which shall contribute to the library of this state the law reports which shall be published under the authority of such state or territory.

Incorpora

PART II. ORGANIZATION AND REGULATION
OF INSURANCE COMPANIES.

CHAPTER III.—LIFE INSURANCE COMPANIES.

An Act in relation to life and casualty insurance companies and surety bonding companies transacting business within this state. (a)

[Act 77, P. A. 1869.]

The People of the State of Michigan enact:

(35) § 7190. SECTION 1. Thirteen or more persons may tion, purposes, become a corporation, for the purpose of making any of the following kinds of insurance:

number, etc.

First, Upon the lives and health of persons and every insurance pertaining thereto, and to grant, purchase or dispose of annuities;

Second, To guarantee the fidelity of persons in positions of trust, private or public, and to act as surety on official bonds and for the performance of other obligations;

Third, To insure against loss or damage to property of the assured, and loss or damage to the life, person or property of another for which the assured is liable, caused by the explosion of steam boilers or their connections or by the breakage or rupture of machinery or fly wheels; and against loss of use and occupancy caused thereby;

Fourth, To insure any person against bodily injury or death by accident, or against disability on account of sickness;

Fifth, To insure any person, firm or corporation against loss or damage on account of the bodily injury or death by accident of any person, or against damage caused by automobiles, vehicles or draft animals to property of another, for which loss or damage said person, firm or corporation is responsible, or against accidental damage sustained by automobiles or vehicles, or against all of said contingencies;

Sixth, To insure against a breakage of plate glass, local or in transit;

Seventh, To insure any goods or premises against loss or damage by water caused by the breakage or leakage of sprinklers, pumps, water pipes or plumbing and its fixtures, and against accidental injury from other cause than fire or light

(a) Title amended, 1907, Act 172.

ning to such sprinklers, pumps, water pipes, plumbing and fixtures;

Eighth, To carry on the business commonly known as credit insurance or guaranty, either by agreeing to purchase uncollectible debts, or otherwise to insure against loss or damage from the failure of persons indebted to the assured to meet their liabilities;

Ninth, To examine titles to real and personal property, furnish information relative thereto, and insure owners and others interested therein against loss by reason of encumbrances or defective title;

Tenth, To insure against loss or damage by burglary, theft or house breaking.

of risks.

Every company organized under this act shall have author- Reinsurance ity to reinsure any risk authorized to be undertaken by them, and to grant reinsurance upon any similar risk undertaken by any other company, but shall not have power to undertake marine and fire risks or any other species of insurance whatever than that specified in some one or more of the foregoing subdivisions; but a corporation may be formed for the combined purposes specified in the first and fourth subdivisions; or, upon compliance with the requirements of sections five thousand one hundred ten, five thousand one hundred eleven, five thousand one hundred twelve, five thousand one hundred thirteen, five thousand one hundred fourteen and five thousand one hundred fifteen of the compiled laws of eighteen hundred ninety-seven, for all the purposes combined, or any two or more of them specified in the third, fourth, fifth, sixth, seventh, eighth, ninth and tenth subdivisions. A life insurance company may insure against the death of the insured by accident or against disability on account of accident or sickness, but against no other contingency specified in any subdivision of section one of this act, unless engaged in insuring against such other contingency in this state prior to the first day of January in the year nineteen hundred nine. The provisions of this act Provisions shall apply to any company heretofore organized, or that applicable. may hereafter be organized under this provision, for any or all of the purposes above specified.

Am. 1899, Act 177; 1907, Act 172; 1909, Act 297.

As to the general subject of insurance see notes to section 209 infra. LIFE INSURANCE: The object of life insurance is to provide for death by disease or in the ordinary course of nature.-John Hancock Mut. L. Ins. Co. v. Moore, 34/46. The business of life insurance has attained enormous proportions. It affects so many interests that the state has attempted to say under what conditions it may be conducted and has created a department for the purpose of supervising the business.-Mich. Mut. L. Ins. Co. v. Hartz, 129/104.

