Nonmutual

This section shall not apply to any stock life insurance corporation which on or after the first day of January, nineteen hundred and seven, shall transact and shall represent itself as transacting its business exclusively upon a nonmutual basis and shall after said date issue only nonparticipating policies.

In the nonmutual associations it is possible to determine precisely how long a time will elapse before the entire debt is discharged, and exactly the cost to the borrower.

The court indicated that the mutual insurance companies are so stabilized and have such reserve funds in the form of net cash surplus, that they are enabled to issue insurance policies upon the cash premium basis. The situation is such that there is no liability on the part of a policyholder, and in effect he does not become a stockholder in the corporation. Quoting from a New Jersey case (French vy. Millville, 66, N. J. L. 392, 49, Atlantie reporter, 465), the court concluded that, “the scheme of mutual insurance does not fasten upon the boards any liability which municipal corporations may not with reasonable safety assume for the limit of obligation is always effective at the time the insurance is obtained and is rarely enforced beyond what would be for insurance on the nonmutual plan.