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declare "shall be deemed for all purposes of the insurance laws, the capital of the company making it?"

"2. Under what circumstances may the capital of foreign insurance companies doing business in this State be said to have become impaired?"

"3. If it shall appear that the capital, that is, the deposit, of a foreign insurance company has become impaired or reduced in value, will this fact authorize this Department to revoke the license of such Company to do business in this State, upon the ground that its affairs are in an unsound condition?"

I will reply to the three questions in their order. 1. Domestic joint stock fire or life insurance companies are not permitted to do business in this state, unless they are possessed of an actual paid up cash capital as follows: Fire insurance companies, of not less than two hundred thousand dollars, and life insurance companies, of not less than one hundred thousand dollars.

3 Mills' Ann. Stats., section 2220.

The same section of our statutes contains the following provision:

"No joint stock insurance company organized for any purpose other than fire or life insurance shall be permitted to do any business in this state unless possessed of an actual paid up cash capital of not less than one hundred thousand dollars."

The same section of our statutes also provides that no foreign fire or life insurance company incorporated or associated under the laws of any government or state other than the United States, shall be permitted to do business in this state, until it has deposited with the State Treasurer of this state, or with the duly authorized officer of some other state of the United States, a sum not less than the capital required of domestic insurance companies.

You will observe that the statute does not provide for a deposit by foreign joint stock insurance companies doing business in this state, where they are organized for any purpose other than that of do

ing a fire or life insurance business. This omission may have been, and probably was, an oversight on the part of the legislature in framing our statutes upon the subject of deposits required of foreign insurance companies.

2. The foreign insurance companies with which we are now dealing, are companies incorporated in foreign countries, and not under the laws of any state within the United States other than the state of Colorado. Such companies, in doing business in the United States, do business through what is commonly called "An American Branch," and the deposit required by our statutes, which is also declared to be the capital of the company making the deposit, may be designated, for convenience, as the capital of the "American Branch."

This statutory deposit, or capital, which is deposited in trust for the benefit and security of all of its policy holders and creditors, is not subject to withdrawal by the company. It may, however, be impaired either where the bonds or other securities deposited shrink in value until their market value is less than the minimum deposit required by our statute, or where the company, being unable to meet its obligations to its policy holders or creditors, is compelled to allow the deposit to be drawn upon to meet its obligations to an extent which reduces the remaining deposit to less than the minimum deposit required by our statutes.

Strictly speaking, its deposits or capital is impaired the moment it is reduced in amount either by the shrinkage in value of its securities or in any other manner, but in my judgment your department is not called upon to take official action unless the impairment is sufficient in amount to either leave the affairs of the company in an unsound condition or to reduce its deposit or capital below the minimum fixed by our statutes.

3. The statutes of this state provide that:

"When it appears to the superintendent of insurance from the report of the person appointed by him or other satisfactory

evidence, that the affairs of any company doing business in this state are in an unsound condition, he shall revoke the authority granted to such company to do business in this state, * * *""

1 Mills' Ann. Stats., section 2211.

The question, therefore, of the soundness or unsoundness of an insurance company doing business in this state, is, in all cases, a question of fact to be determined by the insurance department. The mere fact that the statutory deposit or capital is impaired does not show conclusively that the affairs of the company are in an unsound condition. This is one element which may be taken into consideration by the department in determining the soundness or unsoundness of the company. The deposit or capital, by the shrinking in value of its securities, may be impaired and yet its assets may exceed its liabilities to a very large amount and the company be entirely solvent.

In my judgment, the mere fact that its deposit is impaired, where it does not appear to your department that its affairs are in an unsound condition, does not call for official action from your department, unless the deposit should become so far impaired as to reduce the same to an amount less than the minimum deposit required by our statutes, in which event, it would no doubt become the duty of your department to require an additional deposit to be made, sufficient in amount to maintain at least the minimum deposit required by our statute.

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