REVISED STATUTES, 1989
1 This Act may be cited as the Mutual Insurance Companies Act. R.S., c. 306, s. 1.
Formation of mutual fire insurance company
2 Any three freeholders of any municipality, who deem it expedient to establish a mutual fire insurance company, may open and keep a subscription book in which the owners of property, movable or immovable, within the Province, may sign their names and enter the sums for which they shall respectively bind themselves to effect insurance with the said company. R.S., c. 306, s. 2.
3 Whenever fifty or more persons, being owners of movable or immovable property in the Province, have signed their names in said subscription book, and bound themselves to effect insurances in the said company which in the aggregate amount to one hundred thousand dollars at least, a meeting shall be called, as hereinafter provided. R.S., c. 306, s. 3.
First meeting of company
4 (1) As soon as convenient after the subscription book has been completed in the aforesaid manner, any ten of the subscribers thereto may call the first meeting of the company, at such time and place within the municipality as they shall determine.
Notice of meeting
(2) Such meeting shall be called by sending a printed notice by mail, addressed to each subscriber at the subcribers [subscribers] post office address, at least ten days before the day of such meeting, and by advertisement in one or more papers published in the county in which the municipality is situate, the notice and advertisement to contain the object of the meeting and the time and place at which it shall be held. R.S., c. 306, s. 4.
Business conducted at first meeting
5 (1) At such meeting, the name and style of the company, including the appellations "fire" and "mutual", shall be adopted, a secretary ad interim appointed, a board of not more than twenty nor less than five directors shall be elected and the place named in the municipality at which the head office of such company shall be located, and thereupon copies of the resolutions adopting such name or style and the place of the head office of the company and of such subscription book and the names of the directors elected, and all such documents being certified as correct under the hands of the chairman and secretary, shall be filed in the office of the registrar of deeds of the registration district within which the municipality is situate.
(2) Upon the filing of said documents with such certificate, the several subscribers above-named, and all other persons thereafter effecting insurance therein, shall become members of the said company and shall be a body corporate and politic by and under such name so adopted, and which shall not thereafter be changed.
First meeting of board
(3) As soon after the aforesaid meeting as convenient, the secretary ad interim shall call a meeting of the board of directors for the election of a president and vice-president from amongst themselves, for the appointment of a secretary, treasurer or manager and the transaction of such other business as may be brought before them. R.S., c. 306, s. 5.
6 The company may admit, as a member thereof, the owner of any property, movable or immovable, and may insure the same whether the owner thereof is or is not a freeholder, and every person admitted a member of the company by such insurance shall be entitled to the like rights and be subjected to the like liabilities as other members of the company. R.S., c. 306, s. 6.
Election of directors
7 A meeting of the members for the election of directors shall be held in every year, within three months after the thirty-first day of December in each year, at such time and place as may be prescribed by the by-laws of the company. R.S., c. 306, s. 7.
8 At annual meetings, in addition to the election of directors, a report of the transactions of the company for the year which has ended on the previous thirty-first day of December shall be presented and read together with a full and unreserved statement of its affairs, exhibiting receipts and expenditures, assets and liabilities. R.S., c. 306, s. 8.
Notice of meeting
9 Notice of any annual or special meetings of the members of the company shall be published in one or more newspapers for at least two weeks previous to the day of such meeting and the board of directors may convene at any time a general meeting of the company upon any urgent occasion, giving notice therefor as herein provided. R.S., c. 306, s. 9.
10 Each member of the company shall be entitled, at all meetings of the company, to the number of votes proportioned to the amount by him insured, according to the following rates, that is to say:
(a) for any sum under fifteen hundred dollars, one vote;
(b) from fifteen hundred to three thousand dollars, two votes;
(c) from three thousand dollars to six thousand dollars, three votes;
(d) one vote for every additional three thousand dollars,
but no member shall be entitled to vote while in arrears for any assessment or premium due by him to the company. R.S., c. 306, s. 10.
Election of directors
11 The election of directors shall be held and made by such members of the company as shall attend for that purpose in their own proper persons. R.S., c. 306, s. 11.
Election by ballot
12 The election of directors shall be by ballot. R.S., c. 306, s. 12.
13 (1) If at any such election two or more members have an equal number of votes, in such manner that a less number of persons than the whole number to be elected appear to have been chosen directors by a majority of votes, then the members of the company shall proceed to elect by ballot until it is determined which of the persons so having an equal number of votes shall be the director or directors, so as to complete the whole number of directors to be elected.
Election of officers
(2) The directors shall at their first meeting after any such election proceed to elect by ballot among themselves a president and vice-president, and at such election the secretary shall preside. R.S., c. 306, s. 13.
Qualification of director
14 The directors shall be members of the company, and insurers therein, for the time they hold office, to the amount of at least eight hundred dollars. R.S., c. 306, s. 14.
15 The manager of any mutual insurance company may be a director of such company and may be paid an annual salary, but only under a by-law of the company. R.S., c. 306, s. 15.
Ineligibility of employee or agent
16 No agent or paid officer, or person in the employment of any such company, other than the manager, shall be eligible to be elected a director or shall be allowed to interfere in the election of directors for such company. R.S., c. 306, s. 16.
