The daily morning journal and courier. [volume] (New Haven, Conn.) 1894-1907, 1897-01-12

reform its methods of business and
undo some of its wrongs done policy
holders we must conclude that the
power to protect the insured against
the transgressions of the company
ought to be vested in some officer of
the law.
The states of the union and England
recognize the necessity of protecting
the insured and have organized insur-
ance departments, branches of the eX-
ecutive government, as Connecticut
has done, designed to compel insurance
companies to carry on their business
legally and properly and to perform
their contracts. An equal, and as we
think, a greater necessity exists for
such supervision than in the case of
banking corporations.
Generally speaking the statutory du-
ties of the insurance commissioner,
who is at the head of the insurance
department of Connecticut, are to see
that all laws relating to insurance
companies are faithfully executed and
any illegal or improper methods of do
ing business discontinued.
The law which he must see is faith
the conlpany's organization, all statute
laws relating to insurance companies
and the common law of the land.
That the law he is to see executed in
cludes the common law is clear, suffi-
cient warrant for this conclusion is
found in section 1922 of the general
statutes, which charges the commits
sioner with the duty of investigating
whether the company is honestly keep
ing it's contracts with its policy holders
and this, of course depends upon the
common law.
Insurance Co., ". Wright, 60 VT, 523
Irrespective of the common law our
statutes give the commissioner power
to enforce the law, and these statutes
ought to receive a liberal construction
promoting that end.
The commissioner claims that this
action can be supported by the provi-
sions of section 1892 That provides
that, THE insurance commissioner
may from time to time examine into
the methods of business of any COM
pany and may require
them to answer such questions as he
may think necessary for the purpose
of such inquiry, and if in an Illegal or
improper method of doing business
shall fail within ten days to obey
such order he may apply to
any court or judge having jurisdiction
for an injunction for an injunction
and such court or judge shall
have power to the usual course of pro-
ceedings in equity to enforce such or
der Of the commissioners by injunction
and said court or judge shall
also have power to make all such fur
Their orders as may be necessary or
proper to carry into effect such in
junction
Section 1928 provides that such court
or judge may, in his or it's discretion
vary or modify any such order
or may refuse to enforce the same.
The commissioner is given this wish
torial power of examination and the
power oissue orders where the methods
are Illegal or improper for the protec-
ton of the policyholders.
Illegal and improper are not here
used as synonymous terms. What
ever is Illegal is improper, but the con-
verse of this is not necessarily true
Illegal means contrary to law, in this
case the charter or law of the defen-
dant's organization, the great body of
statute law and the common law of the
land. Improper applied to methods of
insurance business means not a right
or proper or suitable method-an ir-
regular method No general definition
can be given to cover all cases; the
| circumstances of each case must deter
| L. L ~,
| cd.
From 1851 to the date Of this action
the defendant has conducted under one
corporate organization two separate
and Independent departments, having
distinct interests, a stock department
issuing insurance upon the stock plan
and a. mutual department issuing in
surance upon the mutual plan.
The method of business which the
| commissioner characterizes as Illegal
and improper is this: The abstraction
by the defendant of vast sums of mon
| ey from the assets of the mutual de-
| partment which belonged in it for the
benefit of it's policyholders and the ap-
preparation of these vast sums to the
stock department thus benefiting the
pense of the mutual policyholders to an
enormous amount. The company has
| been to the date of this action contin-
uing such abstraction and appropria-
ton and enriching it's stockholders by
the use and increase Of these funds be-
longing to the mutual department for
the mutual policy holders.
| Itneeds no argument to convince that
such a course is not right or suitable
but an irregular method of conducting
| the business of life insurance COM
pany This suffices to bring this action
| within the statute. But this method is
not only improper, it is manifestly
Illegal; among other things in that it
violates the defendants contract with
it's mutual policy holders and takes
from them their property and gives it's
use to the stockholders of the company.
Such acts on the part of individual or
corporation stand on the same basis,
| and it would be a strange system of
| jurisprudence which afforded no rene
! dy.
The defendant claims that even if
these acts charged in the complaint be
true there is no law giving the insur-
to stop this misappropriation of other
funds or to give back what it has
wrongfully taken. We believe that the
| law is not thus impotent to right so
| yxyrn IxY 1- 70 he