UC-NRLF B M b7b 311 AND REIiATI> INSURANCE XM) INSURANCE COMPANIES FRATERNAL BENEFICIARY AND WORK- MEN'S COMPENSATION ASSOCIATIONS - 1922" COMPILED BY THE STATE INSURANCE DEPARTMENT LAWS OF MARYLAND RELATING TO INSURANCE AND INSURANCE COMPANIES FRATERNAL BENEFICIARY AND WORKMEN'S COMPENSATION ASSOCIATIONS COMPILED BY THii STATE INSURANCE DEPARTMENT This edition of the Insurance Laws embraces all amendment^,i«^tt^^Q'Q^' including the Session of 1922^,,,^ pU^^ 'o THE NUMBERING OP THE SECTIGN^FOLLGWS.TilAT'OF BAGBY'S ANNOTATE] OCTOBER, 1922 ,,ir^io>i*^'t- . . « . -, , INDEX TO CORPORATION LAWS References Are to Sections of Art. 23, Except where Otherwise Stated A Section Acknowledgments of papers 3, 25, 29, 35 Agents, resident (see "Resident Agents")- Amendments before stock subscribed 6 After stock subscribed 24, 25, 26, 27, 28 Recording and recording fees for 25 In agreements of consolidation 29, 30, 31 When non-resident attachment against domestic corpora- tions (note) 8A B Benevolent societies (see "Societies"). "Blue Sky Law" Art. 32A. page 112 Bonds, when issued to be approved by members or stockholders 7 (115) Bonus tax, payment of 4, 5, 34B On shares without par value 34 Closing of for transfers of stock 12 By-laws, general provisions as to 3 (g), 7 (8), 9-15, 17, 20, 21 When directors may make, alter or repeal 12 C Capital stock (see "Stock"). Certificate of incorporation, contents 2 To be forwarded to State Tax Commission 4 Fees due on filing 4, 5 May authorize issuance of stock for property, etc 35C Certificates of stock (see "Stock"). Clerk of Superior or Circuit Court, defined 1 (^[2) To record charters, amendments, etc 25, 29, 35 Consolidation of corporations (agreement, amendments in agree- ment, certificates of, dissenting stockholders of) 29-31 Cumulative voting 20 D Deed of trust to secure bond issue 7 (1[5) Directors, definition of 1 (p) Classes of 11 Change in number of 12 669939 II References Are To Sections. Section May authorize issuance of stock 35A-35D May change terms of unissued stock 34 Postponed election of 21 Powers of 10, 12, 25, 29, 32, 35 Removal of 16 Vacancies 9,12 Waiver of notice for meeting of 23 Dividends, stock 35D ^ Dividends, not limited to 6 per centum 34 E Entire property, sale, lease or exchange of 32 Evidence, agreement of consolidation as 30 Certified copy of by-laws as 13 Copy and recording of certificate of incorporation as 5 Copy and recording of certificate of amendment as 25 Execution and attachment (see "Attachment and Execution"). Executive committee 10 Exemption from taxation, waiver of by consolidation. 29 F False statements or entries in connection with issuance of stock 36 Fiduciaries, voting of shares held by 22 Formation of corporations 2-5 Forms — See Appendix. Franchises, from municipal corporations 32 On shares without par value 34 Fraternal societies (see "Societies"). Fraudulent promotions Art. 32A, page 100 G General powers of corporations 7 H Homestead and building associations (same section as building and homestead associations). I Inconsistency between general and special provisions of law. ... 1, 7 L Stockholders not released from 28 Loan corporations 34A Ill ^fleferences Are To Sections. Section M Meetings, general provisions of law as to stockholders', members' and directors' ^ 22 "14-23 May dispense with notice of 23 Of stockholders to be held in this State 17 Members, waiver of notice of meeting by 23 Of non-stock corporations (see "Stockholders or Members"). Mortgage, to secure bond issue 7 (Iarjh>nationa Mechanics Bank (1906), 102 Md. 608, 634, 63 Atl. 70. Power of Stockholders. As to issuance of bonds, notes and other obligations, see Section 7. As to election of directors, see Section 8. As to By-Laws, see Section 12. As to amendments of charter, see Sections 24-28- As to consolidations, see Sections 29 and 31. As to sale, lease or exchange of entire property, see Sec- tion 32. As to issuance of stock and convertible securities, see Sec- tions 35 and 35A-35D. As to purchase by a corporation of its own stock, see Sec- tion 36A. 1916, ch. 596. 11. Every corporation may, by its by-laws, divide its directors into classes and prescribe the tenure of office of the several classes; but no class shall be elected for a period shorter than that from the time of election follow- ing the division into classes until the next annual meeting, and thereafter for a period shorter than the interval be- 22 tween annual meetings or for a longer period than five years, and the term of office of at least one class shall ex- pire each year. 1920, ch. 545. 12. Every corporation may, subject to any special pro- visions of this Article and subject to the provisions of its charter, determine by its by-laws: The manner of calling, the time and place of holding, and the manner of conduct- ing its meetings of managers and stockholders, including elections, the canvassing of votes, the method of verifying proxies, the powers, duties and tenure of its officers and agents; the classification and number of its directors, which may from time to time be fixed at a number greater or less than that named in the charter, but shall never be less than three; the manner of calling and conducting regular and special meetings of the board of directors, which may be held Avithin or outside of the State of Mary- land, and the restrictions, if any, on their powers : the ex- pendiency of providing for an executive committee and the powers which may be delegated to it; the conditions under which a'new certificate of stock may be issued in place of the one which is alleged to have been lost or destroyed ; and the method, in general, of transacting its business. The by- laws may authorize the board of directors, by the vote of a majority of the entire board of directors, to increase the number of directors fixed by the charter or by the by-laws within a limit specified in the by-laws, and to fill the vacan- cies created by any such increase In the number of direc- tors. The by-laws may fix, or authorize the board of direc- tors to fix, the time, not exceeding twenty days preceding the date of any meeting of stockholders, any dividend pay- ment date or any date for the allotment of rights, during which the books of the corporation shall be closed against transfers of stock. In lieu of providing for the closing of the books against transfers of stock as aforesaid, the by- laws may fix, or authorize the board of directors to fix, a date, not exceeding twent^^ days preceding the date of any meeting of stock holders, any dividend payment date or any 23 date for the allotment of rights, as a record date for the determiDation of the stockholders entitled to notice of aiid to vote at such meeting, or entitled to receive such divi- dends or rights, as the case may be; and onl}' stockholders of record on such date shall be entitled to notice of and to vote at such meeting or to receive such dividends or rights as the ciise may be. The members or stockholders shall liave full power to make, alter and repeal by-laws, but the board of directors of anj^ corporation liaving capital stock may exericise such power, if there are no shares of stock outstanding and entitled to vote thereon. If authorized by the by-laws adopted as aforesaid, the board of directors shall have the ])ower to make, alter and roi)eal additional and supi)hMiieutary by-laws not inconsistent with any of the by-laws adopted as aforesaid, but any such additional or siipplomentary l)y-]aws nuiy be altered or repealed by the members or stockliolders. As to meetings of stockholders, see Sections 14-23. As to notice of meetines, see Sections 14, 15, 16 and 23. As to oroxies. see Section 19 and note. As to Quorum, see Section 17. As to cumulative votius. see Section 20- As to insertion in by-laws of provision requiring the vole of the holders of a greater proportion of stock than re- quired by statute, see Section 3A. As to issuance of new certificates of stock in place of cer- tificates alleged to have been lost or destroyed, see Section 67. See also Section 50. As to restrictions upon the transfer of stock, see Section 3 and notes. As to executive committees, see Section 10 and notes. As to officers, see Section 9. As to classification of directors, see Section 11. As to vacancies, occurring in the board of directors and among the officers, see Section 9. As to the board of directors generally, see Sections 8 and 10 and notes. When at a meeting of the board of directors, a director votes for his own salary as an officer, pursuant to authority to act given by the by-laws adopted by the stockholders, and his vote is essential, the act is not void, but the burden of proof is upon him to show that the salary is just. — Francis T. Brigham-Hopknis Co. (1908), 108 Md. 233. 70 Atl. 95. 24 A by-law provision that the salaries of officers "shall be • designated nrevious to their election" held to be directory and that a resolution fixing salaries adopted after election was valid. — Ibid. Although a by-law provided that the decision of the judges of election should be final and conclusive, such decision held not to be conclusive in the case of fraud. — Triesler y. Wil- son (1899), 89 Md, 169. 42 Atl. 926. 1922, ch. 309. 13. The original or a certified copy of the by-laws, in- cluding all amendments thereto, shall be kept at the prin- cipal office of the corporation in this State, and shall, dur- ing the usual business hours of every business day be open for the inspection of every stockholder or member of the corporation, A copy of the by-laws of any corporation in- corf)orated under the laws of this State, certified to be a true copy, under its seal by the president, or a vice-presi- dent, and the secretary, or an assistant secretary, or the treasurer or an assistant treasurer, thereof, shall be re- ceived as prima facie evidence of such by-laws in the courts of this State. As to location of principal office, see Section 1. Meetings. 1908, ch. 240. 14. Every corporation, which is subject to the provisions of this Article, shall hold annually a stated or regular meeting for the election of directors and for the transac- tion of general business; the time and place of holding such meetings, and the notice to be given thereof and of the business to be transacted thereat, may be regulated by the by-laws, and unless otherwise provided by the by-laws, each shareholder or member shall be given notice of the place, day and hour of such meeting in the manner provided for in the next succeeding section ; and such anniial meetings shall be general meetings — that is to say, open for the 25 transaction of any business within the powers of the cor- poration without special notice of such business, unless such notice is required by this Article OT by the by-laws. As to place of meeting, see Section 17. As to when notice of meetings may be disoensed with, see Section 23. As to when special notice of business to be transacted is required, see Sections 7. 21. 25. 29. 32. 35B. and 36A. As to number of votes to which shareholder is entitled, see Section 19. The holders of a majority of the shares at an annual meet- ing adopted and approved the report of the president and di- rectors. Such action constituted the ratification of the acts of the president and directors explicitly referred to in the report, and in the absence of fraud was held to be binding on the minority, whether present or absent. — Pennsylvania R. Co. T. Minis (1913), 120 Md. 461, 487, 87 Atl. 1062; 120 Md. 496. 503, 87 Atl. 1062. 1922. ch. 309. 141^. In any case in which neither the charter nor the by-laAvs of a corporation having no capital stock, heretofore or hereafter incorporated, provides for members thereof as such, and in any case in which any such corporation has in fact no members other than members of its governing body or board by whatever name they may be called, the members for the time being of its governing body or board, shall, for the purposes of any statutory provision or rule of law relating to members of corporations having no capitaj stock, be taken to be the members of such corporation, as well as members of such governing body or board, as may meet as members of such corporation and exercise all of the rights and powers of members thereof. 15. At any time in the interval between regular meet- ings, extraordinary meetings of the shareholders or mem- bers may be called by the president, or by a majority of the board of directors, or by a majority of the executive committee (if the by-laws provide for an executive commit- tee, and confer such power upon such executive commit- tee), upon ten days' written or printed notice, stating the 26 place, day and hour of such meeting and the business pro- posed to be transacted thereat ; such notice shall be given to each shareholder or member by leaving the same with him or at his residence or usual x)lace of business, or by mailing it, postage prepaid, and addressed to him at his address, as it appears upon the books of the corporation ; and no busi- ness shall be transacted at such meetings except that specially named in the notice. As to place of meeting, see Section 17. As to when notice of meetings may be dispensed with, see Section 23. As to calling a meeting by stockholders, see Section 16- 1916, ch. 596. 16. Upon the request in writing delivered to the presi- dent or secretary or any director of a majority of all the members, or of the holders of a majority of all the shares outstanding and entitled to vote, it shall be the duty of such president, secretary or director to call forthwith a meeting of the stockholders or members. Such request shall state the purpose of the meeting, and notice thereof shall be given as required by the next preceding section. If the person to whom such request in writing shall have been delivered shall fail to issue a call for such meeting within three daj^s after the receipt of such request, then the stock- holders owning a majority of the voting shares, or members constituting a majority of all the members, may do so by giving fifteen days' notice of the time, place and object of the meeting by advertisement inserted in a newspaper pub- lished in the county or city in which the principal office of the corporation is situated. At any meeting called and warned under provisions of this and the next preceding section, any director may, by a vote of a majority of all the shares of stock outstanding and entitled to vote or by a vote of a majority in number of all the members, be re- moved from office and another be appointed in the place of the person so removed, to serve for the remainder of his term. 27 As to Dlace of meeting, see Section 17. As to when notice of meeting may be disnensed with, see Section 23. 1922, ch. 309. 17. All meetings of tbe stockholders or members shall be held in this State. The presence, in person or by proxy, of stockholders or members entitled to cast a majority in number of votes, shall be necessary to constitute a quorum, unless the charter otherwise provides; provided, however, that building associations, athletic or social clubs, or mu- tual insurance companies, whose policy-holders, for the time being, are the members thereof, and corporations hav- ing no capital stock may provide by their by-laws what shall constitute a quorum. Except in cases in which it is by this Article, or by charter or by-law provision not incon- sistent with this Article, otherwise provided, a majority of the votes cast, at a duly constituted meeting, shall be suf- ficient to elect and pass any measure. If so provided in the by-laws of any corporation having no capital stock, any action required by law to be taken or authorized by the af- firmative vote of a majority or other designated proportion of all of the members shall be effective and valid if taken or authorized by not less than a majority or not less than such other designated proportion, as the case may be, of all of the votes thereon to which all of the members present, in person or by proxy, at a duly constituted meeting shall be entitled. 1916. ch. 596. IS. No corporation shall directly or indirectly vote any shares of its own stock except such as it holds, and is by its charter, authorized to hold, as trustee, committee, guardian, executor, administrator, or in some other fiduc- iary capacity. Corporations holding shares in other cor- porations may vote the same by such officer, agent or proxy as the board of directors may appoint or by such officer as the by-laws may provide. As to acauisition bv cornoration of its own stock, see Sec- tion 36A. 28 1922. ch. 309. 19. Each stockholder of every corporation of this State having capital stock shall be entitled to one vote for every share of stock standing in his name, unless otherwise pro- vided by the charter; but no shares, original or increased, shall be voted by any holder if any installment payable thereon in accordance with the terms of the subscription contract or duly called thereon shall be overdue and un- paid. Notwithstanding any provision of law requiring any action to be taken or authorized by the af&rmative vote of the holders of a majority or other designated proportion of the shares or of the shares of each class, or by the affirma- tive vote of a majority or other designated proportion of the members, or to be otherwise taken or authorized by vote of the stockholders or members of any corporation, such action shall be effective and valid if taken or authorized by such vote of its stockholders or members as may be re- quired for such action by its charter; but in the case of corporations having capital stock, the requisite number of affirmative votes shall not in any case be less than a ma- jority in number of the aggregate number of votes to which the holders of all of the shares of each class, outstanding and entitled to vote thereon shall be entitled, except in cases in which the law authorizes such action to be taken or authorized by a less vote; and in the case of corporations having no capital stock, the requisite number of affirmative votes shall not in any case be less than a majority of all the votes thereon to which all of the members, present in per- son or by proxy, at a duly constituted meeting, shall be en- titled, except in cases in which the law authorizes such ac- tion to be taken or authorized by a less vote. Stockholders or members may vote either in person or by proxy, but no proxy which is dated more than three months before the meeting at which it is offered shall be accepted, unless such proxy shall, on its face, name a longer period for which it is to remain in force. 29 A subsequent proxy revokes a former one. If it cannot be determined from an inspecion, which of two proxies is the later, both should be rejected.— Pope T. Wliitridge (1909), 110 Md. 468. 7S Atl. 281. 1908, ch. 240. 20. Any corporation subject to the provisions of this Article may by its by-laws provide, throuoh einiuilative voting, for minority representation in the election of di- rectors. 1908. ch. 240. 21. If it shall happen at any time that an election of directors is not made on the day desijjnated therefor, the corporation shall not for that reason be dissolved; but it shall be lawful on any other day (upon due notice as the by-laws may provide, and in default of any provision, then upon notice, as prescribed by Section 15 of this Article) to hold such election ; and all acts of directors so holdino; over shall be valid until their successors are duly chosen and qualified. 1908. ch. 240. 22. Shares standing in the name of fiduciaries, may be voted by them, and fiduciaries may, upon proof of title and qualification, vote the shares standing in the name of any person for whom the^' are authorized to act as executor, administrator, guardian, trustee or committee. A pledger before sale shall be deemed to be tlie holder of his shares for the purpose of voting the same. 1916, ch. 596. 23. Notice of the time, place and/or purpose of any meeting of members, stockholders or directors, whether re- quired by the by-laws or by any provision of this Article, or otherwise, may be dispensed with if every member or stockholder shall either attend in person or by proxy, or if every director shall attend in person, or if every absent member, stockholder or director shall, in writing filed with the records of the meeting, either before or after the hold- ing thereof, waive such notice. 30 Amendments After Organization. 1922. cli. 309. 24. Every corporation of this State, heretofore or here- after incorporated, may from time to time and in the man- ner hereinafter provided, amend its charter and thereby accomplish any one or more of the following objects : The addition to or diminution of the corporate purposes and powers, or the substitution of other purposes and powers in whole or in i)art for those set forth in the charter; the changing of the corporate business; the changing of the corporate name; the changing of the location of the princi- pal office; the increasing of the authorized capital stock by increasing the number of shares thereof and the classi- fication, if desired, of such increase; the decreasing of the authorized but unissued capital stock by reducing the num- ber of shares thereof; the changing of the number and/or par value of shares of the capital stock or of any class there- of, provided that the total amount of outstanding stock is not thereby increased; the classification or re-classification of all or any part of the capital stock; and the making of any other amendment of the charter that may be desired, provided that such amendment shall contain only such pro- visions as it would be lawful or proper to insert in an origi- nal certificate of incorporation made at the time of making such amendment. No amendment of the charter of a cor- poration shall be valid which changes the terms of any of the outstanding stock by classification, reclassification or otherwise, in the absence of a reservation in the charter of the right to make such amendment, unless such change in the terms thereof shall have been authorized by the holders of all such stock at the time outstanding, by a vote at a meeting or in writing with or without a meeting; and in the case of any such change of terms of outstanding stock, the articles of amendment shall, in addition, to other mat- ters required by law, affirmatively set forth that the holders of such stock have duly authorized such change of terms. The word "terms" as used in this section in reference to 31 stock is intended to mean only the contract rights of the holders tliereof as expressed in the charter and shall be so construed. As to reserved power to alter charters, see Constitution, Article III, Section 48 and note. See also Section 105, infra. As to the filing of an amended certificate of incorDoration before acceotance of subscrintions to stock, see Section 6. As to amendments in agreements of consolidation, see Sec- tion 29. As to stock without oar value, see Section 34A. As to changing number of directors, see Section 12. As to changing location of orincipal office and changing resident agent, see Section 8A. As to pre-emptive rights of stockholders on issuance of increased stock, see notes to Section 26. As to articles supplementary classifying or reclassifying unissued stock, see Section 34. 1920, ch. 327. 25. Such amendment or amendments shall be made in the manner following: (1) The board of directors shall pass a resolution de- claring that such amendment or amendments is or are ad- visable and calling a meeting of stockholders or members to take action thereon. The meeting of the stockholders or members shall be duly warned in tlie manner provided in Section 15 of this Article. If two-thirds of all the .shares (or, if two or more classes of shares have been issued, two- thirds of oacli class), outf^itanding and entitled to vote, or two-thirds of the members vote in favor of such amendment or amendments, articles of amendment setting forth such amendment or amendments and stating that the same has or have been duly advised by the board of directors and adopted by the stockholders or members shall be signed and acknowledged in the name and on behalf of the corpora- tion by tlie president or a vice-president with the corporate seal attached, attested, by the secretary or an assistant sec- retary, and the matters and facts set forth in said articles of amendment shall be verified under oath by the chairman or the secretary of the meeting of the members or stock- holders at which such amendment or amendments was or 32 were adopted. Sucli articles of amendment, together with a copy thereof, shall be delivered to the State Tax Commis- sion, which, upon the payment, and not before, of the re- cording fees for which provision is hereinafter made, and, if the amount of the authorized capital stock be increased thereby, upon the payment, and not before, of the bonus tax prescribed by law, if any payable, as in the case of a certifi- cate of incorporation, shall receive the same for record and endorse thereon the date and time of such receipt and promptly record the same as in the case of a certificate of incorporation. After such recording the State Tax Com- mission shall transmit the copy of such articles of amend- ment, duly certified by it, to the Clerk of the Circuit or Superior Court (according to the location of the principal office of the corporation prior to such amendment), by whom the same shall again be recorded. At the time of re ceiving such articles of amendment for record, the State Tax Commission shall collect the same recording fees, to be computed in the same manner as is the case of a certifi- cate of incorporation, and the same to be divided, account- ed for and paid over by the Commission as in the case of a certificate of incorporation. (2) When such articles of amendment have been deliver- ed to the State Tax Commission with the recording fees, for which provision is hereinbefore made, and the bonus tax, if any payable, the amendment or amendments made there- by shall take effect and not before. A duly certified copy of such articles of amendment from the records of the Sec- retary of State, the State Tax Commission or the Circuit or Superior Court shall be evidence of the amendment or amendments made thereby. The recording by the State Tax Commission of the articles of amendment shall be con- clusive evidence of the payment of the recording fees and the bonus tax, if any, required by law to be paid to it, ex- cept in a direct proceeding by the State. For skeleton form of articles of amendment, see Appendix. Only those articles of amendment received for record be- tween the dates of June 1, 1916 and September 30, 1920, both 33 inclusive, have been recorded in the office of the Secretary of State, and therefore no other articles of amendment can be certified by him. For amount of bonus or organization tax, see Section 88A. As to charter and by-law nrovisions requiring vole of a greater proportion of stockholders, see Section 3A. As to stock without par value, see Section 34A. See Section 99B, which provides that no charter or other paper, which is not in conformity with law, shall be received for record- 1922, ch. 309. 20. If ail increase of tlie authorized capital stock of any corporation shall have been duly anthorizetl, as in SJection 24, provided, the articles of anieudmeut shall also set forth : (a) the amount of capital stock theretofore authorized; (b) the amount of additional stock authorized; (e) the classes, if any, into which the additional stock is to be divided, with tlie preferences, voting poAvers, restrictions and qualifications of the newly authorized shares; and (d) the number and par value of the shares of newly autlior- ized stock, and, if more than one class, the number and par A'alue of the shares of each class. The general rule is that when the capital stock of a cor- poration is increased by the issue of new shares, the holders of the original stock are entitled to subscribe to the new stock in the proportion that the number of shares held by them bears to the whole number before the increase. — Real Estate Trust Co. v. Bird (1899), 90 Md. 229, 244, 44 Atl. 1048. The right to subscribe to increased stock belongs to whom- 3ver is the holder of the original stock at the time the in- crease is determined upon. If a stockholder waives to the corporation his right to subscribe to new shares, and subse- quently, but before the authorization of the issue thereof, transfers his stock to a person who has no notice of such waiver, the transferee is not affected by the waiver and is en- titled to subscribe to the new shares. — Ibid-, 246. Pre-emptive rights of stockholders may be qualified or reg- ulated by the terms of the charter. — Ibid. 244. 1916, ch. 596. 27. If a reduction of the authorized but unissued capital stock of any corporation shall have been duly authorized as in Section 24 provided, the articles of amendment shall 34 also set forth: (a) the amount of capital stock theretofore authorized aud the u umber and par value of the shares and, if more than one class, the amounts of each class and the number and par value of the shares of each class; (b) the amount of capital stock issued and, if more than one class, the amounts of each class; (c) the amount of the reduction of authorized but unissued stock, specifying in which class or classes if more than one class, the reduction is to be ef- fected and the amount of the reduction of each class; and (d) the number and par value of the shares of each class as reduced. 1916 Ch. 596 28. When by a reduction of the number and / or par value of the shares of stock of a corporation, the amount of stock issued is thereby reduced, the stock representing the difference between the amount theretofore issued and the amount or the stock issued as thereb}^ reduced, shall be treated as authorized but unissued stock of the corporation, and until the classification or classifications thereof be changed shall retain the classification or classifications obtaining before the reduction. No reduction of the amount of the capital stock outstanding shall release the liability to the corporation, or its receiver, trustee or other person winding up its affairs, of any stockholder, whose shares have not been fully paid, for the payment of its lia- bilities existing at the time of such reduction. If any pay- ments be made to the stockholders representing any or all of such reductions, such stockholders shall be and remain liable to the corporation, or its receiver, trustee or other l)erson winding up its affairs, to the extent of such pay- ments made to them for the payment of its liabilities exist- ing at the times of such payments. If a change in the num- ber and / or par value of the shares of capital stock of any corporation, by which the amount of stock issued is re- duced, shall have been duly authorized, as in Section 24 provided, the articles of amendment shall also set forth : (a) the amount of each class of stock theretofore author- ized and the number and par value of the shares of each 35 class; (b) the number and / or par value of the shares of each class of stock as changed by the amendment; (c) the amount of such reduction, specifying the amounts of the reductions of each class, if more than one class is reduced; and (d) the reclassifications, if any of the stock represent- ing the difference,, if any, between the amount of stock theretofore issued and the amount of the issued stock as reduced. As to purchase by corporation of its own stock, see Sec- tion 36A. As to redemption of stock, see Sections 34 and 36A. ConsoUdatioji. 1920, ch. 327. 29. (1) Any two or more corporations having capital stock, now existing or hereafter formed under any law or laws of this State, which have been or shall have been duly authorized by law to carry on in whole or in part any kind of business of the same or similar nature, nuiy con- solidate, and by such consolidation form one new corpora- tion ; provided, however, that the provisions of this Section and of Sections 30 and 31 of this Article shall not be held to repeal any of the restrictions imposed by this Article on the consolidation of railroads owning or operating compet- ing or parallel lines, and provided further than any cor- poration which shall take advantage of this Section shall be deemed to have waived all claim to exemption from tax- ation or from repeal or modification of its charter. (2) Such consolidation shall be made in the manner following: There shall be an agreement of consolidation between the consolidating corporations giving (a) the terms and conditions of the proposed consolidation; (b) the mode of carrying the same into effect; (c) the name of the new corporation ; (d) the postoflfice address of the place at which the principal office of the corporation in this State will be located, as in the case of a certificate of incorpora- 36 tion and the name or Dames and postoffice address or ad- dresses of the resident agent or agents who will be in charge thereof, as in the case of a certificate of incorpora- tion ; (e) the counties in this State in which any of the consolidating corporations own property, the title to which could be aifected by the recording of an instrument among the land records, and if any of the consolidating corpora-- tions own such property in the City of Baltimore, the agree- ment of consolidation shall so state; (f) the number, names and addresses of the directors and the names of the officers, who shall act as such until their successors are duly chosen and qualified; (g) the amount of authorized capital stock of each consolidating corporation and the total amount of authorized capital stock of the new cor- poration and the number and par value of the shares; (h) the total amount of capital stock of the new corporation to be issued for stock of the consolidating corporations; (i) the restrictions, if any, imposed upon the transfer of the shares or of any of them; (j) if the capital stock is classi- fied, the amount, par value, preferences, restrictions and qualifications of each class, specifying the amount of each class authorized and the amount of each class to be issued for stock of the consolidating corporations; (k) the man- ner of converting the capital stock of each of the consoli- dating corporations into stock of the new corporation ; (1) all such otlier provisions and details which shall be deemed necessary to perfect the consolidation. The agreement of consolidation may also contain any amendment or amend- ments which may be desired, but if such amendment or amendments be made therein, the agreement of consolida- tion shall contain all of the matters and things required to be stated in articles of amendment when such amendment or amendments is or are made under the provisions of Sec- tions 24 to 28, inclusive, of this Article; and no amend- ment not authorized b}^ said sections may be made, but this provision shall not prevent the issuance of an amount of stock of the new corporation greater or less than the stock of the consolidating corporations for which it is exchanged. 