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 NSURANCE LAWS 
 
 North Dakota. 
 
 DIGEST 1915 
 
 W. C. TAYLOR 
 
 MMIS* l( >NfP < )! : INS1 
 
GIFT OF 
 
COMPILATION 
 
 OF THE 
 
 INSURANCE LAWS 
 
 OF THE 
 
 State of North Dakota 
 
 n 
 
 IN EFFECT JULY 1, 1915 
 
 BISMARCK, 1915 
 
 Compiled by 
 
 W. C. TAYLOR 
 
 Commissioner of Insurance 
 

INSURANCE LAWS OF 
 NORTH DAKOTA 
 
 CONSTITUTION 
 
 § 82. There shall be chosen by the qualified electors of the state at the 
 times and places of choosing members of the legislative assembly, a secretary 
 of state, auditor, treasurer, superintendent of public instruction, commissioner 
 of insurance, three commissioners of railroads, an attorney general and one 
 commissioner of agriculture and labor, who shall have attained the age of 
 twenty-five years, shall be citizens of the United States, and shall have the 
 qualifications of state electors. They shall severally hold their offices at the 
 seat of government, for the term of two years and until their successors are 
 elected and duly qualified, but no person shall be eligible to the office of 
 treasurer for more than two consecutive terms. 
 
 POLITICAL CODE 
 
 CHAPTER 4. 
 Article 8 — The Commissioner of Insurance. 
 
 § 172. Duties OF.] It is the duty of the commissioner of insurance: 
 
 1. To see that all laws of this state respecting insurance companies are 
 faithfully executed. 
 
 2. To file in his office the articles of incorporation of all insurance com- 
 panies organized or doing business in this state, and on application to furnish 
 a certified copy thereof. 
 
 3. To report in detail to the attorney general any violation of law relative 
 to insurance companies, their officers or agents. 
 
 4. To furnish the insurance companies required to make reports to him 
 the necessary blank forms for the statements required. 
 
 5. To preserve in permanent form a full record of his proceedings and a 
 concise statement of each company or agency visited or examined. 
 
 6. To furnish at the request of any person and on payment of his fees 
 certified copies of any record or paper in his office, when he deems it not preju- 
 dicial to public interests so to do. and to give such other certificates as may 
 be provided by law. 
 
 7. To furnish a written report to the governor on or before the fifteenth 
 day of November, of each year showing his official acts, the receipts and ex- 
 penditures of his department during the preceding fiscal year, the condition of 
 
 493327 
 
4 • ' *•' ' • ' ' ' INSURANCE LAWS 
 
 the companies doing business in this Btate and such other information as will 
 exhibit the affairs of his department; which report shall be printed^ to the 
 number of five hundred, at the expense oi' the state, and distributed among 
 the members of the succeeding legislative assembly, and otherwise as provided 
 by law. Such reporl must contain only an abstract of the reports of insurance 
 companies. 
 
 8. To send a copy of his annual report to the insurance commissioner or 
 other similar officer, of every other state and to each company doing business 
 in this state. 
 
 !). To communicate on request to the insurance commissioner of any other 
 state any facts which by law it is his duty to ascertain respecting companies 
 doing business within such state. 
 
 10. To have an official seal and to employ competent clerks, such clerks 
 to discharge such duties as he may assign, and in case of his sickness or tem- 
 porary absence from office, his chief clerk shall have authority to sign his 
 name and perform such other duties as are required by law pertaining to the 
 duties of such commissioner of insurance. (R. C. 1905, § 136; R. C. 1895, 
 4 132.) 
 
 § 173. Fees.] The commissioner of insurance shall charge and collect 
 such fees as are prescribed in chapter 18 of the civil code. (R. C. 1905, § 137; 
 R. C. 1899, § 133.) 
 
 § 174. Salary op Commissioner of Insurance.] The commissioner of 
 insurance shall receive an annual salary of three thousand dollars, and shall 
 reside at the capital of the state. (1909, Ch. 216, 4 R, C. 1905, 138; R, C. 
 1895, 134.) 
 
 In R. C. 1905, 138, his salary of two thousand dollars is "to include all 
 services performed by him. ' ' 
 
 § 175. Commissioner Disqualified, State Examiner to Act, When.] 
 In case the commissioner of insurance is a director, officer, agent, attorney, a 
 stockholder of or directly interested in any insurance company except as an 
 insured, the examination of such company shall be made l>y the state examiner, 
 or by some person appointed by him; and no officer or agent of any insurance 
 company doing business in this state shall l>e deputed to examine the affairs 
 of such company. (R. C. 1905, § 139; R. C. 1895, § 135.) 
 
 CHAPTER 49. 
 
 Article 11 — Insurance Tax poh Fire Departments. 
 
 § 3993. Duty of Clerk.] The clerk of each city, town or village in this 
 state having an organized fire department shall on or before the thirty-first 
 day of October in each year make and file with the state auditor his certificate 
 Btating the existence of such department, and the date of its organization, the 
 number of steam, hand or other engines, hook and ladder trucks, and hose 
 carts in actual use, the number of organized companies, the number of mem- 
 bers of each company, and the system of water supply in use ra such depart- 
 ment, together with such other facts as the auditor may require. (R. C. 1905, 
 § 2966; L887, Ch. 53, J 1; K. C. 1899, § 2462.) 
 
STATE OF NOETH DAKOTA '...'. f, 
 
 As to right of hose company to share of insurance premium moneys under 
 statute. Continental Hose Co. No. 1 v. Fargo, 17 N. D. 5, 114 N. W. 834. 
 
 § 3994. State Auditor to Furnish Blanks. Insurance Companies to 
 Make Statements.] The blanks required by law to be furnished by the 
 state auditor to insurance companies shall contain the names of the cities, 
 towns and villages entitled to benefits under this article, and every insurance 
 company doing business in this state shall include in its annual statement the 
 amount of all premiums received by them upon policies issued on property 
 within the corporate limits of such city, town or village during the year ending 
 on the preceding thirty-first day of December. (R. C. 1905, § 2967.) 
 
 § 3995. State Auditor to Issue Warrants.] The state auditor on the 
 first day of June thereafter shall issue and deliver to the treasurer of such 
 city, town or village, having an organized fire department entitled to the bene- 
 fits of this article, his warrant upon the state treasurer for an amount equal 
 to two per cent, of the premium received upon policies issued on property in 
 any city, town or village, which warrants shall be numbered consecutively, and 
 shall each specify the date of its issuance and to whom payable, and such 
 warrants shall be paid by the state treasurer to the treasurer of such city, 
 town or village, upon presentation thereof, and when so received by said treas- 
 urer the same shall be paid over to the treasurer of each separate organized 
 fire company, or companies, in equal proportion, who are members in good 
 standing in the North Dakota Firemen's Association, and having a member- 
 ship of at least fifteen members for a period of eight months prior to the date 
 of the certificate of the clerk, as provided in section 3993, and having the 
 management of at least one steam, hand or fire engine, hook and ladder truck 
 or hose cart, upon the written order of such company or companies, approved 
 by the city, city council, trustees or other governing body of such city, town 
 or village; provided, that in cities, towns and villages having a paid fire 
 department, the amount so received by the city, town or village treasurer shall 
 be placed in a fund to be disbursed by the city council, trustees, or other 
 governing body of such city, town or village in maintaining such fire depart- 
 ment. (R. C. 1905, § 2968.) 
 
 Appropriation of insurance tax to fire companies is constitutional. Cutting 
 v. Taylor, 3 S. D. 11, 51 N. W. 949, 15 L. R, A. 691. 
 
 On right to injunction against city treasurer to determine rights of fire 
 companies to money claimed under statute. Continental Hose Co. No. 1 v. 
 Mitchell, 15 N. D. 144, 105 N. W. 1108. 
 
 § 3996. Qualifications of Fire Departments and Companies.] No city, 
 town or village having one or more organized five companies therein, shall be 
 entitled to any of the benefits arising from this article, unless the fire depart- 
 ment or companies shall have been in actual existence eight months prior to 
 the filing of the certificate required by section 3993, and unless such fire 
 department or company shall have had for such period, as a part of its equip- 
 ment, at least one steam, hand or other fire engine, truck or hose cart, with 
 a membership of at least fifteen persons for said period of eight months. 
 (R, C. 1905, § 2969.) 
 
 § 3997. Secretary to Notify Treasurer.] It shall be the duty of the 
 secretary of the North Dakota Firemen's Association to notify the treasurer 
 
G •■ ::..:.'•'.•,■ insurance laws 
 
 of each city, town or village entitled to the benefits of this article, on or be- 
 fore the first day of June of each year, of the name of the treasurer of each 
 department or Beparate organized company in good standing in the North 
 Dakota Firemen's Association. (R. C. 1905, § 2970.) 
 
 § 3998. Failure to File Certificate a Waiver.] If the certificate re- 
 quired by section 3993 is not filed with the auditor on or before the thirty- 
 first day of October in each year, the city, town or village so failing to file 
 such certificate shall be deemed to have waived and relinquished its rights for 
 such year to the appropriation herein provided for; provided, however, that 
 in case where any city has filed its certificate for three successive years and 
 drawn money thereunder for such years, the certificate herein provided for 
 may be filed at any time up to and including March first of the succeeding 
 year without waiving the right to the appropriation herein named. (R. C. 
 1905, § 2971.) 
 
STATE OF NORTH DAKOTA 
 
 CIVIL CODE 
 
 CHAPTER 12. 
 
 Corporations. 
 
 Article 1 — The Creation of Corporations. 
 
 $ 4494. Corporation Defined.] A corporation is a creature of the law, 
 having certain powers and duties of a natural person. Being created by the 
 law, it may continue for any length of time which the law prescribes. (R. C 
 1905, § 4162.) 
 
 What constitutes de facto corporations. 118 Am. St. Rep. 253. 
 
 As to similar provision in Cal. Civ Code, § 283, see Johnson v. Goodyear 
 Min. Co., 127 Cal. 4, 47 L. R. A. 338, 78 Am. St. Rep. 17, 59 Pac. 304. 
 
 § 4495. Reserved Power op Legislative Assembly.] Every grant of 
 corporate power is subject to alteration, suspension or repeal in the discretion 
 of the legislative assembly. (R. C. 1905, § 4163.) 
 
 § 4496. Collateral Inquiry Prohibited.] The due incorporation of any 
 company, claiming in good faith to be a coloration under this chapter, and 
 doing business as such, or its right to exercise corporate powers shall not be 
 inquired into collaterally in any private action to which such de facto corpora- 
 tion may be a party. (R. C. 1905, § 4164.) 
 
 Receipt of benefits from contract with corporation estops from denying 
 corporate existence. Building & Loan Asso. v. Chamberlin, 4, S. D. 271, 56 
 N. W. 897; School Dist. v. Alderson, 6 D. 145, 41 N. W. 466; Wright v. Lee, 
 2 S. D. 596, 51, N. W. 706. 
 
 Whether corporation has exceeded its authority in purchasing real estate 
 can be inquired into only by state. Gilbert v. Hole, 2 S. D. 164, 49 N. W. 1. 
 
 Attempted incorporation of bank creates simply a partnership, in absence 
 of law under which banking corporation might be formed. Davis v. Stevens. 
 104 Fed. 235. 
 
 Statute presupposes a de facto corporation; it does not preclude private, 
 persons from denying existence, de jure or de facto, of alleged corporation. 
 Davis v. Stevens, 104 Fed. 235. 
 
 Due incorporation of bank cannot be inquired into in action by depositor 
 to recover amount of deposits from incorporators after bank's insolvency. 
 Mason v. Stevens, 16 S. D. 320 N. W. 424. 
 
 $ 4497. Name Required.] Every corporation must have a corporate name 
 which it has no power to change unless expressly authorized by law; but the 
 misnomer of a corporation in any written instrument does not invalidate the 
 instrument if it can be reasonably ascertained 1'rom it what corporation is in- 
 tended. (R, C. 1905, § 4165.) 
 
 § 4198. Corporations Classified.] Corporations are either: 
 
 1. Public; or, 
 
 2. Private. (R, C. 1905, $ 4166.) 
 
[NSUB i.NCE LAWS 
 
 State is a body politic, and not :i corporation. State v. Taylor, 7 S. D. 
 533, 6 1 \. \V. 548. 
 
 § 4499. PUBLIC, How REGULATED.] Public corporations arc formed nr 
 organized for the government of a portion of the state. Such corporations 
 are regulated by the political code or by local statute. (R. C. 1905, § 4167.) 
 
 State is body politic and not a public corporation. State V. Taylor, 7 S. 
 
 D. 533, 64 N. W. 548. 
 
 § 4500. Private, Purposes.] All corporations not public are private. 
 Private corporations may be formed for any purpose for which individuals 
 may lawfully associate themselves. (R. C. 1905, § 4168.) 
 
 Corporation organized under N. D. Rev. Codes, 1899, as private corpora- 
 tion. Arrison v. Company D, N. D. N. G., 12 N. D. 554, 98 N. W. 83, 1 A. & 
 
 E. Ann. Cas. 368. 
 
 Restricting membership of association to persons belonging to certain 
 fraternal order does not change the fact that it is a corporation. Masonic 
 Association v. Taylor, 2 S. D., 324, 50 N. W. 93. 
 
 § 4505. Contents of Articles. | The articles of incorporation must set 
 forth : 
 
 1. The name of the corporation. 
 
 2. The purpose for which it was formed. 
 
 3. The place where its principal business is to be transacted. 
 
 4. The term for which it is to exist. 
 
 5. The number of its directors or trustees and the names and residences 
 of those who are to serve until their successors are elected and qualified. 
 
 6. If there is a capital stock, its amount and the number of shares into 
 which it is divided. (R, C. 1905, § 4173.) 
 
 As to similar provision in Cal. Civ. Codes, § 290, see People ex rel. Schlin- 
 der v. Plint. 64 Cal. 49, 28 Pacific, 495; Thomas v. Placerville Gold Quartz 
 Min. Co., 65 v Cal. 600, 4 Pac. 641 ; Chapman v. Dorav, 89 Cal. 52, 26 Pac. 
 605; Martin v. Deetz, 102 Cal. 55. 41 Am. St. Rep. 151, 36 Pac. 368; Porter 
 v. Lassen County Land and Cattle Co., 127 Cal. 261, 59 Pac. 563; People 
 ex rel. Weatherly v. Golden Gate Lodge No. 6 B. P. O. E., Cal. 257, 60 Pac. 
 865. 
 
 § 4507. Articles. Railways, etc.] The articles of incorporation of 
 railway corporations shall be in compliance with section 4610; of insurance 
 corporations, in compliance with section 4837; of fraternal associations or 
 corporations, in compliance with section 5018; of banking corporations, in 
 compliance with section 5148. (R. C. 1905, § 4175.) 
 
 Article 10 — Assessments of Stock. 
 
 § 4570. When Levied.] The directors of any corporation formed or ex- 
 isting under the laws of this state, after one-fourth of its capital stock has 
 been subscribed, may for the purpose of paying expenses, conducting business 
 or paying debts, levy and collect assessments upon the subscribed capital stuck 
 thereof in the manner and form and to the extent provided herein. (R. C. 
 1905, § 4236.) 
 
 As to similar provisions in Cal. Civ. Code, § 331, see rounglove v. Stein- 
 man, 80 Cal. 375, 22 Pac. 189; Lankershim Ranch, Land & Water Co. v. Her- 
 berger, 82 Cal. 600, 23 Pac. 134; Arroyo Ditch & Water Co. \. Superior Ct., 
 
STATE OF NORTH DAKOTA 9 
 
 92 OaJ. 47, 27 Am. St. Rep. 91, 28 Pac; San Joaquin Land & Water Co. v. 
 Beecher, 101 Cal. 70, Pac. 349; San Bernardino Invest. Co. v. Merrill, 108 
 Cal. 490, 41 Pac. 487; Market Street B. Co. v. Hartman, 116 Cal. 260, 48 Pac. 
 65; Herbert Kraft Co. Bank v. Bank of Orland, 133 Cal. 04, 65 Pac. 143 . 
 
 $ 4571. Limitation of.] No assessment must exceed ten per cent, of the 
 amount of the capital stock named in the articles of incorporation, except in the 
 cases ill this section otherwise provided for, as follows: 
 
 1. If the whole capital of a corporation has not been paid up, and the 
 corporation is unable to meet its liabilities or to satisfy the claims of its 
 creditors, the assessment may be for the full amount unpaid upon the capital 
 stock; or, if a less amount is sufficient then it may be for such a percentage 
 as will raise that amount. 
 
 2. The directors 6"f railroad corporations may assess the capital stock 
 in installments of not more than ten per cent, per month, unless in the 
 articles of incorporation it is otherwise provided. 
 
 3. The directors of fire or marine insurance corporations may assess such 
 a percentage of the capital stock as they deem proper. (R. C. 1905, § 4237.) 
 
 Right to make assessment of stock. 76 Am. St. Rep. 126. 
 
 Effect of transfer of shares of stock on liability for unpaid subscriptions. 
 47 L. R. A. 246; 30 L. R, A. (N. S.) 2S3. 
 
 Liability of pledge of stock as a shareholder. 36 L. R. A. 139; 19 L. R. 
 A. (N. S.) 249. 
 
 As to similar provision in Cal. Civ, Code, § 332, see Santa Cruz R. Co. v. 
 Spreckles, 65 Cal. 193. 3 Pac. 661, 802; Marysville Electric. Light & P. Co. v. 
 Johnson, 93 Cal. 538, 27 Am. St. Rep. 215. 29 Pac. 126; Kohler v. Agassiz, 99 
 Cal. 93 Pac. 741; Shively v. Eureka Tellurium Gold Min. Co.. 129 Cal. 293, 61 
 Pac. 939. 
 
 CHAPTER 18. 
 
 Insurance Corporations. 
 
 Article 1. General provisions, § 4834. 
 2. Provisions common to all domestic insurance companies, §§ 4S35-4852. 
 .3. Domestic, life insurance companies to deposit securities with insurance 
 commissioner, §$ 4S46-4852. 
 
 4. Misrepresentations by insurance companies. §§ 4853-4854. 
 
 5. Discrimination by life insurance companies, §§ 4855-4856. 
 
 6. Disbursements by insurance companies, § 4857. 
 
 7. Diversion of funds for political purposes by life insurance, § 4858. 
 
 8. Salaries of officers and agents of life insurance companies, $$ 4859- 
 4860. 
 
 9. Investment of funds of life insurance companies, $$ 4861-4862. 
 
 10. Provisions peculiar to domestic stock insurance companies, §§ 4S63- 
 4869. 
 
 11. Provisions peculiar to domestic mutual insurance companies, §§ 4870- 
 48S1. 
 
 12. Surplus of life insurance company, §§ 4882-4887. 
 
10 INSURANCE LAWS 
 
 L3. Consolidation and reinsurance of domestic insurance companies, §§ 
 
 4888-4893. 
 
 14. Provisions peculiar to mutual hail insurance companies, §§ 4894-4901. 
 
 1". When hail insurance policies take effect, §§ 4902-4903. 
 
 16. Provisions peculiar to fidelity insurance companies, §§ 4904-4912. 
 
 17. Provisions peculiar to foreign insurance companies, § 4913. 
 
 18. Provisions common to all insurance companies, §§ 4914-4930. 
 
 19. Reports of life insurance companies, § 4931. 
 
 20. County mutual companies, §§ 4932-4950. 
 
 21. Live stock, §§ 4951-4956. 
 
 22. Chattel mortgages in application, §§ 4957-4958. 
 
 23. Licensing insurance agents, §§ 4959-4960. 
 
 24. Resident agents for transaction- of fire insurance business, §§ 4961- 
 4964. 
 
 Article 1. — General Provisions. 
 
 § 4834. Terms Defined.] When consistent with the context and not 
 obviously used in a different sense the term "company" or "insurance com- 
 pany." as used herein, includes all corporations, associations, partnerships or 
 individuals engaged as principals in the business of insurance; the word 
 "domestic" designates those companies incorporated or formed in this state 
 and the word "foreign" when used without limitation includes all those 
 F ormed by authority of any other state or government. (R. C: 1905, § 4417.) 
 Article 2 — Provisio> t "? Common to all Domestic Insurance Companies. 
 
 § 4835. Subject to What Provisions of Law.] All insurance companies 
 now or hereafter incorporated or formed by authority of any law of this state, 
 except when otherwise expressly provided, may exercise the powers and shall 
 be subject to the duties and liabilities provided by this chapter. The general 
 provisions of law relating to the powers, duties anil liabilities of corporations 
 shall apply to all incorporated domestic insurance companies, so far as such 
 provisions are pertinent and not in conflict with other provisions of law re- 
 lating to such companies. (R. C. 1905, § 4418.) 
 
 § 4836. How and for What Purpose Formed.] Any number of persons, 
 not less than seven, may form a corporation to carry on the business of insur- 
 ance, either upon the stock or mutual plan, against loss or damage by fire, 
 lightning, cyclone, tornado or hail, or the risks of inland navigation and trans- 
 portation, or to make insurance upon the lives of persons and every insurance 
 pertaining thereto, and against accidental injuries including the granting, pur- 
 chasing and paying of annuities ami indemnities and to transact fidelity in- 
 surance and corporate suretyship. An insurance company incorporated under 
 the provisions of this chapter shall have power to make insurance of any of 
 the kinds hereinbefore mentioned which shall have been expressed in its articles 
 of incorporation. (R. C. 1905, § 4419.) 
 
 § 4837. Articles. Contents.] The articles of incorporation shall set 
 forth in addition to what is required to be set forth in section 4505 the kind 
 of insurance proposed to be made and whether on the stock or mutual plan, the 
 period for the commencement and termination of its fiscal year and the period 
 for which it is incorporated, not to exceed thirty years, and shall lie filed in 
 the office of the commissioner of insurance. Any name not previously in use 
 
STATE OP NORTH DAKOTA H 
 
 by an existing corporation may be adopted, but the words ' ' insurance com- 
 pany," or, if the business is to be conducted upon the mutual principle, the 
 words ' ' mutual insurance company ' ' shall constitute a part of such name. 
 No certificate shall be granted by the insurance commissioner, as hereinafter 
 provided, if, in his judgment, the name adopted too closely resembles the name 
 of an existing corporation, or is liable to mislead the public. (R. C. 1905, 
 § 4420.) 
 
 § 4838. Qualification op Directors. Residence.] One-third of the 
 directors and all of the executive officers of a domestic insurance company must 
 be residents of this state and each of the directors of such a company, if it has 
 a capital stock, must be the owner in his own right of stock of such company 
 worth at par at least five hundred dollars. (R. C. 1905, § 4421.) 
 
 § 4839. Examination of Articles by Attorney General. Examination 
 by Commissioner of Insurance. Certificate.] The articles of incorporation 
 shall be examined by the attorney general and if found conformable to this 
 article and not inconsistent with the constitution and laws of this state, shall 
 be certified by him to the commissioner of insurance, who shall thereupon make 
 an examination to ascertain whether the company has in all respects complied 
 with the requirements of law, according to the nature of the business proposed 
 to be transacted by it and if satisfied by such examination that the corpora- 
 tion has complied with the law he shall deliver to such corporation a certified 
 copy of the articles of incorporation and a certificate to the effect that such 
 corporation has complied with all requirements of law, which, on being filed 
 in the office of the register of deeds of the county where the principal office 
 of the corporation is located, shall be its authority to commence business and 
 issue policies; and such certified copy of the articles of incorporation and of 
 such certificate may be used for or against such company with the same effect 
 as the originals, and shall be conclusive evidence of the fact of the organization 
 of such corporation. (R. C. 1905, $ 4422.) 
 
 Taking of applications in mutual insurance company is necessary step in 
 formation, and is required to be done before issuance of a certificate to com- 
 mence business. Montgomery v. Harker, 9 N. D. 527, 84 N. W. 369. 
 
 § 4840. Reinsurance.] Any domestic insurance company shall have power 
 to effect reinsurance of any risks taken by it. (R. C. 1905, § 4423.) 
 
 Liability of reinsurer. 44 L. R. A. (N. S.) 317. 
 
 § 4841. Limitation on Trade.] No company organized under this chapter 
 shall, directly or indirectly, deal or trade in buying or selling any goods, waves, 
 merchandise or other commodities whatever, except such as may have boon in- 
 sured by such company and are claimed to be damaged by reason of the risk 
 insured against. (R, C. 1905, § 4424.). 
 
 § 4842. Limitation on Purchase and Conveyance of Real Estate.] No 
 domestic insurance company shall purchase, hold or convoy real estate except 
 for the purpose and in the manner herein set forth, to-wit : 
 
 1. Such as shall be requisite for its convenient accommodation in the trans- 
 action of its business; or, 
 
 2. Such as shall have been mortgaged to it in good faith as security for 
 loans previously contracted, or for money due; or, 
 
12 INSURANCE LAWS 
 
 3. Such as shall have been conveyed to it in satisfaction of debts previ- 
 ously contracted in legitimate business, or for money due; or, 
 
 4. Such as shall have been purchased at sales upon judgment or mortgage 
 foreclosures obtained or made for such debts. (R. C. 1905, § 4425.) 
 
 § 4843. Capital and Surplus Invested.] A domestic insurance company 
 may invest its capital, and the funds accumulated in the course of its business, 
 or any part thereof, in bonds or mortgages on improved unincumbered real 
 estate within this state, or within any state in which such company is or be- 
 comes duly authorized and licensed to transact business, worth double the sum 
 loaned thereon, exclusive of buildings, unless such buildings are insured and 
 the policies made payable to the company as its interest may appear, and also 
 in the bonds of the state, or bonds or treasury notes of the United States, and 
 also in the bonds of any county or incorporated city or school district in this 
 state, or within any state in which said company is or becomes duly authorized 
 and licensed to transact business, authorized to be issued by legal authority, 
 and loan such capital and funds, or any part thereof, on the security of such 
 bonds, treasury notes, or upon bonds or mortgages as aforesaid, and change 
 and re-invest the same in like securities as occasion may from time to time 
 require; but the surplus money over and above the capital stock of such insur- 
 ance company may be invested in or loaned upon the pledge of bonds of the 
 United States or any of the state, or stocks, bonds, or other evidence of in- 
 debtedness of any solvent dividend paying institution incorporated under the 
 laws of this state, or of any state in which such company is or becomes duly 
 authorized and licensed to transact business, or of the United States, except 
 its own stock; provided always, that the market value of such stock, bonds or 
 other evidence of indebtedness shall be at all times during the continuance of 
 such loan at least ten per cent, more than the amount loaned thereon. No 
 domestic insurance company shall invest or loan its capital, or the funds ac- 
 cumulated in the course of its business, or any part thereof, except as provided 
 in this section. (R, C. 1905, § 4426.) 
 
 § 4844. Dividends Only From Surplus Profits. Profits, How Esti- 
 mated.] No domestic insurance company shall make any dividends except 
 from the surplus profits arising from its business; and in estimating such 
 profits there shall be reserved therefrom a sum equal to forty per cent, of the 
 amount of premiums on all unexpired risks and policies, which amount so 
 reserved, is hereby declared to be unearned premiums; and there shall also be 
 reserved all sums due the company on bonds, mortgages, stocks and book 
 accounts of which no part of the principal or interest thereon has been paid 
 during the year preceding such estimate of the profits, and upon which suit 
 for foreclosure or collection has been commenced, or which after judgment 
 has been obtained thereon shall have remained more than one year unsatisfied 
 and "ii which interest shall not have been paid. (R. C. 1905. § 4427.^ 
 
 § 4845. Penalty FOB VIOLATION OF Section 4843.] Any director or 
 officer making or authorizing an investment or loan in violation of section 4843 
 shall be personally liable to the stockholders for any loss occasioned thereby. 
 If a company is under liability for losses equal to its net assets and the presi- 
 dent and directors, knowing it, make or assent to further insurance, they shall 
 be personally liable for any loss under such insurance. If the directors allow 
 
STATE OF NORTH DAKOTA 13 
 
 to be insured on a single risk a larger sum than the law permits they shall 
 be liable for any loss thereon above the amount they might lawfully insure, 
 unless the excess is reinsured as required in ssction 4914. (R. C. 1905, § 4428.) 
 
 Article 3 — Domestic Life Insurance Companies to Deposit Securities 
 With Insurance Commissioner. 
 § 4846. Annual Statement.] The president or vice-president and secre- 
 tary or actuary or a majority of the directors of each company organized under 
 the laws of this state shall annually, by the first Monday in February, prepare 
 under oath and file in the office of the commissioner of insurance a statement 
 of its affairs for the year terminating on the thirty-first day of December, 
 preceding, showing: 
 
 1. The name of the company and where located. 
 
 2. The names of its officers. 
 
 3. The amount of capital, if a stock company. 
 
 4. The amount of capital paid in, if a stock company. 
 
 5. The value of real estate owned by the company. 
 
 6. The amount of cash on hand. . 
 
 7. The amount of cash deposited in banks, giving the name of the bank 
 or banks. 
 
 8. The amount of cash in the hands of agents and in the course of trans- 
 mission. 
 
 9. The amount of bonds of the United States, and all other bonds and 
 securities, giving names and amounts, with the par and market value of each 
 kind. 
 
 10. The amount of loans secured by first mortgage on real estate and 
 where such real estate is situated. 
 
 11. The amount of all other bonds, loans, how secured, and the rate of 
 interest. 
 
 12. The amount of premium notes and their value on policies in force, 
 if a mutual company. 
 
 13. The amount of notes given for unpaid stock, and their value in detail, 
 if a stock company. 
 
 14. The amount of assessments unpaid on stock or premium notes. 
 
 15. The amount of interest due and unpaid. 
 
 16. The amount of all other securities. 
 
 17. The amount of losses due and unpaid. 
 
 18. The amount of losses adjusted but not due. 
 
 19. The amount of losses unadjusted. 
 
 20. The amount of claims for losses resisted. 
 
 21. The amount of money borrowed and evidences thereof. 
 
 22. The amount of dividends unpaid on stock. 
 
 23. The amount of dividends unpaid on ytolicies. 
 
 24. The amount required to safely reinsure all outstanding risks. 
 
 25. The amount of all other claims against the company. 
 
 26. The amount of net cash premiums received. 
 
 27. The amount of notes received for premiums. 
 
 28. The amount of interest received from all sources. 
 
 29. The amount of moneys received from all other sources. 
 
14 INSURANCE LAWS 
 
 30. The amount paid for losses. 
 
 31. The amount of dividends paid to policy holders, and the amount to 
 stockholders, if a stock company. 
 
 32. The amount of commissions and salaries paid to agents. 
 
 33. The amount paid to officers for salaries and other compensation. 
 
 34. The amount paid for taxes. 
 
 35. The amount of all other payments and expenditures. 
 
 36. The greatest amount insured on any one life. 
 
 37. The amount deposited in other states or territories as security for 
 policy holders therein, stating the amount in each state or territory. 
 
 38. The amount of premiums received in this state during the year. 
 
 39. The amount paid for losses in this state during the year. 
 
 40. The whole number of policies issued during the year, with the amount 
 of insurance effected thereby, and total amount of risk. 
 
 41. All other items of information necessary to enable the commissioner 
 of insurance to correctly estimate the cash value of policies or to judge of the 
 correctness of the valuation thereof. (1909, Ch. 150, § 1.) 
 
 § 4847. Commissioner Ascertains Value of Policies. Securities to be 
 Deposited.] As soon as practicable after the filing of such statement the in- 
 surance commissioner shall ascertain the net cash value of every policy in force 
 upon the basis of the American table of mortality and four and one-half per 
 cent, interest, or actuaries combined experience table of mortality and four 
 per cent, interest, in all companies organized under the laws of this state. The 
 company may make such valuation and make and file the same with such 
 annual statement, and it shall be received by the insurance commissioner upon 
 satisfactory proof of its correctness. The net cash value of all policies in force 
 in any such company being ascertained, the insurance commissioner shall notify 
 it of the amount, and within thirty days thereafter, the officers thereof shall 
 deposit with the insurance commissioner the amount of the ascertained value 
 in the securities specified in chapter 156 of the session laws of 1907 (sections 
 4861, 4862, herein) ; provided, however, that no stock company organized under 
 the laws of this state shall be required to make a deposit of such securities 
 in an amount exceeding one hundred thousand dollars; and when securities 
 in that amount shall have been deposited then sucli insurance company may, 
 and the insurance commissioner shall accept in lieu of further deposit, a de- 
 tailed, verified statement setting forth a list of the items of security held by 
 such insurance company with sufficient particularity; and such securities so 
 specified in such list, although retained by such insurance company, shall be 
 kept separate and distinct from its other securities and shall be held as a 
 deposit for the policy holders of said company under the provisions of this 
 section. 
 
 The insurance commissioner may at any time make a personal examination 
 of the books, papers, securities and business of any such life insurance com- 
 pany or authorize any other suitable person to make the same, and he or the 
 person so authorized may examine under oath any officer or agent of the com- 
 pany, or others, relative to its business and management. If upon such exam- 
 ination the insurance commissioner is of the opinion that the company is in- 
 solvent, or that its condition is such as to render a further continuance of its 
 
STATE OF NORTH DAKOTA 15 
 
 business hazardous, then the insurance commissioner may require such insur- 
 ance company to forthwith deposit in his office all of such securities so listed 
 and specified in said list, and not deposited; provided, however, that nothing 
 herein contained shall be construed as preventing or prohibiting any domestic 
 life insurance company from depositing such securities in an amount to exceed 
 the cash value of its policies. (1909, Ch. 150, § 2.) 
 
 § 4848. Certificate op Authority.] On receipt of such deposit and state- 
 ment and such detailed list of securities provided for in the preceding section, 
 all of which shall be renewed annually, by the first Monday in February, the 
 insurance commissioner shall issue a certificate to the effect that such insurance 
 company does business under the compulsory reserve deposit law of the State 
 of North Dakota, and maintains, in accordance with section 2 of said law, in 
 the office of the insurance commissioner of the State of North Dakota, a deposit 
 of an amount in excess of the net cash value of all outstanding policies in 
 stipulated and high-class securities, deposited for the protection of the policy 
 holders of said company, which certificate shall expire on the thirty-first day 
 of March of the ensuing year. Such certificate shall be renewed annually upon 
 a renewal of the deposit or statement provided for under the preceding sections, 
 and upon compliance with the conditions above required. The insurance com- 
 missioner shall receive the sum of five dollars for issuing such certificate ; 
 provided, that a copy of such certificate may be attached to any policy of in- 
 surance hereafter or heretofore issued by any life insurance company organized 
 under the laws of this state, upon its compliance with the provisions of this 
 act. (1909, Ch. 150, § 3.) 
 
 § 4849. On Default Securities Vest in Policy Holders.] The securi- 
 ties of a defaulting or insolvent company or a company against which pro- 
 ceedings are pending for dissolution, on deposit shall vest in the state for the 
 benefit of the policies on which such deposit is made or were made, and the 
 proceeds of the same shall, by order of the court upon final hearing be divided 
 among the holders thereof in the proportion of the last annual valuation of 
 the same, or at any time be applied to the purchase of reinsurance for their 
 benefit. (1909, Ch. 150, § 4.) 
 
 § 4850. Securities May be Exchanged.] Companies shall have the right 
 at any time to change the securities on deposit by substituting a like amount 
 of the character required in the first instance. If the annual valuation of the 
 policies in force shows them to be less than the amount of the security de- 
 posited, then the company may withdraw such excess, but twenty-five thousand 
 dollars must always remain on deposit. (1909, Ch. 150, $ 5.) 
 
 $ 4851. Dividends on Securities Property of Company.] Companies 
 having on deposit with the insurance commissioner bonds or other securities 
 may collect the dividends or interest thereon, delivering to their authorized 
 agents the coupons or other evidence of interest as the same become due, but 
 if any company fails to deposit additional securities when and as called for 
 by the insurance commissioner, or pending any proceedings to close up or enjoin 
 it, the insurance commissioner shall collect such dividends or interest and add 
 the same to such securities. (1909, Ch. 150, § 6.) 
 
 § 4852. Exception to Act.] None of the provisions of this act shall 
 apply to fraternal beneficiary associations. (1909. Ch. 150, § 7.) 
 
16 [NSUR VNCK LAWS 
 
 ARTICLE 4 — MISREPRESENTATION I'.V Ixsl'UANCE COMPANIES. 
 
 $ is.",:;. Prohibited.] No life insurance company doing business in this 
 state, and no officer, director or agent thereof, shall issue or circulate, or cause 
 or permit to be issued or circulated, any estimate, illustration, circular or 
 statement of any sort misrepresenting the terms of any policy issued by it or 
 the benefits or advantages promised thereby, or the dividends or shares 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. (1907, Ch. 147, 
 § 1.) 
 
 § 4854. Penalty.] An officer, agent, solicitor or any representative of 
 any life insurance company violating the provisions of this act, shall be deemed 
 guilty of a misdemeanor. Any life insurance company found guilty of a 
 violation of the provisions of this act by the commissioner of insurance upon 
 a hearing, after fifteen days' notice, shall be subject to a penalty to be by 
 such commissioner of insurance imposed, of not to exceed $500, in default of 
 the payment of which he is authorized to revoke the license of such company; 
 and provided, that upon a second conviction upon a similar hearing the com- 
 missioner of insurance shall revoke the license of such company to transact 
 business in the state. (1907, Ch. 147, § 2.) 
 
 Article 5 — Discrimination by Life Insurance Companies. 
 
 § 4855. Prohibited.] No life insurance company doing business in this 
 state shall make or permit any distinction or discrimination in favor of in- 
 dividuals between insurants (the insured) of the same class and equal expecta- 
 tion of life in the amount or payment of premiums or rates charged for policies 
 of life or endowment insurance, or to the dividends or other benefits payable 
 thereon, or in any other of the terms or conditions of the contracts it makes. 
 nor shall any such company or agent thereof make any contract of insurance 
 or agreement as to such contract other than as plainly expressed in the policj 
 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 insurance, any rebate or premium payable on 
 their policy, 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 contract of insurance, or give, sell or purchase, or offer to give, sell 
 or purchase as inducement to insurance or connection therewith any stocks, 
 bonds or other securities of any insurance company or other corporation, 
 association or partnership, or any dividends or profits to accrue thereon or any- 
 thing of value whatsoever not specified in the policy. (1907. Ch. 148, $ 1.) 
 
 Power of legislature to regulate life insurance rates; 37 L. "R, A. (N. S.) 
 778. 
 
 § 4856. Penalty.] Any officer, agent, solicitor or any representative of 
 any life insurance company violating the provisions of this act shall be deemed 
 guilty of a misdemeanor. Any life insurance company found guilty of a 
 violation of the provisions of this act by the commissioner of insurance upon 
 a hearing, after fifteen days' notice, shall be subject to penalty to be by such 
 commissioner of insurance imposed, of not to exceed $500, in default of the 
 
STATE OF NORTH DAKOTA 17 
 
 payment of which he is authorized to revoke the license of such company; and 
 provided, that upon a second conviction upon a similar hearing the commis- 
 sioner of insurance shall revoke the license of such company to transact business 
 in the state. (1907, Ch. 148, § 2.) 
 
 Article 6— Disbursements by Life Insurance Companies. 
 § 4857. VOUCHEE REQUIRED.] No domestic life insurance company shall 
 make any disbursements of one hundred dollars or more unless the same be 
 evidenced by a voucher signed by or in behalf of the person, firm or corpora- 
 tion receiving the money and correctly describing the consideration for the 
 payment. If the expenditure be for both services ami disbursements the 
 voucher shall set forth the services rendered and an itemized statement of 
 the disbursements made. If the expenditure be in connection with any matter 
 pending before any legislative or public body, or before any department or 
 officer of any state or government, the voucher shall correctly describe, in 
 addition, the nature of the matter and of the interest of such company therein. 
 When such voucher cannot be obtained the expenditure shall be evidenced by 
 an affidavit describing the character ami object of the expenditure and stating 
 the reason for not obtaining such voucher. (1907, Ch. 149.) 
 
 Article 7 — Diversion of Funds for Political Purposes by Life Insurance 
 
 Companies. 
 § 4858. Unlawful to Aid Political Parties. Penalty.] No insurance 
 company or association, including fraternal beneficiary associations, doing 
 business in this state, shall, directly or indirectly, pay or use or offer, consent 
 or agree to pay or use any money or property for or in aid of any political 
 party, committee or organization, or for or in aid of any corporation, joint 
 stock or other associations, 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 whatsoever, or for the reimbursement or indemnifi- 
 cation of any person for money or property so used. Any officer, director, 
 stockholder, attorney or agent of any corporation or association which violates 
 any of the provisions of tins act, 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 aid. shall be guilty of a 
 misdemeanor and be punished by imprisonment for not more than one year 
 and a fine of not more than one thousand dollars, and any officer aiding or 
 abetting in any contribution made in violation of this act, shall be liable to 
 the company or association for the amount so contributed. 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, pro- 
 ceeding or trial for a violation of any of the provisions of this aid. upon the 
 ground or for the reason that the testimony or evidence, documentary or other- 
 wise, required of him. may tend to incriminate or degrade him; but no person 
 shall be prosecuted or subject to any penalty or forfeiture for or on account 
 of any transaction, matter or thinir concerning which he may testify or produce 
 evidence, documentary or otherwise, and no testimony so given or produced 
 shall be used against him UT)OH an\ criminal investigation or proceeding. 
 (1007. Ch. 52.) 
 
18 INSURANCE LAWS 
 
 Article 8 — Salaries of Officers and Agents of Life Insurance Companies. 
 
 § 4859. Exfenses of Officers, How Regulated.] No domestic life insur- 
 ance company shall pay any salary, compensation or emolument to any officer, 
 trustee or director thereof, nor any salary, compensation or emolument amount- 
 ing in any one year to more than five thousand dollars to any one person, firm or 
 corporation unless such payment be first authorized by a vote of the board of 
 directors of such life insurance company. No such life insurance company 
 shall make any agreement with any of its officers, trustees or salaried employes 
 whereby it agrees that for 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; and no officer, director or 
 trustee, who is paid a salary for his services of more than one hundred and 
 fifty dollars per month, shall receive any other compensation or emolument; 
 provided, that the limitation as to time contained herein shall not be construed 
 as preventing a life insurance company from entering into contracts with its 
 agents for the payment of renewal commissions. No such company shall grant 
 any pension to any officer, director or trustee thereof or to any member of his 
 family after his death. (1907, Ch. 154, § 1.) 
 
 Article 9 — Investment of Funds of Life Insurance Companies. 
 § 4861. Investment of Funds Restricted.] No domestic life insurance 
 company, whether incorporated by special act or under a general law, shall, 
 after the first day of January, 1908, invest in or loan upon any shares of stock 
 of any corporation, other than a municipal corporation ; nor, excepting govern- 
 ment, state or municipal securities, shall it invest in or loan upon, any bonds 
 or obligations not secured by adequate collateral security, and when more than 
 one-third of the total value of the collateral security shall consist of shares of 
 stock it shall be deemed inadequate. Every such company possessed of stocks 
 or securities prohibited by this act shall dispose of the same within five years, 
 unless such time is extended by the commissioner of insurance. No investment 
 or loan, except policy loans, shall be made by any such life insurance company 
 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 company shall subscribe to or participate in any under- 
 writing of the purchase or sale of securities or property, or enter into any 
 transaction for such purchase or sale on account of said company jointly with 
 any other person, firm or corporation; nor shall any such company 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 control of its board of directors. 
 Any such company, in addition to other investments allowed by law, may invest 
 any of its funds and accumulations in the bonds of the United States or of 
 tli is state or of any county, city, town or village or duly organized school 
 district therein, or of any municipality or civil division of any state, and may 
 loan upon improved unincumbered real property in any state fifty per centum 
 of the value of such property, or invest in the mortgage bonds of any dividend 
 paying railway or street railway company duly incorporated and organized under 
 the authority of this state or any other state, and it may also make loans on the 
 security of promissory notes amply secured by pledge of any bonds in which 
 
STATE OF NORTH DAKOTA 19 
 
 such insurance companies are hereby authorized to invest their funds, and 
 may also make loans upon the security of its own policies, but no loan on 
 any policy shall exceed the reserve value thereof. (1907, Ch. 156, § 1.) 
 
 § 4862. Holding of Real Property Limited.] Every such life insurance 
 company may acquire, hold and convey real property only for the following 
 purposes and in the following manner: 
 
 First. Such as shall be requisite for the convenient accommodation in the 
 transaction of its business. 
 
 Second. Such as shall have been mortgaged to it in good faith by way of 
 security for loans previously contracted or for moneys due. 
 
 Third. Such as shall have been conveyed to it in satisfaction of debts 
 previously contracted in the course of its dealings. 
 
 Fourth. Such as shall have been purchased at sales on judgments, decrees 
 or mortgages obtained or made for such debts. 
 
 All such property specified in sub-divisions two, three and four of this sec- 
 tion which shall not be necessary for its accommodation in the convenient trans- 
 action of its buisness, shall be sold and disposed of within two years after the 
 company shall have acquired title to the same, or within two years after 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 cer- 
 tificate from the commissioner of insurance that its interests will suffer materi- 
 ally by the forced sale thereof, in which event the time for sale may be ex- 
 tended to such time as the commissioner shall direct in such certificate. (1907, 
 Ch. 156, § 2.) 
 
 Article 10 — Provisions Peculiar to Domestic Stock Insurance Com- 
 panies. 
 
 § 4863. Capital Stock Required.] No stock company shall be incorpo- 
 rated under this chapter unless it has a capital stock of at least $100,000, 
 twenty-five per cent, of which must be paid in previous to the issuance of any 
 policy and the residue within twelve months from the time of filing the articles 
 of incorporation; provided, that the commissioner of insurance may for good 
 cause shown extend the time of payment of such residue for the further period 
 of not to exceed one year. No fire, cyclone, tornado, hail, marine, life, or 
 accident insurance company of any other state, territory or nation shall do 
 business in this state unless it has a paid up capital stock of at least one hun- 
 dred thousand dollars in available cash assets, over and above all liabilities 
 for losses reported, expenses, taxes and reinsurance of all outstanding risks. 
 (1911, Ch. 160; 1909, Ch. 147; R. C. 1905, § 4429.) 
 
 $ 4864. Opening Book for Subscriptions.] The individuals associated 
 for the purpose of organizing an insurance company under this article, after 
 having filed the articles of incorporation as required by section 4837, may open 
 books for subscriptions to the capital stock of such corporation and keep the 
 same open until the full amount specified in the articles of incorporation is 
 subscribed. (R. C. 1905, § 4430.) 
 
 § 4865. Notice to Company When Capital Stock is Impaired.] "When- 
 ever it appears to the commissioner of insurance that the capital stock of a 
 domestic insurance company is impaired to the extent of one-fourth or more 
 on the basis fixed in section 4844 he shall notify the company that its capital 
 
20 [NSURANCE LAWS 
 
 is Legally subject to be made good in the mode provided by section ixt;<>, and 
 if such company shall aot within three months after such notice satisfy him 
 that it. lias fully repaired its capital or reduced its capital as provided in sec- 
 tion 4867, he shall institute proceedings against it in accordance with section 
 4925. (R. C 1905, § 4431.) 
 
