Court Opinion

ID: 4599339
Source: CourtListenerOpinion
Date Created: 2020-11-20 19:23:08.62912+00
Date Added: 2024-06-11T07:59:29.209107
License: Public Domain

WEST VIRGINIA & KENTUCKY INSURANCE AGENCY, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.West Virginia & Kentucky Ins. Agency v. CommissionerDocket Nos. 24170, 25494, 36638, 40455.United States Board of Tax Appeals18 B.T.A. 715; 1930 BTA LEXIS 2605; January 9, 1930, Promulgated *2605  The petitioner was not a life insurance company within the meaning of section 242 of the Revenue Acts of 1921, 1924, and 1926.  Benjamin H. Saunders, Esq., for the petitioner.  B. M. Coon, Esq., and C. R. Marshall, Esq., for the respondent.  SMITH *715  These four proceedings were by proper order consolidated for hearing and opinion.  The deficiencies asserted are as follows: Docket No. 24170:1920$12,270.4419218,216.06Docket No. 25494:19224,058.3719239,669.09Docket No. 36638:19242,616.8419253,978.18Docket No. 40455, 19265,957.10*716  Docket No. 24170 involves the calendar years 1920 and 1921, but the petitioner has abandoned its claim for the deduction from gross income of a net addition to reserve funds and certain other assignments of error for 1920 and has requested that it be taxed for that year as an ordinary corporation and not as an insurance company.  Its only contention with respect to 1920 is that the net income for that year determined by the respondent should be decreased by $25,013.08 representing the excess of the claims which accrued in that year over the amount allowed*2606  by the Commissioner as a deduction from gross income.  The respondent admits that upon the strict accrual basis the net income for 1920, as shown in the deficiency letter, should be decreased by $25,013.08.  The assignment of error which controls all other assignments for the years 1921 to 1926, both inclusive, is in substance that the Commissioner has refused to classify the petitioner for these years as a life insurance company under the provisions of sections 242, 244(a), and 245(a) of the Revenue Acts of 1921, 1924, and 1926.  An assignment of error based on a claim for special assessment for 1921 was abandoned.  Connected with the main issues are two subissues: (a) whether the Commissioner erred in refusing to allow as a deduction from gross income the net addition to a reserve maintained by the petitioner for claims upon policies, and (b) whether certain unpaid claims represent proper accruals.  FINDINGS OF FACT.  The petitioner was incorporated under the laws of West Virginia in 1917.  At that time it took over the business of a partnership composed of George I. Neal and J. W. Slack.  The partnership had been engaged in writing life, accident, and health insurance*2607  on employees of coal operations in West Virginia during the period 1915 to 1917 as agent for the Provident Accident Life Insurance Co. of Chattanooga, Tenn.  Premiums on these policies were collected through the pay rolls of the respective coal companies.  The Provident Co. issued these policies and claims arising thereon were paid or rejected from its offices in Chattanooga.  The partnership handled the applications for the Provident Co. and handled the insurance strictly as agent.  This manner of conducting the business was not satisfactory to the partnership and negotiations were entered into with other insurance companies for an arrangement permitting the partnership to act as agent of an insurance company, but with broader powers than most agents have.  As a result of these negotiations J. I. Neal, president of the petitioner corporation, agreed to purchase stock in the Inter-Ocean *717  Casualty Co., an Indiana corporation with its principal office in Cincinnati, Ohio, the latter company agreeing to give the petitioner a contract under which it might carry on its insurance business in the manner it desired.  On August 9, 1917, the petitioner entered into a contract with*2608  the Inter-Ocean Casualty Co., hereinafter referred to as the Company, and executed a bond to that company with penalty in the sum of $10,000 to indemnify it against liability for petitioner's undertakings under the contract.  After the contract had been entered into all the petitioner's business was transacted in the name of the Inter-Ocean Casualty Co. in the manner hereinafter described.  The contract provided in part as follows: THIS CONTRACT, in duplicate, entered into on this 9th day of August, 1917, between the INTER-OCEAN CASUALTY COMPANY, created and existing under the laws of the State of Indiana (hereinafter called the Company) and the WEST VIRGINIA AND KENTUCKY INSURANCE AGENCY, created and existing under the laws of the State of West Virginia (hereinafter called the Agency).  WITNESSETH THAT.  Appointment. (1) The Company hereby appoints the West Virginia and Kentucky Insurance Agency its agent at Huntington, West Virginia, subject to the provisions hereinafter contained, commencing the 1st day of September, 1917.  