37 The aiiTeeiiient of coiisolidatiou shall first be submitted to the boards of directors of the coDSolidating corporations, which shall pass resolutions declaring that such consoli- dation is advisable and calling separate meetings of the stockholders of the respective consolidating corporations to take action thereon. The meeting of the stockholders shall be duly warned in the manner provided in Section 15 of this Article. If said agreement of consolidation be ap- I>roved by the affirmative vote of two-thirds of all of the shares (or, if two or more classes of shares have been is- sued, of two-thirds of each class), outstanding and entitled to vote, of each consolidating corporation at such separate meetings, it shall be signed and acknowledged in the names of the respective consolidating corporations on behalf thereof by their respective presidents or vice-presidents, with their respective corporate seals attached, attested by their respective secretaries or assistant secretaries. There shall be attached to said agreement of consolidation the affidavits of the chairman or the secretaries of the respect- ive stockholders' meetings that the same was duly advised by the boards of directors and approved by the stockholders of their respective corporations. Said agreement of con- solidation, together with a copy thereof, shall be delivered to the State Tax Commission, which upon payment, and not before, of the recording fees for which provision is herein- after made, and upon the payment, and not before, of the bonus tax prescribed by law, if any payable, as in the case of a certificate of incorporation, shall receive the same for record and endorse thereon the date and time of such rer ceipt and promptly record the same as in the case of a certificate of incorporation. After such recording, the State Tax Commission shall transmit the copy of such agreement of consolidation, duly certified by it, to the Clerk of tlie Cir- cuit or Superior Court (according to the location of the principal office of the corporation, as stated in said agree- ment of consolidation), by whom the same shall again be recorded. The State Tax Commission shall prepare a cer- tificate or certificates of consolidation, giving the names of 38 the consolidating' corporations, tlie name and the location of the principal ofKce of the new corporation, the date of the agreement of consolidation and the time of the receipt of the same for record in the office of the State Tax Com- mission. One of such certificates of consolidation shall be transmitted by the Commission to the Clerk of the Circuit Court of each county in which any one of the consolidating corporations owns property, the title to Avhicli could be affected by the recording of an instrument among the land records, as shown by the agi'eement of consolidation, and if any of the consolidating corporations owns such prop- erty in Baltimore City, as shown by the agreement of con- solidation, one of such certificates shall be transmitted to the Clerk of the Superior Court of said city. Upon receipt of said certificate by a Clerk of a Circuit or Superior Court, the same shall be by him promptly recorded among the land records. At the time of receiving such agreement of con- solidation for record the State Tax Commission shall col- lect recording fees of twenty dollars; six dollars of the fees so collected shall be paid by it to the Clerk of the Circuit or Superior Court to whom a copy of such agreement of consolidation shall be transmitted for recording as afore- said, and for the balance it shall account quarterly to the Comptroller and pay the same forthwith to the State Treas- urer for the use of the State. In addition to any other re- cording fees required by law, the State Tax Commission shall, at the time of receiving the agreement of consolida- tion for record, collect a recording fee of two dollars for each certificate of consolidation required, and one-half of each such fee shall be paid by it for recording the same to . the Clerk of each Circuit or Superior Court to whom a cer- tificate of consolidation is transmitted for recording, as aforesaid, and for the other one-half it shall account quar- terly to the Comptroller and pay the same forthwith to the State Treasurer for the use of the State. As to amount of bonus or organization tax, see Section 88A. The effect of a consolidation is the extinction of the life of the constituent corporations and the creation of a new cor- poration which is a legal unit, and not a mere association or 39 aggregation of co-existing corporations. The rights and pow- ers received by it from the State, at its formation, although identical in character with those which had been possessed by the extinct corporations, are its own rights and powers. — Diggs y. Fidelity & Deposit Co. (.1910). 112 Md. 50, 74, 75 Atl. 517. The consolidated corporation cannot issue bonds author- ized under a mortgage of a constituent company, and which, under the terms of the mortgage, were reserved to be issued for property after acquired by the constituent corporation, since the property was not acquired by it, but by the con- solidated corporation. — Ihid. 1916, ch. 596. 30. When such agreement of consolidation has been de- livered to the State Tax Coniinission Avith the fees required by Section 29 of this Article and the bonus tax, if any pay- able, and not before, all of the property and assets belong- iuii to said consolidating corporations of whatsoever nature and description, and all the jwwers and rights and all debts and liabilities of said consolidating corporations of whatsoever nature and description, shall be devolved upon said new corporation, which shall be regarded as substitu- ted by operation of law in the room and stead of said con- solidating corporations; and from the time of the delivery of said agreement of consolidation, as aforesaid, any amendment or amendments made by said agreement of con- solidation shall take effect, and not before. A duly certi- fied copy of said agTeement of consolidation from the rec- ords of the Secretary of State, the State Tax Commission or the Circuit or Superior Court, shall be evidence of said consolidation and of any amendment or amendments made by said agTeement of consolidation. The recording by the State Tax Commission of said agreement of consolidation shall be conclusive evidence of the payment of the record- ing fees and the bonus tax, if any, required by law to be paid to it, and of the existence of said consolidated cor- poration, except in a direct proceeding by the State. Only those agreements of consolidation received for rec- ord between the dates of June 1, 1916, and September 30, 1920, both inclusive, have been recorded in the office of the 40 Secretary of State, and, therefore, no other agreements of con- solidation can be certified by him. See Chapter 596 of the Acts of 1916 and Chapter 327 of the Acts of 1920 (Section 29, supra). See Section 99B, which provides tliat no charter or other paper, which is not in conformity with law, shall be received for record. 1916, ch. 596. 31. Any stockholder of any corporation consolidating as aforesaid, who at such meeting voted against the agree- ment submitted, may, within twenty days after the agree- ment of consolidation has been delivered to the State Tax Commission (but not afterwards), make upon the con- solidated corporation a written demand for the payment for his stock, and shall thereupon be entitled to receive the fair value thereof, and if the dissenting stockholder and the consolidated corporation shall fail to agree upon the fair value of said stock, or if, having agreed, the corpora- tion shall fail to pa^^ or tender the amount thereof, the dissenting stockholder may, within thirty days after such written demand, appl}^ by petition to any court of eiiuity having jurisdiction over the consolidated corporation, on reasonable notice to be furnished b}^ said court to said con- solidated cori)oration, for the appointment of three disin- terested commissioners to appraise the fair value of his stock without regard to any depreciation or appreciation thereof in consequence of the said consolidation, and on the coming in of the answer to said petition, the court shall pass an order referring the matter to three commissioners named by it, for the purpose of ascertaining such value, and such order shall prescribe the time and manner of pro- ducing evidence, if necessary; and the award of said com- missioners (or that of a majority of them), when confirmed by said court, shall be final and conclusive on all parties, unless any stockholder or the corporation consolidating as aforesaid, feeling aggrieved at the said action of tlie said court, shall appeal to the Court of Appeals of Maryland, which right of appeal from sucli action of the court is here- by given, and said consolidated corporation shall pay such 41 stockholder the value of his stock ascertained as aforesaid, and on receiving such payment or on a tender thereof, said stockliolder shall transfer his stock to the said consolidated corporation, which stock shall then have the status of au- thorized but unissued stock; and in case the award is not so paid within thirty days from the filing of said award and confirmation by said court, or in case of an appeal, Avithin thirty days from the confirmation of said award by the Court of Appeals, and notice thereof given in the man- ner aforesaid .unto said stockholder and the said con- solidated corporation, the amount of tlie award shall be a decree against the said consolidated corporation wliich decree shall be a prior lien to any mortgage or other lien placed on its property or franchises by said consolidated corporation and may be collected as other decrees in said court are bv law collectible. Sale, Lease or Exchange of Entire Property. 1918, ch. 466. 32. Every corporation of this State having capital stock (except railroads) may at any meeting duly warned in accordance with the provisions of Section 15 of this Arti- cle, sell, lease or exchange all of its property and assets as an entirety, including its good will and franchises, to and with any other corporation organized under the laws of this or any other State which is duly authorized to ac- quire and hold such or similar property. An agreement containing the terms and conditions of the proposed sale, lease or exchange shall, after approval by the Board of Directors, be submitted for the approval of the stockhold- ers of any corporation organized under the laws of this State which shall be a party to such agreement at a meet- ing warned as aforesaid; and if approved by the affirma- tive vote of two-thirds of all the stock (or if two or more classes of stock have been issued of two-thirds of each class) outstanding and entitled to vote, such agTeement shall be executed and in terms and conditions performed 42 by the proper officers of the respective companies. Any stockholder of any corporation organized under the laws of this State, who, at such meeting, voted against the agree- ment submitted, may within twenty days after such meet- ing (but not afterward) make upon his corporation a writ- ten demand for payment for his stock ; and he shall be en- titled to receive an amount equal to the fair value thereof, unaffected by such sale, purchase, lease or exchange of the corporate assets. If the dissenting stockholder and his corporation shall fail to agree upon the fair value of said stock (or, if having agreed, the corporation shall fail to pay or tender the amount thereof), the stockholder shall be entitled to file against his said corporation in any Court of Equity having jurisdiction over the same, a pe- tition for an accounting and for the ascertainment of the fair value of his shares, and thereupon such proceedings shall be had as are provided by Section 31 of this Article. The proceeding by a dissenting stockholder hereunder shall not prevent or delay the execution and performance of any agreement so ai)proved by the affirmative vote of two- thirds of the stock ; but in case of every such sale, lease or exchange, the vendee, lessee or grantee shall take the prop- erty of the grantor corporation subject to its debts and lia- bilities, including the claim of such dissenting stockholder; and such proi)erty may be subject to execution on any de- cree entered as herein provided, and such decree shall have priority over any incumbrance placed by the grantee cor- poration upon the property so bought, leased or exchanged; provided, however, that the right granted to a dissenting stockholder hereunder to demand payment for his stock shall cease, if at any time prior to the entry of any decree herein provided for, the defendant corporation shall make it appear to the Court that the agreement of sale, lease or exchange has been rescinded by appropriate corporate ac- tion, so that the stock of such dissenting shareholder re- mains unaffected thereby; and provided, further, that the provisions of this section and of the three preceding sec- tions shall not impair or affect in au}^ way any restrictions, 43 limitatioDS or other provisions, contained in any ordinance granting or conferring any franchise heretofore passed by any municipal corporation of this State prohibiting, limit- ing or restricting the transfer or assignment of such fran- chise. Prior to the enactment of this section it was held that a purely private corporation could, with the express or implied assent of all its stockholders, sell and convey the whole of its property.— Stokes v. Detrich (1892), 75 Md. 256, 23 Atl. 846. A public service corporation has, however, no power to alienate its franchises and property without legislative au- thority.— State T. Coiisolidjition Coal Co. (1877), 46 Md. 1, 10. Capital Stoerior Court to whom a copy of such statement shall be transmitted for record- ing, as aforesaid, and for the balance it shall account quar- terly to the Comptroller and pay the same forthwith to the State Treasurer for the use of the State. The receipt for record of such statement by the State Tax Commission shall be conclusive of the i^ayment of the fees required by law to be paid to it, except in a direct proceeding for the collection of the same. A duly certified copy of such state- ment from the records of tlie State Tax Commission or the Circuit or Superior Court shall be prima facie evidence of the facts therein set forth. (G) After the receipt for record of such statement by the State Tax Commission, the corporation may forthwith or from time to time issue the stock and/or convertible se- curities therein mentioned for the consideration therein specified. ' For skeleton form of stock issuance statement, see Appendix. See Section 35. For definition of convertible securities, see Section 35. See Section 9 9B, which provides that no charteil or other paper, which is not in conformity with law, shall be received for record. 1920, ch. 545. 3r)C.Tlie charter of any corporation of this State incor- porated on or after June 1, 1920, may empower the board of directors thereof to authorize the issuance from time to time of shares of its stock of any class and/or convertible securities for a certain specified consideration or certain specified considerations, subject to such limitations and restrictions, if any, as may be set forth in the charter or in 53 the by-laws of the corporation. Such authorizatiou, how- ever, shall not be effective for the purposes of this section unless such charter shall be set forth: (a) In the case of stock and/or convertible securities authorized to be issued for money, the maximum number of shares and/or the maximum amount of convertible se- curities authorized to be so issued and the minimum price to be received for each share of each class or the minimum price to be received for a given number of shares or one or more classes and/or for a given amount of convertible se- curities, as the case may be. ( b ) In tlie case of stock and/or couA'ertible securities au- thorized to be issued for a consideration other than money, the number of shares of each class and/or the amount of convertible securities authorized to be issued therefor, a particular description of such consideration, showing its nature and character, and the actual value of such consid- eration as fixed by the incorporators. (c) The terms in detail upon which any convertible se- curities authorized to be issued are convertible into stock of the corporation. For definition of convertible securities, see Section 35, certificate of incorporation in Appendix. See Section 3 5. For definition of convertible securities, see Section 3 5. 1920, ch. 545. 35D. The charter of any corporation of this State incor- porated on or after June 1, 1920, may empower the board of directors thereof to authorize the issuance from time to time of shares of its stock without par value of any class and securities convertible into shares of its stock without par value of any class for such considerations as said board of directors may deem advisable, subject to such limita- tions and restrictions, if any, as may be set forth in the charter or in the by-laws of the corporation. The board of directors shall, by resolution, state its opinion of the actual 54 value of any consideratioii other than money for which it authorizes shares of stock without iiar value or securities convertible into shares of stock without par value to be is- sued, unless such value shall have been fixed by the char- ter. For', form of charter authorization, see skeleton form of certificate of incorporation in Appendix. See Section 35. For definition of convertible securities, see Section 35. 1922, ch. 309. 35D^. For the purposes of Sections 35 to 35D, inclu- sive, of this Article, the consideration for which stock is issued as a stock dividend shall be taken to be the capitali- zation thereby of surplus or net profits of the corporation, and the actual value of such consideration shall be taken to be an amount equal to the surplus or net profits thereby capitalized. 1920, ch. 545. 35E. There shall be no individual liability upon any sub- scriber to, or holder of, any stock of any corporation of this State, beyond his obligation to the corporation or its receiver, trustee or other person winding up its affairs, to comply with the terms of the contract of subscription, and any and all stock for which the agreed consideration shall have been paid or delivered shall be fully paid and no/i-ns- sessable stock of the corporation ; provided, however, tlia t nothing in this section shall be taken or construed as liiiiit- ing or affecting the liability of stockholders in banking, safe deposit, trust or loan corporations. See Section 35. See also Sections 61, 62, 63, 66 and notes. 1920, ch. 545. 35F. The books of every corporation of this State shall be so kept as to show at all times what money or other con- sideration was received by such corporation for the slock issued by it and the nundwr and par value of the shares of each class issued for the same, and to show at all times 55 what money or other consideration was received by the cor- poration for convertible securities issued by it and tlie number and par value of the shares of each class of stock into which such securities are convertible. See Section 35. Section 70 of the Code of 1904 provided that when stock was issued for property, "the books of the company shall be so kept as to show at all times fully what property was received for the said stock, at what value, and the number of shares of the capital stock issued for the same." This provision was held to be directory and compliance there- with not essential to the validity of a subscription pay- able in property. — Weber v. Fickey (18 79), 52 Md. 500. 1920, ch. 545. 3G. Any officer or director of any corporation of this State knowingly and wilfully authorizing or consenLing to the issuance of unauthorized stock of such corporation, or knowingly and wilfully authorizing or consenting to the issuance of stock or convertible securities of such corpora- tion except in conformity with the provisions of law appli- cable to the issuance thereof, or knowingly and wilfully making or consenting to the making of any false statement in a statement in respect of the issuance thereof deliverfnl for record to the State Tax Commission, or in the entries in respect of the issuance thereof required by law to be made in the books of the corporation, shall be guilty of a misdemeanor and, upon conviction, shall be fined not more than five thousand dollars or imprisoned for not more Hian two years, or both fined and imprisoned, in the disci'etion of the Court ; provided, however, that the valuation placed by the board of directors or the incorporators, as the case may be, upon the consideration other than money, for which stock and/or convertible securities are to be issued, and the judgment of the board of directors or the incor- porators, as the case may be, as to the propriety of the ac- ceptance of the same and the issuance therefor of the agi'eed amount of stock and/or convertible securities shall be conclusive for all purposes in the absence of actual fraud. 56 See Section 35. See Section 35F and note. 1922, ch. 309. 36A. (1) Any corporation of this KState may acfiuire !^-liares of its own stock of any class by gift or bequest. (2) Any such corporation may purchase shares of its own stock of any class, which is subject to redemption at ihe time of such purchase, at not exceeding the redemption price thereof. Any of such stock purchased for retirement and any of such stock redeemed shall have the staius of authorized but unissued stock of the corporation and, until the classification thereof shall have been changed, shall re- tain the classification obtaining before such purchase for retirement or such redemption. No proceeding for the re- duction of the issued stock of the corporation shall be nec- essary to effectuate such retirement. For the purposes of the succeeding paragraphs of this section every jDurchase for retirement of shares of stock subject to redemption shall be deemed and taken to be a redemption thereof and the term "purchase" whenever used therein shall be con- strued not to include either any purchase for retirement of shares of stock subject to redemption or any redemption thereof. (3) Any such corporation thereunto authorized by its charter or by the vote at a meeting duly called and held of the holders of two-thirds of the shares of each class of stock outstanding, including stock of any class to whicli the charter purports to deny the right to vote, may purchase shares of its own stock of any class. The holders of stock f/f any class to which the charter of the corporal/Ion pur- ports to deny the right to vote shall be entitled {<• vote upon the adoption of any amendment to such charter autliorizing sncli coi-poration to purchase shares of its own stock. (4) Any sliares of its own stock acquired by gift or be- quest by any corporation of this State or purchase by it out of its surplus or net profits may be held by such corpora- 57 tion or sold or otherwise disposed of b^' it from time to time for its corporate purposes. Any such shares so ac- quired may be retired by resolution of the board of direc- tors and if retired shall have the status of authorized but unissued stock of the corporation and, until the classifica- tion thereof shall have been changed, shall retain the classi- fication ol)taiuing- before such retirement. No procedure for the reduction of the issued stock of the corporation shall be necessary to effectuate such retirement. (5) Any shares of its own stock purchased by any such corporation, except when purchased out of its surplus or net profits, shall be retired by reduction of the amount of issued stock of the corporation in the manner provided by law. In such case the articles of amendment reducing the amount of issued stock of the corporation shall, in addi- tion to other matters required by law, set forth the aggre- gate price paid or to be paid by the corporation for the shares of stock thereby retired. (6) The acquisition of its own stock by any such cor- poration, by gift, bequest or purchase, shall not release the liability to the corporation, or to its receiver, trustee or other person winding up its affairs, of any stockholders whose shares have not been fully paid, for the payment of its liabilities existing at the time of such acquisition or created prior to the retirement of the stock so acquired by reduction of the amount of issued stock of the corporation in the manner provided by law. In the case of the pur- chase of its own stock by a corporation, except when pur- chased out of its surplus or net profits, the stockholders selling their stock to the corporation shall be and remain liable to the corporation, or to its receiver, trustee or other person winding up its affairs, to the extent of the payments made to them therefor, for the payment of the liabilities of the corporation existing at the time of such payments or created prior to the retirement of the stock acquired from them by reduction of the amount of issued stock of the cor- poration, in the manner j)rovided by law. 58 (7) No corporation of this State shall purchase or re- deem shares of its own stock for any unlawful purpose whatsoever, or purchase or redeem shares of its own stock when the probable effect of such purchase or redemption would be to prejudice the rights of existing creditors. (8) Nothing in this section shall be taken or construed as limiting or affecting the liability of stockholders in bank- ing, safe deposit, trust or loan corporations. As to right of corporation to vote its own stock, see Sec- tion 18. In the absence of statutory authority, a corporation has no power to purchase its own stock. — Peninsula Trust Co. V. Johnson (1916), 128 Md. 535, 97 Atl. 525. 37. (Repealed by Chapter 596 of the Acts of 1916, Sec- tion 11.) ARTICLE XXXII-A. Fraudulen t Promotions. 1920, ch. 552. 11. If it shall appear to the Attorney General of the State of Maryland that in the issuance, sale, promotion, negotiation, advertisement of, or distribution of any stocks, bonds, notes or other securities within the State of Mary- land, any person, partnership or corporation is employing or is about to employ any device, scheme or artifice to de- fraud, or for obtaining money or property by means of any false or fraudulent pretense, representation or i>romise, or the said Attorney General believes it to be in the interest of tlie public that an investigation be made w^ith a view to the issuance of an order, such as herein provided, he may re- quire such person, partnership or corporation to file Avith him a statement in writing under oath as to all facts con- cerning the same, and for that purpose may prescribe forms upon whicli such statements shall be made. The Attorney (ieneral may relural, and the plural includes the singular. / iisKraiicc Dcjxni iiK'iit. Sec. 3. Tide aiul Jia-mUction. There shall be a Depart- ment, to be known as the State Insurance Department of Maryland, which shall be assigned to the Division of Fi- nancial hVview and Control, and which shall be charged. 69 subjet-t to the .snjiervision and direction of the Comptroller, Avith the execution of the laws of this State in relation to insurance. The principal office of said Department shall be located in tlie City of Baltimore. Sec. 4. Insurance Commissioner; Appointment and Term. The chief officer of said Department shall be ap- pointed by the Governor for a term of fonr years beginning on the first Monday of May succeeding his appointment, except that the Insurance Commissioner first appointed under this Act, shall be appointed on the first day of Jan- uary, 1923, on Avhich date his term shall begin, and shall hold office until the first Monday of May, 1924, or until his successor shall be appointed and shall qualify. Sec. 5. Qualifications; Compensation; Bond. No per- son who is a director, officer or agent of, or directly or in- directly interested in any insurance company, except as an assured, shall be eligible for appointment as commissioner. He shall give bond to the State of Maryland in the penalty of fifty thousand dollars for tlie faithful performance of the duties of his office, and sliall receive an annual compensa- tion as fixed and provided by the budget. Sec. 6. Dcptittj Insurance Conunissioner. There shall also be a Deputy Insurance Commissi(mer, who shall be apjjointed by the commissioner, and who, in the event of the death, resignation, disability or disqualification of the commissioner, or in case the office of commissioner shall for any cause become vacant, shall have and exercise all the powers and duties vested by law in the commissioner. He shall give bond to the commissioner in such penalty as shall be determined by the commissioner, and shall receive an annual compensation as fixed and provided by the bud- get. Sec. 7. Examiner. There shall be an examiner of the in- surance department, who shall be appointed by the com- missioner and whose duty it sliall be to examine, under the direction of the commissioner, the condition and affairs of every insurance company of this State and such other com- 70 panies doiDg business in this State as the commissioner may direct, in order tliat the commissioner may know whetlier or not such companies are solvent and in com- pliance with the laws of this State. Said examiner shall receive an annual compensation not exceeding fifteen hun- dred dollars and the per diem provided by Section 50, to be paid by the companies examined by him. Sec. 8. Actuary. The commissioner shall also appoint an actuary for the department, who shall receive an annual compensation of five hundred dollars and the fees provided by Section 40, to be paid by the companies whose policies he shall value as required by law. Sec. 9. Auditor. The commissioner shall also appoint an auditor for the department, whose duties it shall be to ex- amine and audit the annual statements of all insurance companies authorized to do business in this State, the books, accounts and affairs of the insurance department, and do such other auditing as the commissioner may direct. He shall also, when so directed by the commissioner, assist in the examination of companies, and shall receive tlie an- nual compensation of one thousand dollars, and when en- gaged in the examination of companies, the per diem provided by Section 50, to be paid by the companies ex- amined by him. Sec. 10. CJcrl-s. The commissioner nuiy also employ such clerks and assistants as may be necessary for tlie jDroper discharge of the duties of his department, at such compen- sation as shall be fixed and provided by the budget. Sec. 11. (iciicra] Poircis and Duties of Commissioner. It shall be tlie duty of the commissioner to see that all the laws of this State governing insurance companies or relat- ing to the business of insurance are faithfully executed. He shall keep on file in his office duly certified copies of the charter, declaration of organization or deed of settlement of every insurance company authorized to do business in this State, and all other certificates and documents re- quired by this Article to be filed with him, and shall furnish 71 any «iK-h i-ominuiy api>lYiiio- therefor, certified copies of said documeuts filed in Lis department. He shall furnish in December of each year to the companies required by this Article to report to him, the necessary blank forms for the statements required, and shall carry out, fulfill and enforce all the provisions of this Article with reference to the supervision and reg^ulation of insurance companies and the business of insurance. It shall be his duty to report in de- tail to the Attorney General any violations of the laws rel- ative to insurance companies or the business of insurance, and he shall have power to institute suits and prosecutions, cither by the Attorney General or such other attorney as the Attorney General may select, for any violation of the provisions of this Article. The commissioner is a neces- sary party to any proceedings instituted for the purpose of closing up the affairs of any company', when the same shall not be in the name of the State of Maryland. The couimis- sioner and the deputy commissioner shall have the power to administer oaths to all witnesses who appear before them, or either of them, in connection with any examina- tion, investigation or hearing, and also to require agents •ind broker:? to prodii.e any booi^s, policu "^ or jKii'ers in their ]>ossession that may be needed in connection with any liearing, examination or investigation of such agents or brokers. Sec, 12. Annual Report to Governor. The commissioner shall preserve in permanent form a full record of his pro- ceedings, and a concise statement of the condition of each company visited or examined, and report annually to the Governor,on or before the first day of June, his official acts. In his report to the Governor he shall report the condition of the companies doing business in this State, and such other information as will exhibit the affairs of his depart- ment; a copy of which said report to the Governor he shall forward to the Insurance Commissioner or other similar officer of every other State of the United States, and to each company doing business in this State; and on request he shall communicate to the Insurance Commissioner, or other proper officer of any other State, any facts which by law i* is his duty to ascertain respecting companies of this State doing business within such other State, and at the request of any i)erson, and on payment of the proper fee, as herein- after provided, he shall give certified copies of any record or paper in his office when he deems it not prejudicial to the public interest so to do, and he shall give such other certificates as this Article provides for. He shall adopt and renew from time to time, when necessary, with the ap- proval of tlie Governor, a seal of office, an impression and description of wliich, with the Governor's certificate of ap- proval, shall be filed with the Secretary of State. Sec. 13. ^hall Remit Receipts of Office Quarterli/. The commissioner shall, on the thirty-first day of December, the thirty-first day of March, the thirtieth day of June and the thirtieth day of September, in each and every year, report to the Comptroller and pay in to the state treasury all moneys received by him from all sources, save and except the moneys received by him as the fees of his office, which said fees received and expenses of his department for the year tlien to end, lie sliall annually on the first day of De- cember, report to the Comptroller, and pay into the treas- ury all excess of such receipts over disbursements, Geii era J Pro r i.sion s. Sec. 14. Formation of Iiisiirli cable, i-elating to the formation, powers vested in and obligations imposed upon corporations formed under the 73 provisions of said Article, except as otherwise specifically provided in this Article, but shall in all other respects be subject to and reiiulated by the provisions of this Article and by no other law, act or part of act now in force or that may hereafter be passed, unless one or more classes of cor- porations embraced witliin this Article shall be specifically mentioned and embraced within the provisions of an}^ such Act hereafter i)assed. Sec. 1(). Ccrtificdfc to he Approved hjj CoDunissioiwr Be- fore Record'uuj. The certificate of incorporation of every corporation formed for insurance purposes, or any amend- ment tliercof, sliall be snbnntted to the Insurance Commis- sioner for examination and by him endorsed as being in accordance Avitli the ])rovisions of this Article and not in- consistent with tlie hiws and Oonstitution of this State, before the same may be received by the State Tax Commis- sion for record, and no such certificate or amendment shall be operative and no such company shall be granted a li- cense or authority to do an insurance business until all the provisions of this section shall have been complied with. Sec. it. Chtsses of Business That Mai) Be Conihined. Any company incorporated under the laws of this State for insurance purposes may include in its certificate of incor- poration any two or more classes of insurance business au- thorized by this Article, except as herein otherwise pro- vided, and may also include the following; to guarantee the payment, punctual performance and collection of promis- sory notes, bills of exchange, contracts, bonds, accounts, claims, rents, annuities, mortgages, clioses in action, evi- dences of debt and certificates of property or value, and the titles to property, real or personal, on such terms as may be established by the board of directors of said company ; to receive on storage, deposit or otherwise, merchandise, bul- lion, specie, plate, stock, bonds, promissory notes, certifi- cates and evidences of debt, contracts or other property, and to take the management, custody and charge of real or personal estate or property, and to advance money, securi- ties and credits upon any property, real, personal or mixed,. 