
present his sworn statement setting forth that he is a member of
the corporation; and if a stock corporation, the number of shares
of stock owned by him and standing in his name on the books of
the corporation, and, if known to him, the whole number of shares
of stock of the corporation outstanding. On filing such statement,
he may vote as a member of the corporation; and if a stock corpo-
ration, he may vote on the shares of stock appearing in such state-
ment to be owned by him and standing in his name on the books
of the corporation.

The inspectors shall return and file such statements, with a
certificate of the result of the election, verified by them, in the
office of the clerk of the county in which such election is held,
and the persons so elected shall be the directors of the corporation.

§ 32. Powers of supreme court respecting elections.

The supreme court shall, upon the application of any person
or corporation aggrieved by or complaining of any election of any
corporation or any proceeding, act or matter touching the same,
upon notice thereof to the adverse party, or to those to be affected
thereby, forthwith and in a summary way hear the affidavits,
GENERAL Corporation Law. §§ 33, 34.

proofs and allegations of the parties, or otherwise inquire into
the matters or causes of complaint, and establish the election or
order a new election, or make such order and give such relief as
right and justice may require.

§ 33. Stay of proceedings in actions collusively brought.

If an action is brought against a corporation by the procure-
ment or default of its directors, or any of them, to enforce any
claim or obligation declared void by law, er to which the cor-
poration has a valid defense, and such action is in the interest
or for the benefit of any director, and the corporation has by his
connivance made default in such action, or consented to the valid-
ity of such claim or obligation, any member of the corporation
may apply to the supreme court, upon affidavit, setting forth the
facts, for a stay of proceedings in such action, and on proof of the
facts in such further manner and upon such notice as the court
may direct, it may stay such proceedings or set aside and vacate
the same, or grant such other relief as may seem proper, and
which will not injuriously affect an innocent party, who, without
notice of such wrongdoing and for a valuable consideration, has
acquired rights under such proceedings.

§ 34. Quorum of directors and powers of majority.

The affairs of every corporation shall be managed by its board
of directors, at least one of whom shall be a resident of this
state. Unless otherwise provided a majority of the board of
directors of a corporation at a meeting duly assembled shall be
necessary to constitute a quorum for the transaction of business
and the act of a majority of the directors present at a meeting
at which a quorum is present shall be the act of the board of
directors. The members of a corporation may in by-laws fix
the number of directors necessary to constitute a quorum at a
number less than a majority of the board, but at least equal to
one-third of its number. Subject to the by-laws, if any, adopted
by members of a corporation, the directors may make necessary
by-laws of the corporation.
§§ 35, 36, 387. GuneraL Corporation Law.

§ 35. Directors as trustees in case of dissolution.

Upon the dissolution of any corporation, its directors, unless
other persons shall be appointed by the legislature, or by some
court of competent jurisdiction, shall be the trustees of its cred-
itors, stockholders or members, and shall have full power to settle
its affairs, collect and pay outstanding debts, and divide among
the persons entitled thereto the money and other property remain-
ing after payment of debts and necesssary expenses.

Such trustees shall have authority to sue for and recover the
debts and property of the corporation, by their name as such
trustees, and shall jointly and severally be personally liable to its
ereditors, stockholders or members, to the extent of its property
and effects that shall come into their hands.

§ 36. Forfeiture for non-user.

If any corporation, except a railroad, turnpike, plank-road or
bridge corporation, shall not organize and commence the transac-
tion of its business or undertake the discharge of its corporate
duties within two years from the date of its incorporation, its
corporate powers shall cease.

§ 37. Extension of corporate existence.

Any domestic corporation at any time before the expiration
thereof, may extend the term of its existence beyond the time
specified in its original certificate of incorporation, or by law, or in
any certificate of extension of corporate existence, by the consent
of the stockholders owning two-thirds in amount of its capital
stock, or if not a stock corporation, by the consent of two-thirds of
its members, which consent shall be given either in writing or by
vote at a special meeting of the stockholders called for that purpose,
upon the same notice as that required for the annual meetings of
the corporation; and a certificate under the seal of the corporation
that such consent was given by the stockholders in writing, or that
it was given by vote at a meeting as aforesaid, shall be subscribed
and acknowledged by the president or a vice-president, and by the
secretary or an assistant secretary of the corporation, and if a
corporation formed under or subject to the banking law shall be
GreyeraL Corporation Law. § 38.

filed in the office of the superintendent of banks, if an insurance
corporation, in the office of the superintendent of insurance, and
otherwise in the office of the secretary of state, and shall by such
officer be duly recorded and indexed in a book specially provided
therefor, and a certified copy of such certificate, with a certificate
of such officer of such filing and record, or a duplicate original
of such certificate, shall be filed and similarly recorded and in-
dexed in the office of the clerk of the county wherein the corpora-
tion has its principal place of business, and shall be noted in the
margin of the record of the original certificates of such corporation,
if any, in such offices, and thereafter the term of the existence of
such corporation shall be extended as designated in such certificate.

The certificate of incorporation of any corporation whose dura-
tion is limited by such certificate or by law, may require that the
consent of the stockholders owning a greater percentage than two-
thirds of the stock, if a stock corporation, or of more than two-
thirds of the members, if a nen-stock corporation, shall be requisite
to effect an extension of corporate existence as authorized by this
section.

Amended by L. 1913, ch. 306.

§ 38. Revival of corporate existence.

If the term of existence of any domestic corporation shall have
expired and it shall be made satisfactorily tojappear to the supreme
court that such corporation was legally organized pursuant to any
law of this state, and that it shall have issued its bonds payable ata
date beyond the date fixed in its charter or certificate of incorpora-
tion for the expiration of its corporate existence, and such bonds
shall be unmatured and unpaid, or, if a bank, incorporated under
a general law of this state, that shall have issued any other obliga-
tions or shall have incurred any other indebtedness which at the
date of the application shall be unsatisfied or unpaid, the supreme
court may, upon the application of any person interested and
upon such notice to such other parties as the court may require,
-by order, authorize the filing and recording of a certificate re-
viving the existence of such corporation, upon such conditions
and with such limitations as such order shall specify, and ex-
tending such corporate existence for a term not exceedirg the
term for which it was originally incorporated. Upon filing and
§§ 39, 40. GryeraL Corporation Law.

recording such certificate in the same manner as certificates of
extension of corporate existence duly issued before the expira-
tion of the existence of a domestic corporation are authorized
by law to be filed and recorded, such corporate existence shall
be revived and extended in pursuance of the terms of such order,
but such revival and extension shall not affect any litigation com-
menced after such expiration and pending at the time of such
revival.
Amended by L. 1911, chap. 63.

§ 39. Approval of certificates of extension or revival; when
required.

In the case of a corporation formed under or subject to the bank-
ing law, no certificate of extension or revival shall be filed or re-
corded unless it shall have indorsed thereon the written approval
of the superintendent of banks; or, if an insurance corporation,
unless it shall have indorsed thereon the written approval of the
superintendent of insurance; and, if a turnpike or bridge corpora-
tion, it shall not be filed unless it shall have indorsed thereon or
annexed thereto a certified copy of a resolution of the board of
supervisors of each county in which such turnpike or bridge is
located, approving of and authorizing such extension.

§ 40. Extension when stock Is owned by another cor-
poration.

If all the stock of a corporation other than a corporation
formed under or subject to the banking law, or an insurance
corporation, or a turnpike, plank-road or bridge corporation shall
be lawfully owned by another stock corporation entitled by law to
take a surrender and merger thereof, the corporate existence of
such corporation whose stock is so owned may be extended at any
time for the term of the corporate existence of the possessor corpo-
ration, by filing in the office or offices in which the original certifi-
eate or certificates of incorporation of the first-mentioned corpora-
tion were filed a certificate of such extension executed by its
president and secretary and by such corporation owning all the
shares of its capital stock.
Grnerat Corporation Law. §8§ 41, 42, 43.

§ 41. Effect of extension.

Every corporation extending its corporate existence under this
chapter or under any general law of the state shall thereafter be
subject to the provisions of this chapter and of such general law,
notwithstanding any special provisions in its charter, and shall
thereafter be deemed to be incorporated under the general laws of
the state relating to the incorporation of a corporation for the.
purpose of carrying on the business in which it is engaged, and
shall be subject to the provisions of such law.

§ 42. When notice of lapse of time unnecessary.

Whenever under the provisions of any of the corporate laws
a corporation is authorized to take any action after notice to its
members or after the lapse of a prescribed period of time, such
action may be taken without notice and without the lapse of any

period of time, if such action be authorized or approved, and such .....

requirements be waived in writing by every member of such cor-
poration, or by his attorney thereunto authorized.

§ 43. As to acts of directors.

Whenever, under the provisions of any of the corporate laws, a
corporation is authorized to take any action by the agreement or
action of its directors, managers or trustees, such agreement or
action may be taken by such directors, regularly convened as a
board, and acting by a majority of a quorum, except when other-
wise expressly required by law or the by-laws of the corporation
and any such agreement shall be executed in behalf of the corpora-
tien by such officers as shall be designated by the board of directors,
managers or trustees. At any meeting at which every member of
the board of directors shall be present, though held without notice,
any business may be transacted which might have been transacted
if the meeting had been duly called. Except when otherwise re-
quired by law or the by-laws of the corporation, special meetings
of the members of the corporation may be called in the same man-
ner as the annual meeting thereof. '
§ 44, GryERAL Corporation Law.

§ 44. Political contributions prohibited; penalty.

No corporation or joint-stock association doing business in
this state, except a corporation or association organized or main-
tained for political purposes only, shall directly or indirectly pay
or use or offer, consent or agree to pay or use any money or prop-
erty for or in aid of any political party, committee or organization,
or for, or in aid of, any corporation, joint-stock or other associa-
tion organized or maintained for political purposes, or for, or in
aid of, any candidate for political office or for nomination for
such office, or for any political purpose whatever, or for the
reimbursement or indemnification of any person for moneys or
property so used. Any officer, director, stockholder, attorney or
agent of any corporation or joint-stock association which violates
any of the provisions of this section, who participates in, aids,
abets or advises or consents to any such violation, and any person
who solicits or knowingly receives any money or property in
violation of this section, shall be guilty of a misdemeanor and
punishable by imprisonment in a penitentiary or county jail
for not more than one year and a fine of not more than one
thousand dollars. No person shall be excused from attending
and testifying, or producing any books, papers or other docu-
ments before any court or magistrate, upon any investigation,
proceeding or trial, for a violation of any of the provisions of
this section, upon the ground or for the reason that the testimony
or evidence, documentary or otherwise, required of him may tend
to convict him of a crime or to subject him to a penalty or for-
feiture; but no person shall be prosecuted or subjected to any
penalty or forfeiture for or on account of any transaction, matter
or thing concerning which he may so testify or produce evidence,
documentary or otherwise, and no testimony so given or produced
shall be received against him upon any criminal investigation or
proceeding.
Genrerat Corporarion Law. §§ 60, G1.

ARTICLE 38.

Cuanee or NAME.

Srecrion 60. Petition by corporation to change name.
Gl. Contents of petition. :
62. Notice of presentation of petitiun.
63. Order authorizing change.
64. When change to take effect.
65. Substitution of new name in pending action or proceeding.

§ 60. Petition by corporation to change name.

A petition to assume another corporate name may be made by a
domestic corporation, whether incorporated by a general or special
law, to the supreme court at a special term thereof, held in the
judicial district in which its principal business office shall be
situated, or, if it be other than a stock corporation, at a special
term held in the judicial district in which its certificate of incor-
poration is filed or recorded, or in which its principal property is
situated, or in which its principal operations are or theretofore
have been conducted. If it be a banking, insurance or railroad
corporation, the petition must be authorized by a resolution of the
directors of the corporation, and approved if a banking corpora-
tion, by the superintendent of banks; if an insurance corporation
by the superintendent of insurance, and if a railroad corporation,
by the public service commission. The petition to change the name
of any other corporation must have annexed thereto a certificate
of the secretary of state, that the name which such corporation
proposes to assume is not the name of any other domestic cor-
poration or a name which he deems so nearly resembling it, as to.
be calculated to deceive.

Amended by chap. 296 of 1910.

§ 61. Contents of petition.

The petition must be in writing, signed by the petitioner and
verified in like manner as a pleading in a court of record, and
must specify the grounds of the application, its present name, and
the name it proposes to assume, which must not be the name of
any other corporation, or a name so nearly resembling it as to be
§ 62. Grenerat Corporation Law.

calculated to deceive; and if it be a railroad corporation, a corpo-
ration having banking powers or the power to make loans upon
pledges or deposits, or to make insura.ces, that the petition has
been duly authorized by a resolution of the directors of the corpo-
ration and approved by the proper officer.

§ 62. Notice of presentation of petition.

If the petition be made by a corporation located elsewhere than
in the city and county of New York, notice of the presentation
thereof shall be published once in each week for three successive
weeks in a newspaper of every county in which such corporation
shall have a business office, or if it has no business office, of the
county in which its principal corporate property is situated, or in
which its operations are or theretofore have been principally con-
ducted, which newspaper, if it be a banking corporation, shall be
designated by the superintendent of banks, if an insurance corpora-
tion, by the superintendent of insurance, or of a railroad cor-
poration, by the public service commission. In the city and
county of New York such notice shall be published once in each
week for three successive weeks in two daily newspapers published
in such county. If the petition be made by a domestic corpora-
tion organized under or subject to the religious or membership
corporations law the court may dispense with the publication of
the notice of the presentation of such petition or require notice
of such presentation to be given to such person and in such man-
ner as the court thinks proper.

A copy of the petition and notice of motion shall be filed with
the secretary of state, and the proposed name shall thereupon be
reserved for said corporation until three weeks after the date of
such motion, and until three weeks after the date of any adjourn-
ment of such motion if notice of such adjournment shall be filed
with the secretary of state, and no certificate of incorporation of
a proposed eorporation, having the same name as the name pro-
posed in such petition, or a name so nearly resembling it as to be
calculated to deceive, shall be filed in any office for the purpose of
effecting its incorporation, and no corporation formed without the
state of New York having the same name or a name so nearly
resembling it as to be calculated to deceive shall be given authority
to do business in this state.

Amended by chap. 296 of 1910.
GeweRaL Corporation Law. §§ 638, 64.

§ 63. Order authorizing change.

1f the court to which the petition is presented is satisfied thereby,
or by the affidavit and certificate presented therewith, that the peti-
tion is true, and that there is no reasonable objection to the change
of name proposed and that the petition has been duly authorized
and that notice of the presentation of the petition, if required by
law, has been made, the court shall make an order authorizing the
petitioner to assume the name proposed on a day specified therein,
aot less than thirty days after the entry of the order. The order
shall be directed to be entered and the papers on which it was
granted to be filed within ten days thereafter in the office of the
clerk of the county in which its certificate of incorporation, if any,
shall be filed, or if there be none filed, in which its principal office
shall be located, or if it has no business office in the county in which
its principal property is situated, or in which its operations are or
theretofore have been principally conducted, or in the office of the
clerk of the county in which the special term granting the order is
held; and that a certified copy of such order shail, within ten
days after the entry thereof, be filed in the office of the secretary
of state; and also, if it be a banking corporation, in the office of
the superintendent of banks, or if it be an insurance corporation,
in the office of the superintendent of insurance, or if it be a rail-
road corporation, in the offices of the public service commissions.
Such order shall also direct the publication, within ten days after
the entry thereof of a copy thereof, in a designated newspaper, in
the county in which the order is directed to be entered, once in
each week for four successive weeks. The court may dispense
with the publication of a copy of such order and require notice
to be given to such persons and in such manner as it thinks proper
if the petition be made by a domestic corporation organized under
or subject to the religious or membership corporations law.

Amended by chap. 296 of 1910.

§ 64. When change to take effect.

If the order shall be fully complied with, and within forty days
after the making of the order, an affidavit of the publication thereof
shall be filed and recorded in the office in which the order is en-
§ 65. GrNERAL Corporation Law.

tered, and in each office in which certified copies thereof are re
quired to be filed, if any, the petitioner shall, on and after the
day specified for that purpose in the order, be known by the name
which is thereby authorized to be assumed, and by no other name.
No proceedings had prior to April fourth, eighteen hundred and
ninety-four, under sections two thousand four hundred and four-
teen and two thousand four hundred and fifteen of the code of civil
procedure for the change of the name of a corporation, shall be
invalid by reason of the non-filing of an affidavit of the publication
of the order changing such name within twenty days from the date
thereof.

And no proceedings heretofore had under the provisions of
article three, chapter twenty-three, consolidated laws, for the
change of the name of a corporation, shall be invalid by reason of
the non-filing and recording of such affidavit of the publication of
the order changing such name within forty days from the making
of such order.

Amended by L. 1913, chap. 721. In effect May 24, 1913.

§ 65. Substitution of new name in pending action or pro-
ceeding.

An action or special proceeding, civil or criminal, commenced by _
or against a corporation whose name is so changed shall not abate,
nor shall any relief, recovery or other proceeding therein be pre-
vented, impeded or impaired in consequence of such change of
name. The plaintiff in the action or the party instituting the
special proceeding, or the people, as the case requires, may at any
time, obtain an order amending any of the papers or proceedings
therein, by the substitution of the new name, without costs and
without prejudice to the action or proceeding.
GenrraLt Corporation Law. §§ 70, 71.

ARTICLE 4.

Sane or Corporate ReaLt PROPERTY.

SEcTion 70. Application of this article.
71. Petition. i
72. Hearing on application.
78. Order to sell, mortgage or lease.
74. Insolvent corporation.
75. Service of notices.
76. Practice in cases not herein provided for.

§ 70. Application of this article.

Whenever any corporation is required by law to make applica-
tion to the court for leave to mortgage, lease or sell its real estate,
the proceeding therefor shall be had pursuant to the provisions of
this article.

§ 71. Petition.

The proceeding shall be instituted by the presentation to the
supreme court of the district or the county court of the county
where the real property, or some part of it, is situated, by the
corporation applicant, of a petition setting forth the following
facts:

1. The name of the corporation and of its directors, trustees or
managers, and of its principal officers, and their places of
residence.

2. The business of the corporation or the object or purpose of
its incorporation and a reference to the statute under which it was
incorporated.

3. <A description of the real property to be sold, mortgaged or
leased, by metes and bounds, with reasonable certainty.

4. That the interests of the corporation will be promoted by the
sale, mortgage or lease, of the real property specified, and a con-
cise statement of the reasons therefor.

5. That such sale, mortgage or lease has been authorized, by a
vote of at least two-thirds of the directors, trustees or managers
of the corporation at a meeting thereof, duly called and held, and
a copy of the resolution granting such authority.
S879, 73. GenrraL Corporation Law.

6. The market value of the remaining real property of the cor-
poration and the cash value of its personal assets, and the total
amount of its debts and liabilities, and how secured, if at all.

7. The application proposed to be made of the moneys realized
from such sale, mortgage or lease.

8. Where the consent of the shareholders, stockholders or mem-
bers of the corporation is required by law to be first obtained, a
statement that such consent has been given, and a copy of the con-
sent, or a certified transcript of the record of the meeting at which
it was given, shall be annexed to the petition.

9. A demand for leave to mortgage, lease or sell the real estate
described.

The petition shall be verified in the same manner as a verified
pleading in an action in a court of record.

§ 72. Hearing on application.

Upon presentation of the petition, the court may immediately
proceed to hear the application, or it may, in its discretion, direct
that notice of the application shall be given to any person inter-
ested therein, as a member, stockholder, officer or creditor of the
corporation or otherwise, in which case the application shall be
heard at the time and place specified in such notice, and the court
may in any case appoint a referee to take the proofs and report
the same to the court, with his opinion thereon. Any person, whose
interests may be affected by the proceeding, may appear upon the
hearing and show cause why the application should not be granted.

§ 73. Order to sell, mortgage or lease.

Upon the hearing of the application, if it shall appear, to the
satisfaction of the court, that the interests of the corporation will
be promoted thereby, an order may be granted authorizing it to
sell, mortgage or lease the real property described in the petition,
or any part thereof, for such sum, and upon such terms as the court
may prescribe, and directing what disposition shall be made of the
proceeds of such sale, mortgage or lease.
Generat Corporation Law. §§ 74, 75, 76, 90.

§ 74. Insolvent corporation.

If the corporation is insolvent, or its property and assets aru
insufficient to fully liquidate its debts and liabilities, the applica-
tion shall not be granted, unless all the creditors of the corporation
have been served with a notice of the time and place at which the
application will be heard.

§ 75. Service of notices.

Service of notices, provided for in this article, may be made
either personally or, in case of absence, by leaving the same at the
place of residence of the person to be served, with some person of
mature age and discretion, at least eight days before the hearing
of the application, or by mailing the same, duly enveloped and
addressed and postage paid, at least sixteen days before such
hearing.

§ 76. Practice in cases not herein provided for.

In all applications made under this article, where the mode or
manner of conducting any or all of the proceedings thereon is not
expressly provided for, the court before whom such application
may be pending, shall have the power to make all the necessary
orders and give the proper directions to carry into effect the object
and intent of this article, or of any act authorizing the sale of cor-
porate real property, and the practice in such cases shall conform,
as near as may be, to the ordinary practice in such court.

ARTICLE 5. j

JUDICIAL SUPERVISION OF CORPORATION AND OF THE OFFICERS
anp Members Turreor.
SEcTION 90. Action against officers of corporation for misconduct.
91. Who may bring such an action.

91l-a. Actions against officers by corporation, or receiver or trustee.
92. Visitatorial power over corporation not affected by this article.

§ 90. Action against officers of corporation for misconduct.

An action may be maintained against one or more trustees,
directors, managers, or other officers of a corporation, to procure
§ 90. GreneraL Corporation Law.

a judgment for the following purposes, or so much thereof as the
case requires:

1. Compelling the defendants to account for their official con-
duct, including any neglect of or failure to perform their duties,
in the management and disposition of the funds and property,
committed to their charge.

2. Compelling them to pay to the corporation, which they rep-
resent, or to its creditors, any money, and the value of any prop-
erty, which they have acquired to themselves, or transferred to
others, or lost, or wasted, by or through any neglect of or failure
to perform or by other violation of their duties.

3. Suspending a defendant from exercising his office, where it
appears that he has abused his trust.

4. Removing a defendant from his office, upon proof or con-
viction of misconduct, and directing a new election to be held by
the body or board duly authorized to hold the same, in order to
supply the vacancy created by the removal; or, where there is no
such body or board, or where all the members thereof are removed,
directing the removal to be reported to the governor, who may,
with the advice and consent of the senate, fill the vacancies.

5. Setting aside an alienation of property, made by one or
more trustees, directors, managers or other officers of a corporation,
contrary to a provision of law, or for a purpose foreign to the
lawful business and objects of the corporation, where the alienee
knew the purpose of the alienation.

6. Restraining and preventing such an alienation, where it is
threatened, or where there is good reason to apprehend that it will
be made.

7. The court must, upon the application of either party, make
an order directing the trial by a jury of the issue of neglect or
failure of defendants to perform their duties; and for that pur-
pose the questions to be tried must be prepared and settled as pre-
scribed in section nine hundred and seventy of the code of civil
procedure.

As to any litigation pending prior to September one, nineteen
hundred and seven, the provisions of this section as they existed
prior to that date shall apply.
GeneraL Corporation Law. §§ 91, 91-a, 92.

§ 91. Who may bring such an action.

An action may be brought, as prescribed in the last section, by
the attorney-general in behalf of the people of the state, or, except
where the action is brought for the purpose specified in subdivision
third or fourth of that section, by a creditor of the corporation, or
by a trustee, director, manager, or other officer of the corporation,
having a general superintendence of its concerns.

§ 91. Actions against officers by corporation, or receiver or
trustee.

The supreme court shall also have and exercise jurisdic-
tion in equity, at the suit of a corporation, or of a receiver, or
trustee in bankruptcy thereof, to compel one or more trustees,
directors, managers or other officers of the corporation to account
for injury to or losses of the funds, assets or property of the cor-
poration, caused by or through any neglect or failure of the de-
fendants to perform, or for violation of, their duties. The court
must, upon the application of either party, make an order direct-
ing the trial by jury of the issue of negligence, and for that pur-
pose the questions to be tried must be prepared and settled as
prescribed in section nine hundred and seventy of the code of
civil procedure.

Added by L. 1913, chap. 633.

§ 92. Visitatorial power over corporation not affected by
this article.

This article does not divest or impair any visitatorial power over
a corporation, which is vested by statute in a corporate body, or a
public officer.
§§ 100, 101. GernreraL Corporation Law.

ARTICLE 6.

Action ror SEQUESTRATION, AcTIon For DissoLuTiIon anp Ac-

TION TO Enrorce InpivipvaL Liasiziry or OFFICER AND
MemsBer or CorpoRATION.

Section 100. Action by judgment creditor for sequestration.
101. Action to dissolve a corporation.
102. Who may bring action to dissolve a corporation.

103. Temporary injunction in action authorized by this article.

104. Temporary receiver.

105. Additional powers and duties of temporary receiver.

106. Permanent receiver.

107. Additional duties and liabilities of permanent receiver.

108. Application for appointment of receiver.

109. Officers and stockholders may be made parties in action brought
by creditor.

110. Separate action may be brought against officers and stock-
holders.

111. Proceedings in such actions.

112, Distribution of property of corporation by judgment in actions
under this article.

118. Recovery of stock subscriptions.

114. Liability of directors and stockholders.

115. Effect of this article.

§ 100. Action by judgment creditor for sequestration.

Where final judgment for a sum of money has been rendered
against a corporation created by or under the laws of the state,
and an execution issued thereupon to the sheriff of the county,
where the corporation transacts its general business, or where its
principal office is iocated, has been returned wholly or partly un-
satisfied, the judgment creditor may maintain an action to procure
a judgment sequestrating the property of the corporation, and
providing for a distribution thereof, as prescribed in section one
hundred and twelve of this chapter.

§ 101. Action to dissolve a corporation.

In either of the following cases, an action to procure a judgment,
dissolving a corporation, created by or under the laws of the state,
GeneraL Corporation Law. §§ 102, 103.

and forfeiting its corporate rights, privileges and franchises, may
be maintained, as prescribed in the next section:

1. Where the corporation has remained insolvent for at least
one year.

2. Where it has neglected or refused, for at least one year, to
pay and discharge its notes or other evidences of debt.

3. Where it has suspended its ordinary and lawful business for
at least one year.

4. If it has banking powers, or power to make loans on pledges
or deposits, or to make insurances, where it becomes insolvent or
unable to pay its debts, or has violated any provision of the act,
by or under which it was incorporated, or of any other act binding
upon it.

§ 102. Who may bring action to dissolve a corporation.

An action specified in the last section, may be maintained by the
attorney-general, in the name and in behalf of the people. And
whenever a creditor or stockholder of any corporation submits to
the attorney-general a written statement of facts, verified by oath,
showing grounds for an action under the provisions of the last
section, and the attorney-general omits, for sixty days after this
submission, to commence an action specified in the last section,
then, and not otherwise, such creditor or stockholder may apply
to the proper court for leave to commence such an action, and on
obtaining leave may maintain the same accordingly; and if there
be no person in existence upon whom service of the summons can
be made under the provisions of section four hundred and thirty-
one of the code of civil procedure, service of the summons in such
action may be made in such manmer as the court upon application
by petition may direct.

Amended by L. 1912, chap. 204.

§ 103. Temporary injunction in action authorized by this
article.

In an action, brought as prescribed in this article, the court
may, upon proof of the facts authorizing the action to be main-
§§ 104, 105, GeneraL Corporation Law.

tained, grant an injunction order, restraining the corporation, and
its trustees, directors, managers and other officers, from collecting
or receiving any debt or demand, and from paying out, or in any
way transferring or delivering, to any person, any money, property,
or effects of the corporation, during the pendency of the action;
except by express permission of the court. Where the action is
brought to procure the dissolution of the corporation, the injunction
may also restrain the corporation, and its trustees, directors, man-
agers and other officers, from exercising any of its corporate rights,
privileges, or franchises, during the pendency of the action; except
by express permission of the court. The provisions of title second
of chapter seventh of the code of civil procedure, relating to the
granting, vacating or modifying of an injunction order, apply to
an injunction order, granted as prescribed in this section; except
that it can be granted only by the court.

§ 104. Temporary receiver.

In such an action, the court may also, at any stage thereof, ap-
point one or more receivers of the property of the corporation.
A receiver, so appointed, before final judgment is a temporary
receiver, until final judgment is entered. A temporary receiver
has power to collect and receive the debts, demands, and other
property of the corporation; to preserve the property, and the
proceeds of the debts and demands collected; to sell or otherwise
dispose of the property as directed by the court; to collect, receive
and preserve the proceeds thereof; and to maintain any action or
special proceeding, for either of those purposes. He must qualify
as prescribed by law for the qualification of a permanent receiver.
Unless additional powers are specially conferred upon him, as
prescribed in the next section, a temporary receiver has only the
powers specified in this section, and those which are incidental to
the exercise thereof.

§ 105. Additional powers and duties of temporary receiver.

A temporary receiver, appointed as prescribed in the last section,
is, in all respects, subject to the control of the court. In addition
GrnEeraL Corporation Law. §§ 106, 107.

to the powers conferred upon him, by the provisions of the last
section, the court may, by the order or interlocutory judgment
appointing him, or by an order subsequently made in the action,
or by the final judgment, confer upon him the powers and author-
ity, and subject him to the duties and liabilities, of a permanent
receiver, or so much thereof as it thinks proper; except that he
shall not make any distribution among the creditors or stockholders,
before final judgment, unless he is specially directed so to do by
the court.

§ 106. Permanent receiver.

A receiver appointed by or pursuant to a final judgment in the
action, or a temporary receiver who is continued by the final judg-
ment, is a permanent receiver, and has all the powers and authority
conferred, and is subject to all the duties and liabilities imposed
upon a receiver in article eleven of this chapter.

Am’d by L. 1909, ch. 240.

§ 107. Additional duties and liabilities of permanent
receiver.

A permanent receiver shall keep an account of all moneys re-
ceived by him, and on the first days of January, April, July and
October, in each and every year make and file a written statement,
verified by his oath that such statement is correct and true, show-
ing the amount of money received by such receiver, his agents or
attorneys, the amount he has a right to retain and the items for
which he claims to retain the same, and the distributive share due
each person interested therein. He shall pay such distributive
share to the person or persons entitled thereto, on demand, at any
time after such statement. Such account, statement, and all the
books and papers of the corporation in the hands of such receiver,
shall at all reasonable times be open for the inspection of all per-
sons having an interest therein. And in case of neglect or refusal
to comply with either of the above requirements, or any duty im-
posed upon him, the supreme court, at either an appellate division
§§ 108, 109,110. Gzuwrrat Corporation Law.

or special term, shall, on the application of the party aggrieved,
unless such neglect or refusal shall be satisfactorily explained to
the court, forthwith remove such receiver, and appoint some suit-
able person as receiver in his place. Such removal shall not vitiate
or annul any legal proceedings had by such receiver; but such
proceedings shall be continued by such successor as if no removal
had been made. Such receiver shall also be liable to pay: to the
party interested, interest at the rate of ten per centum per annum
on all moneys due to such party and retained by him more than
one day after such demand made as aforesaid.

§ 108. Application for appointment of receiver.

Applications made by the attorney-general for the appointment
of a receiver of a corporation shall be made in the judicial district
in which the action in which the appointment is sought is triable.

§ 109. Officers and stockholders may be made parties in
action brought by creditor.

Where the action is brought by a creditor of a corporation, and
the stockholders, directors, trustees, or other officers, or any of
them, are made liable by law, in any event or contingency, for the
payment of his debt, the persons, so made liable, may be made
parties defendant, by the original or by a supplemental complaint;
and their liability may be declared and enforced by the judgment
in the action.

§ 110. Separate action may be brought against officers
and stockholders.

Where the stockholders, directors, trustees, or other officers of a
corporation, who are made liable, in any event or contingency, for
the payment of a debt, are not made parties defendant, as pre-
scribed in the last section, the plaintiff in the action may maintain
a separate action against them, to procure a judginent, declaring,
apportioning and enforcing their liability.
GeveraL Corporation Law. §§ 111-114.

§ 111. Proceedings in such actions.

In an action brought as prescribed in either of the last two sec-
tions, the court must, when it is necessary, cause an account to be
taken of the property and of the debts of the corporation, and
thereupon the defendant’s liability must be apportioned accord-
ingly; but, if it affirmatively appears, that the corporation is in-
solvent, and has no property to satisfy its creditors, the court may,
without taking such an account, ascertain and determine the
amount of each defendant’s liability, and enforce the same
accordingly.

§ 112. Distribution of property of corporation by judgment
in actions under this article.

A final judgment in an action, brought against a corporation, as
prescribed in this article, either separately or in conjunction with
its stockholders, directors, trustees, or other officers, must provide
for a just and fair distribution of the property of the corporation,
and of the proceeds thereof, among its fair and honest creditors, in
the order and in the proportions prescribed by law, in case of the
voluntary dissolution of a corporation.

§ 113. Recovery of stock subscriptions.

Where the stockholders of the corporation are parties to the
action, if the property of the corporation is not sufficient to dis-
charge its debts, the interlocutory or final judgment, as the case
requires, must adjudge that each stockholder pay into court the
amount due and remaining unpaid, on the shares of stock held by
him, or so much thereof as is necessary to satisfy the debts of the
corporation.

§ 114. Liability of directors and stockholders.

If it appears, that the property of the corporation, and the sums
collected or *collectable from the stockholders, upon their stock
subscriptions, are or will be insufficient to pay the debts of the cor-
poration, the court must ascertain the several sums, for which the

*So in original
§§ 115, 180. GreneraL Corporation Law.

directors, trustees, or other officers, or the stockholders of the cor-
poration, being parties to the action, are liable; and must adjudge
tha: the same be paid into court, to be applied, in such proportions
and in such order as justice requires, to the payment of the debts
of the corporation.

§ 115. Effect of this article.

This article does not repeal or affect any special provision of law,
prescribing that a particular kind of corporation shall cease to
exist, or shall be dissolved, in a case or in a manner, not prescribed
in this article; or any special provision of law, prescribing the
mode of enforcing the liability of the stockholders of a particular
kind of corporation.

ARTICLE 7.

Action to ANNUL A CORPORATION.

Srcrion 130. Action by attorney-general to annul corporation when legisla-

ture directs.

131. Action by attorney-goneral to annul corporation by leave of
court.

132. Notice of application for leave to commence action to annul
corporation.

133. Jury trial.

134, Injunction and receiver in final judgment.

135. Temporary injunction.

136. Filing and publishing judgment.

§ 130. Action by attorney-general to annul corporation
when legislature directs.

The attorney-general, whenever he is so directed by the legisla-
ture, must bring an action against a corporation created by or un-
der the laws of the state, to procure a judgment, vacating or an-
nulling the act of incorporation, or any act renewing the corpora-
tion, or continuing its corporate existence, upon the ground that
the act was procured upon a fraudulent suggestion, or the conceal-
ment of a material fact, made by or with the knowledge and consent
of any of the persons incorporated.
GreneraL Corporation Law. §§ 131-134.

§ 131. Action by attorney-general to annul corporation by
leave of court.

Upon leave being granted, as prescribed in the next section, the
attorney-general may bring an action against a corporation created
by or under the laws of the state, to procure a judgment, vacating
the charter or annulling the existence of the corporation, upon the
ground that it has, either

1. Offended against any provision of an act, by or under which
it was created, altered or renewed, or an act amending the same,
and applicable to the corporation ; or,

2. Violated any provision of law, whereby it has forfeited its
charter, or become liable to be dissolved, by the abuse of its
powers; or,

8. Forfeited its privileges or franchises, by a failure to exer-
cise its powers; or,

4. Done or omitted any act, which amounts to a surrender of
its corporate rights, privileges, and franchises; or,

5. Exercised a privilege or franchise, not conferred upon it by
law.

§ 132. Notice of application for leave to commence action
to annul corporation.

Before granting leave, the court may, in its discretion, require
such previous notice of the application as it thinks proper, to be
given to the corporation, or any officer thereof, and may hear the
corporation in opposition thereto.

§ 133. Jury trial.

An action, brought as prescribed in this article, is triable, of
course and of right, by a jury, as if it was an action specified in
section nine hundred and sixty-eight of the code of civil procedure
and without procuring an order, as prescribed in section nine hun-
dred and seventy of the code of civil procedure.

§ 134. Injunction and receiver in final judgment.

Where any of the matters, specified in section one hundred and
thirty or section one hundred and thirty-one of this article, are
§§ 185, 186. Generar Corporation Law.

established in an action, brought as prescribed in either of those
sections, the court may render final judgment that the corporation,
and each officer thereof, be perpetually enjoined from exercising
any of its corporate rights, privileges, and franchises; and that
it be dissolved. The judgment must also provide for the appoint-
ment of a receiver, the taking of an account, and the distribution
of the property of the corporation, among its creditors and stock-
holders, as where a corporation is dissolved upon its voluntary
application, as prescribed in article nine of this chapter.

§ 135. Temporary injunction.

In an action, brought as prescribed in this article, an injunction
order may be granted, at any stage of the action, restraining the
corporation, and any or all of its directors, trustees and other
officers, from exercising any of its corporate rights, privileges, or
franchises; or from exercising certain of its corporate rights,
privileges, or franchises, specified in the injunction order; or from
exercising any franchise, liberty, or privilege, or transacting any
business, not allowed by law. Such an injunction is deemed one
of those specified in section six hundred and three of the code
of civil procedure, and all the provisions of title second of chapter
seventh of the code of civil procedure applicable to an injunction
specified in that section, apply to an injunction granted as pre-
scribed in this section, except that it can be granted only by the
court.

§ 136. Filing and publishing judgment.

Where final judgment is rendered against a corporation, in an
action, brought as prescribed in this article, the attorney-general
must cause a copy of the judgment-roll to be forthwith filed in the
office of the secretary of state; who must cause a notice of the sub-
stance and effect of the judgment, to be published, for four weeks,
in a newspaper printed in the county, wherein the principal place
of business of the corporation was located.
GeneraL Corporation Law. §§ 150, 151.

ARTICLE 8.

Action to DissotvsE Monryep CORPORATION.

Section 150. Temporary injunction and receiver in action against moneyed

corporation.

151. Order to show cause why injunction and receiver should not
be permanent.

152. Inventory and appraisal by receiver.

153. Conversion of assets into cash by receiver.

154. Employment of counsel by receiver.

155. Notice to creditors by receiver.

156. Allowance, rejection and adjustment of claims by receiver.

157. Final settlement and distribution by receiver.

158. Notice of account and accounting by receiver.

159. Proceedings upon accounting.

160. Claims barred after distribution of assets by receiver.

161. Application of article.

§ 150. Temporary injunction and receiver in action against
moneyed corporation.

Whenever the attorney-general shall commence an action against
a moneyed corporation upon the information of either the superin-
tendent of insurance, or the superintendent of banks, for the dis-
solution or sequestration of the property or annulment of the char
ter of a corporation formed under or subject to the banking or
insurance law, and shall be satisfied that it is unsafe and inexpedi-
ent for such corporation to continue doing business, the supreme
court may, on his application, in a case provided by law, appoint a
receiver thereof, and may on such appointment grant an injunction
restraining such corporation from carrying on its business until
the further order of the court. The court may, in its discretion,
dispense with notice of the application.

