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§ 3648. Dividends to be payable from surplus profits

only-Reservations therefrom, etc.No fire insurance company organized under any law of this state shall make any dividend except from the surplus profits arising from its business; and in estimating such profits there shall be reserved therefrom:

First. A sum equal to fifty per cent of the whole amount of premiums on unexpired risks and policies, which is hereby declared to be unearned premiums.

Second. All sums due the company on bonds and mortgages, bonds, stocks, and book accounts, of which no part of the principal nor the interest thereon has been paid during the preceding year, and on which an action has not been commenced, or which, after judgment obtained thereon, has remained more than two years unsatisfied, and on which interest has not been paid; and

Third. All interest due or accrued, and remaining unpaid, for which the company does not hold securities as hereinbefore provided. Any dividend made contrary to the provisions of this section shall subject the company which makes the same to a forfeiture of its charter, and each stockholder who receives it to a liability to the creditors of the company to the extent of the dividend received, besides the other penalties and punishments prescribed by law; but this section shall not prevent the declaration of scrip dividends by participating or mutual companies, yet no such scrip dividend shall be declared to an amount in excess of or be paid except from profits, after reserving all sums above provided, including the whole amount of premiums on unexpired risks; and the word “year,” wherever used in this section shall be construed to mean the calendar year, and the “profits” of a mutual insurance company are that portion of its cash funds not required for payment of losses and expenses nor set apart for any purpose required by law. Any such company may in its by-laws provide for the accumulation of a permanent fund, by reserving a portion of the net profits, to be invested and be a reserve for the security of the insured. When the business of such company is confined to the State of Ohio, such reservation shall not exceed twenty-five per cent of said net profits; and when the sum so accumulated amounts to two per cent of the sum insured by all policies in force, the whole of the net profits thereafter shall be divided among the insured at the expiration of their policies. But any such company doing business outside the State of Ohio may set aside and thereafter maintain a permanent fund equal to the minimum amount of net cash assets or capital required to do business in any other state or states, according to the insurance laws thereof. The permanent fund so accumulated shall be used for the payment of losses and expenses, whenever the cash funds of the company in excess of an amount equal to its liabilities are exhausted; and whenever the said fund is drawn upon, the reservation of profits as aforesaid shall be renewed or continued until the limits of accumulation as herein provided is reached, but within a reasonable time after the determination of any policy the owner thereof shall be entitled to receive, and shall be paid his pro rata share of all net profits not included in the aforesaid permanent fund, and a scrip dividend for his contribution to said fund. 94 O. L. 121.

§ 3649. What real estate company may hold

No company, organized under this chapter, shall purchase, hold, or convey real estate, except for the purposes and in the manner herein set forth, to wit:

1. Such as is requisite for its convenient accommodation in the transaction of its business; or,

2. Such as is mortgaged to it in good faith, by way of security for loans previously contracted, or for money due; or,

3. Such as is conveyed to it in satisfaction of debts previously contracted in its legitimate business, or for money due; or,

4. Such as is purchased at sales upon judgment, decree, or mortgages obtained or made for such debts.

No such company shall purchase, hold, or convey real estate in any other case, or for any other purpose; and all such real estate as may be acquired as aforesaid, and which is not necessary for the accommodation of the company in the transaction of its business, shall be sold and disposed of within two years after title thereto is acquired, unless the company procure a certificate from the superintendent of insurance that its interests will suffer materially by a forced sale thereof, when the sale may be postponed for such period as the superintendent shall direct in such certificate. 69 v. 140, S 15.

$3650. Liability of members of mutual companies to

assessments--Assessments, how made — For

what purposes a debt may be createdEvery person who effects insurance in a mutual 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 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 to have impaired its capital, and when such impairment shall exceed twenty-five per cent of the reinsurance reserve required to be maintained, it shall make an assessment for the amount needed to pay such losses and expenses upon its members liable to assessment therefor in proportion to their several liabilities, and to make good the reinsurance reserve; and no such company shall borrow money or create a debt, unless for the purpose of necessary office buildings, 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. 85 O. L. 273.

