Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1884-01-05

ternoon presented special report 70 the leg
i.Iature touching questions of insurance.
The report says:
1.-The annual report of the insurance de-
partmsn, cannot be compiled and submitted
in complete form in season to be of use to
the general court in its ordinary session, and
therefore. in order that the Legislature may
be advised Of such information a. the de-
p,r,ment can furnish pertinent to subjects
likely TO invite legislative action or discus
sion this communication is transmitted"
The Union Mutual Life of Maine forms
an important subject in the report. The
commissioner says that the exclusion Of this
company from the State has provided much
and various comment. He gives his reasons
for biz exclusion of the company from Mas
sachusett, as follows:
THAT its reputation as bourne to him BY
reports, Was not honorable. December 81,
1875. its reported surplus was Sl.24l, l5s.
December 81, 1876 that surplus was reduced
to SOL sos. This shrinkage of over one mill
lion dollars in a single year was not due to
extraordinary expenditures or increased liza
bilities or the excess of disbursements within
the year over income was but Sl05 ,557, and
the increase of liabilities but SS0,562. On
December 81, 1877 its reported surplus was
s37 ,S5l. For 1876 ito real estate was re-
turned at cost value $3.50, 1893; fer 1877 the
return 10 appraised value Of real estate was
81 ,227 ,9sl. Standing a. the company then
did, if not really insolvent, was confessedly
close to that peril, the temptation was siren
uous to save it by . false representation of
| its assets. For 1882 the statement is cost
value of real estate 81, 925,l7l. Its real es-
tate as thus valued comprises nearly q third
of its entire assets, a greatly larger proper
ton Of such assets than any other life COM
psny hold. This real estate was acquired by
foreclosures of mortgages taken for injudic-
Gus loans. Its cost to the company, which
includes the amount of the original loans,
interest, charges OF foreclosure and other ex-
| pendtures, is not the proper measure of its
present value. Upon its own exhibit the
company has a smaller relative surplus than
any other life company. save one, doing
business in Massachusetts,. If its valuation
Of its real estate be 10 per cent in excess of
its true value it is insolvent by the Massa-
chusett laws, allowing full credit it claims
| for other assets. From 1875 to 1888 the
company's assets decrease from 80, 1853, 664
to Se,260,67S; its annual premium income
from sl,s76,4ll to $780,, $40: the number of
policies from 90, l22 to l4.040. Within that
period 576l Of its policies have terminated by
surrender and 10, 1856 by lapse, an extraor-
binary record as compared with other COM
panies of its class. Meanwhile the salary of
its president was increased from $1,000 to
$4,000, its annual salary expenses from
$40 600 to 49,, 900; while the ratio of it's ex-
pense for agents was largely in excess of the
ration Of such expense by like companies,
which show more satisfactory apparent re-
suits. An order of the legislature in 1881
requested of the life companies statements of
the salaries and emoluments of its officers
All complied except the Union Mutual FL
nally, under apprehension of the conse-
sequences of refusal, it furnished the infor-
nation. The peculiar circumstances attend
ant upon the removal of the companys prin-
cipaE office from Boston to Portland and the
incidental legislating out of Office of a mum.
Der Of its officers has induced the suspicion
that such action was schemed to prevent a
critical investigation of its affairs. Every
we'll based mutual life insurance company
inevitably accumulates funds beyond il,
legal reserve. Its assets may be divisable
into two funds, the reserve, which il is re-
CURED by law to have for the performance of
its policy contracts, and the surplus, which
10 the accumulation above the reserve. Tbis
surplus is the property Of the policy holders.
Ordinarily, in the administration of a COM
pany, portion of the surplus is held in in
vestnent to protect the reserve, and the rest
10 distributed into dividends in cash or ap
piled to the purchase of additional insurance
at reduction of premium payment a, the
election of the policy holders. The COM
missioner thinks that Massachusetts right
to examine into foreign companies doing
business within her borders is absolu,e
eSoSae'N 20 tuc uuts VI tue COmmloe-
Toner to make such visit and examination
whenever in his judgment 10 prudent. This
authority and duty are not subordinate TO-
dependent upon, or relative with the laws
Of public administration of other state,
Massachusetts does not remit her peonle
to foreign government for protec-
ton In matters within her own domain, Tn.
failure of Commissioner Smith of Maine to
enter into joint examination of the com
pany is criticised in the report, Commissioner
Tarbox stating that he is ever ready to enter
Joint examination. In closing hi. remark,
upon this subject, Commissioner Tarbox re.
ters to the legislature the propriety of a for.
NAL investigation of all matters pertaining to
the dispute in order that the truth NAV au-
thoritively appear and justice be done to him
and the company. In finishing his COM
municaiion the commissioner urges the re.
peal Or modification of such insurance Law.
a. the public welfare demands.
The Portland d Rochester Safe n Cor.
han Robbeh