5. SAME-POLICY PROVISIONS.

Life insurance policies recited that after one full annual premium had been paid, in case of impairment of health by bodily injury or disease, such as to prevent the insured from pursuing any gainful occupation, an additional provision might be made for him in different ways, viz., by paying insured an annuity and by paying the premiums on the policy during disability, etc. Held, that such provisions for health and accident insurance could not be regarded as subsidiary only to the life insurance feature, and that the policy was therefore in violation of St. 1907, p. 858, c. 576, § 32, prohibiting insurers writing different classes of insurance to include more than one class in the same policy.

Case Reserved from Supreme Judicial Court, Suffolk County.

Petitions by the Etna Life Insurance Company and the Travelers' Insurance Company and others against Frank Hardison, Insurance Commissioner, for the review of respondent's action with reference to certain contemplated policies, etc. On reservation of a single justice of the Supreme Judicial Court on the petitions, answers, and agreed statements of facts. Petitions denied.

Frederick H. Nash and Lewis Sperry, for Etna Life Ins. Co. William A. Morse and Francis J. Geogan, for New York Life Ins. Co. Dana Malone, Atty. Gen., and James F. Curtis, Asst. Atty. Gen., for respondent.

KNOWLTON, C. J. These are petitions brought by foreign life insurance companies under St. 1907, p. 895, c. 576, § 75, for a review of the action of the Insurance Commissioner, in regard to the form of the policies which they propose to issue in this commonwealth. The cases come to this court on the reservation of a single justice upon the petitions, answers and agreed statements of facts. Under this section every life insurance company must file with the Insurance Commissioner a copy of any form of policy that it proposes to issue, for his approval. If within 30 days he notifies the company that in his opinion the form of the policy does not comply with the requirements of the statute, specifying his reasons for his opinion, no policy can be issued in that form. His action in this particular is subject to review by the Supreme Judicial Court. The section further provides that no policy shall be "issued or delivered, unless it contains in substance the following provisions." Then follows a statement of ten provisions, of which the third is: "That the policy and the application therefor shall constitute the entire contract between the parties, and that all statements made by the insured shall, in the absence of fraud, be deemed representations, and not warranties, and that no such statement shall be used in defense of a claim under the policy, unless it is contained in a written application, and a copy of such application shall be indorsed upon or attached to the policy when issued." The provision on this subject, contained in the policy, was

held by the Insurance Commissioner to be sufficient.

A preliminary question raised by the petitioner is whether the Commissioner is authorized, by the statute, to consider matters of substance that enter into the policy, or only the form of the policy in other particulars. We have no doubt that his examination of the form of a policy to see whether it conforms to the requirements of our law was intended to involve a consideration of matters of substance called for by our statutes, and not merely of such things as the size, or shape, of the paper on which the contract appears, or the kind of type used in printing it, or the order in which different parts of the contract are set forth. It is his duty to determine whether the policy contains the substantive provisions of law called for by our statutes, in such a form as to give the contract proper effect.

Another question is whether the provisions which, in substance, must be inserted in the policy, must appear in a form substantially identical with that given in the statute, or whether it is enough if they contain everything, in meaning and legal effect, that the statute prescribes, and at the same time include other things relating to the same subject, no one of which impairs the force of that which is prescribed for the benefit of the insured. Inasmuch as the ten provisions referred to and the other prescribed parts of the policy were intended for the protection of the policy holder, we are of opinion that, if they are contained in substance in the policy, their form may be varied, and additional provisions beneficial to the insured may be inserted, provided the requirements of the statute are satisfied, and are left undiminished by that which is added.

Instead of the third provision already quoted from section 75, the form of policy of the Travelers' Insurance Company says: "This instrument contains the entire contract between the parties hereto, and all statements purporting to be made by the insured shall, in the absence of fraud, be deemed representations and not warranties, and no such statement shall be used in defense of a claim under the contract unless it be contained in the application herefor." The Insurance Commissioner suggested that the words, "and the application is attached hereto," be added to meet the requirement of the statute. We are of opinion that this was necessary. The language of the provision did not even make it certain that the application, or the statement referred to, was in writing. The reference to an application in the early part of the policy, especially if there should be a failure to copy the application on the policy, might not protect the rights of the insured in every case. Moreover, inasmuch as the provision is insufficient, we think it better that the words, "and the application," be also inserted after the words, "this instrument," so as to con

form to the statute exactly. It is conceivable that the application might contain something helpful to the insured as a part of the contract, in connection with other provisions, and with questions that might arise.

