The New York herald., 1877-03-15
principles. or rather wan. Of principles, oueh. to b.

principles or, rather want Of principles, ought 10 bs
policies lapse by forfeiture surrender where one 10
terminated by DEATH In view Of this 10 II prudent 10
late in the contract Itself the SURRENDER value in
or IN paid up nsurancef II the State ncrfercs nj all
N ne insurance matters should see 70 II ina, 'nese
reserves are not confscaed but should compel each
company TO pay IN cash by continued insurance
fair value on the surrender Of each policy
Again, Secretary Lewis says that when policy is
discontinued the company loses the cntre value OF
all the premiums contracted tor upon the policy which
are still unpaid" Mr.. Lewis omts to mention that IN
such case tho company is relieved from Its obligation
10 furnish the insurance which these premiums were
intended 10 purchase. The release from the obligation
to furnish the insurance fully Offsets the loss OF tho
premiums to be paid therefor. unless the company In
ssts upon payments where no consideration Is rem
dcrcd.
Finally, Secretary LOWS states :-"Under the law OF
averages theory recognizes certain amount OF TINS
reserve as corresponding to each policy Dut IN prac
tce and in business point OF view there Is and can 10
no such thing as reserve on particular policy"
BY tho laws OF New York and OF other States every
ic insurance company compelled to hold in certain
securities reserve for each aud every policy IN iorce
This reserve is the legal liability Tor the advanced
payments on unearned premiums on eacn poiicy.
There can be such thing us liability without It's
corresponding credit The liability Is on the part OF
the company; the credit is to the policy holder.
The laws Of Massachusetts provide that In case OF
nonpyment OF premium the insurance snail not
thereby be forfeited but eighty per cent OF the reserve
belonging TO the particular policy snail be applied as
single premium TO continue the whole insurance for
an asccrtainablc period The business OF the Massa-
chusetts companies has not been destroyed but on the
contrary has greatly prospered, by the application OF
this law. Again, the Supreme Court OF the United
States has recently decided that II person Is pre-
vented by circumstances beyond his CONTROL as in the
OF war instance, from paying stipulated pre-
mum when due, the insurance may be forfeited, but
In such the insured Is entitled TO tho equitable
value Of the policy arising from tho premium actually
paid This equitable value " may be recovered
in an action at law or by suit In equity.
This reserve has grown out OF premiums already paid.
IL belongs in one sense to the assured who has paid
them, somewhat deposit In savings bank Is said 10
belong 10 the person who has paid the deposit
TO loriet this excess, which belongs 10 the assured,
and IS ia,rly due from the company, aud which the
latter actually has In its Golfers and to do this for
cause beyond individual control, would be rank In
justice. Finally, the contribution plan" for the
ascertainment and equitable division Of the surplus OF
life insurance company, which has been adopted
ostensby, at least, by every mutual company IN the
country recognizes the tact that the reserve in each
case belongs TO the individual policy holder and conse.
qucny he is entitled to any extra interest which may
be earned thereon.
This liability the conscation Of the reserve or
payments in nd vance on policy, in OF tho nom
payment OF a stated premium wncn due, monstrous
1t rs rcc OF barbarism, and Notwithstanding the fact
that II is advocated BY the New York Chamber of Liie
Insurance II should be prevented by law.
In former days tho provisions OF a mortgage contract
were risidIy enforced Failure to pay an interest IN
stalmcnt when due entaied forfeiture, and the realty
became the absolute property OF the morgagee without
redress, no matter how great tho disproportion be
estate. In time appeals were made to tho English
Court oil Chancery. II was ruled that the for
iet%re o Of say 5000 because aeo' o' say
day it fell due was unconsconablc
and remedy was furnished by giving the right OF re-
demptlon In this country the remedy is iound in
tho statute law The mortgage, when interest or
principal Is IN default may recover. by foreclosure
and sale, the full amount OF principal, interest una
costs OF collection but the remainder, any, belongs
OF right to the mortgager II life insurance contract
should be in default by Of The non-payment
OF stated premium when duo the company is
entitled to full compensation for the insur-
ance already furnished, including an equitable
assessment Tor It's share Of expenses and 1or the
OF procuring substitute equally satisfactory as
contributor to future death claims and expenses but
ba inInr nrpVin IN ny mon tS hQI
right tho policy holder and should be paid to hun
either In cash continued insurance. II THIS Is srcfused
the remedy could, no DOUBT be found In any court OF
equity.
pancs permitted TO do business IN this State amount 10
more than S400, 00OU00 They are, has becn
stated, simply and solely tho accumulated
deposits payments in advance by individual
policy holders for benefits promised TO bo furnished
them, individually. by the companies. They arc in
tended 1t IS true IN each to be left with tho COM
pany until the death tho depostor but for this very
every safeguard which by legislative enactment
is thrown around deposits IN savings bunks trust
panics which may DO drawn At pleasure or during the
lie Time OF the depostor should in greater measure
be thrown around tho deposits in iie insurance
panes. AS It Is these reserves may DO ipjudciousy
managed, insecurey invested, or even conlscatcd
They are placed by the companies beyond the control
OF the ndividua owners or deposors who have no
voice in their investment These large accumula-
tons oler "a fearful temptation to designing and un-
scrupuious men to get and TO retain possession OF
company, and thus TO control and TO manipulate tho
trust funds for their personal benefit.
To crown IL ALL the Secretary OF the New York
Chamber OF Lie Insurance. which is composed OF
nearly all the leading companies IN the country, states
in his official capacity, that TO allow any policy holder
to withdraw and to take with him MS share OF Tho
fund, would bc destruction to the businoss.'
II the legislatures would compel each company to
insert every contract of insurance the and
conditions upon which the holder may. at the end OF
share Of the reserve, In cash padup insurance,
lilo would at once attain much higher and
Its proper place IN the estimation Of the pgnlio
New YORK, March, Is, 1871