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10

Rights of Owners of Policies.

A.D. 1923.

20.-(1) Every proposal for an industrial assurance Provisions policy shall, except

as to pro

(a) where the policy is taken out on the life and posals for on behalf of a child under the age of sixteen;

or

(b) where the policy assures a payment of money
for the funeral expenses of parent, child, grand-
parent, grandchild, brother, or sister; or
(c) where the person whose life is to be assured
under the policy is a person in whom the
proposer has an insurable interest;

contain a declaration by the person whose life is to be assured that the policy is to be taken out by him, and 15 that the premiums thereon are to be paid by him.

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Where the person whose life is to be assured under the policy is a person in whom the proposer has an insurable interest, the proposal shall contain a statement of the nature of that interest.

(2) A collecting society or industrial insurance company shall not, nor shall any collector or agent of such a society or company issue a proposal form or accept a proposal which does not comply with the foregoing provisions of this section.

(3) If the proposal contains a statement that the person whose life is proposed to be assured is not at the time of making the proposal a person on whose life another policy has been issued by the society or company, and a policy is issued in pursuance of the proposal, the 30 society or company shall be liable under the policy, notwithstanding that the statement is not true, and the truth of the statement is made a condition of the policy. (4) If a proposal form for an industrial assurance policy is filled in wholly or partly by a person employed 35 by the society or company, the society or company shall not, except where a fraudulent statement in some material particular has been made by the proposer, be entitled to question the validity of the policy founded on the proposal on the ground of any misstatement contained in 40 the proposal form:

Provided that

(a) if the proposal form contains a misstatement
as to the age of the person whose life is

policies.

A.D. 1923.

Forms of

policies.

Return of

policies and

proposed to be assured, the society or com-
pany may so adjust the terms of the policy,
or of any policy which may be issued in
substitution or in lieu thereof, as to make
them correspond with the terms which would 5
have been applicable if the correct age of the
person had been originally inserted in the
proposal;

(b) where but for this subsection the validity of a
policy could have been questioned on the 10
ground of any misstatement in the proposal
form relating to the state of health of the
person upon whose life the assurance is to be
taken out at the date of the proposal, nothing
in this subsection shall prevent such a question 15
being raised, if raised within two years from
the date of the issue of the policy founded on
the proposal.

21. (1) A policy of industrial assurance issued
after the commencement of this Act shall set out the 20
provisions of this Act mentioned in the Third Schedule
to this Act, such of those provisions as are contained in
Part II. of that Schedule being printed in distinctive
type, and in the case of a policy on the life of a child
under ten years of age shall also set out in distinctive 25
type a statement of the effect of section sixty-two of the
Friendly Societies Act, 1896:

Provided that the policy may, if the Commissioner consents, in lieu of setting out the said provisions of this Act, contain a statement which, in the opinion of the 30 Commissioner, sufficiently sets forth the effect of those provisions.

(2) Where a policy of industrial assurance issued after the commencement of this Act does not comply with the provisions of this section, the society or company 35 effecting the insurance shall be guilty of an offence against this Act, and shall, without prejudice to any other liability be liable to pay to the person by whom the premiums have usually been paid a sum equal to the amount of the premiums paid, which sum shall be recoverable summarily 40 as a civil debt.

22. If at any time a collecting society or industrial assurance company, or any person employed by such a

society or company, take possession of a policy or premium A.D. 1923. receipt book or other document issued in connection with premium

a policy, a receipt shall be given, and the policy book receipt or document shall be returned to the owner of the books after 5 policy within twenty-one days, unless the policy has been inspection. terminated by reason of satisfaction of all claims capable of arising thereunder :

Provided that where possession is taken of a policy, book or document for the purpose of legal proceedings to 10 be taken by the society or company that issued the policy against a collector, it shall be lawful for the society or company to retain the policy, book or document so long as may be necessary for the purposes of those proceedings, but in that case if the policy, book or 15 document is retained for more than twenty-one days, the society or company shall supply to the owner of the policy, a copy thereof certified by the society or company to be a true copy.

23.-(1) A forfeiture shall not be incurred by any Notice 20 member or person assured in a collecting society or before industrial assurance company by reason of any default forfeiture. in paying any premium until after

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30

35

40

(a) notice stating the amount due from him, and
informing him that in case of default of payment
by him within twenty-eight days and at a place
to be specified in the notice his interest or benefit
will be forfeited, has been served upon him by
or on behalf of the society or company; and
(b) default has been made by him in paying any
premium in accordance with that notice.

