INSURANCE DEPARTMENT.

The Insurance Department was originally established under the Act approved April 4, 1873, and, as reorganized by the Act of May 17, 1921, (P. L. 789,) authorizes the appointment of an Insurance Commissioner, prescribes h's powers and duties; provides for the licensing, examination and regulation dissolution of insurance and surety companies and associations and for the licensing and regulation of insurance agents and insurance brokers; provides for the collection of fees, prescribes penalties for the violation of any provisions of the insurance law and repeals all existing acts.

The Insurance Commissioner is appointed by the Governor, with the advice and consent of the Senate, and commissioned to serve for four years from the first Monday of May following his confirmation. He gives bond to the Commonwealth in the sum of $10,000. He is the chief executive officer of the Insurance Department. His duties are to see that the insurance laws are faithfully executed, to license companies and their agents also "public adjusters" of losses and to make collection of all taxes and fees; and he has supervision over the operations of fire insurance rate-making bureaus. The Act of May 25, 1907, requires that all fees and taxes received by him by virtue of his office as Insurance Commissioner or on all collections made by him as such, shall be paid daily into the State Treasury. He makes a report to the Legislature annually showing the receipts and expenses of his Department, his official acts, the condition of companies doing business in this Commonwealth, and such other information as will exhibit the affairs of his DepartHe is a member of the State Workmen's Insurance Board,

ment.

General Requirements and Rules of Practice of the Department of Insurance.

It is required that each insurance company shall file with the Commissioner a certified copy of its charter and an annual statement of its financial condition verified by the officers of the company. Fire, marine, life, casualty and surety companies of other states or countries, must in addition to filing charter, annual stat ment and such other information as the Commissioner may require, file a power of attorney designating the Insurance Commissioner to accept service of legal process. Such stipulations cannot be revoked so long as the company has any liability in this State. Each company must obtain from the Commissioner a certificate of authority or license to do business in this State, and also must procure a certificate of authority or license for each agent it appoints to transact business for it in this State. Certificates must be renewed annually.

An agent is a person, firm or corporation authorized in writing by a company to solicit or countersign or issu polices of insurance in its behalf. No person, firm or corporation is permitted to act as agent in this State of an insurance company until each person and every member of a firm and each officer of a corporation has filed an application with the Insurance Commissioner to be registered as an agent and until there has been issued by the Commissioner a certifi cate showing that the company has complied with the requirements of law and that the person, firm or corporation named has been duly appointed its agent. Companies, their agents, insurance brokers and all other persons are prohibited from making any incomplete comparison of policies for the purpose of inducing any p rson insured in any company to surrender his insurance therein and to take out a policy in another company insuring against similar risks. An insurance agent is made personally liable on all contracts of insurance or suretyship unlawfully made by or through him for or in behalf of any company or association not authorized to do business in this State. It is unlawful for attorneys, officers, clerks, servants, and employes, or persons otherwise hired or engaged, to receive compensation for life insurance placed, sold, or solicited for the benefit of, or on the lives of their clients, servants or employes.

An insurance broker is a person, not an officer or agent of the company interested, who, for compensation, acts or aids in any manner in obtaining insurance for a person other than himself. A person, firm or corporation may obtain a certificate or license from the Insurance Commissioner to act as an insurance broker by making proper application upon blanks furnished by him for that purpose and answering such interrogatories as he may require. The fee for license as an insurance broker is $10.00 in the case of an individual and $25.00 in case the license is issued to a company or copartnership.

Companies, their agents and insurance brokers are prohibited from paying, allowing or giving, and prospective policy-holders are prohibited from receiving as an inducement to insurance any rebate of premiums payabl or any other valuable consideration or inducement whatever, not specified in the policy contract. Only corporations chartered to engage in the insurance and real estate business can be licensed as agents and brokers.

