Insurance laws of the State of Georgia, 1927

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INSURANCE LAWS
OF THE
STATE OF GEORGIA
IN FORCE TO AUGUST. 1927 WM. A. WRIGHT, Insurance Commissioner

INSURANCE DEPARTMENT STATE OF GEORGIA
NOTE.
The laws of this State, relating to insurance and insurance c_ompanies, now in force, are published in the following pages as found in Park's Annotated Code, 1914, Vol. 2, and Supplements of 1917 and 1922 with their section numbers and in the Georgia Laws for the Years 1917 to 1925.
WM. A. WRIGHT, Insurance Commissioner.
Atlanta, May 1st , l926.



STATE OF GEORGIA
LAWS RELATING TO
INSURANCE AND INSURANCE COMPANIES
GENERAL STATUTES
as codified in 'PARK'S ANNOTATED CODE, 1914, Volume 2, and SUPPLEMENTS 1917 and 1922, and PUijLI~ ACTS, 1917 to 1925, inclusi ve.
SECTION I.
Incorporation of Insurance Companies
2388. Charters to insurance companies. All corporate powers and privileges to insurance companies in this State shall be issued and granted by the secretary of State, upon the terms, liabilities, restrictions, and subject to all th~ prov,isions of this Article and the laws and Constitution of this State. If from any cause the secretary of State should be disqualified from issuing and granting said powers, the duties required by this Article to be performed by the secretary of State shall be performed by the comptroller-general.

Acts 1893, p. 73. SS 6446, 2392, 2263 , 2577, 2564 ( n), 2564 ( bb).
2389. Fon!wtion of company and petition. Any number of persons not less than five may form a company, but before receiving a certificate of incorporation under this Article, shall first

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file a petition, addressed to the secretary of State, in which shall be stated the name and residence of each of the persons desiring to form said corporation; the name of the company; the kind or kinds of insurance they propose to carry on; the amount of the proposed capital stock; the number of shares each. of the petitioners agrees to take; that they do in good faith intend to go forward without delay to raise the capital stock and organize said company; a request to be incorporated under the laws of this State; that they have given thirty days no.tice of their intention to apply for said charter, by the publication of said petition in the newspaper publishing the legal advertisements of the county where the principal office of said company is to be located, once a week for four weeks before the filing of said petition. There shall be annexed to said petition an affidavit made by at least two of the persons forming said company, that the names subscribed are the genuine signatures of the persons named the.rein, and that the facts stated in the petition are true. Said petition thus sworn to shall be filed in the office of the, secretary of State, who shall indorse thereon the date of the filing and record the same in a book to be kept by him for that purpose.
Acts 1893, p. 73.
2390. Form of certificate to be issued. When said petition has been filed in the office of the secretary of State, he shall issue to said company under the great seal of the State the following form or _certificate, to-wit:
To all to whom these presents may come-Greeting:

Whereas, In pursuance of an Act of the General Assembly of the State of Georgia, approved Decs,mber 18th, 1893, and (naming the persons who signed the petition) having filed in the office of secretary of State a certain petition seeking the formation of a corporation to be known as (insert name), with a capital stock of$ ----------------, for the purpose of organizing and running a (kind or kinds) insurance company, and having complied with the . statutes in such

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cases made and provided; therefore, the State of Georgia hereby grants unto the above-named persons, their successors and assigns, full authority, by and under the said name of ( insert name,) to exercise the powers and privileges of a corporation for the purposes above stated, subject to the provisions of the Constitution of this State, and all the laws, rules, and regulations governing insurance companies of force at the date of this certificate, or that may hereafter become of force either by constitutional or statute laws, or by any rules or regulations of the insurance commissioner of this State or otherwise, which govern insurance companies in this State.
In witness whereof, these presents have been signed by the Secretary of State (or when he is disqualified, by the comptroller- general), and to which 1s annexed the great seal of the State, at Atlanta, Georgia, this-----day of- - - - -, 19-.
~cts 1893, p. 74.
2391. Corporate powers. Thereafter the persons who signed said petition, and all persons who shall become stockholders in said company, shall be a corporation by the name specified in said certificate, and shall possess the powers and privileges and be subject to the provisions con tai ned in this Article.
Acts 1893, p . 74.
~ 2392. Fee. Before the secretary, or, when disqualified , the comptroller-general, shall issue said certificate, the petitioners shall pay to the treasurer of the State a fee of one hundred dollars.
Acts 1893, p. 74. 6446, 2388.
2393. Certificate Prima facie evidenc,e of corporation-'s existence. Any certificate or a duplicate thereof, issued under this Article, shall be prima facie evidence of the existence of such corporation.
1893, p, 74.

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2394. Capital stock. When such certificate has been issued, the persons named therein, in case they have not taken the whole capital stock, may open books of subscription to fill up capital stock of the company, and, after giving such notice as they may deem expedient, they may from time to time receive subscriptions until the whole capital stock is subscribed. The capital stock of said company shall be divided into shares of one hundred dollars each, and shall not be less than one hundred thousand dollars for each class of insurance to be engaged in, and no insurance company chartered under this Article shall commence the insurance business until at least this amount for each class of insurance to be engaged in is paid in cash, or invested in bonds of the United States, of this State, or the cities or counties or this State, estimated at their cash market value, or in mortgages on real estate worth twice the amount .for which the same is mortgaged, which investment must be approved by the secretary of State, or, when he is disqualified, by the :omptroller-general. When bonds of the cities or counties of this .State are invested in, the secretary of State, or comptroller-general, .as the case may be, shall require an opinion from the attorney-gen,eral, as the case may be, shall require an opinion from the attorneygeneral of State that the bonds are good, legal and valid bonds, be.fore approving the investment.
Acts 1893, p. 75.

2395. Organization. When the amount of the capital stock has been subscribed, the persons named in said certificate are authorized to call a meeting of the stockholders for the purpose of organization, of which meeting every subscribing stockholder shall have ten days notice personally, or by depositing said notice in the post-office, postage paid, directed to him, at the post-office nearest his usual place of residence. At said meeting there shall be elected a board of directors of not less than five, , nor more than fifteen to manage the affairs of said company, said directors to be chosen by a majority vote of the stockhold~rs, each share of stock being entitled to one vote; said election to be governed by such by-laws as said

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company may prescribe; the persons elected as directors to continue in office until others are elected to fill their places. No person shall be elected a director unless he be a stockholder, owning stock in his own name, or as trustee, or personal representative, and who is qualified to vote at the election at which he is chosen. If for any reason the election is not held at the time appointed, the same may be held at any time thereafter on ten days notice to all stockholders; but at any meeting of the stockholders or their legal representatives, the notice may be waived, and an election held at once. The directors shall elect from their number a president, vice-president or vicepresidents, secretary and treasurer, and such other officers and agents as they may deem necessary. The regular elections for directors shall be held annually, at such time and place as may be prescribed in the by-laws of said company. All meetings of directors of said company shall be held in this State. A majority of said directors shall be bona fide residents of Georgia .
J3 , p. 75.
2395 (a). D irectors of life insurance companies. [The board of directors of all life insurance companies chartered by the laws of this State shall consist of not less than five nor more than twenty members, a majority of whom must be bona fide residents of this State, and the majority of which board shall constitute a quorum for the purpose of transactin g business.]
Acts 1912, pp. 119, 137.
2396. Stock to be paid in before beginning business, $100,000. Said insurance company shall not begin business until at least one hundred thousand dollars of the capital stock has been paid in. The directors may require the subscribers to pay the amounts subscribed, in such installments as they may deem proper, which sums they may lend until the company is read y to engage regularly in business. If any subscriber shall neglect to pay any installment required by resolution of the directors, the said board shall declare his stock and all previous payments thereon forfeited to the use of

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the company; but they shall not declare it forfeited until they have served a notice in writing on him personally, or by depositing said notice in the post-office, postage paid, directed to him at the postoffice nearest his. usual place of residence, stating he is required to make such payment at the time and place expressed in such notice, and if he fails to make the same, his stock and all previous payments thereon will be forfeited for the. use of the company ; which notice must be served at least sixty days previous to the day on which such payment is required to be made.
Acts 1893, p. 75.
2572, 268 2.
2397. Stock may be increased or decreased. The capit_al
stock of any fire insurance company organized under the laws of this State, whether incorporated by special act of the General Assembly, or by the secretary of State under the general law, may be increased to such an amount as may be desired by the stockholders of such company, or said capital stock may be decreased to any sum, not less than one -hundred thousand dollars, as may be desired by the stockholders of such company, at a meeting of such stockholders, called for the special purpose by order of the board of directors of such company, of which meeting notice ~hall be given to each stockholder ( or in case of death to his legal representative or heirs at law), personally, or by mail addressed to his last known residence, at least thirty days previous to such special meeting, and such increase or decrease shall be made in such manner as shall have been determined by the stockholders at such meeting, it requiring the vote of a majority in amount of the entire capital stock of such company to authorize such increase or decrease, and the manner of effecting the same. If at such meeting the stockholders, holding the majority in amount of such capital stock, vote for such increase or decrease, the proceedings of the meeting .must be reduced to writing and entered upon the books or minutes of the company, and a copy thereof, verified by the president or secretary thereof, shall be filed and recorded in the office of the secretary of State, and

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when so filed and recorded shall become an amendment to the charter of said company, and a certified copy thereof shall be evidence of all facts therein contained, in all courts of this State, without further proof: Provided , such increase or decrease shall be approved by the comptroller-general as ex-officio insurance commissioner of this State, to be evidenced by indorsin g his appro'val on the said verified copy of such proceedin gs of sai d stockholders, which indorsement shall be recorded in the office of th_e secretary of State, together with said verified copy, and become a part thereof.
Acts 1900, p. 76.
H 2201, 2191, 5798.
2398. Stock deemed personalty. The stock in said insurance company shall be deemed personal , and shall be transferable in the manner prescribed by the by-laws of the company; and no share shall be transferable until all previous calls thereon shall have been fully paid in.
Acts 1893, p . 76. I 3646, 2573, 22 19, 2583.
2399. Organization and commencement of business, charter, etc. All the powers and privileges and said certificate of incorporation of said insurance company shall cease and determine at the expi ration of two years from the date of said certificate, if, at the expiration of said two yea rs, said company has not organized and commenced business.
Acts 1893, p. 76. 1902, p. 52.
2400. Powers of -life msurance companies. Every life insurance company incorporated under this law shall have the power to insure the lives of all persons who apply for insurance therein, stand . the necessary examinations, and comply with such laws as may hereafter be enacted, and with such reasonable requirements as the directors of such company may establish ; and to make any and every insurance appertaining to or connected with life risks.

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2401. Of fire insurance companies. Any fire insurance company incorporated under this Article shall have authority to insure against any loss by fire on all kinds of property, either real, personal, or mixed; also against all the hazards of the ocean or inland navigation, arid transportation of every kind; and is hereby granted the power to insure all classes of property that is now or that may hereafter be allowed to be insured by the laws of this State; and may do any and all thing; necessary for the purpose of carrying on a fire insurance company, not in conflict with the laws of this State, or of the United States.

2401 (a) . Losses ascribable to lightning, etc. P etition and publication. Fee. The Secretary of State for the State of Georgia is hereby empowered to grant to fire insurance companies, heretofore or hereafter incorporated under the la,vs of the State of Georgia, authority to cover by their policies losses ~scribable to lightning, explosions, storms of every character, earthquake, hail, frost, snow, riot or civil commotions, theft and sprinkler leakage, provided the company desiring any one or more of the powers herein mentioned shall file in the office of the Secretary of State a petition, signed with its corporate name , statin g the name an-d character ot the corporation, the date of its ' charter and all amendments thereto, that it desires an amendment to its charter covering any one or more of the powers herein mentioned, and shall file with such petition a certified abstract from the minutes of the board of directors of the said company, showing that the application for the proposed amendment has been authorized by a two-thi rds vote of the entire capital stock of the company at a meeting of the stockholders called for the purpose by resolutions of the said board of directors, notice of w hich said meeting shall be mailed to each stockholder or, in case of death , to his legal representatives or heirs at law, and addressed to his last known resid'ence at least ten days previous to the day of said meeting.
Affidavits, made and signed in due form of law by the president or sec~etary, shall be attached to said petition, showing that it has

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been published once a week for four weeks in the newspaper in which is published the Sheriff's Sales of the County in which the principal office of said corporation is located, and the said corporation shall pay to the Secretary of State a fee of Twenty-five Dollars to be converted by hi_m into the Treasury of the State.
Acts 1921, p. 206.
2+02. Of accident insurance companies. Accident insurance
companies, chartered under this Article, shall have authority to insure persons against accident, loss of life, or personal injury; to provide a weekly indemnity to its members in case of accident; and shall have all the usual and ordinary powers incident to accident insurance, not in conflict with the. Constitution and laws of this State and the United States.

2+03. Of live-stock msurance companies. Live-stock insurance companies, organized under this law, shall have the power to insure against loss arising" from the death of or injury to domestic animals, and shall have all powers incident to the live-stock insurance business, which are not in conflict with the laws and Constitution of this State or of the United States.

24041 Contracts to be evidenced by policy. Contracts of insurance to be entered into by any company organized under this Article shall not be binding unless evidenced by a policy of insurance in writing or print, or both, and the liability of said company, in case of loss sustained by any policyholder, shall be governed by the terms, stipulations, and conditions appearing upon the face of the policy. No policy or other contract of said corporation shall be binding except it be signed by the president or vice-president and secretary or assistant secretary of the company.
I 2470, 2470 (a).
2405. Dividends. The board of directors of any company organized under this Article may declare dividends out of the earn-

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ings of said corporatio11: P rovided, no dividend shall be declared until the earnings are sufficient to pay the same, after deducting all expenses and losses, and after providing for such reserve as may be provided for by law.

2406. Stock dividends. Corporations formed under this Article are empowered to issue stock .dividends in lieu of money di vidends if the board of directors shall so decide, and thereby ~dd to the capital stock, not to exceed the highest limit of the capital stock of their charter.

2407. Participation by policyholders in net profits. The
board of directors may, after providing for such reserve as may be required by law, by a majority vote, give the holders of policies of said company on any particular line or clas.s of insurance the right to participate in the net profits of such company to such an extent, in such manner, and upon such terms as the board of directors may agree, the same to be plainly stipulated on the face of the policy; and unless it be stipulated on the .ace of the policy that the policyholder 'has the right to participate, it shall not be lawfu l for any . policyholder to participate in any of the profits of such company. If the incorporators of any stock company see proper, they may embrace this principle in their charter, stating therein the average amount of dividends the stockholders shall receive on the face value of their stock, in which case all net profits above this dividend and the reserve shall be ,paid as a dividend to all the policyholders.

Section "2408. Investm ents by 1nsurance Companies. Amended by Acts 1918 P. 119, and codified as Section 2409 (a).
2409 (a). Investment by insurance companies. Convey.ances and purchases of realty, etc. Every insurance company organized and doing business by virtue of the laws of this State shall have authority to invest its money or assets in , and make loans on, any and all bonds or securities issued by the United States of America,

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the District of Columbia, or any state of the United States of America, or of any county or city therein, also any bonds of any township or school district therein, or bonds issued by the Federal Land Banks under the provisions of the Act of Congress of the United States of America of July seventeenth, one thousand, nine hundred and sixteen; its amendments and supplements; first lien on improved real estate in any of the States of the United States of America, not exceeding fifty per cent of the value of said property; promissory notes amply secured by - pledge of securities in which said companies are authorized to invest their funds; loans on their own policies not exceeding the reserve thereon; to invest in a building for home office purposes, provided, no company chartered under the laws of Georgia shall hereafter invest in sue~ building unless its assets exceed one hundred thousand dollars; nor shall such company invest more than twenty-five per centum of its assets in such building; provided, further, that any such investment in a building for home office use shall first be approved by the Insurance Commissioner; in bonds in any solvent railroad or street railway corporation, upon which no default in interest has been made; and in any evidence of indebtedness which may, under laws existing at_ this time, be purchased or discounted by the Federal Reserve Banks; but no insurance company shall require or hold more than ten per centum of the securities of any single corporation, nor shall more than ten per centum of its assets be invested in the above described securities of any single company.

Such insurance companies organized and doing business by virtue of the laws of this State are authorized to invest their funds in the inv.estments and securities aforesaid and shall not be required to obtain the approval of the Insurance Commissioner of Georgia in making of such investments, except as herein provided, but should such insurance company desire to invest their funds in investments and securities other than those specified herein, they shall be first required to obtain the approval of the Insurance Commissioner of this State. Such insurance companies may also sell, assign, transfer

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and convey, either with or without warranty, or either with or without recourse upon it, -as it may prefer, any real estate, personal property, bond, note, mortgage, deed or trust, deed to secure debt, or other form of property or security in which it may have invested its .money or essets or made loans on as allowed by law, and, may also buy and sell any realty that may be necessary for the protection of any loan it may make,''
Acts of 1918, pp. 119, 122. 2236. 2413, 2428 , 2564 (2), 62 6 (c), P. C.
Acts of 1925, pp. 92 to 94.

2410. R eins urance and seserve. Any company organized under this Article shall have the right to reinsure any or all of its risks; and every company incorporated under this Article shall provide for such reserve as may be required by law.

2411. Liability of stockholders. Stockholders in corporations organized under this Article shall be individually liable to the extent of their unpaid subscription to the capital stock, and for no greater amount.
2270
2412. Mutual or co -operative compan.i-es. The preceding sections of this Article, in so far as they are applicable, may be applied to the formation of mutual or co-operative fire, live-stock, life, or accident-insurance companies; but applicants for this class of insurance shall not be required in their petition to set out the amount of the proposed capital stock or the number of shares of the same; nor shall it be necessary for the secretary of State to incorporate in his certificate of incorporation any ref~rence to the capital stock of said company.
Acts 1895, p. 53.

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SECTION 1 (a)
Insurance Department
2412 (a). Officers of department. Seal. Records. Re-
ports. [There shall be established in this State in the office of the comptroller~general, a department which shall be called the insurance department of the State of Georgia, and which shall be charged with the enforcement of the laws which have been or may hereafter be passed relating to insurance. Its chief officer shall be the comptroller-general, who shall be styled "insurance commissioner." Whenever in this law the designation "insurance commissioner" or "commissioner" is used, it shall be held to mean the chief officer of the . insnrance department of the State of Georgia. The insurance commissioner shall exercise the powers and perform the duties conferred and imposed upon him by this law or any other law of the State. He may appoint a deputy insurance commissioner to assist him in the discharge and performance of his duties, and in the event of a vacancy in the office of insurance commissi~ner, or in his absence or disability for any re.ason, the deputy shall perform all the. duties required of the insurance commissioner. The said deputy shall execute a bond with proper security in the sum of five thousand dollars, said bond to be approved by the insurance commissioner and conditioned upon the faithful performance of his duties. The said deputy shall be removable at the pleasure of the commissioner. The insurance commissioner may also appoint a clerk in addition to the one already employed by the comptroller, and a fire inspector whose powers aod duties are hereinafter prescribed. The commissioner shall have an official seal of such device as he shall, with the approval of the Governor, select. Every certificate and other document or paper executed by such insurance commissioner in pursuance of any authority conferred upon him by law and sealed with the seal of his office, and all copies of papers certified by him and

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authenticated by said seal, shall in all cases be evidenced equally and in like manner as original thereof and shall have the same force and effect as the original would have in any suit or proceeding in any court in this State. The office of the insurance commissioner shall be deemed a public office and the records, books and papers thereof, on file therein, shall be tleemed public records of the State, except as may be provided otherwise herein. The commissioner shall publish and report annually to the legislature his official transactions, and, shall include in such report abstracts of the annual statements of the several insurance companies and bonding and fidelity companies and an exhibit of the financial condition and business transactions of the said companies as disclosed by official examinatio'ns of the same or their annual statements. He shall include therein a statement of receipts and expenditures of the department for the preceding yea r, and such other information and recommendations relati've to insurance and insurance laws of the State as he shall deem proper.]
Acts 1912, p. 11 9. 2413.
2412 (b). Compensation of officers. [The officers of the
insurance department heretofore mentioned shall be paid the followi ng salaries: The insurance commissioner, $3,000.00 per annum ; the deputy insurance commissioner, who shall be a man of actuarial experience, $3,000.00 per annum; and the additional clerk of the ,department, $2,000.00 per annum. All of said sums to be paid out of the State treasury as is now provided by the law for the payment of salaries of all State house officers, and the said officers of the insurance department herein enumerated shall not receive any ,other fees or compensation whatsoever: Provided, that in no event shall the salaries paid said officials exceed the fees received ~nder the provisions of the law.]
Acts 1912, pp. 119. 128: (a) Acts 1919, p. 283.
2412 (c). Appropriation for payment of salaries. [The sum of $7,500.00, or so much thereof as may be necessary, is

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appropriated annually, and the same is hereby appropriated for the payment of all salaries herein provided for and fixed for the first year's service under this law.]
Acts 1912, pp. 119, 133.
2412 (d). Collection of fees and taxes. [The commissioner shall collect the charges, fees and taxes as now provided by law and give proper receipts therefor, and at the end of every calendar month, or oftener, in the discretion of the commissioner, shall pay into the State treasury, all amounts collected by him.]
Acts 1912, PP, 119, 121.
2412 (e). Fees, taxes, etc. [All fees, license taxes and other dues and taxes now imposed by the laws of this State and by this law on insurance companies, shall be collected as now provided by law, and paid into the State treasury as hereinbefore provided.]
Acts 1912, pp. 119, 128.
2412 ( f). Examination of insurance companies. [The ,insurance commissioner may at any time have the right to examine into the affairs of any insurance company doing business as an assessment, fraternal, industrial and charitable or otherwise, in this State, and into the affairs of any company organized under the laws of any other State, having an office in this State, which company is engaged in or is claiming or advertising that it is engaged in or.ganizing or receiving subscriptions for or disposing of stock of, or in any manner aiding or taking part in the formation or business of an insurance company or companies, or 'vvhich is holding capital stock of one or more insurance company or companies for the purpose of controlling the management thereof or as voting trustee or otherwise. For such purpose he may appoint as examiners one or more competent persons, not officers of, or connected with, or interested in any insurance company other than as policyholders, and .upon such examination, he, his deputy or any examiner authorized by him, may examine under oath,. the officers and agents of such company, and all persons deemed to

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have material information regarding the company's property or business. Every such company, its officers and agents, shall produce at the office of the company, where the same are kept its books and all papers in its possession relating t~ its business, and any other persons may be required to produce any book or paper in his _custody relevant to the exami_nation for the inspection of the commissioner, his deputies or examiners whenever required; and 'the officers and agents of such company shall facilitate such examination and aid the examiners in making the same so far as it is in their power to do so. Every such examiner shall make a full and true report of every examination made by him, verified by his oath, which shall comprise only facts appearing upon the books, papers, records or documents of such company, or ascertained from the testimony sworn to of its officers or agents or other persons examined under oath concerning its affairs, and said report so verified shall be presumptive evidence in any action or proceeding against the company, its officers or agents as to the facts therein stated. The insurance commissioner shall grant a hearing to the company examined before filing any such report; and may withhold any such report from public inspection for such time as he may deem proper, not to exceed sixty days, and may after so filing, if he deems it for the interest of the public to do so, publish any such report or the result of any such examination in one or more newspapers of the State. It shall be the duty of the insurance commissioner to examine every domestic insurance company at least once in five years. The expense of all examinations of insurance compacies now requir~d by law, and the expense of all examinations of -such companies as contemplated by this law, shall be paid by the Companies so examined: Provided , this section shall not apply to assessment farmers co-operative fire insurance companies doing business in this State in not more than four counties in a division.]
i
~cts 1912, pp. 119, 121.
2433, 2514 (j), 2564 (pp); 2564 (rr). ~ 626, P . C.
2412 (g) . Orders, how . enforced. [The insurance com-
m1ss10ner may invoke the aid of any court of competent jurisdiction

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through injunction or other proceedings, mandatory or otherwise, to enforce any order made or action taken in pursuance of the law,
and nothing contained in the insurance laws of this State shall be
construed to prevent any company or person affected by any order or action of the insurance commissioner from testing the validity of same in any court of competent jurisdiction.]
Acta 1912, pp. 119, 126.
2412 (h). Blank forms furnis.hed for reports: [The commissioner shall annually in the month of December furnish to each of the insurance companies authorized to do business in this State and required to make annual statements to the department, two or more blanks in form approved by him and adapted for such statements.]
Acta 1912, pp. 119, 125.
2-H 2 ( i). A dditio11al rules and regulation~. [The insurance comm1ss10ner shall have full power and authority to prescribe such additional reasonable rules and regulations as he may deem proper for the control and government of all insurance companies mentioned in this law. It shall be the duty of such companies to comply fully with such rules and regulations before they shall procure any business in this State, either directl y or indirectly, or to continue to do business in this State.]
Acta 1912, pp. 119, 126.
2412 . (j). Sup ervision of companies before organization. [Immediately upon the granting of the charter to any insurance company, and before it offers for sale any of its capital stock, such company so receiving a charter in this State or being chartered in any other State and offering its stock for sale in this State, before it has
been organized and procured a license to do business in this State,
shall come under the supervision of insurance commissioner, and shall collect, hold and disburse its funds under such rules and regulations, as insurance comm1ss10ner may prescribe. The insurance



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commissioner shall give directions as to all use of funds so collected until same are invested as the law directs and the company fully organized and licensed to do business in the State, thereby becoming subject to the rules and regulations hereinbefore provided.]
Acts 1912, pp. 119, 136.
2412 (k). Fire inspector and Assistant. Duties and Pow-
ers. (As amended by Act approved August 1922).

The Commissioner shall have the power as hereinbefore provided, to appoint a competent person to be known as State Fire Inspector and also a person to be known as Assistant State Fire Inspector, and when any property is destroyed by fire , and the Commissioner deems it proper to have the cause of such fire investigated, he shall cause such State Fire Inspector, or the Assistant State Fire Inspector, to make a thorough investigation of all the facts connected with such fire, and rt!port to him in writing under oath. Such Inspector or his Assistant, when in his opinion such proceedings are necessary, shall take the testimony of all persons supposed to be cognizant or have information or knowledge in relation to the matter as to which the examination is herein required to be made, and he shall cause the same to be reduced to writing, and if he. shall be of the opinion that there is evidence sufficient to charge any person with the crime of arson he shall cause such person to be arrested on a warrant, and cause the same to be fully investigated before an -officer as is now provided for committal trials, or he shall furnish the Solicitor General of the Circuit in which the fire occurred all such facts, together with the na"mes of witnesses, and all the information obtained by him in such investigation.

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Such Fire Inspector, and his Assistant, appointed to conduct such

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examination, shall have the same power as Justices of the Peace for

the purpose of summoni_ng before him, in the county where the fire

occurred, and compelling the attendance of witnesses instanter or at

such other time as may be designated by the said State Fire lnspec-



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tor or his Assistant, to testify in relation to any matter which by the n:vision of this Act is the subject of investigation. Said State Fire
~nspector, or his Assistant, shall have the right to administer oaths to witnesses appearing before him, and shall have the power to compel the witnesses to answer questions pe"rtaining to any investigation as now provided by law for committal Courts; and said Inspector and his Assistant, shall have all the power now conferred by law on courts of inquiry in the State in the investigation of any matter coming before him under this Act.
The office of Assistant Fire Inspector shall be filed by the Commissioner, and he shall be continued in office for such term, and at uch compensation, as the exigencies of the Department may, in the discretion of the Commissioner, warrant and require.

2412 (1). Inspecto r's authority to go upon premises. [Said. fire inspector for the purpose of making the investigation required by this law, shall have authority to go upon the premises where the fire occurred and make investigation as to the cause and origin of fire.]
Acta 1912. pp. 119, 132.
2412 (m). Inspector's compensation. [The insurance commissioner shall have power to prescribe the compensation of the fire inspector for all examinations required by this law and said compensation shall be paid and all other expenses incurred in such examination shall be defrayed by the fire insurance companies doing business, in this State, and a tax of not more than one-tenth of one per cent.. in the discretion of the insurance commissioner on. the gross premium receipts of all such companies is hereby levied for this purpose, to be collected by the insurance commissioner as other taxes on premiums are now collected. The insurance commissioner shall keep a separate account of all moneys received and disbursed under the provisions; of this section and shall include them in his report to the legislature, provided, that should the amount thus collected in any one' year be in excess of the amount required to meet the expenses herein contem-

24

INSURANCE LAWS

plated, such excess shall be held subject to the order of the commis. sioner to be used for the same purpose in the succeeding year, pro-
vided sections 2412 (1) and 2412 ( m) shall not apply to assessment farmers' co-operative fire companies doing business in this State in not more than four counties in a division.]
Acts 1912 , pp. 119, 132.

SECTION 2.
Insurance Companies, How Authorized to Do Business
2413. I nsurance comm1sswner. The comptroller-general
:shall be the insurance commissioner of this State, and shall be charged with the execution' of all laws regulating the business of .insurance in _the State of Georgia.
Acts. 1887, p. U3.
2412 (a) .
2414: Companies must be licensed. It shall not be lawful for any insirrance company chartered by this State, or other States, or foreign government, to transact any business of insurance in this State without first procuring a license from th e insurance comm1ss10ner.
Acts 1887, p. 114. 2415 (a) .
2415. License, how obtained. Before said comm1ss10ner shall issue such license , such insurance company must fully comply with all the provisions of this Article, and file with said insurance comm1ss10ner a statement under oath of its president and secretary, specifying-
First. The name and locality of the company.

INSURANCE LAWS

25

Second. The condition of such company on the thirty-first day of December then next preceding, exhibiting the following facts and items in the following form, namely:
1. The amount of the capital stock of the company, and what part of the same has been paid in cash, and what part is in notes of the stockholders, and how such notes are secured.
2. The property or assets held by the company, specifying-
( J) The value, as near as may be, of the real estate held by uch company; if encumbered, to what amount.
(2) The amount of cash on hand and deposited m banks to the credit of the company.
( 3) The amount of cash m the hands of agents and m the course of transmission.
( -t-) The amount of loans secured by bonds and mortgages on real estate.
( 5) The amount of other loans, and how secured .
( 6) The amount of bonds of this State, of other States in the United States, and of any stocks owned by the company, specifying the amount, number of shares and part and market value of each kind of stock.
( 7) The amount of interest actually due and unpaid.
(8) The amount of premium notes on hand upon which policies have been issued.
(9) The amount of all other assets, real and personal, not included hereinbefore. Third. The liabilities of the company, specifying-
). . The amount of losses due and yet unpaid.
2. The amount of claims for losses resisted by the company.

26

INSURANCE LAWS

3. The amount of losses not yet due, including those reported to the company on which no action has yet been taken.
4. The amount of dividends declared and due and remaining unpaid.
5. The amount of dividends declared but not yet due. 6. The amount of mone)'. borrowed. 7. The amount of all other claims against the company.
8. The amount of reserve for reinsurance.
2434.
Fourth. The income of the company during the preceding year, specifying-
1. The amount of the cash premmms received.
2. The amount of notes received for premiums.
3. The amount of interest money received.
4. The amount of income received from other sources. Fifth. The expenditures during the preceding year, specifying-
!. The amount of losses paid during the year.
2. The amount of dividends paid during the year.
3. The amoun_t of ex-pense paid during the year, includin g fees and commissions to agents and officers of the company.
4. The amount paid in taxes. 5. The amount of all other payments and expenditures. Sixth. The greatest amount insured ih any one risk, and the total amount of insurance outstanding. Seventh. A certified copy of the act incorporating the company.
Acts 1887, p. 114.
2412 (h) 626 (b) P. c.

INSURANCE LAWS

27

2415 (a). Issuing of license. [It shall be the duty of the insurance commissioner to issue license to the insurance companies and agents when they shall have complied with the requirements of the laws of this State and the rules and regulations prescribed by the commissioner so as to entitle them to do business. In each case, license shall be issued under the seal of the commissioner, authorizing and empowering the person, firm, association or company to transact the kind of business specified in the license. Before an inurance company shall be licensed to transact business in this State, the insurance commissioner shall be satisfied by such examination as he may make or such evidence as he may require that such com~ pany is duly qualified under the laws of this State to transact business herein.]
Acta 1912, pp. 119, 123.
ff 2564 (m), 2664 (o), 2414.
24 I 5 (b). Revocation of license. [Whenever ' it shall ap-
pear .to the insurance commissioner that a license already granted to an insuranc_e company, should be revoked, the insurance commisioner shall, by first giving such insurance company ten days notice, require such company to show cause before a board to be composed of the insurance commissioner, the attorney general and the Governor of the State why said license should not be revoked. Upon the hearing of the said cause, the said board may in its discretion revoke uch license of any such insurance company or prescribe the conditions upon which such insurance company may be allowed to continue business in Georgia.]
Acta 1912, pp. 119, 123.
If 2564 (m), 2564 (o), 2264 (tt).
~ 2416. Forfeiture of licen.se.....If any foreign, fire, life, accident, fidelity, guaranty, or other insurance company doing business in this State shall, without the consent of the other party to any uit or proceeding brought against it in any court in this State, remove said suit or proceeding to any Federal court, it shall be the duty

28

INSURANCE LAWS

of the commissioner of insurance to forthwith revoke all authority to such company and its agents to do business in this State,_and to publish such revocation m some newspaper of general circulation published in this State.
Acts 1909, p. 147. Note: Unconstitutional, 257 U. S., p. 529. Terrel vs. Burke Construction Co.
2417. Forfeited license, how renewed. When such license is forfeited as provided in the foregoing section, said license may be renewed by the insurance commissioner upon terms to be prescribed by him: Provided , such license shall not be renewed in less than two years from the date of its forfeiture.

