Wood County reporter. [volume] (Grand Rapids [i.e. Wisconsin Rapids], Wis.) 1857-1923, 1875-04-29
SEC. I: This act shall take effect and be in force
Approved March 5, 1876 E~COPY
Published March %. 1851

gratlons. and for the creation of safety funds
by fire insurance companies.
The people of the State of Wisconsin repre
sented in Senate and Assembly, do enact as fol-
lows:
SECTION 1. Thereafter [hereafterl it ehau be
lawful for any fire insurance company organized
under the laws of this State to create the funds
herein provided for, to be known and designated
as the quarterly Guaranty surplus fund and the
special reserve fund and TO avail itself of the pro-
visions OF this act, upon complying with the re-
qurements thereof. -
SEC 2. ANY fire engine company desiring to
create such funds shall and is hereby authorized
TO do So upon the adoption Of resolution by
its Board Of Directors, at q regular meeting
thereof and filing with the Secretary of State q
copy thereof, declaring the desire and intention
or such company TO create such funds and to do
business under the provisions of this act: and as
soon after the Ming OF such copy OF the resolution
as convenient the Secretary of State shall make
or cause TO be made, an examination of such COM
Pany, and he shall make certificate of the result
shereot, which shall particularly set forth the
amount OF surplus funds held by such company
at the date of such examination, which under the
provisions OF this act to, and may be equally
divided between and be set apart to, constitute
SAID guaranty surplus and special reserve funds
which certificate shall be recorded in the insur
ance department, and from and after the date of
the recording of said certificate all the policies
ana renewals OF policies issued by said company
shall have printed thereon by said company
nouce that the same are issued under and in pur-
spance OF this act, referring to the same by it's
chapter, date and title, and such policies and re-
neWals snail be deemed to have been issued and
received subject to the provisions Of this act
Sec. g. After the date mentioned IN any such
resolution so passed and filed it shall not be law
| full for such company to make, declare pay, in
any form, any dividend upon its capital stock ex-
ceedlng seven 20 per cent. per annum thereupon
and upon the sur plus funds to be formed hereun-
der until after its guaranty surplus fund and it's
special reserve fund shall have together accumu-
lated to an amount equal to its said capital stock;
and the entire surplus profits of such company
above such annual dividend of seven 60 per cent
shall be equally divided between and be set apart
| to constitute the said guaranty surplus
fund and the said special reserve fund which
said funds shall be held and used as hereinafter
provided and not otherwise; and any company
doing business under this act which shall declare
or pay any dividend contrary to the provisions
herein contained shall be liable to be proceeded
against by the Attorney General for the [its dis
solution.
SEC. 4. Said guaranty surplus fund shall be
held and invested by such company the same as
its capital stock and surplus accumulation and
shall be liable and applicable in the same manner
as the capital stock to the payment generally of
the losses of such company.
SEC. .. Said special reserve fund shall be in
vested according to existing laws relating to in
Yestments of capital by fire insurance cOmDanies
and shall be deposited from time to time as the
same shall accumulate and be invested with the
State Treasurer, who shall permit the company
deposlting the same to change such deposits by
substituting for those withdrawn others of equal
amount and value to, and collect and receive the
interest or dividends upon such securities as the
same may accrue; and such special reserve fund
shall be deemed furd contributed bv the stock
holders to protect such company and its policy
holders other than claimants for losses al
ready existing, or then incurred, in cases of such
extraordinary confagration or CONGREGATIONS as
hereinafter mentioned; and said fund shall not be
regarded as any part or portion of the assets in
possession of said company so as to be or rem
der the same liable for any claim o< claims
for loss by fire or otherwise except herein pro-
vided
SEC. 6. In estimating the profit of any such
company for the purpose of making a division
thereof between said guaranty surplus fund and
such special reserve fund, there shall be deducted
from the gross assets of the company, including
for this purpose the amount of the special reserve
fund, the sum of the following items: First, the
amount OF all outstanding claims; second, an
amount sufficient to meet the liability of such
company Tor the unearned premiums received on
policies having less than year to run from
date of policy, and pro rata proportion of the
premiums received on the policies having more
than one year to run from date of policy, and
shall be known the reinsurance liability; third
the amount OF Its guaranty surplus fund and of
Its special reserve fund; fourth the amount of
the capital of the company; and fifth, interest at
the rate of per cent. per annum upon the
amount of the capital and of the said funds for
whatever time shall have elapsed since the last
preceding cash dividend; and the balance shall
constitute the net surplus of the company, sub
JeCt to equal division between the said funds
as herein provided.
SEC. 7. In the event of any extensive confiagra-
ton or CONGREGATIONS whereby the claims upon
such company shall exceed the amount of it's
capital stock and of the guaranty surplus fund
provided for by this act the said company shall
notify the Secretary of State of the fact who shall
then make or cause to be made an examination
70 said company, and shall issue his certificate of
the result, showing the amounts of capital of
guaranty surplus fund, of special reserve fund of
reinsurance liability and other assets, and upon
his issuing such certificate in duplicate, one COPY
to be given the company and one to be recorded
ia the insurance department, the said special re-
serve fund shall be Immediately held to protect
all pol1cy-hOlders OF said company other than
such AZ are claimants upon it st the time or such
SIS become such claimants in consequence of such
conhagration or confagrations; and the amount
OF said special reserve fund and amount equal
to the unearned premiums of such company, to
be ascertained as hereinbefore provided shall
constitute the capital and assets of such company
for the protection of p0licy-hoders other than
such claimants and for the further conduct of it's
business; and such official certificate of the Secre-
tary of State shall be binding and conclusive upon
all parties interested in such company, whether
as stockholders, creditors or policy-holders, and
upon the payment to the claimants, for
losses or otherwise, existing at the time of or
caused by, such general confagration or confla-
gratioas, of the amount to which they are re-
spectively entitled il proportion to their several
claims, of the full sum of the capital of such
company, and of it's guaranty surplus fund, and
of its assets, excepting only such special reserve
fund and an amount of its assets equal to the
liability OF the company for unearned premiums,
rs so certified by the Secretary of State, such
company shall be forever discharged from any
and all further liability to such claimants and to
each of Them and the said Secretary state SHALL
after issuing his said certificate, upon the de-
msnd of such company, transfer TO it all such
securities as shall have been deposited with him
by such company rs such special reserve fund;
and If the amount of such special reserve
fund be less than 20 per cent. of the
ull amount of the capital OF the COM
pany requisition shall be issued by the said Sec
rotary of State upon the stockholders to make up
such capital to that proportion of it's full amount
in the manner now provided by law in the case OF
companies with impaired capitals: And BT0Uid-
ed, further, That any capital go impaired shall be
made up to at least the sum of two hundred thou
sand dollars $500 00O); and in said company
after such requisiton shall fail to make its CAPT
tai to at least said amount of S2000O0 therein
directed, said special reserve fund shall still be
held security and liable for any and all losses
occurring upon policies OF such company after
such confagration confagrations Such COM
pany shall in its annual statement to the lnsur-
ance Department of this State set forth the
amount of such special reserve funa and of its
guaranty surplus fund.
SEC. s. If at any time after said special reserve
fund shall have been accumulated by any com
pany it shall appear, upon examination By the
said Secretary of State, that the capital of such
company has, in tho absence of any such extern
sive confagration, become impaired so to
cause him to order call upon the stockholders
to make up such Impairment, the Board of D-
rectors of such company may either comply with
such order and require the necessary payment by
ply for that purpose much of said special re-
serve fund as will make such impairment good.
No company doing business under this act shall
insure any larger amount upon any single risk
than is permitted by law to company possessing
of r.