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CHAP. III. to charge against the said depositing companies, respectively, an amount sufficient for such purpose, and as may be just and reasonable. It shall be the duty of the said superintendent to receive Mutilated
policies. mutilated policies and annuity bonds issued to the said companies and deliver in lieu thereof other policies and bonds of like tenor and date, and, in case of lost policies or bonds, to furnish certified copies of the duplicates on file in his office.
$ 7. If at any time the affairs of any life insurance company, when comwhich has deposited securities under this act or the act hereby show cause amended, shall, in the opinion of the superintendent of the insur-why its ance department, appear in such a condition as to render the should not issuing of additional policy and annuity bonds by said company injurious to the public interest, the said superintendent shall report that fact to the attorney-general, whose duty it shall then be to apply to the supreme court for an order requiring said company to show cause why its business should not be closed. The court Proceedshall thereupon proceed to hear the allegations and proofs of the supreme respective parties, and in case it shall appear to the satisfaction of the said court that the assets and funds of said company are not sufficient to justify the further continuance of the business of insuring lives, granting annuities and incurring new obligations, as authorized by its charter, then the said court shall issue an order enjoining and restraining said company from the further prosecution of its business, and shall also appoint a receiver of all the assets and credits of said company. The said receiver, upon fil- Duties of
receiver. ing his bond to the people of the State of New York in an amount and with sureties approved by said court, conditioned for the faithful performance of his duties, shall take possession of all the assets and credits of said company, except the securities deposited in the insurance department under the provision of this act and the act hereby amended, which said securities shall remain in said department to be disposed of as hereinafter provided.
People, ex rel. Stout, v Chapman, 5 Hun, 222 ; Attorney-General v. Continental Life Ins. Co., 62 How. 130 ; id., 27 Hun, 524; id., 27 Hun, 195 , Attorney-General y. Atlantic Mutual Life Ins. Co., 53 How 227 : id., 56 How. 391 ; People v. Atlantic Mutual Life Ins. Co ,74 N. Y. 177 ; People v. Globe Mutual Life Ins. Co., 60 How. 57 ; id: 83; Attorney-General v. Guardian Mutual Life Ins. Co., 77 N. Y. 272 ; Attorney-General v Atlantic Mutual Life Ins. Co., id., 336 ; Affg S. C., 15 Hun, 84; Attorney-General v. North America Life Ins. Co., 80 N. Y. 152; Attorney-General v North America Life Ins. Co., 82 id. 172; id., 26 Hun, 294.
appears, from re
assets are sufficient
Notice to pay pre
8 8. The said receiver shall immediately on entering upon the to appoint duties of his office appoint a competent actuary, approved by the approved superintendent of the insurance department, who shall make a by superin
careful investigation according to the standard fixed by the laws of this State into the condition of said company and report thereon
in writing, under oath, to said court, the said superintendent and Duty of actuary to receiver; and if it shall, by said report, be found that the securiand report. ties deposited by said company in the insurance department, and
the assets and credits including the future premiums that will In case it mature on the outstanding policies and other obligations of said
company, are sufficient under the laws of this State to pay all the
policies, annuities and other obligations of said company as they to pay all may mature by the terms thereof, and the legal costs and expenses costs, etc., incident to the business, and if upon due notice to the superinis conso med tendent said actuary's report shall be confirmed by the court, the to be paid said receiver shall notify all the holders of said policies, annuities to receiver. and other obligations requiring them to pay to him, as such re
ceiver, all premiums or other payments due or to become due to said company, from time to time, on their respective policies, annuities or other obligations
Such notice shall be given by deposmiums, how to be
iting the same in the post-office, at the place where said company has its principal business office, addressed to said parties respectively at their several residences, so far as the same can be ascer
tained by said receiver, and, also, by the publication thereof in the tion of.
State newspaper, published in the city of Albany, once a week for six consecutive weeks, or on the confirmation of the report of said actuary, the court may, in its discretion, direct the receiver to re
insure all registered policies in some solvent company on the exeregistered policies. cution by said receiver of an assignment to said reinsuring company
of all securities on deposit in trust for registered policyholders. In case re. And in case the said report of the said actuary shall show that the assets not said securities, assets, credits and premiums are not sufficient under
the laws of this State to pay all the policies, annuities and other liabilities, court may obligations of said company as they may mature by the terms version of thereof, and the legal costs and expenses of said receivership, and
the said report shall, upon due notice to the superintendent, be confirmed by the court, the court may direct the conversion of the securities held by the superintendent into money for the purpose of distribution, and the superintendent shall thereupon, with the consent and advice of the treasurer of the State, and in such manner as the said receiver, superintendent and treasurer, or a majority
CHAP. III. of them, shall determine, sell and convert said securities into money; and the proceeds of such securities, when required for distribution, and when the court shall make an order for that purpose with suitable provisions for the safety of the moneys, shall be When propaid to the said receiver on his giving his receipt to said superin-paid to tendent, and shall be applied by said receiver, under the direction of the court, as follows: To the payment of the registered policy- How to be holders of said company, in a proportion to the net value of their applied. policies respectively, and to the registered annuities of said company, in proportion to the then present value of their respective annuities, as estimated by the legal standard for valuing life insurance and annuity obligations within this State. The surplus of Surplus. the proceeds of such securities, if any there be after the payments last above mentioned, with all the other assets of the said company, shall be then applied to the payment of all the just debts of said company incurred in the conducting and carrying on its lawful business. [As amended by Laws of 1880, chap. 168, 8 1 ]
Attorney-General v. Guardian Mutual Life Ins. Co., 77 N. Y. 272; At torney-General v. Atlantic Mutual Life Ins. Co., id. 336 ; id., 56 How. 391 , Attorney-General v. North America Life Ins. Co., 80 N.Y. 152 ;
Matter of the Atlantic Mutual Life Ins. Co., 55 How. 77; Matter of North America Life Ins. Co., id. 465; People v. Globe Mutual Life Ins. Co., 60 id. 57; id. 82; Attorney-General v. North America Ins. Co., 58 id. 197; Aff'd, S. C., 18 Hun, 470; People v. Security Life Ins. Co., 23 id. 601; People, ex rel. Stout, v. Chapman, 5 id. 222; Attorney-General v. North America Life Ins. Co., 82 N. Y. 172; id., 26 Hun, 294 ; Attorney-General v. Continental Life Ins. Co., 27 id. 195 ; id. 524; id., 88 N. Y. 77,571 ; People v. Globe Mutual Life Ins. Co., 27 Hun, 539.