74 on such terms and with all such powers of sale and other disposition thereof as shall be established by the charter or by-laws of such corporation ; provided that the corporate title of any company having among its other purposes those numerated in this section, shall designate the same as a security, as well as an insurance company; and provided, further, that no company incorporated for the purpose of insuring the lives of persons may include in its certificate of incorporation any other class of business than the insur- ance of persons against disability from accident or sick- ness, and any insurance appertaining to life, insurance, in- cluding endowments, and the grant, purchase or disposi- •tion of annuities. Sec. 18. Capital ^^t(jck. The caj)ital stock of any insur- ance company incorporated under the laws of this State, except companies writing fidelity or surety bonds, or lia- bility, workmen's compensation, or any class of casualty insurance, shall not exceed the sum of two millions of dol- lars, and, with the exception of mutual insurance com- panies and industrial life insurance companies falling within the class of companies embraced within the provi- sions of Sections 95, 96 and 97, shall not be less than one hundred thousand dollars, or in the case of companies writ- ing fidelity or surety bonds, or liability and Avorkmen's compensation insurance, shall not be less than two hun- dred and fifty thousand dollars. Sec. 19. Cancellation and Re-issue of Capital Stock. It shall be lawful for the stockholders of any insurance com- pany, in general meeting assembled, from time to time, to provide for calling in and cancelling the whole or any part of the ca])ital stock and issuing other stock instead there- of at such par value as they may decide on, to an amount not exceeding the true value of such stock, in such manner as to provide such contingent fund or surplus not repre- sented by stock as they may decide to be necessary; provid- ed, that notice of every such meeting of stockholders shall be given in the manner required by Sections 15 and 10 of 75 Article 23, and the proceedings thereafter shall be similar to those prescribed in Sections 26 and 28 (both inclusive) of said Article 23. Sec. 20. Dcitosit of l^ccKritlc.s hi/ Domestic Companies. Every domestic company writing life, health, accident, lia- bility, compensation or casualty insurance, or fidelitj^ or surety bonds, except industrial life insurance companies embraced within the provisions of Sections 95, 96 and 97, shall, before being entitled to transact any business of insurance, assign to and deposit with the Treasurer of the iState of Maryland, in trust, as security for all the holders of policies or other obligations of said company, bonds, coin or treasury notes of the United States of America, bonds of the State of ^Maryland or of any county or munic- ipal corporation of this State, or interest-paying first mortgage Ixmds of such electric railways of this State, or interest-])aying bonds secured by first mortgage on unen- cundiered real estate situated in this State, worth at least double the amount loaned thereon, and not in default, as nmy be approved b}' the Board of Public Works, having a market value not less than one hundred thousand dollars. Sec\ 21. Deposit hj/ Industrial Life hisurance Com- panies. Industrial life insurance companies of this State falling within the class referred to and authorized by Sec- tion 96 shall, before being entitled to transact any business of insurance, transfer and assign to and deposit with the Insurance Commissioner, in trust, as security for the hold- ers of policies or other obligations of said companies, bonds, coin or treasury notes of the United States of America, or securities mentioned and authorized by Section 20, having a market value of not less than fifty thousand dollars; and such companies falling within the class referred to and authorized by Section 97, and not by law otherwise provid- ed for, shall deposit with the Insurance Commissioner, in trust, as aforesaid, bonds, coin or treasury notes or securi- ties as above mentioned and authorized, having a market value of not less than ten thousand dollars (|10,000) nor more than one hundred thousand dollars (|100,000.) 76 Sec. 22. Deposit of Securities by Foreign Companies. Every foreigu company writing life, health, accident, lia- bility, compensation or casualty insurance, or fidelity or surety bonds, shall, before being entitled to receive a li- cense to do any business of insurance in this State, assign to and deposit with the Treasurer of the State of Mary- land, in trust, as security for all the holders of policies or otlier obligations of said companies within this State, bonds, coin or treasury notes of the United States of Ameri- ca, or securities of the same kind in the same amount as required by Sections 20 and 21 of domestic companies doing the same class of business, unless said companies shall have deposited with some proper official of the State where incorporated or organized, or in some other State of the United States, in trust, as security for all the holders of policies or other obligations of said company in the United States of America, coin, notes or securities author- ized by the insurance laws of the State where incorj^orated or organized, and ai)proved by the proper official thereof and having authority therefor, to an amount not less than that required of companies doing the same class of business by the laws of this State to be deposited with the Treasurer (»f til is State. Se(\ 23. Additiomil Deposits. Whenever any of tlie se- curities required to be deposited as provided by Sections 20, 21 and 22, shall depreciate in value so that the market value of the deposit shall be less than that required by said sections, additional securities shall be deposited in order that the deposit shall at all times be maintained in the amount of not less than that re(]uired by said sections. Sec. 24. J'J.rc/i(iJc of and Income From Deposits. All deposits made under the provisions of any of the preceding sections shall be held by said Treasurer or Commissioner, subject to sale and transfer and to the application of the proceeds of any such sale only on the order of a court of competent jurisdicton. So long as a company shall be solvent and not in default under any section of this Article, it shall be en- titled to receive the income from any deposit made under any of the preceding sections. Sec. 26. Investment of Reserves. Every insurance com- pany, domestic or foreign, authorized to do business in this State, must have and continually keep an amount equal to its entire reinsurance reserve and all other debts and claims against it, exclusive of capital stock, invested in the bcmds, coin or treasury notes of the United States, or interest, or dividend-paying bonds or stocks of this or any other State of the United States, or of any county, incorporated city or other corporation of this or any other State having legal authority to issue the same, and not in default, or in real estate for the office or business purposes only of said com- pany; provided, however, that they shall have the right to purchase and hold real estate under a foreclosure of their 78 own mortgages for a period of not more than five years, and for five years longer if, in the judgment of the Insur- ance Commissioner, it is advisable so to do; or it may be invested in ground rents, or loaned upon first mortgages- on unincumbered fee-simple, or improved leasehold real es- tate, in this or any other State of the United States, to an amount not exceeding sixty per cent, of the fair market value of such fee-simple, or improved leasehold, real estate. Whenever such loans are made upon fee-simple, or im- proved leasehold real estate, which is improved by a build- ing or buildings, the said improvements shall be insured against loss by fire and the fire insurance policies shall be duly assigned to the mortgagee as additional security for tlie said loan ; or it may be loaned on pledges of any se- curity named in this section, or on the policies of the com- pany in force, provided, that each loan is less than the net reserve of the policy on which the loan is made, according to the standard of valuation prescribed in this Article; and provided, tliat the current market value of such pledged securities, other than the bonds and stocks of this State, or of the United States, shall be at all times during the con^ tinuance of such loans, at least ten per cent, more than the sum loaned on tliem. All such loans shall be f;ubject to the power of the company to terminate the same in the case of tlie depreciation of the securities below that limit. In all investments made upon mortgage securities, the evidence of the debt shall accompany the mortgage or deed of trust, and the Insurance Commissioner shall have the authority, when any of the securities mentioned in this section and held by any insurance company reporting to him are of doubtful market value, or without any ascertainable value on the exchange, to cause the same to be appraised by two disinterested and competent persons, whose estimate of the value of such securities shall be taken to be the value there- of, unless the company, by placing some of them upon the nuirket, and obtaining a bona fide offer therefor, shall so establish for them a different value. 79 Sec. 27. Business Shall Be Conducted in Own Name. Every insurance company, foreign or domestic, shall con- duct its business in this State in its own proper or cor- porate name, and the policies or contracts of insurance is- sued by it shall be headed or entitled only by its proper or corporate name. Sec. 28. Misleading Name. No insurance company of this State shall assume the name of any foreign or domestic corporation, or one so closely resembling it as to mislead the public as to its identity. Sec. 21). Admission of Foreign Companies. No foreign insurance company shall, directly or. indirectly, transact any business of insurance in this State unless and until it shall be fully organized and possessed of the amount of capital required of similar companies formed under the laws of this State, and until the following conditions sliall have been fully complied with and there shall have been granted by the commissioner a license to said company. There shall be filed with the Insurance Commis- sioner, first, a copy of its charter, declaration of organiza- tion or ^eed of settlement, duly certified by the proper of- ficial of its home State, with his certificate that said com- pany is entitled to assume risks and issue policies therein; secondly, a power of attorney, appointing a citizen of this State, resident within this State, the agent or attorney for the company, upon whom process of law may be served, to- gether with a certified copy of the vote or resolution of the directors appointing such attorney, which said appoint- ment shall continue until another attorney shall be sub- stituted. Said writing or power of attorney shall stipulate and agree, on the part of the company making the same^ that any lawful process against said company which is served on such agent, shall be of the same legal force and validity as if served on such company within this State, and also, that in case of the death or absence of the attor- ney so appointed, service of process may be made upon the Insurance Commissioner. Said power of attorney cannot 80 be revoked or modified, except tliat a new one may be sub- stituted, 80 long as any policy or liability remains outstand- ing against such company in this State. The term process, used above, shall be held and deemed to include any writ, summons or order, whereby any action, suit or proceeding shall be commenced, or which shall be issued in or upon any action, suit or proceeding, by any court, officer or magis- trate; thirdly, a statement of the condition of the company on the thirty-first day of December next preceding, under oath of the president or vice-president of the company, with that of the secretary or actuary, as hereinafter pro- vided; fourthly, a certificate by every company writing life, accident, health, liability or compensation insurance, or fidelity or surety bonds, which shall be renewed annual- ly, from the commissioner or superintendent of insurance or proper financial officer of the State in which such com- pany is organized, or by the Treasurer of the State of Mary- land, or of some other State of the United States, setting forth that such company has deposited with him the sum of one hundred thousand dollars of its capital or assets, in bonds, coin or treasury notes of the United States, or in bonds of the State of Maryland or of the State in Avhicii said deposit is made, or in bonds secured by mortgage or deeds of trust on unincumbered real estate, worth at least double the amount loaned thereon, and that he holds the same in trust and on deposit, under and by the laws of the State in which he resides, for the benefit of all the policy- holders of such company in the United States, and that he is satisfied that the securities so deposited by such company and held by him are worth at least one hundred thousand dollars; fifthly, a requisition for the appointment of each agent or solicitor, executed by the proper officers or author- ized representative of the company, certifj^ing to the fitness of the appointee and signed by the agent or solicitor apply- ing for a license, in accordance with the provisions of sec- tion 60. A company may designate any representative as principal or general agent or state manager, and any repre- 81 sentative thus clesigDated shall be authorized to requisitipn upoD the commissioner for the appointment of sub-agents or solicitors. Sec. 30. Ccrtipcutes of Authority to Domestic Company. No company incorporated under the laws of this State shall, directly or indirectly, transact ixwj business of in- surance until, first there shall haye been filed with the com- missioner a duly certified copy of its charter; secondly, it shall haye made the deposit of cash or securities required 1)}' this Article, according' to the class of business to be transacted, and a certificate of said deposit from the Treas- urer of this State filed with the commissioner, unless said deposit shall be made with the commissioner under the pro- yisions of Section 21; thirdly, the commissioner shall haye examined the officers of such company, under oath, to ascer- tain wliether or not the capital required of the company and authorized, by its charter, according to the nature of the business proposed to be transacted by it, has been paid in cash and is held by the board of directors subject to their actual control in accordance with the proyisions of the charter of said company, or has been inyested by them in. securities authorized by this Article; fourthly, the officers or incorporators of such company shall haye certified, under oath, that the capital exliibited to the commissioner is bona fide property of the company, and fifthly, there shall haye been granted by the commissioner a license or certificate of authority to said company. Sec. 31. Annual Statement. Every insurance company conducting any branch of insurance business in this state, must transmit to the insurance comnnssioner a statement of its condition and business for tlie year ending on the pre- ceding thirty-first day of December, which statement shall be rendered on the first day of January following, or within sixty days tliereafter (except that companies of foreign countries may transmit their statements of business, other than that done in the United States, at any time prior to the following first of July), which statements must be in 82 the form aiul state the particulars required by the blaulvs prescribed by the insurance commissioner; and he may re- quire at any time statements from any company doing busi- ness within this state, or from any of its officers or agents, on sucli points as he may deem necessary and x>roper to elicit a full exhibit of its business and standing; all of which statements herein required must be certified by tlic signatures and oath of the president or vice-president of tlie company, with that of the secretary or actuary. No com- pany Iiaving neglected to file a statement required of it within the time and manner prescribed shall do any new business, after notification by the insurance commissioner, while such neglect continues; and any company neglecting for thirty days to make and transmit any statements re- quired, shall forfeit one hundred dollars for each day's neglect. Sec. 32. Piihlication of Abstracts of Annual Statements. The insurance commissioner shall annually publish once a week for tlireii consecutive weeks in a daily newspaper pub- lished in the City of Baltimore, an abstract of the annual statement of each insurance company, mutual or stock, doing business in this state, except domestic companies Imving their principal office in one of the counties of this state, in which case said publication sluill be in the countj^ where the principal office of any such company is located. The actual cost of such publication by the commissioner shall be taxed against and collected from the companies whose statements are so published by him. Each of said conqKinies except such nuitual companies as are excepted under the provisions of Section 122 shall, in addition to said ]»ubli('alion by the comnnssioner, pu])lisli said abstract of its annual statement in another pai)er in Baltimore City, for three consecutive times. Tlie commissioner and the comi)any shall cause the first ai)pearance of tlie publication of the abstract of each said company prior to tlie first da}' of April. The' commissioner shall, upon the payment of a fee of one dollar, furnish a certified copy of such abstract so ])n])lished, to any person api)lying therefor. 83 Sec. 33. Conditions Precedent to Beginning Business. No person shall act as agent or solicitor in this state for any insurance company in any manner whatever relating to insurance risks, until all the provisions of this article relating thereto have been comi^lied with, and there has been granted by the insurance commissioner a certificate of authority or license to said company. All such licenses sliall be issued annualh' on the first day of January, for the period of one year, upon tlie payment of the license fee here- inafter specified. All licenses issued for a period less than a 3'ear, except in the case of domestic companies embraced within the provisions of Section 38, shall pay pro rata for siuh fractional part of the year. Sec. 34. License Fees of Foreign Life Companies. Every foreign company doing a life insurance business in this state shall pay an annual license fee of three hundred dollars. Sec. 35. License Fees of Foreign Fire and Miscellaneous CoiHjKinic>!. Every foreign company doing a fire, marine or inland insurance business in this state, and every fidelity, surety, casualty, liability or compensation company or- ganized under the laws of any foreign country, shall pay an annual license fee of one hundred dollars. No license fee shall be required of or collected from any company in- corporated under the laws of any state, territory, district or dependency of the United States other than the State of Maryland, for the purpose of carrying on any of the classes of insurance known as liability, workmen's compensation, accident, health, sprinkler leakage, burglary, credit indem- nity, or casualty insurance, or the writing of fidelity and surety bonds, except under the retaliatory provisions here- after referred to. Sec. 36. License Fees of Domestic Surety and Casnaltg Companies. Every domestic company doing a liability, workmen's compensation or casualty insurance business, or : the business of writing fidelity or surety bonds, shall pay an annual license fee of fifteen hundred dollars. 84 Sec. 37. L'wensG Fees of Title and Mortgage Guarantee Companies. Every eomi)aiiy doing a title insurance or mortgage guarantee business sliall pay an annual license fee of one hundred dollars. Sec. 38. License Fees of Domestic Life, Fire, etc., Com- panies. Every domestic company doing a life, fire, marine or other insurance business than as embraced in sections 3G and 37, shall pay an annual license fee of one dollar. 1922 ch. 547. Sec. 39. Ta.r on- Proniiuns. Every insurance company (including Fidelity, Surety, Casualty, Liability, Compen- sation, Livestock and Miscellaneous companies), other tlian sucli as may be chartered under the laws of the State of Maryland, and every company of this State writing fidelity, surety, casualty, liability, and compensation in- surance, shall pay annually to the Insurance Commissioner a tax on gross premiums Avritten in this State during the preceding year, without deduction for any cause whatever except as herein provided, which said tax shall be at the rate of two per cent, for foreign companies on their fire or marine insurance writings, at the rate of one per cent, for all companies, foreign and domestic, on their fidelity, surety, casualty, liability, and compensation insurance writings, and at the rate of one and one-half per cent, for foreign companies on insurance writing other than tliose above mentioned. A report under oatli of the premiums so written during the preceding year nnist be made to the In- surance Commissioner in January of each year by the cliief accounting officer or ollicers of sucli company. Tlie In- surance Commissioner, in computing taxes upon premiums written in tliis State by insurance companies shall allow credit for return premiums on cancelled policies and for premiums on reinsurance effected in companies authorized to do business in this State. vSkc. 40. MisceUaneoiis Fees. Every insurance company doing business in tliis state sliall also pay the following fees to the insurance commissioner : 85 (a) For tiling the certilied copy of charter, declaration of organization or deed of settlement required by this ar- ticle to be tiled as a condition precedent to doing business in this state, the sum of twenty-fiTe dollars. (b) For tiling eacli annual statement, the sum of twenty- five dollars. (c) For the certificate of authority' issued to each agent in this state of every foreign fire or marine insurance com- pany, the sum of ten dollars. (d) For tlie certificate of authority issued to each so- licitor in this state of every foreign fire or marine insurance company, the sum of five dollars. (e) For the certificate of authority issued to each agent in this state of every foreign insurance company other than fire or marine, the sum of two dollars. (f ) For the certificate of authority issued in this state to each insurance agent or solicitor of every insurance com- pany incorporated under the laws of this state, the sum of fifty cents. (g) For each abstract of its annual statement for pub- lication, two dollars. (h) For every copy of ever}' paper filed in the insurance department, the sum of twenty-five cents per folio; and for affixing the official seal to such copy, the sum of one dollar. (i) For valuing policies of life insurance companies thirty dollars per million of insurance, or any fractional part thereof. (j) For official examination of companies under this article, the charges specified in section 50 of this article. Sec. 41. Retaliatory Provisions. When by the laws of any other state, any deposit of money or securities is re- quired, or taxes, fees, fines, penalties or other obligations or prohibitions are imposed upon companies incorporated or organized under the laws of this state, and transacting 86 business in such other state, or upon the agents of such companies, greater than tliose required or imposed by the laws of this state, so long as sucli laws remain in force, the same deposits, taxes, fees, fines, penalties, obligations and prohibitions shall be imposed upon all agents or companies of sucli state doing l)usiness in tliis state, instead of those prescribed by the laws of this state. Sec. 42. Production of Books, etc. No person shall be excused from testifying or from producing any books, papers, contracts, agreements or documents at tlie trial or liearing of any person or company charged with violating any provision of this article on tlie ground that such testi- mony or evidence may tend to incriminate himself, but no person shall be prosecuted for any act concerning which he shall be compelled so to testify or produce evidence, doc- umentary or otherwise, except for perjury committed in so testifying. Sec. 43. Blue Skij Prorisious. No stock salesman, broker or other person representing any insurance com- pany, wherever incorporated, in process of organization and not licensed to transact business in this state, shall be permitted to solicit subscriptions to or sell the stock of sucli company in this state unless and until such company has furnished tlie insurance commissioner witli full par- ticulars as to the methods and proposed cost of promotion. Before any such person shall solicit subscriptions to or sell tlie stock of such company, he shall be required to secure a license from the Insurance commissioner, who, prior to the issuance of such license, shall investigate the record of the applicant and may, for good cause shown, refuse to issue same. The fee for each such license shall be ten dollars. The cost of promotion, including commissions to the stock salesmen and all expenses of organization of whatever character, shall not exceed five per centum of the subscrip- tion or selling price of each share of stock, and the in- surnnce commissioner shall require this provision to be plainly set forth in the stock subscription agreement or 87 contract for tlie sale of stock. No part of the commissions to the salesmen or other organization expense under any subscription for stock shall be payable until such share or shares of stock have been fully paid for in cash or secvirities or equivalent value. The subscription to or sale of stock in any such company in series is prohibited, except that after a company is organized and actively engaged in the insurance business, the insurance commissioner is em- powered to authorize it to sell a new issue of stock at an advanced price on conditions not otherwise inconsistent with tlie ])rovisions of tliis section. The fiscal agent, person or corporation engaged in promoting the organization of any sucli insurance company shall be required to give to the insurance commissioner a surety bond in the amount of ten per cent, of tlie ])roposed maximum capital of such company for tlie faithful performance of the undertaking in accordance witli tlie provisions of this section by both himself and his salesmen. Any violation of the provisions of this section shall be deemed a misdemeanor and shall be punishable by a line not exceeding one hundred dollars for the first offense, and by a fine of not less than one hundred dollars or more than one thousand dollars for each subsequent offense. Sec. 44. Rehatinf/ UnlaiDful {Life and Accident.) No insurance company doing business in this state shall make or permit any discrimination or distinction in favor of in- dividuals of the same class and equal expectation of life in the amount of premiums or rates charged for policies of life or endowment insurance, or for policies insuring per- sons against accidental bodily injury, or in any of the terms and conditions of the contracts it makes, as an inducement of such insurance; nor shall any such company or any of- ficer, agent, solicitor or representative thereof, or any in- surance broker, pay, allow or give, or offer to pay, allow or give, directly or indirectly, as inducement to such in- surance, or after the insurance shall have been effected, any rebate from the premium which is specified in the policy, nor shall the insured, his agent or representative. 