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Ch, 374. AN ACT TO PROVIDE ADDITIONAL CLERICAL ASSISTANCE IN THE INSUR

Insurance commissioner may employ additional clerical assistance.

ANCE DEPARTMENT.

Be it enacted, &c., as follows:

SECTION 1. The provisions of section six of chapter two hundred and ninety-seven of the acts of the year eighteen hundred and seventy-one, are hereby so far amended as to authorize the insurance commissioner to employ such additional clerical assistance as he may find necessary for the proper discharge of the duties of his department. SECTION 2. This act shall take effect upon its passage. Approved December 18, 1872. Ch. 375. AN ACT TO AUTHORIZE THE FORMATION OF INSURANCE COMPANIES

Ten or more residents of the

in writing, to

form an insur

ance corporation.

AND FOR OTHER PURPOSES.

Be it enacted, &c., as follows:

SECTION 1.

Any ten or more persons residents of this State may agree, Commonwealth, who shall have associated themselves together by an agreement, in writing, such as is hereinafter described, with the intention to constitute a corporation for the purpose of transacting the business of insurance, either upon the stock or mutual principle, against loss or damage by fire, by lightning, by tempest, or by the perils of the sea, and other perils usually insured against by marine insurance companies, including risks of inland navigation and transportation, shall become a corporation upon complying with the provisions of section nine of this act, and shall remain a corporation with all the powers, rights and privileges, and subject to all the duties, liabilities and restrictions set forth in all general laws which are or may be in force relating to insurance corporations.

Agreement to set forth inten

a company,

insurance, name

of capital stock,

&c.

SECTION 2. Such agreement shall set forth the fact tion to constitute that the subscribers thereto associate themselves with the name, class of intention to constitute a corporation, the name by which of town, amount the corporation shall be known, the class or classes of insurance for the transaction of which the corporation is constituted, the plan or principle upon which the business is to be conducted, the town or city (which town or city shall be within this Commonwealth) in which it is established or located, and if a joint stock company, the amount of its capital stock, and if a mutual company with a guarantee capital, the amount thereof. The capital stock of a joint stock company insuring against loss or damage by fire, or by fire and lightning only, shall not be less than two hundred thousand dollars if the company is located in Boston, and not less than one hundred thousand if located elsewhere. If insuring marine or inland risks,

either alone or in conjunction with fire risks, its capital stock shall not be less than three hundred thousand dollars if the company is located in Boston, and not less than two hundred thousand dollars if located elsewhere.

insurance com

guarantee cap

not more than

SECTION 3. Any mutual fire insurance company may Any mutual fire be organized under the provisions of this act with a guar- pany to have antee capital of not less than one hundred thousand dol- ftal not less than lars, and not more than three hundred thousand dollars, $100,000, and divided into shares of one hundred dollars each, and no $300,000. policy shall be issued by such corporation until the whole amount of the guarantee capital fixed by the articles of association has been paid in in cash, and invested in accordance with the provisions of section thirty-one of chapter fifty-eight of the General Statutes and chapter twentynine of the acts of the year eighteen hundred and sixtyfour.

and mutual fire

pany, with a permanent fund $400,000.

of not less than

SECTION 4. Any mutual marine, and mutual fire and Mutual marine, marine insurance company may be organized under the and marine comprovisions of this act, with a permanent fund of not less per went f than four hundred thousand dollars, subscribed under the provisions of sections thirty-five and thirty-seven of chapter fifty-eight of the General Statutes; and no policy shall be issued by such corporation until one-half said permanent fund has been paid in in cash, which shall be divided into shares of one hundred dollars each. Such corporations may increase said permanent fund to an amount not exceeding one million of dollars.

SECTION 5. Any name not previously in use by an existing corporation or company, may be adopted: provided, that the words "insurance company" shall constitute a part of the title, and if the business is to be conducted upon the mutual principle, the words "mutual insurance company" shall constitute a part of such title. No certificate shall be granted to any corporation as hereinafter provided, if in the judgment of the insurance commissioner the name adopted too closely resembles the name of an existing corporation or company, or is likely to mislead the public.

Any name not in

use by an exist

ing company

may be adopted.

for organization.

SECTION 6. The first meeting for the purpose of or- First meeting ganization shall be called by a notice, signed by one or more of the subscribers to such agreement, stating the time, place and purpose of the meeting, a copy of which notice shall, seven days at least before the day appointed, be given to each subscriber, or left at his usual place of

Organization ef fected by choice

clerk, directors

cers.

business or residence, or deposited in the post-office, postage prepaid, and addressed to him at his usual place of business or residence. And whoever gives such notices shall make affidavit of his doings, which shall be entered upon the records of the company: provided, however, that when organizations shall be commenced prior to the first day of January, in the year eighteen hundred and seventy-three, the foregoing notice may be waived by a written acknowledgment of the receipt of notice signed by the subscribers, which shall be sufficient evidence that due notice has been given.

SECTION 7. At such first meeting, including any adof a temporary journment thereof, an organization shall be effected by the and other off- choice by ballot of a temporary clerk, who shall be sworn to the faithful discharge of his duty, by the adoption of by-laws and by the election, in the manner provided by law, of directors and such other officers as the by-laws require; but at such first meeting no person shall be elected director who has not subscribed to the articles of association. The temporary clerk shall record the proceedings until and including the qualification of the secretary of the corporation by his being duly sworn.

Directors to elect president,

SECTION 8. The directors so chosen shall elect a pressecretary, &c.ident, a secretary, and any other officers which under the by-laws they are authorized to choose.

