Pennsylvania Act 1951-184 — ALLOWING SOME INSURANCE COMPANIES TO MERGE OR RE-INCORPORATE

Act text

ALLOWING SOME INSURANCE COMPANIES TO MERGE OR RE-INCORPORATE
                 Act of Jun. 28, 1951, P.L. 941, No. 184              Cl. 40
                                  AN ACT

     Authorizing certain existing beneficial or protective societies,
        heretofore incorporated, to reincorporate, or to merge and
        reincorporate, as limited life insurance companies, for the
        purpose of making insurance upon the health of individuals
        and against personal injury and disablement and death,
        including endowment insurance; regulating such corporations,
        and limiting the amounts for which such corporations may
        issue policies.

        The General Assembly of the Commonwealth of Pennsylvania
     hereby enacts as follows:

        Section 1.  Any corporation or any two corporations now
     formed or organized under the provisions of the ninth paragraph
     of section two of the act, approved the twenty-ninth day of
     April, one thousand eight hundred and seventy-four (Pamphlet
     Laws 73), entitled "An act to provide for the incorporation and
     regulation of certain corporations," namely "The maintenance of
     a society for beneficial or protective purposes to its members
     from funds collected therein," except fraternal, benevolent,
     charitable or secret societies issuing beneficial certificates
     and paying benefits to their membership through the lodge
     system, and insurance or relief associations formed by or for
     the exclusive benefit of employes of corporations or firms or
     formed by or for the exclusive benefit of members of any
     religious corporation or association, may be reincorporated, or
     merged and reincorporated, as the case may be, as a life
     insurance company of the class known as limited life insurance
     companies, for the purpose of making insurance, either upon the
     stock or mutual principle, upon the health of individuals and
     against personal injury or disablement and against death
     resulting from natural or accidental causes, including endowment
     insurance, in such amounts and upon such conditions as is now or
     hereafter may be provided by law in the case of limited life
     insurance companies: Provided, however, That any such
     corporation or any two such corporations may not reincorporate,
     or merge and reincorporate, as a limited life insurance company
     under this act, unless such corporation or corporations are
     operating in compliance with the requirements of the act,
     approved the fourth day of June, one thousand nine hundred
     thirty-seven (Pamphlet Laws 1643), entitled "An act relating to
     certain existing beneficial societies; conferring certain
     rights, powers and duties upon them, their officers and members;
     authorizing the payment of benefits by them in the event of
     sickness, accident, disability or death; regulating such
     societies and corporations; and limiting the amount for which
     they may issue membership certificates or policies; providing
     for reserves; imposing penalties; and repealing certain existing
     laws and parts of law."
        Section 2.  Any such corporation or any two such corporations
     desiring to reincorporate, or to merge and reincorporate, as the
     case may be, under the provisions of this act, shall proceed in
     the following manner. A meeting of the members of such
     corporation or of each such corporation shall be held and if a
     majority of the members of such corporation or corporations
     shall vote or authorize a vote in favor of the reincorporation
     or merger and reincorporation, a resolution or resolutions to
     that effect shall be adopted, and upon the recording of such
     resolution or resolutions in the office for the recording of
     deeds in the county where such corporation or each such
     corporation has its principal office, the directors of such
     corporation or the respective directors of two such corporations
     acting jointly, as the case may be, may make articles of
     association as provided by law for the incorporation of
     insurance companies, upon which articles shall be had the same
     proceedings as provided by law for the incorporation of new
     insurance companies; and upon the approval of said articles,
     such corporation or corporations shall become a corporation
     under this act, and all the estate and property, real and
     personal, rights of action, liabilities and obligations of such
     former corporation or corporations shall be deemed and taken to
     be transferred to and vested in or attached to the corporation
     formed under this act without further act or deed.
        As soon as the entire amount of the authorized capital of a
     stock insurance company incorporated under this act has been
     paid in, certificates shall be issued therefor to the persons
     entitled to receive the same, which certificates shall be
