The herald., 1897-09-02
OFFICE OF THE HERALD,
T.os Angeles. Sent 1 1907

OFFICE OF THE HERALD.
Los Angeles, Sept. 1, 1897.
Tho collapse of the Massachusetts Bene-
nt Life association. which has been re-
garded as one Of the chief exponents of
assessment Insurance, has been the theme
of much comment In the eastern press and
in insurance journals generally. The pres-
dent of the concern describes the situation
as follows:
1.-THE number Of assessment members Is
about 10000. The total membership of the
association is about $4,000. and there is
still SO. 900 of insurance in force. accord
ing to the figures given me by my clerks on
July 1st. The number of lapsed members
during the past twelve months is almost
5000, but although this looks large it must
be borne in mind that many Of them are
industrial policies, which average about
$50, and where. the lapse rate is always
very high. The emergency fund, which
appears on the associations s books at $685.
900, contains an item of $195, 900, temporarily
withdrawn for mortuary purposes. The
remainder of the fund is composed of ad-
vance payments made by the natural
premium class of members to keep their
premiums level through life. The March
assessment brought in about $15S000, and
the May assessment $15O,0O0. The regular
assessment levied in July is supposed to
produce $15O.OOO, and the extra assessment
is supposed to produce $s25, ,ooO"
+
The New York Mail and Express has the
following comment on the catastrophe:
'"The failure of the Massachusetts Bene-
flt Life association is the beginning of the
end of assessment insurance. The poor,
helpless people holding death claims are
not to be the only sufferers, although when
1t is considered that there are nearly one
million in claims unpaid. the disaster is
widespread for the widows and orphans of
dead members. But the members who are
now non-insura and who have been
paying for what they supposed was life
insurance for fifteen or twenty years, are
also to be pitied. 1t seems that the aver
age age of the living members is 55 years,
and on December 31st last there were 1893
members. The deluded people are those
who have fancied themselves insured to
the extent of $s4, 900. 900 in a company with
about one million of cash assets to meet
maturing claims
Assessment life insurance companies do
ing business in California have been re-
minded and informed by Insurance Com
missioner Clunie that the laws of the state
require that all applications made for life.
health, accident, annuity or endowment
insurance on the assessment plan and all
policies issued for such insurance must
oh bot ioh; of ba inc,
hereunder are not limited to fixed pre-
miums; that various companies in the past
have not complied with these provisions
of the law and are not now complying with
them; that 1t is his intention to enforce
such compliance; and that failure on the
part of any company to comply with his
notification will result in revocation of
authority to do business in the state.
\ = 4
The waste by fire in California for twenty
years, 1876 to 1896, was s95, LOG, ,2s3, being
about one-third Of the total product of gold
In the state during that period. Fire in
surance agents can do much towards stop
ping this waste by advising better buildings
and improvements in fire departments.
+ +
The statistics of business failures for the
first half of 1897 serve to remind us of what
we have been going through, for the bank
ruptcies of that period were result not
of conditions then prevailing in the main,
but Of burdens that had been accommodating
for four years. The number Of failures
for the first six months of 1897, as reported
by Bradstreet's, was 1924, the liabilities be-
ing $685. 656, ,495. These figures compare with
Rrna nr eO-n n0c
for the corresponding period of 1895. 1t will
be seen that the decrease was not very
great. The percentage of assets to la
bilities was about the same in the two
periods, that is IS in 1897 and 81 in 1896. But
four-sevenths Of the failures the first six
months of 1897 occurred in the first half
of the period and three4sevenths in the
second half, while the liabilities were near
ly $52,000,0 900 in the first half and less than
81, 900, 900 in.the second, showing the strong
tendency toward a decline in these misfor-
tunes as the year advanced. 1t is note
worthy that the number of failures for half
Of the year shows an actual increase in
New England and decrease in the west
ern, northwestern and southern states
These facts are one more evidence that the
west, which for a long time was regarded
as the least prosperous part of the country
has really turned toward the good.
+ \ 4
The following table giving the approxi-
mate holdings of municipal bonds and bond
sales was read by Mr.. John Farson at the
recent bankers convention held at De-
troit:
MUNICIPAL BONDS HELD BY saw
INGS BANKS
Maine .......................... $15, ,19S, $50
New Hampshire. re.................. $3.50, 1886
Vermont Observation-Disclosures. S946,373
Massachusetts ................... 65052, ,426
Rhode Island. nd...................... 10S13,S49
Connecticut ACKNOWLEDGEMENTS. SS993, $3.50
New ACKNOWLEDGEMENTS. 246203, 1872
HELD BY INSURANCE COMPANIES
Life insurance companies in the
United State, estimated...... $4,000, 900
Fire insurance companies in the
United States, estmated..... 1900, 900
Foreign insurance companies in
the United States es........... 100000
Total ......................... $495, ,O2S, 1884