The law for the licensing of life or accident companies doing business upon the assessment plan, was repealed, and such companics or associations cannot her after be authorized to transact business in this State except such as were doing business in this State at the time the law was repealed. It is made the duty of the Insurance Commissioner to examine into the condition of companies of this State 'at least once every three years, and for such purpose he is given

tre access to all books and papers and is authorized to summon and examine any person, under oath, which he or any of his examiners may administer, in order to ascertain all the facts relative to the condition and affairs of the company

The Insurance Commissioner is authorized to proceed against and take possession of any insolvent or delinquent company, order ог association transacting any class of insurance, whenever (a) it is insolvent, or (b) has refused to submit its books, papers, accounts, or affairs to the reasonable inspection of the Insurance Commissioner, or his d puty or examiner; or (c) has neglected or refused to observe an order of the Commissioner to make good within the time prescribed by law any deficiency, whenever its capital, if it be a stock corporation, or its reserve, if it be a mutual corporation, shall have become impaired; or (d) has, by contract of r insurance or otherwise, transferred or attempted to transfer substantially its entire property or business, or entered into any transaction the affect of which is to merge substantially its entire property or business in the property or business of any other corporation, association, society, or order, without having first obtained the written approval of the Insurance Commissioner; or (e) is found, after an examination, to be in such condition that its further transaction of business will be hazardous to its policy-holders, or to its creditors, or to th public; or (f) has wilfully violated its charter or any law of the Commonwealth; or (g) whenever any officer thereof has refused to be examined under oath touching its affairs, the Insurance Commissioner must apply through the Attorney-General to the court of common pleas of Dauphin County or to the court of any county in which the principal office of the corporation is located for an order directing the corporation to show cause why the Insurance Commissioner should not take possession of its property and conduct its business, and for such other r lief as the nature of the case and the interests of its policy-holders or the public may require. Upon dissolution the Insurance Commissioner takes possession and appoints a special deputy to liquidate its affairs.

Joint stock fire and marine and casualty insurance companies will be prohibited from doing any business when their capital is found to be impaired 20 per cent. after providing for all liability and reinsurance reserves, When the capital of a company has been found, upon examination, to be so impaired, the Commissioner gives notice to the company to make good its capital within sixty days, and if this is not done, he must require the company to cease doing new business and may institute proceedings for dissolution. Companies receiving notice of impairment of capital must, within sixty days, call upon stockholders for such amounts as will make its capital equal to the amounts fixed by the company's charter. Stockholders refusing to pay the amount called for, upon notice personally given or by advertisement in such time and manner as the Commissioner may approve, are required to return the original certificate of stock held, and in lieu thereof r ceive new certificates for such number of shares as the stockhold rs may be entitled to in the proportion that the ascertained value of the funds of the company may be found to bear to the original capital. The Commissioner may permit the reduction of capital in proportion to the extent of impairment, but a capital cannot be reduced to an amount less than that required by the law for the organization of the company.

Policies of fire insurance covering property in this State must be approved and countersigned by liensed agents who are residents of Pennsylvania.

In the case of life insurance companies, the Commissioner is required to ascertain the net value of its policies in force on the basis of the American Experience Table of Mortality with interest at not more than 3 per cent. and to requir a reserve to be held sufficient to protect the same. Should the reserves of a life insurance company become impaired, the Commissioner may take possession of the company and appoint a special deputy to conduct its affairs or institute proceedings for its dissolution.

By the Act of May 17, 1921, P. L. 682, provision has been made for the incorporation of companies to make insurances

Purposes for Which Companies May Be Incorporated.

(a) Stock or mutual life insurance companies may be incorporated for any or all of the following purposes:

(1) To insure the lives of persons, and every insurance appertaining thereto; to grant and dispose of annuities; and to insure against personal injury, disablement, or death resulting from traveling or general accidents, and against disablement resulting from sickness, and every insurance appertaining thereto.

(b) Stock fire insurance companies may be incorporated for any or all of the purposes mentioned in paragraphs (1) and (2) of this subdivision; stock marine insurance companies may be incorporated for any or all of the purposes mentioned in paragraphs (2) and (3); and stock fire and marine insurance companies may be incorporated for any or all of the purposes mentioned in paragraphs (1), (2), and (3).

For making insurances

(1) On dwelling houses, stores, and all kinds of buildings, and household furniture and other property,-against loss or damage, including loss of use or occupancy, by fire, lightning, and explosion, whether fire ensue or not, except explosion on risks specified in paragraph (5) of subdivision (c), and by tornadoes, cyclones, windstorms, earthquakes, hail, frost, sleet, snow, or flood; against loss or damage by water to any goods or premises, arising from the. breakage or leakage of sprinklers, pumps, or other apparatus erected for extinguishing fires, and of water pipes; against accidental injury to such sprinklers, pumps, or other apparatus ;. against loss or damage caused by the caving in of the surface of the earth above coal-mines:; and against loss or damage caused by bombardment, invasion, insurrection, riot, civil war, or commotion, and military or usurped power; and to effect reinsurance of any risk provided for in this clause.

