The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1898-11-03
THE NEW TERM POLICIES
CLAIMED STATE LIFE INSURANCE
COMPANIES VIOLATE THE LAW.
Attorney Generals Attention Called to
Local NEUTRALITY-SUSPICIOUS.
of Their Claims.

Since the publication of the recent actor
OF Auditor of State Daily in regard to the
Western Mutual Life Association, of Chi
cago, there has been a considerable stir
among the officers and representatives OF
the Indiana companies issuing policies part
ly payable during the life of the insured
Some foreign companies operating in this
State, realizing that the outcome of the
matter must eventually be their withdrawal
from the public of the best selling policy
they handle, resent what they term is a
Partially displayed by the state officers
for home companies and associations issuing
the same kind of policy, but under evasive
names. Yesterday the representative of
one of the foreign companies called on Aud
itor Daily and Secretary of State Owen and
complained Of the State Life Insurance
Company, Of this city, which. he alleged,
has for some time issued what is in reali-
ty policy of the prescribed kind
He alleged that under cover Of the name
term policy the company issued what was
in reality an endowment policy, and
said that it was only fair that If the outside
companies were compelled to quit selling
the endowment policies, that the State Life
Company should do likewise. There was
such a wide difference of opinion among the
state officials that it was deemed advisable
to consult the attorney general as to this
specific case.
The State Life Insurance Company is in
corpcrated in this State under the assess
ment insurance law. 1t is governed by an
executive committee composed of President
Andrew M. Sweeney, Vice President Samuel
Quinn and Secretary and Actuary Wilbur S.
Wynn. Its home Office is in the fifth floor
OF the Lemcke building, where the officers
We're seen last night by Journal reporter.
The officials Of the company contend that
they are operating strictly within the law
governing policies payable during the life
OF the insured. and contend that Attorney
quoted in his recent opinion is incorrect
Their contention is that in order to be lille
ga the policy must name a fixed sum
ing the nte of the holder and in support
OF their position quote the following eX-
tract from the insurance laws Of Indiana.
IF such fund is in excess of the amount
OF one death assessment or periodical pay
ment upon all certificate or policy holders
and not less than the sum of fifty thousand
dollars, the excess or any portion thereof
may be used in the reduction of assessment
or periodical payments by policy or certih-
cate holders by ratable cash dividends or
credits, or in such other equitable division
or apportionment thereof as its bylaws OF
rules may provide, and such use shall not
be deemed or construed to mean a profit
received by members within the meaning
Of the statutes of this State, or the pre-
minated by death or surrender may be re-
funded to the holder or beneficiary, as may
be provided for in said policy or contract
provided, that nothing contained in this act
shall be construed to permit any contract
promising any fixed cash payment to any
living certificate or policy holder, excepting
in the contingency of physical disability
DISPUTE AS TO FIXED AMOUNT.
The officers claim that as they do not fix
the exact amount" which is to be paid al
the expiration of one of their term poll
cies' they are operating within the law. In
stead of holding out to a possible customer
certain sum, they claim they are, by the
law, allowed to return the "entire accumu.
lations" Of the policy at the end of stated
period. For example, on the back of one OF
their term policies is the following "stipu-
lation and agreement"
twenty Years-Options. Twenty years
from the date hereof. this policy being then
IN force, a special Survivorship dividend will
De credlted hereon, and no dividend will be
allowed or paid hereon until the completion
or said period. The owner Of this policy
may then apply its entire Accommodations and
sad survlVorship dividend according 10 any
one of the following options which he may
select: First, to surrender this policy, prop
erly receipted, and withdraw its entire ac-
cumulations in cash. Second, to apply, upon
the surrender of this policy, properly re-
ceipted, its total accommodations to the pur-
chase OF a paid-up participating policy, al
the single premium rates of the company
for the then age of the insured" ETC.
They maintain that this form of policy is
aItoSether within the law and that Attor-
ney General ketcham has stepped outside
the law if he intimated otherwise. The face
OF their policies would not lead one to be-
l1eVe that they were Issued by a mutual
company, they claim. 1t provides for a reg
ular fixed premium every year during the
life Of the policy according to the COM
pany's schedule rate for this class" So sure
are the company officers of their position,
that they are willing to try conclusions
with the opinion Of the attorney general in
the courts.
Attorney General Ketcham, however, is
trmly on record against the position taken
by the company and, while he will be
case, the outside insura nee men claim he
has already covered it fully in the closing
sentence Of his recent opinion, as follows:
1T is the obvious purpose of the proYiSo
in Section to prohibit any fixed cash pay
ment to any living certificate or policy
holders, save only in the contingency of
physical disability, that Is, the insurance is
TO be mutual In its character, and corpora
lions operating under this law are not per-
mitted to hold out as inducements the pay
ment of any fixed sum at any fixed period,
nor to entice persons with whom they deal
into the superstition that they can at the
same time have insurance and make a per-
manent investment, the effect of which
would be to jeopardiZe the interests of those
to rely upon a fund that is accumulated
for their security, which fund might, by
such processes as are contemplated, be di-
minished; and l think that, whether the
sum TO be paid is fixed stated sum, or a
sum which is to be calculated and become
fixed in amount, as is the result of the call
culation is as much prohibited as the 9TH
err. That sum which is the result of a GER
comes fixed in amount, should within the
purview Of this law, DO treated as a fixed
sum, whether the calculation is to be made
after a particular time or not, and the law
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