CHAPTER XCVII.

INSURANCE COMPANIES.

An Act for the incorporation of insurance companies, and defining their powers and

duties.

[Approved February 15, 1859. Laws of 1859, p. 1079.]

porate.

(2914.) SECTION 1. The People of the State of Michigan enact, Power to incorThat any number of persons, not less than seven, may associate together and form an incorporated company for either of the following purposes, to wit:

First. To make insurance on dwelling-houses, stores, and all Dwellings, kinds of buildings, and upon household furniture, goods, wares stores, etc. and merchandise, and any other property, against loss or damage

by fire;

Second. To make insurance as aforesaid, upon vessels, freights, Vessels, freights, goods, wares, merchandise, and other property, against the risks of etc. inland navigation and transportation;

Third. To make insurance against loss and injury to domestic Domestic anianimals by death, disease, accident, or theft;

Fourth. To make insurance upon the health and lives of individuals, and against accidents of any and all kinds, and every insurance pertaining thereto, or connected with life risks, and to grant, purchase, or dispose of annuities;

mals.

Individuals.

against light

Fifth. To make insurance on buildings or personal property Buildings against destruction or damage by tornadoes or storms, and against ning, etc. destruction or damage by lightning when fire does not ensue.

companies not

(2915.) SEC. 2. Any company organized under this act shall Life insurance have power to make re-insurance upon any risks taken by them, to take other respectively, and may make insurance upon any or all of the risks

risks.

Statement filed.

Stock companies

to file statement

and open subscription books.

mentioned in the first, second, third, and fifth subdivisions of the first section of this act; but no company making insurance upon the lives of individuals shall be permitted to take any other kind of risks; nor shall the business of life insurance be in any way connected or united in any company making insurance on marine and fire risks. 1

(2916.) SEC. 3. Such persons, so associating, shall file in the office of the Secretary of State a statement, signed by all the corWhat to state. porators, stating their purpose of forming a company for the transaction of the business of insurance, as expressed in the several subdivisions of the first section of this act, which statement shall also comprise a copy of the charter proposed to be adopted by them, and shall publish a notice of such their intention, once in each week for at least four successive weeks, in a public newspaper in the county in which such company is proposed to be located. (2917.) SEC. 4. The persons so associating, after having filed the statement and published the notice as aforesaid, may open books for the subscription to the capital of the company so proposed to be organized, and keep the same open till the whole amount specified in the charter shall be subscribed; or, in case the said company is proposed to be conducted on the plan of mutual insurance, then to open books to receive propositions, and enter into agreements in manner hereinafter specified. But no company, organized on the plan of mutual insurance, and insuring against any of the risks mentioned in the first, second, third, or fifth subdivisions of section one of this act, shall hereafter do any business, or take any risks, or make any insurance in any more than two counties in this State, Names in char- Which counties, in the case of companies hereafter organized, shall be named and set forth in their charter, and in the statement required by section three to be filed in the office of the Secretary of State; and the president and secretary of every company heretoselected within fore organized, and making any insurance on the plan of mutual insurance, shall, within six months after the passage of this act, select the county or counties, not exceeding two, which shall be contiguous, in which such company will carry on business and After certifying make insurance, and shall make and sign a certificate of such selecshall do business tion, and affix the seal of the company thereto, and file the same in the office of the Secretary of State, and from thenceforth such company shall not make any insurance in any other county.'

Mutual companies limited to two counties.

ter.

Contiguous counties to be

six months.

and recording,

in no other

county.

1 As amended by Act 208 of the Laws of 1867, p. 289. approved and took effect March 28. 1887.

must be invested

may be issued.

companies may

ness.

scription books

panies.

(2918.) SEC. 5. The capital stock of any stock company organ- Stock companies, capital, ized under this act, shall not be less than one hundred thousand shares, increase of stock. dollars, in shares of fifty dollars each, which capital stock may be increased, by a vote of two-thirds of the stockholders, to not more than ten hundred thousand dollars; and one-third at least of the Where one-third capital stock of every stock company shall consist of and be invested in the bonds or stocks of the United States or of this State, or in county, city, or other municipal bonds, which bonds, at their actual cash value in the market, shall at all times amount to at least one-third of the whole amount of the capital stock of the company. And no stock company shall issue any policy until when policies the full amount of one hundred thousand dollars shall have been paid in by the stockholders, and invested or held in cash by said company; and no mutual insurance company, organized as afore- When mutual said, shall commence business until bona fide agreements have commence busibeen entered into for insurance with at least one hundred individuals, covering property to be insured to the amount of not less than fifty thousand dollars. At the time of the opening of the books on opening subfor the subscription of stock in organizing a stock company, any in stock comperson, corporation, or company may subscribe to the same, and shall pay, at the time of such subscription, the sum of two dollars per share on the stock by each subscribed. The books may be When delivered closed when the whole amount of capital stock is subscribed; and when a board of directors is elected, as hereinafter specified, the said persons so associating shall deliver to such board the books. and money paid in upon such subscriptions as aforesaid. ' (2919.) SEC. 6. No stock company formed for transacting the Capital of business of life insurance shall commence business until a cash capital of one hundred thousand dollars shall have been paid in, and not less than seventy-five thousand or more than ninety thousand dollars of the same invested in the stocks of this State, or of the United States, or in bonds and mortgages on cultivated farms worth double the amount for which the same are mortgaged, the value of the land to be ascertained by three disinterested commissioners to be appointed by the board of supervisors of the county in which such company is located, the buildings to form no part of the valuation thereof: Provided, That no such company shall Previso. have on hand at any time less than ten thousand dollars in cash; and no mutual life insurance company formed as aforesaid shall commence issuing policies until they have received at least five hundred applications for insurance, on which the premiums shall

