The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1897-09-13
Indiana Insurance Law.

There seems to be an impression in some
quarters that life insurance companies in
Indiana organized under the law passed
last winter (I. B., 500 may not promise
definite surrender values or fixed cash
payments of any kind except in the case
of physical disability. This is erroneous
idea and could only arise from a superficial
reading of the law, or from dense ignorance
of it's origin or BOTH The law is substan-
TALLY as drafted by the legislative commit
tee of the Mutual Life Underwriters Asso-
ciaticn with the exception of the proviso
to Section Z. The Mutual Life Underwrit-
ers' Association is composed of companies
large majority of whom have definite
cash surrender values in their policies. The
legislative committee was composed of gen.
tlemen managers of companies a majority
of whom have definite surrender values in
their policies. 1t could not have been the
intention of these gentlemen to have pro-
hibited in this bill the very thing their
companies were doing and that they were
anxious to be still permitted to do in In
diana and elsewhere. The proviso to Sec
ton was of local origin and no doubt
was intended to prohibit definite surrender
values, inasmuch as it was injected sur
reptitiously and by an enemy. But it falls
short of its purpose, as a little investiga-
ton will show L quote the following from
Sutherland on Statutory Construction"
page 1885, Section 223:)
THE natural and appropriate Office of
, tbs provisio being to restrain or qualify
some preceding matter, 1t should be
fined to what precedes it unless it clearly
appears TO have been intended to apply to
some other matter. 2. It is to be construed
in connection with the section of which it
forms part, and it is substantially an eX-
ception:, 3. II it be proviso to a ,particu-
lar section 1t does not apply to others I'M
less plainly intended. d. 1t should be con-
strued with reference to the Immediately
preceding parts of the clause to which it
fS attached In other words the nrOViS0
will be so restricted in the absence Of any
thing in it's terms, or the subject it deals
broader effect. q Peace VS. VS.. Bank f, Of Mo-
| bile SO Ala, 693; Bank for Savings VS.. The
Collector, Wall, 495; Savings Bank VS..
way VS.. Harding, % Graft, 547. Parting
| Trent, B. & c., II; Lehigh Co. VS.. Meyer.
102 Pa ST., 49, Cushing VS.. Worrick
Gray, 9S2. See United States VS.. Rabbit, /
81 Conn, So; Rogers VS.. Vass, 6 Iowa, 405.
6 United States VS.: Rabbit; ! Black, So
points are clearly established:
First-That unless there is something in
the proviso itself to clearly forbid such q
construction its application must be con-
fined to the section to which 1T is attached
treated in that section the proViso at the
end of it must relate to what Immediately
precedes it in the section of which it forms
2 part
Now, what is contained in Section Z, and
what is it that Immediately precedes this
proviso? Section Z provides for the crea-
ton and maintenance of an emergency or
reserve fund; it also provides that COM
pany may create and maintain other
funds besides the emergency reserve, as
many of them and of such amount as may
be found expedient it also and lastly pro-
vides that companies may, If said emer-
gency or reserve fund is in excess of one
death assessment or periodical payment,
and not less than $4,000. pay out such ex-
cess in a ''ratable cash dividend" ETC.,
provided that nothing contained in this
act shall be construed 10 permit any con-
tract promising any fixed cash payment,
to any living certificate or policy holder
disability" This does not prohibit cash
surrender values at all nor does it have any
relation to them. 1t does prohibit prom
Using fixed cash dividends, and there ii
stops. In the light of the authority quoted
above it seems that this Interpretation is
beyond dispute.
The law provides distinctly for an ordi-
nary life policy with an emergency reserve
| fund. provides for the payment of ratable
dividends from that fund after 1t has
reached certain proportions, and prohibits
the promising of any fixed cash pay
| ments' from that fund But it also pro-
| vides for the creation of 'other funds" lin
excess of the amount required by the re
serve fund.- to provide for the purposes
of such corporation, association or society.
| There is clearly nothing then in the law
proh1loltling a special IuIaa or advance pay
ment whereby a member may create
| fund with which ultimately ne may pur-
| chase n paid-up policy or extended insur-
ance. and there is nothing in the law nor
in common sense that would prevent the
return of that special fund to the policy
| holder should he desire It. since IT has nor
in any way affected his policy and is not in
any sense fixed cash dividend or pay
ment from the emergency reserve. 1t is
| impossible TO conceive how there can be
| two opinions on this subject after reading
| the law. 1t is chesrfuliy admitted that the
| law is not all that it ought to be, but
! neither is 1t so bad as IT might be when
| once It Is understood. II agitated shall re-