AN ACT
To provide for the organization of and the regulation and taxation of incorporated mutual or co-operative fire insurance companies, providing a penalty for any violation hereof, and repealing all acts or parts of acts in conflict herewi th ..
I. Be it enacted by the General Assembly of the State of Georgia, and ir is hereby enacted by the authority of the same, th at any number of persons, noi: less than twenty, w ho shall be bona fide residents of this State, by complying with the provisions of this Act, m ay _become, together w ith oth ers .w ho may hereafter be associated with them or their successors, a body corporate f~r the purpose of carryi ng on the business of mutual insurance as . herein provided.
. 2. Be it further enacted, that any person proposing to form any such company shall subscribe and acknowledge articles of incorporation specifying-:
(a) The name, the purpose for w hich formed , and the location of its principal or home office, which shall be within this State;
( b) The names and addresses of those composing the Board

INSURANCE LAWS

29

of Directors in which the management shall be ve.sted until the first meeting of the members ;
(c) The names and places of residence of the incorporators.
3. Be it further enacted, that no name shall be adopted by
uch company which does not contain the word "mutual" or "co-
operative," or which is so similar to any name already in use by any such existing corporation, company, or association, organized or doing business in the United States, as to be co~fusing or misleading.
4. Be it further enacted, "That when a petition and articles of incorporation shall be submitted to the Secretary of State
and found by him to comply with this Act, he shall endorse his approval thereon and shall issue a charter as now provided by law. A
copy of such petition and charter shall also there-upon be filed in the office of the Insura~ce Commissioner. The charter may be amended in the manner now provided by law and any such amendment shall be approved, recorded and filed, as .in the case of the original charter."
5. Be it further enacted, "That such Corporation shall have
legal existence as soon as the charter shall have been issued by the Secretary of State. The Board of Directors named in articles of incorporation may thereupon adopt by-laws, fix the qualification of membership of all applicants for insurance,. accept applications for in urance, and proceed t_o tran sact the business of such company: provided, that no insurance shall be put into force until the company has been licensed to transact insurance as provided by this Act. Such by-laws and any amendments thereto ; hall, within thirty ( 30)
. days after adoption, be filed with said Insurance Commissioner."
6. Be it further enacted, that any company organized under the provisions of this Act, is empo,ve,red and authorized to make contracts of insurance or to re-insure or accept re-insurance on any portion thereof, to the extent specified in its Articles of Incorporation for the kind of insurance following:

30

lKSU RAKCE LAWS

Fire Insurance. Against loss or damage to property and loss of the use and occupancy by fire, or lightnin g, hail, tempest, flood , earthquake, explosion, fire ensuing; against loss or damage to person or property occasioned by the operation .of duly licensed _public servicee motor vehicles and automobiles.
7. Be it further enacted , that no corporation organized under this Act shall issue policies or transact any business of insurance unless it shall comply with the conditions following, nor until the Insurance Commissioner has, by formal license, authorized it to do so, which licen se shall not issue until corporation has complied w ith the following conditions:
(a) It shall hold bona fide applications for insurance upon which it shall issue simultaneously, or it shall have in force at least twenty ( 20) policies to at least twenty members for the same kind of insurance upon not less than two hundred (200) separate risks, each w ithin the maximum sin gle risk described herein ;
( b) Th e "maximum sin gle risk" shall not exceed twenty ( 20) per cent of- the admitted assets or three times the average risk or one per cent of the insurance in force, w hichever is the greater, any reinsurance takin g effect simultaneously with the policy being ded ucted in determining such maximum sin gle risk;
( c) It shall have collected a premium upon each application ,
which premium shall be held in cash or security and which insurance companies are authorized to invest and shall be equal, not to less than tw ice the maximum single risk assumed subject to one fire nor less than ten thousand ($10,000) dollars*
!Language of original bill.
( d) Satisfy the Insurance Commissioner that ifs fin ancial condition , methods of operation and manner of doing business, are adequate to meet its obligations to all policyholders in this State.
8. Be it further enacted, that any public or private corpora-

lNSUR~NCE LAWS

31

don, board, or association in this State, or elsewhe_r~, c~n make application, enter into agreements for and hold policies m any such
tual insurance company. Any officer, stockholder, trustee, or mleu 1 representative of any sueh corporat1.0n, board, assoc.ia.tion, or
:te, may be recognized as acting for or on its behalf for the purpme of such membership, but shall no_t be_ personally liable ~pon such contract of insurance by reason of acting m such representative capacity. The right of any corporation organized under the laws of this
tate to participate as a member of any such mutual insurance company is hereby declared to be incident_al to the purpose for which such
rporation is organized, and as much granted as the rights and powers expressly conferred.

9. Be it further enacted, that every member of the company shall be entitled to one vote, or to a number of votes., based upon the insurance in force, the number of policies held, or the amount of premiums paid, as may be provided in the by-laws.

10. Be it further enacted, that the maximum premium payable by any member shall be expressed in the policy, or in the application for insurance. Such maximum premium may be a cash premium and an additional contigent premium, not less than the
cash premium, or may be solely a cash premium. No policy shall be
i ued for a cash premium without an additional contingent premium unless the company has a surplus of at least One Hundred Thousand ($100,000) Dollars, or a surplus which is not less in amount than the capital stock required of domestic stock insurance companies transacting the same kind of insurance.

11. Be it further enacted, that no such company shall invest an}' of its assets except in accordance with the laws of this State relating to the investment of the assets of domestic stock insurance companies transacting the same kind of insurance.

12. Be it further enacted, that such company shall main-

32

INSURANCE LAWS

tain unearned premiums and other reserves separately for each kind of insurance, upon the same basis as_that required of domestic stock insurance companies, transacting the same kind of insurance.

13. Be -it further enacted, that such company not possessed
of assets at least equal to the unearned premium reserve and other liabilities, shall make an assessment upon its members liable to assessment to provide for such deficiency, such assessment to be against each member in proportion to such liability as expressed in his policy; provided the Insurance Commissioner inay by written order relieve the company from an assesment or other proceeding to restore such assets during the time fixed in such order; and, provided, that any domestic company which shall be deficient in providing the unearned premium reserve required hereby, may, notwithstanding such deficiency, come under this Act on the condition that it shall each year thereafter reduce such deficiency at least fifteen per cent of the original amount thereof, and in such case it may increase its assessments accordingly.
~ 14. Be it further e~acted, that any director, officer or member of any such company, or any other person, may advance to such company, any sum or sums of money necessary for the purpose of its business or to enable it to comply with any of the requirements of the law, and such moneys and interest thereon as may have been agreed upon shall be payable only out of the surplus remaining after providing for all reserves and other liabilities, and shall not otherwise be a liability or claim against the company or any of its assets. No commission or promotion expenses shall be paid in connection with the advance of any such money to the company, and the amount of such advance shall be reported in each annual .statement.

15. Be it further enacted, that ariy law requiring that poli-
cies be countersigned and be deli vered to a resident agent shall not apply to any policy of such mutual company on which no commiss10n shall be paid to any local agent. Such mutual company may

INSURANCE LAWS

33

in any form of policy prescribed by the law of this State any
~ ons or conditions required by its plan of insurance which are
~nconsistent and conflict with any law of this State. Such policy, . lieu of conforming to the language and forms prescribed by such ID may conform thereto in substance, if such policy includes a p~ on or endorsement reciting that the policy shall ~e construed
if in the language and form prescribed by such law, and a _copy uch policy and endorsement, if any, shall have been first filed th and shall not have been disapproved by the Insurance Com-
oner.
16. Be it further enacted, that the taxable premiums or premium receipts of any mutual insurance company organized 111
thi State, for the purposes of taxation under any law of this State,
lhall be the gross premiums received for direct insurance upon
property or risks in this State, deducting amounts paid for reimbursement upon which a tax has been or is to be paid in this State.
and deducting premiums upon policies not taken, premiums returned'.
on cancelled policies, and any refund or return made to policyholdern other than for losses.

17. Be it further enacted, that any such mutual msurance
CIOlllpany organized in this State may reinsure any part or all of
Ill ri ks in any insurance company or insurer licensed in any State of the United States, or in the District of Columbia; provided, that no uch reinsurance shall be effected with any company or insurer
pprpved therefor by written order of the Insurance Commissioner
ft1ecl in his office.

, 18. Be it further enacted, that any person or corporation lating the provisions of this Act shall be guilty of a misdemeanor,
and upon conviction shall be punished by a fine of ~ot less than Fifty ($50.00) Dollars, or more than Five Hundred ($500.00)
Dollars, an_d the Insurance Commissioner shall have power to re-
voke the license of any such person or corporation.

34

h,SURAKCE LAWS

' 19. Be it further enacted, that all laws. or parts of laws, in
-conflict with this Act, so far as companies organized under this Act are concerned, are hereby repealed, but no such repeal and nothing in this Act shall apply to or affect any company or association of this State now doing business, or to any law under which any such company or association is organized or doing business.

Any such company or association may, however, by resolution of its Board of Directors, duly approved by a majority of the members, at a meeting especially called for that purpose, and duly certified .to by the President and Secretary and filed with and ap(?roved by the Insurance Commissioner, elect to adopt and become subject to the provisions of this Act, in lieu of any Act or Acts theretofore governing such companies or associations. Arty company or association so elected and fully complying with this Act may thereafter effect insurance as authorized by this Act, and specify in its . c.ertificate of insurance then in force, or as then or hereafter amended.

20. This Act shall become effective upon its passage. Ap-
prnved: Aug. 17, 1923.-Acts 1924 pp. 122-123.

SECTION 3.
Bonds and Deposits Required
2419. Transact business~ wizen._ No insurance company of
whatever class, except such companies as have already been chartered
by the State, Masonic, Odd Fellows, religious and mutual aid so-
cieties, and co-operative or assessment life insurance companies, shall lbe allowed to t;ansact any business of insurance in this State, unless possessed of at least one hundred thousand dollars of actual cash capital paid up, or assets, and invested in bonds or stocks, estimated at their actual market value at the date of the statement

INSURANCE LAWS

35

by the preceding section, or in mortgages on real estate double the amount for which the same is mortgaged. Upon
uch statement, the insi.trnnce commissioner, when satisfied it is correct, and that the company has fully complied with the
regulating the business of insurance in this State, shall issue to said company to transact business in this State. Said t and license must be renewed annually on the first day oJ or within sixty days thereafter, and must show the condi-
of ' id company on the thirty-first day of December. In addi- .
to this statement, all companies, includin g co-operative or ast life insurance companies doing business in this State, shall, their chief officer or agent residing in this State, make to
Governor of this State semi-annual statements on the first day January and July of each year, or wit~in sixty days thereafter.
January statement shall contain a full and exact report of their
on on the thirty-first day of December next preceding ; said t to be made in accordance with the terms and conditions
forth and required under the preceding section , which shall be
to by the officer or agent making the same. The ~tatement July shall contain a report in short form of income, assets, ex'tures and liabilities in gross, as of thirtieth day of June preced-
and be sworn to by the officer or agent making the same. At time of making such report to the Governor, each company shall
at its own expense a duplicate thereof in a newspaper of circulation published in this State. Should any one of such
companies fail or refuse to make said statement to the r, it shall, by such failure or refusal, forefeit its right to do in this State, until the first of January of the next yeu, uch failure or refusal the insurance commissioner shall re-
and cancel the license of such delinquent compa~y.

626 (b). P. C.
jlla_._, by legislature to charter of mutual company reducing its capital below
amount was invalid. 118 / 796 (45 E. S. 606).
2419. Deposits by companies of other States. All fire ,

36

INSURANCE LAWS

marine, and inland insurance companies, chartered by other States or foreign government, shall be required to deposit with the treasurer of this State bonds of the United-States, or bonds of this State which according to the acts and resolutions of the General Assembly are valid, or bonds of any county or municipality in this State which have been validated under the laws of this State, and which amount according to their face value, to ten thousand dollars, which bond; shall be receipted for by the State treasurer, and especially deposited by him in the vaults of the treasury, and whenever such company ceases to do business in this State, and has settled up all claims against it as hereinafter provided, said bonds shall be delivered up to the proper party on presentation of the treasurer's receipt. While said bonds are so deposited the owners of the same shall, subject to the notices hereinafter provid_ed for or given, be entitled to collect the coupons and use them. For the bonds so deposited the faith of the State is pledged that they shall be returned to the parties entitled to receive them, or disposed of as hereinafter provided.
Acts 188 7, p, 116. 1899t p. 45. 1905, p , 75.
~ 6457, 2449, 232, 445, 2424, 2458.
Amended by Act of Dec. 17, 1900, following.
. Registered Bonds Required
An Act to authorize and require all insurance and fidelity and deposit companies and fidelity or surety companies that may now have bonds deposited in the State Treasury; or that may hereafter be placed there, to have same registered.
Section 1. Be it enacted by the General Assembly of Georgia, and it is hereby enacted by the authority of the same, That all insurance and fidelity and deposit companies and fidelity or surety companies which may now have coupon bonds deposited in the treasury be required to substitute registered bonds for the same on or before January 1, 1901.
Sec. 2. And be it further enacted, That all such companies

INSURANCE LAWS

37

deposits after Jan.uary 1, 1901, be required to furnish reg1,onds.
December 17, 1900.

An Act
To further regulate the deposits req~ired to be made by do-
or foreign Insurance companies under the laws of the State rgia:
ion 1. Be it enacted by the General Assembly of the State rgia, that all deposits of bonds, _collateral or assets which are hereafter be required under the laws of this State, of any life, t, or casualty insurance company incorporated under the laws Georgia, as a condition to its being authorized to do business in on any other account whatsoever, may be made in bonds of 'the 'ted States of America, or bonds of this State, which according
the Acts and resolutions of the General Assembly - are valid, or
of any county or municipality in this State which have been ted under the laws of this State. The said bonds shall be achy the appropriate officer of this State for such deposit to the t of the face value thereof, but in no event in excess of such alue; however, if the actual market value of said bonds be than their face value, then they shall be so accepted at only their market value at the time they are so offered.
Be it further enacted that all laws and parts of laws Acts 1924, p. 121.

When notice of loss is given, bonds to be retained. Wb11!111ev_er any los~ insured against occurs, the insured, in order to
his recovery, may give notice to the State treasurer of the pend-
of said loss, and of the amount claimed, after which time the treasurer shall be bound to retain, subject to the order of the rt trying any suit that may be brought for the- recovery of such

38

INSURANCE LAWS

loss, a sufficient amount to pay the judgment in said case in the event of recovery; and if the amount for which said company is liable is -not paid in ten days, then said plaintiff may file an application with the judge of the superior court of the county where the case was tried, for a receiver to take charge of so many bonds as shall be necessary to satisfy the aforesaid judgment.
2559.
2421. Bond by receiver. When said receiver is appointed by the judge, he shall always require bond and security of him for the faithful performance of his 1uty. The State treasurer, on his application, shall deliver to him bonds sufficient in their market value, if in his custody, to satisfy said judgment. Said receiver's receipt shall be a complete discharge to said treasurer and the State of Georgia. Said receiver shall apply to the judge of said superior court for an order of sale, and, in pursuance of said order, sell said boi;ids. After deductin g such expenses and commissions as shall be allowed by said judge, he shall pay over to the plaintiff, or his attorney, a sufficient amount to satisfy the judgment; and if there remains any residue in the hands of such receiver, he shall pay over the same to the a_gent of the company, taking his receipt for the same, which shall be filed and recorded with the other papers in the case.
Acts 1887, p. 116. 5485. 2559.
2422. C onflicting claims to bonds. If there are conflicting claims, the State treasurer shall deliver over to the receiver, in the order of their application, the aforesaid bonds; and if there is any contest between creditors, which can not be settled in this mode, then . the party not receiving sufficient bonds through the receiver appointed in his behalf may become a party to the other case, and make known his claim to the other receiver by making affidavi_t of the claim and filing the same with him, and the receiver shall report such claims to the judge of the superior court appointing him, who shall, by order, provide for a bill of interpleader, as in cases in equity.

INSURANCE LAWS

39

Acts 188 7, p. 117.
2559, 5471.
2423 . Withdrawal by company from the State. When
any company desires to withdraw from the State, and will satisfy the commissioner that all suits p~nding against such party, and of which no notice has been given, have been full y satisfied, or whenever no notice of claim has been given, and when rights under existing policies have been satisfied and released as the pro;i~ions of this Article require, said treasurer shall return to said company the bonds so deposited, upon order -from said commissioner.
Acts 1887, p. 117.
~ 2425, 2561.
2423 (a ). Withdrawal of fire znsurance companies. [Any
foreign fire insurance company or association doing business in this State and desiring to retire from this State before the maturity or expiration of its policies or contracts, may, upon filing with the insurance commissioner a written notice of such intenton to withdraw, together with a swo rn statement of its outstanding liabilities or obligations under all such policies or contracts, so retire or withdraw,. Including any and all securities on deposit with the State official designated by law for the protection of the beneficiaries of such policies or contracts, provided such company or companies, as a condition precedent to such withdrawal, reinsure all such policies or contr~cts, in some other company or companies authorized to do business in this State, and shall file with said insurance commissioner a list showing the nai:ne or names of such company or companies in which such outstanding policies, contracts or obligations have . been so reinsured; and provided further, that the securities _on deposit as aforesaid, shall not be so withdrawn from the custody, control and possession of said State official until after such proof as may be required by said commissioner has first been furnished him that there are, at the time of such withdrawal, no unsettled claim, claims or losses outstanding against said company or companies so desiring to with-

40

INSURANCE LAWS

draw ; and provided further, that said reinsurance shall be approved by the insurance commissioner.]
Acts 1913, p . 86.
2424. f!f/!ten amount reduced below amount required.
Whenever, by means of the provisions of this Article, the amount of bonds so deposited are reduced, said treasurer shall at once notify ti1e insu rance commissioner in writing, who shall give notice to the company depositing, an d require more bonds to be deposited, so as always to maintain the orig;nal amo unt ; and if the company so notified by the insurance commissione, fails to compl y w ithin thirty days, the license to do business in this State shall be revoked, and said insurance commissioner sl! all at the same time give notice, by publication in a newspaper published at the capital, of the fact of such failure and revocation of license ; the cost of w hich publication shal1 be paid by the compan y failing to comply with th e provisions of this Article.
Acts 1887, p . lli. -~ 24 19 , 2562, 2560.
:: 2425. Policies must be satisfied before wit hdrawal. vVhen any company, having made the deposit required by this Article, has existing policies on property of citizens of this State on which no losses have accrued, and the company wishes to withdraw its deposits, before being allowed so to do sai d company shall take up and :satisfy said policies, and give notice of its intention to withdraw from the State, and of the fact th at it ha.s sat isfied _all losses and the daims of policyholders above designated, w:hich notice shall be published once a week for two months in a newspaper to be desig~ated by the insurance commissioner of the State, and at the expense of said -company. An y claims of the citizens of this State for losses, or on existing policies where no loss<;s have occurred, must be full y settled before said deposits shall be " ithdrawn.
Acts 1887 , p. 11 7.
H 2423, 2561.

INSURANCE LAWS

41

2425 (a). Deposit required of domestic mutual fire insurance companies. [All insurance companies chartered under the laws
of this State to do a fire insurance business upon the mutual, cooperative or assessment plan, shall before recei ving a license from the insurance commissioner, deposit with the State treasurer of Georgia registered bonds of the United States or of the State of Georgia or county or municipal bonds of this State, registered and validated in the sum of $ 10,000.00. Said deposit to be made under the same conditions that deposits of non-resi dent fire insurance companies are made with the State treasurer: Provided , that this shall not apply to such companies as operate in not more than four counties in a division in this State, or to farmers' co-operative companies doing fire insurance business in this State on the assessment plan where their policies stipulate that all the property, real and personal, of the policyholders is pledged for the payment of the policy.]
Acts 1912, pp. 119, 142.
Amended Aug. 19, 1922 ( see following paragraph. )
2425 ( b) . A m ount of assets required.- Em ergency clause.
[Such co~panies shall always have in good assets an amount equal to the unea rned premium liability of the company required of all classes of fire insurance companies by the laws of this State. All policies issued by such companies shall embrace what is termed an emergency clause, whereby the company reserves the right to call for extra assessments from its policyholders whenever the contingency anses. Samples of all policy contracts to ?e used by such companies shall, before issuance , be submitted to the insurance commissioner for his approval.]
Acts 191 2, pp. 11 9, 143 .
Amended Aug. 19, 1922 (see Act inserted follow ing Sec. 2425 (b).

42

INSURANCE LAWS

RELIEVING MUTUAL FIRE INSURANCE COMPANIES OF GEORGIA FROM OBLIGATION OF INSERTION OF "EMERGENCY CLAUSE" IN THEIR POLICIES.

An Act, to amend an Act entitled "An Act to provide for the establishment of a Department of Insurance, etc.," approved Aug. 19, 1912 so as to authorize mutual fire insurance companies chartered under the laws of this State to deposit bonds or other securities with the State Treasurer and be thereby relieved from the necessity of embraci11g an emergency clause in their policies as provided in the above recited Act, and to relieve policyholders of such companies as may make such deposit of bonds or other securities from liability for assessments, except for unpaid premiums, to meet losses or other liabilities incurred by such com'panies, and for other purposes.
Section 1. Be it enacted by the General Assembly of the State of Georgia, and it is hereby enacted by authority of the same, That the Act approved August 19, 1912, entitled:
"An act to provide for the establishment of a Department of Insurance," etc., be and the same is hereby amended so that Section 39 of said Act (Sec. 2425 (a) Code of G.) shall read as follows:

"Be it further enacted, That all insurance companies chartered under the laws of this State to do a fire insurance business upon the mutual, co-opt;rative or assessment plan, shall before receiving a license from the Insurance Comqiissioner, deposit with the State Treasurer of Georgia registered bonds of the United States or of the State of Georgia, or county or municipal bonds of this State, r-egistered and_validated, in the sum of $10,000.00, said deposit to be made under the same conditions that deposits of non-resident fire insurance companies are made with the State Treasurer provided, that this shall not apply to such companies as operate in not more than

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four counties in a division in this State, or to farmers' cooperative companies doing fire insurance business in ths State on the assessment plan where their policies stipulate that all the property, real and personal, of the policyholders is pledged for the payment of the . policy.

Such companies shall always have in good assets an amount equal to the unearned premium liability of the company required of all classes of fire insurance companies by the laws of this State. All policies issued by such companies shall embrace what is termed an emergency clause, when!by the company reserves the right to call for extra assesments from its policyholders whenever the contingency arises. Samples of all policy contracts to be used by such companies shall, before issuance, be submitted to the Insurance Commissioner for his approval;

Provided, that nothing in this Act shall require any mutual fire insurance company chartered under the laws of this State to embrace in their policies said emergency clause when such company shall have deposited with the Treasurer of the State registered securities in the amount of $100,000, consisting of bonds of the United States, bonds of the State of Georgia, bonds of municipalities or counties of the State of Georgia which have been duly . validated, or such other securities as the Insurance Commissioner shall deem adequate, nor shall the policyholders of any such company that shall make said deposit be liable for any assessments, except for unpaid premiums, to meet any losses or" liabilities that may be incurred by any such company; which deposit shall be in lieu of any other d~posit required by this Act; and the amount of said deposit shall always be maintained as a surplus in ex'!:ess of the re-insurance reserve required under the present law.
Sec. 2. Be it further enacted, That the Treasurer of this State is hereby authorized and directed to receive deposit of bonds or other

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s~curities as provided in the preceding section of this Act when the deposit of the same is approved by the Insurance Commissioner, and hold the same subject to the provisions of the laws of this State relating to deposits _by the fire insurance companies.
Sec. 3. Be it further enacted, That all laws and parts of laws m conflict with this Act be, and the same are, hereby repealed.
Approved August 19, 1922.
2426. D eposits of life and accident companies of other States.,. et c. All life and accident insurance companies chartered by -other States of the United States, or foreign govern ments, shall show, by a certificate from the officer havin g supervision of the insurance department in the State in which they are chartered or elect to make their deposi t, that they have deposited not less than ane hundred thousand dollars in such securities as may be deemed by such officer as equivalent to cash, subject to his order, as a guarantee fund for the security of policyholders of said companies.
Acts 188 7, p. 118. 6457.
2427. Of home companies. All such companies chartered by the State of Georgia shall , before doing business in this State, deposit with the treasurer of thi s State one hundred thousand dollars, in such securities as m~y be deemed by the insurance commissioner of this State equivalent to cash, to be subject to his order as a guarantee fund for the security of the policyholders of the company making such deposit. All interest and dividends arising from such secu~ities to be paid when due to the company so depositing them. Any such securities as may be needed by the company may be taken from the treasurer, at any time, by replacing them with other securities equally acceptable to the insurance commissioner. The treasurer's certificate for the same shall be furnished to the company.
Acts 1887, p. 118. 1905, p. 76.
2564 (ddd). Amount of deposit. No life insurance com-

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pany chartered, or which may hereafter be chartered, by the State of _Georgia, ,~hether organized on the mutual or the stock plan, and which is not now authorized to tran sact business in this State, shall be so authorized or licensed, until such company has deposited with the Treasurer of this State securities, deemed by the Insurance Commissioner of this State to be equivalent of cash, in an amount of not less th an One Hundred Thousand Dollars ($100,000.00), as a guaranty fund for its policy holder~ and no such company organized, or which may hereafter be orga11ized, under the laws of any State of this Union, foreign State, and not now authorized to do business in this State shall be authorized or licensed to transact the business of insurance in this State until it has produced evidence satisfactory to the Insu rance Commissioner of Georgia, that it has on deposit in the State in which it is chartered or organized, with the proper officer thereof, One Hundred Thousand ($100,000,.00) Dollars, in such securities as may be deemed by such officer equivalent to cash, subject to his order, as a guaranty fund for the security of policyholders, provided , however, that such non-resident insurance company may make deposit with the Treasurer of Georgia, instead of in the State of its organization , should it elect to do so.
Act 1920, p . 212. Parks Annot. Code, Vol. 8.
2564 ( eee). Annual increases. All life insurance compa-
nies now authorized to t ransact the busin ess of life in surance in this State whose deposit is less than One .Hundred Thousand Dollars ($ 100,000.00), shall annually, on or before the 31st day of December of each year, increase its deposit in an amount not less than 10 per cent of th e amount of deposit which it is required to have under existin g laws, until deposit aggregates not less than One Hundred Thousand ($100,000.00) D ollars.
Acts 1920, p. 213. Parks Annot. Code, Vol. 8.
2564 ( fff)). Indu strial Life I nsu rance companies. Effective date of law. The provisions of thi s law shall apply to indus-

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trial life insurance companies in the same manner as to other life in-
s~rance companies: provided such Act shall take effect Ja~uary 1st, .
1921.
Acts 1920, p . 213. Parks An not. Code. Vol. 8.
2428. Measure of the required deposit. The insurance commissioner shall, as soon as practicable after the filing of the annual statement of any insurance company organized and doing business on . the legal reserve plan under the laws of this State, proceed to ascertain the net reserve value of _each policy in force on the thirtyfirst day of- December immediately preceding, upon the basis of calculation fixed by existing laws of this State; and should any company issue policies based upon a higher standard, such policy shall be. valued according to such higher standard. For the purpose of making such valuation the insurance commissioner may employ a competent actuary to do the same, who shall be paid by the company for which the services are rendered; but nothing in this section shall prevent any company from making said valuation herein contemplated, which may be received by the insurance commissioner upon such proof as he may determine. The expense of procuring such proof shall be paid by the company. Upon ascertaining, in the manner above provided, the net reserve value of all policies in force issued by any company desiring to operate under the provisions of this section, the insurance commissioner shall notify such company of the amount thereof, and within sixty days after the date of such notification the officers of such company shall have the right to deposit with the treasa urer of this State, for the security and benefit of all its policyholders, securities to an amount which, together with the sum already deposited with said treasurer, and such sums as may be deposited by said company. with other States and governments, by requirements of the laws of such other States or gove rnments in which said company is doing business, shall not be less than the amount of such ascertained valuation of all policies in force. In case the deposits made with other States and governments are by the laws of such States and governments held as security first for the policyholders of such

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States and governments, then said policyholders in such other States shall not participate in the securities held in this State until due allowance or credit has been given for the securities held by their own States or government, so that all policyholders of the company shall stand on equal terms. The securities shall be such as are described in sec tion 2408, or certificates of deposit in any solvent -bank or trust company, or satisfactory evidences of ownership of unencumbered improved real estate as may be lawfully acquired by such company, under the provisions of law, at such value as may be determined upon by two disinterested ,appraisers residing in the county in which the real estate is situated, such appraisers to be appointed by the insurance commissioner of this State. Such real estate shall not be sold or encumbered unless securities of equal value as herein required be deposited with the treasurer of this State in lieu thereof.
Acts 1906, p. 107.
~ ~ 2408, 2409, 2438.
2429. C ertificat e by insurance com1msswner. Upon the
deposit bein g made by any company as provided in the fore goin g section, which shall be renewed annually, the insura~ce commissioner shall issue a certificate setting forth the corporate name of the company, its principal office, that it has fully complied with the provisions of this law, stating the amount deposited and the net reserve value of outstanding policies, and the table upon- which the same is computed,. and that it is authorized to transact the business of life insurance .in this State : Provided, that any .such certificate shall ex-
pire on the thirtieth day of may in the year following its issue. If
requested by such company, the insurance commissioner shall furnish such company with a ce rtificate over his signature, to be attached to or printed on policy issued by such company, in substance as follows : State of Georgia, Insurance Department, Stafe Capitol, Atlanta, Ga.,---- , 19-. The net reserve value of policies issued by - - - - - l i f e insura~ce company o f - - - - - , Georgia, is secured by a deposit of acceptable securities in accordance with the compulso ry reserve deposit laws of this State, enacted in the yea r 1906.

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24 13.

msurance comm1ss10ner.

2430. Effect of failure to make deposit. Upon the failure of any company havin g once exercised the privilege of coming under the provisions of the preceding section to make the deposit in the time provided therein, the insurance commissioner shall notify such company to issue no new policies in this State until there shall have been compliance with said requirements. The insurance commissioner shall revoke the lcense of any .company issuing policies after such notice and before compliance with said requirements.
15.

2431. Changes of securities depo sited. All companies, coming within the provisions of the two preceding sections, shall have the right at any time to change their securities on deposit by substituting for those with drawn a like amount in other securities of the character provided for, and whenever the net reserve value of policies outstanding ahd in force against any company is less than the amount of sesurities then on deposit with the treasury of this State, said company shall have the right to withdraw such excess; but at least one hundred thousand dollars shall remain on deposit. Companies having on deposit stock or bonds as security may collect the dividends and interest accruing on such deposits ; but upon default by such company to deposit additional security as called for by the insurance commissioner, the State treasurer shall collect the interest on such security as it becomes due, and add the same to the securities in his hands belon ging to such company.
6459.

2432. Approval of deposits. Securities offered for deposits under the preceding section shall be passed upon by the insurance commissioner and approved by him before being deposited with the State treasurer, and before the withdrawal' of any securities from the treasurer by the company the insurance commissioner shall first ap-

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prove such withdrawal and the substitution of securities therefor.

SECTION 4.
Regulation of Insurance Companies
2433. Investigation by commissioner. It shall be the duty
of the insurance commissioner, whenever he shall deem it expedient so to do, and he is hereby empowered, either in person or by an expert examiner by him appointed, to investigate the affairs of any insurance compa~y doing business in this_ State; to require free access to all books and papers of any company, or the agents thereof; to summon and examine under oath any person in this State, relative td the affairs and condition of said company; for probable cause, to visit at its principal office, wherever it may be, _any insurance company not of the State, in which the substantial requirements of this Article, as to valuations of policies of life and accident insurance companies, and calculations for tlie reinsurance reserve of fire, marine, and inland insurance companies, are not in force, for the purpose of investigating its , affairs and condition; and to revoke its authority to do business in this State, if said company refuses to permit the examination. All expense incurred in the investigation of said- companies shall be paid by the companies so examined.
Acts 188"7, p. 118.
2412 (f), 2564 (pp). 2564 (rr).
~ 2434. Calculat-ion of reinsurance reserve. For every fire insurance company doin g business in this State, the insurance commissioner shall calculate, or cause to be calculated the reinsurance reserve for unexpired fire risks, by taking fifty per cent. of the premium received on all pblicies that are written for a period of one year or less, and according to the New York percentage table for

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calc~lating reinsurance on all premiums received that have more than one year to run; and in marine and inland insurance, he shall charge all the premiums received on ~nexpired risks as a reinsurance reserve. Having charged against the company the reinsurance reserve as above determined for fire, marine, and inland insurance, and adding thereto all other debts and claims against the company, he shall, in case he finds the capital stock of the company impaired more than twenty per cent., suspend the license issued to said company and require the company to cease to do new business within this State, and give notice to said company to make good its whole capital stock within ninety days, and if ~his is not done he shall revoke the license of such company and deba r the same from doing business in this State.
Acts 1887, p. 11 9. Acts 1899, p, 45 .
H 15, 24 15 (3). 2442, 249 1.
2435. Call on stockliolders. Any such insurance company, receiving the aforesaid notice of the insurance commissioner to make _good its whole capital stock within ninety days, shall forthwith call upon its stock holders for such amounts as will make its capital equal to the amount fixed by the charter of said company.
Acts 1887, p . 119.
2436. Calculations of reinsurance reserve by co1111111ss10ners ,of other Stat es. In the case of companies chartered by other States or forei gn gove rnments, the insurance commissioner of this State shall accept calculations of the reinsurance reserve made by th e insurance -commissioners of the States in w hich they _ar_e chartered, when such calculatio~ are made and furni shed to the insurance commissioner -of this State by the first of March in each and every year.
Acts 1887, p. 119.
2437. Proceedings w hen home companies are insolvent. whenever the insurance commissioner shall have reason to believe, f~om an examination into the affairs of a company, that any msur-

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ance company of this State is insolvent or fraudulently conducted or that its assets are not sufficient for carrying on business, as contemplated by the laws of this State, he shall revoke the license of such company and require said company to cease to do business in this State, giving public notice of such revocation of authority. Any , insurance company w hich has been suspended or which has had its license revoked may be reinstated upon showing that its condition is such as to authorize it to do. business in this State, and the insurance commissioner may reinstate such company whenever it makes such sho w ing.
Acts 1887, p. 119. Acts 1899, p . 45.
~ 244 1, 2442. .
2438. C alculation of net valu e of !ife policies. The in-
surance commissioner shall , as soon as practicable in each alternate year, calculate, or cause to be calculated, the net value, on the thi rtyfirst day of D ecember of the previous yea r, of all the policies in force on that day in each life insurance company doing business in this State, chartered by this State, and of every other life insurance company doing business in this State, that shall fail to furni sh him, as hereinafter provided , a certificate of the insurance commissioner of the State by whose authority the company was organized, or by the State in which it may elect to have its policies valued and its deposit made, giving the net value of all policies in force in the company on the thirty-first day of December of the preceding year, which calculation of the net value of each policy shall be based upon the American Experience or Actuaries' table of mortality, at four per cent. interest per annum: Provided, that when any life company shall have a cash capital of not less than one hundred thousand dollars, fully paid up and safety i~vested, the reserve to provide for the liabilities on all policies of such company, not participating in the profits of the company, shall be computed by the American Experience or Actuaries' table of mortality, with interest at not less than three nor more tha_n six per cent, per annum, in the discretion of the com~issioner, and with reference to the rates of premiums charged by such

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company. The net value of a policy, at any time, shall be taken to

be the single net premium which will at that time effect the insur- _ance, less the value at that time of the futu.re net premiums called

for by the table of mortality and rate of interest designated.

p: Acts 1887,

120.

2428, 2452 , 2453 .

2439. Where net value of policies is not on hand. In case
it is found that any life company doing business in this State has not on hand the net value of all its policies in force after other debts of the company and claims againsr it, exclusive of capital stock, have been provided for, it shall be the duty of the insurance commissioner to publish the fact that the then existing condition of the affairs of the company is below the standard of legal safety established by this State, and he shall require the company at once to cease doing new business; and it is hereby made the duty of the insurance commissioner, after having determined, as above, the amount of the net value of all policies in force, to see that the company has that amount in safe legal securities after all debts and claims against it, exclusive of capital stock, have been provided for.
Acts 1&67, p. 120.

