Insurance laws of the State of Georgia, 1936 [1936]

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STATE OF GEORGIA

EDITION OF 1936

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INSURANCE LAWS
OF THE
STATE OF GEORGIA
EDITION OF 1936
Issued from office of the INSURANCE COMMISSIONER
SrATE CAPITOL
ATLANTA
Stein Printing Co., State Printers, Atlanta, Ga.

INSURANCE DEPARTMENT STATE OF GEORGIA
NOTE
The laws of this State, relating to insurance and insurance companies, now in force, are published as they appear in the Code of Georgia of 1933 with the addition of laws enacted at the Session of the General Assembly of 1935.
' Atlanta, 1936.

STATE OF GEORGIA
LAWS RELATING TO
INSURANCE AND INSURANCE COMPANIES
GENERAL STATUTES
as they appear in the Code of Georgia of 1933 with the Additions of laws enacted at the Session of the General Assembly of 1935.

CODE OF GEORGIA
INSURANCE.

Chap.

Sec.

56- 1. Insurance Department ....... .. ..... ... .. .- .... ; .. ... .. :. ..... .. . 56-101

56- 2; Incorporation, . powers, duties, etc., of insurance companies in

general . . . . . . . . . . . . . . . . . . . . . . . . . . .... ~ ...................... . . 56-201

56- 3. Deposits by companies doing business in State ... . .,. ... ... . . ... . 56-301

56- 4. License to do business ............ ..... . .. ..... ..... . . . . . ..... . ... 56-401

56- 5. Agents and solicitors . . .. .' .... .. ........ . .... .. ... . . .. .. . . ... .... 56-501

56- 6. Actions against insurance companies .. .. . .. .. ... . . . ....... .... . .. 56-601

56- 7. Amount of recovery and. damages .- .. .. .. . . .. . .. .... . .......... ." .. 56-701

56- 8. Fire insurance .. : ... .. ....... . ... . .. .. . ... .. . ... . . . ...... . .. . .. . . 56-801

56- 9. Life insurance ...................... . ... ... . .............. . .... . 56-901

56-10. Accident liability and casualty insurance . .. ... ..... . . .... .. . .. .... 56-1001

56-11. Fidelity insurance ........ . ......... . .................. . .. . .. ... 56-1101

56-12. Marine insurance . . . . . . . . .

. ...... ..... : . . . .... . ... . .. .. ..... 56-1201

56-13. Indus"trial life, accident, and health insurance ........ , .. ... ....... 56-1301

56-14. Mutual or cooperative insurance. Burglary and robbery insurance .. 56-1401

56-1'5. Assessment insurance comp;mies . . : . ... ." ..... . ................... 56-1501

56-16. Fraternal benefit societies ................................... . ... 56-160i

56-17. Fraternal beneficiary orders . .. . .... . . .. .' .. .. : ..... .. ... . ... . . .... 56-1701

56-99. . crimes .. ....... . . . . .. ..... : . . .. ... .. : ............... .. . . .. . .... 56-9901

CROSS-REFERENCES.

Burning goods to defraud insurer: See Title 26, Crimes and P unishment, 26-2210.

Constitutional provisions: See Title 2, Constitution of the .State of Georgia,

2-2301 to 2-2305.



Incorporation of companies in general: See Title 22, Corporations.

Securities, sale of, etc.: See Title 97, Securities.

State-owned buildings, insurance of: See Title 91, Public Property, 91-40.3,91-404.

Workmen's compensation: See Title.114, Workmen's Compensation, Chapter 114-6.

, CHAPTER 56-1. INSURANCE DEPARTMENT.

Sec. 56-101.
56-102. 56-103. 56-104.
56-105. 56-106.

Officers of Department. Comptroller General as Insurance Commissioner; deputy; seal; records; reports.
Compensation of deputy.
Collection and disposition of fees and taxes.
Examination of insurance companies doing business a.s assessment, fraternal, industrial,. or charitable companies; appointment of and reports by exan1iners; hearings; ex~ penses.
Investi gation of affai rs of companies by Commissioner; expenses.
Duty of Insurance Commis?ioner in case of insolvency,. fraud, or insuffi ciency of asc sets.

Sec.

56-107. Orders, how enforced; testing validity of.

56-108. . Blank fonns . for reports by

con1panies.

.; . .

56-109. Additional ru!Cs .and regulations, authority to prescribe.

56-110. Supervision of companies before organization.

State fire inspector and assistant; appointment, etc.

56-112. Investigations by State fire in.spec'tor or as"sistant; r epo rts.

56-113. A uthority of State fire .inspector to go upon premises. \

56-114.

Comp.ensation o.f .State fi-re inspector for making investi-
gations;' liability of insurance compani!'s for expenses.

56-115. Commissioner and inspectors may administer baths.

56-101

INSURA N CE.

8

56-101. Officers of Department. Comptroller General as Insurance Commissioner; deputy; seal; records; reports.-There is hereby established in the office of th e Comptroll er General a department w hich shall be called th e Insurance pepartment of the State of Georgia, and which shall be charged with the enfo rce ment of th e laws relating to ins urance. Its chiei officer sh all be the Comptroller Gen eral, who shall be ~ ty l ed " Insurance Commissioner." The Ins uran ce Commissioner shall exercise the powers and perform the duties conferred and imposed upon him by law. He may appoint a deputy insurance commissione r to assist him in the discharge and performance of his duties, and in the event of a vacancy in the o ffice of Insurance Comm issioner, or in his absence o r disability for any reason, th e deputy sha ll perform all the duties required of the Insurance Commiss ioner. The said deputy shall execute a bond with proper security in the sum of $5,000, said bond to be approved by the Insurance Com missioner a nd conditioned upo n the faithful performance of m s duties. The sa id deputy shall be removable at the pl easure of the Comm issioner. Th e Commissioner sha ll have an official seal of such device as he shall , w ith 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 hi s office , and a ll copies of papers certified by him and a uthenticated by said seal, sha ll in all cases be evidenced equally and in like manner as the 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 th e Insurance Commi ssioner shall be deemed a public office a nd the records, books and papers thereof, on file therein, sha ll be d eemed public record s of the St ate, except as may be provided otherwise herei n. The Commissioner sha ll publish and r.eport annually to the legisla ture his official transact ions, and shall include fn such report ab strac ts of the annual statements of the several insurance companies and bonding and fid elity conipanies, and an exhibit of the financial condition and business transactions of the said compa ni es as d isclosed by official examinations of the same, or th eir annua l statem ents. H e sha ll include th erein a statement of receip ts and expenditures of the D epartment for the preceding year, and such other information and recomm endations relati ve t o insurance and th e insurance laws of the .State as he sha ll deem proper . (Acts 191 2, p. 119.)
Cross-reference.-Reports t o S ta te Librari a n, see 101-219.
Editorial Note.-The provision of the above section as it app ea r s in th e o-rig inal Act, which authorized the Insurance Commissioner to appoint a clerk, and the portion of the following section which prescrib erll1is salary, h::tve b een cut out as superseded by Const., Art. V , Sec. II, Par. II ( 2-2702) authorizing th e Ge neral Assembly to provid e help and expenses necessary for the operat io n of the Compt r oll er General's dep a rtm e nt, and by Acts 1931, Extra. Sess ., pp. 94, 96, creatin g th e Budget Bureau, und e r which law approp ria tion s are mad e in lump sum s to the seve ral departments . See 40-403. Th e effec t of th ese laws was t o abo li s h suc h spec ial clerkships and to a uthorize th e h ea ds of th e seve ral departments to employ as sistants at such sa laries as th ey think proper, within the limits of th ei r r espective a ppropriation s.
I
56-102. Compensation of deputy.-The deputy in suran ce commi s-
sioner, who sha ll be a man o f act uarial ex perience, sha ll be paid out of
the State treas ury as is now prov ided by law for th e paym ent of sala ri es
of all Statehouse officers, a salary of $3,000 per annum, and he shall not

9

INSURANCE.

56-104

receive any other fees or compensation whatsoever. (Acts 1912, pp. 119, 128 ; 1919, p. 283' 1931 , pp. 7, 31.)
Cross-reference.-Salary of Comptroller Genera l, see 40-1404.
Editorial Note.- See editorial note under the preceding section.
56-103. Collection and disposition of fees and taxes.-The Insurance Commissioner shall collect the charges, fees, dues and taxes imposed on insurance companies as provided by law and g ive 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. 11 9, 121 , 128.)
Cross-reference.-Occupation taxes on insurance companies, agents, and adjustment bureaus, see Title 92, Public Revenue, chapter 92-25.
56-104. Examination of insurance companies doing business as assess- . ment, fraternal, industrial, or charitable companies; appointment of and reports by examiners ; hearings; expenses.-The Insurance Commissioner may at any time examine into the affairs of any insurance company doing business in this State as an assessment, fraternal, industrial or charitable company or otherwise, 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 organizing 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 which is holding capital stock of one or more insurance companies for the purpose of controlling the man.agement thereof or as voting trustee or otherwise. For such purpose the Commissioner may appoint as examiners one or more competent persons, not officers of, or connect ed 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 th e officers and ag,en ts of such company and all persons deemed to have material information regarding the company's property or business. Every such company, its. officers and agent s, shall produce at the office of the company where the sa me are kept, it.s books and all papers in its possession relating to its business, and any other person may be required to produce any book or paper in his custody relevant to the examination, 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 t rue 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 sworn testimon y of its- officers or agents or othe~ persons examined under oath concerning its affairs, and said report so verified shall be presttm ptive evidence in any action or proceeding against the company, its officers or ag-ents, 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 , not to exceed 60 clays, as he may deem proper, and may after so filing, if he deems it for the interest of the pub-

56-105

I l\SURANCE.

10

lie to do so, publish any such r eport or the result of any such examination in one or more newspapers. It shall be th e duty of the Insurance Commissioner to examine every domestic insurance company at - least once in fi ve years. The expense of all examinations of insura nce com-

pani es shall be paid by the companies so examined: Provided, this _sec-

ti on shall not apply to farm ers ' assessme nt cooperative fire insurance

compani es doing business in thi s State in not m ore than ,four counties

in a divisi~n. (Acts 1912, pp . 11 9., 1Zl.)



Cross-references.- Im;estigation by Commissioner, see 56-105. Powers of In sur a nce Commission e r or deputy, see 56-517. Examination o f domestic fraternal benefit societies, see 56-1629. Exam ina tion of forei g n fraterna l benefit societies, see 56-1631. Penalty on 11gents of unauthorized companies, see 56-9905. N'eglect of summons or obstructing exam in ation, penalty, see 56-9901.

56-105. (2433)' Investigation of affairs of companies by Commissioner;

expenses.-It shall be the duty of the Insurance Commissioner, w hen-

-

.

ever he shall deem it expedient so to do, and he is hereby empowered,

either in person or by ~n exper_t exam iner by him appointed, to in-

ves tiga t e the affairs of any iqs\1rance company doing business in this ~tate; .to require free access 't o a ll books and papers of any company or

of the age nts thereof; to summ on and _examine under oath any per?on in

thi s S,tat e relative t o the affairs -and condition of said company; for prob-

able cause, t o v isit at its p rincipal office, .wherever it may be; any insure

ance .company not of the State', in w-hich th e s ubstantial requ ireme nts

of thi s- law, as to valuations of policies of life and accident- insurance

compan ies, and calcula tion s f6r th e re in o 11r~rir:-o rese rve of fire, marine,

and inland in surance companies, are not in force, for the purpose of in-

v'estigating its affa irs and condition; and to -revoke its a uthority t o do

business, if said company shall refuse to permit the examination . A ll

expense incurred in the investiga t ion of said companies shall be paid by the compan ies 1so examined. (Acts 1887, p. 118.) .

Cross-references,__:__Examination of assessme nt, industrial , etc., co~panies, see

56-104. Domesric fratern a l beriefit societies, see 56-1629. Foreign fraterna l

benefit soc ie ties, see 56-1 631.

..

~

.

56-106. (2442) Duty of Insurance Commissioner in case of insolvency,

fraud , or insufficiEmcy of assets.-Whenever the In_s urance Commis-

sioner shall have reason to bel-ieve th at any inurance company is in-

solvent or fraudulently conducted, or that it s asset s are not suffici ent fo r

conducting the business of the company, or during any noncompliance

with the provisions of this l'aw, h e shall proceed as prescribed in sec-

tion 56-832. (Acts 1887, p. 12L)

56-107. Orde~~. h?Y.: ~,~ri~~rce,~; t~sting validity of.-The Insurance
Comm issioner , may .iny0k~ . th e _aiel of any court of compet ent jurisdic-
tion through injupction pr other proceedings, mandatory or otherwise,
t o enforce any order -made oraction taken -in pursuance of the law, and noth in g contai1!ed in the insuran_ce laws of this State shall be so construed as t o prevent a.ny company .0 r person -affected by any order or action of the Insurance Commissioner from testing the validity of same m any ~ourt of competent jurisdiction. (Acts 1912, pp. 119, 126.)

11

INSURANCE.

56-112

56-108. Blank forms for reports by companies.-The Insurance Commissioner shall annually in the month of December furnish to each of the insurance companies authorized to do business in this State a nd required to make annual statements to the . Department, two or more blanks in form approved by hirn and adop ted for such statemen ts. (Acts 1912, pp. 119, 125.)
56-109. Additional rules and regulations, authority to prescribe.-The Insurance Commissioner 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 directly or indirectly, or continue to do business in this State. (Acts 1912, pp. 119, 126.)
56-110. Supervision of companies before organization.-Immediately upon the granting of the charter to any insurance company, and before it shall offer 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 has procured a license to do business in this State, shall come under the supervision of the Insurance Commissioner, and shall collect, hold and disburse its funds under such rules and regulations as the Insurance Commissioner may prescribe. The Insurance Commissioner shall give directions as to all use of funds so collected until same shall be invested as the law directs and the company fully organized and licensed to do business in this State, thereby becoming subject to the rules and regulations herein provided. (Acts 1912, pp. 119, 136.)
56-111. State fire inspector and assistant; appointment, etc.-The Insurance Commissioner may appoint a competent person to be known as State fire inspector, and also a person to be known as assistant State fire inspector. The assistant fire inspector shall be continued in office for such term, and at such compensation as the exigencies of the Department may, in the discretion of the Commissioner, warrant and require. (Acts. 1912, pp. 119, 131; 1922, pp. 120, 121.)
Cross-reference.-Comp ensation of fi re insp ec tor, see 56-114.
56-112. Investigations by State fire inspector or assistant; reports.When any property shall be destroyed by fire, and the Commissioner shall deem it proper to have the cause of s uch fire investigated, he shall cause the State fire inspector or the assistant State fire inspector to make a thorough investigation of all the facts connected w ith such fire and report to him in writing under oath. Such inspector, or his assistant, when in his opinion such proceedings shall be necessary, shall take the testimony of all persons supposed to be cognizant or have information or knowledge in relation to the matter investigated, and he shall cause the sar:._e to be reduced to writing, and if he shall be of the opinion that there is eviden<::e sufficient to charge any person with the crime of arson,

_,
\

56-113

I NSURANCE.

12

he sha ll cause such person to be a rrested on a warrant, and cause the sam e to be fully investig ated before an offi cer a s is provided for committal trial s, or he sha ll furni sh the solicitor general of the circuit in which the fir e occurred a ll such facts, tog ether with the names of witnesses, and a ll the information obtaine1 by him, in such investig ation . Such fire inspect or and hi s assist ant shall have the same power as justices of the peace for the purpose of summoning before him, in the county where the fire occurred, and compelling the attendance instanter or at such time as may be desig nated by th e said Sta te fire inspector or his assistant, to testify in relation t o any matter whi ch , by th e provisions of thi s law, is the subj ect of investi gation. Said St at e fire in spe ctor or his assistant may administer oaths to witnesses appearing before him, and may compel witn esses to a nswer questi ons perta ining t o 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 investigation of any matter coming before him under this law. (Acts 1912, pp . 119, 131 ; 1922, p. 120.)
56-113. Authority of State fire inspector to go upon premises.-The State fire inspector, for the purpose of making the investigation required by this law, shall have a uthority to go upon the premi ses where the fire occurred and ma ke inves ti gation as to the cause a nd origin of the fire . (A cts 1912, pp . 119, 132.)
56-114. Compensation of State fire inspector for making investigations ; liability of insurance companies for expenses.-'The In suran ce Commissioner shall have power to prescribe the compensati on of the fire inspector for a ll examinations requ ired by thi s law, a nd said compensation shall be paid a nd all other exp enses incurred in such examination shall be defrayed by t he fir e insurance companies doing business in thi ~ State, and a tax of not more "than one-tenth of one per cent. in the discretion of the Ins ura nce Commi ssioner on the g r oss premium receipts of all such companies is hereby levied fo r this purpose, t o be coll ec t ed by the Insurance Commissioner as other taxes on premium s a re coll ect ed. The In sura nce Commission er sha ll kee p a separate a ccount of all moneys received and d isbursed und er the provisions of this section and shall include them in his rep ort to the legislature : Provid ed, that should th e am ount thu s collected in a ny one year be in excess of the amouh t required t o meet the expenses herein contempla ted, such excess shall be held subject t o the orde r of th e Commis sioner to be used for th e sam e purpose in th e succeed in g year: P ro vided fur t her, t ha t secti o n 56-113 and this secti on shall not apply t o farm ers' assess ment cooperative fir~ companies doing bu siness in thi s State in not more tha n four counti es in a di vision . (Acts 1912, pp . 119, 132.)
56-115. (2464) Commissioner and inspectors may administer oaths.The Ins~ranc e Commi ss ioner and such person or persons a s 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 law. (Acts 1887, p. 127.)

13

INSURANCE.

56-201

CHAPTER 56-2. INCORPORATION, POWERS, DUTIES, ETC., OF INSURANCE COMPANIES IN GENERAL.

Sec. 56-201.
56-202. 56-203. 56-204. 56-205. 56-206. 56-207.
56-208. 56-209. 56-210.
56-211. 56-2 12.
56-213.
56-214. 56-215. 56-216. 56-217. 56-2 18.

Charters to insurance companies; authority of Secretary of S t a t e and Comptroller General.
Formation of company; petition; affidavit; filing; record.
Form of certificate to be issued to company.
Corporate existence and name; powers and privil ege s.
Fee required to be paid.
Certificate prima facie evidence of corporation's existence.
Capital stock; subscription to, before commencing business; investment in bonds.
Organization; meeting; notice; board of directors.
Amount of capital required before beginning business.
Subscriptions to stock; payments in installments; forfeitures fo r nonpayment.
Stock deemed personalty.
Termination of powers, etc., on failure to organize and co mmence business within two years.
Contracts of insurance to be evide nced by policy; signatures to policy.
Dividends, declaration of.
Stock dividends in lieu of money dividenils.
Participation by policyholders in net profi ts.
Powers of live-stock insurance compa ni es.
Rebates and discriminatory policies or contracts prohib-
ited~

Sec. 56-219.
56-220. 56-221. 56-222.
56-223. 56-224. 56-225.
56-226.
56-227. 56-228.
56-229. 56-230. 56-231. 56-232.
56-233. 56-234. 56-235.

Arrangements by companies or agents preventing or lessenin g compe tition; revocation of license to do business.
Same; complaints by citizens; citation.
Same; practice_as to testimony, etc., on hearing of complaints.
Same; place of hearing of complaints; costs and fees; execution.
Method of putting companies in hands of receivers.
Authorized investments by insurance companies.
Approval of Insurance Commissioner, when required for investment.
Investment in more than 10 per cent. of securities of a single company or individual not allowed.
Required investments.
Authority to sell and buy property or securities m which money has been iiwested.
Reinsurance and reserve.
Extent of liability of stockholders.
Law applicable to individuals.
Annual report of business; forms; verification; publication.
Fees to be paid; annual report; tax on gross receipts.
Failure to make such report or pay tax.
Exemption of fraternal, secret, and industrial societies from operation of law.

56-201. (2388) Charters to insurance companies; authority of Secretary of State and Comptroller GeneraL-All corporate powers and priv-. ileges to insurance companies shall be issued and granted by the Secre-
tary of State, up on the terms, liabilities, restrictions, and subject to all
the provisions of this Chapter and the laws and Constitution of this State.
If from any cause the Secretary of State should be disqualified from issu-
ing and granting sa id powers, the duties required by this Chapter to be
performed by th e Secretary of State shall be performed by the Comptroller General. (Acts 1893 , p. 73.)
Cross-references.-Tax on premiums of insuran ce companies, see 92-2509. Corporate powers, how granted, see Const., Art. Ill, Sec. VII , Par. XVIII ( 2-18 18). Fee of Treasurer, see 56-205. Organization of fraternal benefit societies, see ' .56-1614 et seq. Penalty on agents of unauthorized companies, see 56-9905. To what extent provisions of this Chapter applicable to mutual insurance companies, see 56-1402.
Editorial Note.-The Act of 1893 was passed to carry into effect Art. III, Sec. VII", Par. XVIII of t"he Constitution ( 2-1818), in so far as the sam e relates to the issuing and granting corporate powers and privileges to insurance companies.

56-202

INSURANCE.

14

56-202. (2389) Formation of company; petition; affidavit; filing;

record.-Any number of persons not less than five may form a company,

but, before receiving a certificate of incorporation under this Chapter,

shall first 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 cap-

ital stock; the number of shares each of the petitioners agrees to take;

that petitioners 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 30 days' notice of

their intention to apply for said charter by the publication of said peti-

tion 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 s ub~cribed are the genuine signatures of

the persons named therein 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.)

Cross-reference.-Incorporation of Mason ic and other secret societies, see

22-412.

.

56-203. (2390) Form of certificate to be issued to company.-When said petition shall have 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 of certificate, to wit:

To all to whom these presents may come-Greeting:
\Vhereas, in pursuance of an Act of the General Assembly of the State of Georgia, approved December 18, 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 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, rul es, and regulation s governing insurance companies of force at the date of this certificate, or that may hereafter become of force either by constitutional or statute law, 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 is annexed the great seal of the State, at Atlanta, Georgia, this - d a y of---, 19-. (Acts 1893, p. 74.)

15

INSURANCE.

56-208

56-204. (2391) Corporate existence and name; powers and privileges. _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 a)1cl be subject to the provisions contained in this Chapter. (Acts 1893, p. 74.)
56-205. (2392) Fee required to be paid.-Before the Secretary of State shall issue said certificate, the petitioners shall pay to the State Treasurer a fee of $100. (Acts 1893, p. 74.)
Cross-references.-Corporate powers, how granted, s~e Const., Art. III, Sec. Vii, Par. XVIII ( 2- 1818). Charters to insurance companies, see 56-201.
56-206. (2393) Certificate prima facie evidence. of corporation's existence.-Any certificate or a duplicate thereof, issued under this Chapter, shall be prima facie evidence of the.existence of such corporation. (Acts 1893, p. 74.)
56-207. (2394) Capital stock; subscription to, before commencing business; investment in bonds.-When such certificate shall have been issued, the persons named therein, in case they have not taken the whole capital stock, may open books of subscription to obtain the full capital stock of the company, and, after giving such notice as they may deem expedient, may from time to time receive subscriptions until the whole capital stock shall be subscribed. The capital stock of said company shall be divided into shares of $100 each, and shall not be less than $100,000 for each class of insurance to be engaged in, and no insurance company chartered under thi s Chapter shall commence the insurance business until at least this amount for each class of insurance to be engaged -in shall have been paid in cash, or invested in bonds of the United States, of this State, or of the cities or counties of 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 shall be approved by the Secretary o State, or, when he is disq ualified, by the Comptroller General. When the investment shall be in bonds oi the cities or counties of thi s State, the Secretary of State, or Comptroller Genera!, as the case may be, shall require an opinion from the Attorney General that the bonds are good, legal, and valid bond s, before approving .the investment. (Acts 1893, pp. 74, 75.)
Cross-reference.-Insurance companies may invest in bonds of drainage districts, see 23-2567.
56-208. (2395) Organization; meeting; notice; board of directors.When the amount of the capital stock shall have been subscribed, the persons named in said certificate may call a meeting of the stockholders for the purpose of organization, of which meeting every subscribing stockholder shall ha ve 10 clays' notice personally, or by notice deposited in the post office, postage paid, directed to him at the post office neares t hi s usual place of res idence. At said meeting there shall be e lected a board of directors of not less than fi v r., nor more than 15, to manage the affairs of said company, said directors to be chosen by a majority vote of the stockholders, each share of stock being entitled to one vote; said election to he governed by s uch byla 11s as said company

56-209

INSURANCE.

16

may adopt; the persons elected as directors to continue in office until others shall be elected to fill their places. No person shall be elected a diiector unless he shall be a stockholder, owning stock in his own name, or as trustee, or personal representative, and qualified to vote at the election at which he is chosen. If for any reason the election shall not be held at the time appointed, the same may be held at any time thereafter on 10 days' notice to all stockholders; but at any meeting pf the stockholders or their legal representatives, the notice m.ay be waived, and an election held at once. The directors shall elect from their number a president, vice president or vice presidents, 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 byl~ws of said comp~ny. 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. (Acts 1893, p. 75 .)
Cross-reference.-Number of directors of life insurance companies, see 56-907.
56-209. (2396, 2418) Amount of capital required before beginning business.-No insurance company of whatever class, except Masonic, Odd Fellows, religious and mutual aid societies, and cooperative or assessment l'ife insurance companies, shall be allowed to transact any business of insurance in this State, unless possessed of at least $100,000 of actual cash capital paid up, or assets and invested bonds or stocks, estimated at their actual market value at the date of th,e statement required by section 56-402, or in mortgages on real estate worth double the amount for which the same is mortgaged. (Acts 1887, p. 113; 1893, p. 80.)
56-210. (2396) Subscriptions to stock; payments in installments; forfeitures for nonpayment.- 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 shall be ready 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 the company; but they shall not declare it forfeited until they shall 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 post office 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 shall fail to make the san1e, his stock and all previous payments thereon will be forfeited for the use of the company; which notice must be served at least 60 days previous to the day on which such payment shall be required to be made. (Acts 1893, p. 75.)
56-211. (2398) Stock deemed personalty.-The stock in an insurance company shall be deemed personalty and shall be transferable in the manner prescribed by the bylaws of the company; and no share shall be transferable until a!! previous calls thereon shall have been fully paid in. (Acts 1893, p. 76.)
Cross-references.-What is personalty, see 85-1701. Transfer of shares, when complete, see 22-706.

17

IN SURANCE.

56-217

56-212. (2399) Termination of powers, etc., on failure to organize and commence business within two years.-A ll the powers and privileges and the ce rtifi ca tes of incorporation of in surance companies s h~ll cease and termin ate a t the expiration of two yea rs from the date of said certificate, if, at the expi ration of sa id two years, said companies shall not have organized and commenced business. (Acts 1893, p. 76 ; 1902, p. 52.)
56-213. (2404) Contracts of insurance to be evidenced by policy; signatures to policy.-Contracts of insurance to be entered into by any company organized under this Chapter 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- unless it shall be signed by the president or vice president and secretary or assistant secretary .of th e company. (Acts 1893, p. 77.)
Cross-references.-Contract of fi re insura nce, sec 56-801. Standard form of policy, see 56-810.
56-214. (2405) Dividends, declaration of.-The board of directors of any company organized ui1eler this Chapter may declare dividends out of the ear.nings of said corporation : Provided, no dividend shall be declared unti l the earnings shall be suffi cient to pay the same, after deducting all expenses and losses, and after providing for such reserve as may be required by law. (Acts 1~93, p. 77.)
56-215. (2406) Stock dividends in lieu of money dividends.-Corporation s formed under thi s Chap ter may issue stock dividends in lieu of cash dividends if th e board of directo rs shall so decide, and th ereby add to the capital stock, not to exceed the highest limit of the capital stock fixed by their charters . (Act s 1893, p. 77.)
56-216. (2407) Participation by policyholders in net profits.- The board of directors, after providing for such reserve as may be required by law, by a majority vote, may give the holders of policies of any company organized under this Chapter on any particular line or class of insurance the right to participate in the net profits of such company to such an extent, in such manner, and tipon such terms as the board of directors may agree, the same to be plainly stipulated on the face of the policy; and unless it s hall be stipulated on the face of the policy that the policyholder has the rig ht to participate, no policy hold er shall participate in any of the profits of such company. If the incorporator s of any stock company shall see proper, they may embrace thi s principle in their charter, stat ing therein th e average amount of dividends the stockholders shall receive on the face value of their st ock, in which case all net profits above this dividend a nd the reserve shall be paid as a di vidend to a ll the policyholders. (Acts 1893, p. 77.)
56-217. (2403) Powers of live-stock insurance companies.-Li ve-stock insurance companies organized under this law may 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 w hich are not in

56-218

INSURANCE.

18

conflict with the laws and Constitution of this State or of the United States. (Acts 1893, p. 77.)
56-218. Rebates and discriminatory policies or contracts prohibited.N o 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 this State, and no iQ.surance 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 policy or contract whereby any discrimination in any form or character is allowed to any.particular person or persons. Any insurance company violating the provisions of this section may have its license re\okecl as provided in section 56-407. (Acts 1912, pp. 119, 129.)
Cross-reference.-Punishment for violation, see 56-9903.
56-219. (2466) Arrangements by companies or agents preventing or lessening competition; revocation of license to do business.-No insurance company authorized to do business in this State; or the agent thereof, sha ll make, maintain, or enter into any contract, agreement, pool, or other arrangeme nt with any other insurance c~mpany 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. When it shall be made to appear to the Commissione'r of Insurance that any company or agent has entered into any such contract, agreement, pool, or other arrangement, said Commissioner shall revoke the license issued to such company and the same shall not be reissued until the president or chief officer of such company shall file an affidavit with .said Commissioner, stating that such contracts, agreements, pools, or other arrangements have been annulled and made void: .Provided,. that nothing in this Chapter shall be so construed as to prevent any insurance company, legally authorized to transact business in this State, from separately surveying, inspecting, or examining the premises to be insured , by and w ith 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.)
Cross-references.-Definition of insurance agent, see 56-501. P rovisi ons of Constitution as to restricting competition, see 2-2504.
56-220. (2467) Same; complaints by citizens; citation.-Any citizen of this State whose rates of insurance have been increased, or who has been refused insurance at reasonable rates, may 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 w ith a violation of the preceding section, and thereupon it shall be the duty of said Insurance Commissioner to issue a citation, addressed to the company or companies against whom said complaint shall be made, requiring it or them to be and appear before said Insurance Commissioner at a time and place to be fixed by said Insurance Commissioner, not less than 20 nor more than 40 days from the date of the filing of the complaint, and show cause why their licenses

19

INSURANCE.

56-223

should not be revoked as provided by the preceding section. Said cita-

tion shall be seryed not less than 10 days from the Clate of filing said

complaint by the sheriffs or constables of the State in the same manner

as provided by law for the service of process upon insurance companies.

(Acts 1890-1, p. 206.)

.

Cross-references.-Investigation of compla!nt, see .56-807, 56-1003. .Service on nonresident companies, see. 56-603. Suits agamst. msurance compan.Ies, see 56-601. Service on nonresident, assessment, etc., msurance compames, . see
56-602, 56-604.

56-221. (2468) Same; practice as to testimony, etc., on hearing of complaints.-For the purposes of the provisions of this Chapter, the Insurance Commissioner may administer oaths, issue subpoenas for witnesses, hear testimony, and issue commissions for taking te'stimony by interrogatories; and the party or parties complaining, and the company or companies defending, may serve notice for the production of books and papers, under the rules provided by law for civil actions in the superior courts. (Acts 1890-1, p. 206.)

56-222. (2469) Same; place of hearing of complaints; costs and fees; execution.-The Insurance Commissioner shall fix the place of hearing or trial. The costs and fees for tlie sheriff or constable, witnesses, and the commissioners taking interrogatories shall be the same as now provided by law for similar service in the superior courts, 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 Commissioner is hereby authorized to issue execution to be levied and collected as executions from the courts. (Acts 1890-1, p. 206.)

56-223. Method of putting companies in hands of receivers.-Before any insurance company chartered under the laws of this State or doing business in this State shall hereafter be put in the hands of a receiver by any court of equity, 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 receivership is sought have been submitted by the complainant to the Insurance Commissioner, and that such complaint and the matters charged against such insurance company have been passed upon by the Insurance Commissioner sitting in connection with the Governor and the Attorney General in the manner hereinafter provided, to wit: The Insurance Commissioner, the Governor, and the Attorney General, sitting as a board as provided in section 56-407, shall, upon such matters and complaint as referred to previously in this section being filed with the Insurance Commissioner, proceed to hear the same after giving both the complainant and 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 such proceedings, the Insurance Commissioner shall ord"r the company and its officers to maintain the assets in statu quo. Upon hearing ~arne, said commission, or a majority of them , shall render a decision and judgment recommending or declining to recommend that the Commissioner make application, in accordance with section 56-921 et seq., for an order directing the company to show cause why

56-224

INSURANCE.

20

the Commissioner should not take possession of its property and conduct its business. No receiver for an insurance company shall be appointed on the petition of any person other than the Insurance Commissioner, unless it be made to appear to the court to which 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.)
Cross-references.-Ex~mination of domestic fraternal benefit societies, see 56-1629. Application for receiver for fraternal benefit society, see 56-1630.
56-224. (2408) Authorized investments by insurance companies.Every insurance company organized and doing business by virtue of the laws of this State shall have authority to invest its money and assets in the following securities, to wit:
(a) Any and all bonds or securities issued by the United States of America, the District of Columbia, or any State of the United States, or any county or city therein; bonds of any township or school district therein; bonds issued by the Federal Land Banks under provisions of the Act of Congress of July 17, 1916, its amendments and supplements.
(b) Loans secured by any of the cl,asses of securities specified in (a) hereof.
(c) Loans secured by first liens on improved real estate in any of the States, not exceeding SO per cent. of the value of said property.
(d) Loans on policies issued by the insurance company, not exceeding the reserve on such policies.
(e) A building for home office purposes: Provided, that no company shall hereafter invest in such building unless its assets shall exceed $100,000, and that such company shall not invest more than 25 per cent. of its assets in such a building: and Provided further, that any such investment in a building for home office use shall first be approved by the Insurance Commissioner.
(f) Evidences of indebtedness which may be purchased or discounted by Federal Reserve Banks.
(g) Investment securities, that is, marketable bonds, notes, and/ or debentures, evidencing indebtedness of solvent persons or corporations, which, under the regulations of the Comptroller of the Currency of the United States, national banks may buy and in which they may deal.
(h) Bonds and debentures of any solvent railroad, street railway, or other public utility corporation, or industrial corporation, on which no default of interest has occurred, when and if secured by a mortgage or deed of trust covering physical assets or securities of ample value to exceed the indebtedness secured.
(i) Preferred stocks of solvent corporations, where at the time of acquisition the equity of all preferred stock outstanding in the assets of the issuing corporation, including the issue in which the investment is made, is more than twice the amo_unt of such preferred stock, and the earnings applicable to dividends on such preferred stock have, for two consecutive years prior to the date of acquisition, exceeded twice the dividend requirements.

21

INSURANCE.

56-229

(j) Common stocks of solvent railroads, street railways, and other utility corporations and industrial corporations which are listed on an established stock exchange, where, prior to the date of acquisition of the stock, the c_ompany issuing such stock has maintained and paid dividends thereon for three consecutive years, and the current earnings of such company issuing such stock have been sufficient in each of such three consecutive years to fully pay the dividends.
(k) Promissory notes amply secured by pledges of securities in which the company is authorized to invest its funds. (Acts 1912, pp. 119, 137; 1918, pp. 119-122; 1925, p. 92; 1929, p. 274.)
Cross-references.-Penalty for violation, see 56-9904. Insurance companies may invest in drainage district bonds, see 23-2567.
56-225. Approval of Insurance Commissioner, when required for investment.-Investments in the classes of securities defined in the preceding section, except as to a building for home office purposes, may be made by insurance companies without the approval of the Insurance Commissioner, and all other investments of funds by insurance companies in classes of .securities other than those specified in the preceding section shall be made only when the approval of the Insurance Commissioner shall have been obtained. (Acts 1929, p. 275.)
56-226. Investment in more than 10 per cent. of securities of a single coil).pany or individual not allowed.-No insurance company organized and doing Business by virtue of the laws of this State shall acquire or hold more than 10 per cent. of the securities of any single corporation; nor shall more than 10 per cent. of the assets of any insurance company be invested in the securities of any single company or in securities issued by any single individual. (Acts 1929, p. 276.)
Cross-reference.-lnsurance companies may invest in drainage district bonds, see 23-2567.
56-227. Required investments.-Every insurance company organized and doing business by virtue of the laws of this State shall, to the extent of the paid-in outstanding capital stock of such insurance company, if it shall be a stock corporation, keep its funds and assets invested in the classes of securities defined and described in sub-paragraphs (a), (b), (c), (d), (e), (f), and (h) of section 56-224. (Acts 1929, p. 276.)
56-228. Authority to sell and buy property or securities in which money has been invested..:._Insurance companies organized and doing business by virtue of the laws of this State may sell, assign, transfer, 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 of trust, deed to secure debt, or other form of property or securities in which it may have invested its money or its assets or on which it may have made loans as allowed by law, and may also buy and sell any realty that may be necessary for the protection of any loan such insurance company may lawfully make. (Acts 1929, p. 276.)
56-229. (2410) Reinsurance and reserve.-Any company organized under this Chapter may reinsure any or all its risks; and every company incorporated under this Chapter shall provide for such reserve as may be required by law. (Acts 1893, p. 78.)

56-230

, I NSURANCE.

22

56-230. (2411) Extent. of liability of stockholders.-Stockholders in corporations organized under this Chapter shall be individually liable to creditors of the corporation to the extent of their unpaid subscription to the capital stock and for no greater a mount. (Acts 1893, p. 78.)
56-231. (2465) Law applicable to individuals.-Alllaws regulating the business of insurance in this State by companies shall apply to individuals, associations, and corporations in like business. (Acts 1893, p. 81.)
56-232; (2458) Annual report of business; forms; verification; publication.- Every corporation or association shall, on or before ' the first
day of March in each year after it shall have commenced to do business,
make and fi le with the Insurance Comm issioner a r eport of its affairs and operations during the year ending the 31st day of D ecember next preced ing. S uch an nual reports shall be made upon blank -forms to be provided and furnished by the Insurance Commissioner, and sh all be verified under the oath of the president or secretary or other like officers, and shall be published~ or the substance thereof, in the annual r eport of said Insurance Commissioner. (Acts 1887, p. 126.)
Cross-references.-Returns of corporations, see 22-1703. Annual report of fraternal benefit societies, see :i6-1626.
56-233. (2459) Fees to be paid; annual report; tax on gross receipts. -There shall be pair! to the Insurance Commissioner by each corporation or association authorized to do business the same fees as r equired by section 56-506, together with all such subsequent fees as are prescribed under said sect ion. 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 Insurauce Commissioner the g ross amount received on bU'siness done in this State during the year ending the 30th of April next preceding, and shall at the same time pay into the treasury of this State a tax of $1.50 upon each $100 of such gross amo unt so received by said association or corporation. If such corporation or association shall at any time be the owner of any real or personal property situated in this State, such property shall not be exempt from taxation by reason of the provisions of this section. (Acts 1887, p. 126 ; 1927, p. 92.)
Cross-reference.-Com pany not complying, fees, etc., see 56-506.
56-234. (2460) Failure to make such report or pay tax.~I such corporation or associa tion shall at any time fail or r e.fuse to make the annual report or to pay the tax on the gross amount received, as hereinbefor e provided, the Insurance Commissioner shall forthwith suspend or r evoke all authority to such corporation or association and all its agents to do business, and shall publish such revoc'ation in some newspaper published in this State, and may proceed to collect whatever sum of money may be due or owing on accou nt of such tax by suit or action, in the name of the State, against such corporation or association. (Acts 1887, p . 126.)
56-235. (2461) Exemption of fraternal, secret, and industrial societies from operation of law.-Nothing in the insurance law shall be_construed to require any fraternal, secret, or industrial societies or other associa-

23

INSURANCE.

