New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1879-02-21

FOarth-I hat the Agency Committee 10 directed
to make q thorough investigation Of tho agency
system az IL has existed since the plan for commit
ing commissions was first adopted by the company,
with the Wow of ertainIng the actual cost oil
obtaining new insurance IN each subsequent year,
and Of making such arrangements for the luturc
conduct of the agencies as VIII secure 10 the
company the greatest permanent advantages under
the J. an now proposed Tor n general reduction of
the rates of premium, tie committee II report 10
the Board for ITS action al the next regular meet
lug.
All OF which is respectfully submitted.
AILNANbFE II. RICE.
WILLIAM T.. DDpGt.
SAuIEL II. BABCJCK.
George :. Coz.
MARIN BATE
". 4. HAINlS.
Mr.. Cossctt absent from ihe state.
HOW TIE REDUCTION WAS ST. T!LD
prominent trustee % the Mutual Lite sad yes-
tcrday: "Prcsident Winston has been determined TO
secure "A reduction in premiums for ten years. The
reduction applies TO all grades premiums aud the
tables will be equazad No outside heip will bo
called ill., the committee IN its report saying:
In cqualizng the reduced rates TO the
different lines OF policies, the COM
pany must DO approved by its own
reports and its own actnalir-. The 80 per cent
rebate plan was most sucCc-slul one foT The com
pany. The annual statement shows that the bSi-
ness tor January, 1879, over the corresponding
month in 1873 was three times a. large IN the en-
tlrc country and over five times as great IN New
York Nv alone. The r"bdt" plan has been
tirelY mSuud TstcOd. Some of the companies, who's"
managers did not see any way 10 offer 6In.iar adj
Vautages, appeared to be- paraiyZ-d hY what they
feared was a dcath-bloW. ana erroneous state
mouts OF the methods Of the Mutual Life
made. IL Is silly TO assume that
the Mutual Life is seeking 10 mOaoP0lze
the lie insurance bueIu,s or to crush ont rival or
glnizluons Tie company Is tndea'uImG To mani
fest skill and -rrwdnr ss, guided hF lessons % tA-
perICucc, and It has been declined wise 10 Withhold
important details of the methods from competitors.
in - Ia +
rates of premiums, there was wrii-orPaniz"d ana
powerful opposition, gu ued by It's c'inpctito
winch comp. He'd 1t 10 dcSst Experience has shown
that the reduction can D. successfully mace ana
for the first time in the history OF ne company The
trustees have recommended II. 10 meet tins
vitality fund has been acCUmulatlug Tor Two
years, and tins we propose 10 u,c now 10 bring I'm
new blood to countcract the effect of more with
drawalS than are consistent WITH the Eahtehahte
Of average vitality and normal death rates. III i
not.at ali improbable that another effect Of this re-
duciion M premiums viii be reduction Of between
10 aud 20 per cent in the running expenses OF the
company, reducing salaries, consolidation Oh Dc
par.ucnit .iI in other ways
Az EQUITABLE REVIEW OF TIE s'HLNE
James ". Alexander, acting President oI the
Equitable Life Assurance Society, said yesterday ::
" As the matter is presented IN the pu6c press, my
first Impression Is that the Mutual Life has made
its third mistake. The impression is gwen ont
that the English companies have set the example
OF reducing rates. | do not understand this to be
the case The strongest and best companies OF
England now charge more for life insurance at
average ages than the best American companies do,
and the bet authorities are on record thcre against
the policy of diminishing the security by
what il practically paying dividends IN advance.
The Abandonment OF the so-callod rebate
an absolute surrender by the management
the cOmpusiOn Of the Board OF Trustees, to the
views of the protesting pohcy-holdeTs. The trus-
tees too il Is thought have been led 10 agree 10
general reduction OF 10 per cent ~ tho beHet that
tins wOud be accepted as "A compromise by the Ola
policy holders. Whether they VIII do so remains
to be seen the other companies are not likely 10
follow suit III hazardous game, when by adherlh8
TO old and welltried methods they VIII have bet
ter opportunity than ever To show up the fallaclcs
Of these new projects. ii the other companies re-
fuse to follow tho Mutual Llfc's lead, and the Old
pOhcy-h0ldcrs remain dissatisfied, there IL little
reason TO believe that this thru attempt 10 control
the IKE insurance business VIII be any moro success
ful than Its two predecessors, ana he company VIII
be compelled to look up "a fourth expedleur.'
OPINIONS or OTHER COMPANIES.
Secretary Charles =. Fraleigh and Superintendent
T. III. Brosnan of the United States Lite, in q gen
eral conyeToa yesterday. said that the action Of
tho Mutual Idfe would doubtless force on other
companies the consideration Of the eXpediency OF
corresponding reduction. "Ihe argument against
reduction they said, will be that it will compel
weaker companies TO make reduction to the
same extent as the Mutual Life. and in case Of
TINS might result IN an impairment, IL lutI
business should continue rs III the past
At the Office of the Germanla Life tho manage
mont could hardly credit the statement a. It APP
peared Yesterday morning that the Mutual Ifo had
made an arbitrary reduction OF 10 per cent on All
premiums. " IL would be contrary, they SAID 10
all principles OF scientific insurance. There ~ Ger
tam net premium which meets the mathenaucalT c-
quiTemcnts of safe life insurance. Added 10 rms Is
the portion of tho premium which comes under the
term loading designed to meet the Expenses of the
business rents, salaries, printing. etc. Ia ordinary
In ft policies
whole premium; in short endowment policies, 10
* To 20 per cent. So a reduction Of - per cent
means cutting down OF the margin for expense,
nearly Ouc-aan IN one case ai.d almost WlPiug ~
ont IN the other The Mutual Lite recognized tins
principle IN their 80 per cent rebate, winch |as Tor
that amount only on ord uAfy life riskS, and II per
cent short ondowments. But really 10 old poilcy-
holders III the Mutual the reduction IL fiction.
Wherr they formerly paid 800 premium and got
500, out they will only dra" 10 "a dlyldends.'
In regard to the charge that this Is an attomp: OF
the Mutual Life to get cOutrol Of life insurance ia
tins country, they SAID: " WHAT else could be its
obicctI The company has large business 1hr"e
or four years ago the reduction couid ha'e been
made with more reason lhtn now tor then II COuii
have been done cheaper. lie fact that interest =
so much lower now than some years ago reduces the
profits OF Insurance companies The several A.
temptS made by the Mutual Lite To reduce pre-
mIums show NacIiiailoD IA the m"naScmrnt. when
stability of policy IS one OF the first principles OI
lie insurance. Inc Mutual Lite and the Gcrmana
did not come ia actual COmpolIt Oh, ~ nlne.tehthS
OF ihe risks OF the latter company were among me
German population. The Mutual Lies 80 per cent
rrb ate system td not affect tue GcTuanias business,
80 1t Is not probable their reduction 81 IL per cent
will. IL wa, not known that any r,pnta Die COM
pauy had privately made rebate OF 20 To 80 PER
ccut. Ihry considered the note plan was "a more
binding one on the insured than the rebate system,
for the note held bv the company could certainly bo
taken from the face of the insurer, policy, Nrc II
was questionable II compdnys draft lnd'r'"d
without recourse could Ice 80 iahen. Whatever the
ACTON ., the Mutual Is. it !, an experiment, aud no
matter how good the trustees judgment may ne. "a
risky Nor does the uwc Tor maknEIt appear
to well chosen a. the rates OF interest are 50 low
and such "a large amount OF real estate has been
thrown on the hands Oi Insurance companies
through fore, Io,uIc proceedings, az which IA" MI