Policy. The Group Policy. An analysis of the policy con- tract. Early forms of the policy. The judicial interpretation of the contract. The effect of competition and legislation on the liberalization of the contract. Difference in state laws. The payment of the premium. Title to the policy. Assignment. Insurable Interest and Beneficiary Right distinguished. The Disability Clause. Loans on Policies, their extent and evil. Difference in judicial interpretation and insurance theory as to the nature of the contract. The forfeiture clause. Cash Surrender Value Clause, its devel- opment and significance. Incontestability Clause. Annuities, their early character, and later development. The Calculation PAGE The Premium defined. Kinds of Premiums. The Level and Natural Premium distinguished. The Net Premium. Cal- THE RESERVE AND VALUATION OF POLICIES The origin of the Reserve. The Reserve as a mortality fund, and as a reinsurance fund. Methods of increasing the CHAPTER IX THE SURPLUS AND DIVIDENDS Surplus defined. Its origin. Its relation to participating PAGE 245 CHAPTER X INVESTMENTS AND INTEREST The importance of investments. Principles determining 276 CHAPTER XI INSURANCE FOR WAGE-EARNERS ance. Kinds of insurance for wage-earners. Industrial Insur- 294 risk and contributory negligence doctrines. The failure in practice of the old theory of liability in securing compensa- tion to the workman. The development of compensation insurance. Its theory and application by different states. Pensions, public and private. The theory of pensions to THE RELATION OF THE STATE TO INSURANCE Character of the insurance contract as a cause of state regulation. Common fallacies as to insurance. Is insurance a public or private business? The decisions of the Supreme Court as to its public character. Is insurance a monopolistic business? Effect of rate wars in fire insurance. Attempts to bring insurance under the regulation of the Federal Gov- ernment. Early methods of regulating life insurance. Pres- ent methods of regulation. How a life insurance company is organized. The examination of life insurance companies. The liquidation of life insurance companies by the state. Taxation of life insurance companies. The regulation of fire insurance companies centers about the rate question. Fire insurance as affected by anti-trust legislation. What authority PRINCIPLES OF INSURANCE CHAPTER I LIFE INSURANCE AND ITS HISTORICAL DEVELOPMENT Insurance Defined.-Insurance is an agreement among individuals of a group or between these individuals and another group called an insurance company under the terms of which each contributes to a fund out of which contingent losses in part or in whole are paid to those suffering the loss. Under normal conditions the payments to the insured individuals or their beneficiaries are paid from the individual contributions and their accumulations. In some cases, however, such as extraordinarily large losses by a fire insurance company, the stockholders of the company may be compelled to pay the losses in part or in whole. But this is unusual and when it does occur, the stockholders expect past and future contributions from the insured to compensate them for these unusual payments. Character of Insurance. Insurance is therefore in all its forms a method of coöperation among members of a group subjected to a risk whose frequency can be calculated with a large degree of certainty. The group as such assumes and distributes the risk, thereby reduc |