56-301

tlons exempt by law now organized or to be organized in this State, to pay any license fee or tax, or to make or file reports with the Insurance
Commissioner, or to prevent the same from doing business, when the
money, benefit' charity' or relief is payable by the grand . or supreme body of th e .same, and is derived from assessments on subor~mate lodges,
coUncils' or other bodies or their members. (Acts 1887, p. 126.)
. Cross-references.-Annual report of fr_aterna_l ~ocieties, see 56-1626. Exemp tions, see 56-1606. Exemption of certam societies, see 56-1634.

CHAPTER 56-3. DEPOSITS BY COMPANIES DOING

BUSINESS IN STATE.

Sec. 56-301.
56-302.
56-303.

Fiarne~emacroinmep, aannides

inland insurof other

States or Cou ntrie s.

When notice of loss given, bonds to be retained; appointment of receiver.

Bond to be give n by re ceive r. Delivery of bonds to receiver; sale of bonds ; disposition of proceeds and residue.

Sec. 56-313.
56-314. 56-315.

Same; amount of assets re-

quired ; emergency clause in

policies ; deposit for exemp-

tion.



Same ; receipt of deposits by State Treasurer authorized.

Deposits by foreign companies or agents when amount required of companies of this State by foreign State greater
t;Ian imposed by this State.

56-304. Conflicting claims to bonds ; 56-316. For eign life and accident in-

affidavit; interpl eader.

surance companies.

56-305 . 56-306. 56-307.

Additional deposit when amount redu ce d below amount required; revocation of license on failure to make.
Li fe insurance companies doing business on legal reserve plan; measure of required deposit; renewal of deposit ann u a l l y.
Same; ce rti fica te to be issued to companies; expiration of ce rti ficate.

56-317. 56-318.
56-319. 56-320.

Dom estic life and accident insurance companies.
Mutual or stock-plan life insurance companies; amc,unt of deposit; nonresident companies.
Same; annual increases until deposit aggregates required amount.
Life, accident, or casualty insurance companies; what securities may be deposited; valuation.

56-308. Same ; failure to make deposit; 56-321. Industrial I if e, accident, or

notice ; re voca ti on of license.

health insurance companies.

56-309. Same; changes of securities deposited.
56-310. Same; approval of securities offered for deposit oand of substitution of securities.
56-311. Fide lity insurance companies.
56-312. 'Mutua l, coope rative, or asse ssment fi re insurance compani es; what companies excepted.

56-322. .Life indemnity or insurance

companies doing business

upon assessment plan.

_

56-323. Withdrawal by company Jrom State, return of bonds deposited.

56-324. Policies required to be satisfied before withdrawal.

56-325. Withdrawal of fi r e insurance companies or associations; reinsurance of policies.

56-301. (As amended by Act of 1935). All fire, . marine, and inland insurance companies, chartered by other States or foreign Governments, shall deposit with the State Treasurer 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 arty county or municipality in this State which have been validated under the laws of this State, of the 'face value of $10,000, Provided that fire, marine, and inland insurance companies chartered by other states or foreign governments, which have a paid-up or issued capital stock in excess of $500,000 shall deposit said bonds in an amount equal to two per centum of said capital stock, but not more than $25,000 in amount, and Provided, further, that other fire, marine and inland insur-

56-302

INSURANCE

24

ance companies chartered by other states or foreig.1 governments shall deposit said bonds in an amount equal to fifteen per centum of the gross annual premiums derived from business written on Georgia property, but in no case shall such amount be less than $10,000 nor. more than $25,000; which bonds shall be receipted for by the Treasurer and specially deposited in the treasury; and whenever such company shall cease to do business in this State, and shall have settled all claims against it, said bonds shall be delivered to the proper party on presentation of the Treasurer's receipt. While said bonds are so deposited the owners shall, subject to the notices hereinafter provided for or given, be entitled to collect the interest thereon. For the bonds so deposited the faith of the State is pledged that they shall be returned or disposed of as hereinafter provided. All bonds deposited by insurance companies under this or any other section of this Title shall be registered bonds (Acts 1935, p. 149).
Cross-references.-Provisions of Constitution as to requirements of nonresident -companies, se!! 2-2301. When charges impos ed on companies of this State by other States are greater tha n imposed by this State, see 56-315. State Treasurer ex-officio bond commissioner, see 40-1201. Bonds of counties or municipalities, how validated, See 87-301. When amount deposited redu ce d below amount required, see 56-305. Annual report of business, see 56-232. Deposits by domestic mutual fire insurance companies, see 56-312.
56-302. (2420) When notice of loss given, bonds to be retained; appointment of receiver.-Whenever any loss insured against shall occur, the insured, in order to secure his recovery, may give notice to the State Treasurer of the occu rrence of said loss and of the amount claimed, after which noti ce the State Treasurer shall be bound to retain, subject to the order of the court trying any suit that may be...hr.oughL for the recovery of such 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 shall not be paid within 10 days, said plaintiff may file an application w ith the judge of the superior court of the county where the case was tried, for a receiver to take charge of as many bonds as shall be necessary to satisfy the aforesaid judg ment. (Acts 1887, p. 116.)
Cross-reference.-Proceed ings when loss occurs, see 56-1109.
56-303. (2421) Bond to be given by receiver. Delivery of bonds to
receiver; sale of bonds; disposition of proceeds and residue.-When said
receiver shall be appointed by the judge, he shall always require bond
and security of him for the faithful performance of his duty. The State
Treasurer, on application by the receiver, shall deliver to him bonds of
sufficient market value, if in his custody, to satisfy said judgment. The
receiver's receipt shall be a complete discharge to said Treasurer and the
, State. The receiver shall apply to the judge of the superior court for an
order of sale, and, in pursuance of said order, shall sell said 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 satisfy the judgment; and if there shall remain any residue in the hands of such ;eceiver, he shall p~y over .the same to the agent 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.)
Cross-references.-Receiver n,ot subject to garnishment, see 55-311. Proceedings when loss occurs; receiver, see 56-1109.
56-304. (2422) Conflicting claims to bonds; affidavit; interpleader.1 there shall be conflicting claims, the State Treasurer shall deliver over to the receivers, in the order of their application, the aforesaid bonds;

25

INSURANCE.

56-306

and if there shall be any contest between creditors, which cannot be settled in this mode, 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 affidavit of the claim and filing the same with him, and the receiver shall report such claim to the judge of the superior court appointjng him, who shall, by order, provide for a bill of interpleader, as in cases in equity. (Acts
1887, p. 117.)
Cross-references.-Proceedings w\len loss occurs; receiver, see 56-1109. Interpleader, see 37-1503.
56-305. (2424) Additional deposit when amount reduced below amount required; revocation of license on failure to make.-Whenever, by means of the provisions of this law, the amount of bonds so deposited shall be reduced, the Treasurer of this State shall at once notify the Insurance Commissioner in writing, who shall give notice to the company .depositing, and require more bonds to be deposited, so as always to maintain the original amount; and if the company so notified by ~the Insurance Commissioner shall fail to comply within 30 days, the license to do business in this State shall be revoked, and said Insttrance Commissioner shall at the same time give notice, by publication in a newspaper published at the State capital, of the fact of such failure and revocation of license; the cost of which publication shall be paid by the company failing to comply with the provisions of this law. (Acts 1887,
p. 117.)
Cross-references.-Deposits by companies of other States, see 56-301. When excess of bonds of fidelity companies shall be returned, see 56-1110. Amount of bonds must be maintained, see 56-1115.
56-306. (2.428, 2429) Life insurance companies doing business on legal reserve plan; measure of required deposit; renewal of deposit annuaJly.. -The Insurance Commissioner shall, as soon as practicable after the filing of the annual statement of any life 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 31 st day of December immediately preceding, upon the basis of calculation fixed by existing laws; and should any such company issue policies ba,seii 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 empl6y a competent actuary, who shall be paid by the company for which the services shall be rendered; but nothing in this section shall prevent any company from making said valuation, 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. Ur-on ascertaining, in the manner above provided, the net reserve value of all policies in force issued by any such life insurance company desiring to operate under the provisions of this section, the Insurance Commissioner shall notify such company of the amount thereof, and within 60 days after the date of such notification the officers of such company shall have the right to deposit with the Treasurer 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

56-307

INSURANCE.

26

company w ith other States and Governments, by requirements of the laws of such other States or Governments 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 shall be by the laws of such States and Governments held as security first for th e policyholders of such States and Governments, said policyholders in such other States shall not participate in the securities held in this State until due allowance or credit shall have been given for the securities held by their own States or Governments, so that all policyholders of th e company shall stand on equal terms. The securities sha ll be such as are described in section 56-224, or certificates of deposit in any solvent bank or trust company, or satisfactory evidences of ownership of unincumbered improved real estate as may be 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 shall be situated, such appraisers to be appointed by the Insurance Commissioner. Such real estate shall not be sold or incumbered unless securities of equal value as herein required shaH be deposited with the Treasurer of this State in lieu thereof. The deposit herein provided for shall be renewed annually. (Acts 1906, p. 107.)
Cross-reference.-Calculation of net value of life policies, see 56-912.
56-307. (2429) Same; certificate to be issued to companies; expiration of certificate.-Upon the deposit being made by any company as provided in the for egoing section, the Insurance Commissioner shaH 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 wh ich the same is computed, and that it is authorized to transact the business of life insurance in this State: Provided, that ahy such certificate shall expire on the 30th day of May in the year following its issue. If requested by such company, the Insurance Commissioner shall furnish such company with a certificate over his signature, t o be attached t o or printed on policies issued by such company, in substance as follows: State of Georgia, Insurance Department, State Capitol, Atlanta, Ga.,---, 19-. The net reserve value of policies issued by - - - life insurance company of - - -, Georgia, is secured by a deposit of acceptable securities in accordance with the compulsory reserve deposit laws of this State, enacted in the year 1906. - - - , Insurance Commissioner. (Acts 1906, pp. 107, 109. )
56-308. (2430) Same; failure to make deposit; notice; revocation of license.- Upon the failure of any company having once exercised the privil ege of coming unde r the provisions of this law to make the deposit in the time provided in section 56-306, the J:nsurance Commissioner shall notify such company to issue no new policies in this State until there shall h ave been compliance with said requirements. The Insurance Commissioner shall revoke the license of any company issuing policies after such notice and before compliance with said requirements. (Acts 1906, pp. 107, 109.)
Cross-reference.-Licenses are revocable, see 20-117.

27

I NSURANCE.

56-312

56-309. (2431) Same; changes of securities deposited.-Ail companies coming within the provisions of this law may at any time change their securities on deposit by substituting for those withdrawn a like amount in other securities of the character provided for, and whenever the net reserve value of policies outstanding and in force against any company shall be less than the a mount of sec urities then on deposit with the Treasurer of this State, said company may withdraw such excess; but at least $100,000 sha ll rema in on deposit. Companies having on deposit stocks 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 stocks or bonds as it becom es due, and add the same to the securities in his hands belong.jng to such company. (Acts 1906, pp. 107, 110.)
Cross-reference.-Provisions of Constitution as to requirements of resident companie s, see 2-2303.
56-310. (2432) Same; approval of securities offered for deposit and of substitution of securities.-Securities offered for deposit under the preceding section sha ll be passed upon by the Insurance Commissioner and approved by him before being deposited with the State Treasurer, and bef9re the withdrawal of any securities from the Treasurer by the company th e Insurance Commissioner shall first approve such withdrawal and the substitution of securities therefor. (Acts 1906, pp. 107, 11 0.)
56-311. Fidelity insurance companies.-Before any surety or bonding company shall wnte any bonds in this State, it shall be required to deposi t the sum of $25,000 with the State. Treasurer, conditioned as is provided by law for the deposits required of such companies in writing bonds of public officials of this State : Provided, that whenever any such company shall have already deposited $25,000 as provi<;!ed by law for writing bonds of public offidals it shall not be required to deposit an additional sum. (Acts 1912, pp. 119, 133.)
56-312. Mutual, cooperative, or assessment fire insurance companies; what companies excepted.-Ail m surance companies chartered under the laws of this State to do a fire insurance business tipon the mutual, coope rati ve or assessment plan, shall , he fore receivin g a license from .the Insurance Com missioner, deposit with the State Treasurer r egistered bonds of- the United States or t his State, or county or municipal bonds of this State, registered and validated, in the sum of $10,000. Said deposit shall be made under the same conditions that deposits of nonresident fire in s;1rance companies are made wi th the State Treasurer: Provided, that this section shall not apply t o such comp~nies as operate in not more than four counties in a division in this State, or to farmers' cooperative compani es doing fire insurance business in this State on the assessment plan where their policies stipulate that all the property, real and personal, of the policy holders is pledged fo r the pay ment of the policy. (Acts 1912, pp. 119, 142.)
Cross-references.-Bonds of county o r munic ipa lity, h ow validated, see 87-301. Deposlts by companies of other States, see 56-301.

56-313

INSURANCE.

28

56-313. Same ; amount of assets required; emergency clause in policies; deposit for exemption.-Companies chartered under the laws of this State to do a fire insurance business upon the mutual, cooperative or assessment plan shall always have in good assets an amount equal tb the unearned premium liability of the company, required of all classes of fire insurance companies by the laws of thi s 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 con tingency shall arise. 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 law shall require any mutual fire insurance company chartered under the laws of this State to embrace in its 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, bonds of municipalities or counties of the State, 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 deposit required by this law, and the amount of said deposit shall always be maintained as a surplus in excess of the reinsurance reserve required under the law. (Acts 1912, pp. 119, 143; 1922, p. 122.)
56-314. Same; receipt of deposits by State Treasurer authorized.The Treasurer of this State is hereby authorized and directed to receive deposits of bonds or other securities as provided in sections 56-312 and 56-313 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 fire insurance companies. (Acts 1922, pp. 122, 124.) '
56~315. (2449) . Deposits by foreign companies or agents when amount required of companies of this State by foreign State greater than imposed by this State.-,-Whenever the laws of any other State 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, license fees, or otherwise, greater than the amount's required for such purposes from similar companies of other States by the then existing laws of t his State, all companies of such States establishing. or having theretofore established an agency or agencies in this State shall make the same deposit for a like purpose w ith the Insurance Commissioner of this Stat e and 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 agents thereof. (Acts 1887, p. 124.)
Cross-references.-Comity of States, see 102-110. State Treasurer ex-officio bond commissioner, see 40-1201. Foreign corporations recognized by comity,

29

INSURANCE.

56-319

22-1501. Returns of corporations, see 22-1703. May transact business,

se~

e 56-209 56-403. Deposits by compantes of other States, see 56-301.

Pr;;ist;ns of Constitution as to insurance compa'nies, see 2-2301 to 2-2304.

56-316. (2426) Foreign life and accident insurance companies.-All

J"fe and accident insurance companies chartered by other States or for-

eli n Governments shall show, by a certificate from the officer having su-

~h!avritseiroend

of or

the insurance elect to ma,ke

department in the their dep0sit, that

State in which they are they have deposited not

less than $100,000 in such securities as may be deemed by such officer as equivalent 'to cash, subject ~o his orde.r, as a guaranty fund for the se-

curity of policyholders of sa1d compames. (Acts 1887, p. 118.)

Cross-reference.-Provisions of Constitution as to requirements of nonresident companies, see 2-2301.

56-317. (2427) Domestic . life and accident insurance companies.-Ail such companies chartered by this State shall, before doing business, deposi t with the Treasurer of this State $100,000, in such securities as may be deemed by the Insurance Commissioner equivalent to cash, to be subject to his order, as a guaranty fund for the security of the policyholders of the company making such deposit. All interest and dividends arise ing from such securities shall be paid when due to the company so depositing them. Any such securiti es 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.)

56-318. Mutual or stock-plan life insurance companies; amount of de-

posit; nonresident companies.-No life insurance company, including in-

dustrial life insurance companies, chartered, or which may hereafter be

chartered, by this State, whether organized on the mutuaL or the stock plan, and which is not now authorized to transact b~siness in this State,

shall be. so authorized or licensed until such company shall have deposited with the Treasurer of this State securities, deeined by the Insu~

ance Commissioner _to be the equivalent of cash, in an amount of not less

than $100,000, as a g uaranty fund for its policyholders; and no such com-

pany organized, or which may hereafter be organized, under the laws

of -any State of the Union or 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 shall have produced evidence

satisfactory to the Insurance Commissioner, that it has on deposit in

the State in which it is chartered or organized, with the proper officer

thereof, $100,000 in such securities as may be deemed by such officer

equivalent to cash, subject to his order, as a guaranty fund for the se-

curity of policyholders: Provided, however, that such nonresident in-

surance company may make deposit with the Treasurer of this State

instead of in the State of its organization, should it elect to do so. (Acts

1920, pp. 212, 213.)

Cross-re~ere.nces.-Insurance companies may in vest in and deposit as s~curities,

dramage dtstnct bonds, see 23-2567.



56-319. Same; annual increases until deposit aggregates required amount.-Every life insurance company, including i~dustria\ life insur~

56-320

INSURANCE.

30

ance companies, authorized l:o transact the business of life insurance, whose deposit is less than $100,000, 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 the amount of deposit which it is required to have unqer existing laws, until such deposit aggregates not less than $100;000. (Acts 1920, p. 213.)
56-320. Life, accident, or casualty insurance companies; what securities may be deposited; valuation.-All deposits of bonds, collateral, or assets required under the Jaw of any life, accident, or casualty insurance company in corporated under the laws of this State as a condition to its being authorized to do business, may be made in bonds of the United States, 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. The said bonds shall be accepted by the appropriate officer for such deposit to the extent of the face value thereof, but in no event in excess of such face value; however, if the actual market value of said bonds shall be less than their face value, they shall be so accepted at only their said market value at the time they shall be so offered. (Acts 1924, p. 121.)
Cross-reference.-Validation of county and municipal bonds, see 87-301.
56-321. Industrial life, accident, or health insurance companies.-Before being authorized to do business in this State, industrial life, accident, or health insurance companies shall deposit with the Treasurer of .this State an amoU:nt equal to 60 per cent. of its capital stock, consisting of Un ited States, Stat~, county, or municipal bonds. (Acts 1912, pp. 119, 126.)
56-322. (2450) Life indemnity or insurance companies doing business upon assessment plan.-All life indemnity 01: insurance corporations or associations, organized under the laws of this or any other State or Country, to do business upon the assessment plan, shall deposit with the Treasurer of this State stock or bonds approved by that officer in an amount equal to $20,000 par value, and of not less th an $20,000 mark.et 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 $500, shall be required to deposit a sum equal to $1,000 for each $1,000,000 in force, and thereafter such industrial associations or assessment life insurance companies doing business upon the industrial or weekly payment plan, and issuing a policy for no greater amount than $500, shall be required to deposit a sum not less than $1,000 in each $1,000,000 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 $100,000. 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 deposit, if the corporation or association shall make itappear to the satisfaction of said Insurance Commissioner

31

INSURANCE.



56-325

that it has on deposit with the proper State offi~i~l in t~e-Stat~ or Coun-

~~

of its terms

incorporation a of this section,

like and

amount of which are

secunt1es as held_ by said

Is required under authority in trust

for the benefit and protectio.n ~f, and a~ secunty for, the p~hcyholders of

such corporations or assoCiations, their. legal repre~entat~ve.s, or bene-

ficiaries . Said securities shall so remam on deposit until Jt has been

ade to appear to the satisfaction of said Insurance Commissioner of
~is State that all the debts and obligations of said company or associa-

tion due the citizens of this State have been discharged, or, in case of

nonresident companies, that, after making deposit, or after similar deposit

has been made with the proper State officials in the State or Country of

its incorporation, said securities shall be subject to the debts due policy-

holders and beneficiaries under the same rules and regulations as gov-

ern 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. (Acts

1887, p. 124; 1900, pp. 47, 74; 1901' p. 33; 1905, p. 77.)

56-323. (2423) Withdrawal by company from State, return of bonds deposited.-When any company shall desire to withdraw from the State, and will satisfy the Insurance Commissioner that all suits pending against such company, and of which no notice has been given, have been fully satisfied, or whenever no notice of claim shall have been given, and when rights under existing policies shall have been satisfied and released as the provisions of this law require, the Treasurer shall return to said company the bonds so deposited, upon order from the Commissioner. (Acts 1887, p. 117.)
Cross-references.-Withdrawal of fidelity company, see 56-1111. Satisfaction of policies before withdrawal, see 56-324.

56-324. (2425) Policies required to be satisfied before withdrawaLWhen any company, having made the deposit required by this law, has existing policies on property of citizens of this State on wh!ch no losses have accrued, and the company wishes to withdraw its deposits, before being allowed so to do said company shall take up and satisfy said policies, and give notice of its intention to withdraw from the State, and of the fact that it has satisfied all l osses and the claims of policyholders above designated, which notice shall be published once a \veek for two months in a newspaper to be designated by the In surance Commissioner of the State, and at the expense of said company. Any claims of the citizens of this State for losses, or on existing policies where no losses have occurred, must be fully settled before said deposits shall be withdrawn. (Acts 1887, p. 117.)
Cross-references.-\Vithdrawal by company from the State, see 56-323. Withdrawal of fidelity company, see 56-1111.

56-325. Withdrawal of fire insurance companies or associations; reinsurance of policies.-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, upon filing with the Insurance Commissioner a written notice of such intention to withdraw, together with a sworn statement of its outstanding liabilities or obligations under all such policies or c:ontracts, and of any and all securities on deposit with the State official designated by law for the pro-

.56-401

INSURANCE.

tection of the beneficiaries of such policies or contracts, may so retire or withdraw: Provided, that such company or companies, as a condition precedent to such withdrawal, shall reinsure all such policies or contracts in some .other company or companies authorized to do business in this State and shall file with said Insurance Commissioner a list showing the name 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 shall have been furnished him that there are, at the time of such withdrawal, no unsettled claims or losses outstanding against said company so desiring to withdraw: and Provided further, that said reinsurance shall be approved by the Insurance Commissioner. (Acts 1913, p. 86.)

CHAPTER 56-4. LICENSE TO DO BUSINESS.

Sec. 56-401.
56-402.
56-403.
56-404. 56-405.
56-406. 56-407. 56-408.

Companies required to be licensed.
How license . obtained; statement require.d to be filed.
Issuance of license; renewal; further statements required.
Fidelity insurance companies.
Same; applicability of requirements relating to life insurance companies.
Issuance of license.
Revocation of license.
Revocation of license of company removing cause to Federal court.

Sec. 56-409. 56-410. 56-411.
56-412. 56-413.

Renewal of license forfeited under preceding section.
Failure to pay judgment as ground for revoking license.
Hearing in proceeding to rl!voke license for failure to pay judgment; order of revocation.
Rc11~wal of license revoked for failure to pay judgment.
Revocation of licenses when companies are insolvent or fraudulently conducted; reinstatement of companies.

56-401. (2414) Companies required to be licensed.-No insurance company chartered by this State, or by another State or a foreign Government, shall transact any business of insurance in this State without first procuring a license from the Insurance Commissioner. (Acts 1887, p. 114.)
Cross-references.-Issuing license, see 56-406. Penalty on agents of unauthorized companies, see 56-9905.

56-402. (2415) How license obtained; statement required to be filed. -Before the Insuran~e Commissioner shall issue a license to an insur-

ance company, the company shall fully comply with all of the provisions

of this Title, and shall file with said Insurance Commissioner a state-

ment under oath of its president and secretary, specifying-

First. The name and locality of the .company.

'

Second. The condition of such company on the thirty-first day of

December then next preceding, if such company was engaged in business on said date; and if not so engaged on said date, then on the date

when said company began to do business, 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

33

INSURANCE.

56-402

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(!) The value, as near as may be, of the real estate held by such company; if encumbeted, to what amount. (2) The amount of cash on h and a nd deposited in banks to the credit
of the company. (3) The amount of cash in the -hands of agents and in the course of
transmission. (4) 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 par and market value of each kind of stock.
(71 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 unRaid. 2. The amount of claims for losses resisted by the company. 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 money borrowed. 7. The amount of all other claims against the company. 8. The amount of reserve for reinsurance. Fourth. The income of the company during the preceding year, specifyin g1. The amount of the cash premiums 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 paii:l during the year. . 2. The amount of dividend s paid during the year. 3. The amount of expense paid during the ,yea r, including fees and commissions to agents and officers of the company. 4. The amount paid in ,taxes. 5. The amount of all other pay~ents and expenditures. Sixth. The greatest amount insured in any one risk, and the total amount of insurance outstanding.

56-403

INSURANCE.

34

Seventh. The charter or act of incorporation, unless the company applying for a li cense is unincorporated. (Acts 1887, p. 114; 1929, pp. 162, 163 .)
Cross-references.-Punishment for false statements, see 56-9902 See note under 56-403.
56-403. (2418) Issuance of license; renewal; further statements. required.-U pon filing such statement, the Insurance Commissioner, when satisfied that it is correct, and that the company has fully complied with the laws regulating the business of insurance, shall issue a license to said company to transact business in this State. Said statement and license must be renewed annually on the first day of January, or within 60 days thereafter, and must show the condition of said company on the 31st day of December. In addition to this statement, all companies, including cooperative or assessment life insurance companies doing business in this'State, shall, through their chief officer or agen t residing in this State, make to the Governor semiannual .statements on the first day of January and July of each year, or within 60 days th ereafter. The January statem ent shall contain a full and exact report of their condition on the 31st day of December next preceding; said statement to be made in accordance with the terms and conditions set forth and required under the preceding section, which .shall be sworn to by the officer or agent making th e same. The statement for July shall contain a report in sh-ort form of income, assets, expenditures, and liabilities in gross, as of the 30th day of June preceding, and be sworn to by the officer or agent making the same. At the tim e of making such r~port to the Governor, each company shall publish at its own expense a duplicate thereof in a newspaper of general circulation published in this State. Should any one of such insurance companies fail or refuse to make said statement to the Governor, it shall, by s uch failure or refusal, forfc: t its right to do busi~ ness until the first of January of the next year, and on such failure or refusal the In surance Commissioner shall recall and cancel the license of such delinquent company. (Acts 1887, p. 115 ; 1893, p. 80.)
Cross-references.-Provisions of Constitution as to requirements of insurance companies before doing business, see 2-2301 , 2-2303. As to their r epo rts, see 2-2305. When charges on companies of this State g reater than imposed by this State, see 56-315. Life insurance on assessment plan, see 56-917 to 56-920. Punishment for fa lse stat eme nts, see 56-9902. Insurance companies may deposit drainage district bonds as security, see 23-2567.
56-404. (2553) Fidelity insurance companies.-F idelity insurance companies o r other corporations o r companies doing a fid elity insurance business, before beginning bu siness in thi s State or s igni ng any bond, shall obtain a license from the Insurance Commissioner, which license shall be re voked if said companies shall begin in a U nited States court, or remove or cause to be removed thereto, any suit as to any bond signed or business clone in this State. (Acts 1887, p. 108.)
Cross-reference.-Revocat ion of lice nse of company removing cause to Federal court, see 56-408.
Editorial Note~Se e 257 U. S. 529 (42 Sup. Ct. Rep. 188, 66 L. Ed. 352), as to constitutionality of this section.
56-405. (2462) Same; applicability of requirements relating to life insurance companies.-Any corporation o rganized und er th e laws of this State for the purpose of transacting the business of fidelity insurance

35

INSURANCE.

56-401:>

hall be licensed to transact business upon compliance with all the re-
~uirements in this law prescribed wi~h reference to li fe insurance com-
panies organized under the laws of thts State, so far as the same may be applicable to such fidelity insur~nce company; any fidelity insurance
comoany incorporated and orgamzed under the laws of any other State or ~reign Government, and which has a paid-up capital of not less than $250,000, may be licensed to transact bt:siness in this State upon compliance with all the reqm.rements presc:~bed. by .law, as far as the same may be applicable, for hcense to foretgn ltfe msurance companies to
transact business in this State. (Acts 1887, p. 127.)

56-406. Issuance of license.-It shall be the duty of the Insurance Commissioner to issue licenses 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 bu siness specified in the license. Before an insurance company shall be licensed to transact business, the Insurance Commissioner shall be satisfied by such examination as he may make or such evidence as he may require that such company is duly qualified under the laws of this State to transact business herein. (Acts 1912, pp. 119, 123.)
Cross-references.-Annual license of fraternal benefit societies, see 56-1619, 56-1620. Organization, see 56-1614 to 56-1616. Penalty on agents of unauthorized companies, see 56-9905.

56-407. Revocation of license.-Whenever it shall appear to the Insurance Commissioner that a license granted to an insurance company should be revoked, the Insurance Commissioner shall, by first giving the company 10 days' notice, require the company to show cause before a board to be composed of the Insurance Commissioner, the Attorney General and the Governor why said license should not be revoked. Upon the hearing of the said cau se, the said board may in its discretion revoke the license of any such insurance company or prescribe the conditions upon which the company may be allowed to continde business in this State. (Acts 1912, pp. 119, 123.)
Cross-references.-Revocation of license of foreign fraternal benefit society, see 56-1633 ; of company fai ling to make required deposit, see 56-312, 56-306, 56-307. Method of putting companies in hands of re ceivers, see 56-223.

56-408. (2416) Revocation of license of company removing cause to Federal court.-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 suit or proceeding brought against it in any court of this State, remove said suit or proceeding to any Federal court, the Insurance Commissioner shall forthwith revoke all authority to such company and its agents to do business in this State, and publish such revocation in some newspaper of general circulation published in this State. (Acts 1909, p. 147.)
Cross-reference.-For similar provision as to fideli ty co~panies, see 56-404. Editorial Note.-See 257 U. S. 529 (42 Sup. Ct. Rep. 188, 66 L. Ed. 352) as to constltutwnality of this section.

56-409

INSURANCE.

36

56-409. (2417) Renewal of license forfeited under preceding section.-

When a license shall be forfeited as provided in the foreg-oing 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. (Acts 1909, pp. 147,

148. )

.

56-410. Failure to pay judgment as ground for revoking license.-If any insurance company, domestic or foreign, insuring against loss or damage to the insured by reason of liability assessed 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 this State, with in 30 days after such judgment shall have become final by reason of having been affirmed, or by reason of the time within which proceedings to appeal from the same having expired, shall not be permitted or licensed to do business in this State: Provided, that this section shall not apply when the amount of the judgment shall exceed 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 ground for the revocation of any license granted to it to do business in this State, and for the refusal to grant or renew such license as long as said company shall fail to make such payment. The provisions of this Jaw shall be cumulative of other provisions of the laws of this State as to revoking the license of >'llch companies. (Acts 1922, p. 125.)

56-411. Hearingin proceeding to revoke license for failure to pay judgment; order of revocation.--\iVhenever it sha ll be brought to the atte ntion of the Insurance Commissioner that any company has failed to pay a judgment under the circumstances stated in the preceding section, it shall be the duty of the said Insurance Commissioner to notify the said company to show cause before him in not less than fi ve days why its
1
license to do bu siness should not be revoked. Upon said hea ring if it shall be made to appear to the Insurance Commissioner that the said company has failed to pay a judg ment, or so much thereof as is required by tl;iis law, under the circumstances provided in the preceding section, it shall be the duty of the Insurance Commissioner to declare the said company's license to do bu sin ess revoked, and after such declaration the company shall no longer be authorized to transact business in this State, except that it shall be authorized to take such proper steps as may be necessary to liquidate its existing bu siness in this State. (Acts 1922, p. 126.)

56-412. Renewal of license revoked for failure to pay judgment.-After
a company's license shall have been revoked under this law, the same
may be renewed and reinstated by the Insurance Commissioner when-
ever it shall be made to appear to him that the judgment or judgments
of the kind provided in this law, or so !J1uch thereof as is required by this
law, have been paid, but no company, the license of which may hereafter

INSURANCE.

56-501

37

be or

revo k e d renewe d

, nd 1 r , O

er a

the new

terms of this law, shall have its license g-ranted to I.t, as long as

license reinstated the j.udgme. nt or

.

t because of which its license was revoked, shall remain un-

JUd gmen s, ,

paid. (Acts 1922, p. 126.)

fra5u6d_4u1le3.nt(ly24c3o7n) dRucetveodc;arteioinnsotaftleimceennstesowf choemn pc_oamnpieasn.i-e\is\fahreeneinvseor l~vheent!no-r sura nce com missio ner shall have reason to believe, from an e.xa.m matwn into the affa irs of a company, that any insurance company IS msolvent or fraudulently conducted or that its assets are not sufficient for carrying
n business, as contemplated by law, he shall re voke the license of such
~ompany and require said compa ny -~o cease to do business, giving pu~lic
notice of such revocation of authonty. Any msurance company which 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 , and the Insurance Com mi ssioner may reinstate such company whenever it makes such showing. (Acts 1887, p. 119; 1899, p. 45.)
Cross-reference.-Proceedings in case of insolvency, see 56-915 et seq.

CHAPTER 56-5. AGENTS AND SOLICITORS

Sec. 56-501.
56-502.

Definition of insurance agent. Civil liability of agents .of un-

authorized companies.

56-503. License, when required. 56-504. Prerequisites to obtaining li-
cense.

56-505. Statement by managing agent of

company showing agents, etc.

56-506. Acting as agent of company not

complying with law; fees; re-

pons.

56-507. Fire and casualty insurance

agents; liabilities; definitions.

56-508. Same; license of agents by In-

surance Commissioner.

56-508 (a). Examination by Commis-

sioner.

56-508 (b). Who may be appointed as

agent.

56-508 (c). Temporary license.

56-508 (ct). Renewal of licenses.

56-508 (e) . Agency associations.

56-509. :>arne; nonresident's license ; ap-

plication for; term; fee.

56-510. Same; license of corporations.

56-511. Same; where to place business;

revoca<ion of license.

56-512. Same; investigation of agents;

revocation or suspension of

licenses.

56-513. Same; inquiry into immoral or

improper conduct of nonresi-

dent agents; suspension or

revocation .

Sec. 56-514. 56-515 . 56-516. 56-517.
56-518. 56-519. 56-520. 56-521.
56-522.
56-523. 56-524.
56-525 . 56-526. 56-527.

Same; sections 56-503 and 56-504 superseded to certain extent.
Same; sections 56-1408 to 56-1425 and 56-9910 saved.
Licenses to agents of assessment life insurance companies.
Industrial life, accident, or health insurance companies, etc. Agents.
Corporations soliciting or writing . life insurance.
False or fraudulent representa- tions.
Nonresident solicitors of life insurance.
Agencies of foreign mutual insurance companies to be licensed.
Commissions on sale of stock, life insurance policies, or agency contracts.
Penalty for writing insurance without license.
Accepting a policy from a nonadmitted company; reporting to Insurance Commissioner; penalty.
Violations of the provisions of this Act.
Additional penalties.
General Assembly shall enact every section independently of each other.

56-501. (2443) Definition of insurance agent.-An y person who shall solicit in behalf of any insurance company, or agent of the same, incor-
or porated by the laws of th is any other State or foreign Government, or
who shall take or transmit, othe~ than for himself, any application for insurance or any policy_of insurance to or from such company or agent of the same, or who shall adve rtise or otherwise give notice that he will :eceive or transmit the same, or who shall receive or deliver a policy of msurance of any such company, or who shall examine or inspect any risk

56-502

I NSURANCE.

38

at any time, or receive or collect or transmit any premium of insurance
or make or forward any diagram of any bt\ilding or buildings, or do 0; 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 exam ine 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 <J,t the m stance or request or by the employment of such in'sur-
ance company, or of, or by, any broker or other person, shall be held to . be the agent of the company for which the act shall be done or the risk shall be taken. (Acts 1887, p, 121. )
Cross-references.-Licenses to <~gents of assessment companies, see 56-516. Unlawful for companies to make contracts affecting competition, see 56-219. Regulating business of fire and casualty insurance companies, see 56~805, 56-1001. P enalty on agents of unauthorized companies, see 56-9905.

56-502. (2445) Civil liability of agents of unauthorized companies.Any person who shall do any of the acts mentioned in section 56-501 without such insurance company's having obtained from the Insurance Commissioner a certificate of authority as required by law, shall also be personally liable to the holder of any policy of insurance, in respect of which su,ch act was done, for any loss covered by the same: Provided, that the penalties provided for shall not apply to adjusters or inspectors of authorized insurance companies from whom the citizens of this State have purchased insurance for themselves, as provided for in this section, whenever the person -or persons pur.chasing said insurance shall immediately notify the Insurance Commissioner, giving the name and locality of said company in which they have policies, and at the same time pay to said Insurance 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 fn)m said company, no person or persons purchasing insurance from said company thereafter shall be liable for the license fees of said company during the said year; but only for such taxes on premium s. as may be required from time to time of insurance companies authorized to do business : Provided further, that said inspectors shall not solicit business for their companies. (Acts 1890-1, p. 205 .)

Cross-references.-Un lawfu l for companies to make contracts affecting compe-

tition, see 56-2 19. Criminal liability, see 56-9905.



56-503. License, when required.-All persons shall be required to pro-
cure a li cense from the Insurance Commissioner before soliciting business except those agents whose names are furnished the Insurance Com-
missioner by some reputable insurance company as its accredited agents.
(Acts 1912, pp .. 119, 124.)
Cross-references.-Licenses to agents of assessment compani~. see 56-516. Agent or soli citor required to procure li cense, see 56-517. Sections 56-503 and 56-504 partly superseded, see 56-514. Taxation of agents, see . 92-2501.

56-504. Prerequisites to obtaining license.-All agents soliciting insurance shall, before procuring the license from the Insurance Commissioner, make application to the Commissioner, and before the Commissioner shall issue such license, he shall satisfy himself that such agent

INSURANCE.

56-507


IS

aut

1 1


0rlZ

ed

by

some

reputable
.

insurance

company
.

to

do

business,

and

the Comnll.ssioner shall be adv1.sed and c.o nvmced as to th e moral .char-

acter and lnte"u' rity of such appltcant for license. (Acts 1912, pp. 119, 124;

151 Ga . 609 ( 1).\

Cross-reference.-This sect ion partly supersed ed, see 56-5 14.

56_505. Statement by managing agent of company showing agents, etc. -Th e managin g agent of each insurance company shall, on the first day of each quarter of the cal endar year, file. with the Insurance Commissioner a stateme nt showing the agents of h1s 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.)
56-506. (2448) Acting as agent of company not complying with law; fees; reports.- No person shall act as agenhn this State of any insurance company of th is or any other State or forei gn Governm ent, doing a business in any ma nn er, until said company shall have fully complied with the provisions of this Title and received from the Insurance Commissioner certificates of authority for itself and its agents to tran sact business in this State. The fees of the Ins urance Commissioner shall be as follows: For filin g certified copy of cha rter, $20; for examination of annual statement, $20; and for certificates of auth ori ty or li cense to agents, $3 each, onefifth of which shall be paid _to t he Commissioner in full compensation for services in executing the provisions of this Title: Provided, howeve r, that all fire insurance companies shall in li eu of such fees and charges pay to the Insurance Commissioner one fee of $200, and upon paying such fee and having otherwise fully complied with the provisions of this Title such fire in surance companies shall be entitled to receive from the Insurance Com mi ssioner certificates of authority for itself and its agents to transact business; fire and st orm assess ment insuranc~ companies in the State, th e 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 In surance Commi ssioner a fee of ~25, in .lieu of $200. In addition to th e payment of th e above fees, each of said companies s hall make a report t o the Commissioner on the first day of May of each year, or within 60 days thereafter, under oath of the president or secretary thereof, showing the entire amount of premium receipts of every character and description (deducting return premiums on canceled policies) of said companies during the year or fractional part of a year ending the 30th day of April next preceding, whether said .premiums were received in money or in notes, credits, or any substitute for money, to be taxed as may be provided by law from time to time. (Acts 1887, p. 124; 1909, p. 87; 1910, p. 55. )
Cross-references.-Fees to be paid, see 56-233. Disposition of fees, see 40-1404.

56-507. Fire and casualty insurance agents; liabilities; definitions.For the purposes of sections 56-507 to 56-515, an " in su rance agent" is hereby defined to be an individual or a corporation, or any member of a partnership or association, or any officer or agent of a corporation, authorized by any insurance company lawfu lly qual ified t o transact business, to so licit, negotiat e or effect contracts lilf insurance on behalf of any

56-508

INSURANCE.

insurance company. All such agents shall thereby become liable to all the duties, requirements, liabilities and penalties herein provided, but this law shall not apply to any executive or traveling salaried employee

of any such insurance company. The phrase "company" or "insurance

company" shall include only insurance companies writing fire or casualty insurance or both. (Acts 1925, pp. 211, 212.)