 § 4866. How Capital Made Good. Forfeiture of Shakes.] Whenever 
 the net assets of the company do not amount to more than three-fourths of its 
 original capital, it may make good its original capital to the original amount by 
 assessment of its stock. Shares on which such an assessment is not paid within 
 sixty days after demand shall be forfeitable and may be canceled by a vote of 
 the directors and new shares issued to make up the deficiency. If such com- 
 pany shall not within three months after notice from the commissioner of 
 insurance to that effect make good its capita! as aforesaid, or reduce the same 
 as allowed by the next section, its authority to transact new business of insur- 
 ance shall cease. (E. C. 1905, § 4432.) 
 
 § 4867. Capital Stock Eeduced. Examination and Certificate of Com- 
 missioner.] When the capital stock of a company is impaired, such company 
 may upon a vote of a majority of the stock represented at a meeting legally 
 called for that purpose, reduce its capital stock and the number of shares 
 thereof to an amount not less than the minimum sum required by law. But no 
 part of its assets and property shall be distributed to its stockholders. Within 
 ten days after such meeting the company shall submit to the insurance com- 
 missioner a certificate setting forth the proceedings thereof and the amount 
 of such reduction and the assets and liabilities of the company, signed and 
 sworn to by its president, secretary and a majority of its directors. The com- 
 missioner shall examine the facts in the case, and if the same conform t'o law, 
 and in his judgment the proposed reduction may be made without prejudice 
 to the public, he shall indorse his approval upon the certificate. Upon filing 
 the certificate so indorsed the company may transact business upon the basis 
 of such reduced capital, as though the same was its original capital, and its 
 articles of incor] (oration shall be deemed to be amended to conform thereto; 
 and the commissioner of insurance shall issue his certificate to that effect. 
 Such company may by a majority vote of its directors after such reduction 
 require the return of the original certificates of stock held by each stockholder 
 in exchange for new certificates in lieu thereof for such number of shares as 
 each stockholder is entitled to in the proportion that the reduced capital bears 
 to the original capital. (E. C. 1905, § 4433.) 
 
 § 4868. Capital Less Titan Liabilities. Notice Not to Issue Policies.] 
 When the actual funds of a domestic life insurance company exclusive of its 
 capital, are not of a net cash value equal to its liabilities the commissioner of 
 insurance shall notify such company and its agents to issue no new policies 
 until its funds become equal to its liabilities. (E. C. 1905, § 4434.) 
 
 § 4869. Transfer op Stuck Pending Examination Does Not Release 
 Liabilities.]. No transfer of the stock of any domestic insurance company 
 made during the pendency of any examination will release the party making 
 the transfer from his liability for loss which may have occurred previous to 
 the transf.'r. (E. C. 1905, § 4435.) 
 
STATE OF NORTH DAKOTA 21 
 
 Article 11 — Provisions Peculiar to Domestic Mutual Insurance Com- 
 panies. 
 
 § 4870. Amount op Subscribed Insurance Required.] No policy shall 
 be issued by a purely mutual insurance company until not less than two hundred 
 thousand dollars of insurance in not less than one hundred separata risks have 
 been subscribed for and entered on its books; but the provisions of this section 
 shall not apply to county mutual insurance companies. (R. C. 1905, § 4436.) 
 
 As to taking applications for $200,000 of insurance before issuance of 
 policy in mutual societies. Montgomery v. Whitbeck, 12 N. D. 385, 96 N. W. 
 327. 
 
 § 4871. Insuked a Member. Notice op Meetings.] Every person insured 
 by a domestic mutual insurance company, other than life, shall be a membei 
 while his policy is in force, entitled to one vote for each policy he holds, and 
 shall be notified of the time and place of holding its meetings by a written 
 notice or by an imprint upon the back of each policy, receipt or certificate of 
 renewal as follows, to-wit: 
 
 The assured is hereby notified that by virtue of this policy he is a member 
 
 of the mutual insurance company, and that 
 
 the annual meetings of such company are held at its home office on the 
 day of in each year at o 'clock. 
 
 The blanks shall be duly filled and the same shall be deemed a sufficient 
 notice. (R, C. 1905, § 4437.) 
 
 § 4872. Same.] Every person insured by a domestic mutual life insurance 
 company shall be a member entitled to one vote and one vote additional for 
 each five thousand dollars of insurance in excess of the first five thousand 
 dollars, anil shall be notified of its annual meetings in the manner provided in 
 the last section. (R. C. 1905, § 4438.) 
 
 § 4873. Manner op Voting by Proxy.] Members may vote by proxy 
 dated and executed within three months and returned and recorded on the books 
 of the company three days or more before the meeting at which they are to be 
 used; but no person shall be allowed as proxy or otherwise to cast more than 
 fifty votes, and no officer shall himself, or by another, ask for, receive, procure 
 to be obtained or use a proxy vote; provided, that this section shall not apply 
 to state mutual hail insurance companies. (R. C. 1905, § 4439.) 
 
 § 4874. Premium. Contingent Liability Stated on Policy.] Mutual 
 insurance companies shall charge and collect upon their policies the full mutual 
 premium in cash or notes, and may by their bydaws fix the contingent mutual 
 liability of its members for the payment of losses and expenses not provided 
 for by their cash funds; provided, that such contingent liability of a member 
 shall not be less than a sum equal to. and in addition to the cash premium 
 written in his policy; provided, further, that in case said premium be not so 
 paid in cash or unconditional notes within sixty days from the date of issue, 
 the policy shall become and be absolutely void and to remain void during the 
 non-payment of such premium, and upon payment of the premium as above 
 provided, such policy shall re-attach; provided, there has been no loss while 
 the policy was void. The total amount of the liability of a policy holder shall 
 be clearly and legibly stated upon the back of each policy. (1907, Ch. 143; 
 R. C. 1905, § 4440.) " 
 
22 INSURANCE LAWS 
 
 As to validity of insurance contract made with company which violated the 
 Btatute. Walker v. Rein, 14 N. D. 608, 106 N. W. 405. 
 
 As to requirements that amount of accepted casli premium should be writ- 
 ten in policy of insurance. Montgomery v. Whitbeck, 12 N. D. 385, 96 N. W. 
 327. 
 
 § 4875. Reserve Fund, How Used.] Any mutual insurance company may 
 at a meeting called for that purpose provide for the accumulation of a per- 
 manent fund by reserving a portion of the net profits to be invested and be 
 a reserve for the security of the insured. Such reservation shall not exceed 
 twenty per cent, of said net profits and when the fund so accumulated amounts 
 to two per cent, of the sum insured by all policies in force the whole of the 
 net profits shall be divided among the insured at the expiration of their policies. 
 The permanent fund so accumulated shall be used for the payment of losses 
 and expenses, whenever the cash funds of the company in excess of an amount 
 equal to its liabilities are exhausted; and whenever the said fund is drawn 
 upon, reservation of profits as aforesaid shall be renewed or continued until 
 the limit of accumulation as herein provided is reached. (R. C. 1905, § 4441.) 
 
 § 4S76. Temporary Capital May be Retired.] A mutual life insurance com- 
 pany may be organized with, and an existing mutual life insurance company 
 may establish a temporary capital of not less than $100,000, which shall be in- 
 vested in the same manner as is provided for the investment of its other funds. 
 Out of the net surplus of the company the holders of the temporary capital 
 stock may receive a dividend of not more than eight per cent, per annum, 
 which may be cumulative. Such capital stock shall not be a liability of the 
 company except that it shall be retired as soon as, but not before the surplus 
 of the company remaining after its retirement shall not be less than the tem- 
 porary capital so established. At the time for the retirement of such capital 
 stock the holders shall be entitled to receive from the company the par value 
 thereof and any dividends thereon due and unpaid, and thereupon the stock 
 shall be surrendered and canceled, and the right to vote thereon shall cease. 
 (1907, Ch. 144.) 
 
 § 4877. Members Entitled to Share of Net Profits.] Every member 
 of a mutual insurance company, except a mutual life insurance company, when 
 his policy expires shall be entitled to be paid in cash his share of the net profits 
 or surplus accrued while his policy was in force; and shall in like manner be 
 liable to pay his proportionate part of any assessments, which may be laid by 
 the company in accordance with law and his contract on account of losses and 
 expenses incurred while he was a member. (R. C. 1905, § 4442.) 
 
 Liability of members of mutual insurance company. 32 L. R. A. 481. 
 Jurisdiction of equity to enforce liability of member of mutual insurance 
 
 company. 40 L. R. A. (N. S.) 781. 
 
 § 4878. Distribution of Surplus on Life Policies.] Every domestic 
 mutual life insurance company shall annually, or once in every two, three, four 
 or five years, as it shall determine, and as may be conditioned in its policies 
 make distribution of all surplus it may have accumulated since its last dividend 
 of surplus. By such surplus is here intended all accumulations since its last 
 distribution of surplus above its debts and reserve computed :is provided in 
 section 4844. The distribution shall be upon what is known as the contribution 
 
STATE OF NOETH DAKOTA 23 
 
 plan and each member upon whose policy no premium is overdue and unpaid 
 shall be entitled to the amount contributed by his policy to such surplus. 
 Policies which have become payable before the time when such distribution is 
 made and after the date of the last previous distribution shall share in the 
 same equitably and proportionally. (R. C. 1905, § 4443.) 
 
 § 4879. Assessments. When and How Made.] Whenever a mutual 
 insurance company other than life, is not possessed of cash funds above its 
 reinsurance reserve sufficient for the payment of incurred losses and expenses 
 it shall make an assessment for the amount needed to pay such losses and ex- 
 penses upon its members liable to assessment therefor in proportion to their 
 several liability. The company shall cause to be recorded in a book kept for 
 that purpose the order for such assessment together with a statement which 
 shall set forth the condition of the company at the date of the order, the 
 amount of its cash assets and of the notes of its policy holders, or other con- 
 tingent funds liable to the assessment, the amount the assessment calls for 
 and the particular losses or other liabilities it is made to provide for. Such 
 record shall be made and signed by the directors who voted for the order before 
 any part of the assessment is collected and any person liable to the assessment 
 may inspect and take a copy of the same. (R. 0. 1905, § 4444.) 
 
 § 4880. Making Premium Reserve Good. Single Assessment. Can- 
 cellation of Policies. Double Assessments. Reinsurance.] When by 
 reason of depreciation or loss of funds, or otherwise, the cash assets of such 
 a company after providing for its other debts are less than the required pre- 
 mium reserve upon its policies it shall make good the deficiency by assessment 
 in the mode provided in the last section; or, if the directors are of the opinion 
 that the company is likely to become insolvent they may, instead of such assess- 
 ment, make two assessments, the first determining what each policy holder 
 must equitably pay or receive in case of withdrawal from the company and 
 having his policy canceled, the second what further sum each must pay in order 
 to reinsure the unexpired term of his policy at the same rate as the whole was 
 insured at first. Each policy holder shall pay or receive according to the first 
 assessment and his policy shall then be canceled, unless he pays the further sum 
 determined by the second assessment, in which ease his policy shall continue 
 in force; but in neither case shall a policy holder receive or have credited to 
 him more than he would have received on having his policy canceled hy a vote 
 of the directors under the by-laws. If within two months After such alternative 
 assessments have become collectible the amount of the policies whose holders 
 have settled for both assessments is less than two hundred thousand dollars. 
 the company shall cease to issue policies; and all policies whose holders have 
 not settled for both assessments shall be void and the company shall con- 
 tinue only for the purpose of adjusting the deficiency or excess of premiums 
 among the members and settling outstanding claims. No assessment shall be 
 valid against a person who has not been duly notified thereof, within two years 
 after the expiration or cancellation of his policy. (R. 0. 1905, $ 4145. "i 
 
 § 4881. Directors Personally Liable for Not Making and Collecting 
 Assessments.] Tf the directors of any mutual insurance company shall 
 neglect or omit for the space of six months to lay and use reasonable diligence 
 to collect any assessment they are required to make, they shall be personally 
 
24 INSURANCE LAWS 
 
 liable for all debts ami claims then outstanding against the company, or that 
 may accrue until such assessment is laid and put in process of collection. If 
 tlic treasurer of such company unreasonably neglects to collect an assessment 
 made by order of the directors and to apply the same to the payment of the 
 claims for which it was made, he shall be personally liable to the party having 
 such claims for the amount of the assessment; and he may repay himself out 
 of any money afterwards received for the company on account of said assess- 
 ment. (R, C. 1905, § 4446.) 
 
 Article 12 — Surplus of Life Insurance Company. 
 
 § 4882. Surplus Apportioned Annually.] Every life insurance com- 
 pany doing business in this state conducted on the mutual plan or in which 
 policy holders are entitled to share in the profits or in which policy holders of 
 life insurance heretofore issued, under the conditions of which the distribution 
 of surplus is deferred to a fixed or specified time and contingent upon the 
 policy being in force and the insured living at that time annually ascertain the 
 amount of surplus to which all such policies as a separate class are entitled, 
 and shall apportion to such policies as a class the amount of surplus so ascer- 
 tained and carry the amount of such apportioned surplus, plus the actual 
 interest earnings and accretions of such fund, as a distinct and separate lia- 
 bility to such class of policies on and for which the same was accumulated, 
 and no company or any of its officers shall be permitted to use any part of such 
 apportioned surplus fund for any purpose whatsoever other than for the ex- 
 press purpose for which the same was accumulated. (1909, Ch. 145, Par. 1; 
 1907, Ch. 142. Par. 1.) 
 
 § 1883. Exception.] The preceding section shall not apply to industrial 
 policies. (1909, Ch. 145, Par. 2.) 
 
 § 4884. Contingency Reserve.] Any life insurance company doing business 
 in this state may accumulate and maintain in addition to the capital and surplus 
 contributed by its stockholders and in addition to an amount equal to the net 
 values of its policies, computed according to the laws of the jurisdiction under 
 which it is organized, a contingency reserve not exceeding the following respec- 
 tive 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 con- 
 tingency reserve shall decrease one-half of one per centum for each one hun- 
 dred 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 hundred thou- 
 sand 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 mil- 
 lion dollars; and if said net values equal or exceed the past mentioned amount 
 the contingency reserve shall not exceed five per centum thereof; provided, 
 that as the net values of said policies increase and the maximum percentage 
 measuring the contingency reserve decreases such corporation may maintain 
 the contingency reserve already accumulated hereunder, although for the time 
 being it may exceed the maximum percentage herein prescribed, but may not 
 
STATE OF NORTH DAKOTA 25 
 
 add to the contingency reserve when the addition will bring it beyond the maxi- 
 mum percentage; provided, further, that for cause shown the commissioner of 
 insurance may at any time from time to time permit any corporation to 
 accumulate and maintain a contingency reserve in excess of the limit above 
 mentioned for a prescribed period, not exceeding one year under any one per- 
 mission, by filing in his office a decision stating his reasons therefor and caus- 
 ing the same to be published in his next annual report. This section shall not 
 apply to any company doing exclusively a non-participating business. (1907, 
 Oh. 142, Par. 2.) 
 
 § 4885. Eights op Policy Holders.] Every policy holder shall on all 
 participating policies hereafter issued be permitted annually to select the man- 
 ner and method of the application of the surplus to be annually apportioned 
 to his policy from among those set forth in the policy. All apportioned surplus 
 not actually paid over to the insured, or applied in the reduction of current 
 or future premiums or in the purchase of paid-up insurance or pure endowment 
 additions, shall be credited to the assured and carried as an actual liability and 
 be paid at the maturity of the policy. (1907, Ch. 142, Par. 3.) 
 
 § 4886. Automatic Insurance.] In event of default in payment of any 
 premium due on any policy, provided not less than three full years' premiums 
 shall have been paid, there shall be secured to the insured without action on 
 his part, either paid-up or extended insurance as specified in the policy, the 
 net value of which shall be at least equal to the entire net reserve held by the 
 company on such policy less two and one-half per centum of the amount insured 
 by the policy and dividend additions, if any, and less any outstanding indelt- 
 edness to the company on the policy at the time of default. There shall be 
 secured to the insured the right to surrender the policy to the eompany at its 
 home office within one month after date of default for the cash value other- 
 wise available for the purchase of the paid-up or extended insurance as afore- 
 said. (1907, Ch. 142, Par. 4.) 
 
 § 4887. Contra Agreement Forbidden.] No agreement between the com- 
 pany and the policy holder or applicant for insurance shall be held to waive 
 any of the provisions of this act. (1907, Ch. 142, Par. 5.) 
 
 Article 13 — Consolidation and Reinsurance of Domestic Insurance Com- 
 panies. 
 
 § 4888. Consolidation Forbidden.] No company organized under the 
 laws of this state to do business of life, accident or health insurance, either on 
 the stock, mutual, stipulated premium, assessment, or fraternal plan, shall 
 consolidate with any other company, or reinsure its risks, or any part thereof 
 with any other company, or assume or reinsure the whole of or any portion of 
 the risks of any other company, except as hereinafter provided, but nothing 
 lu-rcin contained shall prevent any such company, organized on the stock or 
 mutual plan, from reinsuring a fractional part of any risk. (1907, Ch. 150, 
 Par. 1.) 
 
 Right of corporations to consolidate. 52 L. R. A. 369. 
 
 § 4889. Petition for Consolidation.] When any such company shall 
 propose to consolidate with any other company, or to enter into any contract 
 of reinsurance, it shall present its petition to_ the insurance commissioner of 
 this state, setting forth the terms and conditions of such proposed eonsolida- 
 
26 [NSUEANCE LAWS 
 
 tion or reinsurance, and asking for the approval or of any modification thereof, 
 which the commission hereinafter provided for may approve. (1907, Ch. 150, 
 Par. 2.) 
 
 § 4890. Duty op Insurance Commissioner.] The insurance commissioner 
 thereupon shall issue an order of notice requiring notice to be given by mail 
 to each policy holder of such company, of the pending of such petition, and 
 the time and place at which hearing thereon will be held, and shall publish 
 the said order of notice and said petition in five newspapers for at least two 
 weeks before the time appointed for the hearing upon said petition, and in one 
 daily newspaper published at the capital of the state. (1907, Ch. 150, Par. 3.) 
 
 § 4891. Commission.] The governor, or in the event of his inability to 
 act, some competent person resident of the state to be appointed by him, the 
 attorney general and the insurance commissioner of this state, shall constitute 
 a commission to hear and determine upon said petition. At the time and place 
 fixed in said notice or at such time and place as shall be fixed by adjournment, 
 the said commission shall proceed with the hearing and may make or order 
 such examination into the affairs and condition of such company as it may 
 deem proper. The insurance commissioner shall have the power to summon and 
 compel the attendance and testimony of witnesses and production of books 
 and papers before said commission. Any policy holder or stockholder of the 
 company or companies so petitioning may appear before said commission and 
 be heard in reference to said consolidation or reinsurance. Said commission if 
 satisfied that the interests of the policy holders of such company or companies 
 are properly protected, and that no reasonable objection exists thereto, may 
 approve and authorize the proposed consolidation or reinsurance or may modify 
 or change the terms and conditions thereof as may seem best for the interests 
 of the policy holders, and said commission may make such order with reference 
 to the distribution and disposition of the surplus assets of any such company 
 thereafter remaining as shall be just and equitable to the policy holders. 
 Such consolidation or reinsurance shall only be approved by the consent of 
 all members of such commission, and it shall be the duty of said commission 
 to safeguard the interests of the "policy holders of any such company or com- 
 panies proposing to consolidate or reinsure. (1907, Ch. 150, Par. 4.) 
 
 § 4892. Expenses Paid.] All actual expenses and costs incident to pro- 
 ceedings under the provisions of this act shall be paid by the company or com- 
 panies bringing said petition, and an itemized statement of the expenses and 
 costs shall be filed with the insurance commissioner with a certified copy of 
 the decision of the commission. No officer of any such company or companies, 
 nor members of said commission, or employee of the state, shall receive any 
 compensation, gratuity or otherwise, directly or indirectly, for in any manner 
 aiding, promoting or assisting in such consolidation or reinsurance. (1907, 
 Ch. 150, Par. 5.) 
 
 § 4893. Penalty for Violation.] Any officers, director or stockholder of 
 any such company or companies, or any member of such commission or em- 
 ployee of the state, violating or consenting to the violation of the provisions 
 of this act shall be punished by a fine not less than five thousand dollars or 
 imprisonment in the county jail for not less than one year, or both such fine 
 and imprisonment, in the discretion of the court. (1907, Ch. 150, Par. 6.) 
 
STATE OF NORTH DAKOTA 27 
 
 Article 14 — Provisions Peculiar to Mutual Hail Insurance Companies. 
 
 § 4894. Foreign Mutuals Prohibited. Contracts Void. Penalty.] No 
 foreign insurance company incorporated upon the mutual plan shall directly 
 or indirectly, take any hail risk, or transact the business of hail insurance in 
 this state. All contracts, notes, mortgages and other evidence of indebtedness 
 made or taken in violation of this section are hereby declared void. (P. C. 
 1905, § 4447.) 
 
 § 4895. Penalty.] Any person who violates any of the provisions of 
 section 4894 or who procures or induces another to do so is guilty of a misde- 
 meanor. (R C. 1905, § 4448.) 
 
 § 4896. Mutual Insurance Companies (Engage) Engaged in II mi 
 Business, When.] No mutual insurance company hereafter organized under 
 the laws of this state shall engage in the business of hail insurance in this 
 state without first filing a bond in the office of the commissioner of insurance 
 in the sum of twenty-five thousand dollars ($25,000.00), said bond to be satis- 
 factory in form and surety to the commissioner of insurance, and no mutual 
 hail insurance company now or hereafter organized under the laws of any other 
 state or county shall be admitted to engage in the business of hail insurance in 
 this state without having net cash assets in the sum of one hundred thousand dol- 
 lars ($100,000.00) above its liabilities and without first depositing and thereafter 
 keeping on deposit with the treasurer of this state the sum of twenty-five thou- 
 sand dollars ($25,000.00) in money, or first mortgage loans on real estate in 
 the State of North Dakota or certificates of deposit issued by banks in North 
 Dakota, both mortgage and certificate to be approved by the commissioner of 
 insurance; said mortgages or deposits to be of the face value of twenty-five 
 thousand dollars ($25,000.00), the said bond and said deposit conditioned for 
 the carrying of its contracts and obligations incurred by its policies. (Chap. 
 109, L. 1915.) 
 
 § 4897. Duties of State Treasurer.] Said money or securities so deposited 
 shall be and remain in the hands of the treasurer of this state as a fund to 
 secure the payment of all losses occurring under all policies or contracts for 
 hail insurance, made by such company in this state, or covering property situ- 
 ated within the state. And the treasurer of this state shall not permit said 
 deposit or any part thereof to be withdrawn by said company from his custody 
 except as hereinafter provided. (R. C. 1905, § 4450.) 
 
 § 4898. Penalty.] If any such company hereafter organized under the 
 laws of this state shall violate any of the provisions of this article, the charter 
 of said company or association shall thereupon be forfeited and it shall lie the 
 duty of the attorney general, on complaint of the commissioner of insurance. 
 to take all legal proceedings necessary to have such forfeiture enforced and 
 such company dissolved and its affairs wound up. (R. C. 1905, § 4451.) 
 
 $ 4899. Relinquish Business, How.] When any such company or cor- 
 poration, having made the deposit as herein provided, desires to relinquish the 
 transaction of the business of hail insurance in this state and withdraw such 
 deposit, and shall file with the commissioner of insurance an application, under 
 the oath of its officers, stating that all its liabilities arising under the contracts 
 or policies above mentioned are paid, the commissioner of insurance shall there- 
 upon publish notice of such application in a newspaper published at the capital 
 
28 INSURANCE LAWS 
 
 of the state, twice a week for a period of three mouths, and after such publi- 
 cation, on his being satisfied by the exhibition of the books and papers of such 
 company, and on examination by himself or a person appointed by him, that 
 all liabilities under the policies or contracts herein mentioned have been fully 
 paid and extinguished, the commissioner of insurance shall thereupon file a 
 certificate to that effect with the treasurer of this state, who shall thereupon 
 deliver such deposit to said company, or its assigns.- If it shall appear from 
 such application and examination that all the liabilities of such company have 
 nut been paid and extinguished, and that the amount of such deposit is more 
 than equal to twice the amount of such remaining liabilities, the treasurer shall 
 thereupon pay to such company, or its assigns, a part of such deposit, retaining 
 an amount equal to twice the amount of the liabilities so remaining. (R. C. 
 1905, § 4452.) 
 
 § 4900. Companies Collect Interest.] So long as any deposit required by 
 this article is kept good, and the depositing company is solvent, the state 
 treasurer may permit the company to collect the interest on the securities so 
 deposited, and from time to time to withdraw any such securities on depositing 
 with him others of the value and character required by this article. (R. C. 
 1905, § 4453.) 
 
 § 4901. Proceedings, Who Institute.] Any insurance company which 
 has made such deposit, or the commissioner of insurance in the name of the 
 state, or any person entitled to the benefit of such deposit, may at any time 
 institute in the district court of Burleigh county legal proceedings against this 
 state and other parties properly joined therein to enforce, administer or 
 terminate the trust created by such deposit. The process in such suits shall 
 be served upon the insurance commissioner of this state, who shall appear ami 
 answer in its behalf, and he and the treasurer of this state shall perform such 
 orders and decrees as the court may make therein. (R. C. 1905, § 4454.) 
 
 Article 15. — Time When Hail Insurance Policies Take Effect. 
 
 § 4902. Twenty-four Hours After Application Taken.] Every insur- 
 ance company engaged in the business of insuring against loss by hail in this 
 state, shall be bound, and the insurance shall take effect from and after twenty- 
 four hours from the day and hour the application for such insurance has been 
 taken by the authorized local agent of said company, and if the company shall 
 decline to write the insurance upon receipt of the application, it shall forth- 
 with notify the applicant and agent who took the application, by telegram, 
 and in that event, the insurance shall not become effective. Provided, that 
 nothing in this act shall prevent the company from issuing a policy on such 
 application and putting the insurance in force prior to the expiration of said 
 twenty-four hours. (1907, Ch. 177, Par. 1.) 
 
 § 4903. No provision herein, however, shall apply to the State Hail Insur- 
 ance Department. (1907, Ch. 177, Par. 2.) 
 
 Article 16 — Provisions Peottliae to Fidelity Insurance Companies. 
 
 § 4904. Fidelity Insurance and Corporate Suretyship. Sole Surety.] 
 Any corporation organized under the laws of the State of North Dakota, or of 
 any state of the United States, or of any foreign country, to transact the busi- 
 ness of fidelity insurance .-mil corporate suretyship, and authorized to do busi- 
 
STATE OF NORTH DAKOTA 29 
 
 ness in this state, as hereinafter provided, may make contracts of insurance to 
 guarantee the fidelity of persons holding positions of trust in private or public 
 employment or responsibility, and may, if accepted and approved by the court, 
 magistrate, obligee or person competent to approve Buch bond act as surety 
 upon the official bond or undertaking of any person or corporation, to the 
 United States, to the State of North Dakota, or to any county, city, town, 
 school district, court, judge, magistrate or public officer, or to any corporation 
 or association, public or private; and may also act as surety upon any bond 
 or undertaking to any person or corporation conditioned upon the performance 
 of any duty or trust, or for the doing or not doing of anything in such bond 
 specified, and to indemnify against loss any person who is responsible as surety 
 upon a written instrument or otherwise, for the performance of the officers of 
 any office, employment, contract or trust. When by law two or more sureties 
 are required upon any obligation, any corporation qualified as herein provided 
 is authorized to insure, and it may act as sole surety thereon, and may be 
 accepted as such by the court, magistrate or other officer or person authorized 
 to approve of the sufficiency of such bond or undertaking. (E. C. 1905, § 4455.) 
 Certificate of corporation's authority to execute surety bond need not 
 
 be annexed to undertaking. Oermantown Trust Co. v. Whitney, S. D. 108, 
 
 102 N. W. .304. 
 
 § 4905. Acceptance of Such Bond.] Whenever any bond, undertaking, 
 recognizance or other obligation is, by law, or the charter, ordinance, rules or 
 regulations of any municipality, board, body, organization, court, judge, or 
 public officer, required or permitted to be made, given, tendered or filed with 
 any surety or sureties, and whenever the performance of any act, duty or 
 obligation or the refraining from any act, is required or permitted to be 
 guaranteed, such bond, undertaking, obligation, recognizance or guaranty may 
 be executed by a surety company, qualified under this chapter; provided, that 
 such execution by such company of such bond, undertaking, obligation, re- 
 cognizance or guaranty, shall be in all respects a full and complete compliance 
 with every requirement of every lav.-, charter, ordinance, rule or regulation and 
 such bond shall be valid and shall be accepted notwithstanding any requirement 
 of law that such bond, undertaking, obligation, recognizance or guaranty shall 
 be executed by one or more sureties, or that such sureties shall be residents or 
 householders or freeholders, or either or both, or possess any other qualifica- 
 tions, and all courts, judges, heads of departments, boards, bodies, munici- 
 palities and public officers of every character, shall accept and treat such 
 bond, undertaking, obligation, recognizance or guaranty when so executed by 
 such company, as conforming to and fully and completely complying with 
 every such requirement, ami every such law, charter, ordinance, rule or regula- 
 tion. (R. C. 1905. § 4456.) 
 
 Board of railroad commissioners may examine into sufficiency of bonds 
 
 given by grain elevator operator and may for such purpose summon any 
 
 witness before them that they please. State e\ rel Dakota Trust Co. v. 
 
 Stutsman. 24 N. D. 68, 139 N. W. S. - '.. 
 
 § 4906. Expense cot Bond, ITov; Paid.] Any receiver, assignee, guardian, 
 trustee, committee, executor, administrator or other fiduciary required by law 
 or ordered by any court or judge to give a bond or other obligation as such. 
 
30 INSURANCE LAWS 
 
 may include as a part of the lawful expense of executing his trust, such reason- 
 able sum paid to a corporation authorized under the laws of this state so to 
 do, for acting as surety on such bond, as may be allowed by the court in which 
 the judge before whom he is required to account, not exceeding one per cent, 
 per annum, or fraction thereof, on the amount of such bond, and in all actions 
 and proceedings a party entitled to recover disbursements therein shall be 
 allowed, and may tax and recover such sum paid such corporation for executing 
 any bond, recognizance or undertaking therein, not less than five dollars, nor 
 more than one per cent, per year, or fraction thereof, on the amount of the 
 penalty or liability in such bond, recognizance or undertaking specified, while 
 the same has been in force. (R. C. 1905, § 4457.) 
 
 § 4907. Must Comply With Laws of State.] Every corporation not 
 organized under the laws of the State of North Dakota, to be qualified to act 
 as surety or guarantor, must comply with the requirements of every law of this 
 state applicable to such company, and to foreign insurance companies doing 
 business, thereunder; must be authorized under the laws of the state wherein 
 incorporated, and under its charter to be surety upon such bond, undertaking, 
 recognizance or obligation, must have fully paid up and safely invested an 
 unimpaired capital of at least two hundred thousand dollars; must have good 
 and available assets exceeding its liabilities, which liabilities for the purpose 
 of this article, shall be taken to be its capital stock, debts outstanding, and a 
 premium reserve at the rate of fifty per centum of the current annual premiums 
 on each outstanding bond or obligation of like character in force; must file 
 with the commissioner of insurance a certified copy of its certificate of incoiv 
 poration, a written application to be authorized *to do business in this state, 
 also with such application, and in each year thereafter, a statement, verified 
 under oath, made up to December thirty-first preceding, stating the amount 
 of its paid up cash capital, particularizing each item of investment, the amount 
 of premiums upon existing bonds, undertakings and obligations of like char- 
 acter in force upon which it is surety, the amount of liability for unearned 
 portion thereof, estimated at the rate of fifty per centum of the current annual 
 premiums on such bond, undertaking, recognizance and obligation in force, 
 stating also the amount of debts outstanding, obligations of all kinds, and such 
 further facts as may be by the laws of this state required of such company 
 in transacting business therein; and if such company be organized under the 
 laws of any other state than this state, it must have on deposit with a state 
 officer of one of the states of the United States not less than one hundred 
 thousand dollars in securities prescribed by law, deposited with and held by 
 such officer for the benefit of the holders of its obligations. It must also, by 
 a duly executed instrument, filed in his office, constitute and appoint the com- 
 missioner of insurance of this state and his successors, its true and lawful 
 attorney, upon whom all process in any action or proceeding against it may 
 be served, and therein must agree that any process which may be served upon 
 its attorney shall be of the same force and validity as if served upon the cor- 
 poration, and tli.it the authority thereof shall continue in force irrevocable, 
 so long as any liability of the company remains outstanding in this state. 
 Service upon such attorney shall be deemed sufficient service upon the corpora- 
 tion. (R. C. 1905, § 4458.) 
 
STATE OF NORTH DAKOTA 31 
 
 $ 4908. Domestic Surety Companies.] Every corporation organized 
 under the laws of this state, and for the purpose in whole or in part of trans- 
 acting the business of fidelity or corporate suretyship, must comply with the 
 provisions of chapter 31 of the civil code and section 4929, and upon such 
 corporation filing in the office of the commissioner of insurance a certificate 
 issued by the state treasurer, to the effect that such corporation has complied 
 with the provisions of section 5207, together with a certified copy of its articles 
 of incorporation, and the payment of the proper fees therefor, the commissioner 
 of insurance shall issue to such corporation a certificate, and shall issue to its 
 agents certificates as provided in section 4920, which certificate shall be issued 
 yearly on the filing by such corporation of a statement of its condition as of 
 December thirty-first of the year last ending. (E. C. 1905, § 4459.) 
 
 Board of railroad commissioners may examine into sufficiency of bonds 
 
 given by grain elevator operator and may for such purpose summon any 
 
 witness before them that they please. State ex rel. Dakota Trust Co. v. 
 
 Stutsman, 24 N. D. G8, 139 N. W. 83. 
 
 § 4909. Concurrent Undertakings.] Whenever any bond, undertaking 
 or other obligation is by law, or the charter, ordinances, rules and regulations 
 of any municipality, board, body, organization, court or public officer, required 
 or permitted to be made, given or filed as hereinbefore provided, and whenever 
 the amount thereof is fixed by law or by the charter, ordinances, rules or regu- 
 lations of any municipality, board, body, organization, court, judge or public 
 officer, then two or more such bonds executed by corporations qualified under 
 the laws of this state, and aggregating the amount so fixed or determined, 
 may be accepted and shall be in all things treated as one bond or obligation, 
 and in case of loss or liability thereunder, the amount of such loss or liability, 
 chargeable against each such bond or undertaking, shall be the same proportion 
 of the entire loss or liability, as such bond or obligation bears to the aggre- 
 gate amount of the penalty or liability specified in all of such bonds, whether 
 such proportion be stated therein or not. (R. C. 1905, § 4460.) 
 
 § 4910. Relief from Liability.] The surety, or the representative of any 
 surety upon a bond of any officer or fiduciary, may apply by petition to the 
 court wherein said bond is directed to be filed or which may have jurisdiction 
 of the beneficiary thereunder, praying to be relieved from further liability 
 thereon, and to require said officer or fiduciary to show cause why he should 
 not account and said surety be relieved from such further liability as aforesaid. 
 and the said principal be required to give a new bond, and thereupon and upon 
 the filing of said petition, said court shall issue an order returnable at such 
 time and place, and to be served in such manner as said court shall direct, 
 and may restrain such officer or fiduciary from acting except in such manner 
 as it may direct therein, to preserve the trust estate, and upon the return of 
 such order to show cause, if the principal in the bond account in due form of 
 law and file a new bond, duly approved; then said court must make an order 
 releasing said surety filing the petition aforesaid from further liability upon 
 the bond for any subsequent act or default of the principal, and in default 
 of said principal this accounting and filing said new bond, the said court shall 
 make an order directing such officer and fiduciary to account in due form of 
 law within thirty days, and that if the trust fund or estate shall be found or 
 
3<J [NSUEANCB LAWS 
 
 made good, or properly secured in the manner directed by the court, such com- 
 pany shall be discharged from any and all further liabilities as such for the 
 subsequent acts or omissions of the said officer or fiduciary after the date of 
 the said surety being so relieved or discharged, and discharging said trustee, 
 officer or other fiduciary. (R. C. 1905, § 4461.) 
 
 § 4911. Report of Taxes.] Every foreign corporation doing business in 
 this state, under the provisions of this article, shall, at the time of making the 
 annual statement of business done as required by law, pay to the commissioner 
 of insurance two and one-half per cent, of the gross, premiums, fees or charges 
 received in this state during the preceding year upon all bonds or undertakings 
 written by it, for or in behalf of any person in this state, and only upon and 
 after the payment of such sum, the commissioner of insurance shall issue the 
 annual certificate provided by law. (R. C. 1905, § 4462.) 
 
 § 4912. Any corporation organized under the laws of this state, or of 
 any state or country, to transact the business of fidelity insurance and cor- 
 porate suretyship, and authorized to do business in this state, which makes 
 contracts of insurance guaranteeing the fidelity of persons holding positions 
 of trust in public office, shall be held responsible to any person for any loss 
 or damage which he may suffer by reason of any fraud or misrepresentation 
 practiced upon him by such public official under the guise of or by virtue of 
 his office. (1913, Ch. 193.) 
 
 Article 17 — Provisions Peculiar to Foreign Insurance Companies. 
 
 § 4913. Conditions of Admission. Articles and Statement Filed. 
 Must be Legally Organized. Appoint Commissioner Its Attorney for 
 Service. Resident Agents.] No foreign insurance company shall directly 
 or indirectly take any risk or transact the business of insurance in this state 
 until : 
 
 1. It shall deposit with the insurance commissioner a certified copy of 
 its articles of incorporation and a statement of its financial condition and busi- 
 ness in such form and detail as he may require, signed and sworn to by its 
 president and secretary or other proper officers. 
 
 2. It shall satisfy the insurance commissioner that it is fully and legally 
 organized under the laws of its state or government to do the business it 
 proposes to transact; that it has a fully paid up and unimpaired capital, ex- 
 clusive of stockholders' obligations of any description, of an amount not less 
 than is required by section 4S(!:: ami, if a mutual company, that its assets 
 are not less than is required by section 4870, that such capital or net assets 
 are well invested and immediately available for the payment of losses in this 
 state; and that it Insures on any single hazard a sum no larger than one-tenth 
 of its net assets. 
 
 3. It shall by a duly executed instrument, filed in his office, constitute and 
 appoinl the commissioner of insurance and his successors its true and lawful 
 attorney upon whom all process in any action or proceeding against it may 
 be served and therein shall agree that any process which may be served upon 
 its said attorney shall be of the same force and validity as if served on the 
 company and that the authority thereof shall continue in force irrevocable so 
 long as any liability of the company remains outstanding in this state. Service 
 upon such attorney shall be deemed sufficient service upon the company. When- 
 
STATE OF NORTH DAKOTA ;};$ 
 
 ever process against any foreign insurance company, doing business in this 
 state, shall be served upon the commissioner of insurance, he shall forthwith 
 mail ;'. copy of such process, postage prepaid, and directed to such company 
 at its principal place of business, or if it is a foreign company, to its resident 
 manager in the United States, or to such other person as may have been pre- 
 viously designated by it by written notice filed in the office of the commissioner 
 of insurance. As a condition of valid and effectual service the plaintiff shall 
 pay to the commissioner of insurance at the time (if service the sum of two 
 dollars, which the plaintiff shall recover as taxable costs if he shall prevail in 
 his action. The commissioner shall keep a record of all such process which 
 shall show the time and hour of service. 
 
 4. It shall appoint as its agents in this state 'only residents thereof. (R. 
 0. J 905, § 4463.) 
 
 Failure of foreign corporation to comply with law as" to doing business 
 in state justifies direction of verdict against it in suit for breach of eon- 
 tract. Chesley v. Soo Lignite Coal Co., 19 N. D. 18, 121 N. W. 73. 
 
 Restrictions on business of foreign insurance company. 24 L. R. A. 298. 
 Effect on insurance of non-compliance with statutory requirements as 
 to recovery on the policy. 20 L. R. A. 405. 
 
 Article 18 — Provisions Common to all Insurance Companies. 
 § 4914. Limit of 1 Risk.] No company organized under this chapter, or 
 transacting business in this state shall expose itself to loss on any one risk or 
 hazard to an amount exceeding ten per cent, of its paid up capital, exclusive 
 of any guarantee, surplus, or special reserve fund, unless the excess shall be 
 reinsured in some other good reliable company. (R. C. 1905, § 4464.) 
 
 Board of railroad commissioners may inquire into general business con- 
 duct and reliability of sureties on bonds given by grain elevator operator. 
 State ex rel. Dakota Trust (Jo. v. Stutsman, 24 N. D. 68, 139 N. W. 83. 
 <> 4915. Annual Statement, Publication Thereof.] Every insurance 
 company doing business in this state must transmit to the commissioner of 
 insurance a statement of its condition and business for the year ending on 
 the preceding thirty-first day of December, which shall be rendered not later 
 than the first day of March in each year. Foreign insurance companies shall 
 have until the following first day of December to transmit their statements of 
 business, other than that taken in the United Stales. It shall be the duty of 
 the insurance commissioner upon the date of the receipt of any such statement 
 to stamp thereon the date of the receipt of such statement in his office, and 
 the insurance commissioner is hereby prohibited from receiving such statement 
 from any company after the day which is herein designated for the filing of 
 such statement, unless the same be accompanied by the penalty by law provided 
 for each day's delinquency in filing such statement. Such statements must lie 
 published at least three times in a newspaper of general circulation printed 
 and published in each judicial district of the state in which such insurance 
 eompany shall have an agency, provided, however, that the statements of state, 
 county and town mutual insurance companies need only be published once in 
 a newspaper selected at their annual meeting in the county wherein such com- 
 pany does business. Statements for publication shall be made out on blank* 
 furnished by the commissioner of insurance and the certificate of authority 
 
34 INSURANCE LAWS 
 
 of the commissioner of insurance for the company to do business in this state 
 shall be published in connection with such statement. Proof of publication 
 shall be filed with the commissioner of insurance in all cases within four months 
 from the time of such filing of the annual statement. Such publication shall 
 be made at the authorized rate for publishing legal notices. The commissioner 
 of insurance shall select three newspapers of general circulation published in 
 each of the judicial districts from which such companies shall select one in 
 which such statements shall be published. (1911, Ch. 159.) 
 
 § 4916. Contents of Annual Statement.] The annual statement re- 
 quired by the last section must be in form and state particulars as follows: 
 
 1 . The name of the company and where located. 
 
 2. The amount of capital stock actually paid in cash. 
 :!. The property or assets of the company, specifying: 
 
 (a) The value, as nearly as may be~, of the real estate owned by the 
 company. 
 
 (b) The amount of cash on hand in the office. 
 
 (c) The amount of cash on deposit in banks. 
 
 (d) The amount of cash in the hands of agents and in course of trans- 
 mission. 
 
 (e) The amount of loans secured by bonds and mortgages, being first 
 lien on real estate worth double the amount of the sum loaned 
 thereon. 
 
 (f) The amount of stocks and bonds owned by the company, specifying 
 the amount, number of shares, and the market value of each kind 
 of stock on the day of making the statement. 
 
 (g) The amount of stock held by it as collateral security for loans 
 with the amount loaned on each kind of stock, the par value and 
 market value thereof on the day the statement is made. 
 
 (h) The amount of all other sums due the company. 
 
 4. The liabilities of such company, specifying: 
 
 (a) The amount of losses unpaid. 
 
 (b) The amount of claims for losses resisted by the company. 
 
 (c) The whole amount of unearned premiums on outstanding risks. 
 
 (d) The amount of dividends declared and due and remaining unpaid. 
 
 (e) The amount of dividends, if any. declared and not yet due. 
 
 (f) The amount of money borrowed and remaining unpaid, and the 
 security, if any, given for the payment thereof. 
 
 (g) The amount of all other existing claims. 
 
 5. The income of the company during the preceding year, specifying: 
 
 (a) The whole amount of interest received, stating separately the 
 amount of interest received on loans in the State of North Dakota. 
 
 (b) The whole amount of cash premiums received, stating separately 
 the amount of premiums received on policies written in the state. 
 
 (c) The whole amount of income received from all sources. 
 
 6. Expenditures during the preceding year, specifying: 
 
 (a) The whole amount of losses paid during the preceding year stating 
 
 ♦ how much of the same accrued prior and how much subsequent to 
 
 the date of the preceding statement; also stating separately the 
 
STATE OF NORTH DAKOTA 35 
 
 amount of losses paid upon risks taken in this state and how much 
 accrued prior and how much subsequent to the preceding statement. 
 
 (b) Tie amount of dividends paid during the preceding year. 
 
 (c) The whole amount of fees and commissions paid to officers and 
 agents during the preceding year. 
 
 (d) The amount of taxes paid during the preceding year, stating 
 separately the amount paid in this state. 
 
 (e) The amount of fees paid the commissioner of insurance of this 
 state. 
 
 (f) The whole amount paid for salaries for officers and agents during 
 the preceding year. 
 
 (g) The whole amount of all other expenditures. 
 I. Such statement shall further specify: 
 
 ;a) The gross amount of risks taken during the preceding year, statin^ 
 
 the amount in this state separately. 
 (b) The whole amount of risks outstanding. 
 
 (c) The whole amount of losses incurred during the year, including 
 those claims not yet due, stating separately those incurred in this 
 state. 
 
 (d) The number of agents in this state. (R. C. 1905, § 4457.) 
 See, also section 4931. 
 
 § 4917. Statements Verified. Duty op Commissioner.] Such state- 
 ments must be verified by the signature and oath of the president or vice 
 president and of the secretary of a domestic insurance company, and by the 
 manager or general agent of a foreign company doing business in this state; 
 and it shall be the duty of the commissioner of insurance to cause the informa- 
 tion contained in such statements to be arranged in a tabular form and printed 
 annually for distribution to the companies doing business in this state and 
 for transmission to the legislative assembly with his biennial report. (R. C. 
 1905, $ 4468.) 
 
 § 4918. Statements of Receivers.] It shall be the duty of all receivers 
 of insurance companies on or before the thirtieth day of June of each year and 
 at any other time, when required by the commissioner of insurance, to make 
 and file annually statements of their assets and liabilities and of their income 
 and expenditures in the same manner and form as the officers of such companies 
 are required by law to make, and for refusal or neglect to make and file the 
 same they shall be subject to the same penalty. (R. C. 1905, § 4469.) 
 
 § 4919. Inquiry Into Condition of Companies.] The commissioner of 
 insurance is authorized and empowered to address any inquiries to any insur- 
 ance company doing or applying for permission to do business in this state in 
 relation to its doings or condition or any other matter connected with its 
 transactions and it shall be the duty of any such company so addressed to reply 
 promptly in writing to any such inquiries. (R. C. 1905, § 4970.) 
 
 § 4920. Agents Must Not Act Without Certificate.] No agent shall 
 act for any insurance company directly or indirectly in taking risks or trans- 
 acting the business of insurance without procuring from the commissioner of 
 insurance a certificate of authority, stating that such corporation or company 
 has complied with all the requisites of this chapter. The statements and evi- 
 
36 INSURANCE LAWS 
 
 donees of investment required by this chapter shall be renewed from year to 
 year in such manner and form as are required by this chapter and the com- 
 missioner of insurance on being satisfied that the capital securities and invest- 
 ments remain secure as hereinbefore provided shall furnish a renewal of the 
 certificate as aforesaid. (R. C. .1905, § 4471.) 
 
