LIFE INSURANCE AS A SCIENCE 223 



remarks that " this history of the English law reveals change and 

 growth, but growth by slow and deliberate processes." It would 

 be an immense step in advance towards the perfection of Ameri- 

 can insurance law if a similar habit of mind prevailed in this 

 country. 



The taxation of life insurance companies may be referred to here 

 as an important problem of insurance company administration. 

 If it is the duty of the state to encourage thrift or efforts on the 

 part of the people toward economic independence and a secure posi- 

 tion above the need of state aid, it is certainly a paradox to meet 

 with an increasing tendency to tax life insurance policy-holders out 

 of a relatively large share of their annual savings. 



In many other countries than the United States insurance is 

 supervised and regulated by some central authority; in England 

 by the Board of Trade, in France by the Minister of Commerce, etc. 

 There must come a time when the burden, expense, and annoyances 

 incident to supervision by some forty-nine different insurance com- 

 missioners of states and territories will become intolerable and some 

 form of federal supervision must be the result. 



An increasing number of life and fire insurance companies are 

 extending their fields of business operations to foreign countries, and 

 in a few cases companies transact business in most of the civilized 

 countries of the earth. Without wishing to underrate the ratio of 

 progress made by life insurance companies of other countries, it is 

 generally conceded that the American life insurance companies 

 abroad are more aggressive, and as a rule attain more rapidly to a 

 commanding position than the home companies. As a result, there 

 is, at first, much local antagonism to foreign insurance com- 

 panies, to which, partly, at least, a large share of the burdensome 

 regulations which have been imposed in certain countries upon 

 American insurance companies must be attributed. On the other 

 hand, there can be no doubt but that during the past quarter of a 

 century the tendency has been politically and socially to draw states 

 together by the strong attraction of " common political sentiments, 

 common aspirations, and common interests of a permanent kind." 

 Insurance may rightfully claim to be one of the forces making for 

 international harmony and good will. 



All insurance is in the nature of a contract between the company 

 and the insured, who is usually referred to as a policy-holder. The 

 policy is the instrument which defines the respective rights and 

 duties of the contracting parties, who are assumed to be aware of 

 the fact at law that " a contract is a deliberate engagement between 

 competent parties, upon a legal consideration, to do, or to abstain 

 from doing, some act." Out of the contractual relations and its 

 unavoidable disputes, misunderstandings, etc., has resulted a mass 



