The news-democrat. (Providence, R.I.) 1906-1909, 1907-07-08

propriated, for the purpose or carrv,ng
this act into effect.
Sec. g. This act shall take effect upon
Its passage.
CHAPTER lass.
AN ACT in Relation TO the Establishment
and Maintenance OF Safety Funds bv
Fire Insurance Companies.
Passed April Is, 1907.
IL is enacted by the General Assembly as
follows:
Section /. Any insurance company or
ganized under the laws OF this state au-
tnorized TO transact fire insurance busi-
ness, may create the funds herein pro-
vided for, to be known and designated as
the guaranty surplus fund and the special
reserve fund. and may avail itself OF the
provisions OF this section and the follow
ing sections OF this chapter upon comply
ing with the requirements thereof
Sec. z Any such insurance company
desiring to create such funds may do SO
upon the adoption OF resolution by itS
board or directors. at a regular meeting
thereof. to that effect, and fling with the
insurance commissioner of the state n
copy thereof declaring the intention of
such company to create such funds and
10 do business under the provisions of
this chapter; ana, as soon after the filing
or such copy of the resolution as con-
Venient, the insurance commissioner shall
make. or cause to be made, an examina-
ton OF such company, and he shall make
certincate OF the result thereof, which
shall particularly set forth the amount
or surplus funds held by such company.
at the date OF such examination. the
whole or any part OF which under the
provisions of this chapter may be equally
divided between and set apart to consti-
tute guaranty surplus and special reserve
funds, which certificate shall be recorded
In the insurance department
Sec. 3. After the date OF filing any such
resolution with the insurance commis-
sioner such company shall not make or
declare or pay In any form any dividend
upon Its capital stock exceeding eight per
cent. per annum thereupon and six per
cent. per annum upon the surplus funds
TO be formed hereunder until after its
guaranty surplus fund and its special re-
serve fund shall have together accumu-
lated to an amount equal its capital
stock; and any part OF the surplus profits
Of such company above such annual divi-
dend may be equally divided between and
set apart TO constitute the said guaranty
surplus fund and the said special reserve
fund, which funds shall be held and used
as hereinafter provided and not other
wise. And any company doing business
under this chapter which shall declare or
pay any dividend contrary to the pro-
visions herein contained shall forfeit It's
charter and be liable to be proceeded
against by the attorney general for it's
dissolution.
Sec. 4. Whenever such company shall
notify the insurance commissioners that it
has fulfilled the requirements already ex-
pressed In this act, and that it's guaranty
surplus fund and It's special reserve fund
taken together equal It's capital stock the
commissioner shall make am examination
OF such company and make a certificate
OF the result thereof. and file the same
In his office: and II the commissioner
shall find that said combined funds shall
equal the capital stock of such company,
thereafter such company may continue.
out or any subsequent profits OF It's busi-
ness, TO add TO such funds: Provided,
that whenever any addition Is made to
the special reserve fund an equal sum
shall be carried to the guaranty surplus
fund
Sec. 6. Said guaranty surplus fund
shall be held and be invested by such
company in the same manner as It's capi-
tai stock and surplus accumulation may
be held and be invested. and shall be la
bic and applicable I'm the same manner as
the capital stock to the payment gener-
ally OF the losses OF such company.
Sec. 6. Said special reserve fund shall
be invested according to existing laws re-
laung to investments OF capital by fire
Insurance companies. and shall be depos-
tied. from time TO time as the same shall
accumulate and be invested. with the In
surance commissioners or the state. who
shall permit the company depositing the
same to change such deposits by subeti-
tuting for those withdrawn others OF
equal amount and value, and TO collect
and receive the interest or dividends upon
such securities the same may accrue /;
and said fund shall not be regarded as
any part OF the assets In possession OF
satd company. so as 20 be or render the
same liable for any claim for loss by fire
or otherwise except as herein provided.
Sec. Z. In estimating the profit of any
such company for the purpose OF making
division thereof between said guaranty
surplus fund and such special reserve
fund, until such funds shall together
amount TO sum equal to the capital
stock Of such company, there shall be de
Quoted from tho gross assets OF the COM
amount OF the special reserve fund. the
sum OF tho following Items:
First. The amount OF all outstanding
claims:
the liability OF such company for the un-
earned premiums upon its unexpired poll
ciee which amount shall at least equal
one-half the premiums received on poll
cies having less than one year to run
from the date OF policy, and n pro rata
proportion OF the premiums received on
the policies having more than one year TO
run from the date OF policy. and shall be
known as the reinsurance liability:
Third. The amount Of its guaranty
surplus fund and OF It's special reserve
fund.-
Fourth. The amount Of the capital OF
the company: and
Fifth Interest at tho rate of eight per
ccntum per annum upon the amount OF
the capital and six per centum per annum
upon tho amount OF the said funds for
whatever time shall have slapsed since