(2) Upon vessels, boats, cargoes, goods, merchandise, freight and other property,-againsu loss or damage by all or any risks of lake, river, canal, and inland navigation and transportation; upon automobiles, airplanes, seaplanes, dirigibles, or other aircraft, whether station

ary or in operation or in transit, against loss or damage by fire, explosion, transportation, collision, or by burglary, larceny, or theft; not including, in any case, insurances against loss by reason of bodily injury to the person; and to effect reinsurance of any risk provided for in this clause.

(3) Upon vessels, freight, goods, wares, merchandise, speci", bullion, jewels, profits, commissions, bank notes, bills of exchange, and other evidence of debt, bottomry and respondentia interests, and every insurance appertaining to or connected with marine risks, and risks of transportation and navigation; and to effect reinsurance of any risk provided for in this clause. (c) Stock casualty insurance companies may be incorporated for any or all of the following purposes:

(1) Guaranteeing the fidelity of persons holding places of public or private trust; guaranteeing the performance of contracts, other than insurance policies; guaranteeing the perfor mance of insurance contracts, where surety bonds are accepted from insurance companies by States or municipalities in lieu of actual deposits; executing or guaranteeing bonds and undertakings required or permitted in all actions or proceedings or by law allowed; and indemnifying banks, bankers, brokers, financial or moneyed associations, or financial or moneyed corporations, against the loss of any bills of exchange, notes, drafts, acceptances of drafts, bonds, securities, evidences of debt, deeds, mortgages, documents, currency, and money, except against loss caused by marine risks or risks of transportation or navigation. Also guarante ing any Federal Land Bank against loss by reason of defective title or incumbrances on real property on which any such Federal Land Bank may make a loan secured by a mortgage

(2) To insure against injury, disablement, or death resulting from traveling or general accident, and against disablement resulting from sickness, and every insurance appertaining thereto, including a funeral benefit to an amount not exceeding one hundred dollars.

(3) To insure glass against breakage.

(4) To insure any one against loss or damage resulting from accident to, or injury, fatal or non-fatal, suffered by an employe or other person, for which the person insured is liable; or against loss or damage to property caused by horses, or by any vehicle drawn by animal power, for which loss or damage the person insured is liable.

(5) To insure steam boilers, and pipes, flywheels, engines, and machinery connected therewith or operated thereby, against loss caused by explosion or accident; and against loss of or damage to life, person, or property resulting therefrom; and against loss of use and occupancy caused thereby; and to make inspection of, and issue certificates of inspection upon, such boilers, pip s, flywheels, engines, and machinery.

(6) To insure against loss or burglary or larceny or theft or forgery.

(7)

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

(8) To insure any goods or premises against loss or damage by water, caused by the breakage or leakage of sprinklers, pumps, or other apparatus, erected for extinguishing fires, and of water pipes; and against accidental injury, from causes other than fire or lightning, to such sprinkl rs, pumps, water pipes, or other apparatus; and against damage from use or occupancy of premises by reason of such breakage or leakage.

(9) To insure against loss or damage to elevators or other property, except loss or damage by fire, caused by the maintenance, operation, or use of elevators and machinery; loss or legal liability for damage to property resulting from such operation, maintenance, or use of el vators. (10) To insure horses, cattle, and other live stock.

(11) To insure against loss or damage to automobiles and airplanes, seaplanes, dirigibles, or other aircraft (except loss or damage by fire or while being transported in any conveyance by land or water), including loss by legal liability for damag to property resulting from the maintenance and use of automobiles and airplanes, seaplanes, dirigibles, or other aircraft.

(d) Mutual insurance companies of any kind, other than life insurance companies, may be incorporated for the following purposes:

(1) To make contracts of insurance, or to reinsure and accept reinsurance, for any and all kinds of insurance, other than life insurance, which are not prohibited by statute or at common law from being th subject of insurance, but no such mutual company may transact any kind of insurance other than such as may be transacted by a stock company writing the same kinds of insurance.

