Colorado. Insurance Dept Colorado. Division of Insurance.

Annual report of the commissioner of insurance, Volume 19 online

. (page 28 of 29)
Online LibraryColorado. Insurance Dept Colorado. Division of InsuranceAnnual report of the commissioner of insurance, Volume 19 → online text (page 28 of 29)
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444 INSURANCE LAWS

poration may continue to exercise all rights, powers
and privileges conferred by this act or its articles of
incorporation, not inconsistent herewith the same as
if reincorporated hereunder. [L. '87, p. 285, Sec. 3.

2240, p. 1343, Mills 1. Violation of Law— Duty of Attorney
General.

When the Superintendent of Insurance, on in-
vestigation, is satisfied that any corporation doing
business in this State, under this act, has exceeded
its po\\'ers, failed to comply with any provision of
law, or is conducting business fraudulently, he shall
report the facts to the Attorney General, who shall
thereupon apply to the District Court for an injunc-
tion restraining such corporation from the further
prosecution of business, and the said court, upon hear-
ing the matter, may issue such injunction or decree
for the removal of any officer, and substitute a suitable
person to serve in his stead until a successor is duly
chosen, and may make such other order and decrees
as the interests of the corporation and the public may
require. [L. '87, p. 285, Sec. 4.

2241, p. 1344, Mill8 1. What Policy Shall Contain— Duty of
Superintendent of Insurance.

Every policy or certificate hereafter issued by
any corporation doing business under this act and
promising a payment to be made upon a contingency
of death, sickness or accident shall specify the mini-
mum sum of money which it promises to pay upon
each contingency insured against and the number of
days after satisfactory proof of the happening of such
contingency at which such payments shall be made,
and upon the occurrence of such contingency, unless
the contract shall have been voided by fraud or by



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STATE OF COLORADO. 445

breach of its conditions, the corporation shall be
obligated to the beneficiary for such payment at the
time and to the amount specified in the policy or cer-
tificate, and this indebtedness shall be a lien upon all
the property, effects and bills receivable of the cor-
poration, with priority over all indebtedness there-
after incurred, except as hereinafter provided in case
of the distribution of assets of an insolvent corpora-
tion ; Provided^ That the statement of such minimum
sum shall not invalidate the right of the party insured
from receiving any further amount above such mini-
mum sum that shall be based upon membership and
to which he shall be entitled by the provisions of his
policy. If the Superintendent of Insurance shall be
satisfied, on investigation, that any such corporation
has refused or failed to make such payments for thirty
days after it became due, and after proper de-
mand, he shall notify the corporation to issue no new
policies or certificates until such indebtedness is fully
paid, and no officer or agent of the corporation shall
make, sign or issue any policy or certificate of insur-
ance while such notice is in force. [L. '87, p. 286,
Sec. 5.

2242, p. 1345, Mills 1. Superintendent Investigate — Power —
Report — Court Close Business.

Whenever the Superintendent of Insurance shall
have given the notice required by the last preceding
section, he shall proceed without delay to investigate
the condition of the corporation, and shall have full
power, in person or by deputy, to examine its books,
papers and accounts, and to examine under oath its
officers, agents, clerks and certificate holders, or any
persons having knowledge of its business; and if it



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446 INSURANCE LAWS

shall appear to him that its liabilities exceed its re-
sources, and that it can not, within a reasonable time,
not more than three months from the date of the
original default, pay its accrued indebtedness in full,
he shall report the facts to the Attorney General, who
shall, upon the report of the Superintendent of Insur-
ance, apply to the District Court for an order closing
the business of the corporation and appointing a re-
ceiver or trustee for the distribution of its assets
among creditors; Provided^ That notice of such ap-
plication, and a copy thereof in writing, shall be
served upon the corporation at least ten days before
the same shall be heard; Atid provided^ That upon
hearing the matter, the court shall have power to
make any order which the interests of the corporation
and the public may require. [L. '87, p. 286, Sec. 1.

2243, p. 1345, Mills 1. Risks Not Transferable Without Consent
—Liability in Case of Neglect.