2440. Valuation by commissioners of other States. He
shall accept the valuations made by the insurance commissioner of the State under whose authority a life insurance company is chartered, when such valuations have been made on the basis mentioned above: Provided, the company shall furnish to the insurance commissioner of this State, on or before the first day of March in each and every alternate year, a certificate from the insurance commissioner of such State, setting forth the value, calculated on the dates designated above, of all the policies in force in the company on the previous thirty-first of December, and stating that after all the other debts of the company and claims against it at that time were provided for, the company had in safe securities an amount equal to the net value of all its policies in force, and that said company is entitled to do

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business in its own State; and every company doing business in the State durin1; the year for which ~he statement is made, that fails to furnish promptly the certificate aforesaid, shall be required to make full detailed list of policies and securities held or owned, by the company to the insurance commissioner of this State, and shall be liable for all charges and expenses consequent upon not having furn-
ished said certificate.
Acts 1887, p. 120.
2440. (a). Commissions on sale of stock, and sale of !ife insurance policies and agency contracts. [No officer, agent or other
person selling or negotiating stock in any insurance company in this State shall receive either .directly or indirectly more than ten per cent. of the sales of any of said stock. No president, vice-president, secretary, treasurer, or director or a~y other executive officer of any insurance co~pany shall participate in the commissions received by any person selling, negotiati ng the salo of any stock of any insurance companies either directly or indirectly, nor shall any salaried officer of any insurnhce company doing business in this State participate in the commissions arising from the sale of life insurance policies or agency contracts of such companies.]
Acts 191 2, pp. 119, 129.
.
2440 ( b). R ebates and discriminatory contracts prohibited.
[No insurance company or insurance agent doing business in this State shall enter into any contract to rebate any insurance premium or any part thereof of any insured or other person. No person shall sell or offer for sale in Georgia and no insurance company shall do business in this State which sells or offers for sale to the public any "special contract," "board contract" or any other form of poli.cy or contract whereby any discrimination in any form or character is allowed to any particular per~o n or persons. Any insurance company violating the provisions of this section shall be subject to have its license revoked as hereinbdore provided. An y person acting as agent for any insurance company and the party receiving the benefit of any

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such rebate or discrimination in violation of this section shall be deem-

ed guilty of the offense of misdemeanor and shall be punished as

provided in section 1065 of the Penal Code.]



Acts 1912, pp, 119, 129. 627 (b), P. C.

SECTION 5.
Proceedings in Case of Insolvency
2441. Proceedings where home companies fail to maintain standard. It shall be the duty of the commissioner, after he has notified a life insurance company, chartered by the State, to cease doing business until the net value of its policies in force is equal to that called for by the standard of safety established by the State, at once to cause a rigid examination into the affairs of such company; in case it shall appear that there is no fraud or gross incompetency or recklessness in the mana~ement, he may, upon publishing the facts in the case, permit such company to continue its _business for one year: Provided, there is, in his opinion, reason to believe that the cqmpany may be able to re-establish the legal net value of all its policies in force. At the end of the yea r nramed above, he may renew the permission , in case on examination he is satisfied th at the company 1s likely to retrieve its affairs.
Acts 1887, p. 120. ~ 2437.
2442. If comptroller knows of insolvency. Whenever the insurance commissioner shall have reason to believe th at any insurance company of this State is insolvent _or fraudulently conducted, or that its assets are not sufficient for conducting the business of the company, or durin g any non-compliance with the prov1s10ns of this Article, his duty shall be as prescribed in section 2434:

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Acts 1887, p. 121. 2437.



SECTION 5 (a) .

Commissioner Taking Control of Property and Business of Life Insurance Company

2442 (a). ProcedingJ to take control. [Whenever any do-
mestic life insurance company ( a) is insolvent; or ( b) has unlawfully refused to submit its books, papers, accounts, or affairs to the reasonable inspection of the commissioner or his deputy or examiner; (c) or, in the case of a capital stock company, has neglected or refused to observe an order of the commissioner to make good within the time prescribed by law; any deficiency of its capital, or, in the case of a mutual company, if its assets have not become equal to its liabilities within ninety days from the date of notification thereof by the commissioner; or, ( d) has, by contract of reinsurance or otherwise, transferred or attempted to transfer substantially its entire property or busi~ess, or entered into any transaction the effect of which is to merge substantially its entire pro'perty or business in the property or business of any other company, association, society or order without having first obtained the written approval of the commissioner; or ( e) is found, after an examination, to be in such condition that its further transaction of business w ill be hazardous to its policyholders, or to its creditors, or to the public; or (f) has wilfully violated its charter or any law of the State; or ( g) w henever any officer thereof has unlawfolly refused to be examined under oath touching its. affairs, the commissioner may, the attorney-general representing him , apply to the circuit court or any judge thereof in the judicial district in which the principal office of which such company is located, . for an order directing such company to show cause why the commissioner should not take possession of .its property and con-

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duct its business, and for such other relief as the nature of the case, the interest of its policyholders, creditors, stockholders or the public may require.]
Acts 1912, pp. 119, 133.
~ 2564 (pp).
2442 ( b) , Injun ction. H earing and order. [ On such app,ication, or at any time thereafter, ~uch court may in its -discretion, issue an injunction restrainng such company from the transacton of its affairs or disposition of its property until the furthe r order of the court. On the return of such order to show cause, the court shall hear, try and determine the issues forthwith and shall either den y the application or direct the commissioner to take possession of . the property, con.duct the business of such company and retain such possession and conduct such business until on the application of either the commissioner, the attorney-ge neral representing him, or such company, it shall, after a like hearin g, appear to the court that the ground for such order directing the commissioner to take possession has been removed, and that the company can properly resume pos.session of its property and the conduct of its business. ]
Acts 191 2, pp. 119, 134.
: 2442 ( c). Liquidation. [ lf on like application an order to
snow cause and after like hearin g the court shall order the liquidation of the business of such company, such liquidation shall be made by and under the direction of the commissioner, who ~ay deal with the property and business of such company in his own name as commissioner or in the name of the company as the court may direct, and t he commissioner shall be vested by operation of law with title to all the property, contracts and rights of action of such company, as of the date of the order so directing him to liquidate. The filing or recording of such order in the office of the clerk of the superior court of the county wherein said liquidation is made, shall impart the same ~otice that a deed, bill of sale or other evidence of title duly filed or recorded by such company would have imparted. [

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Acts 1912, pp. 119, 135.
2442 (d). Assistants, and their compensation. [For the
purpose of this Section the commissioner shall have power to appoint under his hand and official seal one or more special deputy -commissioners of insurance as his agent or .agents and to employ such counsel, clerks and assistants, as may by him be deemed necessary and give each of such part_ies such powers to assist him as he may consider wise. The compensatiort of such deputy, special commissioners, counsel, clerks and assistants and all expense of taking possession of and c<;mducting the business of liquidating any such company shall be .fixed by the commissioner subject to the approval of the court, and shall on certificate of the commissioner be paid out of the fund s or assets of such company.]
Acts 1912, pp. 119, 135.
2442 ( e). Rules and regulations. [For the purpose of
this Section the commissioner shall have power subject to the approval of the court to make and prescribe such rules and regulations as to him may seem proper.]
Acts 1912, pp. 119, 136.
2442 ( f) . Report o.f comm1ss10ner. [The commissioner
shall transmit to the legislature in his annual report the -names of the companies so taken possession of, whe.ther the same have resumed business or have been liquidated, .or such other facts as shall acquaint the policyholders, creditors, stockholders and the public with his proceedings under this Section, and to that ~nd the special deputy commissioner in charge of any such company shall file annually with the commissioner a report of the affairs of such cbmpany, similar to that required by law to be filed by such company.]
Acts 1912, pp. 119, 13 6.

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SECTION S (b).
Receivers For Insurance Companies
2442 ( g ) . M et lz od of putting companies in hands of re-
ceivers. [Befo re any insu rance company chartered under th e laws of thi s State or doing busine;s in this State shall hereafter be put in the hands of receiver by any court of equity in this State, upon any claim or demand not in judgment, it must first appear that the cause of complaint and the matters and grounds upon which the re~eivership is sought have been submitted , by the complainant to the insurance commissioner of this State, and that such complai nt of the complain ant and the matters charged against such in surance company have been passed upon by the in surance commi ssioner sittin g in connection w ith the Governo r and the at torney-general in the manner hereinafter provided, to-wit: The insurance commissioner, the Governor and the attorney-general sitting as a board as provi ded in section 241 S ( b), shall , upon such matters and complai nt as referred to previously in this section, being fil~d with the insurance commissioner, proceed to hear the same after giving both the complainant an d the insurance company in question, opportunity to be heard, ample and legal time, however,. being given for the production of such evidence as either party may deem necessary. During the pendency of s1:1ch proceedings, the insurance commissioner shall order the compan y to maintain the assets instatu quo. Upon hearing the same, said commission, or a majority of them ,. shall render a decision and judgment recommending or declinin g to recommend th at the com~_issioner make application, in accordance with section 2442 (a) et seq ., for an order directing the company to show cause why the commissioner should not take poss~ssion of its property and conduct its business. No receiver for an insurance company doing business' in this State shall be appointed on the petition of any person oth er th an the insurance commissioner, unless it' be made to appear to the

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court where application for such appointment is made, that the insurance commissioner has failed or refused to comply and proceed with the findings of said board.]
Acts 1914, p. 135. 2564 (pp), 2564 (qq).

SECTION 6.
Agents of Insurance Company
2443. Definition of insurance agent. Any person who so-
licits in behalf of any insurance .company, or agent of the same, incorporated by the laws of this or any other State or foreign government, or who takes or transmits, other than for himself, any application for insurance or any policy of insurance to or from such com- , pany, or agent of the same, or who advertises or otherwise gives notice that he will receive or transmit the same, or who shall receive or deliver a policy of insurance, of any such company, or who shall examine or inspect any risk at any time , or receive or collect or transmit any premiums of insurance, or make or forward any diagram of any building or buildings, or do or perform any other act or thing in the making or consummating of any contract of insurance for or with any such insurance company, other than for himself, or who shall examine into or adjust or aid in adjusting any loss for or in behalf of any such company, whether any of such acts shall be done at,. the in.stance or request or by the employment of such insurance company, or of, or by, any broker or other person, shall be held to be the agent of the company for which the act is done or the risk 1s taken .
Acts 1887, p. 121. 2466, 2491, 2456, 935, 936, 937.
~2444. P enalty on agents of unauthoriz ed companies. Any person who shall do or perform any of the acts or thin gs mentioned,

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for any insurance company or agent of said company, without such company having first received a certificate of authority from the insurance commissioner of this State as required by law, shall be guilty of .a misdemeanor, and shall also pay a sum equal to the State, county, and municipal taxes and license required to be paid by insurance companies legally doing business in this State; and it is hereby made the duty of the insurance commissioner to see that all violato rs of the provisions of this section are prosecuted.
A cts 1887, p . 121.
2465 , 2448, 2457, ~ 626, P. C:
2445 . Civil liability. Any person who shall do any of the
acts mentioned in the preceding sections shall also be personally liable to the holder of any policy of insurance, in respect of which such act was done, for any loss covered by the same: Provided, that the penalties provided for shall not apply to adjusters or inspectors of un authorized insurance companies from whom the citizens of this State have purchased in surance for themselves, as provided for in this section, w heneve r the person or persons purchasing said insurance shall immediately notify the insurance commissioner, g ivi ng ~he name and locality of said company in which they have policies, and at the same time pay to said in suran ce commissioner the same licenses, fees, and taxes for each company as are now or may hereafter be required of fire insurance companies authorized to do business by the laws of this State; and when the license fees for any company have been paid in any one year by any person or persons who have purchased insurance from said company, then in that case, any person or persons purchasing insurance from said compa~y thereafter shall not .be liable for the license fees of said company durin g the said year, but onl y for much taxes on premiums as may be required from time to time of in surance companies authorized to do business in this State: Provided furth er, that it shall not be lawful for said inspectors to solicit business for their companies.
Acts 1890-1, p. 205.
2466.

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2445 (a). Agent's license. [All persons shall be required
to procure a license from the department of insurance before soliciting business in this State except those agents whose names are furnished the insurance commissioner by some reputable insurance company as its accredited agents.]
Acts 1912, pp. 119, 124. 2456, 2514 (i)
2445 (b). Requisites to obtai.n license. Revocation. [All
agents soliciting insurance in the State of Georgia shall, before procuring the license from the department of insurance, make application to the commissioner and before the said commissioner shall issue such license, he shall satisfy himself that such agent is authorized by some reputabl~ insurance company to do business in this State and the commissioner shall be advised and convinced as to the moral character and integrity of such applicant for license. The license of any soliciting agent may be revoked at any time by the insurance commissioner in his discretion.]
Acts 1912, pp. 119, 124. The concluding sentence of this. Section was declared by t h e Geo rgia Supreme Court (107 S. E. 857 ( to l)e uncons titutional.
2445 (c). Statement showing agents. [The managing
agent of each insurance company in this State shall on October 1st, 1912, and each three months thereafter file with the insurance commissioner a .statement showing the agents of his company, the amount paid for the license of each agent, and the date of its payment, which statement shall be verified by such managing agent.]
Acts 1912, pp. 119, 128.
2445 (d). Corporation soliciting or writing life insurance.
[Any person or persons incorporated for the purpose of soliciting or writing life insurance in Georgia of for the purpose of offering their stock in said company for sale to the public before procuring a license for such .incorporation, shall comply with such reasonable rules and regulations as the insurance comm1ss10ner may in his discretion

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lNSURAKCE LAWS

prescribe.]
Acts1912, pp. 119, 130.
2445 ( e). False representation unlawful. [It shall be unlawful for any person, firm or corporation to make or cause to be made any fraudulent or false representations as to the form, nature and character of the policy offered for sale, and any person selling a different form or character of policy from that which he represents himself as selling, or makes any other material misrepresentation as to the benefits accruing under any policy which he sells or offe.rs for sale, shall be deemed guilty of a misdemeanor and punished as provided in secti?n 1065 of the Penal Code and any note or other evidence of debt given in consideration of said policy shall be null and void and any premiums paid on such policy may be recovered by such policyholder m any court having jurisdiction thereof.]
Acts 1912, p p. 119, 124. ~ 627 (a) , P . C.
An Act to regulate the business of Fire and Casualty Insurance in this State, provide for the licensing of Agents and for the revocation or suspension of such licenses, and for other purposes.

Be it enacted by the General Assembly of Georgia and it 1s hereby enacted by authority of the same:
Section 1. For the purposes of. this Act an "In_surance Agent " is hereby defined to be an individual or a corporation or any member of a copartnership or association or any officer or agent of a corporation authorized by any insurance company lawfully qualified to transact business in the state to solicit, negotiate or affect contracts of insurance on behalf of any insurance company. All such agents shall thereby become liable to all the duties, requirements, liabilities and penalties herein provi''ded, but this act shall not apply to any executive or traveling salaried employee of any such insurance company. The phrase "company" or "insurance company" shall

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include only insurance companies writing fire or casualty msurance or both.
Sec. 2.-No insurance company admitted to do business in this State shall write or issue any fire or casualty insurance policy on any risk in this State except th r_ough a resident agent or resident age nts licen sed by the Insurance Commissioner of this State; nor shall any company or agent pay any remuneration or commissions for said business to any one except to an age nt licensed by said Ins_u rance Commissioner, provided however, that this section shall not apply to property of railroad companies an d other comrpon carriers." No person except as hereinafter provided shall be licensed as an Insurance Agent in this State except upon the application of a company authorized to do busin ess in this State, which said application shall be accompanied by a certificate signed by an executive officer of such company and certifying that af ter inquiring into the facts to the best knowledge, judgment and belief of such company, such person is of good character and is or expects to become bona fide engaged in the business of an insurance agent ( as defined in this Act), that he has such moral and financi al stan din g as to make it probable that he can carry on such an agency without detriment to the public, that he expects bona fide to serve the public and not to procure the license chiefl y for the purpose of getting a rebate or commission on insurance written for himse lf or his family or some partnership or corporation in w hich he is interested or with which he is connected , and that he has such knowledge of the business and of the law and practices governing and relating to the same as will enable him to carry on the business in a competent manner and without detriment to the public.
Sec. 3. A license to be known as a " non-resident's license" ( to be good for one year from the date of its issuance) will be granted by the Insurance Commissioner to any non-resident of this State upon the written application of such non-resident certifying that he is regularly licensed by the D epa rtment of Insurance of the State in whicli he resides, and that he will not negotiate nor effect any con-

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INSURANCE LAWS

tract of insurance on property in this State in who_le or in part in any company not qualified to do business in this State, and upon payment to the Insurance Commissioner a fee of $10.00.
Sec. 4. No corporation shall be licensed as an insurance agent unless its charter expressly authorized it to engage in that business and unless the company such corporation represented or is to represent certifies in the manner provided for in section 2 hereof that some officer of said corporation is qualified to act as insurance agent; the name of such officer shall be stated in the license of such corporation and such license shall automatically expire as and when such officer so certified ceased to hold active connection with said corporation, but may be revived upon' the substitution of some other officer of said corporation, duly certified to and licensed as provided m Section 2 hereof.
Sec. 5. No agent or non-resident shall solicit or be instrumental m placing insurance upon any risk in this Stat_e except in a company or companies admitted to do business in .this State; and the violation _of this provision shall be sufficient cause for the revocation of such agent's or non-resident's license.
"Sec. 6. The Insurance Commissioner may, upon his own motion, and must upon a written complaint signed by a citizen of this State and filed with the commissioner, inquire into any alleged illegal or improper conduct of any licensed insurance agent in this State, and any agent's license may be revoked or may be suspended by the Insurance Commissioner after giving such agent notice and opportunity to be heard, upon satisfactory proof that the agent has been guilty . of immoral -or illegal conduct or such practices as to render him unfit to carry on the business or to make his continuance therein detrimental to the public interests, or that he is no longer bona fide carrying on -the business of an insurance agent, but holds his license chiefly for the purpose of securing rebates or commis-
sions on insurance written fo.r himself or hi~ family 01: some partner-
ship or corporation in which he is interested or with whch he is connected, or that the license was improperly or improvidently granted.

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Notice to such agent shall be sufficient if given personally or by registered mail to the last known address of such agent or if the agent's address be unknown, by posting in the public office of the Insurance Commissioner in the State Capitol for ten days prior to the date of such inquiry. In connection with such inquiry the Insurance Commissioner shall have the power to summon witnesses against any agent _and shall, upon the application of such agent, summons his witnesses for the purpose of testifying at such inquiry.
Sec. 7. The Insurance Commissioner may, upon his own motion, and must upon a written complaint signed by a citizen of this State and filed with the Commissioner, inquire into any alleged illegal or improper conduct of any licensed non-resident insurance agent in this State, and any non-resident's license may be revoked or may be suspended by the Insurance Commissioner after giving such non-resident notice and opportunity to be heard, upon satisfactory proof that the non-resident has been guilty of immoral or illegal conduct of such practice as to render him unfit to carry on the business or to make his continuance therein detrimental to the public interests, or that the licenses was improperly or improvidently granted. Notice to such non-resident shall be sufficent if given personally or by registered mail to the last known address of such non-resident or if the non-resident's address be unknown by posting in the public office of the Insurance Commissioner in the State Cap"itol for ten days prior to the -date of such inquiry. In connection with such inquiry, the Insurance Commissioner shall have the power to summon witnesses against any agent and shall upon the application of such non-resident, summons his witnesses for the purpose of testifyin g at such inquiry.
Sec. 8. This Act shall supersede the provisions of Section 2445 (a) and 2445 (b) of Parks Annotated Code of Georgia of 1914, so far as relates to the business of fire and casualty insurance, except to the extent that the agent must first be designated by some company authorized to do business in this State as its agent before a license other than a non-resident license shall be issued to him.

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Sec. 9. This Act shall go into eff<;ct from and after its passage, but shall not revoke any agent's license n~w in force; which license shall remain in fo~ce until the end of the year 1925 unless sooner revoked or suspended, as herein provided for, and until the holder shall have had opportunity to be designated and certified by the company he represents, as herein provided for, and until such designation and certificate are passed upon by the Insurance Comm1ss10ner.
Sec. 10. Conflicting laws are repeaied. Provided, nevertheless, nothing herein contained shall be construed as repealing or affecting the provis_ions of" an Act approved August 17, 1923, entitled "An Act to provide for the organization of, or the regulation and taxation - of incorporated mutual cooperative fire insur;.ince companies, providing a penalty for any violation hereof, and repealing all acts or parts of acts in conflict herewith"; nor shall the provisions of this present Act apply to said companies or to their agents in the transaction of their business.
"Provided, also, that mutual insurance companies licensed to do business in this State, which issue policies upon which no compensation is paid to a local agent in this State, shall be entitled to have their agents licensed on the application for the license and the payment of the license fee, and the requirements of Section 2 of this Act, as to the qualifications for agents to obtain license, shall not :apply in such instances."
Approved August 26, 1925.
2446. Service on non-resident companies. Any insurance company not organized under the laws of this State, desiring to transact business in this State, shall fiie with the insurance commissioner a written instrument pr power of attorney, duly signed and sealed, appointing and authorizing some person, who shall be a resident of this State, to acknowledge or receive service of process, and upon whom process may be served, for and in behalf of such company, in all pro-

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67

ceedings that may be instituted against such company in any court of this -State, or any court of the United States in this State, and consenting that service of process upon any agent or attorney appointed under the provisions of this section shall be taken and held to be as valid as if served upon the company; and such .iristrument shall further provide that the authority of such ;ittorney shall continue until revocation of his appointment is made by such company by filing a similar instrument with said insurance commissioner, whereby another person shall be appointed as such attorney: Provided, however, that the provisions of this section shall not be construed to alter or amend the laws now of force in this State relative to bringing suits and serving process on foreign corporations_ doing business in this State.
Acts 1887, p. 123.
2542, 2258, 2563.
2447. Attorney may be appointed to rec.eive service. If any attorney so appointed shall absent himself- from this State, or his usual place of business or abode, or shall secrete himself, so that process may not be served upon him, or shall have become disqualified from any cause whatever, or shall die, the insurance commissioner shall immediately appoint an attorney for service for such company, of which appointment notice in writing shall be immediately given by said insurance commissioner to such appointee and also be sent to the company by mail, or to its general agent or manager, which appointment shall be as valid as if made by the company, and shall continue in force until such absent agent or att~rney shall return and give to said insurance commissioner written notice thereof, or until the company shall have made another appointment in the manner above prescribed. Service of process as aforesaid, issued by any such court as aforesaid, upon any such . attorney appointed by the company, or by the insurance commissioner, shall be valid and binding, and be deemed personal service upon such company so long as it shall have any obligations or liabilities outstanding in this State, although such company may have wi_thdrawn, been excluded from , or ceased to do

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business in this State. If any company shall fail, neglect, or refuse to appoint and maintain within this State such attorney or agent, it shall forfeit the right to do or continue business in this State.
Acts 188 7, p. 123.
~ 2564 (i).
2448. Company not complying, fees, etc. No person shall act as agent in this State of any insurance company of this or any other State or foreign government, doing a business in any manner, until said company has full y complied with the provisions of this Article, and received from the insurance commissioner certificates of authority for itself and its agents to transact business in this State. The fees charged insurance companies shall be as follows: For filing certified copy of charter, twenty dollars; for examinnation of annual statement, twenty dollars; and for certificates of authority or license to agents, three dollars each, Provided, however, that all fire insurance companies doing business in this State shall in lieu of such fees and charges, pay to the i_nsurance commissioner one fee of $200.00, and upon paying such fee and havin g otherwise fully complied with the provisions of this Article such fire insurance companies shall be entitled to receive from the insurance commissioner certificates of authority for itself, and its agents, to transact business in this State ; [fire and storm assessment insurance companies in the State of Georgia, the business of which is confined to four counties or less, or operated by independent divisions composed of four counties or less, shall pay to the insurance commissioner a fee of twenty-five dollars, in lieu of two hundred dollars. ] (a) In addition to the payment of the above fees, each of said companies shall make a report to the commissioner on the first day of May of each year, or within sixty days thereafter, under oath of . the president _or secretary thereof, showin g the entire amount of premium receipts of every character and description ( deducting return premiums on cancelled policies) of said companies in this State during the year or fractional part of a year ending the 30th day of April next preceding, ~hether said premiums were received in money or in notes, credits, or any substi-

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tute for money, to be taxed as may be provided by law from time to time .
Acts 1887, p. 124. 1909, p. 87. (a) Acts 1910, p. 55. 2459, 2443.

SECTlON 7.
Comity to Foreign Insurance Companies
2449. If/ hen charges on companies of this State greater than
imposed by this State. Whenever the laws of any other State of the United States shall require of insurance companies chartered by this State, and having agencies in such other State, or of the agents thereof, any deposit of securities in such State for the protection of policyholders or otherwise, or any payment of penalties, certificates of authority, licen se fees, or otherwise, greater than the amounts required for such purposes from similar companies of other States by the thenexisting laws of this State, then and in every such case, all companies of such States establishing or havin g theretofore established an agency or agencies in this State shall be and are hereby required to make the same deposit for a like purpose w ith the insurance commissioner of this State, and to pay to said commissioner, for penalties, certificates of authority, license fees, or otherwise, an amount equal to the amount of such charges imposed by the laws of such State upon companies of this State and the agents thereof.
Acts 1887, p. 124.
2419, 232, 9, 2203, 2209, 2418, 6457-6460, 288 9.

SECTION 8.
Assessment and Other Companies, Reports, Etc.
2450. Sworn statement to be filed by assessment companies,

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etc. -It shall not be lawful for any corporation or as~ociation, organ-
ized under the laws of this or any other State of the Unite~ States for the purpose of furni shing life indemnity or insurance upon the assessment plan by its agents, to do any business in this State until such corporation or association shall deposit with the insu.rance commissioner of this State a certified copy of its charter or articles of incorporation; a copy of its statement of business for the year ending the thirty-first day of the next preceding December, swo rn to by the president or secretary, or like officer thereof, settin g forth the number and amount of certificates of membership or policies in force and a detailed account of its expenditures, income, assets, and liabilities, and also a certificate swo rn to by the president and secretary or like officer thereof, settin g forth that it has paid, and has the ability to pay, its certificates or policies to the full limit named therein , th at its certificates or policies are payab le only to the beneficiaries havin g a legal . insurable interest in the life of the member or the insured, that an ordinary assessment upon its members is suffici~nt to pay its maximum certificate of membership or policy theretofore or the reafter to be issued to the full amount or limit named therein; a certificate from the insurance commissioner, or other like officer, charged with the duty of executing or enforcing the execution of insurance laws of its home State, certifying th at it is legally entitled to do business in -said home State; a copy of the application for membership or insurance, and of each form thereof if more than one form is used; a copy of the constitution and by-laws, and of each and every addition thereto, w hich must show that all indemnities to beneficiaries are in the mai n provided for by assessments upon all surviving members. And whenever said company shall fail to pay a valid claim to the full limit named in any policy issued by them to any resident of this State, the insurance commissioner shall revoke their authority to do business in this State: Provided, that all such corporations or associations, organized under the laws of this or any other State or country, shall deposit with the treasurer of this State stock or bonds approved by that officer in an amount equal to twenty thousand dollars par value, and of not less than twenty thousand

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71

dollar_s market value: Provided, however, that industrial associations or assessment life insurance companies doing business on the industrial or weekly payment plan, and issuing no policies for an amount greater than five hundred dollars, shall be required to deposit a sum equal to one th,ousand <l:ollars for each one million dollars in force, and thereafter such industrial associations or assessment life insurance companies doing business upon the industrial or weekly payment plan, arid issuing a policy for no greater amount than five hundred dollars, shall be required to deposit a sum no,t less than one thousand dollars in each million dollars of insurance in force on the last day of the last calendar year, as shown by its annual statement, until the sum so deposited shall be equal to one hundred thousand dollars. The security so deposited shall be held in trust for the benefit and protection of, and as security for, the policyholders. of such corporation or association, their legal representatives, and beneficiaries. A corporation or association organized under the laws. of other States or countries shall not be required to make such de-posit, provided the corporation or association desiring to do business in this State shall make it appear to the satisfaction of said insurance commissioner that it has on deposit with the proper State official in the State or country of its incorporation a like amount of securities as is required under the terms of this section, and which are held by said authority in trust for the benefit and protection of, and as security for, the policyholders of such corporations or associations, their _ legal representatives, or beneficiaries. Said securities shall so remain on deposit until it has been made to appear to the satisfaction of said insurance commissioner of this State that all the debts and obligations of said company or association due the citizens of this State have been discharged, or, in _case of non-resident. companies that, after ma~ing deposit, or similar deposit has been made with the proper State officials in the State or country of its corporation, said securities shall be subject to the debts due policyholders and beneficiaries under .the same rules and regulations as govern the deposits required to be made by fire insurance companies under the laws of this State, in so far as the same may be applicable. Companies or asso-

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c1at10ns now organized under the assessment li fe insurance laws of this State shall not be required to make such deposits for and dur-
ing the yea r 1901 ; but said companies may make such deposits fo r
and during said yea r if they so elect.
Acts 1887, p . 124. l 'J00, pp. 4~. 74. 190 1, p . 33. 1905, p. 77.
2413, 2514 (b). Amended b y 2564 (ddd), 2564 ( eee) and 2564 ( fff) , as i n-
serted followin g Section 2428.
2451. Life insurance 011 assess m ent plan. A ny corporation
chartered to do a liie in surance business on the assessment plan, and doin g business in this State, may, if it so desi re, by a comp liance with this and the three succeeding sect10ns, be relicensed and authorized to transact a general life in surance busin ess in this State, upon filing with the insurance depa rtment of the State all papers and doc uments and makin g the payments requi r-ed under existing laws, so far as the same are or may be app licable to such life insurance com_panies, and all business thereafter t ra nsacted by such corporations in this State, shall be done in accordance wi th and governed by the provisions of the laws of this State relatin g to life insurance companies other than those doing business on the assessment plan except as provided in this and the three succeeding sections.
Acts 1900, p. 74.
2452. Policies and certificates. Every such corporation, upon complying with the requirements of this and sections 2451, 2453 , and 2454, is authorized to carry out, -in good faith, its contracts
heretofore made with its members, but all policies or certificates of insurance heretofore issued by such corporations and now remaining in force which contain a provision for a payment other than the premium stipulated therein , and under which the duration of <premium payments is coequal with the duration of the contract ( endowment policies. and endowment certificates excepted), shall be valued and reserve maintained thereon on the basis of renewable term insurance as fixed by age in accordance with the provisions of section
2438. To the reserve liability determined as above, the msurance

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comm1ss10ner shall add the determinate contracts reserve under any other policies or certificates heretofore issued and remaining in force, and in the absence of such contract reserve shall value them as contracts providing similar benefits are 'to be valued under _the provisions of section 2438: Provided, that under no policy or certificate shall a greater aggregate reserve liability be charged than is required by said section.
2438
2453. R eserve . No policy or certificate of life insurance
shall be issued by a company licensed under section 245 I, in this State, unless in compliance with the provisions thereof. All policies of life insurance issued by such corporatioil, under this Article, whether or not they contain a provision for a payment other than the premium specified therein, shall be valued and the reserve maintained thereon acco rding to the provisions of section 2438, and the nature of the insurance as defined in each policy.
24-54. Societies to which this applies. No law which relates
to the formation of corporations to transact the business of life insurance upon the assessment plan, or which provides for the regulation of the business of life insurance by such corporations, shall be applicable to companies doin g business under this and the three preceding sections, except to the extent of permitting the carrying out of contracts heretofore made with members: Provided, nothing in this and said precedin g sections shall be construed to apply to any fraternal beneficiary order or society operating on the systi;m of lodges, councils, or chapters, as defined by the laws of this State regulating such orders or societies.
2455. On assessment plan ; policies, how written. Every
policy or certificate issued to ~ resident of the State of Georgia by any corporation transacting therein the business of life insurance upon . the assessment plan, or admitted into this State under the assessment laws of Georgia, shall print in bold t ype ( in red ink), in every policy,

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or certificate issued upon the life or lives of the citizens of Georgia, making one of the principal lines near the top thereof, the words "issued upon the assessment plan," and the words "assessment plan" shall be printed conspicuously (in red ink) in or upon every application, circular: card, advertisement, and other printed documents issued, circulated, or caused to be circulated by such corporation within the State: Provided, that this section shall apply o~ly to such corporations or associa:tions as shall write or issue p_olicies or certificates on the post-mortem assessment plan, and shall not apply to such corporations or associations as shall only issue policies un_der which the premiums are stipulated, and made payable at fixed periods in advance. If any such corporation or association shall at any time fail or refuse to comply with this section, the insurance commissioner shall forthwith suspend or revoke all authority to such corporation or association and all its agents to do business in this State, and shall publish such revocation in some newspaper published n this State.
Acts 1897, p. 67. 1898 , p . 97. 1901, p . 77.
15.
2455 (a) : Life insurance on mutual plan, regulations and requirements. [Life in.surance companies chartered by the laws of this State to operate on the mutual co-operative or assessment plan without limitation as to the amount for which policies of said company are to be i~sued, shall stipulate definitely in the face of the policies the amount to be paid to the beneficiaries on the said policies in the ev.ent of the death of the assured. In no event, shall payments to beneficiaries by such companies be contingent upon the number of policyholders in the company or on the number in any division .or branch of such company. The intention of this law being to require the payment of the full f~ce of the policy as stipulated therein without regard to subdivisions of the membership of such insurance companies in the management of- their affairs. No policy shall be issued by such companies without subjecting applicants for such insurance to medical examination. It shall be the duty of the insurance commissioner to investigate the rates of premiums which are to

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be charged by all such companies, and he is hereby authorized to require said companies to charge such rates as are deemed by him adequate to pay their policies at maturity.]
Acts 1912, pp. 119, 141.
H 2514 (e), 2499 (a).
2456. L icenses to agen ts of assessment companies After authorizing such corporation or association to do business in this State, as provided in this Article, the insurance commissioner shall issue licen se to _agents thereof, to be designated by the corporation or association or association, or a general agent thereof, authorizing them to act as such agents during the year for which said company is licensed; but such licenses must be rene,.,ved annual~y.
Acts 188 7, p. 125. 2491, 2445 (a) .
2457. Penalty for fraudulently procuring msurance. Any agent, physician, or other person who shall knowingly secure, or cause to be secured, a certificate of membership on any person without his know ledge or consent, or by means of mi srepresentations, false, fraudulen t, or untrue statements, be instrumental in securing a certificate of membership on any aged or infirm person or in restoring to membership any person not in an insurable condition, shall be deemed guilty of a mi sdemeanor, and said certificat,e or renewal so secured shall be absolutely void.
Acts 1887, p. 125. 2444. 627, P. C
2458. Annual report of business. Every corporation or association, w hich may be doin g business in this State under the provisions of this Article, shall, on or before the first day of March in each year after it commences to do business in this State make and file with the Insurance Commissioner a report of its _affairs and operations d~ring the year ending the thirty-first day of December next preceding. Such annual reports shall be made upon

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blank forms to be provided and furnished by thi; insurance commisoioner, and shall be verified under the oath of the president or secretary, or other like officers, and shall be published, or the substance thereof, in the aQnual report of said insurance commissioner.
Acts 1887 , p. 126.
986, 2209, 2564 (g).
2459. Fees to be paid. There shall be paid to the insurance comm1ss10ner, by each corporation or association authorized to do business in this State, the same fees as required by section 2448, together with all such subsequent fees as are prescribed under said section. In addition to the foregoing fees , every such corporation or association shall, on or before the first day of July of each year, report under oath of its president and secretary, or other like officers, to the insurance commissioner the gross amount received on business done in this State during the year ending the thirtieth of April next preceding, and shall at the same time pay into the treasury of this State a tax as provided for under the General Tax Act for said year ( see following this section) : Provided, however, that if such corporation or association should at any time be the owner of any real or person al property situated in this State, such property shall not the same time pay into the Treasury of this State a t~x as provided for under the General Tax Act for said year. ( See following this section) : Proyided, however, that if such corporation or association should at any time be the owner of any real or personal property situated in this State, such property shall not be exempt from taxa-
tion by reason of the provisions of this . section .
Acts 1887, p. 126.
2448.
2460. Failure to make. such report or pay tax. If such
corporation or association shall at any time fail or refuse to make the annual report, or to pay the tax on the gross amount received, as hereinbefore provided, the insurance commissioner shall forthwith suspend or revoke all authority to such corporation or association,

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and all its agents, to do business in this State, and shall publish such revocation in some newspaper published in this State, and may proceed to collect whatever sum of money may be due or owing on account of such tax by suit or action, in the name of the State of Georgia, against such corporation or association.

