he must revoke its certificate of authority to do business, and cause the notification thereof to be published in some paper of general circulation in the state for four weeks. Section 7 makes it the duty of the commissioner to investigate all complaints of violation of the law. Section 8 forbids any person to act as agent for a company after its certificate of authority has been revoked, under a penalty of not less than $50, nor more than $100, in default of the payment of which he shall be imprisoned in the county jail not exceeding ninety days.

KANSAS (Adopted in 1889):

SECTION 1. That all arrangements, contracts, agreements, trusts, or combinations, between persons or corporations, made with a view, or which tend to prevent full and free competition in the importation, transportation, or sale of articles imported into this state, or in the product, manufacture, or sale of articles of domestic growth or product, or domestic raw material, or for the loan or use of money, or to fix attorneys' or doctors' fees, and all arrangements, contracts, agreements, trusts, or combinations, between persons or corporations, designed or which tend to advance, reduce, or control the price or the cost to the producer, or to the consumer, of any such products or articles, or to control the cost or rate of insurance, or which tend to advance or control the rate of interest for the loan or use of money to the borrower, or any other services, are hereby declared to be again public policy, unlawful, and void.

The remaining sections prescribe the penalty for violation of the law, and the legal proceedings in connection therewith. Any person entering into the trust or combination forbidden shall be guilty of a misdemeanor, and upon conviction shall be subject to a fine of not less than $100 nor more than $1,000, and to imprisonment not less than thirty days nor more than six months, either or both, in the discretion of the court. The punishment of public officers failing to prosecute violators of the law is provided for.

NEBRASKA (Adopted in 1889):

SECTION 2. Pooling between persons, partnerships, companies, associations, or corporations, engaged in the same or like business for any purpose whatever, and the formation of combinations or common understanding between two or more persons, companies, partnerships, associations, or corporations, in the nature of what are commonly called trusts for any purposes whatever or the continuance of the same after the taking effect of this act, are hereby prohibited and declared to be unlawful, and each day of the continuance of any such pool or trusts shall constitute a separate offense.

A violation of the law is declared to be a misdemeanor, and a person or company convicted under it shall be fined not exceeding $1,000, or imprisoned in the county jail not exceeding six months, or both, in the discretion of the court.

GEORGIA (Approved October 21, 1891):

SECTION 1. From and after the passage of this act it shall be unlawful for any insurance company or companies authorized to do business in this state, or the agent or agents thereof, to make, maintain, or enter into any contract, agreement, pool, or other arrangement, with any other insurance company or companies licensed to do business in this state, or the agent or agents thereof, for the purpose thereof, or that may have the tendency or effect of preventing or lessening competition in the business of insurance transacted in this state, and when it shall be made to appear to the commissioner of insurance that any company or companies, agent or agents, have entered into any such contract, agreement, pool, or other arrangement, thereupon said commissioner shall revoke the license issued to such company or companies, and the same shall not be re-issued until the president or chief officer of such company or companies shall file an affidavit with said commissioner, stating that all such contracts, agreements, pools, or other arrangements have been annulled and made void; provided, that nothing in this act shall be so construed as to prevent any insurance company legally authorized to transact business in this state, from separately surveying, inspecting, or examining the premises to be insured, by and with the consent of the owner, for the purpose of bringing about improvements in fire protection so as to lessen the cost of insurance by reducing rates.

SEC. 2. Any citizen of this state whose rates of insurance have been increased, or who has been refused insurance at reasonable rates, shall have the right to file a written complaint under oath, to the best of his knowledge and belief, with the insurance commissioner, charging any company or companies authorized to do business in this state, with a violation of the preceding section of this act, and that thereupon it shall be the duty of said insurance commissioner to issue a citation addressed to the company or companies against whom said complaint is made, requiring it or them to be and appear before said insurance commissioner at a specified time and place to be fixed by said insurance commissioner, not less than twenty nor more than forty days from the date of the filing of such complaint, and show cause why its or their license or licenses should not be revoked as provided by the first section hereof. And it is further provided that said citation shall be served not less than ten days from the date of filing said complaint by the sheriffs or constables of said state in the same manner as provided by law for the service of process upon insurance companies.

