Page images

State Treasurer of the State of Texas, at his office, Austin, Texas, and maturing one each year, consecutively, until all such bonds shall have matured, and reserving to said Board of Penitentiary Commissioners the right to pay off and redeem each bond and its coupons before maturity, at the option of said board. Each of said bonds shall upon its face declare that the payment of such bond and its interest coupons is secured by a lien upon all of said State railroad lying between the cities of Rusk and Palestine, and embracing its entire right of way, franchises, depot buildings and grounds, equipment, rolling stock, engines and cars, and that to the payment thereof are pledged all of the net revenues and income which may be derived or received by said board from year to year from any and all sources whatsoever, and remaining after the payment of the current expenses and necessary improvement of every character which may be incurred by said board, or under its direction, pursuant to law, in such current year, until all of said bonds and coupons shall have been paid. All of such net income from year to year shall be so applied by said Board. The form of such bonds and coupons shall be prepared by the Attorney General, and all such bonds and coupons shall bear the signature of the president and secretary of said board and each bond shall be countersigned by the Governor. Such bonds and coupons, or any of them, when so executed and delivered to the State Treasurer, shall constitute a valid lien upon said State railroad as aforesaid.

SEC. 2. The Comptroller of Public Accounts and the State Board of Education are severally hereby authorized, and it shall be their duty to purchase said bonds from said Board of Penitentiary Commissioners and to pay to said board therefor, out of the permanent school fund, the face value of said bonds with accrued interest thereon, down to the date of such purchase; and the principal of such bonds shall constitute and remain a part of the permanent school fund, and the interest thereon shall become a part of the available school fund, and such bonds and coupons shall be deposited with and kept and held by the State Treasurer as provided by law in case of other securities belonging to the permanent school fund; provided, however, that no part of the permanent schood fund shall be invested in such bonds unless same shall have been registered by the Comptroller of Public Accounts and shall be accompanied by a certificate from the Attorney General under his seal to the effect that such bonds are in all respects in compliance with the requirements of this Act.

SEC. 3. The money which shall be derived by the said Board of Penitentiary Commissioners from said bonds shall be used as follows:

1st. One hundred and fifty thousand dollars, or so much thereof as may be necessary, shall be used by said board for the purpose of taking up and redeeming the twenty bonds authorized by and issued in virtue of Chapter LXXIV of the Acts of the Thirtieth Legislature.

2nd. The residue thereof shall be applied by said board to the completion of said State railroad into the City of Palestine.

3rd. The remainder, if any, shall be applied by said board at any time to the payment, pro tanto, of said bonds and coupons in numerical order.

SEC. 4. When said railroad shall be completed to the town of Palestine it shall be the duty of the Penitentiary Board to endeavor to make a sale of the same whenever said sale can be made without detriment to the interest of the State and the several industries operated as a part of the penitentiary system. Said board shall be authorized, at its discretion, to make application to the Railroad Commission of the State of Texas to value said railroad property, together with all of its equipments, rolling stock, right of way, depot buildings and all appurtenances of whatsoever kind and character, and in no event shall said road be sold for less than such valuation fixed upon the same by said Railroad Commission. In the event that said railroad shall be sold as herein provided for, the proceeds of such sale shall be applied as follows:

First. To the repayment of the permanent school fund of the amount used out of the appropriation herein named made for the construction of said railroad and for the taking up of the bonds issued therefor under the provisions of this Act.

Second. The remainder of the proceeds of the sale of such railroad shall be deposited in the State Treasury and be credited to the Penitentiary Board to be applied to the betterment and enlargement of the iron industry and other industries situated within the walls of the penitentiary at Rusk.

SEC. 5. The provisions of this Aet shall be construed as cumulative of and supplemental to all laws now in force in this State, and nothing herein shall be construed to repeal any other law in force, especially none of the provisions of Chapter LXXIV of the Acts of the Thirtieth Legislature, page 151.