Acts 1887, p. 126.

2461. Exemption of fraternal, secret, and industrial socie-
ties, etc. Nothing in this Article contained shall apply to or be

construed to require any fraternal, or secret, or Industrial societies,

or other associations exempt by law, now organized or to be organ-

ized .in this State, to pay any license fee or tax, or to make or file re-

ports with the insurance commissioner, or to prevent the same from

doing business in this State, when the money, benefit, charity, or

relief is payable by the grand supreme body of the same, and is de-

rived from assessments on subordinate lodges, councils, or other

bodies or their members.

.

Acts 1887, p . 126.

2564 (d), 2564 (g), 2564 (k).

2462. License of fidelity companies. Any corporation now or hereafter organized under the laws of this State for the purpose of transactin g the business of fidelity insurance shall be licensed to transfer business upon compliance with all the requirements in this Article prescribed with reference to life insurance companies organized under the laws of this State so far as the same may be applicable to such fidelity insurance company; any fidelit y insurance company incorporated and organized under the' laws of any other State of the United States, or forei gn gove rnments, and which has a paid-up capital of not less than two hundred and fifty thousand dollars, may be licensed to transact business in this State upon compliance with all the requirements prescribed by this Article, so far as the same may be applicable, for license to foreign life insurance companies to transact business in this State.
Acts 1887, p . 127.

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2463. Live stock and steam boiler insurance companies
subject. All live stock and steam boiler insurance companies chartered by this State or other States of the United States, or, foreign governments, and doing business in this State, shall be subject to all the requirements of this Article in reiation to life insurance companies, except the requirements in relation to valuation of policies.
Acts 1887, p. 127.
2464. Commissioner and inspectors may administer oaths. The insurance commissioner and such person or persons as may be appointed by him to make inspections are hereby authorized to administer any and all oaths to parties and witnesses, as required under the provisions of this Article.

2465. Law applicable to individuals. All laws regulating
the business of insurance in this State by companies are applicable
. to individuals, associations, and corporations in like business. Acts 1893, p. 81.

SECTION 9.
Pooling
. 2466. Unlawful for companies to make contracts affe.ctwy competitzon. It shall be unlawful for any insurance company, or companies, authorized to do business in this State, or the agent or agents thereof, to make, maintain, or enter into any contract, agreement, J?Ool or other arrangement with any other insurance company, or companies, licensed to do business in this State, or the agent or agents thereof, for the purpose of, or that may have the tendency or effect of, preventing or lessening competition in the business of insurance transacted in this State. And when it shall be made to appear to the coimissioner of insurance that any company, or companies,

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agent, or agents have entered . into any such contract; agreement, pool, or other arrangement said commissioner shall revoke the license issued to su_ch company or companies, and the same shall not be reissued until the president or chief officer of such company or co~panies shall file an affidavit ~vith said commissioner, stating that such contracts, agreements, pools, or other arrangements have been annulled and made void: Provided, that nothing in this Article shall be so construed as to prevent any insurance company, legally authorized to transact business in this State, from separately surveying, inspectin g, or examining the premises to be insured, by and with the consent of the owner, for the purpose of bringing about improvements in fire protection, so as to lessen the cost of insurance by reducing rates.
Acts 1890-1, p. 206.
~ ~ 6466, 2443.
2467. Complaints by citizens and citation. Any citizen of
this State ( whose rates of insurance have been increased, or who has been refused insurance at reasonable rates) shall have th~ right to file a written complaint under oath, to the best of his knowledge and belief, with the insurance commissioner, charging any company or companies authorized to do , business in this State with a violation of the preceeding section, and thereupon it shall be the duty of said insurance cominissioner to issue a citation, addressed to the company or companies aginst whom said . complaint is made, requiring it, or them to be and appear before said insurance commissioner at a time and place to be fi xed by sa id insurance commissioner, not less than twenty nor more than forty days from the date of the filing of such complaint, and sh_ow cause why their license should not be revoked as provided by the precedin g section. Said citation shall be served, not less than ten days from the date of filing said complaint,. by the sheriffs or constables of said State in the same manner as provided by law for the service of process upon insurance companies.
~ 2493, 2446, 2563, 2564.
Acts 1890-1, p. 206.

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INSURANCE LAWS

2468. Practice as t o t estimony, et c. For the purposes of the provision of this Article, the insurance commissioner shall have power to administer oaths, issue subpoenas for witnesses, hear testimony, issue commissions for taking testimony by interrogatories; and the party or parties complaining, and the company or companies defendin g, shall have the right to serve notice for the production of books and papers, under the same rules as now provided by law for civil actions in the superior courts.

2469. Forum. The county m which the insuranc;e commissioner shall fix the hearin g shall be the loci forum of said hearin g or trial. The costs and fees for the sher!ff or constable, witnesses, and the commissioners takin g interrogatories shall be the same as now provided by law for similar se rvice in the superior courts of this State, the same to be taxed against and paid by the party or parties cast in said suit, and against whom said insurance commissioner shall find; for which costs said insurance commssioner is hereby authorized to issue execution to be levied and collected as executions from the courts of this State.

SECTION 10.
Fire Insurance Contracts
2470. Contract of fire insurance. Th e contract of fire in surance is one w hereby an individual, or company, in consideration of a premium paid, agrees to indemnify the assured against loss by fire to the property desc ribed in the policy, according to the terms and stipulation s thereof. Such contracts, to be binding, must be in writ\ng; but delive ry is not necessary if, in other respects, the cont ract is consummated .
3222, 2404, 2496.
24 70 (a). Standard farm of policy for fire insurance. Pol-

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81

icies requmng certificates null and void. [Each and every fire insurance company doing business in this State shall adopt and write. a standard or uniform policy such as may be prescribed by the commissioner; (a) " Provided that any policy condition requiring the insured to procure the ce rtificate of the nearest magistrate, or notary public (not interested in the claim as a creditor or otherwise, nor related to the insured) living nearest the place of fire, stating that he has examined the circumstances and believes the insured has honestly sustained loss to the amount that such magistrate or notary public shall certify, shall be null and void; and it shall be unlawful to issue any other class of policy in this State: Provided, however, that local assesment fire insurance companies doing business in not more than four counties in a di vision m the State of Georgia, may issue and write such form of policy as may be prescribed by the commissioner.]
Acts 1912, pp. 11 9, 131 (a), 1921, p. 208 .
24 71. Policies must contain the entire contract. All life
and fire insurance policies issued upon the life or property of persons. within this State, whether issued by companies organized under thelaws of this State or by foreign companies doin g business in this, State. which contain any reference to the application for insurance,. or the constitution, by-laws, or other rules of the company, either as forming part of the policy or contract between the parties thereto or having any bearing on said contract, shall contain, or have attached to said policy, a correct copy of said application signed by the applicant, and of the by-laws referred to; and unless so attached and acco_inpanyi ng the policy, no such constitution or by-laws shall be. received in evidence either as par.t of the policy or as an independent contract in any controversy qetween the parties to or interested in the said policy, nor shall such application or by-laws be considered a part of the policy or contract between such parties.
Acts 1906, p . 107. 2479, 2530, 2564 (x).
2472. Int erest of assured. To sustain any contract of m-

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surance, it must appear that the assured has some interest 111 the property or event insured, and such as he represented himself to have. A slight or contingent interest is sufficient, whether legal or equitable, and several havi ng different interests may unite in procuring one policy; so a husband o r parent may insure the separate property of his wife or child, the recovery being held by him in t rtist for them ; but a mere expectation of . an interest is not insurable.
' 2483, 2484.
2473. l nsur.'ng interest of anot her. If one und ertakes to
insure the interest of another, it must be done by his consent, or be subsequentl y ratified by him ; but an insurer may rein sure to protect himself against loss on his contract.
_ 2474. In surance on changing pro perty . A policy of insurance may be made to cove r property changing daily in its specific .a rticles, as a stock of goods.
. 2545.
~ 2475 . Construction. The contract of in su ra nce should be construed so as to carry out the true intention of the parties.
4266
2476. L oss, what is. .A loss or injury may occur from fire
without the actual burnin g of the articles or property; as, a house blown up to stop a conflagration, or goods removed in imminent dan ge r, or damage by water used to extinguish the flames.
2545.
2476. (a) . Umpire to appraise loss. Appointment. No tice
and service. [When in the event of loss or damage to property in this State, described in any policy of fire insurance and covered thereby, the ascertainment of any such loss or damage is, as provided in the policy, to be determined by appraisers, one selected by the company, the other by the insured, and the two so chosen shall have failed or neglected, for a sp~ce of ten days after both have been chosen,

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83

to agree upon and select an umpire, it shall be lawful for either the assured or the company to apply to any court of record in the county
in which the property is or was located, on five days' notice in writ-
ing to the other party of his or its determination so to do, to appoint a competent and disinterested umpire. Any such notice in writing, when served by ~he insured, may' be served upon any local agent of the company; and the said court shall, on proof by affidavit of the failure; and the said court shall, on proof by affidavit of the failure or neglect of the said appraisers to agree upon and select an umpire within the time aforesaid, and of the .service of notice aforesaid, forthwith appoint a competent and disinterested person to act as umpire in the ascerta_inment of the amount of said loss or damage; and the acts of the umpire so appointed shall be binding upon the insured and the company to the same extent as if such umpire had been selected in the manner provided for in said policy of insurance.]
Acts 1916, p . 128.
. 2476 ( b). Contrmy stipulation v oid. [Any stipulation in_ any policy of fire insurance contrary to the terms of section 2476 (a) shall be void.]
Acts 1916, p. 128.
2477. Loss unknown to the parties. If the loss has already
occurred, and both parties are ignorant of it, the contract is valid; but the slightest grounds of suspicion known to the insured will vitiate the contract unless made known to the insurer. .
2478. Diligence by assured. The assured is bound to ordinary diligence in . protecting the property from fire ,' and gross negligence on his part will relieve the insurer. Simple negligence by a _servant, or the assured, unaffected by fraud or design in the later, will not relieve the insurer.
2521.
247Q. Application, . good faith. Every application for m-

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surance must be made in the utmost good faith, and the representa~ tions contained in such application are considered as covenanted to be true by the app licant. Any variation by which the nature, or extent, or character of the risk is changed will void the policy.
. 4113, 2471, 2482, 2533, 2499 (a) , 2514 (b).
2480. Effect of misrepresentation. Any verbal or written representations of facts by the assured to induce the acceptance of the risk, if material, must be true, or the policy is void. If, however, the party has no knowledge, but states on the representation of others, bona fide, and so informs the insurer, the falsity of the information does not void the policy.
4113, 24 83.
2481. Concealment. A fa:ilure to state a material fact, if not done fraudulently, does not void; but the willful concealment of such a fact, which would e~hance the risk, will void the policy.
4114.
2482. Increasing risk. Any change in the property, or the use to which it is applied, without the consent of the insurer, wherebv the risk is increased, voids the policy.
2523, 2479.
2483. "fVillful misrepresentation voids policy. Willful misrepresentation . by the assured, or his agent, as to the interest of the assured, or as to other insurance, or as to any other material inquiry made , will void the policy.
2480, 2489.
2484. Effect of alienation. An alienation of the property insured, and a transfer of the policy, without the consent of the insurer, voids it; but the mere hypothecation of the policy, or creating a lien on the property, does not .void.
H 4188, -3256, 2472.

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85

2485. Transfer to one of several. A policy issuing to several may be transferred to one of the assured without the consent of the msurer.

2486. Partial sale. A partial sale of property insured voids the policy only pro tanto. A sale not full y executed, and possession remaining with the assured, does not void.

2487. Transfer after lo ss. After the loss occurs, a sale of the property and transfer of the policy does not affect the liability of the insurer, but the assignee may recover.

2488. Or by operation of law. A transfer of the property or policy by operation of law, or under the order of the court will confer on the assignee all the rights of the assured_.

2489. Second insurance. A second i-nsu rance on the same property, unless by consent of the insurer, voids his policy.
2544 , 24 83.
2490. Prescribing regulations. Every in surer has a right to prescribe regulations as to notice and preliminary proof of loss, which must be subst antially complied with by the assured: P rovided , the same are made known at the time of the insurance, and are not materially changed during th e existence of the contract. An absolute refusal to pay waives a compliance with these preliminaries.

SECTION II.
Fire and Casualty Insurance Companies
2491. R egu lating business of fire and casualty-insurance companies. Fire insurance companies not incorporated by the laws of the State of Georgia, but legally authorized to do business in this

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INSURANCE LAWS

State through regularly commissioned and licensed agents located in this State, shall not make contracts of fire insurance on property herein, save through agents of such companies regularly commissioned and licensed to write policies of insurance in Georgia: Provided, however, that this section shall not apply to property of railroad companies and other common carriers. Accident-liability or casualty insurance companies not incorporated by the laws of the State of Georgia, but legally l!uthorized to do business in this State through regularly commissioned and licensed agents located in this State, shall not issue a policy of accident-liability or casualty insurance to an y person, or corporation, resident in said State, save through agents of such companies regularly commissioned and licensed to write policies of accident-liability or casualty insurance in Georgia.
Acts 1896, p. 61. i901, p. 74.
2443, 2445, 2456, 935, 936, 937 .
2492. Affidavit of president or chief officer. Before issuing certificate of license to any fire, accident-liability, or casualty insurance company to transact the business of fire, accident-liability, or casualty insurance in this State, the insurance commissioner shall require, in addition to requirem~nts already provided for by law, that such fire, accident-liability, or casualty insurance company shall file with him the affidavit of its president, or other chef officer, that it has not violated any of the provisions of this section for the space of twelve months last past, and that they accept the terms and oblgations of this section as a part of the consideration of their license.

2493. Investigation of complaint of violations of law. Complaint being filed by any citizen of this St~te that a company authorized to do business in this State has violated any of the provisions of this section, the comptroller-general shall diligently investigate the matter, and if necessary examine, by himself or his accredited r'epresentative at the head offices located in the United States of America, and also such other offices or agents of such C0!1lpanies as may be deemed proper, all books, records, and papers of the same,



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and also the officers thereof under oath as to such alleged violation or violations: Provided, that before making such examinations the comptroller-general shall require the party making complaint to file with him a good . and sufficient bond to cover any expense or cost that may .be necessary in making such examination; and in the event that the insurance company is found not guilty of a violation of this section, then said bond shall be responsible for all expense incurred by reason of said investigation. But should the compan)' be found guilty of a violation of this law, then said company shall be responsible for the expense thereof.

2494. Forfeiture of right to do business. Any fire, accident-liability, or casualty insurance c~mpany violating any provision of _this section, or refusing to submit to the aforesaid examination when required, shall forfeit the right to_do business in this State for the next twelve months thereafter, and the insurance commissioner shall immed.iately revoke the license already issued to said company to do business in this State.
15.
2495. Failure to pay expenses of examination. If any such company si)all fail or refuse to pay such expense of examination upon the presentation of a bill therefor by the comptroller-general, the comptroller-general may issue his fi. fa. against such company therefor, to be collected out of the property of the company or its deposit with the State treasurer, in the same manner as judgments against insurance companies not chartered by this State, but doing business herein, are collected. If any company disputes the amount of such bill and fi. fa., it may contest such amount and its liability therefor by affidavit of illegality returnable to the superior court of Fulton county, in the same manner as comptroller-general's execu- tions for railroad county taxes can be contested.
~ 1041.
2495 ( b). Reserve for outstanding losses '. computation; Zia-

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bility policies; compensation claims. The reserve for outstanding losses under insurance against loss or damage from accident to or injuries suffered by an employee or other .person and for which the insured is liable shall be computed as follows:
( 1) For all liability suits bein g defended under policies written more than
( a) Ten years prior to the date as of which the statement 1s made, one thousand fi ve hundred dollars for each suit .
( b) Five and less than ten years prior to the date as of which the statement is made, one thousand dollars for each suit.
( c) Three and less than five years prior to the date as of which the statement is made, eight hundred and fifty dollars for each suit.
(2) For all liability policies written durin g the three years immediately pre.ceding the date as of which the statement is made, s uch reserve shall be sixty per centum of the earned liability premiums of each of such three years less all loss and loss expense payments made under liability polic.ies written in the corresponding yea rs; but _in any event, such reserve shall for the first of such three years, be not less than seven hundred and fifty dollars, for each outstanding liability suit on said year's policies.
( 3) For a ll compensation claims under policies written more than three years prior to the date as of which the statement is made, the present values at fou-r per centum interest of the determined and estimated future payments.
( 4) For all compensation claims under policies written the three years immediately preceding the date as of which the statement is made, such reserve shall be sixty-five per centum of the earned compen sation premiums of each of such three yea rs, less all loss and expense payments made in con_nection with such claims under policies written in the corresponding yea rs; but in _any event in the case -0f the first year of any such three-year period such reserve shall not

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89

be less than the present value at four per centum interest of the determined and the estimated unpaid compensation claims under policies written during such year; provided, however, that in computing the reserve for the statement for December 31st, 1919, and December 31st, 1920, the ratios sixty per centum and sixty-two and one-half per centufn respectively shall be used instead of sixty-five per centum as hereinbefo re provided.
Acts 1920, pp .- 111 , 112.

2495 (c). Definitions; "earned premiums"; compensation";

" liability"; "loss expense payments." The term "earned premiums,"

as used herein shall include gross premiums charged on all policies

written, induding all determined ~xcess and additional premiums,

less return premiums, other than premiums returned to policy hold-

ers as dividends, and less reinsurance premiums and premiums on

policies cancelled, and less unearned premiums on policies in force.

But any participating company which has charged in its premiums

a loading solely of dividends shall not be required to include such

loading in its earned premiums, provided a statement of the amount

of such loadin g has been filed and approved by the Insurance Com-

m1 ss10 ner.

The term "compensation" as used in this Act, shall relate to all

insurances effected by virtue of statutes providing compensation to

employees for personal injuries irrespective of fault of the employer.

The term "liability" shall relate to all insurance except compensation

insurance against loss, or damage from accident to or injuries suf-

fered by an employee or other person and for which the insured is

liable.



The terms "loss payments" and "loss expense payments" as

herein used shall include all payments to claimants, including pay-

ments for medical and surgical attendance, legal expense, salaries

and expenses of investigators, adjustors and field men, rents, station-

ery, telegraph and telephone charges, postage, salaries, and expenses

of ~ffice employees, home office expenses, and all other payments

made on account of claims, whether such payments shall be allocated

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to specific claims or un allocated.
Acts 1920, p . 11 3.
2495 (d). ' D istribution of unallo cated liability loss expense payments; unallo cated compensation loss payments; additional reserves. All unallocated liability loss expense payments made in a given calendar year subsequent to the first four years in w hich an insurer has been issuing liability policies, shall be distributed as follows : Thirty-five per centum shall be charged to the policies written in that year, forty per centum to the policies written in the preceding year, ten per centum to the policies written in the second preceding year, ten per centum to the policies written in the third preceding Yea r and fi ve per centum to the policies written in the fourth yea r preceding, and such payments made in each of the first four calendar years in w hich an insurer issued liability policies shall be distributed as follows: In the first calendar year one hundq:d per centum shall be charged to the policies written in that year, in the second calendar year fifty per centum shall be charged to the policies written in that year and fifty per centum to the policies written in the preceding year, in the third yea r forty per centum shall be charged to the policies written in that year, forty per centum to the policies written in the precedin g year and twenty per centum to the policies written in the second year preceding and in the fourth calendar year thirty-five per centum shall be charged to the policies w ritten in that year, forty per centum to the policies written in the second year preceding, an d ten per centum to the policies written in the third yea r preceding and a schedule showi ng such distribution shall_ be included in the annual st atement.
All unallocated compensation loss payments made in a give n calen dar year subsequent to the first three yea rs in w hich an insurer has been issuing compensation policies shall be distributed as follows: F orty per centum shall be charged to th e policies written in that year, forty-five per centum to the policies written in the preceding yea r, ten per centum to the policies written in the second year preceding, and fi ve per centum to the policies w 'ritten in the third year

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91

preceding, and such payments made in each of the first three calendar years in which an insurer issues compensation policies shall be distributed as follows: In the first calendar year orie hundred per centum shall be charged to the policies written in that year, in the second year fifty per centum shall be charged to the policies written in that year and fifty per centum to the policies written in the preceding year, in the third calendar year forty-five per centum shall be charged to the policies written in that year, forty-five per centum to the policies written in the preceding year and ten per ceritum to the policies written in the second year preceding, and schedule showing such distribution shall be included in the annual statement.
Whenever in the judgment of the Insurance Commissioner, the liability or compensation loss reserves of any insured under his suprovision, calculated in accordance with the foregoing provisions, are inadequate, he may, in his discretion, require such insurer to maintain additional reserves based upon estimated indvdual clams or otherwise.
Acts 1920, p . 114.
2495 (e). Schedule of experience. Each insurer that writes
liability o, compensation policies shall include in the annual statement required by law a schedule of its experience thereunder in such form as the Insurance Commissioner may prescribe.
Acts 1920, p. 115.
~ 2495 (f). Unearned premium reserve. On all policies of casualty insurance in force and written for one year or less, there shall be maintained the unearned premium reserve of fifty per centum of the current year's premium; on all such policies in force and written for more than one year there shall be maintained an unearned premium reserve of fifty per centum of the current year's premium, phis the entire premium for subsequent years, provided, such unearned premium reserve may be reduced by the amount of unearned commissions on premiums not more than ninety days past due, which premiums are due fr~m agent, or agencies whose accounts

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with the Insurance Commissioner are secured by bonds executed by companies licensed to do business in this State.
Acts 1920, p. 120.

No. 314
REVOCATION OF LICENSE OF CASUALTY COMPANY FOR FAILURE TO PAY JUDGMENT
AN ACT to provide additional grounds for revoking the licenses to do business in Georgia of companies engaged in the bus. iness of insuring agajnst liability of various kinds, to provide limitations on the grant and renewal of such licenses ; to authorize the Insurance Commissoner to carry into effect the provisions for revoking such licenses; and for other purposes.
1. If any insurance company, domestic or foreign, doing business or insuring against loss or damage resulting to the insured by reason of liability asserted against the insured on account of accident to, injuries to, or the death of any other person, or injuries or damage to the property of others, shall fail or refuse to pay off and discharge any judgment rendered against such insured for liability covered by such insurance written by said company in the State, within thirty days after such judgment shall have become final by rea~ son of having been affirmed, or by rea~on of the time within which proceeding to appeal from the same having expired, or within thirty days from the passage of this Act, as to judgments which shall have become final at the time of its passage or prior thereto, shall not be permitted or licensed to do business in this State; provided that this shall not apply when the amount of the judgment exceeds the amount of the insurance, and the company has paid so much of said judgment as equals the amount stated in its contract of insurance. The failure of any such company to pay off the amount of said judgment or the amount stated in its contract of insurance, as the case may be, shall be a ground for the revocation of any license granted to it to

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93

do business in this State, and for the refusal to grant or renew ~i.!ch license so long as said company fails to make such payment. The provisions. of this Act are cumulative of the provisions of the laws of this State as to revoking the license of such companies.
2. Whenever it shall be brought to the attention of the In-
surance Commissioner that any company has failed to pay such judgment under the circumstances stated in the preceding section, it shall be the duty of the said Insurance Commissioner, and it is hereby made his duty, to notify the said company to show cause . before him in not less than five days why its license to do business in Georgia should not be revoked . Upon said hearing if it is made to appear to the Insurance Commissioner that the said company failed i:o pay a judgment, or so much thereof as is required by _this Act, under the circumstances provided in Section 1 of this Act, it shall be the duty of the Insurance Commissioner, and it is hereby made his duty, to declare the said company's license to do business in Georgia revoked, and after such declaration the company shall not longer be authorized to transact business in this State, except that it shall be authorized w take such proper steps as may be necessary to liquidate its existing business in this State, but shall not be authorized to issue an_y new policies of insurances.
3. After a company's license has been revoked under this
Act, the same may be renewed and reinstated by the Insurance Commissioner whenever it is made to appear _to him that the judgment or judgments of the kind provided in this Act, or so much thereof as is required by this Act, have been paid, but no company, the license of which may hereafter be revoked under the terms of this Act, shall have its license reinstated or renewed, or a new license granted to it, so long as the judgment or judgments, because of which its license was revoked, shall remain unpaid.
4. All laws and parts of laws in conflict with this Act are
hereby repealed.
Approved Aug, 2, 1922.

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SECTION 12.
Life Insurance
2496. Contract of life-insurance. An insurance upon life is a contract by which the insurer, for a stipulated sum, engages to pay a ~ertain amount of money if another dies within the time lim- . ited by the policy. The life may be that of the assured, or of another in whose continuance the assured has an interest.
~ 2471, 2564, (c), 2470.
2497. By whom taken. Contracts of life insurance can be taken only by persons or corporations specially authorized so to do by law.
2498. To whom to be paid. The assured ,may direct the money to be paid to his 'personal representative, or to his wido\.v, or to his children, or to his assignee; and upon such direction given, and assented to by the insurer, no other person _can defeat the same. But the assignment is good \.Vithout such assent.
2499. -Law of fire insurance applicable. The principles before stated as to fire insurance, wherever applicable, are equally the law of life insurance.
2499 (a). Medical examinations. [All insurance . companies except companies writing policies of insurance on the industrial plan writing life insurance in this State, including fraternal orders and all other associations, shall be required to have made a strict medical examination of each and every person applying for life msurance. Such persons shall submit to such reasonable rules and regulations as may be prescribed by such insurance companies for the purpose of making such examirtations, and after a policy is issued on the life of such person, the beneficiary. of such policy-shall

INSURANCE LAWS

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be entitled to collect the amou_nt of such policy under the terms of the contract when it matures unless the applicant or beneficiary has been guilty of actual fraud or has made material misrepresentations in procuring such policy, which misrepresentations change the character and nature of the risk as contemplated in the policy so issued by the company. All statements, covenants and representations contained in applications for insurance shall never be held or construed to be wa rranties, but shall be held to be representations only.]
Acts 1912, pp. 119. 130.
~ 2564 (!) , 2564 (o) , 2514 (e) , 2455 (a) , 2564 (w), 2479, 24 80, 2481, 2483.
2500. Self-caused death releases insurer. D eath by suicide , or by the hands of justice, either punitive or preventive, releases the insurer . from the obligation of his contract.
2501. Time, how counted. A policy of life insurance runs from midday of the date of the policy, and the time must be estimated accordingly, if the policy is limited to a specified number of yea rs.

SECTION 13.
Industrial Life Insurance
2502. Industrial life insurtm ce defined. Industrial life-in-
surance is that insurance for \yhich the stipulated premiums, advance assessments, or dues, a re regularly payable and collectible weekly, bi-weekly, monthly, quarterly, semi-annually or annually, and the policies or benefit certificates for which are for sums of not more than five hundred dollars on a single life, and w hich policies or benefit certificates may provide a ' "'.eekly benefit for disability, caused by sickness or accident, not g reater than twenty dollars per week."
Acts 1905, p . 96-2506. Acts 1924, pp. 51-5~.

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2503. Companies of that character. All corporations, as-
sociations, relief organizations, societies, or fraternal orders, with or without capital stock and having or not having a ritualistc form of government, whether operating under the present insurance laws as insurance companies, or operating under the laws governing fraternal beneficiary orders, and issuing policies or benefit certificates, and conducting their business in the manner and wthin the meanin g and definition set forth in the precedig paragraph, shall be held and deemed to be doing an industrial life insurance business, and shall be subject to this section and all the other laws of this State not repugnant to this section, regulating the business of life, health and accident insurance in this State.

2504. Requirements. Any corporation, assoc1at10n, society,
or fraternal order organized under the laws of this State, whether organized upon the mutual assessment plan or as a stock company, for the purpose of doing the business of industrial life insurance as in this Section defined , shall, before commencing to do business in this State, comply with the laws of this State, regulating the manner in which other in surance companies shall be authorized to do business in this State, except that the deposit, required of companies operating upon the plan and according to the manner specified in the two preceding paragraphs of this Section, shall be five thousand dollars, to be made in such securities as are required of such other insurance companies as are now required to make a deposit in this State; and such deposit shall be made prior to or on the first day of January, 1906.
2502. Amended by Code Sections 2564 (ddd), et. seq., inserted followin i
Sec. 2427.
2505. Deposits by. Any corporation, associat10n, society,
or fraternal order, organized under the laws of any other State upon the mutual assessment plan, or as a stock company, for the purpose of doing the business of industrial life insurance as in this Section defined, shall be authorized to do business in this State upon

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97

complying with the other laws of this ~tate regulating the manner in which foreign insurance companies shall be authorized to do business in this State, and filin g with the insurance commissioner of this State a certificate from the officer havin g supervision of the insurance departm~nt of the S.tate under the laws of which such corporation, association, society, or fraternal order was chartered, or elects to make its deposit, that such corporation, association, society, or fraternal order has deposited w ith said State a sum of not less than five thousand dollars in such securities as are required to be deposited by in surance companies.
Amended by Sec. 2564 (ddd), et seq.
2506. Companies subject to this law. Th e prov1s10ns of this section shall in no way apply to any company, association , organization, or society which does not collect its premiums, or dues, wekly, bi-weekly, monthly, quarterly, semi-annually, or annually; but any company, association, organization, society or fraternal beneficiary order, with or without a ritualistic form of gove rnment, which collects its dues or premiums weekly, bi-weekly, monthly, quarterly, semi-annually, or annually and which for the purpose of securin g business or members, employs paid agents, collectors, or solicitors, shall come und er the provisions of this section.
2502.
2507. 'l'Vh en laws apply. No law hereafter passed shall be held or deemed-, to refer to the business of industrial life insurance, unless the same is expressly referred to in said law.
2508. Solve nt assets, amount of. From and after the first day of January, 19 10, every mutual aid, benefit, or industrial life insurance company or association doing the business of industrial life insurance in this State, as defined by the laws of this State, whether on the stock or on the co-operative, or mutual assessment plan, shall at all time~ own and possess solvent assets to the amount of one dollar and fift y cents fo r each hundred dollars of insurance at

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I NSU RANCE LAWS

risk by such corporation. In estimating and determining such

amount there must be deducted therefrom any liabilities of such

corporation for any sums or amounts due or owing for any. purposes

on claims other than liabilities upon its policies, contracts of insur-

ance, or certificates of membership ; [

] (a) and any

such corporation with a capital stock may estimate and use the

property or fund s in w hich its capital stock has been invested in

accordance with this Section, in determining the amount of its said

solvent assets.

Acts 1909, p. 169. (a) Acts 1912, pp. 119, 142. Sec. 25 14 (a).
( H 2509-2513 r epealed by ~25 14 (a) .

s 25 14. Examinations by insurance commissioner. All com-
panies doing the business of industrial life insurance in this State shall, at all times, be subj ect to such examination as the insurance -commissioner of this State may order, and shall be liable for the reasonable expense of makin g such examination.
Sec. 25 14 (a).

2514 (a). In come or guaranty certificates. [No income or guarantee fund certificates, as provi<led for in the Act approved August 16, 1909, (sections 2508 to 2514) shall be issued in this State: Provided, that the provisions of this section shall not apply to insurance companies now chartered and organized in this State -and issuing and sellin g such ce rtificates until the first day of Januai;y, 1913 , and said Act being entitled "An Act to fi x the amount of solvent assets, which mutual aid , benefit and industriat life insurance companies shall have and maintain; to provide a method by which said companies, organized under the co-operative or mutual assessment plan, may procure such assets; and to provide for the manner of investing the as~ets of such companies; to provide for an examin ation of such companies by the insurance commissioner, and for .other purposes," which Act provides for the issuing of such
certificates, be and the same is hereby repealed. J

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99

acts 191 2, pp. 119, 142.
The Act of 1909 referred to in this Section was codified in the Code oi 19i0 as sections 2508-2514 inclusive. 1t is doubtful whether this section repeals all of the Act of 1909 or onJ.y the part relating to guaranty-fund

certificates. Accor\lingly, only that part of the Act referring to s uch cer-
tificates has been stricken from this Code. This section has been checked with the en rolled Act and appears here in the language o( t hat Act.

2514 ( b). .Incorporation of industrial companies. Rights
and Powers. Deposits. [ Stock companies or corporations* for the purpose of doing an industrial, life, health or acddent insurance business or for the purpose of doing eithe_r of said business, _may be created under the laws of this State, with a minimum capital stock of $25,000.00, provided, that the petitioners for such charter shall comply with the laws of this S_tate applicable to the incorporation of insurance companies as set out in section 2394 et seq., except that the minimum capital stock may be $25,000.00 and that said company so organized may do any or all branches of said business without increasing its capital stock though it shall have all the power, rights and privileges conferred upon life insurance companies under the aforementioned sections of the Code, except that it shall not be authorized to write ordinary life insurance, nor shall it be permitted to write any policy whatever exceeding the amount of $500.00. Before being authorized to do business, the said company shall deposit with the treasurer of the State of Georgia an amount equal to 60 per cent. of its capital stock, consisting of United States bonds, State, county or municipal bonds.]
Acts 1912, pp. 119, l.26.
2450.

2514 (c). When authorized to do ordinary life insurance business. [Any corporation organized in pursuance of the preceding se.ction may be authorized to do an ordinary life insurance business by complying with the requirements of the laws applicable to life . insurance companies and by filing its certificate with the . secretary of the State showing that it has made the deposit required for

*This word appears in enrolled Act, instead of "corporation," which appears in published copy.