Duties. (2) It shall be the duties of the Agency to solicit contracts for business with individuals, or corporations, in cases where the collection*2609  of the premiums is to be made over the pay rolls of such individual or corporations to insure the employees at such operations; to appoint and supervise subagents for whose acts it shall be responsible; to furnish at its own cost policies, applications, reports, agents' licenses and all other supplies whatsoever, which may be necessary for the proper conduct of the business of the Agency, to pay all claims arising under the policies issued by the Agency and all costs and expenses in connection therewith; to collect all premiums as they may fall due on all policies issued in the Agency's territory; to make reports each month to the Company of the gross amount of premiums collected from each operation and a list of the claims paid by the Agency; to devote as much of its time to the services of the Company as may be necessary for the development of the business, and to represent no other insurance company doing an accident and health business unless expressed permission in writing is granted by the Company.  The Agency shall be permitted to issue the kind of policy which it deems best for the successful operation of the business.  The contract contemplated the carrying on of two kinds*2610  of business by the petitioner: (1) pay-roll insurance, and (2) cash or commercial insurance.  Under the subheading "Agency Expenses," the contract provides that the petitioner, hereinafter sometimes called the Agency shall pay "all expenses of the agency." There are a few minor exceptions of no importance to the issues in this proceeding.  But all taxes, municipal, county, state, and Federal were to be paid by the Company to an amount not exceeding 2 per centum of the gross premium *718  collections, and all taxes amounting to more than 2 per centum of the gross premium collections were to be paid by the agency so far as the excess was based upon the amount of the business of the agency.  The appointment of the petitioner under the said contract was as exclusive agent of the Company for the States of West Virginia, Virginia, and Kentucky "where premiums are collected from the pay roll, generally known as the pay-roll or franchise business." Under the title "Compensation," it was provided: * * * The Agency is to pay the Company for thus underwriting the business of the Agency six per centum of the gross amount of payrolls premiums collected by the Agency each year.  Such*2611  payments are to be made monthly.  The Company had the right to inspect the books of the petitioner at all times.  Under "Litigation," it was provided that the Agency should defend the Company and hold it harmless against all litigation arising out of any controversies between policyholders and the Agency or Company or between the Agency or Company and any employee.  The contract was for 10 years, subject to cancellation by the Company for cause and withdrawal by the Agency on 30 days written notice.  Paragraph (9) of the contract provided that: The Company hereby appoints the aforesaid Agency, subject to all of the rules, regulations, and instructions of the Company, to represent it in the above-named territory, in what is known as the commercial or cash business.  The Company shall furnish the Agency with the necessary supplies and equipment, except that the Agency is to provide at its own cost all sub-agents' or solicitors' licenses.  All applications for this kind of business secured by the Agency, or its agents or solicitors, or sub-agents, shall be forwarded to the Company, and if such applications are approved the policies are to be issued by the Company.  The Company*2612  shall not be required to pay any expense of any kind or character, other than furnishing the necessary supplies, except to pay the taxes on such business.  In consideration of such services so performed by the Agency, the full compensation of the Agency for all business procurable under this provision of the contract shall be the policy fee and a renewal commission of thirty per centum on the gross amount of premiums collected thereon each month.  The Agency may remit the full amount of the premiums so collected and the Company will immediately remit to the Agency the amount of commission due it as herein provided, or the Agency may retain the commission and remit the net amount due the Company each month.  The contract recognized the right of the Company to enter into contracts with other persons for soliciting cash or commercial business within the territory granted the Agency as to pay-roll or franchise business, but the petitioner would be entitled to receive on its business as great a compensation as any competitive agency of the Company.  