The Salt Lake tribune. [volume] (Salt Lake City, Utah) 1890-current, 1910-05-23
UTAH'S INSURANCE LAWS

Hardly day passes that the insurance
department OF this state does not receive
letter OF inquiry, ana in many Instances
complaints. regarding insurance matters.
Occasionally the attention of the public
has been called by the department. 10 Ger
tain Illegal methods on the part OF the
representatives. of insurance companies
and Others and with the view of pre-
senting them TO the public in definite
form, The Tribune has received from
willard Done. assistant insurance com
missioner the following statement;
"tt is not generally known, and ! think
that the public should be informed. that
the accepting OF rebates on life insur-
ancc policy is punishable the same as
the giving OF the rebate. Both are Grim
inal offenscs. and the one who receives.
as well as the one who gives. is liable
TO the penalty. ! believe there has been
some doubt in the minds OF individuals
as TO the truth OF the agents assertion
when he has stated that prohibition
against receiving 81 rebate is equal 10 that
this announcement on the authority of
the state insurance department. and refer
TO sections 40, 10 and ~ for the further
information OF the public. Section 81
prescribes both fine and Imprisonment for
these offcnSeS.
There are various forms OF rebates
which arc included in this prohibition,
among them, advisory board schemes,
special contracts. discriminating in favor
of different persons OF the Same class,
etc. The idea Is that every applicant for
insurance should receive fair treatment
no matter whether he applies for small
or a large policy; that the premium rates
must be proportionately the same Tor
large or small policy of the same kind
at the same age: and so must the death
benefit, dividends, and guaranteed re-
turns.
"No agent is permitted 10 promise n
larger dividend TO one individual tllan
TO another OF the same class and age on
the same policy Such an offer would
constitute rebate and Misrepresentation.
and would como under the penalties pro-
vidcd in the law. II has been customary
in the past for agents TO approach men
of some prominence in the community
with the statement that they have been
singled out for some special contract Of
ferinG advantages and returns superior to
those enjoyed by other policy-holders OF
like age. On this representation men
have been induced to buy large policies
and have found out afterward that the
representation, This is now prohibited by
law. and both the agent who writes and
the person who accepts one Of these spc-
cial contracts are guilty OF violation
OF the law.
"Some months ago tho department is
sued statement regarding Tie large
number OF new companies. particularly
life insurance companies. now being or
canizcd. and their stock being placed on
the market at cNorbitant rates. in many
cases selling at twice the face value. At
|
promotion expenses OF these companies
are excessively high. and that the rates
promised in the way of dividends are
very largely drawn from an overwor<ed
imas snation. The insurance commission
er has had no occasion 10 change his
mind on this question, or course. there
is no law IN the state 10 prohibit the
selling OF these stocks at whatever price
the agent may demand: but persons who
arc approached with this sort Of PROPOSE
ton would do we'll TO investigate the
| i1,o for Will hc ihpTDnrlnpGS %
fore buying the stock: and il they are
in doubt as to tho proposition. they are
surance commissioners. and he will be
pleased TO give them the benefit OF what
eyer knowledge he may have on the indi.
vidual cases presented to him. 7 am Of
opinion that the promotion OF new life
insurance companies has been carried to
an extreme, and that in many cases its
purpose has been chiefly tile enrichment
OF the promoters and the agents who
sell the stock. There is law. however.
against selling this stock in connection
, with policies OF life insurance. and ii any
are approached with this sort Of prop
ositlon the department desires 10 be in
formed. al once.
The insurance department is IN re-
ceipt of occasional hints OF the opera
/ tiOn Of unauthorized companies in Utah.
! This matter has been taken up careful
, ly and Systematically. and any cases
! that come 10 the attention OF the de-
partment will be promptly dealt with il
| Is not generally known that the accept
! ance OF a policy from an Unauthorized
/ company is punishable the same as the
writing of such policy; and under the
I law every such contract Of insurance Is
/ null and void. Any individual or firm
| may he asked at any time by the in
surance commissioner for list OF all
/ policies OF fire insurance carried. and in
case of refusal To do so. a penalty is ex-
acted of 5000 for each such refusal The
/ commissioner has obtained some iRlor-
! nation of late along these lines. and is
| proceeding Systematically 10 obtain fur
! ther data upon which 10 base streuu-
! Gus campaign against wild cat inslir-
! ance. The public are asked 10 cooper
ate by coming 10 the commissioner of
insurance regarding the standing OF any
company in which insurance may have
been effected, without full knowledge OF
the policyholder as to The authority of
the company TO do business in the state,
/ All questions pertaining 10 these mat
/ ters Will be chccrfully answered and as
sstancc will he gladly rendered TO re-
! place the insurance in authorized COM
I panies where IL will he effective and not
simply a dead piece OF worthless paper,
II have before me an interesting item
peals OF Kentucky has recently rendered
a decision 10 the effect that the agent
who writes insurance in an unauthorized
company Is personally liable for any le-
gitirnatc loss that may be incurred, III
view Of The fact that such company
has strong inducement FOR refusing to
nav even valid claims. it is easily seen
that the agent who places the business
takes two-fod risk In so doing. 1t is