§§ 153, 155.

Hospitals for criminal insane.

L. 1916, ch. 118.

gations belonging to the hospital and not required by law to be or remain in the custody of the comptroller or in the state treasury, and shall open with some bank, in the vicinity of the hospital, to be selected with the approval of the comptroller, an account in his name as such medical superintendent, and immediately deposit in such bank all moneys received by him as such medical superintendent and treasurer, and shall draw therefrom only for the use of the hospital and in the manner provided by the by-laws and upon the order of the steward, specifying the object of each payment. He shall keep a full and accurate account of the receipts and payments, as directed by the by-laws, and of such other matters as the superintendent of state prisons and the state hospital commission may prescribe, and balance all his accounts, annually, on the thirtieth day of June, and within ten days thereafter deliver to the superintendent of state prisons a statement thereof and an abstract of such receipts and payments for the past year. His books and vouchers shall at all times be open to the inspection of the superintendent of state prisons and the commission, and they may at any time require of him a statement of his accounts and of the funds and property in his custody. (Renumbered by L. 1912, ch. 59, and amended by L. 1916, ch. 118, in effect Apr. 3, 1916.)

§ 153. Medical superintendent as treasurer of the hospital.-The medical superintendent shall be the treasurer of the hospital, and before entering upon his duties, shall file with the state comptroller his undertaking to the people with sureties, to be approved by the superintendent of state prisons, to the effect that he will faithfully perform his trust as such treasurer. He shall have the custody of the moneys, securities and obligations belonging to the hospital and not required by law to be or remain. in the custody of the comptroller or in the state treasury, and shall open with some bank, in the vicinity of the hospital, to be selected with the approval of the comptroller, an account in his name as such medical superintendent, and immediately deposit in such bank all moneys received by him as such medical superintendent and treasurer, and shall draw therefrom only for the use of the hospital and in the manner provided by the bylaws and upon the order of the steward, specifying the object of each pay.ment. He shall keep a full and accurate account of the receipts and payments, as directed by the by-laws, and of such other matters as the superintendent of state prisons may prescribe, and balance all his accounts, annually, on the thirtieth day of June, and within ten days thereafter deliver to the superintendent of state prisons, a statement thereof and an abstract of such receipts and payments for the past year. His books and vouchers shall at all times be open to the inspection of the superintendent of state prisons, who may at any time require of him a statement of his accounts and of the funds and property in his custody. (Renumbered by L. 1912, ch. 59, and amended by L. 1916, ch. 118, in effect Apr. 3, 1916.)

§ 155. Powers and duties of medical superintendent and assistants.

L. 1916, ch. 118.

Hospitals for criminal insane.

$155.

Subd. 7, amended by L. 1916, ch. 118, in effect Apr. 3, 1916, as follows: 7. See that all accounts and records are fully made up to the last day of June in each year, and present the principal facts and results, with his report thereon, to the superintendent of state prisons, within forty days thereafter. The resident officers, before entering upon their duties as such, shall severally take and file in the office of the secretary of state, the constitutional oath of office. The first assistant physician shall perform the duties and be subject to the responsibilities of the superintendent in his sickness or absence. The steward may personally purchase any supplies for the use of such hospital, but only in the name of the medical superintendent, and in each instance by his direction and not otherwise. (Section renumbered by L. 1912, ch. 59, and amended by L. 1912, ch. 121. Subd. 7 amended by L. 1916, ch. 118, in effect Apr. 3, 1916.)

Application to foreign corporations.-Where, in an action against a foreign corporation to recover upon a life insurance policy, it is not alleged where the policy was delivered and the pleadings are insufficient to show or raise a presumption that it was made or delivered in this State, the Insurance Law of this State does not apply to regulate its form or legal effect, and, therefore, a demurrer to a separate defense should be overruled. Mees v. Pittsburgh Life & Trust Co. (1915), 169 App. Div. 86, 154 N. Y. Supp. 660.

