ties, and the proportionate amount thereof. The term net Term defined. indebtedness in this section shall be construed to denote the indebtedness of any city, county, township, village or school district, omitting debt created for supplying the inhabitants with water and deducting the amount of sinking funds available for the payment of such indebtedness; Third, In the legally authorized first mortgage bonds of First mortgage any steam railroad corporation organized under the laws railroad bonds. of any state of the United States: Provided, That such Proviso, divicompany has for five years prior to the time of making such dends. investment by said insurance company, paid annually dividends equal to not less than four per cent on its entire capital stock and has not during said period defaulted in the payment of the matured principal or interest of any debts. incurred by it and secured by mortgage or trust deed upon its property or any part thereof, or in the payment of any part of the matured principal or interest of any bonds guaranteed or assumed by it; or, leased lines. funding bonds Fourth, In the first mortgage bonds of railroad companies First mortgage whose lines are leased or operated or controlled by any rail- bonds, of road company specified in paragraph three, subdivision b of this section, if said bonds be guaranteed both as to principal and interest by the railroad company to which said lines are leased or by which they are operated or controlled; Fifth, In the legally authorized mortgage bonds of any Mortgage resteam railroad incorporated under the laws of any state of of steam railthe United States, which shall have been issued for the pur- roads. pose of retiring all prior mortgage indebtedness on so much of the property of such company as is covered by the mortgage securing such issue of bonds, and further providing for additions, extensions or improvements: Provided, That such Proviso, divicompany has for three years prior to the time of making such investment by said insurance company, paid annually dividends equal to not less than four per cent on its entire capital stock, which capital stock shall equal or exceed in amount one-third of the par value of all its bonded indebtedness, and has not during the same period defaulted in the payment of the matured principal or interest of any debts incurred by it and secured by mortgage or trust deed upon its property or any part thereof, or in the payment of any part of the matured principal or interest upon a bond guaranteed or assumed by it: Provided further, Said issues of Further bonds shall have been approved by the securities commission viso, approval hereinafter referred to; dends. of issue. pro bonds of elec railroad, Sixth, In the legally authorized first mortgage bonds of First mortgage any electric railroad, street railway, gas or electric light or tric power company, organized under the laws of the State of etc. Michigan: Provided, That such company has for five years Proviso, diviprior to the time of making such investment by said insur- dends. ance company, paid annually dividends equal to not less. than four per cent on its entire capital stock, and has not during the same period defaulted in the payment of the Further proviso. Further pro ship companies. Proviso. Further proviso. matured principal or interest of any debts incurred by it and secured by mortgage or trust deed upon its property or any part thereof, or in the payment of any part of the matured principal or interest of any bonds guaranteed or assumed by it; or in the first mortgage bonds of any such company which has been in operation less than five years: Provided further, That the cost of construction and equipment of the plant of such company shall exceed by at least fifty per cent the amount of the entire bonded indebtedness of such company, and the said plant and equipment shall be free from all other liens and encumbrances, and the said company shall have earned during the period it has been in operation, more than enough to pay all interest accrued on all said bonds and not less than four per cent per annum dividends upon its entire capital stock outstanding: Proviso, approval vided further, Said issues of bonds shall have been approved of issue. by the securities commission hereinafter referred to; First mortgage Seventh, In the legally authorized first mortgage bonds bonds, steam of steamship companies: Provided, That such mortgages shall be upon steel steamship or steamships for the carriage of freight or package freight and passengers combined, upon the Great Lakes and connecting waters, of at least five thousand tons carrying capacity each: Provided further, Such bonds are issued at the time of the completion and enrollment of such steamship or steamships, or within one year thereafter: Provided further. That by the express terms of said mortgage at least ten per cent of the total issue of said bonds shall be retired annually, beginning within two years from the date of said bonds, and that the mortgage liability against said property shall not exceed one-half of its actual cost: Provided further, That the trustee of such mortgage shall be required to protect the lien of said mortgage by attending to the recording thereof and by causing property cov ered by said mortgage to be insured against all risks on vessel property ordinarily covered by such insurance, including marine risks and disasters, general and particular average, collision liability, protection and indemnity insurance and insurance against liability for injuries to persons, in insurance companies and under forms of policies approved by the trustee, for an amount equal to the full insurable value of such steamship, such insurance to be made with loss payable to said trustee and policies deposited with it: Provided further, That by the terms of such mortgage, the mortgagor shall not suffer such steamship to become indebted in an amount exceeding five per cent of the original amount of the principal of said mortgage at any time, and that the failure of the mortgagor to forthwith procure the release of such steamship or steamships from mechanics', laborers', admiralty, statutory or other liens, claims or charges against such steamship shall constitute a default in the provisions of such mortgage: Provided further, That such bonds shall Further proviso. Further proviso. Further proviso. Further proviso. have been approved by the securities commission hereinafter referred to; Eighth, Said insurance companies may loan the same upon Negotiable negotiable paper, or other evidences of indebtedness, secured paper. by any of the above mentioned classes of security; or, notes of banks. Ninth, Upon negotiable notes secured by pledge of stock Negotiable of National or State banks which have a surplus of twentyfive per cent more than the capital: Provided, That such Proviso. loan shall not exceed eighty-five per cent of the market value of the stock; and to change and reinvest the same from time to time as occasion may require: Provided further, That Further the total amount loaned on bank security collateral shall viso. not exceed fifteen per cent of the capital and surplus of the insurance company; pro