The indemnity bond given by the petitioner to the Company provided that the petitioner should: *719  * * * Faithfully account for*2613  money due the said Inter-Ocean Casualty Company, its successors and assigns, and shall pay all claims arising under policies issued by said Agency in the name of said Company, as provided in Clause No. 8, of said contract * * *.  The petitioner carried on its insurance business under its contract with the Inter-Ocean Casualty Co. until termination thereof by mutual consent as of December 31, 1921.  At that time the petitioner disired some additional territory and the Inter-Ocean Casualty Co. wished to write what was known as cash or commercial business in the territory in which the petitioner operated.  The petitioner had never written this form of insurance and was not interested in doing so.  Its insurance had been confined to the so-called pay-roll business of coal operations and continued to be such during the tax years involved in this proceeding.  Another contract was entered into between the petitioner and the Inter-Ocean Casualty Co. on January 31, 1922, effective January 1, 1922, granting additional territory to the petitioner and eliminating the provision for cash and commercial business which the petitioner had been authorized to carry on under the first agreement.  This*2614  contract provided in part as follows: (2) It shall be the duties of the Agency to solicit and contract for franchises with individuals and corporations for the privilege of soliciting applications for insurance upon the employees of such individuals and corporations, and for the collection of premiums for the policies through the pay rolls where orders are taken for such premiums, to appoint and supervise sub-agents for whose acts the Agency shall be responsible; to furnish, at its own cost, policies, applications, reports, agents licenses and all other supplies whatsoever, which may be necessary for the proper conduct of the business of the Agency; to pay all claims arising under the policies issued by the Agency and all costs and expenses in connection therewith; to collect all premiums as they may fall due on all policies issued by the Agency; to devote as much time in the conduct of the business of the Company as may be necessary for the proper and reasonable development of the business, and to represent no other insurance company doing a health and accident business, unless written permission be granted by the Company.  The Agency shall be authorized to issue such forms of the*2615  policies as it may deem best for the successful operation of the business of the Agency, subject to the approval of the Company.  One of the purposes of this new contract was to eliminate the "cash or commercial business" from a scope of the Agency.  The contract also enlarged the appointment of the petitioner so as to add the States of Maryland, Pennsylvania, Illinois, Indiana, Tennessee, and Ohio.  It provided that: * * * The Agency shall be entitled to receive, after paying all claims and expenses whatsoever herein specified, all remaining premiums to an amount not exceeding 94 per centum of the gross premiums collected by it.  *720  In connection with the second contract a new bond was given with a penalty of $75,000; but the petitioner made no change in the manner or method of conducting its business.  The petitioner determined for itself the form of policy and the form of application, claim, etc., to be used.  It devised or prepared these policies and had them lithographed or printed at its own expense.  It employed its own agents to obtain applications for insurance.  These applications were forwarded to the petitioner's offices in Huntington, W. Va., where they*2616  were passed upon by officers and employees of the petitioner and the policies were issued from that office.  The insurance form used by the petitioner bore the lithographed graphed signatures of the president and secretary of the Inter-Ocean Casualty Co., together with the seal of that company.  They were countersigned by an employee of the petitioner.  When insurance was applied for the applicant signed a pay order authorizing his employer to deduct from his earnings an amount to cover the premium on the policy.  Such authorization read as follows: I hereby assign to the West Virginia & Kentucky Agency, Huntington, West Virginia, agent for the Inter-Ocean Casualty Co.  dollars out of my wages for the current month in payment of the policy fee and premium on insurance applied for today in the said company.  The employer deducted from the insured's wages such amount as was necessary to pay the monthly premium upon the policy taken out by the insured and the amount thus deducted was remitted directly to the office of the petitioner at Huntington, W. Va.  All premiums were collected in this manner.  The petitioner introduced in evidence five specimen policies, some or all of which*2617  were used by it in writing insurance during the taxable years 1921 to 1926, inclusive.  