New-York tribune., 1897-07-31
MANY POLICIES ILLEGAL.
REPORT OF THE COMMITTEE TO INvEsTI'
GATE THE MASSACHUSETTS, BENE-
FIT ASSOCIATIONS.

Roston July 30-Augustus F. Harvey actuary
of the Missouri State Insurance Department. and
James NJ. Lewis of the same, who have been In
vestgating the affairs OF the Massachusetts Bene'
fl Life Association. to-day made public their re-
port Besides showing the financial condition OF
the association the report finds that all of the
policies issued from 1879, when the organization
was Incorporated till the enactment Of the statutes
OF 1885 relating to insurance upon the assessment
plan. were illegal, a-d that the llegaty OF the
business OF the company prior to 1885 seems to
have been condoned and egalized by the Legis-
lature The report also contains further severe
criticism of the General Court for the legislation
in connection with the case.
The following is the result Of the examination OF
the account books OF the association: Mortuary
and reserve 1909 s Is; expense account slo6s32 s3
non-invested assets, S@, ,l65 q; contingent assets
1888 30; liabilities, s9l,3s9 80; emergency fund.-
ss9S 239 Is; policies in force June 10 3S.llO
The report says:
All irregularities. If any. in the conduct of the
business are now under consideration by duly
chusetts, and for that reason we have no further
opinion to express except that the self-consti-
isso by which out Of one thousand two hundred
and thirty members seven Of them ma made n them m
be entitled to vote for officers or in any manner
affecting the DISPOSITION Of the funds or the con,
opinion. indefensible destruction Of the
enae GnGGP aa ThG m ali hs such ssaIrs
this matter however there is a difference OF
opinion among lawyers.
What is wrong or at least open TO criticism, is in
the concentration OF the Commission account, by
which the balance of monthly expense income over
expenditures. which was regarded by the corpora :
tors a legitimate profit to themselves. was paid
to themselves and charged out to commissions to
agents" The total amount of these payments to
incorporators appears to have been about si6oeo
since 1896 The Governors Commission put II at
about $4,000 but the items for 1891 1913 include
some $4,000 $4,000 paid for commissions for re-
insuring other compan MES. There are no books
showing the total distribution OF the commissions
paid among the persons receiving them
For the mismana cement the incorporators are un-
doubtedly blamable. but less so than Is the Legis
laturc, which. contrary to the advice and protesa
ons of the present Insurance Commissioner and
his predecessor. put premium on invincible insur-
ance and encouraged the essaying of highly COM
plex business without rudder or compass. and so
made mismana cement possible
The new president. Mr.. Rolker. proposes reform
He knows and polcv-holders must learn, that no
life insurance business whatever be conducted
I safely without a reserve and without an interest
factor
In view of the facts We strongly recommend that
all policy holders subject the call for extra
sessments now pending now pay the amounts asked
for TO be held in trust on their account until ~ per
cent OF the amount shall have been paid. and to be
returned 10 them in case this percentage is not
As TO the future OF the association we are salts
payment OF the present call and extra call by the
assessment members. and also upon prompt pay
ment OF future premiums by new membership not
subject 10 assessment.
President John II. Rolker of the Massachusetts
Benefit Life Association to-day issued circular
to members OF the association announcing the fact
that with the aid OF some policy holders he had
succeeded in inducing Alfred s Woodwork. prcsl-
dent Of the National Eagle Bank OF Boston. TO
consent to act trustee for the policy holders in
relation to the conditional payments OF call No. lO3
| and the extra call.