 Granting or revoking of certificate to transact business within com- 
 missioner's discretion. State v. Carey, 2 N. D. 36, 49 N. W. 164. 
 
 Soliciting applications necessary in formation of mutual insurance com- 
 pany not a violation. Montgomery v. Harker, 9 N. D. 527, 84 N. W. 369. 
 
 Crime for agent to act without procuring certificate of authority. State 
 v. Hogan, 8 N. D. 301, 78 N. W. 1051, 73 Am. St. Rep. 759, 45 L. R. A. 166. 
 
 § 4921. Examination Before Granting Certificates. When Domestic 
 Companies Examined. Examination of Foreign Companies. Expenses.] Be- 
 for granting certificates of authority to an insurance company to issue policies 
 or make contracts of insurance the commissioner of insurance shall be satisfied 
 by such examination and evidence as he sees fit to make and require that such 
 company is duly qualified under the laws of the state to transact business 
 therein. As often as once in two years he shall personally, or by his deputy or 
 chief clerk, visit each domestic insurance company and thoroughly inspect and 
 examine its affairs, especially as to its financial condition and ability to fulfill 
 its obligations and whether it has complied with the law. He shall also make 
 an examination of any such company whenever he deems it prudent to do so or 
 upon the request of five or more of the stockholders, creditors, policy holders 
 or persons pecuniarily interested therein who shall make affidavit of their 
 belief, with specifications of their reasons therefor, that such company is in 
 an unsound condition. Whenever he deems it prudent for the protection of 
 policy holders in this state he shall in like manner visit and examine, or cause 
 to be visited and examined by some competent person appointed by him for 
 that purpose any foreign insurance company applying for admission, or already 
 admitted, to do business by agencies in this state and such company shall pay 
 the proper charges incurred in such examination, including the expenses of the 
 commissioner or his deputy- For the purposes aforesaid the commissioner or 
 person making the examination shall have free access to all books and papers 
 of an insurance company that relate to its business and to the books and papers 
 kept by any of its agents and may summon as witnesses and examine under 
 oath the directors, officers, agents and trustees of any such company and any 
 other persons in relation to its affairs, transactions and condition. (R. C. 1905, 
 § 4472.) 
 
 § 4922. Authority Revoked foe False Statemknt. When Revocation 
 Set Aside.] If the commissioner of insurance has, or shall have at any time 
 after examination, reason to believe that any annual statement or other report, 
 required or authorized by this article made or to be made out by an officer or 
 agent of any insurance company is false, it shall be the duty of said commis- 
 sioner of insurance immediately to revoke the certificate of authority of such 
 company and mail a copy of such revocation to such company, and to the agents 
 thereof in this state and such company and its agents after such notice shall 
 discontinue the issuance of any new policies or the renewal of any policy pre- 
 viously issued; and such revocation shall not be set aside nor any new certificate 
 
STATE OF NORTH DAKOTA 37 
 
 of authority be given until satisfactory evidence shall have been furnished to 
 said commissioner of insurance that such company is in substance and in fact 
 in the condition set forth in such statement or report ami that all requirements 
 of this article have been fully complied with. (R. C. 1905, § 4-473.) 
 
 § 4923. Commissioner Must Ascertain Net Cash Value of Life Pol- 
 icies.] The commissioner of insurance shall, at the expense of the company, 
 as soon as practicable after statements are filed, proceed to ascertain the net 
 cash value of all life insurance policies in force. The commissioner of insurance 
 may, however, accept such valuation from the proper officer of the company 
 or the insurance officer of the state in which such company is located, should he 
 deem it expedient so to do. When the actual funds of any life or accident 
 insurance company doing business in this state are not of a net value equal 
 to the net value of its policies according to the combined experience or 
 acturaries' rate of mortality, with interest at four per cent, per annum, it 
 shall be the duty of the commissioner of insurance to give notice to such com- 
 pany and its agents to discontinue the issuance of new policies in this state 
 until its funds have become equal to its liabilities, valuing its policies as afore- 
 said. Any officer or agent, who after such notice has been given issues or 
 delivers a new policy from and in behalf of such company before its funds 
 have become equal to its liabilities as aforesaid shall forfeit for each offense 
 a sum not exceeding one thousand dollars. (R. C. 1905, § 4474.) 
 
 § 4924. Tax. How Levied.] Every insurance company doing business in 
 this state, except joint stock and mutual companies, organized under the laws 
 of this state, shall at the time of making the annual statement of business done, 
 as required by law, pay to the commissioner of insurance two ami one-half per 
 cent, of the gross amount of premiums received in this state during the pre- 
 ceding year. Upon payment of such sum the commissioner of insurance shall 
 issue the annual certificates provided by law. (R. C. 1905, § 4475.) 
 
 Association incorporated principally to secure for each member payment 
 of certain sum to his beneficiary at death is taxable as a life insurance com- 
 pany. Masonic Association v. Taylor, 2 S. D. 324, 50 N. W. 93. 
 
 Ancient Order United Workmen is exempt from state tax. Ancient 
 Order, U. W. v. Shober, 16 S. D. 513, 94 N. W. 405. 
 
 Imposes "occupation tax" and not an "ordinary tax" within constitu- 
 tion relating to taxation. Queen City F. Ins. Co. v. Rasford, 27 S. D. 164, 
 130 N. W. 44. 
 
 State tax on insurance premiums. 57 L. R. A. 69. 
 $ 4925. Authority of Foreign or Domestic Company Revoked. How.] 
 If the commissioner of insurance is of opinion upon examination or other evi- 
 dence that a foreign insurance company is in an unsound condition, or if it 
 has failed to comply with the law, or if it, its onicer^ or agents, refuse to sub- 
 mit to examination, or to perform any legal obligation in relation thereto, or 
 if a life insurance company, that its actual funds, exclusive of its capital, are 
 less than its liabilities, he shall revoke or suspend all certificates of authority 
 granted to it or to its agents, and shall cause notifications thereof to be pub- 
 lished three times, once in each week for three successive weeks, in some news- 
 paper published at the seat of government and no new business shall there- 
 after he done by it or its agents in this state while such default or disability 
 
38 INSURANCE LAWS 
 
 continues, nor until its authority to do business is restored by the commis- 
 sioner; provided, further, that if any insurance corporation organized under 
 the laws of any other state or country and having been authorized to transact 
 business in this state, shall remove or make application to remove into any 
 court of the United States any action or proceeding begun in any court of this 
 state upon a claim or cause of action arising out of any business or transaction 
 done in this state, or upon any contract made, executed or to be performed 
 herein, the commissioner of insurance shall revoke all certificates of authority 
 granted to such insurance corporation, or to its agents, and shall cause notifica- 
 tions thereof to be published three times, once in each week for three succes- 
 sive weeks in some newspaper published at the seat of government, and no new 
 business shall thereafter be done by it or its agents in this state until after 
 the expiration of three years from the date of such last publication. If upon 
 examination he is of the opinion that any domestic insurance company is 
 insolvent, or has exceeded its powers or has failed to comply with any provi- 
 sions of law, or that its condition is such as to render its further proceedings 
 hazardous to the public or its policy holders, he shall apply to the district 
 court of the county in which the principal office of the company is located to 
 issue an injunction restraining it in whole or in part from further proceeding 
 with its business. The court or judge may, in its discretion, issue an injunc- 
 tion forthwith or upon notice and hearing thereon, and after a full hearing 
 of the matter may dissolve or modify such injunction or make it perpetual, 
 and may make all orders and decrees needful in the premises and may appoint 
 agents or receivers to take possession of the property and effects of the com- 
 pany and to settle its affairs according to the course of proceedings in equity. 
 (E. C. 1905, § 4476.) 
 
 § 4926. Insurance by Resident Agents Only.] No insurance company 
 shall do business in this state, except through its authorized agents who must 
 be residents of and have their office or place of business in this state. All 
 policies not written in accordance with the foregoing provisions shall be deemed 
 a violation of this article. (R. C. 1905, § 4477.) 
 
 § 4927. Penalty for Not Making Statement. For False Statement.] 
 Any insurance company doing business in this state that neglects to make the 
 statements in the manner and within the time in this article required shall 
 forfeit one hundred dollars for each day's neglect, and upon notice by the 
 insurance commissioner to that effect, its authority to do new business shall 
 cease while such default continues and every such company that wilfully makes 
 false statements shall be liable to a fine of not less than five hundred dollars 
 nor more than one thousand dollars. Any new business done by the insurance 
 company after neglect to make the required statements shall be deemed to be 
 done in violation of law. (R. C. 1905, § 4478.) 
 
 § 4928. Penalty When There is no Specific Provision.] For violation 
 of any provision of this chapter when no penalty is specifically provided for 
 herein the offender shall be punished by a fine of not less than one hundred 
 dollars nor more than five hundred dollars. (R. C. 1005. § 4479.) 
 
 § 4929. Fees.] There shall be paid by every company doing business in 
 this Btate, except county mutual insurance companies, the following fees: 
 
 Upon filing articles of incorporation, or copies thereof, twenty-five dollars. 
 
STATE OF NORTH DAKOTA 39 
 
 Upon filing the annual statement, ten dollars. 
 
 For each certificate of authority and certified copy thereof, two dollars. 
 
 For every copy of any paper filed in the insurance department, the sum of 
 twenty cents per folio; and for affixing the official seal on such copy and certi- 
 fying the same, the sum of one dollar. 
 
 For official examination of companies under this article the actual expense 
 incurred, not to exceed ten dollars per day. (R. C. 1905, § 4480.) 
 
 § 4930. Same Conditions Imposed on Companies ok Other States as 
 They Impose on Domestic Companies.] Whenever the laws of any other 
 state of the United States or foreign country shall require of insurance com- 
 panies incorporated under the laws of this state, or of the agent thereof, any 
 deposits of securities in such state for the protection of policy holders or 
 otherwise, or any payment for taxes, fines, penalties, certificate of authority, 
 license or fees greater than the amount required for such purposes from similar 
 companies of other states by the then existing laws of this state, then and in 
 every such case, all insurance companies of such states establishing or having 
 heretofore established an agency in this state, shall be and are hereby required 
 to make the same deposit for a like purpose with the state treasurer of this 
 state, and to pay to the commissioner of insurance an amount equal to the 
 amount of such charges and payment imposed by the laws of such other states 
 upon the companies of this state and the agents thereof. (R. C. 1905, § 4481.) 
 Restrictions on business of foreign insurance companies. 24 L. R. A. 
 
 298. 
 
 Effect on insurance by foreign company of non-compliance with statutory 
 
 requirements. 20 L. R. A. 405. 
 
 Right of burglary and theft insurance companies to do business in 
 
 foreign states. 46 L. R. A. (N. S.) 563. 
 
 Article 19 — Reports of Life Insurance Companies. 
 § 4931. Annual Report, Contains What.] In addition to any other 
 matter which may be required by law or pursuant to law by the commissioner 
 of insurance to be stated therein, every annual report of every life insurance 
 company doing business in this state, shall contain an accurate, concise and 
 complete statement of the following matters, to-wit: 
 
 1. All the real property held by the company, the dates of acquisition, 
 the names of the vendors, the actual cost, the value at 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 commissioner 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 tiie 
 consideration. 
 
 2. The amount of existing loans upon the security of real property, stating 
 the amount loaned upon property in each state and foreign country. 
 
 3. The moneys loaned by the company to any person other than loans 
 upon the security of real property above mentioned and other than loans upon 
 policies the actual borrowers thereof, the maturity and the rate of interest of 
 such loans, the securities held therefor, and all substitutions of securities in 
 
40 [NSURANCE LAWS 
 
 connection 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 interesl 
 (including all securities, whether or not recognized by law as proper invest- 
 ments), 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 dividends 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; 
 ami also the income received ami 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 connection with any matter pending before 
 any legislative body or any officer or department of government, giving par- 
 ticulars as to dates, amounts, names and addresses of payees, the measure or 
 proceeding in connection with which the payment was made, and the interest 
 of the company therein. 
 
 7. The names of 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 mail. 
 
 8. The salary, compensation and emoluments received by officers or direct- 
 ors and where the same amount to more than five thousand 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 representative 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 par- 
 ticulars 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 state- 
 ment showing separately the margins upon premiums for the first year of 
 insurance and the actual expenses chargeable to the procurement of new busi- 
 ness incurred since the last annual statement. A foreign company, issuing both 
 participating and non-participating policies, shall make a separate statement 
 of profits and losses, margins and expenses, as aforesaid, with reference to 
 each of said kinds of business, and also showing the manner in which any 
 general outlays of the company have been apportioned to each of such kinds 
 of business. 
 
 12. A statement separately showing the amount of the gains of the com- 
 pany for the year attributable to policies written after December thirty-first, 
 
 nineteen hundred and and the precise method ly which the calculation 
 
 lias been made. 
 
STATE OP NORTH DAKOTA 41 
 
 1.",. The rates of annual dividends declared during the year for all plans 
 of insurance and all durations for ages at entry, twenty-five, thirty-five, forty- 
 five and fifty-five, and the precise method by which such dividends have been 
 calculated. 
 
 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 calculated or held awaiting apportionment upon policies with 
 deferred dividend periods longer than one year for all plans of insurance 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 pro- 
 visionally or otherwise determined. 
 
 It). 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. (1907, 
 Ch. 1410 
 
 See, also, section 4916. 
 
 Article 21 — Live Stock. 
 
 § 4951. GENERAL Laws Govern.] Companies organized under this article 
 shall be subject to the general statutes of this state relating to domestic mutual 
 insurance companies, in so far as the same are applicable and not in conflict 
 with the express provisions of this article. (R. C. 1905, § 4500.) 
 
 § 4952. Live Stock Insurance Companies, How Organized.] Any num- 
 ber of persons not less than ten, of whom at least five shall be residents of 
 this state, may form a corporation for mutual insurance against loss or damage 
 to pure bred live stock occasioned by the death of the property insured by fire, 
 lightning, accident or disease, which shall possess the powers and be subject 
 to the duties and liabilities of other insurance companies, except as herein 
 otherwise provided. The term "pure bred live stock," as used in this article 
 includes horses, cattle, sheep and swine of either sex and any breed; provided, 
 that the animals insured must be duly registered in the recognized stud 
 or herd book of such breed; and provided, further, that corporations may be 
 organized under this article for the purpose of insuring either or all of said live 
 stock, against loss or damage to the property insured by reason of fire, light- 
 ning, accident or disease, or any or all of them. (R. C. 1905, § 4501.) 
 
 § 4953. Management.] The general management of the business cf 
 such company shall be vested in a board of directors of not less than five nor 
 more than nine directors, each of whom shall during his term of office be a 
 policy holder in the company. Such directors shall be elected annually and shall 
 hold their offices for one year and until their successors are elected ami qualified. 
 (R. C. 1905, $ 4502.) 
 
 § 4954. Board of Directors to Elect Officers and Fix Bond.] It shall 
 be the duty of the board of directors to annually elect such officers of the 
 corporation as may be provided in the articles of incorporation and by-laws 
 of the company. It shall also bo the duty of the said board of directors to 
 fix the amount of the bonds required of the treasurer and other officers having 
 or likely to have control of any funds belonging to the company, which bonds, 
 in the case of the treasurer, shall not be less than ten thousand dollars, and 
 
42 INSURANCE LAWS 
 
 in the case of the secretary not loss than two thousand five hundred dollars, 
 
 and as near as may be shall equal twice the amount of money likely at any 
 one lime to be in the hands of the respective officers. (R. C. 1905, § 4503.) 
 
 § 4955. Members May Vote by Proxy.] Members may vote by proxy 
 dated and executed within three months and returned and recorded on the 
 books of the company three days or more before the meeting at which they are 
 to be used. (R. C. 1905, § 4504.) 
 
 § 4956. Amount of Subscribed Insurance Required.] No policy shall 
 be issued by an insurance company organized under this article until not less 
 than thirty thousand dollars of insurance in not less than fifteen separate risks 
 have been subscribed for and entered on its books. (R. C. 1905, § 4505.) 
 
 Article 22 — Chattel Morgtgages in Application. 
 
 § 4957. Chattel Mortgage Void Unless on Separate Paper.] It shall 
 be unlawful for any insurance company, or any agent or solicitor therefor 
 within this state, to take or procure to be taken upon the property to be in- 
 sured, or any other property, a chattel mortgage, securing the payment of the 
 premium due or to become due, including policy fees, or any part thereof, 
 unless such chattel mortgage shall be printed or written upon a separate and 
 distinct paper from the application, and no mortgage given in violation of 
 the provisions of this section shall be valid or binding upon the party executing 
 the same, but shall in all things be null and void. (R. C. 1905, § 4506.) 
 
 § 4958. Penalty for Violating Last Section.] Any insurance company, 
 or any agent or solicitor thereof, violating the provisions of the last section 
 shall be deemed guilty of a misdemeanor; and such company shall forfeit all 
 its rights and privileges under its articles of incorporation. (R. C. 1905, 
 § 45070 
 
 Article 23 — Licensing Insurance Agents. 
 
 § 4959. Agents Defined.] Whoever solicits insurance on behalf of any 
 insurance corporation or person desiring insurance of any kind, or transmits 
 an application for a policy of insurance, other than for himself, to or from 
 any such corporation, or who makes any contract for insurance, or collects any 
 premium for insurance, or in any manner aids or assists in doing either, or 
 in transacting any business of like nature for any insurance corporation, or 
 advertising to do any such thing, shall be held to be an agent of such corpora- 
 tion to all intents and purposes, unless it can be shown that he receives no 
 compensation for such services. This section shall not apply to fraternal, 
 assessment or beneficiary associations. (R. C. 1905, § 4508.) 
 
 § 4960. Must Have License. Penalty for Non-compliance.] No 
 officer or broker, agent or sub-agent of any insurance corporation of any kind, 
 except county mutual insurance corporations of this state, shall act or aid 
 in any manner in transacting the business of or with such corporation, in 
 placing risks or effecting insurance therein, without first procuring from the 
 commissioner of insurance a certificate of authority as provided by law, nor 
 after the period named in such certificate shall have expired. Every person 
 violating the provisions of this and the previous section shall be guilty of a 
 misdemeanor and be punished by a fine of uo1 less than fifty dollars nor more 
 than five hundred dollars for each offense. (B. < '. 1905, § 4509.) 
 
 Effect of insurance agent's failure to procure license. 1 L. R. A. 1159. 
 
STATE OF NOBTH DAKOTA 43 
 
 Article 24 — Resident Agents for Transaction of Fire Insurance 
 
 Business. 
 
 § 4961. Foreign Agents.] No insurance company or association, not 
 incorporated under the laws of this state, authorized to transact business 
 herein, shall make, write, place or cause to be made, written or placed, any 
 policy, duplicate policy or contract of insurance of any kind or character, or 
 any general or floating policy, upon property situated or located in this state 
 except after the said risk has been approved in writing, by an agent who is 
 a resident of this state, regularly commissioned and licensed to transact insur- 
 ance business therein, who shall countersign all policies so issued and make a 
 record of the same on books provided for that purpose and receive the com- 
 mission thereon when the premium is j>aid, to the end that the state may 
 receive the taxes required by law to be paid on the premiums collected for 
 insurance on all property located in the state, and the agents be paid the 
 commission thereon. Nothing herein shall be construed to prevent any such 
 insurance company or association, authorized to transact business in this state, 
 from issuing policies at its principal or department offices, covering property 
 in this state, provided that such policies are issued upon applications procured 
 and submitted to such company by agents who are residents of this state, and 
 licensed to transact the business of insurance herein, and who shall counter- 
 sign all policies so issued and receive the commission thereon when paid; 
 provided, no provision of this section is intended to or shall apply to direct 
 insurance covering the rolling stock of railroad corporations or property in 
 transit, while in the possession and custody of railroad corporations or other 
 common carriers nor to movable property of such common carrier used or 
 employed by them in their business as common carriers of freight, merchandise 
 or passengers. (R. C. 1905, § 4510.) 
 
 § 4962. Cannot Reinsure.] No fire insurance company or association 
 shall reinsure, or assume as a reinsuring company or otherwise in any manner 
 or form whatever, the whole or any part of any risk or liability, covering 
 property located in this state, of any insurance company or association not 
 authorized to transact business in this state. (R. C. 1905, § 4511.) 
 
 § 4963. Insurance Commissioner. Examine Records, Books, Etc.] 
 Whenever the commissioner of insurance shall have or receive information that 
 any fire insurance company or association, not incorporated under the laws of 
 this state, has violated any of the provisions of section 4961, he is authorized, 
 at the expense of such company or association, to examine, by himself or his 
 accredited representative at the principal office, or offices of such company or 
 association, located in the United States of America, and also at such other 
 offices or agencies of such company or association as he may deem proper, all 
 books, records and papers of such company or association and may examine 
 under oath, the officers and managers and agents of such company or associa- 
 tion as to such violation or violations. The refusal of any such company or 
 association to submit to such examination or to exhibit its books and records 
 for inspection shall be presumptive evidence that it is violating the provisions 
 of section 4961, and shall subject it to the penalties prescribed and imposed 
 in section 4964. (R, C. 1905, § 4512.) 
 
 § 4964. Penalty for Violation.] Any insurance company or association 
 
44 INSURANCE LAWS 
 
 violating or failing 1<» observe and comply with any of the provisions of sec- 
 tions applicable thereto, shall l>c subject to and liable to pay a penalty of 
 five hundred dollars for each violation thereof and for each failure to observe 
 and comply with any provisions of the three previous sections mentioned. Such 
 penalty may be collected and recovered in an action broughl in the name of 
 the state in any court having jurisdiction thereof. Any insurance company 
 or association which shall neglect and refuse for thirty days after judgment 
 in any such action to pay and discharge the amount of such judgment shall 
 have its authority to transact business in this state revoked by the commis- 
 sioner of insurance and such revocation shall continue for at least one year 
 from the date thereof, nor shall any insurance company or association whose 
 authority to transact business in this state shall have been so revoked be again 
 authorized or permitted to transact business herein until it shall have paid 
 the amount of any such judgment, and shall have filed in the office of the 
 commissioner of insurance a certificate signed by its president or other chief 
 officer to the effect that the terms and obligations of the provisions herein are 
 accepted by it as a part of the condition of its right and authority to transact 
 business in this state. (R. C. 1905, § 4513.) 
 
 CHAPTER 19. 
 
 Accident and Sickness Insurance Corporations, Associations and So- 
 cieties. 
 
 § 4965. Number Requisite to Organization.] Any number of persons, 
 not less than five, a majority of whom are citizens of- this state, may associate 
 themselves together as a corporation, association or society for the purpose 
 of transacting the business of accident or sickness, or accident and sickness 
 insurance upon the assessment plan. (1907, Ch. 157, Pr. 1.) 
 
 § 4966. Compliance Required.] Every corporation, association or society 
 organized under this act shall, before commencing business, comply with the 
 provisions of this act. (1907, Ch. 157, Pr. 2.) 
 
 § 4967. Articles, State What.] The articles of incorporation of such 
 organizations shall state the name or title by which the corporation, associa- 
 tion or society shall be known in law, the location of its principal office (which 
 office must be located in this state) with its plan of doing business clearly and 
 fully defined, the number of its directors, trustees or managers, and shall be 
 submitted to the insurance commissioner and attorney general, and if said 
 articles of incorporation are found to comply with the provisions of this act 
 they shall approve the same. When said articles of incorporation are thus 
 approved they shall be recorded in the office of the recorder of deeds in the 
 county where such organization is located, and of the secretary of state, and a 
 notice published as provided for under the general incorporation laws of the 
 State of North Dakota; provided, that corporations, associations and societies 
 heretofore incorporated and doing business in this state shall not be required 
 to re-incorporate. But any corporation, association or society may become a 
 corporation under this act and avail itself of the provisions herein by filing 
 with the insurance commissioner a certificate signed by the president and secre- 
 
STATE OF NORTH DAKOTA 45 
 
 tary of such corporation, association or society, setting forth the facts as to 
 its incorporation, and that it desires to avail itself of the provisions of this 
 act and will be controlled thereby and transact its business thereunder; pro- 
 vided, this act shall not relieve any corporation, association or society now 
 doing business in this state from the fulfillment of any contract heretofore 
 entered into with its members under its policies or certificates of membership, 
 nor shall any member be relieved thereby from his or her part of the contract. 
 (1907, Ch. 157, Pr. 3.) 
 
 § 4968. Name Forbidden.] No corporation, association or society organ- 
 ized under this act shall take any name or title in use by any other corpora- 
 tion, association, or society, or so closely resembling such name as to deceive 
 the public as to its identity. (1907, Ch. 157, Pr. 4.) 
 
 § 4969. Application Contains What.] Each corporation, association or 
 society organized under this act shall, before issuing any policy or certificate 
 of membership, if said corporation, association or society has not membership, 
 sufficient to pay the full amount of the certificate or policy on an assessment, 
 cause the application for insurance to have printed in red ink in a conspicuous 
 manner along the margin of said application the words "It is understood and 
 agreed that the amount to be paid, when the certificate or policy issued upon 
 this application becomes a claim, shall be dependent upon the amount collected 
 for an assessment made to meet such claim," and they must have actual 
 applications upon at least two hundred and fifty persons for accident indem- 
 nity, or accident and sick benefits in such corporation, association or society 
 as the case may be, and shall file with the insurance commissioner satisfactory 
 proof that the president, secretary and treasurer of said association or society 
 will faithfully discharge their duties as such officers and fully comply with 
 this act in the organization and carrying on the business of such corporation, 
 association or society. A list of said applications giving the name, age and 
 residence of the applicant, together with the annual dues and the proposed 
 assessments thereon shall be filed with the insurance commissioner, with a 
 sworn statement of such officers and that such parties have deposited with 
 them one advance assessment on the insurance applied for, and a certificate 
 of a solvent bank that such funds are deposited therein to be turned over to 
 the treasurer of the corporation, association or society after certificate of 
 authority is issued by the insurance commissioner as provided herein. (1907, 
 Ch. 157, Pr. 5.) 
 
 § 4970. Agent Must Have Certificate of Authority.] No person 
 shall act within this state as agent in receiving or procuring applications for 
 accident insurance or accident and sick benefit insurance for any corporation, 
 association or society organized under this act (except for the purpose of 
 taking applications for organization), unless this corporation, association or 
 society for which he is acting lias received a certificate from the insurance 
 commissioner as provided in this act, authorizing said corporation, association 
 or society to transact business in this state, nor as general or traveling agent 
 or solicitor, until he shall have received from the insurance commissioner a 
 certificate in substance the same as that provided for in section 4'.»76. (1907, 
 Ch. 157, Pr. 6.) 
 
 § 4971. By-laws.] The bylaws of such corporation, association or 
 
46 INSURANCE LAWS 
 
 society shall state the object or objects for which the money to be collected 
 is intended. (1907, Oh. 157, Pr. 7.) 
 
 § 4972. Age of Members.] No corporation, association or society organ- 
 ized or operating under this act shall issue any certificate of membership or 
 policy of insurance to any person under the age of fifteen years, nor over the 
 age of sixty-five years. Any member of any corporation, association or 
 society holding a policy or certificate of membership, naming a beneficiary, 
 operating under this act shall have the right at any time with the consent of 
 such corporation, association or society to designate a new and different bene- 
 ficiary without requiring the consent of such beneficiary. (1907, Gh. 157, 
 Pr. 8.) 
 
 § 4973. Annual Report.] The business year of such corporation, associa- 
 tion or society organized or operating under this act shall close on the 31st 
 day of December of each year, and such corporation, association or society 
 shall, within sixty days thereafter, prepare under oath of its president and 
 secretary, and file in the office of the insurance commissioner a detailed state- 
 ment of its assets, liabilities, receipts from assessments and all other sources, 
 expenditures, salaries of officers, number of contributing members, losses paid 
 for indemnity and benefits, the amount paid on each death loss and answer 
 such other interrogatories as the insurance commissioner (who shall furnish 
 blanks for the purpose) may require, in order to ascertain its true, financial 
 condition, and shall pay upon filing each annual statement the sum of ten 
 dollars. The insurance commissioner shall publish said annual statement in 
 detail in his annual report and for the purpose of verifying such statement the 
 insurance commissioner may make, or cause to be made, an examination of the 
 affairs of any corporation, association or society doing business under this 
 act at the expense of the corporation, association or society, which expense shall 
 not exceed the necessary hotel and traveling expenses of the auditor or clerk. 
 If the insurance commissioner appoints some person not employed in his office 
 to make the examination he shall in addition to actual expenses, be allowed 
 not to exceed five dollars per day for the time actually employed. If the said 
 insurance commissioner shall deem it necessary for the security of the funds 
 of the association, he may require the official bonds of the officers to be in- 
 creased to an amount not to exceed double the sum for which they are ac- 
 countable, and he may require supplemental reports from any such corporation, 
 association or society at such time and in such form as he may direct. (1907, 
 Ch. 157, Pr. 9.) 
 
 § 4974. Reserve Fund.] Any North Dakota corporation, association or 
 society organized and doing business under this act may create and maintain 
 and disburse a reserve or surplus fund, and may invest such funds in interest 
 bearing securities. (1907, Ch. 157, Pr. 10.) 
 
 § 4975. Duty of Insurance Commissioner.] When any North Dakota 
 corporation, association or society operating under this act shall fail to make 
 its annual statement to the insurance commissioner on or before the first day 
 of March, or is conducting its business fraudulently and not in compliance 
 with this act, then it shall be the duty of the insurance commissioner to 
 promptly communicate the facts to the attorney general who shall at once 
 commence action in the district court of the county in which said organization 
 
STATE OF NORTH DAKOTA 47 
 
 is located, or before any judge thereof, citing the officers to appear before said 
 court or judge, and if upon a hearing of said cause it is found to be for the 
 best interests of the holders of certificates of membership or policies in said 
 corporation, association or society, said court or judge shall have the power 
 to remove any officer or officers of said corporation, association or society and 
 appoint others in their place until the next annual election. If it is found to 
 be for the best interest of said certificate or policy holder that the affairs of 
 said corporation, association or society be wound up, said court or. judge shall 
 so direct, and for that purpose may appoint a receiver, who shall regard all 
 proper claims for benefits under said certificates as preferred claims. No 
 action or proceeding shall be instituted with a view of the appointment of 
 a receiver or closing up of the business of any such corporation, association 
 or society by any other person, or in any other manner except as herein pro- 
 vided. (1907, Ch. 157, Pr. 11.) 
 
 § 4976. Company's Certificate of Authority.] On compliance with this 
 act by any corporation, association or society the insurance commissioner shall 
 issue a certificate that it has fully complied with the provisions of this act, 
 and is authorized to transact business for a period of one year from April 1st 
 of the year of its issue. (1907, Ch. 157, Pr. 12.) 
 
 § 4977. Voting Proxy.] At any regularly constituted meeting of the 
 policy holders or certificate holders of any corporation, association or society 
 doing business under this act, each policy holder or certificate holder shall be 
 entitled to at least one vote, and any such person may in writing authorize 
 any other person entitled to vote at such meeting to vote for him. (1907, Ch. 
 157, Pr. 13.) 
 
 § 4978. Limit Time ov 1 Suit.] Any corporation, association or society 
 organized or operating under this act may limit the time within which suit 
 may be brought against it on any claim based upon its policies or certificates 
 of membership, and after the expiration of the time thus limited shall not be 
 liable thereon ; provided, such limitation shall be incorporated in and form a 
 part of the contract between the company, association or society, ami the 
 assured or its members; and provided, further, that such limitation shall not 
 be limited to a period of less than one year from the time such right of action 
 accrues. (1907, Ch. 157, Pr. 14.) 
 
 § 4979. Reciprocal Penalties.] Whenever the existing or future laws 
 of any other state of the United States, territory or province of any other 
 country, or the rules and regulations of the insurance department of any such 
 state, territory or province shall require of corporations, associations or 
 societies organized and doing business under this act, any payment of taxes. 
 fines, penalties, certificates of authority, licenses, fees, or require any other 
 duties, examinations or acts other than are by the laws of this state required 
 of such mutual corporation, association or society organized under the laws of 
 such other state, territory or province, then the insurance commissioner shall 
 immediately require from every such insurance corporation, association or 
 society of such other state, territory or province transacting or seeking to 
 transact business in this state, the like payment of all licenses, fees, taxes, 
 fines or penalties, and the like doing of all acts which by the laws or the 
 rules of the insurance department of such other state, territory or province. 
 
48 [NSURANCE LAWS 
 
 require in excess of the licenses, tees, taxes, statements, fines, penalties, acts, 
 
 examinations or duties required by the laws of this state of the mutual com- 
 panies of such other states, transacting business in this state. (1907, Ch. 157, 
 Pr. 15.) 
 
 § 4980. Foreign Corporations, Licensed When.] When any corporation, 
 association or society not organized in this state and doing business of accident 
 or sickness, or accident and sickness insurance shall comply with the require- 
 ments of this act applicable to it and shall satisfy the insurance commissioner 
 that it is in a solvent condition and able to meet its obligations at maturity, 
 he shall issue to such foreign corporation, association or society a certificate 
 stating that such corporation, association or society has complied with the laws 
 of this state and authorizing said corporation, association or society to do and 
 transact such business in this state subject to the provisions of this act. 
 (1907, Ch. 157, Pr. 16.) 
 
 CHAPTER 23. 
 
 Article 6 — Fraternal Benefit Societies. 
 
 § 5059. Fraternal Benefit Societies Defined.] 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, and not 
 for profit, and having a lodge system with ritualistic form of work and repre- 
 sentative form of government, and which shall make provisions for the pay- 
 ment of death benefits in accordance with section 5062 hereof, is hereby declared 
 to be a fraternal benefit society. (1913, Ch. 191, Pr. 1.) 
 
 § 5060. Lodge System Defined.] Any society having a supreme govern- 
 ing or legislative body, and subordinate lodges or branches by whatever name 
 known, into which members shall be elected, initiated and admitted in accord- 
 ance 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. (1913, Ch. 191, Pr. 2.) 
 
 § 5061. Representative Form of Government Defined.] 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 govern- 
 ing body, composed of representatives elected either by the members or by 
 delegates elected 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 dele- 
 gates shall he held as often as once in four years. The members, officers, 
 representatives or delegates of a fraternal benefit society shall not vote by 
 proxy. (1913, Ch. 191, Pr. 3.) 
 
 § 5061a. Exemptions. ] Except as herein provided, such societies shall 
 be governed by this act, and shall be exempt from all provisions of the instir- 
 
STATE OF NORTH DAKOTA 49 
 
 ance laws of this state, not only in governmental relations with the state, but 
 for every other purpose, ami no law hereafter shall apply to them unless they 
 lie expressly designated therein. (1913, Ch. 191, Pr. 4.)' 
 
 § 5062. Benefits.] Sub-section 1. Every society transacting business 
 under this act shall provide for the payment of death benefits, ami may provide 
 for the payment of benefits in case of temporary or permanent physical dis- 
 ability, either as the result of disease, accident, or old age; provided, the 
 period of life at which the payment of benefits or disability <>n account of old 
 age shall commence, shall not be under seventy years, ami 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 on attaining the age of seventy, all, 
 or such portion of the face value of his certificate as the laws of the society 
 may provide; provided, that nothing in this act contained shall be so construed 
 as to prevent the issuing of benefit for a term of years less than the whole 
 of life, which are payable upon the death or disability of the member occurring 
 within the term for which the benefit certificate may be issued. Such society 
 shall, upon written application of the member, have the power to accept a part 
 of the periodical contributions in cash, and charge the remainder, not exceeding 
 one-half of the periodical contribution, against the certificate with interest 
 payable or compounded annually at a rate not lower than four per cent, per 
 annum; provided that this privilege shall not be granted except to societies 
 which have readjusted or may hereafter readjust their rates of contributions, 
 and to contracts affected by such readjustment. 
 
 Sub-section 2. Any society which shall show by the annual valuation here- 
 inafter provided for that it is accumulating and maintaining the reserve not 
 lower than the usual reserve computed by the American Experience Table ami 
 four per cent, interest, may grant to its members extended and paid up pro- 
 tection, or such withdrawal equities as its constitution and laws may provide; 
 provided, that such grants shall in no case exceed in value the portion of the 
 reserve to the credit of such members to whom they are made. (1913, Ch. 191, 
 Pr. 5.) 
 
 § 5063. Beneficiaries.] The payment of death benefits shall be confirmed 
 (confined) to wife, husband, relative by blood to the fourth degree, father-in- 
 law, mother-in-law, son-in-law, daughter-in-law, stepfather, stepmother, step- 
 children, 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 have the privilege w T ith the consent of the society to make such insti- 
 tution his beneficiary. Within the above restrictions, each member shall have 
 the right to designate his beneficiary, and from time to time 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 upon the death of the said member; 
 provided, that any society may, by its laws, limit the scope or beneficiaries 
 within the above classes. , 1913, Oh. 191. Pr. 6.^1 
 
 Who is a ••dependent" within statute or rules defining beneficiaries 
 
 of mutual benefit societies. 2 L. P. A. (N. S.) 653; 36 L. E. A. (X. s. , 
 
 208; 37 L. P. A. (N. S.) 1191. 
 
50 INSURANCE LAWS 
 
 § 506-4. Qualifications of Membership.] Any 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 the society; provided, that any beneficiary member of such 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. 
 (1913, Ch. 191, Pr. 7.) 
 
 § 5065. Certificate.] 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 associa- 
 tion, the articles of association, the constitution and laws of the society and 
 the applications for membership and medical examination, signed by the 
 applicant, and all amendments to each thereof, shall constitute the agree- 
 ment 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 of the terms and conditions thereof, and any changes,' addi- 
 tions or amendments to said charter or articles of incorporation, or articles 
 of association, if a voluntary association, constitution or laws duly made or 
 enacted subsequent to the issuance 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 amendments had been 
 made prior to and were in force at the time of the application for membership. 
 (1913, Ch. 191, Pr. 8.) 
 
 § 5066. Funds.] Sub-section 1. Any society may create, maintain, invest, 
 disburse and apply an emergency, surplus or other similar fund in accordance 
 with its laws. Unless otherwise provided in the contract, 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 therein or become 
 entitled to any apportionment or the surrender of any part thereof, except as 
 provided in sub-section 2 of section 5062. The funds from which benefits shall 
 be paid and the funds from which the expenses of the society shall be de- 
 frayed, shall be derived from periodical or other payments by the members of 
 the society and accretions of said 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 suf- 
 ficient 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 Fraternity Congress, August 23, 1S99, or any higher 
 standard with interest assumption not more than four per cent, per annum, 
 nor 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 cent, per annum. (1913, Ch. 191, Pr. 9.) 
 
 Sub-section 2. Deferred payments or 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 of installments upon the rate of interest 
 
STATE OF NORTH DAKOTA 51 
 
 and mortality assumed by the society for valuation, and every society shall 
 maintain a fund sufficient to meet such liabilities regardless of proposed future 
 collections to meet any such liabilities. 
 
 § 5067. Investments.] Every society shall invest its funds only in securi- 
 ties 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 accordance with 
 the laws of the state in which it is incorporated shall be held to meet the 
 requirements of this act for the investment of funds. (1913, Ch. 191, Pr. 10.) 
 
 § 5068. Distribution of Funds.] Every provision of the laws of the 
 society for the payment by members of such society, 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 
 of or disability purposes, or the net accretions of either or any of said funds 
 shall be used for expenses. (1913, Ch. 191, Pr. 11.) 
 
 Distribution of assets of insolvent insurance company. L. R. A. 97. 
 
 § 5069. Organization.] 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 denned by this act, may make and sign (giving 
 their addresses) and acknowledge before some officer competent to take ac- 
 knowledgment of deeds, articles of incorporation, in which shall be stated: 
 
 1st. 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 to lead to confusion. 
 
 2nd. The purpose for which it is formed — which shall not include more 
 liberal powers than are granted by this act, provided, that any lawful, social, 
 intellectual, education, charitable, 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. 
 
 3rd. 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. 
 
 Such articles of incorporation and duly certified copies of the constitution 
 and laws, rules and regulations, and copies of all proposed form of benefit 
 certificates, applications therefor and circulars to be issued by such society, 
 and a bond in the sum of five thousand dollars, with sureties approved by the 
 commissioner of insurance, conditioned upon the return of the advance pay- 
 ments, as provided in this section, to applicants, if the organization is not 
 completed within one year, shall be filed with the commissioner 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 act, and all pro- 
 visions of law have been complied with the commissioner of insurance shall 
 so certify and retain and record (or file) the articles of incorporation, and 
 furnish the incorporators a preliminary certificate authorizing said society to 
 solicit members as hereinafter provided. 
 
52 [NSURANCE LAWS 
 
 Upon receipl of said certificate from the commissioner of insurance said 
 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 and laws, and shall issue to each such applicant a receipt for the 
 amount so collected. But no such society shall incur any liability other than 
 for such advanced payments, nor issue any benefit certificate nor pay or allow, 
 or 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 commissioner of insurance, under oath of the presi- 
 dent and secretary, or corresponding officers of such society, a list of such 
 applicants, giving their names, addresses, date examined, date approved, date 
 initiated, name and number of the subordinate branch of which each applicant 
 is a member, amount of benefits to be granted, rate of stated periodical contri- 
 butions, which shall be sufficient to provide for meeting the mortuary obliga- 
 tion, contracted, when valued for death benefits upon the basis of the National 
 Fraternal Congress Table of Mortality, as adopted by the National Fraternal 
 Congress August 23, 1899, or any higher standard at the option of the society, 
 and for disability 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 cent, 
 per annum: nor until it shall be shown to the commissioner 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 at least one regular 
 monthly payment, as herein provided per one thousand 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 dis- 
 ability fund on account of such applicants, and no part of which may be 
 used for expenses. 
 
 Said advanced payments shall, during the period of organization, be held 
 in trust, and, if the organization is not completed within one year, as herein- 
 after provided, returned to said applicants. 
 
 The commissioner of insurance may make such examination and require 
 such further information as lie 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 certificate 
 shall be prima facie evidence of the existence of such society at the date of 
 such certificate. The commissioner of insurance shall cause a record of such 
 certificate to be made and certified copy of such record may be given in evi- 
 dence with like effect as the original certificate. 
 
 No preliminary certificate granted under the provisions of this section shall 
 
 be valid after one year from its dale, or after such further period, not ex- 
 
STATE OF NORTH DAKOTA 53 
 
 eeeding one year, as may be authorized by the commissioner 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 expira- 
 tion of said extended period, unless such society shall have completed its 
 organization and commenced business as herein provided. When any domestic 
 society shall have discontinued business for the period of one year, or has less 
 than four hundred members, its charter shall become null and void. 
 
 Every such society shall have the power to make a constitution and bydaws 
 for the government of the society, the admission of its members, the manage- 
 ment 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 carrying into effect the objects 
 and purposes of the society. (1913, Ch. 191, Pr. 12.) 
 
 § 5070. Powers Retained. Reincorporation. Amendments.] Any 
 society now engaged in transacting business in this state may exercise, after 
 the passage of this act, all of the rights conferred thereby, and all of the rights, 
 powers and privileges not exercised or possessed by it under its charter or 
 articles of incorporation not inconsistent with this act, if incorporated; or if it 
 be a voluntary association it may incorporate hereunder. But no society already 
 organized shall be required to re-incorporate hereunder, and any such society 
 may amend its articles of incorporation from time to time in the manner pro- 
 vided therein, or in its constitution and laws, and all such amendments shall 
 be filed with the commissioner of insurance and shall become operative upon 
 such filing unless a later time be provided in such amendments, or in its 
 articles of incorporation, constitution or laws. (1913, Ch. 191, Pr. 13.) 
 
 § 5071. Mergers and Transfers.] No domestic societies shall merge 
 with or accept the transfer of the membership or funds of any other society 
 unless such merger or transfer is evidenced by a contract in writing, setting out 
 in full the terms and conditions of such merger or transfer, and filed with the 
 commissioner of insurance of this state together with a sworn statement of 
 the financial condition of each of said society by its president and secretary, 
 or corresponding officers, and a certificate of such officers, duly verified under 
 oath of said officers of each of the contracting societies that such merger 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 commis- 
 sioner of insurance shall examine the same, and if he shall find such financial 
 statements to be correct and said contract to be in conformity with the pro- 
 visions of this section, and that such merger or transfer is just and equitable 
 to the members of each of said societies he shall approve said merger or trans- 
 fer, issue his certificate to that effect, and thereupon the said contract of 
 merger or transfer shall be of full force and effect. 
 
 In case such contract is not approved the facts of its submission and its 
 contents shall not be disclosed by the commissioner of insurance. (1913, Ch. 
 191, Pr. 14.) 
 
54 INSUKANCE LAWS 
 
 § 5072. Annual License.] Societies which are now authorized to transact 
 business in this state may continue such business until the first day of April 
 next succeeding the passage of this act, and the authority of such societies 
 may thereafter be renewed annually, but in all cases to terminate on the first 
 day of the succeeding April; provided, however, the license shall continue in 
 full force and effect until the new license be issued or specifically refused. 
 For each such license or renewal the society shall pay the commissioner of 
 
 insurance dollars. A duly certified copy or 
 
 duplicate of such license shall be prima facie evidence that the licensee is a 
 fraternal benefit society within the meaning of this act. (1913, Ch. 191, Pr. 
 15.) 
 
 § 5073. Admission of Foreign Society.] No foreign society now trans- 
 acting business, organized prior to the passage of this act, which is not now 
 authorized to transact business in this state, shall transact any business herein 
 without a license from the commissioner of insurance. Any such society shall 
 be entitled to a license to transact business within this state upon filing with 
 the commissioner a duly certified copy of its charter or articles of associa- 
 tion, a copy of its constitution and laws, certified by its secretary or corre- 
 sponding officer; a power of attorney to the commissioner of insurance as here- 
 inafter provided; a statement of its business under oath of its president and 
 secretary, or corresponding officers, in the form required by the commissioner, 
 duly verified by an examination made by the supervising insurance official of 
 its home state or other state satisfactory to the commissioner 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 contract, which 
 must show that benefits are provided for by periodical, or other payments 
 by persons holding similar contracts; and upon furnishing the commissioner 
 such other information as he may deem necessary to a proper exhibit of its 
 business and plan of working, and upon showing that its assets are invested 
 in accordance with the laws of the state, territory, district, province or country 
 where it is organized, he shall issue a license to such society 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 act, be renewed annually but in 
 all cases to terminate on the first day of the succeeding April; provided, 
 however, that license shall continue in full force and effect until the new 
 license be issued or specifically refused. Any foreign society desiring admis- 
 sion to this state shall have the qualifications required of domestic societies 
 organized under this act and have its assets invested as required by the laws 
 of the state, territory, district, country, or province where it is organized. 'For 
 
 each such license or renewal the society shall pay the commissioner 
 
 dollars. When the commissioner refuses to license any society, or revokes its 
 authority to do business in this state he shall reduce his ruling, order or de- 
 cision to writing and file the same in his office, and shall furnish a copy thereof, 
 together with a statement of his reasons, to the officers of the society, upon 
 request, and the action of the commissioner 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 section shall lie taken 
 or construed as preventing any such society from continuing in good faith 
 
STATE OF NORTH DAKOTA 55 
 
 all contracts made in tins state during the time such society was legally author- 
 ized to transact business herein. (1913, Ch. 191, Pr. 16.) 
 