No life or casualty insurance corporation, organ-
ized under the laws of this State, shall transfer its
risks to, or reinsure them in, any other corporation,
unless the said contract of transfer, or reinsurance,
is first submitted to and approved by two-thirds vote
of a meeting of the insured called to consider the
same, of which meeting a wTitten or printed notice
shall be mailed to each policy or certificate holder at
least ten days before the date fixed for said meeting,
and, in case said transfer or reinsurance shall be ap-
proved, every policy or certificate holder of the said
corporation who shall file with the secretary thereof,
within five days after said meeting, written notice of
his preference to be transferred to some other cor-
poration than that named in the contract, shall be ac-



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STATE OP COLORADO. 447

corded all the rights and privileges, if any, in aid of
such transfer as would have been accorded under the
terms of the said contract had he been transferred to
the corpM>ration named therein. The members of any
insurance corporation other than those which are
purely mutual, whose management shall refuse or
neglect, for the space of thirty days after the filing of
satisfactory proof of the death of any certificate or
policy holder, where the claim so arising is not dis-
puted on account of fraud or want of validity, and
where the death fund is not sufficient to pay said
claim, to levy an assessment to provide for the same,
shall thereby become liable to the beneficiary, under
said certificate or policy, in a sum not exceeding the
face of said claim. [L. '87, p. 287, Sec. 7.

2244, p. 1346, Mills 1. Foreign Companies File Copies of Charter
— Other Requirements.

Any corporation organized under authority of
another State or government to issue policies or cer-
tificates of life or casualty insurance on the assess-
ment plan, as a condition precedent to transacting
business in this State, shall deposit with the Superin-
tendent of Insurance and also with the Secretary of
State a certified copy of its charter or certificate of
incorporation; it shall also file with the Superinten-
dent of Insurance a statement, under oath, of its
pre?^ident and secretary, in the form by the Superin-
tendent of Insurance required, of its business for the
preceding year, a certificate, under oath of its presi-
dent and secretary, that it is paying and for the twelve
months then next preceding has paid the amounts
named in its policies or certificates in full; in ac-
cordance with the requirements of Section 5, a cer-



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448 INSURANCE LAWS

tificate from the proper authority in its home State,
that said corporation engaged, according to the pro-
visions of this act, in life or casualty insurance on
the assessment plan in this State, is legally entitled
to do business in such home State, a copy of its policy
or certificate and application, which must show that
benefits are provided for by assessment upon policy
or certificate holders. The Superintendent of Insur-
ance shall thereupon issue or renew the authority of
such corporation to do business in this State, and
such authority shall be revoked whenever the Super-
intendent of Insurance, on investigation, is sat-
isfied that such corporation is not pajing in ac-
cordance with the requirements of Section 5
of this act, the amount named in its policies
or certificates in full. Upon such revocation,
the Superintendent shall cause notice thereof to be
published in a daily newspaper in Denver, Colorado,
and no new business shall be thereafter done by it
or its agents in this State. When any other State or
country shall impose any obligations upon any such
corporation of this State the like obligation shall be
imposed on similar corporations and their agents of
such State or country doing business in this State.
[L. '87, p. 287, Sec. 8.

2245, p. 1347, Mills 1. Policy on Life Over Sixty— Call for Pay-
ments State Purpose — Assignments.

No corporation doing business under this act
shall issue a certificate or policy upon the life of any
person more than sixty years of age, nor upon any
life in which the beneficiary named has no interest,
and every call for payments by the policy or certifi-
cate holders shall distinctly state the purpose of the



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STATE OP COLORADO. 449

same, and whether any part thereof shall or may be
used for expenses, and if so, how much. Any assign-
ment of a policy or certificate to a person having no
interest in the insured life shall render such policy
or certificate void. [L. '87, p. 288, Sec. 9.

2246, p. 1347, Mills 1. Benefit Not Liable to Attachment.

The money or other benefit, charity, relief or aid
to be paid, provided or rendered by any corporation
authorized to do business under this act shall not be
liable to attachment or other process, and shall not
be seized, taken, appropriated or applied by any legal
or equitable process, nor by operation of law, to pay
any debt or liability of a policy or certificate holder,
or any beneficiary named therein. [L. '87, p. 289,
Sec. 10.

