Chap. 413.—An ACT to amend the Code of Virginia by adding to Chapter 169
thereof a new section to be numbered 4258-1, relating to policies of industrial
life insurance and providing provisions which must be contained therein, and
provisions which must not be contained therein, and requiring forms of policies
to be filed with the State Corporation Commission. [S B 222]

Approved March 30, 1936

1. Be it enacted by the General Assembly of Virginia, That the
Code of Virginia be amended by adding to chapter one hundred and
sixty-nine thereof a new section numbered forty-two hundred and
fifty-eight-l, which new section shall read as follows:

Section 4258-1. Standard Provisions Required in Industrial Life
Insurance Policies; Provisions Prohibited; Policy Forms to Be Filed
With State Corporation Commission.—(a) From and after the first
day of January, nineteen hundred and thirty-eight no policy of indus-
trial life insurance shall be issued or delivered to take effect in this
State, or be issued by an industrial life insurance company organized
under the laws of this State, unless the same shall contain in substance
the following provisions:

First. A provision that the insured is entitled to a grace period of
four weeks within which the payment of any premium after the first
may be made, which grace period shall terminate at noon on the
twenty-eighth day after the due date of the defaulted premium, except
that where premiums are payable monthly the insured shall be entitled
to a grace period of one month or thirty days. During such period
of grace the policy shall continue in full force, but in case the policy
becomes a claim during said grace period, before the overdue premiums
are paid, the amount of overdue premiums may be deducted in any
settlement under the policy.

Second. A provision that the policy, including the application,
whether or not a copy thereof be attached to or endorsed on the policy,
shall contain the entire contract between the parties.

Third. A provision that, except as otherwise expressly provided by
law, the policy shall be incontestable after it has been in force, during
the lifetime of the insured for one year, from its date, except for non-
payment of premiums and except for violation of the conditions of the
policy relating to naval or military service in time of war, and except
as to provisions and conditions relating to benefits in the event of cer-
tain specific types of disability and those granting additional insurance
specifically against death by accident.

Fourth. A provision. that if it shall be found at any time before
final settlement of the policy that the age of the insured has been mis-
stated the amount payable under the policy shall be such as the pre-
mium would have purchased at the correct age at the time the policy
was issued.

Fifth. A provision that in event of default in premium payments,
after premiums have been paid for five full years, there shall be avail-
able without action on the part of the insured a stipulated form of in-
surance, effective from the due date of the defaulted premium, the
net value of which stipulated form of insurance shall not be less than
the reserve on the policy (exclusive of reserves, if any, for provisions
relating to benefits in the event of specific types of disability, for pro-
visions granting additional insurance specifically against death by ac-
cident, and for provisions granting other benefits in addition to life
insurance) at the end of the last completed policy year for which pre-
miums have been paid, and on any dividend additions thereto, if any
(the policy to specify the mortality table, rate of interest and method
of valuation adopted for computing such reserve) less a specified max-
imum percentage (not more than two and one-half) of the maximum
face amount insured by the policy and of dividend additions thereto, if
any, and less any existing indebtedness to the company on or secured
by the policy; provided, however, that the said percentage or other
rule of calculation so stated as to permit determination of the values
shall be specified for each year for which required values are not in-
cluded in the policy; and provided a company may, in lieu of the pro-
vision herein permitted for the deduction from the reserve of a sum
not more than two and one-half per centum of the maximum face
amount insured by the policy and of any dividend additions thereto,
insert in the policy a provision that one-fifth of said reserve may be
deducted, or may provide therein that a deduction may be made of
said two and one-half per centum or one-fifth of said reserve at the
option of the company. Provided, further, that after premiums have
been paid for ten full years, the policy may be surrendered to the
company at its home office within three months of the due date of the
defaulted premium for a specific 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 pay-
ment for not more than three months after the application therefor
is made.
Sixth. If more than one option is provided, the policy must also
provide which of such options shall apply in the event of the insured’s
failure to notify the company of his selection of an option. Provisions
(fifth) and (sixth) shall not be required in term insurance of twenty
years or less, but such term policy shall specify the mortality table,
rate of interest and method of valuation adopted for computing
reserves.

Seventh. A provision that the policy, if not surrendered for its
cash value or if the period of extended term insurance has not expired,
may be reinstated within one year from the date of default in pay-
ment of premiums upon payment of all overdue premiums and, at the
option of the company, interest thereon at a rate not to exceed six per
centum per annum, and upon the presentation of evidence satisfactory
to the company of the insurability of the insured.

Eighth. A table showing in figures the non-forfeiture options avail-
able under the policy each year upon default in the payment of
premiums during at least the first twenty years of the policy, such
table to begin with the year in which such values become available,
and providing that the company will furnish, upon request, an exten-
sion of such table beyond the years shown in the policy.

Ninth. A provision that when a policy shall become a claim by the
death of the insured settlement shall be made not later than two
months after the receipt of due proof of death.

Tenth. Title on the face of the policy clearly and correctly describ-
ing its form.

(b) Any such policy may be issued or delivered in this State
which in the opinion of the State Corporation Commission contains
provisions on any one or more of the several foregoing requirements
more favorable to the policyholder than hereinbefore required. The
policies of an insurance company organized under the laws of any
other State or foreign government may contain, when issued in this
State, any provision which may be prescribed by the laws of the
State or government under which the company is organized, and the
policies of a life insurance company organized under the laws of this
State, when issued in any other State, territory or foreign country, may
contain any provision required by the laws of such State, territory or
foreign country to be contained in the policies issued therein.

(c) From and after the first day of January, nineteen hundred
and thirty-eight, no policy of industrial life insurance shall be issued
or delivered in this State, or be issued by an industrial life insurance
company organized under the laws of this State, if it contains any
of the following provisions:

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

Second. A provision for any mode of settlement at maturity of
less value than the amount insured by the policy plus dividend addi-
tions thereto, 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, payments to be made in accordance with the
terms of the policy.

Third. A provision to the effect that the agent soliciting the in-
surance is the agent of the person insured under said policy, or making
the acts or representations of such agent binding upon the person so
insured under said policy.

(d) The provisions of this section shall not apply to policies issued
or granted pursuant to the non-forfeiture provisions prescribed in
paragraphs (five) and (six) of sub-section (a).

(e) No policy of industrial life insurance shall be issued or
delivered in this State until the form of the same has been filed with
the State Corporation Commission, nor after written notice from
the said commission, given within thirty days of such filing to the
company filing such form, showing wherein the form of such policy
does not comply with the requirements of the laws of this State.