Mr. Strobel to Mr. Olney.
Santiago, May 7, 1896. (Received June 12.)
Sir: Referring to my No. 83 of the 30th ultimo, containing a summary of the legislation to be brought before the Chilean Congress, in view of the importance of the subject to the American insurance companies established in this country, I have the honor to inclose copy and translation of the Government bill which imposes certain burdens on foreign companies of this class.
According to this bill agents of a foreign insurance company will be required to obtain a special permit to carry on business, under penalty of imprisonment; and this permit will not be granted until the company has deposited 100,000 pesos in the mint.
The companies are also required to deduct from their semiannual profits 10 per cent for a reserve fund of 400,000 pesos; and this reserve fund must also be deposited in the mint.
These deposits may be wholly or partially withdrawn, for the purpose of paying losses, when all other resources are exhausted. Should, however, the capital of 100,000 pesos be withdrawn, the whole of the half-yearly profits are to be deposited until this amount is again completed.
Life insurance companies, and companies receiving deposits in the form of savings, are required by the bill to deposit in the mint sums received for premiums, after deduction of an amount necessary for expenses, losses, and dividends. Dividends are not to exceed 6 per cent semiannually.[Page 44]
The above deposits may, wholly or partially, be replaced by real estate. Foreign insurance companies must pay the same taxes as native companies. All legal questions arising out of the business transacted in this country must be decided by the Chilean courts.
The question of accepting or rejecting a proposition for an insurance policy must be passed upon by the agent of the company in Chile, and can not be referred to the head office; and if within fifteen days after the receipt of the proposition by the principal agency the proposition has not been rejected and the premium returned, the policy will be regarded as in force, and on no grounds can it be rejected by the company.
I have, etc.,