kamer" (Insurance Chamber), the duty of which is to exercise control over insurance companies and protect policy holders. This law was amended on April 24, 1929, on February 7, 1935 and on May 22, 1937, these amendments providing for suspension of payment and requiring extra guarantees from foreign companies. It is understood that the law works satisfactorily. DEMAND FOR LIFE INSURANCE IN THE NETHERLANDS Although the business of life insurance in the Netherlands is expanding as may be seen from the tables given previously in this report, there is no widespread demand for life insurance as there is in many other countries. The total amount of new life insurance written in 1936 amounted to approximately 241.4 million guilders which indicates that only a small percentage of the population, amounting to 8.5 millions, carry life insurances. Life insurance in the Netherlands is considered too expensive and it is calculated here that only those with an annual income of fl.5,000 may afford to be insured. This limits the demand as only about five percent of the income taxpaying public or about 1,300,000 have incomes of fl.5,000 or more. Envisaging the death of the breadwinner of the household and making provision there for on a commercial basis are not popular concepts. It is also reported that some of the ancient superstition about life insurance still sways a certain proportion of the population. METHODS OF OPERATION Most of the life insurance companies in the Netherlands operate in the form of limited liability companies. Of the 66 domestic companies in the Netherlands, 50 are limited liability companies, 12 mutual, 3 associations and one a cooperative society. Only 11 companies are engaged exclusively in the business of writing ordinary life insurance and selling annuities. The others combine "volksverzekering" (burial insurance) with other ordinary life insurance business. Foreign companies are required by law to operate through a representative residing in the Netherlands and are further required by the law, as has already been remarked, to give special guarantees. COURT DECISIONS IN INSURANCE CASES No. 1: In a case which was decided on March 10, 1922 by the Supreme Court of Judicature at The Hague, the question was raised as to whether the insurance funds paid to a wife as beneficiary should be considered as part of the husband's estate. In this case, the estate was in bankruptcy. The Court denied the right of the receiver in bankruptcy to the insurance funds paid to the beneficiary. No. 2: In another case appearing before the Arrondissements Rechtbank (Provincial Court) at Rotterdam on March 13, 1922, concerning the construction of a life insurance contract. The beneficiary was designated as "his wife, nee M. M., or, in her absence, his heirs." At the time of the insured's death, the deceased was divorced from his wife and the Comparative Law Series February 1938 - 50 claim was made by both her and the heirs for payment under the insurance policy, the former wife contending that she was clearly designated as the beneficiary. The Court decided that the above-quoted clause did not designate her personally as beneficiary, but rather the wife "nee M. M.". It was decided, therefore, that payment should be made to the person who, at the time of the insured's death was the wife and also the person designated as "nee M. M.", and in the absence of such person, to the heirs. The heirs were therefore, designated as entitled to payment. This case was appealed and on October 6, 1922, the Court of Justice at The Hague reversed the decision of the Rotterdam Court. Considering the case in the light of a commercial contract, it was argued, the language of the policy was clear and had no other meaning than to designate the person "M. M." as beneficiary. The words "my wife" were merely descriptive. It was further argued by the Court that if the husband had intended that payment be denied his wife in the event of divorce, he would have so stated. As a matter of fact, he had left the contract unchanged after the divorce, although he had had the power to change it without the knowledge of his divorced wife. No. 3: A decision of the Court of Justice at The Hague on June 19, 1922 held that payment to a beneficiary is considered as a gift. In this case, the testator had designated his second wife as beneficiary in a life insurance policy. The other heirs, on his death, claimed the life insurance funds, arguing that it reduced the inheritance. The Court decided in favor of the second wife on the ground that the insurance benefit was to be considered as a gift intended for the second wife. No. 4: In a case before the Arrondissements Rechtbank (County Court) of Amsterdam on October 26, 1923, the facts were as follows: a citizen of the Netherlands carried insurance with a German life insurance com pany for an amount stated in guilders, with the stipulation that after three years, the policy might be surrendered at a value calculated according to the amount of the reserves. The insured claimed an amount in guilders. The company refused to pay except in marks arguing that, according to German law, the policy must be invested in German securities and that the insured was entitled to his proportion of that investment. The Court held that the premium reserve is an amount calculable independent of the currency in which which the amount is invested and decided that the surrender value was