The daily morning journal and courier., 1897-11-08
COMMISSIONERS REPORT
CONCERNING THE NATIONAL LITE
 ASSOCIATION.

Insurance Commissioner Betts' Finding on the subieot-what the Investigation Disclosed-The Reorganization. State of Connecticut, Insurance Depart
 ment, Hartford, Nov. :, 1897.
 Examination of the National Life association, Hartford, Conn.
 The quadrennial examination of the National Life association was made pursuant to section 2857 of the general statutes: "The insurance commissioner shall, at least once In four years, visit each life insurance company incorpor- ated by this state, thoroughly examine it's financial condition, and ascertain whether it has complied with all the provisions of law"
 The examination was begun August 3, and was in charge of MT. s. H. Wolfe, consulting actuary, of New York, who was assisted by MT. William P. Futile of New Haven, and by the employees of the department
 In addition to ascertaining the finan- cial condition of the association at the date of it's last annual statement, I also wished to determine whether there existed in the management of the as- sociation, or it's treatment of it's policy holders, any justification for the ab- normally large number of complaints which were addressed to this depart ment.
 The records kept in the office of the association are incomplete, and in con- sequence the examination was delayed from time to time to determine facts which should have been shown by reg isters, ledgers, cards, or other memo randa,
 It has been the policy in the past for this association to take over without examination the policy-holders Of smaller assessment concerns whose in surance had become valueless, owing to the failure or dissolution of the com- panies in question. The wisdom of this step is open to discussion, inasmuch as the class of risks taken from the small CT concerns is usually of an inferior quality, which means not only an 1n- creased mortality, but additional cost to the association. The officers of the association have also made inside con- tracts in the way of bonuses and re- newa1s, which have not been profitable at all to the association, and some of the methods used in absorbing these companies are questionable, and are not a credit to the association.
 The officers of this association have attempted in many ways to mislead the insurance department and the general public. The chief sources of deception were:
 (a) The suppression of death claims at the end of the year
 (b) Reporting to the insurance de- partment amounts as payments to ben- eficiaries, when, in reality, these amounts included payments to other people.
 Co Retaining upon the books of the association several millions of insur ance which the officers knew to have lapsed or been not taken during the years 1892, 1893, 1894, 1895, and 1896.
 (d) Reporting that death claims had been paid, when, in reality, they were not paid for some months afterwards.
 In settlement of death claims it has been the policy of the officers to scale the policies and use improper methods to induce benefciaries to accept less than the amounts due them. This practice is inconsistent with honest management, and cannot be condemned too strongly.
 Although no liabilities were reported to my department, I found salaries, rents. office expenses due and accrued of over $3,000 and also over $2OOO of credit balances.
 The assocation reported that on De- cember 31, 1896, it's real estate owned was valued at $524,2OO amount of in- cumbrances thereon, $307, ,3S7 50; actual +o departments appraisal of this property shows depreciation of $14S359.92
 The net amount of losses and claims paid to beneficiaries during 1S96 after deducting premium liens and interest for advance payments, amounts to $309,112, and it will be apparent from an inspection of the sworn annual state ment that, in order to administer the affairs of the association, it cost $23O,- 822. In other words, administration ex- penses amounted to 72 per cent of the actual payments of death-claim bene- ficiaries.
 The following statement, compiled from the books of the association and my own appraisals, shows the condition as of the first of October, 1897.
 LEDGER ASSETS.
 Cost value of real estate eXclu-
 sive of incumbrances. .....: ...$ .$224, 50 % Loans on mortgages on real es-
 tate .:...:.. .......... 69,192 B Loans secured by pledge of bonds,
 stock, or other collateral ..... 5445 04 Cost value of bonds and stocks
 owned ........ ............... 77,9Os 43 Premium notes ................ 5,SS7 S9 Cash in office and in banks. .... 42579 76 Agents debit balances .......... 2S,45O 7G Bills receivable ................ 1,030 %
  Total ........ .$455, ,095 15
 LEDGER LIABILITIES. Agents credit balances and bor-
 rowed money ................. S11, ,62S 43 Total net ledger assets. ...... .$443, ,466 72
 NON-LEDGER ASSETS,
 Premiums in course of collection
 (eStimaTed) ........ .......... S00,0OO 0O Interest and rents due and ac-
 crued ................ ........ 3,67O 3s Gross assets .$497, ,137 10