not to accept SECTION 2. No person shall receive or accept from any company Agent, etc., or agent, sub-agent, broker or any other person any such rebate or rebate, etc. premium payable on the policy, or any special favor or advantage in the dividend or other benefits to accrue thereon, or any valuable consideration or inducement not specified in the policy of insurance. No person shall be excused from testifying, or from producing any books, papers, contracts, agreements or documents at the trial of any other person charged with violating any provision of this act, on the ground that such testimony 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, documentary or otherwise, except for perjury committed in so testifying. visions of law not to apply. SECTION 3. The provisions of this act shall apply to all kinds of Certain probusiness specified in said section thirty-two, and in the transaction of business specified in the third clause of said section thirty-two acting or agreeing to act as guarantor or surety shall, for the purposes of this act, be deemed insurance, but it shall not apply to the kind of business specified in the second clause of said section thirtytwo, either as to company, agent, broker or insured, except as to insurance against loss or damage to motor vehicles, their fittings and contents, as provided in said second clause. This act shall not be so construed as to prevent any insurance company from paying a commission to another insurance company, or to any person who is a duly authorized agent, sub-agent, or broker, and who holds himself out and carries on business in good faith as such, or to prevent an insurance company from receiving a commission in respect to any policy under which it is itself insured, or to prevent such a person from receiving a commission in respect to any policy under which he himself is insured. SECTION 4. Whoever violates any provision of this act shall be Penalty. punished by a fine of not more than two hundred dollars. Installation of a sprinkler system for the insured by an agent or broker not a violation of this act. (Õp. A. G., 1913.) GENERAL PROVISIONS FOR MASSACHUSETTS COMPANIES. all SECTION 23. The general provisions of law relative to the powers, duties and liabilities of corporations shall apply to incorporated domestic insurance companies, so far as such provisions are pertinent and not in conflict with other provisions of law relative to such companies or with their charters. Subject to poration law. P. S. 105, § 1. general cor 1887, 214, § 22. § 22. Continuation of corporation. 1875, 34. SECTION 24. Domestic insurance companies incorporated by P. S. 119, § 22. special acts, whose charters are subject to a limitation of time, shall after such limitation expires continue to be bodies corporate, subject to all general laws applicable to such companies. 1887, 214, § 23. 1894, 522, § 23. R. L. 118, § 23. Domestic company to obtain certificate before issuing policies. 1871, 297, § 5. P. S. 119, § 5. 1887, 214, § 24. may adopt by-laws, divide directors SECTION 25. No domestic insurance company shall issue policies until upon examination by the commissioner, his deputy or examiner, it is found to have complied with the laws of the commonwealth, nor until it has obtained from the commissioner a certificate stating that fact and authorizing it to issue policies. R. L. 118, § 24. 1897, 67, § 2. 122 Mass. 90. 1894, 522, § 24. SECTION 26.1 Such company may adopt by-laws for the conduct of its business and therein may provide for the division of its board of directors into two, three or four classes, and the election thereof at its annual meetings in such manner that the members of one class only shall retire and their successors be chosen each year. Vacancies P. S. 119, § 43. in any such class may be filled by election by the board for the un into classes, etc. 1856, 252, § 9. G. S. 58, § 16. 1887, 214, 25. secretary and treasurer of, to give bond. 1856, 252, § 9. call for meetings of. 1856, 252, § 9. G. S. 58, § 15. -investments of, to be in corporate name. 1856, 252, § 35. G. S. 58, § 20. P. S. 119, §46. R. L. 118, 25. officers not to be pecuni 1894, 522, § 25. expired term. All investments and deposits of the funds of the company shall be made in its corporate name, and no director or other officer thereof, and no member of a committee having any authority in the investment or disposition of its funds, shall accept, or be the beneficiary of, either directly or remotely, any fee, brokerage, arily interested. commission, gift or other consideration for or on account of any loan, deposit, purchase, sale, payment or exchange made by or in behalf of such company, or be pecuniarily interested in any such purchase, sale or loan, either as borrower, principal, co-principal, agent or beneficiary except that, if a policy holder, he shall be entitled to all the benefits accruing under the terms of his contract. 1858, 48. G. S. 58, § 21. 