The Guthrie daily leader. [volume] (Guthrie, Okla.) 1893-1996, 1905-12-23
Suggestions on.
Insurance Problems
Address Delivered Yesterdny Before The Oklahoma
Association.
Oklehoma Bar


this business. II federal control Of ilfe
insurance IS desirable the same consid-
erations would apply with equal force
to Insurance other than lfc to trust
companies and to al contracts OF an in
terstato character.
Tho conteation that federal control is
necessary because state regulation is IN
adequate can not be upheld. II Il can be
shown that the states have ampie power
/ to accomplish the power Of regulation.
\ This purpose ought TO be to protect the
citizens and to make them secure in
their constitutional rights, and TO pre-
vent unfair and Illegal contracts.
The subject Of state regulation Of cor
porations engaged in the business Of in
smance naturally divides itself into two
parts; (a) Regulations imposed bv the
state upon corporations OF her own crea-
u9h' and, tbl regulations imposed by
the state as conditions upon which she
Will admit corporations Of other states
lt was held IN the case Of Mining co.
/ " Pennsylvania. 125 u. S. 1Si. that a
stnte had the absolute power 10 en-
tirely exclude corporations Of Other
states mot engaged In interstate com
merce or federal busincss). OF 10 itnpose
such terms and conditions upon which
they would be admitted Is she might
please.
1t therefore follows that the regua
! lions which may be Imposed by the
state upon ee-Fciations OF her own Gre
euon are such as mny be limited only
/ by her organic law. while as to c5apo.
raiious Of other states, seeking to do
/ the business Of Insurance within her
! jurisdiction. she may Impose such con-
+ ditons as prudent regard for the pro-
/ lection of her citizens may require.
fair Illustration OF the practical or
GRAFTON OF the latter part OF this rule is
I 20 pe FOUND IN the case OF Insurance Co.
/ v Cavens, supra. In that case. the
/ policy was contracted paid for ana de-
/ livered IN the state Of Missouri; If con-
! tanned a provision that Ia the event Of
lapse after three or more annual preml-
ums had been paid. the liability OF the
company should be determined by ihe
/ laWs OF the state Of New YORK. viz: the
net value Of the policy. on the other
hand. the Missouri law provided that. in
such case, the net value should he an
pied as g. single premium to keeping the
/ policy N force for such period AS three
/ fourths OF the net value would n,,rchase
Insurance at ordinary life rates. and
/ that IN the vent OF the death Of the in
sured within such extended Insurance.
I the company should be Liable for the face
/ OF the policy less the unpaid premiums
! compounded az six per cent between the
GATE OF the lapse aud the date OF death.
/ The Missouri court held that notwith-
standing the provision In the contract
Tor the law Of New York. that the La
bility OF the company was TO be deter
mined BY the laws of Missouri and that
the statutory rule Of liability prescribed
| py the laws Of that state was one OF
the conditions precedent upon which the
foreign corporation might transact such
business within the state. (cravens y.
Insurance Co.. 14S Mo- 5Ss; 80 w.
/ 519) This decision OF the AfIssonri
court was upheld by the supreme court
of the United States
II, therefore. the several states would
Impose salutary regulations upon corpo-
rauons of their owa creation. ana as
rigidly exclude corporations OF other
states whose methods were Inconsistent
with the requirements OF her own cor
I poratlons, The necessity for federal con-
troll would not be apparent
We shall now allude briefly to some
features Of the business OF Insurance.
that we regard as proper subjects OF
legislative regulation, dealing first with
life insurance and later with Insurance.
other than life
! 1t is well, in discussing the FIRST branch
OF the subject to refer briefly to the
nature OF life insurance contract.
Broadly speaking. they may be divided
into two classes; assessment, and old
line policies An assessment poIcy Is
one where the company oblg4ies itself
merely to assess its members as occa-
sion may require to pay death losses and
other liabilities as they accrue. Such
lion or maintenance or either reserve or
surplus. An Old line policy is one where
the company obligates itsef, IN consid-
GRAFTON Of stipulated premium, to pay
the amount therein agreed, az such timo
and 10 such person as may be specified
/ by the terms of the contract such a
contract, or policy, may be fully paid
/ by a single premium, or by payments
annual or otherwise during the life Of
the insured, or fce any shorter period
therein provided Lhe obligation as
sumed by the company Is TO pay la any
event upon the death Of tho insured, and
otherwise as provided at the maturity
Of the policy The maturity OF the pol
/ Icy is the time fixed by It's terms when
the liability OF the company becomes
absolute without the death OF the insured.
In an ordinary life policy this would
] DO at Ait tAQ yl lut IRE expectancy AT
age ninety-siS, and in other forms OF
/ policy at the time fixed by the contract
/ itself The premiums upon this form
of contract are computed upon the the
ory that there VIII be set aDart such
portion Of each payment as viii IN the
aggregate, with the estimated accumu-
latiOns OF interest thereon, equal the
face of the policy az maturity. This is
called the reserye and the amount thus
apportioned. together with the accumula-
tions Of Interest thereon, may pe COM
puted at any time before the maturity
Of thei policy. ana the result is its
net value.
Every person who buys insurance,
however. does not live until tho maturity
of his policy as above defined: yet au
policies provide for fun payment at any
time upon thu death Of the Insured TO
meet this liability a certain percentage
OF each premium payment Is Ret apart
as mortality fund OF given number
OF persons Of the same age. insured ac
the same time, the percentage Of whom
VIII die each year thereafter may be
l accurately computed from the mortality
tables, and it Is from such computation
that the amount necessary to maintain
the mortality fund is determined
The net premium therefore S. an RS
innate Of the amount necessary TO maine
tain the reserve and fnortnlitv funds