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INSURANCE LAWS

life insurance companies, has procured a license from the insurance
commissioner, and has complied with the other requirements 0 life
insurance co~panies:J
Acts 1912, pp. 119, 127.
2514 (d). A,,Jutual companies may beco1he stock companies. [Any mutual, industrial, life, health or accident insurance company now existing under the laws of Georgia, or which may hereafter be organized under the laws of this State, may become a stock company by filing a certificate with the secretary of State, showing that three-fourths of its outstanding policyholders have voted in lawful meeting assembled to beco_me a stock company, and that the capital - of said company is fixed at not less than $25,000, and that the other requirements of the laws of this State in this behalf have been complied with: Provided, however, that no publication or petitfon for ch ar ter shall be required in sw;:h instances, except as is hereinafter provided. Policyholders in mutual companies may vote by proxy at meetings held for the aforementioned purpose. Said stock company w,hen organized as aforesaid shall have all the power and authority as though it had been originally organized as a stock corporation.]
Acts 1912, pp. 119, 128.
2514 {e) . Regulation of mutual or assessment companies. [All industrial life insurance companies chartered under the laws of this State to do business on the mutual co-operative or assessment plan, and limiting their policies to the sum not excee.ding $500.00, shall stipulate definitely in the face of the policies the amount to be paid to the beneficiaries under said policies in the event of the death of the assured. In no event shall payments to beneficiaries by such companies be contingent upon the number of policyholders in the company nor on the number in any division or branch of such company. The intention of this law being to require the payment of the full face of the poiicy as stipulated therein without regard to the subdivisions of the membership by such insurance companies in

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101

the management of their affairs. No policies shall be issued by such companies without subjecting applicants for such insurance to medi-
cal examination. It shall be the duty of the insurance commissioner
to investigate the rates of premiums which are to be charged by all such companies and he is hereby authorized to require said companies to charge such rates as are adequate to pay their policies at maturity. Provided, that companies doing business on the industrial plan shall not be required to have medical examiners.]
Acts 1912, pp. 119, 140.
s~ 2499 (a), 2456 (a).
2514 ( f). False representations in regard to policies prohibited. [No insurance company or association doing business in this State, and no officer, director or agent thereof shall knowingly issue, circulate, or cause 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 dividends or shares of surplus to be received thereon, or shall use any name or title of any policy or class of policies which misrepresent the true nature thereof: Provided nothing contained in this section nor in the following sections shall apply to any company or corporation except to companies or corporations doing an industrial, life, health or accident insurance bus~ness; nor shall it apply to any policy, membership or beneficial certificate except it be an industrial, health, life or accident insurance policy
membership or certificate. J
Acts 1913, p. 98.
. 627, (c), P. C.
2514 (g). R eceiving premium after insolvency. Fraudulent reinstatement. [No agent, director or officer shall knowingly. and wilfully receive any premium or assesment on behalf of any insurance company or associati~n or fraternal organization, knowing at the time of receipt of said premium or assessment that said company or association is insolvent according to the laws of the State of the

102

INSURANCE LAW8

organization of said company without giving notice thereof to the person paying the said premium or assessment. Any officer, director, agent, physician or other person who shall knowingly issue or cause to be issued a policy or benefit certificate, or aid in the issuing uf any policy or benefit certificate, or aid in the reinstating in membership or policy standing of any infirm or unhealthy person not at the time of such reinstatement or insurance in an insurable condition, w ith the intent to defraud, shall be guilty of a mi sdemeanor.]
Acts 1913, pp. 98, 99.
2514 (h). Fraudulent statements and claims prohibited.
[ No person shall knowingly or wilfully make or aid in making of any false or fraudulent statement or representation of any material fact or thing in any written statement or certificate for the purpose of procuring or attempting to procure the payment of any false or fraudulent claim against any such in su rance compan y or fraternal or benefit association, and no person shall make any false or fraud.ulent statement or aid in the making of any false or fraudulent statement in any application for insurance or as to the death or disability of the policy or certificate holder for the purpose of fraudulently obtainin g any money or benefit from any such insurance company or fraternal or benefit association licensed to do business m this State.]
Acts 1913, pp. 98 , 99. 2479, 2480, 2481, 2483. .
741 ( d). Vol. 11, Park's Annotated Code. Statement of Claims. No persons knowingly or wilfully shall make or aid in
the makin g of any false or fraudulent statement or representation of any materi al fact or thing in any written statement or certificate, for the purpose of procuring or attempting to procure the payment of any false or fraudulent claim against any Indnstrial, Health, Life or Accident In surance Company, or Fraternal or Benefit Association licensed, or which may be licen sed, to do business in this State, and no person shall make any false or fraudulent statement in any ap-

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103

plication f_or insurance,. or as to the death or disability of a policy or certificate holder in any such Industrial, Health, Life or Accident Insurance Company, or Fraternal or Benefit Association for the purpose of fraudulently obtaining any money or benefit from any such insurance company, or fraternal o-r benefit association licensed, or which may be licen sed, to do business in this State.
Acts 1921, pp. 250, 25 1.
741 ( e) . Punishment. Any person who violates any of the
provisions of this Act shall be guilty of a misdemeanor, and upon conviction shall be punished as provided by Section 1065 of the Code of Georgia of 19 I 0.
Acts 1921, p. 25 1.
25 l 4 (i). A gent or so licitor required t o procure li cense. [No person shall act as agent or solicitor for any insurance company,
benefit association or fraternal organization in this State without havi ng firs t procured a license therefor from the insurance ,depart-merit of this State as required by the law.]
Acts 1913 , pp. 98, 99. 2445 (a).
25 I4 (j). Po wers of insurance commissioner or deputy.
[Th e insurance commissioner or deputy insurance commissioner of this State shall have full power to issue subpoenas and process requirin g the presence of w itnesses and the production of books and pape rs before him at the place where any investi gation is bein g had by him, or either of them, and in the event any person w ho is served with such subpoena fails to comply therewith , he shall be punished as for a contempt by the superior court of the county in which the hearin g is being had, and the superior courts of this State are fully empowered hereunto, including the power to issue attachments or other processes or notice, to the end that the person so subpoenaed may have his proper notice and his day in court.]
Acts 1913, pp. 98, 100. 2412 (f).

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SECTION 14.
Marine Insurance
' 2515. Contract of marine insurance. A contract of marine
insurance is one by w hich a person or corporation, for a stipulated premium, in sures another again st losses occurring by the casualties of the sea.
2516. Unlawful commerce. Prohibited or illegal com-
merce, or commerce with an en emy, or goods co ntraba nd of war, are not the subjects of marine insurance.
2517. D ouble insurance. Double man ne insurance may be
obtained by a party havi ng an insurable interest ; but in case of loss, he can recove r from both compani es only the full value of such interest. If one underwriter pays the whole amount, he is entitled to ,contribution from the other.
. 4588, 2544.
2518. Implied warranty. The assured impliedly warrants that the ship is seaworth y, and shall not be changed except from necessity, and th at she shall be employed, conducted, and navigated with reaso nable skill and according to law.
2519. Illegal voyage. The illega lity of the voyage, whether known tq the assured or not, renders the contract void.
2520. D eviation. A de viation from . the voyage, if voluntary and not from necessity, voids the policy. This necessity may ~rise from-
1. Stress of weather. 2. Want o_f necessary repairs.

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105

1. Joining convoy. 4. Succorin g ships in distress. 5. Avoiding capture or detention. 6. Sickness of master or crew. 7. Mutiny on board. 8. Any similar cause founded upon reason.

252 1. P erils of the sea. The "perils of the sea" comprehend all those misfortunes to which goods and ships at sea are exposed fro m earth , air, fire, or wate r. L oss from enemies is not included, unless exp ressly named. The negligence, or unskillfulness of masters or mariners is not included in a policy on the ships or goods belongin g to. the owners of the vessel. If loss occurs to third persons there fro m the underwriter may recover from the owner of the ship the amount paid by him.
2478.
2522. Continuance of risk. Generally the risk continues till the goods are delivered on shore at the port of destination, or to o thers by direction of the ass ured_.
2523. In crease of risk. Any chan ge by which the risk is increased voids the policy.
2482.
2524. Open policy. An open policy is where the amount of the interest of the assured is not fixed by the policy, but is left to be adjust ed in case of loss; such policies may issue in bl:nk to be filled by the insured as new risks may be d<:sired.
2645.
2525. Value. how ascertained. The value stated in a policy 1s always subject to be reduced by proof.
2546.

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INSURANCE LAWS

2526. Former rules applicable. The rules as to warranties, misrepresentations, and concealments, are the same m marine as in fire insurance.
2479-2483.
2527. Rights of owners of merchandise on vessels. Whenever any cotton or merchandise, on any vessel loading or loaded, within the waters of this State is damaged by fire or water, or both,
0
while .within the waters of this State, the owners or insurers of such cotton or merchandise, or the agents of either or any of them, shall, after having given a satisfactory bond for the payment of the pro rata share of said cotton or merchandise in any liability for salvage, and in the expenses of general or particular average, and after ha.ving given a bcind to hold the ship harmless against the liens of those holding the bills of lading for said cotton or merchandise be authprized to take possession of and control such damaged cotton or merchandise, and use, manage, and dispose of the same for the protection of the interest of such owners or insurers in such property, any law, usage, custom, or anything in t_he contract of affreightment with the owner, master, or agent of such vessel to the contrary notwithstanding: Provided, that, as between the owner and insurer, the rights and rowers of the owner shall be prior and superior to the rights and powers of the insurer, e~cept as specially stipulated in the contract of insurance.
Acts 1889, p . 165.
2528 . Owner or master of vessel must care for damaged property. Nothing in the preceding section shall be construed to relieve such owner or master of such vessel from taking proper care of such damaged property in the event the owners or insurers, within a reasonable time after such damage, fail to take control of such cotton or merchandise, and nothing herein contained shall be construed to relieve said damaged property from the liability imposed by existing laws and customs to contribute its proportion to the expenses accruing up to the time said property is. taken possession of by the owner, insurer, or agent .

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107

SECTION 15.
Mutual Insurance
2529. Contract of mutual insurance. The contract of insurance is sometimes upon the idea of mutuality, by which each of the assured becomes one of the insurers, thereby becoming interested in the profits and liable for the losses; without a charter, such an organization would be governed by the general l~w of . partnership; when incorporated, they are subject to the terms of their charter.
2530. By-laws. The rules and regulations of such a company, adopted in pursuance of the charter, become a part of each policy, and all the assured are presumed to have notice thereof. But new conditions can not be annexed to the policy after it is issued, except by the consent of the assured.
2471.
2531. Officers agents of all. The officers of such a com!)any are the agents of all the assured, and to the extent of their misconduct or neglect, shall affect each, upon the general principles governing principal and agent, except as to the transaction of making the contract of insurance; up to the time of its execution, the assured stantls as a third party, and the officer issuin g the policy acts for those already in the company.
3601.
2532. Liability for redu ci ng funds . If a mutual insurance company, by dividends, reduces its available funds helow the point of remaining able to meet all losses occurring on policies then i.n exist~nce, the director_s of such company primarily, and the parties re-. ceiving the dividends, ultimately and pro rata, shall be liable individually, jointly, and severally, for the amount of such unpaid losses.
2533. Stricter good faith req uired. A stricter good faith

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INSURAN CE L AWS

as to representations and concealments should be required m mutual insurance than in any other similar contracts.
2479.
2534. A gents of foreign companies t o be licensed. Agents of all foreign insurance companies must obtain a license before taking insurance in this State, under the penalties and in accordance with the provisions of this Code.
ss 2443. 2456, 935, 936, 937.

SECTION 16.
Mutual Companies Insuring Against Loss by
Burglary, Etc.
2535 . f!V hen to be licensed. An y insurance company organ ized and incorporated on the mutual plan unde r the laws of this State, and any other State of the U nited States, for the purpose of insuring against loss or damage resulting from burglary and ro bbery or attempt the reat, and in surin g against the loss of money and securities in course of transi::ortation when shipped by registered mail,
shall be admitted an d licensed to do busin ess in this State as here-
inafter provided .
Acts 1897, p. 64.
2536. Prerequisites to obtaining license. Befo re such company shall be permitted an d licensed to transact business in this State it shall have in force five hundred or more policies on which the premium shall have been paid in cash, or shall be ev idenced by the written contracts of the policyholders, on which not less than onefifth of the amount shall have been paid in cash , and the cash and net face value of contracts for premiums on hand shall amount to a sum of not less than fift y thousand dollars. The premium contracts so held shall constitute a part of the assets of the company.

INSURANCE LAWS

i09

2537. Copy of charter_ and statement of condition to be filed. ;
Every such company, association, or partnership shall file in the office of the commissioner of insurance _a certified copy of their char~ ter or deed of settlement together with a statement under oath of the president and vice president and secretary of the company for which he, or they, may act, stating the name of the company and place where located, a detailed statement of its assets, showing the number of policyholders, aggregate amount of premium contracts, the amount of cash on hand in bank or in the hands of agents, the amount of real estate, and how the same is incumbered by mortgage, the number of shares of stock of every kind owned by the company, the par and market value of the same, amount loaned on bond and mortgage, the amount loan ed on other securities, stating the kind and the amount loaned on each, and the estimated value of the whole amount of such securities, and any other assets or property of the company; also statin g the indebtedness of the compan y, the amount of losses adjusted and unpaid , the amount incurred and in process of adjustment, the amount resisted by the company as illegal and fraudulent, and all other claims existin g against the company; also a copy of th e last annual report, if any, made under any law of th e State by which such company was incorpo rated; and no age nt shall be allowed to transact business for any such company w hose reinsurance reserve, as required in this section, is impaired to the extent of twenty per cent. _thereof w hile such deficiency shall contin1.1e.

2538. Stat em ent to be renewed. The statement required
by the precedin g paragrap h shall be renewed from year to yea r in such manner and form as may be req uired by said in surance commissioner, with an additional statement of the amount of 1:remiums received in this State during th e preceding yea r , so long as such agent continues, and the said insurance commissioner, on being satisfied th at the membership, asse ts, securities and investments remain secure, as heretofore mention ed, shall furni sh a renewal of the certificate as aforesaid, upon the payment to the State, at the time _of filin g the statement here provided for, of a fee of fi ve dollars for each corpo-

110

I NSURANCE L AWS

ration , and twenty-five dollars for each foreign co'rporation.
2539. C ertificate of authority before doing business. Nor shall it be lawful for any agent or agents to act for any company or companies referred to in this Section, directly or indirectly, in taking risks or transacting the business of burglary and robbery. insurance, or the insurance of the safe shipping of money and securities by registered mail in this State, without procuring from the commissioner of insurance a certificate of authority, stating that such company has complied w ith all the requisitions of this Section w hich apply to such companies, and the name of the attorney appoi nted to act for the company.
2443, 935.
,2540. L ine of business and remsurance reserve. Any company permitted and licensed to transact business in this State under this Section shall confin e its line of business .to th at stated in paragraph 2535, and shall confine its business in this State to banks, bankers, loan compan ies, and county treasurers, and shall not issue any policy or policies to any persons, firms, or corporations in this State other th an banks, bankers, loan companies, and county treasurers. Every such company shall set aside a reinsurance reserve of fift y per cent. of its premiums, w hether collected in cash or represented by obligations of the policyholders, as wri tten in .its policies; this reinsurance reserve to be maintained so long as the risk is in force .
254 i. Membership f ee and premium. Policyholders of any
company permitted to transact business in this State under this Section, shall be held liable to pay the membership fee and premium on their in s~rance as paid or contracted to be paid at the time the policy is taken out or the risk begins, and shall not be held liable for any other or further assessments or claims on the part of the company or its policyholders. The membership fee and premium agreed upon may be collected in cash at the time the policy is issued , or evidenced by a wriuen obligation of the _policyholder as may be agreed upon by

l NSU.RANCE L AWS

111

the company and the policyholder. Such payment or obligation shall be the limit of the liability of the policyholder to the company for premium on their insurance.

2542. Service on appointed attorney and otherwise. It shall not be lawful fo r any insurance company, association , or partnership incorporated by or organ ized under the laws of any other State of the U nited States, for any of the purposes specified in this Section, directly or indirectly to take risks or t ransact any business of insurance in this State, by an)1 agent or agents in this State, until it shall first appoint an attorney in this State on w hom process of law can be served, and file in the office of the insurance commissioner a wri tten instrument, duly signed and sealed, certifying such appoint- . ment, w hich shall continue until. anoth er attorney be substituted, and any process issued by any court of record in this State, an d served upon such attorney by the proper officer of the county in which such attorney may reside or may be fo und , shall be deemed a sufficient se rvice of process upon such company, but service of process upon such company may also be made in any other man ner provided by law.
244G, 225 8, 2564.
2543. Penalty. Any violation of any . of the prov1s10ns of this Section shall subject the party violating the same to a penalty of not less than one hundred dollars or more than fi ve hundred dollars.

SECTIO N 17.
Amount of Recovery and Damage
2544. Amount of recovery. The assured may recover the full amount of his loss: P rovided , the same is within the amount insured. If he has several policies on the same property, the recovery from each company w ill be pro rata as to the amount insured.
2476, 2517 , 2489.

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I NSU RANCE LAWS

2545. Valued policy. All insurance companies shall pay the full amount of loss sustained upon the property insured by them: Provided , said amount of loss does not exceed the amount of insurance expressed in the policy ; and all stipulated in such policies to the contrary shall be null and void: Provi ded, that in cases of losses on stocks of goods and merchandise and_other species of personal property changing in specifies an d quantity by the usual customs of ~rade, only the actual value of the property at the time of loss may be recovered : Provided, the loss does not exceed the amount expressed m the policy.
A ct s 1895, p . 51. 43 90 , 2524, 2525, 4253 , 2474, 3256.
2546. Estimation of 7Jalu e. The value of property is to be estimated at the time of the loss. Contin gent profits are not a part of such value.
4394.
2547. Priv ilege of rebuilding. The privilege of rebuilding or reinstating the property must be reserved in the policy or it does not exist. In such cases, the assured has no claim for rents, if done w ithin a reasonable time, nor the insurer for increased value from the fact of new and mo re valuable materials.
371 1.
2548. R ecovery back by insurer. If, after payment of loss, the insurer discovers evidence to show himself not liable on the policy, he may recover back the money in an action for money had and received.
~ 2477, 248 1, 4317, 4570 , 4581.
2549. ln sumnce companies shall pay damages, w hen. The several insurance companies of this State, and foreign insurance companies doin g business iri this State, in all cases when a 1oss occurs, and they refuse to pay the same within sixty days after a demand

INSURANCE LA.V:;

113

shall have been made by the holder of the policy on which said loss occurred , shall be liable to pay the holder of said policy, in .addition to the loss, not more than twenty-five per cent. on the liability of said company for said loss; also, all reasonable attorney's fees for the prosecution of the case against said company: Provided , it shall be made to appear to the jury trying the same that the refusal of the company to pay said loss was in bad faith.
Acts 1872, p. 43.
~ 4392, 4505, 2666, 3714 (2).

SECTION 18.
Fidelity Insurance
2550. Contract of fidelity insurance. The contract of fidelity insurance contemplated by this Article is one _whereby a fidelity insurance company, or such other corporation or company as may be doin g a fidelity insurance business in this State, for a stipulated sum of money, or premium, insures against loss caused by the defalcation, default, neg lect, .or dishonesty of a trustee; officer of the law, officers of court, agents, or other employees and such other persons as may be required to give bond, or gu_arantees the performance of all such bonds, or other obligations in favor of the insured as individuals now do under the law who sign the bond of all such persons as sureties.
Acts 1887, p. 108.
282, 986, 2458.
2551. What companies may become sureties on bonds. Any fidelity insurance company or such other corporation or company that ma)'. do fidelity insurance business in this State, incorporated and organized u~der the laws of this State, or any other State of the United States, or a foreign State, for the purpose of transacting business of fidelity insurance,- which has a paid up capital of not less than two hilndred and fifty thousand dollars, and which shall have complied

114

INSURANCE LAWS

with all requirements of law for license to an d transaction of business by such companies in this State, may, upon proper proof thereof and upon production of evidence of solvency and credit, satisfactory to the judge, head of department, o.r other officer or officers in this State autho rized to approve and accept bonds, be accepted as surety upon the bond of any person, company, or corporation required by the laws of this State to execute bonds, in lieu of any surety or sureties now required by law; an y such fidelity insurance company, or other companies in this State doing a fidelity insurance business, may be released from its liability on such bonds on the same terms and conditions as are by law prescribed for the release of in.dividuals; it bein g the true intent and meaning of the provision s of .this Article to enable the compan ies and corpo rations doing a fidelity insurance . business to become the surety on all bonds required by law to be taken , with all th e rights and subj ect to all the li abili..ties of individuals.
Ji 2911, 407 1.
s 2552. Estopped to deny corporate power. An y fidelit y in-
surance compan y, or other corporation 9r company doing a fidelity insurance business in this State, ;which shall execute any bond as surety under the provisions of this Article, shall be estopped in any proceeding to enforce the liability which it shall have assumed or incur;ed , to deny its corporate power to execute such instrument, or assume such liability.
5736.
2553 . Venue of suits on such bonds. In the event an y fi-
delity insurance company, or other corporation or company doing a fidelit y insurance business in this State, shall become surety on any of the bonds or obligations mentioned in this Article, such corl?oration or company shall be subject to be sued on such bonds or obligations in the county of the residence of the principal in such bond or obligation, and service may be perfected on said corporation or company in the manner prescribed for service on fire insurance ccim-

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115

panies doing business in this State: Provided, that said companies, before beginnin g business irt this $tate, or sgnng any bond, shall obtain a license from the comptroller-general, which license shall be . revoked if said companies as to any bond as to business in this State shall begin a suit in the United States courts, or remove or cause to be removed any suit thereto.
2564, 55 30, 5594, 29 12.
2553. (a). D eposit required. [ Before any surety, or bonding company shall write any bonds in this State, it shall be required to deposit the sum of $25,000 with the State treasurer, conditioned as is now provided by law for the deposits required of such companies in writing bonds of public officials of this State: Provided, That w henever any such company shall have already deposited $25,000.00 as now provided by law for w riting bonds of public officials it shall not be required to deposit an additional sum.]
Acts 191 2, PI>- 11 9, 133.
~ 2557.
2554. Bonds of city, county, and State officers. Solvent guarantee companies, surety companies, fidelity insurance companies, and fidelit y and deposit companies incorporated and organized under the laws of this State, or any other State of the United States, for the purpose of transacting business of fidelity insurance, which have a paid-up capital of two hundred and fifty thousand dollars, and which shall have complied with all the requirements of law as to license required by the State, may upon proper proof thereof, and upon production of evidence of solvericy, be accepted upon the bonds of all city, county, and State officers of this State; and the various officers of this State, whose duty it is to approve the sureties upon such bonds, a re hereby authorized to accept such company or campanies as one of the sureties, or the only surety, upon such bonds as the solvency of such company may warrant: Provided, n~ compa~y shall be relieved of its liability upon any such bond by reason of the fact that the books and acco unts of the principal have

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been examined and apprnved as correct by the proper authorities, when in fact there has been a breach of said bond and a loss occur-
ring from such breach.
Acts 1896, p. 58. 1897, p . 60. 282.
2555. Attachment bonds. Such companies may be taken as the sole surety -upon all attachment bonds, whether they have or do not have real estate in this State.
5059.
2556. R emedies in case of default. In case of default upon
any bond u pon w hich such companies are sureties, then the city, county, and State authorities shall have all the remedies against the prin cipal and sureties upon said bonds, includin g th e right to is,ue fi . fas. in stanter, as provided by law.
Acts 18 97 , p. 60. 224.
2557. D eposit to be made before becoming security. Alf companies described in this Section , chartered by this State or other States or foreign governments, now doing business in this State or hereafter doin g business in this State, which offer or undertake to become security upon any bond required by law of city, couQty and State officers, before being accepted as surety thereon, shall be required to deposit with the treasurer' of this State bonds of the United States, or bonds of this State w hich according to the acts and resolutions of the General Assembly are valid, and w hich amount, acco rding to their face value, to twenty-five thousand dollars, w hich bonds shall be receipted for by the State treasurer, and especially deposited by him in the vaults of the treasury, and whenever such company ceases to do business in this State and has settled up all claims against it, as hereinafter provided, and has been released from all th e bonds upon which it has been taken, said bonds shall be delivered up to the proper party on presentation of the treasurer's: receipt.

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_ 2553 (a).

2558. Collection of coupons; faith of the State. While said bonds are so deposited, the owner of the same shall, subject to the notices provided for or given, be entitled to collect the coupons and use them. For the bonds so deposited the faith of the State is pledged that they shall be returned to the partie~ entitled to receive them, or disposed of as hereinafter provided.
Acts 1896, p. 58.
2419.
Acts of Dec. 19, 1900, requires registered bonds to be deposited. See clause fol-
lowing Sec. 2419.
2559. Proceedings when loss occurs, receiver. Whenever any loss insured against occurs, the insured, in order to secure his recovery, may give notice to the State treasurer of the pendency of the loss and of the amount claimed, after which time the State treasurer shall be bound to retain, subject to the order of the court tryin g any suit that may be brought for the recovery of such loss, a sufficient amount to pay the judgment in the case, in the event_of recovery; when suit is ended, and the amount ascertained for which the party sued may be liable is not paid in ten days, then the plaintiff may file an application with the judge of the superior court of the county where the case was tried , for a receiver to take charge of so many bonds as shall be necessary to satisfy the judgment.
When a receiver is appointed by the judge, who shall always require- bond and security of him for the faithful performance of his duty, the State treasurer, on his application, sh_all deliver to him bonds sufficient in their market value, if in his custody, to satisfy the judgment. The receiver's receipt shall be a complete discharge to the treasurer and the State of Georgia. Then the receiver shall apply to the judge of the superior court for an order of sale, and in pursuance of the order sell the bonds. After deducting such expenses and commissions as shall be allowed by the judge, he shall pay over to the plaintiff, or his attorney, a sufficient amount to sat-

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isfy the judgment; and if there remains any residue in the hands of the receiver, he shall pay it to the agent of the company, taking his receipt for it, which shall be filed and recorded "\Vith the other papers in the case.
If there are conflicting claims, then the State treasurer shall deliver to the receivers, in the order of their application, the bonds ; and if there is a~y contest between creditors which can not be settled in this mode, then the party not receiving sufficient bonds through the receiver appointed in his behalf may become a party to the other case and make known his claim to the other receiver by making affid avit of the claim and filing the same w ith him, and t~en th e receiver shall report such claim to the judge of the superior court appointing him, w ho shall by order provide for a bill of interpleader, as in cases in equity.
5471, 5475, 54 82, 2420, 242 1_. 2422.
2560. PV hen excess of bonds shall be returned. The State
treasurer, upon demand made upon him by said companies, shall ret~rn . to insurance and fi delity and deposit companies and fidelity and sur.ety companies the excess of th e deposits held by him over and above the deposit required of said companies is lessened by the law, the excess of the sum required by law after such decrease shall, upon demand of said companies, be returned to them by State treasurer.
Acts 189n, p. 54. 2424, 2562.
256 1. PVhen a company desires to withdraw from the State. When any compa_ny desires to withd raw from the State and will satisfy the insurance commissioner that all suits pending against it, and of which no notice has been given., have been full y satisfied, or whenever no notice of claim has been given, and w hen it has been released from all bonds theretofore given by it, then the treasurer shall ret urn to it the bonds so deposited upon order from the insurance comm1ss10ner. Wheri any company, havin g made the deposit requi red by this law, has assumed any liability, by suretyship or

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119 .

otherwise, on which no losses have accrued, and it wishes to withdraw its deposit, before being allowed to do so it shall have itself released from such obligation, whether su retyship or otherwise, and give notice of its intention to withdraw from this State, and cif ,the fact th at it has satisfied all losses and the claims against it, ~and has been released from all obligations assumed by it, which notice shall be published in a newspaper to be de; ignated by the in surance commissione r of the State, and at the expense of said compan y; and it is hereby provided, that any claims of the citizens of this State must, whether for losses accrued or upon obli gations thereinbefore assumed by said company ( where no losses have occurred) , be fully settled before said deposits sha-11 be w ithdraw n.
Acts 1896 , p. 58.
2423, 2425 .
2561 (a). lif7ithdrawal of d eposit by retiring company, how
accomplished. Conditions specified. [In case any fid elity in surance company, or any surety or bonding company autho rized to do the busin ess of fidelit y insurance or acting as surety on bonds under the provisions of the statutes of this State touchin g that subject has retir_ed from doing that busi ness in this State, or wishes so to retire, and wishes to withd raw the dep.osit required to be made with the State treasurer of this State, as required of such companies, the same may be accomplished in the following manner : The company so desirin g to retire from business and to w ithdraw the deposit _shall file with th e insurance commissioner in writing, ve rified by the oath of one of its executive officers, st atin g that it has reti:ed, or on or af ter the date uf the filing of such writing will retire from doin g the busi_ness of fidelit y' insurance or becomin g surety upon bonds in this State, and _stati ng its desire to withdraw .the deposit with the State treasurer, of this State made in pursuance -of the statutes of this State regulatin g the business of such companies. Additionally thereto the company shall do one of the following three things:

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First. Submit a statement under oath verified by one of its executive officers that such company has settled all _losses which have accrued against it on account of bonds written or suretyships assumed in this State, and that its liability has terminated as to all obligations incurred on account of b.onds written or suretyships assumed in this State, and shall, if required by the insurance commissioner of this State, make such further proof of these facts as will satisfy the commissioner of the truth thereof, and shall further show that there has been published in some daily newspaper of general circulation in this State an advertisement for four insertions in separate weeks preceding the date of the application to withdraw the deposit, a notice stating the intention of such company to retire from business in the State and withdraw its deposit with the State treasurer, and that it claims to have settled all losses and to have procured its . release from all obligations incurred on any and all bonds and any and all assumptions of suretyship in this State; and also giving notice of the date on which application will be made to the insurance commissioner for authority to withdraw the deposit, and warning all persons that if they have any cause to show why said company should not be allowed to withdraw its deposit that they should the insurance commissioner make the same known in writing to the insurance commissioner on or before the date named shall have jurisdiction to hear evidence and determine the validity of any such objection, if filed.
Second. File with the insurance comm1ss1oner a bond in a :sum to be fixed by the insurance commissioner, and to be approved by him, in an amount not exceeding the amount of such deposit, pay-able to the State of Georgia, for the use and benefit of whom it .may concern, conditioned that said company shall pay all losses which it may have sustained upon any bond or contract of suretyship written or assumed in this State and that it will faithfully perform and fulfill all of its outstanding obligations so written or assumed according to the legal tenor and effect thereof. Such bond so to be :given shall have as surety thereon some fidelity insurance company -or surety or bonding company, which shall have been authorized to

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121

do business in this State, and which shall have mad.e the deposit provided by the statutes of this State governing the business of such companies. It shall be stated in said bond that it is made in pursuance of this section; and any person, having a right of action against the fidelit y insurance company, surety or bonding company on account of any bond written or act of suretyship assumed in thi s State by the retiring company may join the surety on the bond in this sub-section of this section provided for, as defendant upof1: the obligation of suretyship or indemnity of the retiring company in like manner as if it were a joint obligation or joint surety upon each and every bond or assumption of sur~tyship made or executed in this State by said retiring company. The surety upon the bond so given by such retiring company shall be liaple to the same extent and in the same manner as if it were a co-surety with the retiring company upon each and all of the obligations assumed upon risks and bonds written in this State.
Third. 0.r make proof to the insurance comm1ss10ner of this State that it has reinsured all of its risks and obligations, so far as they exist in this State, in some other solvent fidelity insurance company or companies which have complied with the laws of this State and been authorized to do business in this State and made the deposit required of such companies in this State, and shall produce and .file with the commissioner a written contract signed by the proper executive officers of such reinsuring company or companies, that it or they have reinsured such risks, and that it or they consent to be bound thereon in the manner provided in this law. The reinsuring company may be joined as defendant in any action on any obligation of suretyship or indemnity of the company whose risks have thus been reinsured, and it shall be liable in like manner as if it were a joint promissor or a co-surety with the retiring company upon each and every risk upon which such retiring company may be liable as to business done in this State, and shall be subject to suit therefor in like manner as if it were the su~ety solely or in connec- tion with such retiring company 1.:pon each and all of its obligations

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of suretyship or indemnity.]
Acts 1916, p. 129.
2561 (b). Order to treasurer to surrender bonds. [Upon the insurance commissioner being satisfied that the provisions of either of the three subsections of the foregoing section have beeri complied with, he shall thereupon pass an ordet .reciting compliance and directin g th,e State treasurer to return to such retiring company the bond'S which have been deposited with the State treasurer by such company under the statutes regulating the business of such companies in this State, and a certified copy of such orders of the insurance commissioner shall be authori_ty to the State treasurer thereupon to deliver such bonds to said company or to such person, firm, or cor. poration as it may in writing direct the State treasurer to deliver them to; and upon such company or person duly authorized in writing by such company to receive such bonds for it, receipting the treasurer therefo r, the treasurer shall deliver such bonds to said COII).pany or the person to w hom said company shall direct that they be delivered.]
Acts 1916, p. 132.
2561 (c). Liability. Notice of suit. Judgm ent. D efense. Subrogation. R eimbursement . [Nothin g in this law shall be construed to relieve any such company so retiring from business in this State from liability upon any of its obligations, but it shall still remain bound the.reon until the same shall have been full y discharged and satisfied. If the company which shall have guaranteed or assumed the liability of such retiring company is sued upon a bond executed or a risk originally assumed by such retiring company wit_hout such retiring company also being joined therein, it may give to the company whose risk it has guaranteed or assumed, notice of the pendency of the suit, and as between the two companies and their privies the judgment rendered i~ such action shall' be conclusive as to the validity and extent of the liability claimed in the suit; and the company originally liable may cause itself to be made party de-

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123

fendant and may defend the action with like effect as if it were sued in the first instance. Upon jud&ment being rendered aga:inst the company assumin g or guaranteeing the liability of the retiring company it shall be subrogated to all the rights of the company for whose undertaking it shall so have been held liable. Any right of action for reimbursement which the retiring company would have had if it had been directly sued and held liable, against the principal on the bond, against indemnitors or other third persons or corporations, or collateral deposited or upon funds or against persons to which or to whom it might otherwise, either. in law or equity, have the right to look for reimbursement, shall survive and may be enforced by a suit brought in the name of such retiring company for the use of the company so held liable.]
Acts 1916, p 132.

2562. Amouni of bonds must be maintained. Whenever, by means of the provisions of this Section, the amount of bonds so deposited are reduced, the treasurer shall at once notify the in surance commissioner in writing, who will give notice to the company depositin g, and require more bonds to be deposited, so as to always mantain the original amount; and if the company so notified by the insurance commissioner fails to comply within thrty days, the rght of the company to do business in this State shall be revoked, and the insurance commissioner shall, at the . same time, give notice, by publication in a newspaper published at the capital, of the fact of such failure and revocation . of license: and shall mail - wri_tten or printed notice to the several ordinaries of this State, the cost of which publication shall be paid by the company failing to comply with the provisions of this law.
Acts 1896, p. 58. 24~4. 2560.