commission, Tenth, The securities commission referred to in subdivision Securities b, paragraphs five, six and seven, shall be the securities com- act creating. mission created by section sixty-seven, act number two hundred sixty-two of the public acts of nineteen hundred five, being "An act to amend sections twenty-seven and fifty-two of act number two hundred five of the public acts of eighteen hundred eighty-seven, entitled 'An act to revise the laws authorizing the business of banking and to establish a banking department for the supervision of such business,' as amended, being compiler's sections six thousand one hundred sixteen and six thousand one hundred forty-one respectively, of the Compiled Laws of eighteen hundred ninetyseven, as amended by act number two hundred sixty-five of the public acts of eighteen hundred ninety-nine, and by adding a new section thereto to stand as sixty-seven of said act;" approved June sixteen, nineteen hundred five: Provided, Proviso, That not more than one-fourth of the capital and surplus of amount may said insurance company shall be loaned on or invested in the bonds of any one steam railroad, and not more than one-tenth of the capital and surplus shall be loaned on or invested in the bonds of any one railroad corporation described in paragraphs two and three of subdivision b, and not more than one-twentieth of the capital and surplus shall be loaned on or invested in the bonds of any one company or corporation described in paragraphs five, six and seven of subdivision b; and not more than one-tenth of the capital and surplus of the insurance company shall be loaned to any one person, corporation or firm on the collateral pledges allowed by paragraph b of this section. This act is ordered to take immediate effect. invest, etc. Certain estimates, circu [No. 185.] AN ACT to prohibit misrepresentation by life insurance companies. The People of the State of Michigan enact: SECTION 1. No life insurance company doing business in lars, etc., not this State, and no officer, director or agent thereof shall isto be issued. sue or circulate, or cause or permit to be issued or circulated, any estimate, illustration, circular or statement of any sort misrepresenting the terms of any policy issued by it or the benefits or advantages promised thereby, or the dividends or shares of surplus to be received thereon, or shall use any name or title of any policy or class of policies misrepresenting the true nature thereof. Penalty. Repealing clause. SEC. 2. Any officer, director or agent who shall violate the provisions of this act shall be guilty of a misdemeanor, and upon the conviction thereof shall be punished by fine not exceeding one hundred dollars or by imprisonment not exceeding three months, or by both such fine and imprisonment in the discretion of the court. SEC. 3. All acts and parts of acts inconsistent with the provisions of this act are hereby repealed. This act is ordered to take immediate effect. Sections added. [No. 186.] AN ACT to amend act one hundred nineteen of the public acts of eighteen hundred ninety-three, entitled "An act to define what shall constitute fraternal beneficiary societies, orders, or associations, to provide for the incorporation and the regulation of their business and for the punishment for violation of the provisions of the act of their incorporation and to repeal all existing acts inconsistent therewith," by adding four new sections to be known as sections twenty-three, twenty-four, twenty-five and twentysix. The People of the State of Michigan enact: SECTION 1. Act one hundred nineteen of the public acts of eighteen hundred ninety-three, entitled "An act to define what shall constitute fraternal beneficiary societies, orders or associations, to provide for the incorporation and the regulation of their business and for the punishment for violation of the provisions of the act of their incorporation and to repeal all existing acts inconsistent therewith," is hereby amended by adding four new sections to be known as sections twenty-three, twenty-four, twenty-five and twenty-six. date or rein SEC. 23. No society organized under the laws of this Not to consoliState shall consolidate with any other society, or reinsure sure except as its risks or any part thereof with any other society, or as provided." sume or reinsure the whole of or any portion of the risks of any other society, except as hereinafter provided. consolidate. SEC. 24. When any such society shall propose to consoli- Petition to date with any other society, or enter into any contract of reinsurance, it shall present its petition to the Commissioner of Insurance of this State, setting forth the terms and conditions of such proposed consolidation or reinsurance, and praying for the approval or of any modification thereof, which the commission hereinafter provided for may approve. The Commissioner of Insurance shall thereupon issue an To issue order order of notice, requiring notice to be given by mail to the of notice. members of such society, of the pendency of such petition, and and the time and place at which the same will be heard, Publication of and the publication of said order of notice and said petition, petition in five daily newspapers designated by the Commissioner of Insurance, at least one of which shall be published in the city of Lansing for at least two weeks before the time appointed for the holding of such hearing. held. and testimony SEC. 25. The Governor of the State or in event of his in- Commission, membership ability to act, some competent person resident of the State of. to be appointed by him, the Attorney General of the State, and the Commissioner of Insurance of the State shall constitute a commission to hear and determine upon said petition. At the time and place fixed in said notice, or such Hearing, when time and place as shall be fixed by adjournment, said commission shall proceed with said hearing, and may make such examination into the affairs and conditions of said society as it may deem proper. The Commissioner of Insurance of Attendance this State shall have the power to summon and compel the of witnesses. attendance and testimony of witnesses and the production of books and papers before said commission. Any policy holder or member of the above named society or societies may appear before said commission and be heard in reference to said petition. Said commission, if satisfied that the When commisinterests of the policy holders and members of such society horizonsor societies are properly protected and that no reasonable idation, etc. objection exists thereto, may approve and authorize the proposed consolidation or reinsurance, or of such modification thereof as may seem to it best for the interests of the members and policy holders, and said commission may make such order with reference to the distribution and disposition of the surplus assets of any such society thereafter remaining, as shall be just and equitable. Such consolidation or rein- Approved by surance shall only be approved by the consent of all the mem- consent of all bers of said commission, and it shall be the duty of said commission to guard the interests of the policy holders and may au members. |