New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1885-03-11
LIFE INSURANCE METHODS.
VIEWS OF yIcE-pREsIDENT MccuRDY.

PURSUING the inquiries concerning the dlueront
systems of life insurance. TRIBUNE reporter yes
terday called upon Mr.. Richard A. McCurdy. vice
president Of the Mutual Life Insurance Company.
to obtain his views with regard to the recent
attack Of the Connecticut Mutual upon some of the
New-York companies, and to secure more light
upon the motives of the attack. The following
| interview took place:
Q-What do you think is the object of the Con-
| necticut Mutual in Its attack upon the principal
New-York companicsi
Al have no interest in the controversy be-
tween Colonel Greene and the Equitable and New
York Life but only far as it relates to our own
| company
Dwell, what Is the real animus of Colonel
Greene's recent fulminations
Al think that the almost utter disappearance
OF the Connecticut Mutual, as factor in obtaining
new insurance. Is the reason for it.
Q.-Then you consider Colonel Greene's motive to
be desire for notoriety and hope to increase his
business therebyf
Alt may be on that account. He seems to be
deficient in fertility of resources. and your sur
mise may be true
Q.-What was the principle that Colonel Greene's
company started ONT have been told that at one
time it was very successful company
A.-The Connecticut Mutual was the principal
note company of the country; and the fact that
they adhered to that system long after most Of tho
other companies had seen the evil of it and aban-
dOned 1.-THE fact that they persevered in twas
the first step in their unsuccessful career.
Q.-Was the note system popular at any timef
Am the early history of life insurance it was
very popular The Mutual Life always op-
posed it. We stated in our annual report, in
1s47: 1.-The Objectionable features.in the credit
system of life insurance are these 1t creates no
sufficient funds to establish such q company upon
stable foundation to secure 1T against liability to
DO Overthrown by any unfav0rable turn at risk
I'D. 1t makes those who are able liable for the
Deficiencies of those who are unable to pay.
Lastly. 1t defeats the general objects of such
institutions, which is a great savings bank for the
benefit of widows and orphans.
"The statements and expectations here given are
intended to show the practical working of the
credit SYSTEM and that this dangerous innovation,
If generally acted upon, must later cause
great disappointment and disastrous results"
Q.-But Is not the note system at this time prac-
ticaily dead issuoi
Alt would be but for its results as shown to-
day.
Q.-But are there not other reasonsf
have been told that the Connecticut Mutual
have made very large loans on real estate Do you
know what has been the result of these invest
mentsf
A.-They have been Obliged to take in an i'm
mense amount of real estate under foreclosures,
much of which has been unproductlve and has in
volyed largo additional OUTLAWS IN taxes, care of
property and repairs, with 1ncdentaiiOss of inter-
est in the meantime.
Q.-Is 10 not q very strong point in favor OF the
Connecticut Mutual that they are creating re-
serve new policies at the rate of 3 per cent per
annnm for future interest
Alt is true they are doing this, but it amounts
to nothing more than the company limiting itself
beforehand to pay very small dividend, and it Is
creating a surplus at q loss to its new policy
holders for the benefit of the old poicy-holders,
who have suffered through the losses which
| the company has sustained. and the promis-
sorry note system under which it had been con-
Quoted.
Q.-rhen you think there is no advantage in
| this
| A.-Certainy not. Tho now policies are brought
| in. and squeezed out of their dividends for the
benefit of the old members Why, il is only ncces-
sary for agent TO have five minutes CONVERSE
ton with an intelligent policy-holder to convince
him that the Connecticut Mutual about the
poorest company TO insure in so far prospective
returns are concerned. io is trying to recover part
of the money lost unsuccessful real estate opera
tons by this method; they have very large
u
IL is owing to the insecure foundation upon which
the Connecticut Mutual was based that after many
years PRACTISE of the injurious note system. against
which we warned the public many years ago, 1t was
not able successfully to stand the shock OF large
accumulation of notes, and at the Same time tho
cash losses which took place III consequence OF ILL
iudged loans These things have brought the CON-
pany to position which has rendered 1t nouen-
tIty among the active companies OF the day. Much
of this may also be duo to the fact that colonel
Greene's health is rcputed not to have been robust
of late years. and while he really may have been
unable to infuse the necessary energy into the
management of his company, his views have posi-
bly, become distempered from the same cause.
O.-How much real estate have theyf
A.-They have or had recently, nearly one
quarter of their assets in real estate; on
this 1t is not probable that they have
received 2la por cent net per year. 1t is oN-
ing to this loss that they have boen induced to try
TO create larger reserve by practically reducing
the dividends on the policies of new members.
O.-Do You issue what is called Tontnc policy
A.-Our policy cannot properly DO called Ton
zine rolicy IL is termed The Five Year DIstribu-
ton Policy"
OIL am told that this new policy of the Mutuals
is really the way IN which it conducted its business
during Its earlyyeaIsf
A-Yes it is "A substantial return to our Old
method of paying qumquennial dividends instead
of paying them annually and is believed to be. as
now presented, most valuable form of insurance
for the pocy-holder.
O.-Is this plan popular with the pubicf
A-Yes we are doing very large part OF our
business on this plan. and are not aware OF any
troublesome competition with Colonel Greene's
company. There can be no comparison between
the advantages of this plan and that OF the Con-
neeticut Mutual on a per cent reserve. Colonel
Greene show his appreciation OF the necessity OF
increasing his available surplus, and that this Is
the only way left him. 1t does not, however. hold
ont much indncement to now applicants.