The San Francisco call., 1895-11-17
INSURANCE.

1 " l-l
ratio of death claims is only about. 80 per
cent of that expected by the tables upon
| which its premiums and reserve are calcu-
lated. >, ::
The ratio of expenses is small and shows
| economical management.
! An investigation of the business done in
| 1895 to August l discloses no unusual event
apart from the regular course. The COM
mission, however, desires TO give express
sion to their opinion, applicable alike to
all companies that the interest of the
policy holders dictates that no more
money be carried as leash on hand or in
| banks" than is necessary to meet the cur
rent needs of the company, and that all
| funds over and above these necessities be
| promptly invested.
The amount of business has increased,
with corresponding increase IN income,
disbursements, assets, liabilities and sur
| plus.
| A larger relative proportion of invest
ments in city, county, State and United
| States bonds has been made. The COM
pany holds no stocks and does not invest
! in railroad bonds.
The expense chargeable to eacL item is
well within the limit provided for, except
| In the single case of new business, whereon
the first years commissions plus the ad-
ditional expenses incident to the first
year, after allowing for light mortality,
does not leave enough of the premium to
| cover the necessary reserve at the end of
! the year.
This comment is not to be accepted as a
reflection upon the company, but is made
| to emphasize the regret OF the commission
that all fixed premium life companies do
not take concerted action in cutting down
| this large expense item found in these
companies, rather than await the time for
| legislation to restrict the expenditures for
| new business.
| The Various Departments.
| The several departments of the COM
pany are conducted with ability and IN
| tegrity.
| The medical department is thoroughly
systematized in its methods of appointing
| and supervising local examiners and scru-
| tlnlzlng applications for insurance.
The ratio ofrejected cases averages about
| per cent, and the districts in which ap-
| plicants must reside are restricted to the
| better portion of the United States-no
| foreign business is done.
| The care exercised in selecting risks is
| likewise proved by the actuary's calcula-
| tions, showing the deathrate to be only
| about 80 per cent of that expected by the
mortality table, although the company is
| now 80 years old. Care is again shown by
the small number of cases of fraud among
death claims.
| The legal department looks after the
! titles and abstracts, and examines mi
nutely into the legality of each bond in
which the company makes investments.
A careful inquiry into the details of this
department will be found in the Attorney
| Generals report.
| The actuarial department is well
| systematized and equipped, making it easy
| to acquire any information desired. The
card system is used in this and several
other departments with good effect and to
an extent not usually found.
| Tho financial Vrifh tho oiH
| OF the finance committee of seven trustees,
| is an extensive affair. This committee
| meets several times week and passes
upon every investment. The minutes of
| their transactions, as well as the character
of the investments, indicate careful. and
| lntelligent discrimination.
The agency department is managed with
| the assistance of the committee on
agencies and insurance. The increasing
new business and advance in insurance
outstanding from year to year are evi-
dences of competency. The company
| gives no bonuses, allowances or salaries to
| agents. Agents are under bond ana losses
| from default are few and small in amount.
| Agents debit balances and commuted COM
missions are noticeably small.
| The examining committee is composed
! of three trustees, whose duty it is twice
| year December 81 and June 3O) to
count all the assets, compare vouchers and
checks with the cashbooks, check all the
entries which finally culminate in the
| ledger, and verify the trial balances from
which the published ana sworn statements
| are made up. This work was found to
| have been faithfully done both for Decetn-
| ber 81, 1894, and June 80, 1895.
| No expenditures for illegal or improper
purposes have been discovered. The Gus
tody of securities is in the hands of the
J president and second vice-president.
| Bonds with two sureties for 1000 are
/ hr-% ~
and treasurer. All officers and office en-
| ployes are salaried, and receive no other
com pensation. No one, except agents, de-
| rives any commission upon the business. ..
The company's treatment of policy
holders is eminently fair. All privileges
and benefits given to new policy-holders;
as to loans, rates of interest, surrender
values, guarantees, freedom of occupation
and residence, are extended at once to the
old.
Every facility in making this examina-;
tion has been cheerfully extended by the
officers and clerks over a period of more:
than two months, frequently entailing
night work and considerable interruption.
to current business and suspension of va
cations. The new business written by the
company, however, during this period has
been as large as for corresponding date in
any previous year of its history. =.
The commission has found little to criti-
pleasure to congratulate the policy holders
of the Northwestern Mutual Life Insurance
Company upon having their interests
guarded by so efficient board of officers,
and the highest compliment that can be
paid is that this examination has demon
strated that the com pany in its dealings
with its policy holders and benefciaries
and in its financial management has lived
up to that high standard of reliability
which has gained for it the confidence Of
the people and made its grand success
possible. Respectfully submitted,
WILLIAM A. FRICKE,
Commissioner OF insurance Wisconsin, Chairman.
GEORGE s. MERRILL,
Insurance Commissioner Massachusetts
BRADFORD K. DURFEE,
superintendent of Insurance, illinois,
J. 4. NIPPLE,
Commissioner of Insurance South Dakota
EUGENE MOORE,
Auditor OF Public Accounts Nebraska.
CLARENCE NJ SMITH,
General Agent,
Rooms 110-112-114, Phelan Building,
San Francisco Cal.