AN ACT relating to the transaction of the business of life insurance in the State of Illinois, and regulating the conditions and provisions of policies of life insurance companies, organized under the laws of this State, or doing business herein.

SECTION I. Be it enacted by the People of the State of Illinois, represented in the General Assembly: That from and after January 1, 1908, no policy of life insurance shall be issued or delivered in this State or be issued by a life insurance company organized under the laws of this State, unless the same shall provide for the following:

(1) That all premiums after the first shall be payable in advance either at the home office of the company or to an agent of the company, upon delivery of a receipt signed by one or more of the officers who shall be designated in the policy.

(2) For a grace of one month for the payment of every premium after the first year which may be subject to an interest charge, during which month the insurance shall continue in force: Provided, that if the insured shall die within the month of grace the unpaid premium for the current policy year may be deducted in any settlement under the policy. (3) That the policy, together with the application therefor, a copy of which application shall be endorsed upon or attached to the policy and made a part thereof, shall constitute the entire contract between the parties and shall be incontestable after two years from its date, except for non-payment of premiums and except for violations of the conditions of the policy relating to the naval or military service in time of war: Provided, that the application therefor need not be attached to any policy containing a clause making the policy incontestable from date of is e.

(4) That if the age of the insured has been misstated the amount payable under the policy shall be such as the premium would have purchased at the correct age, or the premium may be adjusted and credit given to the insured or to the company, according to the company's published rate at date of issue.

(5a) That the policy shall participate in the surplus of the company, and any policy containing provisions for participation at the end of the first policy year, and annually thereafter, may also provide that each dividend shall be paid subject to the payment of the premium for the next ensuing year; and the insured under any annual dividend policy shall have the right each year to have the dividend arising from such participation paid in cash, and if the policy shall provide other dividend options, it shall further provide that if the insured shall not elect any such other options, the dividend shall be paid in cash. Such participation may, however, begin not later than the end of the 20th policy year. (5-b) If any company shall issue any policies under the terms of which the payment of dividends is deferred later than the third policy year, such company shall furnish the Insurance Superintendent each year a statement showing the number and amount of all policies with deferred dividends in force at the beginning of the year for which the statement is made; of all such policies issued and revived or terminated during the said year with the mode of termination; and the number and amount of all such policies in force at the end of said year. Also a statement showing any and all amounts provisionally set apart, ascertained or calculated or held awaiting apportionment upon such policies at the beginning of said year, the additions made to the said fund during the year with the source from which such additions arose, the deductions made from the said funds during the year, with the reasons therefor and the amount of said fund at the end of the year; which shall be carried as a distinct and separate liability to such class of policies on and for which the sum was accumulated. Upon written request of the insured under any deferred dividend policy, after said policy shall have been in force more than three years, the company shall furnish said policy holder with a statement of the amount of surplus provisionally ascertained or set aside on such policy and held awaiting apportionment at the expiration of the deferred dividend period.

(5-c) The provisions of this section shall not apply to any form of paid up insurance or temporary insurance or pure endowment insurance, issued or granted in exchange for lapsed or surrendered policies, or to non-participating policies.

(6) That after three full years' premiums have been paid, the company, at any time, while the policy is in force, will loan, on the execution of a proper note or loan agreement by the insured, and on proper assignment and delivery of the policy and on the sole security thereof, at a specified rate of interest, a sum equal to, or at the option of the insured less than, the reserve at the end of the current policy year on the policy and on the dividend additions thereto, if any, (the policy to specify the mortality table and the rate of interest adopted for computing such reserve) less a specified percentage (not more than two and one-half) of the amount insured by the policy and of the dividend addi

tions thereto, if any, and that the company will deduct from such loan value any existing indebtedness on or secured by the policy and any unpaid balance of the premium for the current policy year, and may collect interest in advance on the loan to the end of the current policy year: Provided, that such loan may be deferred for not exceeding six months after the application therefor is made. No condition other than as herein provided shall be exacted as a prerequisite to any such loan. This provision shall not be required in term insurance, nor shall it apply to temporary insurance or pure endowment insurance, issued or granted in exchange for lapsed or surrendered policies.

(7) That in the event of default in premium payments, after premiums shall have been paid for three years, the insured shall be entitled to a stipulated form of insurance, the net value of which shall be at least equal to the reserve at the date of default on the policy and on dividend additions thereto, if any, (the policy to specify the mortality table and rate of interest adopted for computing such reserve) less, a specified percentage (not more than two and a half) of the amount insured by the policy and of existing dividend additions thereto, if any, and less any existing indebtedness to the company on or secured by the policy: Provided, that the policy may be surrendered to the company at its home office within one month of date of default for a specified cash value at least equal to the sum which would otherwise be available for the purchase of insurance as aforesaid: And, provided, further, that the company may defer payment for not more than six months after the application therefor is made. This provision shall not be required in term insurance of twenty years or less.