88 directly or iDclirectly accept or knowingly receive any re- bate from the premium specified in the policy, or any spe- cial favor or advantage in the dividends or other benefits to accrue tliereon, or any joaid employment or contract for services of any kind, or any special advantage in date of policy or age of issue, or any valuable consideration what- ever, not specified in the policy. Nor shall any company, or its representatives, procure for any person applj'ing for insurance, or for any person acting in collusion with him in seeking to avoid tlie penalty prescribed for violation of this section, a state license for the i)urpose of allowing such jjerson a rebate. Provided that nothing in this sec- tion shall be so construed as to forbid a company trans- acting industrial insurance on the weekly payment plan, with weekly collection of premiums at the houses of the insured, from returning to policyholders who have made premium payments directly to the company at its home office or district offices, the savings which the company effects through such direct payments; and provided fur- ther that nothing in this section shall be so construed as to forbid a company issuing non-participating life insurance from paying bonuses to policyholders out of surplus ac- cumulated from such non-participating insurance. Se(\ 45. Rehat'nif/ UnhnrfHl (Fire and MisceUaneous.) No fire, casualty, surety or other insurance company, Lloyds, or individual underwriters authorized to do in- surance business in this state, or any officer, agent, solicitor or representative thereof, shall make any contract for in- surance on property or risks located within this state against liability, casualty, accident or hazard of any kind tlmt may arise or occur therein, or agreement as to such contract, other than as plainly expressed in the policy issued or to be issued thereon ; nor shall any such company, Lloyds, or individual underwriter, or any officer, agent, solicitor, or representative tliereof, directly or indirectly, in any manner whatsoeA'er, pay or allow, or offer to pay or allow, as inducement for such insurance, or after the in- surnnce sluill have been affected, any rebate from the pre- 89 mium which is specified in the policy, or any special favor or advantage in the dividends or other benefits to accrue thereon, or any valuable consideration or inducement whatever not specified in the policy or contract of in- surance; nor shall any insurance broker, his agent or rep- resentative, or any other person, directly or indirectly, either by sharing commissions or in any manner whatso- ever, pay or allow, or offer to pay or allow as inducement to such insurance, or after the insurance shall have been effected, any rebate from the premium which is specified in the policy; nor shall the insured, his agent or representa- tive, directly or indirectly, accept or knowingly receive from any company, Lloyds, or individual underwriters, or from any insurance broker or other person, any such rebate of premium payable on the policy, or any special favor or advantage in the dividends or other benefits to accruethere- on. Tliis section shall not prevent any company lawfully doing such insurance business in this state from the distri- bution of surplus and dividends to policyholders after the first year of insurance, or prevent any member of an inter- insurance or Lloyd's association from receiving the profit on his or its underwriting; nor shall this section prevent any licensed insurance broker from sharing or dividing a commission earned or received by him with any other licensed insurance broker who shall have aided him in respect of the insurance, for the negotiation of which such commission shall have been earned or paid. Sec. 46. Misrepresentation of Terms of Policy. No in- surance company, or any officer, director, agent, broker or solicitor thereof, shall issue, circulate or cause or permit to be issued, circulated or used, any statement, estimate, illustration or circular misrepresenting the terms of any policy issued or the benefits or privileges promised under any such policy, or the future dividends payable under such policy. Sec. 47. Penalties for Violation of Sections 44, 45 and 46. Any person or corporation violating any of tlie provi- sions of sections 44, 45 and 46 of this article shall be 90 guilty of a misdemeanor, and upon conviction thereof t\w offender or offenders shall be sentenced to pay a fine of not less than two hundred dollars or more than five hundred dollars for each and every violation of either of said sec- tions. Any agent or solicitor of any insurance company, or any insurance broker, shall, upon being convicted of a second offense under said sections, be disqualified from act- ing as an insurance agent, solicitor or broker, for the period of one year thereafter; and it shall be the duty of the in- surance commissioner, upon being satisfied that any in- surance company, or agent thereof, has violated any of the provisions of said sections 44, 45 and 46, to report the same to the state's attorney for the county or city in which such offense may have been committed. Sec. 48. Consolidation of Companies. Any two corpor- ations, one of which is created and existing under the laws of this state, and one of which is created and existing under the laws of any other state or territory of the United States, and each of which is organized for the purpose of undertaking the following classes of insurance: (1) Acci- dent and health insurance; (2) insurance against loss or damage by reason of injuries to employee, or other persons, for which tlie insured is liable, and loss or damage to prop- erty caused by horses or vehicles for which the insured is liable; (3) fidelity and surety insurance and bonding; (4) burglary and theft insurance; (5) plate glass insurance; (6) steam boiler, flywheel and machinery insurance, in- cluding the liability of tlie insured for damage to persons or property of others; (7) loss or damage to automobiles (exce])t by fire or when l)eiug transported in any couA^ey- ance by land or water) and legal liability for damage to property caused thereby ; (8) sprinkler leakage insurance ; or any two or more of said classes of insurance may merge or consolidate such corporations into one corporation in the name of one or more corporations. The corporations may enter into and make an agreement for such merger or consolidation under their respective corporate seals, pre- scril)ing its terms and conditions, the amount of its capital, 91 which shall not exceed in amount the aggregate amount of capital of the merged or consolidated corporations, and the number of shares into which it is to be divided. Such agree- ment must be assented to by a vote of the majority of the number of directors of each corporation prescribed in its charter, and must be approved by the votes of stockholders owning at least two-thirds of tlie stock of each corporation represented to vote upon in person or b}^ proxy at a meeting called specially for that purpose upon a notice stating the time, place and object of tlie meeting served at least thirty dajs previously upon each personally or mailed to him at his last known postoifice address, and also published at least once a Axeek for four weeks successively in some news- paper printed in the city, town or county where such cor- poration has its principal office, and there shall be en- dorsed upon the aggreement the certificate of the secre- taries of the respective corporations under the seals thereof to tlie effect tliat the same has l)een assented to by sucli votes of diret-toi-s and approved by such votes of the stock- holders. The agreement shall contain a copy of tlie cliarter under whicli the business is to be conducted, which shall conform to tlie provisions of either one or more of the charters of the merging or consolidating corporations, and the continu- ance of said charter shall be for the time therein stated, not exceeding the longest unexpired time of tlie charter of one of the merging or consolidating corporations. The agree- ment may provide that one of the said consolidating cor- porations shall cease to exist and become merged into the other. Every such agreement must have the approval of the in- surance commissioner of this state, and of the official head of the insurance department of the state under which said foreign corporation is organized. Upon filing such agree- ment with said certificates of the secretaries, and the ajj- proval of the said insurance commissioner, and of the official head of the insurance department of said state or territory, in the office of the insurance commissioner of 92 Maryland and in the office of the said official head of the insurance department of such other state or territory, and a certified copy tliereof in tlie office of the clerk of the county Avliere the office of the said Maryland corporation is located, and in tlie office of the clerk of the county where the office of said foreign corporation is located, the details of such agreement ma^^ be carried into effect as provided therein. The corporation may require the return of the original certificates of stock held by each stockholder in each of the corporations to be merged or consolidated, and issue in lieu thereof new certificates for sucli number of shares of its own stock as said stockholders may be entitled to receive. Upon such merger or consolidation all the rights, fran- chises and interest of the corporations so merging or con- solidating in and to every kind of property and tiling in action belonging to them, or either of them, shall be deemed to be transferred to and vested in the new corporation, without any other deed or transfer, and the new corpora- tion shall hold and enjoy the same to the same extent as if the old corporations or either of them, sliould have con- tinued to retain their titles and transact business. The new corporation shall be authorized to receive from the official head of the insurance department of said other state or territory any and all securities which under the laws of said state or territory may have been deposited with ]iim by any of said old corporations, provided said deposi- tory may be authorized by tlie law of said state or territory to transfer the same to said new corporation. The new c()ri)oration shall succeed to all the obligations and liabilities of the old corporation, or any of them, and shall be held liable to pay and discharge all such debts and liabilities in the same manner as if they had been incurred or contracted by it. The stockholders of the old corpora- tions shall continue subject to all the liabilities, claims and demands existing against them, or either of them, at or before said merger or consolidation. No action or proceed- ing pending at the time of consolidation in which any or all 93 of the said old corporatious may be a party shall abate or discoDtimie by reason of the merger or cousolidatiou, but the same may be prosecuted to final judgment in the same manner as if the merger or consolidation had not taken place, or the new corporation may be substituted in place of any corporation so merged or consolidated by order of the court in Avhich the action or proceeding may be pending. Sec. 49. Proi)erti/ of Foreign Companies in Mart/land. Any foreign insurance company may acquire by purchase or in any other manner, and take, receiye, hold, use, em- ploy, manage, dispose of, or deal with, any property, real, personal or mixed, and situated in the State of Maryland, which may be necessary or proj)er to enable it to erect buildings for oflftce or business purposes, or to foreclose any mortgages that may be due it for loans made; proyided, that all transactions, as herein permitted, shall be in ac- cordance with the laws now in force regulating such trans- actions on the part of insurance companies incorporated under the laws of this state. Sec. 50. E-raininatioii of Comixmics. Once at least dur- ing his term of ottice the commissioner shall cause the af- fairs of eyery insurance company organized under the laws of this state to be thoroughly inspected and examined with special regard to its financial condition and its ability to fulfill its obligations, and shall ascertain and determine whether or not it has complied with the laws of this state; he shall also cause an examination of eyery such company to be made wheneyer he deems it prudent to do so, or upon the request of five or more of the stockholders, creditors, policyholders, or persons pecuniarily interested therein, who shall make affidayit of their belief, with specifications of reasons thereof, showing a prima facie case that such company is in an unsound condition. Wheneyer the in- surance commissioner may haye reason to doubt the sol- yency or the correctness of the statement of any foreign company which may haye been licensed to do business in this state, or which may be applying for said license, he 94 shall communicate such doubts, and the reasons therefor, to the insurance commissioner, or other officer charged with the supervision of insurance corporations of the state in which said company is located, and if he is not satisfied from the information obtained from such insurance com- missioner or other officer, or from the officers of the com- pany, that the condition of the company is such as to warrant him in permitting it to transact business in this state, under the provisions of this article, he shall notify such company that it will be necessary for him to have its affairs examined. Whenever an examination of any in- surance company doing business in this state shall be determined upon under tlie provisions of this article, the examiner of the insurance department and such other per- son or persons who shall be appointed by the insurance commissioner for that purpose shall visit such company at its principal office and make a thorough examination into its affairs; and if such company shall refuse to permit such examination, or sliall refuse free access to all its books and papers, or shall in any v>SiY prevent or obstruct a thorough examination into its affairs, he shall not grant a license to sTU-h company, or if a license shall already have been granted, he shall at once revoke it and publish the fact of such revocation in one daily newspaper published in the city of Baltimore. The exann'ner of the insurance depart- ment shall be paid by the company whose affairs are ex- amined, his traveling and other expenses, and in addition tliereto a sum to be approved by the insurance commis- sioner, not exceeding, however, fifteen dollars (|15) for each and every day that he shall be engaged in any such examination ; and such other person or persons who may b\» a])pointed by the insurance commissioner for any of th;^ ])urposes mentioned herein shall each b^ paid by the com- pany whose affairs are examined tlieir traveling and otlief expenses, aiul in addition thereto, a sum to be approved by the insurance commissioner, not exceeding, however, ten (h)llars (-li^lO) per day for each and every day that he or they are engaged in any such examination ; except that th(; 95 iu.suraDce commissioner uiay employ one special examiner on any examination that in his judgment may require such employment, who sliall be paid by the company whose affairs are examined his traveling' and other expenses, and in addition thereto, a sum to be approved by the insurance comndssioner, not exceeding, however, twenty-five dollars (|25) per day, for each and every day that he is engaged in any sucli examination ; and provided, further, that any official or employee of the insurance department who shall be directed by the insurance commissioner to assist in the examination of any insurance company organized and lo- cated outside of this state and doing business in this state, shall be paid by such company his traveling and other expenses and such reasonable comi)ensation as shall be fixed by the insurance commissioner, in addition to the salary paid such official or employee out of the funds of said department. If the per diem and expenses in any case herein provided shall remain unpaid after ten days from the completion of any such examination, the insurance commissioner may sue therefor. For the purposes of any examination authorized by law, the insurance commis- sioner, or the insurance examiner, shall have power and is hereby authorized to summon any person or persons being within this state, and to administer to him or them the proper and necessary oath, and to examine him or them, under oath, in relation to the affairs and conditions of any insurance company. In order that the public may be fully informed as to the condition of all companies doing busi- ness in this state, the result of the official examination of any such company, in such condensed form as shall show the true condition of the company examined, shall be pub- lished within thirty days thereafter by the insurance com- missioner, at the expense of said company, in one daily newspaper published in the city of Baltimore. Should any insurance company organized under the laws of this state refuse to permit its affairs to be examined as herein pro- vided, or refuse free access to its books or papers, or in any 96 manner whatever prevent a tliorough examination, the said insurance commissioner shall proceed against said com- pany in the manner provided in section 51. Sec. 51. Liqmdation of Insolvent or JUeroper case where the same has been wrongfully and im- properly withheld. 103 j^ec. 61. Revocaiion of License of Agent or Broker. Whenever the commissioner shall be satisfied that any in- surance broker,. broker's solicitor, agent or solicitor, licensed or registered by this State, has wilfully violated any of the iiisurance laws of this State, or has wilfully misrepresent- ed any policies of insurance, or has dealt unjustly with or wilfully deceived any citizen of this State in regard to any insurance policy, or has failed or refused to pay over to the company or to his principal or other person whom he repre- sents or has represented, or by or for whom he is employed or acts, any money or property in the hands of said agent, solicitor, broker or broker's solicitor belonging to said com- pany, firm, broker, principal or person when demanded to do so, or has violated any ruling of the insurance depart- ment which he is by law authorized to make, or upon con- viction of any infamous crime under the laws of this State, or has been guilty of twisting or attempting to twist by mis- representation any policy of insurance or has made any false statement, answer or declaration in his application for license, then and in any such case, the commissioner may, and it shall be his duty to revoke the license of such broker or broker's solicitor, or revoke the license of any agent or solicitor for all companies which he represents in this State for such length of time as the commissioner may think proper; provided, liowever, that before the commis- sioner shall revoke said license he shall give ten days' notice of the charges in writing, to be served upon said broker, agent or solicitor in person or by registered letter to his last known address, or by copy of the charges left at his last known address, and provided an opportunity shall be giA'en the said broker, broker's solicitor, agent, or solicitor to be heard upon said charges, and the said broker, brok- er's solicitor, agent or solicitor shall have the right to have such revocation of license reviewed by the Superior Court of Baltimore City, when said offense occurred in Baltimore City, or by the Circuit Court of any of the counties of the State wherein such offense or offenses complained of occur- red. 104 Sec. 62. Payment of Conwiission to Unauthorized Agent. No comijany and do agent or employee of any comi^anj', or other person, whether such person be a licensed broker or otherwise, shall directly or indirectly, pay, except to the lawful agent or solicitor of such company, and to him solely upon the premiums on policies issued by the companj^ for wliich he ma,y be licensed agent or solicitor, or to an insur- ance broker licensed by the State of Maryland, any commis- sion, reward, or rebate in consideration of procuring, or in- fluencing others to procure, insurance from such company or person, or collect or agree to collect from any person, whether or not the same may be the owner of the property insured, or his agent, or other person, any amount less than that expressed in the policy or policies as being the j)rem- iums therefor. Sec. 63. Resident Agent. No companj^ authorized to transact business in this State, and no person, resident or nonresident, shall write any policy of insurance, or assume any liabilit}^ in the matter of insurance upon any property, real or personal, situated in this State, unless such policy, certificate or otlier evidence of liability assumed by said conipany or person shall have been, previous to delivery, signed or countersigned by an officer or agent, resident in this State, authorized b}' law to sign such policy' or con- tract; provided, however, that policies issued to railway corporations insuring the rolling stock and other movable property of said road, and those insuring the liability of such railroads as common carriers, shall be subject to the re(iuirement that they shall be signed by the resident agent in cases only where more than one-half the trackage of the roads o])erated by such railway companies is situate in the State of jNIaryland. Ever^^ company or person, resident or non-resident, engaged in business in this State, shall pay to its legally licensed agent in the State of Maryland, for signing or countersigning any policy, certificate or other evidence of liability assumed by said company or person, the same rate and amount of commission as if such policy, certificate or other evidence of liability, had been issued 105 through said agent residing in the State of Maryland; and 110 agent shall sign or countersign any policy, certificate or other eyidence of liability, upon any property situated in this State, for an amount less than the coniinission allowed on any policy, certificate or other eyidence of liability' is- sued tltrougli an ajjent residing in this State. The premiums on all policies so signed or countersigned shall be included in the report of gross premiums required to be made to the Insurance Commissioner by all companies not organized under the laws of this State. Sec. 04. lustiirdiice lirohcr. All licenses for the purpose of conducting the occupation or business of insurance broker or broker's solicitor shall be granted by the State Insurance Commis.sionor of Maryland, and all such licenses granted by said commissioner sliall expire on the 1st day of ]May thereafter. Whoeyer, for compensation, acts or aids in any manner in negotiating contracts of insurance or re- insurance or placing risks or effecting insurance or rein- surance for a person other than himself, and not being a duly appointed solicitor, agent or otficer of the company in which such insurance or reinsurance is effected, and not be- ing a duly licensed and qualified broker's solicitor as de- fined in, and in conformity with, the proyisions of Section 66 of this Article, shall be deemed an insurance broker. Sec. 65. Broker's License. Any natural person, bona fide copartnership or corporation applying therefor as herein- after set forth, and paying to the Insurance Commissioner the sum of one hundred dollars for the use of the State, and an additional sum of one dollar as a fee to the said commis- sioner for issuing said license, may obtain a license for carrying on the business of an insurance broker; proyided, howeyer, that any natural person, bona fide copartnership, or corporation residing in any of the counties of this State, may, upon payment of a fee of twenty-fiye dollars for the use of the State, and an additional sum of one dollar as a fee to the said commissioner for issuing said license, ob- tain a license to act as broker as to risks situated in the 106 county only within wliicli lie, they or it may reside. A li- cense issued to a copartnership or corporation shall au- thorize only those members of the copartnership, not ex- ceeding- three in number, who are specified in the license, or those officers, agents and employees of the corporation, not exceeding three in number, who are specified in the license, to act for the said copartnership or for the said corporation thereunder. The Insurance Commissioner shall from time to time, upon application, and payment of an additional sum of fifty cents in each case as a fee to the insurance com- missioner, change the designations of members of copart- nerships and of officers, agents and emploj^ees of corpora- tions in licenses issued under this section to copartnership* and corporations. Every application for a license under this section shall be addressed to the Insurance Commis- sioner in writing, sliall set forth in full the name and ad- dress of such applicant and the name and address of each person who proposes to act under a license issued as afore- said to an3^ copartnership or corporation, that each such ap- plicant or person proposing to act under such license has not wilfully violated any of the insurance laws of this State during the past year and that he will not violate any such law during the term of the license applied for if issued; that he has not dealt unjustl^^ with or deceived any citizen of this State or misrepresented the conditions of any in- surance policy or contract; whether or not he is indebted to any insurance company or general agent by virtue of any contract as former agent or broker, whether or not his li- cense as insurance agent or broker has been declined or re- voked in this or any other State for a violation of law; where and in what business engaged during the past year, and sliall give full answers to the following questions: Do you understand that it is against the laws of this State (a) to act as a broker for any company without license from this (h'jtartnieiit, (b) to mi'srepresent the conditions of any lH)li(y contract, (c) to make any discrimination between citizens of this State in premiums, or in rebating any port of premiums or commissions, or to twist or attempt to 107 twist, policies hj misrepresentation. Said application and declaration shall be signed b}' the person, a member of the copartnership, or a dul}' authorized oiiftcer of the corpora- tion applying- as the case may be. If any such license shall be it>sued for any portion of any year, a ratable sum shall be charged therefor up to the first day of May next succeed- ing the date of such application. Sec. ()(). Broker-s Solicitor. Any person who shall be a bona fide emidoyee of a duly licensed and qualified broker and not duly operating under a broker's license in conform- ity with tlie provisions of Section 65 of this Article, and who, for compensation, whether by way of salary or com- mission, or botli, shall solicit on behalf of and in the name of his said employer, and not in his own name, or in any n)anner aids his said employer in negotiating contracts of insurance or reinsurance in the name of his said employer, is hereby designated a broker's solicitor and shall be deem- ed to be such for the purposes of this Article. No person shall act in any manner or perform any of the duties or functions of such broker's solicitor until api:)licati(m for a license therefor shall have been made both by said broker's solicitor and by his employer on application forms provid- ed by the Insurance Commissioner, and duly signed hy said broker's solicitor and by his said employer, and there shall have been issued b}' the Insurance Commissioner a license to act as such broker's solicitor, for which license there shall be paid to the Insurance Commissioner the sum of twenty-five dollars by or for each such broker's solicitor. Said license shall bear the name of the broker's solicitor to whom issued and of the employer for whom he is author- ized to act and shall authorize said broker's solicitor named therein to solicit insurance and reinsurance in the name of his said employer, but not in his own name, or in the name of any other person, firm or corporation, and further to aid in any proper and lawful manner his said employer in ne- gotiating contracts of insurance and reinsurance, in the name of his said employer, but shall not authorize or per- mit said broker's solicitor to act in or use his own name in 108 soliciting or negotiating any contracts of insurance or re- insurance or in any renewal or renewals of any such con- tracts, or to deliver any policy or bill to any assured or collect any premium of insurance in his own name or in any other manner than in the name of and as the agent or employee of his said employer. The broker for whom any such solicitor shall act under such license may -place any insurance procured by or through said solicitor in any com- pany and in the same manner and to tlie same extent as if said business had been procured or negotiated directly by said broker employing said solicitor. Sec. 67. Non-Resident Brokers. Any duly authorized broker of any other State of the United States or of the District of Columbia, residing outside of this State, may negotiate any contract of insurance within this State or on property located Avithin this State to the same extent, and on the same terms and upon the payment of the same fees as are or shall be required, demanded or exacted by any Buch State or the District of Columbia, or from citizens of this State negotiating or transacting a like business in any such State or the District of Columbia. Sec. G8. Penalties for Violation of Sections 64, 65, 66 and 67. Any person who shall use or exercise within this State the business or occupation of an insurance broker or broker's solicitor, as the case may be, without having pro- cured a license therefor, as required by Sections 64, 65, 66i and 67 of this Article, and each person who employs, and each member of any partnership, and each offtcer of any corporation having authority to employ agents, clerks and solicitors, who shall emploj^ or permit the emplo^anent or receive or accept the services of any broker's solicitor until a license in each such case shall have been duly issued as provided in Section 66, sliall be deemed guilty of a misde- meanor and shall be subject to a penalty of five hundred dollars for each such offense, one-half for i\\e use of the Slate and the other half to the informer. 109 Sec. G9. Shei-ijfs IShall FuriiisJi List of Lisunnice Brok- ers. It shall be the duty of the sheriff of the city of Balti- more and the sheriff of each county throughout the state to furnish the Insurance Commissioner, prior to the lirst day of May in each and every year, the names of all persons conducting the business of "Insurance Broker'' within the respective jurisdiction of each of said sheriffs, for which he shall receive a fee of fifty cents for each license issued by the Insurance Commissioner. Fire Insurance. Sec. 70. Insurance of Property bi/ Guardknis, etc. Any domestic company may insure the property, real, personal or mixed, which any married woman may own jointly or in severalty, in the same manner as if she were femme sole; and any guardian may, with the assent of the Orphans' Court by which he shall have been appointed, insure in any domestic company any property which the ward or wards of such guardian may own, either jointly or in severalty, and such insurance shall have the same effect in all re- spects as if the minor wliose property is thus insured were of full age, and had made such insurance himself. Sec. 71. Unauthorized Insurance. All persons obtain- ing insurance on property situate in this State (owned by individuals or firms resident in this State, or corporations incorporated under the laws of this State), against fire, lightning or tornado, from companies, associations, firms or corporations not authorized to transact business in this State, shall file with the Insurance Commissioner a state- ment or declaration setting forth the name of the company, number of policy, amount of insurance, rate, premium and description of property; shall be required to pay a tax thereon of five per cent, of the premium paid on such poli- cies to the said commissioner, and shall further pay a fee to said Insurance Commissioner of one dollar on each policy for making a record of the said statement or declara- tion, which record shall be kept for the private information of the insurance department of this State, and shall not be a public record. 110 Any insurance broker placing insurance on property situate in this State against fire, lightning or tornado, in companies not authorized to transact business in this State, shall, between the first and tenth days of each month, sub- mit in writing to the commissioner a true list of such i)oli- cies of insurance so placed by him in the preceding month, together witli a statement or declaration setting forth the information above required. Such information shall be kept for the private information of the insurance depart- ment, and shall not be a public record. Upon tlie failure of any broker to so file the true list, statement and declaration herein specified, within the limit of time herein mentioned, the Insurance Commissioner may suspend his or their license for a period not exceeding ninety days. Sec, 72. When Tax Need Not Be Paid. Whenever any person or firm resident in this State, or corporation incor- porated under the laws of this State, shall file with the In- smaiMe Coiiiuiissiorer an affidavit that said person, firm or corporation is unable to obtain in companies legally au- thorized to do business in this State, insurance, or a suf- ficient amount thereof, on property situate in this State owned by said person, firm or corporation, then the com- missioner shall issue a license to such person, firm or cor- poration authorizing the procurement of insurance in fwn- admitted companies or associations to tlie extent of the in- surance desired; and such person, firm or corporation shall not be required to pay the tax imposed by the preceding section, but shall be required to pay said Insurance Com- missioner a fee of one dollar on each policy so obtained; and said commissioner shall make a record thereof in the book mentioned in the preceding section, showing name of company, number of policy, amount of insurance, rate, premium and date of expirati(m of policy; and in case of damage to or loss by fire, lightning or tornado of any prop- erty so insured, the said unauthorized company is hereby nuthorized through its agent or agents to enter this State Ill for the i>urpo8e of ad j listing any such loss or damage sus- tained under said policies, but not to solicit insurance iu such unauthorized companies. Sec. 73. Stamping Policies in Unauthorized Companies. It shall be the duty of the commissioner to stamp all poli- cies issued iu non-admitted companies "Unauthorized Com- pany, Tax paid," or "Unauthorized Company, no Tax." Provided, however, tliat railway comx^anies and other com- mon carriers engaged in inter-state commerce, may place insurance without complying with the requirements of this section and sections 71 and 72. Sec. 7-1. StampiiKj Policies in Authorized Companies. All policies of insurance against loss or damage to property in this State from lire, lightning or tornado issued by com- panies authorized to transact such business in this State, shall have plainly nuirked or stamped in indelible ink on each policy the words following, "Authorized to do busi- ness in the State of Maryland," to which shall be affixed a facsimile, of tlie signature of the insurance commissioner. The commissioner shall furnish stamps for the purpose herein prescribed at a cost not to exceed two dollars for each stamp, to be paid by all such authorized companies. Sec. 75. Penalties for Violation of Sections 71, 72, 73 and 74. Any person who shall, with intent to avoid the pay- ment of the tax on insurance in unauthorized companies as provided by Section 72, make false affidavit, shall be guilty of perjury and shall be proceeded against and punished as provided by the statutes of this State in relation to the crime of perjury, and any policy of insurance obtained by means of such false affidavit shall be void, and the license or authority for such unauthorized insurance shall be can- celled by the commissioner. The obtaining or possession of any such policy insuring against loss by fire, lightning or tornado on property situated in this State issued by com- panies not authorized to do business in this State, without complying with the provisions of Sections 71, 72, 78 and 74 shall be a misdemeanor, and any person convicted thereof 112 shall be subject to a fiue not less than one hundred dollars or more than one thousand dollars, or imprisonment in the jail of Baltimore City or of the county of this State where such offense ma}' be committed, for a period not less than one month or more than six months, in discretion of the court having jurisdiction. Any person who shall act as intermediary in any manner in procuring or delivering any poiic}' of insurance in violation of any of said sections 71, 72, 73 or 74 shall be subject to all the penalties of this sec- tion above enumerated. Sec. 76. Reinsurance Reserve. Every company doing a fire or inland insurance business in this State, shall be charged with and maintain as any other liability, an un- earned or reinsurance reserve for all unexpired fire and in- land risks at the rate or in the proportion of fifty per centum of the premiums written or renewed on all unex- pired risks that have one year or less to run, and pro rata for all premiuiiis written or renewed on risks that have more than one year to run. Every company doing a marine insurance business shall be charged with a reinsurance re- serve as above at the rate of sixty per centum of all prem- iums written or renewed on all marine risks for one j-ear or covering more than one voyage, not terminated, and one hundred per centum of all premiums written or renewed on policies less than one year, not terminated. The reinsur- ance reserve on the business of companies organized under the laws of foreign governments, shall be calculated only upon the business of such companies in the United States of America, and the assets of such companies held and in- vested in the United States of America only shall be recog- nized as constituting the admitted assets of such companies for reserve purposes. Sec. 77. Impairment of Capital. Having charged the company the re-insurance reserve as above determined, for fire, inland and marine insurance, and adding thereto all debts and claims against it, the commissioner shall, in case lie finds the capital stock of the company impaired to the 113 exteut of twenty-five per cent., give notice to the company to make good its whole capital stock within sixty clays; and if this is not done he shall require the company to cease to do new business within this State; and shall thereupon, in case the company is organized under the authority of tiiis State, immediately institute such legal proceedings as are necessarj^ to protect the rights of all persons in said com- pany. Sec. 78. Lloijds Insurance. Associations of individuals, citizens of the United States, whether organized within this State, or elsewhere within the United States, formed upon the plan known as Lloyds, whereby each associate under- writer becomes liable for a proportionate part of the whole amount insured by the policy, may be authorized