New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1892-02-03

brook Hall. woum have been only four hundred
twenty nine thousand three hundred and nine dollars
and twenty-five cents This alone would Increase our
surplus eight hundred thousand dollars.
AGENCY MANAGEMENT
Under the head Of Agency Management. the Super
inendent o, Insurance says that " Funds fhe Com
pany to the extent Of hundreds OF thousands of dol
lars have been advanced 10 these agents without In
terest and upon insufficient security To persons mn
familiar with the life insurance business this state
ment would seem To indicate the worst possible man
agement Of our Agency Department; IN" lSoi' VufG
therefore, 10 b. u.ly explained lie general system
upon which advances have been maze 20 HSeht' N
this COMPANY and by other life companies may he
Illustrated follows tlc figures uscu pens W'.sF
Illustrations and not th' terms OI any ft
cOnli act: The Company We NIL "a! enters mo
contract with Brown. 70. state, that Dc ,ia fc'eiNe
commission Of twenty five per cent OF tng iN1 g,''i
premium on all police, paced DS sum aiu l'l - -
commission OF hye per cent on each renewal pt.'"tt
paid on such p2ll,e' , ngS o Sa a9 ascnt
and he ordinarily pays them thc tN'lE-Nc per 80
commits on allow ed him by the Company on INST year
Tor his own compensation. but while he continues ~
amount against commission. or ~ iist.s - ~;
such amount being rcguntcd by III" of''HNtinv', ~
the case. As competition lncIt"'YS hiN LIZ a. "a
In order TO retain subhgeht Jone, e WI, ~ In
pay than twenty nve per rent cohihi-'lo 10 w.
his Brown OBLIGED TO- make new nr" I;og MIX NIX
year commission. the Company agree |" advance u
him sum equal b TWO renewals tor zen per I 1r Tn
business secured by Jones ana To hon al ol .Io"Il
future renewal commissions uIder INC to!,'aot a ~
cdity for the advance. brown i now l"ic ~ pay """
thirty five per cent commission, and - retain NJ ser
vices But at the end Of the year, Brown Is applf
emily In debt To- the Company IN an amoun Tes'
Jones. and the larger The business tG iarc H oo ~"
parent debt This viii continue rn'i s Weeds
the amount OF new business annuaiy doIs' =" q
rapidly Increasing cuisines ms ,d r to,aI amount pa
10 Brown has not exceeded what the b,,'l"tS, -
actually worth, the time Will come Wrn ti th~ t
sions accrIng under hS contract VIII eNe sipcs from
cost OF the years business. browns DISHES HT I
this time forth viii require less cNr.ndl,1IG OF ,b ,g
part Company In proportion To rs N"luh' 'Ia
heretofore ard his socaled imdebtedne.s As ,, ZIP
uears under his contract viii disappear more lapMy
than It accumulated at which time, Brown WI rea|o
the profit for w nss f hG mi his in large paw
will have lower expense ratio to TINS extent ~ t'
future and It's surplus will hc correspondent Ia
creased You will notice that this debt docs not rep
which Brown ir,s sguannc,ea, or -,
for his own He has Simply uIed 'h' m3 i -
carry on the COmpany's business II II sh0!in 'V,'
hannen that Browns renewal commissions fail u can
eel The debt tho business has simply cost IN. om!iN
nro bot thc total amount Of comm siOns and advance
received by Brown should never be sum rrei''' '"
the business secured by MN ""S "oi'"'
l.. C. vANUXEM & co.
