The herald. [microfilm reel] (Los Angeles [Calif.]) 1893-1900, 1898-07-29
fRATfRNAL METHODS
AN INSURANCE COMMISSIONER
USES PLAIN TALK
DEPOSITS FALL IN NEW YORK
More About the Express Companies
and the War Tax-The Views Of
Clews-Hawaiian Funds
OFFICE OF 1.-THE HERALD,

Los Angeles, July 2S, 1879.
The methods of fraternal companies are
reviewed by Illinois Insurance Com
missioner Van Cleave in his life report,
just out, in which he says:
The organization of fraternal society is
not always due to public demand for new
beneficial institution, but too frequently to
desire on the part of a few to provide them
selves with official positions, with salaries.
Under such circumstances the temptation is
strong to adopt plans and schemes offering
so-called cheap insurance and Of present
attractiveness rather than plans and meth
DDS which have regard for stability and per-
manence. The present alone is considered
and the future is left to take care of itself
This is shortsightedness in any business and
disastrous in any form of life insurance bust
ness. The adoption by these societies of the
plans and methods formerly adopted but sub
sequently discarded by assessment associa-
tons may be expected to subject them to
the same unfavorable experience which COM
PEELED the assessment associations to dis
card them for plans and systems of more
substantial and enduring character. Some
or the older and more prominent societies.
as we'll as number of those recently organ
lied. have recognized this fact, and have I'M
dertaken to incorporate in their plans fea-
lures which Will put their business on
more substantial and enduring basis. Such
reform and notifications of plans as will!
measurably forestal the inevitably increas-
ing future cost of insurance are of suffi-
Client Importance to receive the favorable
consideration of all such societies.
The fact that these societies are required
by statute to make annual reports to the
department and are subjected to certain
statutory requirements and regulations
seems to convey to the public the impression
that the reliability of society which is au-
IN t. -
is thereby indorsed. Nevertheless the stat
ute imposes no test of condition in the a6-
mission of a society except that 1t shall
have paid all approved death claims for a
period of at least six months prior to apply
ing for permission to do business here, and
no test of condition whatever for contnu-
ance In business. Therefore the ability
Of a society must be determined from its
statement of condition, and not assumed
from its authority to do business. The stat
ute should be amended so to fix the point
of impairment of condition and membership
at which the authority of a society to so.
lcit new members should terminate.
The present provisions of the statute re-
quire that in case society refuses or neg
lects to make its annual report to the super
intendent as provided in the act. he shall
report the fact to the attorney general. who
Shall commence proceedings to enjoin 1t
from carrying on business. The laws gov
erning other insurance companies and asso-
Citations provide that upon failure or neg
lect to make the annual statements required
the superintendent shall revoke the license
of the company or association in default
There is no apparent reason why the -eme-
dy should be different in the case of frater-
nal societies. The provision of the statute
referred to ought to be so amended that If
a society desires to discontinue its business
in this state and make no statement as re-
,gra1 tv-t1 A ~ No r;x knx, Je~
have authority to revoke its license without
putting the attorney general to the neces-
sity of instituting proceedings in court to
terminate its authority