     transferable upon the books of the company, and the president or
     secretary of the company shall notify the Insurance Commissioner
     that the entire capital of the company has been paid in and that
     it is ready to commence business. Upon receipt of such notice
     the Insurance Commissioner shall, in person or by deputy or
     examiners, examine the company, and in case he finds that it has
     complied with the provisions of this act and is possessed of
     funds equal to the amount of its capital, he shall issue to said
     company a certificate showing that it has been organized in
     accordance with the provisions of this act and that it has the
     requisite amount of capital for the transaction of business in
     the Commonwealth, which certificate shall empower the company to
     issue policies and otherwise transact the business of insurance
     for which it was incorporated.
        In the case of a mutual life insurance company incorporated
     under this act, upon the receipt of a notice from the president
     or secretary of such company, the Insurance Commissioner shall
     make an examination, and if he finds that it has the necessary
     amount of insurance in force and that the guaranteed capital has
     been paid in, he shall issue a certificate authorizing the
     company to commence business.
        The Insurance commissioner may also conduct such examination
     of any proposed company as may be deemed necessary, to determine
     whether the responsibility, character and general fitness for
     the business of the incorporators and directors named in the
     articles are such as to command the confidence of the public and
     to warrant the belief that the business of the proposed company
     will be honestly and efficiently conducted in accordance with
     the intent and purpose of this act.
        Until such time as the Insurance Commissioner shall issue a
     certificate authorizing companies to commence business under
     this act, said companies shall have the same powers to transact
     the business of insurance as were possessed by said companies
     prior to their reincorporation under this act.
        Any corporation formed under this act shall be authorized to
     transact the business of insurance in the same manner and upon
     the same conditions as insurance companies are by law authorized
     to do, in so far as not inconsistent with the provisions of law
     relating to limited life insurance companies.
        Section 3.  Any corporation formed under the provisions of
     this act shall place reserves on the life portion contained in
     all policies issued based upon a standard table of mortality,
     with interest at a rate of not more than three and one-half per
     cent (3 1/2%), as approved by the Insurance Department of the
     Commonwealth, and reserves shall be carried on the disability
     feature, of fifty per centum of the actual weekly, monthly or
     annual premiums in force, and reserves shall be charged on all
     definite and outstanding incurred claims.
        Section 4.  Capital stock of a stock company formed under
     this act shall not be less than twenty-five thousand dollars,
     and shall be divided into shares of not less than ten dollars
     each, payment of which shall be made in lawful money, ten per
     centum on each share at the time of subscribing, and the balance
     at such times as the company may direct, not exceeding one year
     from the time of subscription; and the company may provide such
     rules with regard to forfeiture of partial payments on
     subscriptions as they may deem advisable, which rules shall be
     binding upon the subscribers, provided they are made known at
     the time of subscription. Each such company shall, in addition
     thereto, have a surplus paid in at least equal to the amount of
     the capital stock.
        Section 5.  (5 repealed Dec. 19, 1990, P.L.834, No.198)
        Section 6.  Any mutual company formed under this act shall be
     authorized to do the business of insurance when it shall have
     insurance in force against death amounting to not less than two
     hundred fifty thousand dollars upon at least two thousand
     persons: Provided, That no such company shall be authorized to
     do the business of insurance until it shall have a guaranteed
     capital of a least twenty-five thousand dollars and a surplus of
     a least twenty-five thousand dollars and until it shall have
     deposited with the Insurance Commissioner the sum of twenty-five
     thousand dollars in cash or approved securities, which sum the
     Insurance Commissioner is hereby authorized and empowered to
     receive; and it shall be his duty to hold the same for the
     benefit of the members of such corporation and its creditors,
     preference being given thereto in the following order, to wit:
     first, claims under policies; second, salaries of employes;
     third, general creditors.
        Section 7.  The provisions of this act shall become effective
     immediately upon final enactment.