apply respectively to shareholders in stock companies and policyholders in purely mutual companies; and said guaranty cap ital shall be retired when the permanent fund of the company equals two per cent. of the amount insured upon all policies in force; and said guaranty capital may be reduced or retired by vote of the policyholders of the company and the assent of the Insurance Commissioner, if the net assets of the company above its reinsurance reserve and all other claims and obligations exclusive of guaranty capital, for two years last preceding and including the date of its last annual statement, shall be not less than twenty-five per cent. of the guaranty capital. Due notice of such proposed action on the part of the company shall be mailed to each policyholder of the company not less than thirty days before the meeting when such action may be taken, and shall also be advertised in two papers of general circulation in the city or county where the principal office of the company is located, not less than three times a week for a period of not less than four weeks before said meeting. No insurance company with a guaranty capital, which has ceased to do new business, shall divide among its stockholders any part of its assets or guaranty capital, except income from investments. until it shall have performed or canceled its policy obligations.

1916, ch. 256, sec. 154x.

154x. Mutual fire insurance companies, incorporated under the laws of any other State of the United States, or of any foreign government, and duly licensed to transact business in such other State or county, shall be admitted to do business within this State, upon complying with all the requirements and restrictions of this Article applicable to domestic companies of the same class, save only as to their incorporation and the investment of their funds, if they shall at the time of application for admission be in compliance with all the laws of their respective State or country, and shall file with the Insurance Commissioner of this State the following: (a) a certified copy of its Articles of Incorporation or Association and of its bylaws; (b) a consent duly executed, appointing the State Insurance Commissioner of Maryland to be the true and lawful attorney for such company in and for this State, upon whom all

legal process in any action or proceeding against the company may be served with the same effect as if it were a domestic company. Service upon such attorney shall thereafter be deemed service upon the company; (c) an agreement that it will pay the taxes provided for in Section 184 of this Article,, and that it will furnish any further information as to its financial condition, as the Insurance Commissioner shall require (d) each such company shall pay to the Insurance Commissioner the fees required by Section 184 of this Article applicable to Fire Insurance Companies.

Provided, however, that nothing in this Act shall be construed as applying to reciprocal or inter-insurance exchanges; nor shall anything in this Act or in Article 23 of the Code of Public General Laws of Maryland as amended by this Act, be construed as in any manner restricting or limiting the right of individ uals, partnerships, or corporations of this State to protect themselves against loss for damage through the medium of reciprocal or inter-insurance contracts; nor shall any law of this State be construed as requiring any reciprocal or inter-insurance to pay any tax on premium or deposits.

1916, ch. 256, sec. 154Y.

154y. All provisions of Article 23 governing or in any manner applying to stock fire insurance companies, not inconsis tent with any provision of Section 154-L to Section 154X, both inclusive, of this Article, shall govern and apply with equal force to mutual fire insurance companies, and all sections of said Article 23 inconsistent in whole or in part with any section or provision of this Act, except Section 173, which is hereby declared to be and remain in full force and effect, are hereby repealed in so far as they may be inconsistent herewith. 1912, art. 23, sec. 155. 1904, art. 23, sec. 147. 1898, ch. 226. 1902, ch. 131, sec. 114A. 1912, ch. 410, sec. 147. 1914, ch. 729, sec. 147. 155. Any life, accident or health insurance company or association heretofore incorporated under the laws of this State without capital stock, and whether conducted upon the mutual legal reserve, co-operative or assessment plan, may with the consent of at least three-fourths of its directors become a stock corporation, subject to the laws of this State applicable to such

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corporations, and those prescribing the form and manner of making amendments to articles of incorporation, upon complying with the following conditions and regulations:-Notice of the proposal is to change the form of the corporation organization and of a meeting of the members of the corporation, its policy holders or certificate holders, or by whatever name its members are known, to be held for the purpose of taking action thereon shall be given by publication stating the time, place and object of said meeting, once a week for six consecutive weeks in at least one newspaper of general circulation published in the city or county in which said corporation has its principal place of business, and in at least two such newspapers if so many are published in said city or county..

