The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1897-02-08
INSURANCE LEGISLATION.
The State Life ard the Iowa and In
diana Laws.

To the Editor of the Indianapolis Journal:
The Iowa law regarding companies for
life insurance" after setting out in detail
the requirements of the annual report of any
such company organized and doing business
in that State, recites that upon the nling or
such report the state auditor shall proceed
TO ascertain the net cash value of each poll
cy in force of such company, upon the basis
of the American experience table of NOR
tally and Az per cent or the actuarleS or
combined experience table of mortality and
AZ per cent. interest; that having ascer-
tanned the amount he shall notify the COM
pany of the amount; that the company
shall have thirty days i'm which TO comply
with the law and deposit with such officer
the securities required by the law TO the
amount of such net cash value OF all Its
outstanding policies; that on failure to
make the annual report required within
the time prescribed, or on the 1alIure 10
make the deposit or securities, the AUDITOR
shall notify the attorney general, VINO shali
at once apply TO aly district court, III In
session, and if not i'm session then TO any
Judge thereof, and on failure of such COM
pany to show sufficient cause for such neg
lect, the court shall decree its dissolution
for default in not complying with the laws
The law also provides for such decree Tor
insolvency according TO the test above CIV
en-. In either case the law PROVIDES tnat
the reserve be apportfoncd among the poll
CIV holders that paid IL in, or for the pur-
pose or their reinsurance.
The Iowa law regarding mutual benefit
associations and applying only TO COM
panies doing business on the assessment
plan, is quite different thing. and pro-
Vides that any such company accommodating
any money TO be held in trust for the 1ul-
fillment OF its policy or certihcate contracts
shall deposit securities for such accumuIa-
tons with the auditor of state, ana pro-
vides for their withdrawal down 10 the
last dollar for the purpose for which
dpnpSifp1
The deposit required by the nrSt named
law is the reserve according to either OF
the tables, and is the legal reserve there,
because required by law to be maintained.
The deposit required by the last-named law
is only such amounts as the assessment
company may be accommodating as n NOR
tuary or emergency fund, the amount dis
cretionary. the object discretionary and Its
Withdrawals discretionary with the deposit
ing company.
The laws of no State contemplate any
other than the 'lfe-inSuIance-for-llfe
kind and the ''mutual-benefit, or assess
ment' kind, and the State OF Iowa, IN,
stead of having the Iowa insufance law,
indeed has two insurance laws mentioned.
Does the manner of withdrawal pro.ided IN
House bill No 279 render the securities for
the reserve any more secure from any los-
sible wrong use by the depositing company
than though they were with a trust cen
pany or in a safety deposit vault! Indeed,
no trust company would undertake the re-
sponsibiIity and service sought TO be I'M
posed on the state officer without COM
pensation that would render II liable where
neither the State nor its officer might De
liable. But their deposit with inc State en-
abes the agents, when tEey get away from
home to ascribe virtues to he law ana a
responsibility to the State fer the l.ablilIies
of the company that, however .2olish' End
now traduced by the veriest assessment
concerns from that State admitted 20 do
business in this State.
If House bill No 219 is TO become a law,
amended or not, is the State TO assume the
responsibility for the safekeeping OF the Sc
curilies? If DESTROYED or stolen. is 1t In
tended that the State be liable to the de-
posting company? If some state auditor be
negligent and worthless securities are de-
posted and his certificate given as though
good ones had been. Will the State make
good the wrong done the policy holders
that bought their policies on the false show
ing thus made? Will the auditor DE re-
quired TO give additional bond, and who VIII
pay for il and the extra work and RESPONSE
bility imposed on him? And II The deposit
ing company, may not some future auditor
serve the company that pays him!
L have before me a copy or the articles
of INCORPORATION of the State Life Insurance
Company, of Indianapolis, a copy of the
act under which il was organized, ana
policy or contract issued by that company.
the signers had. under the name OF The
State Life Insurance Company, organized
to do q life and accident business, all in
accordance with and under the provisions
of ar act of the General Assembly of said
State. entitled an act to provide for or
ganizing and regulating the business OF life
Citations, or societies, transacting business
or what is known as the assessment plan,
and liking penalties for the violation OF its
provisions, approved March 8. 1888 " Sec
ton OF such act provided how money Is
to be collected. by assessment notices sent
to members, stating the various purposes
for which the money is intended Section
eXempts the company from maintaining
any reserve, lin consequence or such asso-
citation conducting its business on the plan
OF assessing its members" Section Z pro-
vides that no concern organized under the
act shall issue any endowment policy. or
certificate, promising TO pay any MEM
Der any stipulated sum of money, except
for accident or temporary sickness. The
policy purportS to be option life twenty
year distribution" and docs promise to pay
the holder all the way from more than 500
at the end of the fifth year TO more than
81 100 at the end OF the twentieth year. The
subject OF these operations is led to be-
lievc. by means OF "a special contract and
an estimate that his profit will be any
where from S3,041.S2 (aged twenty to
| SS.2S4S2 at the age of fifty-five, on the
| above form of contract.
This company Is asking, in House bill No.
| 27S. that the Legislature declare that this
! il doinS business on the assessment plan,
! within the meaning OF said act. Then, in
| bill No 27a. they ask 10 be allowed TO
! write 'all forms of life insurance con-
| tracts, including endowment and annuity
! contracts. Ought Il not rather regulate this
| company 70 the bounds of the very obvi-
GUS intention Of the act under which il
| was organized? If this company thinks IL
has the law for what II is doing how
| will it explain the purpose of House bill
! No. 27S? If ii is sincere in its pretension
| holders or the office of the auditor of state
| by the kind of policies ii writes, why did
| il ask that Office TO support its request by
some statute whereby ii had TO. before il
' JAMES A. BUCHANAN.
| Indianapoli Feb g.