§ 151. Order to show cause why injunction and receiver
should not be permanent.

The court, on granting an order without notice, either for the
appointment of a receiver or for an injunction, or for both forms of
relief, as herein provided, shall make an order that the corporation
so proceeded against show cause at a term of the court to be held
not more than thirty days thereafter, why such receiver and
§ 152. GryreraL Corporation Law.

injunction should not be permanent. Such order shall be served
not less than eight days before the date upon which the hearing
thereon is to be had. Unless the court otherwise directs, the
receiver appointed in the first instance shall be permanent re-
ceiver of such corporation, and the injunction shall be continued
during the pendency of the litigation. Such receiver shall, unless
otherwise ordered by the court, continue to act as such up to and
after final judgment, and until the affairs of the corporation shall
be finally settled and its property distributed by him according
to law. The bond to be given by the receiver on his appointment
shall be fixed at such sum and so conditioned that it shall con-
tinue in force and effect until the final discharge of such receiver,
including any liability which may be incurred by said receiver
by virtue of his appointment as such in the final judgment, in
case he shall be so named therein.

§ 152. Inventory and appraisal by receiver.

It shall be the duty of the receiver to take an inventory and make
an appraisal of the assets and property of the corporation. In
case the corporation is subject to the banking law, two disinterested
appraisers shall be appointed by the superintendent of banks to
aid in this duty, and in case the corporation is subject to the
insurance law, such appraisers shall be appointed by the superin-
tendent of insurance. Ten days’ notice of such inventory and
appraisal shall be given to the corporation and such inventory and
appraisal shall be completed and filed with the clerk of the su-
preme court in the county in which the trial is to be had, within
ninety days after the appointment of such receiver, and a certified
copy thereof in the office of the attorney-general, and in the office
of the superintendent of banks, or in the office of the superin-
tendent of insurance, as the case may be, unless for good cause
shown. the officer appointing such appraisers shall, in writing,
extend the time for the completion thereof. Such appraisers shall
receive as compensation a reasonable sum, not exceeding fifteen
dollars per day and actual and necessary expenses, to be paid by
the receiver upon the approval of the officer by whom they were
named. The receiver shall be chargeable with the amount of such
Grnerat Corporation Law. §§ 153, 154, 155.

inventory and shall be relieved therefrom to the same extent and
upon the same grounds as in the like case of an executor.

§ 153. Conversion of assets into cash by receiver.

The receiver shall proceed, immediately upon his appointment,
to convert the assets of the corporation into cash.

§ 154. Employment of counsel by receiver.

It shall not be lawful for any receiver to pay to any attorney or
counsel any costs, fees or allowance until the amount thereof shall
have been stated to the special term, as expenses incurred by such
receiver and shall have been approved by that court by an order
duly entered. Any such order shall be the subject of review by
the appellate division and the court of appeals on appeal thereto
taken by any party. The receiver may employ not to exceed one
counsel unless the employment of additional counsel shall be
authorized by the supreme court after notice to the attorney-general
of an application therefor.

§ 155. Notice to creditors by receiver.

1. Within thirty days after a receiver qualifies he shall cause
to be published once a week for twelve weeks in a newspaper pub-
lished at the principal place of business of the corporation, a notice
to all creditors of the corporation to present their claims to such
receiver at his place of business within fifteen days after the
last publication of such order. He shall also mail a copy of such
notice to all the creditors of the corporation known to him or as
shown on the books of the company, at their last known place of
residence.

2. The receiver of any title guaranty company heretofore
or hereafter appointed, which company is authorized by law
to issue policies of insurance or agreements of indemnity or guar-
anty, and which corporation has issued and outstanding at the
time of the appointment of the receiver, policies of insurance
or agreements of indemnity or guaranty, exceeding two thousand
in number, shall not be required to mail to the holders or owners
of said policies of insurance or of said agreements, the notice
§ 156. GeyrraL Corporation Law.

required by law to be given to creditors of an insolvent moneyed
corporation; but such receiver shall cause a notice to be published
twice a week, for four successive weeks, in two newspapers pub-
lished in the county where said corporation has its principal place
of business ; which said notice shall require all creditors and owners
and holders of outstanding policies of insurance or agreements of
indemnity or guaranty, to exhibit and prove their claim, within
sixty days; and, in default of so doing, shall be precluded from
all benefit of the judgment and from any and all distribution
which may be made thereunder, except that the creditor or holder
or owner of any policy or agreement of indemnity or guaranty,
who shall exhibit or prove his claim, with an affidavit that he had
no notice or knowledge thereof, in time to comply with the pro-
visions hereof, at any time before an order is made directing a
final settlement and distribution of assets of such corporation,
shall be entitled to have his claim received, and shall have the same
rights and benefits thereon, so far as the assets of such corporation
then remaining undistributed may be applied, as if his claim had
been exhibited and proved within the time limited by such notice.
This subdivision shall apply to receivers of moneyed corporations.
Am’d by L. 1909, ch. 240.

§ 156. Allowance, rejection and adjustment of claims by
receiver.

The. receiver shall have the same power and authority with ref-
erence to the allowance or rejection of claims as is given to execu-
tors, and,no reference shall be had to pass upon claims except such
as may be disputed by such receiver. In case any claim shall
be disputed, the receiver shall immediately upon the expiration
of the time for the presentation of claims, upon notice to the par-
ties whose claims have been rejected, apply to the court for the
appointment of a referee to hear and determine as to the allowance
thereof. Claims allowed by the receiver shall be subject: to objec-
tion upon the final settlement and their validity may be determined
as the validity of claims against estates are determined upon final
settlement by a surrogate.
GeneraL Corporation Law. §§ 157, 158.

§ 157. Final settlement and distribution by receiver.

The receiver may apply for a final settlement of his accounts
and an order for distribution at any time after the expiration
of six months, and shall so apply within eighteen months after
qualifying as such. The attorney-general or any creditor, or party
interested, may apply for an order that the receiver show cause
why an accounting and distribution should not be had at any time
after the expiration of one year after the receiver qualifies; and
it shall be the duty of the attorney-general, after the expiration of
eighteen months from the time the receiver enters upon his duties,
in case he has not applied for a final settlement of his accounts, to
apply for such an order on notice to such receiver. In case of
such application by a party other than the receiver, the court shall
direct the receiver to take steps to account with all convenient
speed. The receiver is not required or authorized to file any
account, except as herein provided, except by special order of the
court.

§ 158. Notice of account and accounting by receiver.

1. The receiver shall file his account, together with a statement
of the items and amounts claimed by his counsel, up to that date
with the court and a duplicate thereof, together with the vouchers,
with the attorney-general, at least thirty days before the time fixed
for his final settlement and accounting, and the attorney-general
shall serve upon the attorney for the receiver any objections he
may have to the account, or to the statement as to the items and
amounts claimed by counsel for compensation, appearing in such
account on or before such hearing. The receiver shall also within
ten days after the filing of the account, mail to each creditor of
the corporation a notice of the time and place of the filing of his
account, and a notice of the time and place of the presentation
of the account to the court. Unless objection is made to the
items of the account by a creditor or on behalf of the attorney-
general, no referee shall be appointed to pass thereon, but the same
shall be examined and settled by the court. In case objection is
made a referee may be appointed to take the testimony and report
the same to the court.
§ 159. GeneRAL Corporation Law.

2. Prior to the final settlement of accounts of a receiver of
any moneyed corporation, having in force, at the time of his
appointment, outstanding policies of insurance or agreements of
indemnity or guaranty, exceeding two thousand in number, said
receiver shall give notice to all of the creditors and to the owners
or holders of said policies of insurance or agreements of indemnity
or guaranty, issued or entered into by such insolvent corporation,
by publication of a notice published at least twice a week, for
three successive weeks, immediately preceding the making of an
application for a final settlement of his accounts and for an order
for the distribution of the assets in his hands. Said notice shall
state the fact that an application for a final settlement of his ac-
counts and for an order for the distribution of the assets in hand
will be made, and shall also state the time and place, when and
where the application will be made. Upon the hearing of such
application and motion, the court shall, unless objection is made
to the items of the account by a creditor or by a holder or owner
of a policy of insurance or agreement of indemnity or guaranty,
or on behalf of the attorney-general, examine and settle the said
accounts, and make an order for the settlement, adjustment and
distribution of the assets in the hands of the receiver. Where
objection is made to the items of account, the court may refer the
same to a referee to examine and pass thereon. This subdivision
shall apply to receivers of all moneyed corporations heretofore or
hereafter appointed.

Am’d by L. 1909, ch. 240.

§ 159. Proceedings upon accounting.

Upon any accounting by the receiver, after the expiration of the
time for creditors to present claims, the court shall direct the
receiver to immediately convert the entire assets of the corporation
in his hands into cash, in case any of the assets have not been so
converted, unless good and sufficient cause to the contrary shall
appear to the satisfaction of the court, such as to authorize an order
granting the receiver additional time for that purpose, and upon
any such accounting the court shall direct the receiver to distribute
the assets of the corporation in his hands to the persons entitled
Greyrrat Corporation Law. §§ 160, 161.

thereto, except so much thereof as may be necessary to be retained
for the purpose of administering the trust and making payment
upon contested claims, and upon such claims as may thereafter be
presented and entitled to be paid. Whenever the attorney- general
shall apply for an order to show cause why an accounting should
not be had by a receiver by reason of his failure to so account
within twelve months after his appointment, and shall deem it ad-
visable to designate counsel to act on his behalf, the court may,
upon the accounting, make a reasonable allowance by way of
counsel fee to counsel so designated.

§ 160. Claims barred after distribution of assets by
receiver.

Upon the granting of the application and the making of the
order of distribution, as provided in subdivision two of section one
hundred and fifty-eight of this article, and the distribution of the
assets in the hands of the receiver, in the manner directed by the
order of the court. all claims of the creditors or of holders or
owners of policies of insurance or agreements of indemnity or
guaranty, against such receiver, shall be barred. This section shall

apply to receivers of all moneyed corporations.
Am’d by L. 1909, ch. 240.

§ 161. Application of article.

Except as provided in sections one hundred and fifty-five, one
hundred and fifty-eight, subdivision two, and one hundred and
sixty of this article, this article shall apply to a" actions for the
appointment of receivers of moneyed corporations brought by the
attorney-general, and to all receivers of such corporations hereto-
fore or hereafter appointed, and te the settlement and adjustment
of their accounts and distribution of assets in their hands, and all
proceedings with reference thereto hereafter to be taken, and shall
supersede and repeal all provisions of law inconsistent herewith,
so far as the same relate to actions for the sequestration, annul-
ment or dissolution of moneyed corporations, As to all other
corporations and as to matters not affected by this article, pro-
visions of law heretofore existing shall remain in full force and
effect.
§ 170.

GryrraL Corporation Law.

ARTICLE 9. _

Procrrpines ror Vo.tuntTary DissotuTion oF CoRPORATION.

Section 170.
171.
172.
173.
174.
175.
176.
177.
178.
179.

180.
181.
182.
183.
184.
185.
186.
187.
188.
189.
190.
191.
192.

193.
194.
195.

Petition for voluntary dissolution of corporation.

Directors or trustees may be required to petition.

Petition when directors or trustees do not agree.

Corporations excepted from two preceding sections.

Contents of petition.

Affidavit to be annexed to petition.

Presentation of petition.

Corporations without stockholders.

Action by court upon petition for dissolution.

Publication of order to show cause why corporation should
not be dissolved.

Service of order to show cause.

Entering and filing order and papers.

Temporary receiver.

Application for appointment of receiver.

Injunction.

Referee.

Hearing.

Decision.

Use of original papers on hearing.

Amending papers.

Final orders.

Permanent receiver.

Appointment of director, trustee or other officer or stock-
holder as receiver. ;

Certain sales, transfers and judgments void.

Omission, defect or default of receiver.

Exception of certain corporations.

§ 170. Petition for voluntary dissolution of corporation.

If a majority of the directors, trustees, or other officers, having
the management of the concerns of a corporation created by or
under the laws of the state, discover that the stock, effects, and
other property thereof are not sufficient to pay all just demands,
for which it is liable, or to afford a reasonable security to those
who may deal with it; or if, for any reason, they deem it beneficial
to the interests of the stockholders that the corporation should be
dissolved, they may present a petition to the supreme court praying
for a final order dissolving the corporation, as prescribed in this

article.

tail
GreneraL Corporation Law. §§ 171-174.

§ 171. Directors or trustees may be required to petition.

Tt shall be the duty of a majority of the directors or trustees of
every corporation created by or under the laws of this state to pre-
sent a petition as prescribed in the last section whenever directed
so to do by a majority in interest of its stockholders.

§ 172. Petition when directors or trustees do not agree.

If a corporation, created under a general statute of the state for
the formation of corporations or under any special act or charter
has an even number of trustees or directors who are equally
divided respecting the management of its affairs, or if the stock of
such corporation is equally divided into not more than two inde-
pendent ownerships or interests, or if the entire stock of the cor-
poration is, at that time, owned by the trustees or directors who
are even in number or equally divided representing the manage-
ment of its affairs, or if the stock is so divided, that one-half
thereof is owned or controlled by persons favoring the course of
part of the trustees or directors and one-half thereof is owned by
persons favoring the course of the other trustees or directors, the
trustees or directors or the stockholders or one or more of them
may present a petition as prescribed in section one hundred and
seventy of this chapter.

§ 173. Corporations excepted from two preceding sections.

Sections one hundred and seventy-one and one hundred and sev-
enty-two of this chapter do not apply to a savings bank, a trust
company, a safe deposit company, or a corporation formed to rent
safes in burglar and fire-proof vaults, or for the construction or
operation of a railroad, or for aiding in the construction thereof,
or for carrying on the business of banking or insurance, or intended
to derive a profit from the loan or use of money.

§ 174. Contents of petition.

The petition must show that the case is one of those specified in
sections one hundred and seventy and one hundred and seventy-
two of this chapter, and must state the reasons, which induce the
petitioner or petitioners to desire the dissolution of the corporation.
§§ 175, 176. Gryrrat Corporation Law.

A schedule must be annexed to the petition, containing the follow-
ing matters, as far as the petitioner or petitioners know, or have
the means of knowing the same:

1. A full and true account of all the creditors of the corpora-
tion, and of all unsatisfied engagements, entered into by, and
subsisting against, the corporation.

2. A statement of the name and place of residence of each
ereditor, and of each person with whom such an engagement was
made, and to whom it is to be performed, if known; or, if either is
not known, a statement of that fact.

3. A statement of the sum owing to each creditor, or other per-
son specified in the last subdivision, and the nature of each debt,
demand, or other engagement.

4. A statement of the true cause and consideration of the in-
debtedness to each creditor.

5. A full, just, and true inventory of all the property of the
corporation, and of all the books, vouchers, and securities, relating
thereto.

6. A statement of each incumbrance upon the property of the
corporation, by judgment, mortgage, pledge, or otherwise.

7. A full, just, and true account of the capital stock of the
corporation, specifying the name of each stockholder; his residence,
if it is known, or if it is not known, stating that fact; the number
of shares belonging to him; the amount paid in upon his shares;
and the amount still due thereupon.

Am’d by L. 1909, ch. 240.

§ 175. Affidavit to be annexed to petition.

An affidavit, made by each of the petitioners, to the effect that
the matters of fact, stated in the petition and the schedule, are just
and true, so far as the affiant knows or has the means of knowing
the same, must be annexed tc the petition and schedule.

§ 176. Presentation of petition.

The papers must be presented at a special term of the supreme
court, held within the judicial district, embracing the county
wherein the principal office of the corporation is located.
GreneraL Corporation Law. §§ 177-180.

§ 177. Corporations without stockholders.

In the case of corporations affected by the provisions of this
article and not having stockholders, it shall be sufficient for the
purposes of this article to notify, name and refer to the “ mem-
bers” of such corporations, instead of “ stockholders,” as herein
provided. :

§ 178. Action by court upon petition for dissolution.

In a case specified in sections one hundred and seventy-one and
one hundred and seventy-two of this chapter the court may, in its
discretion, entertain or dismiss the application. Where it enter-
tains the application, or where the cause is one of those specified
in section one hundred and seventy of this chapter, the court must
make an order, requiring all persons interested in the corporation
to show cause before it, or before a referee designated in the order,
at a time and place therein specified, not less than six weeks after
the granting of the order, why the corporation should not be
dissolved.

Am’d by L. 1909, ch. 240.

§ 179. Publication of order to show cause why corporation
should not be dissolved.

A copy of the order must be published, as prescribed therein, at
least once in each of the three weeks immediately preceding the
time fixed therein for showing cause, in one or more newspapers,
specified in the order, published in the city or county wherein the
order is entered.

§ 180. Service of order to show cause.

A copy of the order must also be served upon each of the persons,
specified in the schedule as a creditor or stockholder of the corpora-
tion, or as a person to whom an engagement of the corporation is
to be performed, other than a person whose residence is stated to
be unknown, or to be without the United States. The service must
be made either personally, at least ten days before the time ap-
pointed for the hearing; or by depositing a copy of the order, at
least twenty days before the time so appointed, in the post-office,
§§ 181-184. GzvERaL Corporation Law.

inclosed in a postpaid wrapper, addressed to the person to be
served, at his residence, as stated in the schedule.

§ 181. Entering and filing order and papers.

The order must be entered, and the papers must be filed, within
ten days after the order is made, with the clerk of the county where
the principal office of the corporation is located.

§ 182. Temporary receiver.

If it shall be made to appear to the satisfaction of the court
that the corporation is insolvent, the court may at any stage of
the proceedings before the final order, on motion of the petitioners
on notice to the attorney-general, or on motion of the attorney-
general on notice to the corporation, appoint a temporary receiver
of the property of the corporation, which receiver shall have all the
powers and be subject to all the duties that are defined as belonging
to temporary receivers appointed in an action, in section one hun-
dred and four of this chapter. The court may also, in its discre-
tion, at any stage in the proceeding after the appointment of a
temporary receiver, upon like motion and notice, confer upon
such temporary receiver the powers and authority, and subject
him to the duties and liabilities of a permanent receiver, or as
much thereof as it thinks proper, except that he shall not make
any final distribution among the creditors and stockholders, before
final order in the proceedings, unless he is specially directed so to
do by the court.

§ 183. Application for appointment of receiver.

Every application made for the appointment of a receiver of a
corporation other than applications made by the attorney-general
on behalf of the people of the state, shall be made at a special term
of the supreme court held in and for the judicial district in which
the principal business office of the corporation is located.

§ 184. Injunction.

If a temporary receiver be appointed, the court may, in its dis-
cretion, on like motion and notice, with or without security, at any
stage of the proceeding before the final order, grant an injunction,
General Corporation Law. §§ 185-189.

restraining the creditors of the corporation, from beginning any
action against the said corporation for the recovery of a sum of
money, or from taking any further proceedings in such an
action theretofore commenced. Such injuction shall have the
same effect and be subject to the same provisions of law as if each
creditor upon whom it is served was named therein.

§ 185. Referee.

If a referee was not designated in the order to show cause, the
court may, in its discretion, appoint a referee when or after the
order is returnable.

§ 186. Hearing.

At the time and place specified in the order, or at the time and
place to which the hearing is adjourned, the court, or the referee,
must hear the allegations and proofs of the parties, and determine
the facts.

§ 187. Decision.

The decision of the court, or the report of the referee, must be
in writing, and must be made and filed with all convenient speed.
It must contain a statement of the effects, credits, and other prop-
erty, and of the debts and other engagements, of the corporation,
and of all other matters, pertaining to its affairs.

§ 188. Use of original papers on hearing.

The court or the referee is entitled to use, upon the hearing, the
original petition, and the schedules annexed thereto; and the clerk
must transmit them accordingly, upon the written order of the
judge, or of the referee. In that case, they must be returned with
the decision or report.

§ 189. Amending papers.

The court may, at any stage of the proceedings before final
order, on the application of the petitioners, or a majority of them,
or on the application of the temporary receiver, grant an order
amending the schedules annexed to the original petition, by the
insertion of additional items, or by making the statements or
§§ 190-192. GrnerRaL Corporation Law.

inventory fuller and in greater detail than as originally filed, with
the like effect as though said petition and schedules had been orig-
inally presented and filed as amended.

§ 190. Final order.

Where the hearing is before a referee, a motion for a final order
must be made to the court, upon notice to each person who has
made himself a party to the proceedings, by filing with the clerk,
before the close of the hearing, a notice of his appearance, in per-
son or by attorney, specifying a post-office within the state, where
such a notice may be served. The notice may be served as pre-
scribed in the code of civil procedure for the service of a paper
upon an attorney in an action. Where the hearing was before
the court, a motion for a final order may be made immediately,
or at such a time and upon such a notice, as the court prescribes.

§ 191. Permanent receiver.

Upon an application for a final order, if it appear to the court
in a case specified in section one hundred and seventy of this chap-
ter that the corporation is insolvent, or, in a case specified either in
that section, or in section one hundred and seventy-one and one
hundred and seventy-two of this chapter, that for any reason a
dissolution of the corporation will be beneficial to the interests of
the stockholders and not injurious to the public interests, the court
must make a final order dissolving the corporation, and appointing
one or more receivers of its property. But in the case of a solvent
corporation, the court may, if there is no objection by creditors,
dispense with a receiver and provide in the final order for the dis-
tribution of the assets. Upon the entry of the order the corpora-
tion is dissolved. A receiver appointed under this section shall
have all the powers, duties and liabilities uf receivers under article
eleven of this chapter.

Am’d by L. 1909, ch. 240.

§ 192. Appointment of director, trustee or other officer or
stockholder as receiver.

The court may, in its discretion, appoint a director, trustee, or
other officer, or a stockholder of the corporation, a receiver of its

property.
GenreRaL Corporation Law. §§ 193-195.

§ 193. Certain sales, transfers and judgments void.

A sale, assignment, mortgage, conveyance, or other transfer, of
any property of a corporation, made after the filing of a petition
as prescribed in this article, in payment of, or as security for, an
existing or prior debt, or for any other consideration; or a judg-
ment thereafter rendered against the corporation by confession,
or upon the acceptance of an offer, is absolutely void, as against
the receiver appointed in the special proceeding, and as against the
creditors of the corporation.

§ 194. Omission, defect or default of receiver.

In a proceeding for the voluntary dissolution of a corporation,
the court may, in the furtherance of justice, upon notice to the
attorney-general, and the attorney-general not objecting, and upon
such further notice to creditors or others interested as the court
shall direct, which notice may be made by mail upon all persons
and corporations not residing or existing within the state, relieve
a receiver from any omission, defect or default, in any proceed-
ing or act required by law to be taken or done, or in the giving
of any notice required by law to be given, and the court may upon
like notice, confirm any act of a receiver, and any decision,
report, order or judgment made in such proceeding.

§ 195. Exception of certain corporations.

This article does not apply to an incorporated library society,
to a religious corporation, or to a select school or academy, incor-
porated by the regents of the university or by the legislature, or to
a municipal or other political corporation.
§§ 220, 221. Gurwnerat Corporation Law.

ARTICLE 10.

Dissotution or Srock Corporation witTHouT JupDICIAL
PROCEEDINGS.

SECTION 220. Dissolution of stock corporation before beginning business.
221. Dissolution of stock corporation before expiration of time
limit.

§ 220. Dissolution of stock corporation before beginning
business.

The incorporators named in any certificate of incorporation
filed for the purpose of creating a domestic stock corporation,
other than a moneyed or transportation corporation, may, before
the payment of any part of the capital, and before beginning busi-
ness, surrender all corporate rights and franchises, by signing,
verifying and filing in the office of the secretary of state and the
clerk of the county where the certificate of incorporation is filed,
a certificate setting forth the names of the incorporators, that no
part of the capital has been paid, that there are no liabilities, that
such business has not been begun, and surrendering all rights and
franchises ; and proof of the facts set forth in such certificate to the
satisfaction of the secretary of state; and thereupon the said cor-
poration shall be dissolved, and its corporate existence and power
shall cease. In case any incorporator of such a corporation shall
be deceased, then the aforesaid certificate may be made by the
surviving incorporators providing two years shall have elapsed
since the date of its incorporation, but in such case the certificate
shall set forth the fact that one or more of said incorporators is
deceased.

§ 221. Dissolution of stock corporation before expiration of
time limit.

Any stock corporation, except a moneyed or a railroad corpora-
tion, may be dissolved before the expiration of the time limited
in its certificate of incorporation or in its charter as follows:

1. The board of directors of any such corporation may at a
meeting called for that purpose, upon at least three days’ notice
GenrraL Corporation Law. § 221.

to each director, by a vote of a majority of the whole board, adopt
a resolution that it is in their opinion advisable to dissolve such
corporation forthwith, and thereupon shall call a meeting of the
stockholders for the purpose of voting upon a proposition that such
corporation be forthwith dissolved.» Such meeting of the stock-
holders shall be held not less than thirty nor more than sixty
days after the adoption of such resolution, and the notice of
the time and place of such meeting so called by the directors
shall be published in one or more newspapers published and cir-
culating in the county wherein such corporation has its principal
office, at least once a week for three weeks successively next pre-
ceding the time appointed for holding such meeting, and on or
before the day of the first publication of such notice, a copy
thereof shall be served personally on each stockholder, or mailed
to him at his last known post-office address. Such meeting shall
be held in the city, town or village in which the last preceding
annual meeting of the corporation was held, and said meeting
may, on the day so appointed, by the consent of a majority in
interest of the stockholders present, be adjourned from time to
time, and notice of such adjournment shall be published .in the
newspapers in which the notice of the meeting is published. If
at any such meeting the holders of two-thirds in amount of the
stock of the corporation, then outstanding, shall, in person or by
attorney, consent that such dissolution shall take place and signify
such consent, in writing, then such corporation shall file such
consent, attested by its secretary or treasurer, and its president
or vice-president, together with the powers of attorney signed by
such stockholders executing such consent by attorney, with a
statement of the names and residences of the then existing board
of directors of said corporation, and the names and residences of
its officers duly verified by the secretary or treasurer or president
of said corporation, in the office of the secretary of state.

2. The secretary of state shall thereupon issue to such corpora-
tion, in duplicate, a certificate of the filing of such papers and
that it appears therefrom that such corporation has complied with
this section in order to be dissolved, and one of such duplicate
certificates shall be filed by such corporation in the office of the
§ 221. GrenrraL Corporation Law.

clerk of the county in which such corporation has its principal
office; and thereupon such corporation shall be dissolved and shall
cease to carry on business, except for the purpose of adjusting and
winding up its business. The board of directors shall cause a
copy of such certificate to be published at least once a week for
two weeks in one or more newspapers published and circulating
in the county in which the principal office of such corporation is
located, and at the expiration of such publication, the said cor-
poration by its board of directors shall proceed to adjust and
wind up its business and affairs with power to carry out its con-
tracts and to sell its assets at public or private sale, and to apply
the same in discharge of debts and obligations of such corpora-
tion, and, after paying and adequately providing for the payment
of such debts and obligations, to distribute the balance of assets
among the stockholders of said corporation, according to their
respective rights and interests.

3. Said corporation shall nevertheless continue in existence for
the purpose of paying, satisfying and discharging any existing
debts or obligations, collecting and distributing its assets and
doing all other acts required in order to adjust and wind up its
business and affairs, and may sue and be sued for the purpose of
enforcing such debts or obligations, until its business and affairs
are fully adjusted and wound up.

4. After paying or adequately providing for the debts and
obligations of the corporation the directors may, with the written
consent of the holders of two-thirds in amount of the capital stock,
sell the remaining assets or any part thereof to a corporation
organized under the laws of this or any other state, and engaged
in a business of the same general character, and take in payment
therefor the stock or bonds or both of such corporation and dis-
tribute them among the stockholders, in lieu of money, in pro
portion to their interest therein, but no such sale shall be valid
as dgainst any stockholder, who, within sixty days after the mail-
ing of notice to him of such sale, shall apply to the supreme
court in the manner provided by section seventeen of the stock
corporation law, for an appraisal of the value oz his interest
GrneraL Corporation Law. § 225, 226.

in the assets so sold; unless within thirty days after such appraisal
the stockholders consenting to such sale, or some of them, shall
pay to such objecting stockholder or deposit for his account, in
the manner directed by the court, the amount of such appraisal and
upon such payment or deposit the interest of such objecting stock-
holder shall vest in the person or persons making such payment
or deposit.

ARTICLE 10-a.

Provisions APPLICABLE TO TEMPORARY AND PERMANENT

RECEIVERS OF CoRPORATIONS.

Section 225. Security.
226. Removal or new bond.
227, Notice to sureties upon accounting.

§ 225. Security.

A receiver, appointed in an action or special proceeding, must,
before entering upon his duties, execute and file with the proper
clerk, a bond to the people, with at least two sufficient sureties, in
a penalty fixed by the court, judge, or referee, making the appoint-
ment, conditioned for the faithful discharge of his duties as re
ceiver; and the execution of any such bond by any fidelity or surety
company authorized by the laws of this state to transact business,
shall be equivalent to the execution of said bond by two sureties.
But this section does not apply to a case where special provision
is made by law for the security to be given by a receiver or for
increasing the same.

Added by L. 1909, ch. 240.

§ 226. Removal or new bond.

The court, or, where the order was made out of court, the judge
making the order, by or pursuant to which the receiver was ap-
pointed, or his successor in office, may, at any time, remove the
receiver, or direct him to give a new bond, with new sureties, with
the like condition specified in the last section. But this section
§ 22°. GrnrraL Corporation Law.

does not apply to a case where special provision is made by law
for the security to be given by a receiver, or for increasing the
same, or for removing a receiver.

Added by L. 1909, ch. 240.

§ 227. Notice to sureties upon accounting.

A receiver who, having executed and filed a bond as provided
for in section twu hundred and twenty-five or section two hundred
and twenty-six of this chapter, before presenting his accounts as
receiver, must give notice to the surety or sureties on his official
bond, of his intention to present his accounts, not less than eight
days before the day set for the hearing on said accounting. The
same notice must be given to such surety or sureties where the
accounting is ordered on the petition of a person or persons other
than the receiver, and in no case shall the receiver’s accounts be
passed, settled or allowed, unless the said notice provided for in
this section shall have first been given to the surety or sureties on

the official bond of such receiver.
Added by L. 1909, ch. 240.

ARTICLE 11.

Powers, Duties anp Liasttiries oF RECEIVERS OF CoRPORATION.

SEoTIon 230. Application of this article.
231. Receiver trustee of property.
232. Receiver’s title to property.
233. Transfer of assets of corporation to receiver.
234. Security of receiver.
236. Authority of single receiver.
236. Authority where there is more than one receiver.
237. Surviving receivers.
238. Oath of receiver.
239. General powers of receivers.
240. Power of receiver to institute proceedings to recover assets.
241. Power of receiver in the settlement of controversies.
242. Power of receiver to employ counsel.
243. Power of receiver to hold real property.
244. Power of receiver to recover stock subscriptions.
245. Duty of receiver to convert assets into money.
246. Duty of receiver as to private sales.
247. Duty of receiver to keep accounts.
Veale

251.

252,
253.
254,
255.
256.
257.

258.
259.
260.
261.
262.
263.
264.
265.
266.
267.
268.
269.
270,
271.
272.
273.
274.
275.
276.
277.
278.

GenreraL Corporation Law. §§ 230, 231.

Duty of receiver to serve copy of report upon attorney-general
and superintendent of banks.

Duty of certain receivers to make reports.

Duty of receivers to give notice to creditors.

Delivery of property and payment of debts to receiver after
notice.

Penalty for concealing property from receiver.

Duty of receiver to call creditors’ meeting.

Proceedings at creditors’ meeting.

Deduction of disbursements and commissions by receiver.

Refunding consideration of subsisting contracte.

Retention of funds for subsisting contracts and pending
suits.

Payment of debts not due.

Allowance of set-offs.

Penalties recovered by receiver.

Order of payment by receiver.

Failure to file claim before first dividend.

Second dividend by receiver.

Surplus to stockholders.

Disposition of moneys retained by receiver for suits.

Duty of receiver as to unclaimed dividend.

Effect of failure to file claim before second dividend.

Final accounting by receiver.

Notice of final accounting.

Hearing on final accounting.

Reference of final account.

Further accounting.

Removal of receiver.

Vacancy.

Renunciation by receiver.

Control of receiver by court.

Commissions and expenses of receiver in voluntary dissolution.

Commissions and expenses of receiver except in voluntary
dissolution. ‘

§ 230. Application of this article.

Unless otherwise provided the provisions of this article shall
apply only to permanent receivers appointed pursuant to section
one hundred and six or section one hundred and ninety-one of this

chapter.

§ 231. Receiver trustee of property.

Permanent receivers shall be trustees of the property for the
benefit of the creditors of the corporation and of its stockholders.

‘
§§ 232-236. General Corporation Law.

§ 232. Receiver’s title to property.

Such receivers shall, from the time of their having filed the
security required by law, be vested with all the property, real or
personal, vested or contingent of the corporation.

Am’d by L. 1909, ch. 240, and L. 1913, ch. 766.

§ 233. Transfer of assets of corporation to receiver.

In all cases where receivers have been or shall be appointed for
any corporation of this state other than an insurance company on
application by the attorney-general, all property, real and personal,
and all securities of every kind and nature belonging to such cor-
poration, no matter where located or by whom held, shall be trans-
ferred to, vested in and held by such receiver; provided, however,
that such transfer shall only be made when directed by an order of
the supreme court, due notice of the application for such order
having been made on the attorney-general and the custodian of the
funds, securities or property.

§ 234. Security of receiver.

Before entering upon the duties of their appointment, such
receivers shall give such security to the people of the state, and in
such penalty, as the court shall direct, conditioned for the faithful
discharge of the duties of their appointment, and for the due
accounting for all moneys received by them.

§ 235. Authority of single receiver.

When one receiver only, shall be appointed, all the provisions
herein contained, in reference to several receivers shall apply to

him. a. af i

§ 236. Authority where there is more than one receiver.

When there are more receivers than one appointed, the debts and
property of the corporation may be collected and received by any
one of them; and when there are more than two receivers ap-

“pointed, every power and authority conferred on the receivers may

be exercised by any two of them.
GrveraL Corporation Law. §§ 2387-239.

§ 237. Surviving receivers.

The survivor or survivors of any receivers shall have all the
powers and rights given to receivers. All property in the hands
of any receiver at the time of his death, removal or incapacity,
shall be delivered to the remaining, receiver or receivers, if there
be any; or to the successor of the one so dying, removed or inca-
pacitated ; who may demand and sue for the same.

§ 238. Oath of receiver.

Before proceeding to the discharge of any of their duties, all
such receivers shall take and subscribe an oath, that they will well
and truly execute the trust by their appointment reposed in them,
according to the best of their skill and understanding; which oath
shall be filed with the officer or court, that appointed them.

§ 239. General powers of receivers.

The said receivers shall have power:

1. To sue in their own names or otherwise, and recover all
the property, debts and things in action, belonging or due or
to become due to such corporation, whether accruing or maturing
before or after the dissolution thereof and whether vested or con-
tingent at the time of such dissolution, in the same manner and
with the like effect as such corporation might or could have done
if no receivers had been appointed; and no set-off shall be allowed
in any such suit, for any debt, unless it was owing to such
creditor by such corporation before the appointment of the re-
ceiver of such corporation, or unless it shall have been duly con-
tracted by such receiver subsequent to his appointment; not-
withstanding the notice to creditors the receivers may sue for
and recover any property or effects of the corporation and any
debts due to it, at any time, before the day appointed for the
delivery or payment thereof ;

2. To take into their hands, all the property of such corpora-
tion, whether attached, or delivered to them, or afterwards dis-
covered; and all books, vouchers and securities relating to the
same};
§ 239. GrweraL Corporation Law.

8. In the case of a non-resident, absconding or concealed debtor,
to demand and receive of every sheriff who shall have attached
any of the property of such debtor, or who shall have in his hands,
any moneys arising from the sale of such property, all such prop-
erty and moneys, on paying him his reasonable costs and charges,
for attaching and keeping the same, to be allowed by the court
having jurisdiction ;

4. From time to time, to sell at public auction, all the prop-
erty, real and personal, vested in them, which shall come to their
hands, after giving at least fourteen days’ public notice of the
' time and place of sale, and also publishing the same for two weeks
in a newspaper, printed in the county, where the sale shall be
made, if there be one;

5. To allow such credit on the sale of real property by them, as
they shall deem reasonable, subject to the provisions of this article
for not more than three-fourths of the purchase money; which
credit shall be secured by a bond of the purchaser, and a mortgage
on the property sold ;

6. Onsuch sales, to execute the necessary conveyances and bills
of sale.

7. To redeem ail mortgages and conditional contracts and all
pledges of personal property, and to satisfy any judgments, which
may be an incumbrance on any property so sold by them; or to
sell such property subject to such mortgages, contracts, pledges or
judgments ;

8. To settle all matters and accounts between such corporation
and its debtors, or creditors, and to examine any person touching
such matters and accounts, on oath, to be administered by either
of them;

9. Under the order of the court appointing them, to compound
with any person indebted to such corporation and thereupon to
discharge all demands against such person.

Amended by L, 1913, chap. 766.
GuenxeraL Corporation Law. § 240.

§ 240. Power of receiver to institute proceedings to recover
assets.

Whenever any receiver of a domestic corporation, or of the prop-
erty within this state of any foreign corporation, shall have been
appointed and qualified, as provided in articles five, six, seven,
nine, eleven or twelve of this chapter either before, upon, or after
final judgment or order in the action or special proceeding in which
such appointment was made, and shall, by his own verified petition,
affidavit or other competent proof, show to the supreme court, at a
special term thereof, held within the judicial district wherein
such appointment was made, that he has good reason to believe
that any officer, stockholder, agent or employee of such corporation,
or any other person whomsoever, has embezzled or concealed, or
withholds or has in his possession or under his control, or has
wrongfully disposed of, any property of such corporation which of
right ought to be surrendered to the receiver thereof; or that
any person can testify concerning the embezzlement, concealment,
withholding, possession, control or wrongful disposition of any
such property, the court shall make an order, with or without
notice, commanding such person or persons to appear at a time
and place to be designated in the order, before the court or before
a referee named by the court for that purpose, and to submit to
an examination concerning such embezzlement, concealment, with-
holding, possession, control or wrongful disposition of such prop-
erty; and at the time of making such order or at any time there-
after, the court may, in its discretion, enjoin and restrain the
person or persons so ordered to appear and be examined from in
any manner disposing of any property of such corporation which
may be in the possession or under the control of the person so or-
dered to be examined, until the further order of the court in rela-
tion thereto. No person so ordered to appear and be examined
shall be excused from answering any question on the ground that
‘his answer might tend to convict him of a critninal offense; but
his testimony taken upon such examination shall not be used
against him in any criminal action or proceeding.