Quorum and equality of votes
17 Three directors shall constitute a quorum for the transaction of business, and in case of an equality of votes at any meeting of the board, the question shall pass in the negative. R.S., c. 306, s. 17.
Record of dissent
18 Any director disagreeing with the majority of the board at any meeting may have his dissent recorded with his reasons therefor. R.S., c. 306, s. 18.
19 If any vacancy happens among the directors during the term for which they may have been elected, by death, resignation, ceasing to have the necessary qualification under Section 14, insolvency or by being absent without previous leave of the board from the board for three regular meetings in succession, which shall ipso facto create such vacancy, such vacancy shall be filled up for the remainder of the term by any person duly qualified, to be nominated by a majority of the remaining directors, and as soon as may be after the vacancy occurs. R.S., c. 306, s. 19.
Failure to hold election
20 In case an election of directors is not made on the day on which it ought to have been made, the company shall not for that cause be dissolved, but the election may be held on any subsequent day at a meeting to be called by the directors or as otherwise provided by the by-laws of the company, and in such case the directors shall continue to hold office till their successors are elected. R.S., c. 306, s. 20.
THE BOARD OF DIRECTORS
Powers of board of directors
21 The board may
(a) from time to time appoint a manager, secretary, treasurer and such other officers, agents or assistants as to them may seem necessary, prescribe their duties, fix their compensations or allowances, take such security from them as may be required by this Act for the faithful performance of their respective duties and remove them and appoint others instead;
(b) adopt a tariff of rates for insurance and vary the same from time to time and determine the sum to be insured on any property;
(c) hold their meetings monthly, or oftener if necessary, for transacting the business of the company,
and they shall keep a record of their proceedings. R.S., c. 306, s. 21.
22 (1) The board of directors may from time to time make and prescribe such by-laws as to them may appear needful and proper respecting
(a) the funds and property of the company;
(b) the duty of the officers, agents and assistants thereof;
(c) the effectual carrying out of the objects contemplated by this Act;
(d) the holding of the annual meeting;
(e) all such other matters as appertain to the business of the company and are not contrary to law,
and may from time to time alter and amend the by-laws, except in cases with regard to which it is provided that any such by-law shall not be repealed, or where such repeal would affect the rights of others than the members of the company, in any of which cases such by-law shall not be repealed.
Procedure respecting by-law
(2) Every by-law of the board shall be duly entered on the minutes and when confirmed at any subsequent meeting of the members shall be held to be and have the same force and effect as a by-law of the company. R.S., c. 306, s. 22.
23 The board of directors shall superintend and have the management of the funds and property of the company, and of all matters relating thereto and not otherwise provided for. R.S., c. 306, s. 23.
Reinsurance of risks
24 The board of directors may make arrangements with any mutual or other insurance company for the reinsurance of risks, on such conditions with respect to the payment of premiums thereon as may be agreed between them. R.S., c. 306, s. 24.
Cancellation of policy
25 (1) The company shall be at liberty to cancel any policy by
(a) giving to the insured notice to the effect that they have cancelled or will cancel the same, by registered letter, signed by the secretary of the company, addressed and sent by mail postage paid to the post office address of the insured as given by the insured in the application for insurance, or subsequent writing to the company; or
(b) giving to the insured personally, notice in writing, signed by the secretary or an officer or agent of the company, to such effect.
Rights and liability
(2) The party insured shall nevertheless be liable to pay his proportion of the losses and expenses of the company to the time of cancelling the policy, and on payment of his porportion [proportion] of all assessments then payable and to become payable in respect of losses and expenses sustained up to such period, shall be entitled to a return of his premium note or undertaking, and such portion of the premium paid by him as has not been absorbed by the losses and expenses of the company up to such period.
(3) A condition to this effect shall be endorsed on the policy. R.S., c. 306, s. 25.
Bonus or dividend
26 (1) When and so long as the surplus of the company exceeds one and one-half per cent of the total amount of insurance in force at the end of the preceding calendar year, the board of directors may declare a bonus or a dividend to be applied in the reduction of the cash premium, payable on the renewal of policies expiring during the twelve months ending December thirty-first next succeeding the declaration.
(2) In this Section, "surplus" means the excess of assets over liabilities including the reserve of unearned premiums calculated pro rata for the unexpired term of the policies of the company in force. R.S., c. 306, s. 26.
Withdrawal of member
27 Any member of such company may, with the consent of the directors, withdraw therefrom upon such terms as the directors may require. R.S., c. 306, s. 27.
28 Any company may from time to time invest the capital and funds of the company in any securities in which a trust company is authorized to invest trust funds by Section 76 of the Trustee Act except securities described in clause (b) of that Section. R.S., c. 306, s. 28.
Debenture or promissory note
29 The board of directors of any such company may issue debentures or promissory notes in favour of any person, firm, building society, banking or other company, for the loan of money, and may borrow money therefrom on such debentures or promissory notes for any term not exceeding twelve months, and on such conditions as they may think proper, and may renew the same from time to time for any such term, the whole of the assets, including premium notes of the company, being held liable to pay the same at maturity, but no such debenture or promissory note shall be for a sum less than one hundred dollars, and provided always all the debentures and promissory notes at any one time outstanding shall not exceed one fourth of the amount remaining unpaid upon the same premium notes. R.S., c. 306, s. 29.
