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having received authority from the Commissioner of Insurance and Banking to transact business in this State, shall receive from such commissioner upon written request therefor a certified copy of its certificate of authority for each of its agents in this State.
Sec. 8. Actions may be maintained by a company organized under the laws of this State against any of its policy holders, stock holders, or other persons for any cause relating to the business of such company, and actions may also be prosecuted and maintained by any policy holder or the heirs or legal representatives of any such policy holder against the company for losses which accrue on any policy, but no action shall be brought or maintained by any person other than the Commissioner of Insurance and Banking of this State for the enjoining, restraining or interfering with the prosecution of the business of the company.
SEC. 9. The laws relating to and governing corporations in general shall apply to and govern companies organized under this Act, in so far as the same are pertinent and not in conflict with the provisions of this Act.
Sec. 10. A life insurance company organized under the laws of this State, may after this Act takes effect invest in or loan upon the following securities, viz.:
(a) It may invest any of its funds or accumulations in the bonds of the United States or of any State, county, or city of the United States, or the bonds, of any independent or common school district, or first mortgage bonds of any dividend paying railroad or electric railway company duly incorporated under the laws of the United States or any State thereof.
(b) 1 may loan any of its funds and accumulations, taking as security therefor such collateral as under the previous subdivision it may invest in; and upon first liens upon real estate, the title to which is valid and the value of which is double the amount loaned thereon; provided, that if any part of such value is in buildings, such buildings shall be insured against loss by fire for at least fifty per cent of the value thereof, with loss clavse payable to such company. It may also make loans upon the security of or purchase its own policies, but no loan on any policy shall exceed the reserve value thereof. No investment or loan, except policy loans, shall be made by any such insurance company unless the same shall first have been authorized by the board of directors, or by a committee charged with the duty of supervising such investments or loans. No such company shall subscribe to or participate in any underwriting of the purchase or sale of securities or property or enter into any such transaction for such purpose, or sell on account of such company jointly with any other person, firm or corporation, nor shall any such company enter into any agreement to withhold from sale
any erty, but the disposition of its property shall be at all times within the control of its board of directors. Every such company possessed of assets not authorized by this Act shall dispose of the same within five years after the taking effect of this Act, unless such time is extended for good cause by the Commissioner of Insurance and Banking.
Sec. 11. Every such insurance company may secure, hold and convey real property only for the following purposes and in the following
of its prop
1. One building site and office building for its accommodation in the transaction of its business and for lease and rental. 2. Such as shall have been acquired in good faith by way of security for loans previously contracted or för moneys due. 3. Such as shall have been conveyed to it in the satisfaction of debts previously contracted in the course of its dealings. 4. Such as shall have been purchased at sales under judgment or decrees of court, or mortgage or other liens held by such com. panies.
All such real property specified in subdivisions 2, 3 and 4 of this Section which shall not be necessary for its accommodation in the convenient transaction of its business, shall be sold and disposed of within five years after the company shall have acquired title to the same, or within five years after the same shall have ceased to be necessary for the accommodation of its business, and it shall not hold such property for a longer period unless it shall procure a certificate from the Commissioner of Insurance that its interests will suffer materially by the forced sale thereof, in which event the time for the sale may be extended to such time as the commissioner shall direct in such certificate.
SEC. 12. No director or ofiicer of any insurance company transacting business in this State, or organized under the laws of this State, shall receive any money or valuable thing for negotiating, procuring, recommending or aiding in any purchase or sale by such company of any property or any loan from such company, nor be pecuniarily interested either as principal, 10-2rincipal, agent or beneficiary, in any such purchase, sale or loan; provided, that nothing contained in this Section shall prevent a life insurance corporation from making a loan upon a policy held therein, by the borrower not in excess of the reserve value thereof. Any person violating any provisions of this Section shall be guilty of a misdemeanor, and upon conviction thereof, shall be punished by a fine of not less than $300.00 nor more than $1,000.00.