The subject most discussed in both cases is whether the form of the policy conforms to St. 1907, p. 861, c. 576, § 34, which requires that "contracts of insurance for each of the classes specified in section 32 shall be in separate and distinct policies, notwithstanding any provision of this act which permits a company to transact more than one of said classes of insurance." Section 32 authorizes the formation of an insurance company to engage in insurance of any one of twelve different kinds or classes. The agreement of association must state the class of insurance the company proposes to transact, and on what business plan or principle. Section 33. Under section 34, neither domestic nor foreign companies, with certain specified exceptions, are permitted to transact more than one kind or class of insurance. One of these exceptions allows life insurance companies with a certain amount of paid-up capital to transact the business specified in the fifth clause which is insurance against bodily injury, or death by accident, and upon the health of individuals.

This statute carries the regulation of the business of insurance much further than any previous legislation. It forbids the combination of two classes of insurance in the same policy, even when one company is permitted to transact insurance business of two or three classes. The petitioner contends that this quoted requirement does not apply to one of these classes of insurance, when conducted by a company in connection with life insurance. There is no reason for a distinction of this kind. The contract for insurance in each of these classes is to be in a separate and distinct policy, as well when the company is also doing the business of life insurance, as when it is furnishing insurance of any other class. There are reasons for this requirement, especially in connection with the maintenance of proper reserve funds, and with taxation. These reasons are as strong in their application to life insurance in connection with insurance in one of the classes named in section 32, as in their application to any two classes specified in the section.

It remains to inquire as to each of these companies, whether any part of the insurance referred to in the policy is within the fifth clause mentioned in section 32. That clause is: "To insure any person against bodily injury or death by accident,

*

and to make insurance upon the health of individuals." The policy of each of these companies, besides providing for life insurance in a common form, provides that after one full annual payment has been made, in case of impairment of health by bodily in jury or disease, such as to prevent the insured

for the rest of his life from pursuing any gainful occupation, an additional provision shall be made for him in some one of dif

ferent ways. The first of the petitioners agrees, in such a case, to keep the policy in force 12 months, and then to pay the policy holder one-twentieth of the sum insured, and make the same payment annually thereafter, until the whole sum insured shall have been paid, or to pay him a specified annuity for life. The second of the petitioners agrees, in such a case, to pay the premiums on the policy so long as the disability continues, without charging them against the contract, and the cash loans and the values of the contract are to increase in the same manner as if the premiums were being paid by the insured. But the insured may at any time cancel this provision of the policy and be entitled to a reduction of 25 cents for each $1,000 of insurance, upon his annual premiums.

It is agreed, and if it were not agreed it would be obvious, that this insurance against disability from injuries or disease is a liability which costs the company something, and for which provision must be made by way. of reserve. It seems plain that it is an insurance of health and against accident. The real difference between this and an ordinary accident insurance policy is that the liability is only for a disability which is total and is thought to be permanent, and that the compensation to the insured is made in connec tion with a contract for life insurance, instead of being made in separate payments of money directly to the insured. But these conditions do not affect the principle. Life in surance and insurance of the fifth class, under section 32, are embodied in the same policy.

It is said that this is incidental to life insurance. In the sense that, of the two classes of insurance, one is the principal and more important and the other subordinate, it may be said to be incidental; but that is of no im portance. Any two of the classes of insur ance mentioned in section 32 which are kin dred to each other, might be combined in the same contract, and the contract might be so made that one would be the principal and the other secondary, and in their nature they might have close relations to each other. This would not enable an insurance company to embody them in the same policy, even though, in a sense, one might be said to be incidental to the other. In a true sense they are two different classes of insurance under the statute. It is only the attempt to incorporate them in the same contract, and connect one contract with the other in violation of the statute, that makes one seem incidental to the other.

As to this part of the policy in each case, we are of opinion that the Insurance Commissioner was correct, that the form of the

2. SAME CONTRACT SIONS OF POLICY.

APPLICATION-PROVI

A life insurance policy, declaring that the policy constituted the entire contract between the parties and was free of conditions as to residence, occupation, habits of life, and manner, time, or place of death, did not comply with St. 1907, p. 896, c. 576, § 75, subsec. 3. requiring each policy to provide that the policy "and the application" constituted the entire contract between the parties, and that all statements made by the insured, in the absence of fraud, shall be deemed representations, and not warranties, and that no such statement shall be used in defense of a claim under the policy, unless contained in a written application and a copy of the application shall be indorsed on or attached to the policy when issued.

3. SAME-LANGUAGE OF POLICY-STATUTORY PROVISIONS.

No departure from the exact provisions required in insurance policies by St. 1907, p. 895, c. 576, § 75, should be permitted, unless it is too plain for doubt that the substitution is in every way as advantageous to the insured and as desirable as the prescribed provision.