One policy known as the group disability policy provided in part as follows: WEST VA. AND KENTUCKY INSURANCE AGENCY Incorporated Huntington, W. Va. Representing INTER-OCEAN CASUALTY COMPANY Incorporated under laws of State of Indiana (hereinafter called The Company) Executive OfficesCINCINNATI, OHIO.  IN CONSIDERATION of the statements and agreements contained in Schedule endorsed hereon or attached hereto and made a part hereof and the further consideration of the payment of premium, as proportionately set forth in said Schedule.  *721  DOES HEREBY INSURE the Employees mentioned in said Schedule (such Employees hereinafter called the Employee), and AGREES TO PAY * * * (the company insured as trustee, etc.).  The policy provides for the payment of from $100 to $300 to an employee in case of certain injuries: If such injury to the Employee shall, within ninety days from the date of accident and exclusive of all other causes, result in any of the following specific losses, the Company will pay, in lieu of all other indemnity, the sum specified in this Part for such loss; *2618  Provided, however, that not more than one such indemnity shall be payable as a result of all injuries sustained by any one Employee in any one accident.  It further provides a funeral benefit in the words following: In the event of death of an Employee while this policy is in force, as the sole and direct result of illness or disease that is contracted and begins after thirty days from date of the Employee becoming insured hereunder (accidental death or suicide, sane or insane, is not covered), the Company shall pay the sum of $100 DOLLARS.  All of the policies were issued in the name of the petitioner as representing Inter-Ocean Casualty Co.  All except the group disability policy specifically state that the "Inter-Ocean Casualty Co. does hereby insure" the insured.  Every policy issued by the petitioner bore in heavy type the following: IMPORTANT NOTICE ALL CLAIMS AND OTHER CORRESPONDENCE UNDER THIS POLICY MUST BE SENT DIRECT TO THE WEST VIRGINIA & KENTUCKY INSURANCE AGENCY, HUNTINGTON, W. VA.When claims arose under these policies, claim forms supplied by the petitioner were filled out by the insured, the pay-roll clerk, or physician and mailed directly to the*2619  offices of the petitioner.  These claims were investigated when necessary, and paid or rejected by the petitioner at its offices in Huntington, without reference to the Inter-Ocean Casualty Co.  The check issued in settlement of any claim was issued in the name of the petitioner and provided: Endorsements on back hereof by Payee shall constitute a receipt in full settlement of all claims which Payee has or may have under Inter-Ocean Casualty Company Policy No.  by reason of sickness received or occurring on or about the day of 192 and Payee thereby releases and discharges the Drawee from all further liability for said disability.  Whenever suits were filed on policy claims the litigation was defended by the petitioner and all costs in connection therewith were paid by the petitioner.  In some cases suits were brought against the petitioner while in others they were brought against the Inter-Ocean Casualty Co.  In either event the petitioner defended and paid all costs and judgment, if any.  *722  The Inter-Ocean Casualty Co. had established its status as an insurance company with the Insurance Department of the State of West Virginia.  The petitioner was not recognized*2620  by the state authorities as an insurance company.  It had not been incorporated as such.  It had been incorporated under the general laws of the state and was authorized only as a soliciting agent.  It was authorized by the state authorities to solicit insurance for the Inter-Ocean Casualty Co. and had been designated by that company as its agent.  The petitioner did not make and was not required to make reports to the state insurance department.  Although the petitioner acted as the Inter-Ocean Casualty Co.'s agent in the writing of pay-roll business, the company exercised no supervision or control over the petitioner's business.  It had nothing to do with the preparation or issuance of policies, collection of premiums, payment of claims or the administration of its business.  It kept in its office no records of policies written by the petitioner.  It occasionally made audits of petitioner's books of account merely for the purpose of establishing that it was receiving its 6 per cent of the gross premiums actually collected.  A check for the amount due the principal was sent by the petitioner to it monthly.  The petitioner's books of account and its tax returns were made upon the*2621  accrual basis.  OPINION.  SMITH: Although in the petitions filed in these proceedings numerous errors are alleged on the part of the respondent in the determination of deficiencies, most of these were abandoned at the hearing or else no evidence was offered in support of them.  