 § 5074. Power of Attorney and Service op Process. | Every society, 
 whether domestic or foreign, now transacting business in this state, shall, 
 within thirty days after the passage of this act, and every said society here- 
 after applying for admission shall, before being licensed, appoint in writing 
 the commissioner of insurance and his successors in office 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 commissioner of insurance, 
 shall be deemed sufficient evidence thereof and shall be admitted in evidence 
 with the same force and effect as the original thereof might be admitted. 
 Service shall only be made upon such attorney, must be made in duplicate upon 
 the commissioner of insurance, 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 thirty days from the date of mailing the copy of such service to such 
 society. When legal process against any such society is served upon said com- 
 missioner of insurance he shall forthwith forward by registered mail one of 
 the duplicate copies prepaid and directed to its secretary or corresponding 
 officer. Legal process shall not be served upon any such society except in the 
 manner provided herein. (1913, Ch. 191, Pr. 17.) 
 
 $ 5075. Place of Meeting, Location of Office.] 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 sub- 
 ordinate 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 prin- 
 cipal office shall be located in this state. (1913, Ch. 191, Pr. IS.) 
 
 § 5076. No Personal Liability.] Officers and members of the supreme, 
 grand, or any subordinate body of any such incorporated society shall not be 
 individually liable for the payment of any disability or death benefit 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. 
 (1913, Ch. 191, Pr. 19.) 
 
 Liability of members of mutual insurance company. 32 L. R. A. 481. 
 Jurisdiction of equity to enforce liability of member of mutual insurance 
 
 company. 40 L. R. A. (N. S.) 781. 
 
 § 5077. Waiver of the Provisions of the Laws.] The constitution and 
 laws of the society may provide that no subordinate body, nor any of its sub- 
 ordinate officers or members shall have the power or authority to waive any of 
 the provisions of the laws and constitution of the society, and the same shall 
 be binding on the society and each and every member thereof and on all bene- 
 ficiaries of members. I 1913, Ch. 191, Pr. 
 
56 INSURANCE LAWS 
 
 § 5078. Benefit Not Attachable.] No money or other benefit, charity, 
 or relief or aid to be paid, provided or rendered by any such society shal] be 
 liable to attachment, garnishment, or other process, or be seized, taken, ap- 
 propriated 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 persos 
 who may have a right thereunder, either before or after payment. (1913, 
 Oh. L91, Pr. 210 
 
 § ill i79. Constitution and Laws. Amendment.] Every society trans- 
 acting business under this act shall file with the commissioner 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, certified by the 
 secretary or corresponding officer of the society shall be prima facie evidence 
 of the legal adoption thereof. (1913, Ch. 191, Pr. 22.) 
 
 § 5080. Annual Reports.] Every society transacting business in this state 
 shall annually, on or before the first day of March, file with the commissioner 
 of insurance, in such form as he may require, a statement under oath of its 
 president and secretary, or corresponding officers, of its condition and standing 
 on the thirty-first day of December next preceding, and of its transactions for 
 the year ending on that date, and also x shall furnish such other information as 
 the commissioner of insurance may deem necessary to a proper exhibit of its 
 business and plan of working. The commissioner may at other times require 
 any further statement he may deem necessary to be made relating to such 
 society. 
 
 In addition to the annual report herein required each society shall annu- 
 ally report to the commissioner a valuation of its certificates in force on Decem- 
 ber .31st, last preceding; including those issued within the year for which the 
 report is filed, in cases where the contributions for the first year in whole or 
 in part are used for current mortality and expenses; provided, the first report 
 of valuation shall be made as of December 31st, 1912. Such report of valua- 
 tion shall show, as contingent liabilities, the present mid-year value of the 
 promised benefits provided in the constitution and laws of such society under 
 certificates then subject to valuation; and, as contingent assets, the present mid- 
 year value of the future net contributions provided in the constitution and 
 laws as the same are in practice actually collected. At the option of any 
 society, in lieu of the above, the valuation may show the net value of the cer- 
 tificates subject to valuation hereinbefore provided, and said net value, when 
 computed in case of monthly contributions, may be the means of the terminal 
 values for the end of the preceding and of the current insurance years. 
 
 Such valuation shall be certified by a competent accountant or actuary, or. 
 at the re.juest and expense of the society, verified by the actuary of the de- 
 partment of insurance of the home stale of the society, and shall be filed with 
 the commissioner of insurance within ninety days after the submission of the 
 last preceding annual report. The legal minimum standard of valuation for 
 all certificates, except for disability benefits, shall be the National Fraternal 
 Congress Table of Mentality as adopted by the National Fraternal Congress 
 
 August 23, 1899, or. al the option of the society, any higher table; or at its 
 option it may use a table based upon the society's own experience 1 of at least 
 
STATE OF NORTH DAKOTA 57 
 
 twenty years and covering not less than one hundred thousand lives with in- 
 terest assumption not more than four per cent, per annum. Each such valuation 
 report shall set forth clearly and fully the mortality and interest bases and 
 the method of valuation. Any society providing for disability benefits shall 
 keep the net contributions for such benefits in a fund separate and apart from 
 all other benefit and expense funds and the valuation of all other business of 
 the society; provided, that where a com] lined 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, 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. 
 
 Beginning with the year 1914 a report of such valuation and an explana- 
 tion of the facts concerning the condition of the society thereby disclosed shall 
 be printed and mailed to each beneficiary member of the society not later than 
 June 1st of each year; or, in lieu thereof, such report of valuation and show- 
 ing of the society's condition as thereby disclosed may be published in the 
 society's official paper and the issue containing the same mailed to each bene- 
 ficiary member of the society. 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, 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 the member, his certificate may be charged with its proportion of 
 any deficiency disclosed by valuation, with interest not exceeding five per 
 centum per annum. (1913, Ch. 191, Pr. 23.) 
 
 § 5081. Provisions to Insure Future Security.] If the valuation of 
 the certificates, as hereinbefore provided, on December 31, 1917, 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 thereafter maintain said financial condition at each 
 succeeding triennial valuation in respect of the degree of deficiency, as shown 
 in the valuation as of December 31, 1917. If at any succeeding triennial 
 valuation such society does not show at least the same condition the commis- 
 sioner 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 condition required 
 herein the commissioner may, in the absence of good cause shown for such 
 failure, institute proceedings for the dissolution of such society, in accordance 
 with the provisions of section 5083, or in the case of a foreign society, its 
 license may be canceled in the manner provided in this act. 
 
 Any such society, shown by any triennial valuation, subsequent to December 
 31, 1917, not to have maintained the condition herein required, shall within 
 two years thereafter make such improvement as to show a | ercentage of 
 deficiency not greater than as of December 31, 1917. or thereafter, as to all 
 
58 INSURANCE LAWS 
 
 new members admitted, be subject, so far as stated rates of contributions are 
 concerned, to the provisions of section 5069, applicable in the organization of 
 new societies; provided, that the net mortuary or beneficial contributions and 
 funds of such new members shall be kept separate and apart from the other 
 funds of the society. Tf such required improvement is not shown by the suc- 
 ceeding triennial valuation then the said new members may be placed in a 
 separate class, and their certificates valued as an independent society in respect 
 of contributions and funds. (1913, Ch. 191, Pr. 23a.) 
 
 § 50S2. Alternative Provisions.] In lieu of the requirements of sections 
 5080 and 5081, any society accepting in its laws the provisions of these sections 
 may value its certificates on a basis herein designated "accumulation basis" 
 by crediting each member with the net amount contributed for each year 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 if insur- 
 ance may be according to the actual exrjerience of the society applied to a 
 table of mortality recognized by the law of this state, and shall take into con- 
 sideration the amount at risk during each year, which shall be the amount pay- 
 able 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 hereunder 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 contri- 
 bution 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 contributions especially created or required for such 
 purpose. 
 
 Any member may transfer to any place 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. 
 
 Certificate issued, re-rated or re-adjusted on a basis providing for adequate 
 rate with adequate reserves to mature such certificates upon assumption for 
 mortality and interest recognized by the law of this state shall be valued on 
 such basis, herein designated the "Tabular Basis;" provided, that if on the 
 first valuation imder this section a deficiency in reserve shall be shown for any 
 such certificate the same shall be valued on the accumulative basis. 
 
 Whenever in any society having members upon the tabular basis and upon 
 the accumulation basis the total of all costs of insurance 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 society 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 cluss of members may be carried separately for such class as 
 
STATE OF NORTH DAKOTA 59 
 
 if an independent society, and the required 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 opposite each credit the tabular 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 1st 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 pursuant to its law; nor be construed as giving to the individual 
 member any right or claim to any such reserve or credit other than in manner 
 as expressed in the contract and its laws; nor as making any such reserve or 
 credits a liability in determining the legal solvency of the society. (1913, Ch. 
 191, Pr. 23b.) 
 
 § 5083. Examination of Domestic Societies.] The commissioner of 
 insurance, or any person he may appoint, shall have the power of 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 
 appoint, shall have free access to all the books, papers and documents that 
 relate to the business of the society, and may summon and qualify as witness 
 under oath and examine its officers, agents and employees, or other persons 
 in relation to the affairs, transactions and condition of the society. The ex- 
 pense of such examination shall be paid by the society examined upon state- 
 ment furnished by the commissioner of insurance, and the examination shall 
 be made at least once in three years. 
 
 Whenever, after examination, the commissioner of insurance is satisfied 
 that any domestic society has failed to comply with any provisions of this act, 
 or is exceeding its powers, or is not carrying out its contracts in good faith, 
 or is transacting business fraudulently; or whenever any domestic society, after 
 the existence of one year or more, shall have a membership of less than 400 
 (or shall determine to discontinue business) the commissioner of insurance may 
 present the facts relating thereto to the attorney general, who shall, if he 
 deems the circumstances warrant, commence an action in quo warranto in a 
 court of competent jurisdiction, and such court shall thereupon notify the 
 officers of such society of a hearing, and if it shall then appear that such 
 society should be closed, said society shall be enjoined from carrying on any 
 further business and some person shall be appointed receiver of such society. 
 and shall proceed at once to take possession of the books, papers, moneys, 
 and other assets of the society, and shall forthwith, under the direction of the 
 
GO INSURANCE LAWS 
 
 court, proceed to close the affairs of the society and to distribute its funds to 
 those entitled thereto. 
 
 No such proceedings shall be commenced by the attorney general againffl 
 any such society until after notice lias been duly served on the chief executive 
 officers of the society and a reasonable opportunity given to it on a date to be 
 named in said notice to show cause why such proceedings should not be com- 
 menced. (1913, Ch. 191, Pr. 24.) 
 
 § 5084. Api'ltcation for Receiver, Etc.] No application for injunction 
 against or proceedings for the dissolution of or the appointment of a receiver 
 for any such domestic society or branch thereof shall be entertained by any 
 court in this state unless the same is made by the attorney general. (1913, Ch. 
 191, Pr. 25.) 
 
 § 5085. Examination op Foreign Societies.] The commissioner of insur- 
 ance, or any person whom he may appoint, may examine any foreign society 
 transacting or applying for admission to transact business in this state. The 
 said commissioner may employ assistants, and he, or any person he may appoint. 
 shall have free access to all the books, papers and documents that relate to the 
 business of the society, and may summon and qualify as witness under oath 
 and examine its officers, agents and employees and other persons in relation to 
 the affairs, transactions and conditions of the society. He may, in his dis- 
 cretion, accept in lieu of such examination the examination of the insurance 
 department of the state, territory, district, province or country where such 
 society is organized. The actual expenses of examiners making any such 
 examination shall be paid by the society upon statement furnished by the 
 commissioner of insurance. 
 
 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 license 
 refused until satisfactory evidence is furnished the commissioner relating to 
 the condition and affairs of the society, and during such suspension the society 
 shall not write new business in this state. (1913, Ch. 191, Pr. 26.) 
 
 § 5086. No Adverse Publications.] Pending, during or after an exam- 
 ination or investigation of any such society, either domestic or foreign, the 
 commissioner of insurance shall make public no financial statement, report, or 
 finding, nor shall he permit to become public any financial statement, report 
 or finding affecting the status, standing or rights of any such society until a 
 copy thereof shall have been served upon such society at its home office, nor 
 until such society shall have been afforded a reasonable opportunity to answer 
 any such financial statement, report or finding, and to -make such showing 
 in connection therewith as it may desire. (1913, Ch. 191, Pr. 27.) 
 
 § 5087. Revocation of License.] When the commissioner of insurance, 
 on investigation, is satisfied that any foreign society transacting business under 
 this act has exceeded its powers, or has failed to comply with any provisions 
 of this act, or is conducting business fraudulently, or is not carrying out its 
 contracts 'ii good faith, he shall notify the society of his findings, and state in 
 
 writing the grounds of his dissatisfaction, and after reasonable notice require 
 said society, on a date named, to show cause why its license should not be 
 revoked. If on the date named in said notice such objections have not been 
 
STATE OF NOKTH DAKOTA 61 
 
 removed to the satisfaction of the said commissioner of insurance, or the 
 society does not present good and sufficient reasons why its authority to trans- 
 act 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. All decisions 
 ami findings of the commissioner made under the provisions of this section 
 may be reviewed by the proper proceedings in any court of competent juris- 
 diction, as provided in section 5073. (1913, Ch. 191, Pr. 28.) 
 
 § 5088. Exemption of Certain Societies.] Nothing contained in tins 
 act shall be construed to effect or apply to grand or subordinate lodges of 
 Masons, Odd Fellows or Knights of Pythias (exclusive of the insurance de- 
 partment of the Supreme Lodge Knights of Pythias), and the Junior Order 
 of the United American Mechanics (exclusive of the beneficiary degree of 
 insurance branch of the National Council Junior Order United American 
 Mechanics), or societies which limit their membership to any one hazardous 
 occupation, nor to similar societies which do not issue insurance certificates, 
 nor to an association of local lodges of a society now doing business in this 
 state, which provides death benefits not exceeding five hundred dollars to any 
 one person, or disability benefits not exceeding three hundred dollars in any 
 one year to any one person, or both, nor to any contracts of reinsurance business 
 on such plan in this state, nor to domestic societies which limit their member- 
 ship to the employees of a particular city or town, designated firm, business 
 house, or corporation, nor to domestic lodges, orders, or association of a purely 
 religious, charitable and benevolent description, which do not provide for a 
 death benefit of more than one hundred dollars, or for disability benefits of 
 more than one hundred and fifty dollars to any one person in any one year. 
 The commissioner of insurance may require from any such society such informa- 
 tion as will enable him to determine whether such society is exempt from the 
 provisions of this act. 
 
 Any fraternal benefit society, heretofore organized ami incorporated and 
 operating within the definition set forth in sections 5059, 5060 and 5061 of 
 this article, providing for benefits in case 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 act. and shall have all 
 tin' privileges and shall be subject to all the provisions and regulations of this 
 act, except that the provisions of this act requiring medical examinations, 
 valuations of benefit certificates, and that the certificate shall specify the 
 amount of benefits, shall not apply to such society. | 1913, Ch. 191, Pr. 29.) 
 
 § 5089. Taxation.] Every fraternal benefit society organized or licensed 
 under this act is hereby declared to be a charitable and benevolent institution, 
 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. 
 (1913, Ch. 191. Pr. 30.) 
 
 Fraternal benefit society as a benevolent or charitable association within 
 
 exemption statutes. 7 L. P. A. (X. S.) 380. 
 
 § 5090. Penalties.] Any person, officer, member or examining physician 
 of any society authorized to do business under this article shall knowingly or 
 willfully make any false or fraudulent statement or representation in or with 
 reference to any application for membership, or for the purpose of obtaining 
 
62 INSURANCE LAWS 
 
 mono)- from or benefit in any society transacting business under this act, 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 
 one year, or both, in the discretion of the court; and any person who shall 
 willfully make a false statement, of any material fact or thing in a sworn state- 
 ment 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, and any person who shall willfully make any false statement in 
 any verified report or declaration under oath required or authorized by this 
 state, shall be guilty of perjury, and shall be proceeded against and punished 
 as provided by the statutes of this state in relation to the crime of perjury. 
 
 Any person who shall solicit membership for, or in any manner assist in 
 procuring membership in any fraternal benefit society not license* to do 
 business in this state, or who shall solicit membership for, or in any manner 
 assist in procuring membership in any such society not authorized, as herein 
 provided, to do business, as herein defined in this state, shall be guilty of a 
 misdemeanor, and upon conviction thereof shall be punished by a fine of not 
 less than fifty or more than two hundred dollars. 
 
 Any society, or any officer, agent or employee thereof neglecting or refusing 
 to comply with, or violating any of the provisions of this act, the penalty for 
 which neglect, refusal or violation is not specified in this section, shall be 
 fined not exceeding two hundred dollars upon conviction thereof. (1913, Ch. 
 191, Pr. 31.) 
 
 CHAPTER 77. 
 Insurance in General. 
 
 Article 1. Definition of insurance, 6458. 
 
 2. What may be insured, 6459-6460a. 
 
 3. Parties to the contract, 6461-6465. 
 
 4. Insurable interest, 6466-6479. 
 
 5. Concealment and representation, 6480-6502. 
 
 6. The policy, 6503-6518. 
 
 7. Warranties, 6519-6528. 
 
 8. Premium, 6529-6536. 
 
 9. Loss. 6537-6540. 
 
 10. Notice of loss, 6541-6546. 
 
 11. Double insurance, 6547-6548. 
 
 12. Reinsurance, 6549-6552. 
 
 Article 1 — Definition of Insurance. 
 § 6458. Defined.] Insurance is a contract whereby one undertakes to 
 indemnify another against loss, damage or liability arising from an unknown 
 or contingent event. (R. C. 1905, § 5890.) 
 
 Corporation undertaking to guarantee fixed revenue per acre for farm 
 lands is an insurance company within statute. State v. Hogan, 8 N. D. 
 301. 78 N. W. 1051, 73 A. S. R. 759, 45 L. R. A. 166. 
 
STATE OF NORTH DAKOTA 63 
 
 Insurer is entitled to such interpretation of clause making policy void 
 because of increase of hazard occasioned by insured as will include mortgage 
 place upon property insured. Lawyer v. Globe Mut. Ins. Co., 25 S. D. 
 549, 127 N. W. 615. 
 
 What constitutes insurance. 47 L. R. A. (N. S.) 290. 
 
 Article 2 — What May be Insured. 
 
 § 6459. Insurable Interest.] Any contingent or unknown event, whether 
 past or future, which may damnify a person having an insurable interest or 
 create a liability against him may be insured against, subject to the provisions 
 of this chapter, with the exception of an insurance for or against the drawing 
 of any lottery or for or against any chance or ticket in a lottery drawing a 
 prize. (R. C. 1905, § 5891.) 
 
 § 6460. Insurance Classified]. The most usual kinds of insurance are: 
 
 1. Marine insurance. 
 
 2. Fire insurance. 
 
 3. Life insurance. 
 
 4. Health insurance; and 
 
 5. Accident insurance. (R. C. 1905, $ 5892.) 
 
 § 6460a. All Kinds Subject to Chapter.] All kinds of insurance are 
 subject to the provisions of this chapter. (R. C. 1905, § 5893.) 
 
 Mutual fire insurance company is as effectively bound by section 1849 
 (6515 herein) as an insurance company organized on any other basis. 
 Peever Mercantile Co. v. State Mut. F. Ins. Co., 25 S. D. 406, 127 N. W. 559. 
 
 Article 3 — Parties to the Contract. 
 
 § 6461. Insurer and Insured Defined.] The person who undertakes to 
 indemnify another by a contract of insurance is called the insurer and the 
 person indemnified is called the insured. (R. C. 1905, § 5894.) 
 
 § 6462. Who May Insure.] Any one who is capable of making a eon- 
 tract may be an insurer, subject to the restrictions imposed by special statutes 
 upon foreign corporations, non-residents and others. (R. C. 1905, § 5895.) 
 
 § 6463. Who May be Insured.] Any one except a public enemy may be 
 insured. (R, C. 1905, § 5896.) 
 
 § 6464. Insurance of Mortgaged Property.] When a mortgagor of 
 property effects insurance in his own name, providing that the loss shall be 
 payable to the mortgagee, or assigns a policy of insurance to the mortgagee, 
 the insurance is deemed to be upon the interest of the mortgagor, who does 
 not cease to be a party to the original contract and any act of his which 
 would otherwise avoid the insurance will have the same effect, although the 
 property is in the hands of the mortgagee. (R. C. 1905, § 5897.) 
 
 Failure to give notice under mortgage clause agreement of material 
 
 changes in property will avoid policy. Ormsby v. Ins. Co., 5 S. D. 72, 58 
 
 N. W. 301. 
 
 Liability of mortgagee for premium. St. Paul Ins. Co. v. Upton, 2 
 
 N. D. 229, 50 N. W. 702. 
 
 Mortgagee to whom policy is made payable may sue alone when his 
 
 claims exceed amount of insurance. Travelers' Ins. Co. v. Ins. Co., 1 N. 
 
 D. 151, 45 N. W. 703. 
 
64 [NSURANCE LAWS 
 
 Application of proceeds of insurance on mortgaged premises. 118 Am. 
 St. Ron. 968. 
 
 Forfeiture of insurance as against mortgagees for breach of condition. 
 58 Am. St. "Rep. 667. 
 
 Rights of mortgagee under an insurance on the mortgaged property. 
 54 Am. Dec. 693. 
 
 § 6465. Same. New Contract.] If an insurer assents to the transfer of 
 au insurance from a mortgagor to a mortgagee and at the time of his assent 
 imposes further obligations on the assignee, making a new contract with him, 
 the acts of the mortgagor cannot affect his right. (R. C. 1905, § 5898.) 
 
 Article 4 — Insurable Interest. 
 
 § 6466. Defined.] Every interest in the property, or any relation thereto, 
 or liability in respect thereof of such a nature that a contemplated peril might 
 directly damnify the insured is an insurable interest. (R. C. 1905, § 5899.) 
 
 What is insurable interest in property. 7 Am. Dec. 42; 20 Am. Dec. 510. 
 
 Insurable interest in unfinished building during its construction by a 
 contractor. 43 L. R. A. 664. 
 
 — Of sole and absolute owner of building and land not belonging to 
 him. 38 L. R. A. (N. S.) 429. 
 
 — Of one secondarily liable on an obligation, in property primarily 
 charged with the same. 9 L. R. A. (N. S.) 490. 
 
 — Of tenant in leased property. 42 L. R, A. (N. S.) 135. 
 
 — Of husband in wife's property, or that in which she is interested. 
 66 L. R. A. 658. 
 § 6467. Classified.] An insurable interest in property may consist in: 
 
 1. An existing interest. 
 
 2. An inchoate interest founded on an existing interest: or, 
 
 3. An expectancy coupled with an existing interest in that out of which 
 the expectancy arises. (R. C. 1905, § 5900.) 
 
 § 6468. Carrier or Depositary Has.] A carrier or depositary of any 
 kind has an insurable interest in a thing held by him as such to the extent 
 of its value. (R, C. 1905, § 5901.) 
 
 § 6469. Contingent or Expectant Interest Not.] A mere contingent 
 or expectant interest in anything, not founded on an actual right to the thing, 
 nor upon valid contract for it, is not insurable. ( R. C. 1905, § 5902.) 
 
 § 6470. MEASURE ok. ] The measure of an insurable interest in pro; erty 
 is the extent to which the insured might be damnified by loss or injury thereof. 
 (R. ('. 1905, $ 5903. 
 
 § 6471. [NSURANCE WITHOUT INTEREST VOID. | The sole object of insur- 
 ance is the inch mnity of the insured and if he has no insurable interest the 
 contract is void. (R. C. 1905, § 5904.) 
 
 Insurable interest in the life of another, and necessity of. Am. Dec. 
 
 93; 46 Am. Rep. 189; 52 Am. Rep. 135; 58 Am. Rep. 852; L28 Am. St. 
 
 Rep. 302. 
 
 When life insurance regarded as wagering contract because of the small 
 
 insurable interest. 60 Am. Rep. 729. 
 
 Insurance ''I'm- whom it may concern. 16 Am. Dec .">2.">. 
 
STATPJ OF NOETH DAKOTA 65 
 
 § 6472. When Interest Must Exist.] Ah interest insured must exist 
 when the insurance takes effect and when the loss occurs, but need not exist 
 in the meantime. (R, C. 1905, § 5905.) 
 
 Company not liable if insured had no interest in insured property at 
 
 time of loss. Tierney v. Ins. Co., 4 N. D. 565, 62 N. W. 642j Ormsby v. 
 
 Ins. Co., S. D. 72, 58* N. W. 301. 
 
 Immaterial variance as to incumbrance, value or size of property will 
 
 not vitiate policy. McNamara v. Ins. Co., 1 S. D. 342, 47 N. W. 288. 
 
 When insurable interest must exist under fire policies. 52 L. R. A. 330. 
 
 § 6473. When Change of Interest Suspends Insurance.] Except in 
 the cases specified in the next five sections and in the cases of life, accident 
 and health insurance, a change of interest in any part of a thing insured, un- 
 accompanied by a corresponding change of interest in the insurance, suspends 
 the insurance to an equivalent extent, until the interest in the thing v and the 
 interest in the insurance are vested in the same person. (R. C. 1905, § 5906.) 
 When sale or alienation of property avoids insurance. 28 Am. Dec. 154. 
 
 § 6474. Change After Loss Does Not Affect.] A change of interest 
 in a tiling insured after the occurrence of an injury which results in a loss 
 does not affect the right of the insured to indemnity for the loss. (R. C. 
 1905, § 5907.) 
 
 § 6475. Change in One of Several Things.] A change of interest in one 
 or more of several distinct things insured by one policy does not avoid the 
 insurance as to the others. (R. C. 1905, § 5908.) 
 
 § 6476. Incumbrance or Reinsurance of One of Several Things.] The 
 procurement of any other contract of insurance upon or the incumbrance of 
 one or more of the several distinct things insured by one policy does not 
 render void any insurance upon the things not covered by such other contract 
 of insurance or incumbrance; but in case of loss or damage such an amount 
 shall be deducted from the insurance as the value of the property so incum- 
 bered or doubly insured bears to the value of all the property covered by the 
 policy. Any agreement made to waive the provisions of this or the preceding 
 section is void. (R. C. 1905, § 5909.) 
 
 Policy covering building and personal property, having separate amounts 
 
 on each must be treated as separate policies. First Nat. Rank v. German 
 
 American Ins. Co., 23 N. D. 139, 38 L. R. A. (N. S.) 213, 134 N. W. 873. 
 Mortgage as terminating insurable Interest in property. 38 L. R. A. 
 
 562. 
 
 § 6477. Change of Interest by Death.] A change of interest by will 
 or succession on the death of the insured does not avoid an insurance, and his 
 interest in the insurance passes to the person taking his interest in the thing 
 insured. (R. C. 1905, $ 5910.) 
 
 § 6478. Change Among Joint Owners.] A transfer of interest by one 
 id' several partners, joint owners or owners in common who are jointly insured 
 to the others does not avoid an insurance, even though it has been agreed that 
 the insurance shall cease upon an alienation of the thing insured. (R. < '. 1905, 
 $ 5911.) 
 
 Whether sale by one partner to another, whether amounts to change of 
 
 title. 49 Am. Rep. 22; 52 Am. Rep. 142. 
 
66 INSURANCE LAWS 
 
 § 6479. Stipulation ok Interest Von).] Every stipulation in a policy 
 of insurance for the payment of loss whether the person insured lias or has 
 not any interest in the property insured or that the policy shall be received as 
 
 proof of such interest and every policy executed by way of gaming or wagering 
 is void. (R. C. 1905, § 5912.) 
 
 Article 5 — Concealment and Representation. 
 
 § 6480. CONCEALMENT Defined.] A neglect to communicate that which 
 a party knows and ought to communicate is called a concealment. (R. C. 1905, 
 $ 5913.) 
 
 Concealment of facts by insured in case of Lloyds Policies. 55 L. R. 
 
 A. 201. 
 
 Duty to notify insurer of facts which develop after submission of 
 
 application, but before delivery of policy or certificate. 39 L. R. A. (N. 
 
 S.) 951. 
 
 § 6481. Rescission on Account op.] A concealment, whether intentional 
 or unintentional, entitles the injured party to rescind a contract of insurance. 
 (R. C. 1905, $ 5914.) 
 
 When concealment or misrepresentation avoid insurance. 35 Am. Rep. 
 
 629. 
 
 § 6482. Mutual Disclosures.] Each party to a contract of insurance 
 must communicate to the other in good faith all facts within his knowledge 
 which are or which he believes to be material to the contract and which the 
 other has not the means of ascertaining and as to which he makes no warranty. 
 (R. 0. 1905, § 5915.) 
 
 § 6483. What Not Bound to Disclose.] Neither party to a contract of 
 insurance is bound to communicate information of the matters following, except 
 in answer to the inquiries of the other: 
 
 1. Those which the other knows. 
 
 2. Those which in the exercise of ordinary care the other ought to know 
 and of which the former has no reason to suppose him ignorant. 
 
 3. Those of winch the other waives communication. 
 
 4. Those which prove or tend to prove the existence of a risk excluded 
 by a warranty and which are not otherwise material ; and, 
 
 5. Those which relate to a risk excepted from the policy and which are not 
 otherwise material. (R, C. 1905, § 5916.) 
 
 § 6484. How Materiality Determined.] Materiality is to be determined 
 not by the event, but solely by the probable and reasonable influence of the 
 facts upon the party to whom the communication is due in forming his estimate 
 of the disadvantages of the proposed contract or in making his inquiries. 
 (R. C. 1905, § 5917.) 
 
 .Materiality of representation. Waterburv v. Ins. Co., 6 D. 468, 43 
 
 N. W. 697. 
 
 § 6485. Presumption op Knowledge.] Each party to a contract of insur- 
 ance is bound to know all the general causes which are open to his inquiry, 
 equally with that of the Other and which may affect either the political or 
 material perils contemplated, ami all general usages of trade. (R. C. 1905. 
 $ 5918.) 
 
 $ 6486. RIGHT to Information WATTED.] The right to information of 
 
STATE OF NOETH DAKOTA 67 
 
 material facts may be waived, either by the terms of insurance, or by neglect 
 to make inquiries as to such facts, when they are distinctly implied in other 
 facts of which information is communicated. (R. C. 1905, § 5919.) 
 
 Life insurance agents accepting insurance when they know answers in 
 
 the application are false. 7 Am. Rep. 128. 
 
 § 6487. Information as to Interest.] Information of the nature or 
 amount of the interest of the one insured need not be communicated unless in 
 answer to inquiry, except as prescribed by section 5937. (R. C. 1905, § 5920.) 
 Clause avoiding policy in case property is incumbered not waived by 
 
 insurer's neglect to make inquiry if such incumbrance is a chattel mort- 
 gage. Harding v. Ins. Co., 10 S. D. 64, 71 N. W. 755. 
 
 How far an undivided interest in property is a complete or full owner- 
 ship for the purpose of insurance. 18 L. R. A. 481. 
 
 Vendee under executory contract is owner, where vendee holds legal 
 
 title. 20 L. R. A. (N. S.) 775. 
 
 Retention of policy as waiver of mistake or fraud as to state of title. 
 
 67 L. R. A. 731. 
 
 Effect of broker's knowledge as to title. 38 L. R, A. (N. S.) 637. 
 Conclusiveness of statements as to ownership, etc., in proof of loss. 
 
 44 L. R. A. 859. 
 
 § 6488. Rescission for Fraudulent Concealment.] An intentional and 
 fraudulent omission on the part of one insured to communicate information of 
 matters proving or tending to prove the falsity of a warranty entitles the 
 insurer to rescind. (R. C. 1905, § 5921.) 
 
 § 6489. Matters of Opinion.] Neither party to a contract of insurance 
 is bound to communicate even upon inquiry information of his own judgment 
 upon the matters in- question. (R. C. 1905, § 5922.) 
 
 § 6490. Form of Representation.] A representation may be oral or 
 written. (R. C. 1905, § 5923. 
 
 § 6491. When May be Made.] A representation may be made at the 
 same time with issuing the policy or before it. (R. C. 1905, § 5924.) 
 
 § 6492. Rules of Interpretation.] The language of a representation is 
 to be interpreted by the same rules as the language of contracts in general. 
 (R. C. 1905, $ 5925.) 
 
 Failure to build a chimney as promised will not avoid policy. Water- 
 bury v. Ins. Co., 6 D. 468,' 43 N. W. 697. 
 
 Warranties and representations and their effect. 16 Am. Dec. 462; 59 
 
 Am. Rep. 816. 
 
 § 6493. What Deemed Promise.] A representation as to the future is to 
 be deemed a promise, unless it appears that it was merely a statement of belief 
 or expectation. (R, C. 1905, § 5926.) 
 
 § 6491. Cannot Qualify Contract; May, Implied Warranty.] A repre- 
 sentation cannot be allowed to qualify an express provision in a contract of 
 insurance; but it may qualify an implied warranty. (R. C. 1905, § 5927.) 
 
 § 6495. When May be Withdrawn.] A representation may be altered 
 or withdrawn before the insurance is effected, but not afterwards. (R. C. 
 1905, § 5928.) 
 
 § 6496. Time to WHICH Refers.] The completion of the contract of in- 
 
(38 INSURANCE LAWS 
 
 surance is the time to which a representation must be presumed to refer. 
 (K. ('. .1905, § 5929.) 
 
 § G497. On Information and Belief.] When a person insured has no 
 personal knowledge of a fact, he may, nevertheless, repeat information which 
 he lias upon the subject and which he believes to be true with the explanation 
 that he does so on the information of others, or he may submit the information 
 in its whole extent to the insurer; and in neither case is he responsible for 
 its truth, unless it proceeds from an agent of the insured whose duty it is to 
 give the intelligence. (R. C. 1905, § 5930.) 
 
 § 6498. When Deemed False.] A representation is to be deemed false 
 when the facts fail to correspond with its assertions or stipulations. (R. C. 
 1905, § 5931.) 
 
 § 6499. Effect of Falsity.] If a representation is false in a material 
 point, whether affirmative or promissory, the injured party is entitled to rescind 
 the contract from the time when the representation becomes false. (R. C. 
 1905, § 5932.) 
 
 Life insurance agents accepting insurance when they know answers in 
 
 the application are false. 7 Am. Rep. 128. 
 
 Right of insured to return of premium where policy is void or voidable 
 
 because of misrepresentations on his part. 32 L. R. A. (N. S.) 298. 
 
 § 6500. How Materiality Determined.] The materiality of a repre- 
 sentation is determined by the same rule as the materiality of a concealment. 
 (R. C. 1905, § 5933.) 
 
 § 6501. When Not Material.] No oral or written misrepresentation 
 made in the negotiation of a contract or policy of insurance by the insured or 
 in his behalf shall be deemed material or defeat or avoid the policy or prevent 
 its attaching, unless such misrepresentation is made with •actual intent to de- 
 ceive, or unless the matter misrepresented increased the risk of loss. (R. C. 
 1905, § 5934.) 
 
 Misrepresentation referred to in statute includes statements in applica- 
 tions for insurance, called warranties, by law of insurance. Soules v. 
 
 Brotherhood of American Yoemen, 19 N. D. 23, 120 N. W. 760. 
 
 § 6502. Modification. Rescission.] The provisions of this article apply 
 as well to a modification of a contract of insurance as to its original formation. 
 Whenever a right to rescind a contract of insurance is given to the insured by 
 any provision of this chapter such right may be exercised at any time previous 
 to the commencement of an action on the contract. (R. C. 1905. § 5935.) 
 
 Article 6 — The Policy. 
 
 § 6503. Defined.] The written instrument in which a contract of insur- 
 ance is set forth is called a policy of insurance. (R. ('. 1905, § 5936.) 
 
 § 6504. What Must Specify.] A poliev of insurance must specify: 
 
 1. The parties between whom the contract is made. 
 
 2. The rate of premium. 
 
 3. The property or life insured. 
 
 4. The interest of the insured in property insured, if he is not the absolute 
 owner thereof. 
 
 5. The risks insured against; and. 
 
STATE OF NORTH DAKOTA 69 
 
 6. The period during which the insurance is to continue. (R. C. 1905, 
 $ 5937.) 
 
 As to similar provision in Cal. Civ. Code, 4 2557, see Davis v. I'hcenix 
 Ins. Co., Ill Cal. 409, 43 Pac. 1115. 
 
 4. Effect of bond for title to defeat unconditional and sole ownership. 
 2 L. R. A. (N. S.) 512. 
 
 Vendors lien as affecting sole and unconditional ownership. 7 L. R. A. 
 (N. S.) 627. 
 
 Failure to record conveyance to insured as affecting his "sole and un- 
 conditional ownership." 22 L. R. A. (N. S.) 732. 
 
 Title for purpose of insurance, of house on government land under 
 homestead entry, as within sole and unconditional ownership clause in 
 insurance policy. 8 L. R. A. (N. S.) 903. 
 
 Want of title to land where insured is sole and absolute owner of build- 
 ing. 38 L. R, A. (N. S.) 427. 
 
 § 6505. Applied Only to Interest.] When the name of the person in- 
 tended to be insured is specified in a policy, it can be applied only to his own 
 proper interest. (R, C. 1905, § 5938.) 
 
 § 6506. Insurance by Trustee or Agent.] When an insurance is made 
 by an agent or trustee, the fact that his principal or beneficiary is the person 
 really insured may be indicated by describing him as an agent or trustee or 
 by other general words in the policy. (R. C. 1905, § 5939.) 
 
 § 6507. Terms Govern Joint or Common Interest.] To render an insur- 
 ance effected by one partner or part owner, applicable to the interest of his 
 co-partners or of other part owners, it is necessary that the terms of the policy 
 should be such as are applicable to the joint or common interest. (R. C. 1905, 
 § 5940.) 
 
 § 6508. Only Person Tntp;nded May Claim Benefit.] When the de- 
 scription of the insured in a policy is so general that it may comprehend any 
 person or any class of persons, he only can claim the benefit of the policy who 
 can show that it was intended to include him. (R. C. 1905, § 5941.) 
 
 Insuring under an assumed name. Pollard v. Ins. Co., 1 S. D. 570, 
 47 N. W. 1060. 
 
 Condition rendering policy void on procuring additional insurance with- 
 out consent of company cannot be waived by agent whose agency has ex- 
 pired. Smith v. Ins. Co., 6 D. 433, 43 N. W. 810. 
 
 Representations in application signed by agent disregarded. South 
 Bend Toy Co. v. Ins. Co., 2 S. D. 17, 48 N. W. 310. 
 
 Knowledge of facts by agent may be a waiver. Lyon v. Ins. Co., 6 
 D 67, 50 N. W. 483. 
 
 Devesture of title by sheriff's deed being proved it is error to allow 
 plaintiff to show deed to lie void. Tierney v. Ins. Co., 4 N. D. 565, 62 N. 
 W. 642. 
 
 Failure of mortgagee to notify company of changes in condition of 
 property. Ormsby v. Tns. Co., 5 S. D. 72, 58 N. W. 301. 
 
 False statement in application and medical examination for life insur- 
 ance constitute breach of warranty. Knudson v. Legion of Honor. 7 
 S. D. 214, 63 N. W. 911. 
 
7() INSURANCE LAWS 
 
 § 6509. BENEFIT OF Any Owner.] A policy may be so framed that it 
 will inure to the benefit of whomsoever dining the continuance of the risk may 
 become the owner of the interest insured. (R. C. 1905, § 5942.) 
 
 § 6510. Transfer Suspends.] The mere transfer of a thing insured does 
 not transfer the policy, but suspends it until the same person becomes owner 
 of both the policy and the thing insured. (R. C. 1905, § 5943.) 
 
 § 6511. Classified.] A policy is either open or valued. (R. C. 1905, 
 § 5944.) 
 
 § 6512. Open.] An open policy is one in which the value of the thing 
 insured is not agreed upon, but is left to be ascertained in case of loss. (R. C. 
 1905, § 5945.) 
 
 § 6513. Valued.] A valued policy is one which expresses on its face 
 an agreement that the thing insured shall be valued at a specified sum. (R. C. 
 1905, § 5946.) 
 
 Under standard policy, value of real property on total loss is conclu- 
 sively fixed by total of all insurance written therein which is amount of 
 policy and concurrent insurance. Lawyer v. Globe Mut. Ins. Co., 25 S. D. 
 549, 127 N. W. 615. 
 
 § 6514. Running.] A running policy is one which contemplates succes- 
 sive insurances and which provides that the object of the policy may be from 
 time to time defined, especially as to the subjects of insurance, by additional 
 statements or indorsements. (R. C. 1905, § 5947.) 
 
 § 6515. Receipts for Premium. Effect of.] An acknowledgment in a 
 policy of the receipt of premium is conclusive evidence of its payment so far as 
 to make the policy binding, notwithstanding any stipulation therein that it 
 shall not be binding until the premium is actually paid. (R. C. 1905, § 5948.) 
 Is not unconstitutional because it declares that receipt of premium 
 acknowledged in policy is conclusive evidence of payment. Peever Mer- 
 cantile Co. v. State Mut. F. Ins. Co., 25 S. D. 406, 127 N. W. 559. 
 
 Insurance company acknowledging receipt of premium in renewal policy 
 x cannot deny same in action on policy. Peever Mercantile Co. v. State Mut. 
 F. Asso., 23 S. D. 1, 119 N. W. 1008. 
 
 Insurance company cannot be permitted to show that actual date of 
 issuance of policy was of later date than date recited in policy, where 
 policy acknowledges receipt of premium. Harrington v. Mutual L. Ins. Co., 
 21 N. D. 447, 34 L. R. A. (N. S.) 373, 131 N. W. 246. 
 
 Policy becomes binding on its delivery to insured, though it contains 
 condition that policy shall not take effect until actual payment of first 
 premium. Chasse v. Bankers' Reserve Fund L. Ins. Co., 27 S. D. 70, 
 129 N. W. 568. 
 
 Waiver of conditions requiring payment of premium before delivery of 
 policy. 57 Am. Rep. 514. 
 
 As to similar provision in Cal. Civ. Code, section 2598, see Palmer v. 
 Continental Ins. Co., 132 Cal. 68, 64 Pac. 97. 
 
 § 6516. Agreement Not to Transfer Void.] An agreement made before 
 a loss not to transfer the claim of a person insured against the insurer after 
 the loss lias happened is void. (R, C. 1905, § 5949.) 
 
 § 6517. Holder May Surrender for Cancellation.] The holder of any 
 
STATE OF NORTH DAKOTA 71 
 
 policy of insurance against loss or damage to property by fire or other casualty 
 hereafter issued by any insurance company doing or contract to the contrary, 
 at any time surrender the same for cancellation; and upon such surrender the 
 company issuing such policy shall retain or receive such proportion and not 
 more of the premium paid or agreed to be paid as corresponds with the usual 
 short rates upon term policies as adopted and maintained by the Minnesota 
 and Dakota fire underwriters' union of St. Paul, Minnesota, for the time the 
 policy remained in force. (R. C. 1905, § 5950.) 
 
 § 6518. Notice Necessary to Forfeit.] No such policy of insurance 
 shall by virtue of any condition or provision thereof be forfeited, suspended 
 or impaired for non-payment of any note or obligation taken for the premium, 
 or any part thereof, unless the insurer shall, not less than thirty days prior to 
 the maturity of such premium, note or obligation, mail, postage prepaid, to the 
 assured at his usual postoffice a notice stating: 
 
 1. The date when such note or obligation will become due. 
 
 2. The amount of principal and interest that will then be due. 
 
 3. The effect upon the policy of non-payment. 
 
 4. Such notice shall further inform the assured of his right at his own 
 election either to pay in full and keep the policy in full force, or to terminate 
 the insurance by surrendering the policy and paying such part of the whole 
 premium as it shall have earned and must further state the amount which the 
 assured is lawfully required to pay, or which on account of previous payment 
 may be due him in case of his election to terminate the insurance on the day 
 of the maturity of 'the premium, note or obligation. (R. C. 1905, § 5951.) 
 
 Notice to insured that premium note falls due on certain date not suf- 
 ficient to forfeit policy for non-payment of premium. Epiphany Catholic 
 Church v. Ins. Co., 16 S. D. 17, 91 N. W. 332. 
 
 Notice mailed twenty-three days before premium note falls due is 
 insufficient. Epiphany R. C. Church v. German Ins. Co., 16 S. D. 17, 91 
 N. W. 332. 
 
 First and last days in computing time for notice of premiums. 49 
 L. R. A. 208. 
 
 Mode of proving mailing of notice of maturity of premiums or assess- 
 ments. 7 L. R. A. (N. S.) 238. 
 
 Necessity that notice of maturity of- premiums or assessments sent 
 through the mail be received. 7 L. R. A. (N. S.) 253. 
 
 Effect of custom to give insured notice of maturity of premium where 
 insured is not otherwise entitled to notice. 20 L. R. A. (N. S.) 1037. 
 
 Article 7 — "Warranties. 
 5 6519. Classified.] A warranty is either express or implied. (R. C. 
 1905, $ 5952.) 
 
 Policy of insurance cannot be avoided after loss where premium was 
 received with full knowdedge of facts. Leisen v. St. Paul F. & M. Ins. Co., 
 20 N. D. 316, 30 L. R, A. (N. S.) 539, 127 N. W. 837. 
 
 Warranties and representations and their effect. 16 Am. Rep. 816. 
 § 6520. No Form Necessary.] No particular form of words is necessary 
 to create a warranty. (R. C. 1905, § 5953.) 
 
 Warranties in case of Lloyds policies. 55 L. R. A. 202. 
 
72 INSURANCE LAWS 
 
 When may statements be regarded as representations, although expressly 
 
 denominated in the policy as warranties. 11 L. R. A. (N. S.) 981. 
 
 When answers concerning watchmen deemed to be warranties. 33 Am. 
 
 Rep. 832. 
 
 § 0521 . Express, Must be Written.] Every express warranty made at 
 or before the execution of a policy must be contained in the policy itself, or 
 in another instrument signed by the insured and referred to in the policy as 
 making a part of it. (R. C. 1905, § 5954.) 
 
 § 6522. To What Time May Relate.] A warranty may relate to the 
 past, the present, the future or to any or all of these. (R. C. 1905, § 5955.) 
 
 § 6523. What Statement of Fact is Express Warranty.] A statement 
 in a policy of a matter relating to the person or thing insured or to the risk 
 as a fact is an express warranty thereof. (R. C. 1905, § 5956.) 
 
 Policy of insurance cannot be avoided after loss where premium was 
 
 received with full knowledge of facts. Leisen v. St. Paul F. & M. Ins. Co., 
 
 20 N. D. 316, 30 L. R. A. (N. S.) 539, 127 N. W. 837. 
 
 On representations and promises made in application for policy as im- 
 material because policy does comply with this section. Farmers' & M. 
 
 State Bank v. United States Fidelity & G. Co., 28 S. D. 315, 36 L. R, A. 
 
 (N. S.) 1152, 133 N. W. 247. 
 
 As to similar provision in Cal. Civ. Code, section 2607, see National 
 
 Bank v. Union Ins. Co., 88 Cal. 497, Am. St. Rep. 324; 26 Pac. 509. 
 
 § 6524. Statement op Intention a Warranty.] A statement in a policy, 
 which imports that it is intended to do or not to do a thing which materially 
 affects the risk, is a warranty that such act or omission shall take place. (R. 
 C. 1905, § 5957.) 
 
