its outstanding benefit certificates unless requested to make such valuation by the association.

SEC. 26. Examination of domestic associations: The Commissioner of Insurance and Banking, or any person he may appoint, shall have the power of visitation and examination into the affairs of any domestic association. 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 association and may summon and qualify as witness under oath and examine its officers, agents and employes or other persons in relation to the affairs, transactions and conditions of the association. The expense of such examination shall be paid by the association examined upon a sworn itemized statement thereof being presented by the Commissioner of Insurance and Banking or his authorized representative, a copy of which statement shall be filed in the office of said commissioner; provided the expense of such examination shall be limited to $50.00.

Whenever after examination or from other information the commissioner is satisfied that any domestic association is insolvent, as insolvency is herein defined, or has failed to comply with any provisions of this law, or is exceeding its powers, or is not carrying out its contract in good faith, or is transacting business fraudulently, or whenever any domestic association, after the existence of one year or more shall have a membership of less than five hundred, or votes to discontinue business, the Commissioner of Insurance and Banking may present the facts relating thereto to the Attorney General, who shall, if he deem the circumstances warrant, commence an action in quo warranto in a court of competent jurisdiction and such court shall thereupon notify the officers of such association of a hearing, and unless it shall then appear that some special and good reason exists why such association should not be closed, said association shall be enjoined from carrying on any further business, and some person shall be appointed receiver of such association and shall proceed at once to take possession of the books, papers, moneys and other assets of the association, and shall forthwith, under the direction of the court, proceed to close the affairs of the association and to distribute its funds to those entitled thereto. No such proceeding shall be commenced by the Attorney General against such association until after notice has been duly served on the chief executive officer of the association and a reasonable opportunity given to it on a date to be named in said notice, which shall not be less than thirty days after service of notice, to show cause why such proceedings should not be continued. No such receiver shall receive compensation for his services greater than that allowed by law to State bank examiners. Pending, during or after an examination or investigation of any such association whether domestic or foreign, the Commissioner of Insurance and Banking shall make public no statement, report of finding, nor shall he permit to become public any statement, report or finding affecting the status, standing or rights of any such association until a copy thereof shall have been served upon the president or secretary or corresponding officer of such association, nor until such association shall have been afforded a reasonable opportunity to answer any such statement, report

or finding, and to make such showing in connection therewith as it may desire. If such statement, report or finding shall not be withdrawn after such hearing, it shall not thereafter be made public except in connection with the answer or explanation of the association concerned.

SEC. 27. Application for receiver, etc.: No application for injunction or other proceeding for the dissolution of, or the appointment of a receiver for, any such domestic association or branch thereof shall be entertained by any court in this State unless the same is made by the Attorney General.

SEC. 28. Examination of foreign associations: The Commissioner of Insurance and Banking, or any person whom he may appoint, may examine any foreign association transacting or applying for admission to transact business in this State. The commissioner 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 association and may summon and qualify as witnesses under oath and examine its officers, agents, employes, and other persons in relation to the affairs, transactions and conditions of the association. He may in his discretion accept in lieu of such examination the examination of the insurance department of the state, territory, district, province or country where such association is organized. The expenses of such examination shall be paid by the association examined upon a sworn itemized statement thereof being presented by the Commissioner of Insurance and Banking or his authorized representative, a copy of which statement shall be filed in the office of said commissioner. If any such association or its officers refuse to submit to such examination, or to comply with the provisions of this Section relating thereto, the authority of such association to transact business in this State shall be revoked until satisfactory evidence is furnished the Commissioner of Insurance and Banking relating to the condition and affairs of the association and during such revocation the association shall not transact any business in this State. Provided no such revocation shall be made until thirty days written notice shall be given to such association at its home office. Provided that the total cost of this examination shall never in any one year exceed the sum of fifty dollars.

