named therein. Before issuing the call aforesaid, a certified copy of such proposed contract of transfer or re-insurance shall be filed in the Insurance Department, and the call for such meeting shall be submitted to the Commissioner of Insurance for his approval. The meeting and the counting of votes shall be held and done under the supervision of the Commissioner, for the purpose of seeing that the by-laws of the company and the laws of the State are faithfully observed, and the Commissioner shall, before the transfer is finally made, report to the Governor upon the nature of the contract of re-insurance or transfer, and also as to the methods employed to secure the consent of the members or policy-holders thereto, and as to the disposition of any funds belonging to the members or policy-holders of the company that is to be re-insured, and the said Commissioner may, if in his judgment the law has been violated or the members are to be wrongfully deprived of any of their rights, or of their joint assets, apply, with the consent of the Governor, to the District Court for an injunction restraining such transfer or re-insurance. In case such transfer or re-insurance of the corporation is to result in any increase in the premium or rates of insurance of those already holding contracts, or in any reduction of the amount of insurance, in lieu of such advance in premium the facts shall be set forth in the call for the meeting. [L. '13, p. 362, § 64.]

3151. Fees, etc., of mutual companies.

SEC. 65. Mutual and assessment companies shall, unless otherwise specified in this Act, be required to pay the same fees, and be under the same supervision and authority of the Commissioner of insurance business and which are organized upon the joint stock plan; and shall comply with the general laws of Division 1 of this Act, unless otherwise specified, and be subject to the penalties provided therein. [L. '13, p. 364, § 65.]

3152. Ownership of profits.

SEC. 66. Every domestic insurance company incorporated upon the mutual or assessment plan shall state clearly in its policies or certificates that the accumulations of profits of such cor'porations over and above all proper liabilities shall be the sole property of the members or policy-holders in good standing, and that the same shall be distributed in a just and equitable manner, in case such company is re-insured or ceases to do business. [L. '13, p. 364, § 66.]

3153. Mutual fire insurance companies.

SEC. 67. Twenty-five or more persons, citizens of this State, may form a corporation to carry on the business of fire insurance on the mutual plan; but no such corporation shall begin to do business until a guaranty fund of at least ten thousand dollars ($10,000) has been provided and deposited in cash or in such

securities as are permitted by law in case of stock companies, with the Commissioner of Insurance, under the conditions named in this Act; the same to be held as security for the payment of all losses and other policy liabilities of such companies. Any company so incorporated shall thereupon have the power to elect directors by vote of the incorporators, but the directors so selected shall serve but one year, when an election by the members shall be held. The number of such directors shall be not less than five nor more than fifteen, and in all meetings of the members each shall have one vote and shall vote in person or by proxy. When such company has paid the fees required by law, and fully complied with all other statutes, the Commissioner shall furnish such company with a certificate of authority to do business in this State, and shall issue to such company, as provided for other insurance corporations, a certificate showing the amount and purpose of the guaranty fund deposit with the Insurance Department. Every such company must in its by-laws, and must in its policies, fix by a uniform rule the contingent mutual liability of its members for the payment of losses and expenses; and such contingent liabilities shall not be less than one nor more than three annual cash premiums, in addition to the one that is written in the policy; and such liability shall be agreed to in writing by each applicant for insurance, before the policy is issued; but such liability shall cease with the expiration of the time for which a cash premium has been paid in advance, except for liability incurred during such time; but nothing in this section shall apply to mutual protective associations organized as provided in this Act. No mutual fire insurance company shall have the power to insure the property of others than members of the company. [L. '13, p. 364, § 67.]

3154. Liability of members of mutual fire insurance companies.

SEC. 68. Every person who effects insurance in a mutual fire insurance company and continues to be insured, and his heirs, executors, administrators and assigns, shall thereby become members of the company, during the period of insurance, and shall be bound to pay for losses and such necessary expenses as accrue in and to the company in proportion to the original amount of his deposit note or contingent liability; and the directors shall, as often as they deem necessary, settle and determine the sum to be paid by the several members thereof, and publish the same in such manner as they may choose, or as the by-laws prescribe, and the sum to be paid by each member shall always be in proportion to the original amount of such liability, and shall be paid to the officers of the company within thirty days next after the publication or mailing of such notice; provided, that whenever such company is not possessed of cash funds above its reinsurance reserve sufficient for the payment of incurred losses and expenses, it shall be deemed as having impaired its capital, and shall make an assessment for the amount needed to pay such losses and expenses

upon its members liable to assessment therefor, in proportion to the several liabilities; and no such company shall borrow money or create a debt, unless for necessary operating expenses to continue beyond the period when such assessment may be collected and applied to the payment thereof, and no member shall be assessed for liabilities incurred prior to his membership. [L. '13, p. 365, § 68.]

3155. Enforcement of assessment.

SEC. 69. If a member neglect or refuse, for a space of thirty days after the publication or mailing of notice of an assessment, and after demand for payment, to pay the sum assessed upon him as his proportion of any loss or expense as aforesaid, the corporation may sue for and recover the whole amount of contingent liability, with cost of suit; but execution shall only issue for assessments and costs as they accrue, and every such execution shall be accompanied by a list of losses or expenses for which the assessment is made. If the whole amount of the contingent liability of members shall at any time be insufficient to pay expense and the losses occasioned by any fire or fires, the insured who are entitled to receive payment for losses sustained, for which the company is liable upon its policies, shall receive from and out of such contingent liabilities of members on account of their respective losses a proportionate share of the whole amount of such liability, according to the amount of their respective losses; provided, however, that nothing herein contained shall be deemed or construed to affect or take away the rights of such policy-holder in the guaranty fund of such company; and provided, further, that no member of such company shall ever be required to pay for any expense or loss occasioned by fire more than the whole amount of his contingent liability. [L. '13, p. 366, § 69.]

