CHAPTER XCIX.

FIRE AND MARINE INSURANCE COMPANIES.

Formation of company.

To make insur

ance on build

An Act relative to the organization and powers of fire and marine insurance companies transacting business within this State.

[Approved April 3, 1869. Laws of 1869, p. 230.]

(2965.) SECTION 1. The People of the State of Michigan enact, That 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 ings, furniture, kinds of buildings, and upon household furniture, goods, wares, and merchandis, and any other property, against loss or damage by fire;

goods, etc.

On vessels, freight, etc.

Power to re-insure.

Declaration of

intention to

with copy of articles, filed with Secretary of State.

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

(2966.) SEC. 2. Any company organized under this act shall have power to affect re-insurance of any risks taken by them, respectively.

(2967.) SEC. 3. Such persons shall file in the office of the Secreform company, tary of State a declaration, signed by them, expressing their intention to form a company for the purpose of transacting the business of insurance, as expressed in the first section of this act, which declaration shall also comprise a copy of the articles of association proposed to be adopted by them, and shall publish a notice of such

notice.

intention, once in each week, for at least six weeks, in a public Publication of newspaper in the county in which such insurance company is proposed to be located.

Articles;

contents of.

(2968.) SEC. 4. The articles of association shall set forth the name of the company; the place where the principal office for the transaction of its business shall be located; the mode and manner in which the corporate powers granted by 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 of filling vacancies (but each director of a stock company shall be the owner in his own right of at least five hundred dollars' worth of the stock of such company, at its par value); the period for the commencement and termination of its fiscal year, and the amount of capital to be employed in the transaction of its business; and the Secre- Secretary of tary of State shall have the right to reject any name or title of any name. company applied for, when he shall deem the name too similar to one already appropriated, or likely to mislead the public in any respect.

State may reject

companies from

etc.

(2969.) SEC. 5. No company formed under this act shall, directly Prohibiting or indirectly, deal or trade in buying or selling any goods, wares, dealing in goods, merchandise, or other commodities whatever, excepting such articles as may have been insured by such company, and are claimed to be damaged by fire or water.

capital stock.

companies may

(2970.) SEC. 6. The capital stock of any stock company organized Amount of under this act shall not be less than one hundred thousand dollars, in shares of fifty dollars each, which capital stock may be increased, How increased. by a vote of two-thirds of the stockholders, to not more than one million dollars; nor shall any company hereafter organized How mutual on the plan of mutual insurance commence business in this organize. State until agreements have been entered into for insurance with at least two hundred applicants, the premiums upon which shall amount to not less than twenty-five thousand dollars, of which at least five thousand dollars shall have been paid in actual cash, and for the remainder of which notes of solvent parties, founded upon actual and bona fide applications for insurance, shall have been received. No one of the notes received as aforesaid shall Amount of notes amount to more than five hundred dollars; and no two thereof shall be given for the same risk, or made by the same person or firm, except where the whole amount of such notes does not exceed the sum of five hundred dollars; nor shall any note be regarded or when notes may represented as capital stock unless a policy to be issued upon the capital stock. same within thirty days after the organization of the company

limited.

be regarded as

Notes payable when directors deem requisite.

Provision regarding notes

ital stock.

Not to be surrendered while

taking the same, upon a risk which shall be for no shorter period than twelve months. Each of said notes shall be payable, in whole or in part, at any time when the directors shall deem the same requisite for the payment of losses by fire, and such incidental expenses as may be necessary for transacting the business of said company; and no note shall be accepted as part of such capital accepted as cap- stock unless the same shall be accompanied by a certificate of the clerk of the circuit court of the county in which the person executing such note shall reside, that the person making the same is, in his opinion, pecuniarily good and responsible for the same in property not exempt from execution by the laws of this State; and no such note shall be surrendered while the policy for which it was policy is in force. given continues in force. But no company organized on the plan of mutual insurance, and insuring against any other risks mentioned in 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, which counties shall be contiguous, and which counties, in the case of companies hereafter organized, shall be named and set forth in their articles of association, and in the statement required by section three to be filed in the office of the Fire insurance Secretary of State. No fire insurance company organized under this act, or transacting business in this State, shall expose itself to any loss on any one fire or inland navigation risk or hazard, to an amount exceeding ten per cent of its paid-up capital, nor shall any Risks limited. fire insurance company organized under the laws or by authority of any foreign government expose itself to any loss on any one fire or inland navigation risk or hazard, to an amount exceeding ten per cent of its deposit capital in the United States.1

Mutual companies limited to two counties.

companies doing business in this State.

Book of subscription, when

proposed stock companies.

(2971.) SEC. 7. It shall and may be lawful for the individuals to be opened by associated for the purpose of organizing any company under this act, after having published the notice and filed their declaration. and a copy of their articles of association, as required by the third section of this act, and also on filing in the office of the Secretary of State proof of such publication, by the affidavit of the publisher of such newspaper, his foreman or clerk, to open books for subscription to the capital stock of the company so intended to be organized, and to keep the same open until the full amount specified in the articles of association is subscribed; or, in case the business of such company is proposed to be conducted on the plan of mutual insurance, then to open books to receive propositions,

Mutual companies.

1 As amended by Act 92 of the Laws of 1871, p. 182, approved and took effect April 12,

and enter into agreements, in the manner and to the extent specified in the sixth section of this act.

funds may be

bonds and

this State.

recorded.

register of

(2972.) SEC. 8. It shall be lawful for any fire insurance company Capital and organized under this act, or incorporated under any law of this invested in State, to invest its capital, and the funds accumulated in the course mortgages of of its business, or any part thereof, in bonds and mortgages on unincumbered improved real estate within the State of Michigan, worth double the sum loaned thereon, exclusive of buildings, unless such buildings are insured and the policy transferred to said company. Said mortgages shall not, however, be accounted a Mortgages to be part of the capital stock of a company until they shall have been recorded agreeable to the provisions of law, and a certificate there- Certificate of of from the register of deeds filed with the Secretary of State, deeds, etc., to be together with an abstract of title of the lands therein mortgaged, and tary of State. also a certificate of the register of deeds of the county in which the lands are located, that the same are worth at least double the amount loaned thereon; and also in the bonds of this State, or May also invest bonds or treasury notes of the United States, and also in the bonds United States, or of any county, municipality, or school district in this State author-nicipal bonds of ized to be issued by law, and to lend the same or any part thereof, on the security of such bonds, or treasury notes, or upon bonds and mortgages as aforesaid, and to change and reinvest the same as occasion may from time to time require.

filed with Secre

in bonds of

or mu

this State.

(2973.) SEC. 9. No company formed under this act shall purchase what real estate or hold any real estate, except—

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

Second. Such as shall have been conveyed or mortgaged to the company 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,

companies may purchase, etc.

tain real estate may be held.

Fourth. Such as shall have been purchased at sales, upon judgments, decrees, or mortgages in favor of such company, or held or owned by it. And all real estate obtained by virtue of any pro- How long cervisions of this section, except that mentioned in the first subdivision, shall be sold or disposed of within five years after the title has been perfected in such company, unless the company shall procure a certificate from the Secretary of State that the interest of said company will materially suffer by forced sale, in which event the sale may be postponed for such period as the said Secretary of State shall direct in said certificate, not to exceed ten years in all.