See notes to %% 3634 and 3686.

Subjecting the assured to examination after non.payment of assessment for thirty days does not waive the right to a forfeiture. Phønix Ins. Co. v. Hoeffiler, 23 B. 108, reversing 2 C. C. 131. Although no statute authorizes cancellation of policy and note on ground that risk is undesirable, if policy does not reserve such right, if it has been done in good faith, the insured cannot be assessed upon the note by a receiver. Mansfield v. Franklin Furniture Co., 12 C. C. 222, affirmed in 35 B. 180. As to whether members whose notes have been canceled and surrendered can be assessed by a receiver under order of court, see Wilhelm v. Parker, Rec., 17 C. C. 234.

Loss hy fire and payment hy company does not extinguish the contingent liability of the insured. Mansfield et al. v. Houston, 35 B. 182.

Member assessed to pay his share of indebtedness of insolvent corporation cannot plead that company was not properly organized or had not complied with the law, nor set up fraud as a defense, after the rights of innocent creditors have intervened. Mansfield v. Woods et al., 29 B. III (C. P.); Ins. Co. v. Horner, 17 O. 407.

§ 3651. Enforcement of assessments -Partial payment of

lossIf a member neglect or refuse, for the space of thirty days after the publicatiou of such notice, and after demand for payment, to pay the sum assessed upon him (as his?] proportion of any loss as aforesaid, the directors 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 for which the assessment is made; and if the whole amount of such liability be insufficient to pay the loss occasioned by any fire or fires, the sufferers insured by the company shall receive, toward making good their respective losses, a proportional share of the whole amount of such liability, according to the sums by them respectively insured; but no member shall ever be required to pay for any loss occasioned by fire, or inland navigation, more than the whole amount of such liability. 85 O. L. 273.

Where policy in mutual company provided it should be void if assessment should remain unpaid thirty days, and also that assured should submit to examination under oath-Held, that in case of fire during said thirty days, if the company with knowledge of the facts subjects assured to such examination, the right to a forfeiture is not waived. Ins. Co. v. Hoeffler, 23 B. 108, reversing 2 C. C. 131.

§ 3652. How assessments and notice proved

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 non-payment of which any such action is commenced, has been duly levied, and notice thereof given. 85 0.

L. 273.

See note to section 3634.

$3653. What kind of policies company to issue

Every mutual company shall embody the word “mutual” in its title, which shall appear upon the first page of every policy and renewal receipt, and every stock company shall express, upon the face of every policy and renewal receipt, in some suitable manner, that such policy or receipt is a stock policy or receipt; but neither class of companies, doing business in this state, shall issue any policy other than that appropriate to its class, except that any mutual company now doing business in this state, having net assets not less than two hundred thousand dollars invested, as provided in section thirty-six hundred and thirty-seven, may issue policies either upon the mutual or stock plan, and may continue to do such kind of business so long as its assets continue so invested, and may expose itself to loss on any risk or hazard, either by one or more policies, to an amount not exceeding five per cent thereof. 69 v. 140, § 17.

See Mansfield v. Cin. Ice Co., 28 B. 113, and Ohio Farmer's Ins. Co. v. Malony, 33 B. 147.

$3654. Annual statements of companies

The president or vice-president and secretary of such [each] insurance company organized under any law of this or any other state, and doing business in this state, shall annually, on the first day of January, or within thirty days thereafter, prepare, under oath, and deposit in the office of the superintendent of insurance a statement of the condition of such company on the thirty-first day of December then next preceding, exhibiting the following facts and items, and in the following form, namely:

First. The amount or the capital stock of the company, specifying the amount paid and unpaid.

Second. The property or assets held by the company, specifying:

1. The value of the real estate owned by such company, where it is situated, and the value of the buildings thereon.

2. The amount of cash on hand and deposited in banks to the credit of the company, specifying in what banks the same is deposited.

3. The amount of cash in the hands of agents and in course of transmission.

4. The amount of loans secured by bonds and mortgages,

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