4. SAME-INCONTESTABILITY.

A provision that an insurance policy shall be incontestable from date was not a statutory compliance with St. 1907, p. 896, c. 576, § 75, subsec. 2, requiring policies to provide that they should be incontestable after 2 years from date, except, etc.; a provision making the policy incontestable from date being contrary to public policy.

5. SAME-REINSTATEMENT.

A policy authorizing reinstatement on payment of all arrears, with interest thereon, not to exceed 6 per cent. per annum, was a substantial compliance with St. 1907, p. 895, c. 576, 75, requiring a provision for reinstatement on payment of all overdue premiums and any other indebtedness to the company on the policy, with interest at a rate not exceeding 6 per cent. per annum.

6. SAME TABLE OF LOAN VALUE.

St. 1907, p. 897, c. 576, § 75, subsec. 8. provides that each life insurance policy shall contain a table showing in figures the loan values, if any, and the options available under the policy each year, on default of premiums. Petitioners' proposed policy form showed the "cash surrender value" accurately, the column being headed with such words, and just before that table, under the head "Loans," in large type, was a statement that at any time while the policy was in force the company would loan up to the limit secured by the cash surrender value, etc. Held, that such table, with the accompany

ing statement, sufficiently showed the actual loan values of the policies.

7. SAME.

A proposed life insurance policy form, not containing a provision that the contract includes the application as well as the policy. and, also a provision that no statement made by the insured shall be used in defense of a claim under the policy unless contained in a written application, a copy of which is indorsed on or attached to the policy when issued, as required by St. 1907, p. 896, c. 576, § 75, subsec. 3, was defective.

8. SAME STATUTES-CONSTRUCTION.

St. 1907, p. 896, c. 576, § 75, subsec. 3. requiring that an insurance contract shall consist of the policy and application, and that no statement of the insured not contained in the application attached to the policy at the time shall be used as a defense, must be strictly construed. 9. CONSTITUTIONAL LAW CONSTITUTIONAL QUESTIONS-RIGHT TO URGE.

The constitutionality of a statute will not be considered on an objection made by persons not parties to the suit, whose rights are not affected by it, appearing through an amicus curiæ.

10. SAME-JURISDICTION.

Where jurisdiction depends only on the validity of a statute, and the court's attention is brought to its constitutionality by persons interested in the effect to be given to the statute, though not interested in the cause on trial, the court will consider the constitutionality of the statute as a preliminary jurisdictional question. 11. SAME JUDICIAL POWER AUTHORITY VESTED IN ADMINISTRATIVE OFFICER-INSURANCE REGULATION FORMS OF POLICIES.

St. 1907, p. 895, c. 576, § 75, prescribing certain provisions to be contained in policies to be used in Massachusetts, and requiring forms of policies to be submitted to the Insurance Commissioner, who is authorized to determine their compliance with the law, and, if he make objection, giving the insurance company the right to bring suit for the determination of the question, is not unconstitutional on the ground that it vests in the Insurance Commissioner. an administrative officer, authority to pass on the forms of policy to be issued.

12. INSURANCE-REVIEW OF ACTION OF ADMINISTRATIVE OFFICER-REGULATION-FORMS OF POLICIES.

St. 1907, p. 895, c. 576, § 75, prescribing provisions to be contained in insurance policies. and requiring forms of policies to be submitted to the Insurance Commissioner, who is to determine their compliance with the law, and, if he make objection, giving the insurance company the right to bring suit for the determination of the question, is not unconstitutional on the ground that it provides for a review by the court of the action of the Insurance Commissioner; the provision being for an original judicial proceeding to determine whether the company's plan for conducting its business is within the statute.

13. SAME-REGULATION-FORMS OF POLICIES -AUTHORITY OF INSURANCE COMMISSIONER.

The Legislature, under its power to regulate insurance companies, is authorized to prescribe provisions for insurance policies, to require insurance companies to submit forms of policies intended to be used within the state to the Insurance Commissioner before using them. to prohibit the use of policies declared by the Commissioner not to comply with the law until such question should be passed on by the courts, and to punish insurance companies for disobedi

ence.

14. SAME-POWER TO REGULATE.

The state has power to regulate insurance corporations, either under its police power for

the protection of the public, or as a creator and controller of corporations, domestic and foreign. 15. SAME-STANDARD FORM OF POLICY.

The Legislature has power to prescribe a standard form of insurance policy.

Case Reserved from Supreme Judicial Court, Suffolk County.

