The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1897-01-29
Insurance Legislation.

IO EultO o VI IN UIih
The Journal of Sunday, 10th inst, pub
fishes in full the two bills that are now be-
fore the House. Nos. 27s and 27S, and states
that the State Life of this city has sent out
a circular letter inclosing copies of the bill
and asking support for them before the
Legislature. Rough Notes of the 14th pub
lished both these bills, and commenting on
them states that the first one, as published
(Nc 27S), was in the interest of the assess
ment companies in general, and the second
would be introduced in the interest of the
State Life, and that this bill should meet
with neither opposition nor amendment. In
a later number that paper comedies that
this bill should be amended TO obviate the
objection that it might be possible, under
the bill as drawn, for securities TO be de-
posted for more than they were worth,
that the bill be so amended as to require
that the state auditor or some trust COM
pany be required to value the securities.
VIII the amendment cure the bill so that it
be not harmful or capable of being made
harmful to the public? / submit that it will
not, and If my reasons be good l ask that
they be considered. If the bill be amended
as stated, then let il be further amended
that only such companies, associations or
societies as by the terms OF their contracts
definitely state the amount the policy hold
er is to pay to the company, and the
amount the company shall pay 10 the policy
holder" shall be allowed TO operate under
the provisions thereof. Why? Because then
the policy holders of any such company as
failed to keep good the reserve. the com
pany then being insolvent, according to the
law as applied TO any other corporation or
person, can protect themselves against FUR
Their loss by bringing about an apportion-
ment of the reserve among the persons who
paid it in. and apportioned in the proportion
as they had paid it in. Without certainty
of contract being required of such com
panies. then the so-called reserve is not a
reserve. 1t becomes only a mortuary fund
or an emergency fund, from which any
death loss may be paid, and in which the
largest contributor to il has no more inter-
est than has the smallest. Policies are
written of SO low a quality that the reserve
policy holder that contributed his $1,000 or
more to this NEUTRALITY-SUSPICIOUS.
loss to the man who has contributed moth
ing. while under a definite contract the re-
serve can only be used to pay the claims OF
its contributors and then only TO the ex-
tent Of their respective contributions to 1t.
The company seeking the passage OF
these bills was organized under the act that
bill No. 2S is intended to amend. The title
of that act (Acts 1888. page 203) is as fol-
lows: AN act to provide for organizing and
regulating the business of life insurance
corporations. associations and societies
| tranacting business on what is known as
the assessment plan" Section z of such act
provides that no company organized under
4 Ills Z Sitd lSSue ally liO IIthl z llIi-
cate or policy undertaking or promising to
pay any member during life except for ac-
cident or temporary illnessl any stipulated
sum of money. Does that company in any
policy il issues promise to pay any Stipu-
lated sum of money to the holder of such
policy? II the answer be that it does not,
then it will likely hear from its policy hold
erS who think IL does, and with good rea-
son, and If the company answers that it
does. then what of said Section z and the
regulating of such companies as stated in
the title of the act? The point IS not sought
to be made that. having been given an inch,
that company has taken an ell. but, in view
| of the foregoing, If given the mile asked for
in House bill No. 279. even with its con-
coded amendment, it might take a million,
the act under which it is organized, fail to
regulate. Associations almost innumerable
from without and within admitted as doing
a life insurance business on the assessment
plan only, and SO classified and certified by
the auditor of state, are making the people
believe land collecting definite policy rates
therefor) that they have ten. fifteen, twenty
or life-payment policies, without any pre-
tense of reserve, as reserve, any longer than
il takes to get the policy holders money.
This Legislature seems to be a-working-in-
Observation-Disclosures one, and they can
in no other line do more good to more peo-
pie than to stop their being worked any
more on this lire.
Safety clauses" and emergency clauses
never appear in the body of any contract,
but no matter how deftly concealed. they
have the effect Of transferring the reserve
collected that should be conserved for the
benefit of the policy holder that paid il in
into an emergency or mortuary fund avail
able TO pay any death loss with. and ex-
empting the ompany from a charge of in
solvency. until the last dollar is paid out,
and of placing on the fleeced policy hold
ers the liability of assessments at the hands
of a receiver TO pay the unsatisfed death
claims of the company. Stop IL.
4 1t is not the writer's wish TO swop compli-
mentS or have the question at issue divert
ed; if ii We're / would remind Mr.. Wynn
and his company hat the company he re-
fers to in the Sunday Journal as having col
lected 81. 499. 1872 in the last fifteen years in
indianapolis Che must mean the State Of In
diana) and paid in losses only 1868, 1868. what
ever the inference he intended. compares
favorably with his company as reported &c
its policy holders Feb. 10, 1896. which shows
total collected from policy holders $70.666. 4
and paid in losses only s. 500. The inference
that may be drawn from both these state
ments is mischievous and misleading. and
has nothing TO do with the questions raised
in my article in Saturdays Journal. tC
which his statement purports 10 be a reply
NJ a. BUCHANAN.
Indianapolis, Jan. 20.