(e) Domestic stock and mutual insurance companies, other than life, and, if their charters permit, foreign companies, may transact any form of insurance not included in this section, if such insurance is not contrary to law, and is allied or in harmony with the classes of insurance herein provided. Such additional insurance shall be transacted only on expr ss license by the Insurance Commissioner and upon such terms and conditions as are from time to tiine prescribed by him.

Charters are issued under these Acts by the Secretary of the Commonwealth. Articles of Association are first sent to the Insurance Commissioner for his approval on the nam selected, and are by him transmitted to the Attorney-General for approval, and by him forwarded to the Governor, who, upon receipt of same, causes letters patent to be issued. Provision is made in th various Acts for the amount of capital required for each class of business transacted, and provision is also made for amendments to the charters of such corporations.

All supreme or grand bodies constituting the head of any fraternal society doing business in this State, must fil copies of their constitution and laws, make an annual report and appoint the Insurance Commissioner for service of process.

The Act of May 17, 1921, P. L. 682, provides that fire insurance companies must either file rates with the Commissioner or be members of rating bureaus established in the State for rating purposes, such bureaus being subject to supervision by the Commissioner. Mutual companies are exempt but any mutual company may apply for membership in any bureau and thereafter be subject to the law.

BANKING DEPARTMENT.

This Department was created by the Act approved June 8, 1891, P. L. 217, and its powers were enlarged and extended by the Act approved April 11, 1895, P. L. 4. Both of these Acts were repealed by the Act of May 21, 1919, P. L. 209, entitled "An Act relating to the organization, maintenance, and operation of the Banking Department."

The Commissioner of Banking

is the chief officer, who is appointed by the Governor by and with the advice and consent of the Senate, for a term of four years. He gives bond to the Commonwealth in the sum of $50,000, appoints a first deputy, and may appoint a second and a third deputy. He employs, with the approval of the Governor, such clerks examiners, special agents, and other employes, as he may need to discharge in a proper manner the duties imposed upon him by law, and fixes their compensation, with the approval of the Governor.

Neither the Commissioner nor any of his deputies, clerks, examiners or other employes, shall be interested as officer, director, trustee, manager or stockholder in any corporation subject to the supervision of the Banking Department, nor interested in any way in the business of any person subject to such supervision.

It is the duty of the Commissioner to take care that the laws of the Commonwealth, in relation to persons and institutions under his supervision, shall be faithfully executed. Such supervision extends and applies to the following corporations:-corporations now or hereafter incorporated under the laws of this State or under the laws of any other State and authorized to transact business in this State; namely, all such corpórations having power to receive and receiving money on deposit or for safe keeping otherwise than as bailee, including all banks, banking companies, cooperative banking associations, trust, safe deposit, real estate, mortgage, title insurance, guarantee, surety and indemnity companies, savings institutions, savings banks and provident institutions, mutual savings funds, building' and loan associations and corporations doing a safe deposit business only; national banking associations located in this State, now or hereafter incorporated under the laws of the United States, which shall, in pursuance of Federal law or regulation, be granted a permit to act in any fiduciary capacity; all such individuals, partnerships and unincorporated associations as are or shall be by law made subject to the supervision of said Department and to any individuals or associations of individuals doing the business of building and loan associations or a business in the nature thereof, whether under the guise of a deed of trust or otherwise.

The deputy commissioner next in charge, by reason of the absence or incapacity of the Commissioner, performs the duties of the Commissioner.

The Act approved February 17, 1906, P. L. 45, requires the Commissioner of Banking to act jointly with the Revenue Commissioners in the selection of banks, banking institutions or trust companies in which State moneys shall be deposited.

Foreign Corporations.

It is not lawful for any foreign corporation to receive any deposit or deposits or transact any banking husiness whatsoever, in this Commonwealth, until it shall have first filed in the office of the Commissioner of Banking a certified copy of the statement required by the Act of April 22, 1874, to be filed in the Office of the Secretary of the Commonwealth.

Expenses of the Department.

All of the expenses of the Department, including the cost of examinations, are charged to and paid by the corporations and persons subject to the supervision of the Department in equitable proportions, at such times and in such manner, as the Commissioner shall by general rule or regulation annually prescribe: provided, the charge for the examination of building and loan associations shall not exceed the sum of $5 for each $100,000 or fraction thereof, of assets, with a minimum charge of $10.