1879, 51. P. S. 119, § 47. R. L. 118, § 25. directors to authorize investments, etc. If a person as a trustee holds a parcel of real estate which is exchanged for stock in a corporation which was organized for the purpose of acquiring such land, and the directors of an insurance company, one member of which is the aforesaid trustee and is also a member of the insurance company's finance committee, negotiates a loan with said real estate corporation that director and member of the finance committee cannot be held to have acted in violation of the statute. (Op. A. G., 1914.) No investment, sale or loan, except loans on its own policies, shall be made which has not first been authorized by the board of 1 As amended by chapter 473, Acts of 1908. 1 directors, or by a committee thereof charged with the duty of investing or loaning the funds of the company, nor shall any deposit be made in a bank or banking institution unless such bank or banking institution has first been approved as a bank of deposit by the board of directors or said committee thereof and unless the vote authorizing such investment, sale or loan or approval of the place of deposit has been duly recorded in the books of the company. "This statute does not in terms prohibit the corporation from lending money to its officers or declare that such contracts shall be void. It is directed to the officers, and seems intended to prescribe rules to regulate the duty of the officers to the corporation and its members. It does not say the corporation shall not lend, but that the officers shall not borrow. It is intended as a shield to the corporation. To construe it as making the promises of the officers who borrow money in violation of its provisions void would defeat the main purpose of its enactment." Hence, where the officer borrows money from the company and fraudulently pledges negotiable bonds of an innocent third party, the company nevertheless acquires title to the bonds, it having acted in good faith and without notice. (Bowditch . Ins. Co., 141 Mass. 292, 1886.) On the same reasoning, it has been held that where the officers of a savings bank invest its funds in a manner forbidden by statute, such illegal action does not impair the validity of the investment. (Holden v. Upton, 134 Mass. 177, 1883.) On the general subject of the power of the officers to bind the company, see Baxter v. Ins. Co., 1 Allen, 294, 1861, where held president has no authority to waive certain by-law provisions relative to non-delivery of policies before payment of premiums; Buffum v. Ins. Co., 3 Allen, 360, 1862, where the treasurer made a similar promise; Topping v. Bickford, 4 Allen, 120, 1862, where held president might, under certain circumstances, sign the company's notes; and Emery v. Ins. Co., 138 Mass. 388, 1885, where held the secretary might, under certain circumstances, make and sign the policies. A director charged with the duty of investing the funds of an insurance company violates the law if he invests so that he becomes owner of both the legal title and a portion of the equitable title of the property which is directly liable for a loan. (Op. A. G., 1908.) pany may hold estate. 181,281, § 12. 1872, 375, § 15. P. S. 119, § 36. R. L. 118, § 25. No domestic company hereafter acquiring title to real estate Domestic comunder the conditions of any mortgage owned by it or by purchase certain real or set-off on execution upon judgment for debts due it previously contracted in the course of its business or by other process in settlement for debts shall hold it for a longer period than five years without permission granted in writing by the insurance commissioner; nor shall any such company hereafter invest in real estate except to the extent that may be necessary for its convenient accommodation in the transaction of its business, and then in no case to exceed ten per cent of its invested assets, including cash in banks. A company's investment in real estate is its equity therein if mortgage is on property when purchased. If mortgage is negotiated after purchase the company's investment is the whole value of the real estate. (Op. A. G., 1914.) Such company shall not engage in buying or selling goods, wares not to engage in other or merchandise, except articles insured by it on which losses are business. 1817, 120, § 3. claimed, and except in replacing, rebuilding or repairing insured R. S. 37, § 14. 1851, 281, § 11. 1854, 453, § 6. 1856, 252, § 4. G. S. 58, § 23. Domestic company, policies, how executed. 1817, 120, § 1. 1835, 147, § 5. R. S. 37, §§ 13, 29. office for business; cards, etc., to specify location. 1851, 281, § 25. 1856, 252, § 5. G. S. 58, § 18. P. S. 119, § 44. property as provided in its policies, nor engage in any business other than as specified in its charter or agreement of association and expressly authorized by law. P. S. 119, § 49. R. L. 118, § 25. All policies issued by such company shall be signed by its secretary, assistant secretary, or, in their absence, by a secretary pro tempore, and by its president or vice president or, in their absence, by two directors. 1856, 252, § 15. 