SEC. 29. Revocation of license: When the commissioner on investigation is satisfied that any foreign association transacting business under this Act is insolvent, or has exceeded its powers, or has failed to comply with any provision of this law, or to pay off and satisfy any execution that may lawfully issue on any final judgment against it within sixty days after the officer holding such execution has demanded payment thereof, or is conducting business fraudulently, or is not carrying out its contracts in good faith, he shall notify the president and secretary or other officers corresponding thereto, of his findings and state in writing the grounds of his dissatisfaction, and after not less than ten days notice require said association on a date named to show cause why its license should not be revoked. If on the date named in said notice such objections have not been removed to the satisfaction of the Commissioner of Insurance and Banking, or the association does not present good and

sufficient reason why its authority to transact business in this State should not at that time be revoked, he may revoke the authority of the association to continue business in this State. All decisions and findings of the Commissioner of Insurance and Banking made under the provisions of this Section may, by proper proceedings in any court of competent jurisdiction, as provided in Section [18] of this Act be re

viewed.

SEC. 30. Exemption of certain associations: Nothing contained in this Act shall be construed 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), nor the Junior Order of United American Mechanics (exclusive of the beneficiary degree or insurance branch of the National Council Junior Order United American Mechanics), nor to societies which limit their membership to a particular vocation; nor to similar associations which do not issue insurance certificates; nor to an association of local lodges of an association doing business in this State, which provide death benefits not exceeding three hundred dollars to any one person, or disability benefits not exceeding five hundred dollars in any one year to any one person, or both; nor to any contract or reinsurance of or between such local lodges of such association doing business on such plan in this State, nor to domestic associations, which limit their membership to the employes of a particular city or town, designated firm, business house or corporation; nor to domestic lodges, orders or associations of a purely religious, charitable and benevolent description which do not provide for a death benefit of more than one hundred dollars, or for disability benefit of more than one hundred and fifty dollars to any one person in any one year, provided, always, that any such domestic order or association which has more than five hundred members and provides for death or disability benefits, and any such domestic lodge, order or association which issues to any person a certificate providing for the payment of benefits, shall not be exempt by the provisions of this Section, but shall comply with all the requirements of this Act. The Commissioner of Insurance and Banking may require from any association such information as will enable him to determine whether such association is exempt from the provisions of this Act.

SEC. 31. Taxation: Every fraternal beneficiary association, organized or licensed under this Act is hereby declared to be a charitable and benevolent institution, and all of its funds and assets shall be exempt from any State, county and municipal tax other than taxes on real estate and office equipment.

SEC. 32. All associations, domestic or foreign, now doing business in this State and which are not by the terms of this Act exempted from its provisions, and having less than three hundred bona fide paying benefit members, and less than $300,000 insurance in force upon their lives, shall, within twelve months from the passage hereof secure at least three hundred such members, upon whose lives said amount of insurance shall be in force, or failing therein, it shall be the duty of the Commissioner of Insurance and Banking to revoke the license of such association, which shall do no further business in the State until it shall have pro

cured bona fide applications for insurance on said number of lives upon which one full monthly assessment has been paid in accordance with the constitution and laws of such association.