Any person so ordered to appear and be examined shall be
entitled to the same fees and mileage, to be paid at the time of
§ 241. GeneraL Corvoration Law.

serving the order, as are allowed by law to witnesses subpoenaed
to attend and testify in an action in the supreme court, and shall
be subject to the same penalties upon failure to appear and tes-
tify in obedience to such an order as are provided by law in the
case of witnesses who fail to obey a subpoena to appear and testify
in an action.

Any person appearing for examination in obedience to such
order shall be sworn by the court or referee to tell the truth, and
shall be entitled to be represented on such examination by counsel,
and may be cross-examined, or may make any voluntary statement
in his own behalf concerning the subject of his examination which
may seem to him desirable or pertinent thereto.

The court before which such examination is taken, as well as
the referee, if one be appointed for that purpose, shall have power
to adjourn such examination from time to time, and may rule
upon any question or objection arising in the course of such exami-
nation, to the same extent that might be done if the person so
examined were testifying as a witness in the trial of an action.

When the examination of any person under such order shall
be concluded, the testimony shall be signed and sworn to by the
person so examined, and shall be filed in the office of the clerk of
the county where the action is pending, or was tried, in which
the receiver was appointed; and if from such testimony it shall
appear to the satisfaction of the court that any person so exam-
ined is wrongfully concealing or withholding, or has in his posses-
sion or under his control, any property which of right belongs to
such receiver, the court may make an order commanding the per-
son so examined forthwith to deliver the same to such receiver,
who shall hold the same subject to the further order of the court
in relation thereto; and otherwise, the court may, at the con-
clusion of any such examination, make such final order in the:
premises as the interests of justice require.

§ 241. Power of receiver in the settlement of controversies.
If any controversy shall arise between the receivers and any
other person, in the settlement of any demands against such cor-
poration, or of debts due to such corporation the same may be
GuneraL Corporation Law. § 241,

referred to one or more indifferent persons, who may be agreed
upon by the receivers and the party, with whom such controversy
shall exist, by a writing to that effect, signed by them.

If such referee or referees be not, selected by agreement, then
the receivers or the other party to the controversy, provided no
action at law is pending arising out of any such debts or demands,

may serve a notice of their intention to apply to any judge of the
supreme court at chambers, residing in the same district with said
receivers, for the appointment of one or more referees, specifying
the time and place when such application will be made, which
notice shall be served at least ten days before the time so therein
specified.

On the day so specified, upon due proof of the service of such
notice, the judge before whom the application is made may, in
his discretion, proceed to select one or more referees, the same in
all respects as they are now selected according to the rules and
practice of the supreme court.

When any witness to such controversy shall reside out of the
county where the said receivers resided at the time of their
appointment, the referee or referces appointed to hear said con-
troversy shall have power to issue a commission or commissions
in like manner as justices of the peace are now authorized to issue
the same, and the testimony so taken shall be returned to said
referee or referees in the same manner, and be read before them
on a hearing, in Jike manner as testimony taken on commission
before justices of the peace.

The officer before whom they shall be selected, shall certify such
selection in writing. Such certificate, or the written agreement
of the parties, shall be filed by the receivers in the office of a clerk
of the supreme court, and an order shall thereupon be entered
by such clerk in vacation or in term, appointing the persons so
selected to determine the controversy.

Such referees shall have the same powers, and be subject to the
like duties and obligations, and shall receive the same compensa-
tion, as referees appointed by the supreme court, in personal
actions pending therein.

The report of the referces shall be filed in the same office where
the order for their appointment was entered, and shall be con-
clusive on the rights of the parties, if not set aside by the court
§§ 242, 2438. Grnerat Corporation Law.

§ 242. Power of receiver to employ counsel.

If the receiver of a corporation employs counsel he shall within
three months after he has qualified as receiver enter into a written
contract fixing the compensation of such counsel at not exceeding
a certain amount or a certain percentage of the sums received and
disbursed by him, which contract must be approved by the supreme
court, on at least eight days’ notice to the attorney-general. A
payment by such receiver to his counsel on account of services shall
only be made, pursuant to an order of the court, on notice to the
attorney-general and subject to review on the final accounting.
A contract with counsel shall not be made for a longer period
than eighteen months, but may be renewed from time to time for
periods of not more than one year, if approved by the supreme
court on at least eight days’ notice to the attorney-general. In
case of the intervention of any policy-holder or depositor, by per-
mission of the court, such policy-holder or depositor shall defray
the legal expenses thereof, and no allowance shall be made for
costs or fees to any attorney of such policy-holder or depositor.
It shall be unlawful for receivers of an insurance, banking or
railroad corporation, or trust company to pay to any attorney or
counsel any costs, fees or allowances until the amounts thereof
shall have been stated to the special term as provided in section
two hundred and forty-nine of this chapter, as expenses incurred,
and shall have been approved by that court, by an order of the
court duly entered; and any such order shall be the subject of
review by the appellate division and the court of appeals on an
appeal taken therefrom by any party aggrieved thereby.

§ 243. Power of receiver to hold real property.

A receiver, appointed by or pursuant to an order or a judgment,
in an action in the supreme court or a county court, or in a special
proceeding for the voluntary dissolution of a corporation, may
take and hold real property, upon such trusts and for such pur-
poses as the court directs, subject to the direction of the court,
from time to time, respecting the disposition thereof.
‘

GrneRaL Corporation Law. §§ 244-248.

§ 244. Power of receiver to recover stock subscriptions.

If there shall be any sum remaining due upon any share of
stock subscribed in such corporation, the receiver shall immediately
proceed to recover the same, unless the person so indebted shall be
wholly insolvent; and for that purpose may commence and pros-
ecute any action or proceeding for the recovery of such sum, with-
out the consent of any creditors of such corporation.

§ 245. Duty of receiver to convert assets into money.

The receivers shall, as speedily as possible, convert the prop-
erty, real and personal, of the corporation into money.

§ 246. Duty of receiver as to private sales.

A receiver duly appointed in this state by and pursuant to a
judgment in an action, or by and pursuant to an order in a special
proceeding, may, upon application to the court by which such
judgment was rendered, or such order was made, and upon notice
to such parties as may be entitled to notice of applications made in
such action or special proceeding, be authorized by the said court
to sell or convey the property, whether real or personal, of the
corporation of which he is the receiver, at private sale, upon such
terms and conditions as the court may direct.

§ 247. Duty of receiver to keep accounts.

They shall keep a regular account of all moneys received by
them as receivers; to which, every creditor, or other person inter-
ested therein, shall be at liberty, at all reasonable times, to have
recourse.

§ 248. Duty of receiver to serve copy of report upon attor-
ney-general and superintendent of banks.

All receivers of insolvent corporations who are required by law
to make and file reports of their proceedings shall at the time of
making and filing such reports, serve a copy thereof upon the
attorney-general of this state, and receivers of such corporations
as report to, and are under the supervision of, the banking depart-
ment shall on the first day of January and July of each year,
§§ 249, 250. GeneraL Corporation Law.

during the continuance of their respective trusts, file with the
superintendent of banks a report, verified by oath, in such form as
the superintendent may prescribe, showing the condition of their
respective trusts. In case any receiver of an insolvent corpo-
ration shall neglect to make and file a report of his proceedings
for thirty days after the time he is required by law to make
and file such report, or shall neglect for the same length of time
to serve a copy thereof on the attorney-general, as required by
this section the attorney-general may make a motion in the supreme
court for an order to compel the raakiag and filing and serving a
copy on him of such report, or for the removal of such receiver
from his office.

§ 249. Duty of certain receivers to make reports.

It shall be the duty of every receiver of an insurance, banking
or railroad corporation, or trust company, to present every six
months to the special term of the supreme court, held in the judi-
cial district wherein the place of trial or venue of the action or
special proceeding in which he was appointed may then be, on the
first day of its first sitting, after the expiration of such six months,
and to file a copy of the same, if a receiver of a bank or trust com-
pany, with the superintendent of banks; if a receiver of an insur-
ance company, with the superintendent of insurance; and in
each case with the attorney-general, an account exhibiting in
detail the receipts of his trust, and the expenses paid and incurred
therein during the preceding six months. Of the intention to
present such account, as aforesaid, the attorney-general, and also
the surety or sureties on the official bond of such receiver, shall
be given eight days’ notice in writing; and the attorney-general
shall examine the books and accounts of such receiver at least
once every twelve months.

§ 250. Duty of receivers to give notice to creditors.

The receivers, immediately upon their appointment, shall give
notice thereof which shall be published for three weeks in a news-
paper printed in the county where the principal place of con-
ducting the business of such corporation shall have been situated ;
and therein shall require,
GunekaL Corporation Law. §§ 951-253.

1. All persons indebted to such corporation, by a day and ata
place therein to be specified, to render an account of all debts and
sums of money owing by them respectively, to such receivers and
to pay the same.

*

2. All persons having in their possession any property or
effects of such corporation to deliver the same to the said receivers
by the day so appointed.

3. All the creditors of such corporation to deliver their respec-
tive accounts and demands to the receivers or one of them, by a
day to be therein specified, not less than forty days from the first
publication of such notice.

4. All persons holding any open or susbsisting contract of such
corporation, to present the same in writing and in detail to such
receivers, at the time and place in such notice specified.

§ 251. Delivery of property and payment of debts to re-
ceiver after notice.

After the first publication of the notice of the appointment of
receivers, every person having possession of any property belong-
ing to such corporation, and every person indebted to such corpo-
ration, shall account and answer for the amount of such debt and
for the value of such property to the said receivers.

§ 252. Penalty for concealing property from receiver.

Every person indebted to such corporation, or having the posses-
sion or custody of any property or thing in action, belonging to
it, who shall conceal the same, and not deliver a just and true
account of such indebtedness, or not deliver such property or
thing in action, to the receivers, or one of them, by the day for
that purpose appointed, shall forfeit double the amount of such
debt, or double the value of such property so concealed; which
penalties may be recovered by the receivers.

§ 253. Duty of receiver to call creditors’ meeting.

They shall call a general meeting of the creditors of such cor-
poration, within four months from the time of their appointment
by a notice to be published in the same manner, as herein-
§§ 254-257, Genrrat Corroration Law.

before directed respecting the publication of the notice of their
appointment; in which notice, they shall specify the place and
time of such meeting, which time shall not be more than three
months, nor less than two months after the first publication of such
notice. Every such notice shall be published at least once in
each week, until the time of such meeting.

§ 254. Proceedings at creditors’ meeting.

At such meeting, or other adjourned meeting thereafter, all
accounts and demands for and against such corporation, and all
its open and subsisting contracts, shall be ascertained and adjusted
as far as may be, and the amount of moneys in the hands of the
receivers declared.

§ 255. Deduction of disbursements and commissions by
receiver.

Out of the moneys in their hands the receivers may first deduct
all the necessary disbursements made by them in the discharge of
their duty and such commissions as may be allowed by law.

§ 256. Refunding consideration of subsisting contracts.

If there shall be any open and subsisting engagements or con-
tracts of such corporation, which are in the nature of insurances
or contingent engagements of any kind, the receivers may, with
the consent of the party holding such engagement, cancel and
discharge the same, by refunding to such party the premium or
consideration paid thereon by such corporation, or so much thereof
as shall be in the same proportion to the time which shall remain
of any risk assumed by such engagement, as the whole premium
bore to the whole term of such risk; and upon such amount being
paid by such receivers to the person holding or being the legal
owner of such engagement, it shall be deemed canceled and dis-
charged as against such receivers.

§ 257. Retention of funds for subsisting contracts and
pending suits.

The receivers shall retain out of the moneys in their hands, a
sufficient amount to pay the sums, which they are hereinbefore
GrveraL Corvoration Law. §§ 258-261.

authorized to pay, for the purpose of canceling and discharging
any open or subsisting engagements. If any suit be pending
against the corporation or against the receivers, for any demand,
the receivers may retain the proportion which would belong to
such demand if established, and the ‘necessary costs and proceed-
ings, in their hands, to be applied according to the event of such
suit, or to be distributed in a second or other dividend.

§ 258. Payment of debts not due.

Every person to whom a corporation shall be indebted on a
valuable consideration, for any sum of money not due at the time
of such distribution, but payable afterwards, shall receive his
proportion with other creditors, after deducting a rebate of legal
interest upon the sum distributed, for the time unexpired of such
credit.

§ 259. Allowance of set-offs. ,

Where mutual credit has been given by any corporation, and
any other person, or mutual debts have subsisted between such cor-
poration and any other person, the receivers may set off such
credits or debts, and pay the proportion or receive the balance due.
But no set-off shall be allowed of any claim or debt, which would
not have been entitled to a dividend, as hereinbefore directed.

No set-off shall be allowed by such receivers, of any claim or
debt, which shall have been purchased by, or transferred to, the
person claiming its allowance, which could not have been set off
by him, in a suit brought by such receivers.

§ 260. Penalties recovered by receiver.

All penalties which shall be recovered by any receivers, pursuant
to the provisions of this article, shall be deemed a part of the
property of the corporation, and shall be distributed as such among
its creditors.

§ 261. Order of payment by receiver.

The receivers shall distribute the residue of the moneys in their
hands, among all those who shall have exhibited their claims as
creditors, and whose debts shall have been ascertained, as follows:
§§ 262, 268. Gnrnerat Corporation Law.

1. All debts due by such corporation to the United States, and
all debts entitled te a preference under the laws of the United
States.

2. All debts that may be owing by the corporation as guardian,
executor, administrator or trustee; and if there be not sufficient
to pay all debts of the character above specified, then a distribution
shall be made among, them, in proportion to their amounts
respectively.

3. Judgments actually obtained against such corporation, to
the extent of the value of the real estate on which they shall
respectively be liens.

4, All other creditors of such corporation, in proportion to
their respective demands, without giving any preference to debts
due on specialties.

§ 262. Failure to file claim before first dividend.

Every creditor who shall have neglected to exhibit his demand
before the first dividend, and who shall deliver his account to the
receivers before the second dividend, shall receive the sum he
would have been entitled to on the first dividend, before any
distribution be made to the other creditors.

§ 263. Second dividend by receiver.

If the whole of the property of such corporation be not dis-
tributed on the first dividend, the receivers shall, within one year
thereafter, make a second dividend of all the moneys in their
hands, among the creditors entitled thereto; of which, and that
the same will be a final dividend, three weeks’ notice shall be
inserted once in each week in a newspaper printed in the county
where the principal place of business of such corporation was
situated.

Such second dividend shall be made in all respects in the same
manner as herein prescribed in relation to the first dividend, and
no other shall be made thereafter among the creditors of such cor-
poration, except to the creditors having suits against it, or against
the receivers, pending at the time of such second dividend, and
GeneraL Corrorstion Law. §§ 264-267.

except of the moneys which may be retained to pay such creditors,
as herein provided.

§ 264. Surplus to stockholders.

If after the second dividend is made, there shall remain any
surplus in the hands of the receivers, they shall distribute the
same among the stockholders of such corporation, in proportion to
the respective amounts paid in by them, severally, on their shares
of stock.

§ 265. Disposition of moneys retained by receiver for suits.

When any suit pending at the time of the second dividend shall
be terminated, they shall apply the moneys retained in their
hands for that purpose, to the payment of the amount recovered,
and their necessary charges and expenses; and if nothing shall
have been recovered, they shall distribute such moneys, after
deducting their expenses and costs, among the creditors and stock-
holders of the corporation, in the same manner as herein directed
in respect to a second dividend.

§ 266. Duty of receiver as to unclaimed dividend.

If any dividend that shall have been declared, shall remain un-
claimed by the person entitled thereto for one year after the
same was declared, the receivers shall consider it as relinquished,
and shall distribute it, on any subsequent dividend, among the
other creditors.

§ 267. Effect of failure to file claim before second dividend.

After such second dividend shall have been made, the receivers
shal] not be answerable to any creditor of such corporation, or to
any person having claims against such corporation, by virtue of
any open or subsisting engagement, unless the demands of such
ereditor shall have been exhibited, and the engagements upon
which such claims are founded, shall have been presented to the
said receivers, in detail and in writing, before or at the time
specified by them in their notice of a second dividend.
§§ 268-270. Grenrrat Corporation Law.

§ 268. Final accounting by receiver.

A receiver shall apply within one year after qualifying as such
for a final settlement of his accounts und an order for distribution,
or shall apply to the court upon notice to the attorney-general
for an extension of time, setting forth the reasons why he is
unable to close his accounts, which order may be granted in
the discretion of the court. The attorney-general or any cred-
itor, or any party interested, may apply for an order that the
receiver show cause why an accounting and distribution shall
not be had at any time after the expiration of one year after
the receiver qualifies; and it shall be the duty of the attorney-
general after the expiration of eighteen months from the time
the receiver enters upon his duties, in case he has not applied
for a final settlement of his accounts, to apply for such an order
on notice to such receiver. In case of such application by a
party other than the receiver the court shall direct the receiver
to take steps to account with all convenient speed. The receiver
is not required or authorized to file any account, except as herein
provided, except by special order of the court.

§ 269. Notice of final accounting.

Previous to rendering such account the receivers shall insert a
notice of their intention to present the same, once in each week,
for three weeks, in a newspaper, of the county in which notices of
dividends are herein required to be inserted, specifying the time
and place at which such account will be rendered. Said receivers
shall also give notice to the sureties on their official bonds, as pro-
vided in section two hundred and twenty-seven of this chapter.

Am’d by L. 1909, ch. 240.

§ 270. Hearing on final accounting.

Upon the coming in of such report, the court shall hear the alle-
gations of all concerned therein, and shall allow or disallow such
account, and decree the same to be final and conclusive upon all
the creditors of such corporation, upon all persons who have claims
Gryerat. Corporation Law. §§ 271-275,

against it, upon any open or subsisting engagement, and upon all
the stockholders of such corporation.

§ 271. Reference of fina! account.

The referee to whom such account shall be referred, shall hear
and examine the proofs, vouchers and documents offered for or
against such account, and shall report thereon fully to the court.

§ 272. Further accounting.

Such receivers shall also account from time to time in the same
manner, and with the like effect, for all moneys which shall come
to their hands after the rendering of such account, and for all
moneys which shall have been retained by them for any of the
purposes hereinbefore specified, and shall pay into court all
unclaimed dividends.

§ 273. Removal of receiver.

Such receivers may be removed by the court.

§ 274. Vacancy.

Any vacancy created by removal, death or otherwise, may be
supplied by the court.

§ 275. Renunciation by receiver.

Any receiver who shall be desirous of renouncing the trust
vested in him, may apply to the court from whom his appointment
was received, for an order to all persons interested, to show cause
why such renunciation should not be accepted.

Such application shall be accompanied by a full, true and just
account of all the transactions of such receiver, and particularly
of the property, moneys and effects received by him; of all pay-
ments made, whether to creditors or otherwise; and of the remain-
ing effects and property of the corporation, in respect to which
he was appointed receiver, within his knowledge, and the situation
of the same.
§ 276. GeneraL Corporation Law.

To such account shall be annexed the affidavit of the receiver,
that the said account is in all respects just and true, according
to the best of his knowledge and belief; which affidavit shall be
subscribed and sworn to, before the court, to whom the application
is made, and shall be certified by the clerk of the court.

Such court, shall thereupon grant an order, directing notice
to be given to all persons interested in the property of the cor-
poration, in respect to which such receiver was appointed, to show
cause on a day or at a term and at a place therein to be specified,
why he should not be permitted to renounce his appointment.

Such notice shall be published, once in each week, for six weeks
successively in such newspapers, as such court shall direct.

On the day appointed for such hearing, and on such other days
as shall from time to time be appointed, if it shall appear that
notice was duly published, the court shall proceed to hear the
proofs and allegations of the parties.

If it shall appear that the proceedings of such receiver, in
relation to his trust, have been fair and honest, and particularly
in the collection of the property and debts vested in him; and
if such court be satisfied that for any reason it is inexpedient
for such receiver to continue in the execution of the duties of his
appointment, and that such duties can be executed by another
receiver, without injury to the property of the corporation, or to
the creditors; and if no good cause to the contrary appear, such
court shall grant an order, allowing such receiver to renounce his
appointment.

Upon such order being granted, such receiver shall be dis-
charged from the trust reposed in him, and his power and au-
thority shall thereupon cease; but he shall, notwithstanding, re-
main subject to any liability he may have incurred, at any time
previous to the granting of such order, in the management of his
trust.

The expense of all proceedings in effecting such renunciation
shall be paid by the receiver making the application.

§ 276. Control of receiver by court.

The receivers shall be subject to the control of the court and
may be compelled to account at any time.
Genera Corporation Law. §§ 277, 278.

§ 277. Commissions and expenses of receiver in voluntary
dissolution.

A receiver appointed pursuant to article nine is entitled, in
addition to his necessary expenses, to commissions upon the sums
received and disbursed by him as the court by which or the judge
by whom he is appointed allows, as follows: On the first twenty
thousand dollars not exceeding five per centum; on the next eighty
thousand dollars, not exceeding two and one-half per centum; and
on the remainder, not exceeding one per centum; but in case the
commissions of a receiver so computed shall not amount to one
hundred dollars, said court or judge may in his or its discretion
allow said receiver such a sum not exceeding one hundred dollars
for his commissions as shall be commensurate with the services
rendered by said receiver.

§ 278. Commissions and expenses of receiver except in
voluntary dissolution.

A receiver of a corporation,.except a receiver appointed in pro-
ceedings for its voluntary dissolution, is entitled, in addition to
his necessary expenses, to such commissions, not exceeding two
and one-half per centum upon the sums received and disbursed by
him, as the court by which or the judge by whom he is appointed
allows, but except upon a final accounting such a receiver shall
not receive on account of his services for any one year a greater
amount than twelve thousand dollars, nor for any period less than
a year more than at that rate. Upon final accounting, the court
may make an additional allowance to such receiver, not exceeding
two and one-half per centum upon the sums received and disbursed
by him, if the court is satisfied that he has performed services that
fairly entitle him to such additional allowance. Where more than
one receiver shall be appointed, the compensation herein provided
shall be divided between said receivers.
§ 300.

Genernat Corporation Law.

ARTICLE 12.

Provisions APPLICABLE To Two or More or THE FoREGOING

SzctTion 300.
301.

302.
303.

304,
305.
306.
307.
308.
309.
310.
311.

312.
313.

314.
315.

316.

Procrepines og ACTIONS.

Application of preceding articles to certain corporations.

Officers and agents may be compelled to testify in certain
actions.

Injunction staying actions by creditors in certain actions.

Creditors of corporation may be brought in to prove their
claims in certain actions.

When attorney-general must bring certain actions.

Requisites of injunction against corporations in certain cases.

Appointment of receivers of property of corporations.

Judicial suspension cr removal of officer of corporation.

Application of the last three sections.

Misnomer not available in action against stockholder.

Appraisal of property of insolvent corporation.

Application by attorney-general for removal of receiver and to
facilitate closing affairs of receivership.

Service of papers upon attorney-generai.

Designation of depositories of funds in order appointing
receiver. ;

Application to the court in certain actions and proceedings.

County wherein action may be brought by attorney-general
on behalf of the people.

Preferences in actions *of proceedings by or against receivers.

§ 300. Application of preceding articles to certain
corporations.

Articles fifth, sixth or seventh of this chapter do not apply to
a religious corporation; or to a municipal or other political corpo-
ration, created by the constitution, or by or under the laws of this
state; or to any corporation which the regents of the university
have power to dissolve, except upon the application of the regents,
or of the trustees of such a corporation; and in aid of its liquida-
tion under such dissolution.

*So in original.
Gexerait Corporation Law. §$§ 301-808.

§ 301. Officers and agents may be compelled to testify in
certain actions.

In an action, brought as prescribed in article fifth, sixth or
seventh, a stockholder, officer, alienee, or agent of a corporation,
is not excused from answering a question, relating to the manage-
ment of the corporation, or the transfer or disposition of its prop-
erty, on the ground that his answer may expose the corporation to
a forfeiture of any of its corporate rights, or will tend to convict
him of a criminal offense, or to subject him to a penalty or for
feiture. But his testimony shall not be used, as evidence against
him, in a criminal action or special proceeding.

§ 302. Injunction staying actions by creditors in certain
actions.

In such an action, the court may, in its discretion, on the appli-
cation of either party, at any stage of the action, before or after
final judgment, and with or without security, grant an injunction
order, restraining the creditors of the corporation from bringing
actions against the defendants, or any of them, for the recovery of
a sum of money, or from taking any further proceedings in such
actions, theretofore commenced. Such an injunction has the
same effect, and, except as otherwise expressly prescribed in this
section, is subject to the same provisions of law, as if each creditor,
upon whom it is served, was named therein, and was a party to
the action in which it is granted.

§ 303. Creditors of corporation may be brought in to prove
their claims in certain actions.

In such an action, the court may, at any stage of the action,
before or after final judgment, make an order requiring all the
ereditors of the corporation to exhibit and prove their claims, and
thereby make themselves parties to the action, in such a manner,
and in such a reasonable time, not less than six months from the
first publication of notice of the order as the court directs; and
that the creditors, who make default in so doing, shall be pre
§§ 804, 305.  Gunurat Corporation Law.

cluded from all benefit of the judgment, and from any distribu-
tion which may be made thereunder, except as hereinafter pro-
vided. Notice of the order must be given by publication, in such
newspapers, and for such a length of time, as the court directs.
Notwithstanding such order any such creditor who shall exhibit
and prove his claim in the manner directed thereby, with proof,
by affidavit or otherwise, that he has had no notice or knowledge
thereof in time to comply therewith, any time before an order is
made directing a final distribution of the assets of such corporation,
shall be entitled to have his claim received, and shall have the
same rights and benefits thereon, so far as the assets of such cor-
poration then remaining undistributed may render possible, as if
his claim had been exhibited and proved within the time limited
by such order.

§ 304. When attorney-general must bring certain actions.

Where the attorney-general has good reason to believe, that an
action can be maintained in behalf of the people of the state, as
prescribed in articles fifth, sixth or seventh of the chapter, except
section one hundred and thirty of this chapter, he must bring
an action accordingly, or apply to a competent court for leave to
bring an action, as the case requires; if, in his opinion, the public
interests require that an action should be brought. In a case
where the action can be brought only by the attorney-general in
behalf of the people, if a creditor, stockholder, director, or trustee
of the corporation, applies to the attorney-general for that purpose,
and furnishes the security required by law, the attorney-general
must bring the action, or apply for leave to bring it, if he has
good reason to believe, that it can be maintained. Where such an
application is made section nineteen hundred and eighty-six of the
code of civil procedure applies thereto, and to the action brought
in pursuance thereof.

§ 305. Requisites of injunction against corporations in cer-
tain cases.

An injunction order, suspending the general and ordinary busi-
ness of a corporation, or suspending from office, or restraining
GeneraL Corporation Law. § 306.

from the performance of his duties, a trustee, director, or other
officer thereof, can be granted only by the court, upon notice of
the application therefor, to the proper officer of the corporation, or
to the trustee, director, or other officer enjoined. If such an
injunction order is made, otherwise than as prescribed in this
section, it is void.

§ 306. Appointment of receivers of property of corporations.

A receiver of the property of. a corporation can be appointed
only by the court, and in one of the following cases:

1. An action, brought as prescribed in articles fifth, sixth or
seventh of this chapter.

2. An action brought for the foreclosure of a mortgage upon
the property, of which the receiver is appointed, ‘where the mort-
gage debt, or the interest thereupon, has remained unpaid, at
least thirty days after it was payable, and after payment thereof
was duly demanded of the proper officer of the corporation and
where either the income of the property is specifically mortgaged,
or the property itself is probably insufficient to pay the mortgage
debt.

8. An action brought by the attorney-general, or by a stock-
holder, to preserve the assets of a corporation, having no officer
empowered to hold the same.

4. A-special proceeding for the voluntary dissolution of a
corporation.

5. Upon the application of the regents of the university, in aid
of the liquidation of a corporation whose dissolution they con-
template or have decreed; or upon the application of the trustees
of such a corporation, with notice to the regents.

Where the receiver is appointed in an action, otherwise than
by or pursuant to a final judgment, notice of the application for
his appointment must be given to the proper officer of the
corporation.
§§ 307-310. GrenreraL Corporation Law.

§ 307. Judicial suspension or removal of officer of
corporation.

A trustee, director, or other officer of a corporation shall not
be suspended or removed from office, by a court or judge, otherwise
than by the final judgment of a competent court, in an action
brought by the attorney-general, as prescribed in section ninety
of this chapter.

§ 308. Application of the last three sections.

The last three sections apply to an action or special proceeding,
against a corporation created by or under the laws of the state, or
a trustee, director, or other officer thereof ; or against a corporation
created by or under the laws of another state, government, or
country, or a trustee, director, or other officer thereof, where the
corporation does business within the state, or has, within the state,
a business agency or a fiscal agency, or an agency for the transfer
of its stock.

§ 309. Misnomer not available in action against stock-
holder.

Where an action, authorized by a law of the state, is brought
against one or more persons, as stockholders of a corporation, an
objection to any of the proceedings can not be taken, by a person
properly made a defendant in the action on the ground that the
plaintiff has joined with him, as a defendant in the action, a
person, whose name appears on the stock-books of the corporation,
as a stockholder thereof, by the name so appearing; but who is
misnamed, or dead, or is not liable for any cause. In such a case,
the court may, at any time before final judgment, upon motion of
either party, amend the pleadings and other papers, without preju-
dice to the previous proceedings, by substituting the true name
of the person intended, or by striking out the name of the person
who is dead, or not liable, and, in a proper case, inserting the name
of his representative or successor.

§ 310. Appraisal of property of insolvent corporation.

Whenever by reason of the provisions of any law of this state
it shall become necessary to appraise in whole or in part the
GeveraL Corporation Law. §§ 311, 312.

property of any corporation in the hands of a receiver or other-
wise, the persons whose duty it shall be to make such appraisal
shall value the real estate at its full and true value, taking into
consideration actual sales of neighboring real estate similarly
situated during the year immediately preceding the date of such
appraisal, if any; and they shall value all such property, stocks,
bonds or securities as are customarily bought or sold in open
markets in the city of New York or elsewhere, for the day on
which such appraisal or report may be required, by ascertaining
the range of the market and the average of prices as thus found,
running through a reasonable period of time.

§ 311. Application by attorney-general for removal of re-
ceiver and to facilitate closing affairs of receivership.

The attorney-general may, at any time he deems that the inter-
ests of the stockholders, creditors, policy-holders, depositors or
other beneficiaries interested in the proper and speedy distribution
of the assets of any insolvent corporation will be subserved thereby,
make a motion in the supreme court at a special term thereof, in
any judicial district:

1. For an order removing the receiver of any insolvent corpo-
vation and appointing a receiver thereof in his stead, or,

2. To compel him to account, or,

3. For such other and additional order or orders as to him
may seem proper to facilitate the closing up of the affairs of such
receivership, and

Any appeal from any order made upon any motion under this
section shall be to the appellate division of the department in
which such motion is made.

§ 312. Service of papers upon attorney-general.

A copy of all motions and all motion papers, and a copy of any
other application to the court, together with a copy of the order or
judgment to be proposed thereon to the court, in every action or
proceeding for the dissolution of a corporation or a distribution
of its assets, shall, in all cases, be served on the attorney-general,
§§ 313-315. GryeraL Corporation Law.

in the same manner as provided by law for the service of papers
on attorneys who have appeared in actions, whether the applica-
tions but for this section would be ex parte or upon notice, and
no order or judgment granted shall vary in any material respect
from the relief specified in such copy, order or judgment, unless
the attorney-general shall appear on the return day and shall have
been heard in relation thereto; and any order or judgment granted
in any action or proceeding aforesaid, without such service of
such papers upon the attorney-general, shall be void, and no
receiver of any such corporation shall pay to any person any money
directed to be paid by any order or judgment made in any such
action or proceeding, until the expiration of eight days after a
certified copy of such order or judgment shall have been served as
aforesaid upon the attorney-general.

§ 313. Designation of depositories of funds in order ap-
pointing receiver.

All orders appointing receivers of corporations shall designate
therein one or more places of deposit, wherein all funds of the
corporation not needed for immediate disbursement shall be
deposited and no deposits or investments of such trust funds shall
be made elsewhere, except upon the order of the court upon due
notice given to the attorney-general.

§ 314. Application to the court in certain actions and pro-
ceedings.

All applications to the court shall be made in the judicial district
where the principal office of the corporation against which pro-
ceedings are taken is located, excepting such applications as are
made in actions brought by the attorney-general on behalf of the
people of the state, and all such applications shall be made in
the judicial district in which the action is triable.

§ 315. County wherein action may be brought by attorney-
general on behalf of the people.

An action or proceeding brought by the attorney-general on
behalf of the people of the state against any corporation for the
Guxenat Corroration Law. §§ 316-321.

purpose of procuring its dissolution, the appointment of a receiver,
or the sequestration of its property, may be brought in any county
of the state, to be designated by the attorney-general.

§ 316. Preferences in actions or proceedings by or against
receivers.

All actions or other legal proceedings and appeals therefrom or
therein brought by or against a receiver of any of the insolvent
corporations referred to in this chapter, shall have a preference
upon the calendars of all courts next in order to actions or proceed-
ings brought by the people of the state of New York.

ARTICLE 13.

ALTERATION AND Repeat or CHARTER OF CoRPORATION.

SecTion 320. Alteration and repeal of’ charter.
321. Conflicting corporate laws.

§ 320. Alteration and repeal of charter.

The charter of every corporation shall be subject to alteration,
suspension and repeal, in the discretion of the legislature.

§ 321. Conflicting corporate laws.

If in any corporate law there is or shall be any provision in con-
flict with any provisions of this chapter or of the stock corporation
law, the provisions so conflicting shall prevail, and the provision
of this chapter or of the stock corporation law with which it con-
flicts shall not apply in such a case. If in any such law there is
or shall be a provision relating to a matter embraced in this chap-
ter or in the stock corporation law, but not in conflict with it, such
provision in such other law shall be deemed to be in addition to the
provision in this chapter or in the stock corporation law relating
to the same subject-matter, and both provisions shall, in such case,
be applicable.
§§ 330-332, Genera Corporation Law.

ARTICLE 14.

Laws REPEALED; Construction; WHEN To TAKE EFFECT.

SEcTION 330. Laws repealed.
331. Construction.
332. When to take effect.

§ 330. Laws repealed.

Of the laws enumerated in the schedule hereto annexed, that
portion specified in the last columm is hereby repealed.

§ 331. Construction.

Nothing in this chapter shall be construed to impair any right
or liability which any existing corporation, its officers, directors,
stockholders or ereditors may have or be subject to or which any
subject to on the date when this chapter takes effect, by virtue of
any special act of the legislature creating such corporation or
ereating or defining any such right or liability, unless such special
act is repealed by this chapter or the other general laws herein-
before mentioned.

§ 332. When to take effect.
This chapter shall take effect immediately.
STOCK CORPORATION LAW.

ARTICLE

PE ee oN os

Section 1.

f

CHAPTER 61 of 1903.

CuarTer 59 oF THE ConsoLipatTrep Laws,
Short title (§ 1).

General provisions (§§ 5-18).

Directors and officers (§§ 25-35).

Stock and stockholders (§§ 50-70).

Laws repealed; when to take effect (§§ 80, 81).

ARTICLE 1.

Suort TIrLe
Short title.

§ 1. Short title.
This chapter shall be known as the “ Stock Corporation Law.”

SECTION

18.
19.
20.
21.
22.
23.

ARTICLE 2.

GeneRAL Provisions.

Application of article.

Power to porrow money and mortgage property.

Validating corporate mortgages.

Power to guarantee bonds of other corporations.

. “Reorganization upon sale of corporate property.

Contents of plan or agreement.

Sale of property; possession of receiver and suits against
him.

Municipalities may assent to plan of readjustment.

Change of place of business.

Combinations prohibited.

Merger.

Voluntary sale of franchise and property.

Rights of non-consenting stockholders on voluntary sale of
franchise and property.

Alterations or extension of business.

Issuance of shares of stock without nominal or par value.

Commencement of business; authorized debts.

Taxation.

Increase or reduction of shares or capital.

‘Amount of capital stock and of shares within meaning of other
laws.

 

*So in original.
Srocx Corporation Law. §§ 5, 6.

§ 5. Application of article.
This article except sections eight, fifteen, sixteen, seventeen and
eighteen thereof, shall not apply to moneyed corporations.

§ 6. Power to borrow money and mortgage property.

In addition to the powers conferred by the general corporation
law, every stock corporation shall have the power to borrow money
and contract debts, when necessary for the transaction of its busi-
ness, or for the exercise of its corporate rights, privileges or fran-
chises, or for any other lawful purpose of its incorporation; and
it may issue and dispose of its obligations for any amount so
borrowed, and may mortgage its property and franchises to secure
the payment of such obligations, or of any debt contracted for said
purposes. Every such mortgage, except purchasemoney mort-
gages and mortgages authorized by contracts made prior to May
first, eighteen hundred and ninety-one, shall be consented to by the
holders of not less than two-thirds of the capital stock of the corpo-
ration, which consent shall be given either in writing or by vote
at a special meeting of the stockholders called for that purpose,
upon the same notice as that required for the annual meetings
of the corporation; and a certificate under the seal of the corpo-
ration that such consent was given by the stockholders in writing,
or that it was given by vote at a meeting as aforesaid, shall
be subscribed and acknowledged by the president or a vice-
president and by the secretary or an assistant secretary, of the
corporation, and shall be filed and recorded in the office of the
clerk or register of the county wherein the corporation has its
principal place of business. When authorized by like consent, the
directors under such regulations as they may adopt, may confer
on the holder of any debt or obligation, whether secured or
unsecured, ‘evidenced by bonds of the corporation, the right to
convert the principal thereof, after two and not more than twelve
years from the date of such bonds, into stock of the corporation;
and if the capital stock shall not be sufficient to meet the conversion
when made, the directors shall from time to time, authorize an
increase of capital stock sufficient for that purpose by causing to
be filed in the office of the secretary of state, and a duplicate
§ 7. Stock Corporation Law.

thereof in the office of the clerk of the county where the principal
place of business of the corporation shall be located, a certificate
under the seal of the corporation, subscribed and acknowledged by
the president and secretary of the corporation setting forth,

1. A copy of such mortgage; or resolution of directors author-
izing the issue of such bonds;

2. That the holders of not less than two-thirds of the capital
stock of the corporation duly consented to the execution of such
mortgage or resolution of directors authorizing the issue of such
bonds by such corporation ;

3. A copy of the resolution of the directors of the corporation
authorizing the increase of the capital stock of the corporation
necessary for the purpose of such conversion;

4, The amount of capital theretofore authorized, the propor-
tion thereof actually issued and the amount of the increased
capital stock.

If the corporation be a railroad corporation the certificate shall
have indorsed thereon the approval of the public service commis-
sion having jurisdiction thereof. When the certificate herein
provided for has been filed, the capital stock of such corporation
shall be increased to the amount specified in such certificate.

§ 7. Validating corporate mortgages.