SEC. 3. For the purposes of the provisions of this act, the insurance commissioner shall have power to administer oaths, issue subpoenas for witnesses, hear testimony, issue commissions for taking testimony by interrogatories, and the party or parties complaining, and the company or companies defending, shall have the right to serve notice for the production of books and papers; all to be done under the same rules as now provided by law for civil actions in the supreme courts. The county in which the insurance commissioner shall fix the hearing shall be as to this act, the loci forum of said hearing or trial. The costs and fees for the sheriff or constable, witnesses, and the commissioner's taking interrogatories shall be the same as now provided by law for similar service in the superior courts of this state, the same to be taxed against, and paid by the party or parties cast in said suit, and against whom said insurance commissioner shall find; for which costs said insurance commissioner is hereby authorized to issue execution- the same to be levied and collected as executions from the courts of this state.

MAINE (Adopted in 1893). Additional to Chapter 49 of the Revised Statutes.

Should any insurance company, not organized under the laws of Maine, but doing an insurance business within this state, or its representatives residing out of the state, make an application to remove any suit or action to which it is a party, heretofore or hereafter commenced in any court of this state, to the United States district or circuit court, or shall enter into any compact or combination with other insurance companies or agents for the purpose of governing or of controlling the rates charged for fire insurance on any property within this state, the insurance commissioner shall forthwith revoke the license or authority of said company to transact business, and no renewal of said license or authority shall be granted for the period of three years from the date of uch revocation.

8

Anti-Rebate Laws. Bills prohibiting the giving of rebate of premium to the insured by life insurance companies or their agents appeared in the legislatures of Indiana, Minnesota, Missouri, Nebraska, New Jersey, and Kentucky in 1893. The bill in the latter state only was successful.

In the 1893 session of the Ohio legislature, the anti-rebate law was modified in several particulars; the word willfully" in the second section, which reads "every corporation which willfully violates any of the provisions of this law, etc.," was stricken out, and the third and fourth sections prescribing penalties for the violation of the law were changed. The law as amended is printed under the caption of Ohio on a following page.

In the state legislatures of 1894, the bill was introduced in one only (to May 1), that of New Jersey, where it was defeated for the fourth time, having met that fate in the three preceding legislative sessions.

For action of life insurance companies and associations in 1893 in reference to rebates, see "Northwestern Mutual Life Insurance Company," "National Association of Life Underwriters," Baltimore Life Underwriters' Association." See also for letters and address on

the subject, "McCall, John A."; for a proposed remedy for the rebate malady, "Holden, Charles W."; for the dismissal of agents guilty of rebating, "Equitable Life Assurance Society" and "New York Life Insurance Company"; for legal aspects of the subject, "Legal Decisions Affecting the Law," at the conclusion of this article.

HISTORY OF ANTI-REBATE LEGISLATION.

The first anti-rebate law applying specifically to the business of life insurance, was enacted by Massachusetts in 1887. The previous year, it is true, Louisiana passed a law prohibiting the allowance of rebates in insurance, but no class of insurance was named in the act, it was supposed to refer to fire insurance, and it was not until later that an opinion was given by the attorney-general of the state that its provisions were applicable to the practice of life insurance.

The Massachusetts law has served as a model for the anti-rebate laws of most of the states enacting them, in some cases being copied almost literally, and in others being followed closely in substance. The following is a synopsis of anti-rebate legislation from its beginning in 1886.

LOUISIANA. The Louisiana law is Act 86 of the Acts of 1886, and is as follows:

SECTION 1. It shall not be lawful for any insurance company, conducting or doing business in this state, whether same be domiciled in this state, or doing business through an agent, to allow any rebate on any policy effected in their respective companies, but it shall be their duty to make their net premiums, and such net premium shall appear in the body, and be embraced in said policy, and no rebate nor allowance shall be made either by endorsement on said policy or otherwise; nor shall it be lawful to give any rebate on open policies effected in any insurance company doing business in this state, either in money, or in insurance scrip, or otherwise.

SEC. 2. Any insurance company violating the provisions of this act, they shall forfeit their charter, and not be allowed to do or carry on any business in this state, either by them or their agents, and shall be liable to any person or persons who shall suffer thereby, to refund double the amount of such rebate, and all damages, such as attorney's fees, or otherwise caused thereby, in case of suit.

