The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1910-06-08
JULIAN MAKES RULING
Stock In Alabama Is Cause of I'M
portant Step Taken by the
Commissioner

that only those companies licensed to do
an insurance business will be allowed to
sell stock, and none will be licensed that
has not this Endorsement from its own
state.
Complaint has been made from time to
time that companies were offering stock
In the state, and II has not been an easy
matter to prevent sales of securities that
have no very bright future. Mr.. Julian
has been after them wherever there Is a
showing that he can lay hands on, but
they are, IN many cases, elusive, so it
was thought best to make a sweeping rule
that will apply to all, thus bringing every
one of the propositions under the same
general schedules and evolving a scheme
of publicity that no company with good
intentions can afford to sidestep.
The ruling in full follows:
Ruling In Full
Whereas, it is the law of this state
that:
Section t. No life insurance corporation
not now authorized to transact business
in this state shall sell, or offer to sell,
its stock, or permit the same to be sold,
or offered for sale, by any firm, company
or other corporation to the citizens OF
this state until such life insurance COM
pany secure permit for the sale of its
stock from the insurance commissioner.
Before such permit can be granted for
the sale of the stock Of any life insurance
company in this state, directly or indirect
lv nv ftqalf Or- hy firm
other corporation, such life insurance
company shall file with the Insurance
commissioner a duly certified copy of it's
articles of Incorporation and designate
the insurance commissioner attorney for
the service of legal process as required
of foreign corporations by section 3642 of
the code of Alaabma, 1907, and shall file
with the insurance commissioner such
other information with reference to it's
proposed plans of transacting business in
this state as the insurance commissioner
may require. If after an examination of
such articles of Incorporation and upon
being otherwise satisfied that the bust
insurance company in the state Is proper
and right under the laws of this state,
then the insurance commissioner shall is
sue to such insurance company a permit
to place Its stock in Alabama, provided
however, that every person In any man
ner whatsoever connected with the sale of
such stock in the state shall obtain a
permit from the insurance commissioner
to act as the agent for the sale of stock
of such insurance company in this state.
For failure or refusal to obtain permit,
required In section of this act. such in
surance company on failing or refusing
to obtain such permit, shall be forever
transact an insurance business, and II
any person, firm or corporation In any
manner represents as agent or otherwise
such insurance company for the sale of
it's stock. or for any other purpose. before
such insurance company secures the per-
nit required in section of this act, such
person, firm or corporation, shall be sub
ject to the penalties provided In section ]
of this act, such penalties being a fine
of 500 to $500 or Imprisonment for 30
days" (Act approved August &c. 1902
And, whereas, 1t appears that some or
CARNATIONS by their plan of stock selling,
so mortgage and cucumber their future as
to practically destroy their powers for
performing the functions of sound and
profitable underwriting.
and whereas, it has come to the at
tention of the insurance department that
there have been certain instances where
l. 60 10 IT,.
companies to sell their stock In Alabama,
on which certain advantages were to ac-
crue dependent upon the transaction of
the business of Insurance by such COM
panies in this state, and that instances
have developed wherein representations
have been made by such companies and
their stock statesmen to the effect that
such companies intended entering the
state to transact the business of insur-
ance thus holding out an inducement to
the prospective purchaser that might not
ever be fulfilled on account of such conf
pany perhaps not having the proper quail
ifcations TO be entitled to a license under
the laws of this state.
And whereas, life insurance companies
organized under the laws of this state
and complying with sections 3446 and S44I
of the code of Alabama providing that
at least 100000 capital must be paid up in
cash, are deemed by this department sub
ject to the same laws and rulings made
and provided for foreign life insurance
companies.
And whereas, while fire and miscel-
laneous Casualty. etc) insurance com
panes of this and other states are not
Included in the laws applying to life in
surance companies In the matter of selling
stock. they are, in the interest of public
policy, deemed subject to the same laws
and rulings as apply to life insurance
companies so far as the department may
be able to enforce such laws and rulings
as applying to fire and miscellaneous
companies
"And whereas it is considered proper
and right by the department that in or
der to act in good faith toward the citi-
gems of this state. to whom 1t is proposed
to sell stock in any insurance company,
such company shall prove its claim to be
organized for the purpose of transacting
the business of insurance by securing
proper license from this department.
"And whereas, 1t is the determination
of this department to protect the citizens
of this state. so far as any remedies ex-
list. against the unworthy company which
would offer to sell it's stock to such cit
liens,
Now. therefore, it is hereby ruled by
the insurance department of Alabama as
follows:
Il. That no life insurance company shall
be issued a permit. nor shall a permit be
issued to any person to act as agent Of
any life insurance company under the
aforesaid section of an act. approved
August Is. 1909, until such company has
been licensed to transact the business of
life insurance In its home state. and until
such company, either foreign or domestic,
whether organized under the laws of this
state or otherwise has been licensed to
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