The daily morning journal and courier. [volume] (New Haven, Conn.) 1894-1907, 1897-05-04

The old eXpedient of graded rates fixed
at entry, to be called for as many times
during each year as mortuary necessi-
ties required, adopted so generally by
the fraternal societies, Is now admitted,
almost unanimously, to be inadequate
to stay the tide of practically unlim-
tied increase In the number of assess
ments as age advances, During the
year additional associations which had
failed to keep a sufficient reserve to
maintain level'stipulated rates have ac-
knowledged the fact by levying addi-
tional assessments or becoming absorb
ed into stronger organizations. Others
will treat their low rates hereafter as
for term insurance, to be regularly ad-
vanced at certain intervals and have
put out much higher stipulated rates
which they intend to maintain as level
with the usual machinery of self-im-
posed mathematical reserve. Some
radical changes appear in the new form
of policy. All premiums, whether term
advancing with age or fixed from entry,
are collected in advance and "stipu-
lated" in the contract the same as with
a non-assessment company; and as all
forms of policies require some reserve
which must be impaired before an &C
tual inability to pay claims can occur,
the Safety or assessment clause is
made to apply upon the impairment of
said reserve and limited to the sum
| necessary to its restoration.
The Commissioner says that this
movement is altogether more sound
mathematically than those which have
preceded, and brings the assessment
business upon the same plane as regu-
lar insurance, with the additional re-
source that in case of necessity a re-
ownership may be avoided through the
reserved right to call upon it's own
members for assistance. He thinks
paratively recent departure will depend
upon the correctness of the stipulated
premiums and the character and man
agement of the self-imposed reserve,
over which the statutes and insurance
departments have no control. IF these
are made sufficiently high there will be
but little occasion to apply the safety
clause" A yearly computation of the
| reserves on the basis adopted by such
| association will be necessary to deter
| mine whether a surplus exists for the
purposes of a dividend, or a deficiency
which requires an assessment.
The chief danger, according to the
Commissioner, lies in not assuming
enough reserve for term insurance. Be
sides the mere unearned premiums on
this for the unexpired period for which
advance payments have been made, an
additional amount is required against
the emergency of the sudden stamped
ing of a volume of good lives, by reason
of some accidental occurrence, leaving
on hand an undue proportion of de-
Perforated risks In order to take care
of these without undue assessments,
and to run the association, In such
event, under it's insufficient income for
both mortality and expenses, an addi-
tional or emergency fund should be
maintained upon term policies equal to
| about half years regular premiums
on outstanding term risks.
It Is encouraging to learn that there
has been such an improvement in as
sessment insurance, and 1t is to be
hoped that the wise and safe sugges
tons of Commissioner Belts for it's fur
Their improvement will be adopted.