Mut. Benefit Life Ins. Co. v. Comm'r of Ins.

• Decision Date: 28 May 1930
• Citation: 271 Mass. 365,171 N.E. 656
• Parties: MUTUAL BENEFIT LIFE INS. CO. v. COMMISSIONER OF INSURANCE.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

271 Mass. 365

171 N.E. 656

MUTUAL BENEFIT LIFE INS. CO.

v.COMMISSIONER OF INSURANCE.

Supreme Judicial Court of Massachusetts, Suffolk.

May 28, 1930.

Petition by the Mutual Benefit Life Insurance Company to review the action of the Commissioner of Insurance in refusing to approve the form of a policy insuring against disability, which petitioner intended to use as supplementary to other policies of life and endowment insurance issued by it.

Respondent's order affirmed.

F. H. Nash and R. Wait, both of Boston, for petitioner.

Joseph E. Warner, Atty. Gen., and Roger Clapp, Asst. Atty. Gen., for respondent.

PIERCE, J.

This case was reserved upon the pleadings by a single justice of this court for the determination of the full court. It is a petition under G. L. c. 175, § 24, as amended by St. 1929, c. 235, praying that this court review the action of the respondent in refusing to approve the form of a policy insuring against disability, which the ‘petitioner intends to use * * * as supplementary to other policies of life and endowment insurance issued by it.’

The petitioner is a foreign corporation organized under a law of the state of New Jersey, approved January 31, 1845 (P. L. N. J. 1845, p. 25), and a ‘supplement to the act’ approved January 27, 1848 (P. L. N. J. 1848, p. 4) by the Governor. Section 3 of the act of 1845 reads: And be it enacted, That ‘it shall and may be lawful for the said corporation to insure their respective lives, and to make all and every insurance appertaining to, or connected with life risks, of whatever kind or nature, as well of the sound in health, as the infirm or invalid.’ G. L. c. 175, § 152, as amended by St. 1925, c. 267, § 13, reads: ‘No foreign company shall transact in this commonwealth any kind of business not specified in its charter and in its license.’

It is stated in the petition: ‘Your petition intends to use said form in the issuance of policies to be issued as supplementary to other policies of life and endowment insurance issued by it. The purpose of this supplementary policy is to insure the holder, to the extent of the premiums payable on both the original and the supplementary policy against loss of earning capacity by reason of bodily injury or disease in the event of total and permanent disability. To that end the form provides that in consideration of the premiums your petitioner ‘hereby indemnifies' the insured ‘against the loss of earning capacity by reason of bodily injury or disease’ subject to the conditions and agreements contained in the form.'

It is further provided in the form that ‘if * * * within the time and in the manner herein provided, there shall be submitted to the Company * * * due proof that the Insured is totally and permanently disabled’ the petitioner will pay the premiums becoming due on the policy and on the co-existing policy; that ‘for the purposes of this insurance total disability is incapacity (resulting from bodily injury or disease) to engage in any occupation for remuneration or profit. Such disability shall be presumed to be permanent when it has been continuous for a period of four months. As proof of disability, it must be established that by reason of bodily injury or disease, the average monthly earned income of the Insured for a period of four months has not exceeded one-fourth of his former earned income (averaged monthly for the twelve months immediately preceding such four months).’ The words ‘earned income’ as used in the above quotation are defined in the form as follows: ‘As herein used the term ‘earned income’ means wages, salaries, professional fees, and other amounts, received as compensation for personal services actually rendered in any profession, trade or business, not including therein amounts received as a pension or retirement allowance, or as a temporary continuance in whole or in part of customary earned income during the insured's enforced absence from business on account of bodily injury or disease.'

Under date of November 14, 1929, in answer to the application of the petitioner filed with the respondent on November 5, 1929, for the approval of the form of policy which it intends to have used as supplementary to other policies of life and endowment insurance issued by it, the respondent notified the petitioner that, in his opinion, because of these provisions ‘the said form does not comply with the laws of the...