Cross-references.-As to effect of this and the following sections on prior law

see 56-514, 56-~15 .

'

56-508. (As amended by Act of 1935). License of Agents by Insurance Commissioner -No licensed fire or casualty insurance company or company writing fidelity or surety bonds, shall write or issue any policy or indemnity contract on any risk in this State except through a resident agent licensed by the Insurance Commissioner : Provided that no contract bond shall be issued by any company, except through an agent, resident of the county in which the work under contract is located, if the compapy has an agent, resident in the county in question. The full commission thereon, (meaning thereby the commission paid for the production of business by him) shall be paid to such resident agent. Provided, however, that such resident agent may pay a commission on business placed with him by another duly licensed resident agent, and provided further, that such resident agent may pay a commission not exceeding fifty per centum of the regular commission allowed resident agents upon the issuance of such policies or contracts, to a duly licensed non-resident on any business originated by such non-resident. This section shall not apply to policies covering property in transit while in the custody of any common carrier or to rolling stock of any common carrier, nor to cotton insurance issued under a per bale reporting form of coverage. The words 'resident agent' as used in this Section are deemed to mean resident agents engaged in the solicitation of such business from the public generally and shall not include any salaried employee of any insurance company doing business in thi;> State; but shall include any agents of mutual insurance companies however compensated. Nothing in this Section, however, shall be construed to relieve from license requirements any State or Special Agent, or traveling and/ or salaried employee, who performs any of the acts, services or things mentioned in Section 56-501 of Title 56 Code of Georgia, in behalf of any i,ns1,1rer or agent of the same. Such resident agent shall keep a true record of all policies and/ or bonds thus issued through him on business originated by such licensed non-resident and shall furnish, if requested by the Insurance Commissioner, a verified statement showing the risk covered, amount of insurance and premium involved, and such other information as may be required to aid the said Commissioner in the collection of all premium ta;es due in this State and the enforcement of the provisions of this Act as amended hereby. No person except as hereinafter provided shall be licensed as an insurance agent except upon the application of a company authorized to do business in this State, which said application shall be accompanied by a certificate signed by an executive officer of such company and certifying that after inquiring into the facts to the best knowledge, judgment and belief of such company, such person is of good character, is now a bona fide resident of the State of Georgia, and in good faith intends to remain as such resident for a period of twelve (12) months or more from the date of the filing of said application, and is or expects to become bona fide engaged in the business of an .

INSURANCE

56-508(a)

41

s1.ntasnudram.ngceaasgteontm(aaks edeiftinperdobianbtlheisthAactt)h,ethcaant

he has carry

such moral and financ. ial On SUCh an.a.gency With-

out detriment to thl! public, that he expects bona fide to sohc1t and serve

ot hf eg~tutbilnigc

generally a rebate

oarndconmomt istosiopnroocnur_eintsh~eranliccee.nwsreitctheie~fl~yorfohrimthseelfpuorrpo~sise

family or some partnership or corporation m wh1ch he 1s mterested or w1th

which he is connected, and that he has such knowledge of the business and

f the law and practices governing and relating to the same as will enable
~im to carry on the business in a competent manner and without detriment

to the public. (Acts 1935, pp. 139, 140.)

56-508. (a) Examination by Commissioner. After receipt of applica-

tion for such agent's license in due form (and if said application is from

a first time applicant for license, it shall be accompanied by an examina-

tion fee of $10.00, tc be paid by agent), it shall be the duty of the Insurance

Commissioner, or his deputy or any person he may designate to represent

him, within a reasonable time and in a place reasonably accessible to the

applicant, in order to determine the trustworthiness and competency of an

applicant, for a license, to subject each first-time applicant for license, and,

if he deems necessary, any applicant for renewal of license, to a personal

written examination as to his or her competency to act as such agent in the

community which he intends to serve. When it is shown from such applica-

tion and examination that the applicant is int~nding in good faith to act

as an insurance agent or solicitor and to be principally engaged in the in-

surance business and is of good character, is now a bona fide resident of the

State of Georgia, and in good faith intends to remain as such resident for a

period of twelve (12) months or more from the date of the filing of said

application, 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

financial standing as to make it probable that he can carry on such an agency

without detriment to the public, that he expects bona fide to solicit and

serve the public generally and not to procure the license chiefly for the pur-

pose of getting a rebate or commission on insurance written for himself

or his family or some partnership or corporation in which he is interested

or with which he is connected, and that he has such knowledge of the busi-

ness 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 with-

out detriment to the public, and is worthy of a license, the Insurance Com-

missioner shall issue to the applicant a license to transact business in this

State as an insurance agent or solicitor. Such license shall expire annually

on the first day of March unless sooner revoked for cause by the Insurance

Commissioner: Provided, that no agent holding a license at the time of the

enactment of this Act shall be deemed a first time applicant. (Acts 1935,

pp. 139, 141.)

56-508. (b) Who May Be .Appointed As Agent. -Any company law-

fully authorized to transact business in this State may contract with and

appoint as its representative in this State any person as its agent who holds

an unexpired agent's license issued under the provisions of this Act, by

filing with the Insurance Commissioner a certificate showing the name and

address of such appointee and by paying such fee as is provided by law.

(Acts 1935, pp. 139, 142.)

56-508(c)

INSURANCE

42

56-508. (c) Temporary License.-In the event of the death, or the inability further to act, of an agent holding a certificate of authority from any company, where no other agent in the co-partnership, association or corporation is authorized to represent such company, the Insurance Commissioner may issue a temporary license to another person enabling such other person to represent any such company upon an application being made in conformity with Section 2 and the additional information required by this Section. Such temporary license.shall continue only until the licensee is afforded an opportunity of takin~ .the examination provided in Section 2 above. (Acts 1935, pp. 139, 143.)

56-508. (d ) Renewal of Licenses.-Renewal of all expiring licenses shall be upon application in writing, subject to the conditions of examination of such applicants as set forth in Section 2 for renewal of licen~e. and upon payment of the annual insurance agent's occupational tax. Provided that should the Commissioner require an examination for renewal of such license, no examination fee shall be required. (Acts 1935, pp. 139, 143.)

56-508. (e) Agency Associations.-Associations may be formed or maintained by all or any Glass of the regularly licensed insurance agents referred to in this act for the purpose of maintaining the ethics of the profession and forwarding their aims. It shall be lawful for such associations to make and enforce by-laws deemed by such associations needful to carry out such purposes. (Acts 1935, pp. 139, 143.)

56-509. Same; nonresident's license; application for; term; fee.- A license to be known as a "nonresident's license" shall be granted by the Insurance Commissioner to any nonresident of this State upon the written appli.cation of such nonresident certifying that he is regularly licensed by the department of insurance of the State in which he resides, and that he will not negotiate nor effect any contract of ins urance on property in this State in whole or in part in any company not qualified to do business in this State, and upon payment to the Insurance Commissioner of a fee of $10. The license shall be good for one year from date of its issuance. (Acts 1925, p. 213.)

56-510. Same; license of corporations.-No corporation shall be licensed as an insurance agent unless its charter expressly authorizes it to engage in that business and unless the company such corporation represents or is to represent certifies in the manner p.-ovided for in section 56-508 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 if and when

43

I NSURANCE.

~ 56-513

sueh o ffi cer So certifi ed ceases to hold active. co. nnection with said cor-

but may be revived upon the substitutiOn of some other officer

po 0 f

rsaatt!eO11c1 'ot

p

o

rati

o

n

'

dul y

ce rtt"fiecI

to

an d

It"c e n s e d

as

provt"d ed

t. n

s ecti.On

56_508. (Acts 1925, p. 213 .)

56 _511. Same; where to place business; revocation of license.-No

a oen t

r
0

nonresident

shall

soli cit

or

be

in strumental

in

placing -

insurance

, any risk except in a company or companies admitted to do business

upothnis State; and the v iolation of t h"ts proviSIOn sha!I be su ffi ctent cause

~:r the 1-evocation of such agent's o r nonresident's license. (Acts 1925,

p. 213.)

56-512. Same ; investigation of agents; revocation or suspension of licenses.-The Insurance Commissioner tpay, upon his own motion, and shall, up on a written complaint signed by a citizen of this State and fil ed with the Commissioner, inquire into any alleged iii egal or improper con-

duct of any licensed insurance agent, 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 agen t has been guilty of immoral or illegal conduct or such

practices as to ren d er him unfit to carry o n the bu sin ess or t o m ake his continua nc-e therein detrimental t o the public interests, or that he is no longer bona fide carrying on the business of an insu rance agent, but hold s his license chiefly for the purpose of securin g rebates or commission s on insurance written for himself or hi s family or some partnership

or corporation in which he is interested or with wh ich he is connect ed, or t h:.tt the license was improperly or improvidently g ranted . Notice to such agent shall be suffi cient if g i"ven personally or by registered mail to th e last known address of such agent, or, if the agent's address sha ll be unkn own, by posting in the public office of the Insurance Commissioner in th e State capitol for 10 days prior to th e date of such inquiry. In connection with such in quiry, the Insurance Comm issioner s hall have the power to summon witnesses against any agent, and shall, upon the application of such agent, summon his witnesses for the purpose of testifying at such inquiry. (Acts 1925, p. 214.)

56-513. Same; inquiry into immoral or improper conduct of nonresident agents; suspension or revocation of licenses.-The Insurance Commi ssioner may, upon his own motion , and shall , upon a written comp laint sign ed by a citizen of this State and filed with t he Commissioner, inquire into any all eged ill egal or im proper conduct of an y li censed nonresident insurance agent, and any nonresident's license may be revoked o r may be suspended by the Insurance Commissioner after giving such nonresident notice and opportunity to be hea rd, upon satisfactory proof that the nonres id ent has been g uil ty of imm oral or illeg al conduct or such practices as to render him un fit to carry on the business or to make his continuance th erein detrimental to th e public interests, or that the license was improperly or improvidently granted. N otice t o s uch non resident shall be sufficien t if given persona ll y or by registered mail to the last kn own address of such nonresident or if th e nonresid ent 's address be unkn own by pos ting in the public o ffice o f the Insurance Commissioner in the State capitol for 10 days prior to the date of such inquiry. In con-

56-514

I NSURANCE.

44

nection with such inquiry, the Insurance Commissioner may summon witnesses against any agent, and shall, upon the application of such nonresident, summon his witnesses for the purpose of testifying at such in~uiry. (Acts 1925, p. 214.)
56-514. Same; sections 56-503 and 56-504 superseded to certain extent. -Sections 56-507 to 56-513 shall supersede the provisions of sections 56-503 and 56-504, as far as they relate to the business of fire and castralty insurance, except to the extent that the agent shall first be designated by some company authorized to do business in this State as its agent before a license other than a nonresident license shall be issued to him. (Acts 1925, p. 215.)
56-515. Same; sections 56-1408 to 56-1425 and 56-9910 saved.-Nothing in sections 56-507 to 56-514 contained shall be construed as repealing or affecting the provisions of sections 56-1408 to 56-1425 or 56-9910, relating to the organization of, or. the regulation and taxation of incorporated mutual cooperative fire insuran ce companies; nor shall the provisions of said section s apply to sa\d companies or to their agents in the transaction of their bu siness: Provided, also, that mutual insurance companies which issue policies upon which no compensation is paid to a local agent in this State, licensed to do business in this State, may have their agents licensed on the application for the license and the payment ~f the license fee, and the requirements of section 56-508 as to the qualifications for agents to obtain license shall liot apply in such instances. (Acts 1925, p . 215.)
56-516. (2456) Licenses to agents of assessment life insurance companies.-After authorizing a life indemnity or insurance corporation or association to do business upon the assessment plan as provided in sections 56-322 and 56-1501, the In~mrance Commissioner shall issue licenses to agents thereof, to be designated by the corporation or association; or a general agent thereof, authorizing them to act as such agents during the year for which said compahy is licensed; but such licenses must be renewed annually. (Acts 1887, p. 125. )
Cross-references.-Regulatin g business of fire and casualty insurance companies, see 56-805, 56-1001. Agent's license, see 56-503. Penalty on agents of un- ' authorized companies, see 56-9905. Taxation o f agents, see 92-2502. Taxation of travelin g, etc., agents; see 92-2504.
56-517. Industrial life, accident, or health insurance companies, etc. Agents.-No person shall act as agent or solicitor for any insurance company, benefit association, or fraternal organization issuing industrial life, accident, or health policies, memberships, or beneficial certificates without first having procured a license therefor from the Insurance Department as required by law. (Acts 1913, pp. 98, 99.)
56-518. Corporations soliciting or writing life insurance.-Any company incorporated for the purpose of soliciting or writing life insurance or for the purpose of offering stock in said company for sale to the public, before procuring .a license for such corporation, shall comply with such reasonable rules and regulations as the Insurance Commissioner may in his discretion prescribe. (Acts 1912, pp. 119, 130:)

J NSCRANCE.

56-5 19

45

519 False or fr audulent representations.-It shalt be unlawful fo r

56any pe

rson

'

f iI. m

or

corporation to m ake or cause to be made any entations as to the form, nature and character

fraudof the

uIen t

r false repres

.

d f le and no person shall sell a d 1ffere nt form or char-

Pac0 tre1croy0thof efpfreorlmei.cayt

forromsa t J1' at which en.a1 Inisrepresen

he rep tation

res as

ent to

s t

lu.m self he bene

as fits

se II'mg., or mak e accrumg .under

an y, an)

pol!.cv~

w 111ch

11e sell s or offers for onsideration of said

sale. A ny note or other policy s h all be null and

ev.idence vo1d a nd

0 f

debt

g 1ven
.

111

cid

on

such

policy

may

be

re cove r ed

by

such

p o h.c y -

any premiUm. S opuart havino- J Unsdictio n th ereo f. (.A ct s 1912, pp . 119, 124.)

holder In an) c

"'

.. . -

Cross-reference.-Punishment for vwlat10n, see J6-9906.

56.520. Nonresident solicitors of _life insuqmce.-:-Resi d en t s o~ .ot~e; S t s which permit residen t s of this Stat e to be !tcensed t o soltc1 t life . ta ;ance in such States may reciprocally be authori zed to solic it life insmusruance in this State, upon procunng a cert1'fi cate of authont y f ro m th e Insurance Commissioner, and upon paying- the fee re qu ired by law for issu ing li censes to residen t age nts: Provided, app lication shall be made for such certificate by a life in s urance company, duly a uthorized t o do
busi ness in this State. (Acts 1933, p. 180.)

56-521. (2534) Agencies of foreign mutual insurance companies to be Jicensed.-Agents of all foreign insurance com panies s hall obt ain a license before taking insurance in this State, under the penalties and in accordance with the provisions of this Code.
Cross-references.- Definition of insurance agen t. see 56-50 1. Licenses to agents of assessment comp anies, see 56-5 16.
56-522. Commissions on sale .of stock, life insurance policies, or agency contracts.-No o ffi cer, agent or oth er pe rson se llin g or negotiating stock in any insurance cnmpany shall receive eith er di rectly or indirectly more than 10 per ce nt . of th e sales of any of said stock. No president, vice president, secretary, treasurer, or director or any oth er executive officer of any in surance company shall participate in th e commissions received by any person selli ng or negotiating the sale of any stock of a ny insuran ce company either d irectly or indirectly, nor shall any salaried officer o f any in surance company participate in the commissions arisin g from the sale. of life insura n ce poli cies or, agency contracts of such compan ies. (Act s 1912, pp. 119, 129. )
56-523. No corporat ion, indi vidu al, firm or assoc iation not licensed in Georgia to transact the business of a fi re and casua lty insurance, or the writing and issue of fideli ty and surety bonds, shall so engage in such business within the limits of this State, nor shall a ny person act as agen t for any company, individual, firm , or association engaged in the writing of such business, unl ess such person h as himself first received a license from the Insurance Department to represent a company duly authorized in the State. Penalty for the violation of this provision on the part of the corpora tion , indi\idual. firm c r assoc iation ille~rallv engaged in the writing of business

56-524
in this State as herein provided shall be $1,000 for the first offense and $2,000 ' for each additional offense. It shall be deemed a demeanor for any person
to act as agent for any such company without such person having first received a license as provided herein. (Acts 1935, pp. 139, 144.)
56-524. No individual, firm, corporation or association residing or doing business in this State shall accept a policy of fire or casualty insurance, or' fidelity or surety bond issued by a non-admitted company, individual firm or association in violation of the preceding section, unless such in~ dividual , firm, corporation, or association shall immediately report the fact to the Insurance Commissioner, giving the name of the company issuing the policy or qmtract stating its amount and the premium paid thereon, and shall thereupon pay to the In~urance Commissioner the license fee properly chargeable against such company if it were admitted to the State, and the premium tax chargeable under the General Tax Act upon the amount of premium so paid. Failure so to report and pay the license fee.and premium tax herein mentioned. shall subject such individual, firm, corporation or association to a penalty of lOo/o of any such sum as may be paid as indemnity by such insurer to the assured in the event of a loss. Such penalty may be collected upon the establishment of such fact in a civil suit by any informer in any court having jurisdiction thereof, one-half of the amount of such recovery to go to the informer and the other half to be paid to the Insurance Commissioner to be placed by him in the general funds of the State; or the same may likewise be recover ed upon the establishment of such fact in a civil suit brought in the name of the State of Georgia by the solicitor general of the circuit where such act may have been done, in which event the solicitor general shall be paid 10o/o of the amount received. (Acts 1935, pp. 139, 144.)
56-525. If any licensed company shall violate any of the provtstons this Act as hereby amended, the Insurance Commissioner may, upon own notion, and shall upon sworn information in writing signed by a of this State and filed with the Commissioner make due inquiry, in the and manner hereinafter provided, into any such alleged violation of pro\isions of this Act, and upon proof being presented, the sufficiency which shall be determined by him, the Commissioner shall assess a of One Hundred ($100.00) dollars for each offense. No penalty as provided shall be imposed upon such alleged violator .until a written of such charges, together with a citation requiring appearance before Insurance Commissioner at the State Capitol on a day certain to be by the Insurance Commissioner, at a time not less than twenty (20) after the service of such citation and copy of charges, then and there to cause in writing why such penalties should not be inflicted. Service of citation and copy of charges shall be made upon its Attorney-in-Fact nated to acknowledge or receive service in the manner provided by law such service. For the purpose of such inquiry the Insurance Cc>m:mi:sston~~ is hereby empowered to summon witnesses, so as to enable him to make determination of the merits, provided that any order of the Insurance missioner suspending or revoking any license shall be subject to an on the same .terms and in the same manner and form as is now by law for appeals from the decisions of the Courts of Ordinary of this (i}cts 1935, pp. 139, 145.)

INSU RANCE

56-526

56-526.

Any penalty or penalties ~cre in provided for by Sections 56-523 inclusive, shall be in addttwn to and cumulative to any other

to 56-525, penalty or

penalties

heretofore

p r o vi d e d

for

by

law.

(Acts 1935, pp. 139,

145 5.)_6 5b2l7,

It is specificall y declared to to enact each and every one

be the intention of the General of h t eS ectw. ns herem' contam' d e

A(Ssesecmtwns)

::.>

6



,
v

0

8

to

56-508

(e)

and

56-523
.

to

56-526)

separat ely

and inde-
.

pe.nd

eA n

tl t

of yshall

each other, be declared

and to

th be

erefore, vot'd or

m the event that any Sectwn unconstt.tutw. na1 by any court

of o f

thiS . c competen t

Jur'isdiction '

such

dec1.s1. 0n

sh a II

n_ot

a ff ect

t h e

remam. der

o f

t h 'IS

Act or any Other Section hereof. (Acts 193::>, pp . 139, 146.)

CHAPTER 56-6. ACTIONS AGAINST INSURANCE. COMPANIES.

Sec. 56-60 1. 56-602 . 56-603. 56-604.

Venue. Senice of process. Same; nonresid e nt compan ies.
Same nonr es id ent coopera tive or ~ssessment life in s urance compan ies.

Sec. 56-605.

Same; attorney appointed by Insurance Commissioner to receive service, when .

56-601. (2563 ) Venue.- \ Vhenever any person shall h ave any <;laim or demand up on any insurance com pany having age ncies or more than one place of doing bu siness, such person may in stitute suit agains t the c:ompany in the county whe r e the pnnc tpal cffice of the company ts located, or in an y co un ty where the compa ny shall have an agent or place of doin g bu s iness, or in any county w her e su ch agent o r place of doing business was loca t ed at the time the cause of action accru ed o r the contract was made , out of whic h said cause of actio n arose. (Ac t s 186 1, pp. 58, 59; 1862-3, p. 161; 1878-9, p. 54; i 902, p. 53.)

56-602. (2564) Service of process.-In all su ch su it s service sh a ll he perfected upon such in surance comp a ny hy leaving a copy of th e petition or writ w it h t he age nt of the com pany, if any. (Acts 1890- 1, p. 75 .)
Cross-references.-Se rvice on no n re sident compa nies, see 56-603. Serv ice o n corpora ti ons, how perfected, see 22-1101. Where suits o n co n t racts or for torts may be brough t against co rporat ions, see 22-1102. Powe r of attorney, and service of pro cess on fraterna l benefi t societies, see 56-1621.
Editorial Note.-The second sentence of the . above section as it appea rs in the Code of 1910 has been omitted because it was declared unconstitutiona l in 140/637 (2) (79 S. E . 467) That sentence prov id ed: "lf no age n t should be in the cou nty, then at the age n cy or place of doi n g bu s in ess, or where th e same was lo cated at the time suc h cause of action occu rred, or the contract made ou t of which the same arose."
56-603. (2446) Same; nonresident companies. -An y in suran ce company not organized under the laws of this State, desiring to transact business in this S t ate , shall file with th e Insurance Commi ss ion er a written instrum ent or power of attorney, duly signed and sealed, appointing and authorizing some person, w ho sh a ll b e a resident of this State, t o
acknowledge or accept service of process for and in behalf of such co mpany, and upon w hom process may be served, in all proceedings that may be in st ituted aga in st such co m pany in an y court of this State or a ny

56-604

INSURANCE

court of the United States in this State, and consenting- that service
process upon any ag-ent or attorney appointed under the provisions this section shall be taken and held to be as valid as if served upon company ; and such instrument shall further provide that the authority
of such atto rn ey 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 appoil}ted as such attomcy: Provided, ho\vever, that the provisions of this section shall
not be construed to alter or amend the laws relative to bringing suits and serving process on foreig-n corpora ti ons doing business in this <.:;tate. (Acts 1887. p. 123.) . Cross-references.-Servic e on corporatio~s, how perfected, see 22-1101. Serv-
tce on appointed attorney of mutual company, a nd otherwise, see 56-1433. Suih against insurance companies, see 56-601.

56-604. (2564) Same; nonresident cooperative or assessment life in-

surance companies.-ln suits upon any certificate or policy issued by a

nonres id ent religious o r mutual aid society, cooperative or assessment

life insurance company or society, service upo n the chief executive officer,

or the person acting officiall y for or as such chief executive officer of a

local lodg e, sha ll be suffici ent service upon such society or company-

officers of local lodges being hereby declared agents of such nonresident

societies or companies, and such local lodges agencies of said companies

or societies. (Acts 1890-1, p. 75.)



Cross-references.-Service on appointed attorney of mutual company, and wise, see 56-1433. See also first three references under 56-601.

56-605. (2447) Same; attorney appointed by Insurance to receive service, when.-If any attorney appointed as provided in tion 56-603 shall absent himself from this State or his usual place business or abode, or shall secrete himself, so that process may not served upon him, or shall have become disqualified from any cause ever, or shall die, the Insurance Commissioner shall immediately an attorney for service for such company, of which appointment in writing shall immediately be given by said Insurance Commissioner to such appointee and also be sent to the company or to its general agent or manag-er by mail, which appointment shall be as valid as if made by !he company, and shall continue in force until such absent agent or attorney 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, upon any such attorney appointed by the company, or by th e Insuran ce 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, although such company may have withdrawn, been excluded from, or ceased to do business in this State. If any company shall fail, neglect, or refuse to appoint and main-

INSURANCE

56-701

tam. w1.t111 n this State such attorney or agent, it shall forfeit the right to do or contl.nue business. (Acts 1887, p. 123.)
soCcireotisess-,resfeeeren5ce6--1P62o1w. ~ r of attorney, and service of process on fralernal benefit

CHAPTER 56-7. AMOUNT OF RECOVERY AND DAMAGES.

Sec. 56-701.
56-702. 56-703.

Full amount of loss paid, when;

losses on stocks of goods and

mercha ndise. Recove ry where there are sev-

eral policies.

.

Estimation of value ; contmgent

pro fi ts.

Sec. 56-704.
56-705.
56-706.

Privilege of rebuilding or re-
instating property. Recovery b a c k by insurer,
when; nature of action. Insurance companies shall pay
damages and attorney's fees, when.

56-701. (2545) Full amount of loss paid, when; losses on stocks of goods and merchan~ise.-All insurance co~panies shall pay the_ full amount of loss sustamed upon the property msured by them : Provided, said amount of loss does not e~ceed the amount of insurance expressed in the policy; and all stipulations in such policies to the contrary shall be
null and void. In cases of losses on stocks of goods and merchandise and other species of personal property changing in specifics and quantity by the usual customs of trade , only the actual value of the property at
the time of loss may be recovered: Provided, the loss does not exceed the amount expressed in the policy. (Acts 1895, p. 51.)
Cross-references.-Liquidat ed damages, see 20-14,02. Open policies, see 56-1210. Value, how asce rtain ed, see 56-1211. Insurance on changing property, see 56-814. Contra cts aga inst pu.blic policy, see 20-504.

56-702. (2544) Recovery where there are several policies.-If the insured shall h ~ve several policies on the same property, the recovery from
each company shall be pro rata as to the amount insured.
Cross-references.-D ouble marine insurance, see 56-1203. Second insurance, see 56-830. Loss fr om fi re, what is, see 56-816.

56-703. (2546) Estimation of vjtlue; contingent profits.-The value of property shall be estimated at the time of the loss. Contingent profits shall not be a part of such value.
Cross-reference.--Remote dam ages for breach of contract, see 20-1406.

56-704. (2547) Privilege of rebuilding or reinstating property.-The privilege of rebuilding or reinstating the property shall be reserved in the policy or it shall not exist. In such cases, the insured shall have no claim for rents, if done within a reasonable time, nor the insurer for mcreased value from the fact of new and more valuable materials.
Cross-refererice.-Casualties no abatement of rent, see 61-113.

56-705

INSURANCE

56-705. (2548) Recovery back by insurer, when; nature of action.-If after payment of loss, the insurer discovers evidence to show himself n~
liable on the policy, he may recover the money paid in an action for
. money had and received.
Cross-references.-Loss unknown to parties, see 56-818. Misrepresentation of material fact, see 56-822. Recovery back of voluntary payments, see 20-1007 What is mistake, see 37-202. Negligence and concealment as grounds for relief in equity, see 37-211.

56-706. (2549) lnsurance companies shall pay damages and attorney's fees, when.-The' several insurance companies of this State and foreign insurance companies doing business in this State in all cases when a loss shall occur and they shall refuse to pay the same within 60 days after a demand 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 25 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 shalf be made to appear to the jury trying the case that the refusal of the company to pay said loss was in bad faith. (Acts 1872, p. 43.)
Cross-references.-Expenses of litigation as damages, see 20-1404. Necessary expenses os item of damages for torts, see 105-2004.

CHAPTER 56-8. FIRE INSURANCE.

Sec. 56-801. 56-802. 56-803. 56-804.
56-805.
56-806.
56-807. 56-808.

Natu re of contract ; .1ecessity of writing; deliv~ry.
Capital ~tock of corapames; increase or decrease.
Powers of companies.
Policies cove ring losses asc ri bable to lightning, explosives, elements of nature, riot, theft, etc.; petition for added powers; fee.
Contracts of insnrance to be made through r.e gularly commissioned and licensed agents.
Affidavit of president or chief officer, filing prerequisite to issuance of license.
Investigation of complaint of violations of law.
Forfeiture of right to do business upon refusal to submit to examina tion.

Sec. 56-809. 56-810.
56-8 11. 56-8 12. 56-813 .
56-8 14. 56-815. 56-8 16. 56-817.

Failure to pay expenses of examination, proceedings on.
Standard form of policy. Policies re quiring certificates null and void.
Policies to contain the entire contract.
Interest of insured which may be subject of policy.
Insuring interest of another; reinsurance to protect again$t loss.
Insurance on changing property.
Construction of contract.
Loss, what constitutes. Umpire to app raise loss; ~p
pointment; notice and serv1ce thereof.

I NSURANCE.

56-802

Sec. 56-818.
56-81 9. 56-820.
56-82 1. 56-822.
56-823. 56 -824 .
56-825 .
56-826.
56-827.

Loss unknown to the parties,
effec t . Diligence by insured. App lication, good fa ith in m ak -
ing. Mis rep r ese nta tion, effect of.
Concealment of material fac t,
effect. In creasing risk, effect. Misrepresentation as to inter-
est, other insurance, etc.
Effect of alienation of msured property.
Transfer of po licy to on e of several insured.
Partial sale or sale n ot fu ll y executed, effect.

Sec. 56-828. 56-829. 56-830. 56-83 1.
56-832.
56-833. 56 -83 4.

Transfer of property or policy

after loss, effect.

'

Tra nsfe r of property or poli cy by operation of law, effect.

Second insurance, effec t.

Right of in surer to prescribe

regulations as to notice and proof of los s.

Calculation of reinsurance reserve for fire, marine, a nd inland insurance by Commis-

SIOner.

Call on stockholders to bring capital up to charter amou nt.

Calculations of r ei nsurance reserve by Commissio ne rs of other States.

56_801. (2470) Nature of contract; necessity of writing; delivery.The contract of fire insurance is one w hereby an indi vidua l or company,

in consideration of a premium paid, shall agree to indemnify th e assured

at~eaitnesrtmlossasnbdy

fire to the property stipulations thereof.

described in the Such contract,

policy, according to to be binding, shall

be 111 writing; but delivery shall not be necessary if, in other respects, the contract shall be consummated.

Cross-references.-Obligations which must be in writing, see 20-401. Contra cts to be evidenced by pohcy, see 56-213 Contract of li fe in su r a n ce, see 56-901 Law of fire m surance applicable to life in s uran ce, see 56-911.

56-802. (2397) Capital stock of companies; increase or decrease.-The capital stock of an y fire insurance company, whether incorporat ed by special Ac t of the Ge neral Assemb ly or by the Secretary of State under the ge neral law, may be increased to such an amount as may be desired by th e stockholders of such company, or sa id capital stock may be decreased to any sum, not less tha n $100,000, as may be desired by the stockh olders of such company, at a meeting of such stockholders, call ed for th e special purpose by order of th e board of directors of such co mpany, of which meeting notice sha ll be g ive n to each stockholde r (or in case of death to h is legal representative o r heirs at law), personally, or by mail addressed to his las t known resid ence, at least 30 clays previous to such special meeting, and suc;: h increase or decrease shall be made in such manner as shall have been determined by the stockholders at such meetin g, it requiring the vote of a majority in amount of the en tire capital stock of such company to authorize such increase or decrease, and the mann er of effecting the same. If at such meeting the stockholders, holding th e majority in amount of such capital stock, shall vote for such increase or decrease, the proceedings of the meeting shall be reduced to writing and ent ered upon th e books or minutes of the company, and a copy thereof, verified by the president or secretary thereof, sha ll be filed and recorded in the office of th e Secretary of State, and when so fil ed and record ed shall become a n amendment to the charter of said company , an d a certified copy thereof shall be evidence of all facts therein contained in all courts of this State, without further proof: Pr~v id ed, such increase or decrease shall be approved by th e Comptroller General as exofficio Insurance Commissione r, to be evidenced by indorsin g his ap-

56-803

INSURANCE.

proval on the said verified copy of such proceedings of said stockholders which indorsement shall be recorded in the office of the Secretary of State, together with said verified copy, and become a part thereof. (Acts 1900, p. 76.)

Cross-references.-Charters of certain corporations, how amended, see 22-SOS

Change of name or capital stock, pr place of business, see 22-510 to 22-514.

Exemplifications, see 38-601.



56-803. (2401) Powers of companies.-Any fire insurance company incorpor;:~ted under Chapter 56-2 may insure against any loss by fire on all kinds of property, either real, personal, or mixed, also against all the hazards of ocean or inland navigation, and transportation of every kind; and may insure all classes of property that are now or may hereafter be allowed to be insured by the laws of this State; and may do any and all things 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. (Acts 1893, p. 76.)

56-804. Policies covering losses ascribable to lightning, explosives, elements of nature, riot, theft, etc.; petition for added powers; fee.-The Secretary of State may grant to fire insurance companies incorporated under the laws of this State, authority to cover by their policies losses ascribable to lightning, explosives, storms of every character, earthquake, hail, frost, snow, riot and civil commotion, 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, statmg the name and character of 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-thirds vote of the entire capital stock of the company at a meeting of the stockholders called for the purpose by resolution of the said board of directors, notice of which meeting shall have been mailed to each stockholder, or, in case of death, to his legal representatives or heirs at law, and addressed to his last known residence at least 10 days previous to the day of said meeting. An affidavit, made and signed in due form of law by the president or secretary, shall be attached to said petition, showing that it has been published once a week for four weeks in the newspaper in which are published the sheriff's advertisements of the county in which the principaf office of said corporation is located. The said corporation shall pay to the Secretary of State a fee of $25 to be covered by him into the State treasury. (Acts 1921, p. 206.)

56-805. (2491) Contracts of insurance to be made through regularly commissioned and licensed agents.-Fire insurance companies not incorporated by the laws of this State, but legally authorized to do business in this 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' this State: Provided,

INSURANCE.

~ 56-809

.
ho,~ev et,

t 11attl

this section shall not apply to property of railroad er common carriers. (Acts 1896, p. 61; 1901, p. 74.)

com-

pantes anfc1 o J

Definition of m. surance agent, see 56-501. Ct.vtl h.abt.h. ty of

Cross-re erent~e5o~ized compan ies. see 56-502. Penalty on agents of unauthor-

~gednts ofp~t~i~~~ 'see 56-9905.

tze com

'

(2492) Affidavit of president or chief officer, filing prerequisite

to 51.6s-s8u0a6nce of license.-B. efore tssmng a c. erhficate of 1.1 cense to a.ny fi r.e

.

e company to transact the busmess of fire ms.urance m th1s

1Ssm0htseaauntlelrta,sfnitlalce1IerweIa'intdhsyuhrpiamrnocvtehideCeoadfmffimodrat.vsbsi.tt.yoonflea~r.wt~s,

h all -reqmre, 111 ptrheastt. dseunc~horfiroet

a dd thon m. sura.nc her chtef

to requtree company officer that

. t

t211masonntohts

viola last

ted pas

a t,

ny an

o d

f t

the hat

proviSIOns of t_t acce_rts t he.

thts Chapter for the space of terms and obl'tgattons of t1I1s

1 Ch

ap

t

er

as

a

p.art of

the

constderatton

of

1ts !tcense.

(Acts

1896, p.

62;

1901, p. 76.)

56_807. (2493) Investigation of complaint of violations of law.-Upon complaint being filed by any citizen of this State that a company authorized to do business in this State has violated any of the provisions of thi s Chapter, th e Insurance Commissioner .shall diligently investigate the matter, and if necessary examine, by himself or his accredited representative, at the head offices located in the United States, and also such other offices or agencies of such companies as may be deemed proper, all books, records, and papers of the same, and also the officers. thereof under oath as to such alleged violation or violations: Provided, that before making such examinations the Insurance Commissioner shall re-

quire the person 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 shall be found not guilty of a violation of this Chapter, said bond shall be responsible for all the expense incurred by reason of said investigation. If the company shall be found guilty of a violation oL this law, it shall be responsible for the expense thereof. (Acts 1896, p. 62.)

56-808. (2494) Forfeiture of right to do business upon refusal to sub-

mit to examination.-Any fire insurance company violating any provision

of sections 56-805 to 56-807, or refusing to submit to the aforesaid exami-

nation when required, shall forfeit the right to do business for the next

12 months thereafter, and 'the Insurance Commissioner shall immediately

revoke the license already issued to said company to do business. (Acts

1896, p. 62.)

'

Cross-reference.-License revocable, see 20-117.

56-809. (2495) Failure to pay expenses of examination, proceedings on.-If any such company shall fail or refuse to pay such expense of examination l;pon the presentation of a bill therefor by the Insurance Commi ssione r, the Commiss ioner may issue his fieri facias against such company th erefor, to be collected out of the property of the company or It deposit with the State Treasurer, in the same manner as judg-ments again st insurance companies not chartered by this State, but doin~ business herem, are collected. If any company shall dispute the amount of such bill and fieri facias, it may contest such amount and its liability

56-810

I NSURANCE.

therefor by affidavit of illegality returnable to the superior court of ton county, in the same ma~ner as the Comptroller Gener-al's for railroad county taxes may be contested. (Acts 1896, p. 62.)
56-810. Standard form of policy. PoHcies requiring certificates nu]l and void.-Every fire insurance company shall adopt and write a standard or uniform policy, such as may be prescribed by the Commissioner. Any policy condition requiring the insured to procure the certificate 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 the fire, stating that he has examined the circumstances and believes the insured has honestly sustain ed loss to the amount that such magistrate or notary public shall certify, shall be null and void. No class of policy other than that prescribed in this section shall be issued in this State: Provided, however, that local assessment fire in:surance companies doing business in not more than four counties in a division in the State, may issue and write such form of policy as may be prescribed by the Commissioner. (Acts 1912, pp. 119, 131; 1921, p. 208.)
56-811. (2471) Policies to contain the entire contract.-Ail fire insurance policies issued upon the property of persons within this State, whether issued by companies organized under the laws of this State or by foreign companies doing business in this State, which contain any reference to the application for insurance, or the constitution, bylaws, or other rules of the company, either as fort11ing 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 constitution, bylaws, and rules referred to; and unless so attached and accompanying the policy, no such constitution, bylaws or rules shall be received in evidence either as part of the policy or as an independent contract in any controversy between the parties to or interested in the said policy, nor shall such application, constitution, bylaws or rules be considered a part of the policy or contract between such parties. (Acts 1906, p. 107.)
Cross-references.-Good faith in applicat ion, see 56-820. Bylaws as part of policy of mutual company, see 56-1403. Certi ficate of fraternal societies, see 56-1610.
56-812. (2472) Interest of insured which may be subject of To sustain any contract of insurance, it shall appear that the insured some interest in the property or event insured, and such as he sented himself to have. A s li gh~ or contingent interest, whether or equ itable, shall be sufficient, and several having d-ifferent may unite in procuring one policy; so a husband or parent may the separate property of his wife or child, the recovery being held by in trust for th em; but a mere expectation of an interest is not i
Cross-references.-Wilful misrepresentation voids policy, see 56-824. of alienation of property, see 56-825.
56-813. (2473) Insuring interest of another; reinsurance to against loss.-If one shall undertake to insure the interest of it shall be done by his consent or be subsequently ratified by him; an insurer may reinsure to protect himself against loss on his con

INSURANCE.

56-820

1 1 56_814.
ance rnay

(2474) Insurance on changhing proped~ty.-:-~ polic!fi of i~surbemade to cover property c angmg at y m tts spect c artie es,

a stock of goods.

.

as

ference -Valued policy, see 56-701.

Cross-re



56_815. should be

(2475) Construction of contract.-Th~ con~ract of insura~ce cOnstrued so as to carry out the true mtenbon of the parttes.

Cross-referen ce-Intention of parties, see 20-702.

56_816. (2476) Loss, what constitutes.-A loss or injury may occur

hf roournse

fire w ithout blown up to

the actual burning of the articles or stop a confl agrat10n, ~r g~o ds removed

property; as, a f rom tmmm ent

danger, or damage by water used to' extmgmsh the flames.

Cross-reference.-Valued policy, see 56-701.

