The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1898-12-17
A LEGAL RESERVE FUND
FEATURES OF INSURANCE BILL THAT
WILL BE PRESSED.
Indiana Companies That Are Inter-
ested in the Measure
Points of 1t.

under the laws of Indiana and those expect
ing to organize to have the Legislature
make thorough revision of the laws gov
erning life insurance The companies now
operating and some which will operate have
agreed on measure which has just been
drawn up and which thoroughly revises all
existing laws on the subject 1t is claimed
by the companies that they desire the law
to compel them to keep a legal reserve and
to do business on that basis. They claim
that they do keep a legal reserve on de-
post with the auditor of state, although the
law does not compel them to do So and this.
with other points, they wish to remedy.
The bill which has been prepared is in addi-
ton to the brief bill noted in yesterdays
journal, and this bill will receive the united
support of practically all Indiana life in
surance companies
The companies which will incorporate nm
der this bill, if it becomes a law, are the
state Life, Indiana Life, Reserve Loan Life
interstate Life and the company which is
ready to incorporate, but which is await
ing the result of the effort to secure legis-
IaIon on the subject, and which will be
known as the Columbian Life Insurance
company. Among those interested i'll the
last-named company are r. L. Martindale
Augustin Boice and c. E. Dark.
The bill covers both stock and mutual
companies and confers the right on any ten
or more citizens to organize a company for
the purpose of life insurance The method
or organization is the same as in the exist
ing laws, and the articles of incorporation
must be approved by the auditor of state.
attorney general and then certified to the
secretary of state The incorporators shall
elect a president, secretary and treasurer
and board of five directors and the bill
authorizes them to receive subscriptions of
STOCKS. Ii a stock company, a capital stock
of not less than 100000 must be subscribed,
OF which 80 per cent must be paid up and
invested in United States or Indiana bonds,
certificates of deposit in any solvent bank
or trust company bonds and mortgages
on unincumbered real estate in this State.
winch must be worth at least double the
sum loaned on it. OF this $4,000 worth of
securities shall be deposited with the auditor
OF state NO part of the 90 per cent. shall
De loaned to any officer or stakeholder of
the company. Mutual companies before
issuing any policies shall have actual appli-
cations on at least $50 individual lives for an
amount of not less than 81 O00 each and a
list OF these applications, with the name
age, residence, amount of insurance and an
nuai premium, must be filed with the
AUDITOR OF state. Such COMPANIES shall also
make deposit with the auditor of state
or an amount equal to three-ffths of the
nrst annual premium on the applications
filed, as we'll as the securities OF the value
of $4,000 This provision is based on the
laws OF Iowa, which have been taken for
a model of many of the features. The usual
rights to change a name, make bylaws,
etc, are conferred in detail. The subjects
which must be touched upon in the annual
report are specified, but the auditor is given
the power to amend this form and make
any additional inquiries that he may DESIRE
THE LEGAL RESERVE
The greatest amendment is in regard to
the legal iS boc
law also. The law requires that the auditor
of state shall. as soon after the filing of the
annual report as possible, ascertain the net
cash value of each policy in force on the
last day of December, on the basis of the
American Experience Table of Mortality and
per cent. interest or the Actuary's Com
bined Experience Table of Mortality and
per cent. interest. If desired the auditor
can employ a competent actuary to do this,
and he shall be paid by the company for
which the services are rendered The aud
itOr may receive the statement presented by
me company, if he so desires. AS soon as
the net cash value of the policies of the
companies are aScertained, the auditor of
state is required to notify each company of
the amount and within ninety days after
the receipt of this notification, each COM
pany shall deposit with the auditor, for the
security and benefit of it's policy holders, an
amount which, together with the sum al
ready deposited, shall be not less than the
valuation of all policies in force This sum
must be in the securities above named, but
deposit of this kind is required only when
the cash value of the policies exceeds the
amount first deposited by the company. The
auditor shall then issue certificate giving
full information regarding the company and
authorizing 1t to transact business but this
certificate expires on May 80 in the year
following it's issue. No company will be
permitted to transact business in the State
until 1t has complied with the provisions of
SCALING LIABILITIES.
The auditor is empowered at any time to
make an examination of the affairs Of a
company and to require statements from
any officer under oath. If, from any exam
ination or otherwise, the auditor finds the
assets of a company to be less than it's liza
bilities, he may notify it to cease issuing
policies or paying dividends until the de-
ficiency shall be wiped out or, if the assets
are less than three-fourths of the liabilities,
he is required to at once notify the attorney
general, who shall bring proceedings in the
Circuit or Superior Court for the appoint
ment of receiver. If the court finds that
the assets are less than the liabilities he
may, and, If the assets are found to be less
than three-fourths of the liabilities, shall,
III practicable, with the consent or approval
of majority of it's policy holders, scale its
policy liabilities to an amount equal TO or
less than its assets. or he may provide for
the reinsurance of its outstanding policies
in some solvent company" This is an en-
stated by the advocates of the bill that it is
intended to tide over small companies which
may be temporarily embarrassed, but which
may be brought back to a solid nasiS. If
neither of these methods be practicable, the
court is authorized to appoint a receiver and
to provide rules for the winding up of the
affairs of the company and the annulment
of its charter.
Companies can change the securities on
deposit by substituting like amounts of
other securities and when the actual valua-
ton of outstanding policies is less than the
amount on deposit. they have the right to
withdraw the excess, but the amount on
request, the auditor shall examine the af-
fairs of any company, and the expenses are
to be borne by the company No order,
Judgment or decree affecting the company
shall be made other than on the motion of
the attorney general as is provided in the
law of 1897. A company cannot voluntarily
retire from business until its policy holders
company writes business without an aud
itors certificate 1T shall forfeit 800 a day
for each day it does business. This forfeit
shall be collected in the name of the State,
and shall be paid into the school fund. The
law as to investments is practically the
same as that now on the statutes, except
that loans on the policies of a company
policy at the time the loan is made The
provision as to reinsuring is practically the
same as il now is The insured shall have
the right. at any time with the consent of
the company, to make a change in his payee
or beneficiary without requiring the consent
of the payee or beneficiary, provided the
policy has not been assigned for debt or
other legal consideration. Companies now
doing business may reincorporate under this
law by complying with it's provisions, but