How performed. plan, that the company is in the actual possession of the Section amended. [No. 144.] AN ACT to amend section one of chapter four of part two of act number two hundred fifty-six of the public acts of nineteen hundred seventeen, entitled "An act to revise, consolidate and classify the laws of the state of Michigan relating to the insurance and surety business; to regulate the incorporation of domestic insurance and surety companies and associations and the admission of foreign companies; and to provide for the departmental supervision and regulation of the insurance and surety business within this state," approved May tenth, nineteen hundred seventeen. The People of the State of Michigan enact: SECTION 1. Section one of chapter four of part two of act number two hundred fifty-six of the public acts of nineteen hundred seventeen, entitled "An act to revise, consolidate and classify the laws of the state of Michigan relating to the insurance and surety business; to regulate the incorporation of domestic insurance and surety companies and associations and the admission of foreign companies; and to provide for the departmental supervision and regulation of the insurance and surety business within this state," approved May tenth, nineteen hundred seventeen, is hereby amended to read as follows: PART II Chapter 4 manage SECTION 1. It shall be unlawful for any corporation, Unlawful foreign or domestic, to take, receive or solicit subscriptions control of in this state for the capital stock of any insurance corpora- ment. tion or to take any part, directly or indirectly, in the formation of any insurance corporation for the purpose of controlling in any way the management thereof; and every contract, order or subscription for stock, made directly, or indirectly with such corporation, or any voting trust or other agreement hereafter made, the purpose of which is directly or indirectly to control such corporation, is hereby declared to be void: Provided, That nothing in this act contained Proviso. shall prohibit an individual stockholder or group of individual stockholders in any insurance corporation from placing his or their stock in the control of a trustee or trustees for such period and for such purpose as is not otherwise prohibited by law. Any violation of this section shall be deemed a misdemeanor. Approved May 12, 1927. [No. 145.] AN ACT to amend section sixteen of chapter one of part two of act number two hundred fifty-six of the public acts of nineteen hundred seventeen, entitled "An act to revise, consolidate and classify the laws of the state of Michigan relating to the insurance and surety business; to regulate the incorporation of domestic insurance and surety companies and associations and the admission of foreign companies; and to provide for the departmental supervision and regulation of the insurance and surety business within this state", as amended by act number three hundred sixtyone of the public acts of nineteen hundred twenty-five. The People of the State of Michigan enact: SECTION 1. Section sixteen of chapter one of part two of Section act number two hundred fifty-six of the public acts of nineteen amended. hundred seventeen, entitled "An act to revise, consolidate and classify the laws of the state of Michigan, relating to the insurance and surety business; to regulate the incorporation of domestic insurance and surety companies and associations and the admission of foreign companies; and to provide for the departmental supervision and regulation of the insurance and surety business within this state", as amended by act Capital, etc., investment of. Bonds, etc., secured by mortgage lien. U. S. bonds. Proviso. Further proviso. Steam railroads. Leased railways. Steam railways. Proviso. Electric, etc., railways. number three hundred sixty-one of the public acts of nineteen hundred twenty-five, is amended to read as follows: SEC. 16. It shall be lawful for any insurance company organized or doing business under this act, or incorporated under any law of this state, to invest its capital and the funds accumulated in the course of its business or any part thereof: First, In bonds or notes secured by mortgage lien upon unencumbered real estate worth at least double the amount loaned; Second, In the bonds of the United States, or any state or territory of the United States, or in the valid public debt or bonds of any city, county, township, village or school district of any state or territory in the United States: Provided, That such state or municipality has not, in the ten years preceding the time of such investment, repudiated its debt or failed to pay the same or the interest due thereon, or upon any part of such debt: And provided further, That the net indebtedness of said city, county, township, village or school district shall not exceed eight per cent of the assessed valuation of all the real estate therein; Third, (a) In the lawful authorized first mortgage bonds of any steam railroad corporation organized under the laws of any state of the United States; (b) In the first mortgage bonds of railway companies whose lines are leased or operated or controlled by any railroad company specified in paragraph three (a), if said bonds. be guaranteed both as to principal and interest by the railway company to which said lines are leased, or by which they are operated or controlled; (c) In the lawful authorized first mortgage bonds of any steam railway incorporated under the laws of any state of the United States, issued for the purpose 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 any such company mentioned in the foregoing subdivisions (a), (b) and (c) has for five years prior to the time of making such investment by said insurance company paid annual dividends equal to not less than four per cent of 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; (d) In the lawful authorized first mortgage bonds of any electric railway, street railway, gas or electric light or power company organized under the laws of the state of Michigan, if the issue and sale of said bonds shall have been duly approved by the Michigan public utilities commission, and if the said company, or its predecessor in interest, issuing said bonds shall have for three years prior to the time of making such investment by said insurance company had net earnings to an amount equal to not less than twice the interest on such bonds and has not during such period defaulted in the payment of the matured principal or interest of any debt incurred by it and secured by mortgage or trust deed on 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: And provided, That in the case of electric Proviso. railroad, street railways, gas or electric light or power companies above referred to, 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 plant and equipment shall be free from all other liens and incumbrances; companies. (e) In the lawful authorized first mortgage bonds of Steamship steamship companies: Provided, That any such company Proviso. mentioned in the foregoing subdivisions has for five years prior to the time of making such investment by said insurance company paid annually dividends equal to not less than four per cent of 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, and provided that in the case of electric railroad, street railways, gas or electric light or power companies above referred to, 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 plant and equipment shall be free from all other liens and incumbrances, 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: Provided, That in the case of first mortgage bonds of steam- Proviso. ship companies such mortgages shall be upon steel steamships 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: And provided further, That such bonds are issued at the time Further of the completion and enrollment of such steamship or steam- proviso. ships, or within one year thereafter, and 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 the said property shall not exceed one-half of its actual cost, and 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 covered by said mortgage to be insured against all risks on vessel property ordinarily covered by such insurance, including marine Further proviso. Negotiable paper, etc. Proviso. Further proviso. Farm loan bonds, etc. Governmental securities. Proviso. risks and disasters, general and particular average, collision liability, protection and indemnity insurance, and insurance against liability for injury 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; and 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 as to any bonds mentioned in this subdivision they shall be first approved by the Michigan securities commission; Fourth, In any negotiable paper or other evidences of indebtedness secured by any of the above mentioned classes of security; Fifth, Upon negotiable notes secured by pledge of stock of national or state banks, which have a surplus of twenty-five per cent more than the capital: Provided, That such loans. shall not exceed eighty-five per cent of the market value of the stock, and that the total amount of the loan on bank secured collateral shall not exceed fifteen per cent of the capital and surplus of the insurance company: Provided further, That not more than one-fourth of the capital and surplus of any 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 railway corporation other than a steam railway, 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 other than railroads, and not more. than one-tenth of the capital and surplus shall be loaned to any one person, corporation or firm on collateral pledges; Sixth, In the farm loan bonds or in joint stock land bank bonds to be issued by the federal land banks operating under the act of congress, approved July seventeen, nineteen hundred sixteen; Seventh, In such governmental securities of this or any foreign government, or governmental subdivisions thereof, not otherwise provided for herein, as may be first approved by the securities commission herein above referred to and the commissioner of insurance and subject to such limitations as are herein prescribed for other government and municipal securities: Provided, That any insurance company of this state owning or possessing any bonds, stocks or other securities not in conformity with the provisions of this act shall dispose of such securities within five years from the date of the passage of this act; |