ALBERT C. RITCHIE, GOVERNOR. 1193

has first been approved as a bank of deposit by the board of
directors, or said committee threof and unless the vote author-
izing such investment, sale or loan, or approval of the place of
deposit has been duly recorded in the books of the company.

SEC. 116. Investments in Real and Personal Property. No
domestic company hereafter acquiring title to real estate under
the conditions of any mortgage owned by it, or by purchase
or set-off on execution upon judgment for debts due it pre-
viously contracted in the course of its business, or by other
pr cess in settlement for debts, shall hold it for a longer period
than five years without permission granted in writing by the
insurance commiss'oner; 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 busi-
ness, and then in no case to exceed ten per cent, of its invested
assets, including cash in banks.

Such company shall not engage in buying or selling goods,
wares or merchandise, except articles insured by it on whicli
losses are claimed, and except in replacing, rebuilding or re-
pairing insured property as provided in its policies, nor engage
in any business other than as specified in its charter or agree-
ment of association and expressly authorized by law.

SEC. 117. Reserves. Such company shall maintain unearned
premium and other reserves in the same manner, and upon the
same basis as required of domestic stock insurance companies
transacting the same kind of insurance; provided that such
companies as write all, or the major portion of its policies, to
expire on some certain date, or levy annual or periodic assess-
ments against all policies in force payable on some certain
date, shall maintain unearned premium reserves computed pro
rata for the unexpired portion of the term. All reserves re-
quired to be maintained as aforesaid, shall be set up as a
liability in all financial reports of or concerning each such com-
pany filed with the insurance commissioner. The commission-
er may prescribe any reasonable basis other than the above
for reserves for losses or claims, or may permit such reserves
for losses or claims, when based upon the premium income, to
be computed upon the net premium income after deducting any
so-called dividend, or premium returned or credited to members.

SEC. 118. Assessments. Such company not possessed of assets
at least equal to the unearned premium reserve and other lia-
bilities, shall make an assessment to provide for such deficiency