Colorado. Insurance Dept Colorado. Division of Insurance.

Annual report of the commissioner of insurance, Volume 19 online

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— Fees.

Xo insurance company, not incorporated or or-
ganized under the law of this State, shall transact any
insurance business in this State unless it shall first
file in the office of the Superintendent of Insurance a
duly certified copy of its charter, or articles of incor-



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STATE OF COLORADO. 429

poration, or deed of settlement together with a state-
ment, under oath, of the president and secretary, or
other chief officers of such company, showing the con-
dition of affairs of such company on the Slst day of
December next preceding the date of such oath. The
statement shall be in the same form and shall set forth
the same particulars as the annual statement required
by this chapter; Provided, That insurance companies
complying with the provisions of this section shall
not be required to comply with section 25 of chapter
XIX of the General Statutes of Colorado; Provided,
further^ That all insurance companies organized by
authority other than that of the State of Colorado,
hereafter applying for authority to do business in this
State, shall, for filing the articles required by this
section, pay to the Superintendent of Insurance the
same fee as that required by the statutes for filing the
same document or documents with the Secretary' of
State, but in no case shall the fee paid to the Super-
intendent of Insurance be less than twenty-five (|25)
dollars. [L. '83, p. 220, Sec. 4; G. S. '83, p. 555, Sec.
1692; amended, L. '89, p. 199, Sec. 5.

2219, p. 1335, Mills 1. Insurance Company Shall Render Re-
port and Statement — Publication.

Sec. 5. Everj- insurance company doing busi-
ness in this State shall, on or l>efore the 1st day of
March in each year, render to the Superintendent of
Insurance a report, signed and sworn to by its chief
oflBcer, of its condition on the preceding 31st day of
December, which shall include a detailed statement of
assets and liabilities, the amount and character of its
business transiicted, and moneys received and ex-
pended during the year, and such other information



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430 INSURANCE LAWS

as the Superintendent of Insurance may deem neces-
sary. A synopsis of such statement, together with the
Superintendent of Insurance's certificate of authority
to transact business in this State shall be published
in some newspaper of general circulation, published
at the capital, for at least four insertions. Such pub-
lication shall be made within thirty days after such
certificate of authority is issued, and a copy of the
paper containing such publication shall be filed in the
office of the Superintendent of Insurance. [L. '83, pp.
220, 221, Sec. 5; G. S. '83, p. 555, Sec. 1693; amended,
L. '89, p. 200, Sec. 6.



2220, p. 647, Mills 3. When Companies May Do Busine
Cash Capital — Deposit.

No joint stock, fire or life insurance company
shall be permitted to do any business in this State un-
less it is possessed of an actual paid up cash capital
as follows : Fire insurance companies of not less than
two hundred thousand dollars, and life insurance com-
panies not less than one hundred thousand (100,000)
dollars. No joint stock insurance company organized
for any purpose other than fire or life insurance shall
be permitted to do any business in this State unless
possessed of an actual paid up cash capital of not less
than one hundred thousand dollars.

Any foreign life or fire insurance company incor-
porated or associated under the laws of any govern-
ment or State other than the United States, shall not
be admitted or permitted to do any business in this
State until, besides complying with the conditions of
the insurance laws of this State, it has made a deposit
with the Treasurer of this State, or with the duly au-
thorized officer of some other State of the United



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STATE OF COLORADO. 431

States, of a sum not less than the capital required of
like companies under this act

Such deposit must be in exclusive trust for the
benefit and security of all the company's policy hold-
ers and creditors in the United States, and may be
made in the securities, but subject to the limitations
specified in Section 1695 of the General Statutes of
this State; and such deposit shall be deemed for all
purposes of the insurance laws, the capital of the
company making it. [L. '95, p. 192-3, Sec. 1.

2221, p. 1335, Mills 1. Investments of Companies.