Sec. 13. Any life insurance company organized under the laws of this State may reinsure in any insurance company authorized to transact business in this State, any risk or part of a risk which it may assume; provided, that no such company shall have the power to so reinsure its entire outstanding buiness until the contract therefor shall be submitted to the Commissioner of Insurance and Banking and be by him approved as protecting fully the interests of all the policy holders.
SEC. 14. No life insurance company organized under the laws of this State shall declare or pay any dividends to its policy holders except from the profits made by such company; provided, that this shall not prohibit the issuance of policies guaranteeing a definite payment or reduction in premiums, not exceeding the expense loading on said premiums, but where said reduction exceeds said expense loading the proper reserve therefor must be held by the company to provide for the deficiency so arising in the net premium; and provided further, that this shall not apply to payments to holders of special or board contracts heretofore issued. No such life insurance company shall declare or pay any dividends to its stockholders except from the profits made by said company, not including surplus arising from the sale of stock.
SEC. 15. It shall be the duty of the Commissioner of Insurance and Banking, as soon as practicable in each year, to compute the reserve liability on the 31st day of December of the preceding year of every company organized under the laws of this State or authorized to transact business in this State, which has outstanding policies of insurance on the lives of citizens of this State in accordance with the following rules :
1. The net value on the first day of December of the preceding year of all outstanding policies of life insurance in the company issued prior to the 1st day of January, 1910, shall be computed according to the terms of said policies on the basis of the American Experience Table of Mortality and four and one-half per cent interest per annum.
2. The net value on the last day of December, of the preceding year of all policies of life insurance issued after the thirty-first day of December, 1909, upon the basis of the Actuary's or Combined Experience Table of Mortality, with four per cent interest per annum; provided, that the policies of any such life insurance company thereafter issued upon the reserve basis of an interest rate lower than four per cent shall be computed upon the basis of the American Experience Table of Mortality with interest at such lower rate per annum; provided, that any company which on January 1st, 1909, was writing policies on the basis of four and a half per cent may continue on that basis until January 1st, 1912. and its policies shall be so valued.
3. In every case in which the actual premium charged for an insurance is less than the net premium for such insurance computed according to its respective tables of mortality and rate of interest sforesaid, the company shall also be charged with the value of annuity, the amount of which shall equal the difference between the premium charged and that required by the rules above stated and the term of which in years shall equal the number of future annual payments due on the insurance at the date of the valuation.
SEC. 16. No level premium policy of life insurance shall be issued or sold by any company in this State after December 31, 1909, which
provides for more than one year preliminary term insurance.
SEC. 17. Every policy of insurance issued or delivered within this State on or after the first day of January, 1910, by any life insurance company doing business within this state, shall contain the entire contract between the parties and the application therefor may be made a part thereof.
Sec. 18. Any person who shall solicit an application for insurance
SEC upon the life of another shall in any controversy between the assured and his beneficiary and the company issuing any policy upon such application be regarded as the agent of the company, and not the agent of the insured, but such agent shall not have the power to waive, change or alter any of the terms or conditions of the application or policy.
SEC. 19. No insurance company doing business in this State shall make or permit any distinction or discrimination in favor of individuals between insurants (the insured) of the same class and of equal expectation of life in the amount of or payment of premiums or rates charged for policies of life or endowment insurance or in the dividends or other benefits payable thereon; nor shall any such company or agent thereof make any contract of insurance or agreement as to such contract
other than as expressed in the policy issued thereon, nor shall any such company or any officer, agent, solicitor or representative thereof pay, allow or give, or offer to pay, allow or give, directly or indirectly, as an inducement to insurance any rebate of premium payable on the policy, or any special favor or advantage in the dividends or other benefits to accrue thereon or any paid employment or contract for service of any kind or any valuable consideration or inducement whatever not specified in the policy contract of insurance; or give, sell or purchase, or offer to give, sell or purchase, as an inducement to insurance or in connection therewith, any stocks, bonds or other securities of any insurance company or other corporation, association or partnership or any dividends or profits to accrue thereon or any thing of value whatsoever not specified in the policy, or issue any policy containing any special or board contract or similar provision by the terms of which said policy will share or participate in any special fund derived from a tax or a charge against any portion of the premium on any other policy. Any company or agent violating the provisions of this Act shall be deemed guilty of a misdemeanor and upon conviction thereof shall be punished by a fine of not less than one hu dred dollars nor more than five hundred dollars and the said company shall as an additional penalty forfeit its certificate of : uthority to do business in this State and the said agent shall as an additional penalty forfeit his license to do business in this State for one year; provided, the company shall not be held liable under this Section for any act of its agent unless such act was authorized by its president, one of its vice presidents, its secretary or an assistant secretary or by its board of directors.