MASSACHUSETTS. The Massachusetts law is Section 68 of the codified insurance laws of 1887, and is as follows:

SECTION 68, of "An Act to amend and codify the statutes relating to insurance." No life insurance company doing business in Massachusetts shall make or permit any distinction or discrimination in favor of individuals, between insurants of the same class and equal expectation of life, in the amount of payment of premiums or rates charged for policies of life or endowment insurance or in the dividends or other benefits payable thereon, or in any other of the terms and conditions of the contracts it makes; nor shall any such company or any agent thereof make any contract of insurance or agreement as to such contract other than as plainly expressed in the policy issued thereon; nor shall any such company or agent pay or allow or offer to pay or allow as inducement to insurance any rebate or premium payable on the policy or any special favor or advantage in the dividends or other benefits to accrue thereon, or any valuable consideration or inducement whatever, not specified in the policy contract of insurance. VERMONT. Vermont passed the law in 1888, affixing as a penalty for its violation a fine of not more than $500.

OHIO. The Ohio law follows that of Massachusetts with the following additional sections [as amended in 1893]:

SECTION 2. Every corporation or officer or agent thereof who shall violate any of the provisions of this act, shall be fined in any sum not exceeding $500, to be recovered by action in the name of the state, and on collection paid into the county treasury for the benefit of the common school fund.

SEC. 3. Every officer or agent of any such corporation who shall violate any of the provisions of this act, shall be deemed guilty of a misdemeanor, and, upon conviction

thereof, shall be fined in any sum not exceeding one hundred dollars, or imprisoned in the jail of the county not exceeding thirty days, or both, at the discretion of the court, and shall pay the costs of prosecution.

SEC. 4. It shall be the duty of the superintendent of insurance, upon being satisfied that any such corporation, or any agent thereof, has violated any of the provisions of this act, to revoke the license of the company, or agent, so offending, and no license shall be granted to such company, or agent, for one year after such revocation.

COLORADO. The Colorado law also is the same as the Massachusetts law, with an additional section as follows:

The penalty for violating this section shall be a fine of $250; and the superintendent of insurance shall revoke the certificate of authority of any agent convicted of a violation of this act, and shall not grant the agent so convicted a license as agent for the term of three years thereafter.

MICHIGAN. lowing addition:

Michigan copies the Massachusetts law, with the fol

Any company which shall violate any of the provisions of this section shall forfeit to the state the sum of $500 for each violation, to be recovered by the attorney-general by appropriate action in the court of competent jurisdiction, and any judgment therefor may be collected in the same manner as is herein provided for collecting judgments rendered in favor of policy-holders, and any officer or agent who shall violate any of the provisions of this section shall be deemed guilty of a misdemeanor, and upon conviction thereof shall be punished by imprisonment in the county jail, not exceeding one year, or by a fine of not less than $50 and not exceeding $500, or by both such fine and imprisonment in the discretion of the court.

CONNECTICUT. The Connecticut law varies somewhat in phraseology from that of Massachusetts, so it is printed here in full, being Chapter CXXXIV, Session Laws of 1889:

SECTION 1. No life insurance company doing business in the state of Connecticut shall make or permit any distinction or discrimination in favor of individuals between insurants of the same class and expectation of life in the amount of payment of premiums or rates charged for policies of life or endowment insurance, or in the dividends or other benefits payable thereon, or in any other of the terms and conditions of the contracts it makes; nor shall any such company or any agent, sub-agent, broker, or any other person, make any contract of insurance or agreement as to such contract, other than as plainly expressed in the policy issued thereon; nor shall any such company or agent, sub-agent, broker, or any other person, pay or allow, or offer to pay or allow, as inducement to insurance, any rebate of premium payable on the policy, or any special favor or advantage in the dividends or other benefits to accrue thereon, or any valuable consideration or inducement whatever not specified in the policy contract of insurance.

SEC. 2. No person shall act in the solicitation or procurement of applications for, or policies of, insurance for any company or corporation, referred to in this act, without first procuring a certificate of authority as agent from the insurance commissioner. Said certificate of authority must be renewed on April 1 of each year.

SEC. 3. Any person or corporation violating any provision of this act shall be fined not less than $100 nor more than $500, and it is hereby made the duty of the insurance commissioner, on the conviction of any person acting as such agent, sub-agent, or broker, to revoke the certificate of authority issued to him at once, and no such certificate shall be thereafter issued to said convicted person by said commissioner for the term of three years from the date of such conviction.