SEC. 6. The fact that there now exists no law providing for means for the completion of said State railroad, creates an emergency and an imperative public necessity that the Constitutional rule requiring bills to be read on three several days be suspended, and it is hereby suspended, and that this Act shall take effect and be in force from and after its passage, and it is so enacted.

Approved May 12, 1909.

Takes effect ninety days after adjournment.


[blocks in formation]

An Act authorizing any life insurance company incorporated under the laws of this State, at its option, to deposit securities equal in value to the legal reserve on its outstanding policies and annuity bonds for the benefit of all the holders thereof, and providing for the regulation and maintenance of such deposit, and the terms and purposes for which same shall be held; providing for additional reserve on extra hazardous risks; making it unlawful to pay certain persons for procuring insurance, and fixing a penalty for the violation thereof, and declaring an emergency.

Be it enacted by the Legislature of the State of Texas:

SECTION 1. Any life insurance company now incorporated, or which may hereafter be incorporated under the laws of this State, may deposit with the Commissioner of Insurance and Banking of the State of Texas, for the common benefit of all the holders of its policies and annuity bonds, securities of the kinds in which by the laws of this State it is permitted to invest or loan its funds, equal to the legal reserve on all its outstanding policies in force, which securities shall be held by said commissioner in trust for the purpose and objects herein specified. Any such company may deposit lawful money of the United States in lieu of the securities above referred to, or any portion thereof, and may also, for the purposes of such deposit convey to said commissioner in trust the real estate in which any portion of its said reserve may be lawfully invested, and in such case said commissioner shall hold the title thereto in trust until other securities in lieu thereof shall be deposited with him, whereupon he shall reconvey the same to such company. Said commissioner may cause any such securities or real estate to be appraised and valued prior to their being deposited with or conveyed to him in trust as aforesaid, the reasonable expense of such appraisement or valuation to be paid by the company.

SEC. 2. After making the deposit mentioned above, no company shall thereafter issue a policy of insurance or endowment or annuity bond, except policies of industrial insurance, unless it shall have upon its face a certificate substantially in the following words: "This policy is registered, and approved securities equal in value to the legal reserve hereon are held in trust by the Commissioner of Insurance and Banking of the State of Texas," which certificate shall be signed by such commissioner and sealed with the seal of his office.

All policies and bonds of each kind and class issued and the forms thereof filed in the office of said commissioner shall have printed thereon some appropriate designating letter or figure, combination of letters or figures or terms identifying the particular form of contract, together with the year of adoption of such form, and, whenever any change or modification is made in the form of 'contracts, policy or bond, the designating letters, figures or terms and year of adoption thereon shall be correspondingly changed.

The Commissioner of Insurance and Banking shall prepare and keep such registers thereof as will enable him to compute their value at any

time. Upon written proof attested by the president or vice president and secretary of the company, which shall have issued such policies or annuity bonds, that any of them have been commuted or terminated, the commissioner shall commute or cancel them upon his register, and until such proof is furnished all registered contracts shall be considered in force for the purposes of this Act. The net value of every policy or annuity bond, according to the standard prescribed by the laws of this State for the valuation of policies of life insurance companies, when the first premium shall have been paid thereon, less the amount of such liens as the company may have against it (not exceeding such value), shall be entered opposite the record of said policy or annuity bond in the register aforesaid at the time such record is made. On the first day of January of each year, or within sixty days thereafter, the commission shall cause the policies and annuity bonds of each company accepting the terms of this Act to be carefully valued, and the actual value thereof at the time fixed for such valuation, less such liens as the company may have against it, not exceeding such value, shall be entered upon the register opposite the record of such policy or bond, and the commissioner shall furnish a certificate of the aggregate of such value to the company.

It shall be the duty of the commissioner to cancel mutilated or surrendered policies and annuity bonds issued by any such company, and register other like policies or bonds issued in lieu thereof.