Whenever any mortgage affecting property or franchises within
this state heretofore or hereafter executed by authority of the board
of directors in behalf of any stock corporation, domestic or foreign,
of any description, recites or represents in substance or effect that
the execution of such mortgage has been duly consented to, or
authorized by stockholders, such recital or representation in any
such mortgage, after public record thereof within this state, shall
be presumptive evidence that the execution of such mortgage has
been duly and sufficiently consented to, and authorized by stock-
holders as required by any provision of law. After any such
mortgage heretofore or hereafter shall have been publicly recorded
for more than one year in one or more of the counties of this state
containing the mortgaged premises or any part thereof, and the
corporation shall have received value for bonds actually issued
Stock Corporation Law. § 7.

under and secured by such mortgage, and interest shall have been
paid on any of such bonds according to the terms thereof, such
recital or representation of such mortgage so recorded shall be
conclusive evidence that the execution of such mortgage has been
duly and sufficiently consented to, and authorized by stockholders
as required by any provision of law, and its validity shall not be
impaired by reason of any defect or insufficiency of consent or
authority of stockholders or in filing or recording such consent or
authority, and such mortgage shall be valid and binding upon the.
corporation, and those claiming under it, as security for all valid
bonds issued or to be issued thereunder, unless such mortgage shall
be adjudged invalid in an action begun as hereinafter, in this sec-
tion, provided. Notwithstanding the foregoing provisions of this
section, the invalidity of any such mortgage heretofore recorded
because of insufficiency of consent by stockholders may be adjudged
in any action for such purpose begun before the first day of
April, nineteen hundred and two, and the invalidity of any such
mortgage hereafter recorded, because of insufficiency of consent
by stockholders, may be adjudged in any action for such purpose
begun, within one year after the earliest record of such mortgage
in any county in this state, provided in either case that such action
shall have been so begun by or in behalf of the corporation by
direction of the board of directors acting in their own discretion,
or upon the written request of the holders of not less than one-
“third of the capital stock of the corporation; and in any such
action so begun by or in behalf of the corporation, the recitals or
representations of the mortgage shall be presumptive evidence only
as first above provided. Whenever hereafter, in compliance with
any law of this state, the officers of any corporation shall have
made and filed and recorded a certificate that the execution of a
mortgage hereafter made by the corporation has been duly con-
sented to by stockholders, such certificate shall be conclusive
evidence as to the truth thereof, in favor of any and all persons
who in good faith shall receive or purchase, for value, any bond
or obligation purporting to be secured by such mortgage, at any
time when said certificate shall remain ef record and uncanceled.
Nothing in this section contained shall affect any right or any
§§ 8, 9. Stock Corporation Law.

remedy in respect of any such right of any creditor accrued
before this enactment nor shall it dispense with the necessity of
obtaining the consent of the public service commission having
jurisdiction thereof to any mortgage by a railroad corporation.

§ 8. Power to guarantee bonds of other corporations.

Any stock corporation may, in pursuance of a unanimous vote
of its stockholders voting at a special meeting called for that pur-
pose by notice in writing signed by a majority of the directors
of such corporation stating the time and place and object of the
meeting and served upon each stockholder appearing as such
upon the books of the corporation, personally or by mail at his
last-known post-office address at least sixty days prior to such
meeting, guarantee the bonds of any other domestic corporation
engaged in the same general line of business; and any stock cor-
poration owning the entire capital stock of any other domestic
stock corporation engaged in the same general line of’ business may
in pursuance of a two-thirds vote of its stockholders voting at a
special meeting called for that purpose by notice in writing
signed by a majority of the directors of such corporation, stating
the time and place and object of the meeting and served upon
each stockholder appearing as such upon the books of the corpora-
tion personally, or by mail, at his last-known post-office address,
at least sixty days prior to such meeting, guarantee the bonds of
such other corporation.

§ 9. Reorganization upon sale of corporate property and
franchises.

When the property and franchises of any domestic stock cor-
poration shall be sold by virtue of a mortgage or deed of trust, duly
executed by it, or pursuant to the judgment or decree of a court of
competent jurisdiction, or by virtue of any execution issued
thereon, and the purchaser, his assignee or grantee shall have
acquired title to the same in the manner prescribed by law, he
may associate with him any number of persons, not less than the
number required by law for an incorporation for similar pur-
poses at least two-thirds of whom shall be citizens of the United
Stock Corporation Law. § 9.

States and one shall be a resident of this state, and they may
become a corporation and take and possess the property and
franchises thus sold, and which were at the time of the sale
possessed by the corporation whose property shall have been so
sold, upon making and acknowledging and filing in the offices
where certificates of incorporation are required by law to be filed,
a certificate in which they shall describe by name and reference
to the law under which it was organized, the corporation whose
property and franchises they have acquired, and the court by
whose authority the sale had been made, with the date of the
judgment or decree authorizing or directing the same, and a brief
description of the property sold, and also the following par-
ticulars:

1. The name of the new corporation intended to be formed by
the filing of such certificate; and the place where its principal
office is to be located.

2. The maximum amount of its capital stock and the number
of shares into which it is to be divided, specifying the classes
thereof, whether common or preferred, and the amount of and
rights pertaining to each class.

3. The number of directors, not less nor more than the number
required by law for the old corporation, who shall manage the
affairs of the new corporation, and the names and_ post-office
addresses of the directors for the first year. They may insert
in such certificate any provisions relating to the new corporation,
or its management, contained in any plan or agreement which
may have been entered into as provided in section ten of this
chapter. Such corporation shall be vested with, and be entitled
to exercise and enjoy, all the rights, privileges and franchises,
which at the time of such sale belonged to, or were vested in the
corporation last owning the property sold, or its receiver, and shall
be subject to all the provisions, duties and liabilities imposed
by law on that corporation. Any proceedings heretofore taken in
substantial compliance with this section as hereby amended, and
any and all incorporations based thereon are hereby ratified and
confirmed.
§ 10. Stock Corporation Law.

§ 10. Contents of plan of agreement.

At or previous to the sale the purchasers thereat, or the persons
for whom the purchase is to be made, may enter into a plan or
agreement, for or in anticipation of the readjustment of the respec-
tive interests therein of any creditors, mortgagees, stockholders,
or any of them, of the corporation owning such property and fran-
chises at the time of sale, and of holders of claims for materials,
supplies and equipment furnished, and for injuries and damages
sustained, in and about the operation, maintenance or construc-
tion of any or all the property formerly owned or leased to
said corporation, and for the representation of such interests
in the bonds or stock of the new corporation to be formed, and
may therein regulate voting by the holders of the preferred and
common stock at any meeting of the stockholders, and may pro-
vide for, and regulate voting by the holders, and owners of any or
all of the bonds of the corporation, foreclosed, or of the bonds
issued or to be issued by the new corporation; and such right of
voting by bondholders shall be exercised in such manner, for such
period, and upon such conditions, as shall be therein described.
Such plan or agreement must not be inconsistent with the laws of
the state and shall be binding upon the corporation, until changed
as therein provided, or as otherwise provided by law. The new
corporation when duly organized, pursuant to such plan or agree-
ment and to the provisions of law, may issue its bonds and stock
in conformity with the provisions of such plan or agreement, and
may at any time within six months after its organization, com-
promise, settle or assume the payment of any debt, claim or
liability of the tormer corporation or any claims for materials,
supplies and equipment furnished, or any claims for injuries
and damages sustained, in and about the operation, maintenance or
construction of any or all the property formerly owned or leased
‘to said corporation, upon such terms as maybe lawfully
approved by a majority of the agents or trustees intrusted with
the carrying out of the plan or agreement of reorganization, and
may establish preferences in favor of any portion of its capital
stock and may divide its stock into classes; but the capital stock
of the new corporation shall not exceed in the aggregate the maxi-

mum amount of stock mentioned in the certificate of incorporation.
Amended by L. 1911, chap. 858.
Stock Corporation Law. §§ 11, 12.

§ 11. Sale of property; possession of receiver and suits
against him.

The supreme court may direct a sale of the whole of the prop-
erty, rights and franchises covered by the mortgage or mortgages,
or deeds of trust foreclosed at any one time and place to be named
in the judgment or order, either in case of the non-payment of
interest only, or of both the principal and interest due and unpaid
and secured by any such mortgage or mortgages or deeds of trust.
Neither the sale nor the formation of the new corporation shall
interfere with the authority or possession of any receiver of such
property and franchises, but he shall remain liable to be removed
or discharged at such time as the court may deem proper. No
suit or proceeding shall be commenced against such receiver unless
founded on wilful misconduct or fraud in his trust after the
expiration of sixty days from the time of his discharge; but after
the expiration of sixty days the new corporation shall be liable in
any action that may be commenced against it, and founded on any
act or omission of such receiver for which he may not be sued, and
to the same extent as the receiver, but for this section would be or
remain liable, or to the same extent that the new corporation
would be had it done or omitted the acts complained of.

§ 12. Municipalities may assent to plan of readjustment.

The commissioners, corporate authorities or proper officers of
any city, town or village, who may hold stock in any corporation,
the property and franchises whereof shall be liable to be sold, may
assent to any plan or agreement of reorganization which lawfully
provides for the formation of a new corporation, and the issue of
stock therein to the proper authorities or officers of such cities,
towns or villages in exchange for the stock of the old or former
corporation by them respectively held. And such commissioners,
corporate authorities or other proper officers may assign, transfer
or surrender the stock so held by them in the manner required by
such plan, and accept in lieu thereof the stock issued by such new
corporation in conformity therewith.
§§ 18, 14. Stock Corporation Law.

§ 13. Change of place of business.

Any stock corporation now existing or hereafter organized under
the laws of this state, except moneyed corporations, may at any
time change its principal office and place of business from the city,
town or county named in its certificate of incorporation, or to
which it may have been changed under the provisions of this sec-
tion, to any other city, town or county in this state, in which it
may desire to actually transact and carry on its regular business
from day to day, provided that such change has been authorized,
either by unanimous consent of the stockholders expressed in writ-
ing and duly acknowledged and filed in the office of the secretary
of state, or by a vote of the stockholders of said corporation at a
special meeting of stockholders called for that purpose. When
such change shall be authorized by the stockholders as herein pro-
vided, the president and secretary and a majority of the directors
of such corporation shall sign a certificate stating the name of
said corporation, the city, town and county where its principal
office and place of business was originally located, and to which
it may have been subsequently changed, and the city, town and
county to which it is desired to change its said principal office
and place of business, and that it is the purpose of said corpora-
tion to actually transact and carry on its regular business from
day to day at such place, and that such change has been author-
ized as herein provided, and the names of the directors of said
corporation and their respective places of residence, which certifi-
cate shall be verified by the oaths of all the persons signing the
same, and when so signed and verified, shall be filed in the office
of the secretary of state and a duplicate thereof in the office of
the clerk of the county from which said principal office and place
of business is about to be removed or changed, and another in the
office of the clerk of the county to which said removal or change
is to be made, and thereupon the principal office and place of
business of such corporation shall be changed as stated in said
certificate.

§ 14. Combinations prohibited.

No domestic stock corporation and no foreign corporation doing
business in this state shall combine with any other corporation or
Stock Corporation Law. §§ 15, 16.

person for the creation of a monopoly or the unlawful restraint of
trade or for the prevention of competition in any necessary of
life.

§ 15. Merger.

Any domestic stock corporation and any foreign stock corpora-
tion authorized to do business in this state lawfully owning all the
stock of any other stock corporation organized for, or engaged in
business similar or incidental to that of the possessor corporation
may file in the office of the secretary of state, under its common
seal, a certificate of such ownership, and of the resolution of its
board of directors to merge such other corporation, and thereupon
it shall acquire and become, and be possessed of all the estate,
property, rights, privileges and franchises of such other corpora-
tion, and they shall vest in and be held and enjoyed by it as fully
and entirely and without change or diminution as the same were
before held and enjoyed by such other corporation, and be man-
aged and controlled by the board of directors of such possessor
corporation, and in its name, but without prejudice to any liabil-
ities of such other corporation or the rights of any creditors
thereof. Any bridge corporation may be merged under this sec-
tion with any railroad corporation which shall have acquired the
right by contract to run its cars over the bridge of such bridge
corporation.

§ 16. Voluntary sale of franchise and property.

A stock corporation, except a railroad corporation and except
as otherwise provided by law, with the consent of two-thirds of its
stock, may sell and convey its property, rights, privileges and fran-
chises, or any interest therein or any part thereof to a domestic
corporation, engaged in a business of the same general character,
or which might be included in the certificate of incorporation of
a corporation organizing under any general law of this state for a
business of the same general character, and a domestic corporation
the principal business of which is carried on in, and the principal
tangible property of which is located within a state adjoining the
state of New York, may with the consent of the holders of ninety-
§ 17. Stock Corporation Law.

five per centum of its capital stock, sell and convey its property
situate without the state of New York, not including its franchises,
to a corporation organized under the laws of such adjoining state,
and such sale and conveyance shall, in case of a sale to a domestic
corporation, vest the rights, property and franchises thereby trans-
ferred, and in case of a sale to a foreign corporation the property
sold, in the corporation to which they are conveyed for the term of
its corporate existence, subject to the provisions and restrictions
applicable to the corporation conveying them. [Before such sale
or conveyance shall be made such consent shall be obtained at a
meeting of the stockholders called upon like notice as that. required
for an annual meeting.

§ 17. Rights of non-consenting stockholders on voluntary
sale of franchise and property.

If any stockholder not voting in favor of such proposed sale or
conveyance shall at such meeting, or within twenty days thereafter,
object to such sale, and demand payment for his stock, he may,
within sixty days after such meeting, apply to the supreme court
at any special term thereof held in the district in which the
principal place of business of such corporation is situated, upon
eight days’ notice to the corporation, for the appointment of three
persons to appraise the value of such stock, and the court shall
appoint three such appraisers, and designate the time and place
of their proceedings as shall be deemed proper, ‘and also direct
the manner in which payment for such stock shall be made to
such stockholders. The court may fill any vacancy in the board
of appraisers occurring by refusal or neglect to serve or otherwise.
The appraisers shall meet at the time and place designated, and
they or any two of them, after being duly sworn honestly and
faithfully to discharge their duties, shall estimate and certify the
value of such stock at the time of such dissent, and deliver one
copy to such corporation, and another to such stockholder, if
demanded; the charges and expenses of the appraisers shall be
paid by the corporation. When the corporation shall have paid
the amount of such appraisal, as directed by the court, such stock-
holders shall cease to have any interest in such stock and in the
corporate property of such corporation and such stock may be
held or disposed of by such corporation.
Stocx Corporation Law. §§ 18, 19.

§ 18. Alterations or extension of business.

Any stock corporation heretofore or hereafter organized under
any general or special law of this state may alter its certificate of
incorporation so as to include therein any purposes, powers or
provisions which at the time of such’alteration may apply to cor-
porations engaged in a business of the same general character, or
which might be included in the certificate of incorporation of a
corporation organized under any general law of this state for a
business of the same general character, by filing in the manner
provided for the original certificate of incorporation an amended
certificate, executed by the president and secretary, stating the
alteration proposed, and that the same has been duly authorized
by a vote of a majority of the directors and also by a vote of stock-
holders representing at least three-fifths of the capital stock, at
a meeting of the stockholders called for the purpose in the man-
ner provided in section sixty-three of this chapter, and a copy
of the proceedings of such meeting, verified by the affidavit of one
of the directors present thereat, shall be filed with such amended
certificate.

§ 19. Issuance of shares of stock without nominal or par
value.

Upon the formation or the reorganization of any stock corpora-
tion, other than a moneyed corporation, and other than a corpora-
tion under the jurisdiction of any public service commission, the
certificate of incorporation may provide for the issuance of the
shares of stock of such corporation, other than preferred stock
having a preference as to principal, without any nominal or par
value by stating in such certificate:

(1) The number of shares that may be issued by the corpora-
tion, and if any of such shares be preferred stock, the preferences
thereof. If such preferred stock or any part thereof shall have a
preference as to principal, the certificate shall state the amount
of such preferred stock having such preference, the particular
character of such preferences, and the amount of each share
§ 19. Stock Corporation Law.

thereof, which shall be five dollars or some multiple of five dollars,
but not more than one hundred dollars.

(2) The amount of capital with which the corporation will
carry on business, which amount shall be not less than the amount
of preferred stock (if any) authorized to be issued with a prefer-
ence as to principal, and in addition thereto a sum equivalent to
five dollars or to some multiple of five dollars for every share au-
thorized to be issued other than such preferred stock; but in no
event shall the amount of such capital be less than five hundred
dollars.

Such statements in the certificate shall be in lieu of any state-
ments prescribed by the law under which the corporation shall
have been formed or reorganized as to the amount or the maxi-
mum amount of its capital stock or the number of shares into
which the same shall be divided, or of the amount or the par value
of such shares.

Each share of such stock without nominal or par value shall
be equal to every other share of such stock, subject to the prefer-
ences given to the preferred stock if any authorized to be issued.
Every certificate for such shares without nominal or par value
shall have plainly written or printed upon its face the number of
such shares which it represents and the number of such shares
which the corporation is authorized to issue, and no such certifi-
eate shall express any nominal or par value of such shares. The
certificates for preferred shares having a preference as to princi-
pal shall state briefly the amount which the holders of each of
such preferred shares shall be entitled to receive on account of
principal from the surplus assets of the corporation in preference
to the holders of other shares, and shall state briefly any other
rights or preferences given to the holders of such shares.

Such corporation may issue and may sell its authorized shares,
from time to time, for such consideration as may be prescribed in
the certificate of incorporation, or as from time to time may be
fixed by the board of directors pursuant to authority conferred in
Stock Corporation Law. § 20.

such certificate, or if such certificate shall not so provide, then by
the consent of the holders of two-thirds of each class of shares
then outstanding given at a meeting called for that purpose in
such manner as shall be prescribed by the by-laws. Any and all
shares issued as permitted by this section shall be deemed fully
paid and non-assessable and the holder of such shares shall not be
liable to the corporation or to its creditors in respect thereof.
Added by L. 1912, chap. 351 (in effect April 15, 1912).

§ 20. Commencement of business; authorized debts.

No corporation formed pursuant to section nineteen hereof shall
begin to carry on business or shall incur any debts until the amount
of capital stated in its certificate of incorporation shall have been
fully paid in money, or in property taken at its actual value. In
case the amount of capital stated in its certificate of incorpora-
tion shall be increased as herein provided, such corporation shall
not increase the amount of its indebtedness then existing until it
shall have received in money or property the amount of such in-
crease of its stated capital. The directors of the corporation as-
senting to the creation of any debt in violation of this section
shall be liable jointly and severally for such debt; but no action
shall be brought under the foregoing provision of this section un-
less within one year after the debt shall have been incurred the
creditor shall have served upon the director written notice of in-
tention to hold him personally liable for such debt. Any direc-
tor who, because of any such liability under this section, shall
pay any debt of the corporation, shall be subrogated to all rights
of the creditor in respect thereof against the corporation and its
property and also shall be entitled to contribution from all other
directors of the corporation similarly liable for the same debt and
the personal representative of any such director who shall have
died before making such contribution.

No such corporation shall declare any dividend which shall re
duce the amount of its capital below the amount stated in the cer-
§ 1. Srock Corporation Law.

tificate as the amount of capital with which the corporation will
carry on business. In case any such dividend shall be declared,
the directors in whose administration the same shall have been
declared, except those who may have caused their dissent there-
from to be entered upon the minutes of such directors at the time
or who were not present when such action was taken, shall be
liable jointly and severally to such corporation and to the cred-
itors thereof to the full amount of any loss sustained by such
corporation or by its creditors respectively by reason of such
dividend.

Added by L. 1912, chap. 351 (in effect April 15, 1912).

§ 21. Taxation.

The organization tax payable under section one hundred and
eighty of the tax law by any corporation issuing such shares
without designated monetary value shall be at the rate of five
cents on each such share which the corporation is authorized to
issue, and a like tax upon any subsequent increase thereof. The
tax payable under section two hundred and seventy of the tax
law in respect of any sale or agreement of sale or any memorandum
of sale or delivery or transfers of shares or certificates of any
share without designated monetary value hereafter issued by any
such corporation issuing such shares shall be at the rate of two
cents for each and every share of such stock so transferred. The
franchise tax upon any corporation issuing such shares of stock
payable under section one hundred and eighty-two of the tax law
shall be determined by the amount of the gross assets of such
corporation employed in any business within this state, less such
proportion of its liabilities as shall represent the ratio of its gross
assets employed in any business within this state to its entire gross
assets wherever employed in business, and the rate of such
franchise tax shall be fixed in the manner provided in said section
one hundred and eighty-two of the tax law. For this purpose
the rate of dividends shall be computed by dividing the total
Stock Corroration Law. § 22,

amount of dividends which have been paid during the year by the
amount of assets of the corporation upon the first day of such
year.

Added by L. 1912, chap. 351 (in effect April 15, 1912).

§ 22. Increase or reduction of shares or capital.

Any corporation formed or reorganized pursuant to section nine-
teen may amend its certificate of incorporation so as to increase or
to reduce the number of shares which it may issue, or so as to in-
crease or to reduce the amount of its stated capital, by filing, in
the manner provided for the original certificate of incorporation,
a certificate of amendment under seal executed by its president or
a vice-president and by its secretary or its treasurer, stating the
amendment proposed and that the same has been duly authorized
by a vote of a majority of the directors and also by the vote of
the holders of at least three-fifths of the outstanding shares of
each class issued by the corporation, at a meeting of the stock-
holders called for the purpose in the manner provided in section
sixty-three hereof, and by filing with such certificate of amend-
ment a copy of the proceedings of such meeting, made, signed,
verified and acknowledged by the president or a vice-president
and by the secretary or the treasurer of the corporation; but an
amendment cannot be made under this section unless as so
amended the certificate of incorporation could lawfully have been
filed under section nineteen of this chapter. In case of a reduc-
tion of the amount of capital of a corporation, a certificate setting
forth the whole amount of the ascertained debts and liabilities of
the corporation shall be made, signed, verified and acknowledged
by the president or a vice-president and by the secretary or the
treasurer of the corporation and shall be filed with the certificate
of amendment; and such certificate of amendment shall have en-
dorsed thereon the approval of the comptroller to the effect that
as so stated the reduced amount of capital is sufficient for the
proper purposes of the corporation and is in excess of its ascer-
tained debts and liabilities.

Added, by L. 1912, chap. 351 (in effect April 15, 1912).
§ 23. Srocx Corporation Law.

§ 23. Amount of capital stock and of shares within mean-
ing of other laws.

For the purpose of any rule of law or of any statutory pro
vision (other than the foregoing sections nineteen, twenty,
twenty-one and twenty-two) relating to the amount of the capital
stock of a corporation or the amount or par value of its shares, the
aggregate amount of the capital stock of any such corporation
formed pursuant to section nineteen hereof shall be deemed to be
the aggregate amount specified in the certificate or amended cer-
tificate of incorporation or of reorganization as the amount of
capital with which the corporation will carry on business; the
amount or the par value of each share of preferred stock having a
preference as to principal shall be deemed to be the amount thereof
so specified in such certificate or such amended certificate; and the
amount or the par value of each other share shall be deemed to
be an aliquot part of the aggregate capital so specified in such
certificate or in such amended certificate in excess of the specified
amount (if any) of the preferred stock therein authorized to be
issued with a preference as to principal.

Added by L. 1912 chap. 351 (in effect April 15, 1912).
Stock Corporation Law. §§ 25, 26.

ARTICLE 3.

Directors AND OFFICERS.

*

SzecTIon 25. Directors.
26. Change of number of directors.
27. When acts of directors void.
28. Liability of directors for making unauthorized dividends.
29. Liability of directors for loans to stockholders.
30. Officers.
31. Inspectors and their oath.
32. Books to be kept.
33. Stock books of foreign corporations.
34. Annual report to secretary of state.
35. Liability of officers for false certificates, reports or public
notices.

§ 25. Directors.

The directors of every stock corporation shall be chosen at the
time and place fixed by the by-laws of the corporation by a plural-
ity of the votes at such election. Each director shall be a stock-
holder ‘unless otherwise provided in the certificate, or in a by-law
adopted by a stockholders’ meeting. Vacancies in the board of
directors shall be filled in the manner prescribed in the by-laws.
Notice of the time and place of holding any election of directors
shall be given by publication thereof, at least once in each week
for two successive weeks immediately preceding such election, in
a newspaper published in the county where such election is to be
held, and in such other manner as may be prescribed in the by-laws.
Policyholders of an insurance corporation shall be eligible to
election as directors, whether or not they be stockholders. At
least one-fourth in number of the directors of every stock corpora-
tion shall be elected annually.

§ 26. Change of number of directors.

The number of directors of any stock corporation may be
increased or reduced, but not below the minimum number pre-
scribed by law, when the stockholders owning a majority of the
§ 26. Stock Corporation Law.

stock of the corporation shall so determine, at a meeting to be held
at the usual place of meeting of the directors, on two weeks’ notice
in writing to each stockholder of record. Such notice shall be
served personally or by mail, directed to each stockholder at his
last known post-office address. Proof of the service of such notice
shall be filed in the office of the corporation at or before the time
of such meeting. The proceedings of such meeting shall be
entered in the minutes of the corporation and a transcript thereof
verified by the president and secretary of the meeting shall be filed
in the offices where the original certificates of incorporation were
filed. Such increase or reduction may also be effected by unani-
mous consent without a meeting, in which case there shall be filed
in the offices herein specified the unanimous consent of the stock-
holders in writing, signed by them, or their duly authorized
proxies, but no such consent shall be valid unless there is annexed
thereto an affidavit of the custodian of the stock book of such cor-
poration stating that the persons who have signed such consent,
either in person or by proxy, are the holders of record of the
entire capital stock of said corporation issued and outstanding.
If a corporation formed under or subject to the banking law, the
consent of the superintendent of banks, and if an insurance cor-
poration, the consent of the superintendent of insurance, shall be
first obtained to such increase or reduction of the number of
directors. This section shall apply to any stock corporation
whether organized under a general or special law, and the num-
ber of directors may be increased as hereby provided notwithstand-
ing the maximum number of directors now prescribed by law. If
the number of directors be increased, the additional directors
authorized by such increase shall be elected by the votes of a
majority of the directors in office at the time of the increase. If
the original or an amended certificate of incorporation of the
corporation shall provide that the directors shall be divided into
two or more classes, whose terms of office shall respectively expire
at different times, the additional directors shall be divided among
such classes as nearly as practicable in proportion to the respective
numbers of directors constituting each class prior to such increase.

Amended by L. 1909, chap. 421.
Stocx Corporation Law. 8§ 27, 28.

§ 27. When acts of directors void.

When the directors of any corporation for the first year of its
corporate existence shall hold over and continue to be directors
after the first year, because of their neglect or refusal to adopt the
by-laws required to enable the stockholders to hold the annual
election for directors, all their acts and proceedings while so hold-
ing over, done for and in the name of the corporation, designed to
charge upon it any liability or obligation for the services of any
such director, or any officer, or attorney or counsel appointed by
them, and every such liability or obligation shall be held to be
fraudulent and void.

§ 28. Liability of directors for making unauthorized
dividends.

The directors of a stock corporation shall not make dividends,
except from the surplus profits arising from the business of such
corporation, nor divide, withdraw or in any way pay to the stock-
holders or any of them, any part of the capital of such corporation,
or reduce its capital stock, except as authorized by law. In case
of any violation of the provisions of this section, the directors
under whose administration the same may have happened, except
those who may have caused their dissent therefrom to be entered
at large upon the minutes of such directors at the time, or were
not present when the same happened, shall jointly and severally
be liable to such corporation and to the creditors thereof to the
full amount of any loss sustained by such corporation or its
creditors respectively by reason of such withdrawal, division or
reduction. But this section shall not prevent a division and dis-
tribution of the assets of any such corporation remaining after the
payment of all its debts and liabilities upon the dissolution of such
corporation or the expiration of its charter; nor shall it prevent
a corporation from accepting shares of its capital stock in complete
or partial settlement of a debt owing to the corporation, which by
the board of directors shall be deemed to be bad or doubtful.
8§ 29-31. Stock Corroration Law.

§ 29. Liability of directors for loans to stockholders.

No loan of moneys shall be made by any stock corporation,
except a moneyed corporation, or by any officer thereof out of its
funds to any stockholder therein, nor shall any such corporation or
officer discount any note or other evidence of debt, or receive the
same in payment of any instalment or any part thereof due or to
become due on any stock in such corporation, or receive or dis-
count any note, or other evidence of debt, to enable any stock-
holder to withdraw any part of the money paid in by him on his
stock. In case of the violation of any provision of this section,
the officers or directors making such loan, or assenting thereto,
or receiving or discounting such notes or other evidences of debt,
shall, jointly and severally, be personally liable to the extent of
such loan and interest, for all the debts of the corporation con-
tracted before the repayment of the sum loaned, and to the full
amount of the notes or other evidences of debt so received or
discounted, with interest from the time such liability acerued.

§ 30. Officers.

The directors of a stock corporation may appoint from their
number a president, and may appoint a secretary, treasurer, and
other officers, agents and employees, who shall respectively have
such powers and perform such duties in the management of the
property and affairs of the corporation, subject to the control of
the directors, as may be prescribed by them or in the by-laws.
The directors may require any such officer, agent or employee to
give security for the faithful performance of his duties, and may
remove him at pleasure. The policyholders of an insurance cor-
poration shall be eligible to election or appointment as its officers.

§ 31. Inspectors and their oath.

The inspectors of election of every stock corporation shall be
appointed in the manner prescribed in the by-laws, but the inspec-
tors of the first election of directors and of all previous meetings
of the stockholders shall be appointed by the board of directors
named in the certificate of incorporation. No director or officer
of a moneyed corporation shall be eligible to election or appoint-
Srock Corporation Law. § 32.

ment as inspector. Each inspector shall be entitled to a reason-
able compensation for his services, to be paid by the corporation,
and if any inspector shall refuse to serve, or neglect ‘to attend at
the election, or his office become vacant, the meeting may appoint
an inspector in his place unless the by-laws otherwise provide.
The inspectors appointed to act at any meeting of the stockholders
shall, before entering upon the discharge of their duties, be sworn
to faithfully execute the duties of inspector at such meeting with
strict impartiality, and according to the best of their ability, and
the oath so taken shall be subscribed by them, and immediately
filed in the office of the clerk of the county in which such election
or meeting shall be held, with a certificate of the result of the vote
taken thereat.

§ 32. Books to be kept.

Every stock corporation shall keep at its office correct books of
account of all its business and transactions, and a book to be known
as the stock book, containing the names, alphabetically arranged,
of all persons who are stockholders of the corporation, showing
their places of residence, the number of shares of stock held by
them respectively, the time when they respectively became the
owners thereof, and the amount paid thereon. The stock book of
every such corporation shall be open daily, during at least three
business hours, for the inspection of its stockholders and judgment
creditors, who may make extracts therefrom. No transfer of
stock shall be valid as against the corporation, its stockholders and
creditors for any purpose except to render the transferee liable
for the debts of the corporation to the extent provided for in this
chapter, until it shall have been entered in such book as required
by this section, by an entry showing from and to whom trans-
ferred. The stock book of every such corporation and the books
of account of every bank shall be presumptive evidence of the facts
therein so stated in favor of the plaintiff, in any action or proceed-
ing against such corporation or any of its officers, directors or
stockholders. Every corporation that shall neglect or refuse to
keep or cause to be kept such books, or to keep any book open for
inspection as herein required, shall forfeit to the people the sum of
§§ 33, 34. Stock Corporation Law.

fifty dollars for every day it shall so neglect or refuse. If any
officer or agent of any such corporation shall wilfully neglect or
refuse to make any proper entry in such book or books, or shall
neglect or refuse to exhibit the same, or to allow them to be in-
spected and extracts taken therefrom as provided in this section,
the corporation and such officer or agent shall each forfeit and pay
to the party injured a penalty of fifty dollars for every such neglect
or refusal, and all damages resulting to him therefrom.

§ 33. Stock books of foreign corporations.

Every foreign stock corporation having an office for the transac
tion of business in this state, except moneyed and railroad corpo-
rations, shall keep therein a book to be known as a stock book,
containing the names, alphabetically arranged, of all persons
who are stockholders of the corporation, showing their places of
residence, the number of shares of stock held by them respectively,
the time when they respectively became the owners thereof, and
the amount paid thereon. Such stock. book shall be open daily,
during business hours, for the inspection of its stockholders and
judgment creditors, and any officer of the state authorized by
law to investigate the affairs of any such corporation. If any
such foreign stock corporation has in this state a transfer agent,
whether such agent shall be a corporation or a natural person,
such stock book may be deposited in the office of such agent and
shall be open to inspection at all times during the usual hours of
transacting business, to any stockholder, judgment creditor or
officer of the state authorized by law to investigate the affairs of
such corporation. For any refusal to allow such book to be
inspected, such corporation and the officer or agent so refusing
shall each forfeit the sum of two hundred and fifty dollars to be
recovered by the person to whom such refusal was made.

§ 34. Annual report to secretary of state.

Every domestic stock corporation and every foreign stock cor-
poration doing business within this state, except moneyed and
railroad corporations, shall annually, during the month of Janu-
ary, or, if doing business without the United States, before the
first day of May, may make a report as of the first day of Janu-
ary, which will state:
Srock Corporation Law. § 35,

1. The amount of its capital stock, and the proportion actually
issued.

2. The amount of its debts or an amount which they do not
exceed. ;

3. The amount of its assets or an amount which its assets at
least equal.

4. The names and addresses of all the directors and officers of
the company, and in the case of a foreign corporation, the name
also of the person designated in the manner prescribed by the
code of civil procedure, as a person upon whom process against
the corporation may be served within this state.

Such report shall be made by the president or a vice-president
or the treasurer or a secretary of the corporation and shall be
filed in the office of the secretary of state. If such report be not
so made and filed, any such officer who shall thereafter neglect
or refuse to make and to file such report, within ten days after
written request so to do shall have been made by a creditor or
by a stockholder of the corporation, shall forfeit to the people the
sum of fifty dollars for evety day he shall so neglect or refuse.

§ 35. Liability of officers for false certificates, reports or
public notices.

If any certificate or report made or public notice given by the
officers or directors of a stock corporation shall be false in any
material representation, the officers and directors signing the same
shall jointly and severally be personally liable to any person who
has become a creditor or stockholder of the corporation upon the
faith of any such certificate, report, notice or any material repre-
sentation therein to the amount of the debt contracted upon the
faith thereof if not paid when due, or the damage sustained by
any purchaser of or subscriber to its stock upon the faith thereof.
The liability imposed by this section shall exist in all cases where
the contents of any such certificate, report or notice or of any
material representation therein shall have been communicated
either directly or indirectly to the person so becoming a creditor
or stockholder and be became such creditor or stockholder upon
the faith thereof. No action can be maintained for a cause of
§§ 50, 51. Stock Corporation Law.

action created by this section unless brought within two years from
‘the time the certificate, report or public notice shall have been
made or given by the officers or directors of such corporation.

ARTICLE 4.

Stock AND STOCKHOLDERS.

Section 50. Issue and transfers of stock.
51. Transfers of stock by stockholder indebted to corporation.
52. Purchase of stock of other corporations.
53. Subscriptions to stock.
54. Time of payment of subscriptions to stock.
55. Consideration for issue of stock and bonds.
56. Liabilities of stockholders.
57. Liabilities of stockholders to laborers, servants or employees.
58. Non-liability in certain cases.
59. Limitation of stockholder’s liability.
60. Partly paid stock.
61. Preferred and common stock.
62. Increase or reduction of capital stock.
63. Notice of meeting to increase or reduce capital stock.
64. Conduct of such meeting; certificate of increase or reduction.
65. Change in par value of shares.
66. Prohibited transfers to officers or stockholders.
certificate of stock.
67. Application to court to order issue of new in
68. Order of court upon such application.

69. Financial statement to stockholders.
70. Liabilities of officers, directors and stockholders of foreign cor-

mint

place of lost

porations.

§ 50. Issue and transfers of stock.

The stock of every stock corporation shall be represented by
certificates prepared by the directors and signed by the president
or vice-president and secretary OF treasurer and sealed with the
seal of the corporation, and shall be transferable in the manner
prescribed in this chapter and in the by-laws. No share shall be
transferable until all previous calls thereon shall have been fully
paid in.

§ 51. Transfers of stock by stockholder indebted to

corporation.

Tf a stockholder shall be indebted to the corporation, the diree-

tors may refuse to consent to 4 transfer of-his stock until such
Stock Corporation Law. §§ 52, 53.

indebtedness is paid, provided a copy of this section is written or
printed upon the certificate of stock.

§ 52. Purchase of stock of other corporations.

Any stock corporation, domestic or foreign, now existing or
hereafter organized, except moneyed corporations, may purchase,
’ acquire, hold and dispose of the stocks, bonds and other evidences
of indebtedness of any corporation, domestic or foreign, and issue
in exchange therefor its stock, bonds or other obligations if author-
ized so to do by a provision in the certificate of incorporation of
such stock corporation, or in any certificate amendatory thereof
or supplementary thereto, filed in pursuance of law, or if the cor-
poration whose stock is so purchased, acquired, held or disposed
of, is engaged in a business similar to that of such stock corpora-
tion, or engaged in the manufacture, use or sale of the property,
or in the construction or operation of works necessary or useful
in the business of such stock corporation, or in which or in con-
nection with which the manufactured articles, product or prop-
erty of such stock corporation are or may be used, or is a
corporation with which such stock corporation is or may be author-
ized to consolidate. When any such corporation shall be a stock-
holder in any other corporation, as herein provided, its president
or other officers shall be eligible to the office of director of such
corporation, the same as if they were individually stockholders
therein and the corporation holding such stock shall possess and
exercise in respect thereof, all the rights, powers and privileges of
individual owners or holders of such stock.

§ 53. Subscriptions to stock.

If the whole capital stock shall not have been subscribed at the
time of filing the certificate of incorporation, the directors named
in the certificate may open books of subscription to fill up the
capital stock in such places and after giving such notices as they
may deem expedient, and may continue to receive subscriptions
until the whole capital stock is subscribed. At the time of sub-
scribing, every subscriber, whose subscription is payable in money,
shall pay to the directors ten per centum upon the amount sub
scribed by him in cash, and no such subscription shall be received
or taken without such payment.
§§ 54, 55. Stock Corporation Law.

§ 54. Time of payment of subscriptions to stock.

Subscriptions to the capital stock of a corporation shall be
paid at such times and in such instalments as the board of
directors may by resolution require. If default shall be made
in the payment of any instalment as required by such resolution,
the board may declare the stock and all previous payments thereon
forfeited for the use of the corporation, after the expiration of
sixty days from the service on the defaulting stockholder, per-
sonally, or by mail directed to him at his last-known post-office
address, of a written notice requiring him to make payment within
sixty days from the service of the notice at a place specified
therein, and stating that, in case of failure to do so, his stock
and all previous payments thereon will be forfeited for the use
of the corporation.

