CHAPTER 34.

CORPORATIONS-INSURANCE.

Section numbers to notes refer to Revised Statutes of 1901.

4875c. Examination of special companies.

Section 3 of the act of 1899, section 4875c, Burns' R. S. 1901, requiring the auditor of state to examine into the business of insurance companies operating under special charters is invalid, as such section is not covered by the title to such act. State v. Commercial Ins. Co., 158 Ind. 680.

ARTICLE 2.-MUTUAL FIRE COMPANIES.

4891a. Foreign companies, license, conditions.

[Acts 1905, p. 113. In force March 2, 1905.]

4891a. Foreign companies, license, conditions.-1. That any mutual fire insurance company organized under the laws of any state of the United States, other than the State of Indiana, having actual cash assets to the amount of fifty thousand dollars and premium notes or contingent liabilty required of similar companies organized under the laws of this state shall, upon complying with the other laws of this state relating to foreign fire insurance companies, be entitled to transact the business of mutual fire insurance in this state: Provided, That the auditor of state shall as a condition precedent, before issuing a license to any mutual fire insurance company of any other state, or to any agent thereof, applying therefor, require such company or agent to furnish a certificate, under the seal of the department having charge of insurance companies in the state where such company is organized, showing that such company is

duly organized, and is solvent and entitled to do the business of mutual fire insurance; and that similar companies of this state, under like conditions, are legally entitled to do business in such other state.

ARTICLE 3.-STOCK OR MUTUAL LIFE.

SEC.

SEC.

4894u. Valuation of policies-Deposits. 4894z. Changing securities. 4894y. Insolvency-Receiver-Dissolution. 4894g1. Investment of funds.

[Acts 1903, p. 45. In force February 25, 1903.]

4894u. Valuation of policies-Deposits.-10. As soon as practicable after the filing of said annual statement of any company organized and doing business under the provisions of this act, in the office of the auditor of state, he shall proceed to ascertain the net cash value of each policy in force on the thirty-first day of December immediately preceding, upon the basis of the American Experience Table of Mortality and four per cent. interest, or Actuaries' Combined Experience Table of Mortality and four per cent. interest, as adopted by the company, and should any such company issue any policies based upon a higher standard than the above, such policies shall be valued according to such higher standard. For the purpose of making such valuation, the auditor of state may employ a competent actuary to do the same, who shall be paid by the company for which the services are rendered; but nothing herein shall prevent any company from making said valuation herein contemplated, which may be received by the auditor of state upon such proof as he may determine. Upon ascertaining, in the manner above provided, the net cash value of all policies in force in any company organized or doing business under this act, the auditor of state shall notify said company of the amount thereof, and within ninety days after the date of such notification, the officers of such company shall deposit with the auditor of state, for the security and benefit of all its policy-holders, an amount which, together with the sum already deposited with said officer and such sums as may be deposited by said company with other states or governments, by the requirements of the laws of such other states or governments in which said company is doing business shall be not less than the amount of such ascertained valuation of all policies in force in the securities described in section 22 of this act, or in certificates of deposit in any solvent bank or trust company, or satisfactory evidences of ownership of unencumbered, improved real estate, as may be lawfully acquired by such company under the provisions of this act, at such value as may be determined upon by two disinterested appraisers, residing in the county in which the real estate is situated; such appraisers to be approved by the auditor of state. Such real estate shall not be sold or encumbered, unless securities of equal value as herein required be deposited with the auditor of state in lieu thereof. But no company organized under this act shall be required to make such deposit until the net cash value of the policies in force, as ascertained by the auditor of state, exceeds the amount deposited by said

company under sections 5 and 6 hereof: Provided, That the auditor of state, or anyone acting for him or in his behalf, in making any valuation of the policies of any life insurance company, incorporated under the laws of the State of Indiana, for the purpose of ascertaining the net cash value of outstanding policies, or for the purpose of ascertaining the reserve of outstanding policies of any such company, or for the purpose of ascertaining the policy liability of any such company, shall compute such net cash value, reserve or policy liability, according to the terms of each policy outstanding, and should any policy provide that any time covered thereby is term insurance, or for a valuation as term insurance for any time covered by such policy, the valuation of such policy shall be in accordance with any such provision in such policy: And provided further, That 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, the company shall also be charged with the value of an 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 the date of the valuation.

This section amends section 4594u, Burns' R. S. 1901.

