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are hereby authorized to exchange reciprocal or inter-insurance contracts with each other or with individuals, partnerships and corporations of other states and countries providing indemnity among themselves from any loss which may be insured against under other provisions of the laws excepting life insurance.
Sec. 2. Agent may execute.-Such contracts may be executed by an attorney, agent or other representative herein designated attorney, duly authorized and acting for such subscribers. The office or offices of such attorney may be maintained at such place or places as may be designated by the subscribers in the power of attorney.
Sec. 3. Declaration-filings, etc.—Such subscribers so contracting among themselves, shall, through their attorney, file with the State Insurance Board a declaration verified by the oath of such attorney, or where such attorney is a corporation, by the oath of the chief officer thereof, setting forth:
(a) The name or title adopted by such subscribers proposing to exchange such indemnity contracts. Such name or title shall not be so similar to any other name or title previously adopted by a similar organization or by any insurance corporation or association as in the opinion of the State Insurance Board is likely to result in confusion or deception.
(b) The kind or kinds of insurance to be effected or exchanged.
(c) A copy of the form of policy contract or agreement under or by which such insurance is to be effected or exchanged.
(d) A copy of the form of power of attorney or other authority of such attorney under which such insurance is to be effected or exchanged.
(e) The location of the office or offices from which such contracts or agreements are to be issued.
(f) That applications have been made for indemnity upon at least seventy-five separate risks aggregating not less than one and one-half million dollars as represented by executed contracts or bona fide applications to become effective concurrently; or, in the case of Employers Liability or Compensation Insurance, at least seventy-five separate risks covering a total pay roll of not less than one and one-half million dollars.
(g) That there is on deposit with such attorney and available for the payment of losses, a sum of not less than fifty thousand dollars, except that in case of employers liability and compensation insurance such sum shall be not less than one hundred thousand dollars.
Sec. 4. Bond-process.—Concurrently with the filing of the declaration provided for by the terms of section 3 hereof, the attorney shall file with the state insurance board an instrument in writing executed by him for said subscribers, conditioned that upon the issuance of certificate of authority provided for in Section 10 hereof, action may be brought in the county in which the property insured thereunder is situated and service of process may be had upon the secretary of the state insurance board in all suits in this state arising out of such policies, contracts or agreements, which service shall be valid and binding upon all subscribers exchanging at any time reciprocal or inter-insurance contracts through such attorney. Three copies of such process shall be served and the state insurance board shall file one copy, forward one copy to said attorney and return one copy with his admission of service. Such instrument shall further provide that in all suits arising in this state on account of contracts issued by such attorney for the account of said subscribers, such action may be brought against such attorney as attorney in fact for all subscribers at such reciprocal or interinsurance exchange, and the judgment in the action shall be a judgment against and binding upon each of the subscribers, as their respective interests may appear.
Sec. 5. Amount of insurance limited.—There shall be filed with the state insurance board by such attorney, a statement under oath of such attorney showing the maximum amount of indemnity upon any single risk and such attorney shall, whenever and as often as the same shall be required, file with the state insurance board a statement verified by his oath giving such information.
Sec. 6. Reserve. There shall at all times be maintained with such attorney as a reserve, a sum in cash or convertible securities equal to fifty per cent of the aggregate net annual deposits collected and credited to the accounts of the subscribers on policies having one year or less to run and pro rata on those for longer periods plus claim and loss reserves as reCh. 189)
quired for the same kind of insurance in other cases; or in lieu thereof at the option of the attorney, one hundred per centum of the aggregate net unearned deposits collected and credited to the accounts of participating subscribers plus such claim and loss reserves.
Net annual deposits shall be construed to mean the advance payments of subscribers after deducting therefrom the amounts specifically provided in the subscribers agreements for expenses. Said sum in reserve shall at no time be less than Fifty Thousand Dollars and in case of employers liability and compensation insurance not less than $100,000.00, and if at any time such reserve computed as provided herein and so collected and credited shall not equal the amount hereby prescribed, then the subscribers or their attorney for them, shall make up any deficiency. In calculating such reserves, the amounts provided for in subdivision “g” Section 3 shall be included. Provided also that in case of workmens compensation insurance the State Insurance Board may require of any such attorney a bond or deposit of money with a bank or trust company of this state for the purpose of securing deferred payments or installments for compensation benefits provided for by the workmens compensation act of Nebraska.
