Court Opinion

ID: 8037571
Source: CourtListenerOpinion
Date Created: 2022-09-09 03:22:43.319466+00
Date Added: 2024-06-11T16:37:11.765021
License: Public Domain

Johnsen, J.,
concurring separately.
To me, the controlling question in this case is one of public policy. Shall an insurance company be permitted to collect premiums on a life insurance obligation, create cash values out of the money collected, and then confiscate or forfeit such rights on a premium default? I think not. The law abhors forfeitures generally, and in the case of insurance contracts they are quite intolerable.
The fact that the contract in this case was labeled a “thrift certificate” and combined a savings and insurance feature should not enable the company to dodge the statutes regulating the conduct of life insurance business or escape the rules of construction applicable to such contracts. Whether the company subsequently chose to make separate allocations on its records for thrift benefits and insurance costs is of no importance here. No such apportionment was made in the contract itself. The certificate-holder had no insurance protection except upon payment of the premium as an entirety. Since the insurance obligation rested upon the consideration of payment of the whole premium, it remained an insurance premium throughout. Any cash or surrender values created out of it were cash or surrender values derived from insurance premiums and could not be confiscated or forfeited by any contractual provision in conflict with the insurance statutes or rules of law applicable to insurance contracts. Not being forfeitable, such values were available for the purchase of extended insurance, with the accompanying right to reinstatement of the contract recognized by the statute.
The contention is made — and is accepted in the dissenting opinion herein — that no reserve was set up in connection with the insurance feature of the contract and that there was nothing therefore that could be used for the purchase of extended insurance. As to the allocations made by the company on its records, I find no evidence in the record. It is quite inconceivable to me, however, that a company would assume a ten-year insurance risk without creating a reserve against the hazard. The point, however, is quite immaterial *758here, because, as I have already stated, the question is not what the company did on its records, but what it did in its contract. The contract sets up specific cash or surrender •values out of premiums collected. These values were rights which could not be forfeited by any attempted apportionment or private bookkeeping on the part of the company.
I have previously expressed my views more fully in the •dissenting opinion in State v. Cosmopolitan Old Line Life Ins. Co., 136 Neb. 833, 839, 287 N. W. 654, 657, and I shall not repeat them here. The general public policy involved is to me more vital than the number of certificate-holders who may be affected by the present litigation.