Morning journal and courier., 1885-02-02
Monday, February 2, 1855.
ASSESSMENT INSURANCE.


Mr.. Tarbox, insurance commissioner in
Massachusetts, has made a stir by his propo-
sition to bring assessment life insurance as
| sociations or benefit associations under closer
supervision. There are two forms of assess
| ment insurance companies in Massachusetts
those that are strictly mutual and those
which are not. The former is strictly mu-
tual, every policy-holder being voting mem
Der and entitled to an equal share: the latter
is a close corporation, to which the policy
holders do not belong, and in whose manage
ment they have no voice. Moreover it has
been the practice for this latter class of asso-
Citations to issue Certificates of member
ship" or policies which are assignable to
those having insurable interest in the
lives insured The law exempted the former
class, the original beneficiary associations,
from the operation of the statute regulating
life insurance. Commissioner Tarbox claims
that the exemption from the operation of the
life-insurance statute should be strictly con-
strued and not allowed to cover corporations
Q) which do not admit their members to
share in the management of the corpora
tion or corporations (9 which contract to
pay death benefits to others than those desig-
mated by law,-namely, widows, orphans,
relatives dependents of deceased members
of the corporation" or finally corporations
(3) which hold their funds otherwise than as
trust for the benefit of the insured
Commissioner Tarbox also holds that in
assessment insurance there should be no re-
serve, because the certifcate-holder pays for
o1,1 cir 81;
ance as it accrues. He holds also that assess
ment insurance under the law can only be
strictly mutual and the law never
designed that eight or ten men
should assume all the functions
of the association or divide up any of its
funds among them. He is hostile to the as
signability of policies to those who have no
insurable interest in the lives. ''I would
treat he told the committee, call life insur-
ance as vested and irrevocable trust, and
never a subject of merchandise. The idea of
investment in life insurance is repugnant, ex-
cept in the sense of an investment to create
trust that shall be safe from the ordinary
vicissitudes of life. When a man insures his
life for the benefit of wife OR child, I would
have it trust inviolate for the declared pur-
pose, available only for that purpose end
when the event occurs"
The Springfield Republican heartily sup
ports Commissioner Tarbox. 1t says of the
assessment system: The weakness of the
policy accruing to the family of deceased
member depends wholly upon the number of
persons in the association from whom the
tax is collected at that time. AS the original
members reach period where deaths become
frequent, the association ceases to be attrac-
tive to young men and begins to decline and
those who are in at the end find they have
paid assessments for everybody else, but that
there are few associates left to pay their own
In the meantime, their youth during which
they could have insured cheaply in the "old
line" life insurance companies has passed by,
SO that they have lost everything.
This matter is important to the people of
other States than Massachusetts, 1t will be
to see how the legislature of Mass
achusetts deals with it.