Such stock, if forfeited, may be reissued or subscriptions there-
for may be received as in the case of stock not issued or subscribed
for. If not sold for its par value or subscribed for within six
months after such forfeiture, it shall be canceled and deducted
from the amount of the capital stock. If by such cancellation,
the amount of the capital stock is reduced below the minimum
required by law, the capital stock shall be increased to the
required amount within three months thereafter or an action may
be brought or proceedings instituted to close up the business of the
corporation as in the case of an insolvent corporation. If a re
ceiver of the assets of the corporation has been appointed, ail
unpaid subscriptions to the stock shall be paid at such times and —
in such instalments as the receiver or the court may direct.

§ 55. Consideration for issue of stock and bonds.

No corporation shall issue either stock or bonds except for
money, labor done or property actually received for the use and
lawful purposes of such corporation. Any corporation may pur-
chase any property authorized by its certificate of incorporation,
or necessary for the use and lawful purposes of such corporation,
and may issue stock to the amount of the value thereof in pay-
ment therefor, and the stock so issued shall be full paid stock
and not liable to any further call, neither shall the holder thereof
Stock Corporation Law. §§ 56, 57.

be liable for any further payment under any of the provisions of
this chapter; and in the absence of fraud in the transaction the
judgment of the directors as to the value of the property pur-
chased shall be conclusive; and in all statements and reports of the
corporation, by law required to be published or filed, this stock
shall not be stated or reported as being issued for cash paid to the
corporation, but shall be reported as issued for property purchased,

§ 56. Liabilities of stockholders.

Every holder of capital stock not fully paid, in any stock corpo
ration, shall be personally liable to its creditors, to an amount
equal to the amount unpaid on the stock held by him for debts of
the corporation contracted while such stock was held by him. As
to existing corporations the liability imposed by this section shall
be in lieu of the liability imposed upon stockholders of any exist-
ing corporation, under any general or special law, excepting laws
relating to moneyed corporations, and corporations and associa-
tions for banking purposes, on account of any indebtedness here-
after contracted or any stock hereafter issued; but nothing in this
section contained shall create or increase any liability of stock-
holders of any existing corporation under any general or special
law.

§ 57. Liabilities of stockholders to laborers, servants or
employees.

The stockholders of every stock corporation shall jointly and
severally be personally liable for all debts due and owing to any
of its laborers, servants or employees other than contractors, for
services performed by them for such corporation. Before such
laborer, servant or employee shall charge such stockholder for
such services, he shall give him notice in writing, within thirty
days after the termination of such services, that he intends to
hold him liable, and shall commence an action therefor within
thirty days after the return of an execution unsatisfied against the
corporation upon a judgment recovered against it for services.
§§ 58-60. Stock Corporation Law.

§ 58. Non-liability in certain cases.

No person holding stock in any corporation as collateral security,
or as executor, administrator, guardian or trustee, unless he shall
have voluntarily invested the trust funds in such stock, shall be
personally subject to liability as a stockholder; but the person
pledging such stock shall be considered the holder thereof and shall
be liable as stockholder, and the estates and funds in the hands of
such executor, administrator, guardian or trustee shall be liable in
the like manner and to the same extent as the testator or intestate,
or the ward or person interested in such trust fund would have
been, if he had been living and competent to act and held the same
stock in his own name, unless it appears that such executor, admin-
istrator, guardian or trustee voluntarily invested the trust funds
in such stocks, in which case he shall be personally liable as a
stockholder.

§ 59. Limitation of stockholder’s liability.

No action shall be brought against a stockholder for any debt of
the corporation until judgment therefor has been recovered against
the corporation, and an execution thereon has been returned unsat-
isfied in whole or in part, and the amount due on such execution
shall be the amount recoverable, with costs against the stockholder.
No stockholder shall be personally liable for any debt of the cor-
poration not payable within two years from the time it is con-
tracted, nor unless an action for its collection shall be brought
against the corporation within two years after the debt becomes
due; and no action shall be brought against a stockholder after he
shall have ceased to be a stockholder, for any debt of the corpora-
tion, unless brought within two years from the time he shall have
ceased to be a stockholder.

§ 60. Partly paid stock.

The original or the amended certificate of incorporation of any
stock corporation may contain a provision expressly authorizing
the issue of the whole or of any part of the capital stock as partly
paid stock, subject to calls thereon until the whole thereof shall
have been paid in. In such case, if in or upon the certificate
Stock Corporation Law. §§ 61, 62.

issued to represent such stock, the amount paid thereon shall be
specified, the holder thereof shall not be subject to any liability
except for the payment to the corporation of the amount remaining
unpaid upon such stock, and for the payment of indebtedness
to employees pursuant to sections fifty-seven, fifty-eight and fifty-
nine of this chapter; and in any such case, the corporation may
declare and may pay dividends upon the basis of the amount
actually paid upon the respective shares of stock instead of upon
the par value thereof.

§ 61. Preferred and common stock.

Every domestic stock corporation may issue preferred stock and
common stock and different classes of preferred stock, if the cer-
tificate of incorporation so provides, or by the consent of the hold-
ers of record of two-thirds of the capital stock, given at a meeting
ealled for that purpose upon notice such as is required for the
annual meeting of the corporation. A certificate of the proceed-
ings of such meeting, signed and sworn to by the president or a
vice-president, and by the secretary or assistant secretary, of the
corporation, shall be filed and recorded in the offices where the
original certificate of incorporation of such corporation was filed
and received; and the corporation may, upon the written request
of the holders of any preferred stock, by a two-thirds vote of its
directors, exchange the same for common stock, and issue cer-
tificates for common stock therefor, upon such valuation as may
have been agreed upon in the certificate of organization of such
corporation, or the issue of such preferred stock, or share for
share, but the total amount of such capital stock shall not be
increased thereby.

§ 62. Increase or reduction of capital stock.

Any domestic corporation may increase or reduce its capital
stock in the manner herein provided, but not above the maximum
or below the minimum, if any, prescribed by general law governing
corporations formed for similar purposes. If increased, the
holders of the additional stock issued shall be subject to the same
liabilities with respect thereto as are provided by law in relation
8§ 638, 64. Stock Corporation Law.

to the original capital; if reduced, the amount of its debts and
liabilities shall not exceed the amount of its reduced capital,
unless an insurance corporation, in which case the amount of its
debts and liabilities shall not exceed the amount of its reduced
capital and other assets. The owner of any stock shall not be
relieved from any liability existing prior to the reduction of the
eapital stock of any stock corporation. If a banking corporation,
whether the capital be increased or reduced, its assets shall at
least be equal to its debts and liabilities and the capital stock, as
increased or reduced. A domestic railroad corporation may in-
crease or reduce its capital stock in the manner herein provided,
notwithstanding any provision contained herein, or in any genera]
or special law fixing or limiting the amount of capital stock which
may be issued by it.

§ 63. Notice of meeting to increase or reduce capital stock.

Every such increase or reduction must be authorized either by
the unanimous consent of the stockholders, expressed in writing
and filed in the office of the secretary of state and in the office of
the clerk of the county in which the principal business office of
the corporation is located, or by a vote of the stockholders owning
at least a majority of the stock of the corporation, taken at a
meeting of the stockholders specially called for that purpose in the
manner provided by law or by the by-laws. Notice of the meeting,
stating the time, place and object, and the amount of the increase
or reduction proposed, signed by the president or a vice-president
and the secretary, shall be published once a week, for at least two
successive weeks, in a newspaper in the county where its principal
business office is located, if any is published therein, and a copy of
such notice shall be duly mailed to each stockholder or member at
his last-known post-office address at least two weeks before the
meeting or shall be personally served on him at least five days
before the meeting.

§ 64. Conduct of such meeting; certificate of increase or
reduction.

If, at the time and place specified in the notice, the stockholders
shall appear in person or by proxy in numbers representing at
Stock Corporation Law. § 64,

least a majority of all the shares of stock, they shall organize by
choosing from their number a chairman and secretary, and take
a vote of those present in person or by proxy, and if a sufficient
number of votes shall be given in favor of such increase or reduc-
tion, or if the same shall have been authorized by the unanimous
consent of stockholders expressed in writing signed by them or
their duly authorized proxies, a certificate of the proceedings show-
ing a compliance with the provisions of this chapter, the amount
of capital theretofore authorized, and the proportion thereof ac-
tually issued, and the amount of the increased or reduced capital
stock, and in case of the reduction of capital stock the whole
amount of the ascertained debts and liabilities of the corporation,
shall be made, signed, verified and acknowledged by the chairman
and secretary of the meeting, and filed in the office of the clerk
of the county where its principal place of business shall be located,
a duplicate thereof in the office of the secretary of state, and, if
a corporation formed under or subject to the banking law, a tripli-
cate thereof in the office of the superintendent of banks, and if an
insurance corporation, a triplicate thereof in the office of the
superintendent of insurance. In case of a reduction of
the capital stock, except of a railroad corporation or a
moneyed corporation, such certificate or consent hereinafter
provided for shall have indorsed thereon the approval of the
comptroller, to the effect that the reduced capital is sufficient for
the proper purposes of the corporation, and is in excess of its
ascertained debts and liabilities; and in case of the increase or
reduction of the capital stock of a railroad corporation or a
moneyed corporation, the certificate or the unanimous consent of
stockholders, as the case may be, shall have indorsed thereon the
approval of the public service commission having jurisdiction
thereof, if a railroad corporation; of the superintendent of banks,
if a corporation formed under or subject to the banking law, and
of the superintendent of insurance, if an insurance corporation.
When the certificate herein provided for, or the unanimous consent
of stockholders in writing, signed by them or their duly author-
ized proxies, approved as aforesaid, has been filed, the capital stock
of such corporation shall be increased or reduced, as the case may
be, to the amount specified in such certificate or consent. The
§§ 65, 66. Stock Corporation Law.

proceedings of the meeting at which such increase or reduction is
voted, or, if such increase or reduction shall have been authorized
by unanimous consent without a meeting, then a copy of such con-
sent shall be entered upon the minutes of the corporation. If the
capital stock is reduced, the amount of capital over and above the
amount of the reduced capital shall, if the meeting or consents so
determine or provide, be returned to the stockholders pro rata, at
such times and in such manner as the directors shall determine,
except in the case of the reduction of the capital stock of an insur-
ance corporation, as an alternative to make good an existing
impairment.
Amended by L. 1913, chap. 305.

§ 65. Change in par value of shares.

The number of shares into which the capital stock of any stock
corporation is divided may be increased or reduced by a two-thirds
vote of all stock duly represented at-a meeting held and conducted
in like manner, and upon filing a like certificate, as required for
the increase or reduction of its capital stock. If such increase or
reduction of the number of shares be so authorized, the corpora-
tion shall issue to each stockholder certificates for as many shares
of the new stock as equal in par value the shares of the old stock
held by him, upon surrender and cancellation of such old stock.
This section does not authorize the increase or reduction of the
capital stock of such corporation.

§ 66. Prohibited transfers to officers or stockholders.

No corporation which shall have refused to pay any of its notes
or other obligations, when due, in lawful money of the United
States, nor any of its officers or directors, shall transfer any of its
property to any of its officers, directors or stockholders, directly
or indirectly, for the payment of any debt, or upon any other
consideration than the full value of the property paid in cash.
No conveyance, assignment or transfer of any property of any
such corporation by it or by any officer, director or stockholder
thereof, nor any payment made, judgment suffered, lien created
or security given by it or by any officer, director or stockholder
Stock Corroration Law. § 67.

when the corporation is insolvent or its insolvency is imminent,
with the intent of giving a preference to any particular creditor
over other creditors of the corporation, shall be valid, except that
laborers’ wages for services shall be preferred claims and be enti-
tled to payment before any other creditors out of the corporation
assets in excess of valid prior liens or incumbrances. No corpora-
tion formed under or subject to the banking, insurance or rail-
road law shall make any assignment in contemplation of insolv-
ency. Every person receiving by means of any such prohib-
ited act or deed any property of the corporation shall be bound
to account therefor to its creditors or stockholders or other trus-
tees. No stockholder of any such corporation shall make any
transfer or assignment of his stock therein to any person in con-
templation of its insolvency. Every transfer or assignment or
other act done in violation of the foregoing provisions of this
section shall be void. No conveyance, assignment or transfer of
any property of a corporation formed under or subject to the
banking law, exceeding in value one thousand dollars, shall be
made by such corporation, or by any officer or director thereof,
unless authorized by previous resolution of its board of directors,
except promissory notes or other evidences of debt issued or
received by the officers of the corporation in the transaction of
its ordinary business, and except payments in specie or other
current money or in bank bills made by such officers. No such
conveyance, assignment or transfer shall be void in the hands of
a purchaser for a valuable consideration without notice. Every
director or officer of a corporation who shall violate or be concerned-
in violating any provisions of this section, shall be personally
liable to the creditors and stockholders of the corporation of which
he shall be director or an officer to the full extent of any
loss they may respectively sustain by such violation.

§ 67. Application to court to order issue of new in place of
lost certificate of stock.

The owner of a lost or destroyed certificate of stock, if the cor-
poration shall refuse to issue a new certificate in place thereof,
may apply to the supreme court, at any special term held in the
§ 68. Stock Corporation Law.

district where he resides, or in which the principal business office
of the corporation is located, for an order requiring the corpora-
tion to show cause why it should not be required to issue a new
certificate in place of the one lost or destroyed. The application ,
shall be by petition, duly verified by the owner, stating the name
of the corporation, the number and date of the certificate, if known,
or if it can be ascertained by the petitioner; the number of shares
named therein, to whom issued, and as particular a statement of
the circumstances attending such loss or destruction as the peti-
tioner can give. Upon the presentation of the petition the court
shall make an order requiring the corporation to show cause, at a
time and place therein mentioned, why it should not issue a new
certificate of stock in place of the one described in the petition.
A copy of the petition and order shall be served on the president
or other head of the corporation, or on the secretary or treasurer
thereof, personally, at least ten days before the time for showing
cause.

§ 68. Order of court upon such application.

Upon the return of the order, with proof of due service thereof,
the court shall, in a summary manner, and in such mode as it may
deem advisable, inquire into the truth of the facts stated in the
petition, and hear the proofs and allegations of the parties in
regard thereto, and if satisfied that the petitioner is the lawful
owner of the number of shares, or any part thereof, described in
the petition, and that the certificate therefor has been lost or
destroyed, and can not after due diligence be found, and that no
sufficient cause has been shown why a new certificate should not
be issued, it shall make an order requiring the corporation, within
such time as shall be therein designated, to issue and deliver to
the petitioner a new certificate for the number of shares specified
in the order, upon depositing such security, or filing a bond in
such form and with such sureties as to the court shall appear suf-
ficient to indemnify any person other than the petitioner who
shall thereafter be found to be the lawful owner of the certificate
lost or destroyed; but such provision requiring security to be de-
posited or bond filed is to be construed as excluding an application
Srock Corporation Law. § 69.

made by a domestic municipal corporation or by a public officer
in behalf of such corporation; and the court may direct the pub-
lication of such notice, either before or after making such order
as it shall deem proper. Any person claiming any rights under
the certificates alleged to have been lost or destroyed shall have
recourse to such indemnity, but in any application under the pro-
visions of this chapter, in which a domestic municipal corpora-
tion or a public officer in behalf of such corporation, shall be by
the foregoing provisions of this section excused from depositing
security or filing a bond, such municipal corporation shall be liable
for all damages that may be sustained by any person, in the same
case and to the same extent as sureties to a bond or undertaking
would have been, if such a bond or undertaking had been filed;
and the corporation issuing such certificate shall be discharged
from all liability to such person upon compliance with such order;
and obedience to the order may be enforced by attachment against
the officer or officers of the corporation on proof of his or their
refusal to comply with it.

§ 69. Financial statement to stockholders.

Stockholders owning five per centum of the capital stock of any
corporation other than a moneyed corporation, not exceeding one
hundred thousand dollars, or three per centum where it exceeds
one hundred thousand dollars, may make a written request to the
treasurer or chief fiscal officer thereof, for a statement of its
affairs, under oath, embracing a particular account of all its
assets and liabilities, and the treasurer shall make such statement
and deliver it to the person presenting the request within thirty
days thereafter, and keep on file for twelve months thereafter a
copy of such statement, which shall at all times during business
hours be exhibited to any stockholder demanding an examination
thereof; but the treasurer or such chief fiscal officer shall not be
required to deliver more than one such statement in any one year.
The supreme court, or any justice thereof, may upon application,
for good cause shown, extend the time for making and delivering
such certificate. For every neglect or refusal of the treasurer or
other chief fiscal officer thereof to comply with the provisions of
a”

§§ 70-81. Stock Corporation Law.

this section he shall forfeit and pay to the person making such
request the sum of fifty dollars, and the further sum of ten
dollars for every twenty-four hours thereafter until such state-
ment shall be furnished.

§ 70. Liabilities of officers, directors and stockholders of
foreign corporations.

Except as otherwise provided in this chapter the officers, direc
tors and stockholders of a foreign stock corporation transacting
business in this state, except moneyed and railroad corporations,
shall be liable under the provisions of this chapter, in the same
manner and to the same extent as the officers, directors and stock-
holders of a domestic corporation, for:

1. The making of unauthorized dividends;

2. Unlawful loans to stockholders;

3. Making false certificates, reports or public notices ;

4. An illegal transfer of the stock and property of such cor-
poration, when it is insolvent or its insolvency is threatened ;

5. The failure to file an annual report.

Such liabilities may be enforced in the courts of this state, in
the same manner as similar liabilities imposed by law upon the
officers, directors and stockholders of domestic corporations.

ARTICLE 5.

Laws REPEALED; WHEN To Take EFFECT.

SEcTION 80. Laws repealed.
81. When to take effect.

§ 80. Laws repealed.
Of the laws enumerated in the schedule hereto annexed, that
portion specified in the last column is hereby repealed.

§ 81. When to take effect.
This chapter shall take effect immediately.
GENERAL INDEX.

(References are to sections.)

Acceptance:

of candidates, to be filed with certificate of nomination............ 94
Accidents:

Insurance against .......cceecvccrrccecscconncccocrecsccsecvecesse IO

standard provisions. . . .....- eee eee eee eee cere tee eet cteeeseecees 107
Accident Insurance:

Open is TOR wey so xaeeandw et hae «Morera dec 84 shORe REY Sg 864 canes Dla
Accident Insurance Corporations (see Life, Health and Casualty Insurance

Corporations) :

incorporation Of sisi csicnnseniei seers eeead cee eae saneaeaNerenis oer 70

Assets Of 2.2 aciecie disk ececeiie ss 345 te Reweedeccaaeeeeieaet ies 86

standard proviSions. . . 1... cece cece eee cece e eee teen ence tee e eens 107

discriminations prohibited .. 0.06... ccc ce eee eee 108
Accountants:

at election, how appointed.............+. errr reer rrr ree ie sa # Sara 94

to determine verification of ballots...........cccccccceeeceensscneee 94
Accumulation Basis:

fraternal benefit societies . 2 21... .... cece e eens 2438
Actions: 4

against foreign insurance corporation, service of process on superin-

Pendent. s osise 25 vision sagisie ido. 5 0c hes Mh aerroeenwe s Hed a ree ORE 29

effect of removal to federal courts.......... cscs sccceeeeeceeececere 30
Accumulation:

of contingency Preserve siiicsssssiccnecwews sos Veevneeeerseasaeesvenewes 87

of reserve or emergency fund by co-operative company............ 205
Actuary:

to be appointed by receiver.............cceeee cece eec rec senevencees 77

investigation DY .......ccececeeeeeeceeccecereees wees ciaaeeeeeextes 7

TEPONE: OF vise es ceaoc asin aig bc eeinieraierere alas rave Mtaten(ain: wieiiei oR Hie BStveatacaen onde tiers 77

to make annual investigation of insolvent corporation.............. 79

appointment of, by receiver..........ccccsecece reece ene esceeesenes ‘gl

COMpeNsAtion OF. s.sernwrere'es sc cmesnewsicr ess snaWerwiedie v6 os wadieeiemawic as _ 81
Administration Ticket:

GERNILION OF oo. sine siiscacaiie oyauig vaeU waeavuenaled Haeed ieee Veadamea vee 04

Advance premiums:
fire insurance companies (see Co-operative Fire Insurance Corporations) :

limitation on business............sseeeee eee dieaege es SEN eats eye 262
subject of insurance Dy......... ccc cece e cece ene e ence teen eee teeenee 267
expense of managment. . ....... see eeee cet e sent e center eee enseetaee 267
Wability to be carried... ...... ccc cece cece cence renee nett ee eeenes 267
OUNDIUS ses bas eet eees GG as Venwee at Ss oe ENSUE AN eles SSeS 267
GeCIENGY.. 6 cos cede ee eRe Ghee se eES Ie e EC EY Se eee Rae eS 267

WEINGUTANCE “OF IBM, se easiaie u win wheres eco ecs ws wi oeieces tists ip See alsin ere 267
GeneraL [npEx.

(References are to sections.)

Advertisement:
deceptive statements by insurance corporations........++-+--++++++ 4
by insurance corporations, contents of..... Ss eistazpratavancte wioiearmsaresere sven 4
contents of, by insurance companieS......-... essere eres eee eee 4
Affidavit:
to be affixed with bonds and siertgazéa deposited. .......... eeu aire: ol.
of agent as to notice of premium.......... sees cece teen een erees g

of notices of assessment of fraternal beneficiary society.............. 2d

Agents:
not to transact business for foreign corporation until certificate of
authority is filed.......... gicblal adn batcacesene fies KEES RES Ss 31, 149
fiduciary capacity Of............ ee cece ee eenee egiaihearers eevwlic@ericeva: 8
shall aid in the examination of corporation..... seaweeds eGyeinogrnse a
shall state certain matters in advertisements.........+sseeeeeceeeeee 4
definition of ...........eeeeeeee ice eee Se meeeEEs Se REESIOAN 4
for foreign corporation, certificate of authority of................. 5
penalty for improper acts of...........+..5+5- Saeestarsys iat eibciavaveliogs caren 6
not to act for unauthorized corporations............ eaten astra ererene . 6
not to transact business under fictitious name......... eee Gimerwane » 6
not to be agent of insured.............. ese neeeer eee enees ec uuartalyies 5
inducing person to surrender insurance..........0..seceeeeeeeceeees 6
PLOSENTS! Dy: sities tincirdgn downed ak gatas: Sawant sa daenngare mae mnm aed weet alate 6
can make only contract expressed in policy.........ccceeeeeecceeees &
certificate of authority Of ..... 0... ccc cee cece cece eee eee cece ene ncees 9
certificate of authority of, must be renewed annually................ §
of industrial and prudential companies............ aoa ve vee a onestohlaees §
certificate of authority of, may be revoked...........ccecccucn evens g
for health or accident insurance............ ccc ccc eee eee eens 91
not to omit name of policyholder from list............... aya evan thiohadeindn §
not to advance money for elections..........ccccceccscnccccccsesee §
not to solicit votes during working hours.......... ao0 Se wee ine . 9
of life insurance corporations, salaries of........... 0... cece eee cees §
license to, in certain cases....:...... oemey vate See BR Ati eral teavcnnabio ‘
not to act for foreign fire corporation until payment of taxes........ é
of foreign fire corporation, undertaking of...............ececeece cee
neglect to pay tax......... HARE a Hii aes Ni sislersltawe OME Tae E ES ¢
certificate of authority......... cece cece c cece cee cc ces ceueccevceus ik
of fire insurance companies to report consideration.................. iv
penalties for violation, provisions of................0c.0000. 144-147, 1:
not to receive excessive rate for insurance upon canals........ wees 1¢
penalty for receiving excessive rates...... Piciess carn nan weeeeeeceesnes Li
of marine corporations outside of United States.................0.. . it
power of title guaranty companies to act as............ ee hi
Amendment:

eRe eR csicussdiesene Sesisieiiadsly e66 sei cseateee Ll
GENERAL INDEX.

(References are to sections.)
Amount of risk:

that may be assumed............ cece e cece eee cece eee ccecntenseece 24
Annual Election:
town co-operative corporation.............cccccesececcucccceceeves 272
Annual Meeting:
of co-operative or assessment corporation..............0ecceeee coos 209
of governing body of fraternal society................cecceeeceecees 238
of company to insure domestic animals.................0.eceeeecuce 251
of co-operative fire insurance corporations............0.ceseeceeeeee 264
Annual Report:
fee. Por MAG ii acicinwiosai eee Daa wearer eiesulge Sadao eben wanngess 6
of certain corporations............ 00... cee cc cece cece eceeeeneeeeens 44
forms of, to be furnished by superintendent...............0000e0e0: 45
to exhibit amount of capital notes.............. cee cece eee eee eee ees 45
of foreign insurance company...............cceecee cece tee ceeeeees 45
penalty for failure to file............ cece cece cece ence cece ceeeenes 45
Of Superintendent: occ caec cnenelorainanie wir winiawaw~eaeeaviga nanan 46
of registered policies and annuity bonds..............-.....eeeeees 74
of life insurance corporation..............0. sce cece eee eee e eee enes 103
of life insurance corporation, contents Of.............cecseeeeeeees 103
of foreign mutual fire insurance corporation.................cceeeuee 1494
by marine corporations, of agencies outside of United States........ 161
fraternal beneficiary society, contents of...........0. cece cee eee ee eee 242
of fraternal beneficiary society..........cecc esc c cece e eee e reece eens 242
of company to insure domestic animals...............eeeeeeeeeees 252
of town insurance corporation. ............ 0 cece eee eee eee eee eens 344
OF States Mire: Marshal ieee si wiser aver sp ser occas ios ercie coin look: hleaadeSatanetieameinanare 371
Annuities:
certain, how ‘valued s isc ccc ccc so crdeswions ye eeomesiodennaienntnen aes 84
provisions concerning contract for insurance and annuity............. 88
deferred, non-payment of premiums................ 0c cece eee nee 88
Annuity Bonds: c
special deposit to SeCUTe......... ce cece cee ence eee ee ee eeeeenenes 73
annual report Of...........seeeeeeeeeeee sialeee dpnia asa aterardr eb mie eaeanys ware 74
liability of State to pay.........cseeec cece cecce sere tent eeceneenes 74
Fegistration Of ....ccstee cedeeeeare es staeensaweee ces eee eeeemeRee ey 75
payment Of 2.0... cc ccc cece cece recente ene e ease renseesseeeetoaes 17
Application:
Of article Tesscicaaesonsaysee curated inst yer eee erica s ere gregeeae et 57
of other sections, fraternal beneficiary society.............0eeseeeeee 248

Articles of Incorporation (see Incorporation).
Articles of Association:

Of Lloyds, to be filed........ 0c cece cece eee cee cence teeter eeteees 57

of Lloyds, contents Of .......... ccc ecc ence cree econ ne eteeeeneeaee 57
Assessment:

of corporations to defray expenses of insurance department.......... 8

on premium notes by receiver..... cs cscs cere eee e eee e et eeeneteeeene 61
General InpeEx.

(References are to sections.)

Assessment — (Continued):

in mutual fire insurance corporationS...........+.eeeeeserereserees 116
to be made by directOrs.........secesseeeecec eens ee eescteeececoens 116
notice Of .... cs. cece sees eseeees Lai swab aarniee vectemeninear se 116
effect of notice of.........2.2eee0es isis 864 ORMM ROO Ra oR UEe Ne 2s 116
ofi mutual employers’ lability corporations. ..........-..e.eeeeeeeee 189
of workmen’s compensation corporationS.........++.seeeeeeeeeeere 189
in co-operative or assessment insurance corporations............... 210
policy to indicate plan. ......... eee cece ee eee ete tenet eee nee 219
of members of company to insure domestic animals................. 254
by co-operative fire insurance corporationS..........+.+seeseeeeeenee 264
collection of unpaid, town co-operative corporation...........+...+. 270
town insurance corporations may make..........ssseeeeeereeceeeees 337

assessment fire insurance corporations (see Co-operative Fire Insur-
ance corporations).

LOT ., se. ss. wisavehinnecereidioidle 6s 08s ANAT ATONE ELIS ANAEUT EY DAVARI OS aS 262,
subject of insurance Dy. . ..... cece eee ee eect ence eee eres eeeeeerenss 266
classification of property. ©... cece cece ence cree teeter eer eceeees 266
MAY DOTTOW. . cece cece cee reece terete reer enaceeeeseeeeeseees 266
Assets:
sufficiency Of .......... cess cece eee eneeee aja lacdcauacdbieid SSO peLOBTREO SE © 5-55 21
when stock is not valued as an asset Of.......cccseecceeeeececeres 21
ON FEINSUFANCE ....... cece ccc eee ence e eee e eee e teeter eee enretene 23
Of foreign Corporation. ........ ccc e cece cere cece teeter ee ree nese nees 25
receiver to take possession Of..........cceeeccer ene seceeeceeeceees 76
what shall be allowed a8..........-ccccce cee creeeccceeeetereenneeee 86
of fire insurance corporations, allowance Of.............ceeeeeceeee 118
certain documents not to be considered a8.........ccseseeeereeeees 132

Assignee of Policy:
when allowed to vote for directors of life insurance corporation.... 94

Associations: :
TALE2MAKING ox. 55.35. seer er asind dig eraeigie Ga wlornraeoureesd nee vidtwaledewaretea irre 14M
Attorney-General:
certificate of authority.to be approved by...........csecceerecccecuce 10
consent of, to reinsurance by receiver...........cccccccccccesceccce 23
report of superintendent to, as to insolvency of corporation......... 76
proceedings to restrain co-operative company from doing business
DY se cov'sl es Vale se seaeirmaeaneweaes bis eae TERRES bo acid ancien ewes 207, 208
Authority, Certificate of (see Certificate of Authority).
Automobiles:
incorporation of companies to insure ................000. 110, 150
ayateindiete ,
Bankrupt Corporation (see Insolvency).
Beneficiary: ’
of co-operative or assessment company, charge of..............2..5 21

payment to, is exempt from execution............... O54 ania wate ers waxes 212
Genera INDEX.

(References are to sections.)

Benefits:
METSSMENES LOT asses och scene ealeisTNal x 8 Meeawete ter tceaadadealde vo 210
of fraternal society, to whom payable.............ccccccceecececaces 231
certificate of, what to contain.............ccccceccacecccccecccecues 232

Board of Directors (see Directors),

Boiler:
inspection Of is 2 cinuwts us Gea ese er erae Peta Cd de ewes ed owmenanaes 357
Bonds (see Undertaking):
Geposit: OF i. eescsran wens 6 ox cineenwinrnvand syne esuddueeeacmotwwdeesn 13
minimum amount Of............ ccc cece cece ecee ees cecuceuceveess 13
affidavit annexed to deposit Of ...........ccscecceesccevcecececeeecs 13
walusbiony OP cindsceiide i4.4 Hees bane ee ea wena eeblegss te cede eseteey 18
deposit of, in certain caseS........... cc ceee eee esucececccecesuvens 28
insurance of municipal, etc., validity Of.............ceccceucevecaes 70
OF PECCLVER 3 ead erentarentssd oiieesiess aciais. aaiw paavhie Sieve ne whaenverers «ese wah aie 76
title guaranty companies may execute............ceceeeececeenccece 181
title guaranty companies, justification upon............... cece eens 183
Books (see Documents):
to record exchange of securities deposited............0cesseceecceees 15
Of foreign corporation........... ccc ee eee c cece cece eee e seer reneeeees 25
to be produced for examination.............ccccceccecceccceccesees 39
when to be opened for subscriptions.............:0.ceecceceeeeeres 71
in department, access of State Treasurer t0...........seeececeeeeees 74
of fire insurance corporations, opening Of...........cesseceececeeeees 112
Bottomry Interests: ;
Marine insurance UPON... ...ecceeecereerceeseacesenscnseeee so sieialane ees 150
Broker:
present by agent Or... 0.0... cece eee eee teens 65
certificate of authority Of.......0..eccceesecsenecee ‘dese nbers 91-142
Building:
inspection by State Fire Marshal.............. see esse e eee cece eee 369
Burglary or Theft:
insurance against loss Dy.......-.-eeeeeeseee rence rece ee eee cneeaees 70
Business (see New Business) :
By-Laws:
to be indorsed on certificate of stock or profits........-.++.+++ tenes 19
of title and credit guaranty corporations, adoption of...........-.+ 171
contentS Of ....... cece cece rete reece nena a eastesiaiaa apace igforscess e BsitiN 172
copy of, to be filed with superintendent..........--+es++eeees a yet csty 173
amendment of, to be filed with superintendent...........+..++-+-++ 173
of fraternal beneficiary society, amendments to........++-+.e--eee ees 241
of co-operative fire insurance corporationS.......+-.++sesereeeseees 264
Canals:
insurance upon, by marine corporations. .......+.++e+rereeeerreees . oe

agent not to receive excessive rate for insurance upon......+...+++-+-
GENERAL INDEX.

(References are to sections.)

Cancellation:
of policy of fire insurance corporation........+.seeeeeceereeeeeeeses 122
of policies, by co-operative fire insurance corporations........--.++- 264
Capital (see Capital Stock; Impairment of Capital):
investment of ...........-..eeeeeee we eee ee eee eee ere eecessnaaceees 16
percentage of, to be exposed to 1088........ sees eeceereeteececcees .. 24
of corporation of foreign country..........-seeeeeeeeeseeeterereees 27
of foreign country corporation, taxation Of..........-.seseeeeeeeees 27
of foreign corporation subject to taxation..........seeseeeeeeeceeee 34
of insurance corporation heretofore incorporated..........++.+++-++ 37
impairment Of ...... ce cece cece eee teeter eee eee eee een ence ecenens 41
of corporation to be stated in advertisement.............-.sseeeeeee 48
of fire insurance corporations. ..........eceeeee cece erect eee eeeeeee 112
cash capital of mutual fire insurance corporation..............-.++5 114
of title guaranty company, investment Of............:2seeeeeeee ners 176
Capital Stock (see Capital):
MiniMuM AMOUDE ...... eee cece cece eee reese ween e rene eneeees 12
of life, health and casualty corporations to be paid in............... 71
to be computed as liability of corporation...........2..eeeeeeeeeeeee 82
impairment of, of life insurance corporation............ceeeeeee eens 86
plan of retirement Of......... ccc cece scence cence teense ree seeres 95
of mutual fire insurance Corporation.......... cece eens eee eenes lll
of fire insurance corporation, increase Of ............ cece cece eee eeee 117
Of marine COrporation.........ccee eect ene eee eet e tenet eer eeeeees 151
of marine corporaticn, restrictions aS tO.........cceeseeeeeeeceeene 152
of mutual marine company, increase Of.........e0eeseeeececeeecers 153
cash capital of mutual marine corporationS............cceeecceeees 154
rights and liabilities of holders of cash capital.............seeeeees 155
subscriptions to, of title and credit guaranty corporation.......... 171
of title and eredit guaranty corporations, certificate of payment of... 174
of credit guaranty corporations, use Of...........seeeeseeeeeserence 178
Capital Stock Notes:
of mutual fire insurance corporations...........0ccceceeeeeeeecnane 113
Caps:
not kept in magazines........ 0.0.0.0. cece cece cece cece n eens 362
Cargoes:
Insurance UPON .......c cece eeeee eee eees eve Gineewus site i domaleee ss 110
Cash Payment:
to mutual fire company, in lieu of deposit note...............0- 115, 113
Casualty:
MNSUPANCE APAINS Ei ccsscigigareipeieee d ciewistsicieae bie Na ealdeNee aie viva onnsdon 70
Casualty Insurance Corporations:
fees for filing charter of............ 0. cece eeececccescceccececcceves 6
fees for filing Teport: Of ay secsinosauvgs eeavedisicinted geaemawedy ooaivewasee 6
minimum capital stock Of.......... ccc ese e cece eee eee ee ence veccece 12
proceedings against, liquidation of delinquent....................... 63
ngsets OF +...25 eiesacasaeaeeiied ys ciulneninenel te Bw AGINOeawes aaewaee ec. 88
estimation of liabilities of....... TASKER Hea es ’
GENERAL InpDeEx.

(References are to sections.)

Casualty Insurance Corporations — (Continued).
increased powers Of..........000. 6 ce cece aces ces ecuceucetsnconces 105
reincorporation of certain.......... 0... cece ee cece cece sec encenenees 217

See Life, Health and Casualty Insurance Corporations.

Certificates:
fee for MN ge ie sy cayenne sens acaieleds a bcueismdiloredwews, cenmnewaiieales 6
to extend time for duration for holding real property............... 20
of indebtedness issued by receiver.............ececcececcecsececcecs 123
of profits of marine corporation convertible into stock.......... 156, 159
of payment of capital stock of title and credit guaranty corporations, 174
life, must be filed and approved........... cece ccc ceee ene e eee ees 220
of authority of co-operative fire insurance corporations............. 263
of right to continue as a co-operative fire insurance corporation...... 260
of right of voluntary association to continue a co-operative fire insur-
WNCE CORPOFALION.. co cwsawmegucuiiusw a nacemineenmetaceses@nee's 261

Certificate of Attorney-General (see Attorney-General).
Certificate of Authority:

fees for flings. osacwsamace raaeaaGiucnace sbi nda oGus eds kad SOONER ERE 6
issuance by superintendent............... cece eee e eee eeeeeenenees 9
no corporation to transact business without..............eeeeeceres 9
POCOP GING OP saigieigicis ue ainrataiai o's: cisis.d deakeloisineieis'a aa oauWieiinnisieneis senecisienayye 9
must specify business to be transacted..........esceeeeeeeecceeesees 9
superintendent may refuse to issue.............. eee ee eee ereceeeece 9
not required by certain corporations............ccccceecsenncercrces 9
to be approved by Attorney-General...........cccccceesesceccerene 10
when not to be issued............ ccc cc cece eset nce c eee eeceteneeee 10
Of foreign corporation. ...........cc cece cece eee eecenceeneneeeenees 25
revocation of, on account of removal.............eeeceeeeeccceseas 30
to be filed in county clerk’s office by agent...........0ceeeceeeeeeeee 31
Tenewal, Of, TEVOCALION OF ..2.c.. saucdsnsnarugea Med ges TOS 458i SAAS 32
revocation of, on account of impairment of capital..............00 41
of agent for foreign corporation.........0scceeeecrcseceereceeeoees 50
of life insurance corporation, revocation of, for impairment of capital
BtOCK: crn gmnarcs se reeMes sae eaeON es NoeEEIuSSIAN nN MRE 86
of agent, when revoked........ ccc cee cece cee r et eenceneeeeeeneenns 91
OL SAD OES se ssjsceynvasciavetuyo slitaxevbtoloverino salsa used sackssara, scorer \dre eqalte steaencer' isceim ora rolhee 91
must be renewed annually...........ccce sec c nce ee eee eeeteeeeenaes 91
not required of industrial or prudential companies..............+2+0 91
Of publi¢ adjuster’ cs ......0¢ 022 neeceawcraea eran eeemneery seseawens 138-a
LONGI oy vais ic beceaeccaycatas cc scabies at anes coke Aca toca Arsaaoud ua enaueues vac suansnoeaaaSE 142
e brokers) ive ee somevey sve gawremoremsecansmarienrs awed Tso nt neces 143
of foreign mutual fire insurance corporation...............:.seeeeeee 14¢

of co-operative company, revocation Of............cesecereeeereeees 213
General INDEX.

(References are to sections.)

Certificate of Examiners (see Examiners).