to trans- act insurance other than life in this State, upon the fol- lowing conditions: That any such association organized in tliis State may be permitted to tran.sact the insurance busi- ness upon the same terms and conditions as are by the laws of this State imposed upon an insurance company organ- ized under the laws of this State, and any such association organized in any other State of the United States may be permitted to transact its business in this State upon the same terms and conditions as are by the laws of this State imposed upon an insurance company incorporated in the State where such association was organized. Life, Accident and Health Insurance. Sec. 79. Life Insurance Companies. Any company mak- ing any engagement for the payment of money or other benefits in the event of sickness, accident or death, or other contingency, either to the member, policy or certificate holder, or by whatsoever name the same may be known, or to their families or representatives, or entering into any contract or agreement in which the chances or probabilities of the duration of life, or the rate of mortality or hazard of occupation are in any way involved as an element or con- dition of such contract or agreement, shall be deemed and taken to be a life insurance company within the meaning 114 of this Article, and shall be subject to all the requirements of law applicable to said life insurance companj^ Every domestic life insurance company is hereb}' also authorized to insure individuals against accident, and to grant, pur- chase, or dispose of annuities, unless it shall be otherwise provided in its charter or by-laws. • Sec. 80. Valuation of Policies. As soon as practicable in each year, the actuary shall, under the supervision of the comndssioner, calculate the net value on the thirty-flrst day of December of the previous year, of all the policies and ad- ditions thereto, and all obligations for the payment of an- nuities in force on that day of each life insurance company doing business in this State organized by authority of this State; and every other life insurance company doing busi- ness in this State, that shall fail to furnish him, as herein- after provided, from the Insurance Commissioner of the State by whose autliority the company was organized, or of the State in which it maj elect to have its policies valued and its deposits made, in case the company is chartered by the (Jovernment of the United States, or by any foreign government, or by any State not having an insurance de- partment, a certificate giving the net value of all policies in force in the company on the thirty-first day of Decem- ber, in the year nineteen hundred and two, be based upon the American Experience Table of Mortality, and four and one-half per cent, interest per annum; and for all policies issued sul)se(pient to said thirty-first day of December, in the year nineteen hundred and two, and on or before the thirty-first day of December, in the year nineteen hundred and eigliteen, upon the Actuaries Table of Mortality, and four per cent, interest per annum; and for all policies, ex- cept industrial, issued subse(]uent to the thirty-first day of December, in the year nineteen hundred and eighteen, upon the American Experience Table of Mortality and three and one-half ])er cent, interest per annum ; provided, that the In- surance Oommissioner shall, upon the request of any com- pany, cause all policies of such company issued subseqtient to the thirty-first day of December, in the year nineteen 115 hundred and eij^hteeu, to be valued in accordance with the terms of the policy contract, but in no case to be less than that determined by the one year term method of valuation, as hereinafter modified, (m the basis of the American Ex- perience Table of .Mortality and three and one-half per cent, interest per annum. If the premium charged for term in- surance under a limited payment life preliminary term policy providing for the payment of all premiums thereon in less tlian twenty years from the date of the policy, or under an endowment preliminary term policy, exceeds that cluirged for like insurance under twenty payment life pre- linunary term policies of the same company, the reserve thereon at the end of any year, including the first, shall not be less than the reserve of a twenty payment life prelimi- nary term policy issued in the same year and at the same age, together with an amount which shall be eiiuivaleut to the accumulation of a net level premium reserve at such time of sucli a limited payment life or endowment policy. The premium i)ayment period is the period during wliich premiums are concurrently payable. Tlie value of all poli- cies which contain any promise or agreement for the pur- chase of the policy at any date prior to its maturity or its termination by death for a sum in excess of the value of the policy at such date determined according to the standard of valuation herein prescribed for such policy, shall be cal- culated in such manner and upon such assumption as to rate of interest and mortality, that the value of the policy so calculated shall at no time be less than the amount stipu- lated therein, to be 'paid upon surrender of the policy at the date then attained, and for the purpose of such valua- tion the standard adopted by the company for the value of sucli obligation may, if adequate, be employed. In the determination of the values of the policies, the calculations may be made either seriatim or of the policies in groups, using approximate averages for fractions of the year; and in all certificates of valuations issued by the In- surance Commissioner or accepted by him under the pro- visions of this section, the basis upon which the valuation has been made shall be expressed. All policies of life insurance issued in this State shall contain a clause specifying the basis upon which the re- serve is calculated; and every policy of life insurance is- sued in til is State shall have legibly inscribed at the foot of tlie first page a brief description of the true nature of the policy. The legal minimum standard for the valuation of industrial policies issued subsequent to the thirty-first day of December, in the yedv nineteen hundred and eighteen, sliall be the American Experience Table of Mortality with interest at three and one-half per centum per annum. The commissioner may, in his discretion, upon the re- (luest of any life insurance company so reiDorting to him, cause the net value of all or any number of the policies in force in such company to be calculated upon a higher basis of reserve tlian that prescribed above by the assumption of a lower rate of interest than that prescribed, or the as5?ump- tion of a higiier rate of mortality by the substitution of the Actiuiries' Table for the American Experience Table of jMortality or otherwise as the circumstances of the case may re(]uire; provided, that in no case shall the net value so ascertained and taken as a basis of reserve be less tliau that determined by the standard of valuation above prescribed; and in every certificate of the valuation of policies issued by Ihe commissioner the basis upon which the valuation is calculated shall be stated. The commissioner shall accept the valuation made by the Insurance Commissioner of the State ynder whose author- ity a life insurance company is organized, or that of the State in which it may elect to have its policies valued, when such valuations have been proi)ei'ly made on sound and recognized principles, and legal basis not less than that pre- scribed above; provided, that the company shall furnish to the Insurance rommissioner of this State a certificate from the Insurance Commissioner of such State, setting forth the value, calculated on the data designated above, of all 117 the policies in force in the company on the previous thirty- first day of December, and stating that the said company is fully authorized to do business in its OAvn State. EvQi-y life insurance comjiany doing business in this State during the year for which the statement is made that fails prompt-" ly to furnish the certificate aforesaid shall be required to make a full detailed list of its policies and securities to the Insurance Commissioner of this State; who shall there- upon cause the same to be valued at the expense of said company. Sec. 81. Valuation of Policies on Lives of Infants. An^' company granting insurance on the lives of persons under the age of ten years, and doing business in the State of Maryland, or issuing policies on the lives of residents of this State, must value all of its policies issued on the lives of persons under tlie age of ten years, in accordance with the general legal rules for tlie valuation of life insurance policies based on the mitrtality table known as Farr's No. 3, for males; provided, that in no case shall the valuation for the said policies on the lives of persons under ten years of age be less than eight-tenths of the weekly gross or office premiums thereon,' with no credit for deferred net prem- iums. Sec. 82. Valuation of Securities. All bonds and other evidences of debt held by any life insurance corporation authorized to do business in this State, may, if amply se- cured and not in default as to principal or interest, be valued for any and all purposes for which valuation may be made, or is required to be made under the laws of this State, as follows : If purchased at par, at the par value. If purchased above or below par, on the basis of the pur- chase price adjusted so as to bring the value to par at ina- turity, and so as to yield meantime the effective rate of in- terest at which the purchase was made; proAided, that the purchase price shall in no case be taken at a higher figure than the actual market value at the time of purchase ; and 118 provided, further, that the commissioner shall have full dis- cretion in determining the method of calculating values ac- cording to the foregoing rule, and the values found by him in accordance with such method shall be final and binding; l.rovided also, that any such corporation may return such bonds or otlier evidences of debt at their market value or their book value, but in no event, at an aggregate value ex- ceeding the foregoing rule; and provided further, that all securities, except those having a fixed term and rate and not in default as to principal or interest, shall be valued according to the provisions of the laws of this State, or the estal)lished practice in this State existing at the time of the passage of this Act. I>ut this Act shall not be constructed to appl^' to an}^ insurance corporation authorized to do business in this State which shall not elect to value its bonds and other evidences of debt by amortization as liere- in provided. Sec. 83. In. 'durance For Wife's SoJe Use. Any married woman by herself and in her name, or in the name of any other person, with his assent, as her trustee, may insure in any life insurance company formed under the provisions of this Article, for her sole use, the life of her husband for any definite period or for the term of his natural life; and in case she shall survive her husbnad, the sum or net amount of the insurance becoming due and payable by the terms of the policy shall be payable to her and for her. own use, free from the claims of the representatives of the hus- band or of any of his creditors; and in case of the death of the wife before the decease of the husband, the amount of tlie insurance" may be made payable, after death, to her children for their use, and to their guardian if under age. Sec. S4. Mlsrcprcscufntion in Ajiplicaiidu. AVhenever the a];ilication for a policy of life insurance contains a clause of warianty of the truth of the answers therein contained, no niisreitresentati(m or untrue statement in sucli appli- cation, made in good faith by the applicant, shall effect a forfeiture or be a ground of defense in any suit brought 119 upon any policy of iusiirance issued upon tlie faitli of such api)lication, unless such misrepresentation or untrue state- ment relates to some matter material to the risk. Sec. 85. Misstatement of Age In Application. Wlien- cA'er it shall be made to appear that a wrong age has been aiven in good faith in any application for a policy of life insurance, the company shall not be required to pay the' face value of tlie policy, but such sum as the premium paid would liave purchased at the applicant's real age at the time of elfecting the insurance. Sec. 80. /^ostpoiiciitciit of Diridcnds on Policies. iS'o life insurance compvmy authorized to tran.sact business in this State shall hereafter issue to or upon the life of any resi- dent of this State any policy participating in the profits or sur])lus, under which the accounting, apportionment and dis.tributiori of surplus to the policyholders shall be de- layed for a longer period than five years from the date at wliich the insurance first went into effect, or from any pre- ceeding accounting, apportionment or distribution of sur- plus. No such company shall be permitted to enter into any agreement with any policyholder or applicant for insur- ance, intended as a waiver of any of the provisions of this section, and it shall be the duty of the commissioner to re- voke the authority of any such company to transact busi- ness in this State, for failure to comply with any of the re- quirements of this section. Sec. 87. Underaverage Risks. Nothing in the foregoing section shall apply to policies written on underaverage risks, but such underaverage insurance may be written upon such terms as the parties may agree upon, and the surplus may be apportioned and dividends declared and paid annually, or at longer intervals in the manner and proportions, and among the parties entitled thereto under the terms of their renewal contracts with the corporation. 7.20 Sec. 88. Insurance or Reinstatement of Unsound Per- son. Any agent, physician or other person who shall in- sure, or knowingly cause to be insured or reinstated in membership, any infirm or unhealth}^ person not at the tin;e in an insurable condition, shall be deemed guilty of a misdemeanor. Sec. 89. Inadequate Rates. Whenever the actuary for the department shall ascertain that any insurance com- pany doing business in this State is writing and issuing policies upon an insufficient, insecure or impracticable table of rates, then he shall report the same to the com- missioner, who, upon such report, shall notify such com- ]>any so Avriting or issuing policies at rates less than are deemed in the opinion of said actuary adequate for the protecton of its contracts made with its policyliolders, of the fact of such report and advice; and shall thereupon, if sucli company shall refuse or neglect to adjust its rates in accordance with the advice of said actuary, cause an exannnation to be made into the affairs of said company, and if the opinion of said actuary be sustained by the re- sult of such examination, it shall be the duty of the com- missioner to require said company to cease writing and issuing policies at rates so found to be insufficient. If said company continues the writing and issuing of such policies after notice from tlie commissioner, then it shall be the duty of the commissioner to institute proceedings against said company as provided in section 51 of this Article. Sec. 90. Misrepresentation of Policy. No life, health or accident insurance company, or officer, director, agent, solicitor or broker, or any person shall make any misrep- resentation, oral, written or otherwise, to any person for the purpose of inducing or tending to induce such person to take out a policy of life, healtli or accident insurance, or for tlie purpose of inducing or tending to induce a policy- liohler in any company to lapse, forfeit or surrender his insurance therein, or to refuse to accept a policy issued upon an application thereof and to take out a policy of in- surance in any other company. 121 Sec. 91. Fraud Practiced Against Company. Any agent, collector, physician, assured or other person who shall make, present or cause to be presented to any company, including fraternal beneficiary companies or associations any false, dishonest or fraudulent certificate or report of death, sickness or disability of any kind or nature, or any false, dishonest or fraudulent claim for any death, sick- ness or disabilit}^ benefit, or claim for payment to or against any such company; or any agent or collector who shall falsely represent or pretend to represent any such company, or Avho shall collect or attempt to collect any premiums or money's or do any business of insurance with- out authority of the company for which he pretends or claims to act, or who shall secure or obtain any cash or I)ecuniary advantage from any such company by any false statement, or who shall fail to turn over when required to do so, or satisfactorily account for all collections for or on account of or property of any such company, shall be deemed guilty of a misdemeanor. Sec. 92. Siritc/iinf/ Policies. No agent, collector, solici- tor or other empk)yee or representative of any company is- siiing contracts providing for sick, accident or death bene- fits and operating on the weekly or monthl^^ industrial plan, shall be deemed the owner of any part of the weekly or monthly debit collected by him or that may be under his cliarge, care, control or supervision, but each and every such debit shall be deemed wholly the property of the com- pany in whose name such policies, contracts or obligations were written or assumed. No agent, collector, solicitor, superintendent or other employee or representative of any such company shall barter, sell, give, transfer or in any manner switch, or offer or attemi^t to barter, sell, give, transfer or in any manner switch to any person or com- pany any part of any debt of such company, or any poli- cies or contracts of such company, without the consent of said company first had in writing. 122 Sec. 93. Penalty for Violation of Sections 90, 91 and 92. Any insurance company, agent, solicitor or broker, or any person Avliatsoever violating any provision of Sections 90^.. 91 and 92 shall, upon conviction, be sentenced to pay a fine of not less than one hundred dollars or more than flvo hundred dollars for each and every violation, or in the dis^ cretion of the court, to an imprisonment for a period of not more than six months. Sec. 94. Impairment of Capital. In case it is found that any life insurance company doing business in this State has not on hand, after deducting all debts and claims against it, exclusive of capital stock, an amount of assets of the character authorized by this Article equal in value to the net present value of its policies in force, it shall be the duty of the commissioner to publish the fact that the existing condition of the affairs of such company is below the legal standard of solvency established by this State, and he shall require the compan^^ at once to cease doing new business and cause a rigid examination in regard to all of the affairs of such company. If it shall thereupon appear that said company is in such condition as to fall below the legal standard of solvency established by this Article, the commissioner shall not permit said company to continue in control of its business, and it shall be his duty to at once institute the necessary proceedings in ac- cordance with the provisions of this Article for the pro- tection of its policyholders, and to publish the results of the examination of such company whenever he may deem it for the interest of the public to do so; provided, how- ever, that in case it shall appear that there is no fraud, gross incompetency or recklessness in the management of said compan^^, he may allow said company ninety days from the time of the completion of said examination with- in whicli to reestablish its solvency, before instituting pro- ceedings as herein provided. Sec. 95. 2Iutual Industrial Life Insurance Companies. Companies issuing certificates for the payment of money or other benefits in the event of sickness, accident or death, 123 or other coutiugency, either to the members, policy' or certificate holders, or to their families or representatives, but issuing no certificate or other form of contract of pay- ment in the aggregate of a greater sum than one thousand dollars upon the termination of any one life or combina- tion of lives, or a sum greater than seventy-five dollars an- nually, or the equivalent thereof, whether the payments be stipulated to be made annually, or at shorter or longer intervals, upon any contract of annuity in which the con- tinuance of any one life, whether singly or in connection with other lives jointly or in succession, or combined in any way whatsoever, or during sickness or disability, is involved as an element of the contract, may be formed subject to the provisions of this Article applicable to life insurance companies and not inconsistent herewith, on the mutual, co-operative, assessment or stock plan. Any such company formed on tlie mutual, co-operative or assess- U'ent plan, shall not be entitled to receive a certificate of authority to transact such business, or issue any benefit certificate, or pay or allow, or otfer or promise to pay or allow to any person any deatli, endowment or disability benefit until actual bona fide applications for death benefit certificates shall have been secured upon at least five hun- dred lives for the aggregate amount of at least twenty thousand dollars. All such companies formed on the capi- tal stock plan, except those authorized and referred to in Section 97, shall, before being entitled to receive a certifi- cate of authority to transact such business, have a paid-up capital of at least fifty thousand dollars, and all such com- panies, except those authorized and referred to in said Section 97, whether formed on the mutual, co-operative, assessment or capital stock plan, shall be possessed of and constantly maintain a sum of money not less in amount than fifty thousand dollars, or interest or dividend-paying securities of equal market value, not in default, which shall be deposited with the commissioner as provided by Section 21. 124 Sec. 96. Conversion of Mutual Life to Stock Company. Any life, accident or health insurance company heretofore incorporated nnder the laws of this State without capital stock, and whether conducted uj)on the mutual, legal re- serve, co-operative or assessment plan, may, with the con- sent of at least three-fourths of its directors, become a stock corporation, subject to the laws of this State appli- cable to such corporations, and those prescribing the form and manner of making amendments to articles of incor- poration, upon complying with the following conditions and regulations : Notice of the proposal so to change the form of the corporate organization and of the meeting of the members of the corporation, its policyholders or certifi- cate holders, or by whatever name its members are known, to be held for the purpose of taking action thereon, shall be given by publication stating the time, place and object of said meeting, once a week for six consecutive weeks in at least one newspaper of general circulation published in the city or county in which said corporation has its prin- cipal i)lace of business, and in at least two such news- papers , if so many are published in said city or county. At sucli meeting there shall be required, in order to effect the change proposed, the affirmative vote in person, or the consent in writing, of at least two-thirds of all the mem- bers of the corporation and the concurrence of at least three-fourths of the directors. At such meeting, if the pro- posed change be approved, the amount of the capital stock of the corporation shall be fixed, within the limits pre- scribed by law for such corporations, and the par value of the shares and number of shares into which the capital stock is to be divided shall also be determined. The mem- bers, policyliolders or certificate holders of such corpora- tion sliall luive the first right to subscribe to said stock, subject to such equitable regulations as the directors may prescribe, but all subscriptions for shares of stock must be made and paid for in cash and at a price not less than par. Stock must be paid for in cash not less than par. Upon the completion of its reorganization as a stock company 125 (lie assets, if any, of siuh corporation and its liabilities sluill be and become the assets and liabilities of the stock coiiipariv, except so far as herein otherwise provided. 8aid conii>an3', however, shall not be entitled to do any business as a stock corporation, until the amount of capi- tal stock, determined as herein provided and as authorized by law, shall have been subscribed and paid for at not less than par and in accordance with the laws governing the formation of corporations, and shall have been invested in an amount equal to the par A-alue of such stock in securi- ties mentioned and authorized by Section 21, and deposit- ed with the Insurance Commissioner to guarantee the pay- ment of policies issued by said company, and until the com- missioner shall, upon request, value the assets of the said company, and its outstanding policies, and shall give his certificate tliat the admitted assets of said company are sutiflcient to provide reserve upon all outstanding policies as required by the laws of this State in relation to insur- ance companies, over and above all bona fide debts and claims against it, exclusive of its capital stock liability. Upon th(? receipt of such certificate from tlie Insurance Commissioner, the stockholders may elect from among themselves not less than five or more than twenty-five di- rectors to hold office until the ensuing annual meeting or until their successeors shall have been duly elected and shall qualify, and the directors so elected shall have, and they are hereby authorized, to exercise all the rights and powers proper to be exercised by the directors of such stock company under the laws of this State. The Insurance Commissioner upon request, and upon payment to him at the usual rates of the cost of such work, shall ascertain and certify the proportionate interest in the assets of the mutual corporation before its reorganiza- tion as a stock company, of each of the members of the mutual company who may refuse to assent to the change of said company into a stock company; but the interest of no member so dissenting shall be valued at more than the full legal reserve upon his policy as prescribed by law, at the 126 time of the reorganization of the corporation as a stock company, and the amount of the interest of each such dis- senting member or policyhohier shall be paid over to him, and upon the payment or tender to him of the amount of interest so ascertained and certified, the membership of each such dissenting member or policyholder shall cease and determine; and the remainder of the assets in excess of the sum required for the compensation of dissenting mem- bers or policyholders as aforesaid, may be deposited with the Treasurer of Maryland or the Insurance Commis- sioner under the provisions of Sections 20 and 21 of this Article, as a guarantee for the payment of the policies issued by said company'. Any surplus tliat may be found to exist in the assets of such corporation over and above all its liabilities, including the legal reserve for all out- standing policies in force, as ascertained and certified by the Insurance Commissioner as hereinabove provided at the date of its reorganization as a stock company, shall be held as a fund for the security of the creditors of the com- pany, and sliall under no circumstances pass to the owner- sliip of the stockholders, be distributed among them or be used or encroached upon for the payment of oividends upon the capital stock. The mutual policies and all rights and liabilities attach- ing thereto, and all the powers and obligations of the com- pany with reference to the same, shall survive so long as said policies shall remain in force, except that such policies shall thereafter be considered as policies for the lurcr^st amount which, according to their terms, might be payable nierounder in case the assessments provided for should yield a sufficient amount to pay the same, and if any cer- tain number of assessments be specified upon said policies as payable by the holders thereof, tlie company shall not be entitled to levy any further assessments, even though such rights may have been previously reserved in the policy. 127 Sec. 97. Companies Converted Prior to July 1, lOK). Sufli mutual, cooperative or assessment industrial iiisiir- aiice companies, organized and doing business in this State prior to, January 1, 1914, as actually converted, prior to July 1, 191 (), in conformity with the law providing for the conversion of such companies, may have a paid-up capital less than fifty thousand dollars, but not less than ten thou- sand dollars; provided, , that in no case shall the assets of any such company at any time be insufficient to provide full legal reserve upon all outstanding x)olicies as required by law, over and above all bona fide debts and claims against it, exclusive of capital stock; and provided further, that no such company having a paid-up capital stock less than fifty thousand dollars shall issue any certificate or other form of contract for the payment of a greater sum of money in the aggregate than five hundred dollars upon the termination of any one life or combination of lives, or a sum greater than seventy-five dollars annually, or equiva- lent thereof, upon any contract of annuity, or during sick- ness or disability. Sec. 98. Insurance of Infants. Companies as mentioned in Sections 95, 96 and 97, upon complying with the require- ments of this Article with reference to such companies, may make such contracts of insurance as are allowed by said sections, both of adults and infants, provided, how- ever, that in all cases of the insurance of infants, some adult shall become responsible for all obligations of any such infant to the company writing said insurance. Sec. 99. Reserves for Industrial Accident and Health In- surance. All companies of the classes referred to in Sec- tions 95, 96 and 97, conducting the business of health in- surance, or assuming the payment of money or providing other benefits on account of and during disability from sickness or accident in this State, shall have and constant- ly maintain, over and above its capital stock and other liabilities and reserves required, and as a special security for the payment of such benefits, cash or investments such 128 as are prescribed for the reserve fund of life insurance companies, equal in amount, if the premiums for such benefits are payable monthly or at shorter intervals, to at least one twelfth part of the total premiums or contribu- tions payable during the year for and on account of such disability insurance or sick or accident benefits; and if the f>remiums for such insurance are payable annually or at intervals longer than one month, then the sum to be main- tained shall be the amount of the unearned premium calcu- lated proportionately for the unexpired term of the in- surance in the manner provided in this Article for calcu- lating the reinsurance reserve of fire insurance comj)anies. Sec 100. Bonds Required of Industrial Acfeiits. Every industrial life, accident or health insurance company doing business in this State, shall require from each of its agenta or collectors in this State a good and sufficient bond for not less than fifty dollars. Failure to require such bond shall, in each and every case, be deemed to be a misdemeanor, and upon conviction, the company so adjudged to be guilty shall, for each such offense, be subject to the penalties specified in Section 53, and in addition thereto, be liable for any damage the public may have sustained by reason of such failure. The informant shall receive one-half of any fines imposed under this section. Siireti/, (^(iximJti/, Lidhiliiij and Couipen- satioii Iiiyui'ducr. Sec. 101. Corporate f>uretij Bonds AutJiorizcd. When- ever any bond, undertaking, recognizance or other obliga- tion is by law, or the charter, ordinances, rules or regula- tions of any municipality, board, body, organization, court, judge or public officer, required or permitted to be niade, given, tendered or filed with surety or sureties, and when- ever tlie performance of any act, duty or obligation, or the refraining, from any act, is required or permitted to be guaranteed, such bond, undertaking, obligation, recogniz- ance or guaranty may be executed by a surety company (lualifiod as hereinafter provided; and such execution by ' 129 such company of such bond, undertakiug, obligatiou, recog- nizance 01* guaranty- shall be in all respects a full and com- plete compliance with every requirement of every law, charter, ordinance, rule or regulation that such bond, undertaking, obligation, recognizance or guaranty shall be executed by one surety or by one or more sureties, or that such sureties shall be residents or householders or free- holders, or either or both, or possess any other qualifica- tion ; and all courts, judges, heads of departments, boards, bodies, municipalities and public officers of every charac- ter, shall accept and treat such bond, undertaking, obliga- tion, recognizance or guaranty when so executed by such company as conforming to and fully and c(nn])letely com- plying with every such requirement of every such law, charter, ordinance, rule or regulation. Sec. 102. QuaUpcatiuiis ami ^Surplus. Any (•(U)i])any to be qualified to act as surety or guarantor in this State, or to transact any of the classes of business known as. casual- ty, liability or workmen's compensation insurance, must comply with all the requirements of this Article applicable to insurance companies, except such requirements as may be inconsistent with those embraced within the sections under this sub-title, must be authorized under the laws of the State where incorporated and under its charter to do the classes of business for which a license is sought under the laws of this State, and every such company authorized to write fidelity or surety bonds, or liability or workmen's compensation insurance, must have good, available assets of at least one hundred and twenty-five thousand dollars in excess of its capital stock, reserves and all other liabili- ties. Sec. 103. Certificate of AutJioritfj. The commissioner shall issue to any company having complied with all the requirements of this Article applicable thereto and apply- ing therefor a license or certificate setting forth that said company has qualified and is authorized for the ensuing vear to do the classes of business in this State set forth in (5) 130 said certificate, which said certificate shall be evideuce of such qualification of such