At such meeting there shall be required in order to effect the change proposed the affirmative vote in person, or the consent in writing, of at least two-thirds of all the members of the corporation and the concurrence of at least three-fourths of the directors. At such meeting if the proposed change be approved the amount of the capital stock of the corporation shall be fixed within the limits prescribed by law for such corporations, and especially subject to the provisions of Sections 149 and 176 of this Article, and the par value of the shares and the number of shares into which the capital stock is to be divided shall also be determined. The members, policy holders or certificate holders of such corporation shall have the first right to subscribe to said stock, subject to such equitable regulations as the directors may prescribe, but all subscriptions for shares of stock must be made and paid for in cash and at a price not less than par. Upon the completion of its reorganization as a stock company the assets, if any, of such corporation and its liabilities shall be and become the assets and liabilities of the stock company except so fas as herein otherwise provided. Said company, however, shall not be entitled to do any business as a stock corporation, until the amount of capital stock, determined as herein provided and as authorized by law, shall have been subscribed and paid for at not less than par and in accordance with the laws governing the formation of corporations, and shall have been invested in an amount equal to the par value of such stock, in the securities of the United States, of the State of Maryland or the City of Baltimore, or in such securities as may be prescribed by the in

surance laws of this State, and deposited with the proper official of this State to guarantee the payment of policies issued by said company, and until the insurance commissioner shall, upon re quest, value the assets of the said company, and its outstanding policies, and shall give his certificate that the admitted assets of said company, including its capital stock, are sufficient to provide reserve upon all outstanding policies as required by the laws of this State in relation to insurance companies, over and above all other bona fide debts and claims against it. Upon the receipt of such certificate from the Insurance Commissioner, the stockholders may elect from among themselves not less than five or more than twenty-five directors to hold office until the ensuing annual meeting or until their successors shall have been duly elected and qualified, and the directors so elected shall have and they are hereby authorized to exercise all the rights and powers proper to be exercised by the directors of such stock company under the laws of this State.

The Insurance Commissioner upon request, and upon payment to him at the usual rates of the cost of such work, shall ascertain and certify the proportionate interest in the assets of the mutual corporation before its reorganization as a stock company, of each of the members of the mutual company who may refuse to assent to the change of said company into a stock company; but the interest of no member so dissenting shall be valued at more than the full legal reserve upon his policy as prescribed by law, at the time of the reorganization of the corporation as a stock company, and the amount of the interest of every such dissenting member or policy holder, shall be paid over to them respectively, and upon the payment or tender to him of the amount of interest so ascertained and certified, the membership of each such dissenting member or policy holder shall cease and determine; and the remainder of the assets in excess of the sum required for the compensation of dissenting members or policy holders as aforesaid, may be deposited with the Treasurer of Maryland or the Insurance Commissioner under the provisions of Sections 149 and 176 of this Article as a guarantee for the payment of the policies issued by said company. And any surplus that may be found to exist in the assets of such corporation over and above all its liabilities including the legal reserve for all outstanding policies in force, as

ascertained and certified by the Insurance Commissioner as hereinabove provided at the date of its reorganization as stock company shall be held as a fund for the security of the creditors of the company, and shall under no circumstances pass to the ownership of the stockholders, be distributed among them or be used or encroached upon for the payment of dividends upon the capital stock.

The mutual policies and all rights and liabilities attached thereto, and all the powers and obligations of the company with reference to the same, shall survive so long as said policies shall remain in force, except that such policies shall thereafter be considered as policies for the largest amount, which, according to their terms, might be payable thereunder in case the assessments provided for should yield a sufficient amount to pay the same, and if any certain number of assessments be specified upon said policies as payable by the holders thereof, the company shall not be entitled to levy any further assessments, even though such rights may have been previously reserved in the policy.

Ibid, sec. 148. 1888, art. 23, sec. 115. 1868, ch. 471, sec. 99.

156. Every corporation formed under the provisions of this Article for the purposes of life insurance is hereby authorized also to insure individuals against accident, and to grant, purchase or dispose of annuities, unless it be otherwise provided in its charter or by-laws.

1904, art. 23, sec. 149. 1888, art. 23, sec. 116. 1868, ch. 471, sec. 100. 1900, ch. 660.

157. Every life or health insurance company incorporated under this Article, except organizations formed under the provisions of Section 193 of this Article, shall have a guaranteed capital of not less than one hundred thousand dollars, which shall be invested either in securities of the United States, of the State of Maryland, or of the City of Baltimore, and the same shall, before said company shall commence issuing policies, bedeposited in the treasury of this State as a guarantee for the payment of the policies of insurance issued by said company; and the said company, from time to time, as it shall deem proper, may sell and dispose of the said securities, and exchange