Refusal of Corporation or Person to Pay Assessment.

On failure or refusal of any corporation or person to pay, after thirty days written notice, any sum assessed against it or him by the Commissioner, the Commissioner may bring an action at law to recover the same.

Information as to Reports and Financial Standing of Corporations or Persons Prohibited. Neither the Commissioner nor any deputy, examiner, or employe of the Department shall directly or indirectly, wilfully exhibit, publish, divulge, or make known, to any person ог persons, any record, report, statement, letter or other matter, fact, or thing, contained in said Department, or ascertained from any of the same, or from any examination made under the provisions of this act, excepting in such manner as is expressly authorized by Section 12, Act of May 21, 1919; and any violation thereof shall be a misdemeanor, upon conviction whereof the person so offending shall be sentenced to pay a fine not exceeding one thousand dollars and shall be dismissed from his employment in said Department.

Examinations.

It is the duty of the Commissioner, at least twice in each year, to examine or cause to be examined the books, papers, and affairs of each and every State bank, trust company, and private banks, subject to supervision of the D partment, and, at least once in each year, the books, papers and affairs of each and every other corporation and person subject to such supervision. The Commissioner may also, at any time, make such special investigations or examinations as, in his opinion, the exigencies of any case may require. The examiner or examiners shall make a full and detailed report of the condition of the corporation or person under examination, or such special report as may be directed by the Commissioner.

The Commissioner and his deputies and any qualified examiner are authorized and empowered to administer oaths or affirmations, and any wilful false swearing in any inquiry thereunder is perjury, and subject, upon conviction thereof, to the same punishment as is or may be provided by law for the punishment of perjury.

Upon failure of any individual to make answer to any such inquiry, the Attorney General. upon request of the Commissioner, shall make information thereof to the court, whereupon the court, after hearing, shall make such order as occasion requires.

Reports to Commissioner and Publication of Same.

Every corporation and person subject to the supervision of the Department, except building and loan associations doing business exclusively within this State, shall make and render to the Commissioner not less than two nor more than five reports of its or his condition during each year. The number, form and manner of such reports is prescribed by the Commissioner by general rule or regulation. Every such report shall be verified by the oath or affirmation of the president, cashier, treasurer, or other managing officer in the case of a corporation or association, by a member of the firm in the case of a partnership, and by an individual banker in person. It shall be attested as correct by the signatures of at least three of the directors, trustees or other managers of a corporation or association, and by the signatures of all the members of a partnership.

Each report shall be transmitted to the Commissioner within five days, or such further time as he may allow after the receipt of a request therefor from him.

Abstract summaries of two of said reports, designated by the Commissioner, in each year, except the reports of building and loan associations doing business exclusively within this State, are published in a newspaper and proof of such publication, verified by affidavit, is furnished to the Commissioner.

Building and loan associations doing business exclusively within this State, render one report during each year. No abstract summaries of such reports need be published.

The Commissioner may also call for special reports, whenever, in his judgment, the same may be necessary to a complete knowledge of the condition of any corporation or person.

Any corporation or person failing to make such reports, to publish and furnish proofs of publication, as indicated, shall be subject, at the discretion of the Commissioner, to a penalty of not more than $100 for each day after the time, or any extension thereof fixed for filing such report, making such publication and furnishing such proof. Blauk forms of reports, schedules and proof of publication are furnished by the Commissioner.

Report of Commissioner to the Governor.

The Commissioner makes an annual report to the Governor setting forth:

1.

A summary of the state and condition of every corporation and person from whom reports have been received during the proceding year, with such other information in relation to said corporations and persons as in his judgment may be useful.

2. A statement of the corporations and persons under the supervision of the Department, whose business has been closed or taken in possession by the Commissioner during the proceding year, with such information relating thereto as he may deem useful.

8. Suggestions of amendments to the laws relating to corporations and persons under the supervision of the Department by which the condition of such corporations and persons may be improved.

4.

The names and compensation of the deputies, examiners, clerks and other employes of the Department during the preceding year, the whole amount of the receipts and expenditures of the Department during such year, and the method and basis of assessing such expenditures adopted by the Commissioner under the provisions of this Act.