Whenever the business of any company shall be continued Excess of under the provisions of the next preceding section, in case the when to be
, receipts for premiums and from all other sources shall at any time be in excess of the sums required to meet the policy and all other obligations of said company, said receiver, whenever such excess shall amount to twenty-five thousand dollars, shall invest said excess in such securities as are authorized to be deposited in the insurance department, and shall deposit said securities with the superintendent of said department in the manner herein provided. If, at any time, the funds in the hands of said receiver are not in case of sufficient to meet such obligations of said company as they mature, portion of he shall notify the said superintendent of the amount required to may be meet the deficiency in respect thereto, and it shall become the duty of the superintendent to sell, with the consent and advice of the
treasurer of the State, and in such manner as the receiver, superintendent and treasurer, or a majority of them, shall determine, such portion of said securities as may be required to meet the said matured obligations, and the proceeds of such sale or sales shall be paid to said receiver, on his giving his receipt therefor to the said superintendent, to be used as required for said matured obli
gations. Annual in- § 10. On the first day of January, in every year, or within thirty vestigation of affairs of days thereafter, an investigation shall be made by a competent company.
actuary, approved by the superintendent of the insurance department, into the affairs of said company, and if, upon such investigation, it shall be found that a surplus of its assets, not less in amount than ten thousand dollars, exists, after making adequate provision for meeting at maturity all the obligations of said company and all the legal expenses of said receivership, and in case of a joint stock company, over and above the amount of its capital, such portion of said surplus as may, under the charter of said company, if a stock company, belong to its stockholders, shall be set aside and invested by said receiver in such securities as are
authorized to be deposited by life insurance companies in the Contingent
insurance department, as a contingent fund, and scrip therefor shall be issued by said receiver to said stockholders, respectively, in proportion to their respective shares, bearing six per cent interest and payable on the final settlement of the affairs of said com
pany, as herein provided. The remainder of such surplus, if the Disposi
company be a stock company, and the whole of said surplus, if it surplus.
be a mutual company, shall be disposed of as follows: One-quarter of such remainder shall be reserved by said receiver and invested by him in such securities as are authorized to be deposited by life insurance companies in the insurance department as a contingent fund, for which scrip shall be issued by said receiver to
all policyholders entitled under their policies to share in the surScrip to plus of said company. Said scrip shall bear interest at the rate of
per cent per annum, payable annually, and shall be redeema
ble on the maturity of the respective policies to which said scrip Surplus. may be related.
The remaining three-quarters of said surplus shall be paid by said receiver within one year from said first day of January to said policyholders, respectively, in lawful money of the United States. But no scrip shall be issued for any fractional part of a dollar, and any scrip so issued may, at any time, be called in and canceled by said receiver, without payment, if necessary to
better secure the remaining obligations of said company; and all scrip so issued shall have printed thereon a clause to this effect. If, on the final accounting of said receiver, after the liquidation of Final acall the obligations of said company, as herein provided, and in counting case of a joint stock company, the return to the respective stockholders of their respective amounts of stock and the scrip issued to them under this act, there shall remain a surplus in the hands of said receiver, it shall be divided by him among said stockholders, if a stock company, proportionately to their respective shares, as provided by the charter of said company, and the balance of said surplus among the last ten policyholders of said company, or their legal representatives, in proportion to the amounts of their said respective policies, and, if not a stock company, among the holders of the last ten policies issued by said company, or their legal representatives, in proportion to the amount of their said respective policies.
§ 11. Any life insurance company which, by virtue of any law, Effect of is making deposit of securities and receiving registered policies, upon busishall, after the passage of this act, make such deposit and receive dessin such policies in accordance with this act, and not otherwise ; and such company shall be authorized to issue policies and annuity bonds only such as shall be registered under this act, except such other as in this section provided, and shall, whenever required by the holders of its unregistered policies and annuity bonds, issued previous to the passage of this act, upon their compliance with the terms and conditions of such company for registered policies and annuity bonds, issue to them, respectively, registered policies and annuity bonds, in exchange for and in value equal to those previously issued to them , provided, that any company availing itself of the provisions of this act may issue unregistered policies and annuity bonds, as heretofore authorized by its charter, but subject to the provisions of section eight of this act, in relation to the distribution of its assets. Attorney-General v. North America Life Ins. Co., 82 N. Y. 172. § 12. The receiver of any company under this act shall have all
Powers of the powers incident to the successful management of its affairs ; and, to that end, authority to purchase policies issued by said company, to make any other compromise in the settlement of its outstanding obligations, and to use the corporate seal of said company, whenever necessary, in the transaction of the business of his receivership.
Attorney-General v. North America Life Ins. Co., 26 How. 294.