AN ACT

RELATING TO LIFE AND CASUALTY INSURANCE ON THE

ASSESSMENT PLAN.

Definition.

Except fraternal societies.

Twenty-five persons form company.

How charter invalidated.

Be it enacted by the General Assembly of the State of Colorado:

Section 1. Every contract whereby a benefit is to accrue to a party or parties named therein upon the death or physical disabilty of a person, which benefit is in any degree or manner conditioned upon the collection of an assessment upon persons holding similar contracts, shall be deemed a contract of insurance on the assessment plan, and the business involving the issuance of such contracts shall be carried on in this State only by duly organized corporations, which shall be subject to the provisions and requirements of this act; but nothing herein contained shall be construed as applicable to organizations which conduct their business as fraternal societies on the lodge system, or to organizations which do not employ paid agents in soliciting business or limit their certificate holders to a particular order or fraternity. If the benefit is to accrue through the death of the insured person, the contract shall be of life insurance; if through accidental death only or the physical disability from accident or sickness of the insured, it shall be of casualty insurance.

Sec. 2. Twenty-five or more persons, citizens of this State, may form a corporation to carry on the business of a life or casualty insurance or both, on the assessment plan; but no such corporation shall begin to do business until at least two hundred persons have subscribed in writing to be insured therein, and have each paid in one full mortuary assessment, to be held in trust for the benefit of the beneficiaries, nor until the Superintendent of Insurance has certified that it has complied with the provisions of this act and is authorized to transact business. No charter granted under the provisions of this act shall continue valid after one year from date, unless the organization has been completed and business begun thereunder.

panies may re

Sec. 3. Any corporation existing under the laws Existing comof this State and now engaged in transacting the incorporate. business of life or casualty insurance on the assessment plan may re-incorporate under the provisions of this act; Provided, That nothing in this act contained shall be construed as requiring or making it obligatory upon such corporation or re-incorporate, and any such corporation may continue to exercise all rights, powers and privileges conferred by this act or its articles of incorporation, not inconsistent herewith the same as if re-incorporated hereunder.

Penalty for

Sec. 4. When the Superintendent of Insurance, failure to comon investigation, is satisfied that any corporation ply with act. doing business in this State, under this act, has exceeded its powers, failed to comply with any provisions of law, or is conducting business fraudulently, he shall report the facts to the Attorney General, who shall thereupon apply to the District Court for an injunction restraining such corporation from the further prosecution of business, and the said court, upon hearing the matter, may issue such injunction or decree the removal of any officer, and substitute a suitable person to serve in his stead until a successor is duly chosen, and may make such other order and decrees as the interests of the corporations and the public may require.

Sec. 5. Every policy or certificate hereafter is. sued by any corporation doing business under this act and promising a payment to be made upon a contingency of death, sickness or accident shall specify the minimum sum of money which it promises to pay upon each contingency insured against and the number of days after satisfactory proof of the happening of such contingency at which such payment shall be made, and upon the occurrence of such contingency, unless the contract shall have been voided by fraud or by breach of its conditions, the corporation shall be obligated to the beneficiary for such payment at the time and to the amount specified in the policy or certificate, and this indebtedness shall be a lien upon all the property, effects and bills receivable of the corporation,

Policy shall mum amount paid and the which.

specify a mini

which must be

time within

Rights of insured to collections in excess of minimum named.

with priority over all indebtedness thereafter incurred, except as hereinafter provided in case of the distribution of assets of an insolvent corporation; Provided, That the statement of such minimum shall not invalidate the rights of the party insured from receiving any further amount above such minimum that shall be based upon membership and to which he shall be entitled by the provisions of the policy. If the Superintendent of Insurance shall be satisfied, on investigation, that any such corporation has refused or failed to make such After failure to payments for thirty days after it became due, and pay for 30 days, superintendent after proper demand, he shall notify the corporation to issue no new policies or certificates until such indebtedness is fully paid, and no officer or agent of the corporation shall make, sign or issue any policy or certificate of insurance while such notice is in force.

of insurance may notify to

stop business.

Power to examine.

Report to attorney general.