2247, p. 1347, Mills 1. False Statennents Forbidden— Penalty.
Any solicitor, agent or examining physician who

shall knowingly or wilfully make any false or fraud-
ulent statement or representation in, or with refer-
ence to, any application for insurance, or for the pur-
pose of obtaining any money or benefit in any cor-
poration transacting business under this act, shall be
guilty of a misdemeanor, and, upon conviction, shall
be punished by a fine or not less than one hundred
nor more than five hundred dollars, or imprisonment
in the county jail for not less than thirty days nor
more than one year, or both, at the discretion of the
court. [L. '87, p. 289, Sec. 11.

2248, p. 1347, Mills 1. Annual Statement.

Every corporation doing business under this act
shall, annually, on or before the first day of March,
return to the Superintendent of Insurance, in such

15



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450 INSURANCE LAWS

manner and form as he shall prescribe, a statement
of its affairs for the year ending on the preceding
31st day of December, and the said Superintendent,
in person or by deputy, shall have the powers of vis-
itation of and examination into the affairs of any
such corporation which are conferred upon him in
the case of life insurance companies, as provided by
law in case of other companies; Provided, always,
That nothing herein contained shall subject any cor-
poration doing business under this act to any other
provisions or requirements of said laws, except as
distinctly set forth herein. [L. '87, p. 289, Sec. 12.

2249, p. 1347, Mills 1. Fees and Penalties.

The fees for filing statements, certificates or
other documents required by this act, or for any
service or act of the Superintendent of Insurance,
and the penalties for any violation of this act, shall
be the same as provided in the case of other insurance
companies. [L. '87, p. 289, Sec. 13.

2250, p. 1347, Mills 1. Repeal.

All acts and parts of acts in conflict with this
act, so far as they apply to insurance companies on
the assessment plan, are hereby repealed. [L. '87,
p. 290, Sec. 14.



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STATK OF COLOKADO. 451



SURETY COMPANIES.



Surety Companies — Requirements.

That whenever any bond, undertaking, recogniz-
ance or other obligation, is by law, or the charter, or-
dinance, rules or regulations of any municipality,
board, body, organization, court, judge or public
officer, required or permitted to be made, given, ten-
dered or filed with surety or sureties, and whenever
the performance of any act, duty, contract or obliga-
tion, or the refraining from any act, is required or
permitted to be gimranteed, such bond, undertaking,
obligation, recognizance or guaranty may be executed
by a surety company qualified as hereinafter pro-
vided; and such execution by such company of such
bond, undertaking, obligation, recognizance or guar-
anty shall be in all respects a full and complete com-
pliance with every requirement of every law, charter,
ordinance, rule or regulation, that such bond, under-
taking, obligation, recognizance or guaranty shall be
executed by one or more sureties, or that such sureties
shall be residents or householders or freeholders or
either or both, or possess any other qualification ; and
all courts, judges, heads of departments, boards,
bodies, municipalities and public officers of every
character may accept and treat such Ijond, undertak-
ing, obligation, recognizance or guaranty, when so
executed by such company as conforming to and fully



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452 INSURANCE LAWS

and completely complying with every such require-
ment of every such law, charter, ordinance, rule or
regulation. Provided^ hoicever, that such surety com-
pany may be required to justify in such terms and for
such amounts as may be satisfactory to the court,
person or body authorized to approve such surety.
[L. '97, p. 266, Sec. 1.

Qualifications — Cliarter — Capital — Premium Reserve — File with
Superintendent of Insurance — ^Annual Statement — If Organ-
ized Under Other States Must Deposit — Appoint Superin-
tendent of Insurance Its Attorney.

That such company to be qualified to so act as
surety or guarantor, must comply with the require-
ments of every law of this State applicable to such
company doing business therein ; must be authorized
under its charter, to become surety upon such bond,
undertaking, obligation, recognizance or guaranty;
must have a fully paid up and safely invested and
unimpaired capital of at least |250,000; must have
good available assets exceeding its liabilities, which
liabilities for the purposes of this act shall be taken
to be its capital stock, its outstanding debts and a pre-
mium reserve at the rate of fifty per centum of the
current annual premiums on each outstanding bond,
undertaking, recognizance and obligation of like char-
acter in force; must file with the Superintendent of
Insurance of this State a certified copy of its cer-
tificate of incorporation, a written application to be
authorized to do business under this act, and also
with such application, and each year thereafter, a
statement verified under oath, made up to December
31 preceding, stating the amount of its paid up cash
capital, particularizing each item of investment, the
amount of premiums upon existing bonds, undertak-



