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686
xi. banking, credit, and insurance.
panies, and other companies, this part of the law consists of two main divisions
with parallel regulations for the two different kinds of insurance companies.
In addition to this, the Act contains the provisions which the peculiar
character of insurance business, and particularly life insurance, render necessary.
In this respect the nucleus of the Insurance Act consists of the regulations
intended to ensure that the insurance fund shall be reserved as far as possible
for the benefit of the insured. The amount of the premium reserve, the
essential part of the insurance fund, shall thus be estimated in accordance with
certain principles laid down by Government. The insurance fund shall be invested
in certain safe securities, which shall be kept under lock and key by a public
official, the policy-holders having a lien on them, as in the case of a pledge
actually in their hands. Moreover, in order to safeguard the interests of the
insured, the Company shall appropriate a certain amount of its capital to a
safety fund, which, subject to penal presecution, shall not drop below a certain
percentage of the insurance fund.
Furthermore, a Board of Insurance Inspection with extensive powers has been
established for the supervision of insurance establishments and the maintenance
of the publicity essential for the benefit of the public.
Of particular importance are the measures adopted for the inspection of
insurance companies in the event of their being wound up or adjudged bankrupt,
— in which cases a special procedure is adopted — and with regard to the
voluntary transference of the life insurance policies. In both these cases the
intention of the law is to safeguard to the greatest possible extent the rights of
individual policy-holders while keeping the insurance stock on the basis of the
insurance fund.
Alien Insurance Companies Act.
If an alien insurance company desires to carry on insurance in Sweden, they
shall make application through a general agent possessing certain necessary
qualifications, in the capacity of trustee: further, prior to starting insurance
operations, certain documents, powers of attorney, certificates, and arguments shall
be submitted to the Board of Insurance Inspection; moreover, proofs shall be
furnished that the Company has in a certain prescribed mode deposited with
the Riksbank (the Bank of Sweden) an amount of 100 000 kronor for life, fire
and maritime insurance, and of 50 000 kronor for every other kind of
insurance. After the examination of the documents submitted, the inspection
authorities will, if approved, grant the concession demanded. The business will then
be subject to the control of the board of inspectors for insurance and to a
certain degree of publicity, besides which there are provisions aiming at
safeguarding the rights of policy-holders, in case the Company should cease to carry on
business in Sweden.
Both Acts contain provisions as to fines for various kinds of infractions
of the law. The need of a modified and perfected insurance law is now
universally admitted. In the first place, since the issue of the Act 1903, there
has been passed a new Companies Act which entails corresponding changes in
the Insurance Act; and in the second place modified views particularly in the
sphere of life insurance, and with regard to the estimation of the insurance
fund and the safety fund, have gradually engendered a powerful current of
opinion in favour of an amended law, even though views on this point have
not yet assumed definitive shape. Some essential modifications in the Act of
1903 were made by the Riksdag in 1914. The most important change in the
law concerns regulations regarding the premium reserve, which was formerly
computed solely on the basis of a certain death rate and a certain rate of in-
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