(2) This section shall extend to contracts of assurance effected by a collecting society before the commencement of this Act which are not contracts of industrial assurance within the meaning of this Act.

24. (1) Where notice of the forfeiture of a policy Provisions. of industrial assurance by reason of default in the pay- as to forfeited ment of any premium thereunder has been served on the policies. owner of the policy, then if the policy

(a) is a policy for the whole term of life or for a
term of fifty years or upwards, the person whose
life is assured under which is a person who is
at the time of such default over fifteen years of
age, and upon which not less than five years'
premiums have been paid; or

A.D. 1923.

(b) is a policy for a term of twenty-five years or upwards, but less than fifty years, upon which not less than five years' premiums have been paid; or

(c) is a policy for a term of less than twenty-five 5
years upon which not less than three years'
premiums have been paid;

the owner of the policy shall, on making application for
the purpose to the collecting society or industrial assurance
company within one year from the date of the service of 10
the notice, be entitled-

(i) to a free paid-up policy for such amount as is
hereinafter mentioned payable upon the happen-
ing of the contingency upon the happening of
which the amount assured under the original 15
policy would have been payable or of any other
contingency not less favourable to the owner of
the policy; or

(ii) if the owner of the policy is permanently resident
or submits satisfactory proof of his intention to 20
make his permanent residence outside Great
Britain, the Isle of Man and the Channel Islands,
or if the person whose life is assured has dis-
appeared and his existence is in doubt, to the
surrender value of the forfeited policy ascertained 25
in manner hereinafter provided.

(2) The amount of a free paid-up policy so issued as
aforesaid shall not be less than such as may be determined
in accordance with the rules contained in the Fourth
Schedule to this Act, and shall be ascertained at the date 30
when the premium following the last premium paid
became due:

Provided that the amount of the free paid-up policy shall not exceed the difference between the amount of the forfeited policy (inclusive of any bonus added thereto) 35 and the amount which would be assured by a corresponding policy at the same premium effected on the life of the same person according to the age of that person at his birthday next following the date of forfeiture.

(3) In every premium receipt book issued after the 40 commencement of this Act there shall be printed a notice stating that in the event of the forfeiture, after the expiration of five years from the passing of this Act, of any policy of industrial assurance by reason of default in

the payment of premiums thereunder, the owner of the A.D. 1923. policy shall, if the policy has been in force a sufficient period as provided by this section, be entitled to a free paid-up policy or, if the conditions mentioned in para5 graph (ii) of subsection (1) of this section are fulfilled, to the surrender value of his policy, and that upon application to the head office of the society or company information as to the amount of such free paid-up policy or surrender value will be supplied, and it shall be the duty 10 of the society or company to supply such information.

(4) Where the rules of a society or the conditions of a policy are such as would confer on the owner of the policy in case of forfeiture rights more favourable to the owner of the policy than those conferred by this section, 15 nothing in this section shall prevent the owner of the policy from claiming under those rules or conditions instead of under this section.

(5) This section shall not apply in the case of a forfeiture occurring before the expiration of five years 20 after the passing of this Act.

25.-(1) Where the owner of an industrial assurance Substitution policy agrees to accept a new policy in substitution there- of policies. for, the collecting society or industrial assurance company, shall pay to the owner of the policy the surrender value 25 (to be ascertained in manner herein-after provided) of the old policy or shall issue to him a free paid-up policy of equivalent value, unless the value of the substituted policy, calculated in accordance with the rules set out in the Fourth Schedule to this Act, at the date of the 30 substitution is equal to or exceeds such surrender value.

(2) In any such case the society or company shall furnish to the owner of the policy, with the new policy and new premium receipt book, a statement setting forth the rights of the owner under this section, and containing an 35 account certified by the secretary of the society or company, or other officer appointed for the purpose, showing the surrender value of the old policy and the value of the new policy.

(3) Where a substituted policy is so issued and the 40 value thereof is equal to or exceeds the surrender value of the old policy, then for the purpose of determining whether the owner is entitled to a free paid-up policy or surrender value under the provisions of this Act relating to forfeited policies, the substituted policy shall be deemed