First made available in Massachusetts in 1907, savings bank life insurance is transacted on an over-the-counter basis or by mail without the use of soliciting agents. This normally results in reduced expense and lower costs to policyholders.
The technical details of administering the business are performed by a central organization that provides actuarial, medical, and certain other services for the member banks. The central organization computes the premium rates and prepares policy forms and application blanks. Each participating bank, however, is an independent body that issues its own contracts, maintains records, and retains and invests the assets of its own insurance department. The surplus funds attributable to insurance operations of the bank are available only to its policyholders; moreover, the central organization maintains a contingency or guaranty fund to protect policyholders.
The technical details of administering the business are performed by a central organization that provides actuarial, medical, and certain other services for the member banks. The central organization computes the premium rates and prepares policy forms and application blanks. Each participating bank, however, is an independent body that issues its own contracts, maintains records, and retains and invests the assets of its own insurance department. The surplus funds attributable to insurance operations of the bank are available only to its policyholders; moreover, the central organization maintains a contingency or guaranty fund to protect policyholders.