Term of policy
30 The company may issue policies of insurance for any time not exceeding five years. R.S., c. 306, s. 30.
Conditions for issue of policy
31 No policy of insurance shall be issued by any such company until application has been made for insurance to the extent of one hundred thousand dollars at least, and approved of by the board. R.S., c. 306, s. 31.
Renewal of policy
32 Any policy issued or that may be issued on or after the thirtieth day of April, 1930, may be renewed at the discretion of the board of directors of the insuring company by the renewal receipt instead of policy upon the insured giving his premium note and making the required cash payment. R.S., c. 306, s. 32.
Unreasonable condition void
33 Every condition endorsed upon or affecting any policy of insurance which is held by the court or judge before whom any question relating thereto is tried not to be just and reasonable, shall be absolutely null and void. R.S., c. 306, s. 33.
34 (1) In this Section, "surplus" has the same meaning as in Section 26.
(2) The company may insure dwelling houses, stores, shops and other buildings, household furniture, merchandise, machinery, livestock, farm produce and other commodities, against damage or loss by fire or lightning, whether the same happens by accident or any other means, except that of design on the part of the insured, or by the invasion of an enemy or by insurrection.
(3) The company may also insure school buildings, and the trustees of schools are authorized and empowered to pay premiums, and make and sign premium notes or undertakings for such insurance.
Additional insurable peril
(4) A company which has a surplus of three hundred thousand dollars or more may insure any property, which is insured under a fire insurance policy of the company, against the following additional perils, namely, damages resulting from: civil commotion, earthquake, falling aircraft, hail, impact by vehicles, limited or inherent explosion, sprinkler leakage, water damage, weather and windstorm, as those classes of insurance are defined in the Regulations from time to time made under the Canadian and British Insurance Companies Act (Canada).
(5) Notwithstanding subsection (4), a company that has a surplus of less than three hundred thousand dollars may insure property that is insured under a fire insurance policy of the company against the perils enumerated in subsection (4) where
(a) the fire insurance policy under which the additional insurance is included is in an amount of not less than four thousand dollars;
(b) the insurance against the additional perils is not more than fifteen hundred dollars;
(c) the company has made and maintains in effect a reinsurance arrangement with respect to the insurance against the additional perils that is approved by the Minister of Consumer Affairs; and
(d) the insurance against the additional perils is granted on terms and conditions that are prescribed or approved by the Minister of Consumer Affairs. R.S., c. 306, s. 34.
35 The minimum rate to be charged or taken by any company for insuring first-class isolated non-hazardous property, shall be not less than twenty cents per centum per annum, and the minimum rate of insurance upon other property shall be increased relatively with the increased risk, according to the nature of such property. R.S., c. 306, s. 35.
Validity of policy
36 All policies of insurance issued by the board of directors, sealed with the seal of the company, signed by the president or vice-president and countersigned by the secretary or acting secretary, shall be binding on the company, provided that
(a) any fraudulent misrepresentation contained in the application therefor;
(b) any false statement respecting the title or ownership of the applicant or his circumstances;
(c) the concealment of any encumbrance on the insured property, or on the land on which it may be situate; or
(d) the failure to notify the company of any change in the title or ownership of the insured property and to obtain the written consent of the company thereto,
shall render the policy void, and no claim for loss shall be recoverable thereunder unless the board of directors in their discretion shall see fit to waive the defect. R.S., c. 306, s. 36.
37 If an insurance subsists by the act or with the knowledge of the insured in the company and in any other office at the same time, the insurance in the company shall be void unless the double insurance subsists with the consent of the directors, signified by endorsement on the policy signed by the secretary or other officer authorized to do so or otherwise acknowledged in writing. R.S., c. 306, s. 37.
38 Whenever notification in writing has been received by a company from an applicant for insurance, or from a person already insured, of his intention to insure or of his having insured an additional sum on the same property in some other company, the additional insurance shall be deemed to be assented to unless the company so notified shall, within two weeks after the receipt of such notice, signify to the party in writing their dissent, and in case of dissent, the liability of the insured on the premium note or undertaking shall cease from the date of such dissent on account of any loss that may occur to such company thereafter, and the policy of the assured shall be void at the option of the directors of the company. R.S., c. 306, s. 38.
Effect of alienation of property
39 (1) In case any property, real or personal, is alienated by sale, insolvency or otherwise, the policy shall be void and shall be surrendered to the directors of the company to be cancelled, and thereupon the assured shall be entitled to receive his deposit note or notes upon payment of his proportion of all losses and expenses which had accrued prior to such surrender, but the assignee may have the policy transferred to him, and upon application to the directors such assignee, on giving proper security to their satisfaction for such portion of the deposit or premium note or undertaking as remains unpaid, and with their consent within thirty days next after such alienation, may have the policy ratified and confirmed to him, and by such ratification and confirmation said assignee shall be entitled to all the rights and privileges, and be subject to all the liabilities and conditions, to which the original party insured was entitled and subject.
(2) Notwithstanding subsection (1), in cases where the assignee is a mortgagee, the directors may permit the policy to remain in force and to be transferred to him by way of additional security, without requiring any premium note or undertaking from such assignee, or his becoming in any manner personally liable for premiums or otherwise, but in such cases the premium note or undertaking and liability of the mortgagor in respect thereof shall continue in no wise affected. R.S., c. 306, s. 39.