1

to directors.

company.

1 Vide note to section 2 of this act.

When companies may hold real estate.

Charter; what it shall declare.

Evidence of investment, how ascertained.

amount to three thousand dollars or over. They shall also provide in their charter for the acquiring of a stock capital, by each member paying annually into the fund for that purpose at least one dollar for each one thousand dollars he has insured by such company.'

(2920.) SEC. 7. No company organized under this act shall purchase, hold, or convey real estate, except as hereinafter set forth:

First. Such as shall be necessary for its immediate accommodation in transacting business; or,

Second. Such as shall have been mortgaged to it in good faith by way of security for debts; or,

Third. Such as shall have been conveyed to the company in satisfaction for debts; or,

Fourth. Such as shall have been purchased at sales upon judgments, decrees, or mortgages, obtained or made for such debts, and all real estate obtained by virtue of any provisions of this section, except that mentioned in the first subdivision, shall be sold or disposed within five years after the title has been perfected in such company.

(2921.) SEC. 8. In addition to the foregoing provisions, it shall be the duty of the corporators of any company organized under the provisions of this act, to declare, in the charter which is hereby required to be filed, the mode and manner in which the corporate powers given under and by virtue of this act are to be exercised, the mode and manner of electing trustees or directors, a majority of whom shall be citizens of this State, and the filling of vacancies, the period for the commencement and termination of its fiscal year, together with the amount of capital to be employed in the transaction of its business, if it be a stock company. They may also provide in their charter for the division of the risks to be insured by the company, into two or more classes, according to the degree of hazard, or according to the nature or kind of risks to be effected, and if it be a mutual company, may prescribe therein the liabilities of the members thereof, to contribute toward defraying the losses and expenses of the company, and the mode and manner of collecting such contributions.

(2922.) SEC. 9. The charter thus filed by the corporation shall be examined by the Attorney General, and if found to be in accordance with the requirements of this act, he shall certify the same to the Secretary of State, and said Secretary shall appoint three disinterested persons, residents of the county wherein such corpora

1 As amended by Act 277 of the Laws of 1865, p. 566, approved March 20, 1865.

tion is proposed to be formed, who shall certify under oath that a sum at least equal to the amount specified in the fifth section of this act, if it be a stock company, has been paid in and is possessed by it in money or stocks, bonds, and mortgages, as are required by the sixth section of this act, or if a mutual company, that it has received and is in actual possession of the capital, premiums, or engagements of insurance, as the case may be, to the full extent required by the fifth section of this act. Copies of such certificate shall be filed in the office of the Secretary of State, whose duty it shall then be to furnish the corporation with a certified copy of the charter and certificates aforesaid, which, upon being filed by Authority to them in the county clerk's office of the county in which such company is located, shall be their authority to commence business and issue policies, and the same may be used in evidence for or against such corporation. (2923.) SEC. 10. The corporators, or the trustees or directors, as Powers of corpothe case may be, of any company organized under this act, shall have power to make such by-laws, not inconsistent with the Constitution or laws of this State, as may be deemed necessary for the government of its officers and members, and the conduct of its affairs.

issue policies.

rators.

be responsible

for losses in

another class.

(2924.) SEC. 11. In case any mutual company under this act One class not to shall divide their risks into two or more classes, pursuant to section ten, then the person insuring in one class in said company shall in no event be held responsible for losses occurring in the other classes or class, and in case one class should at any time become insolvent, then such class may be proceeded against, and its affairs closed up, pursuant to the law in relation to insolvent corporations, and such insolvency shall in no manner affect the right of the directors to manage and conduct the other class or classes in the same manner as if no such insolvency had occurred. (5925.) SEC. 12. First. It shall be the duty of the president, or vice-president and secretary of each company organized under this ment under act, annually, in the month of January, to prepare, under oath, and file in the office of the Secretary of State, a statement of the standing and condition of said company on the last day of December prior thereto, which statement, if it be a stock company, shall Its contents. show the amount of the capital stock of the company, how much thereof has been paid in, and how and in what manner the same is invested, whether in bonds, stocks, mortgages, real or personal property, or how otherwise, and shall show

The kind, amount, and cash market value of such stocks;

Annual state

oath.

Stocks.