payable in guilders. No. 5: There was the same decision in a similar case tried before the Arrondissements Rechtbank (County Court) of Amsterdam on October 15, 1923. PRINCIPAL COMPANIES The "Nationale" and the "Utrecht" led all the other companies as regards the value of life insurance policies in force at the end of 1936. At the end of 1936, these twelve companies had 2,978.1 million guilders Comparative Law Series February 1938 51 of life insurance in force representing approximately 75 percent of the total value of life insurance policies in the Netherlands. New Business. From 387 million guilders' new business done in 1930, the amount of new insurance written has declined each year, so that at the end of 1936, which was a comparatively good year for new business, the total of new business amounted to 348.3 million guilders. The number of cancellations was less during 1936 than during any of the previous four years. The general improvement in business conditions during 1936 explained the increase in new business and the decline in cancellations. Claims Liquidated. "Claims Liquidated" include payments made the case of death, as well as cancellations. The number of cancellations during 1936 declined considerably. Cancellations in previous years, as shown by the table, reflected the serious economic condition. It was not possible for many policy holders to keep up the payment of their premiums. The Insurance Chamber divides the insurance companies into two groups; Group 1, insurance companies not writing industrial insurance ("volksverzekering") and Group 2, those who combine the business of ordinary and industrial ("volksverzekering") insurance. Cancellations for the years 1933-1936 in these two groups is shown in the following table: GROUP I: Ordinary Life Insurance Companies It will be seen from the above that the companies writing industrial insurance do a greater amount of business but also have a larger percentage of cancellations. MORTALITY TABLES The actuarial tables used, upon which life insurance premiums are based in the Netherlands are the W. G. B. ("Geheele Bevolkingstafel Mannen"), which are derived from the statistics of the census of the Netherlands, taken every ten years. These actuarial tables are distinguished as "5e M. G. B. ", which includes the statistics taken from census for the period 1910-1920, and the "6e M. G. B.", for 1920-1930. These tables are used by the Insurance Chamber in every published statistics. The English table known as "Office Mails" and indicated as "O" is also used, as well as several others. LIBRARY DIVISION OF COMMERCIAL LAWS BOOKS RECEIVED Martindale-Hubbell Law Directory 1938, Vols. I & II. Why Trade-Mark Registration Should Be Mandatory, Paul Struven. Brazil 1937, Ministry of Foreign Affairs. Wisconsin Insurance Laws 1937. New Jersey State Tax Report for 1936. Anuario Argentino de Seguros y Capitalization 1937. Code of Laws of the United States Sup. III, 1934 Edition. Puerto Rico Insurance Report, Fiscal Year 1936-37. Reviews and Journals: Missouri Law Review, January 1938; La Taxation on business in Sweden is assessed under two main headings, (1) Royal Crown Taxes (national government or State), and (2) Municipal Taxes (payable to the township or commune within which the income was earned or in which the property taxed is situated). Income and property taxes are paid to each authority. The basis of the present national taxation is the law of 1928 embodying a general revision of previous tax laws; in 1932, in order to supplement revenue during the depression, an "Extra Income and Property Tax" was passed by Parliament; in 1938 Parliament passed a Compensation Tax Law, applicable to undistributed profits of Swedish Real Estate and Marketable Securities Companies, and in 1934 through Parliamentary action, there was inaugurated a Special Tax on the Net Worth of Property. STATE TAXES The Royal Crown (State) Taxes are (1) Combined Income and Property Tax, (2) Extra Income and Property Tax, (3) Special Property Tax, (4) Equalization Tax and (5) Compensation Tax. Additionally there are a number of small fees collected, namely: Registrar, Sick Benefit, House of Nobles, Forest Preservation, Accident Insurance and Pension Fees; these are not of especial importance since they are of a special nature and apply only to certain groups of taxpayers. Combined Income and Property Tax. This form of taxation, in operation since 1910, is composed of an assessment on total income plus onesixtieth of the declared net value of property owned by the taxpayer at the end of the tax year. The applied tax rate in a given case is calculated from certain base rates and in the case of corporations, the base rate plus a percentage thereof determined yearly in Parliament; for example, in 1937 the State Income and Property Tax rate on corporations is the base rate plus 70 percent. The fundamental base rates of taxation applying to to all taxpayers except Swedish corporations (and some funds, etc., which pay a proportional tax) are shown hereunder: Note: 10,000 20,000 This article consists of a revision of Special Circular No. 515 issued by the Division of Commercial Laws in April 1935, based on a report of Action Commercial Attache 0. S. Watson. The authority consulted in bringing the present material down to date has been Kammarrattsradet Kuylenstierna, Finansdepartementets Skatteberedning, who has suggested and approved the changes made. |