Petitions for review by the New York Life Insurance Company and the Mutual Benefit Life Insurance Company against Frank Hardison, Insurance Commissioner. Cases reserved. Petitions denied.

William A. Morse and Francis J. Geogan, for petitioners. Dana Malone, Atty. Gen., and James F. Curtis, Asst. Atty. Gen., for respondent. Fredk. H. Nash, for other life insurance companies and the Association of Life Insurance Presidents.

KNOWLTON, C. J. These are petitions under St. 1907, p. 895, c. 576, § 75, for a review of the action of the Insurance Commissioner in refusing to approve forms of policies for life insurance, filed with him by the petitioners, respectively. Certain preliminary

questions that arise in each case are the same as arose and were decided in Etna Life Insurance Company v. Hardison, 199 Mass. 181, 85 N. E. 407.

In the first of these cases the form of policy provided for a grace of 1 month for the payment of every premium after the first. St. 1907, p. 896, c. 576, § 75, subsec. 1, provides for a grace of 30 days. A grace of 1 month is not the same as a grace of 30 days. It might be a longer or a shorter period, according to the time in the year when the payment became due. One month from February 10th would ordinarily be 28 days. In leap year it would be 29 days, but it never would be 30 days. The form of policy was insufficient in this particular.

Instead of the provision required by section 75, subsec. 3, the form filed by the petitioner contains this language: "This policy constitutes the entire contract between the parties, and is free of conditions as to residence, occupation, habits of life, and manner, time or place of death." For reasons stated in Travelers' Insurance Company v. Hardison, 199 Mass. 181, 85 N. E. 407, and for other reasons, this language should be changed so as to make it conform to the statute. The application should be included in the statement of the contract. It is conceivable that something in the application might be advantageous to the insured, as a part of the contract. Millard v. Brayton, 177 Mass. 533537, 59 N. E. 436, 52 L. R. A. 117, 83 Am. St. Rep. 294. It was doubtless the intention of the Legislature that the insured should have in the policy an affirmative assurance that no statement will be used in defense of a no

plication, a copy of which is indorsed upon or attached to the policy. See Moore v. Northwestern, etc., Insurance Company, 192

Mass. 468-471, 78 N. E. 488. No departure from the exact provisions required by the statute should be permitted, unless it is too plain for doubt that the substitution is in every way as advantageous to the insured and as desirable as the prescribed provision.

The provision that the policy shall be incontestable from date, contained in the petitioners' form of policy, is not the same as the provision that it "shall be incontestable after two years from its date," except, etc., required by subsection 2 of section 75 of the statute. Such a provision is not in accordance with public policy. Reagan v. Union Mutual Life Insurance Company, 189 Mass. 555, 76 N. E. 217, 2 L. R. A. (N. S.) 821, 109 Am. St. Rep. 659. The action of the Insurance Commissioner in reference to this form of policy was right.

In the second case, the first objection to the form of policy, made by the Commissioner, was that the clause providing for reinstatement gives the privilege "upon payment of all arrears, with interest thereon not to ex

ceed 6 per cent. per annum," etc., while the statute gives the privilege "upon the payment of all overdue premiums and any other indebtedness to the company upon said policy, with interest at the rate of not exceeding 6 per cent. per annum." Under the statute, all loans and other indebtedness must be paid. Under this form of policy, if the arrears of premiums are paid, it is unnecessary to pay the other indebtedness to the company. Everything secured to the insured by the statute is secured by this language. The chief objection of the Commissioner was that the other indebtedness is not expressly referred to in the form. But we think the meaning is clear, and that the form is sufficient.

The statute calls for a table upon or attached to the policy, “showing in figures the loan values, if any, and the options available under the policy each year, upon default in premium payments." etc. The table in the petitioners' form shows the "cash surrender value" accurately, the column being headed with these words. Just before the table, under the head "Loans," in large type, is a statement that "at any time while this policy is in force, the company will loan up to the limit secured by the cash surrender value," etc. We are of opinion that the table, with the accompanying statement, sufficiently shows the loan value.

For reasons already stated in this opinion and in Travelers' Insurance Company v. Hardison, supra, the form is defective in not containing a provision that the contract includes the application, as well as the policy, and also a provision that no statement made by the insured shall be used in defense to a claim under the policy, unless it is contained in a written application, and a copy of the application is indorsed upon or attached to the policy when issued. The policy

holder is entitled to have the agreement in the policy substantially as it is stated in the provision. Not only the legal effect of the contract, but the character of it, should be stated in the policy. This clause of the statute should be construed strictly. In former cases, under Rev. Laws, c. 118, § 73, where the conditions were peculiar, applications were admitted in evidence, notwithstanding certain safeguards for the insured which were less strict than some of those furnished by this statute. Holden v. Prudential Insurance Company, 191 Mass. 153, 77 N. E. 309; Moore v. Northwestern, etc., Insurance Company, 192 Mass. 468, 78 N. E. 488; Paquette v. Prudential Insurance Company, 193 Mass. 215, 79 N. E. 250; Holden v. Metropolitan Life Insurance Company, 188 Mass. 212, 74 N. E. 337; Reagan v. Union Mutual Life Insurance Company, 189 Mass. 555, 76 N. E. 217, 2 L. R. A. (N. S.) 821, 109 Am. St. Rep. 659.