The Superintendent criticses the agency OF McSsfs
L. c. yanuxem q co., at Philadelphia. Ia, and al
lcgcs debt to the company on account OF "hat no
terms "cxtravagant allowances Of several hundred
thousand dollars Referring 70 the Illustration above
II the method on which general agents business j.
conducted and the manner in which IN apparent o'p
might be contracted when l state that from l77'
to 1891, inclusive. this firm wrote business aesie
eating one hundred and thir y-two million uo
Iar- clear explanation Afforded Nod o
how under the above practice, large ueDt MI-'t hP
pear 10 exist In th, particular agency, the "dth,e
contemplated In our Illustration TOOK Oh N'Di' i
under various contracts (Which, however, were dIH"s9
subject to our spproIa ,he mcmlrs Of this firm
drew advances for living expenses, rs Dtloi Iclc't
agents but at no time has the amount OF money 40
vanccd to l.. {. NanuXen Co exceeded tc r"irv T."
ton II has been possible for single him 10 tuIe q
large territory, and by creating renewal HTa, 'lu
his case II very large proportions we nave nv hu
rcGucnt changes I'm general agents. and have lr3cN
escaped tic danger Of having our bushes cI!cu i"
1vor Motley ccnsed with the first year Of IL existence
in this why McsSr,. l.. G. NauuXcn ~ 'o nave o"' I"l
81 several Of the smaller He insurance companies and
the largest business Of any single agency III w.
pcn-c and the cost 81 It's procurrmrut ni' Zen d.
'mdcd each year in the disbursements ~ ~. I,HN
II the advance Is, first Ia produce aisf pu,.'n
and secondly 10 create an Incentive for the gen RAJ
rossble cost In order that after period Of years lo
may begin TO rallrc return commep ,uia'' W ,
each year. II becomes necessary to Keep WIN Tn
manager bloitcr. or sab iedgcr ana me 'I 1T" ior
The illustration would show for an once doing twenty
millions Of new bnsncss IN r s n5 b S Snprntenden
i, Insurance instead 81 viewing Tho business ~ We
done rs simply business paid for, decided 10 80 nn,,
|
frLt II il Of first importance that You understand
clearly that This money Is not due from h. e. NahA ~.
4 Co in the ordinary acceptance OF th' "'Il "'u''
II is due under the terms OF thelr on la', q. S,
time, the commissions carried on thr Dua ' ',n
VIII uuuidato the money advanced rom umc u tu'
nr rho conduct OF the business. II has not tr slu
dcred hy them, nor rtnincd hy them. IL mas H"'
benefited them personally. and never can u,,', -
s,ed tho earnings Of their business have lgmhaioi
ali moneys drawn for every pufpo," under thf CON
trnct Including advances and agency cNp 'n"S ~
every Kind And here let M" call your auell' IN !"
an extremely important fact wlnch appu.> !" "l' ,
ruseion OF agency matter hy IN" superintendent anu
rLirh no 10 mention. namely, that tir-' m
vuuces I'm every case, were charged - expenses III U
c~mn,ny's hooks when the advances were made" alu
that the COMPANY hHs counted mem as u pil ~
its Insects or surplus The superintendent. therefor"
stead az unearfhing with great dncnlty sOln'lhnH
m. company desired to conceal As "" Stil'>; ~,
tlcolly sss M an arbitrary standard ~ what ne ou-h
our huSncss ought 20 coei in any gwen year. ullu
crarced mn as debt the difference between ms opn-
lon and oirs II would he scarcely l"s, unjust - nc
compnny had he alleged. I'm any gwen year tI't ,c
Aggregate amount paid icr the procurement "i tn'
nnsness Of that year was ON" or wv Num- .,,,
drc from tho mon 10 whom T. was PAD. Esht hrN,
desire IA stato. and state II with all due rr't j."
the ourion OF the official with whose conc H,. 'i>
differ that i'm matter, ~ this character thc ''h'i- ~
- men who have had thirty years experience n lH'
business a. 10 the propMcty ~ pylnS gN"n sun
FOR y given volume Of huSn's, lthcy alone non- r,
vrrsnnt with all tho surrounding orcuhoHU' H.
con Inqences) are nc likely 10 be correct ana n l-'
interests ~ poJcv holders. the opinion Of 3 g,n
,lomsn WHO while cmlncrty qualified ipr iHe u',
~ re Office cannot 10 credited with snecal hhp"lu-'
In he particular Interests now under di,cIe'''Ih
SPANISH AMERICAN DEPARTMENT.
The Superintendent nntunlly treats at some length
tho affairs Of the Spanish American department i"'
invitation extended him by our Io"rd OF lH's,c,
.t,f