The Birmingham age-herald., 1913-03-02
Statute, However, Applies
Only to Insurance Com
panies-Others Not
Restricted
by HUGH w. ROBERTS

|
LNYERY state is preparing to prevent
the sale of spurious stock. Ala
- bama. in the next regular session
of the legislature, will. in all probability,
enact the 'bue sky" law of Kansas
That statute covers the sale of every
character of stock, and since its adop-
ton, only one company in Is which applied
received permission to dispose of its
shares.
Alabama, at the present time, has no
law as broad as that which has proved
SO successful in its protection of Kan
sas people. But this state, as a matter
of record, was the first to sound the
warning. In 1909, Frank N Julian, then
| secretary of state and insurance COM
missioner, prepared and secured the adop-
tion of bill restricting the sale of life
insurance stock. The commissioner, fol-
lowing the adoption of the bill, learned
that many promoters had shifted their
energies from life insurance to = other
FERNS of insurance. There then was is
sued a departmental ruling that all In
surance companies must conform to the
provisions of the statute. Thereafter for
@ period of five months, only one new
| company was organized, and that has
proved to be one of the best engaged in
business within the borders of the state.
| The Alabama Statute
| Alabama's S position assumed in the ref
erence to the sale of stock of insurance
companies is presented in the following
sections of the bill above referred to:
Section A. 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. COM
pany other corporation to the citizens
OF this state until such life insurance COM
! pany secures a 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 In
| directly by itself or by any person, firm,
or other corporation, such life insurance
company shall file with the insurance
! commissioner Il duly certified copy of its
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 Alabama, 1907 and shall
| file with the Insurance commissioner such
other informatin with reference to its
| prposed 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 busi-
| ness proposed to be transacted by such
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 manner
whatsoever connected with the sale of
such stock in the state shall obtain a
| permit from the insurance oop,,,,i cfr rY, ar
TO act as the agent for the sale of stock
! Of such insurance company in this state.
| Section 8. For the failure or refusal to
obtain permit required in section of this
! act, such insurance company SO failing
or refusing to obtain such permit shall
! be forever barred from admission to this
state to transact an insurance business
and If any person, firm or Corporation in
any manner represents as agent or other
| wise, such insurance company for the sale
OF Its stock, or for any other purpose. be-
fore such insurance company secures the
permit required in section of this act.
| such person., firm or corporation shall
be subject to the penalties provided in
section of this act
Legal Requirements of ComDany
| 1t is also interesting to know what
| legal requirements are made of insur-
ance companies in proces of organiza-
tion. In the first place an embryonic
InS VI aiieo eoiiipahS uesiring to transact
business on the legal reserve plan must
have not less than 100000 in aproyed
securities before charter can be had
before license is issued by the state
department the said sum of 800, 600
must be deposited with the state treas
urer; the company must file with the
insurance commissioner a certified
copy of the charter DESIGNATE the in
surance commissioner as agent for
service for all process and a license
must be had from the insurance de-
partment authorizing transaction OF
| business
In addition to the above com-
pany selling stock, though duly quail
Iied to transact an insurance business