It shall be lawful for any insurance company in-
corporated under the laws of this State to invest its
capital and funds accumulated in the course of its
business, or any part thereof, in bonds and mortgages
on real estate worth fifty per cent more than the sum
loaned thereon over and above all incumbrances, ex-
clusive of buildings, unless such buildings are insured
and the policy transferred to said company ; and also
in the stocks of this State, or stocks or treasury notes
of the United States ; and also in the stocks and bonds
of any school district or incorporated city in this
State, authorized to be issued by the Legislature ; and
to lend the same, or any part thereof, on the security
of such stocks or bonds, or treasury notes, or upon
bonds or mortgages as aforesaid, and to change and
reinvest the same as occasion may from time to time
require; but any surplus money over and above the
capital stock of any such insurance company may be
invested in or loaned upon the pledge of the public
stocks or bonds of the United States or any one of the
states on the stocks or bonds or other evidences of in-
debtedness of any solvent dividend-paying institu-



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432 INSURANCE LAWS

tions, other than mining corporations, incorporated
under the laws of this State or of the United States ;
Provided, always. That the current market value of
such stocks, bonds or other evidences of indebtedness
shall be at all times, during the continuance of such
loan, at least twenty per cent more than the sum
loaned thereon. [L. '83, p. 221, Sec. 7; G. S. '83, p.
556, Sec. 1695.

2222, p. 1336, Mills 1. No Dividends Except from Surplus
Profits.

It shall not be lawful for the directors, trustees,
managers or officers of any insurance company, organ-
ized under any of the laws of this State, directly or
indirectly, to make or pay any dividend, or pay any
interest, bonus or other allowance in lieu of dividends,
except from surplus profits arising from their busi-
ness. [L. '83, pp. 221, 222, Sec. 8; G. S. '83, p. 556,
Sec. 1696.

2223, p. 1336.' Mills 1. Making Valuations of Life Insurance
Policies — Liability — Paid-up Policies — Proviso.

For the pui'pose of making valuations of life in-
surance policies under the provisions of this act, the
rate of interest assumed shall be four per cent per
annum, and the rate of mortality shall be established
by the table known as the "Actuaries' Experience
Tables," such valuations to be on the losses of net
premiums. For the purpose of estimating the liabil-
ity of insurance companies, other than life, the
amount required to safely reinsure all outstanding
risks should be estimated by taking fifty per cent of
gross premiums on all risks and policies in force and
that have less than one year to run, and pro rata of
all gross premiums on risks that have more than one



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STATE OF COLORADO. 433

year to run. All life insurance companies, authorized
to transact business in this State, shall provide in
their policies that, after three or more annual pre-
miums have been paid upon a policy of life insurance,
and default is made in payment of any subsequent
premiums when due, then, notwithstanding such de-
fault, the company shall convert the same into a paid-
up policy for as many dollars as the value of such
policy will purchase, to be determined by the table of
surrender values in use by such company at the time
of the issue of policy, which shall not be less than
the full net value of the policy per Actuaries' Exper-
ience Table of mortality, four per cent interest ; Pro-
vided^ That the application be made in writing for
such paid-up policy by the assured within six months
after default in the payment of premiums shall first
have been made. [L. '83, p. 222, Sec. 9; G. S. '83, p.
550, Sec. 1697 ; amended, L. '89, p. 201, Sec. 7.



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434 INSURANCE LAWS



DIVISION III.



ORGANIZATION OF COMPANIES.

2224, p. 1336, Mills 1. Purposes of Organization.

It shall be lawful for any insurance company or-
ganized under the laws of this State :

First — To make insurance on dwelling houses,
stores and all kinds of buildings, and upon house-
hold furniture and other property against loss or
damage by fire, lightning, tornadoes and hail, and the
risks of inland navigation and transportation.

^eco7id — To make insurance upon the lives of
persons and every insurance appertaining thereto or
connected there\^ith, and to grant, purchase or dis-
pose of annuities.

Third — To make any of the following kinds of
insurance: First, upon the health of persons; Sec-
ond, against injury, disablement or death of persons
resulting from traveling or general accidents by land
or water; Third, guaranteeing the fidelity of persons
holding places of trust, public or private; Fourth,
upon the lives of horses, cattle and other live stock;
Fifth, upon plate-glass against breakage ; Sixth, upon
steam boilers, against explosion and against loss or
damage to life or property resulting therefrom ; Sev-
enth, against loss by burglary or theft, or both ; Pro-
vided, That no company shall be organized to issue



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STATE OF COLORADO. 435

policies of insurance for more than one of the above
three mentioned purposes, and no company that shall
have been organized for one of said purposes shall
issue policies of insurance for any other, and no in-
surance company shall expose itself to loss on any
one risk or hazard to the amount exceeding five per
cent of its paid-up capital, unless the same shall be
reinsured in some other good and responsible com-
panies. [L. '83, p. 222, Sec. 1; G. S. '83, p. 557, Sec.
1698 ; amended, L. '89, pp. 201, 202, Sec. 8.