company to do the classes of business authorized by said certificate, and if so autlior- ized therein of its authorization to become and be accepted as sole surety on all bonds, undertakings, recognizances and obligations required or permitted by law, or in the charter, ordinances, rules or regulations of any municipal- it3', board, body, organization or public officer, and of the solvency and credit of such company for all purposes, and of its sufficiency as such surety. i^EC. 1(U. Corporate Fiduciurji >^haU Not Act As ^^l(retl/. No corporation, which, under the laws of this State, shall act as trustee, executor, administrator, guardian, commit- tee or receiver, or in any one or more of those capacities^ without bond or security other tlian its own obligation, in any case in which bond would be required from a natural person in the like or similar capacity, shall incur the lia- bility of a surety upon any bond of any sort or description. Sec. 105. J^rcniiinu Rrscrvr. Every company doing any of the classes of business mentioned and embraced in the preceding section, shall be charged with and maintain as any other liability an unearned or reinsurance reserve for all unexpired policies or risks in force, equal to the un- earned portions of the gross premiums charged for cover- ing said policies or risks, computed on each respective policy or risk from the date of the issuance- of the policy, bond or other contract of insurance; or, in the discretion of the commissioner, at the rate of fifty per centum of the current annual premiums on each outstanding bond, l)olicy or contract in force and written for one year or less, and on policies and bonds in force and written for more than one year at the rate of fifty per centum of the current year's premiums, plus the whole of the premiums for sub- sequent years. Se(\ KfG. (Id i III I*cs-crrcs. All conspanies authorized to do any of the above classes of business in this State, shall, in addition to the unearred premium or reinsurance re- 1 131 serve required by Section 105, also at all times keep and maintain adequate reserve sufficient to pay the claims which may have been filed against such companies, com- puted as hereinafter provided. Sec. 107. LuihUitji and Com pciisatioii (laiui /'cscrrc.s. Tlie reserve for outstanding losses under insurance against loss or damage resulting from accident to or injuries suf- fered by an emplo^'ee or other person and for wliich the insured is liable, and under insurance against loss from liability on account of the death of or injury to an em- ployee not caused by the negligence of the employer, shall be determined as follows: (1) For all liability suits being defended under policies written more than (a) Ten Years prior to the date as of which the statement is made, one thousand five hundred dollars for each suit, (b) Five and less than Ten Years prior to the date as of which the statement is made, one thousand dollars for each suit, (c) Three and less than Five Years prior to the date as of which the statement is made, eight hundred and fifty dollars for each suit; (2) For all liability policies written during the three years im- mediately preceding the date as of which the statement is made, such reserve shall be sixty per centum of the earned liability premiums of each of such three years, less all loss and loss expense payments made under liability policies written in the corresponding years; but in any event, such reserve shall, for the first of such three years, be not less than seven hundred and fifty dollars for each outstanding liability suit on said year's policies; (3) For all compen- sation claims under policies written more than three years prior to the date as of which the statement is made, the present values at four per centum interest of the deter- mined and estimated future payments; (4) For all compen- sation claims under policies written in the three years im- mediately preceding the date as of which the statement is made, such reserve shall be sixty-five per centum of the earned compensation premiums of each of such three years, less all loss and loss expense payments made in connection 132 with such claims under policies written in the correspond- ing years; but in any event, in the case of the first year of any such three-year period such reserve shall not be less than the present value at four per centum interest of the determined and the estimated unpaid compensation claims under policies written during such year. The term ''earn- ed premiums" as used herein shall include gross premiums charged on all policies written, including all determined excess and additional premiums, less return premiums other than premiums returned to policyholders as divi- dends, and less reinsurance premiums and premiums on policies cancelled, and less unearned premiums on policies in force. But any participating company which has charged in its premiums a loading solely for dividends shall not be required to include such loading in its earned premiums, provided a statement of the amount of such loading had been filed with and approved by the Insurance Commissioner. The term "compensation'' as used in this Act 'shall re- late to all insurance effected by virtue of statutes provid- ing compensation to employees for personal injuries irre- spective of fault of the employer. The term "liability" shall relate to all insurance, except compensation insur- ance, against loss or damage from accident to or injuries suffered by an employee or other person and for which the insured is liable. The term "loss payments" and "loss expense payments" as used herein shall include all payments to claimants, in- cluding payments for medical and surgical attendance, legal expenses, salaries and expenses of investigators, ad- justers and field men, rents, stationery, telegraph and tele- phone charges, postage, salaries and expenses of office em- ployees, home office expenses, and all othQr payments made on account of claims whether sucli payments shall be al- located to specific claims or unallocated. All unallocated liability loss expense payments made in a given calendar year subsequent to the first four years in whicli an insurer has been issuing liability policies shall 133 be distributed as follows : Thirty-five per centum sball be charged to the policies written in that year, forty per centum to the policies written in the preceding year, ten per centum to the policies written in the second year pre- ceding, ten per centum to the policies written in the third year preceding and five per centum to the policies written in the fourth year preceding. Such payments made in each of the first four calendar years in which an insurer issued liability policies shall be distributed as follows : In the first calendar year one hundred per centum shall be charged to the policies written in that year ; in the second calendar year fifty per centum shall be charged to the policies written in that year and fifty per centum to the policies written in the preceding year; in the third calen- dar year forty per centum shall be cliarged to the policies written in that year, forty per centum to the policies writ- ten in the preceding year, and twenty per centum to tlie policies written in the second year preceding; and in the fourth calendar year thirty-five per centum shall be charged to the policies written in that year, forty per centum to the policies written in the second year preced- ing, and ten per centum to the policies written in the third year preceding, and a schedule showing such distribution shall be included in the annual statement. All unallocated compensation loss expense payments made in a given calendar year subsequent to the first three years in which an insurer has been issuing compensation policies shall be distributed as follows : Forty per centtim shall be charged to the policies written in that year, forty- five per centum to the policies written in the preceding , year, ten per centum to the policies written in the second year preceding and five per centum to the policies written in the third year preceding. Such payments made in each of the first three calendar years in which an insurer issues compensation policies shall be distributed as follows: In the first calendar year one hundred per centum shall be charged to the policies written in that year ; in the second calendar year fifty per centum shall be charged to the 134 policies written in that year and fifty per centum to the policies WTitten in the preceding year; in the third calen- dar year fortj-five per centum shall be charged to the policies written in that year, forty-five per centum to the policies written in the preceding 3^ear and* ten per centum to the policies written in the second year preceding, and a schedule shoAving such distribution shall be included in the annual statement. Whenever, in the judgment of the Insurance Commis- sioner, the liability or compensation loss reserves of any insurer under his supervision, calculated in accordance with the foregoing provisions, are inadequate, he may, in his discretion, require such insurer to maintain additional reserves based upon estimated individual claims, or other- wise. Each insurer that writes liability or compensation policies shall include in the annual statement required by law a schedule of its experience thereunder in such form as the Insurance Commissioner may prescribe. Sec. 108. FideJify, Surety and Casualty Claim Reserves. The reserve for all other outstanding losses under any and all other classes of casualty insurance policies and under every character of bond and writing obligatory, executed by casualty or bonding insurance company, shall be de- termined by a consideration of facts and circumstances of each particular claim, the amount so set aside as a re- serve to be reasonably sufficient to cover the probable ex- pense and payments in each case. The reserves for claims of the classes mentioned in this section shall be first esti- mated and set aside by each such company and may be inquired into and verified by the Insurance Commissioner, or any examiner from his office, during any regular exami- nation of said company, and if found to be inadequate, the said company may be required to set aside such reserves on claims mentioned in this section as may in the aggre- gate be deemed reasonably and fairly sufficient by the In- surance Commissioner. 135 Sec 100. Revocation of Licciif. staled periodical contributions which shall be sufficient to provide for meet- ing the mortuary obligation, contracted, when value, for death benefits, upon the basis of the iVational Fraternal T'ongress Table of Mortality, as adopted by the National Fraternal Congress August 23, 1899, or any higher stand- ard at the option of the association and for disability bene- fits by tables based upon reliable experience and for com- bined death and permanent total disability benefits by tables based upon reliable experience, with an interest as- sumption not higher than four per cent, per annum, nor until it shall be shown to the Insurance Commissioner by the sworn statement of the treasurer or corresponding of- ficer of such association that at least five hundred appli- cants have each paid in cash at least one regular monthly payment as herein provided per one thousand dollars of indemnity to be effected, which payments in the aggTegate shall amount to at least twenty-five hundred dollars, all of which shall be credited to the mortuary or disability fund on account of such applicants, and no part of which may be used for expenses. Said advanced payments shall, during the period of or- ganization, be held, in trust and, if the organization is not complete witliin one year, as hereinafter provided, return- ed to said applicants. The Insurance Commissioner may make such examination and require such further informa- tion as he deems ad-sisable, and upon presentation of satis- factory evidence that the association has complied with all provisions of law he shall issue to such association a cer- tificate to that effect. Such certificate shall be prima facie 161 evidence of the existence of such association at the date of such certificate. The Insurance Commissioner shall cause a record of such certificate to be made and a certified copy of such record may be given in evidence with like effect as the original certificate. No preliminary certificate gTanted under the provisions of this section shall be valid after one year from this date, or after such further period, not exceed- ing one year, as may be authorized by the Insurance Com- missioner upon cause shown, unless the five hundred ap- plicants herein required have been secured and the organi- zation has been completed as herein provided, and the arti- cles of incorporation and al-l proceedings thereunder shall become null and void in one year from the date of said preliminary certificate, or at the expiration of said extend- ed period, unless such association shall have completed its organization and commenced business as herein provided. When any domestic association shall have discontinued business for the period of one year, or has less than four hundred members its charter shall become null and void. Every such association shall have the power to make a constitution and by-laws for the government of the asso- ciation, the admission of its members, the management of its affairs, and the fixing and readjusting of the rates of contribution of its members from time to time; and it shall have the power to change, alter, add to or amend such con- stitution and by-laws, and shall have such other powers as are necessary and incidental to carrying into effect the objects and purposes of the association. Sec 156. Existing Corporation^ Reincorporation. Any association uoav engaged in transacting business in this State may exercise, after the passage of this Act, all of the rights conferred thereby, and all of the rights, powers and privileges now exercised or possessed by it under its charter or articles of incorporation not inconsistent with this Act, if incor^Dorated ; or, if it be a voluntary associa- tion, it may incorporate hereunder. But no association already organized shall be required to reincorporate there- under, and any such association may amend its articles 162 of iiicorporatioii from time to time in tlie mauuer provided tliereiu, or iu its coDstitution and laws, and all such amend- ments shall be tiled with the Insurance Commissioner and shall become operative upon such filing unless a later time be provided in such amendments or in its articles of in- corporation, constitution or laws. Sec. 157. Mergers and Transfers. No domestic asso- ciation shall merge with or accept the transfer of the membership or funds of any other association unless such merger or transfer is evidenced by a contract in Avriting, setting out in full the terms and conditions of such merger or transfer and filed with the Insurance Commissioner of this State, together with a sworn statement of the j&nanciaJ condition of each of said associations by its president and secretarj^, or corresponding officers, and a certificate of sucli officers, duly verified under oath of said officers of each of tiie contracting associations, that such merger or transfer has been approved by a vote of two-thirds of the members of the supreme legislative or governing body of each of said associations. Upon the submission of said contract, financial state- ments and certificates, tlie Insurance Commissioner shall examine the same, and if he shall find such financial state- ments to be correct and the said contract to be in conform- ity with tlie provisions of this section, and that such merger or transfer is just and equitable to the members of eacli of said associations, he shall approve said merger or trans- fer, issue his certificate to that effect, and thereupon the said contract or merger or transfer shall be in full force and effect. In case such contract is not approved, the fact of its sub- mission and its contents shall not be disclosed by the Insur- ance Commissioner. Skc. 158. Annual License. Associations which are now autliorized to transact business in this State may continue such business until the first day of January next succeed- ing the passage of this Act, and the authority of such 163 association may thereafter be renewed annually, but in all cases to terminate on the first day of the succeeding Jan- uary ; provided, however, that license shall continue in full force and eft'ect until the new license be issued or speciflcaf- ly refused. For each .such license or renewal the associa- tion shall pay the Insurance Commissioner twenty-five dollars. A duly certified copy or duplicate of such license shall be prima facie evidence that the licensee is a frater- nal beneficiary association within the meaning of this Act. Sec. 159. Admission of Foreign Associations. No for- eign association now transacting business organized prior to the passage of tliis Act which is not now authorized to transact business in this State shall transact any business herein without a license from the Insurance Commissioner. Any such association shall be entitled to a license to trans- act business within this State upon filing with the Com- missioner a dul^' certified copy of its charter or articles of association ; a cop^- of its constitution and laws certified by its secretary or corresponding officers; a power of at- torney to the Commissioner as hereinafter provided; a statement of its business under oath of its president and secretary, or corresponding officers in the form required by the Commissioner, duly verified by an examination made by the supervising insurance official of its home State or other State satisfactory to the Insurance Com- missioner of this State; a certificate from the proper of- ficial in its home State, proA'ince or country that the association is legally organized; a copy of tlie contract, which must show that benefits are provided for by period- ical or other payments by person holdng similar con- tracts; and upon furnisliing the Commissioner such other information as he may deem necessary to a proper exhibit of its business and plan of working, and upon showing that its assets are invested in accordance with tlie laws of the. State, territory, district, province or country Avhere it is organized, he shall issue a license to such association to do business in this State until the first day of the suc- ceeding January, and sucli license shall, upon compliance 164 with the provisions of this Act, be renewed annually, but in all cases to terminate on the first day of the succeeding January; provided, howeA^er, that license shall continue in full force and effect until the new license be issued or specifically refused. Any foreign association desiring ad- mission to this State shall have the qualifications required of domestic associations organized under this Act, and have its assets invested as required by the laws of the State, territory, district, country or province where it is organized. For each such license or renewal the associa- tion shall pay the Commissioner twenty-five dollars. When the Commissioner refuses to license any association or revokes its authority to do business in this State he shall reduce his ruling, order or decision to writing and file the same in his office, and shall furnish a copy thereof, together with a statement of his reasons, to the officers of the association upon request, and the action of the Com- missioner shall be reviewable by proper proceedings in any court of competent jurisdiction within the State; pro- vided, however, that nothing contained in this or the pre- ceding section shall be taken or construed as preventing any such association from continuing in good faith all con- tracts made in this State during the time such association was legally authorized to transact business herein. Sec. 160. Service of Process. Every association whether domestic or foreign, now transacting business in this State shall, within thirty days after passage of this Act, and every such association hereafter applying for ad- mission, shall, before being licensed, appoint in writing the Insurance Commissioner and his successor in office to be its true and lawful attorney, ujdou whom all legal pro- cess in any action or proceeding against it shall be served and in such writing shall agree that any lawful process against it which is served upon such attorney shall be of the same legal force and validity as if served upon the association, and that the authority shall continue in force so long as any liability remains outstanding in this State. 165 Copies of such appointment, certified by said Insurance Commissioner, shall be deemed sufficient evidence thereof and shall be admitted in evidence with the same force and effect as the original thereof might be admitted. Service shall only be made upon such attorney, must be made in duplicate with the Insurance Commissioner, or, in his absence upon the person in charge of his office, and shall be deemed sufficient service upon such association ; pro- vided, however, tlmt no such service shall be valid or bind- ing against any such association when it is required there- under to file its answer, pleading or defense in less than thirty days from the date of mailing the copy of such service to association. When legal process against any such association is served upon said Insurance Commis- sioner he shall forthwith forward by registered mail one of the duplicate copies, prepaid and directed to its secretary or corresponding officer. Legal process shall not be served upon any such association except in the manner provided herein. Sec. 161. Place of Meeting. Any domestic associa- tion may provide that the meetings of its legislative or governing body may be held in any State, district, province or territor}^ wherein such association has subordinate branches, and all business transacted at such meetings shall be as valid in all respects as if such meetings were held in this State. But its principal office shall be located in this State. Sec. 162. LiahiUty of Officers and Members. Officers and members of the supreme, grand or any subordinate body of any such incorporated association shall not be individually liable for the payment of any disability or death benefit provided for in the laws and agreements of such association, but the same shall be payable only out of the funds of such association and in the manner provided by its laAvs. Sec. 163. Limitation Upon Power to Waive Provisions of Association's Laics. The constitution and laws of the association may provide that no subordinate body nor any 166 of its subordinate officers or members shall have the power or authority to waive any of tlie provisions of the laws and constitution of the association, and the same shall be binding on the association and each and every member thereof, and on all beneficiaries of members. Sec. 164. Benefits Exempt from Execution, ^o money or other benefit, charity or relief or aid to be paid, pro- vided or rendered hj any such association shall be liable to attachment, garnishment or other process or be seized, taken appropriated or applied by any legal or equitable process or operation of law to pay any debt or liability' of a member or beneficiary or any other person who may have a right thereunder, either before or after payment. Sec. 165. Amendments to Goiistitution and Laws. Every association transacting business under this Act shall file with tlie Insurance Commissioner a duly certified copy of all amendments of or additions to its constitution and laws witliin ninet}- days after the enactment of the same. Printed copies of the constitution and laws as amended, changed or added to, certified by the secretary or corres- ponding officer of the association, shall be prima facie evidence of the legal adoption thereof. Sec. 166. Annual Reports. Every association trans- acting business in this State shall annually, on or before the first day of IMarch, file with the Insurance Commis- sioner in sucli form as he may re(iuire a statement under oatli of its president and secretary or corresponding offi- cers, of its condition and standing on the thirty-first day of December next preceding, and of its transactions for the year ending on that date, and also shall furnish such other information as tbe Commissioner may deem neces- sary to a proper exhibit of its business and plan of work- ing. The Commissioner may at otlier times require any further statement he may deem necessary to be made re- lating to such association. 167 8e(\ IGT. YaJudtlon of Certipcatci^. Iii addition to the anmial report herein recjuired, each association sliall annually report to the Commissioner a valuation of its certificates in force on December 31st last precedini>-, ex- cluding those issued within the year for whicli the report is filed in cases where the contributions for the first year in whole or in part are used for current mortality and ex- penses. Such rei)ort of valuation shall show, as contin- gent liabilities, the present mid-year value of the promised benefits provided in the constitution and laws of such association under certificates then subject to valuation ; and, as contingent assets, the present mid-year value of the future net contributions provided in the constitution and laws as the same are in practice actually collected. At tlie option of any association, in lieu of the aboAe, tlie valuation may show the net value of the certificates sub- ject to valuation hereinbefore provided, and said net value, when computed in case of monthly contributions, ma}' be the means of the terminal values for the end of the preced- ing and of the current insurance years. Sec, 168. Stanckird of Yaluat'ion. Such valuation shall be certified by a competent accountant or actuary; or, at the request and expense of tlie association, verified by the actuary of the Department of Insurance of the home State of the association, and shall be filed with the Commissioner within ninety days after tlie submission of the last preced- ing annual report. The legal minimum standard of valua- tion for all certificates, except for disability benefits, shall be the National Fraternal Congress Table of Mortality as adopted by the National Fraternal Congress, August 28, 1899, or, at the option of the association, any liiglier table; or, at its option, it may use a table based upon the associa- tion's own experience of at least twenty years and cover- ing not less than one hundred thousand lives, with interest assumption not more than four per centum per annum. Each such valuation report sliall set forth clearly and fully the mortality and interest basis and the method of valua- tion. Any association providing for disability benefits ! 168 j shall keep the net contribution for such benefits in a fund separate and apart from all other benefit and expense funds and the valuation of all other business of the associa- tion ; provided that where a combined contribution table is used by an association for both death and permanent total disability benefits, the valuation shall be according to tables of reliable experience, and in such case a sej)aration of the funds shall not be required. The valuation herein provided for shall not be consid- ered or regarded as a test of the financial solvency of the association, but each association shall be held to be legally solvent so long as the funds in its possesion are equal to or in excess of its matured liabilities. Sec. 169. Report of Valuation. Beginning Avith the year 1917 a report of such valuation and an explanation of the facts concerning the condition of the association thereby disclosed shall be printed and mailed to each bene- ficiary member of the association not later than June Ist of each year; or, in lieu thereof, such report of valuation and showing of the association's condition as hereby dis- closed may be published in the association's official pa- per, and the issue containing the same mailed to each bene- ficiary member of the association. The laws of such asso- ciation shall provide that if the stated periodical contribu- tions of the members are sufficient to pay all matured death and disability claims in full and to provide for the y creation and maintenance of tlie funds required by its ^ laws, additional, increased or extra rates of contribution shall be collected from the members to meet such defici- ency; and such laws may provide that, upon the written application or consent of the member, his certificate may be charged w^ith his proportion of any deficiency disclosed by A'aluation, with interest not exceeding five per centum per annum. Sec. 170. Provisions to Insure Future Security. If the valuation of the certificates, as hereinbefore provided, on December 31, 1920, shall show that the present value of future net contributions, together with the admitted 169 assets, is less than ninety per cent, of the present value of the promised, benefits and accrued liabilities, such asso- ciation shall be required thereafter to reduce such defi- ciency not less than five per centum of the total deficiency on said December 31, 1920, at each succeeding triennial valuation. If at any succeeding triennial valuation such association does not show such percentage of improve- ment, the Commissioner shall direct that it thereafter comply with the requirements herein specified. If the next succeeding triennial valuation after the receipt of such notice shall show that the association has not made the percentage of improvement required herein, tlie Commis- sioner may, in the absence of good cause show for such failure, institute proceedings for tlie dissolution of such association in accordance with the provisions of Section 172 of this Article, or, in the case of a foreign association, its license may be cancelled in the manner provided in this Article.' Sec. 171. \Deficienci/ Shoicn hij Triennial Valuation. Any such association, shown by any triennial valuation, subsequent to December 31, 1020, not to have made the improvements herein required shall, within one year there- after complete such deficient improvements, or thereafter, as to all new members admitted, be subject, so far as stated rates of contribution are concerned, to the provi- sions of Section 155 of this Article, applicable in the organ- ization of new associations; provided that the contribu- tions and funds of such new members shall be kept sepa- rated and apart from the other funds of the association un- til the required improvement shall be shown by valuation. If such required improvement is not shown by the succeed- ing triennial valuation, then the said new members may be placed in a separate class and their certificates valued as an independent association in respect of contribution and funds. Sec. 172. Examination of Domestic Associations. The Insurance Commissioner, or any person he may appoint, shall have the power of visitation and examination into the 170 affairs of any domestic association. He may employ as- sistants for the purpose of such examination, and he, or any person lie may appoint, sliall have free access to all the books, papers and documents that relate to the business oC the association, and may summon and qualify as witnesses under oath and examine its officers, agents and employees or other person in relation to the affairs, transactions and conditions of the association. The expense of such examination shall be paid by the association examined, upon statement furnished by the In- surance Commissioner, and the examination shall be made at least once in three 3^ears. Whenever after examination the Insurance Commissioner is satified that any domestic association has failed to comply with any provisions of this Act, or is exceeding its powers, or is not carrying out its contracts in good faith, or is transacting business fraudulently, or wherever any domestic association after the existence of one year or more shall have a membership of less than 400 (or shall determine to discontinue busi- ness), the Insurance Commissioner may present the facts relating thereto to the Attorney-General who shall, if he deem the circumstances warrant, commence an action in quo warranto in a court of competent jurisdiction, and such court shall thereupon notify the officers of such asso- ciation of a liearing; and if it shall then appear that sucli association should be closed, said association shall be en- joined from carrying on any further business; and some person sliall be appointed receiver of such association and shall proceed at once to take possession of the books, papers, monies and other assets of the association, and shall forthwith, under the direction of the court, proceed to close the affairs of the association and to distribute its funds to tliose entitled thereto. No such proceedings shall be commenced by tlie Attorney-General against any such association until after notice has been duly served on the chief executive officer of the association and a reasonable opportunity given to it, on a date to be named in said notice, to show cause why such proceedings should not be commenced. 171 Sec. 173. Application for Receiver. No application for injunction against or proceedings for any dissolution of or the appointment of a receiver for anj^ such domestic association or branch thereof shall be entertained by any court in this State unless the same' is made by the Attor- ney-General. Sec. 174. E.imniiKition of Foreign Associations. The Insurance Commissioner, or any person whom he may ap- point, may examine any foreign association transacting or applying for admission to transact business in this State. The said Commissioner may employ assistants, and he, or any person he may appoint, shall have free access to all the books, papers and documents that relate to the business of the association, and may summon and qualify as wit- nesses under oath and examine its officers, agents and em- ployees and otlier persons in relation to the atfairs, trans- actions And ccmditions of the association. He may, in his discretion, accept in lieu of such examination the exami- Tiation of the Insurance Department of the State, terri- tory, district, jDrovince or country where such association is organized. 