56-817. Umpire to appraise loss; appointment; notice . and service thereof.-W hen, in th e event of loss of or damage to property described in a policy of fire insurance and covered thereby~ the ascertainment of such loss or damage is, as provided in the policy, to be determined by appraisers, one to be appointed by th: in~urer, the other by the insured, which appointees shall select an umptre, tf the two so chosen shall have failed or neglected, for a space of 10 days after both have been chosen, to agree upon and select an umpire, either the insured o1 the insurer may apply to any cou rt of record in the county_ where the Joss occurred, on five days' notice in writing to the other party of his or its determination so to do, to appoint a competent and disinterested umpire. . Any such notice in w riting, w hen served by the insured, may be served upon any local agent of the company; and the said court shall, on proof by affidavit of the fai lure or neglect of 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 ascertainment of the amount of said loss or damage; and th e acts of the umpire so appointed shall be binding upon the insured and the insurer to the same extent as if such umpire had been selected ip the manner provided for in said policy of insurance. Any stipulation in any policy of fire insurance contrary to the terms of this section shall be void. (Acts 1916, p. 128. l 56 Ga. 774, 775 (120 S. E. 102).)

56-818. (2477) Loss unknown to the parties, effect.-If the loss shall have already occurred, and both parties shall be- ignorant 9f it, the contract is valid; but the slightest grounds of suspicion known to the insured shall vitiate the contract unless made known to the insurer.

56-819. (2478) Diligence by insured.--The insured shall be bound to ordinary di lige nce in protecting the property from fire, and gross negligence on his part shall relieve the insurer. Simple negligence by a servant or the insured, unaffected by fraud or design in the latter, shall not relieve the insurer.
Cross-references.-Perils of the sea, see 56-1207. Increasing risk, see. 56-823.
56-820. (2479) Application, good faith i'n making.-Every application for insurance shall be made in the utmost good -faith, and the representa-

56-821

INSURA NCE.

tions contained in such application shall be considered as covenanted to

be true by th e appli cant. A ny variation by which the nature, extent

0

charac ter. of the risk is changed shall void the policy.

' r

Cross-references.-W contract, see 56-811 ,

hat is fraud, see 56-904. In creas

96-202. ing risk,

sePeolic5i6e-s82m3u. stSctroincttaeirngtohoedefna!f~he

in mutual contracts, see 56-1406.

1

56-821. (2480) Misrepresentation, effect of.-Any verbal or written representations of facts by the insured to induce the acceptance of the risk, if material, must be true, or the policy shall be void. If, however, the party shall have no knowledge, but shall state on the representation of others, bona fide, and shall so inform the insurer, the falsity of the information shall not void the policy .
Cross-references.-What is fraud , see 96-202. Wilful misrepresentation voids policy, see 56-824.

56-822. (2481) Concealment of material fact, effect.-A failure to state a material fact, if not done fraudulently, shall not void the contract; but the wilful concealment of such a fact, which would enhance therisk, shait void the policy.
Cross-reference.-Concealment, when fraud, see 96-203.

56-823. (2482) Increasing risk, effect.-Any change in the property or the use to which it is appli-ed, without the consent of the insurer, whereby the risk shall ':>e increased, shall void the policy.
Cross-references.-Increase of risk in marine insurance, see 56-1209. Application, good faith, see 56-820.

56-824. (2483) Misrepresentation as to interest, other insurance, etc. -\Vilful misrepresentation by the insured, or his agent, as to the interest of the insured, or as to other insurance, or as to any other material inquiry n:ade, shall void the policy.
Cross-references.-Effect of misrepresentation, see 56-821. Second insurance, see 56-830.

56-825.- (2484) Effect of alienation of insured property.-An alienation of the property insured and a transfer of the policy, without the conseht of the insurer, shall void the policy ; but the mere of the policy, or creating a lien on' the property, shall not void the
Cross-references.-Recitals do n.ot estop, see 29-110. What mortgage embrace, see 67~103. Interest of assured, see 56-812.

. 56-826. (2485) Transfer of policy to one of several insured.-A issuing to several may be transferred to one of the insured without consent of the insurer.

56-827. (2486) Partial sale or sale not fully e~ecuted, effect.-A sale of property insured shall void the policy only pro. tanto. A sale fully executed, possession remaining with the assured, shall not void policy.

56-828. (2487) Transfer of property or policy after loss, err...<.:Y.-n..,,.. the loss -shaii occur, a sale of th e property insured and transfer of policy shaii not affect the. liability of the insurer, but the assignee recover on the policy to the same extent as the assignor could have

INSURA NCE.

56-834

-

A56_t8r2a9n.sf(2e4r 8o8f)thTerapnrsofpeerrotyf

property or, ~ol~cy b~ ope~ation of insured or of t e po tcy ':( operat

~aw, ~~ect. tohn o . ahw,

or under th e order of the court, sha11 con er on t11e asstgnee a11 t e ng t s

of the insured.

56_830 same prop

(2489) Seco erty' unless

nd by

insurance, comsent of

effect.-A secon~ insurance on t he m. surer, WI"II vot"d t he po1tcy.

the

voCidrsospso-lrie~fye,resnecees-5A6-m82o4u. nt of recovery, see 56-702. Wilful misrepresentation

56_83 1. (2490) Right of insurer to prescribe regulations as to notice d oof of loss.-Every insurer shall have a rig-ht to prescribe regu-

aanltt.onpsr as to notice and preliminary proof of lo.ss, which shall be subd~lt ally complied with by the .assured: Provtded, the same shal.l be made known at the time of the msurance, and shall not be matenally changed during the existenc_e of the cont~ac~. A_n absolute refusal to pay

shall waive a compliance wtth these prehmmanes.

56-832. (2434) Calculation of reinsurance reserve for fire, marine, and inland insurance by Commissioner.-For every fire insurance company doing business in this State, the Insurance Commissioner shall calculate the reinsurance reserve for unexpired fire risks, by taking SO per cent . of the premium received on all policies that are written for a period of one year or less, and an amount determined according to the New York per" centage table for calculating 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 unexpired risks as a reinsurance reserve. Having charged against the company the reinsurance reserve as above determined for fire, marine, and inland insurance, and added thereto all other debts and claims against the company, he shall, in case he finds the capital stock of the company impaired more than 20 per cent., suspend the license issued to said company and require the
company to cease to do new business, and give notice to said company
to make good its whole capital stock within 90 days, and if this shall not
be done he shall revoke the license of such company and debar the same
from doing business. (Acts 1887, p. 119; 1899, p. 45.)
Cross-references.-Licenses are revocable, see 20-117. Reserve to be stated in application for license, see 56-402. Proceedings if Commissioner knows of insolvency, see 56-106. Regulating business of fire and casualty insurance companies, see 56-805; 56-1001.

56-833. (2435) Call on stockholders to bring capital up to charter amount.-Any such insurance company, receiving the aforesaid notice of the Insurance Commissioner to make good its whole capital stock within 90 days shall forthwith call upon its stockholders for such amounts as will make its capital equal to the amount fixed by the charter of said company. (Acts 1887, p. 119.)

56-834. (2436) Calculations of reinsurance reserve by Commissioners of other States.-In the case of companies chartered by other States or foreign Governments, the Insurance Commissioner of this State shall accept calculations of the reserve made by the insurance commissioners of the States in which they are chartered, when such calculations are

56-901

INSURANCE.

made and furnished to the Insurance Commissioner of this first of March in every year. (Acts 1887, p. 119.)

CHAPTER 56-9. LIFE INSURANCE.

Sec. 56- 901. Contract of life insurance .defined. 56- 902 . By whom contracts may be taken. 56- 903 . To whom insurance money to be
paid.
56- 904. Policies to contain the entire contract.
56- 905. Creditor's rights in proceeds of policy. Notice by creditor. Annuity contracts.
56- 906. Powers of companies. 56-907. Directors of companies; number;
qualifications; quorum.
56-908. RUles and regulations binding upon applicant for insurance.
hffect of fraud or misrepre-
sentations by insured or bene-
ficiary. Warranties and representations.
56-909. Death by suicide or by hands of justice, effect.
56-910. Time policy effective, how calculated.
56-911. Law of fire insurance applicable. 56-912. Calculation of net value of life
policies.
56- 913. Requiring life company to cease business where net value of
policies is not on hand.
56-914. Valuation by commissioners- of other States; certificate to be furnished.
56-915. Proceedings where home companies fail to maintain stand-
ard.
56-916. Authority of industrial life insurance companies to do ordi-
nary life insurance business.
56-917. Authority of companies doing business on assessment plan to
transact general life insurance
business; prerequisites.

Sec.

56-918. Policies and certificates of .._.

ment companies h~

56-919.

Commapdl,eia; nvcael uwait i~ohn

reserve Oft 'law as pzae,.

:U.U. qu1~1te to domg business val-
uation of policies and

tenance of reserve.

56-920. Certain laws inapplicable Fratern~l societies to whi~ law
apphcable.

56-921. Control of business of comPBDJ

by Insurance Commissioner

proce~d!ngs ~eking.

'

56-922. Same; InJUnction; hearing and

order.

56-923. Same; liquidation of busint~~

order of court.

'

56-924. Same; ~ss~stant~ o_f Insurance

Comm15;510ner m liquidation of

compan1es; compensation.

56-925. Same; rules and regulations.

56-926. Same; report by Commissioner to le~is!ature and by deputy com.

.m1ss1oner to Commissioner.
56-927. L1ve-stock and steam-boiler iil-

surance companies subject to

life insurance law.

56-928. Freedom of choice not to be ze.

stricted.

56-929. Policy proceeds payable only Ia

cash.

56-930. Burial contracts prohibited.

56-931. Service or merchandise contnea

prohibited.

56-932. Revocation of license for vicJ1a.

tion.

56-933. Violation a misdemeanor.

56-934. Conflicting laws repealed.

56-901. (2496) Contract of life insurance defined.-A life policy is a contract by which the insurer, for a stipulated sum, engages pay a certain amount of money if another shall die within the time ited by the policy. The life may be that of the insured or of another the continuance of whose life the insured has an interest.
Cross-references.-Policies must contain e ntire contract, see 56-811, Beneficiaries under frat ernal s ociety poli cie s, see 56-1608. Contract of fire surance, see 56-801.
56-902. (2497) By whom contracts may be taken.-Contracts of insurance may be taken only by persons or corporations authorized by law so to do.
56-903. (2498) To whom insurance money to be paid.-The may direct the money to be paid" to his personal representative or widow, his children, or his assignee. Upon such direction given, assented to by the insurer, no other person may defeat the same:

INSURANCE.

56-905

. h ever that assignment of the money shall be good without such vsded, ow '

assent.

s a. n5c6e-d9p0ob41!..Cl(ce2so4m7is1ps)aunePideosluipcoioregnsatmtho.ez.ecldot.vneutsanidonef

the entire contract.-All persons wt.th'm t h1' s tat r the laws of tht.s State

life insure, whether or by for-

ss.sue mYpanies doing busm ess m t hI'S State, w h1' ch ~ontam any re fer-

esgn co the application for m surance, or t h e constitutiOn, b y1aws, or oth er

tcteriwouno1nceenetesasntmioogft,nhteoehdrepbhcayaorvtmtiehepesaaatntthpyaep,crlheieceittadohnettor,oraashnsaadft.vdoom.rfmpgtohm1aet.gcnycypo, naabsrtetciatoonufr.tnrtieghoc~eto,pncbooys1ptlaycat.ydwosofc,ros~ncantot.drdnatrcarutap,lcepstshh.cbraaeel---l

ferred to; and unless so attached and accompanymg the pohcy, no such

lication, constitution, bylaws or rules shall be received in evidence eaiptpher as part of the po1t cy or as an m dependent contract tn any con-

troversy between the parties to or interested in the said policy, nor shall

such application, constitution, bylaws, or rules be considered a part of

the policy or contract between such parties. (Acts 1906, p. 107.)

Cross-references.-Good faith in application, see 56-820. Bylaws as part of policy of mutual company, see 56-1403. Certificate of fraternal societies, see ,
t 56-1610.

56-905. Creditor's rights in proceeds of policy. Notice by creditor. Annuity contracts.-If a policy of life or endowment insurance, whether heretofore or hereafter issued, is effected by any person on his own life, or on another life, in favor of a person other than himself, or, except in cases of transferwith intent to defraud creditors, if a policy of life or endowment insurance is assigned or in any way made payable to any such person, the ]awful beneficiary or assignee thereof, other than the insured or the person so effecting such insurance, or his executors or administrators, shall be entitled to its proceeds and avails against the creditors and representatives of the insured and of the person effecting the same, whether or not the right to change the beneficiary shall be reserved or permitted, and whether or not the policy shall be made paJ:able to the person whose life is insured if the beneficiary or assignee shall predecease such person: Provided, that, subject to the statute of limitations, the amount of any premiums for said insurance paid with intent to defraud creditors, with interest thereon, shall enure to their benefit from the proceeds of the policy; but the company issuing the policy shall be discharged of all liability thereon by payment of its proceeds-in accordance with its terms, unless before such payment the company shall have written notice, by or in behalf of a creditor, of a claim to recover for transfer made or premiums paid with intent to defraud creditors, with specifications of .the amount claimed. If an annuity contract, whether heretofore or hereafter issued, shall be effected by any person, based on his own life or on another life, payable to a person other than himself, the lawful beneficiary or assignee thereof, other than the person so effecting such contract or his executors or administrators, shall be entitled to its proceeds ~nd avails against the creditors and representatives of the person effectmg such contract, to the Saqj.e extent and under the same conditions herei?before provided with reference to the proceeds and avails of policies of hfe or endowment insurance. (Act 1933, p. 181.)

56-906

I NSURA NCE.

56-906. (2400) Powers of companies.-Every life insurance inco rporated under Chapter 56-2 may insure the lives of all persons apply for insurance ther ein , stand the necessary examinations, and ply with such laws as may h e~eafter be enact ed and with such re:lsoona.k requirements as the directors of such company may establish; and make any and every insurance appertaining to or connected with risks. (Acts 1893, p. 76.)
56-907. Directors of companies; number; qualifications; The board of directors of all life insuran.ce companies chartered by laws of this State shall consist of not less than five nor more than members, a maj ority of whom shall be bona fide residents of this State, and the majority of which board shall constitute a quorum for the purpose of transacting business. (Acts 1912, pp. 119, 137.)
56-908. Rules and regulations binding upon applicant for insurance. Effect of fraud or misrepresentations by insured or beneficiary. Warranties and representations.- All persons applying for life insurance in a life insurance company writing life insurance in this State shall submit to such reasonable rules and regulations as may be prescribed by such in'surance company; and after a policy shall be issued on the life of such person, the beneficiary of such policy shall be entitled to collect the amount of such policy under th e terms of the contract when it shall mature, unless the applicant or beneficiary shall h ave been guilty of actual fra ud or shall h ave mad e material misrepresentations in procuring such policy, w hich representations change the rh<'r~ ctPr and nature of the risk as con t emplated in th e poli cy so issued by the company. No statements, covenants, or rep resentations contained in applications for insurance shall ever be held or constru ed to be warranties, but sh all be held to be representations on ly. (Acts 1912, p. 130 ; 1927, p. 223.)
56-909. (2500) Death by suicide or by hands of justice, effect.-Death by suicide, or by the hands of justice, either punitive or preventive, shall r elease the insurer from the obligation of his contract.
56-910. (2501) Time policy effective, how calculated.-A policy of life insurance sh all run from midday of the date of the policy, and the time shall be estimat ed accordingly, if the policy is limited to a specified number of yea rs.
56-911. (2499) Law of fire insurance applicable.-The principles before stated as t o fire insurance, wherever applicable, shall be equally the law of life insurance.
56-912. (2438) Calculation of net value of life policies.-The Insurance Commissioner shall, as soon as practicable in each alternate year, calculate the net value, as of the 31st day of December of the previous year, of all the policies in fo rce on that day in each life insurance rnmroan,v doing business in this State that shall fail to. furnish him , as hereinafter provided, a certificate of the Insurance Commissioner of the State by whose auth orit y th e company was organized:~ or by the State in 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 31st day of IJe..

INSURANCE.

56-914

cember

of

ltlI1be

receding year, which calculation of the net value of Pbased upon the Amencan Expenence or A ctuanes'

each ta bl e

opof lmic~yrtsahhat

y

'

aet four per cent. any shall have a

interest per cash capital

ann um : Provided, that of not less than $ 100,000,

when fully

any 'd
pat

hfe comp

u ~. an

d

s f

a fely such

lnvested ' company,

th e not

reserve to provt'de for t h e 1tab1'.l'ttles on participating in the profits of the com-

allnpohschtaelsl obe computed by the Amen.can Expen.ence or Actuanes' table

pa y, of morta cent per

l1a'tnYn' uwmit'

h i

interest at not n the discretiOn

less of t

than he C

three omm1 s

nor more swner, an

t d

han w1 t

s 1 1

ix re

per fer-

the rates of premiums charged by such company. The net value

ence of a

to po

I

t. c

y

'

at

any

time '

shall

be .taken

to

b e

t h e

sm. g1e

net

premt..um

which will at that time effect the msurance, less the value at that ttme

of the future net premiums called for by the table of mortality and rate

of interest designated. (Acts 1887, p. 120.)

ceCrtJ~osfcisa-treesf, esreeence5s6.--9M18e.asuRreeseorfvethoef

required assessm

deposit, see ent companies,

56-308. Policies see 56-919.

and

56-913. (2439) Requiring life company to cease business where net

value of policies is not on hand.-In case it shall be found that any life company doing business in this State has not on hand the net valu~ of

all its policies in force after other debts of the company and clatms

against 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 com-

pany has that amount in safe legal securities after all debts and claims

against it, exclusive of capital stock, have been provided for. (Acts 1887,

p. 120.)

56-914. (2440) Valuation by commissioners of other States; certificate to be furnished.-The Insurance Commissioner 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 fun1ish to the Insurance Commissioner of this State, on or before the first day of March in each alternate year, a certificate from the insurance commissioner of such other State, setting forth the value, calculated on the dates designated above, of all the policies in force in the company on the previous 31st of December, and stating that after all the other debts 9f 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 poiicies in force, and that said company is entitled to do business in its own State; and every company doing business in the State during the year for which the statement shall be 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 expens~s consequent upon not having furnished said certificate. (Acts 1887, p. 120.)

56-915

INSURANCE.

56-915. (2441) Proceedings where home companies fail to maintain standard.-lt shall be the duty of the Insurance Commissioner, after he has notified a life insurance company chartered by the State to cease doing new 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 th-ere is no fraud or gross incompetency or recklessness in the management, 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 company may be: able to reestablish the legal net value of all its policies in force. At the end of the year named above, he may renew the permission, in case on examination he is satisfied that the company is likely to retrieve its affairs. (Acts 1887, p. 120.)
Cross-reference.---Proceedings when home companies insolvent, see 56-413.
56-916. Authority of inqustriallife insurance companies to do ordinary life insurance business.-Any corporation organized under section 56-1307 to do an industrial life, health or accident insurance business or for the purpose of doing any of said businesses, 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 State showing that it' has made the deposit required for life insurance companies, has procured a license from the Insurance Commissioner, and has complied with the other requirements of life insurance companies. (Acts 1912, pp. 119, 127.)
56-917. (2451) Authority of companies doing business on a.Ssessment plan to transact general life insurance business; prerequisites.-Any corporation chartered to do a life insurance business on the assessment plan, and doing business in this State, may, by a compliance with this and the three succeeding sections, be relicensed and ,authorized to transact a general life insurance business, upon filing with the Insurance Department all papers and documents and making the payments required under existing laws, so far as the same are or may be applicable to such life insurance companies, and all business thereafter transacfed by such corporations shall be done in accordance with and governed by the provisions of the laws relating 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.)
Cross-reference.-Penalty for fraudulently procuring insurance, see 56-9911.
56-918. (2452) Policies and certificates of assessment companies heretofore made; valuation; reserve.-Every such corporation, upon complying with the requirements of this section and sections 56-917; 56-919, and 56-920, may carry out, in good faith, its contracts heretofore made with its members , but all policies or certi-ficates 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 donation 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

INSURANCE.

56-921

able term insurance as fixed by ag-e, in accordance with the pro-

re.n.ew of section 56-912. To t he reserve 11ab'1J1' ty determm ed as above,

VIS!OllS

. .

.

h Insurance Comm1sswner shall add the determmate contract reserve

:n~er any other policies or certificates heretofore issued and remaining

. force, and in the absence of such contract reserve shall value them as

Ill ntracts providing similar benefits are to be valued under the provisions
c~ section 56-912: Provided, that under no policy or certificate shall a

;reater aggregate reserve liability be charged than is required by said

section. (Acts 1900, pp. 74, 75.)

56-919 (2453) Compliance with law as prerequisite to doing business; valuation of policies and maintenance of reserve.-No policy or certificate of life insurance shall be issued by a company licensed under section 56-917 in this State, unless in compliance with the provisions thereof. All policies of life insurance issued by such corporation, under this law, whether or not they contain a provision for a payment other than the premium specified therein, shall be valued and the reserve maintained thereon according to the provisions of section 56-912 and the nature_of the insurance as defined in each policy. (Acts 1900, p,o. 74, 75.)

56-920. (2454) Certain laws inapplicable. Fraternal societies to which law applicable.-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 doing 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 preceding sections shall be construed to apply to any fraternal beneficiary order or society operating on the system of lodges, councils, or chapters, as defined by the laws regulating such orders or societies. (Acts 1900, pp. 74, 75.)
Cross-referense.-Fraternal beneficiary societies, see Chapter 56-17.

56-921. Control of business of company by Insurance Commissioner; proceedings seeking.-Whenever any domestic life insurance company (a) is in solvent; or (b) has unlawfully refused to submit its books, papers, acco unts, or affairs to the reasonable inspection of the Insurance Com missioner or his deputy or exam iner; (c) or, in the case of a capital s tock company, has neglected or refused to observe an orde; 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 b e~o me equal to its liabi lities within 90 days from the date of notification thereof by the Commissioner; or (d) has, by contract of reinsurance or otherwise, transferred or attempted to transf-er substantially its entire property or business, or entered into any transaction the .effect of which is to merge substantially its entire property or busin ess 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 fo und, after an examination, to be in such condition that its further transaction of business will be hazardous to its policyholders, or to its creditors, or to the public; or (f) has wilfully violated its charter or any law of this State; or (g) any officer thereof has unlawfully refused to be

56-922

INSURANCE.

examined under oath touching its affairs, the Commissioner, the Attor. ney General representing him, may apply to the superior court or any judge thereof in the judicial circuit in which the principal office of such company is located, for an order directing such company to show cause why the Commissioner should not take possession of its property and conduct 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.)
Cross-references.~Examination of domestic fraternal benefit societies, see 56-1629. Method of putting companies in hands of receivers, see 56-223.

56-922. Same; injunction; hearing and order.-On such application, or at any time thereafter, such court may in its discretion, issue an injunction restraining such company from the transaction of its affairs or disposition of its property until the further 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 deny the application or direct the Commissioner to take possession of the property, conduct the business of such company and retain such possession and conduct such business until on the application of either the Commissioner, the Attorney General representing him, or such company, it shall, after a like hearing, 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 possession of its property and the conduct of its business. (Acts 1912, pp. 119, 134.)

56-923. Same; liquidation of business; order of court.-If on like appli-

cation and order to show cause and after like hearing 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 may

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 the 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 record-

ing 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 notice

It

that a deed, bill of sale or other evidence of title duly filed or recorded

by such company would have imparted. (Acts 1912, pp. 119, 135.)

56-924. Same; assistants of Insurance Commissioner in liquidation of companies; ~ompensation.-For the purpose of this Chapter the Commissioner may appoint under his hand and official seal one or more special deputy commissioners of insurance as his agent or agents and employ such clerks and assistants as may by him be deemed necessary, and give each of such persons such powers to assist him as he may consider wise. The compensation of such special deputy commissioners, clerks and assistants and all expense of taking possession of and conducting the business of liquidating any such company shall be fixed by the Commissioner subject to the approval of the court, and shall on cer,

INSURANCE.

56-925

.

f the Commissioner be paid out of the funds or assets of such

ttficate 0 (Acts 1912, pp. 119, 135; 1931, pp. 7, 38.)

company.

.

_.

f ence -Exclusive authonty of Department of Law to represent State

deCparortsms-ernetse,r etc., see 40-1609.

.



tthoe5r6nC-a9ok2me5.maSnisdasmipoerne'esrrcurslihebaselalsnhudacvhreergpuuolelwasetiaronsndusb.r-jeeFgcoutrltatothw.ethnpesuaarpps optsrooe

of this Chapter

vhat.lmofmtahye

court seem

proper. (Acts 1912, pp. 119, p6.)

56_926. Same; report by Commissioner to legislature and by deputy rnmissioner to Comrnissioner.-The Insurance Commissioner shall ctroansmit to the legislature tn h"ts annuaI report t he names of t he com.anies so taken possession of, whether the same have resumed business
~r have been liquidated, or such other facts as shall acquaint the policy-
holders, creditors, stockholcj.ers and the public with his proceedings under this Jaw', and to that end the special deputy commissioner in charge of any such company shall file an~u~lly with the C?mmissioner a report of the affairs of such company, stmtlar to that requtred by law to be filed by such company. (Acts 1912, pp: 119, 136.)

56-927. (2463) Live-stock and steam-boiler insurance companies subject to life insurance law.-All live-stock and steam-boiler insurance companies chartered by this State or other States, or foreign Governments, and doing business in this State, shall be subject to all the requirements of Jaw in relation to life insurance companies, except the requirements in relation to valuation of policies. (Acts 1887, p. 127.)

BURIAL INSURANCE 56-928. Freedom of Choice Not To Be Restricted.-It shall be unlawful for any life insurance company, fraternal benefit society or other similar company, association or society issuing insurance policies, contracts, or certificates upon the lives of citizens of this State, to designate in said policy, contract or certificate, or otherwise, the. person, firm or corporation to conduct the funeral of the insured or to organize, -promote or operate any enterprise or plan, or to enter into any contract with such insured or with any other person, which plan or contract tends to limit or restrict the freedom of choice in the open market of the person or persons having the legal right of such choice regarding contracts, purchases and arrangements with reference to any part of funeral service for such insured. (~cts 1935, p. 392.)
56-929. Policy Proceeds Payable Only In Cash.~It shall be unlawful for any life insurance company, fraternal benefit society, or similar company, association or society issuing life insurance policies, contracts, or certificates upon the lives of citizens of this State, to provide therein that the face amount thereof, or any loss or indemnity, which may accrue thereunder, shall be payable in anything other than legal tender of the United States to the beneficiary named therein or the legal representative of such insured; and any provision to the contrary shall be t;tull and void; (Acts 1935, -pp. 39i, 393.)
56-930. Burial Contracts Prohibited.-It shall be unlawful for any life insurance company, fraternal benefit society, association, or similar company; or any person, firm or corporation engaged in writing any type of life insurance, by whatever term described, upon the lives of citizens of this

56-931

INSURANCE

State, to enter into any contract with any funeral director, or providing that such funeral director, or undertaker, shall conduct the of members insured by such insurance company, fraternal benefit or similar company. (Acts 1935, pp. 392, 393.)
56-931. Service or Merchandise Contrac~s Prohibited.-It shall be lawful for any life insurance company, fraternal benefit society, or company, or association, engaged in writing any type of life insurance whatever name called, upon the lives of citizens of this State, contracting and agreeing to furnish funeral merchandise or services upon the death of any person insured. (Acts 1935, pp. 392, 393.)
56-932. Revocation of License for Violation.-The violation of any provision hereof (Sections 56-928 to 56-931, inclusive) by any such life insurance company, fraternal benefit society, association, or similar company or any agent thereof, shall be ground for the revocation by the insurance commissioner of this State of the license granted to said company, association or society, or to said agent. (Acts 1935, pp . 392, 394.)
56-933. Violation A Misdemeanor.-Any person, firm or corporation violating any of the provisions of this Act (Sections 56-928 to 56-932, inclusive) shall be deemed guilty of a misd~meanor and shall, upon conviction thereof, be punished accordingly. (Acts 1935, pp. 392, 394.)
56-934. Conflicting Laws Repealed.-All laws or parts of laws in conflict with the provisions of this Chapter are hereby repealed.
Effective immediately upon passage and approval. Approved.February, 1935 .

CHAPTER 56-10. ACCIDENT LIABiLITY AND CASUALTY INSURANCE.

Sec. 56-1001.
56-1002. 56-1003. 56-1004. 56-1005 . 56-1006.

Contracts of insurance to be made through regularly com-
missioned a n d I i c e n s e d agents.

Sec. 56-1007.
56-1008.

Affidavit of president or chief

officer, filing as prerequisite

to issuance of license.

56-1009.

Investigation of complaint of violations of law.

Forfeiture of right to do business upon refusal to submit 56-1010.
to examipation. Failure or refusal to pay ex- 56-1011.
penses of examination, pro- 56-1012. ceedings on.

Powers of accident insurance companies.

Creditor's rights in proceeds of policy. Notice by creditor. Annuity contracts.
Reserve for outstanding losses; computation; liability poli7 cies; compensation claims.
Distribution of unallocated liability Joss expense payments; unallocated com p e nsa ti on Joss payments; additional reserves.
Schedule of experience, inclusion in annual statement.
Unearned premium reserve.
Definition of terms used in law; "earned premiums ;" "compensation;" "liability;" "loss payments;" "loss expense payments."

56-1001. (2491) Contracts of insurance to be made through regularly commissioned and licensed agents.-,-Accident liability or casualty insurance companies not incorporated by the laws of this State, but legally authorized to do business in .this State through regularly commissioned and licensed agents located in this State, shall not issue a policy of acci-

INSURANCE.

56-1002

d. ent

h.abJ.1J. ty 'd State,

r o sa

casualty insurance ve through agen~s.

to of

any suc

hpe~rosmopna:~o1r.e~co:repgouralatirolyn

,

resident .
comm.Is-

Jn. snaetd an d

sto

.

su ranee

Ill
f

t1hI.C1'se

nsed to State (


w A

rite cts

pohc1es of 1896, p. 61;

rences.-Definition ?f insurance

accident 1901, p.
agent, see

liability 74.)
56-501.

or casualty m-
Civil liability of

Cross-~e e thorized compa mes, see 56-502. Penalty on agents of unauthor-

agents 0 p~~te~

ized com

,

se e



56-9905.

req5u6t_. s1l'0t0ei2dt.eon(2ti s4sl9iu2aa)bniclAietfyfoifdoalrvi iccteanosfus

president or chief officer, ael.t-.yB em.f osruerat.snscme.ngc-omceprattn'fiycattoe

filing as pre~ of 11 cense to
transact the

any ace

. ..

.

. ess of accident habthty or casualty msurance, the Insurance Com-

bmuissmsioner shall require, m add'ttton to reqmrements a1ready provt'd ed for

b law, that such accident liability or casualty insurance company shall

fiie with him the affidavit of its president, or other chief officer, that it

has not violated any of the provisions of this Chapter for the space of 12

months last past, and that it accepts the terms and obligations of this

Chapter as a part of the consideration of its license. (Acts 1896, p. 62;

1901, p. 76.)

56-1003. (2493) Investigation of complaint of violations of law.-Upon complaint b eing filed by any citizen that a company authorized to do business in this State has violated any of the provisions of this Chapter, the Insurance Commissioner shall diligently investigate the matter, and if necessary examine, by himself or his accredited representative, at the bead offices located in the United States, and also such other offices or agencies of such company as may be depmefi p roper, all books, records, and papers of the same, and also the officers thereof under oath as to such alleged violation or violations: Provided, that before making such examinations the Insurance Commissioner shall require the person making complaint to fil e 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 be found not guilty of a violation of this Chapter, then said bond shall be responsible for all the expen se incurred by reason of said investigation. If the company shall be found guilty of a violation of this law, it shall be responsible for the expense thereof. (Acts 1896, p. 62.)

56-1004. (2494) Forfeiture of right to do business upon refusal to submit to examination.-Any accident liability or casualty insurance company violating any provision of this Chapter, or refusing to submit to the aforesaid examination when required, shall forfeit the right to do business for the next 12 months thereafter, and i:he Insurance Commissioner shall immediately revoke the license already issued to said company to do business. (Acts 1896, p. 62.)
Cross-reference.-Licenses revocable, see 20-117.

56-1005. (2495) Failure or refusal to pay expenses of examination, proceedings on.-If any such company shall fail or refuse to pay such expense of examination upon the presentation of a bill therefor by the Insurance Commissioner, the Commissioner may issue his fieri facias against such company therefor, to be collected out of the property of the company or its deposit with the State Treasurer, in the same man-

56-1008

INSURANCE.

ner as judgments agairist insurance companies not chartered by this

State, but doing business herein, are collected. If any company shall dis-

pute the amount of such bill and fieri facias, it may contest such amount

and its liability therefor by affidavit of illegality returnable to the supe.

rior court of Fulton county, in the same manner as the Comptroller Gen.

eral's executions for railroad county taxes may be contested. (Acts 1896

p. 62.)

.



56-1006. (2402) Powers of accident insurance companies.-Accident insurance companies, chartered under Chapter 56-2, may .insure persons against accident, loss of life, or personal injury and may provide a weekly indemnity to its members in case of accident. They shall have all the usual and ordinary powers incident to accident insurance, not in conflict with the Constitution and laws of this State and of the United States. (Acts 1893, p. 76.)

56-1007. Creditor's rights. in proceeds of policy. Notice by creditor. Annuity contracts.-1 a policy of accident insur~nce whether heretofore or hereafter issued, is effected by any person on his own life or on another life, in favor of a person other than himself, or, except in cases of transfer with intent to defraud creditors, if a policy of accident insurance is assigned or in any way made payable to any such person, the lawful beneficiary or assignee thereof, other than the insured or the person so effecting such insurance, or his executors or administrators, shall be entitled to its proceeds and avails against the creditors and representatives of the insured and of the person effecting the same, whether or not the right to change the beneficiary shall be reserved or permitted, and whether or not the policy shall be made payable to the person whose life is insured if the beneficiary or assignee shall predecease such person: Provided, that, subject to the statute-of limitations, the amount of any premiums for said insurance paid with intent to defraud creditors, with interest thereon, shall enure to their benefit from the proceeds of the policy; but the company issuing the policy shall be discharged of all liability thereon by payment of its proceeds in accordance with its terms, unless before such payment the company shall have written notice, by or in behalf of a creditor, of a claim to recover for transfer made or premiums paid with intent to defraud creditors, with specifications of the amount claimed. (Acts 1933, p. 181.)

561008. Reserve fol' outstanding losses; computation; liability poli cies.; 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 being defended under policies written more than
(a) Ten years prior to the date as of which the statement is made, $1,500 for each suit.
(b) . Five and less than 10 years prior to the date as of which the statement is made, $1,000 for each suit.
(c) Three and less- than five years prior to the date as of which the statement is made, $850 for each suit.

INSURANCE.

56-1009

F r all liability policies written during the three years immedi-

(2)
atelyl

bpre~"edpienrg

the date as of centum of the

which the statement is made, earned liability premiums of

such each

reserve of such

shal three

e ye

alN rs

Jess

all

loss

and

loss

ex. pense

payment.s

rna d e

un d er

I1' ab1'l1' ty

. written in the correspondmg years; but m any event, such re-

pohcleshall for the first of such three years, be not less than $7SO for

serve s ach outstanding

h.ab1.11. ty

. sUit

on

'd sa1

, year s

po11.C.1es.

e (3) For all compensation claims un~er policies writte~ more than

tphrereseenYt evaarsluepsrioart

to the date as of wh1ch four per centum m terest

the statement IS made, the of t he determm ed and estl-

mated future payments.

(4) For all compensati~n claims under polici~s written during t_he three

~uecahrsreimsemrveedsiahtaelllybper6eScepdemr gcetnhteumdaotef

as of wh1ch the statement IS made, the earned compensation premiums

of each of such three years, less all loss and loss expense payments

made in connection with such claims under policies written in the cor-

responding years; but in any event, in the case of the first year of any

such three-year period such reserve shall not 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.

(Acts 1920, pp. 111 , 112.)

56-1009. Distribution of unallocated liability loss expense payments; unallocated compensation loss payments; additional reserves.-All unallocated liability loss expense payments made in a given calendar year subsequent to the first four years in which 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, 40 per centum to the policies written in the preceding year, 10 per centum to the policies written in the second preceding year, 10 per centum to the policies written in the third preceding year and five per centum to the policies written in the fourth year preceding; and such payments made in each of the first four calendar years in which an insurer issued liability policies shall be distributed as follows: In the first calendar year 100 per centum shall be charged to the policies written in that year; in the second calendar year SO per centum shall be charged to the policies written in that year and SO per centum to the policies written in the preceding year; in the third year 40 per centum shall be charged to the policies written in that year, 40 per centum to the policies written in the preceding year 2nd 20 per centum to the policies in the second year preceding; and in the fourth calendar year 3S per centum shall be charged to the policies written in that year, 40 per centum to the policies written in the preceding year, 1S per centum to the policies written in the second year preceding, and 10 per centum to the policies written in the third year preceding; and a schedule showing such distribution shall be included in the annual statement.
All unallocated compensation loss payments made in a given calendar year subsequent to the first three years in which an insurer has been issuing compensation policies shall be distributed as follows: Forty per centum shall be charged to the policies written in that year, 4S per centum to the policies written in the preceding year, 10 per centum to

56-1012

INSURANCE.

the policies written in the second year preceding and five per to the policies written in the third year preceding; and such made in each of the first three calendar years in which an insurer compensation policies sha-ll be distributed as follows: In the first endar year 100 per centum sh.all be charged to the policies written that year; in the second year SO per centum shall be charged to policies written in that year and SO per centum to the policies in the pr.eceding year; in the third calendar year 4S per centum shall charged to the policies written in that year, 4S per centum to the cies writte~ in the preceding year and 10 per centum to the written in the second year preceding; and a schedule showing such distribution shall be included in the a"nnual statement.
Whenever in the judgment of the Insurance Commissioner, the liability or compensation loss reserves of any insurer under his supervision, calculated in accordance with the foregoing provisions, are inadequate, he may, in his discretion, require such insurer to maintain additional reserves based upon estimated individual claims or otherwise. (Acts 1920, p. 114.)
56-1010. Schedule of experience, inclusion in annual statement.-Each insurer writing liability or 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. 11S.)
56-1011. 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 SO 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 SO per centum oi the current year's premium, plus the entire premium for subsequent years: Provided, s_uch unearned premium reserve may be reduced by the amount of unearned commissions on premiums not more than 90 days past due, which premiums are due from agents or agencies whose accounts with the insurance company are secured by bonds executed by companies licensed to do business in this State. (Acts 1920, p. 116.)
56-1012. Definition of terms used in law; "earned premiums;" "compensation;" "liability;" "loss payments;" "loss expense payments."-
1. The term "earned premiums," as used in section S6-1008 et seq., shall include gross premiums charged on all policies written, including all determined excess and additional premiums, less return premiums, other than premiums returned to policy hplders as dividend,s, and less reinsurance premiums and premiums on policies canceled, and less unearned premiums on policies -in force. But any participating company which has charged in its premiums a loading solely of dividends s~all not be required to include such loading in its earned premiums, provided. a statement of the amount of such loading has been filed and approved by the Insurance Commissioner.
\
2. The term "compensatism," as used in this law, shall relate to all

INSURANCE.

56-llOl

ff ted by virtue of statutes providing compensation to em-

insurance e ec sonal injuries irrespective of fault of the employer.

I es for per

.

P oye

"liability" shall relate to all insurance except compensa-

3 .The tercme against loss or damage from acc1'dent to or m. J. un.es suf-

tion 1nsu:~nempl oyee or other person and for which the insured is liable.

fered by 4 Thhe

terms "loss payments" and 11 include all payments to

"Ioss expense payments," as herem cIa1 mants, m. eIud m.. g payments for

used: sl and surgical attendance, legal expenses, salaries and expenses obamnfoedrd..nn1tecevaoIeefspftialhcegoanetexoprcseh'nasargedsej'us,astnpedorssat,lalgaoen,tdhseafrlieaplnd;.1eysmmaenennd,tserxempnaetdsn,ese.sostnaotfai.ococnffoe.iucryen,temotefp.lcelolgayrt.eamepssh,, whether such payments shall be allocated to spec1fic clatms or unallo-

cated. (Acts 1920, p. 113.)