THE APPLICATION: False answers written in an application for life insurance by the agent, unknown to the applicant who signs the same, will not avoid the policy.-Van Houten v. Metropolitan Life Ins. Co., 110/682. An incorrect statement of the maiden name of the insured, by the agent in filling out an application, will not avoid the policy.-Plumb v. Mut. Life Ins. Co., 108/94. Policy avoided by misrepresentations in applications as to use of liquors.-Malicki v. Guaranty Fund Life Society, 119/151. Waiver by company of right to insist on breach of warranty in application for life insurance. Moore v. Mut. Reserve Fund Life Ins. Assn., 133 / 526.

GOOD HEALTH: "Good Health" means a state of health free from any

disease or ailment that affects the general soundness and healthfulness of the system seriously. Hann v. Nat'l Union, 97/513; Brown v. Life Insurance Co., 65/314. The condition of good health required at the time of insurance is not violated by a slight indisposition, as headache or colic, only temporary in its effect.-Tobin v. Modern Woodmen of America, 126 / 161. See, also, Hann v. Nat'l Union, 97/513; Pudritzky v. Knights of Honor, 76/428. A representation that one is in good health and has not been attended by a physician means that he is free from disease that would seriously affect the general soundness of the system, and that he has not been attended by a physician for a se:ious ailment.-Blumenthal v. Berkshire Life Ins. Co., 134/216. To have been "attended by a physician" or to have "consulted one professionally," within the meaning of such terms in an application for life insurance, must have been attendance or consultation with reference to some ailment of a serious character and not in relation to such temporary indisposition as all persons are liable to, though considered to be in good health generally.-Plumb v. Mut. Life Ins. Co., 108/94. Immaterial variation in statement as to attendance of physician for illness prior to application for life insurance.-Id. Policy avoided by material misrepresentations as to past health of applicant, made in the application. Ketcham v. Am. Mut. Accident Association, 117/521; Ferris v. Home Life Assurance Co., 118 / 485. Waiver of provision that no obligation is assumed unless the assured is in sound health at the time of insurance.Hilt v. Life Ins. Co., 110/517. A bill in equity will lie to enjoin the prosecution of a pending suit at law upon a policy of life insurance and to compel the surrender of the policy for cancellation, where a lapsed policy had been reinstated upon a false and fraudulent certificate as to the health of the insured. John Hancock Mut. Life Ins. Co. v. Dick, 114/337.

THE POLICY: Where a company takes a note for premium due and gives renewal receipts therefor, the policy continues in force.-Mich. Mut. L. Ins. Co. v. Bowes, 42/19; Tabor v. Mich. Mut. L. Ins. Co., 44/324. A policy is not issued until delivered.-Malicki v. Guaranty Fund Life Society, 119/151. Vested interests in policies of life insurance.-Voss v. Conn. Mut. Life Ins. Co., 119/161. The construction of stipulations in a life policy is for the courts.--New Era Ass'n v. Mactavish, 133/68. Construction of contract of casualty insurance.-Stephens v. Penn. Casualty Co., 135/189. Reinstatement of lapsed policy.-Clark v. Insurance Co., 107160; Mosser v. Life Indemnity Co., 115/672. When a policy for the surrender value must be demanded.-Clark V. Insurance Co., 107 / 160. Under a policy requiring the assured to give immediate notice in writing of an accident or claim, notice need not be given until there has been both an accident and a claim for damages.-G. R. Electric Light & Power Co. v. Fidelity & Casualty Co., 111 / 148. An assignment of a life insurance policy to secure creditors is valid.-McDonald v. Birss, 99/329; Met. L. Ins. Co. v. O'Brien, 92 / 584. Surrender of policy.-Lockwood v. Mich. Mut. L. Ins. Co., 108 / 334. A policy of insurance issued in Michigan by a mutual benefit association organized under the laws of another state having a branch in Michigan is a Michigan contract.-Dolan v. Catholic Mutual Benefit Ass'n, 152 / 266.