4894y. Insolvency - Receiver - Dissolution.-14. If the auditor of state shall, at any time, find from any report, examination or otherwise, that the assets of any life insurance company organized or doing business under this act, are less than its liabilities, exclusive of capital stock, he may notify it to cease the issue of new policies, or the payment of dividend to stockholders or policy-holders, or both, until the deficiency be made good; and he may, and if it appear to him that the assets of such company are less than three-fourths of its liabilities, exclusive of capital stock, he shall communicate the facts to the attorney-general, who shall, if by him deemed advisable, at once apply to the circuit or superior court of the county, where the principal office of said company is located, for a receiver for said company, and said court shall forthwith issue a citation to such company, to appear at a day and place to be named therein, and answer to said application; and if, upon the hearing of said application. the said court shall find the assets of the said company to be less than its liabilities, as aforesaid, said court may, and if the assets are found to be less than three-fourths of its liabilities, as aforesaid, shall make such order with reference to the matter as shall be for the best interests of the policy-holders, or, if it be not practicable to continue the business, provide for the reinsurance of its outstanding policies, in some solvent company doing business in this state; or, if this is impossible, such court shall appoint some disinterested person or persons to be receiver or receivers of the said company; and said court may provide the mode of proving said claims against such company, and appoint a committee to hear and decide upon them, and may limit and extend the time for the presentation of

such claims, and may make all necessary orders in reference to the delivery to and possession of such receiver of the assets and property of such company, and the sale and conveyance of the same by him, and may direct the application of the avails of such assets and property equitably in satisfaction of the claims proved against such company, and the payment of the present net cash value of its outstanding policies to policyholders, either in whole or in part; and said court shall annul the charter and decree the dissolution of such company, and make all other orders and decrees necessary and proper in reference to winding up the affairs of such company and the disposition of its property.

This section amends section 4894y, Burns' R. S. 1901.

4894z. Changing securities.-15. Companies shall have the right at any time to change their securities on deposit, by substituting for those withdrawn a like amount in other securities of the character provided for in this act, and whenever the net cash value of policies outstanding and in force against any company is less than the amount of security then on deposit with the auditor of state, said company shall have the right to withdraw such excess; but at least twenty-five thousand dollars shall remain on deposit.

This section amends section 4894z, Burns' R. S. 1901.

[Acts 1905, p. 181. In force March 4, 1905.]

4894g1. Investment of funds.-22. No company organized under the provisions of this act shall invest its funds in any other manner than as follows: In bonds of the United States, in bonds of this state or of any other state, country or province in which said company is transacting an insurance business, if at or above par; in legal tender money of the United States; in bonds and mortgages on unincumbered real estate within this state, or in any other state or country in which said company is transacting an insurance business, worth at least double the amount loaned. thereon, and the value of such real estate shall be determined by a valuation made under oath by two freeholders of the county where the real estate is located (if buildings are considered a part of the value of such real estate they must be insured for the benefit of the mortgagee); in bonds or other evidence of indebtedness, bearing interest, of any county, incorporated city, town, township or school district within this state, or in any other state or country in which said company is transacting an insurance business, where such bonds or other evidences of indebtedness are issued by authority of law, and upon which interest has never been defaulted; in loans upon the pledge of stock, bonds or mortgages of par value, if the current value of such stock, bonds or mortgages is at least twenty-five per cent. more than the amount loaned thereon, and in loans upon its own policies: Provided, That the amount so loaned shall not exceed the reserve against said policy at the time such loan is made: Provided, That in the annual certificate furnished by the auditor of state to any such company he shall name all deposits and the amount thereof

made by such company with any other state or country, which deposits must be of the character of securities herein provided for.

This section amends section 4894g1, Burns' R. S. 1901.

4897. Life insurance, assessment plan.

Construction of the powers of a mutual accident insurance company organized under the act of 1883, and the rights of policy holders when such a company is in the hands of a receiver. Robison v. Wolf, 27 App. 683.

4905. Fraud in procuring policy.

If a person takes out an insurance policy on the life of another in which he has no insurable interest without the consent of the insured, and against the provisions of a statute, such person can not recover from the insurance company the premiums paid although the company knew all the facts. Work v. American Ins. Co., 31 App. 153.

[Acts 1905, p. 454. In force March 6, 1905.]

4909a. Foreign company, license, statement, capital.-1. That it shall not be lawful for any agent or agents of any casualty, surety or health company incorporated under the laws of any other state or any government foreign to the United States, directly or indirectly, to solicit insurance by any person or persons, firm, partnership or corporation, or to take any risks, or transact any business of insurance or suretyship in this state without first procuring a license from the auditor of state authorizing him, or them, to transact such business of insurance or suretyship as agent for such company in this state; and before such license shall be issued there shall be filed with the auditor of state a copy of the act of incorporation of such company, if such copy has not already been filed, and a statement or [on] blanks prepared by said auditor of state, under oath of two of the officers of the company making such statements, which statement shall show in detail the assets and liabilities of such company, and such other information as the auditor of state may require and no accident and health company shall transact any business of insurance in this state unless such company is possessed of at least one hundred thousand dollars invested in the stocks or bonds of some one or more of the states of the United States or of the United States or in bonds of some one or more of the counties, cities or towns of this state or some other state of the United States, at the current market value thereof at the date of admission of such company to do business in this state, or in first mortgage bonds or mortgages on real estate worth double the amount for which the same is mortgaged and free from any prior incumbrance. And no casualty company shall transact a general casualty business unless such company is possessed of at least two hundred thousand dollars in