 § 6525. As to Future, When Need Not be Fulfilled.] When before 
 the time arrives for the performance of a warranty relating to the future a 
 loss insured against happens or performance becomes unlawful at the place of 
 the contract or impossible, the omission to fulfill the warranty does not avoid 
 the policy. (R. C. 1905, § 5958.) 
 
 § 6526. Rescission for Violation of Material.] The violation of a ma- 
 terial warranty or other material provision of a policy on the part of either 
 party thereto entitles the other to rescind. (R. C. 1905, § 5959.) 
 
 § 6527. What Avoids Policy.] A policy may declare that a violation 
 of specified provisions thereof shall avoid it; otherwise the breach of an imma- 
 terial provision does not avoid the policy. (R. C. 1905, § 5960.) 
 
 Forfeiture waived by demanding judgment for premium note. Johnson 
 
 v. Ins. Co., 1 N. D. 167, 45 N. W. 799. 
 
 Undisclosed incumbrances will avoid policy. Peet v. Ins. Co., 7 S. D. 
 
 410, 64 N. W. 206. 
 
 Policy of insurance cannot be avoided after loss where premium was 
 
 received with full knowledge of facts. Leisen v. St. Paul F. & M. Ins. Co., 
 
 20 N. D. 316, 30 L. R. A. (N. S.) 539, 127 N. W. 837. 
 
 5 6528. Breach Without Fraud.] A breach of warranty without fraud 
 merely exonerates an insurer from the time that it occurs, or when it is broken 
 in its inception, prevents the policy from attaching to the risk. (R. C. 1905, 
 $ 5961.) 
 
STATE OF NORTH DAKOTA 73 
 
 Policy of insurance cannot be avoided after loss where premium was 
 received with full knowledge of the facts. Leisen v. St. Paul F. & M. Ins. 
 Co., 20 N. D. 316, 30 L. R. A. (N. S.) 539, 127 N. W. 837. 
 
 Article 8 — Premium. 
 § 6529. When Premium Payable.] An insurer is entitled to the payment 
 of the premium as soon as the thing insured is exposed to the peril insured 
 against. (R. C. 1905, § 5962.) 
 
 What amounts to waiver of payment of premium. 29 Am. Rep. 777. 
 As to similar provision in Gal. Civ. Code. Section 2616, Joshua Bendy 
 Mach. Works v. American Steam Boiler Ins. Co., 86 Cal. 248, 21 Am. St. 
 Rep. 33, 24 Pac. 1018. 
 
 § 6530. When Insured Entitled to Return.] A person insured is en- 
 titled to return of premium as follows: 
 
 1. To the whole of the premium if no part of his interest in the thing 
 insured is exposed to any of the perils insured against. 
 
 2. When the insurance is made for a definite period of time and the in- 
 sured surrenders his policy, to such proportion of the premium as corresponds 
 with the unexpired time after deducting from the whole premium any claim 
 for loss or damage under the policy which has previously accrued. (R. C. 
 1905, § 5963.) 
 
 Premium note past due is collectible though policy is void while due 
 and unpaid. St. Paul Ins. Co. v. Coleman, 6 D. 458, 43 N. W. 693; St. 
 Paul Ins. Co. v. Neidecken, 6 D. 494, 43 N. W. 696; Johnson v. Ins. Co., 
 1 N. D. 167, 56 N. W. 709. 
 
 Breach of agreement of insurer to make loan on policy as justifying 
 rescission and recovery of premiums by insured. 30 L. R. A. (N. S.) 
 1202. 
 
 Right of insured to return of premium where insurer seeks rescission on 
 ground of misrepresentation by insured. 32 L. R. A. (N. S.) 299. 
 
 As to similar provision in Cal. Civ. Code, section 2617, see Joshua Bendy 
 Mach. Works v. American Steam Boiler Ins. Co., 86 Cal. 248, 21 Am. St. 
 Rep. 33, 24 Pae. 1018. 
 
 § 6531. Premium DEFINED.] The term premium within the meaning of 
 sections 6517, 6518 and 6530 includes policy fees in excess of two dollars on 
 any one policy and all other sums of money paid or agreed to be paid in con- 
 sideration of the policy of insurance. (R. C. 1905, § 5964.) 
 
 § 6532. RETURN When INSURANCE is Voidable.] A person insured is 
 entitled to a return of the premium when the contract is voidable on account 
 of the fraud or misrepresentation of the insurer or on account of facts of 
 the existence of which the insured was ignorant without his fault; or when by 
 any default of the insured other than actual fraud, the insurer never incurred 
 any liability under the policy. TR. C. 1905, § 5965.) 
 
 Return of assessment on benefit certificate proving void for fraud. 3 
 L. R. A. (N. S.) 114. 
 
 Reason of insured to return of premium where policy is void or voidable 
 because of misrepresentations on his part. 32 L. R. A. (N. S.) 298. 
 § 6533. Not Entitled to Return.] If a peril insured against has existed 
 and the insurer has been liable for any period, however short, the insured is 
 
74 INSURANCE LAWS 
 
 not entitled to a return of premium so far as that particular risk is concerned, 
 unless the insurance was for a definite period of time, in which case he is 
 entitled to a proportionate return under sections 6517 and 6530. (R. G. 1905, 
 § 5966.) 
 
 § 6534. Return ix Over Insurance bv Several.] In case of an over 
 insurance by several insurers the insured is entitled to a ratable return of the 
 premium, proportioned to the amount by which the aggregate sum insured 
 in all the policies exceeds the insurable value of the thing at risk. (R. C. 1905, 
 « 5967.) 
 
 § 6535. Contribution to Return.] When an over insurance is effected 
 by simultaneous policies the insurers contribute to the premium to be returned 
 in proportion to the amount insured by their respective policies. (R. C. 1905, 
 § 5968.) 
 
 § 6536. Same.] When an over insurance is effected by successive policies, 
 those only contribute to a return of the premium who are exonerated by prior 
 insurances from the liability assumed by them and in proportion as the sum 
 for which the premium was paid exceeds the amount for which on account of 
 prior insurance thev could be made liable. (R. C. 1905, § 5969.) 
 
 Article 9 — Loss. 
 
 § 6537. When Insurer Liable.] An insurer is liable for a loss of which 
 a peril insured against was the proximate cause, although a peril not contem- 
 plated by the contract may have been a remote cause of the loss; but he is 
 not liable for a loss of which the peril insured against was only a remote cause. 
 (R. C. 1905 § 5970.) 
 
 Losses for which insurer is liable. 36 Am. St. Rep. 852. 
 What included in fire, loss by. 45 Am. Dec. 657; 23 Am. St. Rep. 915; 
 133 Am. St. Rep. 1087. 
 
 What is proximate cause of loss. 36 Am. St. Rep. 852. 
 Custom to pay certain class of losses as affecting liability of insurer for 
 such a loss not covered by the policy. 19 L. R. A. (N. S.) 421. 
 
 Retention of policy as waiver of mistake or fraud of insurer or agent 
 as to provisions as to risks insured against. 67 L. R. A. 711. 
 
 Loss by lightning. 26 L. R, A. 267. 
 $ 6538. Liable for Loss in Rescuing.] An insurer is liable when the 
 thing insured is rescued from a peril insured against that would otherwise 
 have caused a loss, if in the course of such rescue the thing exposed to peril, 
 not insured against, which permanently deprives the insured of its possession 
 in whole or in part; or when a loss is caused by efforts to rescue the thing 
 insured from a peril insured against. (R. C. 1905, § 5971.) 
 
 § 6539. Not Liable for Peril Excepted.] When a peril is specially 
 excepted in a contract of insurance, a loss which would not have occurred but 
 for such peril is thereby excepted, although the immediate cause of the loss 
 was a i eril which was not excepted. (R. C. 1905, § 5972.) 
 
 Does general requirement as to external, violent ami accidental means 
 apply to a separate provision as to liability in case of death or injury from 
 certain specified causes, l'7 L. R. A. (N. S.) 480. 
 
 When death or injury may be deemed to have been caused by accidental 
 
STATE OF NORTH DAKOTA 7.". 
 
 means, though the voluntary act of insured was the primary cause thereof. 
 5 L. R. A. (N. S.) 657. 
 
 § 65-10. Willful Act Exonerates; Negligence Not.] An insurer is not 
 liable for a loss caused by the willful act of the insured; but he is not exoner- 
 ated by the negligence of the insured or of his agents or others. (R. C. 1905, 
 § 5973.) 
 
 Negligence of assured will not avoid policy. Angier v. Ins. Co., 10 
 S. D. 82, 71 N. W. 761, 65 Am. St. Rep. 685. 
 
 Policy holder cannot recover for loss of personal property where he did 
 not exercise proper diligence to save same. First National Bank v. German 
 American Ins. Co., 23 N. D. 139, L. R. A. (N. S.) 213, 134 N. W. 873. 
 
 Liability of insurance company in case of intentional destruction of 
 property by insured. 17 L. R, A. (N. S.) 189. 
 
 Article 10 — Notice of Loss. 
 § 6541. Without Unnecessary Delay.] In case of loss upon an insur- 
 ance against 'fire an insurer is exonerated, if notice thereof is not given to 
 him by some person insured, or entitled to the benefit of the insurance without 
 unnecessary delay. (R. C. 1905, § 5974.) 
 
 Proof of loss in case of Lloyd 's policies. 55 L. R. A. 200. 
 Delay in giving notice of claim under employer's indemnity policy. 47 
 L. R. A. (N. S.) 1214. 
 
 Condition in burglary insurance policy as to notice and proof of loss. 
 46 L. R. A. (N. S.) 571. 
 
 Waiver by requiring further proofs of loss. 9 Am. St. Rep. 236. 
 § 6542. Only Best Proof in Power Required.] When preliminary proof 
 of loss is required by a policy the insured is not bound to give such proof as 
 would be necessary in a court of justice; but it is sufficient for him to give the 
 best evidence which he has in his power at the time. (R. C. 1905, § 5975.) 
 Effect of false swearing in proofs of loss. 32 L. R, A. (N. S.) 453. 
 Conclusiveness of proofs of loss as against insured or beneficiary. 44 
 L. R, A. 846. 
 
 Furnishing proofs of loss not under oath as substantial compliance with 
 policy requiring proofs under oath. 28 L. R. A. (N. S.) 651. 
 
 Duty of insured to submit to examination and furnish information. 52 
 L. R, A. 424. 
 
 § 6543. Defects in. How Waived.] All defects in a notice of loss or in 
 preliminary proof thereof which the insured might remedy and which the in- 
 surer omits to specify to him without unnecessary delay as grounds of objection 
 are waived. (R, C. 1905, $ 5976.) 
 
 Objection to proofs of loss come too late after suit brought Fosmark 
 v. Equitable R. Asso., 23 S. D. 102, 120 N. W. 777. 
 
 Waiver of condition as to arbitration by accepting proof of loss. 15 
 L. R. A. (N. S.) 1073. 
 
 § 6544. Delay in. How Waived.] Delay in the presentation to an in- 
 surer of notice or proof of loss is waived, if caused by any act of his. or if he 
 omits to make objections promptly and specifically upon that ground. (K. C. 
 1905, § 5977.) 
 
 Evidence examined and held waiver. Johnson v. D. F. & M. Co., 1 N. D. 
 
76 INSURANCE LAWS 
 
 J (57, 45 N. W. 799; PurceU v. St. P. F. & M. Co., 5 N. D. 100, 64 N. W. 
 943; Peot v. D. F. & M. Co., 1 S. D. 462!, 47 N. W. 532. 
 
 Failure to make objection to proof until after expiration of time pre- 
 scribed for making, held waiver of time. Angier v. Assurance Co., 10 S. D. 
 82, 71 N. W. 761. 
 
 Making proof of loss may be waived by company's adjuster. Hitch- 
 cock v. Insurance Co., 10 S. D. 271, 72 N. W. 898. 
 
 § 6545. Time in Which to Make. Blanks to be Furnished.] Upon 
 notice of loss being given to the insurer on behalf of the insured or of a 
 beneficiary under a policy of life insurance the insured shall within twenty days 
 alter receipt of such notice furnish to the insured or beneficiary, as the case 
 may be, a blank form of proof of loss and the insured shall have sixty days 
 after such blank form is furnished in which to make such proof of loss; in 
 case of life insurance the beneficiary shall have ninety days after receipt of 
 such blank form in which to make such proof of loss. If the insurer shall fail 
 to furnish such blank form of proof of loss within the time aforesaid he shall 
 be deemed to have waived such proof and any agreement made to waive the 
 provisions of this section is void. (R. C. 1905, § 5978.) 
 
 § 6546. Failure to Furnish Certificate of Another.] If a policy re- 
 quires by way of preliminary proof of loss the certificate or testimony of 
 another person than the insured, it is sufficient for the insured to use reason- 
 able diligence to procure it and in case of the refusal of such person to give it, 
 then to furnish reasonable evidence to the insurer that such refusal was not 
 induced by any just grounds of disbelief in the facts necessary to be certified. 
 (R, C. 1905, § 5979.) 
 
 Effect of failure of mortgagor to give notice or proof of loss upon right 
 of mortgagee to recover under the policy. 14 L. R. A. (N. S.) 459. 
 
 Article 11 — Double Insurance. 
 § 6547. Defined.] A double insurance exists when the same person is 
 insured by several insurers separately in respect to the same subject and in- 
 terest. (R. C. 1905, § 5980.) 
 
 Waiver of conditions against other insurance. 27 Am. Rep. 601. 
 § 6548. Contribution of Insurers.] In case of double insurance the 
 several insurers are liable to pay losses thereon, as follows: 
 
 1. In fire insurance each insurer must contribute ratably towards the loss 
 without regard to the dates of the several policies. 
 
 2. In marine insurance the liability of the several insurers for a total loss, 
 whether actual or constructive, when the policies are not simultaneous is in the 
 order of the dates of the several policies, no liability attaching to a second 
 or other subsequent policy, except as to the excess of the loss over the amount 
 of all previous policies on the same interest. If two or more policies bear date 
 upon the same day they are deemed to be simultaneous and the liability of 
 insurers on simultaneous policies is to contribute ratably with each other. The 
 insolvency of any of the insurers does not affect the proportionate liability of 
 the other insurers. The liability of all insurers on the same marine interest 
 for a partial or average loss is to contribute ratably. (R. C. 1905, § 5981.) 
 
 Insurer is entitled to such interpretation of clause making policy void 
 because of increase of hazard occasioned by insured as will include inert- 
 
STATE OF NORTH DAKOTA 77 
 
 gage placed upon property by insured. Lawyer v. Globe Mut. Ins. Co., 25 
 S. D. 549, 127 N. W. 615. 
 
 Liability of successive insurers. 28 Am. Dec. 121. 
 Article 12 — Reinsurance. 
 § 6549. Defined.] A contract of reinsurance is one by which an insurer 
 procures a third person to insure him against loss or liability by reason of such 
 original insurance. (R. C. 1905, § 5982.) 
 
 Reinsurance and the remedies of the parties thereunder. 45 Am. St. 
 Rep. 442. 
 
 Liability of reinsurer. 8 L. R. A. (N. S.) 845; 44 L. R. (N. S.) 317. 
 § 6550. Disclosures Required.] When an insurer obtains reinsurance he 
 must communicate all the representations of the original insurer and also all 
 the knowledge and information he possesses, whether previously or subse- 
 quently acquired, which is material to the risk. (R. C. 1905, § 5983.) 
 
 § 6551. Contract of Indemnity.] A reinsurance is presumed to be a 
 contract of indemnity against liability and not merely against damage. (R. C. 
 L905, $ 5984.) 
 
 § 6552. Original Insured no Interest.] The original insured has no 
 interest in a contract of reinsurance. (R. C. 1905, § 5985.) 
 
 CHAPTER 78. 
 
 Marine Insurance. 
 ARTICLE 1. Definition of marine insurance, § 6553. 
 
 2. Insurable interest, <j§ 6554-6560. 
 
 3. Concealment. $$ 6561-6564. 
 
 4. Representations, §§ 6565-6566. 
 
 5. Implied warranties. §§ 6567-6574. 
 
 6. The voyage and deviation, §§ 6575-6580. 
 
 7. Loss, $$ 6581-6591. 
 
 8. Abandonment, §§ 6592-6608. 
 
 9. Measure of indemnity, $§ 6609-6619. 
 
 Article 1 — Definition of Marine Insurance. 
 § 6553. Definition.] Marine insurance is an insurance against risks con- 
 nected with navigation to which a ship, cargo, freightage, profits or other 
 insurable interest in movable property may be exposed during a certain voyage 
 or a fixed period of time. (R. C. 1905, $ 5986.) 
 
 Article 2 — Insurable Interest. 
 
 $ 6554. Owner Always Has.] The owner of a ship has in all cases an 
 insurable interest in it, even when it has been chartered by one who covenants 
 to pay him its value in case of loss. (R. C. 1905, § 5987.) 
 
 § 6555. Hypothecation Reduces Interest.] The insurable interest of 
 the owner of a ship hypothecated by bottomry is only the excess of its value 
 over the amount secured by bottomry. (R. C. 1905, § 5988.) 
 
 § 6556. Fbeightagb Defined as to Insi RANGE.] Freightage in the sense 
 of a policy of marine insurance signifies all the benefit derived by the owner, 
 
78 INSURANCE LAWS 
 
 cither from the chartering of the ship or its employment for the carriage of 
 his own goods or those of others. (R. C. 1905, § 5989.) 
 
 § 6557. Expected Freightage.] The owner of a ship has an insurable 
 interest in expected freightage which lie would have certainly earned but for 
 the intervention of a peril insured against. (R. C. 1905, § 5990.) 
 
 § 6558. Same.] The interest mentioned in the last section exists, in the 
 case of a charter party, when the ship has broken ground on the chartered 
 voyage; and if the price is to be paid for the carriage of goods, when they 
 are actually on board or there is some contract for putting them on board and 
 both ship and goods are ready for the specified voyage. (R. C. 1905, § 5991.) 
 
 § 6559. When Profits Insurable Interest.] One who has an interest 
 in the thing fremi which profits are expected to proceed has an insurable interest 
 in the profits. (R. C. 1905, § 5992.) 
 
 § 6560. Charterer Has.] The charterer of a ship has an insurable in- 
 terest in it to the extent that he is liable to be damnified by its loss. (R. C. 
 1905, § 5993.) 
 
 Article 3 — Concealment. 
 
 § 6561. Disclosures More Extensive.] In marine insurance each party 
 is bound to communicate in addition to what is required by section 6482, all the 
 information which he possesses material to the risk, except such as is mentioned 
 in section 6483 and to state the exact and whole truth in relation to all matters 
 that he represents or upon inquiry assumes to disclose. (R. C. 1905, § 5994.) 
 
 $ 6562. Belief of Another Material.] In marine insurance information 
 of the belief or expectation of a third person in reference to a material fact is 
 material. (R. C. 1905. § 5995.) 
 
 § 6563. When Knowledge of Loss Presumed.] A person insured by a 
 contract of marine insurance is presumed to have had knowledge at the time 
 of insuring of a prior loss, if the information might possibly have reached him 
 in the usual mode of transmission and at the usual rate of communication. 
 (R, C. 1905, § 5996.) 
 
 § 6564. What Does Not Vitiate Entire Contract.] A concealment in 
 marine insurance in respect to any of the following matters does not vitiate 
 the entire contract, but merely exonerates the insurer from a loss resulting from 
 the risk concealed : 
 
 1. The national character of the insured. 
 
 2. The liability of the thing insured to capture and detention. 
 
 3. The liability to seizure from breach of foreign laws of trade. 
 
 4. The want of necessary documents; and, 
 
 5. The use of false and simulated papers. (R. C. 1905, § 5997.) 
 
 Article 4 — Representations. 
 § 6565. Rescission' for False.] If a representation by a person insured 
 by contract of marine insurance is intentionally false in any respect, whether 
 material or immaterial, the insurer may rescind the entire contract. (1\. C. 
 L905, § 5998.) 
 
 § 6566. Without Fraud Does Not Avoid.] The eventual falsity of a 
 representation as to expectation does not in the absence <•!' fraud avoid a con- 
 tract of insurance. (R. C. 1905. $ 5999.) 
 
STATE OF NORTH DAKOTA 79 
 
 Article 5— Implied/ Warranties. 
 
 § 6567. SEAWORTHINESS.] In every marine insurance upon a ship or 
 freight, or freightage, or upon anything which is the subject of marine insur- 
 ance a warranty is implied that the ship is seaworthy. (R. ('. 1905, § 6000.) 
 
 What embraced in warranty of seamanship. 1 Am. Dec. 165; 33 Am. 
 
 Dec. 33. 
 
 § 6568. Seaworthy Defined.] A ship is seaworthy when reasonably fit 
 to perform the services and to encounter the ordinary perils of the voyage con- 
 templated by the parties to the policy. (R. C. 1905, § 6001.) 
 
 § 6569. When Foregoing Warranty Complied With.] An implied war- 
 ranty of seaworthiness is complied with if the ship is seaworthy at the time 
 of the commencement of the risk, except in the following cases: 
 
 1. When the insurance is made for a specified length of time, the implied 
 warranty is not complied with, unless the ship is seaworthy at the commence- 
 ment of every voyage she may undertake during that time; and, 
 
 2. When the insurance is upon the cargo, which by the terms of the polity, 
 or the description of the voyage or the established custom of the trade is to be 
 transhipped at an intermediate port, the implied warranty is not complied with, 
 unless each vessel upon which the cargo is shipped or transhipped is seaworthy 
 at the commencement of its particular voyage. (R. C. 1905, § 6002.) 
 
 § 6570. What Seaworthiness Includes.] A warranty of seaworthiness 
 extends not only to the structure of the ship itself, but requires that it be prop- 
 erly laden and provided with a competent master, a sufficient number of com- 
 petent officers and seamen and the requisite appurtenances and equipments such 
 as cables and anchors, food, fuel and lights and other necessary or proper 
 stores and implements for the voyage. (R. C. 1905, § 6003.) 
 
 § 6571. "As to Each" Part of the VOYAGE.] When different portions of 
 the voyage contemplated by a policy differ in respect to the things requisite to 
 make the ship seaworthy therefor, a warranty of seaworthiness is complied 
 with, if at the commencement of each portion the ship is seaworthy with refer- 
 ence to that portion. (R, C. 1905, § 6004.) 
 
 $ 6572. Delay in Repairing Exonerates.] When a ship becomes unsea- 
 worthy during the voyage to which an insurance relates, an unreasonable delay 
 in repairing the defect exonerates the insurer from liability from any loss 
 arising therefrom. (R. C. 1905, § 6005.) 
 
 § 657.'!. Seaworthy as to Cargo.] A ship which is seaworthy for the pur- 
 pose of an insurance upon the ship may, nevertheless, by reason of being un- 
 fitted to receive the cargo be unseaworthy for the purpose of insurance upon 
 the cargo. (R. C. 1905, $ 6006.) 
 
 § 6574. Neutral Papers.] When the nationality or neutrality of a ship 
 or cargo is expressly warranted it is implied that the ship will carry requisite 
 documents to show such nationality or neutrality ami that it will not carry 
 any documents which cast reasonable suspicion thereon. (R. I '. 1905, ^) 6007.) 
 
 Article 6 — The Voyage and Deviation*. 
 § 6575. Voyage Fixed i.v MERCANTILE Usage.] When the voyage con- 
 templated by a policy is described by the places of beginning and ending, the 
 voyage insured is one which conforms to the course from point to point fixed 
 by mercantile usage between those places. ( R. <'. 1905, § 6008.) 
 
80 I.WSWUANCK LAWS 
 
 § 6576. When Not so Fixed.] If the course of sailing is not fixed by 
 mercantile usage, the voyage insured by a policy is the way between the places 
 specified, which to a master of ordinary skill and discretion would seem the 
 most natural, direct and advantageous. (R. C. 1905, § 6009.) 
 
 § 6577. Deviation Defined.] Deviation is a departure from the course 
 of the voyage insured mentioned in the last two sections, or an unreasonable 
 delay in pursuing the voyage; or the commencement of an entirely different 
 voyage. (R. C. 1905, § 6010.) 
 
 Effect of deviation by necessity upon policy. 58 Am. Dec. 673. 
 What is an effect of deviation of vessel. 33 Am. Dec. 60. 
 
 § 6578. When Proper.] A deviation is proper: 
 
 1. When caused by circumstances over which neither the master nor the 
 owner of the ship has any control. 
 
 2. When necessary to comply with a warranty or to avoid a peril, whether 
 insured against or not. 
 
 3. When made in good faith and upon reasonable grounds of belief in its 
 necessity to avoid a peril; or, 
 
 4. When made in good faith for the purpose of saving human life or 
 relieving another vessel in distress. (R. C. 1905, § 6011.) 
 
 § 6579. Improper.] Every deviation not specified in the last section is 
 improper. (R. C. 1905, § 6012.) 
 
 § 6580. Insurer Not Liable After.] An insurer is not liable for any 
 loss happening to a thing insured subsequently to an improper deviation. (R. 
 C. 1905, § 6013.) 
 
 Article 7 — Loss. 
 
 § 6581. Classified.] A loss may be either total or partial. (R. C. 1905, 
 § 6014.) 
 
 Liability of marine insurer for loss caused by explosion. 19 L. R. A. 
 594; 38 L. R. A. (N. S.) 474. 
 
 Effect of navigating in forbidden waters in case of loss within waters 
 covered by policy. 10 L. R, A. (N. S.) 742. 
 
 § 6582. Partial.] Every loss which is not total is partial. (R. C. 1905, 
 § 6015.) 
 
 6 6583. Total Loss Classified.] A total loss may be either actual or 
 constructive. (R. C. 1905, § 6016.) 
 
 § 6584. Actual Total.] An actual total loss is caused by: 
 
 1. Total destruction of the thing insured. 
 
 2. The loss of the thing by sinking or by being broken up. 
 
 3. Any damage to the thing which renders it valueless to the owner for 
 the purposes for which he held it; or, 
 
 4. Any other event which entirely deprives the owner of the possession at 
 the port of destination of the thing insured. (R. C. 1905, $ 6017.) 
 
 § 6585. Constructive Total.] A constructive total loss is one which gives 
 to a person insured a right to abandon under section 6593. (R. C. 1905, 
 $ 6018.) 
 
 § 6586. When Actual Loss Presumed.] An actual loss may be presumed 
 from the continued absence of a ship without being hoard of; and the length 
 
STATE OF NORTH DAKOTA 81 
 
 of time which is sufficient to raise this presumption depends on the circum- 
 stances of the case. (R. C. 1905, § G019.) 
 
 § 6587. Duty to Procure Another Ship for Cargo.] When a ship is 
 prevented at an intermediate port from completing the voyage by the perils 
 insured against, the master must make every exertion to procure in the same 
 or a contiguous port another ship for the purpose of conveying the cargo to 
 its destination and the liability of a marine insurer thereon continues after 
 they are thus reshipped. (R. C. 1905, § 6020.) 
 
 § 6588. Liable for Cost of Reshipmext.] In addition to the liability 
 mentioned in the last section a marine insurer is bound for damages, expenses 
 of discharging, storage, reshipment, extra freightage and all other expenses 
 incurred in saving the cargo reshipped pursuant to the last section up to the 
 amount insured. (R. C. 1905, § 6021.) 
 
 Right to recover under "sue and labor" clause in policy of marine insur- 
 ance, for moving cargo overland. 14 L. R. A. (N. S.) 1161. 
 § 6589. Payment Without Notice.] Upon an actual total loss a person 
 insured is entitled to payment without notice of abandonment. (R. C. 1905, 
 § 6022.) 
 
 § 6590. General Average Loss.] When it has been agreed that an 
 insurance upon a particular tiling or class of things shall be free from par- 
 ticular average a marine insurer is not liable for any particular average loss 
 not depriving the insured of the possession at the port of destination of the 
 whole of such thing or class of things, even though it becomes entirely worth- 
 less; but he is liable for his proportion of all general average loss assessed upon 
 the thing insured. (R, C. 1905, § 602:0 
 
 § 6591. What Agmnst Actual Total Loss Covers.] An insurance con- 
 fined in terms to an actual loss does not cover a constructive total loss, but 
 covers any loss which necessarily results in depriving the insured of the posses 
 sion at the port of destination of the entire thing insured. (R. C. 1905, § 6024.) 
 
 Article 8 — Abandonment. 
 
 § 6592. Defined.] Abandonment is the act by which after a constructive 
 total loss a person insured by a contract of marine insurance declares to the 
 insurer that he relinquishes to him his interest in the thing insured. (R. C. 
 1905, § 6025.) 
 
 § 659.°.. When Author i zed.] A person insured by a contract of marine 
 insurance may abandon the thing insured, or any particular portion thereof, 
 separately valued by the policy, or otherwise separately insured and recover 
 for a total loss thereof when the cause of the less is a peril insured against: 
 
 1. Tf more than half thereof in value is actually lost or would have to be 
 expended to recover it from the peril. 
 
 2. If it is injured to such an extent as to reduce its value more than one- 
 half. 
 
 3. If the thing insured, being a ship, the contemplated voyage cannot be 
 lawfully performed without incurring an expense to the insured of more than 
 half the value of the thing abandoned, or without incurring a risk which a 
 prudent man would not take under the circumstances: or, 
 
 4. Tf. the thing insured being cargo and freightage, the voyage cannot be 
 performed nor another ship procured by the master within a reasonable time 
 
82 INSURANCE LAWS 
 
 and with reasonable diligence to forward the cargo without incurring the like 
 expenses Oi risk. But freightage cannot in any case be abandoned unless the 
 ship is also abandoned. ( R. C. .1905, § 6026.) 
 
 $ 6594. Must be Absolute.] An abandonment must be neither partial 
 nor conditional. (R. C. 1905, § 6027.) 
 
 § 6595. When Made.] An abandonment must be made within a reason- 
 able time after information of the loss and after the commencement of the 
 voyage and before the party abandoning has information of its completion. 
 (R. C. 1905, § 6028.) 
 
 § 6596. When Becomes Ineffectual.] When the information upon 
 which an abandonment has been made proves incorrect or the thing insured 
 was so far restored when the abandonment was made that there was then in 
 fact no total loss, the abandonment becomes ineffectual. (R. C. 1905, § 6029.) 
 
 § 6597. Made by Written Notice.] Abandonment is made by giving 
 notice thereof to the insurer which may be done orally or in writing. (R. C. 
 1905, § 6030.) 
 
 § 6598. Requisites of Notice.] A notice of abandonment must be ex- 
 plicit and must specify the particular cause of the abandonment ; but need 
 state only enough to show that there is probable cause therefor and need not 
 be accompanied with proof of interest or of loss. (R. C. 1905, § 6031.) 
 
 § 6599. Sustained Only on Cause Specified.] An abandonment can be 
 sustained only upon the cause specified in the notice thereof. (R. C. 1905, 
 § 6032.) 
 
 § 6600. Equivalent to Transfer.] An abandonment is equivalent to a 
 transfer by the insured of his interest to the insurer with all the chances of 
 recovery and indemnity. (R. C. 1905, § 6033.) 
 
 § 6601. Payment Entitles Insurer to Salvage.] If a marine insurer 
 pays for a loss as if it was an actual total loss, he is entitled to whatever may 
 remain of the thing insured or its proceeds or salvage as if there had been a 
 formal abandonment, (R, O. 1905, § 6034.) 
 
 § 6602. Insured's Agents Become Insurer's on Abandonment.] Upon 
 an abandonment acts done in good faith by those who were agents of the 
 insured in respect to the thing insured subsequent to the loss are at the risk 
 of the insurer and for his benefit. (R. C. 1905, § 6035.) 
 
 § 6603. Acceptance of Unnecessary.] An acceptance of an abandon- 
 ment is not necessary to the rights of the insured and is not to be presumed 
 from the mere silence of the insurer upon his receiving notice of abandonment. 
 (R. C. 1905, § 6036.) 
 
 § 6604. Acceptance Conclusive.] The acceptance of an abandonment. 
 whether express or implied, is conclusive upon the parties and admits the loss 
 ami sufficiency of the abandonment. (R. ('. 1905, § 6037.) 
 
 § 6605. Accepted is Irrevocable.] An abandonment once made and ac- 
 cepted is irrevocable, unless the ground upon which it was made proves to be 
 unfounded. (E. C. 1905, § 6038.) 
 
 § 6606. Tii Whom Freightage Belongs After.] On an accepted aban- 
 donment of a ship freightage earned previous to the loss belongs to the 
 insurer thereof; but freightage subsequently earned belongs to the insurer of 
 the ship. ( R. C. 19(15, \S 6039.) 
 
STATE OF NORTH DAKOTA 83 
 
 § 6607. Refusal to Accept.] If an insurer refuses to accept a valid 
 abandonment, lie is liable as upon an actual total loss, deducting from the 
 amount any proceeds of the thing insured which may have come to the hands 
 of the insured. (R, C. 1905, § 6040.) 
 
 § 6608. .Rights, if ABANDONMENT Omitted.] If a person insured omits to 
 abandon he may, nevertheless, recover his actual loss. (R. C. 1905, § 6041.) 
 
 Article 9 — Measure of Indemnity. 
 
 § 6609. Valuation Conclusive Between Parties.] A valuation in a 
 policy of marine insurance is conclusive between the parties thereto in the 
 adjustment of either a partial or total loss, if the insured has some interest 
 at risk and there is no fraud on his part; except that when a thing has been 
 hypothecated by bottomry or respondentia before its insurance and without 
 the knowledge of the person actually procuring the insurance, he may show 
 the real value. But a valuation fraudulent in fact entitles the insurer to 
 rescind the contract. (R, C. 1905, § 6042.) 
 
 § 6610. Partial Loss. Liability.] A marine insurer is liable upon a 
 partial loss only for such proportion of the amount insured by him as the loss 
 bears to the value of the whole interest of the insured in the property insured. 
 (R. C. 1905, § 6043.) 
 
 § 6611. Recovery of Profits, How Estimated.] When profits are sep- 
 arately insured in a contract of marine insurance, the insured is entitled to 
 recover in case of loss a proportion of such profits equivalent to the proportion 
 which the value of the property lost bears to the value of the whole. (R. C. 
 1905, § 6044.) 
 
 § 6612. How Loss Determined on Valued Policy.] In case of a valued 
 policy of marine insurance on freightage or cargo, if a part only of the sub- 
 ject is exposed to risk the valuation applies only in proportion to such part. 
 (R. C. 1905, § 6045.) 
 
 § 6613. When Loss of Profits Presumed.] When profits are valued and 
 insured by a contract of marine insurance, a loss of them is conclusively pre- 
 sumed from a loss of the property out of which they were expected to arise and 
 the valuation fixes their amount. (R. C. 1905, § 6046.) 
 
 § 6614. How Loss on Open Policy Estimated.] In estimating a loss 
 under an open policy of marine insurance the following rules are to be observed: 
 
 1. The value of a ship is its value at the beginning of the risk including 
 all articles or charges which add to its permanent value or which are necessary 
 to prepare it for the voyage insured. 
 
 2. The value of the cargo is its actual cost to the insured, when laden on 
 board or when that cost cannot be ascertained, its market value at the time 
 and place of lading, adding the charges incurred in purchasing and placing 
 it on board, but without reference to any losses incurred in raising money for 
 its purchase, or to anv drawback on its exportation, or to the fluctuations of 
 the market at the port of destination, or to expenses incurred on the way or on 
 arrival. 
 
 3. The value of freightage is the gross freightage, exclusive of primage, 
 without reference to the cost of earning it; and, 
 
 4. The cost of insurance is in each case to be added to the value thus 
 estimated. (R. C. 1905, $ 6047.) 
 
g4 INSURANCE LAWS 
 
 § 6(515. How Partial Loss of Cargo Estimated.] If a cargo insured 
 against partial loss arrives at the port of destination in a damaged condition, 
 the loss of the insured is deemed to be the Bame proportion of the value, which 
 the market price at that port of the thing so damaged bears to the market 
 price it would have brought if sound. (R. C. 1905, § 6048.) 
 
 § (3016. Liability tor Repairs and Labor to Recover.] A marine insurer 
 is liable for all the expenses attendant upon a loss which forces a ship into port 
 to be repaired; and when it is agreed that the insured may labor for the 
 recovery of the property the insurer is liable for the expense incurred thereby; 
 such expense in either case being in addition to the total loss, if that afterward 
 occurs. (R. C. 1905, $ 6049.) 
 
 § 6617. Liability for Insured's Contribution to General Average.] 
 A marine insurer is liable for a loss falling upon the insured through a con- 
 tribution in respect to the thing insured, required to be made by him towards 
 a general average loss called for by a peril insured against. (R. C. 1905, § 
 6050.) ■ 
 
 § 6618. Subrogation of Right to Contribution.] When a person insured 
 by a contract of marine insurance has a demand against others for contribution 
 he may claim the whole loss from the insurer, subrogating him to his own right 
 to contribution. But no such claim can be made upon the insurer after the 
 separation of the interests liable to contribution, nor when the insured, having 
 the right and opportunity to enforce contribution from others, has neglected or 
 waived the exercise of that right. (R, C. 1905, § 6051.) 
 
 § 6619. Liability for Partial Loss of Ship.] In the case of a partial 
 loss of a ship or its equipment the old materials are to be applied toward pay- 
 ment for the new and whether the ship is new or old a marine insurer is liable 
 for only two-thirds of the remaining cost of the repairs, except that he must 
 pay for anchors and cannon in full and for sheathing metal at a depreciation 
 of only two and one-half per cent, for each month that it has been fastened to 
 the ship. (R. C. 1905, § 6052.) 
 
 CHAPTER 79. 
 Fire Insurance. 
 
 § 6620. Rescission for Alteration in Use Increasing Risk.] An alter- 
 ation in the use or condition of a thing insured from that to which it is limited 
 by the policy, made without the consent of the insurer by means within the 
 control of the insured and increasing the risk entitles an insurer to rescind a 
 contract of fire insurance. (R. C. 1905, § 6053.) 
 
 A policy limiting the use of buildings insured to certain purposes is void 
 if building is used without knowledge of insured for purposes increasing 
 hazard. School District v. Insurance Co., 7 S. D. 458, 64 V W. 527. 
 
 Indications that building may be intentionally set on fire as an increase 
 of insurance risk. :',1 L. R. A. (N. S.) 603. 
 
 Necessity of proof of increase of risk to avoid insurance policy because 
 of the vacancy of insured property. 12 L. R. A. (N. S.) 456. 
 § 6621. Not rp BlSK Not Increased.] An alteration in the use or con- 
 
STATE OF NORTH DAKOTA 85 
 
 dition of a thing insured from that to which it is limited by the policy, which 
 does not increase the risk, does not affect a contract of fire insurance. (R. C. 
 1905, § 6054.) 
 
 As to similar provision in Cal. Civ. Code, § 2754. See Stinkard v. 
 
 Manchester Fire Assur. Co., 122 Cal. 595, 55 Pac. 417. 
 
 § 6622. When Contract Unaffected, Though Risk Increased.] A con- 
 tract of fire insurance is not affected by any act of the insured subsequent to 
 tlic execution of the policy, which does not violate its provisions, even though it 
 increases the risk and is the cause of a loss. (R. C. 1905, § 6055.) 
 
 § 6623. Measure of Indemnity.] If there is no valuation in the policy, 
 the measure of indemnity in an insurance against fire is the full amount stated 
 in the policy; but the effect of a valuation in a policy of fire insurance is the 
 same as in a policy of marine insurance. (R. C. 1905, § 6056.) 
 
 § 6624. Face of Policy to be Paid in Case of Loss.] Whenever any 
 policy of insurance shall be written to insure any real property in this state 
 against loss by fire and that property insured shall be destroyed without fraud 
 on the part of the insured or his assigns, -the stated amount of the insurance 
 written in such policy shall be taken conclusively to be the true value of the 
 property insured. (1907, Ch. 15S.) 
 
 § 6625. Standard Policy.] No fire insurance company, corporation or 
 association, their officers or agents, shall make, issue, use or deliver for use 
 any fire insurance policy or renewal of any fire 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 the printed form of con- 
 tract or policy heretofore filed in the office of the commissioner of insurance 
 as a standard policy for this state and no other or different provisions, agree- 
 ment, condition or clause shall in any manner be made a part of such contract 
 or policy or be indorsed thereon or delivered therewith, except as follows, 
 to-wit : 
 
 1. The name of the company, its location and place of business, the date 
 of its incorporation or organization, and the state or county under which the 
 same is organized, the amount of paid up capital stock, whether it is a stock 
 or mutual company, the names of its officers, the number and date of the 
 policy; and if it is issued through a manager or agent of the company, the 
 words, "this policy shall not be valid until countersigned by the duly author- 
 ized manager or agent of the company, at " 
 
 may be printed on policies issued on property in tins state. 
 
 2. Printed or written forms of description and specifications or schedules 
 of the property covered by any particular policy and any other matter neces- 
 sary to express clearly nil the facts and conditions of insurance on any par- 
 ticular risk, which facts or conditions shall in no case be inconsistent with or 
 a waiver of any of the provisions or conditions of the standard policy herein 
 provided for may be written upon or attached or appended to any policy 
 issued on property in this state. 
 
 3. A company, corporation or association organized or incorporated under 
 and in pursuance of the laws of this state, or elsewhere, if entitled to do busi- 
 ness in this state, may with the approval of the commissioner of insurance, if 
 the same is not already included in the standard form as filed in the office of 
 
86 INSURANCE LAWS 
 
 tin' commissioner of insurance, print on its policies any provision which it is 
 required by law to insert therein, if such provision is not in conflict with the 
 laws of this Btate or the United States, or of the provisions of the standard 
 form provided for herein, but said [provision shall be printed apart from the 
 other provisions, agreements or conditions of the policy and in type not smaller 
 than the body of the policy and under a separate title, as follows: " Pro- 
 visions required by law to be stated in this policy" and be a part of said 
 policy. 
 
 •4. There may be indorsed on the outside of any policy herein provided 
 for the name, with the word, "agent or agents" and place of business, of 
 any insurance agent or agents, either by writing, printing, stamping or other- 
 wise. 
 
 5. When two or more companies, each having previously complied with the 
 laws of this state, unite to issue a joint policy, there may be expressed in the 
 heading of such policy the fact of the severalty of the contract; also the pro- 
 portion of premiums to be paid to each company and the proportion of liability 
 which each company agrees to assume. And in the printed conditions of such 
 policy the necessary change may be made from the singular to the plural num- 
 ber, when reference is had to the companies issuing such policies. (R. C. 1905, 
 § 6057.) 
 
 Insurance commissioner cannot compel use of standard policy prepared 
 
 by himself. Phenix Ins. Co. v. Perkins, 19 S. D. 59, 101 N. W. 1110. 
 
 § 6626. Construction of Standard Policy.] Policies of insurance in 
 the form prescribed by the last section shall be in all respects subject to the 
 same rules of construction as to their effect or the waiver of any of their pro- 
 visions as if the form thereof had not been prescribed. (R. C. 1905, § 6058.) 
 
 Policy of insurance cannot be avoided after loss where premium was 
 
 received with full knowledge of factor. Leisen v. St. Paul F. & M. Ins. 
 
 Co., 20 N. D. 316, 30 L. R. A. (N. S.) 539, 127 N. W. 837. 
 
 CHAPTER 80. 
 Life and Health Insurance. 
 
 § 6627. When Payable.] An insurance upon life may be made payable 
 on the death of the person or on his surviving a specified period, or periodically 
 so long as he shall live, or otherwise contingently on the continuance or termi- 
 nation of life. (R. C. 1905, § 6059.) 
 
 § 6628. In Whom Person Has Insurable Interest.] Every person has 
 an insurable interest in the life and health: 
 
 1. Of himself. 
 
 i'. Of any person on whom he depends wholly or in part for education or 
 support. 
 
 3. Of any person under a legal obligation to him for the payment of 
 money, or respecting property or services, of which death or illness might delay 
 or prevent the performance; and, 
 
 4. Of any person upon whose life any estate or interest vested in him 
 depends. (R. C. 1905, § 6060.) 
 
STATE OF NORTH DAKOTA 87 
 
 Conflict of laws as to insurable interest. 63 L. R. A. 856; 23 L. R. A. 
 
 (N. S.) 976. 
 
 Insurable in the life of another, and necessity of. 57 Am. Dee. 93; 46 
 
 Am. Rep. 189; 52 Am. Rep. 135; 58 Am. Rep. 852. 
 
 § 6629. Policy TRANSFERABLE.] A policy of insurance upon life or health 
 may pass by transfer, will or succession to any person, whether he has an 
 insurable interest or not, and such person may recover upon it whatever the 
 insured might have recovered. (R. C. 1905, § 6061.) 
 
 Policy made payable to insured or his personal representative may be 
 
 willed, but it is subject to statutory allowance of surviving husband or wife 
 
 and minor children. Meyer v. Meyer, 25 S. D. 596, 127 N. W. 595. 
 Assignment of life insurance policy. 87 Am. St. Rep. 484. 
 Validity of assignment of life insurance policy to one having no insur- 
 able interest. 27 Am. St. Rep. 327; 16 Am. St. Rep. 906. 
 
 § 6630. When Notice op Transfer Unnecessary.] Notice to an insurer 
 of a transfer or bequest therefor is not necessary to preserve the validity of a 
 policy of insurance upon life or health, unless thereby exjjressly required. (R. 
 C. 1905, $ 6062.) 
 
 ■§ 6631. Measure of Indemnity.] Unless the interest of a person insured 
 is susceptible of exact pecuniary measurement, the measure of indemnity under 
 a policy of insurance upon life or health is the sum fixed in the policy. (R. C. 
 1905, § 6063.) 
 
 § 6632. Agent Defined.] Any person who shall solicit an application for 
 insurance upon the life of another shall, in any controversy between the assured 
 or his beneficiary and the company issuing any policy upon such application 
 be regarded as the agent of the company and not the agent of the assured. 
 (1907, Ch. 146.) 
 
 § 6633. Suicide no Defense After One Year.] In all suits on policies 
 of insurance on life issued by any regular or assessment or fraternal beneficiary 
 association, company, or corporation, doing business in this state, it shall be 
 no defense after the policy has been in force one year, that the insured com- 
 mitted suicide, and any provision or stipulation in the policy to the contrary 
 shall be void. (1911, Ch. 157; R, C. 1905, § 6064.) 
 
 Defence that insured committed suicide cannot be set up, when suicide 
 
 occurs after expiration of one year from date of policy. Harrington v. 
 
 Mutual L. Ins. Co., 21 N. D. 447, 34 L. R. A. (N. S.) 373, 131 N. W. 246. 
 Power of legislature to forbid defence of suicide in life insurance. 31 
 
 L. R. A. 831. 
 
 Conflict of laws as to suicide provision in insurance contract. 63 L. R. 
 
 A. 867; 23 L. R. A. (N. S.) 981. 
 
 CHAPTER 81. 
 
 Standard Forms of Insurance Policies; Provisions in Life Insurance 
 
 Policies. 
 
 § 6634. Authority Required to Issue Policies.] No policy of life insur- 
 ance shall be issued or delivered in this state and no policy of life insurance 
 
88 INSURANCE LAWS 
 
 of a life insurance company organized under the laws of this state shall be 
 
 issued unless authorized by the provisions of this .act. (1907, Ch. 140, § 1.) 
 