2225, p. 1337, Mills 1. Formation of New Companies.

Whenever any number of persons shall associate
to form an insurance company, for any of the pur-
poses named in the preceding sections, and become
incorporated in accordance with the provisions of
chapter XIX of the General Laws of 1877, they shall
file a copy of the articles of incorporation with the
Superintendent of Insurance who shall submit the
same to the Attorney General for examination; and
if found by him to be in accordance with the provis-
ions of this act, and not inconsistent with the Con<3ti-
tution of this State, he shall certify and deliver back
the same to the Superintendent of Insurance, who
shall commission the persons named in the certificate
of incorporation, or a majority of them to open books
for the subscription of stock in the company, at such
time and place as they shall deem it convenient and
proper, and shall keep the same open until the full
amount specified in the certificate of incorporation
is subscribed. [L. '83, p. 223, Sec. 2; G. S. '83, p.
557, Sec. 1699.



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436 INSURANCE LAWS

2226, p. 1337, Mills 1. Capital Stock— Certificate of Paid-up.

Whenever such capital stock has been subscribed
and not less than the amount required by this act
shall have been fully paid in, they shall notify the
Superintendent of Insurance, who shall cause an ex-
amination to be made, either by himself or some dis-
interested person, especially appointed by him for
the purpose, who shall certify under oath that the
provisions of this act have been complied with by said
company as far as applicable thereto. Such certifi-
cate shall be filed in the office of the said Superin-
tendent, who shall thereupon deliver to such com-
pany a certified copy of said certificate, which, on
being recorded in the office of recorder of deeds of
the county wherein the company is to be located,
shall be their authority to commence business. [L.
'83, pp. 223, 224, Sec. 3; G. S. '83, pp. 557, 558, Sec.
1700.

2227, p. 1338, Mills 1. Contracts and Policies Not Require Seal.

All policies or contracts made or entered into by
any such company organized under the laws of this
State may be made T\ith or without the seal thereof.
They shall be subscribed by the president or such offi-
cers as may be designated by their by-laAVS for that
purpose, and shall be attested by the secretary, and,
being so subscribed, shall be obligatory upon such
company. [L. '83, p. 224, Sec. 4; G. S. '83, p. 558,
Sec. 1701.

2228, p, 1340, Mills 1. Ninety Days to Comply with Require-
ments.

Every insurance company now existing under the
laws of this State shall be subject to the provisions



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STATE OF COLORADO. 437

of this act, but shall be allowed ninety days from the
approval hereof to comply with the requirements
herein set forth. [L. '83, p. 224, Sec. 5; G. S. '83, p.
558, Sec. 1702; amended, L. '89, p. 202, Sec. 9.

2229, p. 1340, Mills 1. Secret Societies — Assessment Plan —
Render Annual Statement.

Sec. 6. The provisions of this act shall not be
be construed so as to prevent any ilasonic. Odd Fel-
lows, religious or benevolent society from issuing in-
demnity to any one against loss by death or accident,
of any of its members, and such society shall not be
held amenable under nor governed by any of the pro-
visions of any article in this act pertaining to acci-
dent or life insurance, except as to rendering an an-
nual statement of the condition of said association or
societies. But all life and accident associations here-
after organized under the laws of the State to op-
erate on the mutual assessment plan shall comply
with all the provisions of this act so far as applicable,
and shall be under the full supervision of the Super-
intendent of Insurance. All such companies noAv ex-
isting shall comply with this law within ninety (90)
days after its approval, and thereafter shall be sub-
ject to examinations, shall take out certificates of
authority, and in all ways contemplated herein be
under the direction of the Insurance Department.
[L. '83, p. 224, Sec. 6; O. S. '83, p. 558, Sec. 1703;
amended, L. '89, p. 202, Sec. 10.

2229a, p. 652, Mills 3. Benevolent Society — File Copy of Charter.

Any benevolent or fraternal society, or order, do-
ing business in this State, under the Lodge System
and incorporated under the laws of another State,



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438 INSURANCE LAWS

which issues certificates of indemnity against loss by
death, accident or sickness of any of its members,
shall file a copy of its charter or articles of incor-
poration as required by Section 25, Chapter 19, Gen-
eral Statutes. [L. '93, p. 87, Sec. 1.