Certificate of Incorporation (see Incorporation):

to be examined by Attorney-General.........-+eeseeeee tee eeeeeceees 10

of domestic corporation, to contain certain provisions....... tae. 10

amendment Of .....-c.cecseeceereeerreeecessceneessaeeee a soceveyensldte ie 52
Certificate of Nomination:

to have acceptance of candidates..........--+- saeeee teen eeeesaees 94
Certificate, Suspension, Cancellation and Reinstatement of:

in mutual employers’ liability corporations...............e sees eens 191

in workmen’s compensation corporations......... Lagann sea4 hears 191
Certificate of Solvency:

issued by superintendent of imsurance......... 0. cece s eee eect teens 182
Charter:

fees for filing Of. 606 ccssssicsiee » oes viawisiee sere Wes were sie hee eee eee sininisis 6

of foreign corporation, to be filed............. cece eee e cece eecnens 29

amendment: Of 2%. scswwiiosws oss saccard eens ss eiatoeenees sa eae sieeeen 52

effect of amendment Of......... cc cece sere ence ece eee eeeceeeneesees 52

of fire insurance corporation...........e. cece cece eeeeeccens socceees LO

forfeiture of, by declaring improper dividends................ee0e0- 17

amendment of, by mutual fire company, to change to stock company.. 125

of mutual fire company, extension of........... 0... c cece e ee eee eee 126

amendment of, to reincorporate existing fire corporation. .......... 127

of fire insurance corporation, duration of.............cc cscs eens eens 128

of marine insurance corporation............ceeeescncceeeseceeeees » 150

of marine corporation, duration Of.............. cece cece eee ce ee eees 150

of marine corporation, amendment Of............eeceeeeeeeceeeeeee 157

of marine corporation, extension Of.............ccceseee eee eee ences 188
Children:

insurance of, by a person liable for support of.............0e. ee eeee 55
City:

no insurance in, by town co-operative corporation........ osmurigisecdee 271
City Bonds:

investments: Ant so sicse2..geminewiee's coaieneedaris sayeueaswa oe Pope eee 16
Claim Reserves:

for liability companies...........ssceccecceceececces ies waleuaeierorecgele 86
Clerks:

appointment; Of siswaveceaese ses aavsewsseecasaensenn’s caunigauwacuae 5

Compensation Of .......... cc cece c cece cet e ee veenceescesace teewieawe 5

Cubes VOR \ eae sy <cictewaaintivedsnavs alsin neehrace ars aleSteraa ban aeiecs 5

no charge for examination of corporation by................ winreiane oes 7

of receiver, appointment of ..............ceceececeess Wisceieimieseiele a as 81

of receiver, compensation Of.............. cee cece eeeceececeuccue sce 81

Colored Persons:
discriminations against, prohibited....................0000000500.5, 90
GENERAL InpEx.

(References are to sections.)

Comptroller
certificate of, as to deposit of securities. ......... cc cece cece eee e ene 26
Committee of Policyholders:
at elections ....... eee eee reer eee ee ee eee a nin aie are inietnieisieie 94
Concealing:
envelope or ballot from custodians or inspectors..... acs Shareisnarevaielecnisla's 94
Conflagrations:
proceedings in case of extensive........... ccc cess cece ee eeeceeeees 132
Consolidation (see Merger):
Of fire COrPporations........ cece cece eee eens eee ee een ees seen je. 329
Constitution:
amendment to, of fraternal beneficiary society..............eeeeeees 241
Contingency Reserve:
accumulation of, by life insurance corporation...............0eeeeee 87
Contracts:
insurance guaranteeing performance Of.............-0.seeseeeeeoees 70
Conversion:
of a stock life insurance to a mutual corporation................0005 95
Co-operative Fire Insurance Corporations:
existing corporations continued............. 00. eee e seen cece eee ence 260
certificate from superintendent............. cece cece eee eee een eee 260
voluntary associations continued and incorporated................. 261
certificate from superintendent. . ......... cece cece eee eet e eee eeene 261
co-operative fire insurance corporations............0e- sence eee eee 262
Subject Of Insurances, o:.6 sds aucies Deschutes TA SR Rees STS On 262
form of imsurance, . 11... . ccc cece eee e ence eect ener nn eeeeenaeenaee 262
limitation on business of advance premium companies.............+- 262
assessment corporations. . . 11... cece cect e creer ence ete teen nena 262
incorporation and certificate of incorporation..............+.-++-- 263
Bylaws. ooo Ges seieeteasiaede denne hbishe goatee bk WHOS aERe Mme we Re SRS 264
directors... wees cece eee e cere e cence nee e eee ne ee ene es eenerenes 264
amnual meetings. . 2 2... eee eee e eee renee e er eeeee pete e ee ee rene 264
YECOLS, 2. cece eee e ence ence er ret ereeeteeeere occu Goce a veer uinle 264
ASSESSMENES. . ow cece eee ee ee eet nee e tee enn be teense eee e eres 264
withdrawal of members. . ..... cece eee eee ene etre teen e teres eeeneees 264
MEW MEMbETS. .. .. eee cece c cern err e ese ewes seen a sete e ets eeees 264
non-residents may be insured.......+.:sceeeeeeeeeerereeecennceees 264
POLBICR, as ss secaveesasiercagrawsteheendanbaaeriersaaneenmseees 265
property to be insured by......---seereeeseeeeeener reer e ts tes ess 266
assessment companies. . . ..-.esee eee e cece teense tne enet set eerces 266
classification of property by assessment companies.......-+--+++++- 266
assessment company May DOrrow.........-eeeeeeeee rere eters cere 266
advance premium companies may insure........--+++-sere see reteres 267
expenses of such COMpaDY....----+-+eseeseresererceses sss t testes ae

liability carried. . ....-++ssesee ence cece tent ere ene ret eee teers tenes
GENERAL INDEX.

(References are to sections.)

Co-operative Fire Insurance Corporations — (Continued) :

surplus of such COMPANY. . ..... ce eee cece eee eee cree eet e nee ee eeeee 267
ef CIENCY is) ane wee ods pelicano he cdad mau ae ete eas Rhee ET Te skA 267
reinsure by such Company.......... ce cce cece eect eect cece een nenes 267
application of other sections........... (RihgeenaGNe ones Mewahee Eee RS 268
extension of corporate existence...........ee eee cece cece eee enrees 269

Co-operative or Assessment Insurance Corporations (see Insurance Cor-

porations) :
fees for filing charter Of...........cceeeecccceescer seers cecenenecee 6
fees for filing report Of........... eee eee e nce e eee eee et teen eens 6
reincorporation Of ....... ccc ceee eect e ene tere enceeeneeeneenreeens 52
incorporation Of .........c cece cence cece eee e eee eteee cee nesaneenes 200
contents of declaration Of..........cccee cence cence erence ere eeeneeee 200
election of directors Of.........ce cece cence eet eee nneeee een eeseeees 200
number of members required...........-eceees cece eae eeeseerenoeece 200
declaration to contain statement as to Mmembers........-.eeeeeeeeeee 200
license to commence DbuUSINESS........... cece eee renee eee en enene eee 200
what) are eeMed i iiiwwisce ca dias sdarnesisee eso c'a ena eeIie eee eelars 201, 209
annual report Of......cccecccerece cen ee eet eetee tenn eer sete eesenee 202
no deposit of securities required Dy..........2cssceeceeeeeeeeceeers 202
designation of principal Office Of............ cece cece cece cece ec cenes 203
designation of person on whom to Serve PprocesS.........cceeeeeeeee 203
Foreign COMPANIES 060.0056 soe eidiercaginaan yp gies Saige ware cals Saino eines 204
restriction, On fOreIGN soos ve ke co seis eed ks oe obdne a wee oe ee Sea 204
accumulation of reserve or emergency fund............ceeeeeeeeeees 205
Use OF reserve: fuNdissae iiss casa noceswaar ted sass awawe es os as eceees 205
reserve or emergency fund of foreign company........-...seeeeeeee 205
authority of foreign company may be revoked.............eeeee-ees 205
FEINCOMPOTAPON: OF asics cose dua s yaedduwat sg wagGousndees aaa 206
visitation of, by superintendent............ 0... eee cece ence ence eeee 207
replies to superintendent to be under oath..............cceeceeeees 207
proceedings to restrain from doing business..............0.2..ee000% 207
hearing on such proceeding............. cece cece ete eceeceeeeeeceees 208
annual meetings Of........... cece ec cee cence een ee eee seneetsenees 209
@XAMINALIONS) OF 2.6 i sierciedeuis oo een gnunsadien $oteyaegaees ces Sem aune 208
transfers of risks Of....... -. cc cece cece eee e cece eecccecerteeaees 209
reinsurance by ........... CGMS Fee eaealveweeioe sg awe MeeReE Gad Sea aOS 209
payment of maximum amount of policy............... ccc cceceeeees 210
ARSESSMENES IN 66. oe siasien cece ess ee savieviewiaw soeseaneoacewea eaves - 210
notice of assessments........... cee cece eee c eee cece ceceucneeeecs 210
contents of notice of assessment................ccececcecasecuceces 210
change of beneficiary.............. cc ccc cee ceeceuceeccecencsecuvees 211
payment to beneficiary is exempt from execution.................0. 212
Penalbien: a cielsiccu vcs severe sadinwt’s e's sateaiigioieds ves wade le cleo ac oueaiere -. 213
proceedings against, liquidation of delinquent....................... 63
revocation of certificate of authority of........... cc ccc cececccucece 213
Odd Fellows and Masons...............csscenccscecseveuceccavauees 214
GENERAL InpeEx.

(References are to sections.)

Corporations:
TEPOPUS. qe: Susan eidiel cas woenea eo eee ae eke al Siiaweys sas Appendix
reports, further requirements............... ec ce cece eee enees Appendix

Co-operative or Assessment Insurance Corporations (see Insurance Cor-
porations) — Continued:

quorum of members Of.......... cece eee ee cece ene ceeeecenseeseces 216

reincorporation of certain............ cece cece cece ence ceceeecees vee 217
Corporation:

heretofore incorporated, privileges Of............cececececeseeceeecs 37

inducing person to surrender insurance................ceccceceeeees 60

proceedings against and liquidation of delinquent insurance.......... 63

increase powers certain corporations............ cece cece cence tees 105

license to, in excepted cases............ ccc ee cece e eee e eee nee eeeees 138
Corporators:

of fire corporations, liability of.............cccceeeeeeeeeeeenenes 119
Cost of Insurance:

fraternal benefit societies ©. 1.0... cc ccc e eee eee eee teen eneeans 243

County Co-operative Insurance Companies (see Co-operative or Assess-
ment Insurance Companies).

County Co-operative Insurance Corporations:

see town or county co-operative insurance corporations...........-+ oT
County Clerk:
certificate of authority of broker to be filed with..............++-++ 91
to furnish lists to State Fire Marshal.............: cece e cece eee eee 377
Court of Record:
may strike out name of candidate.........--.seeseeceee renee eeneoes 94
Credit:
insurance against loss from.........- ajalaisinte o.o:eesslnvoreleie cccccccccceee - 7
Credit Guaranty Corporations: ;
proceedings against, liquidation of delinquent.............05+ 40. . 63
Incorporation Of ........ccccescceeeeee reece erence receeseneeecnes 170
certificate of incorporation Of ..........ceeeceeeeeeereseeeeeerseeene 170
amount of capital Of.......... 0c cece cece nee e cere neeraceeetecneese 170
subscription to capital stock Of........seeseeeecerecereceeeneerscece 171
adoption of by-laws of......... Towle 6 sow gatiavediowe Gale yee ge ee seme 71
meeting to adopt by-laws...... Hesaieades ¥o os RAR eRe weiee es oe ee eeigie 171
contents of by-laws Of.........eccesee sec er eee e eres ener een eeecace 172
copy of by-laws to be filed with superintendent...........-.++++++- 173
amendment of by-laws to be filed with superintendent.......... eee 173
certificate of payment of capital stock..........++eseerereeecereres 174
directors of, to be stockholders.........sceeeeereerceseee ob ararpipratnacbce 15
Number of directors Of.........ccceceeeec cece ere seeeet anes venennes 175
quorum of directors..........seeeeececcceeeees aidialocletie.ss. 6:65 arehavats: .. 175
treasurer of, to give DOndS.......cseesecceeecerereececesceceseeees 175
change of number of directors of.......--+++ eet cecenencaconensscees 176
conditions reqrisite to commencing business a8.......-.+-.++-++++- v7

powers of ...... voce eee coe eeaeee en eeenceee ee essreesesaveseeereess 178
GENERAL INDEX.

(References are to sections.)

Credit Guaranty Corporations — (Continued) :

uses of capital funds..........-seeeeeeececerenceeeneeseceereees -.- 178

estimation of liabilities of....... 0... eee ene rete ene 178

examination into affairs Of......... 0. ccc cece cee eee eee eee ene 178
Creditor:

may request examination of corporation...........sesseersereereees 40
Custodians:

of ballots, how appointed....... sinwwarse velsiceee awe oe pa wieieia ieee tsccaiee 94
Damage:

umpire to ascertain, fire..........-. cece eet ee enter e nets 121-a
Deceptive Statements:

not to be made by advertisement........-..sceceecereeeeceeereeeees 47

penalty for making.............- ies GW lovers’ g eieterai sie elaveraie oe eeecwennsece 48
Declarations:

of fire insurance corporationS........0....eeeeeee reece eersecnceees 110

of marine insurance corporations...........+++.+ wiarelhwre &Sreiaeiamunieen a 150

of co-operative or assessment insurance corporations................ 200
Definitions:

OF agent .....ccecceee caress ecccecccccevens eer s giaiaiaiguere 0) aver eserves - 49

of fraternal benefit societies........... ccc ccs eee centr ete teneentenes 230

OF EXPlOSIVES: 2 rardsar aimee Gahran sas SR Chuo eHe HE aM abs Bibelaca! Ss Gand ek Mineo 358

Delinquent Corporations:

proceedings against and liquidation of.............ccseeee cena eeeen 63
Deposit:
by credit guaranty corporation.............ccecceecn ee eeeeeeeneeee V7
Deposit Notes:
of mutual fire insurance corporation.........sssceceeesersecece 113, 115
payment Of ........ ccc cece eee es aieinleitheres salaw Wem aIN OL + Baler erSi 113, 115
relinquishment of ............ CO ee erin 113, 115
deposit of, by members of mutual companies.............0.eeeeeeee 115
ABSESSMENTS ON 2... .cececnececccecs Fieve eteveereia a bigae g ahSse: Sa solovesa le isfeieie 116
liability of member on..... pide been ied se tie neea's Sault 116
cash payment in lieu Of........c.cse cece ee receceececccesescecssnens 116
Deposit of Securities:
before receiving certificate of authority............cccccecceceeeses ll
to be made in stocks, bonds and mortgages...........cccceceacceces 183
deposit by foreign corporations..........cececescececsncucccccecuces 13
stocks and bonds for foreign States..........--.cccccccccccaccccecs 13
Oxchange: Of -. preccarscece sels aawurdaeered se seio wale werrewaaalionsntieeney cite valacc 14
UNGOTOSt) OFi Gis. a:5 berate snield ewciotee oid tieiwiy do's wy sraterame wee a.necearn eis 14
by foreign corporation..........seceeeeeeeeceneeteeeeseeccncee ences 26
GENERAL InpEx..

(References are to sections.)

Deposit of Securities — (Continued) :

by foreign country corporation.............cceceeeeees seiaeieeminisinees 27
voluntary deposit by foreign country corporation............0..065 27
special deposits required in certain cases.............eeceececeeeees 28
reciprocal requirements as to foreign corporations...............65+ 33
taxes collected out of interest Of.............. 0. cece eee cece eeeneee 34
securities to be examined.............ccceeeecseraes oie: srar ete serene 51
agents not to act until securities deposited................ eee eee eens 54
by life, health and casualty corporation, in certain cases............ 71
by life, health and casualty corporations, withdrawal of............ 72
withdrawal of, by foreign life insurance corporation........ seisieiaarecses 72
special deposit to secure registered policies and annuity bonds...... 73
special deposit, transfer Of........... cc cess eee eee ee ec eeeeeeeeseaees 73
special deposit, amount Of..........scecececeecennsnceeecuseeececes 73
receiver to take possession Of........... ccc eeee cece ec eetceeceatees 76
conversion of, into MONEY....... cece eee e eee ee eens connec enecceneees 77
transfer by superintendent to receiver...............ce eee ee cece eens 104
by foreign mutual fire insurance companies. ................cceeeeeee 149
not necessary by co-operative or assessment corporations............ 202
by co-operative companieS...........eseeceeceeecnceeeeeeteceneeees 215

Deputy Superintendents:

appointment Of ....... cece cece eee e teen eee sent teen ee eens 5

powers and duties Of........c cece ee eee ce ces ece ren seescereeeeeeene 5

Compensation Of ....... cece cece eect eee r eect een e nen en eee ereeees 5

no charge for personal examination by.........eesseeeeeeeeeeeseees 7
Designation:

of principal office of co-operative company.........+.-+seereeeeeees 203

of person on whom process may be served by co-operative company... 203

Directors:
Mumber Of 2... ccc cece cece scence eee e teen eetenenneneeereserercete 10
reduction of number Of......sssseesereee bi ekeisiaveravejnne cecccecnceeneees 10
not to be pecuniarily interested in transactionS.......+-+++++++eerrre 36
Misdemeanor Of ........cceccece renee cece nee e eee seeser ences ere eeee 36
in specially chartered corporation, residents of State.........0- ia SSE
issuance of stock DY.......eceeecceee reece eeeeeeeetereeensr sense 42
liability of, on account of impairment of capital......... se eeesees 42, 43
to make good impairment of mutual insurance company....++-+-++++> 43
may reduce capital stock on account of impairment.........+-.++-- 86
nonination of candidates for....... bids Saya phelle wsip erey eve. 9 97a onal o SSIES 94
Clection Of occ ccc eee c ec net ewer er ensceseaereessecssseceren® 94
approval of, «o conversion of stock life to mutual...... se staleiepdeyeleatece 95
of fire insurance corporations, salaries of officers......-.-.-- aaeswete 98
to authorize investments of life insurance corporations.......+..+++- 100
statement of monies used in election Of.....-++eeeesesreerceerceecs 103
to be divided into classeS.......ccccsseeeeeecersenreeeeeeeereeeeeare 106

of mutual fire insurance corporation, powers Of...++e.seeeeeereeceres 113
GENERAL INDEX.

(References are to sections.)

Directors — (Continued) :

of mutual fire companies, to make assessments........-.seeeeeeees 116
of fire corporations, liability Of..............ee cece reece terete reeeee 119
of stock fire company, powers of, after change from mutual company, 125
of fire corporation, assent to consolidation or merger.....+-+.+++.+++ 129
of title and credit guaranty corporationS..........seeseeeencesecoes 175
MUMADER OF ois eicsie ce scasayeiaialiecn baie nies eeiaseaiaye: ain Bia idis Salata nemesis twine od Beas 175
QUOTUM Of 2... cccccenenrccnccccce neers rene esenseaaseseeneesseees 175
change of number Of......... cc csc eee ee een cece ee eeeee tenes eenee 175
of mutual employers’ liability corporations.................ees eevee 187
of workmen’s compensation corporationS...........ecseeeseeseeeeees 187
of co-operative and assessment corporations, election of............+ 200
number of companies to insure domestic animals......... thewseduiae 250
election of, company to insure domestic animals................... 251
of co-operative fire insurance corporations................0..cee sues 264
Disbursements:
vouchers required ssee sek cssamerinawde sss cad aneaewesy exbe careening .. 99
Discrimination:
between foreign corporations of same State........ceeeeseeceeeeees 33
and rebating prohibited............cccec cece cece es erccceeseeeenecens 65
PROM IDI a co: <eieisisnassieiaiy acyte's Wiergieeer sia tiaee neg aw treper Dis ee Sie ere mcdreroransnarei car 89
What:is NObie+ si csaonnsrns 4 ceeeadeer ar ve ekintatees yy sleeemenuees 89
against colored persons, prohibited...........-.sceesceescecceencecs 90
under accident or health policies prohibited......................0.. 108
District Attorney:
to assist fire: marshalis.o 2:2 ays oxuwod yee eeew MEcwes seating goa es 373
Dividends:
payments of, by life insurance corporations..........-.0.eeeeeeeaee 83
when to be declared by fire corporationS.........ccceececcessenaces 7
improper dividends by fire corporations..............cccceeeeccceees 117
scrip dividends of fire corporationS.........0seeseceseescreceececess - 17
not to be declared by fire corporation having guaranty or special
TOBELVO! LUNG. goes 0:05 spew aise eos sees MOTE Fee SEEN REEENE eS 130
of mutual employer’s liability corporations...............0... 00 eee 190
of workmen’s compensation corporationS........... cece cece ee eeaes 190
Documents (see Books):
to be in custody of superintendent............ccccee cee eee ees sea 32
in department, access of State Treasurer to...........200- aserateets dee 14
not to be considered assets.......... cece ccc c cece e eee e ee eceeenesenes 132

Domestic Animals (see Domestic Animals, Corporations for Insurance of).

Domestic Corporations (see Insurance Corporations):
consent of directors of, to investment of surplus..................0. 16
doing business in other States, investment of securities in such States, 16

Domestic Animals, Corporations for Insurance of:
GENERAL INDEX.

(References are to sections.)

Domestic Animals, Corporations for Insurance of — (Continued) :

AE CON ROR ALIOM in. anys shetpaevaaa seared nskicen <4 sigh wed eantaes 250
annual meeting, election of directors and officers.................... 251
annual report, contents....... Deen meen n cece eeecetecessesenccwecee 252
annual report, failure to make.............c0.cceeeccceeecvecccees 252
examinations by superintendent...............cccceeeeeeccececccecs 253
order restraining, from doing business...............cceeeeceeeeee, 253
Teel Vers LOT is. oa.s hoa wgelenss cslgatiaedeane ee en ¢ aaerbiseew cates ¢ caasamee 253
assessments, how made............ccceeeeessueeesectcceceseusceces 254
by-laws regulate assessments..................ccccceeececseceecces 254
Earthquakes:
insurance against loss bY............ceeuscccsecscccsceccscecsacens 110
insurance, by co-operative fire insurance corporations................ 262
Election (see Annual Election):
of directors of life insurance corporation......... sige eas ais Qodeaeaies 94
of directors, methods of voting by policyholders.............eeeeee5 94
of directors, how held..............cccccceececccccecccucucecesucecs 94
of directors, inspectors of...........20e000¢ sos sesiaielanewieie ee see warecapais 94
subject to supervision of superintendent.......... Rana eas a ws TS 3%. 94
eligibility of voters of mutual marine corporations...............0+5 155

Emergency Fund:

of co-operative or assessment insurance corporation.............0+- 205

USE: Of GXCOSE.-Of  sc.0c sc Say cquenek 96 HARE MENS is set's delendiaternaae 205

Of foreign corporation...........cccecceeeecescerecceceeececesanens 205
Employer’s Liability:

insurance for employee..........ccccsececccceceecscesceceereeceres 70

unearned premium and claim reserves............scseeeeee rec eeroes 70
Employes:

employer can take out insurance ON.........ccsecccccccsscccceeeeee 55

insurance against injuries DY..........cee eee eee e ence eee eencneeens 70

not to omit name of policyholder from list...............0.seeeeee 94

of life insurance corporation, term of employment of............+.. 98
Endowment Policy:

FOSCLVE UPON sssiswanire dr e's sietswiewes So oa ote eieinens Hiss oe Sietoaeremeewer ee 88

standard provisions concerning..............sseeeeeec erence ennenees 101
Estimate:

of surplus profits of fire corporationS............ 20 ce eee seen eeeeees 117

of liabilities of fire corporationS.........cceececenceceeeeceeneeaees 118
Evidence:

report of examiners is presumptive.............cceeeeceeerereeenee 25

affidavit of agent 9s to notice of premium presumptive
GeneraL Inpex.

(Referezces are to sections.)

Examination:
CXPENSES' OF iiaviees ac stasioase sis des ces waww enews oe Hp elseimieee’s aecees 7
no charge for, if made by superintendent or deputy............+.- a. GEE
expenses for, how paid..........cscc cee cc ewes ence c seer eeeseseees 7
expenses for, repayment of, by corporation.......+.ssseceeseceoeees 7
of proposed corporation by superintendent.........sesseeceeececeens ll
of foreign corporation.......... cece cece cence erent nets ee eentanes 25
of foreign country Corporation.......cceescceeccccceensccsececscoens 27
of trustees of foreign country corporation........sssceseeseresereee 27
when and by whom made........sceccccrcccccccrececnssrerencsceee 39
whom to be examined............cc cece c cece ence een eneeaeenene 39
upon request of stockholder........c.cseccesescccencccsccccnceeece 40
of capital of mutual insurance company...........cesseeeeeeeeeeees 43
of securities deposited........... seilais oes ececrenctcerssresccccese BK]
certificate: Of sicceay 6s o665 Saiepieseewas oe dasireieies eRe. SAT aie seins §1
of fire corporations in case of extensive conflagration..............+ 132
into affairs of credit guaranty corporations........... Sieaitinecwiewieies 178
of title guaranty company............ cece cece eee e eect ee ee enesteuce 184
of co-operative or assessment companies.............0c.ceeeeeeeees 209
into affairs of fraternal benefit society.............c.eceeseeeeneeces 243
of corporations to insure domestic animals.................. ister 8 253
Examiner:
presentment of bill of........... denatvasae Sennen eceouune ee eae OF
no fees for legislative service............ccceceeecceeccenceaccereense 7
appointed by superintendent............ ccc ccc cece cece cseeseeease 1l
to examine affairs of proposed corporation............0.cseececvees nN
COPCATE. Of cieiaciiiwis s sieeve einiseieis aiewie at's e a15 008 sreiaiaiea's Sie Sere RES ll
appointed by superintendent..............cccecceeensveeecrceeuces 39
who are qualified to be.......cceccseecccecceucccuccceecceees eieiaveere 39
report to be made by order Of.............ccceccececcuareccsceeces 39
report of, presumptive evidence...........sccceecescccccceccecccees 39
Exchange of Securities:
deposited with superintendent................cccceccuceeccuceces - i4
when Valid: ois cists vies aii a ess er aneiaielere caine oa eas once ceenceerccccees 15
TeCOTE OF: -csgiaiscscwesanios se oo wansaereeveey sss Pareneeeieiely es wikis ly mare eee 15
Exemption:
of payment to beneficiary...............c cece ecsccccnccccesecesecs 212
from execution of benefits from fraternal societies..............e000. 240
of certain societies....... 0.0... ccc ee ceneccenceeeecae canteeacceence 245
of fraternal societies from taxation............cecececcsecceccececece 246
Expenses:
of examination of corporation............cccceccsccccecceccecccccce 7
of department, how defrayed.............eeceees ski ee eis ae pee weeees 8
of registration of policies and annuity bonds................... eee 75
limitation of ....... 0... ccc cecececcceseceee Once cece en ec cceeeees 97
Explosion:

insurance against

Stree eeevenccccenerestcceeccnasseseccesceesseses 70
GrnreRaL [npEx.

(References are to sections.)

Foreign Co-operative or Assessment Corporations:

must secure certificate of authority........ shied ses seieasiqueeeee nes 204
of State, imposing restrictions on domestic corporations..........+. 204
Keserve: Lund Of vao2ciica:s stin'sie syaes 024 ks Meee ade ee oes acacia 205
authority of, may be revoked...... .....ecseceeceetceccecceusaucces 205

Foreign Corporation:

jurisdiction of superintendent of..............cccceseceeceecceeeees 25
OXAMINALION. OF sissies ayia seis uowewucas 4 Lev denenemeee v¥8.s sAgieRaak gee 25
revocation of certificate Of...........cceeccescceneceeecsceseeesnes 25
transactions allowed .......... ce cece cece cet c ee ee te seecuveneuucs 25
lhabilitios Of) .acies as seisceidia civics auaisisie dba les 3 ss 8 nlgeiguelslgseneie ss Soe Veter 25
deposit of securities DY. ........ ees e cece cece cee cece cence suseeanes 26
of foreign country, capital Of...........c ce cceeceeceeceeeccacteetes 27
of foreign country, deposit of securities............ ERIE TT) OE cbracbaayors 27
of foreign country, voluntary deposit of securities.................. 27
certificate of authority; renewal, revocation............2..0.00.000e 32
of other States, capital required..... 20. 1... lee cece cece eee nena 56

Foreign Country:
capital of corporation Of. .......... cece cece cece cece cteeteeneceans 27

Foreign Fraternal Beneficiary Corporation:

transacting business in New York may continue.................0005 237
certificate to be filed with superintendent................ cee ceeeeaee 237
Foreign Insurance Corporation:
of foreign country, capital Of..........cee eee cence cece cee eencnsees 27
of foreign country, report Of.......... eee eee cece e erence ese eeees 27
to file copy of charter..........ccecsceceeecececetececncncereeneens 29
business same as similar domestic insurance corporation........... «.. 29
appointment as attorney Of........cccec cece cece tee e eee eeeeneees 30
removal of cause to federal courts bY........ccsseececcceeeeeneeees 30
certified copy of certificate to be filed.......... see seee ence ee eees 31
renewal of certificate of authority.........ccesecccccccccccsccscece 32
reciprocal requirements .......0c sec cceee cect cess eeceeeeeetaneeenas 33
taxation Of ........eecseee a:pioibtelelavadales eee wiueausiee sate tsparanmaous 34
revocation of authority of, for failure to pay taxeS.........ssesee- 34
taxation of health or casualty CoMpany.......cscesceececcceesevecs 34
TEPOLE: Of sce ccs saretsae's cease nove sa as 33 24 TERRE 6 oa 344 eke 45
certificate of authority of agents Of........ccsesccesccerssncccescne 50
certain provisions of policies, prohibited..........sscseesececscecees 50
Foreign Fire Insurance Corporation:
taxation on premiums Of..........seseeee eee ee cere eneeceenens 133, 138
agent of, not to act until taxes paid........... see e cere eee e eee e eee 139
undertaking of agent Of......... ce ecew cece er cee renee e enn eenecees 134
transaction of business without agent..........secseeecseceeereeoes 134
neglect of agent of, to pay taX........-seeseeeser cere cece cereetenee 135
penalty for refusal to exhibit policy Of.........0..sessceceeereeecere 136

license to agents of, in excepted cased. .......0..e ee eee eee e ee eeeenece 137
GENERAL INDEX.

(References are to sections.)

Foreign Life Insurance Corporations:

power to hold and dispose of real property............--eeeeseeeeeee 20
of foreign country, capital Of........c..ccee cece eceeceeseetseceeees 27
Paxation: Of sisi gi siscanrsnacecscaceravataiecavdcrs inset iereie lou vies astoecce seuiayecioma widens 34
discontinuance of business Of.......-.+seee0 eeeenseece iw eanessees «» 72
withdrawal of deposit by..........cccce recente eee eeeteeeeereeenes 72
distribution of surplus to policyholders...........++. dee wAe ees 83
certificate of authority not required by certain agents of............ 91
limitation of new business. .......... 00: ccc cece e tee eeees 96
limitation of expenses of............++. feet e ne ee sees eeeeeeneeeees 97
amnual report Of... .cccsccccccsnccecrnccensasesseseeseseeeeseene 103
requirements of imcorporation..........seeeececsereeeecereceeenns -» 149
annual, Tax vesccirieaveriwereses paememdnvese Mw em Rese rE ads 149a
annual report: required :i6c0 02.642 coesonaeesst ech emewad son einwaaesee 149a
OPENS: chon WR RA PSO c RHR R NATE ies cM ae NE eESe 149b
distribution of annual tax.......... cc ccc cece eee e eee cee ee nn eneeee 149e
Collector of annual taX......cccesccnecesereerceenacsecetneececrees 149¢

Foreign Mutual Fire Insurance Company:

requirements of incorporation........... 0. cece ee eee cee n ence neees 149

ONNUA) CAX! verses cacenmedrer's esinentiee where esse Saw eked eee asleie wins 149a

ania Te POT sss sissies 8 anaheim acs napaus ecg GuavesarSniains Snares anid lars vuaav olay eae ouoaets 1498

REL SPO TAB alo, 525s secestuo rovnc ax shcidc af aore dua ves ay se nace tele favoveaaax0is love ‘aneiaue ce erbierananeioucinande 149h

distribution of annual tax............ ccc eee e cece ene nee eeees 149¢

collector of annual taxXs. ossscwsaveeses wreseee ees secema eran aes 149¢
Foreign Mutual Insurance Corporations:

authorization 4 ~ esseavnseods cadteeses costes ee SeaRannds ae Memeaws 194
Forfeited (see Forfeiture).
Forfeiture:

surrender of value of lapsed or forfeited policies...............---4 88

no forfeiture of policy without notice...........cc. sec eee eee ee eeeee 92
Forms:

of annual reports to be furnished by superintendent................. 45
Franchise Tax:

on insurance corporations............ 6. cece cece eee eee eee Appendix
Fraternal Beneficiary Corporations:

fees for filing charter Of............ ccc cece eceececcetenteccecvees 6

fees for filing report Of.......... cs ccc cee ee eee ceccescecnseeereesese 6

certificate of authorization not required by.............eececeeeveees 9

Article I not applicable to...........cceceeccceececncnenncsceeuseses 57

admission of minors to........... cc cece ccc e cece ete ee ee eeseneneeees 241
Fraternal Beneficiary Societies:

ef MTTLOM OF i ssiens,4,5,aysters sla var taeetine ws cease layetare eorwiare ben aeteeree hea 230

bensfits, beneficiaries and membership............0.0008 rae eneaevet mires 23)

shall provide for death benefits..............ccccceccccsccccceccuces 23]

may provide sick or accident benefits..............0.0. ceccecucecece 23)
GENERAL INDEx.

(References are to sections.)

Explosive:
CENHition: OF iweeryawer eines soieahddandes antev ae @aanedelerd oo mccics 358
regulations regarding ....... 202.0... ccc cece cece ec cceccce veces 359
WISTS ICP. i a ssievnns event g-snsfantagnvdgiena ere Noe ap eeosqus vines ud acs Aossadatdancandeecihs Hike Oe 360
MIABAZINES POP ones Suwon seme Meet eu yore oa Welbon re Warwes guew ay wlew noe 361
caps not kept in magazines.......00.00 0000. e ccc ccc cee ceeeue 362
penalties regarding .... 0.00... c ccc ccc e cnc eecneneseseecevavens 363
OXCCPELONS scm ticna's cae Glew a ges meee eas + ace dace @ tera dooahaenaee aah, meee 366
Extension:
of charter, of mutual fire company..............ccccecsaecceccacece 126
of charter of marine corporation.............cccecececececececeece . 158
Federal Courts:
removal of causes tO.........c ccc cceccnecaccsetceuseeseusenteenees 30
Fees:
for filing? Charteris. <.scxexawnnier sad se nsacunwed aenecondspegaregn v
for filing annual report............. ccc cec cece ceececcessecuseccsees 6
for filing certificate of authority, deposit, valuation or compliance.... 6
for filing of any paper.......cccc cece cece ec ee cece ecesencevceesucees 6
for affixing seal of superintendent................cccccececececuens 6
payment of, into State treasury.......... cc cece cece ececesececeees 6
for examination of title to real property...............cecccueeeees 28
remittance of, to foreign corporations.............ecceccevcevecceen 33
for forwarding process by superintendent.............. rotpnagisiemaaayusets 35
not to be included, fire insurance................0ccceecc cee cseeaces 144
to be indorsed on policy, fire insurance.............ccceeeececuceuees 146
Fictitious Name:
use of, forbidden................. eU.s Ree hai yes ss ease et 54
Fidelity:
Insurance ON ....... cece eee ween SGM died aiathienaeriaie eae Una A areal 70
Fire:
umpire to ascertain aamage by......... 6... cece eee cece eee eee 121-a
to be reported by fire insurance compamies.............-.0..0ee eee 354
Fire Arms:
discharge of near MAGAZING. oan e Geng e cwwed aye ee eames waa ew a 367
Fire Departments:
payment of taxes to, by foreign corporations.............cseceeeeeee 133
may collect penalty for neglect of foreign fire corporation to pay tax, 135
may collect penalty for refusal to exhibit foreign fire policies....... 13¢
Fire Insurance Corporations (See Insurance Corporations. See Mutual
Fire Insurance Corporations. See Co-operative Fire Insurance
Corporations) :
minimum amount of capital stock Of.......sceceeesevenes weenie 12
Tien on stock and profits........ccscccecncnenececrssnceeencanenrees 19
readmission of certain foreign corporations............6...ceeeeeeeee 56
Proceedings against, liquidation of delinquent...............++-+-55- 63

incorporation Of ....... cece eee e cece eee ence eet eeneeeneneeeeeenes 110
GENERAL INDEX.

(References are to sections.)

Fire Insurance Corporations (see Insurance Corporations. See Mutual
Fire Insurance Corporations. See Co-operative Fire Insurance
Corporations) — Continued:

must publish notice of intention to incorporate......+-.++ssseeeees 110
shall not deal in merchandise, etc...........eeeeee eee eeeeecteronce 110
subscriptions to capital of.....-... Pisin asa Wie-sdcoinr ns asasepnunae SS ayia vara orn 112
capital stock notes Of.......seeceeeeeeeeeceesensncereececeeseeeeces 113
deposit notes Of......... cece cence eee e eect ene nnenenetecenes 113, 115
cash capital of mutual companies.......+.ceeeeceeeeececeereeseeees 114
deposit notes and cash payments by members of mutual companies... 115
assessments in mutual companies.............-eeree eer enreereeeeee 116
estimation of surplus profits Of ........c+sceececeereeescceceeseees 117
increase of capital stock Of.......-...eecee eee n eee eect twee tenes 117
examination Of ....... 0. cee cece eect eee e nen e te ee er eereeseeacereee 118
allowance of assets and estimation of liabilities upon examination of, 118
liability of directors and Corporators..........eeeeeeceneeeeeeereeee 119
what must appear on face of policy Of...........0seereeeeeeeeeeeee 120
standard form of policy Of......cceceeeeee cence en ceesceeeneeeerens 121
payment on cancellation of policy Of.........-:see esse eee eee eeeee 122
cancellation of policies of, by receiver.........sseeeeeeeeeeceeserecs 123
extension of joint-stock corporations...........+ 0. -.seeeeer eee eeeee 124
change of mutual to stock corporationSs..........+seeeeeeeeeeereeee 125
extension of term of charter of mutual fire corporations............ 126
reincorporation of existing corporations...............+6- ssietaie's peter 127
duration of charter Of. .ccscsccseessaececrecees covseesneenvaess uses 128
MELEr Of Lo. .scceccccevceneceasensenenssessssseseeneersenasaenes 129
GCONBO]AAEION: OF es socarscerscovssaasavereie a vip. b selee wisn e Hialdse wre Seasmaar adele eelele Le 129
guaranty and special reserve fundS............2cceseceecececeecees 130
investment of guaranty and special reserve funds...............00.. 131
proceedings in case of extensive conflagrations.............+....0055 182
amount of guaranty and special reserve fund to be set out in annual
statement to superintendent............cceececnccccceeeececeenes 132
certain documents of, not to be considered as assets............... 132
payment of tax to fire departments by foreign fire corporations..... 133
payment of tax to superintendent by foreign fire corporations........ 138
agent of foreign corporation not to act until payment of taxes....... 139
undertaking of agent for foreign.........c.cccccecceccccececncccees 134
penalty for neglect of agent to pay tax............. cece eee eee ee eee 135
penalty for failure to exhibit foreign fire policy............+..e000- 136
license to agents of foreign corporations in excepted cases.......... 137
fees not included in consideration................0.c cece cee e cues 144
report of consideration to company........... cece cece cece eee eeees 145
fees and charges indorsed on policy............. cece cece eee e eee eee 146
penalty, violation provisionS............. cee ee eee e cece ee eceeees 144, 147
penalties, officers and agents......... 0. . cece cece eee cette eee ee ees 148
to report monthly to the State Fire Marshal................ 000s eee 354

Fire Marshal (see State Fire Marshal).