 § fi635. Standard Poems.] The following are established as standard 
 forms in which policies of life insurance may be issued and delivered in this 
 state, and in which policies of life insurance companies organized under the 
 laws of this state may be issued: 
 
 NORTH DAKOTA STANDARD LIFE INSURANCE POLICY. 
 (Insert "Ordinary" or "Limited Payment.") 
 
 Age 
 
 Amount Premium $ . 
 
 .Life 
 
 Of North Dakota 
 
 In consideration of Dollars, 
 
 receipt of which is hereby acknowledged, and the payment of (insert amounts 
 and times of payments of premiums) nntil (insert "the death of the insured" 
 
 in ordinary life and " full year's premiums shall have been paid or 
 
 until the prior death of the insured" in limited payment life.) 
 
 Promises to pay upon receipt at the home office of the 
 
 company in of due proof of death of 
 
 of County of , State of North Dakota. 
 
 herein called the insured, to beneficiary 
 
 with (insert "out" if so desired) right of revocation 
 
 dollars, less any indebtedness hereon to the company and any unpaid portion 
 of the premium for the then current policy year. 
 
 CHANGE of Benefictaey.] When the right of revocation has been reserved, 
 or in case of death of any beneficiary under either a revocable or irrevocable 
 designation the insured subject to any existing assignment of the policy, may 
 designate a new beneficiary with or without reserving right of revocation by 
 filing written notice thereof at the home office of the company, accompanied by 
 the policy for a suitable endorsement thereon. ' If any beneficiary shall die 
 before the insured and the insured shall not have designated a new beneficiary 
 the interest of such beneficiary shall be payable to the insured, (insert "his" 
 or "her") executors, administrators or assigns. 
 
 Payment of PREMIUMS.] The company will accept payment of premiums 
 at other times than as above stated, as follows: 
 
 Except ns herein provided the payment of the premium or installment 
 thereof shall not maintain the policy in force beyond the date when the next 
 premium or installment thereof is payable. 
 
 All premiums fire payable in advance at said home office, or to an agent 
 of the company upon delivery of the receipt signed by one or more of the 
 following officers of the company (insert titles of officers who may sign receipts) 
 and countersigned by the said agent. 
 
STATE OF NOETH DAKOTA 89 
 
 A grace of one month subject to any interest charge at the rate of 
 
 per centum per annum shall be granted for the payment of every premium 
 after the first, during which month the insurance shall continue in force. If 
 the insured shall die during the month of grace the overdue premiums will be 
 deducted from any amount payable hereon in any settlement hereunder. 
 
 Conditions.] (The policy may here provide for restrictions of liability by 
 reason of travel, occupation, change of residence, and suicide. These restric- 
 tions such as refer to military and naval services in time of war, must be 
 applicable only to cases where the act of the insured provided against occurs 
 within two years after the issuance of the policy.) 
 
 Incontestability.] The policy constitutes the entire contract between the 
 parties and shall be incontestable from its date except for non-payments of 
 premiums and except as otherwise provided in this policy. All statements 
 made by the insured shall in the absence of fraud be deemed representations 
 and not warranties, and no such statement shall void this policy unless it is 
 contained in written application and a copy of such a] 'plication shall be 
 endorsed upon or attached to this policy when issued. If the age of the in- 
 sured has been understated the amount payable hereunder shall be such as 
 the premium paid would have purchased at the correct age. 
 
 Participation.] This policy shall participate in the surplus of the com- 
 pany ami beginning not later than the end of the (insert first, second or third) 
 policy year the company will annually determine and account for the portion 
 of the divisible surplus accruing hereon. 
 
 Dividends.] Dividends at the option of the owner of this policy shall on 
 
 the day of of each year (here may be 
 
 inserted "after the first policy year" or "after the second policy year") be 
 either : 
 
 1. Paid in cash, or, 
 
 2. Applied toward payment of any premium or premiums, or, 
 
 3. Applied to the purchase of paid-up additions to the policy, or, 
 
 4. Left to accumulate to the credit of the policy with interest at (here 
 insert a rate not exceeding that used by the company for calculating its 
 reserves) per centum per annum and payable at the maturity of the policy, 
 hut withdrawable at the anniversary of the policy. 
 
 Unless the owner of the policy shall elect otherwise within three months 
 after the mailing by the company of a written notice requiring such election 
 the dividends shall be paid in cash. 
 
 Loans.] After three full years' premiums have been paid, the company at 
 any time, while this policy is in force, will advance, on proper assignment of 
 this policy, and on the sole security thereof at a rate of interest not greater 
 
 than per centum per annum, which interest if not paid annually shall 
 
 be added to the principal and bear the same 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 this policy and on any dividend additions thereto, 
 computed according to the (designate mortality table adopted by the com- 
 pany for computing reserve) mortality table and interest at the rate of (desig- 
 nate rate of interest adopted by the company for computing reserves) per 
 centum per annum, less (here may be inserted not more than two and one-half) 
 
90 INSURANCE LAWS 
 
 per centum of the amount insured by this policy and of the dividend .additions 
 Miorofco. 
 
 The company, however, will deduct from such loan value any existing in- 
 debtedness to the company on the policy and any unpaid balance of the pre- 
 mium for the current policy year, and may collect interest in advance on the 
 loan to the end of the current policy year. Such loan may be deferred by the 
 company for not exceeding six months after the application therefor is made. 
 Failure to repay any such advance or to pay interest shall not void this policy 
 unless the total indebtedness hereon to the company shall be equal or exceed 
 such loan value at the time of such failure and until one month after notice 
 shall have been mailed by the company to the last known address of the 
 insured and of the assignee, if any. No condition other than as herein pro- 
 vided shall be exacted as a prerequisite to any such advance. 
 
 Assignment.] No assignment of this policy shall be binding upon the 
 company until it be filed with the company at its said home office. The com- 
 pany assumes no responsibility as to validity of any assignment. 
 
 Option op Surrender or Lapse.] After this policy shall have been in 
 force three years the owner, within one month after any default may elect (a) 
 to accept the value of this policy in cash, or, (b) to have the insurance con- 
 tinued in force from date of default, without future participation and without 
 the right to loan, for its face amount, including any outstanding dividend 
 additions, less any indebtedness to the company thereon, or, (c) to purchase 
 non-participating paid-up insurance payable at the same time and on the same 
 conditions as this policy. 
 
 The cash value will be the reserve at the date of default on this policy, and 
 on any dividend additions thereto, computed according to the (designate mor- 
 tality table adopted by the company for computing reserves) mortality table 
 and interest at the rate of (designate rate of interest adopted by the company 
 for computing reserves) per centum per annum, less (here may be inserted not 
 more than two and one-half) per centum of the amount insured by this policy 
 and of any dividend additions thereto, and less any existing indebtedness to 
 the company on this policy. Payment of such cash value may be deferred by 
 the company for not exceeding six months after the application therefor is 
 made. The term for which the insurance will be continued or the amount of 
 the paid-up policy will be such as the cash value will purchase as a net single 
 premium at the attained age of insured according to the (designate the mor- 
 tality table adopted by the company for computing reserves) mortality table 
 and interest at the rate of (designate rate of interest adopted by the company 
 for computing reserves) per centum per annum. If the owner shall not, within 
 one month from default, surrender this policy to the company at its home office 
 for a cash surrender value or for paid-up insurance as provided in options (a) 
 and (c) the insurance will be continued as provided in option (b). 
 
 The figures in the following table are computed in accordance with the 
 above provisions and upon the assumption that there is no indebtedness on the 
 policy, and that there are no outstanding dividend additions. 
 
 (At the option of the company the following may be here inserted: "The 
 
 figures apply to a policy for $1,000. As this contract is for $ the loan, 
 
 cash, or paid insurance available in any year will be $ , the amount 
 
 stated in the table for that year:") 
 
STATE OF NOETH DAKOTA 91 
 
 At Lnd of Cash or Loan Paid-up Life Continued Insurance 
 
 Year Value Insurance Years Months Days 
 
 3. $. 
 
 5. $ $ $. 
 
 6. $ $ $. 
 
 7. $ $ : $. 
 
 8. $ $ $. 
 
 9. $ $ $. 
 
 10. $ $ $. 
 
 11. $ $ $. 
 
 12. $ $ $. 
 
 13. $ $ $. 
 
 14. $ $. 
 
 15. $ $. 
 
 16. $ $. 
 
 17. $ $. 
 
 18. $ $ $. 
 
 19. $ $ .$. 
 
 20. $ $ $ 
 
 (Figures for later years will be furnished upon request.) 
 
 Reinstatement.] In case of continued temporary insurance under the 
 above provisions this policy upon evidence of insurability satisfactory to the 
 company may be reinstated within the first three years of the term for which 
 the insurance is continued by payment of arrears of premiums with interest at 
 (here insert not more than six) per centum per annum. 
 
 Options at Maturity.] The insured, by written notice to the company at 
 its home office, and with the written consent of the assignee and irrevocable 
 beneficiary, if any, may elect to have the net sum payable under this policy 
 paid either in cash or as follows: 
 
 1. By the payment of interest thereon at per centum per annum 
 
 I 'livable annually, to the payee under this policy at the end of each year during 
 the life of the payee and by the payment upon the death of the payee of the 
 said net sum and accrued interest to the executors, administrators or assigns 
 of the payee, unless otherwise directed in said notice. 
 
 2. By the payment of equal annual installments for a specified number of 
 years, the first installment being payable immediately, in accordance with the 
 following table for each $1,000 of said net sum. 
 
 3. By the payment of equal annual installments payable at the beginning 
 of each year for a fixed period of twenty years and for so many years longer 
 as the payee shall survive in accordance with the following table for each $1,000 
 of said net sum. 
 
 Installments payable under options two or three which shall not have been 
 paid prior to the death of the payee shall be paid, unless otherwise directed in 
 said notice, to the executors, administrators or assigns of the payee. 
 
 If the insured shall not have directed otherwise, the beneficiary may, after 
 the death of the insured, by like written notice, and with the written consent 
 of the assignee, if any, select either of the above options. 
 
 Unless otherwise specified by the insured the payee may on any interest 
 
02 INSURANCE LAWS 
 
 date receive the amount yet due under option one, and may at any time receive 
 the commuted value of payments yet to be made, computed upon the same basis 
 as option two in the following table, provided that no such commutation will 
 be made under three, except after the death of the payee occurring within the 
 aforesaid twenty years. 
 
 TABLE OF INSTALLMENTS FOR EACH $1,000. 
 
 Age of Payee 
 
 Number of Annual Amount of Each When Policy Amount of Eaeb 
 
 Installments Installment Becomes Payable Installment 
 $ $ 
 
 $ $• 
 
 $ $. 
 
 $ $. 
 
 $ $. 
 
 .$ $. 
 
 $ $. 
 
 $ $. 
 
 $ $. 
 
 $ $. 
 
 $ $. 
 
 $ $. 
 
 $ $. 
 
 $ $. 
 
 $ $. 
 
 $ $. 
 
 $ $. 
 
 $ $. 
 
 $ $. 
 
 $ $. 
 
 Agents are not authorized to modify this policy or extend time for paying 
 a premium. 
 
 In witness whereof the company has caused this policy to be executed this 
 day of 
 
 NORTH DAKOTA STANDARD LIFE INSURANCE POLICY. 
 Endowment. 
 
 Age 
 
 Amount $ Premium $ 
 
 of North Dakota. 
 
 In consideration of dollars, receipt of which is hereby 
 
 acknowledged, and the payment of (here insert amounts and times of payments 
 
 of premiums) until full year's premiums shall have been paid or unti'i 
 
 the prior death of the insured. 
 
 Promise to pay at the home office of the company in 
 
 to of ». . .County of State of 
 
 North Dakota, herein called the insured, on the dav of 
 
STATE OF NORTH DAKOTA 93 
 
 if the insured be then living, or upon receipt at said home 
 
 office of due record | proof) of the prior death of the insured, to 
 
 beneficiar. . ., with (insert "out" if so desired) right of revocation, ■ 
 
 dollars, less any indebtedness hereon to the company and any unpaid portion 
 of the premium for the then current policy year. 
 
 Change of Beneficiary.] When the right of revocation has been reserved 
 or in case of the death of 'any beneficiary under either a revocable or irrev- 
 ocable designation, the insured, subject to any existing assignment of the 
 policy, may designate a new beneficiary with or without reserving right of 
 revocation by filing written notice thereof at the home office of the company 
 accompanied by the policy for suitable endorsement thereon. If any beneficiary 
 shall die before the insured, and the insured shall not have designated a new 
 beneficiary, the interest of such beneficiary shall be payable to the insured 
 (insert "his" or "her") executors, administrators or assigns. 
 
 PAYMENTS OF PREMIUMS.] The company will accept payments of premiums 
 at other times than as stated above, as follows: 
 
 Except as herein provided the payment of a premium or installment thereof 
 shall maintain the policy in force beyond the date when the next premium or 
 installment thereof is payable. 
 
 All premiums are payable in advance at the said home office or to any 
 agent of the company upon delivery of a receipt signed by one or more of the 
 following officers of the company (insert titles of officers who may sign re- 
 ceipts), and countersigned by said agent. 
 
 A grace of one month subject to an interest charge at the rate of 
 
 per centum per annum, shall be granted for the payment of every premium 
 after the first, during which month the insurance shall continue in force. If 
 the insured shall die during the month of grace the overdue premium will be 
 deducted from any amount payable hereon in any settlement hereunder. 
 
 CONDITIONS.] (The policy may here provide for restriction of liability by 
 reason of travel, occupation, change of residence, and suicide. These restric- 
 tions, except such as refer to military and naval service in time of war, must 
 be applicable only to cases where the act of the insured provided against occurs 
 within two years after the issuance of the policy.) 
 
 Incontestability.] This policy constitutes the entire contract between the 
 parties and shall be incontestable from its date, except for non-payment of 
 premiums and except as otherwise provided in this policy. All statements 
 made by the insured shall, in the absence of fraud, be deemed representations 
 and not warranties, and no BUCh statement shall void this policy unless it is 
 contained in a written application and a cony of such application shall be 
 indorsed upon or attached to this policy when issued. If the age of the in- 
 sured has been understated, the amount payable hereunder shall lie such as 
 the premium paid would have purchased at the correct age. 
 
 Participation.] This policy shall participate in the surplus of the com- 
 pany and beginning not later than the end of the (insert first, second or third) 
 policy year the company will annually determine and account for the portion 
 of the divisible surplus accruing hereon. 
 
 Dividends.] Dividends at the option of the owner of this policy shall on 
 
94 INSURANCE LAWS 
 
 the day of of each year (here may be inserted 
 
 "after the first policy year'' or ''after the second policy year") be either: 
 
 1. Paid in cash, or. 
 
 2. Applied toward the payment of any premium or premiums, or,. 
 :;. Applied to the purchase of paid-up additions to the policy, or, 
 
 4. Left to accumulate to the credit of the policy with the interest at (here 
 insert a rate not exceeding that used by the company in calculating its reserves) 
 per ceutum per annum and payable at the maturity of the policy, but with- 
 drawable on any anniversary of the policy. 
 
 Unless the owner of this policy shall elect otherwise within three months 
 after the mailing by the company of a written notice requiring such election, 
 the dividends shall be paid in cash. 
 
 Loans.] After three full years' premiums have been paid the company at 
 any time while this policy is in force, will advance, on proper assignment of 
 the policy and on the sole security thereof, at a rate of intereft not greater 
 
 than per centum per annum, which interest if not paid annually shall 
 
 lie added to the principal and bear the same 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 this policy and on any dividend additions thereto, 
 computed according to the (designate mortality table adopted by the com- 
 pany for computing reserves) mortality table, and interest at the rate of 
 (designate rate of interest adopted by the company for computing reserves) 
 per centum per annum, less (here may be inserted not more than two and one- 
 half) per centum of the amount insured by this policy and of any dividend 
 additions thereto. The company, however, will deduct from such loan value 
 any existing indebtedness to the company on this policy, and any unpaid bal- 
 ance 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. Such loan may be 
 deferred by the company for not exceeding six months after the application 
 therefor is made. Failure to repay any such advance or to pay the interest 
 shall not void this policy unless the total indebtedness hereon to the company 
 shall equal or exceed such loan value at the time of such failure and until one 
 month after notice shall have been mailed by the company to the last known 
 address of the insured and of the assignee, if any. 
 
 No conditions other than as herein provided shall be exacted as a pre- 
 requisite to any such advance. 
 
 Assignment.] No assignment of this policy shall be binding upon the 
 company until it be filed with the company at its said home office. The com- 
 pany assumes no responsibility as to the validity of any assignment. 
 
 Options on Surrender or Lapse.] After this policy shall have been in 
 force three full years the owner, within one month after any default, may elect 
 (a) to accept the value of this policy in cash, or, (b) to have the insurance 
 continue in force from date of default without future participation and without 
 the right to loans, for its face amount, including any outstanding dividend 
 additions, less any indebtedness to the company hereon, or, (e) to purchase 
 uon-participating paid-up insurance payable at the same times and on tin' same 
 conditions as this policy. The cash value will be the reserve at the date of 
 default on this policy am! on any dividend additions thereto computed accord- 
 ing to the (designate mortality table adopted by the company for computing 
 
STATE OF NOETH DAKOTA 95 
 
 reserves) mortality table and interest at the rate of (designate rate of interest 
 adopted by the company for computing reserves) per centum per annum less 
 (here may be inserted not more than two and one-half) per centum of the 
 amount insured by this policy and of any dividend additions thereto, and less 
 any existing indebtedness to the company on this policy. Payment of such 
 cash value may be deferred by the company for not exceeding six months after 
 the application therefor is made. 
 
 The term for which the insurance will be continued or the amount of the paid- 
 up policy will be such as the cash value will purchase as a net single premium 
 at the attained age of the insured, according to the (designate the mortality 
 table adopted by the company for computing reserves) mortality table and 
 interest at the rate of (designate rate of interest adopted by the company for 
 computing reserves) per centum per annum. If the sum applicable to the pur- 
 chase of temporary insurance shall be more than sufficient to continue the 
 insurance to the end of the endowment term named in this policy the excess 
 shall be used to purchase in the same manner non-participating paid-up pure 
 endowment, payable at the end of the endowment term and on the same con- 
 ditions. If the owner shall not, within one month from default surrender this 
 policy to the company at the home office for a cash surrender value or for 
 paid-up insurance as provided in options (a) and (c) the insurance will be 
 continued as provided in option (b). 
 
 The figures in the following table are computed in accordance with the above 
 provisions and upon the assumption that there is no indebtedness on the policy, 
 and tnat there are no outstanding dividend additions. 
 
 (At the option of the company the following may be here inserted: "The 
 
 figures apply to a policy of $1,000. As this contract is for $ , 
 
 the loan, cash, paid-up insurance on pure endowment available in any year will 
 
 be the amount stated in the table for this year.") 
 
 Paid-up Pure 
 
 At End of Cash or Loan Endowment Continued Insurance Endow- 
 
 Year Value Insurance Years Months Days ment 
 
 .",. $ $ $ $ 
 
 4. $ $ $ $ 
 
 5. $ $ $ $ 
 
 6. $ $ $ $ 
 
 7. $ $ $ $ 
 
 9. $ $ $. 
 
 10. $ $ $. 
 
 11. $ $ $. 
 
 12. $ $ $. 
 
 ] 3. $ $ $ $ . 
 
 14. $ $ $ $ . 
 
 15. $ $ $ $. 
 
 16. $ $ $ $ . 
 
 17. $ $ $ $ . 
 
 18. $ $ $ $ . 
 
 19. $ $ $ $. 
 
 20. $ $ $ $. 
 
 (Figures for later years will be furnished upon request.) 
 
96 INSURANCE LAWS 
 
 Reinstatement.] In case of continued temporary insurance under the 
 above provision this policy upon evidence of insurability satisfactory to the 
 company may be reinstated within the first three years of the term for which 
 the insurance is continued, by payment of arrears of premiums with interest 
 at (here insert uot greater than six) per centum per annum. 
 
 Options at Maturity.] The insured, by written notice to the company at 
 its home office, and with written consent of the assigned and irrevocable bene- 
 ficiary, if any, may elect to have the net sum payable under the policy paid 
 either in cash or as follows: 
 
 1. By the payment of interest thereon at per centum per annum 
 
 payable annually, to the payee under this policy at the end of each year during 
 the life of the payee and by the payment upon the death of the payee of the 
 said net sum and accrued interest to the executors, administrators or assigns 
 of the payee, unless otherwise directed in said notice. 
 
 2. By the payment of equal annual installments for a specified number of 
 years, the first installment being payable immediately in accordance with the 
 following table for each $1,000 of said net sum. 
 
 3. By the payment of equal annual installments payable at the beginning 
 of each year for a fixed period of twenty years, and for so many years longer 
 as the payee shall survive, in accordance with the following table for each 
 $1,000 of said net sum. 
 
 Installments payable under options 2 or 3 which shall not have been paid 
 prior to the death of the payee, shall be paid, unless otherwise directed in said 
 notice, to the executors, administrators or assigns of the payee. 
 
 If the insured shall not have directed otherwise the beneficiary may, after 
 the death of the insured, by like written notice, and with the written consent 
 of the assignee, if any, select either of the above options. 
 
 Unless otherwise specified by the insured the payee may on any interest 
 date receive the amount yet due under option 1, and may at any time receive 
 the commuted value of payments yet to be made, computed upon the same basis 
 as option 2 in the following table, provided that no such commutation will be 
 made under 3 except after the death of the payee occurring within the afore- 
 said twenty years. 
 
 TABLE OF INSTALLMENTS FOR EACH $1,000. 
 
 Option 2. Option 3. 
 
 Age of Payee 
 Number of Annual Amount of J-Zueh When Policy Amount of Each 
 
 Installments Installment Becomes Payable Installment 
 
 $ $ 
 
 $ $ 
 
 $ $ 
 
 $ $ 
 
 $ $ 
 
 $ $ 
 
 $ $ 
 
 $ $ 
 
 $ $ 
 
 $ $ 
 
STATE OF NORTH DAKOTA 97 
 
 $ $■ 
 
 $ $. 
 
 $ $• 
 
 $ $ 
 
 Agents are not authorized to modify this policy or to extend the time for 
 (laying a premium. 
 
 In witness whereof the company has caused this policy to be executed this 
 day of 
 
 NORTH DAKOTA STANDARD LIFE INSURANCE POLICY. 
 (Insert "Ordinary" or "Limited Payment") Life Fixed Survivorship An- 
 nuity. 
 
 Age 
 
 Amount $ Premium $ 
 
 of North Dakota. 
 
 In consideration of dollars, receipt of which is hereby 
 
 acknowledged, and of the payment of (here insert amounts and times of pay- 
 ments of premium) until (insert "the death of the insured" in ordinary life 
 
 and " full year's premiums shall have been paid or until the prior 
 
 deatli of the insured" in limited payment life.) 
 
 Promise to pay at its home office in 
 
 dollars in twenty equal annual installments of 
 
 $ to (herein called the beneficiary,) 
 
 (insert "his" or "her") executors, administrators or assigns, with (insert 
 "out" if so desired) right of revocation, if (insert "he" or "she") survives 
 the insured (otherwise to the executors, administrators or assigns of the in- 
 sured) the first installment being payable immediately upon receipt of due 
 proof of the death of the insured, any indebtedness to the company on this 
 policy, together with the balance, if any, of the then current year's premium 
 being deducted from the amounts first payable under this contract. 
 
 Should the beneficiary live to receive the twenty installments payable to 
 ("insert "him" or "her") as above provided, the company will pay (insert 
 "him" or "her") annually during the remainder of (insert "his" or "her") 
 
 life the sum of $ beginning one year after tin' date when the 
 
 twentieth installment payable hereunder shall fall due. 
 
 Change OF BENEFICIARY.] When the rigid of revocation has been reserved, 
 oi- in case of the death of any beneficiary under either a revocable or irrevocable 
 designation, the insured subject to any existing assignment of the policy may 
 
98 INSURANCE LAWS 
 
 designate a new beneficiary with or without reserving right of revocation, by 
 filing written notice thereof at the home office of the company, accompanied 
 by the policy for suitable indorsement thereon. If any beneficiary shall die 
 before the insured and the insured shall not have designated a new beneficiary, 
 the interests of such beneficiary shall be payable to the insured, (insert "his" 
 or "her") executors, administrators or assigns. If a new beneficiary shall be 
 designated only twenty annual installments will be payable under this policy, 
 and future (if necessary, insert "semi" or "quarterly") annual premiums 
 
 will be reduced to dollars each. 
 
 Payment op Premiums.] The company will accept payment of premiums 
 at other times than as stated above, as follows: 
 
 Upon return of this policy to the company accompanied by evidence satisfactory 
 to the company of the death of the beneficiary the company will reduce the 
 future (here insert "annual," "semi-annual" or "quarterly") premium to 
 $ each. 
 
 Except as herein provided the payment of a premium or installment thereof 
 shall not maintain the policy in force beyond the date when the next premium 
 or installment thereof is payable. 
 
 All premiums are payable in advance at said home office, or to an agent 
 of the company upon delivery of a receipt signed by one or more of the fol- 
 lowing officers of the company (insert titles of officers who may sign receipts) 
 and countersigned by said agent. 
 
 A grace of one month subject to an interest charge at the rate of 
 
 per centum per annum shall be granted for the payment of every premium after 
 the first, during which month the insurance shall continue in force. If the 
 insured shall die during the month of grace the overdue premium will be 
 deducted from any amount payable hereon in any settlement hereunder. 
 
 Conditions.] (The policy may here provide for restriction of liability by 
 reason of travel, occupation, change of residence, and suicide. The restrictions, 
 except such as refer to military and naval service in time of war, must be 
 applicable only to cases where the act of the insured provided against occurs 
 within two years after the issuance of the policy.) 
 
 Incontestability.] This policy constitutes the entire contract between the 
 parties and shall be incontestable from its date, except for non-payment of 
 premiums and except as otherwise provided in this policy. All statements 
 made by the insured shall, in the absence of fraud, be deemed representations 
 and not warranties, and no such statement shall void this policy unless it is 
 contained in a written application and a copy of such application shall be 
 indorsed upon or attached to this policy when issued. 
 
 If the age of the insured has been understated or if the age of the bene- 
 ficiary has been overstated, the amount payable hereunder shall be such as the 
 premium paid would have purchased at the correct age. 
 
 Participation.] This policy shall participate in the surplus of the com- 
 pany ami beginning not later than the end of the (insert first, second or third) 
 policy year the company will annually determine and account for the portion 
 of the divisible surplus accruing hereon. 
 
STATE OF NORTH DAKOTA 99 
 
 Dividends.] Dividends at the option of the owner of this policy shall on 
 
 the day of of each year (here may be inserted 
 
 "after the first policy year" or "after the second policy year") be either: 
 
 1. Paid in cash, or, 
 
 2. Applied toward the payment of any premium or premiums, or, 
 
 3. Applied to the purchase of paid-up additions to the policy, payable in 
 twenty annual installments at the same times as the original amount insured 
 under this policy is payable. The payments of such twenty installments shall 
 discharge the company from all liability on account of such dividend addi- 
 tions, or, 
 
 4. Left to accumulate to the credit of the policy with interest at (here 
 insert a rate not exceeding that used by the company in calculating its re- 
 serves) per centum per annum and payable at the maturity of the policy, but 
 withdrawable on any anniversary of the policy. 
 
 Unless the owner of this policy shall elect otherwise within three months 
 after the mailing by the company of a written notice requiring such election, 
 the dividends shall be paid in cash. 
 
 Loans.] After three full years' premiums have been paid the company at 
 any time, while this policy is in force, will advance, on the proper assignment 
 of this policy and on the sole security thereof, at a rate of interest not greater 
 
 than per centum per annum, which interest if not paid annually shall 
 
 be added to the principal and bear the same 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 required to provide for the twenty installments pay- 
 able under this policy and for any dividend additional thereto and no more, 
 computed according to the (designate mortality table adopted by the company 
 for computing reserves) mortality table and interest at the rate of (designate 
 rate of interest adopted by the company for computing reserves) per centum 
 per annum, less (here may be inserted not more than two and one-half) per 
 centum per annum of the amount insured by the policy, and of any dividend 
 additions thereto. The company will deduct, however, from such loan value 
 any existing indebtedness to the company 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. Such loan may be deferred 
 by the company for not exceeding six months after the application therefor 
 is made. Failure to repay any such advance or to pay interest shall not void 
 this policy unless the total indebtedness hereon to the company shall equal or 
 exceed such loan value at the time of such failure, and until one month after 
 notice shall have been mailed by the company to the last known address of the 
 insured and of the assignee, if any. No condition other than as herein pro- 
 vided shall be exacted as a prerequisite to any such advance. 
 
 Assignment.] No assignment of this policy shall be binding upon the 
 company until it be filed with the company at its said home office. The com- 
 pany assumes no responsibility as to the validity of any assignment. 
 
 Options on Surrender or LAPSE.] After this policy shall have been in 
 force three full years the owner, within one month after any default may elect. 
 
 (a) To accept the value of the policy in cash, or, 
 
 (b) To have the insurance continued in force from date of default without 
 
100 INSURANCE LAWS 
 
 future participation and without the right to loans, for its face amount, in- 
 cluding any outstanding dividend additions, less any indebtedness to the com- 
 pany hereon, or, 
 
 (c) To purchase non-participating paid-up insurance, payable except as 
 hereinafter provided, al the same time and on the same conditions as tins policy. 
 The cash value will be the reserve at the date of default required to provide 
 for the twenty installments payable under this policy and for any dividend 
 additions hereto, computed according to the (designate mortality table adopted 
 by the company for computing reserves) mortality table and interest at the 
 rate of (designate rate of interest adopted by the company for computing re- 
 serves) per centum per annum, less (here may be inserted not more than two 
 and one half) per centum of the amount insured by this policy and of any 
 dividend additions thereto, and less any existing indebtedness to the company 
 on this policy. Payment of such casli value may be deferred by the company 
 for not exceeding six mouths after the application therefor is made. The term 
 for which the insurance will be continued or the amount of the paid-up policy 
 will be such as the cash value would purchase as a net single premium at the 
 attained age of the insured according to the (designate the mortality table 
 adopted by the company for computing reserves) mortality table and interest 
 at the rate of (designate the rate of interest adopted by the company for 
 computing reserves) per centum per annum. If the owner shall not within one 
 month from default surrender this policy to the company at its home office for 
 a cash surrender value or paid-up insurance as provided in options (a) and (c) 
 the insurance will be continued as provided in option (b). The paid-up or 
 continued temporary insurance will be payable in twenty equal installments and 
 a payment of twenty installments under either option shall discharge the com- 
 pany from all liability under this policy. The figures in the following table 
 are computed in accordance with the above provisions and upon the assumption 
 that there is no indebtedness upon the policy, and that there are no outstanding 
 dividend additions. (At the option of the company the following may be here 
 inserted: "The figures apply to a policy for $1,000. As this contract is for 
 
 $ the loan, cash or paid-up insurance, available in any year will 
 
 be $ the amount stated in the table for that year.") 
 
 At Kn<i Cash or Paid-up Life Continued Insurance 
 
 of Year Loan Value Insurance Years Months Days 
 
 3 * $ 
 
 4 $ $ 
 
 5 $ $ 
 
 <i * * 
 
 7 $ $ 
 
 8 $ $ 
 
 !» * * 
 
 Id $ $ 
 
 11 $ $ 
 
 L2 $ $ 
 
 13 $ $ 
 
 14 $ $ 
 
 15 * $ 
 
 16 $ $ 
 
STATE OF NORTH DAKOTA 101 
 
 17 $ $ 
 
 18 $ $ 
 
 19 $ $ 
 
 20 $ $ 
 
 (Figures for later years will be furnished upon request.) 
 Reinstatement.] In case of continued temporary insurance under the 
 above provisions this policy upon evidence of insurability satisfactory to the 
 company may be reinstated within the first three years of the term for which the 
 insurance is continued by payment of arrears of premium with interest at (here 
 insert not greater than six) per centum per annum. 
 
 Agents are not authorized to modify this policy or extend the time for pay- 
 ing the premium. 
 
 In witness whereof the company has caused this policy to be executed this 
 day of 
 
 NORTH DAKOTA STANDARD LIFE INSURANCE POLICY. 
 Endowment Fixed Survivorship Annuity. 
 
 Age 
 
 Amount $ Premium $ 
 
 of North Dakota. 
 
 In consideration of dollars, receipt of which is hereby 
 
 acknowledged, and of the payment of (here insert amounts and times of pay- 
 ments of premiums) until full year's premiums shall have been 
 
 paid or until the prior death of the insured. 
 
 Promises to pay at its home office in 
 
 dollars in twenty equal annual installments of 
 
 $ to the insured, the first installment to be payable on 
 
 the day of 190. . . and 
 
 if the insured shall die before receiving all the twenty installments herein pro- 
 vided for, the remainder of such twenty installments shall be payable as they 
 
 fall due to (herein called the beneficiary) , insert 
 
 "his" or "her" executors, administrators or assigns, with (insert 
 
 "out" if so desired) right of revovation, if (insert "he" or she") survives 
 the insured, otherwise to the executors, administrators or assigns of the in- 
 sured. 
 
 Should the insured die before (insert date of maturity) this policy shall be 
 I Livable to the beneficiary (insert "his" or "her") executors, administrators 
 or assigns, if (insert "he" or "she") survives the insured, otherwise to the 
 executors, administrators or assigns of the insured, (the first installment, being 
 payable immediately upon receipt of due proof of the death of the insured) 
 
 Any indebtedness to the company on this policy together with the balance, 
 if any, of the then current year's premium, will be deducted from the amounts 
 first payable under this contract. 
 
102 INSURANCE LAWS 
 
 Should the insured or beneficiary live to receive the twenty installments pay- 
 able as above provided, the company, beginning one year after the date when 
 the twentieth installment payable hereunder shall fall due, will pay the sum of 
 
 $ annually to the insured, or, in the event of the death of the 
 
 insured, to the beneficiary, the said annual payment to be due and payable so 
 long as either the insured or beneficiary is living. 
 
 Change op BENEFICIARY. ] When the right of revocation has been reserved, 
 or in case of the death of any beneficiary under either a revocable or irrevocable 
 designation, the insured, subject to any existing assignment of the policy, may 
 designate a new beneficiary with or without reserving right of revocation by 
 filing written notice thereof at the home office of the company, accompanied 
 by the policy for suitable indorsement thereon. 
 
 If any beneficiary shall die before the insured and the insured shall not 
 have designated a new beneficiary the interest of such beneficiary shall be 
 payable to the insured, (insert "his" or "her") executors, administrators or 
 assigns. If the new beneficiary shall be designated only twenty annual install- 
 ments will be payable under this policy, and future (if necessary, insert 
 
 "semi" or "quarterly") annual premiums will be reduced to 
 
 dollars each. 
 
 Payment of Premiums.] The company will accept payment of premiums 
 at other times than as stated above, as follows: 
 
 Upon return of this policy accompanied by evidence satisfactory to the com- 
 pany of the death of the beneficiary the company will reduce the future (here 
 insert "annual," "semi-annual" or "quarterly") premiums to $ each. 
 
 Except as herein provided the payment of a premium or installment thereof 
 shall not maintain the policy in force beyond the date when the next premium 
 or installment thereof is payable. All the premiums are payable in advance at 
 said home office or to any agent of the company upon delivery of a receipt 
 signed by one or more of the following officers of the company (insert titles 
 of officers who may sign receipts) and countersigned by said agent. 
 
 A grace of one month subject to an interest charge at the rate of 
 
 per centum per annum shall be granted for the payment of every premium 
 after the first, during which month the insurance will continue in force. If 
 the insured shall die during the month of grace the overdue premium will be 
 deducted from any amount payable hereon in any settlement hereunder. 
 
 Conditions.] (The policy may here provide for restrictions of liability by 
 reason of travel, occupation, change of residence and suicide. These restric- 
 tions, except such as refer to military and naval service in time of war, must 
 be applicable only to cases where the act of the insured provided against occurs 
 within two years after the issuance of the policy.) 
 
 INCONTESTABILITY.] This policy constitutes the entire contract between 
 tin' parties and shall be incontestable from its date, except for non-payment 
 of premiums and except as otherwise provided in this policy. All statements 
 made by the insured shall in the absence of fraud be deemed representations 
 and not warranties and no such statement shall void this policy unless it is 
 
STATE OF NORTH DAKOTA 103 
 
 contained in a written application and a copy of such application shall be 
 indorsed upon or attached to this policy when issued. 
 
 If the age of the insured lias been understated or if the age of the bene- 
 ficiary has been overstated, the amount payable hereunder shall be such as the 
 premium paid would have purchased at the correct age. 
 
 PARTICIPATION.] This policy shall participate in the surplus of the com- 
 pany and beginning not later than the end of the (insert first, second or third) 
 policy year the company will annually determine and account for the portion of 
 the divisible surplus accruing thereon. 
 
 Dividends.] Dividends at the option of the owner of this policy shall on the 
 
 day of of each year (here may be inserted 
 
 "after the first policy year" or ''after the second policy year") be either: 
 
 1. Paid in cash, or, 
 
 2. Applied toward the payment of any premium or premiums, or, 
 
 3. Applied to the purchase of paid-up additions to the policy, payable in 
 twenty annual installments at the same time as the original amount insured 
 under this policy is payable. The payment of such twenty installments shall 
 discharge the company from all liability on account of such dividend addi- 
 tions, or, 
 
 4. Left to accumulate to the credit of the policy with interest at (here 
 insert a rate not exceeding that used by the company in calculating its re- 
 serves) per centum per annum and payable at the maturity of the policy, but 
 withdrawable on any anniversary of the policy. 
 
 Unless the owner of this policy shall elect otherwise within three months 
 after the mailing by the company of a written notice requiring such election, 
 the dividends shall be paid in cash. 
 
 Loans.] After three full years' premiums have been paid the company at 
 any time, while this policy is in force, will advance on proper assignment of 
 this policy and on the sole security thereof, at a rate of interest not greater 
 
 than per centum per annum, which interest if not paid annually shall 
 
 be added to the principal and bear the same 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 required to provide for the twenty installments pay- 
 able under this policy and for any dividend additions thereto, and no more, 
 computed according to the (designate mortality table adopted by the company 
 for computing reserves) mortality table, and interest at the rate of (designate 
 rate of interest adopted by the company for computing reserves) per centum 
 per annum, less (here may be inserted not more than two and one-haTf per 
 centum) of the amount insured by this policy and of any dividend addition 
 thereto. The company, however, will deduct from such loan value any existing 
 indebtedness to the company 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. Such loan may be deferred by 
 the company for not exceeding six months after the application therefor is 
 made. Failure to repay any such advance or to pay interest shall not void this 
 policy unless the total indebtedness hereon to the company shall equal or exceed 
 such loan value at the time of such failure, and until one month after notice 
 shall have been mailed by the company to the last known address of the in- 
 
1()4 INSURANCE LAWS 
 
 sured, and of th<' assignee, if any. No condition other than as herein provided 
 shall be exacted as a prerequisite to any such advance. 
 
 Assignment.] No assignment of this policy shall ho binding upon the com- 
 pany until it be filed with the company at its said home office. The company 
 assumes no responsibility as to the validity of the assignment. 
 
 Options on Subrendeb or Lapse.] After this policy shall have been in 
 
 force three full years, the owner, within one month after any default, may 
 elect : 
 
 (a) To accept the value of this policy in cash, or, 
 
 (b) To have the insurance continued in force from date of default, with- 
 out future participation and without the right of loans, for its face amount, 
 including outstanding dividend additions, less any indebtedness to the company 
 hereon, or, 
 
 (c) To purchase non-participating paid-up insurance, payable, except as 
 hereinafter provided, at the same time and on the same conditions as this 
 policy. The cash value will be the reserve at the date of default required to 
 provide for the twenty installments payable under this policy and for any 
 dividend additions thereto, computed according to the (designate mortality 
 table adopted by the company for computing reserves) mortality table and 
 interest at the rate of (designate rate of interest adopted by the company for 
 computing reserves) per centum per annum, less (here may be inserted not 
 more than two and one-half) per centum of the amount insured by this policy 
 and of any dividend additions thereto, and less any existing indebtedness to the 
 com] >any on this policy. Payment of such cash value may be deferred by the 
 company for not exceeding six months after the application therefor is made. 
 The term for which the insurance will be continued or the amount of the paid- 
 up policy will be such as the cash value will purchase as a net single premium 
 at the attained age of the insured .according to the (designate the mortality 
 table adopted by the company for computing reserves) mortality table and in- 
 terest at the rate of (designate rate of interest adopted by the company for 
 computing reserves) per centum per annum. If the sum applicable to the pur- 
 chase of temporary insurance shall be more than sufficient to continue the in- 
 surance to the end of the endowment term named in this policy, the excess shall 
 be used to purchase in the same manner non-participating, paid-up pure en- 
 dowment, payable at the end of the endowment term on the same conditions. 
 
 If the owner shall not within one month from default surrender this policy 
 to the company at its home office for a cash surrender value or for paid-up 
 insurance as provided in options (a) and (c) the insurance will be continued 
 as provided in option (b). The paid-up or continued temporary and pure 
 endowment insurance will be payable in twenty equal annual installments and 
 the payment of twenty installments under either option shall discharge the 
 company from all liability under this policy. 
 
 The figures in the following table are computed in accordance with the 
 above provisions and upon the assumption that then 1 is no indebtedness on the 
 policy, and that there are no outstanding dividend additions. 
 
 (At the option of the company the following may be here inserted: ''The 
 figures apply to a policy of $1,000. As this contract is for $ the 
 
STATE OF NORTH DAKOTA 105 
 
 loan, cash, paid-up insurance or pure endowment available in any year will 
 be the amount stated in the table for that year.") 
 
 At End Cash or Paid-up Pure 
 
 of Loan Endowment Continued Insurance Endow- 
 
 Year Value Insurance Years Months • Days ments 
 
 3 $ $ $ 
 
 4 $ . $ $ 
 
 5 $ $ $ 
 
 6 $ •$ $ 
 
 7 $ $ $ 
 
 8 $ $. 
 
 9 $ $. 
 
 10 $ $. 
 
 11 $ $• 
 
 12 * $. 
 
 13 $ $. 
 
 14 $ .$ . 
 
 15 $ $. 
 
 16 $ $ $ 
 
 17 if $ $ 
 
 18 $ $ $ 
 
 19 $ $ $ 
 
 20 $ $ $ 
 
 (Figures for later years will be furnished upon request.) 
 Reinstatement.] In case of continued temporary insurance under the 
 above provisions this policy upon evidence of insurability satisfactory to the 
 company may be reinstated within the first three years of the term for which 
 the insurance is continued by payment of arrears of premiums with interest 
 at ( here insert not greater than six) per centum per annum. 
 
 Agents are not authorized to modify this policy or extend time for paying 
 a premium. 
 
 In witness whereof, the company has caused this policy to be executed this 
 day of 
 
 NORTH DAKOTA STANDARD LIFE INSURANCE POLICY. 
 
 Term. 
 
 Age 
 
 Amount $ Premium $ 
 
 of North Dakota. 
 
 In consideration of dollars, receipt of which is hereby 
 
 acknowledged, and of the payment <>r' (here insert amounts ami times of pay- 
 ments of premiums) until full year's premiums shall have been paid 
 
 or until the prioi death of the insured, promises to pay upon receipt at the 
 
106 INSURANCE LAWS 
 
 home office of the company in of due proof of the death of 
 
 of county of State of North 
 
 Dakota, herein called the insured, within years from the date hereof, 
 
 dollars, less any indebtedness hereon to the company and any 
 
 unpaid portion of the premium £or the then current policy year, at said home 
 
 office, to beneficiar. . . .with (insert "out" if so desired) right 
 
 of revocation. 
 
 Change of Beneficiary.] When the right of revocation has been reserved, 
 or in case of the death of any beneficiary under either a revocable or irrevocable 
 designation, the insured,, subject to any existing assignment of the policy, may 
 designate a new beneficiary with or without reserving the right of revocation by 
 filing written notice thereof at the home office of the company, accompanied 
 by the policy for suitable indorsement thereon. If any beneficiary shall die 
 before the insured and the insured shall not have designated a new beneficiary 
 the interest of such beneficiary shall be payable to the insured, (insert "his" 
 or 'her") executors, administrators or assigns. 
 
 Payment of Premiums.] The company will accept payment of premiums 
 at other times than as stated above, as follows: 
 
 , Except as herein provided the payment of a premium or installment thereof 
 shall not maintain the policy in force beyond the date when the next premium 
 or installment thereof is payable. 
 
 All premiums are payable in advance at said home office, or to an agent of 
 the company upon delivery of a receipt signed by one or more of the following 
 officers of the company (insert titles of officers who may sign receipts) and 
 countersigned by said agent. 
 
 A grace of one month subject to an interest charge at the rate of 
 
 per centum per annum shall be granted for the payment of every premium 
 after the first, during which month the insurance shall continue in force. If 
 the insured shall die during the month of grace the overdue premium will be 
 deducted from any amount payable hereon in any settlement hereunder. 
 
 Conditions.] (The policy may here provide for restrictions of liability by 
 reason of travel, occupation, change of residence and suicide. These restric- 
 tions, except such as refer to military and naval service in time of war, must 
 be applicable only to cases where the act of the insured provided against occurs 
 within two years after issuance of the policy.) 
 
 Incontestability.] This policy constitutes the entire contract between 
 the parties and shall be incontestable from its date, except for non-payment 
 of premiums and except as otherwise provided in this policy. All statements 
 made bv the insured shall in the absence of fraud be deemed representations 
 and not warranties and no such statement shall void this policy unless it is 
 contained in a written application and a copy of such application shall be 
 indorsed upon or attached to this policy when issued. 
 
 If the age of the insured has been understated or if the age of the bene- 
 ficiary has been overstated, the amount payable hereunder shall be such as the 
 premium paid would have purchased at the correct age. 
 
 Participation.] This policy shall participate in the surplus of the com- 
 
STATE OF NORTH DAKOTA 107 
 
 pany and beginning not later than the end of the (insert first, second or third) 
 policy year the company will annually determine and account for the portion of 
 the divisible surplus accruing thereon. 
 
 Dividends.] Dividends at the option of the owner of this policy shall on the 
 
 day of of each year (here may be inserted 
 
 "after the first policy year" or "after the second policy year") be either: 
 
 1. Paid in cash, or, 
 
 2. Applied toward the payment of any premium or premiums, or (the 
 policy, at the option of the company, may here provide for a further option, as 
 follows) : 
 
 3. Left to accumulate to the credit of the policy with interest at (here 
 insert a rate not exceeding that used by the company in calculating its re- 
 serves) per centum per annum and payable at the maturity of the policy, or at 
 the expiration of the term, but withdrawable on any anniversary of the policy. 
 
 Unless the owner of this policy shall elect otherwise within three months 
 after the mailing by the company of a written notice requiring such election, 
 the dividends shall be paid in cash. 
 
 Assignment.] No assignment of this policy shall be binding upon the com- 
 pany, until it be filed with the company at its said home office. The company 
 assumes no responsibility as to the validity of any assignment. 
 