Sec. 6. Whenever the Superintendent of Insurance shall have given the notice required by the last preceding section, he shall proceed without delay to investigate the conditions of the corporation, and shall have full power, in person or by deputy, to examine its books, papers and accounts, and to examine under oath its officers, agents, clerks and certificate holders, or other persons having knowledge of its business; and if it shall appear to him that its liabilities exceed its resources, and that it cannot, within a reasonable time, not more than three months from the date of the original default, pay its accrued indebtedness in full, he shall report the facts to the Attorney General, who shall, upon the report of the Superintendent of Insurance, apply to the District Court for an order closing the business of the corporation and appointing a receiver or trustee for the distribution of its assets among creditors; Provided, That notice of such application, and a copy thereof in writing, shall be served upon the corporation at least ten days before the same shall be heard; And provided, That upon hearing the matter, the court shall have power to make any order which the interests of the corporation and the public may require.

insure risks,

Sec. 7. No life or casualty insurance corpora- Shall not retion, organized under the laws of this State, shall except, etc transfer its risks to, or reinsure them in, any other corporation, unless the said contract of transfer, or reinsurance, is first submitted to and approved by two-thirds vote of a meeting of the insured called to consider the same, of which meeting a written or printed notice shall be mailed to each policy or certificate holder at least ten days before the date fixed for said meeting, and, in case said transfer or reinsurance shall be approved, every policy or certificate holder of the said corporation who shall file with the secretary thereof, within five days after said meeting, written notice of his preference to be transferred to some other corporation than that named in the contract, shall be accorded all the rights and privileges, if any, in aid of such transfer as would have been accorded under the terms of the said contract had he been transferred to the corporation named therein. The members of any in- Liability of surance corporation other than those which are purely mutual, whose management shall refuse or neglect, for the space of thirty days after the filing of satisfactory proof of death of any certificate or policy holder, where the claim so arising is not disputed on account of fraud or want of validity, and where the death fund is not sufficient to pay said claim, to levy an assessment to provide for the same, shall thereby become liable to the beneficiary, under the certificate or policy, in a sum not exceeding the face of said claim.

members.

admission to

Sec. 8. Any corporation organized under au- Conditions for thority of another State or government to issue the state. policies or certificates of life or casualty insurance on the assessment plan, as a condition precedent to transacting business in this State, shall deposit with the Superintendent of Insurance and also with the Secretary of State a certified copy of its charter or certificate of incorporation; it shall also file with the Superintendent of Insurance a statement, under oath, of its president and secretary, in the form by the Superintendent of Insurance required, of its business for the preceding year, a certificate, under oath of its president and secretary, that it is pay

May revoke certificate of authority.

No risk on person over sixty years of age.

Money not liable to attach

ment.

ing and for the twelve months then next preceding has paid the amount named in its policies or certificates in full; in accordance with the requirements of Section 5, a certificate from the proper authority in its home State, that said corporation engaged, according to the provisions of this act, in life or casualty insurance on the assessment plan in this State, is legally entitled to do business in such home State, a copy of its policy or certificate and application, which must show that benefits are provided for by assessment upon policy or certificate holders. The Superintendent of Insurance shall thereupon issue or renew the authority of such corporation to do business in this State, and such authority shall be revoked whenever the Superintendent of Insurance, on investigation, is satisfied that such corporation is not paying in accordance with the requirements of Section 5 of this act, the amount named in its policies or certificates in full. Upon such revocation, the Superintendent shall cause notice to be published in a daily newspaper in Denver, Colorado, and no new business shall thereafter be done by it or its agents in this State. When any other State or country shall impose any obligation upon any such corporation of this State the like obligation shall be imposed on similar corporations and their agents of such State or country doing business in this State.

Sec. 9. No corporation doing business under this act shall issue a certificate or policy upon the life of any person more than sixty years of age, nor upon any life in which the beneficiary named has no interest, and every call for payments by the policy or certificate holders shall distinctly state the purpose of the same, and whether any part thereof shall or may be used for expenses, and if so, how much. Any assessment of a policy or certificate to a person having no interest in the insured life shall render such policy or certificate void.

Sec. 10. The money or other benefit, charity, relief or aid to be paid, provided or rendered by any corporation authorized to do business under this act shall not be liable to attachment or other pro