'The actual expenses of examiners making any such examination shall be paid by the association upon statement furnished by the Insurance Commissioner. If any such association or its officers refuse to submit to such examination or to comply with tlie provisions of this section relative thereto, the autliority of such association to Avrite new business in this State shall be suspended or license refused until satisfactory evidence is furnished the Commissioner relating to the condition and affairs of the association, and during such suspension the association shall not write new business in this State. Sec. 175. Adverse Puhlications. Pending, during or after an examination or investigation of any such associa- tion, either domestic or foreign, the Insurance Commis- sioner shall make public no financial statement, report or finding, nor shall he permit to become public any financial statement, report or finding affecting the status, standing or rights of any such association until a copy thereof shall 172 have been served upon such association at its home office, nor until such association shall have been afforded a rea- sonable opportunity to answer any such financial state- ment, report or finding and to make such showing in con- nection therewith as it may desire. Sec. 17G. Revocation of License. When the Insur- ance Commissioner, on investigation, is satisfied that any foreign association transacting business under this Act has exceeded its powers, or has failed to comply with any provisions of this Act, or is conducting business fraudu- lently, or is not carrying out its contracts in good faith, he shall notify the association of his findings and state in writing the grounds of his dissatisfaction, and after rea- sonable notice require said associaton on a date named to show cause why its license should not be revoked. If on the date named in said notice such objections have not been removed to the satisfaction of tlie said Commission ei', or the association does not present good and sufficient reasons why its authority to transact business in this State should not at that time be revoked, he may revoke the au-l thority of the association to continue business in this State. All decisions and findings of the Commissioner made under the provisions of this section may be reviewed by proper proceedings in any court of competent jurisdiction, as pro- vided in Section 159. Sec. 177. Exemptions. Nothing contained in this Act shall be construed to effect or apply to grand or subordi- nate lodges of Masons, Odd Fellows or Knights of Pythias (exclusive of the insurance .department of the Supreme Lodge, Knights of Pythias), and the Junior Order of United American Mechanics (exclusive of the beneficiary degree or insurance branch of the National Council Jun- ior Order United American Mechanics) or associations which limit their membership to any one hazardous occu- pation, or to similar associations which do not issue in- surance certificates, or to any association of local lodges of a society now doing business in this State which provides death benefits not exceeding three hundred dollars to any 173 one persoD, or disability benefits not exceeding tliree liiin- dred dollars in any one year to any one person, or both, or to any contract or reinsurance business on such plans in this &tate, or to domestic associations which limit their membership to emploj^es of any particular city or town, designated firm, business house or corporation, or to domestic lodges, orders or associations of a purely reli- gious, cLaritable and benevolent description, which do not provide for a death benefit of more than one hundred dol- lars, OT for disability benefits of more than one hundred and fifty dollars to any one person in any one year, or to corporations, societies or voluntarj^ associations, the busi- ness of which is conducted strictly upon the mortuary assessment plan and of which the death benefit certifi- cates are issued for no fixed amount and are limited to a *um not exceeding five hundred dollars in the case of aiy one person ; provided, always that any such domestic crder or society which has more than five hundred mem- jers, and provides for death or disability benefits, any and any such domestic lodge, order or society, which issues to any person a certificate providing for the pay- ment of benefits, shall not be exempt by the provisions of this section, but shall comply with all the requirements of this Act. The Insurance Commissioner may require from any so- ciety such information as will enable him to determine whether such society is exempt from the provisions of this Act. No society which is exempt by the provisions of this section from the requirement of this Act shall give or allow or promise to give or allow, to any person any compensation for procuring new members. Any frater- nal beneficiary association heretofore organized and in- corporated and operating within the definition set forth in Sections 143, 144 and 145, providing for benefits in case of death or disability, resulting solely from acci- dents, but which does not obligate itself to pay death or sick benefits, may be licensed under the provisions of this Act, and shall have all the privileges and shall be subject 174 to all the provisions and regulations of this Act, except that the provisions of this Act requiring medical exami- nations, valuations of benefit certificates, and that the certificates sliall specify the amount of benefits, shall not apply to such associations. , Sec. 178. E.rempfious fron Taxation. Every Jraternal beneficiary association organized or licensed unfler this Act is hereby declared to be a charitable and benevolent institution, and all of its funds shall be exempt from all and every State, county, district, municipal andWhool tax, other than taxes on real estate and office equimnent. Sec. 179. PenaJflcs. Any person, officer, mexnbVr or examining physician of any association authorized t\ ^o business under this Act who shall knowingly or wilfully make any false or fraudulent statement or representatipn in or with reference to any application for membership), or for the purpose of obtaining money from or benefit v\ any association transacting business under this Act, shall be guilty of a misdemeanor, and upon conviction thereof shall be punislied by a fine of not less than one hundred! dollars nor more than five hundred dollars, or imprison- ment in the county jail for not less than thirty days nor , more than one year, or both, in the discretion of the court, and any person who shall wilfully make a false statement of any material fact or thing in a sworn state- ment as to the death or disability of a certificate holder in any such association for the purpose of procuring pay- ment of a benefit named in the certificate of such holder, and any person who shall wilfully make a false statement in any verified report or declaration made under oath re- quired or authorized by this Act, shall be guilty of per-* jury, and shall be proceeded against and punished as pro- vided by the statutes of this State in relation to the crime of perjury. Any person who shall solicit membership for, or in any manner assist in procuring membership in any fraternal beneficiary association not licensed to do busi- ness in this v'^tate, or who shall solicit membership for, or in any manner assist in procuring membership in any 175 such association not authorized as herein provided to do business as herein defined in tliis State, shall be guiltj of a misdemeanor, and upon conviction thereof shall be punisled by a tine of not less than fifty nor more than two hundred dollars. Anv association, or any officer, ai^ent, or emplo.ee thereof neglecting or refusing to comply with or vioating. an}' of the provisions of this Act, the penalty for wlich neglect, refusal or violation is not specified in this section, shall be fined not exceeding two hundred dol- lars ipon conviction thereof. WORKMEN'S COMPENSATION LAW OP THE STATE OF MARYLAND {As Amended hy the Acts of the General Assembly) of Maryland of 11)16, 1920 and 1922) {Amendments of 1920 Effective June 1^ 1920) {Amendments of 1922 Effective June 1, 1922) COMMISSIONERS ROBERT E. LEE, Cliainiian JOSEPH B. HARRINGTON GEORGE LOUIS EPPLER A. E. BROWN, Secretary ISSUED BY STATE INDUSTRIAL ACCIDENT COMMISSION EQUITABLE BUILDING BALTIMORE 179 ARTICLE CI. Workmen's Compensation Act CHAPTEK 800, ACTS OF 1914. AN ACT to promote the general welfare of this state by providing compulsory insurance against accident or death of workmen engaged in extra-hazardous employments in this State, and providing for the form, kind and method of such insurance and the incidents thereto; and providing for the amounts of compensation payable thereunder and the person or persons to whom such compensation is payable; and providing for the creation of a State Industrial Acident Com- mission and defining its powers; and providing for the creation oT a State Accident Fund; and providing for an appropriation to carry out the provisions of this Act; and providing for the abolishment in certain cases of the defenses of "Assumption of Risks," "Contribu- tory Negligence" and the "Negligence of a Fellow Servant" in ac- tions for personal injury or death, and to repeal Chapter 837 of the Acts of 1912, and to repeal Chapter 139 of the Acts of 1902, Chapter 153 of the Acts of 1910 as amended by the Acts of 1912, Chapter 445, and to provide for the equitable disposition of the funds created by virtue of the said Acts of 1902, Chapter 139, and the Acts of 1910, Chapter 153. Whereas, the State of Maryland recognizes that the prosecution of various industrial enterprises which must be relied upon to create and preserve the wealth and prosperity of the State involves injury to large numbers of workmen, resulting in their partial or total incapacity or death, and that under the rules of the common law and the provisions of the statutes now in force an unequal burden is cast upon its citizens, and that in determining the responsibility of the employer on account of injuries sustained by his workmen, great and unnecessary costs is now incurred in litigation, which cost is born by the workmen, the employer, and the taxpayers, in part, in the maintenance of courts and juries to determine the question of responsibility under the law as it now exists; and fThe references under this Article to S. I. A. C. are to the opinions of the Maryland State Industrial Accident Commission as found filed among its records of claims or as published in the Daily Record in Baltimore City. 180 Whereas, in addition thereto, the State and its taxpayers are sub- jected to a lieavy burden in providing" care and support for such in- jured worlimen and their dependents, which burden should, in so far as may be consistent with the rights and obligations of the people of the State, be more fairly distributed as in this Act provided; and Whereas, the common law system governing the remedy of work- men against employers for injuries received in extra-hazardous work is inconsistent with modern industrial conditions; and injuries in such work, formerly occasional, have now become frequent and inevitable. Now, therefore, The State of Maryland, exercising herein its police and sovereign power, declares that all phases of extra-hazardous em- ployments be, and they are hereby withdrawn from private contro- versy, and sure and certain relief for workmen injured in extra-haz- ardous employments and their families and dependents are hereby provided for, regardless of questions of fault and to the exclusion of every other remedy, except as provided in this Act. 1914, ch. 800, sec. 1. 1. A Commission is hereby created which shall be known as the State Industrial Accident Commission, to be composed of three Commissioners. Immediately upon the taking effect of this Act, the Governor shall appoint such Commissioners (not more than two of whom shall belong to the same po- litical party). One of them shall hold office for the first two years, another for the first four years, and another for the first six years following the pasage and approval of this Act. Thereafter the term shall be six years. Each Commis- sioner shall devote his entire time to the duties of the office and shall not hold any position of trust or engage in any occupation or business interfering or inconsistent with his duties as Commissioner, or serve on or under any com- mittee of a political party. Each Commissioner shall hold office until his successor shall be appointed and shall have qualified. Vacancies shall be filled by the Governor for the unexpired term. A decision on any question arising under this Act concurred in by two of the Commissioners shall be the decision of the Commission. The Governor may at any time remove any Commissioner from office for inefficiency, neglect of duty or malfeasance in office. Before such re- moval he shall give such Commissioner a copy of the charges against him, and shall fix a time when he can be heard in his own defense, either in person, or by counsel, which shall 181 not be less than ten days thereafter, and such hearing shall be open to the public. The Governor shall designate a mem- ber of said Commission as Chairman thereof. The principal office of the Commission shall be in the City of Baltimore, but branch offices may be established at other places in the State for the purpose of administering this Act. Ibid, sec. 2. 2. A majority of the Commission shall constitute a quorum for the transaction of business, and a vacancy shall not impair the right of the remaining members to exercise all the powers of the full Commission, so long as a majority remain. Any investigation, inquiry or hearing which the Commission is authorized to hold, or undertake, may be held or undertaken by or before any one member of the Commis- sion, and every order made by a member thereof, when ap- proved and confirmed by a majority of the members and so shown on its record of proceedings, shall be deemed to be the order of the Commission. Ibid, sec. 3. 3. The salary of each of the Commissioners shall be three thousand dollars ($3,000.00) per annum and shall be paid out of the State Treasury, and in addition to the said sum of $3,000 per annum, each of said Commissioners shall also re- ceive the sum of $2,000 per annum, which shall be paid out of its funds by the Mayor and City Council of Baltimore to each of said Commissioners as employees of said municipal Corporation. In addition to the salary provided in this sec- tion, each Commissioner shall be allowed his actual and necessary traveling and incidental expenses.* Ibid, sec. 4. 4. The Commission shall be in continuous session and open for the transaction of business during all business hours of each and every day, excepting Sundays and legal *See Chapter 73 of the Acts of 1916, whereby the salaries of the Commissioners are to be paid wholly by the State, the City of Balti- more being relieved from paying a portion of said salaries from and after October 1st, 1916. 182 holidays. All sessions shall be open to the public, and shall stand and be adjourned without further notice thereof on its record. All proceedings of the Commission shall be shown on its record of proceedings, which shall be a public record, and shall contain a record of each case considered and the award paid or allowed to any employe of the Commission, or to any other person for services. Provided, however, that any person in the employ of the Commission who shall di- vulge aiiy information secured by him in respect to the transactions, property or business of any person, firm, com- pany, or corporation, association or joint partnership to any person other than the members of the Commission, shall be guilty of misdemeanor and subject to a fine of not less than $100 or more than $500, or imprisonment not exceeding 18 months, in the discretion of the Court, and shall thereafter be discjualified from holding any appointment or employ- ment with the Commission. Ibid, sec. 5. 5. The Commission may employ a secretary, actuaries, ac- countants, inspectors, examiners, experts, clerks, stenogra- phers and other assistants, and fix their compensation sub- ject to the written approval of the Governor; such compen- sation shall be paid out of the appropriation in the State Treasury provided for in this Act. The Secretary, actfu- aries, accountants, inspectors, examiners, experts, clerks, stenographers and other assistants that may be employed shall be entitled to receive their actual necessary expenses while traveling on the business of the Commission. Such expenses shall be itemized and sworn to by the person who incurred! the expense, and allowed by the Commission. The Commission shall keep and maintain its main office and such branch offices as it shall deem proper and necessary for the administration of the Act, and shall provide suitable rooms, necessary office furniture, supplies, books, periodicals and maps for the same. All necessary expenses shall be audited and paid out of the appropriation in the State Treasury pro- vided for in this Act. It shall provide itself with a seal for the authentication of its orders, awards and proceedings, 183 upon which shall be inscribed the words "State Industrial Accident Commission, State of Maryland — Official Seal." Each member of the Commision and each person appointed to office or employment by the Commission shall before en- tering upon the duties of his office or employment take and subscribe the constitutional oath of office. Ibid, sec. 6. 6. The Secretary of the Commission shall keep and main- tain a full and true record of all proceedings of the Commis- sion, of all documents or papers ordered filed by the Commis- sion or by its rules, of decisions or orders made by any member of the Commission, and of all decisions or orders made by the Commission or aproved and confirmed by it and ordered filed, and he shall be responsible to the Commis- sion for the safe custody and preservation of all such docu- ments at its office. He shall have the power to administer oaths in all parts of the State, so far as the exercise of such power is properly incident to the performance of his duty or that of the Commision. He may designate, from time to time, with the approval of the Commission, one of the clerks of the office appointed by the Commission to exercise the powers and duties of the secretary during his absence. Under the direction of the Commission, the secretary shall have general charge of its office, superintend) its clerical business and perform such other duties as the Commission may prescribe. Ibid, sec. 7. 7. Each member of the Commission, the Secretary thereof, and any examiner or inspector shall, for the purpose contemplated by this Act, have power to issue subpoenas, compel the attendai^ce of witnesses, adminster oaths, cer- tify to official acts, take depositions within or without the State of Maryland as now provided* by law, compel the pro- duction of pertinent books, payrolls, accounts, papers, rec- ords, documents and testimony. If a person in attendance before the Commission or a Commissioner refuse, without reasonable cause, to be examined or to anjswer a legal and pertinent question, or to produce a book or paper when or- 184 dered to do so by the Commission, the Commission may apply to any Judge of the Supreme Bench of Baltimore City, or of the Circuit Court of any county, upon proof by affidavit of the fact, for a rule or order returnable in not less than two or more than five days, directing such person to show cause before the judge who made the order, or any other judge aforesaid, why he should not be committed to jail; upon the return of such order, the judge before whom the matter and such person shall come on for a hearing shall examine under oath such person, and such person shall be given an opportunity to be heard; and if the judge shall de- termine that such person has refused, without reasonable cause or legal excuse, to be examined or to answer a legal or pertinent question, or to produce a book or paper which he was ordered to bring or produce, he may forthwith commit the offender to jail, there to remain until he submits to do the act W'hich he was so required to do, or is discharged according to law. No person shall be excused from testifying or from pro- ducing any books or papers or documents in any investiga- tion or inquiry by or upon any hearing before the Commis- sion or any Commissioner, when ordered to do so by the Commission or its Secretary, upon the ground that the testi- mony or evidence, books or papers or documents required of him may tend to incriminate him or subject him to penalty or forfeiture ; but no person shall be prosecuted, punished or subjected to any penalty or forfeiture for or on account of any act, transaction, matter or thing concerning which he shall, under oath, have, by order of the Commision or a Commissioner or its inspector or examiner, testify to or produce documentary evidence of; provided, however, that no person so testifying shall be exempt from prosecution or punishment for any perjury committed by him in his testimony. « Ibid, sec. 8. 8. Each officer who serves such subpoena shall receive the same fee as the Sheriff would receive in the county or city where said witness is subpoenaed, and each witness who ap- pears in obedience to a subpoena, before the Commission or I 185 an inspector or an examiner, shall receive for his attendance the fees and mileage provided for witness in civil cases in the Circuit Courts of the counties or the Common Law Courts of Baltimore Citj', as of the place where he gives his testimony, which shall be audited and paid from the State Treasury in the same manner as other vouchers aproved by any member of the Commission and the Secretary. No wit- ness subpoenaed at the instance of a party other than the Commission, or an inspector or examiner, shall be entitled to compensation from the State Treasury, unless the Commis- sion shall certify that his testimony was material to the matter investigated. In an investigation the Commission may cause depositions of witnesses residing within or with- out the State to be taken in the manner prescribed by law for like depositions taken in cases pending before the Circuit Courts of the counties or the Common Law Courts of Balti- more City, as is now or hereafter may be provided by law.* Ibid, sec. 9. 9. Subject to the provisions of this Act, the State Indus- trial Accident Commission shall adopt reasonable and proper rules to govern its procedure, whiclj procedure shall be as summary and simple as reasonably may be. It shall regulate and provide for the kind and character of notices, and the services thereof, and in cases of injury by accident to employees, the nature and extent of the proofs and evi- dence and the method of taking and furnishing the same for the establishment of the right to compensation. It shall de- termine the nature and forms of application of those claim- ing to be entitled to benefits or compensation, and shall regu- late the method of making investigations, physical examina- tions and inspections and prescribe the time within which adjudications and awards shall be made ; provided, always, thai such rules and regulations shall conform to the pro- visions of this Act. Ibid, sec. 10. 10. The Commission shall not be bound by the usual common law or statutory rules of evidence or by any tech- *By the terms of the Act the Commission is given power to take de- positions within or without the State, Brenner vs. Brenner, 127 Md. 189. 186 iiical or formal rules of procedure, other than as herein pro- vided, but may make the investigation in such maner as in its judgment is best calculated to ascertain the substantial rights of the parties and to carry out justly the spirit of this Act. Ibid, sec. 11. 11. Transcribed copy of the evidence and proceedings or any specific part thereof, by any investigation taken by a stenographer appointed by the Commission, being certified and sworn to by such stenographer^ to be a true and correct transcript of the testimony, or of a particular witness, or any specific part thereof, or to be a correct transcript of the proceedings had on such investigation so purporting to be taken and subscribed, may be received in evidence by the Commission, with the same effect as if such stenographer M^ere present and testified to the facts certified. A copy of such transcript shall be furnished on demand to any party in interest upon payment of the fee therefor, as provided for transcripts in the Circuit Courts of the counties or the Com- mon Law Courts of Baltimore City. Ibid, sec. 12. 12. The Commission shall prepare and furnish, free of cost, blank forms and provide in its rules for their distribu- tion so that the same may be readily available, of applica- tions for benefits or compensation notices, to employers, proof of injury or death, of medical attendance, of employ- ment and wage earnings and such other blanks as may be deemed proper and advisable, and it shall be the duty of employers to constantly keep on hand a sufficient suply of such blanks. Ibid, sec. 13. 13. Annually, on or before the first day of January, the State Industrial Accident Commission shall make a report to the Governor, which shall include a statement of the number of awards made by it, the causes of the accidents leading to the injuries for which the awards were made, and a detailed statement of the expenses of the Commission and the condi- tion of the State Accident Fund, together with any other 187 matters which the Commission deems proper to report to the Governor, including any recommendations it may desire to make. 1914, ch. 800, sec. 14. 1916, ch. 597. 14. Every employer subject to the provision of this Act shall pay or provide as required herein compensation accord- ing to the schedules of this Act for the disability or death of his employe resulting from an accidental personal injury sustained by the employe arising out of and in the course of his employment, without regard to fault as a cause of such injury, except where the injury is occasioned by the wilful intention of the injured employe to bring about the injury or death of himself or of another, or where the injury results solely from the intoxication of the injured employe while on duty. Where the injury is occasioned by wilful intention of the Injured employe to bring about the injury or death of himself or of another, or where the injury results solely from the intoxication of the injured employe while on duty, neither the injured employe nor any dependent of such em- ploye shall receive compensation under this Act.* The liability prescribed by the last preceeding paragraph shall be exclusive, except that if an employer fail to secure the payment of compensation for his injured employes and their dependents as provided in this Act, an injured employe or his legal representative in case death results from the in- jury may, at his option, elect to claim compensation under this Act, or to maintain an action in the courts for damages *See note to section 45 of this Article 101. See opinion of S. I. A, C, Claim 327, Andrew P. Miller, employee, as to burden of proof and the subject of intoxication. The claim was disalloyed. See opinion of S. I. A. C, Claim 1177, Frank W. Krug, employee, as to injury arising in the course of employment and occupational disease. See also opin- ion of S. I. A. C, Claim 208, Joseph Rimbach, employee, as to disease vs. injury. See also opinion of S. I. A. C, Claim 213, John Hardestay, employee, as to effect of larking at lunch hour by employee. See opin- ion of S. I. A. C, Claim 3906, George F. Smith, as to stock clerk in wholesale house injured in use of an elevator, but customarily em- ployed in more hazardous work. (Daily Record, January 26, 1916.) The letters S. I. A. C. refer to the opinions of the Maryland State Industrial Accident Commission as found among its records or as pub- lished in the Daily Record, a newspaper of Baltimore City. 188 on account of such injury; and in such an action the defend- ant may not plead as a defense that the injury was caused by the negligence of a fellow-servant or that the employe asumed the risk of his employment, or that the injury was due to the contributory negligence of the employe. If an employer, besides employing workmen in extra-hazardous employment within the meaning of this Act, shall also em- ploy workmen in employments not extra-hazardous, the provisions of this Act shall apply only to the extra-hazard- ous employments within the meaning of this Act and the workmen employed therein, except as provided in Section 33 of this Act. 1914, ch. 800, sec. 15. 1916, ch. 597. 1920, cb. 456. 15. The employer shall secure compensation to his em- ployes in one of the following ways: (1) By insuring and keeping insured the payments of such compensation in the State Accident Fund, or (2) By insuring and keeping insured the payments of such compensation with any stock corporation or mutual association authorized to transact the business or Work- men's Compensation Insurance in this State. (3) Any such employer who does not, with the approval of said Commission, voluntarily insure the payment of the compensation by one of the methods designated in the pre- ceding paragraphs in this section, must furnish satisfactory proof to the Commission of his financial ability to pay such compensation himself, in which case the Commission may, at any time and from time to time in its discretion, require the deposit with the Commission of securities such as are ac- cepted by the equity courts of Baltimore City for the invest- ment of trust funds and in an amount or amounts to be de- termined by the Commission, to secure the liability of the employer to pay the compensation specified in this Act; and in order to be informed as to the continued financial respon- sibility of any such employer the Commission may require reports from him annually or at such other times as the Commission may deem necessary or advisable, and may ex- amine such employer under oath or make such other exami- nation of his business as the Commission may determine. 189 If he should fail to furnish such satisfactory proof, or give bond, or deposit such securities as required by the Commis- sion, or if he should at any time fail to render satisfactory reports to the commission or otherwise satisfy the Commis- sion of his continued financial ability to pay the compensa- tion himself he shall be subject to the provisions of the first paragraph of this section of this Act, and shall be required by the Commission to insure as provided in the first para- graph of said this section, unless he, at once, insures volun- tarily as provided in the second paragraph of this section. Any employer, subject to the provisions of this Act, who, after November first, nineteen hundred and fourteen, fails or refuses to submit to said Commission, as provided in the next succeeding paragraphs, the method he desires to adopt for assuring compensation, or who shall fail to secure insur- ance by one of such methods, shall be guilty of a misde- meanor, and shall be subject to a fine of not less than five hundred nor more than five thousand dollars. The Court may, in its discretion, remit any such penalty, provided the employer in default assures the compensation as provided in this section; and provided, further, that he has paid or se- cured to be paid any compensation or other benfits under this Act which may have been awarded against him. Any such employer who may wish to adopt any one of the methods mentioned in the preceding paragraphs for assur- ing the payment of compensation to his employes and their dependents, shall first submit to the State Industrial Acci- dent Commission the method he wnshes to adopt. The said Commission may approve or reject the method proposed. If rejected, the employer may submit another method au- thorized under this Act. The said Commission may from time to time revise or alter its decision in approving the elec- tion of an employer to adopt any one of the methods of as- suring payment of the compensation as provided for in this Act, if such action is reasonably necessary to secure and safeguard such payments to employes or for the diminish- ing and prevention of accidents. Any action of the Com- mission for the purpose of diminishing or preventing acci- dents shall not apply to public service corporations under the 190 jurisdiction of the Public Service Commission. Any de- cision of said Commission under this Section or Section 14 of this Act may be reviewed by writ of certiorari in the Cir- cuit Court for the county in which the employer may reside or in any of the Common Law Courts of Baltimore City, if the employer resides in Baltimore City. Any employer subject to the provisions of this Act, who fails or refuses to insure voluntarily the payment of the com- pensation specified in this Act to his employes and their dependents through one of the methods of assurance of pay- ment, mentioned in the second paragraph of this section of this Act, or fails to furnish satisfactory proof to the Com- mission of his financial ability to pay such compensation himself, or give bond or deposit securities as aforesaid, shall at any time after November first, nineteen hundred and fourteen, be compelled by the Commision to insure to his employes and their dependents the payment of the compen- sation specified in this Act, by paying to the State Treasurer for the use and benefit of the State Accident Fund, herein- after authorized to be established, the premium or taxes levied and published by the Commission for the group of employments, industries or works to which said employer belongs. And any such employer who fails or refuses to so insure within ten days, after being ordered by the Commis- sion to do so, shall be liable to the State in an amount equal to the premium or taxes required of him for six months' in- surance in the State Accident Fund, as a penalty, which, together with his premium or tax due the State Accident Fund for the first six months, nuiy be collected by the Com- mission in the same manner and with the same effect as provided in Section 22 of this Act for the collection of pre- miums or taxes in default. In exercising this discretion conferred upon it by this Sec- tion and Section 14 of this Act, the State Industrial Accident Commision shall consider the reputation of any insurance company or association, in which any such employer may de- sire to insure, for promptness and fairness in the settlement of compensation claims, without unreasonable resistance on the part of any such insurance company or association, and J 191 shall also consider the financial strength of the employer, the number of employes employed, the degree of hazard to em- ployes engaged in the employment, the liklihood or danger of several employes being injured or killed by one and the same accident, the relative influence, the different methods, by which compensation may be assured under this Act, are likely to exert upon the employer and his employes for the prevention of accidents, and any other facts or conditions bearing upon the security and promptness of payment of the compensation and the prevention of accidents. 1914, ch. 800, sec. 16. 1916, ch. 597. 