2229b, p. 653, Milis 3. Designate an Agent for Service of
Process.

Every such foreign benevolent or fraternal so-
ciety or order shall file with the Secretary of the State
a Certificate signed by its president or head officer and
its secretary, duly acknowledged, designating an
agent or agents and their place of residence in this
State, upon whom process may be served. [L. '93,
p. 87, Sec. 2.

2229c, p. 653, Mills 3. Suits.

Suits against such corporations may be insti-
tuted at the election of the plaintiff in the county in
which he resides, or in the county in which the agent
resides. [L. '93, p. 87, Sec. 3.

2229d, p. 653, Mills 3. Suit on Bond.

That any lodge of any such benevolent or fra-
ternal society or order which has complied with the
provisions of this Act may bring an action on any
bond running to it or to any of its officers, the same
as though such lodge had been incorporated under
the laws of this State. [L. '93, p. 87, Sec. 4.

2229e, p. 653, Mills 3. Fees of Secretary of State.

The fees of the Secretary of State shall be the
same as for corporations not organized for pecuniary
profit. [L. '93, p. 87, Sec. 5.



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STATE OF COLORADO. 439

2229f, p. 653, Mills 3. Officer Comply with Law— Fine.

It shall be the duty of the presiding officer of
any lodge in this State under any such foreign benev-
olent or fraternal society or order, to see that the re-
quirements of this law are complied with, and for
holding any meeting after 90 days from the passage
of this act, this time being allowed for a compliance
vnth its provisions, in the absence of a compliance
Avith its provisions such officers shall be subject to a
fine of twenty dollars ($20) for each and every meet-
ing so held by his lodge, the same to be collected by
the District Attorney of the district in which said
lodge is located. [L. '93, p. 88, Sec. 6.

2230, p. 1340, Mills 1. Mutual Insurance Not Prohibited.

The provisions of this act shall not be construed
to prevent any number of persons, not less than
twenty, from associating together for the purpose of
forming an incorporated company for the purpose
of mutual insurance of the property of its members.
When persons so associated shall have complied with
the provisions of this act, so far as are applicable
to such mutual companies, the Superintendent of In-
surance shall commission the persons named in the
certificate of incorporation, or a majority of them,
to open books, to receive propositions, and enter into
agreements in manner hereinafter specified. But no
company so organized shall commence business until
bona fide agreements have been entered into for in-
surance with at least one hundred individuals cover-
ing property to be insured to the amount of not less
than fifty thousand dollars. [L. '83, pp. 224, 225,
Sec. 7; G. S. '83, p. 558, Sec. 1704.



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440 INSURANCE LAWS

2231, p. 1341. Mills 1. Repeal.

All acts and parts of acts inconsistent with the
provisions of this act, heretofore existing, are hereby
repealed; Provided^ That nothing in this act shall be
construed to affect the corporate existence or the
rights as such of any corporation now existing and
heretofore organized under the laws of the State of
Colorado, for the period of 90 days as set forth in
Section 6. [L. '83, p. 225, Sec. 8; G. S. '83, p. 558,
Sec. 1705.

2232, p. 1341, Mills 1. No Discrimination — Contract Expressed
in Policy — Penalty.

No life insurance company doing business in the
State of Coloi'ado shall make or permit any distinc-
tion or discrimination in favor of individuals, be-
tween insurants (the insured) of the same class and
equal expectation of life, in the amount of payment
of premiums or rates charged for policies of life or
endowment insurance, or in the dividends or other
benefits payable thereon, or in any other of the terms
and conditions of the contracts it makes. Nor shall
any such company, or any agent thereof, make any
contract of insurance or agreement as to such con-
tract other than as plainly expressed in the policy
issued thereon ; nor shall any such company or agent
pay or allow, or offer to pay or allow, as inducement
to insurance, any rebate of premiums payable on the
policy, or any special favor or advantage in the divi-
dends or other benefits to accrue thereof, or any val-
uable consideration or inducement whatever not spec-
ified in the policy contract of insurance.

The penalty for violating this section shall be a
fine of |250; and the Superintendent of Insurance



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STATE OP COLORADO. 441

shall revoke the certificate of authority of any agent
convicted of a violation of this act, and shall not
grant the agent so convicted a license as agent for the
term of three years thereafter. [L. '89, p. 203, Sec.
11.