CHAPTER 56-11. FIDELITY INSURANCE.

Sec. 56-1101. 56-1102.
56-1103 . 56-1104. 56,1105 . 56-1106. 56-1107. 56-1108.
56-1109.

Contract of fidelity insurame defined.
What companies may become sureties on bonds ; release from liability.
Estoppel to deny corporate power to execute bond.
Bonds of city, county, and State office rs.
Attachment bonds.
Remedies in case of default.
Deposit to be made before becoming security.
Collection of coupor,s; faith of the State.
Proceedings when loss occurs; receive r.

Sec. 56-1110. 56-1111. 56-1112.
56-1113. 56-1114.
56-1115 . 56-1116.

When excess of bonds shall be returned.
When a company desires to withdraw from the State.
Withdrawal of deposit by retiring company ; how accomplished; conditions spec'ified.
Order to Treasurer to surrender bonds/
Liability. Notice of suit. Judg-
ment. Defense. Subrogation. Reimbursement.
Amount of bonds must be maintained.
Actions on bonds; venue; service of process.

56-1101. (2550) Contract of fidelity insurance defined.-The contract of fidelity insurance contemplated by this Chapter is one whereby a fid elity insurance company, or such other corporation or company as may be doing a fidelity insurance business, for a stipulated sum of money or premium, insures against loss caused by the defalcation, default , neglect, or dishonesty of a trustee, 'officer of the law, officer of court, agent, or other employee, and of such other persons as may be required to give bond, or guarantees the performance of all such bonds or other obligations in favor of the insured as individuals do under the law who sign the bonds of all such persons as sureties. (Acts 1887, p. 108.)
Cross-references.-Guaranty companies as sureties on bonds of . officers, see 89-41 5. Annual reports of companies, see 56-232. Licenses, see 56-404.

56-1102. (2551) What companies may become sUreties on bonds; release from liability.-Any fidelity insurance company or such other corporation or company that may do a fidelity insurance business, incorporated and organized under th.e laws of this State, or of any other State or a foreign Country, for the purpose of transacting business of fidelity insurance, which has a paid-up capital of not less than $250,000, and

56-ll04

INSURANCE.

which has complied with all requirements of law for li cense to business in this State, may, upon proper proof thereof and upon tion of evidence of solvency and credit, satisfactory to the judge, department, or other officer or officers authorized to approve and bonds, be accepted as surety upon the bond of any person, company, corporation required by law to execute bonds, in lieu of any surety sureties now required by law; any such fidelity insurance company, other company doing a fidelity insurance business, may be released its liability on such bond on the same terms and conditions as are scribed by law for the release of individuals; it being the true intent meaning of the provisions of this Chapter to enable the companies and corporations doing a fidelity insurance business to become sureties on all bonds required by law to be taken, with all the rights and subject to all the liabilities of individual sureties. (Acts 1887, p. 108.)
56-1103. (2552) Estoppel to deny corporate power to execute bond.Any fidelity insurance company, or other corporation or company doing a fidelity insurance business, which shall execute any bond as surety under the provisions of this Chapter, shall be estopped, in any proceeding to enforce the liability which it shall have assumed or incurred, to deny its corporate power to execute such instrument, or assume such liability. (Acts 1887, pp. 108, 109.)
Cross-reference.-Estoppels generally, see 38-114.
56-1104. (2554) Bonds of city, county, and State officers.-Solvent guaranty companies, surety companies, fidelity insurance companies, and fidelity and deposit companies, incorporated and organized under the laws of this State, or any other State of the United States, for the purpos-e of transacting the business .of fidelity insurance, which have a paid-up capital of $250,000, and which 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 solvency, be accepted upon the bonds of all city, county, and State officers; and the various officers, whose duty it is to approve the sureties upon such bonds, are. hereby authorized to accept such company or companies as one of the sureties, or the only surety, upon such bonds as the solvency of such company may warrant. No company shall be relieved of its liability upon arty such bond by reason of the fact that the books and accounts of the principal have been examined and approved as correct by the proper
a authorities, when in fact there has been breach of said bond and a loss
occurring from such breach. Upon a recommendation by the grand jury of any county in regular session convened, immediately prior to any general election of county officers that may be held in and for any such county, each county officer so elected in such county shall give as one of the sureties on his official bond some one of the companies heretofore referred to in this section; and such surety company so given by any such officer may be accepted as the only surety on said bond, provided the grand jury shall also include this in their recommendation. (Acts 1896, p . 58; 1897, p. 60; 1920, p. 75.)
Crossreference.....:Guaranty companies as sureties on bonds of officers, see 89-415.

l.NSURANCE.

56-1105

56-115

(2555)

Attachment bond pon all attachment

s.-Such bonds,

compan~
whether 1t

may has

be or

taken as does not

the 5 bave

0r etea ls uesrteat yt e

uin this
Who n

State. (
ot to be

Acts 1896, pp. 58,
surety on attachmen

59.)
t bonds

,

see



8-112.

eross-reference.-

anY56-b1o1n0d6th uo(pr2io5tni5e6sw) hsRhicaehlml sehwda;ivheescioanlml cpatahsneeyor1efsmdseeudfr1'aeeutsyl,ta.tg-I1Ianem nsctta11stee11eCofitpydn,enfcCaouluplnatt1yu,panoondr
State au n said bond, including the right to issue fi. fas. instanter, as suretyrovuipdoed by law. (Acts 1896, pp. 58, 59; 1897, p. 60.) are P references.-Fi. fa. agamst ,,,,tate T reasurer f atTmg to perf orm duties, see I C40ro-&1080-5 Execution against defaulting tax collector and surety, see 92-5504
et seq.

56.1101. (2557) Deposit to be made before' becoming security.-All

ScotamtePsanoiers

described in this Chapter foreign Governments, now

chartered by this State dom g busm ess m t h_'1s

or other State or

hereafter doing business in this State, which offer or undertake to be-

come security upon any bond required by law of city, county, and State

officers, before being accepted as surety thereon, shall be required to

deposit with the Treasurer bonds of the United States, or bonds of this

State which according to the Acts and resolutions of the GenerqJ As-

sembly are valid, and which amount, according to their face value, to

$25,000, which bonds shall be receipted for by the State Treasurer, and

specially 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 the bonds upon which it has become surety, said bonds shall be de-

livered up to the proper party on presentation of the Treasurer's receipt.

(Acts 1896, pp. 58, 59; 1897, p. 60.)

Crou-reference.-Deposit required, see 56-311.

56-1108. (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 parties entitled to r~ceive them, or disposed of as hereinafter provided. (Acts 1896, p. 58.)
Cross-reference.-Deposits by fire, marine and inland companies of other States, see 56-301.

56-1109. (2559) -Proceedings when Ioss 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 notice the State Treasurer shall be bound to retain, subject to the order of the court trying 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 ascertained amount for which the party sued may be liable is not paid in 10 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.

56-1111

INSURANCE.

When a receiver is appointed by the 1judge, who shall always bond and security of him for the fait ful performance of his State Treasurer, on his application, shall deliver to him bonds in th'eir market value, if in his custody, to satisfy the judgment. receiver's receipt shall be a complete discharge to the Treasurer State of Georgia. Then the receiver s hall apply to the judge of superior court for an order of sale, and in pursuance of the order the bonds. After deducting such expenses and commissions as be allowed by the judge, he shall pay over to the plaintiff, or his ney, a sufficient amount to satisfy the judgment; and if there shall any residue in the hands of the receiver, he shall pay it to the agent the company, taking his receipt for it, which shall be filed and rec~ort1..d ' with the other papers in the case.
If there are conflicting claims, then the State Treasurer shall to the receivers, in the order of ~heir app lication, the bonds; and if is any contest between creditors which cannot be settled in this then the party not receiving sufficient 'bonds through the receiver pointed in his behalf may become a party to the other case and known his claim to the other receiver by making affidavit of the c and filing the same with him, and then the receiver shall report such claim to the judge of the superior court appointing him, who shall by order provide for a bill of interpleader, as in cases in equity. (Acts 18%, pp. 59, 60.)
Cross-references.-Interpleader, see 37-1503. When receiver an officer of court, see 55-301. Bond by receiv e rs, see 55-308, 56-303. Retaining bonds to secure recovery when notice of loss is given, see 56-302. Conflicting claims to bonds, see 56-304. Receivers generally, see Title 55, Injunctions and Receivers, Chapter 55-3.
56-1110. (2560) When excess of bonds shall be returned.-The State Treasurer, upon demand made upon him by said companies, shall return to insurance and fidelity and deposit companies and fidelity and surety companies the excess of the deposits held by him over and above the deposits required of said companies by law. In case the deposits required of said companies are lessened by law, the excess of the sums required by law after such decrease shall, upon demand of said companies, be returned to them by the State Treasurer. (Acts 1899, p. 54.)
Cross-references.-When amount reduced below amount required, see ~ 56-305. Amount of bonds must be maintained, see 56-1115.
56-1111. (2561) When a company desires to withdraw from the State. -vVhen any company desires to withdraw 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 fully satisfied, or whenever no notice of claim has been given, and when it has been released from all bonds theretofore given by it, then the Treasurer shall return to it the bonds so deposited upon order from the Insurance Commissioner. When any company, having made the deposit required by this law, has assumed any liability, by suretyship or 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 suretyship or otherwise, and give notice of its intention ~o withdraw from this State, and of the fact that it has satisfied all losses

INSURANCE.

56-lllZ

and

I ms agam st cat . h tice

1t, and has been released from all obligations assumed shall be published in a newspaper to be designated by

,

by 1't whtc noCommissioner, and at t he expense of sat.d company; and I.t

the Insurance ided that any clat.ms of t h e ct.tl.zens of t h'ts State must,

.
IS

herebyf prolovsses 'accrued

or

upon

obh.gatt.ons

theretofore

assumed

b y

Whether or (where no losses have occurred), be fully settled before

'd company

sal

't shall be withdrawn. (Acts 1896, pp. 58, 60.)

id depost

sa

f ences _Withdrawal of fire insurance companies from the State, see

Cross-re ;~lic,es must be satisfied before withdrawal, see 56-324.

t 56-323.

.5~-ldll.2c. oWndiitthiodnrsawsaplecoiffiedde.p-oInsitcabsye

retiring company; how accomany fidelity insurance company,

plis e 'surety or bonding company authorized to do the business of

olird alinty insurance or actm g as surety th: l:ws touching that subject. has

roentibr~odn dfsr oumn dde.roitnhge

tphraotvtbsutosinnse~osf

. this State, or wishes so to retire, and wtshes to wtthdraw the depostt
111
uired to be made with the State Treasurer, as required of such com-
r:~ies, the same may be accomplished in the following manner: The ~ompany so desiring to retire frn'll b~si~ess and. to .~ithdraw. the deposit

shall file w ith the Insurance Commtsstoner a wntmg, venfied by the

oath of one of its executive officers, stating that it has retired, or on or

after the date of the filing of such writing will retire from doing the

business of fidelity insurance or becoming surety upon bonds, and stat-

ing its desire to withdraw the deposit with the State Treasurer made

in pursuance of the laws regulating the business of such companies. In

addition thereto the company shall do one of the following three things :

First. Submit a statement under oath verified by one of its executive officers that such company has settled all losses which have a"Ccrued 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 bonds written or suretyships assumed, and shall, if required by the Insurance Commissioner, make such further prdof of th'ese 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 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 and withdraw its deposit with the State Tr~asurer, and that it claims to haye settled all losses and to have procured its release from all obligations incurred on any and all bonds and any f!nd all assumptions of suretyship; 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 thaf they should make the same known in writing to the Insurance Com-

missioner on or before the date named. The Insurance Commisssioner

shall have jurisdiction to hear evidence and determine the validity of any such objection, if filed.

Second. File with the Insurance Commissioner 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, payable to the

56-1113

INSURA NCE.

State of Georgia, for the use and benefit of whom it may concern, ditioned that said company shall pay all losses which it may have tained upon any bond or contract of suretyship written or assumed that it will faithfully perform and fulfill all of its outstanding o tions so written or assumed according to the legal tenor and thereof. Such bond so to be given shall have as surety thereon fidelity insurance company or surety or bonding company, which have been authorized to do business in this State, and which shall made the deposit provided by the laws governing the business of companies. It shall be stated in said bond that it is made in pu of this section; and any person, having a right of action against fidelity insurance company, s urety or bonding ,company on accou nt any bond written or act of suretyship assumed by the retiring tnay join the surety on the bond in this subsection of this section vided for, as defendant upon the obligation of suretyship or indemnity the retiring company in like mann er as if it were a joint obligor or surety upon every bond or assumption of suretyship made or execu by said retiring company. The surety upon the bond so given by retiring company shall be liable to the same extent and in the same . ner as if it were a cosurety with the retiring company upon each and of the obligations assumed upon risks and bonds written in this State.
Third. Or make proof to the Insurance Commissioner that it h reinsured all of its ri sks and obligations, so far as they exist, in other solvent fidelity insurance company or companies which have plied with the laws and been authorized to do business in this and made the deposit required of such companies, and shall prod 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 r ein sured such risk s, 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 promisor or a cosurety with the retiring company upon each and every ri sk upon which such retiring company may be liable as to business done, and shall be subject to suit therefor in like manner as if it were the surety solely or in connection w ith such retiring company upon each and all of its obligations of suretyship or indemnity. (Act s 1916, p. 129.)
56-1113. Order to Treasurer to surrender bonds.-Upon the Insurance Commissioner's being satisfied that the provisions of any of the three subsections of the foregoing section have been complied with, he shall thereupon pass an order reciting compliance and directing the State Treasurer to return to such retiring company the bonds whicli. have been depos.ited w ith the State Treasurer by such company under the laws regulating the business of such compan ies, and a certified copy of such order of the Insurance Commissioner shall be authority to the State Treasurer thereupon to deliver s uc)1 bonds to said company or to such person, firm or corporation as it may in writing, direct the State Treasurer to deliver them to; an"d up on such company or person duly authorized in writing by such company to receive such bonds for it ,

INSURANCE.

56-1114

Treasurer therefor, the Treasurer shall deliver such bonds the or the person to w hom said company shall direct that company be delivered. (Acts 1916, p. 132.)

56-11 14

Liability. Notice of suit. Judgment. Defense. Subrogation. Nothing in this law sha ll be construed to relieve any

ltlch

ny
co~P~bli

g5a0tiroentisr,i

ng bu

from bus t it shall

iness still

in this rema in

State from liabi lity upon bound thereon until the

anY of ~t~l ha ve been fully discharged and satisfied. If the company

ea~e s ~all have guaranteed or ass umed the liability of such retiring

hch s is sued upon a bond executed or a ri sk originally ass umed by

.-..m., panty. n ao company w1thout sueh rettrm g company aIso 1)e m g JOmed

thuecrhe!.rlel,dm1tnmo"'tai cye

g ive to of the

the company whose pendency of the sm.t,

risk and

it has g uaranteed or as between the two

assumenie' s and their pnv1es t he JUdgment rendere d m sueh actw n sI1aII

comp:clusive as to the validity and extent of the liab ility claim ed in the

lin be. c~
su~,

and the company originally liable may cause defendant and may defend the action with like

itself effect

to as

be if it

made were

pa

the first instance. Upon judgment being rendered again st the

scuoempany assuming or g uaranteemg t h e 11 ab111ty o f t I1e rettnng company,

"t shall be subrogated to all the rights of the company for whose under-
~king it shall so have been held lia ble. Any right of action for r eim-

bursement 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 de-

posited, or upon funds or against persons to which or to whom it might

otherwise, either in law or equi~y, have th e right to look for r eimburse-

ment, shall survive and may be enforced by a s uit brought in the na me

of such retiring company for the use of the company so h eld liable.

(Acts 1916, p. 132.)

56-1115. (2562) Amount of bonds must be maintained.-Whenever, under the provisions of this Chapter, the amount of bonds so deposited is reduced, the Treasurer sha ll a t once notify the Insurance Commissioner in writing, who w ill give notice t o th e company de posit ing, and requi re more bonds to be deposited, so as to always maintain th e original amount; and if the company so notified by the Insurant~ Commissioner fail s to comply within 30 days, th e right of the company to do business shall be revoked, and the Insurance Commissioner shall, at t h e same time, give notice, by publication in a newspaper published at th e Capital , of the fact of such failm:-e and revocation of license, and shall mail written or printed notice to the several or-dinaries, th e cost of which publication shall be paid by the company failing to comply with the provisions of th is.law.' (Acts 1896, pp. 58, 60.)
Cross-references.-Whe n amount r ed uced below a mount required, see 56-305. When excess of bonds sha ll be r et urned, see 56-1110.

56-1116. (2553) Actions on bonds; venue; service of process.-In the event any fidelity insurance company, or other corporation or company doing a fideli ty insurance business in this State, sha ll become surety on any of the bond s or obligations mentioned in thi s Chapter, such cor. poration or company shall be subj ect to be sued on such bonds or obli-

56-1206

INSURANCE.

gations in the county of the residence of the principal in such bond or obligation, and service may be perfected on said corporation or com-. pany in the manner prescribed for service on fire insurance companies doing business in this State. (Acts 1887, pp. 108, 109.)

CHAPTER 56-12. MARINE INSURANCE.

Sec. 56-1201.
56-1202. 56-1203. 56-1204. 56-1205 . 56-1206. 56-1207. 56-1208.

Contract oj ,;;arine insurance defined.
What uninsurable. Double insurance. Implied warranty. Illegality of voyage, effect. Deviation from voyage, effect. Perils of the sea. Continuaqce of risk.

Sec. 56-1209. 56-1210. 56- 1211. 56-1212.
56-1213.
56-1214.

Increase of risk, effect.
Open policy, definition.
Statement of value rebuttable.
Fire insurance rules app1icable.
Rights of owners of merchandise on vessels.
Owner or master of vessel to care for damaged property.

56-1201. (2515) Contract of marine insurance defined.-A contract marine insurance is one by which a person or corporation, for a lated premium, insures another against losses occurring by the ties of the sea.

56-1202. (2516) What uninsurable.-Proh ibited or illegal commerce or commerce with an enemy, or goods contraband of war, shall not the subjects of marine insurance.

56-1203. (2517) Double insurance.-Double marine insurance may obtained by a person having an insurable interest ; but in case of he may recover from both companies only the full value of such in If one underwriter shall pay the whole amount, he shall be entitled contribution from the other.
Cross-references.-Contribution, see 37-303. Amount of recovery, see

56-1204. (2518) Implied warranty.-The insured impliedly that the ship is seaworthy, and shall not be changed except from necessity; and that "she shall be employed, conducted, and navigated with reasonable skill and according to law.

56-1205. (2519) Illegality of yoyage, effect.-The illegality of the voyage,.whether known to the assured or not, shall render the contract void.

56-1206. (2520) Deviation from voyage; effect.-A deviation from the voyage, if voluntary and not from necessity, voids the policy. This necessity may arise from-
1. Stress of weather. 2. Want of necessary repairs. 3. Joining convoy. 4. Succoring 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.

INSURANCE.

56-1207

56_1207. (2521) Perils of the sea.-The "perils of the sea" compred all those misfortunes to which goods and ships at sea are exposed

hen earth, air, fire, or water. Loss from enemies is not included, unless

fro~essly named. The negligence, or unskillfulness of masters or mar-

~p s
m~

is

not

included

in

a

policy

on

the

ships

o. r

goods

belonging

to

the

ners of the vessel. If loss shall occur to thtrd persons therefrom, the

~:derwriter may recover from the owner of the ship the amount paid

by him.
Cross-reference.-Diligence by assured to protect property from fire, see 56-819.

56-1208 (2522) Continuance of risk.-Generally the risk continues till the goods are delivered on shore at the port of destination, or to others by direction of the assured.

56-1209. (2523) Increase of risk, effect.-Any change by which the risk is increased shall void the policy.
Cross-reference.-Increasing risk in case of fire insurance, see 56-823.

56-1210. (2524) Open policy, definition.-An open policy is one in which the amount of the interest of the insured is not fixed by the policy, but is left to be adjusted in case of loss; such policies may issue in blank to be filled by the insured as new risks may be desired.
Cross-reference.-Valued poliGy, see 56-701.

56-1211. (2525) Statement of value rebuttable.-The value stated in a policy is always subject to be reduced by proof.
Cross-reference.-Estimation of value, see 56-703.

56-1212. (2526) Fire insurance rules applicable.-The rules as to warranties, misrepresentations, and concealment, are the same in marine as in fire insurance.
Cross-reference.-See 56-820 to 56-824.
56-1213. (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, 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 having given a bond to hold the ship ha~mless against the liens of those holding the bills of lading for said cotton or merchandise, be authorized 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 s'uch owners or insurers in such property, any law, usage, custom, or anything in the contract of affreightment with the owner, master, or agent of such vessel to the contrary nothwithstanding: Provided, that, as between the owner and insurer, the rights and powers of the owner shall be prior and superior to the rights and powers of the insurer, except as specially stipulated in the contract of insurance. (Acts 1889, p. 165.)

56-1214. (2528) Owner or master of vessel to care for damaged property.-Nothing in the preceding section shall be construed to relieve

56-1303

INSURANCE.

the owner or master of such vessel from taking proper care of damaged prope-rty 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. (Acts 1889, p. 165.)

CHAPTER 56-13. INDUSTRIAL LIFE, ACCIDENT, AND HEALTH INSURANCE.

Sec. 56-1301. 56-1302.
56-1303.
56-1304. 56-1305. 56-1306. 56-13D7.
56-1308.

Industrial life insurance defined.
What companies regarded as industrial life insurance companies.
Prerequisites to doing business; domestic companies, etc.
Same; foreign companies, etc.
Companies subject to this law.
When laws to apply to industrial life insurance.
Incorporation of companies; capital stock; rights an d powers.
Mutual companies may become stock companies.

Sec. 56-1309.
56-1310. 56-1311. 56-1312.

Policies of mutual cooperative or assessment companies to show amount to be paid; payments dependent on contingency; medical examinations.
False representations in regard to policies prohibited; operation of this and following section.
Receiving premium or assessment after i' n so I v en c y. Fraudulent reinstatement.
Powers of Insurance Commissioner or deputy to issue subpcenas; failure to comply with subpcena as contempt.

56-1301. (2502) Industrial life insurance defined.-lndustrial life insurapce is that insurance for which the stipulated premiums, advance assessments, or dues, are reg-ularly payable and collectible weekly, biweekly, monthly, quarterly, semiannually or annually, and the policies or benefit certificates for Which are for sums of not more than $500 on a single life, and which policies or benefit certificates may provide a weekly benefit for disability, caused by sickness or accident, not greater than $20 per week. (Acts 1905, p. 96; 1924, p. 51.)

56-1302. (2503) What companies regarded as industrial life insurance companies.-Ail corporations, associations, relief organizations, societies, or fraternal orders, with or without capital stock, and.having or not having a ritualistic form of government, whether operating under the 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 within the meaning and .definition set forth in the preceding section, 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 not repugnant to this section, regulating the business of life, health, and accident insurance. (Acts 1905, p. 96.)

56-1303. (2504) Prerequisites to doing business; domestic companies, etc.-Any corporation, association, 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 t\usiness

INSURANCE.

56-1304

ropf1~1.i11wedsuitshsthrtaihallellbilfaeewaisuntsrhueogrrauinlzacetedi,nstg.hoatldhlo,e

before commencing to do business
'
manner in which other insurance business in this State, except tha

c c t

omomthe

osit, required of companies operating upon the plan and according

e~h e manner specified in the two preceding sections, shall be $100,000,

to be made in such securities as are required of such other in surance
~~mpani es as are now required to make a deposit. (Act s 1<;)05, p. 96;

1920, pp . 212, 213.)

56-1304. (2505) Same; foreign companies, etc.-Any corporation, asso~

dation, society, or fraternal order, orga nized 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, shall be author-

ized to do business in this State upon comply ing with the other laws of

this State regulating the manner in which foreign insurance companies .

shall be authorized to do business in this State, and filing with the Insur-

ance Gommissioner a certificate from the officer having supervision of

the insurance department of the State under the laws of which such cor-

poration, asso ci ~tion, society, or fraternal order was chartered, or elects

to make its deposit, that such corporation, association, society, or fra-

ternal order has deposited with said State a sum of not less than $100,000

pinanst.eusc.h

securities as are required to be deposited (Acts 190v~,, pp. 96, 97; 1920, pp. 212, 213.)

by

insurance

com-

Cross-reference.-Bonds and deposits required of insurance companies, see Chapter 56-3.

56-1305. (2506) Companies subject to this law.-The provisions of this Chapter sha ll in no way apply to any company, association, organization, or society which does not collect its premiums or dues weekly, biweekly, monthly, quarterly, semiannually or annually; but any company, association, organization, society or fraternal beneficiary order, with or without a ritualistic form of government, which collects its dues or premjums weekly, biweekly, monthly, quarterly, semiannually, or annually, a nd which for the purpose of securing business or members, and for collection of premiums, dues, or assessments, employs paid agents, collectors, or solicitors, shall come under the provisions of this section. (Acts 1905 , p. 96; 1924, pp . 51, 52.)

56-1306. (2507) When laws to apply to industrial life insurance.- 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. (Acts 1905, pp. 96, 98.)

56-1307. Incorporation of companies; capital stock; rights and powers. - Stock compa.nies or corporations for the purpose of doing an indus trial life, heafth or accident insurance business or for the purpose of doing a ny of said businesses, may be created under the laws of this State, w ith a minimum capita l stock of $25,000: Provided, that the petitioners for such charter shall comply with the laws applicable to the incorporation of insurance companies as set out in section 56-207 et seq., except that the minimum capital stock may be $25,000 and that said company so organized may engage in any or all branches of said business without increasing its capital stock, a nd it shall have all the powers,

56-1310

INSURANCE.

82

right~ and privileges conferred upon life insurance companies under the aforementioned sections, 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. (Acts 1912, pp. 119, 126.)
Cross-references.-Sworn state ment to be filed by assessment companies, see 56-322, 56-1501. Deposit, see 56-321.
56c1308. Mutual companies may become stock companies.-Any mutual industrial life, health or accident insurance company 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 become a stock company, and that the capital of said company is fixed at not less than $25,000, and that the other reqtiiremet;tts of the laws in this behalf have been complied with: Provided, however, that no publication or petition for charter shall be required in such instance, except as is hereinafter provided. Policyholders in mutual companies may vote by proxy at meetings held for the aforementioned purpose. Said stock company when organized as aforesaid shall have the same power and authority as though it had been originally organized as a stock corporation. (Acts 1912, pp. 119; 128.)
56-1309. Policies of mutual cooperative or assessment companies to show amount to be paid; payments dependent on contingency; medical examinations.-All industrial life insurance companies chartered under the laws of this State to do business on the mutual cooperative or assessment plan, and limiting their policies to a sum not exceeding $500, shall stipulate definitely on the face of the policies the amount to be paid to the beneficiaries under said policies in the event of t'he death of the insured. 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 is to require the payment of the full face of the policy as stipulated therein without regard to the subdivisions of the membership by such insurance companies in the management of their affairs. No policies shall be issued by such companies without subjecting applicants f0r such insurance to medical 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.)
Cross-reference.-Mutual insurance plan, regulations and requirements, see 56-1407.
56-1310. False representations ~n regard to policies prohibited; operation of this and following section.-No insurance company or association doing business in this State, and no officer; director or agent thereof, sha\1 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

8-Jr ~-----------------I-N-S-UR-A-N-C-E-. -------------~ -56--1-3-1-1
thereby, or dividends or shares. of surplus to be received thereon, nor shall they use any name or title of any policy or class of policies which ~hall misrepresent the true nature thereof: Provided, that this section and the following sections shall apply only to companies doing an indu strial life, h.ealth or accident insurance business, and only to industrial health, li fe or accident insurance policies, memberships or beneficial certificates. (Acts 1913, p. 98.)
Cross-reference.-Punishment for violation, see 56-9908.
56-131l. Receiving premium or assessment after insolvency. Fraudulent reinstatement.-No agent, director or officer shall knowingly and wilfu.lly receive any premium or assessment on behalf of any insurance company, association 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 organ ization of said company, without giving notice thereof to the person paying the said premium or assessment. No officer, director, agent, physician or other person shall knowingly issue or cause to be issued a policy or benefit certificate, nor aid in the issuing of any policy or benefit certificate or in reinstating in membership or policy standing any infirm or unhealthy person not at the time of such reinstatement or Insurance in an insurable condition,.with the intent to defraud. (Acts 1913, pp. 98, 99.)
Cross-reference.-Penalty for violation, see 56-9908, 56-9909.
56-1312. Powers of Insurance Commissioner or deputy to issue subpcenas; failure to comply with subpcena as contempt.-The Insurance Commissioner _or deputy insurance commissioner may issue subpcenas and process requiring the presence of witnesses and the production of books and papers before him at the place where any investigation is being had by them, or either of them; and in the event any person who is served' with such subpcena shall fail to comply therewith, he shall be punished as for a contempt by the superior court of the county in which the hearing is being had, and the superior courts are fully empowered hereunto, including the power to issue attachments or other processes on notice, to the end that the person so subp_cenaed may have his proper notice and his day in court. (Atts 1913, pp. 98, 100.)
Cross-references.-Examination of insurance companies, see 56-104. Punishment for violating regulations, see 56-9908.

CHAPTER 5.6-14. MUTUAL OR COOPERATIVE INSURANCE. BURGLARY AND ROBBERY INSURANCE.

Sec. 56-1401.
56-1402.
56-1403 . 56-1404.
56- 1405. 56-1406.

Sec.

Contract of mutual insura nce, . 56-1407. nature of.

General laws applicable to formation ; contents of petition; capital stock.
Bylaws become part of policy.

56-1408.

Officers of company agents of all insured.

Liability for reducing funds. Good faith requirements.

.56-1409.

Life insurance; contents of policies; amounts of payments ; m ed i c a 1 examinations ; rates of pre1niun1s; regulations and requirements.
Fire insurance ; who may become body corporate for mutual insurance purposes; number of incorporators.
Same; articles of incorporation.

56-1403

INSURANCE.

84

Sec. 56-1410.
56-1411.
56-1412. 56-1413. 56-1414. 56-1415.
56-1416. 56-1417. 56-1418. 56-1419.
56-1420.
56-1421.

Same ; name of company to contain word "mutual" or "cooperative."
Same; charter; issuance; filing copy with Insurance Commissioner; amendment.
Same; commencement of existence and business; bylaws.
Same; authority to insure and reinsure; kinds of insurance.
Same; conditions precedent to transaction of business.
Same; applications and policies validated; personal liability of legal representatives; incidental rights.
Same; voting powers.
Same ; maximum premiums; cash premiums and surplus.
Same; investment of assets.
Same; unearned premiums and reserves for each kind of insurance.
Same; required assets and assessments therefor; defici-
ency.
Same; advances of money which may be made. Commissions or promotion expenses.

Sec. 56-1422. 56-1423. 56-1424. 56- 1425 .
56-1426.
56"1427. 56-1428.
56-1429. 56-1430. 56-1431. 56-1432. 56-1433 .
56='1434.

Same; form of policy and indorsements.
Same; taxable premiums.
Same; reinsurance.
Same; exception of certain companies ftom provtstons of law; election to become subject to Jaw.
Burglary, robbery, etc., insurance; when companies to be licensed.
Same ~ prerequisites to obtaining license.
Same; copy of charter and statement of condition to be filed.
Same; statement of c.ondition to be renewed annuaily; fees.
Same; certi fi cate of authority before doing business.
Same; line of business; reinsurance reserve.
Same; membership fee and premium.
Same; service of process on appointed a t t o r n e y and otherwise.
Same; penalty for violation of law.

56-1401. (2529) Contract of mutual insurance, nature of.-The contract of insurance is sometimes upon the idea of mutuality, by which each of the insured becomes one of the insurers, thereby becoming interested in the profits and liable for thelosses; without a charter, such an organization would be governed by the general law of partnership; when incorporated, they are subject to the terms-of their charters.
Cross-references.-Effect of provisions of preceding Chapter on those of this Chapter, see 56-1425. To what extent provisions of Chapter 56-2 applicable to mutual insurance companies, see 56-1402. See also 56-1407.

56-1402. (2412) General laws applicable to formation; contents of petition; capital stock.- The provisions of Chapter 56-2, in so far as they are applicable, may be applied to the formation of mutual or cooperative fire, live-stock, life, or accident insurance companies; but applicants for a charter to eng~ge in writing 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
I
any reference to the capital stock of said company. (Acts 1893, p. 78; 1895, p. 53.)
Cross-reference.-See 56-1413, 56-1425.

56-1403. (2530) Bylaws become part of policy.-The rules and regulations of a mutual company, adopted in pursuance of the charter, become a part of each policy, and all the insured are presumed to have notice thereof, except as provided in section 56-811. New conditions may not be annexed to the policy after it shall be issued, except by the consent of the insured. (137 Ga. 579, 580 (73 S. E. 851).)

85

INSURANCE.

56-1404

56-1404. (2531) Officers of company agents of all insured.-The officers of a mutual company are the agents of all the insured, 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 insured stands as a third party, and the officer issuing the policy acts for those already in the company.
Cross-reference.-Principal bound by acts of agent, see 4-311.

56-1405. (2532) Liability for reducing funds.-If a rriutual insurance company, by dividends, reduces its available funds below the point of remaining able to meet all losses occurring on policies then in existence, the directors of such company primarily, and the parties receiving the dividends, ultimately and pro rata, shall be liable individually, jointly, and severally, for the amount of such unpaid losses.

56-1406. (2533) Good faith requirements.-A stricter good faith as to representations and concealments is required in mutual insurance than in any other similar contracts.
Cross-reference.-Good faith in application, see 56-820.

56-1407. Life insurance; . contents of policies; amounts of payments; medical examinations; rates of premiums; regulations and requirements. -Life insurance companies chartered by the laws o.f this State to op~r ate on the mutuar cooperative or assessment plan without limitation as to the amount for which policies of said company are to be issued, shall stipulate definitely in the face of the policies the amount to be paid to the beneficiaries on the said policies in the event of the death of the insured. In no event shall payments to beneficiaries by such companies be contingent upon the number of policyholders in the company or on the numbe1 in any division or branch of such company. The intention of this law is to require the payment of the full face 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 is~ued 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 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.)
Cross-reference.-Regulation of mut'ual or assessment companies, see 56-1308.

56-1408. Fire insurance; who may become body corporate for mutual insurance purposes; number of incorporators.-Any number of persons, not less thaft 20, who shall be bona fide residents of this State, by complying with the provisions of this law, may become, together with others
who may hereafter be associated with them or their suc-cessors, a body corporate for the purpose of carrying on the business of mutual insurance as herein ptovided. (Acts 1923, p. 113.)
Cross-references.-Punishment for 4violation, see 56"9910. To what companies this section and the following sections of t'his Chapter are applicable, see 56-1425. This Chapter not affected by 56-507 to 56-514, see 56-515.

56-1413

INSURANCE.

86

56-1409. Same; articles of incorporation.-Any persons proposing to form any such company shall subscribe and acknowledge articles of incorporation specifying:
(a) The name, the purpose for which 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 of directors in which the management shall be vested until the first meeting of the members.
(c) The names and places of residence of the incorporators. (Acts 1923, p. 114.)
Cross-reference.-Punishment for violation, see 56-9910.
56-1410. Same; name of company to contain word "mutual" or "cooperative."-No name shall be adopted by such company which does not contain the word "mutual" or "cooperative" 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 confusing or misleading. (Acts 1923, p. 114.)
Cross-reference.-Punishment for violation, see 56-9910.
56-1411. Same; charter; issuance; filing copy with insurance commissioner; amendment.-When a petition and articles of incorporation shall be submitted to the Secretary of State and found by him to comply with this law, he shall indorse his approval thereon and shall issue a charter as now provided by law. A copy of such petition and charter shall also thereupon be filed in the office of the Insurance 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. (Acts 1924, p. 122.)
Cross-reference.-Punishment for violation, see 56-9910.
56-1412. Same; commencement of existence and business; bylaws.Such corporations shall have legal existence as soon as the charter shall have been issued by the Secretary of State. The board of directors named in the articles of incorporation may thereupon adopt bylaws, fix the qualifications for membership of all applicants for insurance, accept applications for insurance, and proceed to transact the business of such company: Proyided, that no insurance shall be put into force until the company has been licensed to transact insurance as provided by this law. Such bylaws and any amendments thereto shall, within 30 days after adoption, be filed with the Insurance Commissioner. (Acts 1924, p. 122.)
Cross-reference.-Punishment for violation, see 56-9910. Penalty on agents of unauthorized companies, see 56-9905.
56-1413. Same; authority to insure and reinsure; kinds of insurance.Any company organized under the provisions of sections 56-1408 to 56-1412 may make contracts of insurance or reinsurance or accept reinsurance or any portion thereof to the extent specified in its articles of incorporation for the kinds of insurance following:
Against loss or damage to property and loss of 'the use and occupancy by fire, lightning, hail, tempest, flood, earthquake, explosion, fire ensuing; against loss or damage to person or property occasioned by the operation

~8~7--____________________IN_' _SU~R_A_N_C~E~------------~~~56-1414
of motor vehicles duly licensed by the Public Service Commission. (Acts 1923, p. 115.)
Cross-reference.-Punishment for violation, see 56-9910.
561414. Same; conditions precedent to transaction of business.-No corporation organized under this law 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 license shall not issue until the corporation has complied with 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 20 policies to at least 20 members for the same kind of insurance upon not less than 200 separate risks , each within the limit herein prescribed for the maximum s ingle risk.
(b) The maximum single risk shall not exceed 20 per cent. of the admitted assets or three times the average risk or one per cent. of the insurance in force, whichever is the greatest, any reinsurance taking effect simultaneously with the policy being deducted in determining such maximum single risk.
(c) It shall have collected a premium upon each application, which premium shall be held in cash or securities in which insurance companies are authorized to invest, and which shall aggregate not less than twice the maximum single risk assumed s ubject to one fire, nor less than $10,000.
(d) It shall satisfy the Insurance Commissioner that its financial condition, methods of operation, and m anner of doing business are adequate t o meet its obligations to a ll policyholders in this State. (Acts 1923, p. 115 .)
Cross-reference.-Punishment for violation, see 56-9910.
56-1415. Same; applications and policies validated; personal liability of legal representatives.; incidental rights.-Any public or private corporation, board, or association in this State or elsewhere may make application, enter into agreements for, and hold policies in any such mutual insura nce company. 'Any officer, stockholder, trustee or legal representative of any such corporation, board, association, or estate m ay be recogni zed as acting for or on its behalf for the purpose of such m embership, but shall not be personally liable upon such contract of insurance by reason of acting in such representative capacity. The right of any corporation organized under the laws of this State to participate as a member of a ny such mutual insurance company is hereby decl ared t o be incidental to the purpose for which such corporation is organi zed, and as fully gra nted as if the rig hts and powers were expressly co.nferred. (Acts 1923, p. 11 6.)
Cross-reference.-Punishment for violation, see 56-9910.
56-1416. Same; voting powers.-Every member of the company shall be entitled to one vote, or to such 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 bylaws. (Acts 1923, p. 116.)
Cross-referertce.-Punishment for violation, see 56-9910.

56-1421

INSURANCE.