In its brief the petitioner states that one issue is raised by these proceedings, namely, whether the petitioner corporation is entitled to classification as a life insurance company, as defined by section 242 of the Revenue Acts of 1921, 1924, and 1926, for the calendar years 1921 to 1926, inclusive.  If this point be decided against the petitioner it presses its claim that, inasmuch as it kept its books of account and made its returns upon the accrual basis, it is entitled to have regarded as accruals of each calendar year the claims arising in that year which were paid in subsequent years.  It likewise admits that upon such basis there should be excluded from the deductions allowed by the Commissioner in the determination of deficiencies the amounts paid in each year in respect of claims arising from injuries or sickness properly belonging to a prior year.  As above indicated, the principal contention*2622  of the petitioner is that it is entitled to classification as a life insurance company for the years 1921 to 1926, inclusive, under section 242 of the Revenue Acts of 1921, 1924, and 1926.  This section provides: *723  That when used in this title the term "life insurance company" means an insurance company engaged in the business of issuing life insurance and annuity contracts (including contracts of combined life, health, and accident insurance), the reserve funds of which held for the fulfillment of such contracts comprise more than 50 per centum of its total reserve funds.  The genesis of this legislation is explained in part by the reports of the Ways and Means Committee and of the Finance Committee in offering the bill, which later became the Revenue Act of 1921, to the respective Houses of Congress.  The Finance Committee Report on page 20 states: Sections 242-246 provide a new plan for the taxation of life insurance companies, substantially similar to the plan embodied in the revenue act of 1918 as first adopted by the Senate.  The provisions of the present law applicable to life insurance companies are imperfect and productive of constant litigation.  The proposed*2623  plan would tax life insurance companies on the basis of their investment income from interest, dividends, and rents, with suitable deductions for expenses fairly chargeable against such investment income.  * * * See also , especially the dissenting opinion of Mr. Justice Brandeis.  Unquestionably the litigation that was referred to in the Finance Report is ; ; ; ; the last two of such cases being cited by Mr. Justice Brandeis in his dissenting opinion in It is apparent to us that Congress meant to classify as life insurance companies under section 242 those companies which are well recognized as life insurance companies in popular speech and by the laws of several States as distinguished from all other companies.  In *2624 , it was stated: Life insurance imports a mutual agreement, whereby the insurer, in consideration of the payment by the assured of a named sum annually or at certain times, stipulates to pay a larger sum at the death of the assured.  * * * Under the laws of practically all of the States, including those of West Virginia, life insurance companies are dealt with differently from all other companies.  Laws specifically provide the manner in which the reserve of a life insurance company shall be computed.  It is well recognized that this reserve must be built up over a period of years to meet the payment called for by the policy at the expected date of death of the insured.  The petitioner admits that it was not a life insurance company or even an insurance company within the contemplation of the statutes of the State of West Virginia.  *724  The policies issued by the petitioner as agent of the Inter-Ocean Casualty Co. were not ordinary life policies.  It is true that they generally provided that if death resulted within a period of 90 days from an accident, the company would pay a death benefit and*2625  where death was not the result of an accident the company would pay a small funeral benefit.  In , it is stated: * * * In an ordinary life policy the insurer contracts to pay a certain sum of money when satisfactory proof is made that the insured has died.  Death is the contingency which must happen that will create liability under the contract.  Liability attaches under such a policy when death occurs, and the policy is in good standing irrespective of the cause of the death, whether it be brought about by natural causes, by intention, or by accident; and, in the broad sense, any life insurance policy is accident insurance, if perchance the death is occasioned by reason of an accident.  On the other hand, the primary contingency insured against in an accident insurance policy is that no accident will befall the insured under the terms of the policy and in such time as the policy is kept alive.  