2562 a). Contracts of suretyship between common carriers and their employees. [No common carrier authorized to do busines-s in this State when requiring of any employee that he give

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I NSURANCE L AWS

bond or undertaking of any natu re w hatsoever shall require as surety thereon any one or more specif!c or certain bonding company or companies as surety thereon. Provided , however, that nothing herein shall be construed so as to preve nt any cotnmon carrier from
specifying the form or ve rbiage of such bond. J
A cts 1312, p. 153. 630 ( b \ , P. C.
2562 ( b) . Ca_ncellation of bond. [Any such employee
who shall have given any such bond or undertakin g, shall, upon the breach of an y of the conditions the reof by the other party or parties thereto, have the powe r to cancel the same by giving the surety or sureties thereon and the common carrier for the benefit of whom same shall have been made at least ten days' notice in writing, setting out in full the reasons for cancelling same. Any such notice to a company, corporation. or association may be served by leavin g the same with any person upon whom service of legal process upon such company, corporation or association may be had. Any surety on any such bond or undertaking shall, upon the breach of any of the conditions thereof by the common carrier employee for w hom same shall have been made have power to cancel the same by giving such employees at least ten days' notice in writing, setting out in full the reasons for cancelling same, the said notice to be signed by an agent or manage r of such su re ty : Provided, that nothing therein shall affect any right of action accruing to any person upon the breach of a contract.]

SECTIO N 19.
Suits Against I'nsurance Companies
2563. Suits against insurance companies. Whenever any
_person may have any claim or demand upon any insurance company havin g agencies, or more than one place , of doing business, it shall

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125

be lawful for such person to institute suit against said insurance company within the county where the principal office of such company is located, or in any county where said insurance company may have an agent or place of doing business, or in any county where such agent or place of doin g business was located at the time the cause of action accrued, or the contract was made out of which said cause of action arose.
Acts 1861. pp. 58, 59. 1862-3. p. 161. 1878-9, p. 54. 1902, p. 53 . 2446, 2258, 2259, 2553, 2564 (i).
2564. Service on non-resident, assessment, etc., insurance companies. In all such suits service shall be perfected upon such insurance companies by leaving a copy of the petition or writ with the agent of the company, if any. If no age~t should be in the county, then at the agency or place of doing business, or where the same was located at the time such cause of action occurred, or the contract made out of which the same arose. In suits upon any certificate or policy issued by non-resident religious or mutual aid societies, co-operative or assessment life insurance companies or societies, service upon the chief executive officer, or the person acting officially for or as such chief executive officer of a local lod ge in this State, shall be sufficient service upon such societies or companies--officers of local lod ges being hereby declared agents of such non -resident societies or 'companies, and such local lodges agencies of said companies or societies.
cts 1890-1. p. 7n. ~ 2446, 2258, 2542. 2874 . 2553.

SECTION 19 (a).
Fraternal Beneficiarv Orders
rn 2564 ( a )-2564 (k) appeared in the Code of 1910 as
~~ 2866-2877. These sections were moved here for two reasons: First, they properly belon g with the law relating to in surance. Sec-

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INSURANCE LAWS

ond, the Insurance Act of 1912 ( see 2564 ( 1) et seq., below) provides that such orders shall be chartered by the secretary of State. This renders improper the classification of 2564 ( a )-256+ (k) in Chapter 2, Article 9, of this Title.]

2564 (a). D efined. A fraternal beneficiary-order, asso-

ciation, or society is a corporation, society, or voluntary association

which has no capital stock, but is formed or organized and carried

on for the benefit of its members and their beneficiaries, and having

a representative form of government and a lodge system, with rit-

ualistic form of work for the meeting of its lodges, chapters, coun-

cils, or 'other designated subordinate bodies, and the benefits, insur-

ance,

charity,

or

relief.

sha ll

be .

payable

by

a

grand '

or

supreme

body

of the same, excepting sick benefits, which may also be paid by local

or subordin ate bodies. Such grand or supreme bodies may be com-

posed of its officers, incorporators, representatives elected by local,

district-, or grand bodies, past officers, and standin g committees.

Such orders or associations may make a constitution, by-laws, rules,

and regulations consistent with the existing laws of the State, for

the government of all tinder its authority, for the management of

its properties, and the due and orderly conduct of its affairs.

Acts 1900, p. 71. 241 8 , 2564, ( p) 2564 (q)-2564 ( s). S~629, 630 , P. C.

2564 ( b). B enef its. Such orders or associations may make provision for the payment of benefits in case of death, sickness, tem-
porary or permanent physical disability, eithe~ as the result of disease, accident, or old age: Provided, the period of life at which payment for old age commences shall not be under seventy years. Any such order or association may also accumulate, maintain, apply, or disburse among its membership a reserve, emergency, or other funds, as may be provided in its constitution and laws: Provided, however, that no profit or gain shall be added to the payments made by a member.

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2564 (c). Assessments; payments. The fund from which the payment of benefits shall be made, and the funds from which the expenses shall be defrayed, shall be deri ved from assessments, dues, or other payments collected from its members, as may be provided by the constitution or by-laws of such order or association. Payment of death benefits shalf be to families, heirs, . blood relatives, affianced husband , or affianced wife of, or to persons dependent upon , the member, as may be designated by the member.
24 06.
2564 ( d). By what law governed. Such orders or associations shall be gove rned by this Section, and shall be exempt from the provisions of the in surance laws of this State; and no law hereafter passed shall apply to fraternal beneficiary orders or associations unless it is expressly designated therein.
2461.
2564 (e). Existing associations; reports. Any fraternal beneficiary order, assoc,iation, or society of this or . any other State, district, province, or territory, now havi ng members, or any lodge, chaRter, council or subordinate branch duly established and organized in this State, may continue its operations and business in this State: Provided, that it hereafter complies with the provisions of this Section regulating annual reports, and the designation . of the insurance commissioner as the person upon ,vhom process may be served, as hereinafter provided.

2564 ( f). Associations of other States. Any fraternal beneficiary order, association, or society coming within the description as set forth in paragraph 2564 (a), organized under the laws of any other State, province, district, or ter ritory, not now having lodges, councils, or other bodies or members in this State, shall be permitted to do business within this State when it shall have filed with the insurance commissioner a certificate from the official in charge of insurance matters _in its home State of incorporation that it is au-

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INSURANCE LAWS

thorized to transact business therein as a fraternal beneficiary order or association; also a duly certified copy of its charter and articles of associat_ion, and a copy of its constitution and laws, certified to by its secretary or corresponding officer together with the appointment of the insurance commissioner as the person upon whom legal process may be served as hereinafter provided.
~ 2564 (1) 2564 (ff).

2564 (g). Reports. Every such corporation, society, orde.r,
or association doing business in this State, shall, on or before the first day of March each year, make and file with the insurance commissioner a report of its affairs and operations during the year ending the thirty-first day of December immediately precedin g, which annual report shall be in lieu of all other reports required by any other law. Sue~ reports shall be made on blanks provided by the insurance commissioner, and shall be verified under oath by the duly authorized officers of any such order, and shall be published, or the substance thereof, in the annual report of the insurance comm1ss10ner under a separate head, entitled "Fraternal Beneficiary Societies.
2458, 2564 (mm) .
2564 (h). Reports; failure to make. Any such order, association, or society refusin g or neglecting to make said report to the insurance commissioner shall be excluded f.rom doing business within this State, and the insurance comm1ss1oner shall at once recall and cancel their license.
15.
2564 ( i). S ervice on such associations. See Section 2564 (gg).

2564 (j). R eco rd of Suits. The insurance comm1ss10ner
shall keep a record of all such attorneys appointed for such service, together with the record of when any such petitions with process

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129

were received by him in any case, and forwarded to any such corporation, society, or association.

[ 2876 of the Code of 1910, prescribing the license fee for
fraternal orders, followed the above section in the Code of 1910.
It has been superseded by 2565 ( m), 2565 (o) .J

2564 (k). Not applicable to certain orders.' Nothing in
this Section shall be held to affect or to apply to grand or subordinat~ lodges of Masons, Knights of Pythias, Odd Fellows, Red Men, Junior Order American Mechanics, or similar orders that do not have as their principal object the issuance of benefit certificates to members.
~ 2564 (uu).
2564 (I). Non -resident fraternal orders. [Fraternal ben-
eficiary societies or organizations chartered under the laws of other States or foreign governments, except societies which limit their membership to any one hazardous occupation, shall not be allowed to do business in this State with a membership of less than 1,000 members, and they shall be required to submit evidence to the insurance commissioner that they have in cash or approved securities at least one assessment on said membership. Said societies or associations shall file with insurance commissioner of this State a certified copy of the rates charged on classes. of policies being issued by them. Said .societies or associations shall stipulate definitely in the face of the policy the amount to be paid to the beneficiaries under said polfries, an'd said amount shall not be contingent upon the amount col7 lected from the membership of any division or branch of said society or association. No policies shall be issued by such societies or associations without subjecting applicant for insurance to medical examination.]
Acts 191 2, pp. 119, 138. 2499 (a), 2564 (f), 2564 (o)
2564 ( m). License. ] The insurance comm1ss10ner 1s here-

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l N SURAK CE L AWS

by authorized to investigate fully the financial condition of such societies or associations, and if in his judgment, the dianagement of their affairs is not such as to justify the issuance of a license to said society or association, he is hereby fully empowered to decline to license such societies or associations, and in case they have already been licensed to revoke their authority to do business in this State as provided f~r the revocation of license of insurance companies. In the ev_ent such societies or associations fully comply with all the requirements of the laws of .this State, they . may be licensed to do business in Georgia upon the payment of a license fee of $40.00.]
Acts 1912, pp. 119, 138. 2415 ( a), 2415 (b) , 2565 (o(. 2564 (ee) , 2564 (tt).
See Sec. 2564 ( ff) amending requ~rement of fee f o r societ ies of other Statse.
2564 ( n). Incorporation of domestic fraternal orders.
[Domestic fraternal beneficia ry societies or associations shall be chartered by the secretary of State, and shall conform to all the ~equirements of the Act of 1893 with reference to the incorporation of insurance companies except that they shall not be required to have any ca_pital stock.]
Acts 1912, pp. 11 9, 139.
0
2388 , 2564 ( (bb).
2564 ( o) . License. Reriulation. [When such companies
or associations have been duly chartered by the secretary of State and have received a certificate from said officer of their incorporation, upon application to the insurance commissioner, th~y may. be authorized by said officer to solicit applications for membership in said societies or associations, under such rules and regulatons as may be prescribed by the insurance commissioner. When such societies or associations have obtained not less than 300 bona fide applications for insurance, the advance assessments on which have been paid, and a list of the subscribers with their postoffice address and the amount of their advance assessments has been submitted to the insurance commissioner, and by him verified, together with affidavit that said assessments are deposited with some bank or trust com-

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131

pany duly certified by said bank or trust company, the insurance commissioner, if satisfied that the character of the officers of such societies or associations guarantees honest and efficient management of the association's affairs shall issue license to such societies or associations to do business in this State upon the payment of a license fee of $40.00. No policies shall be issued by such societies or associations ,1/ith out subjecting ap plicants _to medical examination. The -insurance commissioner is hereby authorized to investigate full y the financial conditions of such societies or associations at any time, and if in his judgment the management of the affairs of such society or association is not such as to justify the issuance of the license, he is hereby full y empowered to refuse license fo such societies or associations, and in case they have already been licensed such license may be revoked, as provided for the revocation of license of insur-
ance companies. J
Acts 1912, pp. 119. 139. 2499 (a), 2415 l a), 2415 (b). 2564 (I ), 2564 (m) , 2564 (m) , 2564 lee) , .
2564 (ff).
2564 (p). Form of government. [All foreign or domestic fraternal companies, corporations, orders, associat.ions and beneficiary societies soliciting business in this State must have a repre.sentatve form of gove rnment. Any such company, corporation , order, association or beneficiary society shall be deemed to have a representative form of government when it shall provide in its constitution and laws for a supreme legislative or governing body composed of representatives elected either by the members o~ by delegates elected either directly or indirectly by the members, together with such other members as may be prescribed by its constitution and laws: Provid- ed, that the elective members shall constitute a majority in number, and have not less than two-thirds of the vote, nor less than the votes required to amend its constitution and laws. No member of any domestic insurance fraternity, who is a director or manage r of such insurance fraternit y, shall have a contract for fees or premiums from s~ch fraternit y.]
Acts 1912, pp. 119, 140. 2564 (s).

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INSURANCE LAWS

SECTION 19 (b).

Regulation of Certain Fraternal Benefit Societies
, 2564 (q). Fraternal benefit society 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 representative form of government and . which shall make provision for the payment of benefits, in accordance with section 2564 ( u), is hereby declared to be a fraternal benefit society. ]
Acts 1914, p. 99. 2564 (a) .
2564 ( r). Lodge system defined. [Any society having a
supreme governing legislative body and subordinate lodges or branches by whatever name known, into which members shall be elected, initiated, and admitted in accordance with its constitution, laws, rules, regulations, and prescribed ritualistic ceremonies which subordinate lodges or_branches shall be required by the laws of such society to hold regular or stated meetings at least once in each month, shall be deemed to be operated on the lodge system.]
Acts 1914, p. 99. 2564 (a) .
2564 (s). 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 governing 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

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133

less than two-thirds of the votes, nor less than the votes required to amend its constitution and laws; and provided further, that the meetings of the supreme or governing body, and the election of officers, representatives ,or delegates shall be held as often as once m four years. The members, officers, representatives or delegates of a fraternal benefit society shall not vote by proxy.]
Acts 191 4, p. 99. 2564 (a), 2664 (p).
2564 ( t). Exemptions. [Except as herein provided, such
societies shall be gove rned by this Section, and shall be exempt from all provisions of the insurance laws of this State, not only in governmental relation with the State, but for every other purpose, and no law hereafter enacted shall apply to them , unless they be expressly designated therein.]
Acts 1914, pp . 99, 100.
2564 (u). Benefits.

[ I. Every society transacting business under this Section shall provide for the payment of death benefits and may provide for the payment of .benefits in case of temporary or permanent physical disability, either as the result of disease, accident or old age, provided, the period of life at which the payment of benefits for disability on account of old age shall commence, shall not be under ~eventy years, and may provide for monuments or tombstones to the memory of its decl':ased 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 law contained shall be so construed as to prevent the issuing of benefit certificates 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 ap-

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piication of the member, have the power to accept a part of the periodical contribution in cash, and charge the remainder, not exceed_ing one-half of the periodical contributio1;1, against the certificate with interest payable or compounded annually at a rate not lower than four per cent. per annum; provded, 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 readjustments.

2. Any society which shall show by the annual valuation hereinafter provided for that it is accumulating and maintaining the reserve not lower than the usual reserve computed by the American experience table_and four per cent. interest , may grant to its members extended an d paid-up protection, 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.]
Acts 1914, pp. 99, 100. For further provisions as to benefits, see Sec. 2564 (zzl.
2564 (v) . . Beneficiaries. [The payment of death bene-
fits shall be confined to wife, husband, relative by blood tothe fourth degree, father-in-law ( mother-in-law, son-in-l_aw, daughter-in-law, step0father, step-mother, step-children, children by legal ad~ption, or to a person or persons dependent upon the member; provided , that if after the ,issuance of the origi nal certificate the member shall become dependent upon an incorporated charitable instituti_on, he shall have the privilege with the consent of the society to make such in stitution his benefi_ciary. 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 or 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; prociaries within the above classes; provided howeve r, this section shall not be. construed as prohibiting the payment by such society

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ciety of any benefit or benefits to other members of the society m good standing when the said benefit or benefits are provided for m the policies or certificates of such society.]
Acts 1914, pp. 101. Acts 1917, p. 104, Vol. 8, Parks Annot. Code.
2564 (w) . Qualifications for m embership. [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 examinati?n has been supervised and approved in accordance with the laws of the society proved 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 nr social members.]
Acts 1914, pp. 93, 101. 2499 (a).
2564 (x). C ertificat e. [Every certificate issued by any such society shall specify the amount of benefit provided thereby, and shall provide that the certificate, the charter or articles of incorporation, or, if a voluntary association, the articles of association, the constitution and laws of the society and the application for membership and medical examination, signed by the applrcant, and all amendments, to each thereof, shall constitute the agreement between the society and the member, and copies of the same certified by the secretary of the society, or corresponding officer, shall be received in evidence of the terms and conditions thereof, and any changes, additions or amendments .to said charter or articles of incorporation, or articles of the associations, 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

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:prior to and were enforced at the time of the application for mem.bership.]
Acts 19 14, pp. 99, 102. 2471.
2564 (y). Funds.
[ 1. Any society may create, maintain, invest, disburse and apply an emergency, surplus or other similar fund s in accordance with its laws. Unless otherwise provided in the contract, such fund s 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 subsection .two of section 2564 ( u). .The funds from which benefits shall be paid and the funds from which the expenses of the society shall be defrayed, shall be derived from periodical or other payments by the members of the society and accretions of said fund s; provided, that no society shall hereafter be incorporated which does not provide for stated periodical contributions sufficient to provide for meeting the mortuary obligations contracted, when valued upon the basis of the national fraternal congress table of mortality as adopted by the national fraternal congress, August 23rd, 1899, or any higher standa rd with interest assumption not more than four per cent. per annum, nor shall any society be admitted to transact business in this ,State "ivhich does not provide for stated periodical contributions :sufficient to provide for meeting the mortuary obligations contracted when valued upon one of the bases named in section 2564 ( nn) :and applicable thereunder to such society. No society, domestic or foreign, shall hereafter be incorporated or admitted to write or accept members for permanent disability benefits except upon tables based upon reliable experience with an interest assumption not higher than four per cent.

2. Deferred payments or installments of claims shall be con.sidered as fixed liabilities on the happening of the contingency upon

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which such payments or installments are thereafter to be paid; such liability shall be the present value of such future payments or installments upon the rate of interest and mortality assumed by the society for valuation, and every society shall maintain a fund sufficient to meet such li ability regardless of proposed future collections to meet any such liabilities.]
Acts 1914, pp. 93, 102.
2564 (z) . In vestments. [Eve ry society shall invest its funds onl y in securities permitted by the laws of this State for the investmen t of the assets of life insurance companies; provided th at any foreign society permitted or seeki ng to do busi ness in this State, which inves ts its fund s' in accordance w ith the laws of the State in which it is incorporated , shall be held tQ meet the requirements of this law for the investment of fund s. ]
Acts 1914 , p p 99, 103. ~ 240 8.
2564 ( aa). Distrzbution of funds. [Eve ry provision .of the la_ws of the society for pay ment by members of such society, in whatever form made, shall distinctly state the purpose of the same and the proportion th ereo f which may be used for expenses, and no part of the money collected for mortuary or disability purposes. or the net accretions of either or any of said funds shall be used for
expenses. J
Acts 1914, pp. 99, 104 .
2564 (bb). Organization. [Seven or more persons, c1t1zens
of the United States, and a majority of whom are citizens of this State, who desi re to form a fraternal benefit society, as defined by this law may make and sign ( givin g their addresses) and acknowledge before some officer competent to take acknowledgment of deeds, articles of incorporation, in which shall be stated: . First, the proposed corporate name of the society, - which shall not so closely recSemble the name of any society or insurance company already trans-

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acting business in this Stat~ as to mislead the public or to lead to confusion; second, the purpose for which it is formed which shall not include more liberal powers than are granted by this law, provided that any lawful social, . intellectual, educational, 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; third, 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 Qf incorporation and duly certified copies of the constitution and laws, rules and regulations and copies of all proposed forms of benefit certificates, applications therefor and circulars to be issued by such society and a bond in the sum of five th?usand dollars, with sureties approved by the insurance commissioner, conditioned upon the return of the advanced payments as provided in this section, to applicants, if the organization is not completed within one year, shall be filed with the insurance commissioner, who may require such further information as he deems necessary, and if the purposes of the society conform to the requirements of this law, and all provisions of law h_ave been complied with, the insurance commissioner shall so certify and retain and record, ( or file), the articles of incorporation, and furnish the incorporators preliminary certificate authorizing said society to solcit members as hereinafter provided. Upon receipt of said certificate from the insurance commissioner, 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

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offer or promiseto pay or allow, to any person any death or disability benefit until actual bona fide applications f9r 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 regul_arly exam\ned 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 been stablished ten subordinate lodges or branches into which said five hundred applicants have been initiated; nor until there has been submitted to the insurance commissioner under oath of the president and secretary, or corresponding officers of such society, a list of such applicants, giv ing their names, addresses, dates examined, dates approved, dates 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 contributions, which shall be sufficient to provide for meeting the m_ortuary obligations contracted,. when valued . for death benefits upon the basis of the national fraternal congress table _of mortality, as adopted by the national fracternal congress August 23rd, 1899, or any higher standnational fraternal congress August 23rd, 1899, 6r any higher standbased upon reliable experience, and for combined death and permanent total disability benefits by tables based upon reliable experi~nce, with an interest assumption not higher than four per cent. per annum; nor until it shall be shown to the in~urance commissioner 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 disability fund on account of such applicants, and no part of which may be used for expenses. Said advanced payment shall, durin g the period of organization, be held in trust, and if the .organization is not completed within one year as hereinafter provided, returned to said applicants. The insur~n ce commissioner may make such examination and require

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such further information as he deems advisable, and,, upon presentation of satisfactory evidence that the society has complied with all the provisions of law, he shall issue to such society a certificate to that effect. Such certificate shall be prima facie evidence of the existence of such society at the date of such certificate. The insurance commissioner shall cause a record of such certificate to be made and a certified copy of such record may be again* .in evidence 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 date or after such further period, not exceeding one yeair, as may be authorized by the insurance commissioner, upon cause shown i 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 yea r from the date of said preliminary certificate, or at the expiration of said extended period, unless such society shall have completed its organization and commenced business as herein provided. When any domestic society shall have discontinued -business for the period of one year, or has less than four hundred memb~rs, its charter sh.all become null and void . Every such society shall have th e power to make a constitution and by-laws for the government of the society the admission of its members, the management of its affairs and the fixing and readjustin g 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.

Acts 1914. pp. 99, 104. ~ 2388, 2564 ( n) .

This word appears in the enrolled Act.

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An Act
To provide for giving notice to any person, order, lodge, society or corpqration, whose name is sought t9 be used or mentioned in connection with the granting of charter or Articles of Incorporation, or in connection with the organizationzation of any corporation without the knowledge or consent of such person, etc., and for filing objections by such person, etc., to the granting of such Charter .or Articles of Incorporation to any person or persons making application therefor; and to authorize the Superior Court or Judges thereof or the Secretary of State, either to grant or refuse to grant such Charter or articles of Incorporation under the pleadings or evidence in the case, after hearin g, in their discretion to provide for w rits of error and motions for new trial or appeal from the judgment of the trial Judge or trial court, or the Secretary of State to the Court of Appeals or the Supreme Court; and for other purposes.
1. From and after the passage of this Act, whenever ap-
plication is made to the Superior Courts of this State, or to any of the judges thereof, or to .the Secretary of State to obtain a Charter or the authorization of Articles of Inc_orporation, for any purpose, it shall be unlawful in such case to use the name of any person, order, lodge, society or corporation, either as a corporate name or mentioned in connection with the purpos~ of such proposed organization without the consent of such person, lodge, order, society or corporation of such intention to apply for a Charter or Articles of Incorporation, by registered letter mailed to the person, etc., whose name is to be so used, at his or its residence or business address, st ating the proposed name of the organization, its purposes, etc., and the time and place at w hich such application will be passed upon by the Superior Court, or the Jud ge thereof, or the Secretary of State, as the case may be, at least fifte en ( 15) days previous to the time of passing upon such application for Charter or Articles of Incorporation.

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2. It shall be the right of any person, order, lodge, society or corporation interested in the result of such application, a~d who objects to' the granting of such charter or Articles of Incorporation, to file objections to such grant and to appear before the Superior Court or the Judge thereof, or the Secretary of State, as the case may be , and file written objection thereto, and such Court or Judge, or Secretary of State; may, after hearing the issue formed by the . application and objections filed thereto, and after heari ng evidence thereon , in its or his discretion _grant or refuse such charter or Articles of Incorporation. The hearing on such application and objections filed thereto may be heard at such time and place within the county where the application is made under appropriate order of the Superior Court or the Judge thereof, or the Secretary of State, as may be fair and just to all parties concerned.

3. Either party to the cause who is dissatisfied with the
judgment of the Superior Court, or the Judge thereof, or the action of the Secretary of State, may except to such judgment or action and take the case to the Court of Appeals or the Supreme Court by w rit : of error or motion for a new trial, as now provided by law for takin g cases to those Courts.

4. Be it further enacted, That all l_aws and parts of laws m conflict with this Act be, and the same are, .hereby repealed.
Approved August 20, 1923.
2564 (cc). Powers retained. Reincorporation . A mendments. [An y society now engaged in transacting business in this State may exercise, after the passage of . this law all of the rights conferred thereby, and all of the rights, powers, and privileges now exercised or possessed by it under its charter .or articles of incorporation not inconsistent with this law, if incorporated: or, if it be a voluntary association, it may incorporate hereunder, but no society already organized shall be required to reincorporate hereunder, and any such society may amend it-s articles of incorporation from time

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143

to time m the manner provided therein or in its constitution and laws, and all such .amendments shall be filed with the insurance commissioner and shall become operative upon such filin g, unless a later time be provided in such amendrr.ents or in its articles of incorporation, constitu.tion or laws. ]
Ac ts 191 4, p p . 99, 10 '1.
2564 (dd). Mergers and transfers. [ No domestic society shall merge with or accept the transfer of the membership or fund s of any other society unless such merger or transfer is evidenced by a contract in writing setting out in full the terms andconditionsof such merge r or transfer, and filed with the insurance ~ommissioner of this State, together with a sworn statement of the financial condition of each of said societies, 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 membe1:s of the supreme legislative or governing body of each of said societies. Upon the submission of said contract, financial statements and certificate, the insurance commissioner shall examine the same, and, if he shall find such firiancial statemen~s to be correct _and the said contract to be in conformity with the provisions 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 transfer, issue his cer:tificate 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 fact of its submission and its
contents shall not be disclosed by the insurance commissioner.J
Acts 191 4, pp. 99 , 108.
2564 ( ee). Annual license. [ Societ_ies wh_ich are now authorized to tran sact business in this State 111ay continue such business until the first day of April next succeeding the passage of this law, and the authority of such societies may thereafter be renewed annually; but in all cases to terminate on the first day of the sue-

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ceeding April; pro".ided, however, the license shall continue m 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 forty dollars. A duly certified copy or duplicate of such license shall be prima facie evidence that the license 1s a fraternal benefit society within the meaning of this law.]
Acts 1914, pp 99, 108. * 2564 (m), 2564 (o).
2564 (ff). Admission of foreign society. [No foreign society now transacting business, organized prior to the passage of this law, which is not now authorized to transact business in this State, shall transact any business herein without a license from the in surance comm1ss10ner. 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 association; a copy of its constitution and laws, certified by its secretary or corresponding officer; a power of attorney to the commissioner as hereinafter 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 organ ized, 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 law, be renewed annually, but in all cases to terminate on the first day of the succed-

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ing April; provided, however, that license shall continue in full force and effect and until the new license be issued or specifically refused. Any foreign society desiring admission to this State shall have the qualifications required ofdomestic societies organized under this law, upon a valuation by any one of the standards authorized in section 2564 ( nn), and have its asse ts invested as required by the laws of the State, territory, dist rict, country, or province where it is organized. For each such license or renewal the society shall pay th e commissioner twenty dollars. When the commissioner refuses to, licen se any society, or revokes its authority to do business in this State, he shall reduce his rulin g, order or decision to writing and file the same in his office, and shall furni sh a copy thereo f together with a statement of his reason, 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 nothin g contained in this or the pre-ceding section shall be take n or construed as preventing any such society from continuing in good faith all contracts made in this State durin g the time such society was legally authorized to transact business herein.]
Acts 1914, pp. 99, 109. 2564 (f), 25 64 (m), 2564 (o).
2564 (gg) . Po wer of attorney and service of process.
[Every society, whether domestic or foreign, now transacting business in this State, shall, within thirty days after the passage of this law, and everr such society hereafter applying for admission, shall, before being licensed, appoint in writing the insurance commissioner 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 insur-

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:ance comm1ss1oner, shall be deemed sufficient evidence th ereof and shall be admitted in evidence with the same force and efiect as the original thereof might be ad mitted . Service shall only be made upon such at torney, must be made in duplicate upon the in surance commissioner, or, in his absence upon the person in charge of his office and shall be deemed sufficien t se rvice upon such society; provided, however, that no such service shall be valid or bind ing 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 servtd upon said insurance commissioner he shall forthwith forward by regis tered mail on~ of the duplicate copies prepaid and directed to its secretary or co1Tesponding officer. Legal process shall not be se rved upon any such society except in
the manner provided herein. J
A cts 1914, pp. 99, 110. 2564 (i).
2564 (hh). Place of meeting. Locatir,n of office. [Any domestic society may provide that t jie meetings of its legislative or _governing body may be held in any State, district , province or territory wherein such society has s~bordinate branches, and all business transacted at such meetings shall be as valid in all respects as if such meetings were held in this State; but its principal office shall be located in this State.]
Acts 1914, pp. 99, 111.
s 2564 (ii) . No personal liability. [Officers and members
of the supreme, grand or any subordinate body of any such inco rporated society shall not be individually liable for the payment of any disability or death benefit provided for in th e laws and ag reements of such society ; but the same shall be payable only out of the funds of such society and in the man ner provided by its laws.
Ac:s 1914, pp. 99, 111

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2564 ( jj). Waiver of the provisions of the laws. [The
constitution and laws of the society may provide that no subordinate body, nor any of its subordinate: officers or members shall have the power or authority to waive any of the provisions 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 beneficiaries of members.]
Acts 1914 , pp. 99, 112.
2564 (kk) . Benefit non-attachable. [No money or other
benefit, charity or relief or aid to be paid, provided or rendered by an y such society shall be liable to attachment, garnishment or other process, or be seized, taken, appropriated or applied by any legal or equitable process or operation of law to pay any debt or liabil-ity of a member or beneficiary, or any other person who may have a right thereunder, either before or after payment.]
A cts 1914, pp. 99, 112.

2564 (11) . Constitution and laws. Amendment. [Every society transacting business under this law shall file with the insurance commissioner a duly certified copy of all amendments of or additior1!; 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.]
Acts 1914, pp. 99-112.

2564 . (mm). Annual report. [Every society transacting business in this State shall annually, on or before the first day of March, file with the insurance commissioner 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

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ending on that date, and also shall furnish such other information as the commissioner may dee,m nec~ssary to a proper exhibit of its business and plan of working. T.he . 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, eaf=h society shall annually report to the commissioner a valuation of its certificates in force on December 31st, last precedin g; excluding those issued within the year for which the re-
port is filed; 'in cases wh'ere 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 valuation 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 midyear 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 certificates subject to valuation hereinbefore provided, and said net value, when computed in case of monthly contributions, may be the mean 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 request and exi;iense of the society, verified by the actuary of the department of insurance of the home State of the society, and shall be filed with the commissioner within ninety days after the submission of the last pr_eceding annual report. The legal minimum standard of valuation for all certificates, except for disability benefits, shall be the national fraternal congress.* Tables of mortality as adopted by the national fraternal congress, August 23, 1899, or at
*The sentence ends thus in the enrolled Act.
the option of the society, any higher table; or, at its option, it may use a table based upon the society's own experience of at least twenty years and covering not less than one hundred thousand lives with interest assumption not more than four per centum per annum~

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Each such valuation report shall set fprth clearly and fully the mortality and interest basis 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 benefits and expense funds and the valuation of all other business of the society; provided, that where a combined contribution table is used by a society for both death and permanent total disability benefits, the valuation shall be according to tables of reliable experience and in such case a separation of the fund s 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 so lvent so long as the funds in its possession are equal to or in excess of its matured liabilities. ( See second paragraph, 2564 (y). Beginning wi th the yea r 1914 a report of such valuation and an explanation of the facts concerning the conditions 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 showing 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 beneficiary member of the society. The iaws 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.]
Acts 1914, pp. 99, 112. 2564 (g)
2564 ( nn). Provisions to insure future security. [If the valuation of the certificates, as hereinbefore provided, on December



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31, 1917, shall show that the pr,esent 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 31st, 1917. If at any succeeding triennial valuation such society does not show at least the same condition, the commissioner 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 proceedin gs for the dissolution of such society, in accordance with the provisions of section 2564 (pp), or in the case of a foreign society, its license may be cancelled in the manner provided in this law. Any such society shown by any triennial valuation, subsequent to December 31st, 1917, not to have maintained the condition herein required, shall within two years thereafter, make such improvement as to show a percentage of deficiency not greater than as of December 31st, 1917, or thereafter, as to all new members admitted, be subject so far as stated rates of contribution are concerned to the provisions of section 2564 ( bb), applicable in the organization of .new societies; provided that the net mortuary or beneficiary contributions and funds of such new members shall be kept separate and apart from the other funds of the society. If such required improvement is not shown by the succeedin g 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 fund s.]
Acts 1914, pp. 99, 114.
2564 (oo). Provisions zn lieu of requirements of two preceding sections. [In lieu of the requirements of sections 2564
(mm) and 2564 ( nn), any so~iety accepting in its laws t~e provisions of this section may value its certificates on a basis, herein designated . "accumulation basis" by crediting each member with the net amount



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151

contributed for each year anl with interest at approximately the net rate earned and by charging him with his share of the losses for each year, herein designated "cost of insurance" and carrying the balance, if any, to his credit. The charge for the _cost of insurance may be according to the actual experience of the society applied to a table of mortality recognized by the law of this State, and shall take into considerat.ion the amount at risk during each year, which shall be the amount payable at death less the credit to the member. Except as specifically provided in its articles or laws or contracts no charge shall be eoarried 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 )Lea r exceeds his credit includin g the contribution for the year, the contribution shall be increased to cover his share of the losses. Any such excess share of losses chargeable to any member may be paid out of a fund or contributions especially created or required for such purposes. Any member may transfer to any plan adopted by the society with net rates on which tabular reserves are maintained and on such transfer shall be entitled to make such application of his credit as provided in the laws of the society. Certificates issued re-rated, or readjusted on a basis providing for adequate rates with adequate reserves, to mature such certificates upon assumptions for mortality and interest recognized by the l~w of this State shall be valued on such basis, herein desig- nated as the "tabular basis," . provided that if on . the first valuation unde~ .this section a deficiency in reserve shall be, .shown for any such certificate, the same shall be valued on the accumulation basis. Whenever in any society having members upon the tabular basis and upon the accumulation basis, the total of all costs of insurance provided for any yea r shall be insufficient to meet th.e 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

152

INSURAKC E LAWS

of death losses rhay be returned in like manner as may be specifieo 111

its laws. If the laws of the society so provide the assets represent-

ing the r~serves of any separate class of members may be carried

separately for such class so set apart as if in 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 so-

,ciety. 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 spe-

cified in the contract, acconfing to assumptions for mortality and in-

terest 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 c.f each year. In lieu of

the aforesaid statement there may be furnished to each member with-

in the same time a statement giving the credit for such member and

giving the tabular reserve and leve_l rate required for a transfer

carrying out the plan of insurance specified in the contract. No

tabl.e

or

statement need \

be

made

or

furnished

where

the

reserves

are maintained on the tabular basis. For this purpose, individual

bookkeeping accounts for each member shall not be required and all

calculations may be made by actuarial methods. Nothing herein

-contained shall prevent the maintenance of such surplus over and

above the credits on the accumulation basis and the reserves on the

tabular basis as the society may provide by or pursuant to its laws ;

nor be construed as giving to the individual member any right or

claim to any such reserve or credit other than in manner as express-

ed in the contract and its laws nor as making any such reserve or

credits a liability in determining the legal solvency of the society.]

