The Birmingham age-herald., 1907-04-26
Plans Are Examined.

briefs for and against the legality of
 the plans have also been presented to me
 for my consideration.
 Plans Are Examined.
 It appears from an examination of the
 plans of the several companies above
 referred to, wherein life insurance is of-
 fered in connection with stock, that the
 State Mutual Life Insurance company
 proposes to sell stock in an agency com
 pany In connection with life insurance that the Southern States Life Insurance company proposes to sell, through an agency company, the stock of the South ern Security company the last named company practically owning the instlr-
 ance company; that the Philadelphia Life
 Insurance company and the Citizens Life Insurance company both offer their own stock for sale in connection with life in-
 surance; that the Security Life Insurance company of America has contracted with MT. Ed. l.. Williams as It's general agent, for a number of states, and the latter has transferred this contract to the Southern Guaranty company, corporation, and the | last company proposes to sell It's stock | in connection with the insurance of the Security Life Insurance company and the Meridian Life Insurance company and the Meridian Life and Trust company and the Citizens Life Insurance company both desire to offer a special advisory
 board contract in connection with life insurance This opinion deals only with stock propositions and the advisory board contracts will be considered in another communication to you. All that Is said herein is intended to apply to the plans of the several companies above named l so far as their plans relate to the sale of stock.
 Quotes the Law.
 Section 26O2 of the code contains three l distinct propositions, which for conyen- | fence I have grouped as follows:
 l. No life nor any other insurance com l pany nor any agent thereof shall make any contract of insurance nor agreement as to policy contract other than Is plain ly expressed in the policy issued thereon. ?. Nor shall any such company or agent pay or allow or ofter to pay or allow as inducement to insurance any rebate of | premiums payable on the policy.
 3. Nor shall any particular polcyholder
 of the same class be allowed any ad- vantage in the dividends or other benefits to accrue thereon or any valuable consid- eration or inducement whatever not spec- fled in the policy contract of insurance. With all of the companies referred to above where 1t is proposed to sell stock of an independent corporation in con nection with life insurance, the two com- panies sustain close and intimate con l tractual relations to each other, and there can be no escape from the conclusion that the sale of the stock must be considered as an agreement as to policy contract within the meaning of subdivision l of section POOP, and therefore that the agree l ment regarding the stock must be plain ly expressed in the policy of insurance and offered to everybody alike.
 It has been argued with great vigor be- fore me that the two propositions must be kept separate and distinct because the life insurance company and the stock agency company are separate legal en- titles. But on account of the relations they must sustain to each other, In my
 opinion, the plans must be considered to-
 gether. And therefore I advise you that
 in every such case the terms of condi-
 tions relative to the sale of the stock
 should be plainly expressed in the policy
 issued by the company. This, of course,
 is equally applicable to those companies
 that propose to sell their own stock in
 connection with insurance.
 Pays for Right
 The method of selling stock by the in-
 surance companies or their subsidiary or
 auxiliary companies above referred to,
 does not involve a rebate of premium
 payable on the policy as the term "re-
 bate' is used in subdivision 2 of geo.