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STATE OF COLORADO. 453

ings, recognizances and obligations of like character
in force upon which it is surety, the amount of lia-
bility for unearned portion thereof estimated at the
rate of fifty per centum of the current annual pre-
miums on each sueh bond, undertaking, recognizance
and obligation in force, stating also the amount of its
outstanding obligations of all kinds, and such further
facts as may be by the laws of this State required of
such company in transacting business therein; and
if such company be organized under the laws of any
other State than this State it must have on deposit
with a State officer of one of the States of the United
States, not less than |100,000 in good securities, de-
posited with, and held by, such officer, for the benefit
of the holders of its obligations; and must also ap-
point the Superintendent of Insurance of this State
as its attorney upon whom process of law can be
serA^ed, as now provided by law in the case of insur-
ance companies. [L. '97, p. 267, Sec. 2.

Superintendent Issue Certificate— Certificate Evidence — Not
Authorized Without Certificate.

That the Superintendent of Insurance of this
State, upon due proof by any such company of its
possessing the qualifications in this act specified, shall
issue to such company a certificate setting forth that
such company has qualified and is authorized for the
ensuing year to do business under this act, which said
certificate shall be evidence of such qualification of
such company and its authorization to become and to
be accepted as sole surely on all bonds, undertakings,
recognizances and obligations, required or permitted
by law, or the charter, ordinances, rules or regula-
tions of any municipality, board, body, organization



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454 INSURANCE LAWS

OP public olHcer, and the solvency and credit of such
company for all purposes and its sufficiency as
such surety. And no company shall be authorized or
permitted to become surety upon any bond, undertak-
ing, recognizance or other obligation specified in this
act without having first complied with the provisions
of this act and having obtained the certificate of the
Superintendent of Insurance of this State, as herein-
before provided. [L. '97, p. 268, Sec. 3.

Surety Released — Fife Other Security.

Any surety upon the bond of any State, County
or municipal officer shall be released from further lia-
bility as such surety for such officer, by filing with the
person or persons having authority to approve said
bond, or with whom said bond is directed to be filed,
a notice that said surety is unwilling longer to be
surety for such State, County or municipal officer.
When any notice shall be filed as aforesaid, notice
thereof shall immediately be given to such State,
County or municipal officer, who shall thereupon file
other security to be approved as provided by law. If
said State, County or municipal officer shall not in
the manner aforesaid file such bond to be approved
as aforesaid, the said office shall become vacant, and
the said vacancy shall be filled in manner as is now
provided by law. If a new bond shall be given by any
officer, as hereinbefore provided, then the former
surety or sureties shall be entirely released and dis-
charged upon all liability incurred by such officer
after the time of the approval of said new bond, and
the sureties to the new bond shall henceforth be liable
as therein provided, after the approval of said new
bond as aforesaid. [L. '97, p. 268, Sec. 4.



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STATE OF COLORADO. 455

Surety File Application for Release — Refund.

When any surety upon the official bond of any
trustee, committee, conservator, guardian, assignee,
receiver, executor, administrator or other fiduciary In
this State shall desire to be released from such obliga-
tion, such surety may file his application for such re-
lease in the Court having jurisdiction of such fidu-
ciary, and thereupon the clerk of such Court shall
issue, under the seal thereof, a notice to such fidu-
ciary, requiring him or her to furnish a new bond,
with sureties to be approved by the Court, within
twenty days from the date of the service of said
notice. Such notice may be served in the manner pro-
vided by law for the service of a summons in civil
actions. If such fiduciary shall fail to furnish such
bond within the time hereinbefore prescribed, he
or she shall be summarily removed from office, and a
new trustee, committee, conservator, guardian, as-
signee, receiver, executor, administrator or other fidu-
ciary forthwith appointed. From and after the time
when such new bond is furnished, or such new fidu-
ciary appointed, the surety making such application
shall be released from all liability upon the said bond,
except for such default or other misconduct on the
part of such fiduciary as occurred prior thereto.