Foreign Casualty Insurance Corporation:
of foreign country, capital Of......--..ccccceeeeecccec een sseceeeeeee 27
GENERAL INnpeEx.

(References are to sections.)

Injunction:
to restrain insolvent corporation from transacting business.......... 76
to restrain co-operative company from doing business........... 207, 208
to restrain corporation for insurance of domestic animals........... 252
corporation for insurance of domestic animals, for conducting business
fraudulently, etic. siccasscicscicctwoeseses veleaeunivavcaw cccbes 253
Injuries:
insurance against ........ 0... cece cece cece ccececcncuccecuucucevenes 7
Insolvency:
when corporation deemed insolvent.............c0cccceeecceceuecees 21
insurance corporation, when deemed...........c.cccsceccccaceccaces 41
when depositing corporation deemed to be..............ccccececeeee 76
Inspection:
report of by fire marshal.......... 0.00. c cece cee cece ences 363
Inspectors of Election:
how appointed, their duties............ 0... ccc ce cec eee seuceecvens 94
Insurance:
restriction of, town co-operative corporation.............ceceeeeeees 271
Insurance Corporations:
expenses of examination Of.......... cc cece cence cece cece eeeereneene 7
assessment of, to pay expenses of department..............-. 2000008 8
reduction of number of directors.............+-seeee06 Wiesea eae 10
examination of, by superintendent............ 0. cee e eee eee eee eees ll
minimum capital stock Of............ cee cece eee cece ee eeereenens 12
may collect interest on securities deposited...........sceesseeeeecees 14
investment of capital and surplus.............ceeee sees eee ee eee eees 16
restrictions as to ownership of real property DY. ices aasaresessersausuaitue maaceres 20
when deemed insolvent........cccccececccsceccccsccesceesevscceees 2)
FEINSUIPANG! OF WISKS ia.nis:o:ciecsrsvs-es:0.w'e's sig aie a WOH sis e 6 6's eialelw arene ncierds 22
to file schedules of reinsurance.........ccecsecscceeccceceencnseens 22
limitations of risks Of .6.:.scwascieis cr saseaeerwese ces seananawewees 24
examination of affairs Of .........cccc cee ee eect ene necceneccenenccees 39
impairment of capital Of........ 0... cece cece eee teen e teen eenenes 41
when deemed insolvent on account of impairment of capital......... 41
deceptive statements by, prohibited............eeseccceeeeceseeeees 47
ONES OT ~ cece sssvcsacasaus ales oyovsuasdaacasd ask yaaa lovey avalioee lassie: eases vend Ovpetueharaserveeoe arava tai 49
to cause securities to be examined.........cceeeecccececesctaceecees 51
reorganization of CorporationS...........scecseeeeecesceenereeeeees 52
amendment of certificates Of......ccecccscccccecccenensccecsererees 52
penalty for violation of Insurance Law........... siaadvareceuacavandiwra doce (bias 53
agent not to act for, unauthorized......... cece cece ccc eeeceeeeecce 54
policy of, to contain entire contract.......... ese cece cece eee e ne eneee 58
certain provisions of policies prohibited.............sseeceeeeseceeee 59

misrepresentations of, prohibited.............:eeeeeeenceceeeneenns
GenersL [NDEX.

(References are to sections.)

Insurance Corporations —(Continued)

valuation of policies Of.......sceeeeecerceee eter ence neterneessenses 84
proceedings against, liquidation of delinquent........-----+.+.eseees 6:
not to omit name of policyholder from list..........---eeeeeeeeeneee 94
not to spend money in canvass of election...........-+seeseeeeeoeee 94
no officer to issue circular containing false statement in regard to
Clections . 6. . cece eee cece sen en cee neee rece reecerereteneaneans 94
reincorporation of certain...........---+++0+- i sshagaselBoosemaderestwiunatcea toes 217
PPAHCHISE HAR oon einige one LESS ROe RMR ERe Se see eutRMES SY as Appendix

Insurance Department:

GPOREIOT OF cssecasiecaede vo de conse eOEa TTT Teas ME Nw OE Sa eee weeeM Rees 2
OFFICES FOF oo. eee e ccc c weer e cece esse ene ene sen ese esse cesaseereane 3
expenses of; how defrayed...........-cseeeeee reste er ee ener eeseees 8
access of State Treasurer to books Of.......cceecsuecseecensscecece 74

Insurance Law:

application to religious Orders......... 6. sete erence eee eee eens 64
Insurance Rate:
organizations to assist making . ......... cece ee cence eee eee eens 140
rate making associations . 1... esc c cece eee teen ee eee eee ee 141
Interest:
on securities deposited. ........ cece eet e eee e ener eee enter eeeeeeee 14
on securities deposited, taxes collected out Of...........20eeeseeenes 34
OD BCTIP 2. ccc cece cece ees ec sees ee nano n sane en sees eeeensseeeesnns 79
On, Certain: annNiblescccawies vs os xarweawedine’s os eaareaa ee soa einem aWw 8 84
on cash capital of mutual company..........ccceeeseceeceecenveees . 114
Investigation:
of insolvent corporation, yearly..........cecesecvees ec cucecnceeanes 79
Investment:
of surplus by domestic insurance corporation...............0+20ee0e% 16
of funds in foreign states........cccceeccecer essen eetasescarevetees 16
of capital and surplus.......... cc cee c eee cee e eee eect ee eneeneneees 16
in what securities.......ccccccccsecceeneceecesererecscceusnnccenes 16
on its own stock not allowed. ....... ccc c cece tence ec enc tcc cecueoe 16
on stock of corporation doing same business, not allowed............+ 16
of securities of foreign country corporations. .............ccceeeeeeee 27
evidences of, to be filed by foreign corporation...............eeec00 32
of surplus by receiver............seeeeee side e a esieeainais oo eelsrnele 78, 79
cannot enter into joint............. cece cece eee ccccncacccccceeunse 100
of life insurance corporations.............cceccceceecececucucccaucs 100
of life insurance companies to be authorized by board of directors.... 100
of cash capital of mutual company...............6. Belote weuawiehaneie 114
of proceeds from proceeds of deposit notes of mutual companies.... 115
of guaranty and special reserve fund.............c.cceeecececcecces 13]
GeneraL InpeEx.

(References are to sections.)

Fraternal Beneficiary Societies — (Continued)

certificate, what to contain........... ccc ccccceecceccucceccauceccece 232
FUNG: gis aieis san doragueeeinnaicetoaamnduler wasise tans se Sladoaracuarteidshnd eaaatigg 233
MNCOLPOLAWION 6-5) vaisiea'sc'ssiiniv stain d cade goieines badeeneas ss ouveadveradwn 234
reincorporation .. 0... ... ccc ccc ec cee cc cnncaueecsenveeuvceucuucens 235
mergers must be by contract, etc...........cccceccsecccecceececsees 236
foreign societies may continue..............ccccceecceeccecenctecces 237
Place of meetings oss. sist ise cesioulals sine snaeaneer SemaiesadneiSainview ee 238
liability of officers........ 0.0... cc cee e cee cenceucceucsucececeeserans 238
power of subordinate body to waive laws...........sccceecececeecees 239
exemption from execution..............cccccseeccececuccuceceesece 240
amendment to constitution and by-laws...........cccceeeceseceeeces 241
reports and valuations..............ce cece cence cuceeceseeceuccecas 242
examination by superintendent..............0.ccccccscceeccvcecuces 243
TEVOCALION Of DiCONGE. 6c ss sca ca cess wasieniacasaemern aes caceiaieet coker 244
exemption of certain societies..............ce cc cece ces eccnavceseses 245
taxation, exemption from............ ccc cece eens cece ee eeeeteeeeeees 246
penalties for false statements............ ce cece cescecececsceencees 247
application of other sectionS............. cc ecee cee e cee cseeeeneeeeens 248
review of findings of superintendent..............ceceececceneeeneces 249
Freights:
INBULANCE “UPON. -ssxavein pas cies ce itesle aisles acecocesesbseeicietensieressum aye proisinien aries 110
Funds:
of title guaranty company, investment of..............ceeeeeeeeees 176
of fraternal benetit society.......... ccc cee c cece cece sete eetcneees 233

General Corporation Law (see Appendix).
Glass (see Life, Health and Casualty Insurance Corporations):

incorporation of company for insurance against breakage of......... 70

Guaranty Corporations (see Life, Health and Casualty Insurance Cor-
porations) :

incorporation Of .4.c.0.scecseu cine eeeriecesauetenesce pawltenekee 70
Guaranty Fund:

of title guaranty corporation............ 2c cece e erence eee eens 176

application Of .....ccceccc cece nec e eee e ee ee cent eee etntsnnsvarenss 176

additions to ............. NpanaieemEsretnen aiden an ae aEH MALS ErawaN 176
Guaranty Surplus Fund:

Of fire corporationS...........cccc cece e cece erent eee ence ene cnenes 130

examination of corporation before allowance Of.......-..ssseseeeees 130

no dividends by corporations having............--:see eee eeeeeeeene 130

deductions from profits, et¢......csceeeececscerereeeecscenesecesnes 130

net surplus turned into.........- 20. cece eee eee ener een eee en eeenes 130

How invested ....scceccccccncce cnt recee eset ascent scent eneeeecenees 11

amount of, to be set forth in annual statement to superintendent.... 132

Health:
standard. ProvisioNS .....-.- 0... sees eee eee ee eee erent eet n eee eees 107
GENERAL INDEX.

(References are to sections.)

Health Insurance Corporations (see Life, Health and Casualty Insurance

Corporations):
agents fOr ..casimasniness roe eeiemewied Kes meee ne sae eee wee 9la
valuation of policies Of..........eeeeeeeoees Hime wiseeieeasnese 98
increased POWYS Of.......ccceeecceee cess renee eens enn eetetaenares 105
Standard proviSionS ........cccc eee e ene cece een cee e nee ent eeneeees 107
discriminations prohibited .. 4 sssssovsnetss een seune ties enreei aes 108
Household Furniture:
insurance on ..... duo aco iaasvasa pe bus eeanavavantuananeuaisi das ovstaeanieeanens ert Svaiaanlinveleveace 110
Husband:
wife may insure life, eb. Of sos ss vewiisisiene s Cue amen ss salen eses 55
Impairment of Capital:
to be made good by stockholders.............. PRATT TN 41, 42
of mutual insurance companies.......... sknrskanptade-svaverads jiminteiiieia camrasmerare 40)
Of life INSUFANCE: COTPOTALION icc sac cae Ceawed era) saunas 86
reduction of capital on account of..............+. AMEE TS BAGH -. 86
in case of extensive conflagrations...........e.seeesee seescescceees 132
Incorporation:
of life, health and casualty insurance corporations............ wee aiae - 70
of mutual companies ..... abdnareheh alas ver See eesiiiseees evewieene science 20
of fire insurance corporations............... sia mnie ¥ alee widasxsceex, 110
of foreign mutual fire insurance corporation..............0ccceeeees 149
of marine insurance corporation........... snivereinno s aieveie Sleisisieipidie wes ones LO:
of title guaranty corporations....... in ta ain ehghareriias wes lessee ietehaceriimnaiace acer LO
of credit guaranty corporations................... aes ses rere aes 170
of mutual employers’ liability corporations............0.....e ccc eeee 185
of workmen’s compensation corporations...............ccceceeeeeae 185
of co-operative or assessment corporations..... iui eaey.e Pia casas ad 200
of a fraternal beneficiary society.................... santa wes olee ahieis oe. 234
when « company to insure domestic animals............... ayaiarere dines 250
of co-operative fire insurance corporation................c ccc cuceeee 263

Incorporators (see Corporators).

Independent Nominations:
when none is made............. ccc ee cece wesc ee eee ME ecitians nnwenwin, OA

Independent Order of Odd Fellows:

certificate of authority of agents of, not required................0.6. 91

provisions of article VII does not apply.................00. Wifi send tae 239
Industrial Companies:

valuation of policies........... 0... cc cece eee c cence eee ecuvencees 84

certificate of authority of agents of, not required....... aia sigsemarrcaee. 1
Infants:

insurance on life of, without consent of............. SES CER ease, BD

insurance contract of...... Riiesaushava Srdvenong eariaeeatean ome Brahe 6 die avast gs . 65
GENERAL INDEX.

(References are to sections.)

Life Insurance Corporations — (Continued) :

vestments Of wcseveewnvswicserwaswessscaveesesavedeve vnwseereen 100
standard provision concerning policies..............0.0ceeceeeuceeaes 101
participating policies .......... ccc cece cee ese cencenccetceetensenrees 102
ANNUAL, “TEPOTES: OF hy.cssrvwiersrivearuahecnss s SAeKsEh wos Ys sca Seem ES 103
directors to be divided, domestic mutual................ceeceeeeeeee 106
reincorporation of certain........... ccc cece cece cee eeueneueeeunee 217
policies to indicate assessment plan............... cece cee cues eee 219
policies must be filed and approved...............cceeecevececeeves 220
Lightning:
insurance, by co-operative fire insurance corporations............... 262
Limitation:
OL TISKS) versearaniniere ee wS46 cia isis Biase discard insand asaiein cimmeies Chamero HAMEL NeT 24
of new business of life insurance corporations.................00000% 96
of expenses of life insurance corporation..............0ceccececeeees 97
of business, town co-operative corporation.............0.cceeeeeees 278
of business, town insurance corporation..............-.0eececeeeeeee 340

Limitation of Actions:

on: forfeited “Policy's iss :sisieiccisereie's'e\e-s sas Barerieteie Sisiw sa ae wel ineie easel ees 92
Limit of Risks:

LIMOUTIE COL” erst recs ve arore ac sstseeiera iintes wal a BPN ais ue isisie al ciecsiscens/Disueievdeceserwieseys 24
Lloyds:

Insurance Law applies « is dasis.ccows cutaeuns ongews orendeeaneswelsios 1

article I not applicable t0........ cc ccc ccc ec cece cere ec eee neeseenees 57

articles of association to be filed......... sc scene cece enc cnenccccscces 57

amendment of articles of association.............eccceeeeeeeeee eens 57

restrictions on policies Of.........:eecceee sence eect ents eeen cents 121

provisions applicable .......cceceee reece eect neeet ee eeneeeeeeeeeeees 162

application of article 10...........0 ccc ccc eee eee eee eee n ene nens 300

examination and certificate......... cc cece cece eee tee eter eee eees 301

general provisions affecting..........ccsceeecee een eeereeeesterees 302-304

application of other sectionS........... cece esse cece ence nee eee ees 303

of other States, admission of ............ cc cece cece eee eee neces 305
Losses:

statement of, to be filed......... ccc c ce ercccncececcescccsrcccancees 32
Machinery:

insurance against damage Dy...........c.eceececseeeeecerecnereecs 70
Magazines:

CIASSI HOD Ay inst canard ated Pate iad ene aslenersloudwe aoe Serta Guba tanta deg Mae me 361

cape not: Kept: itice bias aug oenag ih aang smcnneadeniar amtcann aaa ans 362

Marine Insurance Corporations:
minimum amount of capital stock Of..........:. cece cece eeneeeeeee 12
lien on stock and profits......c.cceeecseeee scene neeccrenerettetees 19
GeneraL InpEx.

(References are to sections.)

Marine Insurance Corporations — (Continued) :

power to hold real property......... cece cece cece eee eee renee teens
readmission of certain foreign corporations...........-++--+sseeeeeee
proceedings against, liquidation of delinquent..............+..ee055
incorporation of ........ BidceaveNt aacirarantrocnanie eR aaeseIN Siasbio.e aubieiatoraiers
notice of intention to incorporate to be filed............---seeeeeeee .
charter of ........... ei Reta U IS Aa ielalotelare wat ee:s Sag weGiad Vee pinweces os
duration Of. vc.ccsidacis teva sae aiaeen Pei eek eens cases wegeens
certain transactions of, prohibited................. seen eeeeeeenes ses
subscription to capital stock of.............eeeeeeee ive ara uoidvagecounubiacs oss
restrictions as to capital stock and premium notes...............++.
increase of capital by mutual marine corporations...............++6
cash capital of mutual.............eseeeeeeeee aac eee c errs teeeeaee
division of profits of mutual.......... cc cece sete reece eee eeeeeeee
rights of holders to cash capital of mutual................065 araveleneds
certificates convertible into Stock.........ccceceeee ee encecesceencene
amendment of charter Of.......... cece cee e eee e eet e eee n eect neeneee
extension of charter of...........0.0.. atanansiiannsais-aia eidendaeesis #3 ass areas
mutual may change to stock.......... SEERA RRS Rt Aaa secant ves Gee esaarniaca dace
insurance On CanalB.........eeeceeeeace MRD speteie Seba vei dvnveseras8 sora ates
agent must not charge excessive rates for insurance upon canals.....
may maintain agencies outside of United States....... ersten waar whe

Marshal (see State Fire Marshal) :
appointMentOf ws. aeneisinenyannna’s ys waielalsiecuoun ee ee ewacomns €8 C4400 kien

Masons:
exemption of, from provisions of article VI...........eeceeceeececs

Meetings (see Annual Meetings): *
election of directors of life, health, casualty corporations............
changing number of directors of title and credit guaranty corporations.
of employers’ liability corporations..........0..0.0 0.0 c cc ceeecceaees
of workmen's compensation corporations

Members:
of mutual fire insurance corporations.................ecccceseeue aie
of mutual fire companies, assessments on.............ce.ceceeee
of mutual fire companies, liability of.............
of co-operative companies, number required....... BS Bea cacerecgnbd Die acepaneagns
accumulation of fund for benefit of..............
of co-operative companies, quorum of..............

Membership:
of company to insure domestic animals

150
150
150
150
150
151
152
153
154
154
155
156
157
158
159
160
160
161

350

214

94
175
188
188
GENERAL INDEx.

(References are to sections.)
Jewels:

marine insurance UPOD.........ceceeeeeccaeecaeecsteceeeuvevevees 150

Joint-Stock Corporation:

may become mutual........... cece cece cane ees eeeersestacsveces 16, 95

extension, of charter’ Of. iisesssaue ds esteeriwiidee ccc evaseeneceans tee 124
Knights of Pythias:

provisions of article VII does not apply.............ecceeceeeeeeees 239

insurance against loss by..........cceesceesessees ood a cinerea cea wuts 110

Lake Navigation:
insurance against loss by...................0000. Mesa kiwicuer sa Saas Gave 110

Lapsed (see Policies):

surrender value of lapsed or forfeited policies.............0.sseeeeee 88
Larceny:

co-operative insurance against loss DY.........cseeeececceseccnccees 251
Liabilities:

what shall be allowed a8......... cece cece eee cece erence eee neeneecs 86

of fire insurance corporations, estimation Of..........ecseseeeeecees 118

of directors and corporators of fire insurance corporations........... 119

of new fire corporation on merger.......... BAER SS Ha SASS SETI ES 129

of credit guaranty corporations, estimation of...............eseeeee 178

Liability Companies:
ClAINE FESCPVES: LOT vives ccd cseew esos ca we ODES Ree w ss 54 BCR Te 86

Liability Insurance:

by any employee, etC....... cece cece c cree cree eter e nent ee tneseeeees 70
License:

revocation of, of person inducing surrender of insurance...........- 60

to agents in excepted caseS.........ee eee eececereceereeeeeeececnees 137

in excepted CAS€S... 0.6.6. cere eee entree eee eee een e ence een teeeeee 138

revocation of, of fraternal societies.......... sees eee e eres ee eeeeees 244

of company to insure domestic animals.............-sesseeeeeeeeees 250

to Lloyds and inter-insurers...........0seseeee eee ee rte n ete eeeeeeee 302
Lien:

upon stock and profits.........seeesceceeesencenencsen eee ncenceees 19

WALVer Of cece cece cece eee rene teen eee e ene e eee ear senna eeeneneene 19

Life, Health and Casualty Insurance Corporations (see Insurance Cor-

porations):
minimum capital stock Of........ceseee sees eect reece reeceseecens 12
TeiNcOrporation OF .......eeee rece cee cecenc tenets eseceeteneneracee 52
proceedings against, liquidation of delinquent..........--+-+---++--+5 63
incorporation Of .......seeeeeree cece nest eeen ee ceenreeneneneentens 70
for what purpose incorporated.......-.++seersereeesereceresreeeees 70
mutual companies .....-.-. ce eee cece cece eter tcc ee ec eetereeeeneane 70

completion of organization Of..........sceeceereeseeeseerercens jae EM:
GENERAL INDEX.

(References are to sections.)

Life, Health and Casualty Insurance Corporations (see Insurance Cor-

porations)—(Continued) :

withdrawal of securities Of........... cece cece cect e cece cree eeecnaee 72
special deposit to secure registered policies, etc.......-.++sseeeeeeees 73
annual report of registered policies and annuity bonds............... 74
registration of policies and annuity bonds............+++ss+seeeeeee 75
when deemed insolvent...........ccceeeeeee ee ec cece eee reeeceeeee 76
annual investigation of insolvent corporation........-...seeeseseees 79
powers of receiver Of......... cece cece eee e eee r eee e cane ree ceeeneee 81
valuation of policies of health insurance corporations............... 93
Life Insurance Corporations:
power to hold and dispose of real property..........--.0+eeeeeeeeees 20
loan upon policy DY......cceecesec ese n sence cence eee e eer eneeeenees 36
amendment of charter Of.........ccceece ese e eee e eee e nent eeeeeenene 52
Teincorporation Of .....cccecceescceceecee eens eens eeceeeeeeeeseees 52
See Life, Health and Casualty Insurance Corporations.
proceedings against, liquidation of delinquent...............0:eeeeeee 63
issuance of registered policies in exchange..........0cseeeeesseeeees se
powers: of Treciver! Of isi is ccsinsssccwws sess vawssees ss ss cm uneess ease 81
when receiver not to be appointed............ cc cece eee eee eee eens 82
when not to issue new policies............ cc cece reece eect eee eeee 82
distribution of surplus to policyholders.........cccceeecesccccceeces 83
may require policyholders to elect as to manner of payment of
GIVEN 25's acave'e ssc ain seNeey eres lala png 9 le Nae tigmeaaay via guar eeeie 83
payment of dividends to policyholders.................cceeeceeeeees 83
valuation of policies Of...........cccceace cece ec ee eee sseeeneoeneees 84
may make voluntary valuation of policies............... ccc eeeeeeee 84
when actual premium is less than net........... ccc cece cece eee eeeee 85
what shall be allowed as assets Of......... ccc ccecccececeesecteccees 86
impairment of capital stock Of.......... 0. cece cece cece cece ese eeeeee 86
reduction of capital on account of impairment....................2.- 86
may accumulate contingency reserve.........scceecceccecccsecceeccs 87
surrender value of lapsed or forfeited policies..............c.eeceeee 88
discriminations by, prohibited............... cc cc cece cceceeseeaceees 89
discriminations against colored persons forbidden...............0000 90
no forfeiture of policy of, without notice...............cccccceceeee 92
names of policyholders to be filed with superintendent.............. 94
election of directors Of......... 0c. cccceececcseceucucenscuccecencens 94
conversion of stock corporation to mutual..............ccccccceeece 95
limitation of new business Of..............ccceceececcccccccccecece 96
limitation of expenses.............. ccc cece cee cucucacencesecevenece 97
salaries of officers and agents............cccecececcececcccvcccucece 98
vouchers required for disbursements of..............e06 ses elotalaearavens 99
investments of, to be approved by directors.../.......e.eceececucese 100

cannot enter into joint investments................ecccaee aa iwtehsoedaade 100
GeneraL Inpex.

(References are to sections.)

Net Surplus (see Surplus):
turned into guaranty and special reserve fund.............-..0cecs0s 130

New Business:

limitation of ................ ete sveeapess sashavesaisence acpavevaveiats sybase ale aarsictals 96

limitation of, foreign life company.............0.cccccceeceeceecees 96
Nominations:

of candidates for directors. ......... 0... cc cee cece cence eee en eee eees 94
Non-Residents:

insurance of, town co-operative corporation.............. aes sbavarsniaaco 274

as members, town insurance corporation................0.0eeeeeeeee 342

Notes (see Premium Notes).

Notice:
of filing certificate of foreign corporation................eeeee sees . 3i
of intention to form life, health or casualty insurance corporation... 71
of withdrawal of securities deposited.......... 0... cece cence ee een ees 72
of payment of premium............eeeeeeee HbaNeeeus se veces OZ
contents of notice of premium...........cee ese e cece ences stern eS 92
no forfeiture of policy without............ ccc cece cece ee eee eee es 92
of intention to incorporate a fire insurance company................ 110
of assessments in mutual fire companies..............0cee cece neces 116
of intention to incorporate a marie insurance company............. 150

Notice of Assessments:

of co-operative or assessment insurance corporations.............++ 210
contents of ...........+.- daigtales woes gy 50) Seah a iowa asbve ores ereyeaeiacsioia ities 210
affidavit of clerk is presumptive evidence of............--.--2-+eeees 210

Odd Fellows:

exemption of, from provisions of article VI..... Badd diadenagaaseannee aaheink 214
Officers:

not to be pecuniarily interested in transactions.............+++s+e0- 36
misdemeanor of ...........-06- jee. Sears imees ees delacenteee dion 36
shall aid in the examination of corporation....... shives scans Pouioes 39
to examine securities deposited.........-..seeesees saaeee Deusen 61
to issue certiticate of examination of securities.........--.-...000ee 6l
not to omit name of policyholder from list...........sseeseeeeeeeees 94
not to advance money ror elections..........- eee see neces seeeee - 94
not to solicit votes during working hours...... andradenecg oasis amarante 94
agent, employee, not to coerce other agent, officer or employee........ 94
of fire insurance corporations, officers Of........ 6... ese reer renee eee 98
of mutual employers’ liability corporations............-..0eeeee sees 187
of workmen’s compensation corporations.........sceeseeeeeerenenees 187
of company to insure domestic animals..............- ee eee 251

264

of co-operative fire insurance corporation..........-.+..eseee rece eee
Cre rtal Vite?

I Matepscninnn wee ber weed HM, }
Cte
Grr Varmnin inne, As MASPe Hh LTTE ETT ETAT LALLA #
Mdm ON eee TUCO TATU ALLEL CEUTA EET E TTA TUTE #

(Mficins Hatlas-
Mn Fate geet AAA bry wet OHM poner TEEPE ET TATTLE TTT TENSE Wh
har eubationd mand nninbmoe eororsverearecerecsiecieeesenseseeiies WA
WA PAHO POTEET TATA ET EET ELATL ERT EL EAD ATTA EL TTT EET wh
penn tbbnrn Wer Wee eM perprecccrceerenssecrccanecereasaiine We
blew MANNA ie KHON reecerereereccecercovesiecooeerieeieiiy Wh
Ware WUHAN EET TET EO ETL EEO DLUTETATEELTETTLAT ATLL ETAT wh
baw mednenwd serpraccerecansecccerosseerieccriiiiiiiirecriiiies We
rary aNd, Noe bh OWA poreroecccoccstseceriiiiieiieiiiiiiiiny: WA

WANK Nite Vue y
wanhnrh dev VO rrecceecereareerearecerenccenteoriereel AN

VIN ANY SN

porn iin (8 UBBebe bibl MANY AIAER PEEL ILTI CELL ELETITT ELL AAPTEETL Wh

Var itiyhting Pia
WhAte Vids ‘pavendpmrtiton MAEDA Heo Same orrreccercecsenerersinine VA

Yass net they

OR AOKIPN A PET T ERTL ETTELLTATETEETTETETET TUE ELLTLUTTNALT ETNA Wh
‘ 4
MANE VT DET TTOTTEELLLETTATTTELATATELELTLATADTATAATEE LTTE IW

Wemyss ar,

Gop Vie ts Wh Pile with wwYAY crocrosecroctereersieaierisetiisey
Sip Nabe 8p bah y Vr inte Fini Wy WHMHMMNAMI: por cerercrereeiiny W4
Sean banat ingen A -1w1 ViMMMOMi 11 TT ET ELE EL TL ELTT OUELLETTE
tin Sonpsinyedt WA A wire! creercercecsereccoreesiroeriseiiiiiiii: A
Son aiwbitie Mang provi MN brnviynea bwdrerricisieistsiisd
sow waggord, A vyp1h, Me 7) My ARMION NA ed Wr cog ciccrietiitt Vb
fon seh anh 4 1 wisth Vw ys Wile while: crrorerserzoceccecereetitiy Wh
Sop nat tory aibrony 1s Hibhly A rt-en atibhe Wy iM OR rrcrecrreriint
Ay Mid whe 1% Nb WANS INNA, pho oh itt A MAAN ALM LEO TELELTLIELE ELEN LOG
vig i mamboncopseon, Voi ty AA trap e416 MAN YAWN. or rorererecrcieees TIS
fap 1 10w AY Mi MM cr recrerrecreicicitedtrtieetettittertsitt: SM
Sas peptone 1 yd poeneLEss es sess eed etdsesetededdeetdsetidttil IV
9498 1A SPRD AM WA re corerterereredderredsibettestdsetetsrs Vb ba
ty Abate wi wen sorcrircecsinetecricretesisereceteititsirtis Wh
tor trmbanen, “w Ixtan wwhanwnter recrepeccrresretrteircerectrerite TAR
fon 1 tahion A tes worl WA erie y cerry pipe sire ittrtts,

wiles Sors Wind dA, oo Wilt Synrh Pipe er OBL GS

for txine Wh yay +7 Aaya
Vantin;

MA Ny A op nrOhh 4, fhbads Mh beth Aina yp syn bbb reir e:1re1
Varn Winyarty,

j
WA ARAN MME AME OT Dip g pyr py

AOUELVLEDLMMET ELE boy ihylt7
Cro ear Vein.

\Seuhipcpinn wie ty wrens.)
Merger (u« Conastibation):
A fire an porathons, myyroras A RAT ARWAOM, coro ereeeoecaoonsett
t+, tow Filed 1, HAY Ohare’ ¢ DD A IAL DIEEDVEDHCLDDEOPIVIDDDODEDENE
wa hire BMPR 0A RELI EEADDILEDD LOO REUEE DEI CEORP Mabe Fie
A Yithx LAINE Y UN YONSWMINE oor ODD OODLE OURO OE OED EEE TEELELObbTED
Whe ARN COTY AABN. 1 ro eee c econ en reer cobrebeaorerberebroneee

129
2]
5m
179
179

ee
8 hi9'e1 ah bioneBt GARY 0 P2000. 0 020 LLAE CP LIAOEDOEPDEDVEERODEPLIDE LA

Minors:

wMmison ff POOLOEOLIEPLOOOIOPPLIDEPEOPOEPLIOLONEESELELEOOPIDULDSE

Mishemannar:
A Mirentorn on Athan peruuiarily Siheranah 11. VORRWMAOWE oo oes
Vihation A Nnenranne Law Wecrorccrccvocccveceresencceroenrereees
Mijas eyranentathins Wy GRYAMAOR oro rcoreccocerecacoeroerronberet
wnninitheh wh dudivn fA ANCMITHA: pereneececervececorearoeacso++tte

for synth 4, wih Sow Sareign wiry ndiin Nehirre yay ie AB oor cre
Wagar’ Wp anny WI IK MIAIOWE! peereer cee cbertenreete

Miereyrenentotions:

hy SAAN ALIN: Pini Nas, PLUIVPELRLORIAOLALIILDE IL DP PTT RD RE foe

Mortgages:
Aayn SC AACOUOUOUAI TUL OLOLLODOLOEUDOLOUOLOLULUMELEELLUDLELEDLELED
property ehh hy, WN We AWMOR epee eee necceccenesonserere
Wattle BRM MAA DAIV COLO OEUTEO OUT OLEDELODEODUONEDOELELDLIOD
WMiAayh) npnetsd day, Niovecccccccuccccvaseccesereeneeeereres
Ayers, “A, 549 MSIE WEN OOOO EDO TOOOODOLLOLTODEDDADEEOLEDEIES
Snyanhineits A Nile Sturman GY hha UL pp rornenecorrrrereseter

Munteipal Corporations:
SMT ation an brs “a PHEEPEIOELEEEODEEFIEBTIOIETEEAIOFIAUEOMAIDITF4GA LE
Snvawinantn wh Nite Senate MOEYHONIOWE src crreerecetrgereece

Mutual Bensht Fraternity:
Kaertmin whidinn AmAURG Vr Veneer reer cree eran anne neceneersereter

Mutuel binployerd lisiility, and Workmen's Cryin penal inn Nn as inns:
WEN HH ALIN , EPGBILSTIAPREUOTLARFAVATIR 2 FEEEE. Bec eee
HAM Ned jens PN LATELIENTL CLOUT OLE OTEEAEELEDOL ELUTE LODO TLEPLETEEEE
Miveatern and (Mears. , ERP ERE ORE EET UPEVIELLOORLDOT ONLEOT POD
WMAN SNL Ane Of PILING MAE YONA OTTO T ERO OT ETL OOETESELEETTOEEEE
pnnseennenitn » , POOPIPTEEDDETEOTLOUELETELLOLILESEELIELELTETESE
AIVINHA be E LTO OTTO LEELA CELETEELEVELELOTTEILILELELELELOUEE
runeyyun, waperyiniins wane Nasicn and seinebabenunt of verhifieale, ,
pegs $a MHA exarrinad tire Wy manger inte ndent oh UMYATE! core cee
pe yen fen ON MUGMOWA LOL EEO T OLE DTEL OT ELLOOTETEOEELILOLTEEDE
aubanindion ON tordgn MMbMAL era nee AABN preci ecreerce

214

ERPESs

Nits

70
un

Lb

en
1
197
1m
Ion
iw
sat
W4e
Vas

44
GeneraL InpEx.

% (References are to sections.)
Mutual Fire Insurance Corporations:
proceedings against, liquidation of delinquent..........-.++erseeeees 63
not to insure foreign property..... nelacilaratalorahaceseisaas Seeker sxavacacaseinuanege eaters 111
See Fire Insurance Corporations.
when permitted to begin business..........5-.sseeeeeeeeees asajateateoere lll
capital stock of........ absyayaiecareesave ce Mieacceeseseeee sis Muayaetoenivectornata LTT
premium notes of.......... sai cauieceeno raven tnteutlvesadouaearervecis sas oiehes szee« 11]
See Fire Insurance Corporations.
capital stock notes and deposit notes of............. coeeeeeees 113, 115
members of ........-005 egies CoM SMEG Re Ae GEES he sciveveseeue 214
may unite cash capital as an additional security..............-+.... 114
investment of cash capital of............. sadaya ore ince Besiwsers iatecnes sea seasuwiees 114
interest on cash capital of........ hewenee Sibvd-ro'oveseaeldnacers ele arnuaacee siete AA
liability of cash capital of....... sSaiea Ve Veiwsivaaaemavs Ssiaawasajeseuw, 14
cash capital of, when to be paid in.......... Seamweges sigricisiavereieieniee 114
cash capital of, when to be paid Off........cce cc eeee ee eeeecceccceees LL4
deposit notes Of......... cece eee cece ee ete eet e ences eeees Baines 115
cash payments IN.........e00- Sigg ise sot s rate ler oranertt ein bie es agen er ae 115, 116
assessments in .........eeeeeeeee coaaeeebaeereeieases deiieawea aa .-e. 116
examination of ..........eceeeeeee Jao Sea ae Ce oaeelndeiaee - 8
PONCHO jie deecergeacaisracarsscuoresuweesiacianererasetencs Tate NES Aa tersierasnctioaseatvarste eevee 120
change of, to stock corporationS...........-.+0006 auavanotere eer 125
extension of term of charter Of......... 0... cece cece ence e ee eeeens 126
Mutual Insurance Corporations:
impairment of capital cf... ... cc cece cee cece ee eee e teen eeneees 43
directors of, to make good impairment........... Oo aciesnngieencwaey 4d
proceedings against, liquidation of delinquent.....................00 63
incorporation of ............. BTS ean NUON Sd Avie lees Aare 70
Capital: Stocks. Of: aati qian sitisitiavac splcaavare arhigwuatcatave ss paumioe we Medea aes 71
may borrow money......... sy auiaue toch p)avah0's, dy aso taeatantonna ohare Ses ieietneteroiarelets - 71
Mutual Life Insurance Corporations:
conversion of stock life corporation t0.......... cc. cece cece ee eeeees 95
directors to be divided........ 02. ccc cece cece e eee cu eeeaenaees 106
Mutual Marine Insurance Corporations (see Marine Insurance Corporations):
proceedings against, liquidation of delinquent....................00. 63
PREMIUM NOLES Ofes cessive sctessieeuaite nena Rene bite eee sasee eRe S 152
increase of capital of..... sree siecesuaeeeae RSIS gods cececeee 153
cash. capital of. i wssacsamcmwsenes needs sees aeneeaisiearsinte ydaiiieeinvey 154
division of profits of.......... didie ainsi eeihecetrsers ig eeeierlvawaeewndss 164
rights and liabilities of holders of cash capital of......... ayes coos 155
change of certificates of profits into stock............ccceeeeceaen -.. 156
Names:
of policyhoiders to be filed with superintendent before election of
GINECUORS: c-Si cr diautaeigsneaus eter na cilextqeasins narotaenaedeloteuiecs ameter ciielua l4

agent not to transact business under fictitious....... fete cece cece 54
GENERAL INDEX.

(References are to sections.)