BENEFICIARIES: Insurable interest.-L. & A. Ins. Co. v. Catlin, 106 / 138; Hosmer v. Welch, 107 / 470. Upon the execution of a life insurance policy, the beneficiaries therein named acquire an interest which the law recognizes and which the insured cannot dispose of at his own will.-Lockwood v. Mich. Mut. Life Ins. Co., 108/334. Change of beneficiary in life insurance policy.-Malbury v. Metropolitan Life Ins. Co., 127 / 568. One of two beneficiaries in a life insurance policy cannot maintain an action for his proportion of the insurance without accounting for his failure to join the other beneficiary.-Voss v. Conn. Mut. Life Ins. Co., 119/161. When insured is not entitled to sick benefits for "total incapacity."-Shirts v. Phoenix Accident & Sick Benefit Ass'n, 135 / 439. Public policy does not forbid an insured selecting as his beneficiary one not having an insurable interest in his life. Dolan v. Mutual Benefit Ass'n, 152 / 266.

PAYMENT OF INSURANCE: Proofs of death.-John Hancock Mut. Life Ins. Co. v. Dick, 117/518. When an assignment of a life insurance policy to a person having no insurable interest in the life of the assignor will be held good.-Prudential Ins. Co. v. Liersch, 122 / 436. Payment of mutual benefit insurance to common law wife.-Maccabees v. McAllister, 132 / 69. Payment of insurance by company, in good faith, to party in possession of policy.-Voss v. Conn. Mut. Life Ins. Co., 131/597. What constitutes total disability under an accident policy.-Turner v. Fidelity & Casualty Co., 112/425; Hohn v. Inter-State Casualty Co., 115/79. Failure of the insured to give notice of an injury within the time required by an accident policy is waived by the insurance company's asking for further information after receiving notice, without suggesting that the notice came too late.-Hohn v. Inter-State Casualty Co., 115/79. When proofs of claim for sick benefit need not be furnished as provided in the policy.-Hoffman v. Mich. Home & Hospital Ass'n, 128 / 323.

MATTERS OF DEFENSE: The burden of proof is upon an insurance company to show a violation of conditions avoiding an otherwise valid policy. -Malicki v. Chicago Guaranty Fund Life Society, 119/151. Question of use of liquors, as defense against liability of life insurance policy, where evidence is conflicting, is for jury.-Malicki v. Guaranty Fund Life Society, 123 / 148. Defense against note given for premium for life insurance.Sebring v. Hazard, 128 / 330. Suicide, in the case of one non compos is as much the result of disease as death by fever or consumption.-John Hancock

Mut. L. Ins. Co. v. Moore, 34 / 46. Suicide as a defense against claim of insurance.-Wasey v. Travelers' Insurance Co., 126/119. "Voluntary exposure to unnecessary danger," as an exemption from liability on an accident insurance policy, means a conscious or intentional exposure, involving gross or wanton negligence on the part of the insured.-Johnson v. Guarantee & Accident Co., 115 / 86. A condition in an accident insurance policy against liability for injuries caused by "voluntary or unnecessary exposure to danger" is limited to cases of intentional exposure to recognized danger, and does not include acts of mere thoughtlessness on the part of the insured.-Irwin v. Accident & Sick Benefit Ass'n, 127/630. An exception in an accident policy of death or injuries resulting directly or indirectly from poison extends to cases where the poison is administered through the mistake of a druggist or physician.-Early v. Standard L. & A. Ins. Co., 113/58. An intentional homicide is an accident within the meaning of an accident policy, if insured himself was in no way responsible for his death.-Furbush v. Maryland Casualty Co., 131 / 234. Question of whether insured came to his death by homicide or suicide is for the jury, in case of contest.-Furbush v. Maryland Casualty Co., 133/479. An accident insurance company has the burden in an action upon a policy, of proving that an injury to plaintiff, shown to be the result of an accident, was within some exception named in the policy.-Hess v. Masonic Mut. Accident Ass'n, 112/196.