It is further provided that in case of the release
or the withdrawal of any surety as provided in this
act, and in case the principal shall account in due
form of law for all of his acts and doings, and all trust
funds or estate, then the unearned portion of any
premium paid to such surety shall be refunded and
repaid by the said surety or sureties as aforesaid. [L. .
'97, p. 269, Sec. 5.



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456 INSURANCE LAWS

Place of Deposit — Proviso.

That it shall be lawful for any party of whom a
bond, undertaking or other obligation is required to
agree with his surety or sureties for the deposit of
any or all moneys and assets for which such surety or
sureties are or may be held responsible, with a bank,
savings bank, safe deposit or trust company, author-
ized by law to do business as such, or other depository
approved by the Court, or a judge thereof, if such
deposit is otherwise proper, for the safe keeping
thereof, and in such manner as to prevent the with-
drawal of such moneys and assets or any part there-
of, without the written consent of such surety or
sureties or an order of the court, or a judge thereof,
made on such notice to such surety or sureties as
such Court or judge may direct; provided, hoicever,
that such agreement shall not in any manner release
from or change the liability of the principal or sure-
ties as established by the terms of the said bond. [L.
'97, p. 270, Sec. 6.

Bond Part of Expense.

That any receiver, assignee, guardian, trustee,
committee, executor, administrator or curator or
other fiduciary, required by law or the order of any
Court or judge, to give a bond or other obligation as
such, may include, as a part of the lawful expense of
executing his trust such reasonable sum paid a com-
pany authorized under the laws of this State so to do,
for becoming his surety on such bond as may be al-
lowed by the Court in which, or a judge before whom,
he is required to account, not exceeding one per cen-
tum per annum on the amount of such bond ; and in



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STATE OF COLORADO. 457

all actions and proceedinji^s a party entitled to re-
cover costs therein shall be allowed and may tax
and recover such sum paid such a company for
executing any bond, recognizance, undertaking, stip-
ulation or other obligation therein, not exceeding,
however, one per cent, on the amount of such bond,
recognizance, undertaking, stipulation or other ob-
ligation, during each year the same has been in force.
[L. '97, p. 270, Sec. 1.

Saving Clause.

That nothing in this act contained shall be con-
strued or held to require trust, surety or guaranty
companies organized under the laws of the State of
Colorado authorized by their charter and the laws of
the State to act as bondsmen or furnish surety on
bonds, to make any deposit with the State Insurance
Commissioner, or to appoint the said State Insur-
ance Commissioner, or any other person, or officer,
its agent or attorney. [L. '97, p. 271, Sec. 8.

statements to Insurance Commissioner.

That every trust, surety and guaranty company
authorized by its charter under the laws of this State
to furnish bonds, or become surety thereon, shall be
required to furnish to the State Insurance Commis-
sioner any and all statements as to its condition re-
quired of any other like company by this act, and in
addition thereto, the said State Insurance Commis-
sioner be, and is hereby authorized to require any
local company to satisfy him that it has an actual
cash paid up capital of at least $250,000 as required
by the laws of the State regarding said companies.
And if at any time it should appear by such report of



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458 INSURANCE LAWS

said company, or by an examination thereof, by said
Commissioner, or by other satisfactory information,
that any such company has not available cash assets
equal to said sum of $250,000, that then and thereupon
such company so found to be below the legal require-
ments of the laws of the State as above, shall not
thereafter be permitted to act as bondsman, or be*
come surety on any bond covered or contemplated
by this act, or the laws of this State authorizing its
so doing, and said State Insurance Commissioner
shall thereupon withdraw his certificate authorizing
any such company to so act as herein, or by the laws
of this State contemplated or provided. [L. '97, p.

271, Sec. 9.

Repeal.

That all acts and parts of acts inconsistent with
this act be, and they are hereby repealed. [L. '97, p.

272, Sec. 10.



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STATE OF COLORADO. 459



REINSURANCE.



Companies of Other States May Insure, When.



Online LibraryColorado. Insurance Dept Colorado. Division of InsuranceAnnual report of the commissioner of insurance, Volume 19 → online text (page 28 of 29)