§ 9. Certificate of authorization of superintendent.

Statute of limitations.-A foreign insurance company, having a license to transact business in this state, may avail itself of the Statute of Limitations, when applicable. Corney v. United Surety Co. (1916), 217 N. Y. 268, affg. 160 App. Div. 698.

§ 45. Forms of report to be furnished by superintendent.

Report by foreign insurance company.-A foreign insurance company which has established a branch in the United States, and reinsured another company on risks located here and in points without the United States, should report all business applying to such reinsurance in the statements of the branch, and charge itself therein with all liability thereunder. Atty. Genl. Opin., 4 State Dep. Rep. 539 (1915).

The intent of this section is to require insurance companies when issuing policies to set out therein the entire contract of insurance, and every statement or representation which induced the company to enter into the agreement and upon which it relied in so doing must be annexed to and made a part of the policy in order to be thereafter available as a defense. Archer v. Equitable Life Assurance Society (1915), 169 App. Div. 43, 154 N. Y. Supp. 519, affd. 218 N. Y. 181.

Application. An insurer who issues a policy covering only death by accidental means is, nevertheless, engaged in the business of life insurance and is within the provisions of this section, which provides that the policy shall contain the entire contract, and that all statements purporting to be made by the insured shall, in the absence of fraud, be deemed representations and not warranties, and that any waiver of the section shall be void. Moore v. Prudential Casualty Co. (1916), 170 App. Div. 849, 156 N. Y. Supp. 892.

A representation is a verbal or written statement made by the insured to the underwriter before the subscription of the policy as to the existence of some fact or state of facts tending to induce the underwriter more readily to assume the risk by diminishing the estimate he would otherwise have formed of it. It is not part of the contract but is collateral to it. Moore v. Prudential Casualty Co. (1916), 170 App. Div. 849, 156 N. Y. Supp. 892.

Statements constituting representation.-Statements made by the insured in an application for an accident policy as to the name of his employer, the nature of his employment, and his relationship to the beneficiary named by him are under

Delinquent insurance companies.

$ 63.

the statute representations and not warranties. Hence, the alleged falsity of said representations does not vitiate the contract, unless they were fraudulent in that they were made by the insured knowing them to be false, were material, and were, relied upon by the insurer as an inducement to making the contract. As the statute prohibits the waiver of its provisions, the mere fact that the policy calls said statements of the insured warranties does not operate to make them so in law. Moore v. Prudential Casualty Co. (1916), 170 App. Div. 849, 156 N. Y. Supp. 892.

An alleged misstatement as to the name of the present employer of the insured is not material and not to be considered as an inducement to the contract, especially where there is no evidence that the insured knew the statement to be false. The same is true of an alleged false statement as to the relationship of the insured to the beneficiary named by him. Moore v. Prudential Casualty Co. (1916), 170 App. Div. 849, 156 N. Y. Supp. 892.

A defense of fraudulent representations of the insured in his application as to his life, habits and other insurance cannot be sustained where the application or statements of the insured are not attached to and made a part of the policy as required by this section. Mees v. Pittsburgh Life & Trust Co. (1915), 169 App. Div. 86, 154 N. Y. Supp. 660.

The defense to an action on an insurance policy averred that the insured, when applying for and as an inducement to the issuance of the policy, intentionally deceived the defendant by representations which he knew to be false, and the defendant relied and acted upon them in accepting the application and making the contract. The false representations related to facts which would enter into the estimation by defendant of the risk to be assumed by it in effecting the insurance, that is, to the prior physical condition of the insured the last time he had consulted with a physician, the causes of the deaths of his parents and the time of the death and age at death of his father. They were not contained in the policy either directly or by reference. It was held that because of the provisions of this section the defense was insufficient. Archer v. Equitable Life Assurance Society (1916), 218 N. Y. 18, affg. 169 App. Div. 43, 154 N. Y. Supp. 519.

