Mass. Gen. Laws ch. 175, § 63 - Capital and reserve; payment; investment

Cite as:Mass. Gen. Laws ch. 175, § 63
Currency:Current through Chapter 103 of the 2018 Legislative Session
 
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The capital stock and, in the case of a domestic stock life company, the net cash surplus required by section forty-eight shall be paid in cash within twelve months after the date of the charter or certificate of organization, but no certificates of full shares and no policies shall be issued until the whole capital and net cash surplus as aforesaid is paid in. A majority of the directors shall certify on oath that the money has been paid by the stockholders for their respective shares, and that the same is held as the capital of the company, invested and to be invested as required by this section.

The capital of any domestic company, other than life, and three fourths of the reserve of any domestic stock or mutual life company, shall be invested only as follows:

1. In the public funds of the United States or of the District of Columbia or of any state of the United States; or in bonds, notes, evidences of indebtedness, or contractual obligations for the payment of money made, issued, assumed or guaranteed by the United States of America or any instrumentality thereof, or by any state of the United States, including, notwithstanding other provisions of this chapter, joint, undivided or participating interests therein pursuant to agreement with the obligor, other investors or a trustee.

2.

(a) In the legally authorized bonds or notes of any county, city, town, school or water district in the commonwealth.

(b) In the bonds or notes of any county, city, school or water district, or other political subdivision, located in any other state in the United States, and having a population, according to the last national census preceding the date of such investment, of more than twenty-five thousand inhabitants, provided that such notes or bonds are legally authorized and are a direct obligation of the county, city, school or water district or political subdivision issuing the same.

(c) In the bonds or notes of any county, city, town, school or water district, or other political subdivision, located in any other state of the United States and having an indebtedness, after deducting the amount of its water debt and securities in the sinking funds available for payment of its bonds, not in excess of five per cent of the valuation of property therein as assessed for taxation next preceding the date of such investment, provided that such bonds or notes are legally authorized and are a direct obligation of the county, city, town, school or water district or other political subdivision issuing the same.

(d) In the bonds or notes of any county, city, town, district, authority or political subdivision located in any state of the United States, if, by statutory or other requirements applicable thereto, such bonds or notes are payable as to both principal and interest from adequate special revenues pledged or otherwise appropriated or by law required to be provided for the purpose of such payment, but not including any obligations payable solely out of special assessments on properties benefited by local improvements.

3. In securities of the same classes as those described in paragraph one and clauses (b), (c) and (d) of paragraph two, and subject to the limitations therein expressed, issued by the Dominion of Canada or any province thereof, or by any municipality or political subdivision thereof.

3A. In bonds, notes or obligations, issued, assumed or guaranteed by the International Bank for Reconstruction and Development, the International Finance Corporation, the Inter-American Development Bank, the Asian Development Bank or the African Development Bank.

4. In the bonds, notes or other evidences of indebtedness of any corporation primarily engaged in public transportation which is incorporated or located wholly or in part in the commonwealth, or in the bonds, notes or other evidences of indebtedness of any corporation primarily engaged in public transportation which is located wholly or in part in any state of the United States, whose capital stock equals at least one third of its funded indebtedness, which has paid regularly for the five years next preceding the date of such investment all interest charges on said funded indebtedness, and which has paid regularly for such period dividends of at least four per cent per annum upon all its issues of capital stock, or whose net earnings available for fixed charges during each of any three, including the last two, of the five fiscal years next preceding the date of investment, have been for such years not less than one and one half times the total of its present fixed charges, or in the bonds, notes or other evidences of indebtedness of any corporation which have been, both as to principal and interest, assumed or guaranteed by any such corporation primarily engaged in public transportation. "Net earnings available for fixed charges", as used in this paragraph, shall mean net income after deducting operating and maintenance expenses, taxes other than federal, state, dominion and provincial income taxes, depreciation and depletion, but excluding extraordinary non-recurring items of income or expense appearing in the regular financial statements of the issuing corporation. "Fixed charges", as used in this paragraph, shall include interest on debt, annual apportionment of debt discount or premium and rentals for leased properties.

5. In the mortgage bonds of any railroad corporation located wholly or in part in any state of the United States whose liens junior to such mortgage bonds equal at least one third of the funded indebtedness secured by such mortgage bonds and bonds prior thereto which has paid regularly for the five years next preceding the date of such investment all interest charges on the said funded indebtedness, and which has paid regularly for such period at least four per cent interest on such junior securities.

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