Certificate to be signed and sworn to, and submitted to insurance commissioner.

SECTION 9. The president, secretary and a majority of the directors shall forthwith make, sign and swear to a certificate setting forth a copy of the articles of association, with the names of the subscribers thereto, the date of the first meeting, and of any adjournments thereof, and shall submit such certificate and the records of the corporation to the inspection of the insurance commissioner, who shall examine the same, and who may require such other evidence as he may judge necessary. The commissioner, if it shall appear that the requirements of the preceding sections of this act have been complied with, shall certify that fact, and his approval of the certi To be filed in ficate, by indorsement thereon. Such certificate shall secretary of the thereupon be filed in the office of the secretary of the Commonwealth by said officers, and upon being paid by them the fee hereinafter provided, the secretary shall cause the same, with the indorsement thereon, to be recorded, and shall thereupon issue to said corporation a certificate in the following form :—

office of the

Commonwealth.

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COMMONWEALTH OF MASSACHUSETTS.

to the corpora

Be it known, that whereas [here the names of the subscribers Form of certifi to the articles of association shall be inserted], have associated them- cate to be issued selves with the intention of forming a corporation under the name tion by the secof [here the name of the corporation shall be inserted], for the pur- retary of the Commonwealth. pose [here the purpose declared in the articles of association shall be inserted], with a capital or with a permanent fund of [here the amount of capital or permanent fund fixed in the articles of association shall be inserted], and have complied with the provisions of the statutes of this Commonwealth in such case made and provided, as appears from the certificate of the president, secretary and directors of said corporation, duly approved by the insurance commissioner, and recorded in this office. Now, therefore, I [here the name of the secretary shall be inserted], secretary of the Commonwealth of Massachusetts, do hereby certify that said [here the names of the subscribers to the articles of association shall be inserted], their associates and successors, are legally organized and established as, and are hereby made an existing corporation under the name of [here the name of the corporation shall be inserted], with the powers, rights and privileges, and subject to the duties, liabilities and restrictions which by law appertain thereto. Witness my official signature hereunto subscribed, and the seal of the Commonwealth of Massachusetts hereunto affixed this day of , in the year of our Lord

In these blanks the day, month and year of execution of the certificate shall be inserted, and in the case of purely mutual companies, so much as relates to capital stock shall be omitted.]

zation, &c., of

The secretary of the Commonwealth shall sign the same, Certificate to be and cause the seal of the Commonwealth to be thereto dence of organi affixed, and such certificate shall have the force and effect corporation. of a special charter, and be conclusive evidence of the organization and establishment of such corporation. The secretary shall also cause a record of such certificate to be made, and a copy of such record, duly certified, may, with like effect as the original certificate, be given in evidence to prove the organization and establishment of such corporation.

pany not to issue

been subscribed

SECTION 10. No policy shall be issued by a purely Mutual com mutual company organized under the provisions of this act, a policy until until the sum of five hundred thousand dollars shall have $500,000 has been subscribed to be insured and entered on the books of to be insured. the company provided, however, that in any town of less Proviso. than four thousand inhabitants, a company may be organized under the provisions of this act, to insure dwellinghouses, farm buildings and contents only, within the limits of the town where said company is located, and may issue policies when fifty thousand dollars have been subscribed to be insured.

holders of stock

SECTION 11. The holders of stock in mutual fire insur- Dividends to ance companies with a guarantee capital organized under in mutual fire

guarantee capi

tal.

companies with the provisions of this act shall be entitled to a net semiannual dividend not exceeding six per centum on their respective shares, if the net profit, after providing for all expenses, losses and liabilities then incurred, including a sum sufficient to reinsure all outstanding risks, is sufficient from time to time to pay the same; and if any such dividend is less than six per centum it shall be made up when such net profit becomes sufficient therefor. Three-fourths of said net profit, after the payment of said dividends, shall be credited to, and, at the expiration of the policies, divided among the insured, and the remaining one-fourth shall be invested and be a reserve for the security of the insured; but when from time to time the reserve shall exceed five per centum on the amount insured, the whole of said net profit in excess of said reserve of five per centum shall, after the payment of said dividends, be divided among the insured at the expiration of their policies.

Guarantee capi

to payment of losses only

funds are ex

hausted.

The guarantee capital shall be applied to the payment tal to be applied of losses only when the other cash funds have been exwhen other cash hausted; and if the guarantee capital shall at any time be reduced, it shall be replaced from the first accumulation of the reserve, or the directors may at their discretion replace the whole or any part of it by assessments upon the contingent funds in the possession of the company at the time of said reduction.

Dividends to holders of shares

Shareholders and policy-holders in corporations referred to in this section shall be subject to the same provisions of law in voting at all meetings of such corporations as apply respectively to shareholders in joint stock companies and policy-holders in purely mutual companies, and the directors may be elected from the stockholders or policy-holders, not less than one-half being from the holders. of stock. Such companies may insure property located in any part of the United States and for its full value, and shall be subject to the provisions of chapter two hundred and eighty-three of the acts of the year eighteen hundred and sixty-five.

SECTION 12. The holders of shares in the permain permanent nent fund of any mutual marine, or mutual fire and mafund in mutual rine insurance company, shall be entitled to a semi-annual mutual fire and dividend of not exceeding six per centum, and the makers

marine, and

marine com

panies.

of the promissory notes constituting any part of such fund shall be entitled to a semi-annual dividend not exceeding two and one-half per centum of the amount of such

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