Alteration of insured property
40 If any alteration is made in any house or building insured by the proprietor thereof, or if the risk on any house or building or other property insured is increased by any means whatever, after the insurance has been made thereon with the company, whereby it is exposed to greater risk or hazard from fire than it was when insurance was effected, the insurance thereon shall be void unless previous notice thereof is given in writing, and the requisite additional premium note or deposit after such alteration is given or paid to the directors, but no alterations or repairs in buildings not increasing such risk or hazard shall affect the insurance previously made thereon. R.S., c. 306, s. 40.
Premium note or undertaking
41 The company may accept premium notes or the undertaking of the insured for insurances and may issue policies thereon, said notes or undertakings to be assessed for the losses and expenses of the company in the manner hereinafter provided. R.S., c. 306, s. 41.
Demand for payment
42 The directors may demand a part or first payment of the premium note or undertaking at the time that application for insurance is made, and such first payment may be in cash or by promissory note and may be credited upon said premium note or undertaking or against future assessments. R.S., c. 306, s. 42.
43 (1) All premium notes or undertakings belonging to the company shall be assessed under the direction of the board of directors, at such intervals from their respective dates, for such sums as the directors shall determine and for such further sums as they may think necessary to meet the losses and other expenditures of said company during the currency of the policies for which said notes or undertakings were given, and in respect to which they are liable to assessment.
(2) Every member of the company or person who has given a premium note or undertaking shall pay the sums from time to time payable by him to the company during the continuance of his policy, in accordance with such assessment.
(3) Any such assessment shall become payable in thirty days after notice of such assessment shall be mailed to such member or person who has given the premium note or undertaking, directed to his post office address as given in his original application, or in writing to the secretary of the company. R.S., c. 306, s. 43.
Failure to pay
44 If the assessment on the premium note or undertaking upon any policy is not paid within thirty days after the day on which the assessment has become due, the policy of insurance for which such assessment has been made shall be null and void as respects all claim for losses occurring during the time for such non-payment, provided always that the policy shall be revived when such assessment has been paid, unless the secretary gives notice to the contrary to the assessed party in the manner as in this Act provided, but nothing shall relieve the assured party from his liability to pay such assessment or any subsequent assessments, nor shall such assured party be entitled to recover the amount of any loss or damage which may happen to property insured under such policy while such assessment remains due and unpaid, unless the board of directors in their discretion shall decide otherwise. R.S., c. 306, s. 44.
Notice of assessment
45 A notice of assessment upon any premium note or undertaking, mailed as aforesaid, shall be deemed sufficient if it embodies the number of the policy, the period over which the assessment extends, the amount of the assessment, the time when and the place where payable. R.S., c. 306, s. 45.
46 The assessment upon premium notes or undertakings shall always be in proportion to the amount of the notes or undertakings, having regard to the branch or department to which their policies respectively appertain. R.S., c. 306, s. 46.
Recovery of assessment
47 If any member or other person who has given a premium note or undertaking shall, for thirty days after notice of assessment has been mailed to him in manner aforesaid, neglect or refuse to pay the assessment, the company may sue for and recover the same with costs of suit, and such proceedings shall not be a waiver of any forfeiture incurred by such non-payment. R.S., c. 306, s. 47.
Certificate is prima facie evidence
48 Whenever any assessment is made on any premium note or undertaking given to the company for any risk taken by the company or as a consideration for any policy of insurance issued or to be issued by the company, and an action is brought to recover such assessment, the certificate of the secretary of the company specifying such assessment and the amount due to the company on such note or undertaking by means thereof, shall be taken and received as prima facie evidence thereof in any court in the Province. R.S., c. 306, s. 48.
49 The company may form a reserve fund, to consist of all moneys which remain on hand at the end of each year, after payment of the ordinary expenses and losses of the company, and for that purpose, the board of directors may levy an annual assessment not exceeding ten per cent on the premium notes or undertakings held by the company and such reserve fund may from time to time be applied by the directors to pay off such liabilities of the company as may not be provided for out of the ordinary receipts for the same or any succeeding year, provided that such reserve fund shall be invested either in debentures or other securities of the Dominion of Canada or of the Province or in municipal debentures, or may remain in a chartered bank of the Province on deposit at interest. R.S., c. 306, s. 49.
Return of premium note or undertaking
50 Forty days after the expiration of the term of insurance, the premium note or undertaking given for such insurance shall, on application therefor, be given up to the signer thereof, provided all losses and expenses with which the note or undertaking may be chargeable have been paid. R.S., c. 306, s. 50.
51 Any mutual fire insurance company to be incorporated under this Act shall not issue policies otherwise than upon the mutual principle. R.S., c. 306, s. 51.
Payment for loss
52 In case of any loss or damage by fire happening to any member upon property insured with the company, such member shall give notice thereof to the secretary of the company forthwith, and the proofs, declarations, evidences and examinations called for by or under the policy must be furnished to the company within thirty days after the loss, and upon receipt of notice and proofs of claim as aforesaid the board of directors shall ascertain and determine the amount of such loss or damage, and such amount shall be payable in three months after the receipt by the company of such proofs. R.S., c. 306, s. 52.