88

56-1417. Same; maximum premiums; cash premiums and surplus~ The maximum premium payable by any member shall be expressed in the policy, or in the application for the insurance. Such maximum premium may be a cash premium and an additional contingent premium not less than the cash premium, or may be solely a cash premium. No
a policy shall be issued for a cash premium without an additional con-
tingent premium unless the company shall have surplus of at least $100,000, or a surplus which is not less in amount than the capital stock required of dom estic stock insurance companies, writing the same kind of insurance. (Acts 1923, p. 117.)
Cross-reference.-Punishment for violation, see 56-9910.
56-1418. Same; investment of assets.-No such company shall invest any of its assets except in accordance with the laws of this State relating to the investment of the assets of domestic stock insurance compani es writing the ~arne kind of insurance. (Acts 1923, p. 117.)
Cross-reference.-Punishment for violation, see 56-9910.
56-1419. Same; unearned premiums and reserves for each kind of insurance.-Such company shall maintain unearned premiums and other reserves separately for each kind of insurance upon the same basis as that required of domestic stock insurance companies writing the same kind of insurance. (Acts 1923, p. 117.)
Cross-reference.-Punishment for violation, see 56-9910.
56-1420. S,ame; required assets and assessments therefor; deficiency.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 his liability as expressed in his policy: Provided, the Insurance Commissioner may, by written .order, relieve the company from an assessment or other proceeding to restore such assets , during the time fixed in such order: and Provided further, that any domestic company which shall be deficient in providing the unearned premium reserve required hereby may, notwithstanding such deficiency, come under this law on the condition that it shall each year thereafter reduce such deficiency at least 15 per cent. of the original amount thereof and in such case it may increase its assessments accordingly. (Acts 1923, p. 117.)
cross-reference.-Punishment for violation, see 56-9910.
56-1421. Same; advances of money which rpay be made. Commissions or promotion expenses.-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 such 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. (Acts 1923, p. 118.)
Cross-reference.-Punishment for violation, see 56-9910.

89

INSURANCE.

56-1422

56-1422. Same; form of policy and indorsements.-No law requiring that policies be countersigned and be delivered to a resident agent shall apply to any policy of such mutual company on which no commission shall be paid to any local agent. Such mutual company may insert in any form or policy prescribed by the law of this State any provisions or conditions required by its plan of insurance which are not inconsistent and in conflict with any law of this State. Such policy, in lieu of conforming to the language and forms prescribed by such law, may conform thereto in substance, if such policy includes a provision or indorsement reciting that the policy shall be construed as if in the language and form prescribed by such law, and a copy of such policy and indorsement, if any, shall have been first filed with and shall not have been disapproved by the Insurance Commissioner. (Acts 1923, p. 118.)
Cross-reference.-Punishment for violation, see 56-9910.
56-1423. Same; taxable premiums.-The taxable premiums or premium receipts of any mutual insurance company organized in this State, for the purposes of taxation under any law of this State, shall 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 canceled policies, and any refund or return made to policyholders other than for losses. (Acts 1923, p. 118.)
Cross-reference.-Punishment for violation, see 56-9910.
56-1424. Same; reinsurance.-Any such mutual insurance company organized in this State may reinsure any part or all of any risk or risks in any insurance company or insurer licensed in any State of the United States or in the District of Columbia: Provided, that no such reinsurance shall be effected with any company or insurer disapproved therefor by written order of the Insurance Commissioner filed in his office. (Acts 1923, p . 119.)
Cross-reference.-Punishment for violation, see 56-9910.
56-1425. Saine; exception of certain companies from provisions of law; election to become subject to law.-All laws or parts of laws in conflict with this law, so far .as companies organized under this law are concerned, are hereby repealed, but no such repeal and nothing in this law shall apply to or affect any company or association of this State now doing business, or 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 approved by the Insurance Commissioner, elect to adopt and become subject to the provisions of this law in lieu of any law or laws theretofore governing such companies or associations. Any company or association so electing and fully complying with this law may thereafter effect insurance as authorized by this law and so specify in its certificate of insurance then in force, or as then or hereafter amended. (Acts 1923, p. 119.)
Cross-references.-For law relating to mutual insurance companies prior fo th e Act of 1923, see Chapter 56-14. See also 56-1413.

f 56-1429

INSURANCE.

90

56-1426. (2535) Burglary, robbery, etc., insurance; when companies to be licensed.-Any insurance company organized and incorporated on the mutual plan under the laws of this State or any other State for the purpose of insuring against loss or damage resulting from burglary and robbery or attempt thereat, and insuring against the loss of money and securities in course of transportation when shipped by registered mail, shall be admitted and licensed to do business in this State as hereinafter provided. (Acts 1897, p. 64:)
Cross-reference.-See 56-1402, 56-1413.
56-1427. (2536) Same; prerequisites to obtaining license.-Before such company shall be permitted and licensed to transact business it shall have in force 500 or more policies on which the premium shall have been paid in cash, or shall be evidenced by the written contracts of the policyholders, on which not less than one-fifth 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 $50,000. The premium contracts ' SO held shall constitute a part of the assets of the company. (Acts 1897, p. 64.)
56-1428. (2537) Same; c~py of charter and statement of condition to be filed.-Every such company, association, or partnership shall file in the office of the Insurance Commissioner a certified copy of its charter together with a statement under oath of the president, or vice president, and secretary of the company for which 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 notes and mortgages, the amount loaned 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 stating the indebtedness of the company, the amount of losses adjusted and unpaid, the amount incurred and in process of adjustment, th~ amount resisted by the company as illegal and fraudulent, and all other claims existing against the company; also a. copy of the last annual report, if any, made under any law of the State by which such company was incorporated; and no agent shall be allowed to transact business for any such company when its reinsurance reserve, as required in this section, is impaired to the extent of 20 per cent. thereof while such deficiency shall continue. (Acts 1897, p. 64.)
56-1429. (2538) Same; statement of condition to be renewed annually; fees.-The statement required by the preceding section shall be renewed from year to year in such manner and form as may be required by said Insurance Commissioner, with an additional statement of the amount of premiums received during the preceding year, and the said Insurance Commissioner, on being satisfied that the membership, assets, securities, and investments remain secure, as heretofore mentioned, shall furnish a renewal of the certificate as aforesaid, upon the payment to the State, at

91

INSURANCE.

56-1430

the time of filing the statement herein provided for, of a fee of $5 for each corporation, and $25 for each foreign corporation. (Acts 1897, p. 64.)
56-1430. (2539) Same; certificate of authority before doing business.No agent or agents shall act for any company or companies referred to in sections 56-1426 to 56-1434, 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 Insurance Commissioner a certificate of authority, stating that such company has complied with all' the requisitions of said sections which apply to such companies, giving the name of the attorney appointed to act for the company. (Acts 1897, p. 64.)
Cross-references.-Definition of insurance agent, see 56-501. Penalty on agen ts of unauthorized companies, see 56-9905.
56-1431. (2540) Same; line of business; reinsurance reserve.-Any company permitted and licensed to transact business in this State under sections 56-1426 to 56-1434 shall confine its business to that stated in section 56-1426, and to banks, bankers, loan companies, and county treasurers, and shall not issue any policy or policies to any persons, firms, or corporations in this State other than banks, bankers, loan companies, and county treasurers. Every such company shall set aside a reinsurance re1serve of 50 per cent. of its premiums, whether collected in cash or represented by obligations of the policyholders, as written in its policies; this reinsurance reserve to be maintained so long as the risk is in force. (Acts 1897, p. 64.)
Cross-reference.-Calculation of reinsurance reserve by commissioners of other States, see 56-834.
56-1432. (2541) Same; membership fee and premium.-Policyholders of any company permitted to transact business in this State under sections 56-1426 to 56-1434, shall be held liable to pay the membership fe.es and premiums on their insurance 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 written obligation of the policyholder as may be agreed upon by the company and the policyholci"er. Such payment or obligation shall be the limit of the liability of the policyholder to the company for premiums on his insurance. (Acts 1897, p. 64.)

56-1433. (2542) Same; service of process on appointed attorney and otherwise.-No insurance company, association, or partnership incorporated by or organized under the laws of any other State for any of the purposes specified in section 56-1426, shall directly or indirectly take risks or transact any business of insurance in this State, by any agent or agents in this Sta:te, until it shall have appointed an attorney in this State on whom process of law can be served, and file in the office of the Insurance Commissioner a written instrument, duly signed and sealed, certifying such appointment, which shall continue until another attorney shall be substituted, and any process issued by any court of record in this

56-1501

INSURANCE.

92

State, and served upon such attorney by the proper officer of the county in which such attorney may reside or may be found, 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 manner provided by law. (Acts 1897, p. 64.)
Cross-references.-Service on nonresident companies, see 56-603. Se rvice of process against corpo ration s, how p erfec ted, see 22-1101. Service on nonresi dent, assessmen t, etc., ins~ranc e companies, see 56-602, 56-604.

56-1434. (2543) Same; penalty for violation of law.-Any violation of

any of the provisions of sections 56-1426 to 56-1433 shall subject the

party violating the same to a penalty of not less than $100 n'or more than

$500. (Acts 1897, p. 64.)



CHAPTER 56-15. ASSESSMENT INSURANCE COMPANIES.

Sec. 56-1501.

Sworn statement to be filed by assessment companies,
etc.

Sec.
56-1502. Policies; . contents; tion of section.

applica-

56-1501. (2450) Sworn statement to be filed by assessment companies, etc.-No corporation or association, organized under the laws of this or any other State or Country for the purpose of furnishing life ind emnity or insurance upon the assessment plan, shall do any business in this State until such corporation or association shall deposit with the Insurance Commissioner a certified copy of its charter or articles of incorporation; a copy of its statement of business for the year ending the 31st day of the next preceding December, sworn to by the president or secretary or like officer thereof, setting forth the number and amount of certificates of membership or policies in force and a detail ed account of its expenditures, income, assets, and liabilities, and also a certificate sworn to by the president and secretary or like officer thereof, setting forth that it has paid, and has the ability to pay, its certificates or policies to the fulllimit.pamed therein, that its certificates or policies are payable only to the beneficiaries having a legal insurable interest in the life of the member or the insured, that an ordinary assessment upon its members is sufficient to pay its maximum certificate of membership or policy theretofore or thereafter 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 that 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 t'orm is used; a copy of the constitution and bylaws, and of every amendment thereof, which must show that all indemnities to beneficiaries are in t he main provided for by assessments upon all sunrivi ng members. Whenever said company shall fail to pay a valid claim to the full limit named in any policy issued to any res ident of this State, the Insurance Commissioner shall revoke its authority to do business in this State. (Acts 1887, p. 124; 1900, pp. 47, 74; 1901, p. 33; 1905, p. 77.)
Cross-references.-Incorporation, etc., of industrial life insurance companies, see 56-321, 56-1307. Deposits r equired, see 56-312 to 56-314, 56-322. Penalty for fraudulently procuring insurance, see 56-9911.

93

INSURANCE.

56-1502

56-1502, (2455) Policies; contents; application of section.-Every policy or certificate issued to a resident of this State 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 type, in red ink, in every policy 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 this State ; Provided, that this section shall apply only to such corporations or associations as shall write or issue policies or certificates on the post mortem assessment plan, and shall not apply to such corporations or associations as shall only issue policies under 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, and shall publish such revocation in some newspaper published in this State. (Acts 1897, p. 67; 1898, p. 97; 1901 ; p. 77.)
Cross-references.-Licenses are revocable, see 20-117. Penalty for fraudulently procuring insurance, see 56-9911.

CHAPTER 56-16. FRATERNAL BENEFIT SOCIETIES.

Sec. 56-1601. 56- 1602. 56-1603. 56- 1604. 56-1605.
56-1606. 56-1607. 56- 1608. 56- 1609.
56 -1610.
56- 1611.
56-1612. 56- 1613.

Definition.
Law applicable to what societies.
Rules and regulations by Insurance Commissioner.
Lodge system defined.
Representative form of government defined. Voting by proxy. -
Exemption from insurance laws.
Benefits; classes. R e s e r v e fund.
Beneficiaries; who may be; change; vested right.
Qualifications for membership; age; medical examination; general or social members.
Certificate; contents; binding effect of amendments to constitution or bylaws.
Funds; maintenance and disbursement; individual rights of members or beneficiaries; contributions. Deferred payments or installments of claims.
Investment of funds.
Distribution of funds; purposes.

Sec. 56-1614.
56-1615.
56-1616.
56-1617. 56-1618. 56-1619. 56- 1620. 56-1621. 56-1622. 56-1623.

Organization_; articles of incorporation; number of incorporators; name of society; election of officers; filing bond and articles.
Same; p'reliminary certifiqte of incorporation; soliciting members; number of members; medical examination; issuance of benefit certificates.
Same ; issuance of certificate by Insurance Commissioner; charter null and void, w)1en; constitution and bylaws.
Powers retained; reincorporation; amendment of articles of incorporation.
Mergers; transfers of memberships or funds.
Annual license ; fee; certified copy of license as evidence.
Admission of foreign society; requirements for; revocation of license.
Process, appointment of Insurance Commissioner for service of.
Place of meeting. Location of principal office.
Personal liability of officers and members.

56-1604

INSURANCE.

Sec. 56-1624. 56-1625. 56-1626. 56-1627. 56-1628.
56-1629. 56-1630. 56-1631.

Waiver of provisJOns of constitution and laws of the society.
Constitution and laws; filing amendments; evidence.
Annual reports; valuation of certificates.
Maintenance of financial condition; dissolution or revocation of license.
Provisions as to valuation of certificates m lieu of requirements of two preceding sections; "accumulation basis;" "tabular basis."
Examination of domestic societies; enjoining continuance of business.
Application for receiver, etc., to be by Attorney General.
Examination of foreign societies; refusal to submit to; suspension.

Sec. 56-1632. 56-1633. 56-1634. 56-1635. 56-1636. 56-1637. 56-1638. 56-1639.
56-1640.
56-1641. 56-1642. 56-1643. 56-1644.

No publication of statement without notice to society.
Revocation of license of foreign society; review.
Exemption of certain societies.
Taxation, exemption from.
Certificates to persons under 16 years of age.
Premiums, how based.
Benefit certificates in classes.
Incorporation of fraternal benefit societies of other States; proceedings for.
Exemption of foreign society incorporated in this State from taxes, licenses, or fees.
Funds which may be used for expenses.
Forms of certificates issuable.
Supreme governing body, subordinate branches.
Remedy in forum of society to be sought before suit.

56-1601. Definition.-Any corporation, society, order or voluntary
association, withqut 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 representa-
tive form of g-overnment and :which shall make provision for the pay-
ment of benefits in accordance with section 56-1607, is hereby declared
to be a fraternal benefit society. (Acts 1914, p. 99.)
Cross-reference.-Penalties for violations of 56-1601 to 56-1635, see 56-9912 to 56-9915.
Editorial Note.-The Act of 1914, codified herein as 56-1601 to 56-1635, is entitled, "An Act for the regulation of all fraternal benefit societies... ," etc. Sec. 32 of that Act ( 56-1602 of this Code) provides that it shall not apply to societies whose membership does not exceed 5,000 members. Apparently the 1914 Act supersedes Chapter 56"17 as to societies whose membership exceeds 5,000.

56-1602. Law applicable to what societies.-The provisions of sections 56-1601 to 56-1635 shall not apply to fraternal benefit societies whose membership does not exeeed 5,000 members, and all societies writing insurance for the employees of the Federal Government and public utility companies shall come within the provisions of said sections. (Acts 1914, pp.' 99, 122.)
Editorial Note.-See notes under 56-1601, 56-1616, and 56-1629, which seem to conflict with the above section, and editorial notes thereunder.

56-1603. Rules and regulations by Insurance Commissioner.-Ail such societies and organizations as are mentioned in sections 56-1601 to 56-1635 shall be subject to such rules and regulations as may be prescribed by the Insurance Commissioner. (Acts 1914, pp. 99, 123.)
Cross-reference.-Penalties for violating 56-1601 to 56-1635, see 56-9912 to 56-9915.

56-1604. 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

95

INSURANCE.

56-1605

prescribed ritualistic ceremonies, which subordinate lodges or branches shall be required by the laws of such society to hold regular or stated me et~ngs at least once in each month, shall be deemed to be operated on the lodge system. (Acts 1914, p. 99.)
56-1605. Representative form of government defined. Voting by proxy.-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 ejther by the members or by delegates elected directly or indirectly by the members, together with such other members as may be prescribed by its constitution and laws: Provided, that the elective members shall constitute a majority in number and have not less than two-thirds of the votes, nor less than the votes required to amend its constitution and laws: and Provided further, that the meetings of the supreme or governing body, and the election of officers, representatives or delegates shall be held as often as once in four years. The members, officers, representatives or delegates of a fraterna l benefit society shall not vote by proxy. (Acts 1914, p. 99.)
56-1606. Exemption from insurance laws.-Except as herein provided, such societies shall be governed by sections 56-1601 to 56-1635, and shall be exempt from all provisions of the insurance laws, not only in governmental relation with the State, but for every other .purpose, and no law hereafter enacted shall apply to them, unless they shall be expressly designated therein. (Acts 1914, pp. 99, 100.)
Cross-reference.-Exemptions of fratern al, etc., societies, see 56-235.
56-1607. Benefits; classes. Reserve fund.-
1. Every society transacting business under sections 56-1601 to 56-1635 shall provide for the payment of death benefits and may provide for the payments 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 Gf old ag-e shall commence shall not be under 70 years, and may provide for monuments or tombstones to the memory of its deceased members, and for the payment of funeral benefits. Such society shall have the power to give a member, when permanently disabled or on attaining the age of 70 years, 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 preve nt 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 application of the member, have the power to accept a part of the periodical contributions in cash and charge the remainder, not exceeding one-half of the periodical contribution, against the cet tificate, with interest payable or compounded annually at a rate not lower than four per cent. per annum: Provided, that this privilege shall not be granted except to societies which have readjusted or may hereafter readjust their rates of contributions, and to contracts affected by such readjustments.

56-1610

INSURANCE.

96

2. Any society which shall show by the annual valuation hereinafter provided for that it is accumul!lting and maintaining a ~;eserve not lower than the usual reserve computed by the American experience tab!~ and four per cent. interest, may grant to its members extended and paidup 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 the members to whom they are made. (Acts 1914, pp. 99, 100.)
Cross-reference.-Exempti on from garnishment, etc., see 46-213.
56-1608. Beneficiaries; who may be; change; vested right.-The payment of death benefits shall be confined to wife, husband, relative by blood to the fourth degree, father-in-law, mother-in-law, . son-in-law, daughter-in-law, stepfather, stepmother, stepchildren, children by legal adoption, or to a person or persons dependent upon the member: Provided, that if after the issuance of the original certificate the ~ember shall become dependent upon an incorporated charitable institution, he shall have the privilege with the consent of the society to make such institution his beneficiary. Within the above restrictions each member shall have the right to designate his beneficiary, and, from time to time, have the same changed in accordance with the laws, rules 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: Provided, that any society may, by its laws, define the class of beneficiaries within the above limits: Provided, however, this section shall not be construed as prohibiting the payment by such society of any benefit or benefits to other members of the society in good standing when the said benefit or benefits are provided for in the policies or certificates of :uch society. (Acts 1914, p. 98; 1917, p. 104.)
56-1609. Qualifications for membership; age; medical examination; general or social members.-Any society may admit to beneficial membership any person not less than 16 and not more than 60 years of age, who has been examined by a legally qualified physician, and whose examination has been supervised and approved in accordance with the laws of the society: Provided, that any beneficiary member of such society who shall apply for a certificate providing for disability benefits need not be rtquired to pass an additional medical examination therefor. Nothing herein contained shall prevent such society from accepting general or social members. (Acts 1914, pp. 99, 101.)
56-1610. Certificate; contents; binding effect of amendments to constitution or bylaws.-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 artis._les of association, the constitution and laws of the society and the application for membership and medical examination, signed by the applicant, and all amendments to each, 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

97

INSURANCE.

56-1611

articles of association, if a voluntary association, constitution or laws, duly made or enacted subsequent to the issuance of the benefit certificate shall bind the member and his beneficiaries and shall govern and control the agreement in all respects the same as though such changes, additions or amendments had been made prior to and were in force at the time of the application for membership . (Acts 1914, pp. 99, 102.)
Cross-reference.-Policies must contain the entire contract, see 56-811, 56-904.
56-1611. Funds; maintenance and disbursement; individual rights of members or beneficiaries; contributions. Deferred payments or installments of claims.-
1. Any society may create, maintain , invest, disburse and apply an emergency, surplus or other similar fund in accordance with its laws. Unless otherwise provided in the contract, such funds shall be held, invested, and disburseq for the use and benefit of the society, and no member or beneficiary shall have or acquir~ i"ndividual rights therein or become entitled to any apportionment or the surrender of any part thereof, except as provided in section 56-1607, 1T 2. 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 funds: 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 23, 1899, or any higher standard with interest assumption not more than four per cent. per annum, nor shall any such society be admitted to transact business which 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 56-1627 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 considered as fixed liabilities on the happening of the contingency upon which such payments or installments are thereafter to be paid; such liability shall be the present value of such future payments or installments upon the rate of interest and mortality assumed by the society for valuation, and every society shall maintain a fund sufficient to rrieet such liability regardless of proposed future collections to meet any such liabilities. (Acts 1914, pp. 99, 102.)

56-1612. Investment of funds.-Ev ery society shall invest its funds only in securities permitted by the laws of this State for the investment of the assets of life insurance companies: Provided, that any foreign society permitted or seeking to do business in this State, which invests its funds in accordance with the laws of the State in which it is incorpo-

56-1615

INSURANCE.

rated, shall be held to meet the requirements of this law for the ment of funds. (Ac,ts 1914, pp. 99, 103.)
Cross-reference.-Investments by insurance companies, see 56-224.
56-1613. Distribution of funds; purposes.'-Every provision of the laws of the society for payment by members of such society, in whatever form _made, shall distinctly state the purpose of the same and the proportion thereof which may be used for expenses, and no part of the money collected for mortuary or disability purposes or the net accretions of either or any of said funds shall be u sed for expenses. (Acts 1914, pp. 99, 104.)
56-1614. Organization ; articles of incorporation; number of incorporators; naiJle of society; election of officers; filing bond and articles.Seven or more persons, citizens of the United States, and a majority of whom are citizens of this State, who desire to form a fraternal benefit society as defined by this law may make and sign (giving their addresses) and acknowledge before some officer competent to take acknowledgment of deeds, articles of incorporation, in which shall be stated: First, the proposed corporate name of the society, which shall not so closely resemble the name of any society or insurance company already transacting business in thi s State as to mislead the public or lead to con fu sion ; second, the purpose .for wh ich it is formed, which shall not include more liberal powers than are g ran ted by this law : Provided, that any lawful social, intellectual, educa tion al, chari table , benevolent, moral or religious advantages may be set forth among the purposes of the society; and the mode in which its corporate powers are to be exercised; third, th e names, residences and official titles of all the officers, tru stees, directors or other persons who a re to have a nd exercise the g-ener-al 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 th e supreme legislative or goye rning body, which election shall be held not later than one year from the date of the issuance of the permanent certificate. Such articles of incorporation and duly certified copies of the constitution and laws, rul es 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 $5,000, with sureties approved by the Insurance Comm issio ner, conditioned upon the return of the adva nced payments to applicants as provided in this Chapter if the organization shall not be com pleted withi;1 one year, shall be filed with the Insurance Commissioner, who may require such further information as he deems necessary. (Acts 1914, pp. 99, 104.)
56-1615. Same; preliminary certificate- of incorporation; soliciting members; number of members; medical examination; issuance of benefit certificates.-! th e purposes of the society shall conform to the requiremen ts of this law, and all provisions of law have been complied with. the Insurance Cbmmissioner shall so certify and retain and record (or file ) the articles of incorporation, and furnish the incorporators a preliminary certificate authorizing said society to solicit members as hereinafter provided. Lpon receipt of said certificate from the Insurance Commissioner, said society may solicit members for the purpose of compl eting its organ ization and shall collect from each applicant the amount

99

INSURANCE.

56-1616

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 su.ch advanced payments, nor issue any benefit certificate nor pay or allow, or offer or promise to pay or allow, to any person any death or disability benefit until actual bona fide applications for death benefit certificates have been secured upon at least 500 lives for at least $1,000 each, and all such applicants for death benefits shall have been regularly examined by legally qualified practicing physicians, and certiftcates of such examinations have been duly filed and approved by the chief medical examiner of such society; nor until there shall be established 10 subordinate lodges or branches into which said 500 applicants have been initiated; nor until there has been submitted to the Insurance Commissioner under oath of the presi" dent and secretary, or corresponding officers of such society, a list of such appli~ants, giving 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 mortuary obligations contracted, when valued for death benefits upon the basis of the National Fraternal Congre.ss table of mortality, - as adopted by the National Fraternal Congress August 23, 1899, or any higher standard at the option of the society, and for disability benefits by tables based upon reliable experience, and for combined death and permanent total disability benefits by tables based upon reliable experience, with an interest assumption not higher than four per cent. per annum; nor until it shall be shown to the Insurance Commissioner by the sworn statement of the treasurer, or corresponding officer of such society, that at least 500 applicants have each paid in cash at least one regular monthly payment as herein provided per $1,000 of indemnity to be effected, which payments in the aggregate shall amount to at least $2,500; all of which shall be credited to the mor'tuary or disability fund on account of such applicants, and no part of which may be used for expenses. Said advanced payment shall, during the period of organization, be held in trust, and if the organization is not completed within one year as hereinafter provided, returned to said applicants. (Acts 1914, pp. 99, 104.)
Editorial Note.-See editorial note under the following section.
56-1616. Same; issuance of certificate by Insurance Commissioner; charter null and void, when; constitution and bylaws.-The Insurance Commissioner may make such examination and require such further information as he deems advisable, and, upon presentation of satisfactory evidence that the society has complied with all the provisions of law, he shall issue to such society a certificate to that effect. Such 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 received in evidence with like effect as the original certificate. No .preliminary certificate granted under the provisions of the preceding section

56-1618

INSURANCE.

shall be valid after one year from its date or after such further period, not exceeding one year, as may be authorized by the Insurance Commissioner, upon cause shown, unless the 500 applicants therein required have been secured and the organization has been completed as therein provided; and the articles of incorporation and all proceedings thereunder shall become null and void in one year from the date of said preliminary certificate, or at the expiration of said extended period, unless such society shall have completed its organization and commenced business as therein provided. When any domestic society shall have discontinued business for the period of one year, or has less than 400 ''members, its charter shall become null and void. Every such society shall have the power to make a constitution and bylaws for the government of the society, the admission of its members, the management of its affairs and the fixing and readjusting of the rates of contribution of its members from time to time; and it shall have the power to change, alter, add to or amend such constitution and bylaws 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.)
Cross-reference.-Charters to insurance companies, see 56-201.
Editorial Note.-This section provides that the preliminary certificate shall be invalid unless 500 applicants have been secured within one year. It also provides that when a domestic society shall have less than 400 members, its charter shall become void. Section 56-1602 provides that the provisions of this law shall not apply to fraternal benefit societies whose membership does not exceed 5,000 members.
Under Canst., A rt. III, Sec. VII, Par. XVIII ( 2-1818), all charters to insurance companies are granted by the Secretary of State. This Act seems to contemplate the issuing of a certificate which is the equivalent of a charter, by the Insurance Commissioner, and noakes no reference to the incorporation by the Secretary of State. Its constitutionality therefore appears to be doubtful.
56-1617. Powers retained; reincorporation; amendment of articles of incorporation.-Any society engaged in transacting business may exercise all of the rights conferred by this law and all of the rights, powers, and privileg-es exercised or possessed by it under its charter or articles of incorporation not inconsistent with this law, if incorporated; or, if it is a voluntary association, it may incorporate hereunder, but no society already organized shall be required to reincorporate hereunder, and any such society may amend its articles of incorporation from time to time in 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 filing, unless a later time be provided in such amendments or in its articles of incorporation, constitution or laws. (A cts 1914, pp. 99, 107.)
Editorial Note.-Sce editorial note under the preceding section.
56-1618. Mergers; transfers of memberships or fund.-No domestic society shall merge with or accept the transfer of the membership or funds of any other society unless such merger or transfer is evidenced by a contract in writing setting out in full the terms and conditiCJns of such merger or transfer, and filed with the Insurance Commissioner, 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 ycrified under oath of said officers of

101

INSURANCE.

56-1619

each of the contracting societies, that such merger or transfer ha s been approved by a vote of two-thirds of the members of the supreme legislative or governing body of each of said societies. Upon the submission of said contract, finan cial statements a nd certificate, the Insurance Commissioner shall examine the same, and, if he shall find such financial statements to be correct and the said contract to be in conformity with the provisions of this section, and th at 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 certificate to that effect, and th ereupo n the said contract of merger or transfer shall be of full force and effect. In case such contract shall not be approved, the fact of its submission and its contents shall not be disclosed oy the Insurance Commiss ioner. (Acts 1914, pp. 99, 108.)
56-1619. Annual license; fee; certified copy of license as evidence.Societi es which are now authorized to tran sact business may continue such business until the firs t day of Ap ril next succeeding the passage of this law, and the authority of such societi es may thereafter be renewed annuall y; but in all cases to termina t e on the first day of the succeeding Ap ril: Provided, however, the license shall continu e in full forc e a nd effect until th e new lice nse shall b e issued or specifically refu sed. For each such lice.nse or renewal the society shall pay the Insurance Commissioner $40. A duly certified copy or duplicate of such license shall be prima facie evi dence th at the. li censee is a. fraternal benefit society wi thin the m eanin g of this law. (Acts 1914, pp. 99, 108.)
56-1620. Admission of foreign society; requirements for; revocation of license.-Any for eign society shall be entitled to a license to transact bus iness within thi s State upon filin g with the Co mmi ss ioner a dul y certified copy of its charter o r articles of association; a copy of its constitution and laws, certifted 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 offi cers, in the form req uired by th e Commi ssion er, duly verified by a n exam ination made by the supervising insurance official of its hom e State or other State satisfactory to the Insurance Commissioner; 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 peri odical or oth er payments by persons holding similar contracts; and upon furni shing 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 th e la >vs of the State, Territory, District, P rovince or Country :vhere it is organized, he sha ll issue a license to such society to do business in this St ate until the first day of the succeedin g April ; and such li cense shall , upon compliance with the provision s of this law, be renewed annually, but in all cases to terminate on the first day of the succeeding April: Provided, however, that such license shall continue in full fo rce and effect until the new lice nse sha ll be issued or specifically refused. A ny foreign societ y desiring ad missio n to thi s State, sha ll ha ve the (jUalifications required of d omestic societies o r-

56-1622

INSURANCE.

102

ganized under this law, upon a valuation by any one of the standards authorized in section 56-1627, and have its assets invested as required by the laws of the State, Territory, District, Country, or Province where it is organized. For each such license or renewal the society shall pay 'the Commissioner $20. When the Commissioner shall refuse to license any society or shall revoke its authority to do business in this State, he shall reduce his ruling, order or decision to writing and file the same in his office, and shall furnish a copy thereof 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: Provided, however, that nothing contained in this or the preceding section shall be taken or construed as preventing any such society from continuing in good faith all contracts made in this State during the time such society was legally authorized to transact business herein. (Acts 1914, pp. 99, 109.)
Cross-references.-Examination of foreign societies, see 56-1631. Organization,, see 56-1614 to 56- 1616. See .note under 56-1601.
56-1621. Process, appointment of Insurance Commissioner for service of.-Every society, whether domestic or foreign, 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 Insurance Commissioner, shall be deemed sufficient evidence thereof and shall be admitted in evidence with the same force and effect as the original thereof might be admitted. Service shall be made only upon such attorney, must be made in duplicate upon the Insurance Commissioner, or, in his absence, upon the person in charge of his office and shall be deemed sufficient service upon such society: Provided, however, that no such service shall be valid or binding against any such society when it is required thereunder to file its answer, pleading or defense in less than 30 days from the date of mailing the copy of such service to such society. When legal process against any such society shall be served upon said Insurance Commissioner he shall forthwith forward by registered mail one of the duplicate copies prepaid and directed to its secretary or corresponding officer. Legal process shall not be served upon any such society except in the manner provided herein. (Acts 1914, pp. 99, 110.)
Cross-reference.-Service on fraternal benefit societies, see note under .56-1601.
56-1622. Place of meeting. Location of principal office.-Any domestic society may provide that the meetings of its legislative or governing body may be held in any State, District, Province, or Territory wherein such society has subordinate branches, and all business transacted at such meetings shall be as valid in all respects as if such meetings were held in this State; but its principal office shall be located in this State. (Acts 1914, pp. 99, 111.)

103

INSURANCE.

56-1623

56-1623. Personal liability of officers and members.-Officers and members of the supreme, grand or any subordinate body of any such incorporated society shall not be individually liable for the payment of any disability or death benefit provided for in the laws and agreements of such society; but the same shall be payable only out of the funds of such society and in the manner provided by its laws. (Acts 1914, pp. 99, 111.)
56-1624. Waiver of provisions of constitution and laws of the society. -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.)
56-1625. Constitution and laws; filing amendments; evidence.-Every society transacting business under this law shall file with the Insurance Commissioner a duly certified copy of all amendments of or additions to its constitution and laws within 90 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.)
56-1626. Annual reports; valuation of certificates.-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 31st day of December next preceding, and of its transactions for the yeat ending on that date, and also shall furnish such other information as the Commissioner may deem necessary to a proper exhibit of its business and plan of working. The Commissioner may at other times require any further statement he may deem necessary to be made relating to such society. In addition to the annual report herein required, each society shall annually report to the Commissioner a valuation of its certificates in force on December 31, last preceding, excluding those issued within the year for which the report is filed, in cases where the contributions for the first year in whole or in part are used for current mortality payments and expenses. Such report shall snow as contingent liabilities, the present mid-year value of the promised benefits, provided in the constitution and laws of such society under certificates then subject to valuation; and as contingent assets, the present mid-year value of the future net contributions provided in the constitution and laws as the same are in practice actually collected. At the option of any society, in lieu of the above, the valuation may show the net value of the certificates subject to valuation as 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 expense of the society, verified by the actuary of the department of insurance of the home State of the

56-1627

INSURANCE.

104

society, and shall be filed with the Commissioner within 90 days after the submission of the last preceding annual report. The legal minimum standard of valuation for all certificates, except for disability benefits, shall be the National Fraternal Congress tables of mortality as adopted by the National Fraternal Congress, August 23, 1899, or a t 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 20 years and cov' ering not less than 100,000 lives with interest assumption not more than four per centum per annum. t:ach such valuation report shall set forth 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 hinds sh all 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 solve.nt so long as the funds in its possession are equal to or in excess of its matured liabilities. 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 1 of each year; or, in lieu thereof, such report of valuation and showing of the society's condition as thereby disclosed may be pubhsh ed in the society's official paper and the issue containing the same mailed to each beneficiary member of the society. The laws of such society shall provide that if the stated periodical contributions of the members are insufficient to pay all matured death and disability claims in full, and to provide for the creation and maintenance of the funds required by jts 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 val uation, with interest not exceeding five per centum per annum. (Ac ts 1914, pp. 99, 112.)
Cross-reference.-Annual report of business of assessment and other companies, see 56-232.
56-1627. Maintenance of financial condition; dissoluti<?n or revocation of license.-If the valuation of the certificates, as hereinbefore provided , on December 31, 1917, shall show that the present vu.lue of future net contributio_ns together with the admitted assets is less than the present value of the promised benefits and accrued liab il ities, such society shall thereafter maintain said financial condition at each succeeding triennial valuation in respect of the degree of detlciency as shown in the valuation as of December 31, 1917. If at any succeeding triennial valuation such society does not show at least the same .condition, the Commissioner shall direct that it thereafter comply "IYith the requirements herein specified. If the next succeeding triennial Yaluation, after the receipt of such notice shall show that the society has failed to maintain the condition required herein, the Commissioner may,

105

I NSURANCE.

56-1628

in t he absence of good cause shown for s uch failure, institute proceedings fo r the dissolution of such society, in accordance with the provision s of section 56-1629, or in the case of a foreign society, its li ce nse may be ~anceled in the ma nn er provided in this law. Any such society shown by any triennial valuation , subsequen t to D ecember 31, 19 17, not to have maintained th e condition herein required, sha ll, wi thin two ' years thereafter, make such improvement as to show a percentage of deficiency not greater than as of December 31, 1917, or thereafter as t o all new members admitted be subject so far as stated rates of contribution are concerned t o the provisions of sections 56-1614 to 56-1616, 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 fro m the oth er fund s of the society. If such required improvement shall not be shown by the succeeding triennial valuation, the said new members may be placed in a separate class and their certificates valued as an independent society in respect of contributions and funds. (Acts 1914, pp. 99, 114.)
56-1628. Provisions as to valuation of certificates in lieu of requirements of two preceding sections ; "accumulation basis;" "tabular basis." -In lieu of the requirements of sections 56-1626 and 56-1627, any society accepting in its laws the provisions of this section may value its certificates on a basis, herein designated "accumulation basis" by crediting each member with the net amount contributed for each year and with interest at approximately the net rate earned and by charging him with his share of the losses for each year, herein designated "cost of insurance" and carrying the balance, if any, to his credit. The charge for the cost of insurance may be according to the actual experience of the society applied to a table of mortality recognized by Jaw and shall take into consideration the amount at risk during each year, which shall be the amount payable at death less the credit to the member. Except as specifically provided in its articles or laws or contracts no charge shall be carried forward from the first valuation hereunder against any member for any past share of losses exceeding the contributions and credit. If after the first valuati on any member's shares of losses for any year exceeds his credit including the contribution for the yea r, the contribution shall be increased to cover hi s share of the losses. Any such excess share of losses chargeable to any membe'r may be paid out of a fund or contributions especially created or r equired 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 ap plication of hi s cred it as provided in the laws of the society. Certificates issued, rerated, or readjusted on a basis providing for adeq uate rates with adequate reserves, to mat.ure such certificates upon ass umptions for mortality a nd interest recognized by the law shall be valued on such basis, herein designated as the "tabular basis:" Provided, that if on the first valuation under this section a deficiency in reserve shall be shown for any such certificate, the same shall be valued on the accumulation basis. Whenever in any society _having m embers upon the tabular basis and up on the accumu la tion basis, the total of all costs of insurance provided for any

56-1629

INSURANCE.

106

year shall be insufficient to meet the actual death and disability losses for the year, the deficiency shall be met for the year from the available funds after setting aside all credits in the reserve or from increased contributions or by an increase in the number of assessments applied to the society as a whole or to such classes of members as may be specified in its laws. Savings from a lower amount of death losses may be returned in such manner as may be specified in its laws. If the laws of the society so provide the assets representing the reserves of any separate class of members may be carried separately for such class so set apart as if in an independent socjety and the required reserve accumulation of such class so set apart shall not thereafter be mingled with the assets of other classes of the society. A table showing the credits to individual members for each age and year of entry and showing opposite each credit the tabular reserve required on the whole life or other plan of insurance specified in the contract, according to assumptions for mortality and in'terest recognized by law and adopted by the society, shall be filed by the society with each annual report and also be furnished to each member before July 1 of each year. In lieu of the aforesaid statement there may be furnished to each member within the same time a statement giving the credit for such member and giving the tabular reserve and level rate required for a transfer carrying out the plan of insurance specified in the contract. No table or statement need be made or furnished where the reserves are maintained on the tabular basis. For this purpose. individual bookkeeping accounts for each member shall not be required and all calculations may be made by actuarial methods. N0thing 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 expressed in the con~ tract and the laws of the society, nor as making any such reserve or credits a liability in determining the legal solvency of the society. (Acts 1914, pp. 99, 115.)

56-1629. Examination of domestic sobieties; enjoining continuance of business.-The Insurance 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 to all the books, papers and documents that relate to the business of the society and may summon and qualify as witnesses under oath and examine its officers, agents and employees or other persons in relation to the affairs, transactions and condition of the society. The expense of such examination shall be paid by the society examined, upon statement furnished by the Insurance Commissioner, and the examination shal! be made at least once in three years. \iVhenever after examination the Insurance Commissioner shall be 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 fraudulently; or whenever any domestic society, after an existence of one year or more, .shall have a membership of less than 400

107

INSURANCE.