In the first of the cases before us, a gentleman of the bar appeared as amicus curiæ, by leave of the court, representing parties interested in the decision that might be made upon the construction and effect of the statute, and presented a brief suggesting that the section under which the petitions are brought is unconstitutional. The parties who invoke the aid of the court are precluded from making this contention (Pitkin v. City of Springfield, 112 Mass. 509), and the respondent does not desire to make it. It is a general rule that the court will not consider the constitutionality of a statute upon an objection made by persons whose rights are not affected by it, and usually the parties to the suit are the only ones who are permitted to raise such a question. But where, as in this case, the jurisdiction of the court depends entirely upon the validity of the act, and the attention of the court is brought to that fact by persons interested in the effect to be given to the statute, although not interested in the cause before the court, we deem it our duty to consider whether we have jurisdiction, before taking affirmative action. Action of a court that has no jurisdiction is void. Belcher v. Sheehan, 171 Mass. 513, 51 N. E. 19, 68 Am. St. Rep. 445.

The first suggestion is that the Legislature could not give the Insurance Commissioner power to pass upon the forms of policies to be issued, and especially, could not provide that an insurance company should be liable criminally for issuing a policy in a form not approved by him. Secondly, it is suggested that jurisdiction could not be given to this court to review the action of the Insurance Commissioner in a case of this kind.

The Insurance Commissioner is an administrative officer. The Legislature prescribed the requirements in the forms of policies. It did not see fit to prescribe a standard form for life insurance companies, but stopped with an enactment of substantive provisions for all policies. It was proper to leave to

the Insurance Commissioner the management of details in the administration of the law. It was proper to prohibit the use of policies that did not conform to the law, and to punish disobedience on the part of an insurance company. It was a reasonable regulation to require companies to submit the forms of policies to the Insurance Commissioner before using them, so that he could see whether the law was being obeyed. His duty was to approve of every form of policy that seemed to him correct. The insurance companies, after submitting their forms to him, had nothing to do but to go on with their business, unless he made objection within 30 days. If he made such objection, they were given a right to bring a suit in this court for the determination of the question whether their proposed action was within the law.

With the power of regulation of the business of insurance, and of the conduct of corporations, domestic and foreign, belonging to the Legislature, it seems to us that such companies may be forbidden to issue policies that are deemed contrary to law by an administrative officer, until the court can determine the legal questions involved. The Insurance Commissioner cannot decide finally, nor exercise any judicial power in the premises. In these cases, the companies failed to satisfy an administrative officer, acting for the protection of the public, that they were proceeding legally. The statute declares that, thereupon, they shall do no more business until there is a judicial determination of their rights by this court. This part of the case is covered by the decision in Provident Savings, etc., Society v. Cutting, 181 Mass. 261, 63 N. E. 433, 92 Am. St. Rep. 415, and there are many other cases in which authority somewhat like this is held to have been rightly exercised by public officers. Insurance Company v. Wilder, 40 Kan. 561, 20 Pac. 265; State ex rel. v. Moore, 42 Ohio St. 103; Brodbine v. Revere, 182 Mass. 598, 66 N. E. 607; Com. v. Sisson, 189 Mass. 247, 75 N. E. 619, 1 L. R. A. (N. S.) 752, 109 Am. St. Rep. 630.

The authority for a so-called review by this court is simply a provision for an original judicial proceeding which an insurance company may bring before a court of law, to ascertain whether its action in establishing the form of its policy is legal. The party on one side is the company, the party on the other side is the Insurance Commissioner representing the public. It is a convenient and proper method of settling the rights of the company and of the people, by a regular trial of the disputed question whether the company, in its plan for conducting its business, is within the statute. There is no reason why the Legislature should not provide such a judicial tribunal for such a purpose. See St. 1890, p. 258, c. 304. Employers' Liability Assurance Corporation v. Merrill, 155 Mass. 404, 29 N. E. 529; Janvrin, Petitioner, 174 Mass. 514, 55 N. E. 381, 47 L. R. A. 319; Ap