Dispute over value of property
53 If the party is not satisfied with the determination of the board of directors, all questions as to the value of property damaged or destroyed may be submitted to three disinterested persons as referees, one of whom shall be named by the board and one by the suffering party and the third by the two referees, or, on their failing to agree in their choice, by the county court judge in the district in which the loss may have taken place, and the decision or award of a majority of them shall be binding. R.S., c. 306, s. 53.
Limitation of action
54 (1) No action or suit, either at law or in equity, shall be brought against such company upon any policy or contract of insurance granted or entered into by such company, after the lapse of one year next after the happening of the loss or damage in respect of which such action shall be brought, saving in all cases the right of parties under legal disability.
(2) All policies to be issued by such company shall have a condition to this effect endorsed thereon. R.S., c. 306, s. 54.
Judgment and costs against company
55 If upon the trial of such action a greater sum is recovered than the amount determined upon by the directors, the party suffering shall have judgment therefor against the company, with interest thereon from the time such loss or damage would become payable under Section 52 of this Act, with costs of suit. R.S., c. 306, s. 55.
Judgment but no costs
56 If no more be recovered than the amount so previously determined upon by the directors, the plaintiff in the suit shall have judgment for such amount only, and he shall not be entitled to costs against the defendants, and the defendants shall be entitled to costs against the plaintiff as in the case of a verdict for the defendant. R.S., c. 306, s. 56.
57 No execution shall issue against the company upon any judgment until after the expiration of three months from the recovery thereof. R.S., c. 306, s. 57.
Taking of evidence
58 Any justice of the peace, or any one having lawful authority to administer an oath or affirmation in any legal proceeding, may examine on oath or solemn affirmation any party or person who comes before him to give evidence touching any loss by fire in which any mutual insurance company is interested, and may administer any oath or affirmation required under this Act. R.S., c. 306, s. 58.
Effect of loss
59 If there is any loss on property insured by the company, the board of directors may retain the amount of the premium note or undertaking given for insurance thereof until the time has expired for which insurance has been made, and at the expiration of the time the insured shall have the right to demand and receive such part of the retained sum as has not been assessed for. R.S., c. 306, s. 59.
Branches or departments
60 Any mutual company may separate its business into branches or departments with reference to the nature or classification of the risks of the localities in which insurance may be effected. R.S., c. 306, s. 60.
Separation of accounts
61 The directors of every such company so separating its business shall make a scale of risks and tariff of rates for each branch and direct that the accounts of each shall be kept separate and distinct the one from the other. R.S., c. 306, s. 61.
Independence of branch
62 Members of any such company insuring in one branch shall not be liable for claims on any other branch. R.S., c. 306, s. 62.
Apportionment of expenses
63 All necessary expenses incurred in the conducting and management of such companies shall be assessed upon and divided between the several branches in such proportion as the directors may determine. R.S., c. 306, s. 63.
Liability of member
64 No member of any mutual insurance company to which this Act may apply shall be liable in respect of any loss or other claim or demand against the company, otherwise than upon and to the extent of the amount unpaid upon his premium note or undertaking. R.S., c. 306, s. 64.
Security by treasurer
65 The treasurer or other officer having charge of the money of the company shall give security to the satisfaction of the board of directors in a sum of not less than two thousand dollars for the faithful discharge of his duties. R.S., c. 306, s. 65.
66 The location of head offices of companies in existence on the third day of March, 1904, and the original of head offices of companies formed after that date, shall only be changed by a two-third [two-thirds] vote of the members of the company at a special meeting called for that purpose. R.S., c. 306, s. 66.
Acquisition and alienation of land
67 Every mutual insurance company may hold lands, but such lands only as are requisite for the accommodation of the company in relation to the transaction of their business, or such lands as have been bona fide mortgaged to them by way of security or conveyed to them in satisfaction of debts contracted in the course of their dealings previously to such conveyance or purchased at sales upon judgments obtained for such debts, and may from time to time sell and convey or lease any such lands. R.S., c. 306, s. 67.
No loan to officer and no guarantee fund
68 No guarantee capital or fund shall be raised by any company to which this Act is applicable, except as hereinafter mentioned, nor shall any such company contract with any director or officer thereof for any loan or borrowing of money or credit, and every such attempted loan or borrowing is hereby prohibited and declared void. R.S., c. 306, s. 68.
69 (1) It shall be the duty of the president or manager and secretary of each mutual fire insurance company incorporated under this Act and transacting the business of fire insurance in the Province, annually on the first day of January, or within one month thereafter, to prepare and deposit in the office of the Minister of Consumer Affairs, a statement verified by their own oath, of the condition of such company on the thirty-first day of December then next preceding, exhibiting the following facts and items in the following form:
(a) the assets of the company, specifying
(ii) the amount of cash on hand and deposited in banks to the credit of the company, naming the banks and amount in each,
(iii) the amount of cash in the companys office and in agents hands respectively,
(iv) the amount of any loans or investments, and the nature of the security held therefor, in detail, and what, if any, payments in arrears thereon,
(v) the amount of assessments on premium notes or undertakings unpaid,
(vi) the amount still payable upon premium notes or undertakings on hand,
(vii) other amounts due the company;
(ii) the amount of claims for losses resisted,
(iii) the amount of losses incurred during the year, including those claimed but not adjusted,
(iv) the amount payable for money borrowed, and security given, and interest payable,
(v) the amount of all other existing claims against the company,
(vi) the amount covered by policies in force in respect of each class of risk;
(ii) the amount of premium notes or undertakings,
(iii) the amount of interest received,
(iv) the amount of income from all other sources;
(ii) the amount of expenses paid during the year,
(iii) the amount of taxes,
(iv) the amount paid for reinsurance,
(v) the amount of all other payments and expenditures, under their appropriate heads.
