this Commonwealth regarding life insurance companies upon the stock or mutual plan, as the case may be.

Any corporation, so re-incorporated as a life insurance company on the mutual or stock plan, shall, unless a higher method of valuation be provided for in its policies or certificates of membership previously written, value each of its assessment policies or certificates of membership previously written, as an ordinary industrial life policy in force for one year before the date of re-organization (regardless of the length of time actually in force), according to the methods provided for such valuation by the laws of this Commonwealth.

Upon the receipt of such certificate from the Insurance Commissioner, the stockholders may elect from among themselves directors in accordance. with the articles of incorporation and by-laws of the company, and the laws of this Commonwealth, to hold office until the ensuing annual meeting, and until their successors shall have been duly elected and qualified, and the directors so elected shall have and be vested with, and authorized to exercise, all the rights and powers proper to be exercised by the directors of such life insurance companies upon the mutual or stock plan, as the case may be, under the laws of this Commonwealth.

The Insurance Commissioner, upon request, and upon the payment to him of the usual fees therefor, shall ascertain and certify the proportionate interest in the assets of the co-operate or assessment corporation before its re-organization as a stock company of each of the members of said co-operative or assessment company, who may refuse, within six months after notice, to assent to the change of said company into a stock or mutual com

pany, but the interest of no member so dissenting shall be valued at more than his proportionate part of the accumulated emergency fund, to be determined by the Insurance Commissioner as of the date of the re-organization of the co-operative or assessment company as a life insurance company upon the mutual or stock plan, as the case may be, and the amount of the interest of every such dissenting member or policy holder or certificate holder shall be paid over to such dissenting members or policy holders or certificate holders, respectively, on demand within thirty days after ascertaining as aforesaid, and upon the payment or tender to them, respectively, of the amount of interest so ascertained and certified, the membership of such dissenting member or policy holder or certificate holder shall cease and determine, and out of the remainder of the assets in excess of the sum required for the compensation of dissenting members, policy holders or certificate holders, as aforesaid, there shall be deposited with the State Treasurer of the Commonwealth of Kentucky, under the laws of this Commonwealth providing for the deposit of legal reserve, a sum equal to such reserve as computed by the Insurance Commissioner, in addition to the deposit of one hundred thousand dollars, hereinabove provided for.

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 a stock or mutual company, as the case may be, shall be held as a fund for the security of the policy holders of the company, and shall, under no circum

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stances, pass to the ownership of the stockholders or members of the reorganized stock or mutual company, as the case may be, or be distributed among them, or be used or encroached upon for the payment of dividends upon the capital stock, but such surplus may be used to pay the losses incurred by such re-organized company upon policies written upon the co-operative or assessment plan, prior to its reorganization.

Such assessment policies and all rights and liabilities attached thereto, and all the powers and obligations of the company with reference to the same shall survive as long as said policies shall remain in force, except that such policies shall thereafter be considered as ordinary life policies, as hereinabove provided.

The re-incorporated company shall not be entitled to levy any further assessments even though such rights may have been previously reserved in the policy, but shall be entitled to collect as premiums the stipulated payments of dues provided for in said policies.

If the articles of incorporation of the re-incorporated company upon the mutual or stock plan, as the case may be, shall so specify, then such re-incorporated company may write any sort of business. permitted to life insurance companies on the mutual or stock plan by the laws of this Commonwealth as they now are or may hereafter be amended, and may also write life, health and accident insurance on the industrial plan; but if such companies shall write life, health and accident insurance in one contract on the industrial plan, they shall specify in their policies what part of the premium is for the life, and what part is for the health and accident elements, and also make sepa

rate reports to the Insurance Commissioner of each class of business, in addition to the separate reports required by law of life insurance companies writing life and accident business on the stock or mutual plan.

Approved March 23, 1916.

CHAPTER 56.

AN ACT to further amend Sections 124 and 143 of an Act entitled, "An Act providing for the creation and regulation of private corporations," which became a law April 5, 1893, as amended by an Act entitled, "An Act to amend an Act, entitled 'An Act for the creation and regulation of private corporations,'" being an Act relating to the subject of insurance and the transaction of the business of life or casualty insurance or both life and casualty insurance upon the cooperative or assessment plan, which became a law on June

1910, and is Chapter 103 of the Acts of 1910, and which Sections are Sections 661 and 680 of the Kentucky Statutes, Carroll's edition of 1915.

Be it enacted by the General Assembly of the Commonwealth of Kentucky:

§ 1. That Section 661 of the Kentucky Statutes, Carroll's Edition of 1915, being Section 124 of an Act entitled, "An Act providing for the creation and regulation of private corporations," which became a law April 5, 1893, as amended by Chapter 103 of the Acts of 1910, which became a law June 1910, and is entitled, "An Act to amend an Act entitled, 'An Act for the creation and regulation of private corporations,' " being an Act relating to the subject of insurance, and the transaction of the business of life or casualty insurance, or both life and casualty insurance upon the co-operative or assess

ment plan be amended by striking therefrom the following words and figures, to-wit:

"And have each paid in five per centum on the account of insurance severally subscribed for, in cash to be invested in securities in which insurance companies are allowed by law to invest their capital, and deposited with the Treasurer of the Commonwealth in trust for the beneficiaries; and the emergency fund has been deposited as hereinafter provided;"

And by inserting in lieu thereof the following words:

"And when said corporation shall have a guarantee fund of one hundred thousand dollars for the protection of its policyholders or members" and by adding after the words, "and is authorized to transact business" at the end of Section 661 as it appears prior to this amendment the following words and figures, to-wit:

"2. Such guarantee fund may be raised by the issue and sale of guarantee fund certificates in denomination of not less than five dollars nor more than one thousand dollars each; and shall not be sold for less than the par value thereof, which shall be fully paid in when issued. The said one hundred thousand dollars, realized from the sale of said guarantee fund certificates, shall be invested in securities in which insurance companies are allowed by law to invest their capital or funds, and said securities shall be deposited with the Treasurer of this Commonwealth, to be held in trust for the benefit and protection of the members or policyholders or such corporation. The holders or owners of said guarantee fund certificates shall be entitled to receive annual dividends not exceeding eight per centum thereon. Provided however that no dividends are payable except out of the corporation's accumulated surplus fund, if any;