Sec. 7. Annual statement of business. Such attorney shall within the time limited for filing the annual statement by insurance companies transacting the same kind of business, make a report to the state insurance board for each calendar year showing the financial condition of affairs at the office where such contracts were issued and shall furnish such additional information and reports as may be required : Provided, however, that the attorney shall not be required to file the names and addresses of any subscribers. The business affairs, records and assets of such organization shall be subject to examination by the state insurance board at the expense of the organization examined.
Sec. 8. Who may execute reciprocal policies.—Any corporation now or hereafter organized under the laws of this state, shall, in addition to the rights, powers and franchises specified in its articles of incorporation have full power and authority to exchange insurance contracts of the kind and character herein mentioned. The right to exchange such contracts is hereby declared to be incidental to the purposes for which such
corporations are organized and as much granted as the rights and powers expressly conferred.
Sec. 9. Violations—penalty.-Any attorney who shall exchange any contracts of indemnity of the kind and character specified in this act or any attorney, agent or any person representing him, who shall solicit or negotiate any application for same without the attorney first complying with the foregoing provisions shall be deemed guilty of a misdemeanor and on conviction thereof shall be subject to a fine of not less than one hundred dollars nor more than one thousand dollars. For the purposes of organization and upon issuance of permit by the state insurance board, powers of attorney and applications may be solicited without license, but no attorney, agent or other person shall make any contracts of indemnity until he shall comply with the provisions of this act.
Sec. 10. Certificate of authority.--Each attorney by or through whom are issued any policies of or contracts for indemnity of the character referred to in this act, may procure from the state insurance board annually a certificate of authority stating that all the requirements of this act have been complied with and upon such compliance and the payment of the fees and taxes required by this act, the state insurance board shall issue such certificate.
Sec. 11. Penalties. In addition to the foregoing penalties and where not otherwise provided, the penalty for failure or refusal to comply with any of the terms and provisions of this Act upon the part of the attorney shall be the refusal, suspension or revocation of Certificate of Authority or license by the State Insurance Board and publication of his act, after due notice and opportunity for hearing has been given such attorney so that he may appear and show cause why such action should not be taken.
Sec. 12. License fee.-Such attorney in lieu of all taxes in this state shall pay to the state the sum of $20.00 as an annual license fee, and a tax of two (2) per cent of the gross premiums or deposits received from Nebraska subscribers during the calendar year less all amounts returned to the subscribers or credited to their accounts.
Sec. 13. General insurance laws not applicable.-The mak
ing of contracts as herein before provided for and such other matters as are properly incident thereto shall not be subject, unless specifically mentioned, to the laws of this state relating to insurance concerns except as provided in this act.
Approved, April 27, 1917.
(House Roll No. 768.)
[Introduced by Mr. Stearns.]
AN ACT to provide for change in time of payment and rate of payment
of valid outstanding bonds of irrigation districts and of the rate of interest of such bonds; to provide for the refunding of any such bonds by issue and sale or issue and exchange therefor of bonds of such district in the amount of principal and the interest to accrue thereon during the bond term and for payment thereof in installments; to repeal all acts or parts of acts in conflict herewith and to declare an emergency.
Be It Enacted by the People of the State of Nebraska:
Section 1. Irrigation bonds-extension of maturity.-Any irrigation district in this State having valid and unpaid bonds outstanding may by contract with the owners or holders thereof, or by other lawful means, provide for the extension of the time of payment thereof for any period not exceeding forty years and may provide for the payment annually or semi-annually of any rate of interest not exceeding six per cent. per annum, and for the payment of both principal and interest as one sum in any desired percentage per annum. Such district may also provide for the payment or refunding of such bonds by the issue and sale or the issue and exchange therefor of bonds maturing in any period not exceeding forty years, in an amount equal to the principal debt and the total interest to accrue thereon during the term of the bond at any agreed rate not exceeding six per cent. per annum, and may make said bonds payable in installments equal to two per cent. of the principal and interest each year for the first four years; four per cent. of the principal and interest each year for the next two years; and six per cent. of the principal and interest each year for the