Page:United States Statutes at Large Volume 48 Part 1.djvu/1178

 1152 Maxi mum and con - tingent p remiums o f mutual companies. Classification of risks. Mutual company guaranty fund ; power to borrow. Approval of Superin- tendent. Rep ayment. 73d C ONGRESS. SESS. II. CH. 672. JUNE 19, 1934 . SEC. 32. MAX IMUM AND CON TING ENT PREM IUMS OF MUTU AL COM- PANIES .-The maximum premium shall be expressed in the policy of a mutual company and it may be solely a cash premium or may be a cash p remium and an add itiona l cont ingen t prem ium, w hich contingent premium shall not be less than the cash premium, but no mu tual c ompany shal l issu e any insura nce p olicy for a cash premium without an additional contingent premium. until and unless it possesses a surplus of at least $100,000. SEC. 33. CLASSIFICATION OF RISKS BY MUTUAL COMPANIES A mutual company may, in its articles of incorporation or in its bylaws, provide for the classification of its risks and of its members and for the payment of dividends and for the creation of a surplus. SE C. 34. MUTUA L COMPANY GUARANTY FUND ; MUTUAL COMPANY POW ER TO BoRROw .-A mutual company organized under this Act may borrow or assume a liability for the repayment of a sum of money sufficient to defray the reasonable expenses of its organization or to enable it to comply with any requirement of the law or as a guaranty fund upon agreement, which shall first be submitted to and approved by the Superintendent that such loan or advance, with interest at a rate not exceeding 6 per centum. per annum, shall be repaid out of the earnings, or profits of such corporation with the approval of the Superintendent whenever in his judgment the financial condition of the company shall warrant ; but such approval shall not be w ithheld if, a fter such rep ayment shall b e made, the company shall have and be in possession of a surplus equal to 10 Statement to show per centum or more of its gross annual premiums. Any such loan unpaid balance. or advance shall not form a part of the legal liabilities of the com- pany, but until repaid all statements published by such company or filed with the Superintendent shall show the amount thereof then remain ing un paid. Investment of funds, SEC. 35. IN VES TME NT OF FUN DS OF DO MES TIC COMPANIES .-A domestic domestic companies. company shall invest its fund only in- Government bonds. (1) Bonds or other evidences of indebtedness of the United States, or of any State or of the Dominion of Canada or of any Province thereof. Mu nicipal bonds. (2) Bond s or oth er e vide nces of inde bted ness of any coun ty, city , town, village, school district, or other municipal district within the United States or Dominion of Canada which shall be a direct obliga- tion of the county, city, town, village, or district issuing the same. Re al estate mort- (3) Bonds or notes secured by mortgages or deeds of trust of gages, deeds of trust. unencumbered real estate or perpetual leases thereon in the United Insuranee of im- States or Dominion of Canada worth not less than 50 per centum pr ovement s. more than the amount loaned thereon. Where improvements on the land constitute a part of the value on which the loan is made, the improvements shall be insured against fire for the benefit of the mortgagee in an amount not less than the difference between two Unencumbe red thirds of the value of the land and the amount of the loan
 * Provided

neneumbered real , estate, construed. That for the purposes of this section real estate shall not be deemed to be encumbered within the meaning of this section, by reason of the existence of taxes or assessments that are not delinquent, instru- ments creating or reserving mineral, oil, or timber rights, rights of way, joint driveways, sewer rights, rights in walls, nor by reason of building restrictions or other restrictive covenants, nor when such real estate is subject to lease in whole or in part whereby rents or profits are reserved to the owner. Bonds of Federal agencies, (4) Bonds or other evidences of indebtedness of the Farm Loan Banks auth orized und er the Fed eral Farm Loan Act or Acts amendatory thereof or supplementary thereto.