SEC. 20. No domestice life insurance company shall pay any salary, compensation or emolument to any officer, trustee or director thereof, nor any salary, compensation or emolument amounting in any year to more than $5000 to any person, firm or corporation unless such payment be first authorized by a vote of the board of directors of such life insurance company; provided, that the limitation as to time contained herein shall not be construed as preventing a life insurance company from entering into contracts with its agents for the payment of renewal commissions. No such company shall grant any pension to any officer, director or trustee thereof or to any member of his family after his death.
SEC. 21. No domestic life insurance company shall make any disbursement of one hundred dollars or more unless the same be evidenced by a voucher signed by or on behalf of the person, firm or corporation receiving the money and correctly describing the consideration for the payment. If the expenditure be for both services and disbursements the voucher shall set forth the service rendered and statement of the disbursement made. If the expenditure be in connection with any matter pending before any legislature or public body or before any department or officer of any state or government the voucher shall correctly describe in addition the nature of the matter and of the interest of such company therein. When such voucher cannot be obtained the experditure shall be evidenced by a paid check or an affidavit describing the character and object of the expenditure and stating the reason for not obtaining such voucher.
SEC. 22. No policy of life insurance shall be issued or delivereu after December 31, 1909, in this State or be issued by a life insurance company organized under the laws of this State after that date unless the same shall contain provisions substantially as follows:
1. A provision that all premiums shall be payable in advance vither at the home office of the company or to an agent of the company upon delivery of a receipt signed by one or more of the officers who are designated in the policy.
2. A provision for a grace of at least one month for the payment of every premium after the first which may be subject to an interest charge, during which month the insurance shall continue in force, which provision may contain a stipulation that if the insured shall die during the period of grace the overdue premium will be deducted in any settlement under the policy.
3. A provision that the policy or policy and application shall constitute the entire contract between the parties and shall be incontestable not later than two years from its date, except for non-payment of premiums, and which provision may or may not at the option of the company contain an exception for violations of the conditions of the policy relating to naval and military services in time of war.
4. A provision that all statements made by the insured shall, in the absence of fraud, be deemed representations and not warranties.
5. A provision that if the age of the insured has been under-tated the amount payable under the policy shall be such as the premium paid would have purchased at the correct age.
6. A provision that after three full years premiums have been paii the company at any time while the policy is in force, will advance upon proper assignment of the policy and upon the sole security thereof at a specified rate of interest a sum equal to, or at the option of the owner of the policy, less than the legal reserve at the end of the current policy year on the policy and on any dividend additions thereto, less than a sum not more than 24 per centum of the amount insured by the policy and of any dividend additions thereto; and that the company may deduct from such loan value any existing indebtedness on the policy and any unpaid balance of the premium for the current policy year and may col. lect interest in advance on the loan to the end of the current policy year, which provision may further provide that such loans may be deferred for not exceeding six months after application therefor is made. It shall further be stipulated in the policy that failure to repay any such advance or to pay interest shall not avoid the policy until the total indebtedness thereon to the company shall equal or exceed the loan value. No condition other than as herein provided shall be exacted as a prerequisite to any such advance. This provision shall not be required in term insurances nor in pure endowments issued or granted as original policies, or in exchange for lapsed or surrendered policies, and no provision herein required shall compel any company to loan on any policy an amount greater than 974 per centum of the face value thereof, including net dividend additions thereto.
7. A provision which, in event of default in premium payments, after premiums shall have been paid for three full years, shall secure to the