The independent-reporter. [volume] (Skowhegan, Me.) 1909-1955, 1917-04-12


Guaranty Capital OF Mutual Fire In
surance Companies.
BE Ii enacted. etc.
Section nfty-six OF chapter flfty-three
OF the revised statutes Is hereby amend
ed to read as follows.
Section So. Such agreement shall set
forth the fact that the subscribers
thereto associate themselves with the
intention to constitute a corporation.
the name by which 1t shall be known,
the class or classes of insurance for
the transaction OF which it Is to b.
constituted the plan or principle upon
which its business IS to be conducted,
the town or city in which 1t Ia cstab-
lished or located. and II stock com
pany. the amount OF its capital stock,
and II a mutual company with a guar
anty capital, the amount thereof. The
capital stock of a stock company or
gained for any of the purposes here
inbcfore mentioned shall not be less
than one hundred thousand dollars.
mutual company incorporated 10 trans
act any class or kind of insurance 9th
er than fire, marine or plate glass shal
have guaranty capital as provided
IN section tifty-seVcn and holders oil
certificates of such guaranty capital
shall not receive dividends in excess OF
seven per cent. IN any one year. and
IN no eaSe unless such dividends arc
properly earned after determining all
liability rs required BY the insurance
commissioner. Mutual companies may
be incorporated TO transact fire, ma
rlnc and plate GLASS Insurance and may
operate in accordance with the proVls-
IONS Of section thirty-six. and other
provisions of the laws of this state re
lating to such companies, provided.
that they shall eonlno their business to
not more than ten towns; mutual com
pailcs which do not so limit their
business. may incorporate for any OF
FOREGOING before
inE any business they shall establish
guaranty fund or capital of not less
than ten thousand dollars which may
be divided into shares of not less than
one hundred dollars and certificates is
sued therefor. A dividend not exceed
ing seven per cent. in any one ca cndat
year may he paid from the net earn
lngs of the company after providing for
all expenses, losses. reserves and liza
blities then incurred. Such guaranty
fund or capital shall be invested as
provided in section twenty and shall be
deposited with the treasurer of state
When the cash and other available as
sets OF the company are exhausted such
part of said fund as may be required
shall. with the approval of the insur-
anCe commissioner. be drawn and used
to pay losses then due. When such
fund Is so drawn upon the directors
shall make good the amount so drawn
by assessments upon tho contingent
funds or notes of the company and I'M
less such fund IL restored within Sf%
months from date of withdrawal, the
shareholders shall be assessed In pro
portion to the amount Of stock owned
by them for the purpose OF restoring
said capital. Shareholders and mem
btrS of such companies shall be subject
to the Same provisions OF law relative
to their right to vote as apply respect
lively to shareholders In stock com
panioS and policy holders In purely
mutual companies. said guaranty cap
ital may be retired by vote of the pol
iey-holders, when the surplus funds of
the company over and above all liahil-
lties. including guaranty capital. shall
ct4lal or exceed the amount Of e'1-'.
guaranty capital. or my part of Sald
guaranty capital may be retired, PRO.
Vded that the amount of net surplus
and guaranty fund shall not b. less
than ten thousand dollars Said guar
antY capital shall Ice retired when thu
net cash assets Of the company cllal
to three Times the amount of guaranty
capital Any mutual fire. marine or
plate glass Insurance company which
has established a guaranty c4pitpl as
provided herein and has obtained APP
plcations for Insurance az required by
section ffty-eieht. shall be authorized
by the insurance commissioner to write
business and such company may take
premium note as provided In section
iii - .NlA VI Ill lieu oil SAld note IL
may charge and collect n premium in
cash and by its bylaws and policies
fix the contingent mutual liability of
lis members for the payment Of losses
and expenses not provided for by its
cash funds; but such contingent ilnbil-
lty OF member shall not be leas than
an amount equal to and In addition to
the cash premium written In his policy
and In no case less than ono per cent
of the maximum liability OF tie com
pany under said policy The total
amount OF the liability of the policy
holder shall be plainly and lcgihly
stated upon the filinE-bac of each pol
icy. Whenever any reduction Is made
in the contingent liability of members
such reduction shnll apply proportions
ally to all policies IN force.
lApproved March /. 1877