(2) Any company shall further, when required, make prompt and explicit answer in reply to any inquiries in relation to its transactions which may be required by the Governor in Council.
(3) Any such mutual fire insurance company which fails to make and deposit such statement so verified, or to reply to such inquiry, its manager and secretary, shall be subject, respectively, for each offence, to a fine or penalty of fifty dollars, to be recovered on behalf of Her Majesty in right of the Province, for the use of the Province.
(4) It shall be the duty of the Minister of Consumer Affairs to publish a synopsis of such returns, as well as the names of such companies that have not made returns in the Royal Gazette on or before the first day of March in each year. R.S., c. 306, s. 69.
Examination of affairs of company
70 (1) The Governor in Council, whenever he deems it expedient, may appoint any one or more qualified persons, not being officers of any other fire insurance company, to examine into the affairs of any mutual fire insurance company incorporated under this Act, or to which the provisions of this Act apply, and it shall be the duty of the officers or agents of any such company to cause their books to be opened for the inspection of the person or persons so appointed and otherwise to facilitate such examinations.
Power of examiner
(2) For that purpose, such person or persons shall have power to examine under oath such officers and agents.
Application to close company
(3) Whenever it shall appear from such examination that the assets and financial position of such company are such as not to justify the continuance in business of any such company, the Minister of Consumer Affairs may apply in a summary manner, on motion, to the Trial Division of the Supreme Court, for an order requiring such company to show cause why the business of the company should not be closed.
Powers of Court
(4) The Court shall thereupon proceed to hear the allegations and proofs of the respective parties, and in case it shall appear to the satisfaction of the Court that the assets and funds of the company are not sufficient as aforesaid, or that the interests of the public so require, the said Court shall decree a dissolution of said companys affairs, and may appoint a receiver and take possession of, collect and get in the assets and effects of the said company, and otherwise to wind up the affairs thereof. R.S., c. 306, s. 70.
Powers of receiver
71 Such receiver shall have full power under the authority of the Court appointing him to make all such assessments on the premium notes or undertakings held by the company as may be necessary to pay its debts and claims against it, as the directors would have authority to make, and the notice of assessments may be given in the same manner as is hereinbefore provided, and the receiver shall have the like rights and remedies upon and in consequence of the non-payment of such assessments as are given to the company or the directors thereof, and such receiver may receive a surrender of any policy of said company or cancel any policy in all cases where the directors are authorized to receive the surrender of or cancel policies. R.S., c. 306, s. 71.
Order to repay misapplied asset
72 The Court by which such receiver is appointed, may also upon his application examine by a reference or otherwise, as it may deem proper, into the proceedings and acts of the company, and if it shall appear upon such examination that the directors or officers of such company, or any of them, have in any manner misapplied or improperly disposed of the funds, property or effects of such company, it shall be lawful for the Court to order and decree that such person as may be found guilty of such misapplication or improper disposition, shall pay the amount thereof to such receiver, and to enforce such order or decree by the ordinary process of the Court. R.S., c. 306, s. 72.
Transmission of formation documents
73 When a mutual fire insurance company has been formed under the provisions of this Act, and has filed in the registry of deeds office in the county in which it is situate, copies of the resolution and the subscription books and the names of the directors, under the provisions of Section 5, and before they shall transact or be entitled to transact any insurance business, the chairman and secretary shall also transmit or deliver like copies duly certified to by them to the Minister of Consumer Affairs, accompanied by a statement signed by such chairman and secretary, of the kind and character of the risks intended to be taken by the company, that is to say, whether the business to be is the insurance of farm and isolated buildings and property or of commercial, manufacturing and other hazardous and extra hazardous properties. R.S., c. 306, s. 73.
Duty of Registrar of Joint Stock Companies
74 Upon the receipt of such certified copies by the Minister of Consumer Affairs, it shall be the duty of the Registrar of Joint Stock Companies to ascertain whether the proceedings for the incorporation of such company have been taken in accordance with the provisions of this Act in that behalf, and whether the subscriptions are bona fide and by persons possessing property to insure, and may require the declaration of any person or persons upon oath to be filed with him touching any matter concerning which he is called upon to make inquiry. R.S., c. 306, s. 74.
Certificate of Registrar
75 (1) If upon such examination the Registrar of Joint Stock Companies finds that the provisions of this Act have been complied with and that the subscriptions have been made in good faith by persons entitled to make the same, the Registrar of Joint Stock Companies shall so certify to the Minister of Consumer Affairs the facts aforesaid.
Entitlement to transact business
(2) The Minister of Consumer Affairs may thereupon issue his certificate in duplicate under his hand and seal to the company, setting forth that
(a) it has been made to appear to him that they have become a body corporate and politic by the name of "Mutual Fire Insurance Company of . . . . . . . . . .";
(b) they have complied with the requisitions of this Act in that behalf; and
(c) they will, from and after the filing of one of the duplicate copies of such certificate in the office of the registrar of deeds for the county in which the company has been established is situate, be entitled to receive applications to issue policies of insurance and to transact all the business which a mutual fire insurance company formed under this Act may lawfully do in respect of that kind of business mentioned in their statement to the Registrar.