2233, p. 1342, Mills 1. Repeal.

All acts and parts of acts inconsistent with the
provisions of this act, heretofore existing, are hereby
repealed; Provided, That nothing in this act shall
be construed to affect the corporate existence or the
rights as such of any corporation now existing and
heretofore organized under the laws of the State of
Colorado for the period of ninety days as set forth
hereinbefore. [L. '89, p. 203, Sec. 12.

2234, p. 1342, Mills 1. Superintendent of Insurance Shall Have
Power to Examine Form of Policy Contract — Cancellation.

That the Superintendent of Insurance shall have
power and it shall be his duty to examine the form
of all policy contracts hereafter issued or proposed
to be issued by any fire insurance company, associa-
tion or corporation now authorized by law, or that
may hereafter apply to be authorized to transact busi-
ness of fire insurance in this State. The Superin-
tendent of Insurance shall refuse to authorize any
such company, association or corporation to do busi-
ness in this State whenever the form of policy con-
tract issued or proposed to be issued by any such
company, association or corporation does not pro-
vide for the cancellation of the same at the request
of the insured upon equitable terms; nor whenever
the form of policy does not provide that in case the
policy shall be cancelled at the request of the in-
sured, the premiums having been actually paid, that



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442 INSURANCE LAWS

the unearned portion shall be returned on surrender
of the policy or last renewal, the company in no event
retaining an amount in excess of the amount shown
to be the earned portion of said premium, as per the
customary short-rate table. [L. '89, p. 166, Sec. 1.

2235, p. 1342, Mills 1. Fire Companies Shall Conform to Re-
quirements.

Any and all fire insurance companies now au-
thorized to do business in this State shall conform
to the requireriients of this act within sixty days after
the same shall become a law. [L. '89, p. 166, Sec. 2.

2236, p. 1342, Mills 1. Revoke the Authority.

In consequence of any violation of this act it
shall be the duty of the Superintendent of Insurance
to revoke the authority of such company to do busi-
ness in this State, and the same shall not be renewed
during a period of six months thereafter. [L. '89, p.
166, Sec. 3.

2237, p. 1342, Mills 1. Insurance on Assessment Plan Defined.

Every contract whereby a benefit is to accrue to
a party or parties named therein upon the death or
physical disability of a person, which benefit is in any
degree or manner conditioned upon the collection of
an assessment upon persons holding similar contracts,
shall be deemed a contract of insurance on the assess-
ment plan, and the business involving the issuance
of such contracts shall be carried on in this State
only by duly organized corporations, which shall be
subject to the provisions and requirements of this act ;
but nothing herein contained shall be construed as
applicable to organizations which conduct their busi-
nesQ as fraternal societies, on the lodge system, or to



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STATE OP COLORADO. 443

organizations which do not employ paid agents in
soliciting business or limit their certificate holders
to a particular order or fraternity. If the benefit is
to accrue through the death of the insured person, the
contract shall be of life insurance; if through acci-
dental death only or the physical disability from at?ci-
dent or sickness of the insured, it shall be of casualty
insurance. [L. '87, p. 284, Sec. 1.

2238, p. 1343, Mills 1. Companies on the Assessment Plan —
How Organized.

Twenty-five or more persons, citizens of this
State, may form a corporation to carry on the busi-
ness of a life or casualty insurance or both, on the
assessment plan ; but no such corporation shall begin
to do business until at least two hundred persons have
subscribed in writing to be insured therein, and have
each paid in one full mortuary assessment, to be held
in trust for the benefit of the beneficiaries, nor until
the Superintendent of Insurance has certified that it
has complied with the provisions of this act and is
authorized to transact business. No charter granted
under the provisions of this act shall continue valid
after one year from date, unless the organization has
been completed and business begun thereunder. [L.
'87, p. 285, Sec. 2.

2239, p. 1343, Mills 1. Companies May Reincorporate.

Any corporation existing under the laws of this
State and now engaged in transacting the business of
life or casualty insurance on the assessment plan may
reincorporate under the provisions of this act; Pro-
vided^ That nothing in this act contained shall be con-
strued as requiring or making it obligatory upon any
such a corporation to reincorporate, and any such cor-



Online LibraryColorado. Insurance Dept Colorado. Division of InsuranceAnnual report of the commissioner of insurance, Volume 19 → online text (page 27 of 29)