PENNSYLVANIA. The Pennsylvania law is the same as the Massachusetts law, and makes the penalty for violation $500 on each and every violation when the amount of the insurance is $25,000 and under, and for every additional $25,000 or under, an additional penalty of $500.

NEW YORK. The New York legislature passed an anti-rebate law in 1889. [See Cyclopedia for 1890.]

The insurance code passed by the New York legislature of 1892 reenacted the law in the following words:

SECTION 89. No life insurance corporation doing business in this state shall make any discrimination in favor of individuals of the same class or of the same expectation of life either in the amount of premium charged or in any return of premium, dividends, or other advantages. No agent of any such corporation shall make any contract for insurance, or agreement as to such contract other than that which is plainly expressed in the policy issued.

No such corporation or agent thereof shall pay or allow, or offer to pay or allow, as an inducement to any person to insure, any rebate of premium, or any special favor or advantage whatever, in the dividends to accrue thereon, or any inducements whatever not specified in the policy.

If it shall appear to the satisfaction of the superintendent of insurance, after a hearing by him upon due notice, that any corporation is issuing policies or making contracts that are directly or indirectly in violation of this section, he shall, upon the written approval of the attorney-general, require such corporation and its officers and agents to refrain, within twenty days, from making any such policy or contract. No such corporation shall make any agreement with any of its officers, trustees, or salaried employes, whereby it agrees that for any services rendered or to be rendered thereafter by such officials, trustee, or employe, he shall receive any salary, compensation, or emolument that will extend beyond a period of twelve months from the date of such agreement or contract.

If any such corporation, or officer or agent thereof, shall fail to comply with the provisions of this section, the superintendent shall, within twenty days after such failure, publish a notice of the fact in the state paper once a week for four weeks, and institute such proceedings in law as may be necessary to restrain such violation of this section.

MARYLAND. The Maryland law (chapter 254 of the laws of 1890)

reads:

No life insurance company incorporated under the laws of any other state or country and doing business in the state of Maryland, shall make or permit any distinction or discrimination in favor of individuals of the same class and equal expectation of life, in the amount or payment of premiums or rates charged for policies of life or endowment insurance, or in the dividends or other benefits payable thereon, or in any other of the contracts of insurance it makes, nor shall any such company or agent thereof make any contract of insurance or agreement as to such contract, other than as plainly expressed in the policy issued thereon, nor shall any such company or agent pay or allow, as inducement to any person to insure, any rebate of premium payable on the policy, or any special favor or advantage whatever, in the dividends or other benefits to accrue thereon, or any valuable consideration or inducement whatever, not specified in the policy contract of insurance.

It shall not be lawful for any company organized under the laws of any other state or country, or its representative, to procure for any person seeking life insurance a state license for the purpose of allowing to such person a rebate.

Any life insurance company, its agent or agents, violating sections one hundred and nineteen A and one hundred and nineteen B of this act, shall be guilty of a misdemeanor, and upon conviction thereof, the offender or offenders shall be sentenced to pay a fine of five hundred dollars on each and every violation, when the amount of insurance is twenty-five thousand dollars or less; and for every additional twenty-five thousand dollars of insurance or less, there shall be an additional penalty of five hundred dollars; and said offender or offenders shall be prohibited from doing insurance business in the state of Maryland until said fine is paid.

An amendment was added in 1892, providing that an informer of the violation of the law shall receive one-half of the penalty inflicted on the offender. [See Legal Decisions Affecting the Law, further on.] IOWA. The following is the full text of the Iowa law, which was passed in 1890:

SECTION 1. No life insurance company doing business in Iowa shall make or permit any distinction or discrimination in favor of individuals between insurants of the same class and equal expectation of life, in the amount or payment of premiums or rates charged for policies of life or endowment insurance, or in the dividends or other benefits payable thereon, or in any other of the terms or conditions of the contract it makes; nor shall any such company or agent thereon make any contract of insurance or agreement regarding such contract other than as plainly expressed in the policy, nor pay, or allow, or offer, as an inducement to insurance, any rebate of premium of special advantage in the dividends or other benefits to accrue thereon, or any valuable consid