 (If the term of the policy is for more than twenty years, the company shall 
 provide for continuance of insurance on surrender or lapse in the following 
 form : ) 
 
 Continuance op Insurance on Lapse.] In event of default in premium 
 payments after this policy shall have been in force three full years, the reserve 
 hereon according to the (designate mortality table adopted by the company for 
 com] aiting reserves) mortality table and interest at the rate of (designate rate 
 of interest adopted by the company for computing reserves) per centum per 
 annum, less (here may be inserted not more than two and one-half) per centum 
 of the amount insured by this policy will be applied to the purchase of non- 
 participating continued temporary insurance for the face amount of this policy 
 at net single premium rates at the attained age of the insured according to 
 the same table of mortality and rate of interest. 
 
 TABLE OF CONTINUED INSURANCE. 
 
 At End Continued Insurance 
 
 of Year Years Months Days 
 
 4 
 
 5 
 
 6 
 
 7 
 
 8 
 
 9 
 
 Id 
 
 11 
 
 12 
 
 13 
 
 14 
 
108 INSURANCE LAWS 
 
 15 
 16 
 17 
 lfe 
 10 
 20 
 
 (Figures for later years will be furnished on request.) 
 (If the term of the policy is for more than twenty years the company shall 
 provide for reinstatement in the following form:) 
 
 Reinstatement.] Upon evidence of insurability satisfactory to the com- 
 pany this policy may be reinstated within the first three years of the term for 
 which the insurance is continued by payment of arrears of premiums with 
 interest at (here insert not greater than six) per centum per annum. 
 
 Options at Maturity.] The insured, by written notice to the company at 
 its home office and with written consent of the assignee and irrevocable bene- 
 ficiary, if any. may elect to have the net sum payable under this policy paid 
 either in cash or as follows: 
 
 1. By the payment of interest thereon at per centum per annum, 
 
 pay aide annually to the payee under this policy at the end of each year during 
 the life of the payee and by the payment upon the death of the payee of the 
 said net sum and accrued interest to the executors, administrators or assign 
 of the payee, unless otherwise directed in said notice. 
 
 2. By the payment of equal annual installments for a specified number of 
 years, the first installment being payable immediately, in accordance with the 
 following table for each $1,000 of said net sum. 
 
 3. By the payment of equal annual payments payable at the beginning nf 
 each year for a fixed period of twenty years and for so many years longer as 
 the payee shall survive, in accordance with the following table for each * 1,000 
 of said net sum. 
 
 Installments payable under options (2) or (3) which shall not have been 
 paid prior to the death of the payee shall be paid, unless otherwise directed in 
 said notice, to the executors, administrators, or assigns of the payee. 
 
 If the insured shall not have directed otherwise the beneficiary may. after 
 the death of the insured, by like written notice, and with the written conceit 
 of the assignee, if any, select either of the above options. 
 
 Ui less otherwise specified by the insured the payee may on any interest 
 date receive the amount yet due under option (1), and may at any time receive 
 the commuted value of payments yet to be made, computed upon the same basis 
 as option (2) in the fo^owing table, provided that no such commutation will 
 be made under (3) except after the death of the payee occurring within the 
 aforesaid twenty years. 
 
 TABLE OF IXSTA1 I.MFNTS FOR FACH $1,000. 
 
 (Option 2) (Option 3) 
 
 Number of Amount of Age of Payee Amount Of 
 
 Annual Each When Policy Each 
 
 Installments Installment I'.ccomcs Payable Installment 
 
 (Blank lines) 
 
STATE OF NORTH DAKOTA ]09 
 
 Agents are not authorized to modify this policy or to extend the time for 
 paying a premium. 
 
 In witness whereof, the company lias caused this policy to be executed this 
 day of 
 
 NORTH DAKOTA STANDARD LIFE INSURANCE POLICY. 
 Term with right to renew and change. 
 
 Age 
 
 Amount $ » Premium $ 
 
 Of North Dakota. 
 
 In consideration of dollars, receipt of which is 
 
 hereby acknowledged, and of the payment of (here insert amounts and times 
 
 of payments of premiums) until full year's premiums shall have 
 
 been paid or until the prior death of the insured. 
 
 Promises to pay upon receipt at the home office of the company in 
 
 of due proof of the death of of , County of 
 
 , State of North Dakota, herein called the insured, within 
 
 years from the date hereof dollars, less any 
 
 indebtedness hereon to the company and any unpaid portion of the premium 
 
 for the then current policy year at said home office, to 
 
 beneficial - with (insert ''out'' if so desired) right of revocation. 
 
 Change of Beneficiary.] When the right of revocation has been reserved, 
 or in case of the death of any beneficiary under either a revocable or irrevo- 
 cable designation, the insured, subject to any existing assignment of the policy, 
 may designate a new beneficiary with or without reserving the right of revoca- 
 tion by filing written notice thereof at the home office of the company, accom- 
 panied by the policy for suitable indorsement thereon. If any beneficiary shall 
 die before the insured and the insured shall not have designated a new bene- 
 ficiary the interest of such beneficiary shall lie payable to the insured, (insert 
 "his" or "her!") executors, administrators or assigns. 
 
 Payment of Premiums.] The company will accept payment of premiums 
 at other times than as stated above, as follows: 
 
 Except as herein provided the payment of ;i premium or installment thereof 
 shall not maintain the policy in force beyond the date when the next premium 
 oi- installment thereof is payable. 
 
 All premiums are payable in advance at said home office, or to an agent 
 of the company upon delivery of a receipt signed by one or more of the fol- 
 lowing officers of the company (insert titles of officers who may sign receipts) 
 and countersigned by said agent. 
 
 A grace of one month subject to an interest charge at the rate of 
 
 per centum per annum shall be granted for the payment of every premium 
 after the first, during which month the insurance shall continue in force. If 
 the insured shall die during the month of grace the overdue premium will be 
 
 deducted from anv amount payable hereon in any settlement hereunder. 
 
HO INSURANCE LAWS 
 
 Conditions.] (The policy may here provide Cor restrictions of liability by 
 reason of travel, occupation, change of residence and suicide. These restric- 
 tions, except such as refer to military and naval service in time of war, must 
 he applicable only to cases where the act of the insured provided against occurs 
 within two years after the issuance of the policy.) 
 
 Incontestability.] This policy constitutes the entire contract between the 
 parties and shall lie incontestable, from its date, except for non-payment of 
 premiums and except as otherwise provided in this policy. All statements 
 made by the insured shall in the absence of fraud be deemed representations 
 and not warranties and no such statement shall void this policy unless it is 
 contained in a written application and a copy of such application shall be 
 indorsed upon or attached to this policy when issued. 
 
 If the age of the insured has been understated, the amount payable here- 
 under shall be such as the premium paid would have purchased at the correct 
 age. 
 
 Participation.] This policy shall participate in the surplus of the company 
 and beginning not later than the end of the (insert first, second or third) 
 policy year the company will annually determine and account for the portion 
 of the divisible surplus accruing hereon. 
 
 Dividends.] Dividends at the option of the owner of this policy shall on 
 
 the day of of each year (here may be inserted 
 
 "after the first policy year" or "after the second policy year") be either: 
 
 1. Paid in cash, or, 
 
 2. Applied toward the payment of any premium or premiums, (the policy, 
 at the option of the company, may here provide for a further option, as fol- 
 lows) : 
 
 3. Left to accumulate to the credit of the policy with interest at (here 
 insert a rate not exceeding that used by the company in calculating its re- 
 serves) per centum per annum and payable at the maturity of the policy, or at 
 the expiration of the term, but withdrawable on any anniversary of the policy. 
 
 Unless the owner of this policy shall elect otherwise within three months 
 after the mailing by the company of a written notice requiring such election, 
 the dividends shall be paid in cash. 
 
 Privilege op Renewal.] The owner of this policy, if the insured be not 
 over the age of sixty-five years, may renew this policy for the further terms 
 
 of years each by written notice to the company at its said home office 
 
 accompanied by this policy for suitable indorsement on or before the expiration 
 of the insurance hereunder and by paying the premiums to be fixed by the age 
 on the birthday nearest to the date of such renewal in accordance with the fol- 
 lowing table for each one thousand dollars of insurance; if the insured shall 
 be over the age of sixty-five years this policy may upon similar notice be sur- 
 rendered for an ordinary life policy which shall require premiums during life 
 in accordance with the following table for each one thousand dollars of 
 
 insurance. 
 
 TABLE OF PREMIUMS FOR RENEWALS. 
 
 Years Term Premium Ordinary Life Premium 
 
 Attained Payable in Advance Attained Payable in Advance 
 
 Age for Each $1,000 Age for Each $1,000 
 
 (Blank lines) 
 
STATE OF NORTH DAKOTA HI 
 
 Privilege to Change to Other Fobms of Policies.] The owner of this 
 
 policy may at any time within the first years exchange this policy 
 
 for a participating policy Cor the same amount or any less amount upon the 
 ordinary life, limited payment life, or endowment plan upon any anniversary 
 of the policy, or within the month of grace by surrendering the policy to the 
 company at said home office with written notice of the election and by paying 
 the premiums to be fixed by the age on the birthday nearest to the date of such 
 exchange according to the rates of the company then in force. 
 
 Assignment. | No assignment of this policy shall be binding upon the 
 compaaiy, until it be filed with the company at its said home office. The com- 
 pany assumes no responsibility as to the validity of any assignment. 
 
 (If the term of the policy is for more than twenty years, the company shall 
 provide for continuance of insurance on surrender or lapse in the following 
 form : ) 
 
 Continuance op Insurance on Lapse.] In event of default in premium 
 payments after this policy shall have been in force three full years, the reserve 
 hereon according to the (designate mortality table adopted by the company 
 for computing reserves) mortality table and interest at the rate of (designate 
 rate of interest adopted by the company for computing reserves) per centum 
 per annum, less (here may be inserted not more than two and one-half) per 
 centum of the amount insured by this policy will be applied to the purchase 
 of non-participating continued temporary insurance for the face amount of 
 this policy at net single premium rates at the attained age of the insured ac- 
 cording to the same table of mortality and rate of interest. 
 
 TABLE OF CONTINUED INSURANCE. 
 
 At End Continued Insurance 
 
 of Year Years Months Days 
 
 4 
 
 5 
 
 6 
 
 7 
 
 8 
 
 9 
 
 10 
 
 11 
 
 12 
 
 13 
 
 14 
 
 15 
 
 16 
 
 17 
 
 IS 
 
 10 
 
 20 
 
 (Figures for later years will be given upon request.) 
 
112 INSURANCE LAWS 
 
 (If the term of the policy is for more than twenty years the company shall 
 provide for reinstatement in the following form:) 
 
 Reinstatement.] Upon evidence of insurability satisfactory to the com- 
 pany this policy may be reinstated within the first three years of the term for 
 which the insurance is continued by payment of arrears of premiums with 
 interest at (here insert not greater than six) per centum per annum. 
 
 Options at Maturity.] The insured, by written notice to the company at 
 its home office and with written consent of the assignee and irrevocable bene- 
 ficiary, if any, may elect to have the net sum payable under this policy paid 
 either in cash or as follows: 
 
 1. By the payment of interest thereon at per centum per annum, 
 
 payable annually to the payee under this policy at the end of each year during 
 tlic life of the payee and by the payment upon the death of the payee of the 
 said net sum and accrued interest to the executors, administrators or assigns 
 of the payee, unless otherwise directed in said notice. 
 
 2. By the payment of equal annual installments for a specified number of 
 years, the first installment being payable immediately, in accordance with the 
 following table for each $1,000 of said net sum. 
 
 3. By the payment of equal annual payments payable at the beginning cf 
 each year for a fixed period of twenty years and for so many years longer as 
 the payee shall survive, in accordance with the following table for each $1 ,000 
 of said net sum. 
 
 Installments payable under options (2) or (3) which shall not have been 
 paid prior to the death of the payee shall be paid, unless otherwise directed in 
 said notice, to the executors, administrators, or assigns of the payee. 
 
 If the insured shall not have directed otherwise the beneficiary may, after 
 the death of the insured, by like written notice, and with the written consent 
 of the assignee, if any. select either of the above options. 
 
 Unless 1 otherwise specified by the insured the payee ma}' on any interest 
 date receive the amount yet due under option (1), and may at any time receive 
 the commuted value of payments yet to be made, computed upon the same basis 
 as option (2) in the following table; provided that no such commutation will 
 be made under (3) except after the death of the payee occurring within the 
 aforesaid twenty years. 
 
 TABLE OF INSTALLMENTS FOR EACH $1,000. 
 (Option 2) (Option 3) 
 
 Number of Amount of Age of Payee Amount of 
 
 Annual Each When Policy Each 
 
 Installments Installment Becomes Payable Installment 
 
 (Blank lines') 
 
 Agents are not authorized to modify this policy or to extend the time for 
 paying a premium. 
 
 In witness whereof, the company has caused this policy to be executed this 
 day of (1007, Oh. 140, § 2.) 
 
 § 6635a. Single Premium Policies.] Singh 1 premium policies may be 
 issued in any form prescribed in section 2, omitting therefrom provisions or 
 portions thereof applicable only to other than single premium policies. Non- 
 participating policies may be issued in any form prescribed in section 2 if they 
 shall eontair a provision that the policy shall be non-participating, and such 
 
STATE OF NORTH DAKOTA 113 
 
 policies shall omit therefrom clauses for participation is the surplus of the 
 company. (1907, Ch. 140, $ 3.) 
 
 § 6635b. Term INSURANCE.] Policies issued on the standard forms pre- 
 scribed in section 6635 may provide for not more than one year preliminary 
 term insurance by incorporation therein of the following clause immediately 
 preceding the "change of beneficiary'? clause: "The first year's insurance 
 under this policy is term insurance." If the premium charged for term insur- 
 ance under a limited payment life preliminary term policy providing for the 
 payment of all premiums thereon in less than twenty years from the date of 
 the policy or under an endowment preliminary term policy, exceeds that charged 
 for like insurance under twenty payment preliminary term policies of the same 
 company, the reserve thereon at the end of any year, including the first, shall 
 not be less than the reserve on the twenty payment preliminary term policy 
 issued in the same year and at the same age together with an amount which 
 shall be equivalent to the accumulation of a net level premium sufficient to 
 provide for a pure endowment at the end of the premium-payment period equal 
 to the difference between the value at the end of such period of such twenty 
 payment preliminary term policy and the full reserve at such time of such a 
 limited payment or endowment policy. (1909, Ch. 149; 1907, Ch. 140, § 4.) 
 
 § 6635c. Provisions of Life Policies.] No policy of life insurance in 
 form other than is provided in section 6635 shall be issued in this state or be 
 issued by a life insurance company organized under the laws of this state 
 unless the same shall contain the following provisions: 
 
 1. A provision that all premiums shall be payable in advance either at the 
 home office of the company, or to an agent of the company, upon delivery of 
 a receipt signed by one or more of the officers who shall be named in the policy. 
 
 2. A provision for a grace of one month for the payment of every premium 
 after the first, which may be subject to an interest charge during which month 
 the Insurance shall continue in force, which provision may contain a stipulation 
 that if the insured shall die during the month of grace the overdue premium 
 will be deducted in any settlement under the policy. 
 
 3. A provision that the policy shall constitute the entire contract between 
 the parties and shall be incontestable after two years from its date, except 
 for non-payment of premiums and except for violation of the conditions of 
 the policy relating to naval ami military services in time of war. 
 
 4. A provision that ail statements made by the insured shall, in the absence 
 of fraud be deemed representations and not warranties and that no such state- 
 ment shall void the policy unless it is contained in a written application and 
 a copy of such application shall be indorsed upon or attached to the policy when 
 issued. 
 
 5. A provision that if the age of the insured has been understated the 
 amount payable under the policy shall be such as the premium would have 
 purchased at the correct age. 
 
 6. A provision that the policy shall participate in the surplus of the com- 
 pany and that, beginning not later than the end of the third policy year, the 
 company will annually determine and account for the portion of the divisible 
 surplus accruing on the policy, and that the owner of the policy shall have the 
 right each year to have the current dividend arising from such participation 
 
114 INSURANCE LAWS 
 
 paid in cash and if the policy shall provide other dividend options it shall fur- 
 ther provide that if the owner of the policy shall not elect any such other 
 options the dividends shall be paid in cash. This provision shall not be re- 
 quired in non-participating policies. 
 
 7. A provision that after three full year's premiums have been paid the 
 company at any time while the policy is in force will advance on proper assign- 
 ment 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, specifying the mortality table and the rate of in- 
 terest adopted for computing such reserve, 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 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 there- 
 for is made. It shall be further stipulated in the policy that failure to repay 
 any such advance or to pay interest shall not void the policy unless the total 
 indebtedness thereon to the company shall equal or exceed such loan value at 
 the time of such failure nor until one month after notice shall have been mailed 
 by the company to the last known address of the insured and of the assignee, 
 if any. No condition other than as herein provided shall be exacted as a 
 prerequisite to any such advance. This provision shall not be required in term 
 insurances. 
 
 8. A provision which, in event of default in premium payments, after 
 premium shall have been paid for three years, shall secure to the owner of the 
 policy a stipulated form of insurance, the net value of which shall be at least 
 equal to the reserve at the date of default on the policy and on any dividend 
 additions thereto, specifying the mortality table and rate of interest adopted 
 for computing such reserves, less a sum of not more than two and one-half per 
 centum of the amount insured by the policy and of any existing dividend 
 additions thereto, and less any existing indebtedness to the company on the 
 policy. Such provision shall stipulate that the policy may be surrendered to 
 the company at its home office within one month from the date of default for 
 a specified cash value at least equal to the sum which would otherwise be avail- 
 able for the purchase of insurance as aforesaid and may stipulate that the 
 company may defer payment for not more than six months after the application 
 therefor is made. This provision shall not be required in term insurance of 
 twenty years or less. 
 
 9. A table showing in figures the loan values, and the options available 
 under the policies each year upon default in premium payments during at least 
 the first twenty years of the policy, beginning with the year in which such 
 values and options become available. 
 
 10. A 'provision that if, in event of default in premium payments, the value 
 of the policy shall be applied to the purchase of other insurance, and if such 
 insurance shall be in force and the original policy shall not have Keen sur- 
 rendered to the company ami cancelled, the policy may be reinstated within 
 
STATE OF NORTH DAKOTA 115 
 
 three years from such default, upon evidence of insurability satisfactory to 
 the company and payment of arrears of premiums with interest. 
 
 11. A provision that when a policy shall become a claim by the death of 
 the insured settlement shall be made upon receipt of due proof of death, or 
 not later than two months after receipt of such proof. 
 
 12. A table showing the amounts of installments in which the policy may 
 provide its proceeds may be payable. 
 
 13. A title on the face and on the back of the policy correctly describing 
 the same. 
 
 Any of the foregoing provisions or portions thereof relating to premiums 
 not applicable to single [premium] policies, shall to that extent not be in- 
 corporated therein. (1907, Ch. 140, § 5.) 
 
 § 6635d. Provisions Prohibited.] No policy of life insurance in form 
 other than is prescribed in section 6635 shall be issued or delivered in this stal>' 
 or be issued by a life insurance company organized under the laws of this state, 
 if it contain any of the following provisions: 
 
 1. A provision for forfeiture of the policy for failure to repay any loan 
 on the policy or to pay interest on such loan while the total indebtedness on the 
 policy is less than the loan value thereof; or any provision for forfeiture for 
 failure to repay any such loan or to pay interest thereon, unless such provision 
 contain a stipulation that no such forfeiture shall occur until at least one 
 month after notice shall have been mailed by the company to the last known 
 address of the insured and of the assignee, if any. 
 
 2. A provision limiting the time within which any action at law or in 
 equity may be commenced to less than five years after the cause of action shall 
 accrue. 
 
 3. A provision by which the policy shall purport to be issued or to take 
 effect before the original application for the insurance was made, if thereby 
 the assured would rate at an age younger than his age at date when the appli- 
 cation was made, according to his age at nearest birthday. 
 
 4. A provision for any mode of settlement at maturity of less value than 
 the amount insured on the face of the policy plus dividend additions, if any, 
 less any indebtedness to the company on the policy and less any premiums that 
 may by the terms of the policy be deducted. (1907, Ch. 140, § 6.) 
 
 § 6635e. Preliminary Term Policies.] Preliminary term policies not 
 issued on the standard forms shall also be subject to the provisions of section 
 6635b. (1907, Ch. 140, § 7.) 
 
 § 6635f. Form Filed With Insurance Commissioner.] No policy of life 
 insurance shall be issued or delivered in this state, or be issued by a life insur- 
 ance company organized under the laws of this state, until the form of the same 
 has been filed with the insurance commissioner; and after the insurance com- 
 missioner shall have notified any company of his disapproval of any form it 
 shall be unlawful for such company to issue any policy in the form so dis- 
 approved. The commissioner's action shall be subject to review by any court 
 of competent jurisdiction. (1907, Ch. 140, § 8.) 
 
 § 6635g. Provisions Restricted.] The policies of a life insurance com- 
 pany, not organized under the laws of this state, may contain any provision 
 which the law of this state, territory, district or county under which the com- 
 
116 INSURANCE LAWS 
 
 panj is organized; prescribes shall be in such policies when issued in this state, 
 and the policies ol* a life insurance company organized under the laws of this 
 state may, when issued or delivered in any other state, territory, district or 
 county, contain any provision required by the laws of the state, territory, 
 district or county in which the same are issued, anything in this act to the con- 
 trary notwithstanding. (1907, Oh. 140, § 9.) 
 
 § 6635h. What Companies Exempt.] This act (sections 6634-6635i) 
 shall not apply to annuities, industrial policies or to corporations or associa- 
 tions operating on the assessment or fraternal plan. (1907, Ch. 140, $ 10.) 
 
 § 6635i. "Company" Defined.] Wherever the word "company" is used 
 in this act (sections 6634-6635i) it shall be held to include corporations and 
 associations. (1907, Ch. 140, § 11.) 
 
 § 6636. Policy Must Contain Entire Contract.] Every policy of life 
 insurance issued or delivered within this state on or after the first day of 
 January, nineteen hundred and eight, by any life insurance corporation doing 
 business within the state shall contain the entire contract between the parties. 
 (1907, Ch. 155.) 
 
 CHAPTER 82. 
 
 Policies op Health or Accident Insurance. 
 
 § 6637. Typography of Policy, and Provisions Required.] No policy 
 of insurance against loss or damage by the sickness, bodily injury or death by 
 accident of the assured shall be issued or delivered in this state unless the same 
 shall be plainly printed, no portion thereof in smaller than long primer type, 
 and every policy so issued and delivered shall contain the following provisions: 
 
 1. A provision that notice of accident or disability shall be given within 
 forty (40) days, unless such notice may be shown not to have been reasonably 
 possible, to some certain office or officer designated therein. 
 
 2. A provision that the policy or certificate contains the entire contract. 
 
 .'!. A provision that if a past-due premium is accepted after lapse, such 
 acceptance shall reinstate the policy in full. 
 
 4. A provision that if the occupation of the insured be changed to a more 
 hazardous one, then the benefit and payment to be such as the premium would 
 pay for in that occupation. 
 
 5. All benefits called for by the policy shall be specifically stated in full 
 therein, and all exceptions shall be stated specifically and with the same 
 prominence as the benefits. (1911, Ch. 158, § 1.) 
 
 § 6638. Provisions Forbidden.] No policy of insurance against loss or 
 damage by the sickness, bodily injury, or death by accident of the assured shall 
 be issued or delivered in this state if it contain any of the following provisions: 
 
 1. A provision limiting the time in which an action at law or in equity may 
 be commenced to less than two years after date upon which final proof of loss 
 or disability shall have been filed with the company. 
 
 2. A provision referring to the constitution, by-laws or rules of the com- 
 pany or association or attempting In make the' same a part of the policy. 
 
 :;. A provision Cor the deduction of advance premiums or assessments from 
 benefits payable under the terms of the policy. 
 
STATE OF NORTH DAKOTA 117 
 
 4. A provision limiting the amount of indemnity to be paid to a sum 
 less than the indemnity as stated in the policy and for which the premium has 
 been paid. (1911, Ch. 158, § 2.) 
 
 § 6639. Application of This Chapter.] This act shall apply to all" 
 companies, corporations, or associations issuing a policy of insurance against 
 loss or damage caused by the sickness, bodily injury, or death by accident of 
 the assured, except fraternal beneficiary associations. (1911, Ch. 158, § 3.) 
 
 § 6640. Fokiu OF Policy TO BE FILED With INSURANCE COMMISSIONER FOR 
 Approval.] No policy of insurance against loss or damage by the sickness, 
 bodily injury, or death by accident of the assured shall be issued or delivered 
 in this state by any company, corporation, or association until the form of the 
 same together with a table of rates and classification of risks has been filed 
 with the commissioner of insurance; and after the commissioner of insurance 
 shall have notified any company, corporation, or association of his disapproval 
 of any form, stating his reasons therefor in writing, it shall be unlawful for 
 such company, corporation, or association to issue any policy in the form so 
 disapproved. The commissioner's action shall be subject to review by any 
 court of competent jurisdiction. (1911, Ch. 158, § 4.) 
 
 CHAPTER 83. 
 
 Indemnity. 
 
 § 6641. Defined.] Indemnity is a contract by which one engages to save 
 another from a legal consequence of the conduct of one of the parties or of 
 some other person. (R. C. 1905, § 6065.) 
 
 Contracts of indemnity within the statute of frauds. 42 Am. St. Rep. 
 3 86. 
 
 As to similar provision in Cal. Civ. Code, section 2772. See Graves v. 
 Moore, 58 Cal. 435; Magee v. McManus, 70 Cal. 553, 12 Pac. 451. 
 
 § 6642. Against UNLAWFUL Act Void.] An agreement to indemnify a 
 person against an act thereafter to he done is void, if the act is known by such 
 person at the time of doing it to be unlawful. (R. C. 1905, § 6066.) 
 
 Validity of agreement to indemnify hail in a criminal case. 4 L. R. A. 
 78; 20 L. R. A. (N. S.) 58. 
 
 Agreements to indemnify against illegal acts. 40 Am. Dec. 425. 
 
 § 6643. Against Act Done Valid, Unless Felony.] An agreement to 
 indemnify a person against an act already done is valid, even though the act 
 was known to be wrongful, unless it was a felony. (R. C. 1905, § 6067.) 
 
 § 6644. Against Act of Person Includes A.gents.] An agreement to 
 indemnify against the acts of a certain person, applies not only to his acts and 
 their consequences, but also to those of his agents. (R. C. 1905, § 6068.) 
 
 § (i(i4."). SEVERAL INCLUDES Each.] An agreement to indemnify several 
 persons applies to each unless a contrary intention appears. (R. C. 1905, 
 § 6069.) 
 
 § 6646. When Liable Jointly With Person Indemnified.] One who 
 
 indemnifies another person against an act to be clone by the latter, is liable 
 
118 INSURANCE LAWS 
 
 jointly with the person indemnified and separately to every person injured by 
 such act. (R. C. 1905, $ 6070.) 
 
 § 6647. Rules to be Applied in Interpretation.] In the interpretation 
 of a contract of indemnity the following rules are to be applied, unless a con- 
 trary intention appears: 
 
 1. Upon an indemnity against liability, expressly or in other equivalent 
 terms, the person indemnified is entitled to recover upon becoming liable. 
 
 2. Upon an indemnity against claims or demands, or damages or costs, 
 expressly or in other equivalent terms, the person indemnified is not entitled 
 to recover without payment thereof. 
 
 3. An indemnity against claims or demands, or liability, expressly or in 
 other equivalent terms, embraces the costs of defense against such claims, 
 demands or liability incurred in good faith and in the exercise of reasonable 
 discretion. 
 
 4. The person indemnifying is bound on request of the person indemnified 
 to defend actions or proceedings brought against the latter in respect to the 
 matters embraced by the indemnity; but the person indemnified has the right 
 to conduct such defense, if he chooses to do so. 
 
 5. If after request the person indemnifying neglects to defend the person 
 indemnified, a recovery against the latter suffered by him in good faith is 
 conclusive in his favor against the former. 
 
 6. If the person indemnifying, whether he is a principal or a surety in the 
 agreement, has not reasonable notice of the action or proceedings against the 
 person indemnified, or is not allowed to control its defense, judgment against 
 the latter is only presumptive evidence against the former. 
 
 7. A stipulation, that a judgment against the person indemnified shall be 
 conclusive upon the person indemnifying, is inapplicable if he had a good 
 defense upon the merits which by want of ordinary care he failed to establish 
 in the action. (R. C. 1905, $ 6071.) 
 
 One suing on contract of indemnity must show he was injured or became 
 liable to another for damages growing out of the transaction indemnified 
 against. Cramer v. Building & Loan Ass'n, 6 S. D. 341, 61 N. W. 35. 
 
 Indemnification of bail in criminal action is governed by these sections. 
 Western Surety Co. v. Kelley, 27 S. D. 465, 131 N. W. 808. 
 
 $ 6648. Engagement to Answer for Violation of Duty. Reimburse- 
 ment.] When one at the request of another engages to answer in damages, 
 whether liquidated or unliquidated, for any violation of duty on the part of the 
 latter, he is entitled to be reimbursed in the same manner as a surety for what- 
 ever he may pay. (R. C. 1905, § 6072.) 
 
 § 6649. When Sureties Called Bail.] Upon those contracts of indemnity 
 which are taken in legal proceedings as security for the performance of an 
 obligation imposed or declared by the tribunals and known as undertakings or 
 recognizances, the sureties are called bail. (R, C. 1905, § 6073.) 
 
 As verb word "bail" means to deliver arrested person to sureties upon 
 
 their giving security for his appearance in court. State v. Western Surety 
 
 Co., 126 S. D. 170, 128 N. W. 173. 
 
 Presumption that obligation is joint and not several which arises under 
 
 section 111S docs not depend on particular obligation imposed on persons 
 
STATE OF NORTH DAKOTA 119 
 
 therein named as bail. State v. Western Surety Co., 26 S. D. 170, 128 
 N. W. 173. 
 
 § 6650. Obligations op Bail, How Governed.] The obligations of bail 
 are governed by the statutes specially applicable thereto. (R. C. 1905, § 6074.) 
 
 PENAL CODE. 
 
 CHAPTER 45. 
 
 Lotteries. 
 
 § 9669. Insuring Lottery Tickets.] Every person who insures or re- 
 ceives any iisideration for insuring for or against the drawing of any ticket, 
 share or interest in any lottery or for or against the drawing of any num- 
 ber, or ticket or number of any ticket in any lottery; and every person 
 who receives any valuable consideration upon any agreement to pay any sum, 
 or to deliver any property or thing in action in the event that any ticket, 
 share or interest in any lottery, or any number or ticket or number of any 
 ticket in any lottery shall prove fortunate or unfortunate, or shall be drawn 
 or not drawn on any particular day or in any particular order; and every per- 
 son who promises, agrees or offers to pay any sum of money or to deliver any 
 property or thing in action, or to do or forbear to do anything for the benefit 
 of any other person, with or without consideration, upon any event whatever 
 connected with any lottery, is guilty of a misdemeanor. (R. C. 1905, § 8963.) 
 
 § 9670. Advertising Same.] Every person who, by writing or printing, 
 by circulars or letters or in any other way, advertises or publishes any offer, 
 notice or proposal for any violation of the last section, is guilty of a mis- 
 demeanor. (R, C. 1905, § 8964.) 
 
 CHAPTER 58. 
 Arson. 
 
 § 9499. Arson. Nighttime. Destroying Life.] Every person who 
 willfully and maliciously burns, in the nighttime, the dwelling house of another 
 or of which he is a lessee or tenant, whereby the life of any person is destroyed, 
 or who. in the night time, willfully and maliciously sets fire to any other build- 
 ing, owned by himself or another, by the burning whereof such dwelling house 
 shall be burnt in the night time, whereby the life of any person is destroyed, 
 shall be deemed guilty of murder in the second degree. (R. C. 1905. § 8826.) 
 
 As to similar provision in Gal. Pen. Code, sections 447-449. See People 
 
 v. Giacamella, 71 Gal. 48, 11' Pae. 302; People V. Russell. 81 <"'al. 616, 23 
 
 Pac. 418; Clugston v. Garretson, 103 Cal. 441, 37 Pac. 469; People v. 
 
 Mooney, 127 Cal. 339, 59 Pac. 761. 
 
120 INSURANCE LAWS 
 
 § 9849. Arson Defined.] Arson is the willful and malicious burning of 
 a building with intent to destroy it. (R. C. 1905, § 9123.) 
 
 Information charging facts constituting arson in third degree as denned 
 by statute is sufficient. State v. Young, 9 N. D. 165, 82 N. W. 420; State 
 v. McDonald, 16 S. D. 78, !M N. W. 117. 
 
 Crime of arson and who may commit. 1 (| 1 Am. St. Rep. 21. 
 What constitutes arson. 81 Am. Dec. 65. 
 Prisoner burning prison to escape. 21 Am. Rep. 257. 
 § 9850. BUILDING Defined.] Any house, edifice, structure, vessel or other 
 erection, capable of affording shelter for human beings, or appurtenant to or 
 connected With an erection so adapted, is a "building" within the meaning of 
 the last section. (R. C. 1905, § 9124.) 
 
 Freight car as buildings. State v. Lintner, 19 S. D. 447, 104 N. W. 205. 
 What is a house within the meaning of the law of arson. 22 Am. Dec. 
 144; 71 Am. St. Rep. 266. 
 
 § 9851. Inhabitable Building Defined.] Any building is deemed an 
 "inhabitable building," within the meaning of this chapter, any part of which 
 has usually been occupied by any person lodging therein at night. (R. C. 1905, 
 § 9125.) 
 
 As to similar provision in Cal. Pen. Code, section 449. See People v. 
 Russell, 81 Cal. 616, 23 Pac. 418. 
 
 § 9852. Nighttime Defined.] The word "nighttime," in this chapter 
 includes the period between sunset and sunrise. (R. C. 1905, § 9126.) 
 
 § 9853. Burning Defined.] To constitute a burning within the meaning 
 of section 9849 it is not necessary that the building set on fire should be de- 
 stroyed. It is sufficient that the fire is applied so as to take effect upon the 
 substance of the building. (R. C. 1905, § 9127.) 
 
 § 9854. Ownership Defined.] To constitute arson it is not necessary 
 that another person than the accused should have had ownership in the building 
 set on fire. It is sufficient that at the time of the burning another person was 
 rightfully in the possession of, or was actually occupying, such building or any 
 part thereof. (R, C. 1905, § 9128.) 
 
 Arson is setting fire to one's building. 32 L. R. A. 647. 
 
 Arson by one spouse burning property of the other. 21 L. R. A. 
 
 (N. S.) 27.' 
 
 § 9855. Immaterial Variance in Proof.] An omission to designate, or 
 error in designating in an information or indictment for arson, the owner or 
 occupant of a building, shall not prejudice the proceedings thereupon, if it 
 appears that upon the whole description given of the building, it is sufficiently 
 identified to enable the accused to prepare his defense. (R. C. 1905, § 9129.) 
 
 § 9856. Malice, When Inferred.] Malice sufficient to constitute arson 
 is inferred from proof that the accused committed an act of burning a building, 
 and that some other person was rightfully in possession of or actually occupy- 
 ing any pari thereof. It is nol necessary that the accused should have had 
 actual knowledge of such possession or occupancy or should have intended to 
 injure any person. (R. C. 1905, § 9130.) 
 
 § 9857. Burning Without [ntent to Destroy.] The burning of a build- 
 
STATE OF NORTH DAKOTA 121 
 
 ing under circumstances which show beyond :i reasonable doubt that there was 
 
 no intent to destroy it, is not arson. (K. 0. 1905, § 9131.) 
 
 § 9858. Contiguous Buildings.] When any appurtenance to any building 
 is so situated with reference to such building, or when any building is so situ- 
 ated with reference to another building that the burning of one will manifestly 
 endanger the other, a burning of the one is deemed a burning of the other, 
 within the foregoing definition of arson, and as against any person actually 
 participating in the original setting fire, as of the moment when the fire from 
 the one shall communicate to and burn the other. (R. C. 1905, § 9132.) 
 
 § 9859. Degrees OF ARSON.] Arson is distinguished into four degrees. 
 (R. C. 1905, $ 9133.) 
 
 Verdict of "guilty as charged" is sufficient on information charging 
 
 certain degree of arson. State v. McDonald, 16 S. D. 78, 91 N. W. 447. 
 
 § 9860. Ix the First Degree.] Maliciously burning in the nighttime an 
 inhabited building, in which there is at the time some human being, is arson 
 in the first degree. (K. C. 1905, § 9134.) 
 
 As to similar provision in Cal. Pen. Code, section 454. See People v. 
 
 Fisher, 51 Cal. 319. 
 
 § 9861. Exception. Appurtenance to Building.] No warehouse, barn, 
 shed, or other outhouse, is a subject of arson in the first degree, unless it is 
 immediately connected with, and forms part of an inhabited building. (R. C. 
 1905, § 9135.) 
 
 § 9862. Arson in Second Degree.] Maliciously burning in the daytime 
 an inhabited building, in winch there is at the time some human being, is arson 
 in the second degree. (R. C. 1905, § 9136.) 
 
 § 9863. When Burning in Nighttime is.] Maliciously burning in the 
 nighttime a building, not an inhabited building, but adjoining to or within 
 curtilage of an inhabited building in which there is at the time some human 
 being, so that such inhabited building is endangered, even though it is not in 
 fact injured by such burning, is arson in the second degree. (R. C. 1905, 
 $ 9137.) 
 
 § 9864. Arson in Third DEGREE.] Maliciously burning in the daytime a 
 building the burning of which in the nighttime would be, arson in the second 
 degree, is arson in the third degree, i I,'. < '. 1905, § 9138.) 
 
 Sufficient pleading of arson in the third degree. State v. Young, 9 N. 
 
 D. 165, S2 N. W. 420; State v. McDonald, 10 S. D. 78, 91 N. W. 447. 
 
 § 9865. When Burning ix Nighttime is.] Maliciously burning in the 
 
 nighttime any building, not the subject of arson in the first or second degree, 
 including any house for public worship, school house or public building belong- 
 ing to the state, or to any county, city, town or village, any building in which 
 have usually been deposited the papers of any public officer, and any barn, mill 
 or manufactory, is arson in the third degree. (R. < '. 1905, $ 9139:) 
 
 § 9S66. ARSON ix FOURTH DEGREE.] Maliciously burning in the daytime 
 any building the burning of which in the nighttime would be arson in the third 
 degree, is arson in the fourth degree. (R. C. 1905, § 9140.) 
 
 § 9867. Punishment fob Arson.] Arson is punishable by imprisonment 
 in the penitentiary as follows: 
 
 1. Arson in the first degree, for any term not less than ten years. 
 
122 INSURANCE LAWS 
 
 2. Arson in the second degree, not exceeding ten years and not less than 
 seven years. 
 
 3. Arson in the third degree, not exceeding seven years and not less than 
 four years. 
 
 4. Arson in the fourth degree, not exceeding four years and not less than 
 one year, or by imprisonment in a county jail not exceeding one year. (R. C. 
 1905, § 9141.) 
 
 Cruel and unusual punishment for arson. 35 L. R. A. 569. 
 
 CHAPTER 69. 
 
 Fraudulently Fitting Out and Destroying Vessels. 
 
 § 9977. Officer Willfully Destroying Vessel.] Every captain or other 
 officer or person in command or charge of any vessel, who, within this state, 
 willfully wrecks, sinks, or otherwise injures or destroys such vessel, or any cargo 
 in such vessel, or willfully permits the same to be wrecked, sunk or otherwise 
 injured or destroyed, with intent to prejudice or defraud an insurer or any other 
 person, is punishable by imprisonment in the penitentiary for life. (R. C. 
 1905, § 9251.) 
 
 § 9978. Others, Same. J Every person other than such as are embraced 
 within the last section, who is guilty of an act therein prohibited, is punishable 
 by imprisonment in the penitentiary not exceeding ten years and not less than 
 three. (R. C. 1905, § 9252.) 
 
 § 9979. Fitting Out Vessel With Intent to Wreck.] Every person 
 guilty of fitting out any vessel, or lading any cargo on board of any vessel, with 
 intent to cause or permit the same to be wrecked, sunk or otherwise injured or 
 destroyed, and thereby to prejudice or defraud an insurer or any other person, 
 is punishable by imprisonment in the penitentiary not exceeding ten years and 
 not less than three. (R, C. 1905, § 9253.) 
 
 § 9980. Making False Manifest.] Every person guilty of preparing, 
 making or subscribing any false or fraudulent manifest, invoice, bill of lading, 
 boat's register or protest, with intent to defraud another, is punishable by 
 imprisonment in the penitentiary not less than one and not exceeding three 
 years, or by a fine not exceeding one thousand dollars, or both. (R. C. 1905, 
 § 9254.) 
 
 CHAPTER 70. 
 
 Fraudulent Destruction of Property Insured. 
 
 § 9981. Destroying Property Insured.] Every person who willfully 
 burns or in any other manner injures or destroys any property whatever, which 
 is at the time insured against loss or damage by fire or by any other casualty, 
 with intent to defraud or prejudice the insurer, whether the same is the prop- 
 erty of such person or of any other, is punishable by imprisonment in the 
 penitentiary not exceeding seven years and not less than four. (R. C. 1905, 
 § 9255.) 
 
STATE OF NORTH DAKOTA 
 
 123 
 
 Arson in setting fire to one's own building to injure insurer. 32 L. R. 
 
 A. 648. 
 
 As to similar provision in Gal. Pen. Code, section 548. See People v. 
 
 Fong Hong, 120 Cal. 685, 53 Pac. 265. - 
 
 § 9982. Presenting False Proof of Loss.] Every person who presents 
 or causes to be presented any false or fraudulent claim, or any proof in support 
 of any such claim, upon any contract of insurance, for the payment of any loss, 
 or who prepares, makes or subscribes any account, certificate, survey, affidavit, 
 proof of loss or other book, paper or writing, with intent to present or use the 
 same, or to allow it to be presented or used in support of any such claim, is 
 punishable by imprisonment in the penitentiary not less than one and not ex- 
 ceeding three years, or by a fine not exceeding one thousand dollars, or both. 
 (R. C. 1905, § 9256.) 
 
 Short Rate Table at Which Policies May be Cancelled. 
 
 
 
 Per Cent. 
 
 
 
 Per Cent. 
 
 
 Per Cent . 
 
 
 Days 
 
 of Annua] 
 Premium 
 
 
 Days 
 
 ol Annual 
 Premium 
 
 Days 
 
 of Annual 
 Premium 
 
 \ _ - - 2 
 
 18 
 19 — 
 
 
 16 
 16 
 
 105 
 
 120 or 4 months... 
 
 45 
 
 2 
 
 
 4 
 
 50 
 
 3„ 
 
 
 5 
 
 20 
 
 
 17 
 
 135 
 
 55 
 
 4 „ 
 
 
 6 
 
 25 . 
 
 
 19 
 
 150 or 5 months..- 
 
 60 
 
 5 . 
 
 
 ' 7 
 
 30- - 
 
 
 20 
 
 165 
 
 65 
 
 6 — 
 
 
 8 
 
 35 
 
 
 23 
 
 180 or 6 months— 
 
 67 
 
 •j 
 
 
 9 
 
 40 
 45 
 50 
 
 
 26 
 27 
 28 
 
 195 
 
 210 or 7 months— 
 225 
 
 73 
 
 8 — 
 
 
 9 
 
 75 
 
 9 - 
 
 
 10 
 
 78 
 
 10 — 
 
 
 10 
 
 55 — 
 
 
 29 
 
 240 or S months— 
 
 80 
 
 11.. 
 
 
 11 
 
 60 
 
 
 30 
 
 255 
 
 83 
 
 12. 
 
 
 12 
 
 65 — 
 
 
 33 
 
 270 or 9 months 
 
 85 
 
 13 — 
 
 
 13 
 
 70 — 
 
 
 36 
 
 285 
 
 88 
 
 14 — 
 
 
 13 
 14 
 
 75 
 80 — 
 
 
 37 
 38 
 
 300 or 10 months— 
 315 
 
 90 
 
 15 — 
 
 
 93 
 
 16 — 
 
 
 14 
 
 85 — 
 
 
 39 
 
 320 or 11 months— 
 
 95 
 
 17 „ 
 
 
 15 
 
 90 or 
 
 3 months . 
 
 40 
 
 360 or 12 months— 
 
 100 
 
 Short Rate Table fob Term Risks. 
 
 Three-Year Bisks 
 
 
 Five-Year Risks 
 
 
 Term 
 
 Per Cent, 
 of Term 
 Premium 
 
 Per Cent . 
 
 Term of Term 
 
 Premium 
 
 For 3 months or less 
 
 Over 3 and not exceeding 6 months 
 Over 6 and not exceeding 9 months 
 Over 9 and not exceeding 12 months 
 Over 12 and not exceeding 15 months 
 Over 15 and not exceeding 18 months 
 Over IS and not exceeding 21 months 
 Over 21 and not exceeding 24; months 
 Over 24 and not exceeding SET months 
 Over 27 and not exceeding 30 months 
 Over 30 and not exceeding 33 months 
 Over 33 months 
 
 20 
 30 
 40 
 50 
 00 
 70 
 ,75 
 80 
 85 
 90 
 95 
 100 
 
 For 5 months or less .. 
 
 Oveir 5 and not exceeding 10 months 
 Over 10 and not exceeding 15 months 
 Over 15 and not exceeding 20 months 
 Over 20 and not exceeding 25 months 
 Over 25 and not exceeding 30 months 
 Over 30 and noti exceeding 35 months 
 Over 35 and not exceeding 40 months 
 Over 401 and not exceeding 45 months 
 i ivtr 45 and not exceeding 50 months 
 Over 50 and not exceeding 55 months 
 Over 55 months 
 
 20 
 30 
 40 
 50 
 60 
 70 
 75 
 80 
 85 
 90 
 96 
 100 
 
 
 
124 INSURANCE LAWS 
 
 FEES 
 
 Companies of All Other States ok Countries. 
 
 Filing articles of incorporation $ 25.00 
 
 Filing annual statement 10.00 
 
 Certificate of authority 2.00 
 
 Each agent's license (one for each member of a firm).... 2.00 
 
 Bach copy of abstract for publication 2.00 
 
 Two and one-half per cent, of gross premiums received in state. 
 
 Foreign states or nations charging greater fees than the above for like 
 services will be charged at the same rate as their charges. 
 
 State Mutual and Joint Stock Companies Organzed Under Laws of North 
 
 Dakota. 
 
 Filing articles of incorporation $ 25.00 
 
 Filing annual statement 10.00 
 
 Certificate of authority 2.00 
 
 Each agent's license (one for each member of a firm) .... 2.00 
 
 Each copy of abstract for publication 2.00 
 
 County Mutuals. * 
 
 Company's certificate of authority $ 2.00 
 
 One copy of abstract for publication 2.00 
 
 Fraternal Beneficiary Associations. 
 
 Filing annual statement and issuing license $ ]5.00 
 
 Copy of records, 25 cents per folio and $1.00 for seal. 
 
SUPPLEMENT TO 
 
 INSURANCE LAWS 
 
 OF NORTH DAKOTA 
 
 Enacted by the 
 
 Fourteenth Legislative Session 
 
 1915 
 
INSURANCE LAWS OF 
 NORTH DAKOTA 
 
 ENACTED BY THE 
 
 FOURTEENTH LEGISLATIVE ASSEMBLE 
 1915. 
 