16. The State Industrial Accident Commision is hereby authorized and directed to create and establish a fund, to be known as "the State Accident Fund," for the purpose of in- suring employers against liability under this Act, and to their employes and their dependents the payment of the com- pensation specified in this Act. Such fund shall consist of all premiums or taxes received and paid into the fund and of property and securities acquired and interest earned through the use of moneys belonging to the fund. Said fund shall be administered by the Commission, and shall be ap- plicable to the payment of losses sustained on account of insurance, and to the payment of expenses in the manner provided in this Act. 1914, ch. 800, sec. 17. 1916, ch. 597. 1922, ch. 321. 17. For the purpose of creating such State Accident Fund each employer insured in this fund or required to be insured therein by this Act shall pay into the State Treasury the premiums of liability based upon and being such percentage of the payroll of such employer as may have been determined and published by the Commission, and be then in effect. The premiums shall be paid every four months, and shall be the prescribed percentage of the total wages paid to all em- ploj^es subject to the Act for such preceding four months' period ; provided, however, that in order to create a fund available upon application of this Act as aforesaid on November first, one thousand' nine hundred and fourteen, the payments for the months of November, one thousand 192 nine hundred and fourteen, to February, inclusive, one thou- sand nine hundred and fifteen, shall be made on or before November first, one thousand nine hun,di'ed and fourteen, and be preliminarily based upon the payroll of the opera- tions of the first four months of the year one thousand nine hundred and fourteeen. If any employer be found to have overpaid for such four months he may deduct such over- payment from the next succeeding four months' payment made to the fund; if any employer be found to have under- paid for such four months, he shall pay the deficiency with the payments made by him after the end of said four months.* Ibid, sec. 18 18. If a single establishment of work insured in the State Accident Fund comprises several occupations listed in Sec- tion 32 of this Act, the premium shall be compared according to the payroll of each occupation, if clearly separable; other- wise an average rate of premium shall be charged for the entire establishment, taking into consideration the number of employes and the relative hazards. In computing the payroll the entire compensation received by every worl^man employed in extra-hazardous work and insured in the State Accident Fund, within the meaning of this Act, shall be in- cluded, whether it be in the form of salary, wage, piece- work, overtime, or any allowance in the way of profit- sharing premium or otherwise, and whether payable in money, board or otherwise. Provided the money value of board and similar advantages shall have been fixed by par- ties at the time of hiring. Ibid, sec. 19. 1920, ch. 456. 19. It shall be the duty of the Commission to classify any industries subject to this Act mentioned or not mentioned which are insured in the State Accident Fund. And the Commission shall have power on or before the first day of January of each year to reclassify such industries, or oft- ener, if, in the opinion of the Commission, the same should *As amended by Chapter 597, Acts of 1916; and by Chapter 321, Acts of 1922, effective June 1st, 1922. 193 he deemed just and advantageous; or to create additional hazard and determine the risk of the different classes, and fix the rates of premium for each class, according to the risks of the same sufficiently large to guarantee a workmen's compensation fund from year to year. It shall be the duty of the Commission in determining the rates, in order to create a fund sufficiently large to guarantee a workmen's compen- sation fund from year to year to also reclassify from time to time the industries or occupations, in order that there may be a flexible adjustment of the rates as the hazard fluctu- ates, and to use all means in their power through the rate adjustment to lessen the opportunities for injuries to the workmen. The classification so determined and the rates of premium established shall be applicable for such year unless a reclassification should, in the opinion of the Commission, necessitate a change of rates within such year ; and based on each one hundred dollars of the gross annual payroll of each employer in any class; provided, also, that for the pur- poses of this Act the pay of the employe partly within and partly without the State shall be deemed to be such propor- tion of the total pay of such employe as his service within the State bears to his services outside the State. The Commission, in its administration of the State Acci- dent Fund, shall have the power to declare dividends to the subscribers or policy holders in the Fund, either in the form of cash refunders or credits, when the financial condition of the Fund is such, in the judgment of the Commission, as to make such dividend declaration warranted and advisable. Ibid, sec. 20. 20. The Commission may establish and require all em- ployers insured in the State Accident Fund to install and maintain a uniform payroll. The Commission shall ascer- tain and establish the amounts to be paid into and out of the Accident Fund, issue proper receipts for moneys received, and certificates for benefits accrued and accruing from the State Accident Fund. 7) 194 Ibid, sec. 21. 21. Every employer subject to the operation and effect of this Act, who shal linsure in the State Accident Fund, shall every four months submit a report to the Commission herein created, according to the regulations and requirements it may prescribe, of his payroll for four months then ending. A failure to comply with this section shal subject the em- ployer to an extra contribution of one hundred dollars, to be collected by the Commission in a civil action in its name. The amount collected under this section shall be paid into tehe State Accident Fund. Any employer who shall, with fraudulent intent, misrep- resent to the Commission the amount of payroll upon which the premium under this Act is based, shal be liable to the Commission in ten times the amount of the difference in the premium paid and the amount the employer should have paid. The liability to the Commission under this provision shal be inforced in a civil action in the name of the Com- mission. All sums collected under this section shal be paid into the State Accident Fund. Ibid, sec. 22. 22. If an employer shall default in any payment required to be made by him to the State Accident Fund, the amount due from him shall be collected by civil action against him in the name of the State of Maryland, and it shall be the duty of the Commission, on the first Monday of each month, after November first, nineteen hundred and fourteen, to certify to the Attorney-General of the State the names and residences, or places of business, of all employers known to the Commis- sion to be in default for such payment or payments for a longer period than five days and the amount due from each employer, and it shall then be the duty of the Attorney- General forthwith to bring or cause to be brought against each employer a civil action in the proper Court for the col- lection of such amount so due, and the same, when collected, shall be paid into the State Accident Fund, and each em- ployer's compliance with the provisions of this Chapter, re- quiring payments to be made into the State Accident Fund, 195 shall date from the time of the payment of said money so collected as aforesaid to the said Commission for credit to the State Accident Fund.*t Ibid, sec. 23. 23. Ten per centum of the premiums collected from em- ployers insured in the State Accident Fund shall be set aside by the Commission for the creation of a surplus until such surplus shall amount to the sum of fifty thousand dollars, and thereafter five per centum of such premiums until such time as, in the judgment of said Commission, such surplus shall be sufficiently large to cover the catastrope hazard. The Commission shall also set up and maintain a reserve adequate to meet anticipated losses and carry all claims and policies to maturity. Ibid, sec. 24. 24. The Treasurer of the State shall be the custodian of the State Accident Fund, and all disbursements therefrom shall be paid by him upon order or voucher, approved and signed by the chairman or acting chairman and sccreetary of the Commission, and directed to the Comptroller of the State, Avho shall draw his warrant therefor. It shall be* the duty of the Treasurer to keep and maintain the fund herein created separate and distinct from other State funds. On TiUd after January 1st, 1915, the; oblij/ation in the bond of the State Treasurer shall contaiji a provision securing the protection of this fund. Ibid, sec. 25. 25. Whenever and as often as theie shall be in the hands of the Treasurer, any sum belonging lo the State Accident Fund not likely, in the opinion of the Commission, to be re- quired for immediate use, it shall be the duty of tlie Board of Public Works, when called upon oy the Commission, to in- vest the same in interest-bearing securities, such as are *See opinion of S. I. A. C, Claim 1587, Emil Plassil, employee, as to when policy in State fund is effective. Held when premium is paid. fThe Attorney-General shall represent the State Industrial Accident Commission, 1916, chapter 560. 196 accepted by the Equity Courts of Baltimore City for the in- vestment of trust funds, and when and as it may become necessary or expedient to use the monies so loaned or in- vested the Board of Public "Works shall, when called upon by the Commission, collect or sell or otherwise realize upon any such loan or investment, and any interest accruing upon any such loan or investment as well as any interest received upon the deposit of moneys belonging to said fund shall be cred- ited to said fund. The State Treasury may deposit any portion of the State fund not needed for immediate use, in the manner and sub- ject to all the provisions of law respecting the deposit of other State funds by him. Interest earned by such portion of the State Accident Fund deposited by the State Treasurer shall be collected by him and placed to the credit of the fund. Ibid, sec. 26. 1916, ch. 379, p. 779, 26. Any employer, after entering the State Accident Fund, may withdraw from said fund after the period of one year upon giving sixty (60) days' notice of his intention so to do, -and upon paying all arrears, if any, of premiums due the «aid fund, and upon assuring compensation to his em- ployes by one of the other methods specified in the Act. 1914, ch. 800, sec. 27. 1916, ch. 597. 1920,, ch. 456. 27. The entire expense of conducting and administering the State Accident Fund, as likewise all other expense of the State Industrial Accident Commission, shall be paid in the first instance by the State out of the monies appropriated for the maintenance of the State Industrial Accident Commis- sion and the payment of the salaries and expenses of said Commission and its officers and employes. In the month of January, nineteen hundred and eighteen, and annually there- after in such month the Commission shall ascertain the just expense incurred by the Commission during the preceding calendar year, in conducting and in the administration of the State Accident Fund, by including the salaries of the super- intendent of said fund and such other employes of the Com- mission whose services were rendered exclusively to said 197 * fund, and all other expenses incurred exclusively for said fund ; and the amount of such salaries and expenses shall be chargeable to the State Accident Fund. And if there be employes of the Commission, other than the members them- selves and the Secretary, whose time is devoted partly to the general work of the Commission alid partly to the work of the State Accident Fund, and in case there are any other expenses which are incurred jointly on behalf of the general work of the Commission and the State Accident Fund, an equitable apportionment of the salaries of such employes and expenses shall be made by the Commission and the part thereof which is applicable to the State Accident Fund shall likewise be chargeable thereto ; and the Commission shall authorize, in the same manner as other disbursements from the State Accident Fund are authorized, the whole amount so chargeable to the State Accident Fund to be transferred from said fund by the Treasurer to the State Treasury to reimburse the State for the moneys so appropriated and ex- pended in conducting and administering the State Accident Fund for the calendar year ending December thirty-first, nineteen hundred and seventeen, and for each calendar year thereafter. As soon as practicable after January first, nineteen hun- dred and eighteen, and annually thereafter, the Commission shall ascertain as fully and accurately as possible the total payroll of all the employers of this State, subject to the pro- vision of this Act, for the preceding calendar year, whether insured in the State Accident Fund, any stock company, or mutual association, or self-insured, and shall also calculate and ascertain the amount paid by the State for adminintra- tive expenses of the State Industrial Accident Commission during said preceding calendar year, excluding the amount chargeable to the State Accident Fund under the preceding paragraph of this section. The Commission shall then cal- culate and determine the percentage which the total amount of such salaries and expenses, other than the amount charge- able to the State Accident Fund, bore to the total payroll, ascertained as aforesaid for that year, of all the employers of this State subject to the provisions of this Act ; and the 198 percentage so calculated and determined shall be assessed against all such employers carrying their own insurance in proportion to their several payrolls, and all insurance car- riers, including the State Accident Fund, in proportion to the aggregate payroll of employers insured therewith, as a special tax for the maintenance of the State Industrial Acci- dent Commission, other than for conducting and administer- ing the State Accident Fund, for the calendar year ending December thirty-first, nineteen hundred and seventeen, and for each calendar year thereafter; provided, however, that the total amount to be assessed against and paid by such insurance carriers and self -insurers shall not exceed eighty thousand dollars for any one year. Payment of said tax may be enforced by civil action in the name of the State of Maryland, and the amounts so as- sessed and collected by the Commission shall be paid into the State Treasury to reimburse the State for this portion of the expense of administering the Workmen's Compensa- tion Law. And the Commission shall be and is hereby clothed with such power and authority to examine payrolls and require reports from employers and insurance carriers as may be reasonable and necessary to carry out the provis- ions of this section and to adopt rules and regulations in regard thereto. 1914, ch. 800, sec. 28. 28. If this Act shall be hereafter repealed, all moneys which are in the State Accident Fund at the time of the re- peal shall be subject to such disposition as may be provided by the Legislature, and in default of such legislative pro- vision, distribution thereof shall be in accordance with the justice of the matter, due regard being had to obligations of compensation incurred and existing. Ibid, sec. 29. 1920, ch. 456. 29. Every policy for the insurance of the compensation herein provided for, or against liability therefor, shall be deemed to be made subject to the provisions of this Act. No company or association shall enter into any such policy of 199 insurance until such company or association shall first ob- tain from the Insurance Commissioner of Maryland a license of authority for the purpose, which said Commissioner of Insurance shall have full power and authority from time to time to determine the adequacy of its or their premium rates for carrying compensation insurance as provided in this law, and until the form of such policy shall have been aproved by the State Industrial Acident Commission; and said Insurance Commissioner shall have full power and authority to require said insurance companies to estal)lish and maintain adequate rates to cover respective risks to Avhich their policies are applicable under the provisions of this Act. Any insurance company or employer carrying his own insurance, desiring to do compensation insurance in this State shall be required to keep and maintain a local otlfice in charge of a competent person, who shall handle all the compensation work for said insurance company or self- insurer. Any person, firm, corporation, insurance company, association and self-insurer violating the provisions of this Section shall be subject to a fine of not less than $-300 nor more than $1,000, for each offense, and upon conviction thereof the Insurance Commissioner may revoke the license of authority for doing business in this Stfite of such person, corporation, firm, insurance company and association and the State Industrial Accident Commission m^y prohibit such self-insurer from carrying its own insurance. Ibid, sec. 30. 30. Every policy of insurance covering the liability of the employer for compensation, issued by a stock company or by a mutual association authorized to transact workmen's com- pensation insurance in this State, shall contain a provision setting forth the right of the Commission to enforce in the name of the State of Maryland for the benefit of the person entitled to the compensation insured by the policy, either by filing a separate aplication or by making the insurance car- rier a party to the original application, the liability of the insurance carrier in whole or in part for the payment of such compensation; provided, however, that payment in 200 whole or in part of such compensation, by either the em- ployer or the insurance carrier, shall, to tlie extent thereof, be a bar to the recovery against the other of the amount so paid. Every such policy shall contain a provision that, as be- tween the employe and the insurance carrier, the notice to or knowledge of the occurrence of the injury on the part of the employer shall be deemed notice or knowledge as the case may be, on the part of the insurance carrier; the juris- diction of the employer shall, for the purpose of this Act, be the jurisdiction of the insurance carrier, and that the insur- ance carrier shall, in all things, be bound by and subject to the orders, findings, decisions or awards rendered against the employer for the payment of compensation under the provisions of this Act. Every such policy shall contain a provision to the effect that the insolvency or bankruptcy of the employer shall not relieve the insurance carrier from the payment of compen- sation for injuries or death sustained by an employe during the life of such policy. Every contract or agreement of an employer, the purpose of which is to indemnify him from loss or damage on ac- count of the injury of an employe by accidental means, or on account of the negligence of such employer or his officer, agent or servant, if engaged in extra-hazardous employ- ment, shall be absolutely void unless it shall also cover liabil- ity for the payment of the compensation provided for by this Act. No contract or insurance issued by a stock company or mutual association, against liability arising under this Act, shall be canceled within the time limited in such contract for its expiration until at least ten days after notice of intention to cancel such contract, on a date specified in such notice, shall be filed in the office of the Commission and also served on the employer. Such notice shall be served on the em- ployer by delivering it to him or by sending it by mail, by registered letter, addressed to the employer at his or its last known place of residence; provided, that if the employer be 201 a partnership, then such notice may be so given to any one of the partners, and if the employer be a corporation, then the notice may be given to any agent or officer of the corpora- tion upon whom legal process may be served. Ibid, sec. 31. 31. Nothing herein shall effect any existing contract of policy of employer's liability insurance, or the liability of any mutual insurance association, or any arrangement now existing between employers and employes, providing for the payment of such employes, their families, dependents or representatives of sick, acident or death benefits in addition to the compensation provided for by this Act; but liability for the compensation specified in this Act shall not be re- duced or affected by any insurance, contribution or other benefit whatsoever, due to or received by the person entitled to such compensation, and the person so entitled shall, irre- spective of any such insurance or other contract, have the right to recover the compensation directly from the em- ployer.* Ibid, sec. 32. 1916, ch. 597. 1920, eh. 456. 32. Compensation provided for in this Act shall be pay- able for injuries sustained or death incurred by employes engaged in the following extra-hazardous employments: 1. The operatioUj including construction and repair of railways operated by steam, electric or other motive power, street railways and incline railways, but not in their con- struction, when constructed by any person other than the company which owns or operates the railways, including work of express, sleeping, parlor and dining car employes on railway trains. 2. Construction and operation of railways not included in paragraph one. *Settlement.— See opinion of S. I. A. C, Claim 469, Mrs. William Lessner, claimant. Petition to withdraw claim in order to effect pri- vate settlement refused. See opinion of S. I. A. C, Claim 215, Emma R. Chambers, claimant, as to dependency with benefits from other sources and average weekly wage. 202 li. The operation, including construction and repair of car shops, machine shops, steam and power plants, and other works for the purpose of any such railway, or used or to be used in connection with it when operated, constructed or re- paired by the company which owns or operates the railway. 4. The operation, including construction and repair, of car shops, machine shops, steam and power plants, not in- cluded in paragraph 3. 5. The operation, including construction and repair, of telephone lines and wires for the purpose of the business of a telephone company, or used or to be used in connection with its business, when constructed or operated by the company. 6. The operation, including construction and repair, of telegraph lines and wires for the purposes of the business of a telegraph company, or used or to be used in connection with its business, when constructed or operated by the company. 7. Construction of telegraph and telephone lines not in- cluded in paragraphs 5 and 6. 8. The operation, within or without the State, including repair of vessels other than vessels of other States or coun- tries used in interstate or foreign commerce, when operated or repaired by the company.* 9. Shipbuilding, including construction and repair in a shipyard or elsewhere, not included in paragraph 8. 10. Longshore work, including the loading or unloading of cargoes or parts of cargoes of grain, coal, ore, freight, general merchandise, lumber or other products or materials, or moving or handling the same on any dock, platform or place, or in any warehouse or other place of storage.! *See opinion S. I. A. C, Claim 578, J. Peter Clawson, employe. Com- mission is without jurisdiction when the injured employe is employed under shipping articles and engaged at the time of the accident in purely maritime employment. (Daily Record, Nov. 27, 1915.) See opinion of S. I. A. C, Claim, 3521, Emma Luebenheusen, claim- ant, as to jurisdiction of Commission in case of admiralty. (Daily Record, Feb. 5, 1916.) fSee opinion of S. I. A. C, Claim 1719, Ida K. Hill, claimant, as to jurisdiction of Commission' re longshoreman. (Daily Record, Feb. 16, 1916.) See also opinion in case or claim of Emma Luebenheusen. (Daily Record, Feb. 5, 1916.) 203 11. Subaqueous or caisson construction and pile driving. 12. Construction, installation or operation of electric light and electric power lines, dynamos or appliances and power transmission lines. 13. Paving, sewer and subway construction, work under compressed air, excavations, tunneling and shaft sinking, well digging, laying and repair of underground pipes, cables and wires, not included in paragraph 5 of this section. 14. Lumbering, logging, l-iver-driving, rafting, booming, saw mills, shingle mills, lath mills; manufacture of veneer and of excelsior, manufacture of staves, spokes or headings. 15. Pulp and paper mills. 16. Manufacture of furniture, interior woodwork, organs, pianos, piano actions, canoes, small boats, coffins, wicker and rattan ware, upholstering, manufacture of mattresses or bed springs. 17. Planing mills, sash and door factories, manufacture of wooden and corrugated paper boxes, cheese boxes, mould- ings, window and door screens, window shades, carpet SAveepers, wooden toys, articles and wares or baskets. 18. Mining, reduction of ores and smelting preparation of metals or minerals. 19. Quarries ; sand, shale, clay or gravel pits, lime-kilns ; manufacture of brick, tile, terra-cotta, fire-proofing, or pav- ing blocks, manufacture of calcium carbide, cement, asphalt or paving material. 20. Manufacture of glass, glass product, glassware, por- celain or pottery. 21. Iron, steel or metal foundries; rolling mills; manu- facture of castings, forgings, heavy engines, locomotives, machinery, safest anchors, cables, rails, shafting, wires, tubing, pipes, sheet metal boilers, furnaces, stoves, structu- ral steel, iron or metal. 22. Operation and repair of stationary engines and boil- ers, not included in other paragraphs of this section.* *See Note to section 35 of Article 101. 204 23. Manufacture of small castings or forgings, metal wares, in;struments, utensils and articles, hardware, nails, wire goods, screens, bolts, metal beds, sanitary water, gas or electric fixtures, light machines, typewriters, cash registers, adding machines, carriage mountings, bicycles, metal toys, tools, cutlery, instruments, photographic cameras and sup- plies, sheet metal products, buttons. 24. Manufacture of agricultural implements, threshing machines, traction engines, wagons, carriages, sleighs, ve^ hides, automobiles, motor trucks, toy wagons, sleighs, olr baby carriages.! 25. Manufacture of explosive and dangerous chemicals, corrosive acids or salts, ammonia, gasoline, petroleum, pe- troleum products, celluloid, gas, charcoal, gun powder or ammunition. 26. Manufacture of paint, color, varnish, oil, japans, tur- pentine, printing ink, printers' rollers, tar, tarred, pitched or asphalted paper. 27. Distilleries, breweries ; manufacture of spirituous or malt liquors, alcohol, wine, mineral water or soda waters. 28. Manufacture of drugs and chemicals, not specified in paragraph 25, medicines, dyes, extracts, pharmaceutical or toilet preparations, soaps, candles, perfumes, non-corrosive acids, or chemical preparations, fertilizers, including gar- bage disposal plants; shoe blackening or polish. 29. Milling ; manufacture of cereals or cattle foods, ware- housing ; storage ; operation of grain elevators. 30. Packing houses, abattoirs, manufacture or prepara- tion of meats or meat products or glue. 31. Tanneries.. 32. Manufacture of leather goods and products, belting, saddlery, harness, trunks, valises, boots, shoes, gloves, um- brellas, rubber goods, rubber shoes, tubing, tires or hose. 33. Canning or preparation of fruit, vegetables, fish or foodstuffs ; pickle factories and sugar refineries. 34. Bakeries, including manufacture of crackers and bis- cuits, manufacture of confectionery, spices or condiments. fSee opinion of S. I. A. C, Claim 281, Joseph Sebrick, employe, as to blacksmithing in connection with wage on mauufacture. 205 35. Manufacture of tobacco, cigars, cigarettes or tobacco products. 36. Manufacture of cordage, ropes, fibre, brooms or brushes; manilla or hemp products. 37. Flax mills; manufacture of textiles or fabrics, spin- ning, weavilig and knitting manufactories; manufacture of yarn, thread, hosiery, cloth, blankets, carpets, canvas, bags, shoddy or felt. 38. Manufacture of men's or women's clothing, white wear, shirts, collars, corsets, hats, caps, furs or robes. 39. Power laundries ; dyeing, cleaning or bleaching. 40. Printing, photo-engraving, sterotyping, electrotyping, lithographing, embossing; manufacture of stationery, paper, cardboard boxes, bags or wall paper ; and bookbinding. 41. The operation, otherwise than on tracks, on streets, yvays or elsewhere of cars, trucks, wagons or other vehicles, and rollers and engines propelled by steam, gas, gasoline, electric, mechanical or other power, or drawn by horses and mules.* 42. Stone cutting or dressing; marble works; manufacture of artificial stones; steel building and ridge construction; in- stallation of elevators, fire escapes, boilers, engines, or heavy machinery ; brick-laying, tile-laying, mason work, stone setting, concrete work, plastering; and manufacture of concrete blocks; structural carpentry; painting, decorating or renovating; sheet metal work ; roofing ; construction, repair and demolition of buildings and bridges ; plumbing, sanitary or heating engineer- ing ; installation and covering of pipes or boilers. *This section is the one amended by 1916, ch. 597. The occupation of a driver of an ice wagon comes within the provision of this sub- section. (The Court was construing the Act prior to the amendment of 1916.) American Ice Company vs. Fitzhugh (Daily Record, May 6, 1916), decided in Maryland Court of Appeals, April 26, 1916. See also opinion of S. I. A. C, Claim 36, John W. Russel, employe as to cover- age in the case of drivers of horses and mules (Daily Record, Decem- ber 7, 1915.) 206 43. In addition to the employments set out in the preceding paragraphs, this Act is intended to apply to all extra hazardous employments not specifically enumerated herein, and to all work of an extra-hazardous nature, t* 1914, ch. 800, sec. 33. 33. Any employer, his employe or employes engaged in works not extra-hazardous, within the meaning of this Act, may, by their joint election, filed with the Commission, accept the pro- visions of this Act, and such acceptance, when approved by the Commission, shall subject them to the provisions of this Act to all intents and purposes as if they had been originally included in its terms, fCoverage.— See opinion of S. I. A. C, Claim 262, William L. Ben- nett, employe, a private chauffeur. See opinion of S. I. A. C, Claim 966, John A. Lewis, employe. Claim as waiter and porter at hotel disallowed. See opinion of S. I. A. C, Claim 529, Rachel Peaco, claim- ant, who was a chauffeur's helper. Claim allowed. See opinion of S. I. A. C, Claim 470, Lillian Lipscomb, employe. Her claim as sales- lady disallowed. See opinion of S. I. A. C, Claim 607, Arlie P Pippin. Claim, saleslady in dry goods store. Claim disallowed. See opinion of S. I. A. C, Claim 506, Mrs. Laura Roro, charwoman at moving- picture establishment. Claim disallowed. See opinion of S. I. A. C, Claim 645, Harry Blechman, employe Claimant was a ticket-seller in moving-picture business. Claim disallowed. See opinion of S. I. A. C, Claim 746, Philip L. Smallwood, employe. Porter in a warehouse. Claim disallowed. See opinion of S. I. A. C, Claim 1177, Frank W. Krug, employe, as to occupational disease. See opinion of S. I. A. C, Claim 761, Mary Jones, employe. Nurse. Claim disallowed. See opinion of S. I. A. C, Claim 2509. Winfield D. Denham, employe, as to farm helper. Claim was disallowed. See opinion of S. I. A. C, Claim 2736, Leonora P. Moore, claimant, as to riding in a wagon of customer. Claim disallowed. (Daily Record, April 15, 1916.) See opinion of S. I. A. C, Claim 464, Mrs. William J. Lesner, claimant. The deceased was a driver on a bread wagon, and it appeared that the foot brake had slipped and injured his leg", from which it was claimed death re- sulted. The claim was allowed. See opinion of S. I. A. C, Claim 144, Lucy Forest, employe, as to coverage. Cook at hotel. See opinion of S. I. A. C, Claim 334, Toba and Mary Brenner, claimants, as to junk dealer. Claim allowed. This claim was appealed to the Baltimore City Court, and then to the Court of Appeals in IMaryland, upon a question of jurisdiction, which alone was passed upon. Brenner vs. Brenner, 127, Md. 189. t*Amendment by General Assembly of 1920. 207 Any -vvorkman of the age of sixteen years and upwards may himself exercise the election hereby authorized. The right of election hereby authorized shall be exercised on behalf of any workman under the age of sixteen years by his parents or guardian. Nothing herein shall be construed to apply to work- men of less than the minimum age prescribed by law for the employment of minors in the occupation in which such work- man shall be engaged. The provisions of this Act shall apply to employers and em- ployes engaged in intrastate and also in interstate or foreign commerce, for whom a rule of liability or method of compen- sation has been or may be established by the Congress of the United States, only to the extent that their mutual connection with intrastate work may and shall be clearly separable and distinguishable from interstate or foreign commerce, except that any such employer and any of his workmen only in this State may, with the approval of the Commission and so far as not forbidden by any Act of Congress, voluntarily accept the provisions of this Act by filing written acceptances with the Commission, which shall subject the acceptors to the provisions of this Act to all intents and purposes as if they had been origi- nally included in its terms.* Ibid, sec. 33i^ 34. Whenever there shall have been enacted by the Congress of the United States, and shall be in etfect, any act providing an exclusive remedy and compensation to employes of common carriers by railroads while employed in interstate or foreign commerce, who sustain personal injury by accident arising out of and in the course of such employment and resulting in dis- ability, or to the dependents of such employes in case such in- jury results in death, it shall be lawful for any such common carrier by railroad in this State and its employes or any of them, by agreement between such employer and employes, to provide for the payment by the employer of compensation in *See opinion of S. I. A. C, Claim 1824, Alice Hopkins, claimant, as to jurisdiction of Commission as effected by Federal Emploj^er's Lia- bility Act with distinction between negligence and non-negligence case in Interstate Railway employ. (Daily Record, March 9, 1916.) 208 the amounts at the times and in the manner specified in sai