Record of company
(3) The Registrar of Joint Stock Companies shall keep or file said papers so furnished to him, and shall keep a book in which shall be entered the name of the company, the statement delivered by the company and a copy of the Minister of Consumer Affairs certificate. R.S., c. 306, s. 75.
76 There shall be paid to the Minister of Consumer Affairs upon the delivery of any such certificate to the said company, the sum of twenty dollars. R.S., c. 306, s. 76.
Extension of insurable risks
77 (1) A mutual fire insurance company formed under the provisions of this Act may, by resolution passed by a majority of not less than three fourths of the members entitled to vote at a general meeting of which notice specifying the intention to propose the resolution has been duly given, extend the kind and character of the risks which the company may undertake to include any or all of the classes of risks set out in Section 34 and thereupon file a certified copy of the same in the registry of deeds office in the county in which such company is situated.
Filing of resolution
(2) Such company shall also transmit or deliver to the Minister of Consumer Affairs a certified copy of the resolution and a certificate of the registrar of deeds that a copy of the resolution was filed as required by subsection (1) hereof.
Right to issue policy on extended risk
(3) If the Minister of Consumer Affairs is satisfied that the provisions of this Section have been complied with, he may issue a new certificate in duplicate under his hand and seal to include the kind and character of the risks set forth in the said resolution and from and after the filing of one of the duplicate copies of the certificate in the office of the registrar of deeds for the county in which the company is situated, the company shall be entitled to receive application to issue policies of insurance for the kind and character of the risks set out in the certificate. R.S., c. 306, s. 77.
78 Any mutual insurance company formed under this Act may raise by subscription of its members or some of them, or by the admission of new members, not persons insured in the company, or by loan or otherwise, a guarantee capital of any sum not less than twenty thousand dollars, nor exceeding two hundred thousand dollars, which guarantee capital shall belong to the company, and be liable for all losses, debts and expenses of the company, and subscribers of such capital shall, in respect thereof, have such rights as the directors of the company declare and fix by a by-law to be passed before such capital shall be subscribed, and unless such capital is paid off or discharged, such by-law shall not be repealed or altered without the consent of the majority of votes of the shareholders or subscribers of such capital who represent a majority of the shares subscribed, either personally or by proxy at a meeting held for that purpose by the holders of such capital, each shareholder or subscriber being entitled to a vote for every share of fifty dollars held by him. R.S., c. 306, s. 78.
Subscribers to guarantee capital
79 (1) Such capital shall be subscribed by not less than ten persons, and no one person shall subscribe or hold, or receive dividend, interest or commission upon, more than twenty per cent of such guarantee capital of said stock, and the original list of the subscribers to such guarantee capital shall be transferred to and deposited with the Minister of Consumer Affairs and shall be held as security for the payment of all losses and other policy liabilities of such company.
Advance of guarantee capital
(2) The company may from time to time, in accordance with the provisions of any by-law in that behalf, require any portion of the subscribed guarantee capital to be paid over to the company for the purpose of settling any losses of the company, any sums so advanced shall be repaid by the company within one year thereafter, from the proceeds of assessments upon the premium notes liable to assessment for such purposes, and such assessments may be made from time to time by the company for the purpose of repaying such advances. R.S., c. 306, s. 79.
Withdrawal of guarantee capital
80 (1) Such guarantee capital, or any part thereof, shall not be withdrawn until the premium notes held by such company for insurance actually in force shall amount to three per cent of the amount of property covered by policies in the company, nor until one years notice shall have been given to the Registrar of Joint Stock Companies, stating the intention to withdraw the same.
Advertisement of premium notes
(2) Whenever the premium notes held by such company have reached the above amount, the president and secretary, or the directors of the company, may file a certificate, under oath, with the Registrar of Joint Stock Companies, stating that the company holds premium notes of the amount and kind aforesaid, and publish a copy of said certificate, once a week or oftener, for at least four weeks, in some newspaper published in the county where such company has its principal office and two newspapers in Halifax. R.S., c. 306, s. 80.
Discharge of guarantors
81 (1) When the company has filed such certificate and also proof of such publication with the Registrar of Joint Stock Companies, the latter may make or cause an examination to be made, and if he finds that the company has the above amount of premium notes of the kind and character aforesaid, and is in a sound and solvent condition, he shall report the same to the Minister of Consumer Affairs, who may give such company a certificate discharging the fund from all its obligations and liabilities, upon which the fund shall be surrendered to the parties depositing or entitled to receive the same, and they may be discharged from their obligations as such guarantors as aforesaid.
Notice of discharge or withdrawal
(2) Immediately after the discharge or withdrawal of a guarantee fund or capital, the company shall give notice thereof in some newspaper published in the county town of the county in which the company has its head office, by insertion of such notice once a week for at least three successive weeks in the newspaper. R.S., c. 306, s. 81.
Share or stock capital
82 Any mutual fire insurance company incorporated under this Act may raise a share or stock capital of not less than one hundred thousand dollars, and may increase the same from time to time to a sum not exceeding five hundred thousand dollars. R.S., c. 306, s. 82.