1851, 281, § 9. office in the city or town specified in its charter or agreement of association; and if it establishes agencies in other cities or towns, all signs, cards, pamphlets and advertisements exhibited or issued by them shall specify the city R. L. 118, § 25. or town in which the company they represent is located. SECTION 27.1 No domestic insurance company shall pay any salary, compensation or emolument to any officer, trustee or director thereof, nor any salary, compensation or emolument amounting in any year to more than five thousand dollars to any person, firm or corporation unless such payment be first authorized by a vote of the board of directors of such insurance company. No such company shall make any agreement with any of its officers, trustees or employees whereby it agrees that for any services rendered or to be rendered he shall receive any salary, compensation or emolument that will extend beyond a period of three years from the date of such agreement; nor shall such company pay any pension whatsoever, except as is otherwise provided herein. Any such company, when authorized so to do by a vote in each case of not less than two thirds of the whole number of its directors, which vote shall be recorded in the minutes of the board, may grant a pension to any employee who has been continuously in the service of the company for a period of ten years and who has become incapacitated for further service by reason of physical or mental disability resulting from sickness or injury, and may grant a pension to any employee retiring by reason of the infirmities of age who has been continuously in the service of the company for not less than fifteen years. No such pension shall exceed one half the former yearly salary or wages of the employee, nor shall it exceed one thousand dollars in any one year, and any such pension shall be discontinued when any such pensioner substantially recovers his earning capacity. Any such company, with the approval in writing of the insurance commissioner, may also establish an employees' savings fund or contributory pension system for the benefit of its aged or disabled 1 As amended by chapter 613, Acts of 1913. employees, to which fund or system the employees shall contribute an amount not less than the amount contributed by the company; and such a fund or system shall so be established by any such company which pays pensions to the amount of ten thousand dollars or more in any one year. company, SECTION 28. No domestic insurance company shall make any Domestic disbursements of twenty-five dollars or more unless the same be vouchers. evidenced by a voucher signed by or on behalf of the person, firm or corporation receiving the money and correctly describing the consideration for the payment, and if the same be for services and disbursements setting forth the services rendered and an itemized statement of the disbursements made, and if it be in connection with any matter pending before any legislature or public body or before any department or officer of any government, correctly describing in addition the nature of the matter and of the interest of such corporation therein, or, if such a voucher cannot be obtained, by an affidavit stating the reasons for not obtaining such voucher, and setting forth the particulars above mentioned. SECTION 29. No foreign or domestic insurance company or association transacting business in this commonwealth shall make, issue or deliver therein any policy or contract of insurance containing any condition, stipulation or agreement depriving the courts of this commonwealth of jurisdiction of actions against such companies or associations, or limiting the time for commencing actions against such companies or associations to a period of less than two years from the time when the cause of action accrues; and any such condition, stipulation or agreement shall be void. An insurance company, association or agent that makes, issues or delivers a policy or contract of insurance in wilful violation of the provisions of this act shall forfeit not less than fifty dollars, nor more than two hundred dollars, for each offence; but such policy shall be binding upon the company or association issuing the same. This section applies to surety companies. (Op. A. G., 1908.) the -venue and limitation of suits. 1856, 252, § 9. G. S. 58, 16. P. S. 119, § 43. 1887, 214, § 26. 1894, 522, § 26. R. L. 118, § 26. mortgages held by, how taken on exe cution. 1851, 281, § 22. 1854, 453, § 11. 1856, 252, § 6. SECTION 30. Mortgages on real estate held by a domestic insurance company may be attached and taken and sold on execution, in the manner provided in sections ninety to ninety-four, inclusive, of chapter one hundred and fifteen of the Revised Laws relative to mortgages held by banks, and the secretary of company shall perform relative thereto the duties required cashiers and clerks of banks. SECTION 31. If any domestic insurance company shall not commence to issue policies within one year after the date of its act cease, when. of incorporation or of its certificate of organization, or if after 1856, 252, § 3. 1894, 522, § 27. of G. S. 58, § 22. 1887, 214, § 27. P. S. 119, § 48. R. L. 118, § 27. corporate powers of, to 1842, 21. |