To be sure, a policy of accident insurance is life insurance in the broad sense, in that the insurer contracts to pay a certain sum of money when satisfactory proof is made that the insured has died as a result*2626  of an accident.  See ; . In the instant proceedings it is admitted that the State of West Virginia did not recognize the petitioner as an insurance company, but it is nevertheless contended that the State, through its insurance department, did recognize it as carrying on an insurance business, and that the department had checked up the petitioner's books of account.  Elaborate argument is made to the effect that although the petitioner is incorporated and acts as agent of the Inter-Ocean Casualty Co. in West Virginia and other States, it is, nevertheless, an insurance company in fact; that its authorization as agent is so broad as to constitute it an independent company; that it has liabilities to its policyholders and maintains reserves to meet such liabilities; and that the total of these reserves is held for the fulfillment of its contracts.  We do not think that it is necessary to answer all of the petitioners' arguments with respect to its claims that it is an insurance company.  It is not recognized as such by the Insurance Department*2627  of the State of West Virginia.  It is recognized only as agent of the Inter-Ocean Casualty Co.  The policies which it issues are policies of that company.  The fact that under its agreement with the Inter-Ocean Casualty Co. it had very broad powers does not change the fact that it was, neverthelsss, an agent of that company.  The evidence does not show that the petitioner is required to maintain any reserve funds for the fulfillment of the contracts of its principal.  *725  The Inter-Ocean Casualty Co. is liable upon all of the policies and the State of West Virginia is satisfied to let it transact business in that State through the petitioner as its agent.  In , the court stated with respect to the proper construction of section 3 of the Act of June 27, 1902: * * * The statute does not invite speculation in a new nomenclature, or attempt to reach profounder conceptions than those familiar to the law.  When it speaks of interests absolutely vested in possession we presume that it uses familiar legal expressions in their familiar legal sense.  * * * Applying this principle to the interpretation of section*2628  242 of the Revenue Acts of 1921, 1924, and 1926, and to the evidence of record in this case, it is impossible to conceive how the petitioner has any valid claim to be classed as a life insurance company.  Reviewed by the Board.  Decision will be entered under Rule 50.LOVE LOVE, dissenting: I do not believe that the decision reached in this case is authorized by law.  For the purposes of this dissent I accept the findings of the evidentiary facts as stated in the prevailing opinion.  From those findings of fact the following conclusions of fact are inevitable, and as briefly as possible may be thus stated: 1.  Petitioner is, and was during the years in question, a duly organized and chartered corporation.  2.  It was chartered as an insurance agency and not as an insurance company, or a life insurance company.  3.  Under its contract with the Inter-Ocean Casualty Co. it had authority to bind the Inter-Ocean Casualty Co. to the terms and conditions set out in the insurance policies issued by it, and hence to that extent and not otherwise, it was the agent of that company.  4.  By bringing into the concept of the whole situation its contract with the Inter-Ocean*2629  Casualty Co., petitioner made itself liable and was primarily liable under those insurance contracts.  It was not an indemnitor, because it was primarily liable and was bound to pay in the first instance.  5.  It issued policies contracting to pay indemnity in the event of death, accident or sickness of the insured.  6.  It issued such policies on its own responsibility, after making its own investigation, passing on the risk for itself, determining for itself the character of policy to be issued without any supervision or control whatever by the Inter-Ocean Casualty Co.  7.  In the event a liability arose or was claimed by an insured, petitioner made its own investigation, determined the liability, vel*726 non, and adjusted and settled the claim without consulting the Inter-Ocean Casualty Co.; in the event a suit in court were instituted, regardless of who was made defendant in such suit, it responded to such suit, paid all costs and expenses thereof, and responded to the judgment of the court.  In other words, to use a homely expression, it was its own boss, and took orders from no one.  8.  It received and retained for its own use and benefit practically*2630  the whole of every payment of premium on the policies issued by it.  9.  