56-1630

or shall determine to discontinue business, the Insurance Commissioner may present the facts relating thereto to the Attorney General who shall, if he deem the circumstances so warrant, commence an action in quo warranto in a court of competent jurisdiction and such court shall thereupon notify the officers of such society of a hearing, and if it shall then appear that such society should be closed, said society shall be enjoined from carrying on any further business and some person shall be appointed receiver of such society, and shall proceed at once to take pos-. session 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 hmds to those entitled thereto. No such proceedings shall be commenced by the Attorney General against any such society until after notice shall have been duly served on the chief executive officers of the society and a reasonable opportunity given to it, on a date to be named in said notice; to show cause why sych proceedings should not be commenced. (Acts 1914, pp. 99, 118.)
Cross-references.-Examination of insurance companies, see 56-104. Investigation by Commissioner, see 56-105. Proceedings in case of insolve ncy, see 56-223, 56-921 to 56-926. Examination of foreign fraternal benefit societies, see 56-1631. No adverse publication, see 56-1632. Fraternal ben eficia ry societies, see Chapter 56-17.
Editorial Note~See editorial notes under 56-1601, 56-1602, 56-1616, and 56-1701.
56-1630. Application for receiver, etc., to be by Attorney GeneraL-No application for injunction against or proceedings for the dissolution of or the appointment of a receiver for any such domestic society or branch thereof shall be entertained by any court unless the same shall be made by the Attorney General. (Acts 1914, pp. 99, 119.)
Cross-reference.-Attorney General and Department of Law, see Chapter 40-16.
56-1631. Examination of foreign societies; refusal to submit to; suspension.-The Insurance 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 assistants and he or any person he may appoint shall have free access to a ll the books, papers and documents that relate to the business of the society and may summon and qualify as witnesses under oath and examine its officers, agents and employees and other persons in relation to the affairs, tran sactions and conditions of the society. He may in his discretion accept in li eu of such examination the examination of the in sura nce department of the State, Territory, District, Province or Country where such society is organized. The actual expenses of examiners making any such examination shall be paid by th e society upon statem ent furnished by th e Insurance Commissioner. If any such ,so-
ciety or its officers refuse to submit to such examination or to comply with the provisions of this sec ti on relative thereto, the authority of such society to write new business in this State shall be suspended or license refused until satisfactory evidence is furni shed the Commissioner relating to the conditions and affairs of the soc iety , and during such suspension the society shall not write new business. (Acts 1914, pp. 99, 119.)
Cross-references.-Exam inati on of insurance companies, see 56-104. In ves tigation by Commissione r, see ~ 56-105. See note under 56-160.

56-1634

INSURANCE.

108

56-1632. No publication of statement without notice to society.-Pending, during, or after an examination or investigation of any such society, either domestic or foreign, the Insurance Commissioner shall make public no financial statement, report or finding, nor shall he permit to become public any financial statement, report or finding affecting the status, standing or rights of any such society, until a copy thereof shall have been served upon such society at its home office, nor until such society shall have been afforded a reasonable opportunity to answer 'any such financial statement, report or finding and to make such showing in connection therewith as it may desire. (Acts 1914, pp. 99, 119.)
56-1633. Revocation of license of foreign society; review.-When the Insurance Commissioner on investigation shall be satisfied that any foreign society transacting business under this law has exceeded its powers, or has failed to comply with any provision of sections 56-1601 to 56-1635, or is conducting business fraudulently, or is not carrying out its contracts in good faith, he shall notify the society of his findings and state in writing the grounds of his dissatisfaction and after reasonable notice require said society on a date nam ed, to show cause why its license should not be revoked. If on the date named in said notice such objections shall not have been removed to the satisfaction of the said Commissioner or the society does pot present good and sufficient reasons why its authority to transact business should not at that time be revoked, he may revoke the authority of the society to continue business. All decisions and findings of the Commi ssion er made under the provisions of this section may be reviewed by proper proceedings in any court of comp etent jurisdiction, as provided in s.ection 56-1620. (Acts 1914, pp. 99, 120.)
Cross-references.-Revocation of license of insurance company, see 56-407. Annual lice nse of fratern al society, see . 56-1619. Organization, see 56-1614 to 56-1616. To what soci eties this Jaw applica,ble, see . 56-1602.
56-1634. Exemption of certain societies.-Nothing contained in sections 56-1601 to 56-1635 shall be con strued to affect or apply to grand or subordinate lodges of Masons, Odd Fellows, or Knights of Pythias (exclusive of the insurance department of the supreme lodge Knights of Pythias), and the Junior Order of United American Mechanics (exclusive of the beneficiary degree or insurance branch of the nati onal council Junior Order U nited American Mechanics), or societies w hi ch limit their membership to any one hazardous occupation, nor to similar societies which do not issue insurance certificates, nor t o an association of local lodges of a society which provides dea th benefits not exceeding $500 to any one person or disability benefits not exceeding $300 in any one year to any one person, or both, nor to any contracts of reinsurance bu siness on such plan, nor to domestic societies whi ch limit their membership to the employees of a particular city o r town, desig nated firm, bu siness house, or corporation, nor to domestic lodges, orders or associations of a purely re ligio us, charitable and benevolent description, which do not provide for a death benefit of more than $ 100 or for disability benefits of more than $ 150 to any one person in a ny one yea r. T he Insura nce Commissioner may require from any society such information as will enable him to determine wh ether such society is exempt from th e provisions of



109

INSURANCE.

56-1635

this law. Any fraternal benefit society, heretofore organized and incorporated and operating within the definition set forth in sections 56-1601, 56-1604 and 56-1605, 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 requiring medical examinations, valuations of benefit certificates, and that the certificate shall specify the amount of benefits, shall not .apply to such society. (Acts 1?14; pp. 99, 120.)

56-1635. Taxation, exemption from.-Every fraternal benefit society

organized or licensed under this law is hereby declared to be a charitable

and benevolent institution, a.nd all of its funds shall be exempt from

every State, county, district, municipal and school tax, other than taxes

on real estate and office equipment. (Acts 1914, pp. 99, 121.)



Cross-references.-Property exempt from taxation, see 92-201. Provisions of Constitution as to tax exemptions, see 2-5002. Laws exempting other property void, see 2-5005.

56-1636. Certificates to persons under 16 years of age.-Any fraternal benefit society may issue to persons under 16 years o{ age benefit certificates, when such persons are related to a member of said society as son, daughter, ward, stepson, or stepdaughter, 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 years of the insured 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 being the ages at time of death:
Between the ages of-
1 and 2 years ...... . ... .. ......... : ....................... $ 35.00
2 and 3 years ....................................... ... .. . 39.00 3 and 4 years ........... . ........................... . .... . 45.00 4 and 5 years ....... ..................................... . 50.00 5 and 6 years ..... .. ..................................... . 60.00 6 and 7 years ............................................ . 150.00 7 and 8 years ......................... . ... . .............. . 175.00 8 and 9 years ............................................ . 200.00 9 and 10 years .......... . ................. . .... .' ......... . 250.00 10 and 11 years ........................................... . 350.00 11 and 12 years ..... . . : ... ...................... ; ......... . 380.00 12 and 13 years ....................................... . ... . 460.00 13 and 14 years .......................... : ................ . 600.00 14 and 16 years ........................................... . 1000.00
(Acts 1917, p. 103.)
Editorial Note.-The 1917 Act codified as this section and the two following sections, is general in its terms and does not purport to amend either the 1914 Act codified as sections 56-1601 to 56-1635, or the Act of 1900 codified in Chapter 56-17. Apparently it applies to societies operating under either of these laws.

56-1637. Premiums, how based.-The periodical dues or premiums charged for the benefits in such certificates of membership must be based

56-1639

INSURAN CE.