Policies:
pledge of as collateral security.................00- eee Dain Mae seasacn 16
when not to be issued without consent of insured..............0..00- 55
to contain entire contract...........cccsencesccenstsecsccccccuccces 58
COMbETIES: “OF sso nare ganiears aya Hviaw ee S55 Sen wie Sie eveso ated deo Seavainin iene) aethiarsare’e 58
certain provisions in, prohibited............cccececeeeeceveeces vere. 59
misrepresentations of, prohibited..............ceeeeccceeseeceaeeees 60
surrender of, to receiver............. cece ccc ee cee cee cece secaeeaues 62
what may be embraced in....... 2.0... 00 ccc ccc eee eee eee seas 70
repistralion: Of wade xdiscew eGasinieieiecnda siicdsdauidsusinncelebinewrreleanealiers 75
purchase: (of; “Dy TECSLVER a. is isareaid Sutin sawWaraieiiearwaaseautnuesainanies 81
when new policies to be issued.............eccececeeseccececvecvees 82
ValUStION: OF weiss wien ose tmengindewauseaseaaease civ eeseNuureese ee 84
valuation of industrial...... 0.0... ccc e cee eceececeeet ence encase 84
reserve upon endowment policy...........cceccecc cen ceecceeeeeeeees 88
surrender value of lapsed or forfeited........... cece ceceeecncceaces 88
discrimination against colored persons prohibited..................5- 90
no forfeiture without notice....... o'faisla asa emineris Maweinrs lenin aeee 92
of health insurance, valuation Of...........cceeceeeccceccccceeronse 93
of life and endowment insurance, standard provisions................ 101
parbicipaving ss ja. xisaisjasjnin oa nie.ars einiaeioreiersininieis  vuivisjsieleloinaieisinwaleiyte o-. 102
of fire insurance corporationS..............ccceceeeeceeree weeeees 120
standard fire insurance..........ssesseeeee SeREbeeinares seater eee 121
payment on cancellation Of.......... cece scee cree eee eeen eens eeaees 122
cancellation of, by receiver... cc cceece cece cece cece ceeecececeeeene 123
of foreign corporation, penalty for refusal to exhibit............... 136
of fire insurance, report of consideration.............eceeeeeeveeeece 145
of fire insurance, fees and charges to be indorsed on................. 146
of mutual marine corporationS.........cecceeccececencceceecccenees 152
of co-operative company, payment of maximum amount of.......... 210
to indicate assessment plan . . 21... cece eect eet eect eee e en eeeee 219
life must be filed and approved.........sceeecee eee teeeeneeeteeene 220
issued by co-operative fire insurance corporations.................... 265
Policyholders: z
deposit of securities for benefit of.............seeeeeeereseeenees 26, 27
may request examination of corporation..........s++eeceeeeeseeeess 40
distribution of surplus by receiver........-..sseeeeeeeeereeeeereece 79
distribution of surplus t0........ceeeeeeee cee eccececescenceseecens 83
election of manner of payment of dividends......... wba eeeeeeeeoese 83
accumulations for benefit Of..........c. cece eee ee reece cree eereenens 86
lists of, to be maintained at offices of corporation..............++05- 94
lists of, subject to inspection...........- J aceceisarialoeeee neeatele seeds 94
methods of voting by, for director8.........-..sseeeerecesererecees 94
entitled to vote for directors..........ceceecen eee se reece eneeeseenes 94
names and addresses of, to be filed with superintendent before
election 2... cecen cece eecnee ene eeceecnsccererees ciatwiajexate aia javelalarecs 94
committee of, to receive names for electionS............+seeeeseeeee 94

approval of, to conversion of stock life to mutual.............+-..++ 95
GENERAL INDEX.

(References are to sections.)

Powers:
certain existing corporations increased..............0cceeeeerecreees 105

Premium:
ON TeEINSUTANCE ......secereescevvecs eigaceegae nar oeeneoes Sai eee eRI 22
statement of amount of, to be filed ‘by foreign corporation........... 32
of foreign corporation, taxation on............ SEAGN OU web areavonetexetererers 34
when actual premium is less than net premium......... sovececeves »- 85
annuities, non-payment of......... ee teesersersesee saeeeeeees coves 88
surrender value of policies forfeited for non-payment of........... 88
notice of payment of, to be given........ eetetaele's sigbiomintsfoeei eisai 92
of foreign fire corporations, taxation ON.........ccsceceeeececeeeces 133
provisions concerning, life and endowment insurance................. 101
fire insurance, report of consideration as premium.................4. 145
assessment taX ..... cece cece e nese ee eee enseecees HONEEW eee s SaaS 149-a

Premium Fund:

how computed .......cceceeccccreencccecs see eeneeeececnctncenenne 22
Premium Notes:

receivers to make assessment ON... 1. wesc eee cece cece ete ee ceri aeees 61

of mutual fire insurance corporation...........eeecceceeeeeerereeees 111

to be approved by superintendent.........csecceccceccccccce saiewe LIE

of mutual marine corporations............cccecee ence nesceneenece 152

Premium Rates:

approval Of . ..... ee eee cece eee eees PE W/E. Ai achatnn iSoaN oe raietouns Musshvedia asa ye 67
Principal Office:

of co-operative or assessment corporation, designation of..... eeseses 208
Procedure:

in case of impairment of reserve fund..............ecccccscecesceees 86
Process:

service of, on superintendent as attorney of foreign corporation..... 30

superintendent to forward to corporation.......... aoe ete waivers cecese 3D

service on co-operative company, designation of person....... wees eae 203
Profits:

lien on, by certain insurance companies....... Beis’ cays achve w isidsais eit 19

surplus of fire insurance corporations.......... afatahavevsy ere seaaee aioe mateo ge NE

of mutual marine corporation, division of.......... Sa histoire sieiete esters 154
Proxy:

right to vote by, on election of directors....... isipinie ssi 6 sracacwiate wate seeee 94

revocation of ............ Ensen a iniatets-e-s eceuieiswis snecceccrecccssense OF

nomination of person to receiver............cccecececccecaccececees 94

execution Of .......cceeeeeseccseees niewale aanrtels TERRE s corieew games (OE

When. invalid: cscwieccssssennveeevaaeees caaceccewew cae siaieie isiciere one 94

to be attached to official ballot......... Sila aor endless igsevera coecesccercccee OF

| to sign official ballot............. ce cece eee ee renee a4 saleteriotou aeeeeee 04
GENERAL InpEx.

(References are to sections.)
Prudential Companies:

certificate of authority of agents of, not Tequired.............0000. -. Ol
Public Adjuster:
certificate of authority .. 2... cee cece cece cece ec ccaeeeveuenes 138-a
Quorum:
of members of co-operative company..........sseeseees cececvosccccs 216
of annual meeting of company to insure domestic animals........... 251
- Rate Making Associations:
organizations to assist in... .... le cece cece cee ceceecececuecucenens 140
supervision and inspection Of . ...........ccececeeeececceceeucseces 141
Rates:
town insurance corporations may fiX.. ........... ccc cece ec ueceecees 337
organizations for assisting in establishing . ...............2.ec0c0c- 140
Real Property:
deposits of mortgages on, as security............. eieieistaielere osuiteowse 13
affidavit as to value of..... sidigie bis eis ais sieiniet's s srseewanien siege gjereeeriies “AS
MMBUPANCE ON asossiei es mageeuends sonseascemveves wae TER ea eES BRO 13
title and value of, covered by securities deposited..............0.005 13
investment of capital and surplus in..............cseseeeeeeceeceees 16
restrictions as to ownership Of.........+sseeee- Ae oevececcecccee eee. 20
duration of ownership Of............ ces c cece e cece en ceneececeanees 20
investment of life insurance corporations in mortgages on......... - 100
Rebates:
PLOMIDICED soc, scans oa cueneswongie es emmemunbierdtedatiadecnaine t 89, 90
Receiver:
MAY INSUTE ....ccceeceeceesecececeeceeees elas duaiste's 1d areis ecereie eescacee 23
order of court for reinsurance..........csseeeececeesceecererscenes 23
to make assessment on premium notes...........ccceeeeeeeeeerereee 61
surrender of policies to...... sae AWN Sessa Mas eae aes Seema Rr NNNE es 62
appointment of ...........4.. eee neccsnvccscce susvave Se a1eba's pig eielsierers - 76
OMA. -Of ssa ccaiesiy nionce cites sadmwugiion ss «mam@isdecrere ilaidceisieis}s:sisltewieterete 76
to take possession of deposit and assets............s.seeees seeeeee 76
Proceedings DY .......cccccscceccccscccccccerecssceeccnecs eoceeens 77
' to appoint actuary....... ccc ete e cece e cece ceeecncncee sine eisiaimuaseeve 77
when he may be discharged........... peeccercccseccccerecccencsees TE
to receive proceeds of securities sOld............eceeeceeceeccecasees 17
to pay registered policies and annuity bonds............seeeeee- eooe 17
additional duties Of.......... ccc cece cere ener ee eenscrecereceoenues 78
investment by, of surplus of assets.......ceseecereecces alatgue Eeeimesare 79
distribution of surplUs.........--cccececeeeeeseeeees isha aecesa es esrereiey - 79
issuance of scrip........- (iCbeWan SeeSWEReRe se MeseKeuee ss ciasioens 19
POWEFS Of 2... ccc cece cree ccncencetnsesccoees atalahateeietevers 4,5 seaieemtaleness 81
may employ clerks........ssseeeeeees b iwies aia dhe BS Si BOYSN Ste wines eleias arsine 81
compensation of, how paid.........cscceceececcceecccecrses sesatiees 81

when not to be appointed......... aiisiinneirier esisinessserisive scieweeae. OZ
GeneraL InpEx.

{References are to sections.)

Receiver — (Continued) :

distribution of surplus to policyholders. ...........-sseeeeecreeeeens 83

of fire insurance corporations, cancellation of policies............+. 123

issuance of certificate of indebtedness by........ssseeeeecccereeeees 123

report of liabilities by..............0- i sin'se weave Srayevertela-e os iorsiejvesciavararaiee 123

transfer of deposits by superintendent to..............---.- eee eee 104
‘Reciprocal:

requirements a8 tO depOSit........ceeeeecee ene ee eee renee eeeseeeees 33
Records:

of co-operative fire insurance corporations..............-.0eseeeeee 264

Of sales0f Ox plosives. sc cc cana Coeds eee eee meee eres ¥4 365

kept by State Fire Marshal...........ceee cece eeee reese ceceneeeeees 370
Reduction:

of number of directors...........c cece cece eee e eee e enn e eee eeeeeeee 10

Registered Policies (see Policies):

special deposit to SECUTC........ cece cece cece e cee e eee e ee enereceeees 73
annual report Of...........ccereeeececeenceceeesneees SRRR ERNE 74
liability of State to pay........scccevsvscrccvcervccceeessereanenss 74
TepistratiOn: OF aciosa-e:no%scisiniardiewis winie'sece'g igi e's bipiewie Seniors Seale neeoregairs 15
payment Of ........ cee ceeeeveeeeee i aiai6 Sale o- do Wie oraleinisieie sweetie oeselats 17
issued. In. exchange... ses sicnsscasdesvesss smnnesaee neces apewmns ea 80
Registration:
of policies and annuity bonds............. $28) iste sin arelsiare lie isinieis’e seeee 75
Regulation:
to be made by State Fire Marshal..............cceecceueceseuecees 379
Reincorporation:
of existing corporationS............. ccc cece eset cccececceescsseceess 52
GMPC SOR os ayat sinc tvaveveresd Se raed suave ohoia ta retayersteisigiaye:s 0 ioibretelsiejsiel as Sieiereseewniatetans 52
of mutual fire company as a stock corporation........ awe Sie eae maTeE 125
of existing fire insurance companies............ceeceeceecuceecvecn 127
of co-operative or assessment insurance corporations .............+ 206
of existing fraternal beneficiary society............cccccecececcscecs 235
Reinsurance:
Method. OF s.sesss vecinisiensjereeweiawere va receeveces seeceercenccncccces- 22
schedule of, to be filed... .... ccc cece ccc cccnncccnsncscceucnccccce 22
Dy PeCelVeN® aie s soy acsieleiarersistere esa xia ates jecerace, aise lerdveloccias aeesieie srelearsvetnewe - 28
only by order of court................ ecee De eeeeeeeneeeecaees eeeee 23
limitation of risk.............cscceeceeees difere stesefetere' seesasccccscee 24
by co-operative or assessment companies....... tee eeceeeenccceeeeee 209

Reinsurance Fund:
of liability companies.............. eisieete ais isin tele oes eeescccccece oe. 86

Religious Orders:
provisions of insurance law, application to....................0000. 64
GeneraL InpEx.

(References are to sections.)

Removal:
of cause to United States courts revokes certificate..........000006 30
Renewal:
of certificate of authority. .... 0.0.00... ccc cece eeuecceeeeeeeneeuees 32
of statements and evidences of investment..........cececeeseeeceees 32
Reorganization:
of existing corporations............ 0... cccee cece ceeeeeeeeeeeeeenes 52
eflett: OF si.:..wnesnvansentouai nea meats sacrenbeeeweens KisweeCAerae 52
Report (see Annual Report):
of foreign country corporation.............. cece ceeeeeeeeeeeerenes 27
Of OXaMINErs osc sinnceeidadesweseass anes SaNe A WU RA SOON AORN aS 39
may be withheld by superintendent...............cceceeeencneeeees 39
of liabilities, by receiver.......... ialiana ubanashin ele Catrn ao wee alsiaembeer baer 123
of consideration to fire insurance company.................ee eee eeee 145
of fraternal BUCA T iacdesecta ular wobiccalaniatn eectbel aa ndscmnie cua 242
to assistants to State Fire Marshal.............. 0. cee ee ee eee eens 378
of corporations’ « < anss.enieneve reas yiveener ess atarneee sees Appendix
of corporations further requirements....................0000e Appendix
Representative:
of policyholders, not to be paid by company.............cceeeeeeeee 94
Reserve Fund (see Special Reserve Fund):
CO PUEA ELON. OE: ype caiaidvsin: osu oiw'b 6 avere osdiiacede osscnsn.agacectaeraseiuiviaregonin achibvasere aime 86
impairment of, procedure...........ccceccenecenccencescceeseseeeses 86
include dividend additions, etc.............. cece eee e ween ceeeeeseers 88
of foreign mutual fire insurance corporationS..................0e000+ 149
mutual employers’ liability corporations..............eeeeee eee eee ee 191
workmen’s compensation COrporationS........ccsseeeeeeeeeeneeeenes 191
of co-operative or assessment insurance corporation..............+.. 205
USE OF \CXCOSG OF ss jurerow: a:wreieiarsieererrsinisisrerqura oieie qabararerer sie nw wleiaee Muscerara-diestyesar 205
of foreign corporation............cc cece eee eeeeree ree ncteceseeeees 205
Revenues:
of fraternal beneficiary society.......... cc cce eee c ne nseceensaceenace 236
Revocation:
of certificate of authority of foreign corporation................-... 32
Risks:
reinsurance Of ...... cc cccce ssc e eres tere ec ee seen seen eeeeeeneenenes 22
Timitation of ........ ccc cece cence crete eee ere enceceeeesseneessens 24
taken after impairment of capital.............sseeeee eee eens 42, 43
transfer of, by co-operative or assessment companies.........-.....+ 209
classification of, town insurance corporation.......-....:.eseeeeeeeee 337
Salary:
of superintendent .......... sc ce cece eee ee ec eenreeseces saison arena ene - 2
Of CleTKS 22... cece eect eee eee e eee e en eeneeeees eensccoens gaa 6
of deputy superintendents........-...ceceeeeenencncersceeserene ise, 5
of officers and agents of fire insurance corporations..............+.+- 98
350

of State fire marshal.........ccccscec cece nce ce nese eter eeeeeesane
GENERAL INDEX.

(References are to sections.)

Sales:
of explosives, record Of........ 0.0. c cess cece teen eet r eres 365
Schedules:
Of TeiNSUTANCE ..... 2... kc cece eee cece tence teen n ce eeeeeneee aieeiaie’s 22
Scrip:
issuance of, by recelver.......ssescesescecrecere eee ecenenees eeeeee 79
interest ON ....... cece cece cece een rece eens ene eneeneeereenenreeense 79
contents Of ........ ee ecw e eee s eee eens tee cene Srayaia hare eRe some 19
Seal:
of office of superintendent........seeeeeceereeccccenecee Were ieemsiors ie 4
as presumptive evidence..........: cee scenes ceccceeesreeees qsierdibial icons 4
Tenewal Of 2.2... . cece nce e cence ene eneeeneeecene ab ews lersrefaieretierst aise 4
fees for affixing........ cc cece cece een e renee n ere ee cence eecetseeenes 6
Securities (see Deposit of Securities) :
deposited with superintendent...........eeeeeeeseeeeceeecenreee ll, 13
investment in what kinds............cceee cscs eee en scence seer eeas 16
kinds credited to insurance corporation as part of capital........... 17
promotion of insurance companies. sale Of..........--. see e eee eee eee 66

Securities Guaranty Corporation:

INCORPOTALION Of nis csiis cr disaunee nhc mani dddetiues ary ahaa dons eae Be in 170
Service:

of process on superintendent as attorney of foreign corporation...... 30

of notices of assessment of town co-operative corporation........... 269

Short Title:
GE WARS TCS). To Wi ace rasa odie ro tv ersssserave ioiercieserdsetelere,arwd teresa sd cavesava. osaveloveseiessne 1

Sick Benefits:

societies paying only sick benefits not required to report............ 214
Solvency:
certificate issued by superintendent of insurance.................. 182

Special Deposit {see Deposit of Securities).

Special Reserve Fund:

of fire. corporationS ss vcciconsscesasiiseseseaeesare eeeess aeiseawesees 130
examination of corporation before allowance Of........sseseessees -- 130
no dividends by corporation having.........ccccseceecceccccscecees 130
deduction from profits, etc......... ccc cece cece cence cect ec eeceeeens 130
net surplus turned into....... cc cece eee e ence ceceneetcnseee wane Reaver 130
HOW ANVESLED: oc aieiscos poised ineincmae ech emin deen cam acaeenne tenis 131
in case of extensive conflagrations.............0.eeeeeeeence siedpayereie 132

amount of, to be set forth in annual statement to superintendent.... 132

Standard Fire Insurance Policy:
form of, to be prescribed and used........ Sialsaisssiesaie/siate-selejayeiele Sede 121
GeneERAL InpeEx.

Refere: t ions.
Standard Provisions: : pe eras,

concerning life and endowment insurance

rive 894 Vata aeaGae cea es 101
accident and health policies................ccscceucceeceecenneeecs 107
Statement (see Annual Statement):
of insured to be considered representations........ceseeecscccccceees 58
of monies in regard to election of directors.........0.sscccceeesees 103
of condition, title guaranty company...........c.0cceecsceeeeeeeeee 183
Statute of Limitations (see Limitation of Actions).
State Fire Marshal:
office established, appointment of...........cccecececseceececccasees 350
Perms OF! is. waren citiecs 006 acy aca nina e's' « greceichn ge ela'y ore Sahn eeeedy vee Gene 350
Salary? Of cos. cciisisiedawwasied «x eaeaeatal 84 bas kat eemeeae aA Oke 350
duties: Of -csisncda ares Aus asd Misys a4: ddtialewhi vas ebneminenWlel i a tbainare’s 351
CO PULIES! si: pei es esuledemudir ses auateake 12s 1 SaNeRwE eres Seow 352
assistant: OMGars: :22%<(caie cists oc bm atincr awe dso bdiaaekiemieied 6, Fee howtos 353
duties Of WssiStants wis. sagieams avs Hemcek pees aes Siaese when eae soueles 354
duties of, to: INS poets ex aide ssiee sed Gutsdin banks adud nis dRled ager de tineews 356
inspection by, of steam boilers.......... cc cece cece eee eee eee eeee 357
definition Of eXplosiVes cu. 6. cece gees ei ees wea ce mee ee gees ened ewe 358
explosives, quantity Of... see 06s ss ace aude eyeee as ewe eee eee wed cee 359
explosives, where: keptecws sisciaccices cose baceauas ee adeuenaeerer ees 360
magazines classified ........ 0.00. ccc cee cence ener eet eeeeeeene 361
caps not kept in magazines........ 2.00... cece cece eee eee eens 362
report: of imspection.. « 202s eee cageinsaweisa na seeeeree seers ss wees 363
THATSPORTATION 2.15. serady 24 25 hee Ae Saw doctand g Sed ee aid eel 3a w 364
PECONd, Of SAlES nies cies cee aoe ene eee ste e 2s Gad aA RS 365
EXCEPTIONS. fag Gutrasiaress sos parame ewe eaueuiar dese ee uReuENs Teese as 366
Aire @TMS- ssies cyae sy cee rsh See age’ ya ede Ss aS GEE EE ROSE Ew Eee 367
penalties regarding explosives.......... | axbyayactnelaatinas eed ha a eee aaah Secs 368
powers of, deputies and assistants............. 0. 0c cece cece eee ee 369
TOCOTGS sare ssa: eure a's a pertatas ene ows. aw eacebiauete be saa NING w oWiG's Sirota eee e 370
alinual Leport i wciect os oa wae ss dows eee Nes ON Sd A Se oa se Ree eae 371
witnesses summoned by..........-ceeeeeeeere eee eercenneeenececeee 372
duties of District Attorney to assist........... 60. c cece eee eee 373
assistants of, compensation. ...... 20... 6c cece cee cece e ete nen neeee 374
penalties, where pald...... 0... ccc cece cece ee tee reece nee eaees 375
county clerks to furnish lists . ........ cece cece e eee eee nee e ne enes 377
reports of assistants tO . 1... sees eee c eect eee tree een te ete enenees 378
to make regulations .. occ. sce e eee ence eect teen ete e teen eenees 379
State Treasurer:
payment of fees to........ tee eeceeoes oe eee cee eeecen teense eaeeees 6
to keep record of exchange of securities deposited...............+4+ 15
notice to corporation of exchange of securities............ Ses se eee 16
access to certain books of superintendent............+ssecesereceee 15
compensation for services Of...........+++ese0% ja sepaeasieietiess a Bette a

access to documents in department........+.sseesseceeeceserscceees 74
GENERAL INDEX.

(References are to sections.)

Stationery:
not to be used to further election..........-.eeee reece cece nen e rece 94
Steam Boilers:
insurance against damage Dy..........eeeseee erect eececeeeeeeceees 70
insurance and inspection of............ Py svsiebel bjevecctosetons Utrera vetows 70
inspection of, by State Fire Marshal...........---:s see eeeeeeeeeee 357
Stock:
value of to be appraised............. cece eee eee eee teen e ees Appendix
Stocks:
Aeposit Of 2.2... cece cece cere reece cece etn eat eer n ees e ee eateeeeeee 13
of other corporationS...........c- cece cece eens eee ee eet e teen teeta 18
valuation of Donds.........0..ccsee eves erect eee etter teen en eneees 18
lien on, by certain insurance companies...........se+s+e0- oeaeerwigie’s 19
transfer of, on account of impairment of capital...........-+.ee+-+- 42

Stock Corporation:
may become mutual life insurance corporation..............0008- 16, 95

Stock Corporation Law (see Appendix).

Stockholders:

may request examination of corporation...........ccceeceecceeceses 40

to make good impairment of capital.......cceccccecsecccccnnens 41, 42

refusal to make impairment good.........sseeeeeees einiaca Savane Wiststeiets 42

transfer of stock by, before impairment made good.............. 42, 43

issuance of scrip to, by receiver..........c cece reece secre eeeseeeeee 79

to make good impairment of capital of life insurance corporation.... 86

approval of, to conversion of stock life to mutual................06-- 95

liability of, for improper dividends........ piel glee eeigteieie le ersrars sevovees LIT

approval to merger or consolidation of fire corporations.............. 129
Stores:

UMBUTANCE ON 2. cece cece cece eee eeeeeeceereeeeeeene db incaciyorwsaiaRvorecs: 6 110
Storms:

insurance against 1088 DY......... cece eee e cece nee net cence nsenees 110
Sub-Agent:

certificate of authority Of vss. sist cuwwsyeewee mine ewer ees vane oa dee 91
Subscriptions:

tO: Gh pital (BOCK ncn oi weiewiin edie ma trent soeibineelee Maen wea aa Mena T 71

COLLOCHION) OFF i erin nia’ etass sGuciiiectiesain ererasvereauiessei area een weisiees Sa ausceaic ws 7

to capital stock of title and credit guaranty corporations........... 171
Superintendent of Insurance: :

APPOWMLMOHE. OF* syarsrareiaia-aiarevever diets aversianers eunelarateaiews ain elena hts a oboe winless 2

BAIA (OF, -o:ainieretsrerwierssessiavsnetw rare pial ware wenewt eet F094 6 ecdlernv oye uw overnreedetevengectare 2

qualification, Of scsssaiangacinewssdsatcianc sitiee.oee ele eis eieiecnieieawiesas a 2

undertaking Of; seesaw aamasseescitdysminesesirease cineca wee envi s 2
GeneraL Inpex.

(References are to sections.)

Superintendent of Insurance — (Continued) :

custody of documents .................e00- sis wis ehec eal ere late ea oie’ & vee OB
Cuties Of cise awe aus capinseooceasioesmaiien deeb si auleeseaiesage exis 2, 3
sealed by, to be received as evidence, ete........ mR IRA Ra Rae ai So ese eae 4
in case of absence of, duties devolve on deputies.......cceeeeeneeeee 5
fees for affixing seal Dyicpech is oak weasels cennehoa dara wlinamaneutarsie contd 6
payment of fees to State treasury.............ceceecceeeeuseeceees 6
no charge for examination by............- eacdee-vidieenty cimanas Seles 7
certificate of authorization, issued by......-...0c.eecceecceeceeeeees 9
certificate of authorization to be filed in office of.................-. 9
shall not file charter until approved by Attorney-General........... 10
when certificate of authority not to be issued................e0e0e- 10
examination into affairs of proposed corporation by........... oaeeee ll
deposit to be made with superintendent..............cececeecececees ll
appointment of examiners DY.............ccececececcences Sis iaieieiaie sis ll
deposit of securities With............ 0... e cece cece cece cee ceeceoneee 13
duties of, in regard to deposit of securities.............esceseececes 13
approval of foreign securities deposited..............c.ceeeeeceeece 13
cousent of, to exchange of securities.......... cece cee e ces enceceeeeee 14
record of exchange of securities to be kept by..............eeceeeeee 15
securities credited Dy angawa/sacaqul aid bee vaenays Seats pace eneaaee 17
certificate to extend time for holding real property..............eee08 20
shall require schedules of reinsurance tO: D6 Ed 6. saad vieccisisiernewiecne 22
consent of, to reinsurance by receiver............ ee ccee cece ee eeeees 23
JUPIsdiction: Of 2 ce vc cactes ae okie inte reewnie eaetnuieeeRG. aw amunees 25
examination of foreign corporation.............ccc ee ee ee cece ee eeeee 25
deposit: Of securities ‘WIth... 256s <z.<ecisarstaaiew.s.0:5,5 Faia dsie ls sac0 esac 26
notice of deposit of securities with Comptroller..................4 26
report of foreign country corporation.........ccececeseecevecocees 27
to examine trustees of foreign country corporation.................. 27
to transfer excess of securities of foreign country corporation........ 27
to receive deposit of securities of foreign country corporation........ 27
attorney of foreign corporation................ccc ese cence ee eeeeees 30
revocations of certificate of authority by.................0.000- 30, 149a
statement to be filed in office Of......... cece eeeeceneescceseenenees 31
renewal of certificate of authority of foreign corporation............. 32
remittance of fees to foreign corporationS...........eeeseseeeeecers 33
revocation of authority of foreign corporation.............-sseeeeee 33
revocation of certificate of authority of foreign corporation for neglect

£6 Pay TAKES. 6.0 .0e sc ecwnciess hs eae ea RE See bee Rae es 34
power to collect taxes out of deposit of foreign corporation.......... 34
to forward, Process i..ci0:< sc :eiieisis tins vs Helene eames pee aleedeeeiies Fac 34
appointment of examiners DY........esecee cee ec resect eeeneeeeeeees 39
may grant hearing to corporation..........-...-eeeeeee eter ee eeees 39
may make examination on request.......c.ssccseecccecececcccseeces 40
shall determine amount of impairment or deficiency............+0+ 41
examination of impairment of capital of mutual company.......... 43

issuance of requisition for examination...........+++.seeeeseene 41, 43
GENERAL INDEX.

(References are to sections.)

Superintendent of Insurance — (Continued) :
may address inquiries to insurance corporationS.......++ssesseess+» 44

to furnish forms for reports. ..........seeeeeeeees Guidesisedecmennes: 25
may change forms of reports...... ee
annual report of.......... a sigisededed spare g al eaaaia ceOOES peea WOE oaceee 46
issuance of certificate of authority to arent of foreign corporation.... 50
consent of, to amendment of charter...........+seeeeeeee oe eee eenees 52
revocation of license of person inducing the surrender of insurance.... 60
promotion of insurance cOMpanies . ....... seer cece eee e eens eee eeees 66
securities of life, health and casualty corporations, held by.......-.- 71
consent of, to withdrawal of securities deposited by life, health and
casualty corporations ........ceecceee eect eee ne ennesenceeceeeeees 72
registration of policies and annuity bonds....... acstnacseds aiiessiesinesce: 2
to furnish copies of duplicate registered policies...........- oxemiweene: TB
to report insolvency to Attorney-General in certain cases............ 76
shall annually make valuations of policies, etc........ Bis seis saacewces, 84
may restrain discrimination...........0.+00 Sesieeseuspesengecgeceee 89)
may revoke certificate of authority of agent............. seeseceens, OL
shall make valuations of policies of health insurance..... # Saeale cose 98
power to supervise electionS.........ccccecsceeccccencenscceccceeees OF
to BUperVise ....... eee e eee eee Chere tale ous RRMA Giocaers siuaremiasesa “OE
approval of, to conversion of stock life to mutual.........seeeeeeee. 95
transfer of deposits to receiver DY..........secee cece eee eeee eens sees 104

shall approve capital stock notes of mutual fire insurance corporation, 111
approval of, to merger of fire corporationS.........ccsecsecceescnees 129

to supervise organizations assisting underwriters..............0eeees 139
distribution of certain taxes received by..........seeeeee veeee 140, 149¢
appointment of person to collect certain taxes...............06 141, 149¢
Certificate, Of SOLVENCY @ @ ssekeris iad abaende Ghee oly meat Asehensanoe 182
visitation of co-operative companies by.......... occ ccesccccceccces SOT
reply of officers to, to be under oath.............. egw Scainhchaqersieiedeareras 207
may restrain co-operative company from doing business............ 207
to approve forms of life policies....... 0... 0. cece ee eee ee eee ees 220
findings of, may be reviewed .......... cc cce cece enee teeteeeeeeees 249
incorporation of company to insure domestic animals....... veseees 260
certificate to co-operative insurance corporations..............0000 260
certificate to voluntary associations ............... dubai traremuecnghls Sratens 261
voluntary fire insurance associations continued.............eceeeeas 261
filing certificate ......... ccc cece eee e nee SG RIE Sea Matos ie chantate 261
declaration of intention to form a co-operative fire insurance corpo-
TALION........ ccc ee eens Biaaadi ein bi sie ecto dana patina ites aedeare aie ea SNE Sie Fuis 263

Supplementary Proceedings:

when may be instituted.............. LAS eR ANNES W Aare Reva Wes ep aus Oli 66

Sureties: .
compe nies allowed to act as, in certain cases........0.csceceecee sacs 70
GeneraL Inpex. ;
(References are to sections.)
Surplus:
TRMOGL REDE AON -gichon cin d tsghesienlaln wacs amen we eel MaavilaealdwelSes 16
percentage of, to be exposed to Toi oe ae Rewer eer siavoiied jas8: orceiawelaartays oe. 24
of corporation to be stated in advertisement.............. akavowisus aia aie 48
of securities deposited of insolvent corporation.............4. seseeee 7
distribution of, by receiver................0.005 asm RRS s eaie-a 79
distribution of, to policyholders.............ecceccccenseceecs esiseseese 83
profits of fire insurance corporations............. Ocoee seen eenseenes 17
Surplus Profits:
of fire insurance corporation, how estimated.............s00scesee-- 117
Surrender Value:
of lapsed or forfeited policies..............cecccecveccccececeneces 88
WAIVEH OF oni cicee annhoeGatncnenanncieate vauluanarethes niacin tS 88
Tax:
payment, and penalty for failure................. fate wees Appendix
Taxation:
when reduction of, will not be allowed for reinsurance.............. 22
of foreign corporations..............ccceeeceseccucccuccececeeecaes 34
on premiums of foreign fire insurance corporations.............. 133, 138
distribution of certain taxes............ccecceeecceecececceecceeeces 140
appointment by superintendent of person to collect certain taxes..... 141
on premiums of foreign mutual fire insurance companies............. 149a
distribution of annual tax...........cccs cece cee cecececeesecccencnce 149¢
exemption from, of fraternal societies..............cccceesececececs 246
Term Policy:
standard form for..........ccccesececccrcecccees wie aislatnere ee eee 08 101
Territory:
extension of, town co-operative corporation..........ececececuceuees 278
Theft (see Burglary or Theft).
Title Guaranty Corporations:
ANCORPOTALION: OF * i.caynactuccdc now agwalnlavicurcangalelebens even Gioosoens 170
certificate of incorporation Of..........cccececccecsccccncecscscncess 170
amount of ‘capital. sisc0esses ceca assivinee 00% Giatnantmew ese sasieeeeees 170
subscriptions to capital stock Of...........cccccccccrcceccececcnees 7
adoption of by-laws Of.........ccceceec ees see nce ere ces recseeneceees 171
meeting to adopt by-laws Of..........sccccucccceccuccse aradianreisisioesd 171
contents of by-laws Of..........seceeeeecceeeees eisyeyae lei sie Reanatereiatess 172
copy of by-laws to be filed with auperintendint asravepels ewe we s-vevelsietarares 178
amendment of by-laws to be filed with superintendent..... sisaawtierts 173
certificate of payment of capital stock............. wisiararereierw siovaiavnareyar’ 174
directors of, to be stockholders........... shia hidioieuaDcacavers ay elboida we swrasececerete 175
number of directors Of.......csecceccceecceecceecceerenees etenmaeniod 175
quorum! Of directors: is casises svew eossrenesscec vas onmeedeeay oan 175

treasurer of, to give bonds...... Sioa Vd oa.e erecereters siwN ene emeeRE eoveee 175
GENERAL INDEX.

(References are to sections.)

Title Guaranty Corporations — (Continued) :

change of number of directors Of...........ssscsececererecseseccers 175

investment of capital and funds of..........+-seseee- saceratte OGisls Rares 176

creation of guaranty fund Of...........cceeee cece eee e renner en ereee 176

when insurance cannot be made by.......... ibid eta latb/ss6ie Siadate'e's gia 'wiore 176

application of guaranty fund............seeeeeceee eer ter eens er eees 176

additions to guaranty fund.........seeeseceeec cence eer eereeerreees 176

merger Of 10... cece cece eee tere teen eneeascaansenseecceeeatarees 179

merger of, with banking corporation.........+++sseeeeeeer reer eseees 179

additional powers of certain.........-..ceee ee eee cece rete eet eee ees 180

may execute bonds and undertakingS.........++-+esseeereeceeserese 181

supreme court may require statement filed.......-.---.++ees eee eeees 183
Tornadoes:

insurance against loss DY..........eceseeeceeeeeeeeeees aisles ae erasers 110

insurance, by co-operative fire insurance corporations.......-..-..--- 262
Transfers:

of deposits by superintendent to receiver.......... se seeeee eee e eens 104

of risks, by co-operative or assessment compamies.......+-+-++++ee+ 209
Transportation:

of explosives 0.2.01. cece ec eee eee tee eet tent teense 364

Treasurer (see State Treasurer).
Trustees:

of foreign country corporationsS......-.sceceecceesecceeereeeeens +» 27

transfer of securities to...........seeeeee eke esis SGiaieseinie > o Seisieigaee 27

statement of monies used in election Of........sseeeee sasiateteinieers aieis 103
Umpire:

appointment of, to ascertain fire damage........-...seesee sere ees 121-a
Unauthorized Corporations:

agents not to act for....... cece cere ec cec reece cece seecereeneccoes - 54
Unauthorized Insurance:

not to be transacted........ccecceeecececcerccccececs oso ceeceesenas 56
Undertaking:

of agent for foreign corporation......... ccc cece cence eer eeteeseee 134

penalty for failure of agent to deliver............ ec ce cee cere eens 135

title guaranty companies may execute..... saan as uoabnshue ca ecin’ 181

title guaranty company, justification upon . ....... cece ee eee tees 183
Underwriters:

organizations to assist, supervision . . 1... .. cece ee cee ee eee 139
Vacancy:

Oia, GeIC Sty < OW AULT. giahsvivendiaced sted auases dubMeuaibsploeman wigomonataabent a a aaveylcays 94
Valuation:

OF “PON CLES: Soo iad. dalesasmoiarownedniaens DESK oermmaGie. Goad Renee Saas weni oat 84

of industrial policlesiccccseo00s 40s aeslnncuss os saeeersusdemeneers. 84

of policies, upon what basis...........cc cece cece eee eee tae e ees 84

of policies, of health imsurance............ cece eee eee eee eee ees 93

Value (see Surrender Value).
GeneraL Inpex,

(References are to sections.)

Verification:

of annual TOPORE. co: ole s vslvanunacalsunieas Reipaniene emer aucvewocwuwas 44

of annual report of foreign corporation...........0................ 44

of replies to inquiries of superintendent..............ccecceceesece 44
Vessels:

PU OY DE ELON et ca atic st gabe Be Meat on'p eed 110

MSIE: TRSUTANCE “WPON grinsidie x's is cistypuwiiucy ese euwita sake e chek oa wen 150
Visitation:

of co-operative or assessment corporations........... .ceseseeeece 207
Volumes:

names of policyholders for elections..............cccceecesccceuccs 94
Voting:

for directors of life insurance corporation............1.eseeeseec00- 94

for conversion of stock life corporation to mutual................. 95
Vouchers:

when required for disbursements..............ccsecceecceeceeecces 99
Waiver:

of provisions of section 58 VOid............eeccceeececcceecccceues 58
Wares:

Marine iMSUraNce UPON........... cee cceee cece cc encsecccencenncenas 150
Warranty: 2

statements of insured not to be..........ceceeceecneeceeeeeseveues 58
Wife:

can take out policy on husband..............cccceecseececeeeceees 55
Wind:

insurance against loss by..........cecececeecncneeeeeceeeetereecas 110

insurance, by co-operative fire insurance corporations................ 262
Withdrawal:

of securities deposited by health, life and casualty corporations...... 72
Withholding:

envelope or ballot from custodians or inspectors...............+.- 94
Witness:

summoned by State Fire Marshal..............sceeeeeeeeeer scene 372
Workimen’s Compensation Corporations; and Mutual Employers’ Liability

Corporations:

UMCOFPOVAtiON . . wees cece ence cece eect ence nner es taeeeseeenecneenens 185

completion of organization... ...cccceccccecccenee cerca tereeeenes 186

directors and, OffCOTScssid.s ics csisiiecwesse von sneaeee se ss eansrieewens 187

meetings; basis of right to Vote......... ee cece eee cece cence eeeens 188

ASSESSMENLS! 6 6 ce Few sseVDOC ser oMME EBLE oo OUR REENE REE oO oe ee RRRES 189

GUVICOMGB: x: 5. waphsagverosccdssasee site eis oe ore hveieie SR OES BERAS SAMAR Pe esonaraaen 190

reserves; supervision; cancellation and reinstatement of certificate.. 191

reports to and examinations by superintendent of insurance......... 192

prevention of accidents... ...... cee sere eee ee ee tee tenet eter ences 193

authorization of foreign mutual insurance corporations.............. 194