It kept reserves in very substantial amounts to meet its liabilities under its insurance contracts, and not only 50 per cent, but the whole of that reserve, was decicated to that purpose.  The statute involved in the issue in this case is section 242 of the Revenue Acts of 1921, 1924, and 1926, which provides: That when used in this title the term "life insurance company" means an insurance company engaged in the business of issuing life insurance and annuity contracts (including contracts of combined life, health, and accident insurance), the reserve funds of which held for the fulfillment of such contracts comprise more than 50 per centum of its total reserve funds.  The statute has thus defined "life insurance company." The Board is called upon to decide whether or not the petitioner, in view of the facts disclosed by the record before us, has brought itself within the ambit of that definition.  It will be observed that in the statutory definition an insurance company is presupposed.  "Insurance company" is not defined; only "life insurance company" is defined.  It follows therefore that any insurance*2631  company, a corporation, joint stock company, or a partnership, that is "engaged in the business of issuing life insurance and annuity contracts (including contracts of combined life, health, and accident insurance), the reserve funds of which held for the fulfillment of such contracts comprise more than 50 per centum of its total reserve funds," is within the ambit of that definition.  Petitioner seems to have qualified in every particular specified in the definition as a "life insurance company," provided it has first qualified as an insurance company.As heretofore pointed out, the statute does not define "insurance company." The petitioner is a corporation, and being a corporation, and not chartered as an insurance company, the query arises, Is it, or can it be, an insurance company?  It certainly was in fact an insurer, and being a corporation engaged in issuing insurance policies, it must be in fact an insurance company.  It may be that it was guilty of ultra vires acts, yet, nevertheless, under the facts in this case, it was liable on those contracts, and was in fact an insurance company.  No one other than the sovereign that authorized *727  its existence and*2632  endowed it with all its rights and powers will be heard to complain of its ultra vires acts, if any.  It has been urged that it did not conform to the laws of West Virginia in the way of marking reports to the insurance department.  It may be that failure to do those things rendered it liable to the penalties prescribed (in the way of fines) but complaince with those regulations was not a prerequisite, a sine qui non to its existence as an insurance company.  Congress could have prescribed that no company other than a corporation chartered as an insurance corporation, or that no company other than a corporation chartered as a life insurance company could qualify under section 242 hereinbefore quoted, but Congress has not done, so, and seems deliberately to have refrained from doing so.  Petitioner being an insurance company in fact, and having met every requirement contained in said section 242 defining life insurance company, I am not willing to undertake to write into that statute an additional requirement which Congress seems deliberately to have omitted.  It is urged that Congress did not have in mind such an organization as we are here dealing with, and legislative*2633  history in invoked to show that no such organization was contemplated.  I see nothing in that legislative history that tends to exclude such an organization.  It may be true, and likely is true, that no Congressman, or for that matter any one else, other than those who conceived the idea and organized the petitioner corporation, ever had such an idea in mind, but that situation does not preclude petitioner from the benefits granted in sections 243 and 244, if in fact it can qualify under section 242.  It is true that petitioner did not write big policies, did not engage in big business.  It was designed to serve wage earners who were unable to pay large premiums and get large indemnity policies.  It sought and obtained business so very modest in amount that one feels safe in saying that standard life insurance companies would have spurned such business as not worth while.  Yet petitioner served a clientele that sadly needed such protection, and, while not claiming any altruistic motives, it did perform a welfare mission that should not be tabooed.  One who thinks out this problem finds himself asking the question, If the attention of Congress had been called to such an organization, *2634  would Congress have deliberately barred such an organization from the benefits granted to the big life insurance corporations?  I do not believe it would have done so.  SEAWELL agrees with this dissent.