(8) A table showing in figures the loan values, and the options available under the policies each year upon default in premium payments, during at least the first twenty years of the policy, beginning with the year in which such values and options become available. The specified percentage referred to in (6) and (7) need not be stated for the policy years included in the said table.

(9) That if in event of default in premium payments, the value of the policy shall be applied to the purchase of other insurance, and if such insurance shall be in force and the original policy shall not have. been surrendered to the company and canceled, the policy may be reinstated within three years from such default, upon evidence of insurability satisfactory to the company and payment of arrears of premiums with interest.

(10) That when a policy shall become a claim by the death of the insured, settlement shall be made upon receipt of proof of death and of the interest of the claimant and not later than two months after the receipt of such proof.

(II) A table showing the amount of installments in which the policy may provide its proceeds may be payable.

(12) Title on the face and on the back of the policy, correctly describing the same.

§ 2. No policy of life insurance shall be issued or delivered in this State or be issued by a life insurance company organized under the laws of this State, if it contain any of the following provisions:

1. A provision limiting the time within which any action at law or in equity may be commenced to less than three years after the cause of action shall accrue.

2. A provision by which the policy shall purport to be issued or to take effect more than six months before the original application for the insurance was made.

3. A provision, that in event of the maturity of any policy after the expiration of the contestable period thereof, for any mode of settlement at maturity of less value according to the company's published rates therefor then in use than the amount insured on the face of the policy, plus dividend additions, if any, less any indebtedness to the company on or secured by the policy and less any premium that may, by the terms of the policy, be deducted.

4. A provision for forfeiture of the policy for failure to repay any loan on the policy, or to pay interest on such loan while the total indebtedness on the policy is less than the loan value thereof.

§ 3. In ascertaining the indebtedness due upon policy loans the interest, if not paid when due, shall be added to the principal of such loans, and shall bear interest at the rate specified in the note or loan agreement.

§ 4. No policy of life insurance shall be issued or delivered in this State or be issued by a life insurance company organized under the laws of this State until the form of the same has been filed with the Insurance Superintendent; and after the Insurance Superintendent shall have notified any company of his disapproval of any form, it shall be unlawful for such company to issue any policy in the form so disapproved. The Insurance Superintendent's action shall be subject to review by any court of competent jurisdiction.

§ 5. The policies of a life insurance company, not organized under the laws of this State, may contain any provision which the law of the state, territory, district or country under which the company is organized prescribes shall be in such policies when issued in this State, and the policies of a life insurance company organized under the laws of this State may, when issued or delivered in any other state, territory, district or country, contain any provisions required by the laws of the state, territory, district or country in which the same are issued, anything in this Act to the contrary notwithstanding.

§ 6. This Act shall not apply to annuities, industrial policies or to corporations or associations operating on the assessment or fraternal plan.

§ 7. All Acts and parts of Acts inconsistent with the provisions herewith are hereby repealed.

APPROVED May 20, 1907.

LIFE INSURANCE-SALARIES OF OFFICERS AND AGENTS.

§ 1. Limitation of salaries-agreements

§ 2.

Repeal.

regulated-pension prohibited.

AN ACT relating to the salaries of officers and agents of life insurance companies.

SECTION I. Be it enacted by the People of the State of Illinois, represented in the General Assembly: That no domestic life insurance company shall pay any salary, compensation or emolument to any officer, trustee, or director thereof, nor any salary, compensation or emolument amounting in any year to more than five thousand dollars to any person, firm or corporation unless such payment be first authorized by a vote of the board of directors of such life insurance company; which vote shall be by roll call at a regular meeting of said board and which vote shall be duly recorded in the records of said company. No such life insurance company shall make any agreement with any of its officers, trustees or salaried employés, whereby it agrees that for any services rendered or to be rendered he shall receive any salary, compensation or emolument that will extend beyond a period of three years from the date of such agreement; and no officer, director or trustees, who is paid a salary for his services of more than one hundred dollars per month, shall receive any other compensation or emolument.

Provided, that the limitation as to time contained herein shall not be construed as preventing a life insurance company from entering into contracts with its agents, for the payment of renewal commissions. No such company shall grant any pension to any officer, director or trustee thereof or to any member of his family after his death.

§ 2. All Acts and parts of Acts inconsistent herewith are hereby repealed.

AN ACT to amend section 10 of an Act entitled, "An Act to organize and regulate the business of life insurance," approved March 26, 1869, in force July 1, 1869.

SECTION I. Be it enacted by the People of the State of Illinois, represented in the General Assembly: That section 10 of an Act entitled, "An Act to organize and regulate the business of life insurance," (approved March 26, 1869, in force July 1, 1869,) be and the same is hereby amended to read as follows:

§ 10. When the actual funds of any life insurance company doing business in this State are not of a net value equal to the net value of its