3156. Notice of assessment.

SEC. 70. In actions for the recovery of assessments duly levied by the directors of any mutual fire insurance company of this State, or for money due on the liability of the members of any such company, the official statement of the president or secretary of such company, under seal, and sworn to, shall be received in court as evidence of the facts essential for making the same, and that such assessment, for the nonpayment of which any such action is commenced has been duly levied, and notice thereof given. '13, p. 366, § 70.]

3157. Insert word "mutual."

[L.

SEC. 71. Every mutual fire insurance company shall embody the word "mutual" in its title, which shall appear upon the first page of every policy and renewal receipt, in some suitable manner. [L. '13, p. 366, § 71.]

3158. Premium notes not negotiable.

SEC. 72. Mutual fire insurance companies which shall receive notes in consideration of premiums on their policies, shall be required to insert on the face of each note the following words, to-wit: "It is hereby understood and agreed that this note is not transferable." [L. '13, p. 367, § 72.]

3159. Foreign mutual companies.

SEC. 73. Any Mutual fire insurance company organized under authority other than that of Colorado, before being authorized to do business in this State, shall be required to file a certificate from the Insurance Department of its home state, certifying to the fact that such company has assets amounting to not less than two hundred thousand dollars ($200,000) over and above all liabilities. [L. '13, p. 367, § 73.]

3160. County mutual protective associations.

SEC. 74. Twenty-five or more persons, citizens of Colorado and owning insurable property in this State, may form a mutual protective association, for the purpose of insuring each other against loss by fire, lightning, tornado, wind-storm or hail-storm, on property situated in the State; and may assess and collect from each other such sums of money as may be necessary to pay losses from fire, lightning, tornado, wind-storm or hail-storm, from time to time as such losses occur, and to pay such expenses as may be approved by the board of directors, providing that The Grange, or similar fraternal organizations operating upon the lodge plan may operate under this section in all or any of the counties of this State. The assessment and collection of such sums shall be regulated by the constitution and by-laws.

The name of such associations shall be "Protective Associations," preceded by some other appropriate name; and the articles of incorporation shall state the name of the town or city in which the head office of the association shall be located. They shall also state the object of the organization as being one or more of the objects set forth in this section, and to enforce any contract which may be by them entered into, by which those entering therein shall agree to be assessed specifically for incidental purposes and for the payment of losses which occur to its members. The kinds of property proposed to be insured, and the casualty specified in this section proposed to be insured against, shall also be specified in the articles of incorporation.

After a certified copy of these articles is filed with the Commissioner of Insurance and approved by the Attorney General, and the incorporators are advised that the same is approved, they may proceed to select directors and officers and to make their constitution and by-laws, a copy of which shall be filed with the Commissioner of Insurance. The directors selected by the incorporators shall not be less than five (5) nor more than fifteen (15)

in number, and shall serve but one year, when an election by the members shall be held, and the term of no director shall thereafter be more than three years. Members shall have one vote each, and shall vote for directors in person or by proxy. Such association shall in no instance have the power to insure the property of others than members of the association, and all policies issued by the association must state specifically the liability of the insured. All persons becoming members of such association shall be held in law to comply with all the provisions and requirements of the association. Before granting any insurance, such an association shall file with the Commissioner, in addition to a certified copy of the articles of incorporation approved by the Attorney General, a copy of the constitution and by-laws and forms of certificates of membership, or of insurance; and if the Commissioner finds that the laws have been complied with, he shall issue a certificate of authority for such association to commence business. Such association shall pay to the Commissioner for the State, the following fees:

For filing articles of incorporation, $10;

For certificate of authority, annually, $5;

For filing annual statement, $5;

Such association shall make such statements of accounts and of the records of the business and financial condition as may be required by the Commissioner, who shall furnish blank forms for such purpose; and the Commissioner shall have the same right to visit and examine such associations, and the same supervisory authority over such associations, as is given him by law over other mutual companies or associations, and he shall have the power to revoke the license of such association for failure to settle losses with reasonable promptness, and publish such revocation in such manner as may best serve the interests of the policy-holders and the public. [L. '13, p. 367, § 74.]

3160-1. Assessment accident associations.

SEC. 75. (1) Every contract whereby a benefit is to accrue to a party or parties named therein, upon the accidental death, or physical disability from accident or sickness of a person, which benefit is in any degree conditioned upon the collection of an assessment upon persons holding similar contracts, shall be deemed. a contract of accident or casualty insurance upon the assessment plan, and the business involving the issuance of such contract shall be carried on in this State only by duly authorized corporations, which shall be subject to the provisions and requirements of this section and the general laws governing insurance companies in this State, except as herein otherwise provided; but nothing herein contained shall be construed as applicable to organizations which conduct their business as fraternal societies, on the lodge system, or to organizations which do not employ paid agents in soliciting business, or limit their certificate-holders to a particular order or fraternity.