ll0

~~~~------------------------------------------

up on some recognized mortality table the ptemium in which is not less than the Natio nal F raternal Congress tables of mortality and an interest assumption of four per centum per annum, or upon a table of the actual experience of at leas t 20 yea rs of any similar society compiled from a memb ership of not less than 100,000 members. 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 w hich the membersl~ip certificate provides shall be payable to the legal beneficiaries named in such certificate in event of the death of the m ember and t11e other benefits provided for in the certificates of membership. (Acts 1917, p. 103.)

56-1638. Benefit certificates in classes.-Any fraternal benefit society in this State may issue benefit certificates to its members in accordance with its laws providing- for the estab.lishment of its membership into divisions and classes of the same age of entry, and may provide in its laws and certificates for the payment 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.)

56-1639. Incorporation of fraternal benefit societies of other States; proceedings for.-Any frate rnal benefit society or association organized and incorporated under the laws of any other State, and licensed to do busin ess in this State, which has asse ts including li ens charged against certificates in excess of the required . reserve liability when its outstanding certificates or contracts are valued on the Nationa! Fraternal Congress tables of mortality with an interest assumption 0f not more than four per centum, or upon the optional standard set forth in section 56-1626 or upon some hig her standard, may be incorporated under the laws of this State, as a fratern;tl benefit society under such name or names as it may select, and with a continuation without intermission or cessation of all of its powers, ri ghts, and privileges and of all mutual existing corporate ri ghts, obligation s, liabilities, powers, contraets, liens, privileges, and duties at the time existing between said corporation and its members. Its officers shall be continued in office for the terms for which they were elected, with the same rights, responsibilities, liabilities, duties, powers, and privileges as at the time enjoyed and imposed upon them, it being the purpose of this law to extend and continue such society or association as such a corporation of this State, the same as if it had in all respects originally been incorporated und er the laws of this State. In order to become such a corporati on, th e officers of such society or association such as the board of contro l, trustees, directors, coun cil, executiYe council, or by \vhatever name kn own, w hen thereunto duly authorized by its supreme representative or governin g body, by whateYer name known, shall ftle w ith the Secretary of State a certified copy of its articles of in corporation or charter under which it is then operating, together with a petition asking that such society or association be incorporated as such f;aternal benefit society under whatever name or names it may select. "Cpon the filing of the same' with the

Ill

INSURANCE.

56-1640

Secretary of State and paying a fee of $100 therefor, such society or association shall immediately thereby become incorporated as a fraternal benefit society of this State and the Secretary of State shall issue to it a certificate of incorporation as a fraternal benefit society with the powers and privileges appertaining thereto. Upon filing. a copy of said certificate of incorporation with the Insurance Commissioner and paying a fee of $25 therefor, the Commissioner shall issue to such fraternal benefit society a license to do business in this State. Such society shall, 'except as provided in this law, be g~verned by the general laws in respect to fraternal benefit societies: Provided, however; that in no event shall any charter rights be granted under this law which conflict with the general laws of Georgia applicable to such societies or organizations; and wherever such conflict, if any, shall occur, that part of such charter shall be considered stricken, and the remainder not so conflicting with such laws shall be and constitute the charter rights granted hereunder. (Acts 1929, p. 241.)
56-1640. Exemption of foreign society incorporated in this State from ta'xes, licenses, or fees.-Nothing in sections 56-1639 to _56-1-644 shall in any way exempt such societies or organizations (provided for herein) from any taxes, licenses, or fees which may be required of them under existing laws applicable to such societies or organizations. (Acts 1929, pp. 241, 243.)
56-1641. Funds which may be used for expenses.-Such benefit society, after setting up the required reserves on the mortality standard aforesaid, may use any portion of its assets in excess of such reserves as and for its expenses in the procuring, maintaining, and conducting its business. (Acts 1929, pp. 241, 243.)
56-1642. Forms of certificates issuable.-Any fraternal benefit society maintaining a reserve as provided in section 56-1639 may issue to its members or to juveniles such forms of certificate upon such plan of insurance, providing for paid-up insurance, extended insurance, cash-surrender value, whole life and endowment, accident or indemnity, and payable to such beneficiary as may be authorized in the laws of such society. (Acts 1929, pp. 241, 243.)
56-1643. Supreme governing body, subordinate branches.-Such society shall have a supreme representative governing body, said representatives to have the qualifications which are required by the laws of such society, and subordinate lodges or branches by whatever name known, into which members may at their option be admitted in accordance with its laws. (Acts 1929, pp. 241, 243.)
56-1644. Remedy in forum of society to be sought before suit.-No court shall have jurisdiction to entertain any suit or suits against any such fraternal benefit society, unless and until such member shall have first exhausted his remedies within the forums of the society: Provided, that any member or beneficiary may sue upon any certificate or contract, seeking to recover any death or disability loss provided under the terms of such contract or by the laws of such society. (Acts 1929, pp. 241, 243.)

56-1702

INSURANCE.

112

CHAPTER 56-17. FRATERNAL BENEFICIARY ORDERS.

Sec. 56-1701.
56-1702. 56-1703.
56-1704. 56-1705. 56-1706.
56-1707.

Definition.. Grand lodge personnel. Constitution and byl a w s.
Bene fi ts; classes. Rese rve, etc., funds. .
Assessments and dues. Payment of death benefits, to whom made.
\Vhat law governs; operation o f insurance Ia ws.
Associations of other States.
Reports; blanks; verification; publication; effect of failure to make.
Service of process on nonresident societies ; appointment of attorneys for service.

Sec. 56-1 708.
56- 1709. 56-1710.
56-1711. 56-1712. 56 - 1713. 56-1714.

Record of atto rneys appointed for service of process and of actions fi led.
Law not applicab le to certain orders.
Societies of other States; b~sis on which admitted to do business.
License to societies of other States; is suance ; revocation.
Incorporation of dom estic societies.
L icense to domestic societies; issuance; revocation.
Form of government; number of elect ive members of su preme governing body; fees or premiums to director or manage r.

56-1701. (2866) Definition. Grand lodge person~el. Constitution and bylaws.-A fraterna l beneficiary order, association, or society is one

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

for the benefit of its members a nd their beneficiaries, having a repre-

sentative form of government and a lodge system, with ritualistic form of work for the meeting of its lodges, chapters, councils, or other desig-

nated sub ordi nate bodies, and the benefit s, insurance, charity; or relief

being payable by a grand or .supreme body of the same, excepting sick benefits , which may al so be paid by local or subordin ate bodies. Such

grand or supreme bodies may be composed of its officers, incorporators, representatives elected by local , di strict, or grand bodies, past officers,

and standing committees. Such orders or associations may make a constituti on , bylaws, rules, and regulations consistent w ith the existing laws of thi s State, for the government of a ll under its a u t hority, for the

management of its properties, and for the clue and orderly conduct of its affai rs. (Act s 1900, p. 71.)

Cross-referen ces.-Vv'he n insuranc e companies may tran sact b us iness, see

56-209, 56-403. Form of gove rnm e nt of frat ern a l b.eneti ciary ord ers, e tc ., see

56- 1714. See 56-1 601 a nd note. P e nalty for act in g fo r fraternal benefi ciary

o rd er ill egally, s ee 56-99 17, 56-99 18.



Editorial N ote.- It appears from the titl e of th e Act of 1914 (Acts 1914, p. 99, Chapter 56- 16 of this Code) that the Ac t was in te nd ed to supersed e t his Chapter, but sectio n 32 of that Act ( 56-1 602) prov id e s that it shal l not apply to societies whose me mbership does not excee d 5,000. Th e refo re this Chapter is unaffected by the Act of 1914, so far as it r elat es to s oc ieties w ith less than 5,000 members. See notes foll ow in g 56-1601 and 56-1 616.

56-1 702. (2867) Benefits; classes. Reserve, etc., funds.-Such orders or associations may make provision for the payment of benefits in case of death, s ickness, temporary or perman ent physical disa bility, either as the resu lt of di sease . accident, or old age: Provided, the age at which payment of old age benefits commences sha ll not be und er 70 years. A ny such ord er or associ atio n may al so acc umulate, maintain, app ly, or disburse among its membe rship rese rv e, emerge ncy, or other fund s, as may be provide~ in its cons tituti on and laws: Provid ed, how eve r, that no profit or gain sha ll be added to the payments made by a member. (Acts 1900, p. 71.)

113

INSURANCE.

56-1703

56-1703. (2868) Assessments and dues. Payment of death benefits, to whom made.- The funds from w hi ch th e payment of benefits sha ll be made, and the funds fr om which the expenses shall be d efrayed, shall be derived from assess men ts, dues, or other pay ments collect ed from its members, as may be provided by the constitution or byla,vs of such order or association . Payment of dea th benefi ts shall be to families, heirs, blood relatives, affianced hu sband, or affia nced wife of, or t o persons dependent up on, th e member , as may be designated by the member. (Acts 1900, p. 71.)
Cross-reference.- Definition of life insurance contract, see 56-90 1.
56-1704. (2869) What law governs; operation of insurance laws.Such orders or associations sha ll be governed by this Chapter, and shall be exempt from the provisions of the insurance laws of this State; and no law hereafter passed shall apply to fraternal beneficiary orders or associations unless it expressly so provides. (Acts 1900, pp . 71, 72.)
Cross-references.-Exemption of fraternal so cieti es, etc., from license fees and taxes, etc., see 56-235. Incorporation of domestic societies, see 56-1712. Exemption of benefit societies having more than 5,000 memb ers from insuran ce laws, see 56-1606.
56-1705. (2871) Associations of other States.-Any fraternal beneficiary order, associa ti on, or society coming within the description set forth in section 56-1701, organized under the la ws of_ any other State, province, district, or Territory, not now having lodges, councils, or other bodies or members in this State, shall be permitted to do business within thi s State when it shall have filed with the' Insurance Comm issioner a certificate from th e official in charge of insurance m atters in the State of its incorporation that it is authorized to transact business therein as a fraternal beneficiary ord er or association; also a duly certified copy of its charter and articles of association, and a copy of its constitution and laws, certified to by its secretary or corresponding officer, t ogether with an agreement as to the des ig nation of the person upon whom legal process may be served <J.S hereinafter provided. (Acts 1900, pp. 71, 72.)
Cross-references.-Service on such associations, see 56-1707. Admission of foreign society havi ng memb ership o f more th an 5,000, see 56-1602, 56-1620.
56-1706. (2872, 2873) Reports; blanks; verification; publication ; effect of failure to make.- Every such corporation. society, order, or associati on doing bu siness in this St ate shall , on or before th e first day of Ma rch in each yea r. make a nd fil e wit h the Insurance Commi ss ioner a rep ort of its affairs and operat ion s during the year ending the 31 st clay of December imm ed iately preced ing, w hich annual report shall be in li eu of all other reports required by any other law. Such reports shall be made on blanks provid ed by th e In sura nce Com mi ssion er, and sha ll be ve rifi ed under oath by th e du ly a uth ori zed officers of any such ord er, and such report or the substance thereof shall be published in the annual report of the Insurance Commissioner under a separate head, entitled " F:aternal Beneficiary Societies." Any such order, association, or society refusing or neglecting t o make said report to the Insurance Commissioner shall be excluded from doing business within this State, and the

~-5-6 -1-71-0---------------I-N-SU-R-A-N-CE-.--------------- ---11!
Insurance Commissioner shall at once recall and cancel its license. (Acts 1900, pp. 71-73.)
Cross-references.-Annual report of busines~ ?f ass~ssment companies, see 56-232. Annual report of fraternal benefit soctetles havmg membership of more than 5,000, see 56-1602, 56-1626.
56-1707. (2874) Service of process on nonresident societies; appointment of attorneys for service.-Each such corporation, society, or association now doing, or hereafter admitted to do, business in this State and not having its principal office within thi s State and not being or~ ganized under the laws of this State, may be served with process, whether mesne or final , in any action or special proceedings against said corporation, society, or association, as follows: The party in whose favor suit is beingbrought, through his attorney at law, shall notify the Insurance Commissioner in writing of hi s intention to bring s~1ch suit or action, and request the said In s,urance Commissioner to appoint some resident of the county of the residence of said plaintiff in sa id case, and it shall be the duty of the Insurance Commissioner imm ediately to appoint some resident of sa id county to accept service of process in all cases in the name of the said corporation, soc iety, or association; and the said service, when so made, shall b.e deemed and hel d and accepted by said corporation, society, or association to be legal personal service and binding, the same as if made up on any agent or officer of said society or corporation : Provided, that the said party or his attorney shall , 20 days before the appearance term for said suit or action, cause to be sent to the. Insurance Commissioner a copy of the petition. Wh en such service has been made upon such attorney for service on any such corporation, society, or association, and copy of same has been forwarded to said Commissioner as hereinbefore provided, it shall be the duty oii said Insurance Commissioner immediately to notify the said corporation, society, or association of such service by letter , inclosing copy of said petition, together with process filed .in sa id case, prepa id and directed to the secretary or its correspon ding officer. (Acts 1900, pp. 71, 72.)
Cross-references.-Attorn ey to rec eive servi ce, see 56-605. Venue of suits against insuran ce companies, see 56-601. Service on nonresid ent, assessment, etc., companies, see 56-602, 56-604. Location of office of fraternal benefit societies having more than 5,000 members, see 56-1602, 56-1622.
56-1708. (2875) Record of attorneys appointed for service of process and of -actions filed.-The Insurance Commissioner shall keep a record of all such attorneys appointed for such ,service, together with a record of the time any such petition with process was received by him in any case, and forwarded to any such corporation, society, or association. (Acts 1900, pp. 71 , 73.)
56-1709. (2877) Law not applicable to certain orders.- No thing in this Chapter shall be h ~ld to affect or to apply to grand or subordinate lodges of Masons, Knights of Pythias, Oiid Fellows, Reel Meu, Junior Order American Mechanics, or similar orders th at do not hav e as their principal object the issuance of bencftt certificates to members . (Acts 1900, pp . 71, 74.)
56-1710. Societies of other States; basis on which admitted to do business.-Fratern al beneficiary societies or organizations chartered under

115

INSURANCE.

56-1711

the laws of other States or foreign Governments, except societies which limit their membership to any one hazardous occupation, sha ll 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 a sum equivalent to at least one assessment on said membership. Sai~ societies or associations shall file with the Insurance Co!Jlmissioner a certified copy of th e rates charged on classes of policies being issued by them. Said societies or associations shall stipulate definitely on the face of the policy the amount to be paid to the beneficiaries under said policies, w hi ch amount shall not be contingent upon the amount collected fro m the membership of .any di vision or branch of said society or association. No policies shall be . issued by such societies or associations w ithout s ubj ecting the applicant for insurance t o medical examination. (Acts 1912, pp . 119, 138.)
Cross-references.-Fraternal beneficiary order defined, see 56-1701. Associations of "other States, see 56-1 705. License; r egulation, see 56-1713.
56-1711. License to societies of other States; issuance; revocation.T he Insurance Commissioner is hereby authori zed t o investigate fully the financial condition of such nonresident societies or associati ons, and if, in hi s judg ment, the manageme nt of th eir affairs is not such as to justify the issua nce of a license, he is hereby fully empowered to decline to license such societies or association s, a nd , in case they have already been licen sed, to revoke their authority to do business as provided for the revocation of license of in surance companies. In the event such societies or associations fully comply with all the requirements of the laws of this State, they may be licensed to do business up on the payment of a license fee of $40. (Acts 1912, pp. 119, 138.)
Cross-references.-Issuin g of li ce n ses to insurance companies, see 56-406. Revocati o n of li cense, see 56-407. Annual licen se of fra-ternal benefit s o cieties having more than 5,000 m embers , see 56-1602, 56- 1619. Ad mi ss ion of for eig n society having membership of over 5,000, see 56- 1620. R evo cati o n of license of fraternal benefit soc ieties having membership of more than 5,000, see 56-1633.
56-1712. Incorporation of domestic societies.-Domestic fraternal beneficiary societies or associations sha ll be cha rtered by the Secretary of Stat e, and shall conform to all th e requirem ents of law with reference to the incorpo rati on of insurance companies except that they sha ll not be required to have any capital stock. (Acts 1912, pp. 119, 139.)
Cross-references.-Charters to insurance companies , see 56-201 et se q. O rga nization of fraternal b enefi t soc ieties h aving more than 5,000 members, see 56- 1614 to 56- 1616.
56-1713. License to domestic societies; issuance; revocation.- \Nhen such companies or associations have been duly chartered by the Secretary of State and have rece ived from him a ce rtifi cat e of th eir in corporation, upon application to the Insurance Commissioner, they may be authorized by the Com missioner t o soi icit applications for membership in sa id societies or a sso ciations ~ und er such rules and regulations as may be prescribed by the Insurance Commissioner. When a society or association has obtained not less than 300 bona fide applications for insurance, the adva nce assessme nts on w hich have been paid, and a li st of the subscribers w ith their post-office addresses and the amount of their ad-

56-1714

INS U RANCE.

116

vance assessments has been submitted to the Insurance Commissioner, and by him verified, together with an affidavit that said assessments are deposited with some bank or trust company, duly certified by said bank or trust company, the Insurance Commi ss ioner, if satisfied that the character of the officers of such society or association guarantees honest and efficient managem.ent of the associatio.n's affairs, shall issue a license to such society or association to do bu sin ess upon the payment of a license fee of $40. No polici es shall be issued by s uch societies ~r associations without subjecting applicants to .medical examinati on. The Insurance Commissioner is hereby authol"i zed to investigate fully the financial condition of such societies or a ssociation s at any tim e, and if in his judgment the management of the affairs of a ny soc iety or association is not such as to justify the issuance of the license, he is hereby fully empowered to refuse license to such soci et y or as sociation , and in case it has alread y been licen sed, such license ma y be revoked, as provided for the revocation of licenses of in surance companies. (Acts 1912, pp. 119, 139.)
Cross-references.-Fraternal bene fic iary order defined, see ~ 56-170 1 and note. Issuin g of li ce n ses to insuran ce companies an d age nt s, see 56-406. Revocation
* of licenses ge n erally , see 56-407. No nresi de nt frat e rnal orders, see 56-1710.
License for such societies, see 56-1711. Annu a l li ce n se for frat ernal benefit soc ieti es h aving more than 5.000 m embers, see 56-1602, 56-1 619. Admiss ion of such forei gn societies, see 56-1620.
56-1714. Form of government; number of elective members of supreme governing body; fees or premiums to director or manager.-All foreign or domestic fraternal companies, corporations, ord ers, associations and beneficiary societies soliciting business in this State must have a representative form of government. Any such company, corporation, order, a ssociation or beneficiary soci ety shall be d eemed t o have a representative form of government w hen it shall provid e in its constituti on and Ia ws for a supreme legislative or govening body composed of representatives elected either by th e menibers or by delegates elected either directly or indirectly by the members, together with such other members as may be prescribed by its constitution and laws: Provided, that .
th e elective members shall constitute a m ajority in number, and shall
have not less than t wo-thirds of the vote, nor less tha n th e votes required to amend its constitution and laws. No member of any domestic
in surance society, who is a director or manager of such in sura nce so-
ciety, shall have a contract for fees or premium s from such soci ety. (Acts 1912, pp. 11 9, 140.)
Cross-references.- Represe nt a ti ve form of gover nm en t for frat ernal benefit societies havin g more than 5,000 m emb ers defi ned , see 56- 1602, 56- 1605.

CHAPTER 56-99. CRIMES.

Sec. 5!>-\!'JOI.
51i -'J 902.
56-<.J tJ03.

::\eglect of sum mon s or obst ru ct in~ Con1missioner' s ex-
aminal ion.
F a lse stat clllc nts by o ffice r s, age nt s. etc, of insura nce compa ni es .
Gi\ing rehatc~ o r 1nakl ng discr it ninatory co ntracts.

S ec. So-9904. '56 -9905.
56-9906.

Investments by in surance compa ni es.
P enalty on agents of unauthorized insura nce companies.
False rep resentation as to policy sold.

117

IN SURANCE.-

56-9901

Sec. 56-9907. 56-9908. 56-9909. 56-9910.
56-9911. 56-9912.

Receiving commtsswns from undertakers on account of employment.
Violating regulations for indu s trial health, life, or accident insurance business.
Receiving premium after insolvency or fraudulent reinstatement.
Incorporated mutual or cooperative fire insurance companies, violation of Ia w relating to.
Fraudulently procuring insuran ce.
F raternal benefit societies; fraudulent representations with reference to applications for membership or for purpose of obtaining money.

Sec.
56-9913. Same; fal se s tatement s as to death or disability, etc.

56-9914. 56-9915.

Same; soliciting membership in society not licensed or authorized to do business in State.
Same; punishment for violation of law where not fixed by preceding sections.

56-9916. Fraudulent insurance claims.

56-9917. Acting fo r fr a terna l b enefi ciary order prohibited from doing business.

56-9918. Acting fo r fra ternal be neficiary ord e r not complying with law.

56-9901. Neglect of summons or obstructing Commissioner's examination.- Whoever without justifiable cause shall n eglect, up on legal s ummons being served witlain this S tate, to appear and t estify before the Commissioner or his examiner in the examination of any company as provided in section 56-104, and whoever wilfully and wi thout just cause shall obstruct the Commissioner, his .deputy or examiner, in a ny such exam ination , shall b e puni sh ed b y a fine of not more than $ 1,000 or b y impri sonment for not m ore than o ne year. It s hall be th e duty of th e Insurance Commissioner to report any and all such offenses under this se ct io n to th e solicito r genera l of th e circuit in which it o r the y sh a ll occur. ( Acts 1912, pp. 119, 125.)
Cross-reference.-Punish men t fo r burning goods to def raud insu rer, see 26-2210.

56-9902. False statements by officers, agents, etc., of insurance companies.-Any director, officer, agent or employee of any in surahce company who wilfully and knowingly subscribes, makes or concurs in making any annual or other statement req uired by law containing any materia l st a t e m ent which is fal se shall be deem ed guilty of a misd e m ea nor. It s haJl he the duty of the In s ura nce Commi ss ioner t o r eport a ll s u ch misrepresenta tions and false statements t o th e solicitor general of the circuit in which they shall occur. (Acts 1912, pp. 119, 125.)
Cross-references.-Issuing license, see 56-402. \tV hen certain insurance compa nies may transact business , see 56-209, 56-210, 56-403.

56-9903. Giving rebates or making discriminatory contracts.- Any person acting a,; agent for any ins uran ce compa ny in g iving a rebate o n any insurance premium, or in making an y di scriminatory contract, and t11e party receiving the b enefit of any such rebate o r discrimination , in v iolation of section 56-218, s hall be deemed g uilty of a mi sde meanor. (Acts 1912, pp. 11 9. 130.)

56-9904. Investments by insurance companies.-Any person a cting as agent for any co mpany conte mplated by secti on 56-224, ,,ith regard t o inves tm ents by in s ura nce companies, w ho s h a ll kn ow in g ly and wilfully v iola te th e provisio n s of saicl sectio n, s hall be deemed guilty of a mi sdemeanor. (Act s 19 12, pp . 11 9, 137.)

56-9910

INSURANCE.

118

56-9905. (2444; 626 P. C.) Penalty on agents of unauthorized insurance companies.-Any person wh~ shall do or perform any of the acts or things specified in section 56-501 for any insurance company, or agent of said company, without such company's having first received a certificate of authority from the Insurance Commissioner, as required by law, shall be punished as for a misdemeanor, and shall also pay a sum equal to the State, county, and municipal taxes and licenses required to be paid by insurance companies legally doing business in this State. It shall be the duty of the Insurance Commissioner to see that violators of th e provisions of this section are prosecuted. (Acts 1887, p. 122.)
Cross-reference.-Civil liability, see 56-502.
56-9906. False representation as to policy sold.-Any person violating section 56-519, making unlawful false representations as to the policy sold, shall be deemed guilty of a misdemeanor. (Acts 1912, pp. 119, 124.)
56-9907. Receiving commissions from undertakers on account of employment.-No person, firm, or corporation engaged in the life insurance business or th e industrial life insurance business shall contract for or receive any compensation or gratuity, directly or indirectly, on account of the employment of any undertaker in connection with a burial or preparation for burial of any person whose life is insured by said company; and no undertaker shall give or agree to give any such compensation or commission to such person, firm, or corporation engaged in the insurance business. Any person, firm, or corporation violating the provisions of this section shall be guilty of a misdem eanor, and punished as such. (Acts 1933, p. 186.)
56-9908. Violating regulations for industrial health, life, or accident insurance business.-Any person who shall violate sections 56-517 or 56-1310 to 56-1312, regu lating the business of industrial health, life or accident insurance, shali be guilty of a misdemeanor. (Acts 1913, p. 98.)
56-9909. Receiving premium after insolvency or fraudulent reinstatement.-Any person violating any provision of section 56-1311, prohibiting the receiving of premiums or assessments with knowledge of the insolvency of the insurance company or association without giving notice to the person paying the premium or assessment, and prohibiting the fraudulent issuance of policies or benefit certificates as th erein prescribed, shall be guilty of a misdemeanor. (Acts 1913. pp. 98. 99.)

56-9910. Incorporated mutual or cooperative fire insurance companies, violation of law relating to.-Any person or corporation violating the provisions of sections 56-1408 to 56-1424, regulating in.corporatecl mutual or cooperative fire insurance companies, shall be g uilty of a misdemeanor, and. upon conviction shall be punished by a fine of not less than $50 nor more than $500, and the In surance Commissioner shall have power to revoke the license of any such person or corporation. (Acts 1923, pp. 113, 119.)

119

INSURANCE.

56-9911

56-9911. (2457; 627 P. C.) Fraudulently procuring insurance.-Any agent, physician, or other person who shall knowingly secure, or cause to be secured, a certificate of membership in any assessment life insurance company on any person without his knowledge or consent, or, by means of misrepresentations, false, fraudulent, or untrue statements, shall be instrumental in securing a certificat e of membership in any such company on any aged or infirm person, or in restoring to membership any person not in an insurable condition, shall be deemed guilty of a misdemeanor, and said certificate or renewal shall be absolutely void. (Acts 1887, p. 125.)
Cross-reference.-Assessment li fe insurance, see 56-1501, 56-1502.
56-9912. Fratemal benefit societies; fraudulent representations with reference to applications for membership or for purpose of obtaining money.-Any person, officer, member or examining physician of any fraternal benefit society authorized to do business under sections 56-1601 to 56-1635, who s hall knowingly or wilfully make any false or fraudulent statemen t or representation in or with reference to any application for membership, or for the purpose of obtaining money from or benefit in any society tran sacting business under said sections, shall be gui lty of a misdemeanor, and upon conviction thereof shall be punished by a fine of not less than $100 nor more than $500 or imprisonment in the county jail for not less than 30 days nor more than one year, or both, in the discretion of the court. (Acts 1914, pp. 99, 121.)
56-9913. Same; false statements as to death or disability, etc.-Any person who shall wilfully make a false state-ment of any material fact or thing in a sworn statement as to the death or disability of a certificate holder in any fraternal benefit society for-the purpose of procuring payment of the benefit named in the certificate of such holder, and any person who shall wilfully. make any false statement in any verified report or declaration under oath required or authorized by sections 56-1601 to 56-1635 sha ll be g uilty of perjury, and shall be proceeded against and punished as provided by the statutes in r ~lation to the crime of perjury. (Acts 1914, pp. 99, 121.)
Cross-reference.-Perjury, see 26-4001 , 26-4002.
56-9914. Same; soliciting membership in society not licensed or authorized to do business in State.-Any person who shall solicit membership for, or in any manner assist in procuring membership in any fraternal benefit society not licensed to do business, or w ho shall solicit membership for, or in any manner assist in procuring membership in any such society not authorized to do business in this State, shall be guilty of a misdemeanor and upon conviction thereof sha ll be punished by a fme of not less than $50 nor more than $200. (Acts 1914, pp. 99, 121.)
56-9915. Same; punishment for violation of law where not fixed by preceding. sections.- Any society or any officer, agent, or employee thereof, neglecting or refusing to comply with or violating any of the provisions of secti ons 56-1601 to 56-1635, the penalty for which neglect, refusal or v iolation is not specified in the preceding three sections, shall be fined not exceeding $200 upon conviction thereof. (Acts 1914, pp. 99, 121.)

56-9918

INSURANCE,

120

56-9916. Fraudulent insurance claims.-Any person who shall knowingly or wilfully make, or aid in the making of, any false or fraudulent statement or representation of any mater.ial 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 industrial, health, life or accident insurance company, or fraternal or benefit association licensed, or which may be licensed, to do business in this State, and any person who shall I;Ilake any false or fraudulent statement in. any application for insurance , or as to the death or disability of a policy or certificate holder. in any such industrial, health, life or accident insuranc~ company, or fraternal or benefit association, for the purpos: of fraudulently obtaining any money or benefit from any such insurance company, or from any fraternal or benefit association licensed or which may be licensed, to do business, shall be guilty of a misdemeanor. (Acts 192'1, pp. 250; 251.)
56-9917. (629 P. C.) Acting for fraternal beneficiary order prohibited from doing business.-Any officer, agent, ot person acting for any fraternal beneficiary order, or subordinate body thereof, within this State, while it shall be prohibited from doing business pursuant to the provisions of Chapter 56-17, shall be guilty of a misdemeanor, and shall be punished by a fine of not less than $25 nor mote than $100. (Acts 1900, pp . 71, 74.)
56-9918. (630 P. C.) Acting for fraternal beneficiary order>not complying with law.-Any person who shall act within this State as an officer, agent, or otherwise, in soliciting -:::r p!'ocuring new business or members for any fraternal beneficiary order which shall have neglected or refused to comply with the provisions of Chapter 56-17, on the subject of fraternal beneficiary orders, shall be guilty of a misdemeanor and be punished as provided in the preceding section. (Acts 1900, pp. 71, 74.)

WORKMEN'S COMPENSATION

Sec. 114-60 I. 114-602.
114-603. 114-604. 114-605. 114-606. 114-607. 114-608. I 14-609.

CHAPTER 114-6. INSURANCE.

Sec.

Duty of employers to insure

Authority of Insurance Com-

payment of compensation.

missioner to investigate rates,

Duty to insure in licensed com-

publish data, take testimony,

pany, association, etc., or to

etc.

deposit security, indemnity, 114-610. Permits required of insurance

or bond.

carriers, revocation of ~rmits.

Evidence of compliance with re- 114-9901. Refusal or neglect of employer

quirements of law, filing.

to file evidence showing com-

Certificate.



pliance with section 114-603.

Substitute sy>tems; approval; 114-9902. Penalty for carrying on insur-

termination.

ance business without per-

Knowledge of injury. Bond or

mit ot after revocation of

de.posit of insurer.

permit.

Policy or contract of insurance. Page 125. Insurance companies premium

Policies subject to this Title;

tax.

exceptions.

Page 126. Insurance agents occupation

Rates of insurance carriers.

taxes.

114-601. Duty of employers to insure payment of comMnsation.Every employer who accepts the compensation provisions of this Title shall insure the payment of compensation to his employees in the manner hereinafter provided, and whi le such insurance remain s in force he or those conducting his business shall be liable to any employee for personal injury or death by accident only to the extent and in the manner herein specified. (Acts 1920, p. 176.)

121

INSURANCE

114-602

114-602. Duty to insure in licensed company, association, etc., or to deposit security, indemnity, or bond.-Every employer who accepts the provisions of this Title relative to the payment of compensation shall fully insure and keep fully insured, unless otherwise ordered or permitted by the Department of Industrial Relations, his liability hereunder in some corporation, association, or organization, licensed as provided by law to transact the business of workmen's compensation insurance in this State, or in some mutual insurance association formed by a group of employers so licensed, or shall furnish to the Department satisfact.ory proof of his financial ability to pay directly the compensation in the amount and manner and when clue a s provided for in this law. In the latter case the Department may in their discretion require the deposit of acceptable security, indemnity or bond to secure the payment of compensation liabilities as they are incurred: Prov.iclecl, that
it shall be satisfactory proof of the employer's financial ability to pay directly the compen sation in the amount and manner when clue, as provided for in this Title, and the equivalent of acceptable security, indemnity or bond to secure the payment of compensation liabilities as they are incurred, if the employer shall show to the Department that he is a member of a mutual insurance company, duly licensed to do business in this State by the Insurance Commissioner, as provided by the laws of this State, or of an association or group of employers, so licensed, and as such is exchanging contracts of insurance with the employers of this and other States, through a medium specified and located in their agreements between each other, but this proviso shall in no wise restrict or qualify the right of self-insurance as hereinbefore authorized. Nothing herein shall be construed to require an employer to place his entire insurance in a single insurance carrier. (Acts 1920, p. 203; 1931, pp. 7, 43.)

114-603. Evidence of compliance with requirements of law, filing.Every employer accepting the compensation provisions of this Title shall file with the Department of Industrial Relations in form prescribed by the Department, annually or as often as the Department in their discretion may deem neces;;ary, evidence satisfactory to the Department of his compliance with the provisions of the preceding section and all other sections relating thereto. If such employer shall refuse or wilfully neglect to comply with these provisions, the Department of Industrial Relations hearing any applica-tion for compensation by an injured employee of such delinquent employer may assess against such employer compensation in an amount greater by 10 per cent. than that provided for in this law, and shafl also fix a reasonable attorney's fee for the representative of the employee to be paid by the employer in addition to the increased compensation. The said attorney's fee and said increase of compensation shall be due and payable at once and the payment of same shall be enforced as provided elsewhere in this Title. (Acts 1920, p. 204; 1923, p. 97; 1931, pp. 7, 43.)
Cross-reference.-Penalty for em,ployer's failure to comply with this section, see ~ 114-9901.
114-604. Certificate.-Whenever an employer has complied with the )_)rovisions of section 114-602, relating to self-insurance, the Depart;

114-605

INSURANCE

122

ment of Industrial Relations shall issue to such employer a certificate, which shall remain in force for a period fixed by the Department, but the Department may upon at least 60 days' notice and hearing to the employer revoke the certificate upon satisfactory evidence for such revocation having been presented. At any time after such revocation the Department may grant a new certificate to the employer upon his petition. (Acts 1920, p. 204; 1931, pp. 7, 43.)

114-605. Substitute systems; approval; termination.-(a) Subject to the approval of the Department of Industrial Relations, any employer may enter into or continue any agreement with his employees to provtde a system of compen sation , benefit or insurance in lieu of the compensation and insurance provided by this law. No such substitute system shall be approved unless it confers benefits upon injured employees at least equivalent to the benefits provided by this Title, nor, if it requires contribution from the employees, unless it confers benefits in addition to those' provided under thi s Title at least comm ensurate with such contribution. (b) Such substitute system may be terminated by the Department on reasonable notice and hearing to the interested parties if it shall appear that the same is not fairly administered or if its operation shall disclose defects threatening its solvency, or if for any substantial reason it fails to accomplish the purpose of this law; and in this case the Department shall determine upon the proper distribution of all remaining assets, if ahy, subject to th e right of any party at interest to take <Vn appeal to the superior court of the county wherein the principal office or chief place of business of the employer is located . (Acts 1920, p. 205; 1931, pp. 7, 43.)

114-606. Knowledge of injury. Bond or deposit of insurer.-All policies insuring the payment of compensation under this Title, including all contracts of mutual, reciprocal, or inter-insurance, must contain a clause . to the effect that as between the employer and the insure_r or insurers the notice to or knowledge of the occurrence of the injury on the part of the insured employer shall be deemed notice or knowledge, as the case may be, on the part of the insurer or 'insurers; that jurisdiction of the insured for the purposes of this Title shall be jurisdiction of the insurer or insurers; and that the insurer or insurers shall in all things be bound by and subject to awards, judgments, or decrees rendered against such insured employer. Every insurance company doing a workmen's compensation business in this State shall furnish a bond payable to the State in the sum of $50,000 with some surety company authorized to transact business in this State as surety, in such form as may be approved by the Insurance Commissioner, conditioned for the payment of compensation losses on policies issued by such insurance company upon risks located in this State. Suit may be brought upon said bond by the Department of Industrial Relations, for the use and benefit of any party or parties at interest. The annual license of such company shall not be issued or renewed until it has filed with the Insurance Commissioner of thi s State a bond as aforesaid. In lieu of such bonrl a deposit of the same amount may be made with the Treasurer of the State in the form of other security satisfactory to the Insurance Commissioner. (Acts 1920, p. 205; 1933, pp. 182, 183.)

123

INSURANCE

114-607

114-607. Policy or contract of insurance.-No policy or contract of insurance shall be issued unless it contains the agreement of the insurer o r insurers that it or they will promptly pay to the person entitled to same all benefits conferred by this Title and all installments o{ the compensation th'lt may be awa rded or agreed upon, and that the o bligation shall not be affected by any default of the insured after the injury, or by any default in giving notice required by such policy, or otherwise. Such agreement shall be construed to be a direct promise by the insurer or insurers to the person entitled to compensation, enforceable in his na m e.
A policy of insuranc\'! issued under this Titl e shall always fir st be construed as an agreement to pay compensation; and an insurer who issues a policy of compensation insurance to an employer not subj ect to this Title shall not plead a s a defe~1se that the employe r is not subj ect to the Title ; and an insurer who issues to an employer subject to this Title a policy of compensation insurance covering an employee or employees ordinarily exempt from its provisions shall not plead the exemption as a defense. In either case compensation shall be paid to an injured e!11ployee or to the dependents of a deceased employee for a compensable accident as if the employer and/or the employee were subject to this Title, the policy of compensation ins urance constituting a definite contract between all parties concerned. (Acts 1920, p. 206; 1933, pp. 184, 185.)

114-608. Policies subject to this Title; exceptions.-Every policy for the insurance of the compensation herein provided, or against liability therefor, including all contracts of mutual, reciprocal or inter-insurance, shall be deemed to be ma:de subject to the provisions of this Title. No corporation, association or organization, and no mutual, reciprocal or inter-insurers shall enter into or make any such policy or contract of insurance unless its form shall have been approved by the Department of Industrial Relations. This law shall not apply to policies of insurance against loss from explosion of boilers or fly wheels or other similar catastrophic hazards. (Acts 1920, p. 206; 1931, pp. 7, 43.)

114-609. Rates of insurance carriers. Authority of Insurance Commissioner to investigate rat;es, publish data, take testimony, etc.- (a) The rates charged by all carriers of insurance, including the parties to any mutual, reciprocal, or other plan or scheme for writing insurance against the liability for compensation under this law, shall be fair, reasonable, and adequate, with due allowance for merit rating, and all risks of the same kind and degree of hazard shall be written at the same rate by the same carrier. The basic rates for policies or contracts of insurance against liability for compen sation under this Title shall be filed with the Insurance Commissioner for his appwval, and no policy of insurance against such liability shall be valid until the basic rates thereof have been filed with and approved by the Insurance Commissioner, nor if they have been subsequently disapproved by him. Any plan or scheme for modification of such basic rates by physical inspection or experience or merit rating shall likewise be filed with the Insurance Commissioner and by him approved, and no carrier of insurance shall write any such policy or contract until after filing and approval of a basic rate therefor and a schedule or plan to be employed in producing individual rates for

114-610

I N SURANCE

124

risks. (b) Each such in surance carrier, including the parties to any mutual, reciprocal, or other plan or scheme for writing insurance against the liability for compensation under this law, shall report to the Insurance Commissioner as provided by law, a nd in accordance with such reasonable rules as the I~surance Commi ssioner may at any time prescribe for the purpose of determining the solvency of the carrier, and the adequacy or reasonableness of its rates and reserves; for such purpose the Insurance Commissioner may inspect all the books and records of such insurance carrier and its agent or agents, and examine its agents, officers, and directors under oath. (.c) Said Commissioner shall have the power, in such manner and by such means as he may deem proper and adequate, to gather statistics and information and make investigations concern:ing. rates for such insurance, and to that end he may take into consideration the income and earnings, from any and every source whatever, of any such company, and may ca!l upon the directors of the D epartmer.t of Industrial Relations to sit with him in an advisory capacity at a ny in vestigation or hearing concerning such rates. Authority is hereby conferred upon the Insurance Commissioner to make such arrangements with the Department of Industrial Relations as may he agreeable to them for collecting, compiling, preserving, and publi shing sta ti stical" a nd other data in connection w ith th e work of regula ting workmen's compensation in surance rates; and w henever he deem s proper, with the consent of the directors, he may appoint any of the directors, or employees of the D epartment, as special agent s of the Insurance Commissioner to take testimony and make reports with reference to any matters involving questions of workmen's compensation in surance rates. Any party at interest may appeal from any dec ision of the In surance Commissioner, made under this section, in the manner provided by law. (Acts 1920, p. 206; 1929, pp . 358, 360; 1931, pp. 7, 43.)

114-610. Pennits Required of Insurance Carriers, Revocation of Pennits, etc.-Every insuranct' company and every person, firm or corporation, writing policies of insurance under this title, or insuring the payment of compensation to employees as provided by this title, before writing any such policy, or entering upon any such insurance contract, or continuing any such contract of force, shall obtain from the Department of Industrial Relations a permit authotizing such company or such person, firm or corporation to engage in business as an insurance carrier under this title and to write and enter upon such insurance contracts. The application for such permit shall set forth such facts as the Department of Industrial Relations may, by regulation, require. The Department of Industrial Relations is authorized to prescribe the form of permit, and to provide by regulation for a hearing upon such application. Upon the filing of such application, the Department of Industrial R elations shall have such hearing thereon as may be provided for by regulation, and shall grant such permit if in its discretion the applicant is qualified, financially and otherwise, to carry on such insurance business. The Department of Industrial Relations shall prescribe the rul es and regulations for apportioning rejected workmen's compensaticn policies, and may establish an equitable assignment of such policies and enforce such provision ; provided, however, thai: if a nd when any rate-making or rate-modification bureau or other similar bureau main-

125

INSURANCE

114-9902

tained by the insurance carriers and approved by the Insurance Commissioner, with authority to handle such matters in this State, agree that when a risk has been rejected by any three companies doing business in this State, the bureau will immediately assign a company to write said risk, then the Department of Industrial Relations shall not make the assignment, but shall refer the matter to said bureau, which shall make the assignment subject to rules approved by the department of Industrial Relations. The policy to be issued shall be the standard workmen's compensation policy of insurance containing the usual and customary provisions found in such policies thereof, at the rate prescribed by the Insurance Commissioner, and further that the premium charge shall be promptly paid. If there is any question regarding the lack of accident prevention and safety engineering with respect to a particular risk reasonable rules and regulations are to be promulgated, which shall be put into full force and effect when approved by the Department of Industrial Relations. The requirements of this section shall be in addition to anything required of insurance companies under the general laws of this State as embodied in title 56 of this Code. The Department of Industrial Relations is authorized, of its own motion, or upon complaint filed with it, after notice of not less than ten days and a hearing thereon, to revoke any permit granted under this section if it shall appear that the holder of such permit declines to accept and underwrite any risk so assigned to it after said risk shall be assigned to said company by the Department of Industrial Relations and/ or a bureau established and approved for rating purposes where the employer is ready, willing, and able to pay the premium thereon at the rate prescribed by the Insurance Department, or if it shall appear that the holder of any such permit fails and refuses to obey any valid order of the Department of Industrial Relations, or to pay any award entered against it by the Department .and not appealed from, or affirmed on appeal, or if it should appear that the holder of such permit is otherwise not qualified to carry on such business. Appeal from any decision under this section may be made in the manner provided elsewhere for appeals from orders or judgments of the Directors of the Department of Industrial Relations. (Acts 1935, pp. 146-148.)
114-9902. Penalty for Carrying on Insurance Business without Permit or after Revocation of Permit-Any company or any person, firm, or corporation who shall write insurance under this title, or enter upon any contract to insure the payment of compensation under this title, or continue any such contract of force, ~ithout first obtaining a permit from the Department of Industrial Relations as required by Section 114-6!0, or after the revocation of any such permit, shall be guilty of a misdemeanor. (Acts 1935, pp. 146-148.)
Approved March 11, 1935.

INSURANCE COMPANIES PREMIUM TAX
Taxes.-All foreign and domestic insurance companies doing business in this State shall pay one and one-half (1;1%) per centum upon gross premiums received by them in this State for .the year with no deduction for dividends, whether returned in cash or allowed in payment or reduction of premiums, or for additional insurance; nor shall any deduction be allowed for premium abatement of any kind or character, or for reinsurance, except companies doing business in Georgia, or for cash surrender values paid, or

INSURANCE

126

for losses or expenses of any kind said tax being imposed upon gross premiums without any deductions whatever except for premiums returned on change of rate and cancelled policies and on reinsurance as above provided. Provided, that local organization known as Farmers' Mutual Insurance Companies, operating in not more than four counties, shall not be subject to this tax. Provided, further, that mutual fire insurance companies chartered by this State, which require their members to make premium deposits to provide for losses and expenses, and which premium deposits are used wholly for the payment of losses and expenses and returned to the policy holders or held to pay losses and expenses and as reinsurance reserves, shall not be subject to this tax.
Every insurance compa{\y incorporated under the laws of this State, and doing business in the legal reserve plan, shall be required to return for . taxation all of its real estate as other real estate is returned, and all of the personal property owned by it shall be ascertained in the following manner: From the total value of the assets held by the company, both real and personal, shall be deducted the assessed value of all real estate owned by the company in this State, the non-taxable funds deposited by the company with the State Treasurer and the amount of the reserve or net value of the policies required by law to be held by the company for its policyholders; and which belong to such policy-holders; the remainder shall be the value of the personal property owned by and taxable against such companies.
That whenever any insurance company doing business in this State shall make it appear by proof to the Insurance Commissioner that one-fourth of the total assets are invested in any or all of the following securities or property, to-wit: Bonds of this State or of any county or municipality of this State, property situated in this State and taxable therein, loans secured by liens on real estate situated in this State, or policy loans by insunince policies issued by such company on lives of persons resident of this State, then the premium tax levied by the first paragraph of this section shall be abated or reduced to one per centum upon the gross receipts of such c0mpany; and if the amounts so invested by any such company shall be as much as three-fourths of the total assets of such company, then said premium tax shall be abated or reduced to one-fourth of one per centum upon such gross receipts of such company. (Acts 1935, pp. 11, 60.)
INSURANCE AGENTS' OCCUPATION TAXES
(a) Upon each and every local insurance agent, and upon each and every solicitor or sub-agent, for any resident or non-resident life, fire, marine, accident, casualty, liability, indemnity, fidelity, bonding or surety insurance company doing business in this State, $10 .00, payable to the Insurance Commissioner for each county in which said agent, solicitor, or subagent shall transact or solicit business.
(b) Upon each and every local insurance agent, and upon each and every .solicitor or sub-agent, for any resident or non-resident assessment life-insurance company, or industrial life, accident, or sick-benefit insurance company, live-stock insurance company or fire and storm cooperative assessment fire insurance companies doing business in this State, $10.00 payable to the Insurance Commissioner, for each county in which said agent, solicitor, or sub-agent shall transact or solicit business.

127

INSURANCE

(c) Upon each and every general, special, traveling, state, or district agent, or manager, or assistant manager, by whatever name he . may be designated in his contract, of any resident or non-resident life, fire, marine, accident, casualty, liability, indemnity; fidelity, bonding or surety insurance <:ompany, doing business in this State, $100 .00 payable to the Insurance Commissioner, whose receipt shall authorize the person named therein to go to any county in the State without the payment of an additional tax.
(d) Upon each and every general, special, traveling, state, or district agent, manager, assistant manager, district manager, superintendent, or assistant superintendent, by whatever name he may be designated in his contract, of any resident or non-resident assessment life-insurance company, or industrial life, accident or sick benefit insurance company or live-stock insurance company, doing business in this State, $100.00 payable to the Insurance Commissioner, whose receipt shall authorize the person named therein to go into any county in the State without the payment of an additional tax.
(e) Upon all adjustment bureaus employing adjustors, a tax of $50.00 for each person who adjusts any loss, said tax payable to the Insurance Commissioner whose receipt shall authorize the person named therein to go into any county in the State.
(f) ' Upon each and every person. not connected with an adjustment bureau, who adjust insurance losses, $50.00 payable to the Insurance Commissioner, whose receipt shall authorize the person named therein to go into any county in the State. Provided, that this tax shall not apply to local insurance agents who adjust losses without remuneration.
(g) The occupation taxes imposed by this paragraph must be paid 'in advance by said agents to the In!luraaec Commissioner, for the fiscal .year for which they are levied, before said agent shall be authorized to act as agent for any insurance company. Provided, that railt:oad-ticket agents selling accident tickets shall not be deemed insurance agents in the sense of this paragraph. (Acts 1935, pp. 1,1, 36.)

INDEX

(References are to section n\'mbers.)

INSUUANCE ADJUSTMENT BUREAUS.
Taxation, 92- 2505.
INSURANCE COMMISSIONER. Absence, performance of duties of office, 56- 101.
Accounts, 56- 114. Agents-
!?iling st a tements s howin g, 56- 505. Licensing, 56- 508 t o 56- 505, 56- 508
to 56- 513,56-516,56- 517,56- 521. Who may be appointed, 56- 508 (b). Annua l st atements, 56- 101. Appointments by-
Attorney for service of process, 56- G05 .
Fire inspector, 56- 111. R ecei vers, 56- 223. Approval-
Increase or decrea se of capital stock, 56- 802.
Investment s, 56-225. Seal, 5G- l01. Assets, duty in case of insufficiency of, 56- 106. Assistant s, 56- 924.
Attorneys for ser vice of processAppointment, 56- 605. R ecord s, 56- 1708.
Blank for ms for reports, furni shing, 56- 108.
Bond commissioner, report, 40- 1203. Books-
Company, access t o, 56- 1"05. Public records, 56- 101. Calculation-
Net value of life policies. 56- 0ll! to 56- 914.
R einsurance reserve, 56- 106, 56-832,
5 6 -83 ~.
Call on stockholders, .56- 833. Certifica te-
Deposit s, 56- 307, 56- 1304. Sea l, 56- 101. Charter to company, iss uing, 56-201. Citation to pooling companies, 56- 220. ClerkAppointment, 56-101, 56- 924. Co mpensa ti on, 56- 102 . Compensation, .56- 102. Assis tants, 56- 924.
Comptro ll er General, 56- 101 , 56-802. Powers reta in ed, 92-4506.
Control of life insurance co mpa nies, 56- 92 1 to 56-926.
Counsel, 56- 9U . Creation of office, 56- I 01. Decrease of capital stock, approval,
5u- S0 2. Deputy-
Appointment, 56-101, 56- 924. Bond, 56- 101. Co mpensa ti o n, 56- 102. Qu a lifi cat ions, 56- 102. He mo va l, 56- 101. Duties, 56- 101.

INSURANCE COMMISSIONERCont ' d.
EvidenceD ocuments as, 56-101. H earing before, 56- 221.
Exarnination of insurance companies, in genera l, 5 6- 104, 56- 105, 5 6- 508.
Industria l insura nce compa ny, 56- 131 2.
Obstr ucting, as penal offense, 56- 9901.
E xaminer, a ppointment, 56-104, 56- 105. Execution, levy, 56- 222.
E xpend itures, report, 56- 101. Expenses, 56- 105.
Fees, 56- 102, 56- 103, 56- 222, 56-506, .'>6- 1619.
Fire inspec torAppointment, 56- 111 .
Compensation, prescribing, 56-114. Forms-
Foli c~. prescribing, 56- 810 . Ileports, furnishing, 56-108. Fraternal be neficia r y orders, service of process, 56- 1705, 56-1707.
Fraternal benefit societyCertificate, issu a nce, 56-1615, 56- 1616. Dissolution, 56- 1627.
E xa mination, 56- 1629, 56-1631, 56- 163.'l.
Fili ng a rticles of incorporation, 56- 1614, 56- 1615.
License, 56-1619, 56-1620, 56-1633. M erger, 56-1618. R ep ort, 56- 1626.
R evocati on of license, 56- 1633. Service of process, 56- 1621. I'raud, duty in case of, 56-106. General Assembly, report to, 56- 101. Governor, a pprova l of seal, 56-101. Hearings, 56- 221, 56- 222. .Incorp ora tion of company, 56- 201.
Increase of capita l stock, approval, 5 6- 80 2.
Insolven t company, proceedings against, 56- 106, 56- 413.
In vestiga tionCompanies, 56- 105.
Com pl a ints of violation of la ws, Investm56e-n8t0s,7~ p5p6r- o1v0a03l ~f, 56-225. Licen s es -
}'orfeitur e, 56- 403, 56- 408, 56- 409. I ss uing, 56-,101 , 56- 403, 56- 406,
56-502 to 56- 50-t, 56- 506. Ilene wal, 56-403,56- 409,56- 508 (d). R evoca tion, 56~ 105, 56- 2.18 1o
56- 220, 56- 308, 56- 403, 56-407,
56- 408, 56- 413, 56-808, 56- 83Z, 56- 1004.
T axes, collection, 56- 103. T em pora ry, 56- 508 (c) . Liquidation of business, 56- 923.
Mailing notice of service of process on, 56- 1707.

128

INDEX [References are to sections.]

INSURANCE COMMISSIONERCont'd.
Merger of fraternal benefit societies, approval of, 56- 1618.
Notice-Capital stock, to make good, 56-832. Company's intention to withdra w from State, filing, 56-325. Reduct ion of deposits of compa ny, 56- 305. Service of process on, 56-1705, 56- J707.
Oaths, administering, 56-115, 56-221. Obstructing, in examination of insur-
a nce company, 56- 9901. Office as public office, 56- 101. Orders, enforcement, 56-107. P apers as public records, 56- 101. Policy, prescribing form , 56- 810. Powers, 56- 101. Premium rates, investigation, 56-1309. .Process-
Attorney for service, a ppointment, 56- 605.
Power to issue, 56- 131 2. Service on, 56- 1705, 56- 1707. Prosecution of agents of unauthorized companies, 56- 9905. Publication of transactions, 56- 101.
R e ce i p ts Report, 56- 101. Taxes, fees and dues, 56- 103.
Receivers for company, appointment, 56- 223.
RecordsActions against fraternal beneficiary orders, 56- 1713 . . Attorneys for servicE!. of process, 56- 1708. Fraternal beneficiary orders,56- 1713. Public records, 56- 101.
R egu lations, prescribing, 56- 109, 56- llO. R eports, 56- 101, 56- 926.
Bond Commissioner, 40- 1203 . Exami nation of insurance com-
p a nies, 56- 104. Fra t ernal beneficiary orders,56-1706. R eports to, by State Treasurer, 40- 1203.
RulesLife insurance companies, 56- 518. Prescribing, 56- 109, 56- llO, 56- 925.
Seal, 56- 101. . State Treasurer, report as Bond Com-
missioner, 40-1203. State treas ury , payments into, 56- 103. Subpoenas, issuing, 56- 221, 56- 1312. Summons, neglect of, 56- 9901. Supervision of companies before or-
ganiza tion, 56- 110. Taxes, collection, 56- 103, 92-2501 to
9!2- 2507. Vacancy in office, 56- 101. Validity of orders, testing, 56- 107. Valuation of policies, 56-306. Venue of hearings, 56- 222.
Witnesses- Administering oaths to, 56- 115, 56- 221. Examination. 56- 105. Subpoenas, 56- 22 1, 56- 1312.
INSURANCE COl\JPANIES.
Accident insurance: See Accident Insurance Companies: Accid ent Liabil. ity Insu rance Co mpanies; Indus tri al l,ife, Accident, and Health Insura nce.

INSURANCE COMPANIES-Cont'd. Actions againstRecovery of money paid, 56- 705. Venue, 56- 601. Adjusters, t axation, 9~-2506 . Af!idavit of corporators, 56- 202. Agency associations, 56- 508 (e).
AgentsApplication for license, 56- 503. Casualty insurance, 56-507, 56- 514. Civil liability, 56-502. Commissions on sale of agency contracts, 56-522. Definition, 56- 501, 56- 507. Election, 56- 208. False representations, 56- 519, 56- 1310, 56- 990G, 56- 9908.
FeesCommissioner, 56-506. Li cense, 56- 502, 56- 505, 56- 9905.
Fire insurance, 56-507, 56- 514 . Immoral or improper conduct,
56- 513. Investigation of, 56-512, 56-513.
License-Application, 56- 504. Confederate soldiers, 84-2006. Corporations, 56-510. Necessity, 56-503, 56- 508, 56-516, 56- 521. Nonresidents, 56- 509. Revoca tion, 56- 504, 56- 511 to 56-513, 56- 516.
Misdemeanors by, 56- 9905. Occupation taxes, page 126. Offi cers of mutual company as,
56- 1404. Pena l liability, 56- 519, 56- 9905,
56- 9906. Placing business, 56- 511. Pooling contracts, 56- 219 to 56- 222. Process, service, 56-602 to 56- 605. Repeal of conflicting laws, 56- 515. .Statement showing, 56-505 . Taxation, 92- 2501 to 92-250-!,
92-2507, 92- 2508. Unauthorized companies, 56- 9905.
AmountCapital stock, 56- 207. R ecovery, 56- 701 to 56- 704.
Animals, insurance of: See Live Stock Insurance Compan ies.
Application for charter, 56- 202.
ApprovalInvest ments, 56- 207, 56- 224 . Stock increa se or decr ease, 56- SOZ.
Assessment .companies: See Assessment Fire Insurance Compani es ; Assess ment Life Insurance Companies.
Assistant secretary ,. signature to policy, 56-Zlil.
AttorneyFees on refusal to pay loss, 56- 706. service of process, appointment", .56- 605.
Board contracts, 56-ZlS. Board of directors, 22- 510 to 22- 515,
56-208.
BondsDeposit, 56-301 to 56-3 t6. Ill\es tments in 56-207, 56-224. Receiver, 5n- :w:L Statement for license, 56-402.
Buildings which m a.y be owned , 5G- 221.

129

INDEX [References are to sections.]

INSURANCE COMPANIES-Cont'd. Burial .{nsuranceConflicting Iaws repealed, 56- 934. Contracts prohibited, 56- 930. Freedom of choice, 56-9~8. Merchandise contracts, 56- 931. Policy proceeds, 56-9~9. Revoca tion of license, 56- 93~. Service contracts, '56- 931. Violation a misdemeanor, 56-933.

CalculationNet value of policies, 56- 833. Reinsurance reserve, 56- 106, 56-83~. 56-834.
Calls on stockholders, 56- 833. Capital stock-
Amount, 56-~02, 56-~ 07. Change, ~~-510 to ~~-515 . Character as personalty, 56- ~11. Decrease, 56- 802. Increase, 56- 802. Paying in, 56-~09, 56- 210.
Amount to be paid up, 56-209. Statement for license, 56- 402. Subscription, 56-207. Casualty insurance: See Casualty Insurance Companies. Certificate of authority to do business, 56-50~. 56- 506, 56-9905. Commissioner to issue, 56-307. Secretary of State, 56-~03, 56-~06.

ChartersAmendmentAcceptance, ~2-508. Application, ~~-505. Certificate, ~2-506, ~~-507. Fee, ~~-505. Petition, ~~-505, 22-509. Secretary of State's duties, 22-509.
Comptroller General issues, when, 56-201.
Deposit by foreign companies, 56-1501.
Grant, Constitutional provision, 2-1818.
Issuance, 56-201. Net profits, participation of policy-
holders, 56-~16 . Petition for, 56-202. Renewal-
Acceptance, 22-503. Application, 22- 501. Certificate, ~~-502. Fee, 22-501. Petition, ~~-501, ~~-504. Secretary of State's duties,
~~-504.
Secretary of State to issue, 56- 201.

City bonds, investments in, 56- 207,

56- 224.

.

Claims, actions on, venue, 56- 601.

Comity to foreign companies, 56- 315.

Commencement of business, 56-~12.

Commissions on sale of stock, 56-52~.

Commissioner : See Insurance Commis-

sioner.

Competition, pooling contracts, 56-219

to 56- 222.

Comptroller GeneralCharter issued by, 56- 201. Insurance Commissioner, 56-101, 56- 802.
Conflicting claims to bonds depo:,ited, 56- 304.
Contingent profits, recovery, 56- 703.

INSURANCE COMPANIES-Cont'd.

Contracts-

Discriminatory, 56- 218, 56-9903.

Evidenced by policy, 56- 213, 56- 811,

56-904.

Cooperative insurance: See Mutual In-

surance Companies .

Corporate powers and privileges, 56- 204.

County bonds, investments in, 56- 207,

56- 224.

.

Damages, payment when, 56-706. Decrease of stock, 56- 802. Definitions, 56- 507 . Department of Insurance: See Insur-
ance Department.

DepositsAmount, 56- 301, 56- 305, 56-30fl,
56-320 to 56-3 22. Approval, 56- 310. Bonds required, ~-2301, 2- 2302,
2-1!304, 56- 301, 56- 312, 56- 315 to
56-317, 56-320. Retention, 56-302.

Certificate of Co mmissioner,56- 307. Change, 56-309. Conflicting claims, 56-304. Failure to make, effect, 56-308. Industrial life; accident, or health
insurance companies, 56-321.

Mutual or stock-plan life insurance compa nies, 56- 318.
Annual increases, 56- 319. Return, 56- 301, 56-323 to 56-325 .
Sale of bonds, 56- 303. Valuation, 56- 320. Withdrawal, 56- 301, 56- 323 to
56-325.

DirectorsCommissions on sale of stock, 56-522. Election, 56- !WB. False representations, 56- 1310.
Discriminatory contracts, 56- 218, 56- 9903.

DividendsDeclaring, 56- 214. Stock, declaring, 56-215.

Election of officers, 56-208. Evidence, incorporation, 56-206. Examination of, 56- 101, 56-104, 56- 105.
Neglect of summons, 56- 1312, 56-9901, 56- 9908.

False representations, 56-5 19, 56- 1310,

56-9906.

.

False statements, penal offense, 56- 9902.

FeesAttorney, on r efusal to pay loss, 56- 706. Collection, 56- 103. Incorporation, 56-205.

Fidelity: See Fidelity Insurance Companies.
Filing petition for chaJter, 56-202. Fire Insurance : See Fire Insurance
Companies.

Foreign companiesComity, 56- 315. Deposits,. see Deposits, ante. License, 56-315. Service of process, 56-603, 56-605. Taxes, penalty for nonpayment, 92- 7306.
Withdrawal from State, 56-323 to 56-325.

130

INDEX [References are to sections.]

INSURANCE COMPANIES-Confd. ForfeitureCharter, 56-212. License, 56- 40:3, 56- 408, 56- 409. Right to do business, 5G- 605. Stock, 56-210. FortnCertificate issued to, 56- 203. Policy, false representa tions, 56- 9906. Fraternal insurance: See Fraternal Beneficiary Orders; Fraternal llenefi t Societies. Fraud in conduct , 56- 106, 56-ll!l. Fraudulent claims against, 56-9916.
Fra udulently procuring insurance, 56- 9911.
Health insurance: See Health Insurance Companies; Industrial Life, Accident, and Health Insurance.
In corporation, 56- 201 to 56-209. Increase of stock, 56- 802. Indorse ment of date of filing petition for
charter, 56- 202. Industrial insurance: See Industrial In-
surance; Industrial Life, Accident, and Health Insurance. Insolvency, 56-106, 56-413.
Receiving premiums after, 56- 1311, 56- 9902.
Insurance Department: See Insurance Department.
Interpleader, conflicting claims of creditors, 56- 304.
Investigation by Commissioner, 56- I 05. Inves tments, 56- llO, 56- 207, 56- 224 to
5G- 228, 56- 9904.
Farm loan bonds, 108- 421. Liabilities, statement for li cense, 56- 402. Li c e n s e -
Agents, 56-50!3, 56- 504, 56- 51G, 56- 521, 84- 2006.
l?oreign companies, 56- 3 15 . Forfeiture, 56- 403, 56- 408, 56- 409. I ssuing, 56- 403, 56- 406.
Judgment unpaid as ground for revoking, 56-llO to 56- 412.
Necess ity, 56- 235, 56- 40 1. Renewa l, 56- 403, 56- 409, 56- 412,
56- 413.
Revocation,56- 105,56- 218 to 56-220, 56-308, 56- 403, 56- 407, 56-408, 56- 413, 56- 808, 56- 832, 56- 9!32, 56- 1004.
Statement of company, 56-402. Life insurance: See Assessment Life In-
surance Companies; Life Insurance
Companies; Life Insura nce Contracts. Jjmited p a rtnership, 75- 401. Live stock insurance : See Live Stock
Insurance Companies. Loans, 56- 224, 56- 402. Losses-
Ascribable to lightning, storms, etc., authority to cover, 56- 804 .
Bonds deposited retained, 56-302, 56- 324, 56-325.
Recovery .of full amount, 56-701, 56- 702.
M ailing notice-
Meetings of stockholder s, 56-208, 56- 802.
Payment for stock, 56- 210. Marine insurance: See Marine .Insur-
ance.
Meetings of stockholrlers, 56- 208, 56- 802. :\iisrepresentations, 56- 9902, 56- 9906,
56- 9908, 56-991].

INSURANCE COJ\JPANIES-Cont'd. MortgagesInves tments in, 56--207, 56- 224. Statement for lice nse, 5G- .t0'l. ~1unicipal bonds, investments in, 5G- 207, 56-!N -1. Mutual in surance: See Mutual Ins urance Companies. Name, 56- 204. Change, 22- 510 to 22-S15. Statement for li cense, 56- 402. l\et profits, participati on of policy holders, 52- 2 16. l\onuser of charter, forfeiture, 56- 212. 1\ ot es, investme nts in, 50- 224. 1\oticeJ\J eet ings of stockholders, 56- 208, 50- SM. Pay ment of stock subscriptio n, 56- 210. Ite,ocat ion of licen se, 56- 413. Number of persons required to incorporate, 56-202.
OfficersCommissions on sa le of stock, 56- ;>22. El ection, 56- 208. F a lse represe ntations, 5G- J310.
Organization, 56- 208, 5<1- 212. Super vision of company before, 56- ItO.
Paid-up capita l, amount , 56- 209.
Penn !tiesAdditional, 56- 52G. Carry ing on business without permit or after revo ca tion, 114- !}!)02.
" 'riting insurance without license, 5G- 52:J.
Permits required of ins urance carriers, 11<1- 610.
Permits, revocation of, 114- 610. Personal property-
Sa le, 56 -228. Tax returns, 92- 2511. Petition for charter, 56- 202. Place of business, change, 22- 510 to 22-515.
PolicyAcce pting from a nonadmitted company, 56- 524. Attaching to petition, 81 - 105. Contract to he evidenced by,56- 213 . Holder, participation in net profits, 56- 216.
Pooling con tracts, 56- 219 to 56- 222. Powers a nd privileges, 56- 204. Premium tax, insurance companies, page
125. Premiums-
Rebates, 56- 9903. Report to Commissioner, 56- 506. Taxation , 92- 2509 to 92- 251 1.
PresidentCommissions on sale of stock, 5G- 522. Election, 56- 208. l<'iling statement; 5G--402. Service of process, 56--604. Signature to poli cy, 5()-21:~.
Prima facie evidence of existence, :')6--200.
Pro rata recovery from several companies, 56- 702.
Process, servi ce, 56- 602, 5H- G05. Profits, participation of policyholders,
56- 210.
I,ron1issory noles, investments in, 56- 22-t.

131

... __________ ________ _ _ _I_X_I_>_!:_:\:.::_- - - [ References arc to sed ions.] -

JNSUHANCE COJ\IPANIES-Conl'tl. Prornoters, notes, etc., to, 14- HWG, 14 - 1807. Publication of report, 56- 40:3. .Real propert~Sa le, 56- 228. Statement. for license, 56--lO~. Tax returns, 92-251 L .Rebates, 5(i- 21 8, 50-990:!. ReceiversAppointment, 56-!lM. Bond, 56- 30!!. Method of putting into hands of,
56 - 2~:!.
Record- Increase or decrease of stock, 56- 80~. Petition for charter, 56- 20:.?.
Recovery hack b~' insurer, 50- 705. Refusal to pay loss, damages, 56- 706. Heinstatement, 56- ~ 1~. R.einsuranc:e, 56~ 229.
Ueserve, 56- I 06, 56--229, .56- S!l'l,
5(i - S : l~.
Henewal of license, 5G-40!l, 56- -t09. Report, 2- 2305,;Hi - lOH,56- 2:l2 to 56- 235,
50 -~10~~ . 5H - :30G.
Reserve, 5G- 229 . Hules governing, prescribing, 5G - 10!J. Sale-
Bonds deposited, 56- 30!!. Jlropcrty in whieh money invested,
5G- 228.
Sea l, li cense, 56- 406.
Secretary-
Commissions on sale of stock, 5{; -- 5 2 2 .
Election, 50-~WS. }?iling statements, 56-402.
Signature to policy, 50- 21 3 . Secretary of State, charter issued by,
2- 1818, 56- 201, 50- 202.
Fee for granting, renewing or amending charter, 92--!l50!l.
Petition to, for charter, 56--202.
Sections sha ll be enacted separately, 5()- 527.
SignaturePetition for charter, 56- 202. Policy, 5fl- 2Ul.
Special contracts, 56-218. State bonds, investment in, 56- 207,
5U- 224.
Statement for li cense, 56- 402, 56- 403. Stock, 56- 202, 5U -207.
Dividends, declarin!!, 56- ~15. Notes to prom~tcrs, 14- 1806,
14- 1807.
Personalty, 56. 211. Sales, commissions, 5G- 5~f2 . Stockholders-
Calls on, 5G- 8~!L Liability, 5!i - ~!l0.
:Meetings, 5G- 20H, 50- H02. Transfe r, ,lj(j -- 21 l.
Stock ' company, organization, 56 - l!lOS. Subscription to stock, 56- 207, ;i6-210 .
Superior courts without power to create, 22- !Wl.
Supervision Lcfo re organ i z~ttion, 5H- 110. Taxation, 9~- 2501 to 92- 251 I.
ReturnsAssessments Lo correct, etc ., 9~- 6001 to 9~ -6007, 92- 6101 to 92- m 04.

INSUHANCE COM PAN IES- Cont'd . Taxation-Cont"d. Heturn s - Cont ' d. Contents, 92- 2511, !H- ;)907 . Xame:.: of agent !:', 9~ - 5905. Pres ident to make, 9~-J!JOO. Time to tnake, H.Z- ;3!)() I . Time of l"' 'mcnl of lax e, , 9~ - 5908 . Transfers-
Property in which money in\estcd, 5(HWL
" Stock , ;i!i- 211. 1 rcasurer-
Commissions on sale of stock ,JU- 5'2:2. Elect ion, ;j6- 20H.
Cnited States bonds, investment s in, j(i- 207, 50- - 2~4-
Yalued policies, 5(i - 701 , .:30- 70!).
\'enue of action s agains l, JG- 001. Vice president-
Commi sSion s o n sal e of s to c k , 5G-5~2. Eleeliun, ;)(i - ~OX .
Si g nature to policy , 56- 2 t :L \"iolat ions of pro\isious of this act,
5 0 -5 2 5 .
Waiver of notice of stockholders meeting. 5fi- 2UH.
Withdrawal from Stat~, 5G - !l2 ~l to
;)ti ~ :)2;"i.
" 'orkmen's compensation, pay ment of: ~ee \\" orkmen 's Compe nsation.

ll'ISUHANCE DEPAUT~IENT.

Blank forms for r eport s, furni shing,

.W- IOH.

Certifi cates to companies, 56- 1501.

( ' Jerk , compensation , 50- J(H!.

Cummi ~s ioncr: See Jn s urance Cornmis-

siuner.

.

Compen sation of officero, 50 -- 10~. ;iG- 114.

Comptroller General as chief officer,

J(j- 101.

Creation, 5(i- IOI. E.xaminntion of 1nsurance
5G- 1UI, ;jG- 104. Examiners, 5G- 104. Fees, collection, 5H- I O:l.

companies,

Fire inspectorAppointment, ;j(i- t 11 .

Ass is tant, 56- 111 , 56- 11 2.

Authority to go upon premises, Mi-ll!l.
Compensa Iion , JG- 1 14. Duties and powe r~ . 5U- ll 2. Expen ses, Jti-114. Heports, 5G- l I :?. Forms for report s. furni s hing, ;j()-- )00. lnsohe nt compani es, proceedings :~gain s t, 50- I OG, JG- 4 t !l. ln Yes tigations, ;)(;-- 105.
License to agents, 5() - ;1()!) to 56- .50.5, :Hi JOH to ~)(i - ;ll:l , 5G- J10, 5(; - 517, 50 - 5~ 1.
Orde rs, e nfor('em e n I, !JG- 107. Hegulation!", prcseril,ing, 50- lOH, 50-- 110. Hepor!s-

ExalninC'rs, 5(i--l04.
Gen e ral .-\ s.-se lllbl y , to, 50-- 101, 50- I H.
B.ul es, prcs'cribin g, 5() - 109, 5fi- tl 0. Sat! ries of ofliecr~. JH~ IO! . 5ti- 114 . ~upen i s iOn of <'OillJMnies before or-
g;ni;~;::lion , :H.i- 110. Taxes , collc('tion, ;j {i- ]O:L

132

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