Each company which shall have made the deposit herein provided for shall make additional deposits from time to time, in amounts not less than five thousand dollars, and of such securities as are permitted by this Act to be deposited, so that the market value of the securities deposited shall always be equal to the net value of the policies and annuity bonds issued by said company, less such liens as the company may have against them, not exceeding such net value. So long as any company shall maintain its deposits as herein prescribed at an amount equal to or in excess of the net value of its policies and annuity bonds as aforesaid, it shall be the duty of said commissioner to sign and affix his seal to the certificates before mentioned on every policy and annuity bond presented to him for that purpose by any company so depositing.

The commissioner shall keep a careful record of the securities deposited by each company, showing by item the amount and market value thereof. If at any time it shall appear therefrom that the value of the securities held on deposit is less than the actual value of the policies and annuity bonds issued by such company and then in force, it shall be unlawful for the commissioner to execute the certificate on any additional policies or annuity bonds of such company until it shall have made good the deficit. Any company depositing under the provisions of this Act, may increase its deposits at any time by making additional deposits of not less than five thousand dollars of such securities as are authorized by this Act. Any such company whose deposits exceed the net value of all policies and annuity bonds it has in force, less such liens (not exceeding such net value) as the compauy may hold against them, may withdraw such excess, and it may withdraw any of such securities at any time by depositing others of equal value and of the character authorized by this Act in their stead, and it may collect the interest, coupons, rents and other income on the securities deposited as the same accrue.

The securities deposited under this Act by each company shall be placed and kept by the Commissioner of Insurance and Banking of the State in some secure, safe-deposit, fire-proof box or vault in the city or town in or near which the home office of the company is located; and the officers of the company shall have access to such securities for the purpose of detaching interest coupons and crediting payment and exchanging securities as above provided, under such reasonable rules and regulations as the commissioner may establish.

SEC. 3. Every company making deposit under the provisons of this Act shall pay to the Commissioner of Insurance and Banking for each certificate placed on registered policies or annuity bonds issued by the company after the original or first deposit is made hereunder a fee of twenty-five cents, and the fee so received shall be disposed of by said commissioner as follows:


The payment of the annual rent or hire of the safety deposit fireproof box above provided.

2nd. Payment for the services of a competent and reliable representative of said commissioner, to be appointed by him, who shall have direct charge of the securities and safety box containing the same, and through whom and under whose supervision the insurance company may have access to its securities for the purposes above provided. The sum paid such representative shall not exceed sixty dollars per annum for each company.

3rd. The balance of such fees shall be paid to or deposited with the State Treasurer to the credit of the general fund.

SEC. 4. Any life insurance company organized under the laws of this State and making the deposit provided for by this Act, may include as a part thereof securities representing its capital stock and any deposits of its securities heretofore or hereafter made in compliance with the laws of this State representing its capital stock, and shall only be required to deposit in addition thereto the remainder of its total reserve on outstanding policies and annuity bonds after deducting therefrom the amount of its capital stock securities so deposited.

SEC. 5. Deposits of securities made hereunder to the value of the reserve on all outstanding policies and annuity bonds shall be added to and maintained from time to time as the reserve values increase, by the company issuing such contracts, or by any company which may re-insure or assume them, and such securities shall be held by the Commissioner of Insurance and Banking and his successors in office in trust for the benefit of such policies and annuity bonds so long as the same shall remain in force. No company making the deposit provided for herein shall reinsure its outstanding business or the whole of any one or more of its risks, except in or with a company or companies incorporated and organized under the laws of this State, or a company having permission to do business in this State.

SEC. 6. If any life insurance company doing business under the laws of this State has written or assumed risks that are sub-standard or extra hazardous and has charged therefor more than its published rates of premium the Commissioner of Insurance and Banking shall, in valuing such policies, compute and charge such extra reserves thereon as is warranted by reason of the extra hazard assumed and the extra premium charged.

« PreviousContinue »