Acts 1914, pp. 99, 115.

2564 (pp). Examination of dom ~stic societies. [The in-
surance commissioner, 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

INSURANCE LAWS

153

to all the books, papers <!nd. 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, tran sactions and condition of the society. The expense of such examination shall be paid by the society examined, upon statement furnished by the insurance commissioner and the examination shall be made at least once in three yea rs. Whenever after examination the insurance commissioner is satisfied that any domestic society has failed to comply with any provisions of. this law, or is exceeding its powers, or is not carrying out its contracts in good faith, or is transacting business fraudulentl y; 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 insurance commissioner may present the facts relatin g thereto to the attorney-general who shall, if he deem 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 shall 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 court, proceed to close the affairs of the society and distribute its funds to those entitled thereto. No such proceedin.gs shall be commenced by the attorney-general against any such society until after notice has 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 $aid notice, to show cause why such proceedin gs should not be commenced.]
2412 (f), 2433, 2442 (a), 2442 (g), 2564 (qq), 2564 (rr). 2564 (ss). Acts 1314, pp. 99, 118.
2564 (qq). Application 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 there-

1"54

I N SURANC E L A.WS

of shall be entertained by any court m . this State unless the same 1s made by the attorney-general.]
Acts 1914, pp. 99, 11 9.
*2564 (pp) .
2564 ( rr) . Exa11iinatio"Jz of foreign soczetzes. The insur-
ance commissioner 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 assistant 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 w itness under oath and examine its officers, agents and employees and other persons in relation, to t}:ie affairs, transactions and condition s of the society. He may in his disc retion accept in lieu of such examination the examination of th e ' in surance department of the State, territory, district, province or country where such society is organized. The actual expenses of examiners making any such ~xamination shall be paid by the so-
ciety upon state-( ment) * furni shed by the insurance commissioner.
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 thist shall be suspended or license refused until satisfactory evidence is furnished the com~issioner relating-to the conditions and affairs of the society and durin g such suspens10n the society sh,dl not write new business m this State.
Acts 1914, pp. 99, 119. 24 12 ( f), 2433, 2564 (pp ), 2564 (ss).
2564 (ss). No adverse publication. [Pending, durin g or
after an examination or investigations of any such society, either domestic or foreign, th e insurance commissioner shall make public no . financial statement, report or finding, nor shall he permit . to become public any financial st atement, report or findin g affectin g the status, standing or rights of any such soci~ty, until a _copy thereof shall have been served upon such society, at its home office, nor until

I NSU RANCE LAWS

155

such society shall have been afforded a reasonable opportunity to answer any such financial statement, report or findin g and to make such showing in connection therew ith as it may desire.
Acts 1914, pp. 99, 119.
2564 ( tt). R evocation of license. [When the insurance
commissioner on iiwestigation is satisfied that any foreign society tran sactin g business under this law has exceeded its powers, or has failed to comply with any provisions of this law, or is conducting business fraudulently, or is not carrying out its contracts in good faith,
This syllable does not appear in the enrolled Act tThe word '_'State" was doubtless intended to go h er e. It does n ot a ppear, however, in the e nrolled Act.
he shall notify the society of his findings and state in w riting the grounds of his dissatisfaction and after reasonable notice require said society on a date named , to ; how cause w hy its license should not be revoked. If on the date named in said notice such objections have not been removed to the satisfaction of the said commissioner or the society does not present good and sufficient reasons w hy its authority to transact business in this State, should not at that time be revoked, he may revoke the authority of the society to continue business in this State. All decision s and findin gs of the commissioner made under the provisions of this section may be reviewed by proper proceedings in any court of competent jurisdiction, as provided in section 2564 (ff) .]
Acts 1914, pp. 99, 120. 24 15 (b) , 2564 (m), 2564 ( o ).

2564 (uu). Exemption of certain societies. [ Nothing contained in this Act shall be construed to affect or apply to grand or subordinate lod ges of Masons, Odd -Fellows, or Kni ghts of P ythias ( exclusive of the insurance department of the supreme lod ge Knights of P ythias,) and the Junior Order of U nited American Mechanics, ( exclusive of the beneficiary degree or insurance branch of the national council Junior Order United American Mechanics ) or societies

156

INSURANCE LAWS

which limit their membership to any one hazardous occupation, nor to similar societies which do not issue insurance certificates, nor to an assocation of local lodges of a society now doing business in this State which provides death benefits not exceeding five hundred dolla rs to any one person or disability benefits not exceeding three hundred dollars in any one yea r 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 membership to the employees of a particular .city or town, designated firm, business house, or corporation, nor to domestic lodges, orders or associations 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 insurance commissioner may require from any society such information as will enable him to determine whether such society is (?(empt from the provisions of this law. Any fraternal benefit society, heretofore organized and incorporated and operating within the defi nition set forth in sections 2564 ( q), 2564 ( r), and 2564 ( s), 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 law, and shall have all the privileges and shall be subject to all the provisions and regulations of this law except that the provisions of this law requiring medical examinations, valuations of benefit certificates, and that the certificate shall specify the amount of benefits, shall not apply to such society.]
Acts 1914, pp, 99, 120. 2564 (k)
2564 ( vv). Taxation. [Every fraternal benefit society organized or licensed under this law is hereby declared to be a charitable and benevolent institution , and all of its fund s shall be exempt from all and every State, county, district, municipal and school tax, other than taxes on real estate and office equipment.]
Acts 1914, pp, 99, 121. 998. 6554, 6556.

INSU RANCE LAWS

157

2564 (ww) . P enalties. [Any person, officer, member or
examining physician of any society authorized to do business under this law, who 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 money from or benefit in any society transactin g business under this law, shall be guilty of 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 th an thirty days nor more than one year, or both , in the discretion of the court; and any person who shall wilfully make a false statement of any material fact or thin g in a swo rn statement as to the death or disability of a certificate holder in any such society for the purpose of procuring payment of a benefit named in the certificate of such holder, and any person w ho shall wilfully make any false statement in any verified report or declaration under oath required or authorized by this law, 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, w ho shall solicit membership for, or in any manner assist in procuring membership in any fraternal benefit society not licensed 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 dollars nor more than two hundred dollars. Any society, or any officer, agent or employee thereof, rieglecting or refusing to comply with or violating any of the provisions of this law, 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.]
Acts 1914, pp. 99, 121. 259, 260, 630 (a), P. C.
2564 (xx). Applicable to w hat societies. [The prov1s10ns of this law s~all not apply to fraternal benefit societies whose mem--

158

INSURANCE LAWS

bership does not exceed five thousand members and all societies writing ins~1rance for the employees of -the Federal gove rnment and public utility companies shall come within the provisions of this . law.]
Acts 1914, pp. 99, 122. Sae note to 2564 (bb).

2564 ( yy ). Rules and reg ulatio ns by insurance commissioner. [All such societies and organizations as are mentioned in this law shall be subj ect t o such rules and regulations as may be prescribed by the insurance commissioner of the State.]
Acts .1914 , pp. 99, 123.
2564 (zz). C ertificates t o perso ns under 16 years of age.
Any fraternal benefit society may issue to persons under sixteen years of age benefit certificates, provided such persons are related to a member of said society as son, daughter, ward, step-son, step-daughter or shall be dependent upon a member; provided, however, the amount of death benefit payable under the terms of such . benefit certificate may be made to increase as the yea rs of the assured increase, and provided , further , that no benefit certificate shall be issued wherein the death benefit payable shall exceed the sums specified in the following table, the ages therein specified bein g the ages at time of death.
Between the ages of 1 and 2 yea rs _____________ __________ $ 35.00
.Between the ages of 2 and 3 yea rs __________________________ 39.00
Between the ages of 3 and 4 years _________________ ------ 45.00 Between tl)e ages of 4 and 5 years ___________________________ 50:00
Between the ages of 5 and 6 yea rs __________________________ 60.00
Between the ages of 6 and 7 years ______________________ .___ 150.00
Between the ages of 7 and 8 yea rs -------------------------- 175.00

INSURANCE LAWS

159

Between the ages of 8 and 9 yea rs --------------------------- 200.00 Between the ages of 9 and 10 yea rs ______________________ ____ 250.00

Between the ages of 10 and 11 years

3 5 0 .0 0

Between the ages of 11 and 12 yea rs __________________________ 380.00

Between the ages of 12 and 13 years --------------------------- 460.00 Between the ages of 13 and 14 yea rs ___ ________________________ 600.00 Between the ages of 14 and 16 yea rs ___________________________ 1000.00

Acts 1917. p. 102.

2564 ( aaa). Premiums,. lzo w based. The periodical dues
_or premiums charged for the benefits in such certificates of membership must be based upon some recognized mortality table the premium in which is not less than the National Fraternal Congress Tables of Mortal ity and an interest assumption of four - per centum per annum, or upon a table of the actual experience of at least' twenty years of any similar society compiled from a membership of not . less than one hundred thousand members.
Ac ts D 17, p . 103. Parks Annot Code, Vol. 8.

2564 ( bbb) . Benefit certificates zn classes. Any fraternal
benefit. society now operating in this State or that may hereafter seek admission to do business in this State may issue benefit certificates to its members in accordance w ith its laws providipg for the establishments of its membership in to divisions and claSS(,S of the same age of entry, and may provide in its laws and certificates for the payments of benefits from special funds created for such purposes to the oldest membership of a division and class upon the death of a member in the same division _and class.
Acts 1917, p . 103, Parks Annot. Code, VoL 8.

2564 ( ccc). Premiums, lz ow based. The periodical dues
or premium charges for such benefits shall be based upon the National

160

INSURANCE LAWS

Fraternal Congress Tables of Mortality and a four per centum per annum interest assumption, or upon some higher standard. The method of determining the dues or premium charges shall be the joint life plan at equal ages, and shall be so computed that each member's dues or premium charges shall be based upon the exact amount of death benefit which the membership certificate provides shall be payable to the legal beneficiaries named in such certificate in event of the death of the member and the other benefits provided for in the certificates of membership.
Acts 1917, p. 103, Parks Annot. Code, Vol. 8.

INSURAN CE LAWS
I NSU RA NCE AND I NSU RA NCE COMPANLES
General Statutes
SECTIO N 1.
Incorporation of Insurance Companie s............................._..... Charters to In surance Companies ................................................2388 Formatio"n of Company and Petition - 2389 Form of Certificate to be I ss ued ................................................ 2390 Corporate Powers ............................................................................2391 Fee -- 2392
Certificate prima facie ev idence of Corporation's Exi stence........2393 Capi tal Stock .................................................................................... 2394 0 rga ni za tion ..................................................................................... 2395 Directors of Life In surance Companies ....................................2395
Stock to be paid in before beginning bu siness ..................................2396 Stock may be inc rea sed or decre ased ...........~............................2397 Stock deemed personally .............. .................................................2398
Po wers of Life In surance Companies ................................................2400 Of Fire Insurance Companie s -2401 Additional Ri sks of Fire In surance Companies ....................2401 {a) Of Accident In surance Companie s -2402 Of Live Stock Insurance Companies -2403
Contracts to be ev idenced by policy ....................................................2404 D ividends - 240 5 Stock Di v idends ................................................................................2406
Participation by policyholders, net profits --- 2407 Insurance Companies Investments by..........~.............................
Inv estments by. In surance Comp a nie s --2409 (a) Building which may be owned by co rporation.........- 2409 (a) Reinsurance and Re serve '- 2410 Liability of Stockholders ..................................................................241 l
SECTION 1 (a) Insurance Department ---- Officers of Depa ~tment, Seal, Record s, Reports ............................ 2412 ( a j
Compen sation of Officers -2412 (b) Appropriati ons for payment of salaries ....................................2412 (c) Collection Fees and Taxes ................................,.......:..-2412 (d) Fees, Taxes ...................................... .................................................2412 (e) Examinati on of In surance Companies --- 2412 (f)

162

lNSURAl\"C E LAWS

Orders, how enforced ---------------------- 2412 (g) 0
Blank form s furnished for reports ------------------ . _______ 2412 ( h ) Additiona l Rules and Regulations ---------------- --------------------2412 (i)
.Supervision of companies .before organiz~tion ______________________________,__ 2412 (j) Fire In spector and Assistant. Duties and Powers __________________ 2412' (k)
Inspector's authority to go upon premises _______ ---------------- 2412 (1 ) Inspector's compensation -------------------------------------------- ----------- 2412 ( m )
SECTION 2. Insurance Companies, How Authorized to do Business ______
Insur a nee Commissioner ------------------------------------------------------------2413 Companies must be licensed ----------------------------:--------------------------2414 License, How Obtained ______________________:____________________ _______________________2415
Issuing of License ------------------ -------------------------------------------------------2415 (a) Re voe a tion of License ------------ -------------------------------------------------------- 2415 ( b ) Fo rfei tu re of License -----------.-----------------------------------------------------------2416 Forfeited Licen se, how renewed --------------------------- ---------------------2417 Mu tual or Co-operative Fire Insurance Companies-
inserted following ___________2417
SECTION 3. 6
Bond and Deposit Required -------------------------------------------------- ---Transact Business, w hen ----------------------------------------------------------------2418 Deposits by Companies of other States ________________________________________241 9 When notice of lo ss is given, bonds to be retained .___________________2420 Bond by Receiver --------------------------------------- __________________________________ 2421 Conflicting claims to bonds _____________________________ ________________ 2422 Withdrawal by company from the State.___________________________________ 2423 Withdrawal of Fire Insurance Companies ________________________________2423 (a) When amount reduced below, amount required ._____________________2424 Policies mu st be sa tisfied before withdra wal.___________________________2425
'Deposit required of Domestic Mutual Fire Insurance Companies ____________________________________________________________________________________242 5 (a)
Amount of assets required, Emergency Clause ________________________ 2425 (b)
Emergency Clau ses eliminated --------------------------------------------------- 2425 ( b) Deposits of Life a nd Accident Companie~ of other States________2426
Of Home Companies ----------------------------------------------------------~------------ 2427 Measure of the required depo sit --------------------------------------------:_____ 2428 Deposit by Life Companies ------------------------------------------2564 ( ddd to fff) Certificate by In surance Companies __________________________:_________________2429 Effect of failure to make depo si t _________________________________________________2430 Changes of securities deposite d __________________________ ________________________2431
Approval of depo sits --------------------------------------------------------------------2432

lNSU:RANCE LAWS

163

SECTION 4. Regulation of Insurance Companies ------------------------------
Investigation by Commissioner ______________________:______--------- ---243 3 Calculation of Reinsurance Reserve -----------------------------'------------2434 Ca 11 on Stockholders ----------------------------------------------------------- 24 35 Calculations of Reinsurance Reserve by Commiss ione.rs of other
St ates ----------------------------------------------------------------------24 36 Proceedings when home companies are insolvent -----------2437 Calculation of Net Value of Life Policies ---------------------------2438 Where net value of policies is not on hand -----------------2439 Valuation by C0mmi-ssioner of other States -----------------------------2440 Commissions on sale of stock, and sale of Life Insurance Pol-
icies and Agency Contracts --------------------------------------2440 (a) Rebate s and Di scriminatory Contracts prohibited :______________2440 (b)
SECTION 5. Proceedings in Case of Insolvency _______________________:________________
Proceedings where home companies fail to maintain standard _______________________ -------------------------------------------- -.2441
If C_omptroller know s of insolvency ------------2442
SECTION 5 (a). Commissioner Taking Control of Property and Business of Life
Ins u ranee Comp any -------------------P r-oceedings to take co_ntrol ------ --2442 (a) Injunction Hearing and Order ,---2442 ( b) Liquidation ---------------------------2442 (c) A ssistants and their compensation -----------2442 ( d) Rule s and Regulations ---------------------------------:2442 (e) Report of Commissioner -2442 (f)
SECTION 5 (b) . Receivers for Insurance Companies --
Method of putting Companies in hands of Receive-rs ............2442 (g ) SECTION 6.
Agents of Insurance Company --- Definition of Insurance Agent --------- -- ---- -- .....~2443 Penalty on agents of unauthorized companies ....................2+4+ Civil Liability ---: --- . ..... __2++5 Agent's License ........................................................:. ,,.... ...... ...:...~2++5 \a) Requi sites to Obtain License-Revocation ............ ,,.. ------24+5 (b) Statement showing agents ------------------------------------ ___ ------ __ 244S (c) Corporations soliciting or writing Life Insurance -------- ----~2445 ( d j False Repre sentation Unlawful -------------------------------- ____ __ __ ---- -~2445 (e)

164

INSURANCE LAWS

Service on Non-Resident Companies -2~i.> Attorney may be appointed to receive service - .. ....~24-47 . Company not complying, Fees, etc. ..................................... ..... 2H3
SECTION 7.
Comity to Foreign Insurance Companies .......................:- When c;harges on companies of thi s State greater than imposed by this State ----2449
SECTION 8. A ssessment and other companies reports ..'......................................2450
Life Insurance on assessment plan --2451 Policies and Certificates ----2452 Reserve ................................................................................................2453 Societi'es to which this applies ....................................................2454 On assessment plan; I?O licies, how written ................................2455 Life Insurance on Mutual Plan, regulations and require-
m ents ............................................................................................2455 ( a ) Licenses to Agents of Assessment Companies............................2456 Penalty for fraudulently procuring insurance ......:.........-2457. Annua l Report of Business ............................................................245 8 Taxes and Fees to be paid -2459 Failure to make such report or pay tax -2460 Exemption of Fraternal, Secret and Industrial Societies .......2461 License of Fidelity Companies ....................................................2462 Live Stock a'nd Steam Boiler Insurance, companies subject.. 2463 Commissioner and inspectors may administer oaths ................ 2464 Law applicable_ to individuals ........................................................2465
SECTION 9.
Pooling -- Unlawfu l for compan ies to make contracts affecting competition - -----2466 Complaints by citizens and citation ............................................ 2467
Practice a s to testimony ..........._--- 2468 Forum --- 2469
SECTION 10.
Fi re Insur a nee Contracts ----- Contr act of Fi re Ins u ranee -2470 Standard form of Policy for .Fire Ins~rance ............................2470 (a) Policies must contain the entire contract '-247 1 Intere st of assured --2472 Insuring interest of another --------2473

INSURANCE LAWS

165

Insurance on changing property ....................................................2474
Construeti on ......................................................................................2+75
FIRE INSURANCE CONTRACTS-Continued. Loss, what is .................................................. _..................................2476 Umpire to appraise loss, appointment notice a nd service ..:.... 2476 (a ) Contrary stipulation voi.d ............................................................247 6 ( b)
Loss unknown to the parties :--2477 Diligence by a ss ured ......................................................................2478 App.lication, good faith .......................................................:............24 79 Effect of mis representation ............................................................2480 Co neea !ment ......................................................................................248 1 Increa sing Ri sk ................................................................................2482 Wilful misrepresentation voi ds policy ........................................248 3 Effect of alienation ..........................................................................2484 Transfer to one of several ..................................'..........................2485 Pa rti a I Sal e .............................................................. ......................... 2486 Transfer after lo ss ..........................................................................2487
Or by operation of la w .............................-----2488 Second insu ranee ..............................................................................2489 Prescribing Regulations ................................,.................................2490

SECTION 11

Fire an d Casualty Insurance Companies ................................

Regulating bu siness of Fire and Casualty Insurance Com

pa ni es ..........................................................................................2491

.

Affidavit of President or Chief Officer ....................................2492

Investigation of Complaint of Violations of Law........ ...........2493

Forfeiture of right to do business ................................................2494

Failure to pay expense of examination ....................................249 5

Casualty In surance Regul ated --:................ 249 5 (a)

Re serve for loss es ............................................................................ 249 5 ( b)

Definitions .......................................................................................... 249 5 (c )

Distribution of pa yments; reserves ............................................ 249 5 ( d )

Schedule of experience .................................................................... 249 5 (e )

Unearned premium re serve .......................................................... 2495 (f)

Revocation of license for nonpa yment of judgment-

followini..-249 5 (f )

SECTION 12.
Life Insu ranee ........................................... .................................... Contract of Life Insu ranee ............................................................2496 By whom taken ................................................................................2497 To whom to be paid ....................................................................... 2498

166

I N SURANC E L AWS

Law of Fire Insurance applicable ________________________________________________ 2499 M edica I Examinati ons ___________________________________________________________________2499 ( a) Self-cau sed death relea ses insurer ________________________ ________________________2500 T ime, how counted ______________________ _________________________________________________ 2501

SECTION 13.
I ndu str iaI Life In su ranee ---------------------------------------------------------Indu strial Life In su ranee defined ---------------- -------------------------------- 2502 Co mpanie s of that character _____________:__________________________________________ 2503
Requirements ------------------------------------------------------------------------------------2 504 D eposits by ___________________________________________________________________ 2505 and 2564 (ff) Co mpanie s subject to thi s law _______________________________________________________ 2506
When laws apply ------------------------------------~--------------------------------------2507 Solv ent a ssets, amount of ____________________________________________________________ 2508 Examin a ti ons by Insurance Commiss ioner ________________________________ 2514
Industrial Life In sur ance-Continued . Income or guaranty certificates ----------------------------------------------------2514 (a ) Inco rp oration of indu strial companies rights and powers, depo sits -----------.------------------------------------. _____________________________________2514 ( b) When authori zed to do ordinary Life Insurance Business ________2514 (c) Mutual compa nie s may become stock companie s ___________________ 2514 (d) Regulation of Mutual A ssess ment Companies __________________________2514 (e) Fa lse repre sentations in regard to policies prohibited ___________ 2514 (f) Recei v ing p remium after insolvency,- fraudulent reinstate. ment __ --.______________ ________________________________________________________________________2514 (g)
Fraudulent statement and claims prohibited ____________________________2514 (h) Agent or solicitor required to procure license ________________________2514 (i)
Powers of In surance Commi ss ioner or Deputy --,------------------2514 (i)

SECTIO N 14.

Marine In su ranee -------------------.-------------------------------------------------- ---Contra ct of Marine In surance ______________________________:____________________2515 U nlawful commerce ________________________________________________________________________ 2516

Dou hie in; u ra nee ------------------- -----------------------------------------------------'--2517 Imp Iie d warranty _______________________ _____________________________________________________2518 IIlega I voy ag e ____________________________________________________________________________________ 2519

Devi ati on ____________________----------------------------------------------------------------------2520

Peri Is of the sea ------------------------------------------------------------------------------- 2 521 Continua nee of risk ________________________________________________________________________ 25 22 Increa se of ri sk _______________________________________________________________________________ 252 3

Open policy -------------------------------------- ______________________________________________2524

Value, how ascertained

__________________________________ 2525

Former rule s applicable ---------------------------- ----------------------------------2526

INSURANCE LAWS

167

Rights of owners of merchandi se on ve ss els -"2527 Owner or ma ster of vess el mu st care for damaged property ~2528
SECTION 15. Mutual Insurance ......................................................................,...
Contract of Mutual Insurance -2529 By-Laws ............................................................................................ 2530 Officers agents of all ........................................................................ 2531 Liability for reducing funds ...............,.......................................... 2532 Stricter good faith required ............................................................2533 Agencies of foreign companies to be licensed ............................2534:
SECTION 16. Mutual Companies Insuring Again st Loss by ' Burglary ........
When to be licensed ....................................................:.................. 2535 Prerequi sites to obtaining license ................................................2536 Copy of charter and statement of condition t9 be filed ........ 2537 Statement to be renewed ................:.............................................. 2538 Certificate of authority before doing business ..........................2539 Line of business and rein surance re serve ....................................2540 Membership fee and premium -:2541 Service on appointed attorney and -otherwise ............................2542 Penalty ................................................................................................2543,
SECTION 17. Amo1rnt of. Recovery and Damages ............................................
Amount of recovery --2544 Valued policy ....................................................................................2545
E stimation of value "c2546 AMOUNT OF RECOVERY AND DAMAGE-Continued.
Privilege of Rebuilding -2547 Recovery back of insurer -2548 In surance companies shall pay damages , when - 2549
SECTION 18. Fidelity Insurance -
What companies may become sureties on bonds......................_2551 Estopped to deny corporate power ................................................2552 Venue of siiits on such bonds -255'.3. Deposit required --2 553 (a ) Bonds of City, County and State officers - 25 54. Attachment Bonds .25 .5.S: Remedies in case of defaults ........................................................25 56Deposit to be made before becoming security ..........................2557 Collection of coupons, faith of the State --2558.

168

INSURANCE L AWS

Proceedings wben lo ss occurs, Receiver .... .... - 2559

'When excess of bonds shall be returne d ....... ... ..

2560

When. a company de sires to withdraw from the State

2561

Withdrawal of deposit by retiring company, how accom

plished, conditions specified

..................................... 2 561 (a)

Order to Trea surer to surrender bonds . ... ............. 2 561 (b )

Liab ility. Not ice of sui t. Judgm ent Defense. Subroga-

tion, Reimbur sement .. .

. - ....... ... ....... 2561 (c)

Amount of bond s mu st be maintained ....... ... .......... . .. 2562

Contracts of suretyship between common-carriers and their

employees ..... ............. ........... . ..... ...................... ...... 2 . 62 (,a)

Cance Ila tio n of bond ........... ........... ........ - 2562 ( b )

SECTION 19 . Suits against Insurance Compan:es
Suits against In surance Companies ......................... ...... :Se rv ice on nonre sident a ssessment In surance Compan ies

2563 2564

SECTION 19 ( a ) .FRATERNAL BENE FICIARY ORDERS ............................ .
Defined, their composition and p~w ers - - - 2564 ( a) Benefits, Nature of .......... ...... .... - 2564 (b) Assessments, payments; how fund s are deri ved ...................... 256+ (c) By what law governed; and exemptions ..................................2564 ( d ) .Existing associatio ns reports ......................................................... 2564 ( e)
.Associations of other state s - 2564 () Reports; how and ~ hen made ....................................................... 2564 (g) :Reports, penalty for failure to make .......:................................. 2564 ( h ) :Service on such a ssociations ........................................................2564 (i)
Record of suits -2564 (j) Not applicable to certain orders named ....................................2564 (k) Non-Resident Fraternal orders ; how entered in Georgia ...... 2564 ( 1) License and fee ................................................................................. 2564 ( m ) Incorporation of Domestic Fraternal Orders ...............,........... 2564 (n ) License; Regulation for commencing business ......................... 2564 (o )
Form of government - 2564 (p)

SECTION 19 (b) ACTS OF 1924, 1917, 1923
REGULATION OF CERTAIN FRATERNAL BENEFIT SOCIETIES ........................................................Pages 112 to 13g
Fraternal benefit society Defined --2564 (q) Lodge system Defined ....................................................................2564 ( r)

INSURANCE LAWS

169

Representative form of Government Defined _________'.__________________ 2564 (s) .Exemptions a s to' laws __________________________________________________________________2564 (t) Benefits __________________________________:_________________________________________ 25 64 ( u) ( aaa) ( bbb )
Payments, Act of Aug., 1917.
Beneficiaries ----------------------------------------------------------------------------------------2564 ( v) Qualifications for Membership ________________________________________________________2564 ( w)
Certificate ---------------------------------------------------------------------- 2564 (x) ( aaa) (bbb) Funds; how received and di sbursed ____________________________________________2564 (y) Investment; class of authorized ____________________________________________________2564 ( z) Di stribution of Funds ________________________________________________________________________2564 ( aa)
0 rga ni za tion ---------------------------------------------------------------------------------------2 564 ( bb) Requiring notice where other names are used ________________ after 256+ (bb) Powers retained Rejncorporation Amendments ______________________ 2564 (cc) Mergers and Transfer s ______________________________________________________________ 2564 ( dd)
Annual License -----------------------------------------------,----------------------------------2564 (ee)
Admfss ion of Foreign Society; conditions governing ._______________ 2564 (ff) Power of Attorney and Service of Process .___________________________________ 2564 (gg) Place of meeting, Location of office ____________________________________________ 2564 ( hh )
No Persona 1 Liability ---------------------------------------------------------- --------25 64 (ii) Waiver of the Provisions of the La w s________________________________________2564 (jj)
Benefit non-attachable -----------------------------------------------------------------------25 64 ( kk) Constitution and Laws. Amendments to be filed ____________________ 2564 ( II )
Annua1 Report ------------------------------------------------------------------------------------2564 (mm)
Provisions to Insure Future Security --------------------------------------------2564 (nn) Provisions in lieu of Requirements of two preceding sections 2564 (oo) Examinations of Domestic Societies _______________________________.____________2564 (pp) Application for receiver ____________________________________________________________________2564 ( qq)
Examination of Foreign Societies ____________________________________-2564 ( rr) No adverse Publication ______:_________________________ ____________________________________2564 ( ss) Revocation of License for cause ______________________________________25.64 (tt) Exemption of certain Societies ______________,___________________________ 2564 ( uu )
Taxation exemptions -------------------------------------~----------------------------------2564 ( vv) Penalties for fraudulent statement as to application _______________.2564 ( ww) Applicable to what Societies; further exemptions ___________________ 2564 (xx) Rules and Regulation s by Insurance Commiss ioner.___________________ 2564 (yy)
Benefits ----------------------------------- ____ ---------------------------------------------------------2564 ( zz )
Benefits, Act of Aug., 1917 Ba sis of Premium charges ____________,____________________ ___________________2564 (ccc)

170

INSURANCE LAWS

Index of Provisions of lnsur~nce Laws

ACCIDENT COMPANIES:

S e cti ons

Powers of - 2402, 2412
Deposits of ---------- 2426, 2427 ADDITIONAL RULES AND REGULATIONS:

Commi ssioner may prescribe ----- 2412 ( i) AFFIDAVIT OF COMPLIANCE:
With Re sident Agent's Law (No overhead writing) ............................2492 AGENT:

Definition of. ........................................... - 2443 Penalty on Agent of Unauthorized Companies ....................................... 2444

Licenses ................-2445 (a)
Statement showing ---:-- 2445 (c) Agency .Qualification-Fire . and Casualty-Following Sec......... 2445 (e)

Qualification of Agents-Fi re and Ca sualty-Foll owing Sec.......~.2445 (e)

Mu st obtain license ................................................................................ 2514 (i) APPLICATION ':

Good faith in making .............................................................................. 2479 Mi srepresentation in making .................................................................... 2480 Concea lment of facts in ................................................................:...............2481

ASSESSMENT:

Companies --~ .. 2450 to 2461 ASSETS :
Required of all Companies ...................:.....................................:................241 8

Solvent A ss ets of Mutual Aid, Benefit or Industrial Life Companies ..................................................................................... 2508

Of Domestic Mutual Fire In surance Companies - 2~2 5 (a ) ASSISTANTS TO COMMISSIONER:
Special deputies, counse l, clerks and ass istants

and their compensation -:................ 2442 ( d ) ATTACHMENT BONDS :

Companies qualified to write :: 25 55 ATTORNEY:
For Se rv ice ......................................................................................................24+6 Method of appointment, and di squalification ........ ~............................. 2447

Un la wful to tran sact business until appointment of - 2542 A UTHORITY OF COMMISSIONER :

To prescribe rule s and regulation s -2442 ( e)

To permit other i.nvestments - 2409 BOND:
Deposit ............................................................................................................ 2+ 18

Exceptions ............................... --- 241 8

INSURANCE LAWS

171

. Method to obtain recovery of loss therefrom ...____________________:_.__2420, 2421
Conflicting claims to --------------------------------------------------------------------------2422 Withdrawal of -------------------------------------------------------------- 2423, 2424, 2425 Required of Domestic Mutual Fire In surance Companies.__________.2425 (a) Exceptions to requirement of -----------------------------:___________________________ 2425 (a)
Order to surrender ------------------------------------------------------------------- 2561 (b) BONDS (Surety)
Of public officers ------------------------------------------------------------------------------2554 A ttaohment --------------------------------------------------------------------------------------------25 55 Remedies in case of default on -----------------~----------------------------- 25 56 Excess of, to be returned ______:__________________-------------------------------------------2560
Cance11 a tion of ------------------------------------------------- ---------------------- 2 562 (b) BOND:
To cover expense of investigation of Complaint as to
viol ation of Ia ws ------------------------------------------------------------------------ 249 3 BUILDINGS WHICH MAY BE OWNED :
By Corporation (Limitation) ------------------------------------------------------ 2409 BURGLARY INS URAN CE ----------------------------------------------------- ------------ 25 35 CALCULATiqN OF REINSURANCE RESERVE:
Fi re Insu ranee Companies -----------------------'------------------------- ------------------- 2434 CAPITAL STOCK: '
$100,000 for each class of insurance ($100 for each
sh a re .) Sa le of ----------------------------------------------------------------------------- 23 94 Stock to b_e properly invested as per provision of Section 2394.__________ 2394
Paid in before beginning business $100,000 --------------------------------------2396 May be increased or decrea s~d upon approval of
Insurance Commissioner ---------------------------------------------------- 2397 Deemed Personalty ------------------------------------------------------,---------------------2398 Investments :__________________________________________:___________ -------------------------2418, 2394
Impairment -------------------------------------------------------------------------------- 2434 CASUALTY INSURANCE COMPANIES:
Po we rs of ------------------------------------------------------_------------------------2402 Revocation of License ------------------------------------------------following 2495 Mu tu a I or Co-operative --------------------------------------------------------- 2412 Deposits ----------------------- -------------------------------------------------- 2426, 2427 Regulating business of; location and countersignature of Agents _____ 2491
No Overhead Writing permitted -----------------------------------------------------:.. 2492 Complaint and Investigation ------------------------------------------------------------ 2493 Forfeiture of License ---------:----------------------------------------------- ----- 2494 Expense of Examination ----------------------- ----------------- - 2495 CAUSES: For taking Control of Life Insurance Companies --------------------- 2442 (a) For Voiding Policies ------------..------------------------- ---- 2476 (b) 2489

172

INSURANCE L AWS

CERTIFICATE BY INSURANCE COMMISSIONER:
A s to Deposit --- 2429 As to Reserve Va 1ue - 2429 As to Au tho ri ty -2429 Of Valuation of Life Policies -- 2+38 Of Authority to Mutual Companies -2539 CHANGE OF VENUE IN SUIT --2+16 CHANG! G PROPERTY, INSURANCE ON --2474 CHARTERS:
To Insurance Companies -2388 Form of ---239 0 Organization and Commencement of Bu si ne ss, Charters, etc.............2399 I ss ued by Secretary of State or Comptroller-GeneraL...........- .............2388
Fee for .................. ................---2392 Charter Certificate evidence of existence -2393 Charter of Mutual Companies -; --253 7 CITATION OF COMPANIES: In case of Complaint by Citizen ............................................................... 2467 CIVIL LIABILITY: Of Agents of Unauthorized Companies ................:...................................24+5 COLLECTION:
Of Fee s and Taxe s -------~2412 ( d ) Paid into State Treasury --- 2412 ( e ) Of Coupons -2 558 COMMENCEMENT OF BUSINESS ..............................................................2399 COMMISSIONS: Limitation of on Sale of Stock ...........'.................................................2440 (a ) On Life Policies, or Agency Contracts, or Sale of
Stock; Forbidden to Officers or Directors -2440 (a) COMMON CARRIERS:
Contract of Su retyship ........................................................................2562 (a)
COMPENSATION OF OFFICERS --2412 (b ) COMPL,AINTS AGAINST COMPANIES:
By Citizens ....... ........................................................................... ,.................2467 COMPTROLLER-GENERAL:
Is Insu ranee Commissioner -- 2413 COMPUTATION OF RESERVE VALUE:
. Of Life Policies ----- 2+38 CONFLICTING CLAIMS TO BONDS - 2422 CONTINUANCE OF RISK:
U nti 1 De1ive ry ------ 2 S22 CONTRACTS TO BE EVIDENCED:
By Policy --- 2404
'

