Worcester daily spy. [volume] (Worcester [Mass.]) 1850-1888, 1872-12-07
WCRCEsTEB
SATURDAY.. pEoEaEnnR :. 1879.
life Insurance.

The New York Mutual Life Insurance Com
pany proposes TO effect a revolution in the bust
ness Of life insurance, by reducing the rates,
and treating a large surplus as Objectionable"
It's aciuary, Mr. W. H C. Bartlett, has published
letter to explain and support this movement.
He says generally that the aim is to widen the
range OF the company's usefulness by insuring
at cheaper rates. His scheme, if we understand
it, is practically 10 change the present method
of paying dividends, to a certain extent, by de-
Quoting them in advance from the annual pay
ments of the insured so that they shall not be
compelled to 'advance money" which viii only
"be returned at the end Of twelve MONTHS But
the scheme contains other things which are not
stated with the utmost disginctness, although
other insurance companies viii readily under
stand what is meant.
This movement has melted no little criticism;
and the substance of what is said Off is em5od-
led in an article published in the Insurance
Monitor 1t is adiudgei to be mot The offspring
of that high philanthropy with which it is
phrased, but a crushing return for the blows
that have been dealt the Mutual" That is TO
say, it signifies fight in which the Mutual
s6Eho 10 OGsllpy btiGiss NllhDAt lAhii- ANSVHHl
OF what may haupen to itself 1t is held 10 be
"a fatal blow against life insurance at large"
The Monitor says: a reduction Of seventy
five per cent OF the loading on old net prices,
by a company of the MutuaPs prominence,
means the early suspension of ninety
per cent OF all the lite insurance
companies in the country" This is the opin-
ion of those whose study OF the subject
ought to qualify them 10 judge correctly. 1t
seems that this new policy of the New York
company is what the Monitor calls it, "a hid
eous mistake which, if carried out, would
sacrifice the policy holders The Monitor says
of one parl OF Mr.. Bartlett's letter:
"'The Objectionable measure Of keeping on
hand a large undivided surplus! What does
Mr.. Bartlett mean by this? The Mutual has
no undivided surplus TO speak OF. In the very
report published by this gentleman in our
last issue lie showed a liability for reserves Of
Sal ,127 1926, with an undivided surplus OF only
S. ,052 O12, only trJte more than tgO per cent.
on the present cash Uatue of ats policies. Does lie
not know tGat the companies at large show, by
the New YORK report, an undivided surplus Of
more than IS per cent? hat Is to say, more
than 900 per cent in excess, in proportion TO re
serves, over tine Mutual; and yet he assumes to
speak OF his company as if it possessed "a large
December, before the January dividend was
made, the Mutual had but 14,6 undivided sur
plus, while all the companies combined had 1871
aud this included, like DAVIS acoustics, the
blind and the lame; yet, on an even showing,
the Mutual was more than five per cent below
the averaged
1t is stated that the Mutual has already paid
SIS, 100000 in dividends in twenty-nine years
As the years go on, it will necessarily have on
its hands much larger business Of paying pol
icies than heretofore, and then "a large undi-
vided surplus" may not seem Objectionable"
But the scheme proposed is complained Of as
very unjust to the old policy holders, as well as
unsafe. 1t requires them to 90 on paying the
old rates unless they will give up the old policies,
submit to new medical examinations, and take
out new policies paying the new rates CORE
spending to their present ages, This is held TO
be an injustice little short Of an outrage" for
it would give the new cheaper policies the ben
eft of the excess paid on the old ones. We be-
lieve the new policy proposed by the Mutual
has not yet been adopted; and we notice that
the Monitor prophesies on the subject, as fol-
lows:
awe are not prophet, nor the son of n
prophet; nevertheless, we hazard this assertion
with little fear that the future will not verify it:
The Mntuai life insurance company will not
follow he plan proposed by its learned actuaTy /;
and a persistence, by the present management,
in the attempt TO introduce 1t, will bring on a
revolution Of very different sort from that
they may now anticipated"
We give what is said of the proposed regou-
tion. There is, doubtless, something to be said
on the other. side. 1t may be that the rates oil
life insurance have been too high. The ques-
ton is likely to be discussed, for the movement
OF the Mutual has caused some stir, especially
in New York. There are some questions con-
nected with it which ought TO be discussed
thoroughly, not only by life insurance compa-
mics, but, also, by all others. II seems possible
to improve the present practice, so far, at least,
as relates 10 the questions ofdvidends and sur
plus,