 STATE BONDING FUND. 
 
 [Senate Bill No. 78.] 
 
 AN ACT to establish a State Bonding Fund in the office of the commissioner 
 of insurance, providing for the maintenance thereof, and creating a reserve 
 therefor ; prescribing the duties of the officers connected therewith ; provid- 
 ing for the payment of premiums and indemnities for losses; and providing 
 for the disposal of the surplus after said reserve has been created. 
 
 Be it Enacted by the Legislative Assembly of the State of North Dakota: 
 
 § 1. Establishing a State Bonding Fund.] A state bonding fund is 
 hereby established for the purpose of providing a fund for the bonding of such 
 officers of counties, cities, towns, villages, school districts and townships as are, 
 or may hereafter be required by law to furnish official bonds. 
 
 § 2. Commissioner op Insurance to Issue Bonds.] It shall be the duty 
 of the commissioner of insurance, as provided in this act, to issue official bonds 
 to all county officials, city officials, town officials, village officials, school district 
 officials, and township officials required by law to furnish official bonds except 
 as hereinafter otherwise provided. No such bonds shall be issued by the com- 
 missioner of insurance for the bonding of any official for a greater amount than 
 $50,000.00; and any official required by law to be bonded in any greater amount 
 than $50,000.00, shall be bonded in the sum in excess of $50,000.00 with a duly 
 authorized surety company or by personal sureties. The premiums on such 
 excess bonds, except in the case of personal sureties, shall be paid out of the 
 county, village, city, town, school district or township treasury as the case may 
 be. 
 
 If an official who is bonded by both the state bonding department and other 
 surety makes default, then the loss shall be borne between the state bonding 
 department and such other surety in proportion to the amount of bonds fur- 
 nished by the various parties. 
 
 § 3. Premiums; Amount; to Whom Paid.] The premiums of such bonds 
 shall be twenty-five cents per hundred dollars per year on all bonds issued. 
 Such premium shall be paid in advance by the proper authorities of each 
 county, city, town, village, school district or township, from its respective 
 treasury to the state treasurer, who shall issue receipts therefor as hereinafter 
 
128 [NSURANCB LAWS 
 
 provided. The minimum on small bonds and short term officers' bonds shall 
 not be less than $2.50. 
 
 § 4. Whenever there shall be paid into the state treasury, money for 
 premiums for bonding officials as provided in this act, it shall be known as the 
 state bonding fund, and shall be used as provided for in this act. 
 
 § 5. It shall be the duty of the state treasurer whenever there is any 
 money paid into the state treasury for premiums on bonds, to at once issue 
 quadruple receipts therefor. One, he shall issue to the official for whom the 
 premium is paid, one he shall file in his office, one he shall file with the com- 
 missioner of insurance, and one he shall file with the state auditor. Such 
 receipt shall state the amount and date of the bond, name of the officer bonded, 
 and his official duties, his post office address and the county in which he resides. 
 
 § 6. Period of Bonds.] All bonds executed and furnished hereunder by 
 the commissioner of insurance shall be made to run until the expiration of the 
 officer 's term of office, and where such term is less than one year, a full year 's 
 premium shall be charged. 
 
 § 7. Form op Bonds.] All counties, cities, towns, villages, school districts 
 and townships in the state shall be insured as herein provided against loss by 
 the default of any officer of such counties, cities, towns, villages, school districts 
 and townships who is by law required to furnish a bond, by and through a bond 
 executed by the officer to be bonded and the commissioner of insurance in his 
 official capacity, which bond shall be payable in case of default out of the state 
 bonding fund. Said bonds shall be substantially in the following form, the 
 blanks being properly filled out and the bond being executed by the official and 
 the commissioner of insurance. 
 
 § S. Official Bond.] Know all men by these presents; That 
 
 of in the State of North Dakota, hereinafter called the principal, 
 
 and the state bonding fund of the State of North Dakota as surety, are held 
 
 and firmly bound unto in the State of North Dakota, hereinafter called 
 
 the obligee, in the sum of for the payment whereof to the obligee 
 
 the principal binds himself, his heirs, executors, administrators and assigns, 
 and the commissioner of insurance of the State of North Dakota, bind the 
 state bonding fund of the State of North Dakota firmly by these presents. 
 
 Signed, sealed and dated this day of 19. . . . 
 
 Whereas, The above named principal lias been duly appointed or elected to 
 
 the office of in the State of North Dakota for the term of 
 
 years beginning on 
 
 Now, Therefore, The condition of the foregoing obligation is such that if 
 the principal shall faithfully and impartially discharge and perform the duties 
 of his said office, including such duties ae are or may be imposed upon him by 
 law. and shall render a true account of all moneys and property of every kind 
 that shall come into his hands as such officer an«l pay over and deliver the 
 same according to law, this obligation shall be void, otherwise it shall remain 
 in force. 
 
 Principal. 
 State Bonding Fund, Surety, 
 
 By 
 
 Commissioner of Insurance. 
 
STATE OF NORTH DAKOTA 129 
 
 Signed, Sealed and Delivered in the presence of: 
 
 § 9. Appointment op Attorney for Service.] The officer to be bonded 
 shall, prior to the execution of such bond, execute and file in the office of the 
 commissioner of insurance, an instrument appointing the commissioner of 
 insurance and his successors, his true and lawful attorney upon whom all 
 process in any action or proceeding against such officer may be served, and 
 therein shall agree that any process which may be served upon his said attorney, 
 shall be of the same force and validity as if served on him personally and 
 that the authority thereof shall continue in force, irrevocable so long as any 
 liability of such official or of such state bonding fund remains. In actions 
 upon such bond when the sheriff files his return, that he is unable, after diligent 
 search, to find such bonded officer for the purpose of serving the summons, 
 service upon the commissioner of insurance shall be deemed and held to be 
 personal service upon such bonded official. Whenever process against any such 
 bonded official shall be served upon the commissioner of insurance, he shall 
 forthwith mail a copy of such process, postage prepaid, directed to such bonded 
 official at the residence of such official stated in such instrument. The com- 
 missioner shall keep a record of all such process which shall show the time and 
 hour of service. 
 
 § 10. Bonds Run to Whom.] All such official bonds shall run to the 
 political sub-division of which the bonded official is an officer, as obligee, and 
 such bonds shall be construed as provided in section 680 of the Compiled Laws 
 of North Dakota. 1913, and any private corporation or person suing such official 
 may recover under such bond and have the protection of the state bonding fund. 
 
 § 11. State Not Liable.] Any obligee or private corporation or person 
 may sue upon any such official bond issued by the commissioner of insurance 
 and may join the commissioner of insurance as a co-defendant with the default- 
 ing officer and in case judgment is obtained against such defaulting officer, the 
 judgment shall further specify that such judgment shall be paid out of any 
 funds on hand in the state bonding fund, or that may thereafter accrue to such 
 fund. In case a judgment is paid out of the state bonding fund in any such 
 action, the state bonding fund shall be subrogated under the judgment to the 
 right of the judgment creditor to recover against the defaulting officer. In all 
 proceedings to enforce such right of subrogation the commissioner of insurance 
 as nominal defendant shall act for and in behalf of the state bonding fund; 
 and he may in any action or proceeding appeal from any appealable order or 
 from any judgment against said state bonding fund the same as is provided 
 for other parties to civil actions. 
 
 § 12. Other Bonds May be Furnished.] This act shall not be construed 
 to prevent any person elected or appointed to office from furnishing in lieu of 
 the bond provided for in this act. a bond by personal sureties or by a surety 
 company, but no officer or board of any county, city, town, village, school 
 district or township shall have the right to pay for any such bond or bonds 
 out of any public funds, except for such bonds as are procured to cover the 
 excess over $50,000.00 as provided in section 2. 
 
 $ 13. Bonds. How Construed.] The bonds issued in pursuance of this 
 
130 INSURANCE LAWS 
 
 act shall be construed and held to inure to the benefit of not oniy the political 
 sub-divisions named as obligee but also to the benefit of any person damaged 
 by any wrongful act or omission of the bonded official; and any person so 
 damaged may in an action upon the bond brought in his own name as plaintiff 
 against the official bonded join the commissioner of insurance as a co-defendant, 
 and thereby subject the state bonding fund to the payment of any judgment 
 so obtained. 
 
 §14. Clerical Hklp Provided, Expenses, How Paid.] It shall be the 
 duty of the commissioner of insurance and the state auditing board to estimate 
 at the beginning of each year the amount required for additional clerical help 
 and incidental office expenses made necessary by the additional work devolving 
 upon his office on account of the provisions of this act for that year, which 
 estimated amount shall be reserved from the premiums paid in and shall not 
 exceed the sum of $1,500.00 per annum. The amount of premium receipts 
 remaining shall be used for the payment of losses; provided, that if the 
 amount reserved for clerical assistance and incidental office expenses is more 
 than sufficient to pay the same the excess shall be used to pay losses. The 
 commissioner of insurance shall have the authority to engage clerical assistance 
 to conduct the transactions provided for by this act. He shall also prepare 
 and provide the necessary blanks, books, stationery and postage and cause the 
 same to be delivered to the proper officers and persons. Such expenses and the 
 salaries of such clerical assistance shall be audited and allowed by the state 
 auditing board. 
 
 <5 15. Notice of Loss; Duty of State Examiner.] "Whenever a loss shall 
 occur in any county, city, village, township or school district by the default of 
 any officer of the same whose fidelity has been insured under the provisions of 
 this act, it shall be the duty of the county auditor, city auditor, village, town- 
 ship or school district clerk or treasurer in case the defaulting officer is the 
 auditor or clerk, as the case may be, immediately to notify the commissioner of 
 insurance. The commissioner of insurance shall thereupon notify the state 
 examiner; and it shall be the duty of the state examiner when so notified to 
 check the accounts of such defaulting official and file a report with the com- 
 missioner of insurance. 
 
 § 16. Surplus. How Used.] Any sum which remains unexpended at the 
 end of any one year shall remain in the state bonding fund which shall accrue 
 until it equals in amount $100,000.00, after which the surplus in excess of 
 $100,000.00 shall be distributed at the close of each year to the various counties, 
 cities, townships, villages, school districts and towns in proportion to the 
 amount of premium paid into the state bonding fund. In case there shall not 
 be a sufficient amount in the state bonding fund to pay the losses sustained 
 after the reservation of funds to cover clerical assistance and other incidental 
 expenses for the conduct of the bonding department for the year, such losses 
 shall be paid as soon as sufficient funds are accumulated in the state bonding 
 fund by collection of premiums. 
 
 § 17. Fund to Draw Interest.] The state treasurer shall deposit the 
 state bonding fund in approved state depositories at the usual rate of interest 
 paid on other funds of the state, subject to check, but whenever there is in 
 such checking account more than $10,000.00 the state treasurer shall deposit 
 
STATE OF NORTH DAKOTA 131 
 
 the same upon time certificates of deposit drawing the same rate of interest 
 as other state funds deposited upon time certificates. 
 
 § 18. Report.] The commissioner of insurance shall on or about the first 
 day of January in each year, publish in four newspapers of general circulation 
 within the state a copy of the statement of his work and of the condition of 
 the bonding department during the preceding year, and he shall make a biennial 
 report to the governor and the legislative assembly containing a detailed state- 
 ment of the work and the condition of said bonding department during the 
 preceding biennial period. 
 
 § 19. May Require Statements.] The commissioner of insurance shall 
 require and obtain from the various officials bonded statements annually and as 
 often as he deems necessary, of their receipts, bank accounts and disbursements 
 verified by the county auditor, city auditor, or clerk of each town, village, school 
 district and township. To verify such statements he may communicate with each 
 bank having such deposits and he may require any such official to furnish him 
 with any information concerning the office of which he is an incumbent and said 
 commissioner shall file all such information in his office in a proper manner and 
 such records and files shall be open for public inspection. The commissioner 
 of insurance shall supply to each county and city auditor and each town, village, 
 school district, and township clerk, a sufficient number of application blanks. 
 
 § 20. State Examiner to Check Accounts.] In case any official shall 
 default, it shall be the duty of the state examiner immediately to check the 
 accounts of such defaulting official and file a report with the commissioner of 
 insurance stating the amount due upon such defaulting officer's bond and for 
 such services he shall be paid out of the state bonding fund, the same fees as 
 he is paid for examining the accounts of county officers. 
 
 § 21. May Require an Accounting.] If at any time, the commissioner 
 of insurance shall be of the opinion that the interests of the state bonding fund 
 are jeopardized by the misconduct or inefficiency of any bonded official, it shall 
 be his duty to cause an action for an accounting to be instituted against such 
 bonded official for the purpose of requiring a complete disclosure of the busi- 
 ness of the office of which such official is an incumbent. Such action shall be 
 brought in the name of the commissioner of insurance as plaintiff and the 
 court may in such action interplead the obligee and render such judgment as 
 shall protect the rights of all parties concerned. If at any time the commis- 
 sioner of insurance deems it advisable, it shall be his duty to make a complaint 
 to the governor requesting the governor to institute an investigation with the 
 purpose of removing from office any defaulting official or any official who so 
 conducts the affairs of his office as to endanger the state bonding fund. 
 
 § 22. Duty of Attorney General.] It is hereby made the duty of the 
 attorney general to act as attorney for the commissioner of insurance in any 
 and all actions and proceedings to which the commissioner of insurance is a 
 party, on behalf of the state bonding fund. 
 
 § 23. Commissioner May Reject Application.] When any official applies 
 to the commissioner of insurance for the issuance to him of an official bond, the 
 commissioner of insurance may, after due investigation, reject such application 
 if in his judgment the interests of the state bonding fund require such action. 
 In such case the official whose application is rejected may secure a bond exe- 
 
132 INSURANCE LAWS 
 
 cuted either by private surety or by a duly authorized surety company, but 
 no officer or board of any political sub-division shall have the power to disburse 
 public funds to pay the premium on such bonds. 
 
 § 24. Appeal.] The commissioner of insurance shall immediately notify 
 the applicant of such rejection by registered mail, and the applicant shall have 
 twenty days after the receipt of such notice within which to take an appeal 
 from such decision of the commissioner of insurance to the district judge of 
 the judicial district in which the applicant resides. The judge of said court 
 shall hear such appeal at a day to be fixed by him not less than ten nor more 
 than thirty days after the filing of the appeal with the clerk. The case shall 
 be tried by the court without a jury. Notice of such appeal shall be served 
 by the appellant upon the commissioner of insurance. 
 
 § 25. Repeal.] All acts and parts of acts in so far as they conflict with 
 the provisions of this act are hereby repealed. 
 
 § 26. This act shall take effect January 1st, 1916. 
 
 Approved, March 8, 1915. 
 
 [House Bill No. 165. Laws 1915.] 
 
 Providing pok County and District Mutual Insurance Companies. 
 
 AN ACT Providing for the organization, regulation and general management 
 of county and district mutual fire, lightning and cyclone insurance com- 
 panies, and repealing acts and parts of acts in conflict therewith. 
 
 Be it 'Enacted by the Legislative Assembly of the State of North Dakota: 
 
 Article 1. 
 
 § 1. Any number of persons, not less than fifty, residing in not more than 
 ten counties in this state, who collectively own property of not less than one 
 hundred thousand dollars in value, which they desire to insure, or any number 
 of persons not less than twenty-five, residing in any one county, owning prop- 
 erty of not less than twenty-five thousand dollars in value, which they desire 
 to insure, may form a corporation for mutual insurance against loss or dam- 
 age by fire, lightning or cyclone, or all of the above, which shall possess the 
 powers and be subject to the duties and liabilities of other insurance com- 
 panies, except as hereinafter provided: 
 
 The principal office of the corporation must be located within the limits of 
 the county or counties in which the incorporators reside. The name of the 
 county, together with the word "county" shall be embraced in the corporate 
 name of the company when organized by the residents of a single county. 
 Provided, that any corporation, organized under the provisions of this act for 
 mutual protection against loss or damage by tornadoes, wind storms, and 
 cyclones only, may operate and issue policies in all the counties of the state, 
 but shall in all other matters be regulated and limited by the provisions of 
 this act. 
 
 § 2. Such persons shall file with the commissioner of insurance a declara- 
 tion of their intention to form a company for the purpose expressed in the 
 preceding section, which declaration shall be signed by not less than three of 
 
STATE OF NORTH DAKOTA 133 
 
 the incorporators, and shall be accompanied by sufficient evidence of the execu- 
 tion of bona fide application for such insurance to the number and amount 
 stated in the preceding section, and which said declaration shall contain a copy 
 of the articles of incorporation proposed to be adopted by said incorporations. 
 Such articles of incorporation shall set forth the name of the corporation, the 
 name of the city, town or village in which the business office of such company 
 is to be located, and the intended duration of the company, and if it is found 
 conformable to this act and not inconsistent with the laws and constitution of 
 this state, the commissioner of insurance shall thereupon deliver to such per- 
 sons a certified copy of its articles of incorporation, and a certificate to the 
 effect that said corporation has complied with all the requirements of law, 
 \\ huh, on being filed in the office of the register of deeds of the county where 
 the principal office of the corporation is located shall be its authority to com- 
 mence business and issue policies, and such certified copy of the articles of 
 incorporation and of such certificate may be used for or against such com- 
 pany, with the same effect as the original, and shall be conclusive evidence of 
 the fact of the organization of such corporation. 
 
 § o. The number of directors shall be not less than five (5) and not more 
 than fifteen (15) a majority of whom shall constitute a quorum to do business, 
 to be elected by the members of said company in the manner provided by the 
 by-laws of said company, and, if not otherwise provided, by ballot, of whom 
 one-third shall be elected for one year, one-third for two years and one-third 
 for three years, and until their successors are elected and qualified ; in all 
 subsequent elections, except to fill vacancies, one-third of said board of directors 
 shall be elected for three years; said election shall be held at the annual meeting 
 of the company which shall be held on the second Thursday of January of each 
 year, unless otherwise provided by their by-laws. In the election of the first 
 board of directors each incorporator shall be entitled to one vote. At every 
 subsequent election each person insured shall be entitled to one vote for each 
 director to be elected. Twenty members shall constitute a quorum at such 
 annual meeting for the transaction of business. 
 
 § 4. The directors shall elect from their number, a president, and a vice- 
 president, and shall also select a secretary and treasurer, who may or may not 
 be members of the company, all of whom shall hold their office for one year, 
 and until their successors are elected and qualified, provided, that the office of 
 secretary and treasurer may both be held by one person. 
 
 § 5. The treasurer and secretary shall each give bonds to the company for 
 the faithful performance of their duties in such amounts as shall be prescribed 
 by the board of directors. 
 
 § 6. Such corporation and its directors shall possess the usual powers and 
 be subject to the usual duties of colorations and directors thereof and may 
 make by-laws, not inconsistent with the constitution or laws of this state, as 
 may be deemed necessary for the management of its affairs in accordance with 
 the provisions of this act; also to prescribe the duties of its officers and fix 
 their compensation, and to alter and amend its by-laws when necessary. 
 
 § 7. Any person owning property within the limits of the territory in which 
 such company is authorized to transact business may become a member of such 
 company by insuring therein, and shall be entitled to all the rights and priv- 
 
134 INSUEANCE LAWS 
 
 ilcges appertaining thereto; but no person not residing within said territory 
 shall become a director of said company. 
 
 § 8. No company formed under the provisions of this act shall insure any 
 property beyond the limits of the territory comprised in the formation of such 
 company, nor shall it insure any property other than detached dwellings, their 
 contents; farm buildings, their contents; country school houses, furniture, 
 books and fixtures; country churches, furniture and other contents; automobiles, 
 only while in the buildings on premises; live stock on the premises or anywhere 
 within the limits of said territory; farm machinery and vehicles in the build- 
 ings or on the premises, including threshing machines while not in service, only, 
 and hay or grain in stack on said premises; said policies may cover loss or 
 damage to live stock, harness and vehicles temporarily taken from the territory 
 of the company; provided, said live stock, harness and vehicles be not removed 
 to exceed twenty-five miles from the territory of the company. Said policies 
 shall be issued for not to exceed five years, and not to extend beyond the 
 limited duration of said company. Nor shall any policy be issued covering 
 property located within the platted limits of any incorporated city, town or 
 village in this state. 
 
 § 9. Any such company may classify the property insured therein at the 
 time of issuing policies thereon under different rates corresponding as nearly 
 as may be to the greater or less risk from fire or lightning and loss which may 
 attach to each several buildings insured. 
 
 § 10. Every person insured under the provisions of this act shall give his 
 undertaking, bearing even date with the policy so issued to assigns, to pay his 
 pro rata share to the company of all losses or damages by fire, lightning or 
 cyclone, which may be sustained by any member thereof, which said undertaking 
 shall be filed with the secretary in the office of said company before the issuance 
 of such policy, and shall remain on file in the office except when required to 
 be produced in court as evidence. He shall also at the time of receiving such 
 insurance pay such percentage in cash, or such reasonable sum named in the 
 policy as may be required by the rules and by-laws of the company. 
 
 § 11. Every member of such company who may sustain loss or damage by 
 fire, lightning or cyclone, shall immediately notify the secretary of such com- 
 pany, or in case of his absence, the president thereof, which officer shall forth- 
 with ascertain and cause to be adjusted in manner provided for in the by-laws 
 of said company, or forthwith convene the directors of said company, whose 
 duty it shall be to appoint a committee of not more than three members of 
 such company to ascertain the amount of such loss, and in case of the inability 
 of the parties to agree upon the amount of damage the claimant shall choose 
 a disinterested party, and the company shall choose a disinterested party, who 
 shall constitute a board of arbitration to settle such loss, and in case these 
 parties cannot agree, they shall choose a third party to act with them and such 
 board of arbitration shall have power to examine witnesses and to determine 
 all matters in dispute and the decision of such board shall be final. Any officer 
 or member of such company acting as an adjuster, and the members of any 
 hoard of arbitration which may be appointed in accordance with the provisions 
 of this section shall have full power to subpo?na witnesses, administer oaths, 
 examine witnesses and take acknowledgments while acting in the capacity of 
 such adjuster or member of board of arbitration. 
 
STATE OF NORTH DAKOTA 135 
 
 § 12. Whenever the amount of any loss shall have been ascertained if it 
 exceed the amount of cash funds of the company applicable to the payment of 
 such loss, the president shall convene the directors of the company, who shall 
 make an assessment sufficient at least to pay such loss from all members of the 
 company in proportion to the amount of insurance carried. Provided, that, if 
 there be no quorum present, the secretary shall enter the fact on his journal and 
 the names of the directors present, whereupon the president, secretary and treas- 
 urer shall proceed to estimate the rate per cent, necessary to cover the loss and 
 expense thereby incurred, and assess the same upon all the insured members 
 of the said company, which said assessment shall be valid and shall be collected 
 in the same way as though it had been made by the board of directors, in the 
 regular manner. The board of directors may levy and collect an assessment 
 for the purpose of providing funds for the payment of current expenses of the 
 company or for the purpose of establishing a permanent loss fund, which 
 permanent loss fund shall at no time exceed one per cent, of the insurance in 
 force, and such assessments so levied shall be collectible in the same manner 
 as assessment made for the payment of current losses. In case an assessment 
 made shall not be collected at the time same is due and the amount actually 
 collected is insufficient to pay the losses or expenses of the company, then a 
 second assessment shall be made, in the manner above provided, upon the policy 
 holders who have paid their assessment for an amount that shall be sufficient to 
 pay all losses and expenses in full. Such assessments shall be made from time 
 to time until a sufficient amount is collected to pay all losses and expenses in 
 full. In case any such delinquent assessment is collected after other assessments 
 have been made and collected, then such assessment so collected shall be added 
 to the permanent loss fund. 
 
 § 13. It shall be the duty of the secretary whenever such assessments shall 
 have been completed to notify every member of such company by letter smt 
 to his last known post office address, postage prepaid, of the amount of such 
 assessment, the purpose for which made, and if for the payment of certain 
 losses, the amounts of such losses, the sum due from such member as his share 
 of such assessment, the time when and to whom payment shall be paid which 
 shall not be less than thirty nor more than sixty days from the date of such 
 notice. The board of directors shall have the authority, in their discretion to 
 borrow money for the payment of any unpaid losses, said borrowed monev to 
 be repaid from moneys collected from the next ensuing assessment levied in 
 accordance with the provisions of this act. 
 
 § 14. Suits at law may be brought against any member of said company 
 who shall neglect or refuse to pay any assessment made upon him under the 
 provisions of this act; and the directors of any company so formed who shall 
 willfully refuse or neglect to perform the duties imposed upon him by the pro- 
 visions of this act, shall be liable in their individual capacity to any person 
 sustaining such loss. Suits at law may also be brought and maintained against 
 such company, by members thereof, for losses sustained if payment is withheld 
 after such losses have become due. 
 
 § 15. Any member of such company may withdraw therefrom by surrender- 
 ing his policy for cancellation at any time while the company continues to 
 transact the business for which it was organized, by giving notice in writing 
 
136 INSURANCE LAWS 
 
 to the secretary thereof, and paying his share of all claims then existing against 
 Baid i-ompany; provided, that by the withdrawal of such member, the number 
 of members remaining in such company shall not be reduced below the original 
 number of incorporators, or that the assets will not be reduced below the amount 
 at the time of incorporation; provided, further, that the company shall have 
 power at any time to terminate or cancel any policy, by giving the insured 
 written notice to that effect and returning to such insured any unearned pre- 
 mium which he may have paid, pro rata. 
 
 § 16. Non-residents of any county in this state, owning property therein, 
 may become members of any company incorporated under this act, and shall 
 be entitled to all the rights and privileges pertaining thereto, except that they 
 cannot become directors of such company. 
 
 § 17. No company formed under the provisions of this act shall continue 
 for a longer term than thirty years. 
 
 § 18. The secretary of the company shall prepare and submit to the mem- 
 bers thereof, at each annual meeting, a copy of the annual statement required 
 to be filed with the commissioner of insurance, as provided in section 4949 ot 
 the compiled laws of 1913, of the State of North Dakota. 
 
 § 19. In all other respects companies organized under the provisions of 
 this act, shall be subject to the provisions of the general laws of the State of 
 North Dakota relating to such insurance companies. 
 
 j 20. Any such companies now organized and transacting business in this 
 state, whose articles of incorporation or by-laws or any part of them conflict 
 with the provisions of this act, shall within a reasonable time after the passage 
 and approval of this act, amend such articles or by-laws to conform to the 
 provisions hereof and file such amendments with the commissioner of insurance. 
 
 § 21. All acts or parts of acts which conflict with the provisions of this 
 act are hereby repealed. 
 
 Approved, March 9, 1915. 
 
 [Senate Bill No. 103.] 
 
 Exempting Life Insurance Policies From Claims of Creditors. 
 
 AN ACT to exempt policies of life insurance and annuities from the claims of 
 creditors, in certain cases. 
 
 Be it Enacted by the Legislative Assembly of the State of North Dakota: 
 
 § 1. The surrender value of any policy of life insurance, which policy of 
 insurance would upon the death of the insured be payable to the wife or chil- 
 dren or any relative of the insured dependent or liable to be dependent upon 
 him for support, shall be absolutely exempt from the claims of creditors of 
 the insured, and no creditor and no court or officer of a court acting for the 
 creditors of such insured shall have the right under any circumstances to elect 
 for the insured to have such policy of insurance surrendered or in anywise 
 converted into money; and no such policy of life insurance and no property 
 right therein belonging to the holder and no value thereof shall under any 
 circumstances, be subject to seizure under any process of any court. 
 Approved, March 5, 1915. 
 
GENERAL INDEX 
 
 Insurance Commissioner — Duties: Section 
 
 In general, enumerated 172, 176 
 
 Fees 173 
 
 Salary 174 
 
 State examiner to act as, when 175 
 
 insurance tax for fire departments: 
 
 Tax for cities, towns, and villages, fire departments 3993-3998 
 
 Corporations : 
 
 Defined 4494 
 
 Reserved power of legislative assembly 4495 
 
 Collateral inquiry prohibited 4496 
 
 Name required 4497 
 
 Corporations classified 4498 
 
 Public corporations, how regulated 4499 
 
 Private corporations 4500 
 
 Contents of articles 4505 
 
 Articles, railways, etc 4507 
 
 Assessment of stock: 
 
 When levied 4570 
 
 Limitation of 4571 
 
 General provisions: 
 
 Terms defined 4834 
 
 Provisions common to all domestic insurance companies: 
 
 Subject to what provisions of law 4835 
 
 How, and for what purpose formed 4836 
 
 Articles, contents 4837 
 
 Qualifications of directors, residence 4838 
 
 Examination of articles by attorney general, by commissioner of 
 
 insurance, certificate 4839 
 
 Reinsurance 4840 
 
 Limitation of trade 4841 
 
 Limitation on purchase and conveyance of real estate 4842 
 
 Capital and surplus invested 4843 
 
 Dividends only from surplus profits. Profits, how estimated 4844 
 
 Penalty for violation of section 4843 4845 
 
 Domestic Life Insurance Companies to deposit securities with Commis- 
 sioner of Insurance: 
 
 Annual statement 4846 
 
 Commissioner ascertains value of policies. Securities to be deposited 4847 
 
 ( Vrtificate of authority 4848 
 
 On default securities vest in policy holders 4849 
 
 Securities may be exchanged 4850 
 
 Dividends on securities property of company 4851 
 
 Exception to act 4852 
 
138 GENERAL INDEX 
 
 Section 
 Misrepresentation by Insurance Companies: 
 
 Prohibited 4853 
 
 Penalty 4854 
 
 Discrimination by Life Insurance Companies: 
 
 Prohibited 4855 
 
 Penalty 4856 
 
 Disbursements by Life Insurance Companies: 
 
 Voucher required 4857 
 
 Diversion of funds for political purposes by Life Insurance Companies: 
 
 Unlawful to aid political parties. Penalty 4858 
 
 Salaries of Officers and Agents of Life Insurance Companies: 
 
 Expense of officers, how regulated 4859 
 
 Investment of funds of Life Insurance Companies: 
 
 Investment of funds restricted '. 4861 
 
 Holding of real property limited 4862 
 
 Provisions peculiar to Domestic Stock Insurance Companies: 
 
 Capital stock required 4863 
 
 Opening books for subscriptions 4864 
 
 Notice to company when capital stock is impaired 4865 
 
 How capital made good. Forfeiture of shares 4866 
 
 Capital stock reduced. Examination and certificate of commissioner 4867 
 
 Capital less than liabilities 4868 
 
 Transfer of stock pending. Examination does not release liabilities 4869 
 
 Provisions peculiar to Domestic Mutual Insurance Companies: 
 
 Amount of subscribed insurance required 4870 
 
 Insured a member. Notice of meetings 4871 
 
 Same 4872 
 
 Manner of voting by proxy 4873 
 
 Premium contingent liability. Stated on policy 4874 
 
 Reserve fund, how used 4875 
 
 Temporary capital may be retired 4876 
 
 Members entitled to share of net profits 4877 
 
 Distribution of surplus on life policies 4878 
 
 Assessments, when and how made ; . . 4879 
 
 Making premium reserve good. Single assessment. Cancellation of 
 
 policies. Double assessment. Reinsurance 4880 
 
 Directors personally liable for making and collecting assessments. . 4881 
 
 Surplus of Life Insurance Companies: 
 
 Surplus apportioned annually 4882 
 
 Exception 4883 
 
 Contingency reserve 4884 
 
 Rights of policy holders 4885 
 
 Automatic insurance 4886 
 
 ' 'ontra agreement forbidden 4887 
 
GENEEAL INDEX 139 
 
 Section 
 Consolidation and Reinsurance of Domestic Insurance Companies: 
 
 Consolidation forbidden 4888 
 
 Petition for consolidation 4889 
 
 Duty of insurance commissioner 4890 
 
 Commission 4891 
 
 Expense paid 4892 
 
 Penalty for violation 4893 
 
 Provisions peculiar to Mutual Hail Insurance Companies: 
 
 Foreign mutuals prohibited. Contracts void. Penalty 4894 
 
 Penalty 4895 
 
 Mutual insurance companies engaged in hail business, when 4896 
 
 Duties of state treasurer 4897 
 
 Penalty 4898 
 
 Relinquish business, how 4899 
 
 Companies collect interest 4900 
 
 Proceedings, who institute 4901 
 
 Time when Hail Insurance policies take effect: 
 
 Twenty-four hours after application taken 4902 
 
 Exception 4903 
 
 Provisions peculiar to Fidelity Insurance Companies: 
 
 Fidelity insurance and corporate suretyship. Sole surety 4904 
 
 Acceptance of such bond 4905 
 
 Expense of bond, how paid 4906 
 
 Must comply with laws of state 4907 
 
 Domestic surety companies 4908 
 
 Concurrent undertakings 4909 
 
 Relief from liability 4910 
 
 Report of taxes 4911 
 
 Held responsible 4912 
 
 Provisions peculiar to Foreign Insurance Companies: 
 
 Condition of admission. Articles and statement filed. Must be 
 legally organized. Appoint commissioners, its attorney for serv- 
 ice. Resident agents 4913 
 
 Provisions common to all Insurance Companies: 
 
 Limit of risk 4914 
 
 Annual statement, publication thereof 4915 
 
 Contents of annual statement 4916 
 
 Statements verified. Duty of commissioner 4917 
 
 Statements of receivers 4918 
 
 Inquiry into condition of company 4919 
 
 Agents must not act without certificate 4920 
 
 Examination before granting certificates. When domestic companies 
 
 examined. Examination of foreign companies. Expense 4921 
 
 Authority revoked for false statement. When revocation set aside. 4922 
 
 Commissioner must ascertain net cash value of life policies 4923 
 
 Tax, how' levied 4924 
 
140 GENERAL INDEX. 
 
 Section 
 
 Authority of foreign or domestic company revoked, how 4925 
 
 Insurance by resident agents only 4926 
 
 Penalty for not making statement, for false statement 4927 
 
 Penalty when there is no specific provision 4928 
 
 Fees 4929 
 
 Same condition imposed on companies of other states as they impose 
 
 on domestic companies 4930 
 
 Rejjort of Life Insurance Companies: 
 
 Annual report, contains what 4931 
 
 Live Stock : 
 
 General laws govern 4951 
 
 Live stock insurance companies, how organized 4952 
 
 Management 4953 
 
 Board of directors to elect officers and fix bond 4954 
 
 Members may vote by proxy 4955 
 
 Amount of subscribed insurance required 4956 
 
 Chattel Mortgages in Application: 
 
 Chattel mortgages void unless on separate paper 4957 
 
 Penalty for violating last section 4958 
 
 Licensing Insurance Agents: 
 
 Agents defined 4959 
 
 Must have license. Penalty for non-compliance 4960 
 
 Eesident Agents for Transaction of Fire Insurance Business: 
 
 Foreign agents 4961 
 
 Cannot reinsure 4962 
 
 Insurance commissioner. Examine records, books, etc 4963 
 
 Penalty for violation 4964 
 
 Accident and Sickness Insurance Corporations, Associations and So- 
 cieties: 
 
 Number requisite to organize 4965 
 
 Compliance required 4966 
 
 Articles, state what 4967 
 
 Name forbidden 4968 
 
 Application contains what 4969 
 
 Agents must have certificate of authority 4970 
 
 By-laws 4971 
 
 Age of members 4972 
 
 Annual report 4973 
 
 Reserve fund 4974 
 
 Duty of insurance commissioner 4975 
 
 Company 's certificate of authority 4976 
 
 Voting proxy 4977 
 
 Limit time of suit 4978 
 
 Reciprocal penalties 4979 
 
 Foreign corporations, licensed when 49S0 
 
GENERAL INDEX 141 
 
 Section 
 Fraternal Benefit Societies: 
 
 Fraternal benefit societies defined 5059 
 
 Lodge system defined 5060 
 
 Representative form of government defined ? 5061 
 
 Exemptions 5061a 
 
 Benefits 5062 
 
 Beneficiaries 5063 
 
 Qualifications of membership 5064 
 
 Certificate 5065 
 
 Funds 5066 
 
 Investments 5067 
 
 Distribution of funds 5068 
 
 Organization 5069 
 
 Powers retained. Reincorporation. Amendments 5070 
 
 Mergers and transfers 5071 
 
 Annual license 5072 
 
 Admission of foreign society 5073 
 
 Bowers of attorney and service of process 5074 
 
 Place of meeting, location of office 5075 
 
 No personal liability 5076 
 
 Waiver of the provisions of the laws 5077 
 
 Benefit not attachable 5078 
 
 Constitution and laws. Amendment 5079 
 
 Annual reports 5080 
 
 Provisions to insure future security 5081 
 
 Alternative provisions 5082 
 
 Examination of domestic societies 5083 
 
 Application for receiver 5084 
 
 Examination of foreign societies , 5085 
 
 No adverse publications 5086 
 
 Revocation of license 5087 
 
 Exemption of certain societies 5088 
 
 Taxation ." 5089 
 
 Penalties 5090' 
 
 Definition of Insurance: 
 
 Defined 645S 
 
 What May be Insured: 
 
 Insurable interest 6459 
 
 Insurance classified 6460 
 
 All kinds subject to this chapter 6460a 
 
 Parties to the Contract: 
 
 Insurer and insured defined 6461 
 
 Who may insure 6462 
 
 Who may be insured 6463 
 
 Insurance of mortgaged property 6464 
 
 Same, new contract 6465 
 
]42 GENERAL INDEX 
 
 Section 
 Insurable Interest: 
 
 Defined 6466 
 
 Classified 6467 
 
 Carrier or depository has 6468 
 
 Contingent or expectant interest not 6469 
 
 Measure of 6470 
 
 Insurance without interest void 6471 
 
 When interest must exist 6472 
 
 When change of interest suspends insurance 6473 
 
 Change after loss does not affect 6474 
 
 Change in one of several things 6475 
 
 Incumbrance or reinsurance of one of several things 6476 
 
 Change of interest by death 6477 
 
 Change among joint owners 6478 
 
 Stipulation of interest void 6479 
 
 Concealment and Representation: 
 
 Concealment defined 6480 
 
 Rescission on account of 6481 
 
 Mutual disclosures 6482 
 
 What not bound to disclose 6483 
 
 How materiality determined 6484 
 
 Presumption of knowledge 6485 
 
 Right to information waived 6486 
 
 Information as to interest 6487 
 
 Rescission for fraudulent concealment 6488 
 
 Matters of opinion 6489 
 
 Form of representation 6490 
 
 When may be made 6491 
 
 Rules of interpretation 6492 
 
 What deemed promise 6493 
 
 Cannot qualify contract; may, implied warranty 6494 
 
 When may be withdrawn '. 6495 
 
 Time to which refers 6496 
 
 On information and belief 6497 
 
 When deemed false 6498 
 
 Effect of falsity 6499 
 
 How materiality determined 6500 
 
 When not material 6501 
 
 Modification. Rescission 6502 
 
 The Policy: 
 
 Defined 6503 
 
 What must specify 6504 
 
 Applied only to interest 6505 
 
 Insurance by trustee or agent 6506 
 
 Terms govern joint or common interest 6507 
 
 Only person intended may claim benefit 6508 
 
 . Benefit of any owner 6509 
 
GENERAL INDEX 143 
 
 Section 
 
 Transfer suspends 6510 
 
 Classified 6511 
 
 Open 6512 
 
 Va lued 6513 
 
 Running 6514 
 
 Receipt for premium. Effect of 6515 
 
 Agreement not to transfer void 6516 
 
 Holder may surrender for cancellation 6517 
 
 Notice necessary to forfeit 6518 
 
 Warranties: 
 
 Classified 6519 
 
 No form necessary 6520 
 
 Express. Must be written 6521 
 
 To what time may relate 6522 
 
 What statement of fact is express warranty 6523 
 
 Statement of intention a warranty 6524 
 
 As to future, when need not be fulfilled 6525 
 
 Rescission for violation of material 6526 
 
 What avoids policy 6527 
 
 Breach without fraud 6528 
 
 Premium : 
 
 When premium payable 6529 
 
 When insured entitled to return 6530 
 
 Premium defined 6531 
 
 Return when insurance is voidable .- 6532 
 
 Not entitled to return 6533 
 
 Return in over insurance by several 6534 
 
 Contribution to return 6535 
 
 Same 6536 
 
 Loss: 
 
 When insurer liable 6537 
 
 Liability for loss in rescuing 6538 
 
 Not liable for peril expected 6539 
 
 Willful act exonerates ; negligence not 6540 
 
 Notice of Loss: 
 
 Without unnecessary delay 6541 
 
 Only best proof in power required 6542 
 
 Defect in. how waived 6543 
 
 Delay in, how waived 6544 
 
 Time in which to make. Blanks to be furnished 6545 
 
 Failure to furnish certificate of another 6546 
 
 Double Insurance : 
 
 Denned 6547 
 
 Contribution of insurers 6548 
 
144 GENEEAL INDEX 
 
 Section 
 
 Reinsurance: 
 
 Defined '. 6549 
 
 Disclosures required 6550 
 
 Contract of indemnity 6551 
 
 Original insured no interest 6552 
 
 Definition of Marine Insurance: 
 
 Definition 6553 
 
 Insurable Interest: 
 
 Owner always has 6554 
 
 Hypothecation reduces interest 6555 
 
 Freightage defined as insurance 6556 
 
 Expected freightage 6557 
 
 Same 6558 
 
 When profits insurable interest 6559 
 
 Charterer has 6560 
 
 Concealment : 
 
 Disclosures more extensive 6561 
 
 Belief of another material 6562 
 
 When knowledge of loss presumed 6563 
 
 What does not vitiate entire contract 6564 
 
 Representations : 
 
 Rescission for false 6565 
 
 Without fraud does not void 6566 
 
 Limited Warranties: 
 
 Seaworthiness 6567 
 
 Seaworthy defined 6568 
 
 When foregoing warranty complied with 6569 
 
 What seaworthiness includes 6570 
 
 As to each part of the voyage 6571 
 
 Delay in repairing exonerates 6572 
 
 Seaworthy as to cargo 6573 
 
 Neutral papers 6574 
 
 The Voyage and Deviation: 
 
 Voyage fixed by mercantile usage 6575 
 
 When not so fixed 6576 
 
 Deviation defined 6577 
 
 When proper 6578 
 
 Improper 6579 
 
 Insurer not liable after '. 6580 
 
 Loss: 
 
 Classified 6581 
 
 Partial 6582 
 
 Total loss classified 6583 
 
 Actual total 6584 
 
 Constructive total 6585 
 
GENERAL INDEX 145 
 
 Section 
 
 When actual loss presumed 6586 
 
 Duty to procure another ship for cargo 6587 
 
 Liable for cost of reshipment 6588 
 
 Payment without notice 6589 
 
 General average loss 6590 
 
 What against actual total loss covers 6591 
 
 Abandoment : 
 
 Defined 6592 
 
 When authorized 6593 
 
 Must be absolute 6594 
 
 When made 6595 
 
 When becomes ineffectual 6596 
 
 Made by written notice 6597 
 
 Eequisites of notice 6598 
 
 Sustained only on cause specified 6599 
 
 Equivalent to transfer 6600 
 
 Payment entitles insurer to salvage 6601 
 
 Insurer 's agents become insurer 's on abandonment 6602 
 
 Acceptance of unnecessary 6603 
 
 Acceptance conclusive 6604 
 
 Acceptance is irrevocable 6605 
 
 To whom freightage belongs after 6606 
 
 Refusal to acecpt 6607 
 
 Rights, if abandonment omitted 6608 
 
 Measure of Indemnity: 
 
 Valuation conclusive between parties 6609 
 
 Partial loss. Liability 6610 
 
 Recovery of profits, how estimated 6611 
 
 How loss determined on valued policy 6612 
 
 When loss of profits presumed 6613 
 
 How loss on open policy estimated 6614 
 
 How partial loss of cargo estimated 6615 
 
 Liability for repairs and labor to recover 6616 
 
 Liability for insurer's contribution to general average 6617 
 
 Subrogation of right to contribution 6618 
 
 Liability for partial loss of ship 6619 
 
 Eire Insurance: 
 
 Rescission for alteration in use increasing risk 6620 
 
 Not is risk not increased 6621 
 
 When contract unaffected, though risk increased 6622 
 
 Measure of indemnity 6623 
 
 Face of policy to be paid in case of loss 6624 
 
 Standard policy 6625 
 
 Construction of standard policy 6626 
 
146 GENERAL INDEX 
 
 Section 
 Life and Health Insurance: 
 
 When payable 6627 
 
 In whom person has insurable interest 6628 
 
 Policy transferable 6629 
 
 When notice of transfer unnecessary 6630 
 
 Measure of indemnity 6631 
 
 Agent defined 6632 
 
 Suicide no defense after one year 6633 
 
 Standard forms of Insurance Policies; Provisions in Life Insurance 
 Policies : 
 
 Authority required to issue policies 6634 
 
 Standard forms -. 6635 
 
 Single premium policies 6635a 
 
 Term insurance 6635b 
 
 Provisions of life policies 6635c 
 
 Provisions prohibited 6635d 
 
 Preliminary term policies 6635e 
 
 Form filed with insurance commissioner 6635f 
 
 Provisions restricted 6635g 
 
 What companies exempt 6635h 
 
 Company defined 6635i 
 
 policy must contain entire contract 6636 
 
 Policies of Health or Accident Insurance: 
 
 Provisions required , 6637 
 
 Provisions forbidden 6638 
 
 Application of this chapter 6639 
 
 Form of policy to be filed 6640 
 
 Indemnity : 
 
 Defined 6641 
 
 Against unlawful act void 6642 
 
 Against act done valid, unless felony 6643 
 
 Against act of person includes agents 6644 
 
 Several includes each 6645 
 
 When liable jointly with person indemnified 6646 
 
 Rules to be applied in interpretation 6647 
 
 Engagement to answer for violation of duty. Reimbursement 6648 
 
 When sureties called bail 6649 
 
 Obligations of bail, how governed 6650 
 
 Lotteries : 
 
 Insuring lottery tickets 9669 
 
 Advertising same 9670 
 
 Arson : 
 
 Arson. Nighttime. Destroying life 9499 
 
 Arson defined 9849 
 
 Building defined W50 
 
GENERAL INDEX 147 
 
 Sectiou 
 
 Inhabitable building defined 9851 
 
 Nighttime defined 9852 
 
 Burning defined 9853 
 
 Ownership defined 9854 
 
 Immaterial. Variance in proof j 9855 
 
 Malice, when inferred '. 9856 
 
 Burning without intent to destroy ' 9857 
 
 Contiguous buildings ) 9858 
 
 Degrees of arson 9859 
 
 In the first degree 9860 
 
 Exception. Appurtenance to building 9861 
 
 Arson in second degree ." 9862 
 
 When burning in nighttime is 9863 
 
 Arson in third degree 9864 
 
 When burning in nighttime is 9865 
 
 Arson in fourth degree 9866 
 
 Punishment for arson 9867 
 
 Fraudulently Fitting out and Destroying Vessels: 
 
 OfSeer willfully destroying vessel 9977 
 
 Others same 9978 
 
 Fitting out vessel with intent to wreck 9979 
 
 Making false manifest 9980 
 
 Fraudulent Destruction of Property Insured: 
 
 Destroying pro] >ertv insured 9981 
 
 Presenting false proof of loss 9982 
 

 4933L>: 
 
 UNIVERSITY OF CALIFORNIA LIBRARY