Evidence of false representations. In an action by a beneficiary to recover upon a life insurance policy, evidence of false representations on the part of the insured in procuring the issuance of the policy are inadmissible in defense, where such representations were not indorsed upon or attached to the policy as required by this section. So also evidence as to a collateral agreement to the effect that the policy was not to take effect until the first premium was paid during the good health of the insured, it being alleged at the time the first premium was paid he was not in good health, is not admissible where such agreement is not a part of the policy. Archer v. Equitable Life Assurance Society (1915), 169 App. Div. 43, 154 N. Y. Supp. 519, affd. 218 N. Y. 181.

Burden of proof.-Where the insurer seeks to avoid a recovery upon an accident policy upon the ground that the representations were untrue it is under the burden of showing that the answers were material to the contract, were false and were relied upon by it, otherwise there is no fraud which invalidates the policy. Moore v. Prudential Casualty Co. (1916), 170 App. Div. 849, 156 N. Y. Supp. 892.

§ 63. Proceedings against and liquidation of delinquent insurance cor

porations.

Provability of claims against assets of insolvent surety company. An insurance company having been declared insolvent and the superintendent of insurance having taken charge of its affairs, an order of dissolution was granted. The superintendent rejected as contingent certain claims against the estate arising out of bonds given pursuant to a statute of the United States for the faithful perform

§ 87.

Contingency reserve.

L. 1916, ch. 119.

ance of contracts by contractors for government work. It was held, that (1) claims upon which causes of action had accrued and upon which actions against the surety had been commenced before the date of the entry of the order of liquidation in which actions judgments on that date had not been entered, were certain and absolute at the date of the entry of the order of liquidation, and they should be allowed to participate in the ratable division of the assets of the insolvent surety company. (2) Claims upon which no causes of action against the surety had accrued before the date of the entry of the order of liquidation and upon which claims no actions were commenced until after the date of the entry of the order of liquidation are contingent and were properly rejected. Matter of Empire State Surety Co. (1915), 216 N. Y. 273, revg. 167 App. Div. 341, 153 N. Y. Supp. 146.

Where statute of foreign state provides that liquidation of insolvent insurance companies shall be made by insurance commissioner of that state for benefit of creditors thereof, such commissioner being vested with title to property of company for that purpose, an attachment will not be issued against property of company within this state. See Martyne v. American Union Fire Ins. Co. (1915), 216 N. Y. 183 affg. 168 App. Div. 380.

§ 87. Contingency reserve.-Any domestic life insurance corporation may accumulate and maintain in addition to an amount equal to the net values of its policies computed according to the standard adopted by it under section eighty-four of this chapter a contingency reserve not exceeding the following respective percentages of said net values, to wit: When said net values are less than one hundred thousand dollars, twenty per centum thereof or the sum of ten thousand dollars, whichever is the greater; when said net values are greater than one hundred thousand dollars, the percentage thereof measuring the contingency reserve shall decrease onehalf of one per centum for each one hundred thousand dollars of said net values up to one million dollars; one-half of one per centum for each additional one million dollars up to ten million dollars; one-half of one per centum for each additional two million five hundred thousand dollars up to twenty million dollars; one-fourth of one per centum for each additional five million dollars up to fifty million dollars; and if said net values equal or exceed the last mentioned amount, the contingency reserve shall not exceed seven and one-half per centum thereof; provided that as the net values of said policies increase and the maximum percentage measuring the contingency reserve decreases such corporation may maintain the contingency reserve already accumulated hereunder, although for the time being it may exceed the maximum percentage herein prescribed, but may not add to the contingency reserve when the addition will bring it beyond the maximum percentage. Provided however that nothing herein contained shall be construed to affect any existing surplus or contingency reserves held by any such corporation save that whenever the existing surplus and contingency reserves, exclusive of said net values and of all accumulations held on account of existing deferred dividend policies or groups of such policies, shall exceed the limit above mentioned it shall not be entitled to maintain any additional contingency reserve. Provided further that for cause shown the superintendent of insurance may at any time and from