(36) § 7191. SEC. 2. The persons so associating shall Articles, what subscribe articles of association, which shall contain:

First, The names of the associates, and their places of residence respectively;

Second, The name by which the corporation shall be known, which shall not be the same as, nor too closely resembling, the name of any other corporation organized under the laws of this state, or doing business in this state, and the place where its principal office for the transaction of business is to be established, and the period for which it is to be incorporated;

Third, The purposes of the incorporation, as mentioned in the first section of this act;

Fourth, The manner in which the corporate powers are to be exercised; the number of directors and other officers, and the manner of electing the same, and how many of the directors shall constitute a quorum, and the manner of filling all vacancies;

Fifth, The amount of the capital stock, if any, and what proportion is to be paid in before the corporation shall commence business;

Sixth, The time for the holding of the annual meetings of the corporation; and,

Seventh, Any terms and conditions of membership therein which the corporators may have agreed upon, and which they may deem important to have set forth in such articles. And the said corporators shall publish a copy of said articles, with notice of their intention to become incorporated under the same, in some newspaper published in the county where the principal office is to be located, once in each week for at least four weeks before filing such articles as hereinafter provided; and at the time of filing such articles, they shall also file with the secretary of state [commissioner of insurance], proof of such publication.

Am. 1907, Act 173.

"Commissioner of insurance."-The powers, duties and obligations to which the secretary of state was formerly subject in relation to insurance companies have been transferred to the commissioner of insurance. See section 3 of this compilation.

to contain.

Subscriptions to stock.

Capital stock.

(37) § 7192. SEC. 3. SEC. 3. The persons so associating, shall, after having published such articles and notice, open books of subscription to the capital stock of the corporation, and keep the same open until the whole amount specified in the articles shall be subscribed; or, if said corporation is to transact business on the mutual plan, then they shall open books to receive propositions, and enter into agreements, as hereinafter specified.

(38) § 7193. SEC. 4. The capital of any stock company organized under this act shall not be less than one hundred thousand dollars, in shares of fifty dollars each, which capital stock may be increased by a vote of two-thirds of the stockholders present or represented at any regular meeting called for that purpose to not more than one million dollars; and no such stock company, and no company organized to do business on the mutual plan, shall be authorized to issue policies or assume any risk whatever until they have deposited with the state treasurer, as security for any liability to insured parties, stocks or bonds of the United States or of any state or territory of the United States, or of any city, county, village, township or school district in this state authorized by act of legislature to issue the same, or first mortgage bonds of corporations organized under the laws of the state of Michigan, to the amount in par value, exclusive of interest, of not less than one hundred thousand dollars, which stocks or bonds shall be retained by the state treasurer, and disposed of as hereinafter directed: Provided, however, That such deposits shall be made within one year from the date of the articles of association: Provided further, That the capital of any stock company organized to do a general indemnity and surety bonding business shall be, for the separate purpose of such surety bonding business and additional to the capital required in any other business in which it may be lawfully engaged, not less than two hundred fifty thousand dollars nor more than one million dollars, and its deposit of securities with the state treasurer as herein provided for shall not be less than two hundred thousand dollars, and such capital and such deposits shall be used solely in, and shall be liable only for the debts and liabilities Further pro- of such surety bonding business: Provided further, That

Proviso.

Further proviso.

viso, first mortgage.

personal obligations secured by first mortgage on improved and productive real estate within this state, worth at least double the amount of the lien and bearing interest of not less than five per cent per annum, may be received by the state treasurer instead of the bonds or stock herein before provided for in this section. Such mortgages shall be properly assigned to the state treasurer as provided for in section twenty-one of this act, but any examination by the state treasurer or under his direction to satisfy him respecting the title or value of the property mortgaged shall be at the expense of such company; and no mutual insurance company