INSURANCE LAWS

173

Policy must contain entire contract ............................................................2404 CONTRARY STIPULATION:
Void -2476 ( b) CONTROL:
Of Property and Business of Life Insurance Companies,
Proceedings for -2442 (a) Of Companies, Reason s fo r ................................................................2442 (a) CORPORATE POWERS ....................................................................................2391 COSTS ' AND FEES :
For She ri ff and others -- 2469 DAMAGES:
Payable fo r delay in Settlement --2549 DEFAULT UPON BOND:
Remedie s in case of -2556 DELAY IN SETTLEMENT:
Damage for -............2549 DEPOSITS :
. Kind s of securities acceptable ....................................................................2428
By Companies of other States --- 2419 No tice of Loss and Payment of Companies' liab ilites
from Bond Deposi t --2420 Of Life a nd Accident Companies of other StateL ..............................2426
Of Home Companies -2427 Bonds may be replaced by others ..................................................2427, 2432 Amount of required dep osit ........................................................................2428 Ri ghts of Policy-holders to claim ..............................................................2428
Of Bond s -2419 Bonds mu st be regi stered and va lidated ................_....................................2420 Conflicting claims to deposit ............................................................2421, 2422
Withdrawal --'.2423 , 2423 (a), 2425 Amount re.duced ..............................................:.....................................2424, 2562 Deposits requ ired of Domestic Indu strial , etc. ........2504, 2514, 2514 (c)
Mu tu a I Fi re .Insur a nee Companies -242 5 (a) Indu strial Companies of other States ........................................................2505 Acc ident and Life Companies of other States ........................................2426
Of Domestic Life Companies --2564 (ddd) Annua l Increa ses ..............................................~.................................2564 (eee) Of Indu strial Life Companies ..........................~............................2564 (fff) Accident and Life Companies of Georgia ................................................2427
Assessment Companies -2450 Measure of required deposi t -2428. Fa iIu re to make ------243 0 Certificate of Deposit and Va luati on -2429



174

I N SURAJ\'.C E LAWS

Ch a nges of Securities ....... -2431 Approval of .............. ...................---- 2432 Deposit and Withdraw a I -- 2450 Surety Compan ies dep os it -- 2553 (a) 1 255 7 Collection of coupons on. depo sit ................................:...............................25 58
Excess of bonds to be returned --- 2560 Withdrawal ........ ..................L....... ....2561 , 2561 (a) , 2561 (b)
Of Surety or Bonding .Companies - 2553 ( a )
Before becoming surety ---'... 255 7 Amount to be maintained --- 2562 DEPUTY INSURANCE- COMMISSIONER :
Appointment and dutie s -----2412 ( a ) Sa Ia ry of ..................................................................................................2412 (b )
DILIGE N CE TO PROTECT PROPERTY - 2478 DIRECTORS:
Of Life ln su ranee Companies -2 39 5 (a ) Number of Directors (any company ) ........................................................239 5 Who may be .............. .....................................................................................2395
Where re sident --------239 5 Directors forbidden to accept commiss ions ....................................2440 ( a ) DISCRIMINATORY CONTRACTS :
Prohib ited -2440 ( b ) DIVIDENDS:
Mu st be earned before pa id ................................................:.......................2405 Stock Di vi <lends ..................................................'..._.....................................2406 EMERGENCY CLAUSE ....................,................. ................................... 242 5 (b ) Elimination of, Act 505, Aug. 19, 1922. No code
number. See after Sec. 2425 (b). ENFORCEMENT OF ORDERS:
By Commissioner ~............'...................................-:........2412 (g ) ESTIMATE OF VALUE OF INSURED PROPERTY ..........................- 25+6
E;VIDENCE OF CORPORATE EXISTENCE -2393 EXAMINATIONS:
How and when conducted -2412 (f ) Expense of . .-- - - -2412 (f ) Commissio.ner must examine ---2412 (f ) Duty of Commissioner to examine ............................................................243 3 0~ Industrial Companies ............................................................................2514 EXAMINERS: May ad minister oaths .................................__...:._.__-'2464 EXEMPTIONS:
From organization and other requirements "--- 2412 From requirement of depo sit ,--2425 (a )



1NSURANCE LAWS

175

From civil liability -2445 Laws govern ing Assessment Companies -.245+ Uf Fraternal, tiecret and Industrial . Societies -2461 From standard F1re Policy form ........................................................2470 (a) EXPENSE: Ur in vestigation of complaint as to violation of In surance Laws .... 2493 Failure to pay; proceedings in case of ......................,.............................2+95 EXLtSS OF BOND:
1 o be returned --2560 EXPIRATION OF CHARTER RIGHTS --2399 FAILURE TO MAKE DEPOSIT:
Pen a Ity for ........................................-............2430 FAL~E REPRESENTATION:
As to Policies, uni a wfu 1 ....................................................................2445 (e)
Penalty for -------- 2 514 (f ) FARMERS CO-OPERATIVE COMPANIES or FARMERS
MUTUAL ASSESSMENT COMPANIES:
Genera I Laws applicable -2412 No examination required --2412 (f) Organization of - :following Sec. 2417 No depo sit required ..........................:........................................-:2425 (a) Fees for annual license ................................................................................2448
Independent Divi sions -2448 Standard form of policy ........................................................................2470 (a)
Mutua l lnsu ranee defined -~2529, 2 533 FEES:
For is suance of Certificate of Incorporation --2392 FEES AND TAXES:
Collections of ................................................................................2412 ( d and e ) Ch a rged variou s Companies ........................................................................2448 Fees fo.r filing Statement of A ss ess ment Companies............................2459
For Sheriffs, Con stable s, etc. ----2469 . FIDELITY COMPANIES :
Insurance Laws applicable --:2462 Contract defined -2550 Surety Companies defined, and their acceptability................................~5 51
Cannot deny power to a ss ume liabilities ---2552 Venue of suits on bonds ................................................................................2553
Deposit required --- 25 53 (a) Bonds of Public Officers. Qualifications for writing......,.....................2554
Attachment bond s ---------2555 Remedies in ca se of default ........................................................:.................2556
Deposit pre requi site -2557

176

INSURANCE LAWS

Co11ect ion of coup ons ___________________________________________________________________________________2558 Receiver, or Proceedings when loss occurs ____________________________________________z559 Receiver's Bond ___________________________________________________________________________________________2559 Conflicting claims tinder Policies ________________________________________________________________ 25 59 Excess of bonds on depo sit to be returned ________________________________________________2560 Withdrawal of Company from State _______________________________________________________2561 Wi thdrawal of depo sit __________________________________,____________________________________2561 (a} Surrender of depo sit by Trea surer __________________________________________________2561 (b)
Li ab iIi ty ________________.-----------------------------------------------------------------------------------2561 (c) Notice of Suit ------------------------------------------------------------------------------------2561 (c) Judgment -------------------------------------------------------------------------------------2561 (c) Defense ____________ -------------------------------------------------------------------------------------------2 561 c )
Sub roga ti on-Reimbursement ---------------------------~-----------------------------------2561 (c)
Amount of Deposit to be maintained ________________________________________________________2562 Common Carriers cannot specify individual ___________________________________-2562 (a) Cancellation of Bond ____ _______ ________________________________________________ __________ __ ____ 2562 (b}
FIRE IN SPECTOR: Duties and powers --------------------------------------------------------------- ----------------2412 ( k} Du ti es and powers ______________________________________________________________________________ 2412 (I) Compensation _____________________________________________________________________________________2412 (m} Fi re Inspector's Tax ______________________:___________________________________________________2412 (m}
Ass istant to , Act. 515, Aug. 9, 1922. No Code number. See after Sec. 2412 (k}
FIRE INSURANCE COMPANIES:
Powers of -------------------------------------------------------------------------------------- 2401, 2401 (a) Calculation of Reinsu ranee Re serve _______________________________________________________2434
FIRE IN SURA CE CONTRACTS:
Definition of ----------------------------------------------------------------------------------------------------2470 FIRE INSURANCE RULES:
Applicable in Marine Insurance _______________________________________________________________2526
FORFEITURE OF cHARTER -----------------------------------------------------------------------2399 FORFEITURE OF LICENSE:
Cau se for ____________________________________________________________________________________________2416, 2494 How forfeited License may be rene w ed __________________________________________________ 2417 Non-payment of claims is cau se for ______________________________________following 2495 FORFEITURE OF STOCK SUBSCRIPTION ____________________________________________2397 FORM OF CERTIFICATE ISSUED ___________________________________________________________ 2390
Certificate prima facie evidence of existence of Corporation ____2393, 2412 FORMATION oF COMPA NY _____________________________________________________________________2389
Mutual or Co-operative Companies ________________________________________________________-2412 FORMS FOR REPORTS OF COMPANIES _______________________________________2412 (h)
FORUM FOR HEARING ------------------------------------------------------------------------------------2469 FOUR COUNTY FIRE COMPANIES or FARMER'S

INSURANCE LAWS

177

MUTUAL or COOPERATIVE FARMER'S ASSESSMENT COMPANIES. General Laws applicable .......................................:...............---2412
No examination required -24i2 (f ) Organization of Mutual or Cooperative Companies ............following 2417
No deposit required --'....2425 (a ). Fees for ann ua I License ...........................................'..............................~....2448 Independent divisions ..........:........................................................................ 2448
Prescribed form of Policy -'.--2471 Mutual In surance defined -2529, 2533 FRATERNAL BENEFIT SOCIETIES : See General Statute Index. FRATERNAL SOCIETY-ORGANIZATION:
Exemption from other laws --2461 FRAUDULENT CONDUCT OF COMPANIES:
Proceedings in case of --243 7 FRAUDULENT RE-INSTATEMENT ..................................................2514 (g) FRAUDULENT STATEMENTS AND CLAIMS:
Prohibited ..............................................................................................,2514 (h) GOOD FAITH IN APPLICATION .......,........................................................2479
GUARANTY CERTIFICATES --:'2514 (a) ILLEGAL VOYAGE:
Nullifies Marine Insu ranee -- 2519 IMPAIRMENT:
Of Stock .........................................................................................................._2+34
Of Assets --- 2437, 2439 INCOME CERTIFICATES -2514 (a) INCORPORATION .................................................................................._2388, 2412. INCREASI): OF RISK:
Voids Marine Insu ranee --- 2 523 INDUSTRIAL LIFE INSURANCE:
Definition of ....................................................................................................2502
Definition of such Companies - 2503 Legal requirements of such Companies - 2504 Deposits by Companies ......................................................................2504, 2505 Increased deposits to $100,000......................2564 (ddd) , (eee) and (fff) Companies subject to law ..................-..................................................:...... ;!506 Exempt from subsequent laws unless specifically mentioned ...............2507 Solvent Assets required ..........., ................................................................... 2508 Incorporation, Rights, Powers and Deposits ....................................2514 (b) When Companies may be authorized to write Ordinary
Life Insu ranee ............................................................2 514 ( b), 2514 (c) When Mutual may become Stock Company ....................................2514 (d)

178

INSURANCE LAWS

Regulation of Companies ______________________________________________________________2514 ( e)

Full face of policy must be paid ------------------------------------------------------2514 {e) False representations prohibited __________________________________:___________________ 2514 (f}

INJUNCTIONS:
He a ring and Order of ------------------------------------------------------------------------ 2442 ( b) INSOLVENCY:
Proceedings in case of ---------------------------------------------------- 2437, 2441, 2442 (a) Duty in ca se of knowledge of --------------------------------------------------------- 2434, 2442 Receiving premium after ---------------------------------------------- ----------------------2514 (g) Fraudulent reinstatement after _______________________________________________________ 2514 (g)

INSPECTION OF ACCOUNTS: Refu sal of Life Insurance Company to permit ________________________________2442 (a)
INSPECTORS:
Ma y admini ster oaths --------- --------------------------------------------------2464 INSURANCE AGENT :
Defi ni ti on of ---------------------------------------------------------------------------------------2443 INSURANCE BOARD:
Composition and Authority of -------- ------------------------------------ 2415 (b) INSURABLE INTEREST:
Of a ssured_ in policy ----------------------------------------------------------------------------- 2472 Insuring interest of another ----------------------------------------------------------------------2473 INSURANCE COMMISSIONER, POWERS OF: To approve increa se or decrease of amount of Capital stock ___________2397
To a pp rove investments ---------------------------------- ---------------------------------- 2408 To appoint deputy and clerk ___________________:____________________________________________ 2412 (a)

To collect charges, fee s and taxes --------------------------------------------------2412 ( d)

To examine Companies -----------------------------------------------------:------------ 2412 (f)

To enf~rce orders ----------------------------------------------------------------------------2412 (g} To prescribe rules and regulations --------------.--.---------------2412 (i), 2442 (d) -To give directions a s to use of funds collected before

investment ----------------------------------------------------------------------------- 2412 (j)

To appoint Fire Inspector ---------------------------------- -- ---------------------- 2412 (k)

To execute a11 ins u ranee 1a ws --------------------------------------------------------------2413 INSURANCE DEPARTMENT:



Office rs, Sea 1, Records, Reports ---------------------------- --------------------------- 2412 (a)

Compensation of Officers ----------------------------------------------------------- 2412 (b)

Appropr iation for payment of salaries ----------------------------------2412 (c) Collection of fees and taxes ____________________________________________________________,___2412 ( d)

Fees, taxes, etc- -----,------------------------------------------------------------------ 2412 (e) Examination of Companies -------------------------------------- ---------------------------- 2412 (f} Seal of office-when used -------------------------------------------------------------- 2412 (a) Publication of Report ----------------------------------------------------------------------------2412 (a) In vestiga ti ons-powe r to make ____________ --------------------------------------------------2433

INSURANCE LAWS

179

Making of Reports ----------------- ---- 2442 (f)

Commissioner may admini ster oaths ----------------------- 2464, 246&

INSURER:

.

May prescribe regulations -------------------------------- 2490 INTENTION OF PARTIES:

To an Insurance Contract --------------.-----------------------' 2475 INVESTIGATIONS:

By Commissioner or Deputy -----------------------------2433

Seo pe of ....---------...----------------------2433 Expense of ----------------- -------------------------------- 243 3 Of Complaints as to violation of law ---------------------- - 2493

Power to issue subpoenas, etc. ------------ 2514 (j} INVESTMENTS :

By Insurance Companies ----------------- -------- -------- 2408'.

Buildings owned by Corporations ------------------ --- 2409,

In ves trilen t of Stock ------------------- 2394 Legality of Bonds .of cities or counties of Georgia ---------------- ----- 2394

Limitation of --------------------------------------------------------2409 Sa le or T ra nsfer of ---------------------2409 KINDS OF INVESTMENTS ----------------------------2408, 2409, 2394 LAWS APPLICABLE:

To Mutual or Co-operative Companies (Fire, Live-

stock, Life or Acoident Companies) -- ------------------- 2412

To individuals -------------------------------------------- ------- 2465 LAWS GOVERNING COMPANIES:
Applicable to indi vi du als -------------------------------------------- 246 5
LIA~ILITY:

Of Stockholders ---- --------------------- 2411 Of Agents for unauthorized Companies --------------------"-2445 LICENSES:

Un lawfu l to operate without --------------------------------------------2414

How obtained ---------------------------------------------------------- 2415

Issuance of, under Seal -------------- 2415 (a) Notice of revocation of ------------------------------------------2415 (b)

Withdrawal of - ----------------------------------------- 2418 Cau se for revocation -------2415 (b), 2430, 2434, 2437, 2439, 2440 (b)

Who mu st obtain ----------------------,-----------------2445 (a) Requi sites to obtain, and revocation ----------------------- 2445 (b)

To Agent of Assessment Companies ------------------- 2456

Agents mu st obtain -------- ------------------------- 2514 ( i) LIFE INSURANCE COMPANIES:

Formation, Orga.llization, etc. -------------------------23&8, 2399

Powers of ------------------------------------------------- 2400

J80

lNSURAK C E LAWS

Requirement to do business ________ ------------------------------------------- -------'.-- -- 241 8 Deposits ___________________________________________________2426, 2427, 2428, 2564 ( ddd), (eee )

Reserve Valuation and Certificate -------------------- ----------------------- 2428 , 2429
,, Effect of failure to deposit --------------------------------------- ------------------------------- 2430 Calculation of Reserve value __________________________:_ .____;______:__________________________2438
Impairment of N_et or Reserve value ________:_____ 2439 a_ _ ____ __________ __ _ __ ___: _____ ________

Valuation by other Commiss ioners ---------------------------------------------------------- 2440 Commissions to Officers prohibited ___________________________ _______________________2440 ( a )

Anti-rebate law ---------------------------------------------------------------------------------- 2440 ( b) Proceedings to take Control of ________________________________________________________2442 (a)

Assessment plan --------------------------------------- -------------------------------------------------- - 2451 Law of Fi re Ii:isu ranee applicable ----------------------------------------------------------- 2499 LIFE INSURANCE:
Definition of Contract -------------------------------------------------------------------------- ___2496 By whom Contracts can be taken -----------------------------------------,------------2497 To whom proceeds inay be paid ------------------------ ------- ---- ----------------------------2498 Medical examinations required ----------------------------------,----- --------------- 2499 (a) Statements in applications are not warranties -- ----------------------- 2499 (a) Void for suicide _or death by justice -------------------- ----------------------------------- 2500
LIMITATION 'OF BUSINESS :
Of Mutual Companies --------------------------------------------------------------------------2540 LIQUIDATION:
Of business of Companies ______________________________:__: _________________________________ 2442 (c)

LIVE STOCK COMPANIES :
Powers of ----------------------------------------------------------------------------------------------------2403 Laws applicable ____________ ------------------------------------------------------------------------------ 246 3
LOCAL ASSESSMENT COMPANIES: Exemption from deposit requirement ___:____________ _____________________________ 2425 (a)

'Form of policy prescribed ---------------------------------------------------- --------------- 2470 (a)
-Loss:

Definition of what may be a ----------------------------------------------------------------------- 2476 Umpire 'to a pp raise _____________________________________________________________________________2476 (a) Unknown, doe s not invalidate contract ___________________________________________ ________2477

..MARINE INSURANCE:

.

_penition of Contract of --------------------,------------------------------------------------------.2515 l Jnla wful Commerce -----------'------------------------------------------- - - ________2416
J)ou ble Insuranee -------------------------------------------------------------------------------------2517

Jmplied Warranty ---------------------------------------------'---------------------------------------- 2518 111egal Voyage ---- --------------------------------------------------------------------------- 2519

Deviation in transit ----------------------------------------------------- - - ----------------- 2520

Perils of the Sea --------------------------------------------------------.----------

-------- 2521

Continuance of Risk -----------------------------------------------------------

2522

Increa se of ri sk ---------------------------------------------------'-----------------25 23

INSURANCE LAWS

Open Policy 2524 ' - -:...i

;:::e~r h;:le:s:e;;;Lnaeb~e:::::::::::::::~:::'.::::::::::=:::::::::::::::::::~::::'.:::~::::::~:'.':~/'..;!~! '
c:,:::.. Rig hts of owners of Merchandise --:..,:.. 2527
Owner or Master of vesse l to care for damaged property...,..,...i '..,..,.,2528 ~

MEASURE OF DEPOSIT OF LIFE COMPANIES -:.:,.,.,::..! 2428 MEDICAL EXAMINATIONS:
Required by Life Companies ..............................................................,.2499 (a) Required by Mutual or Assess ment Companies
(excluding Industrial Companies) ..............................:..........'.. 25-14 ( e ), MEETINGS:

For organization - . ...239.S-. ' Of DI recto rs ........................................................---:_... 2395

Of StockhoIde rs ...-.......,......... .- 2395.

MEMBERSHIP FEE AND PREMIUM .........:..-- .. 2541

METHOD OF CALCULATION:

Of Reinsurance Reserve (Fire Insurance Companies} .........,............ 2434.-

MISREPRESENT A TION:

. '>

or concealment, increasing risk, or alienation, or

' '

second insurance; effect of -- ----2479 to 2489 MUTUAL OR CO-OPERATIVE COMPANIES:

Laws applicable to -'--.2412 Organization of Farmer' Mutual .....................................:...... see after 2417

Insuring again st loss by Burglary, Robbery, Loss. of

Money in Transpo rta tion ...........:............................:........................:..25 35

Prerequisites to obtaining license and tran sacting business....2536 to' 2539

MUTUAL INSURANCE:

.

Definition of .... --.....2529 By-Laws, nature of ------ 25 30 Officers of Mutual Companies ..............................:....................-'-2531

Liability for reducing Funds --' 2532

Stricter good faith required ---- 25 33

Agencies to be Licensed '---2534

NET PROFITS:

.

Participation by Policy holders _-------2407 ' NET VALUES OF POLICIES:
Required to be on hand, in additi on to capital stock ............................2439'Calculation of Net Value of Life Policies ..................~.........................:.,2438: NON-COMPLIANCE WITH LAW ................................................................2448:

NQ OVERHEAD WRITING; AFFIDAVIT OF -- 2492 NOTICES TO STOCKHOLDERS:
Of Meetings .... ............................................................... . ...........~- 23_9_5

NUMBER NECESSARY TO FORM COMPANY ---23"89, 2412.

182

INSURANCE LAWS

OATHS:
Commissioner's right to administer ---------------------------------- -------- __ 2-1-64, 2468 OFFICE OF INSURANCE COMMISSIONER:
A Public Office ------------ ------------------------------------------------------------------------- 2412 (a) OFFICERS OR DIRECTORS:
Forbidden to accept or participate in Commissions ______:____________ 2440 (a )
OPEN POLICY: Definition of __________________________ __ - ___ ------------------------------------------------------- 252-1-
0RDERS:
How enforced ------- --------------------------------------------------------------------------- 2412 (g ) To Treasure.r to surrender Bonds ____-___________ __________:,_____________________2561 (b)
ORGANIZATION: Of Corporation ____ __________ __________________________________________________________________________:______ 2395

Notice of ________ .------- -------------------- -------------------------------------------------------------------- 2395 Directors of Life Companies ---- -------- ------------------------------------------- _ 239 5 (a) Organization and Commencement of Busi_ness,

Charter, etc. ------------------------------------------------------------------------------- 2399, 2412 Of Mutual or Co-operative Fire Companies ____________________following 2-1-17
OWNER OF VESSEL:

To care for damaged property ---------------------------------------------------------------- 252S

PARTICIPATIO 1 :

By Policy-holders in net profits ( right to participate

must be stated in policy) ------------------------------------------------ ________________ 2407

PAYMENT AND DAMAGES:

When to be made

25-1-9

PENALTIES:

For neglect to file Semi-Annual Statement -------------------------------- __ __ 2413

.Imposed for various reasons -------------------------------------------- --------------- --- 2442 (a) 10n Agents of Unauthori zed Companies -------------------- -------------------- 2444
:For False Representation ------------ -------------------------------------------- ----------- 2445 (e ) For Fraudulently procuring Insurance ------------------------------------ ---- _______ 2-1-57 .For fa iIu re to make Re port ________ ----------------------------------------------- ____ __________ 2-1-60
.For failure to pay Tax ____________ ---------------------------------------------- -------- ----------- 2460 ;For violati ng provisions of law __________;____________________________________________________25-1-3

PERILS OF THE SEA: Covered by Marine Insurance ---------------------------------------------------- ______ ____ 2521
PETITION:

For Formation of Company ---------------------------------------------------------- 2389, 2412 Pub! ica tion of ____ ________ ________ ____ ---------------------------------------------- ____________,___ ___ _ 23 89

POLICY CONTRACTS:

When not binding ________ ------------------------------------------------------------------- ---------- 2404 Of Assessment Life Companies ---------------------------- ------------------ ----------- 2452 (a ) Of Fi'r; In su ranee ---------------------------------------------------------------- -------- 2470 to 2490

INSURANCE LAWS

183

Standard Fire Policy -2470 (a )
Must contain entire Contract -2470 (b), 2404 To be submitted for approval ............................................................2425 (b )

Construction of --247 5 Stipulati?n Contrary to 2476 (a) void ...................................-,...............2476 (b)
To be issued through Resident Agents ....................................................249 l Certificate of no overhead writing ............................................................2492

Of Life Insurance -- --2496 to 2501 When beneficiary may collect ............................................................2499 (a ) Life Policies, void for suicide or death by 'justice................................2500 Life Policies, time effective .............:............................................................2501

Of Indu strial Insurance -2502 to 251+ (j ) Definition of Open Policy ............................................................................252+

Of Mu tu a I Ins u ranee -2529 Of Marine Insurance ......................................................................2515 to 2528

Valued policy -

...25+5

Definition of Fidelity Insurance Contract - 2550

Certificate of Fraternal Insurance -2564 (x )

POOLING:

Prohibit~d ---' -- 2466

POWERS AND PRIVILEGES:

Of Corpora ti on ................ '- 2391 Of Life Companies --- 2400 Of Fi re Companies ........................................:..........-- 2+0 l

Of Accident Companies -..... 2402 Of Live Stock Companies ........................................................................... 2+03
PRACTICE AS TO TESTIMONY ............................................................... 246 8

PREMIUM TAX AND REPORTS --- 24+8, 2459 Penalty for non-payment ----------------- ------- 2460 Exemption from payment of _------------------------------------------------------ 2+61
PRESCRIBING REGULATIONS:

Right of insurer -------------------------------------- 2+90
For Mutual Companies ---------------------- - 2535 PROCEEDINGS FOR TAKING CONTROL:

Of Life Insurance Companies --------------- 2+42 (a } When loss occurs (Surety Companies ) ---------- 2559 PROFITS:

Participation by Policy holder s in net profits - --------2+07 PROPERTY VALUE:

Estimated at time of loss ---------------------- 2 -46 PRO-RATA-RECOVERY --------- -----------------------25++ PUBLICATION OF :

.Petition for Incorporation ------------------ 23 89

184

INSURAN~.E LAWS

Semi-Annual Statement ................................................................' ---2418 QUALIFICATIONS:

For 'writing Surety Bonds "-- --...,-25 51 REASONS FOR TAKING CONTROL: .

Of Life Insurance Companies by Commissioner ---~4A2 . (a)

REBATES PROHIBITED: -,-.2440 (b) RECEIVERS:
To take charge of bonds to satisfy claim .......................................,..-2421 For Insurance Companies (Method of Procedure) ........................ 2442 (g) Hearings before appointment of .................:......................................2442 , (g) Who may appoint .........................:...............................................- 2442 (g) REBUILDING: Privilege of ..............................................................................................._... 2547 RECOVERY: Amount of ............................................................................,...2544, 2545, 2546

Back by Insurer -- 2547

REFUSAL TO OBSERVE ORDER OF:

.

Insurance Commiss ioner, Penalty for ............................................. 2442 (a) RE-INSURANCE AND RESERVE ............................................................... 2410
Calculation of Re-insurance Reserve (Fire Insurance Companies) ._ 2434 Mutual Burglary Insurance Companies ...............................:.................. 2540 Re-insurance or Merger to be approved ........................................2442 (a) REMEDIES: In case of default upon Bond ........................,................:.......................... 2556 REMOVAL OF SUIT TO FEDERAL COURTS ........................................ 2416RENEWAL: Of Forfeited License ............................:...............................................2417, 2441 ,

Of License (annually) -- 2418.

REPORTS:

'

Forms furnished for, and when.......................................................:..2442 (h), Of Com missioner ................................................~.................................. 2442 ( f ), Specia I Deputies ....................................................................................2442 (f ) Premiums ................. ........................................................................._........... 2448' Of Assessment Companies ................................................................ 2450, 2458

Failure to make - 246o; REQUISITES:

To obtain license ............-....2445 (b) Assessment Companies ........................................................................ 2450-2451 As to Bonds of Public Officials .........................................................- 2E4 RESERVE VALUATION:

To be ascertained -.................. 2428. To govern Amount of Deposit .................................'.................................2428

Computation of ....................................................................-..2438

INSURANCE LAWS

185,

....Procedure if Net .Value is not on hand ..........,;:...............:............,.,~...c.t'.2439

Of Policies of Assessment Companies .......:....................:...2452, 245.3, 2454

For Compensation and Liability Insura.nce ~-''- 2495 (b), 249.5 (f)

RESERVE:

,.

And Reinsurance -" -:,~... ....24.10 Calculation of Re,insurance Reserve (Fire
Insurance Companies) ....................................................:.2434, 2452, 2453, Of Life Insurance Companies ................................................................24523 Calculation by Commissioners of other States ........................................2436 Of Mutual Burglary Insurance Companies .......................................'......2540 .RESIDENT AGENT LAW:

Regulating Fire and Ca sualty Companies ..........................................2491 RETALIATORY LAW:
Provisions as to use of Deposit ................................................:.................2428 Provisions as "to Deposit, Fees Penalties .......:....................................... 2449

REVOCATION OF LICENSE: Method of .................. ...........................................................................2415 (b) Cau se for ........................................................ 2430, 2434, 2437, 2439, 2440 b) Of Agents .........................................................................-.............2445 (b) Of Assess ment Companies ....................................................................cc... 2450 Of Casualty Companies, Act 314, Aug. 2, 1922 No Code number. S.ee following 2495 .
RIGHT OF COMMISSIONER:

To examine Companies and appoint Examiners -'-2412 (f)

RIGHT OF INSURER:

To inake r1;gulations as to Contract

.2490

RIGI:ITS OF:

Owners of .Merchandise on Vessels ....................................................... 2527

Policyholders to Deposits . .....:...................... .....................................:..:..' 2428

ROBBERY INSURANCE ....................................................,...:..... ............::...... 2535

RULES AND REGULATIONS: Power to prescribe by Insurance Com missioner ...........................................' ....... 2412 (i), 2442 (e), 2445 (d) Of Fire Insurance applicable in Marine Insurance ...............................2526

SAFETY STANDARD : Of Life Compan ies .....................................................:...................:..:...:...... .2439

.SEAWORTHINESS:

And skill in Navigation implied in Marine insurance -' .. 2518

SEMIANNUAL STATEMENT:

.

Publication of ................................................................................................. 2418

Penalty for Neglect to file ................................................................... .... 2418

SERVICE AND SUITS ........,................................. 2446, 2447, 2542, 2563, 2564

SOLVENT ASSETS:

186

INS U RANCE LAWS

Of Mutual Aid, Benefit or Industrial Life Companies _ __ 2508

Where impaired -- SPECIAL DEP UTY COMMISSIO NER --

2434, 2444 ..- 2442 (d )

Report of --2442 (f ) STANDARD OF SAFETY :

Of Life Companies ---~2439 STATEMENT:
To obtain License ..........................................................................................2415

Of Capital or A ssets -----2418 SemiAnnual --241 8 Showing Agents ......................................................................................2445 (c ) Of Mutual Burglary In surance Companies ..................................2537, 253 8 STEAM BOILER INSURANCE COMPANIES : Laws applicable ..............................................................................................2463 STOCK : Regulations a s to formati on of Company ................................................2389 Regulation s as to Sale of Stock; inve stments, etc.........................2394, 2395 Am ount nece ssary for each class of insurance ..............................2394, 2412 Organization of Company, meetings, etc. ................................................2395

Amount to be paid in -2396 M ay be increased or decreased ...:.......--:2397

Deemed Personalty -2398 D ividends mu st be earned before pa id ....................................................2405

Authority to iss ue Stock Dividends -2406 Amount pf Dividends on Stock may be named in Charter....................2407
Liability of Holders of ......................................................................2411, 2435

Examination of Companies selling Stock -:2412 (f) Supervi sion before and while selling Stock ........................................2412 (j) Amount to be named in filing Statement ...........:................................... 2415 Commi ss ions on Sale of, who may not receive ................................2440 (a)

License and Rules for Sale of......................................-- 2445 (d) SUBSTITUTION:

Of Bonds or Securities on Depos it ----- 2427 SUICIDE :

Voids policy obi iga tion --2500 SUITS AGAIN ST COMPA NIES --- 2446, 2563 SUPERVISION OF COMPA NIES:
Before Organi zation .............................................................................. 2412 (j) SURETY BONDS:

Of Public Official s '- 2554 SURETY SHIP:

Contracts of, between common carriers and employees................ 2562 (a )

Cancellation of ---- 2562 (b )

INSURANCE LAWS

187

SURRENDER OF BONDS :
By Treasurer, 0 rde r for --------------------------------------------------------------------25 61 (b) TAXES:
Collection of Fees and Taxes ___________________________________________________________2412 ( d)

Paid into State Treasury --------------------------------------------------------2412 (e) Fi re Inspector's ------------ -------------------------------- --------------------------------- - 2412 ( m) On Assessment Companies _____________________________________________________________2459, 2460
On Premiums ____ ------ ----------------.---------------------------------------------------24 59 , 2460 TESTIMONY :
Practice a s to ------------------------------------------------------------------------- _________ 2468 TIME :
How counted in Life In surance --------------------------------------------------------- 2501 TRANSPORTATION LOSS INSURANCE ------------------------------------------------ 2535 UMPIRE :
To apprai se Loss ------------------------ -----------------------------------------------------2476 (a ) Appointment, Notice and Service ___________________________________________________2476 (a)
U NAUTHORIZED COMPANIES: Penalty and Ci v il Liability of Agents of _______________________________________________24+5
U NLAWFUL COMMERCE:
Not subject of Marine In su ranee ---------------------------------- -------------------------2516 VALIDITY:
Of In v estment _______________________________________________________________________________________________239+

Of Contract --------------------------------------------------------------------------------------------------2477 VALUATION:
Certi fi ca tes- ______________________________________________________________ ._____________________________2429, 2440
0 f Life Pol icie s ________________ -------------------------------------------------------------------------- 2438 By Commi ssi~ers of other States ____________________________________________________________ 2440
Penalty for failure to furnish certificate ------------------------------------------------- 2440 VALUED PO LI CY CLAUSE ___________________________________________________________________________2545 VALUE, HOW ASCERTAINED ________________________________________________________2525, 2546
VENUE: Of Su its on Bonds ________________________________________'._______________,______________________________ 2 553

VIOLATION OF INS URANCE LAW:

Inve stigation of ------------ ------------------------------------------------------------------------- 2493 WITHDRAWAL:

Of License for ca use ---------------------------------------------------------------------------------- 241 8 Of Deposit ------------------------------------------------------------- ------ 2423 , 2425, 2 561 ( a )



Of Company ---------------------------------------------------------------------------------------------------2 561 No relea se fr om liability when Company Withdraw s ______________ 2561 (c)