Shareholder to be member
83 Every subscriber shall, on allotment of one or more shares to him, become a member of the said company with all incidental rights, privileges and liabilities. R.S., c. 306, s. 83.
Transfer of share
84 The shares shall be personal estate and shall be transferable, but no transfer shall be valid unless made on the books of the said company and until fully paid up, and no shares shall be transferable without the consent of the board of directors, nor shall any transfer be valid while any call previously made remains unpaid, and the company shall have a lien on the shares of any shareholder for unpaid calls or other debts due by him to the company, and for any obligation held by the company against him, and after such call, debt or obligation becomes due, the company may upon one months notice to the shareholder, his executors or administrators, sell such shares or a sufficient portion thereof to pay such call, debt or obligation, and transfer the shares so sold to the purchaser. R.S., c. 306, s. 84.
Forfeiture for non-payment
85 The company may also, after default made in the payment of any call upon any share for one month, and after notice having first been given, as mentioned in Section 84, declare such share and all sums previously paid thereon forfeited to the company, and the company may sell or reissue forfeited shares on such terms as they shall think for the benefit of the company. R.S., c. 306, s. 85.
Cash premium business
86 After the sum of two hundred thousand dollars has been bona fide subscribed, and twenty per cent paid thereon into the funds of the company, the company may make insurance premiums payable wholly in cash, but no insurance on the wholly cash principle shall make the insured a member of the company or make him liable to contribute or pay any sum to the company or to its funds or to any member thereof, beyond the cash premium agreed upon, or give him any right to any participation in the profits or surplus funds of the company, but the company shall not transact any such business on the wholly cash principle without first procuring a licence from the Minister of Consumer Affairs under such rules and conditions as the Governor in Council may order or appoint. R.S., c. 306, s. 86.
Disposition of profit
87 The net annual profits and gains of the company, not including therein any premium notes or undertakings, shall be applied in the first place to pay a dividend on the share capital, not exceeding the rate of ten per cent per annum, and the surplus, if any, shall be applied in the manner provided by the by-laws of the company. R.S., c. 306, s. 87.
Qualification of director
88 After the share capital has been subscribed as aforesaid, at least two thirds of the persons to be elected directors of the company shall be holders of shares of the capital stock to the amount of two thousand dollars, on which all calls have been fully paid up and the other one third of the directors to be elected shall be members of the company and insurers therein for the time they hold office to the amount of at least eight hundred dollars. R.S., c. 306, s. 88.
Approval of by-law
89 The board of directors of any company which raises a share or stock capital under this Act, may make such by-laws, subject to the provisions of this Act and not inconsistent with or contrary to law, as may be necessary to carry out the objects and intentions of this Act, and to give effect to the provisions thereof, and may rescind, vary, alter or add to the same from time to time, but all such by-laws and every amendment, repeal or re-enactment thereof shall have approval of the Governor in Council before becoming law. R.S., c. 306, s. 89.
Books of account and audit
90 Any insurance company or association formed under this Act shall keep such classification of its risks and such registers and books of account, as may from time to time be directed by the Governor in Council, and if it appears at any time to the Registrar of Joint Stock Companies that such books are not kept in such a business-like way as to make at any time a proper showing of the affairs and standing of the company, he shall report the same to the Minister of Consumer Affairs, who shall thereupon nominate a competent accountant to proceed under the direction of the Registrar of Joint Stock Companies to audit such books and give such instruction as will enable the officer of such company to keep them correctly thereafter, the expenses of such accountant to be borne by the company to which he is sent, and shall not exceed five dollars per day and necessary travelling expenses. R.S., c. 306, s. 90.
Conversion to joint stock company
91 Any mutual insurance company which is incorporated or organized under any of the laws of the Province after on or after the third day of March, 1904, having surplus assets aside from premium notes or undertakings sufficient to reinsure all its outstanding risks, after having given notice once a week for four weeks of their intention, and of the meeting hereinafter provided for, in a newspaper published in the county wherein such company is located, and in two newspapers published in the City of Halifax, may, with the consent
(a) of two thirds of the members present at any regular annual meeting, and of two thirds of the subscribers of guarantee capital, or shares, or stock capital, or at any special meeting duly called for the purpose; or
(b) in writing of two thirds of the members of such company, and also of three fourths of the directors and of two thirds of the subscribers to the guarantee capital and share of stock capital,
notwithstanding anything contained in Section 2 or any other Section, become a joint stock company under this Act by conforming to and otherwise proceeding in accordance with the provisions of this Act, and every member of such company on the day of such annual or special meeting, or the date of such written consent, shall be entitled to priority in subscribing to the capital stock of the company for one month after the opening of the books of subscription to such capital stock in proportion to the amount of insurance held by such member on unexpired risks in force on the day of the annual or special meeting, or the date of such written consent, and every company so changed or organized shall come under and be subject to the provisions of this Act. R.S., c. 306, s. 91.
Transfer of assets and liabilities
92 Any company which may be formed under the provisions of Section 91 shall be answerable for all the liabilities of the company from which it has been formed, and may be sued therefor by or under its new corporate name, and the assets, real and personal, of the old company shall pass to and become vested in the new company. R.S., c. 306, s. 92.