SEC. 33. Any person who solicits for or organizes lodges of such associations as are described in the first Section of this Act, without first obtaining from the Commissioner of Insurance and Banking a certificate of authority showing that the association has complied with the provisions of this Act and is entitled to do business in this State, shall be deemed guilty of a misdemeanor, and upon conviction shall be punished by a fine of not less than one hundred dollars ($100) nor more than two hundred and fifty dollars ($250), or by imprisonment in the county jail for not less than three (3) nor more than six (6) months, or by both such fine and imprisonment; provided, the provisions of this Section shall not be so construed as to prohibit any member or members of a local or subordinate lodge from soliciting any person or persons to become a member of any local or subordinate lodge already in existence; and providing further, the provisions of this Section shall not apply to any member or members of any local or subordinate lodge who participates in, supervises, or directs or conducts the organization or establishment of any local or subordinate lodge within the limits of the county of his or their residence, or lodge district. Any society, or any officer, agent or employe thereof neglecting or refusing to comply with, or violating any of the provisions of this Act, the penalty for which neglect, refusal or violation is not specified in this Section, shall be fined not exceeding two hundred dollars upon conviction thereof. All certificates of authority for agents or solicitors shall be issued by the commissioner upon application male therefor by any of the general officers of the association, or by any agent whom the properly authorized governing body of the association has by resolution filed with the Commissioner of Insurance and Banking duly empowered to make such application and all such certificates shall be revoked by the commissioner upon the request of the association, and may be revoked for cause upon like ground and in like manner as the certificates of authority of agents for life insurance companies under the laws of this State. All such certificates shall be renewed annually and shall expire on the last day of February of each year and a fee of one dollar shall be paid for the use of the State for the issuance of each such certificate.

SEC. 34. The provisions of this Act shall not apply to incorporated or unincorporated mutual relief, or benefit or burial associations operating upon the assessment plan, whose business is confined to not more than one county in the State or to a territory in two or more adjacent counties included within a radius of not more than twenty-five miles surrounding the city or town in which its principal office is to be located, which is designated in its charter, which are hereby denominated local mutual aid associations, providing that such associations are in no manner directly or indirectly connected, federated or associated with any such association, and do not directly or indirectly contribute to the expense or support of any other such association, or to the officers, promoters or managers thereof. And provided, that no person or officer shall receive from said association any payment on account of organi

zation or other expenses or salaries not a bona fide resident of such county in which such association is domiciled. The association above mentioned shall annually on or before March 1st, file a statement with the Commissioner of Insurance and Banking which shall be signed and sworn to by the president, secretary and treasurer or the officer holding positions corresponding thereto. Such statement shall show whether the association has during the preceding year done any business outside of the county in which it is domiciled, and shall state whether or not said association is associated, federated or directly or indirectly connected with any other, and shall show what, if anything, has been contributed during the preceding year by said association or the members to any person or officer or director thereof for salaries, commissions or promotion expenses and the name and residence of the party or parties receiving the same. Should any person in such affidavit herein provided for make any false statement, he shall be deemed guilty of false swearing and punished as provided by law.

The Commissioner of Insurance and Banking may at his option, and it shall be his duty if not satisfied with said statement, to demand other and additional statements, and examine the books, papers and records of said association, either himself or by some other suitable person authorized by him. Should it appear to the Commissioner of Insurance and Banking that any such local mutual aid association is not carrying on business as set forth in this Section, and is not entitled to the exemption therein set forth, such association shall be subject to and comply with all provisions of this Act as a fraternal beneficiary association. Every such local association claiming to be entitled to the benefit of the exemption created by this Section shall plainly state upon its certificates, applications and all advertising matter, in a conspicuous manner, that said association is a local mutual aid association, or same shall be deemed subject to all provisions of this Act concerning fraternal beneficiary associations.

SEC. 35. All associations or organizations expressly exempted from the provisions of this Act, or any portion thereof, shall be deemed exempt from all provisions of the insurance laws of this State which are not made specially applicable thereto.

Any association doing business under the provisions of this Act may issue term payment certificates upon the death of members within the term for which said payments are limited, or limited payment, full life certificates payable at death, provided that the contract with the member shall provide that if such limited or term payments are not sufficient to meet the liabilities of the association for death benefits as same accrue, additional assessments may be made for this purpose.

SEC. 37. That Chapter 115, General Laws of the Twenty-sixth Legislature of the State of Texas, as amended by Chapter 86 of the General Laws of the Twenty-seventh Legislature and Chapter 113 of the General Laws of the Twenty-eighth Legislature, and by Chapter 108, General Laws of the Twenty-ninth Legislature, and all laws and parts of laws in conflict herewith be and the same are hereby repealed.

SEC. 38. The fact that many associations are undertaking to write