The herald., 1898-06-07

Supplementing some informa ton recently
given In this column as to the difficulties un-
der which the Royal Arcanum is labor.ng
the following from the New York Evening
Post will be found of interest both to the
members of this large organization and to
those who are investigating the subject o.
assessment Insurance.:
The failure of the supreme council of the
Royal Arcanum to adopt the report of its
special commission regulating assessments
is being generally discussed by those famil-
lar with the problems of assessment insur-
ance. Members of the order everywhere
have been interested in the proceedings at
Cleveland, and since the "step-rate'' pl1D
was talked of certificate holders in this vi
cinity have been anxious to learn its posi-
BILE effect upon their insurance. Little has
been known concerning the precise recon-
mendations of the commission, or as to the
actual statistics upon which its calculations
were based. but full data are today availa-
ble and they demonstrate clearly how the
conclusions were reached.
AS to the necessity for changing the rates
the commission reported: at seems to be
conceded that 1t is absolutely necessary that
such change should be made, and that
unless 1t is made there is Imminent danger
impending over the order, threatening its
perpetuity, and that such danger cannot
long be averted. Undeniable facts demon
strate this conclusion" The earlier eXper-
fence OF the order Gas heretofore published)
is then cited to show how rapidly the older
members are becoming serious burden. 1t
being argued that the disparity "unless
checked will inevitably stop the influx Of
young men, and thus lead, first. to a con-
slant increase In the cost of insurance and
prove disastrous to the benefit department
of the order" AS to defects In the old plan
the commission urged that had sufficient
assessments (say thirty per annum) been
made from the start to accumulate reserve
adequate to provide for future level rates
there would have been no such divergence
from proper apportionment of cost as to
Impair the progress of the order or the
maintenance of proper age distribution in
entrants and persistent members The trou-
Bile has been that assessments covering for
the most part merely current cost had been
provided which, the commission declares,
has not resulted in any approach to equity,
and cannot by any length of continuance
be made to produce equity"
After stating the two methods of paying
for benefits ~ by the natural payment for
the increasing risk by an increasing equiva-
lent, and (2) by an artificial payment for the
Increasing risk by a uniform equivalent, the
commission favored the "step-rate" plan as
best calculated to meet the needs of the
membership" In urging its acceptance the
commission added this significant state
ment: THE fact stands, beyond the posi-
b;lity of successful challenge. that, If the
order is to endure and is to continue to pay
maximum benefit of $4,000 throughout life
steps must be taken to provide for the ulti-
mate cost and its equitable distribution in
proportion to the weight of risk, and that
that provision will involve one of two
tMngs-either accumulation, which will con-
vert the order into great financial concern,
approaching in magnitude our great life in
surance corporations; or an advancing rate
following the natural advance in cost, due
to advancing age, which will ultimately
produce rate of payment that will be pro-
hibitory, and coming, as 1t will. at the least
productive period of life, will drive our old
members from the order without benefit re-
turn al death. There Is no escape from both
these results, since to avoid the one is to
throw ourselves upon the other and to shun
both will surely threaten our perpetuity."
While rejecting the ''step-rate" plan the
council was evidently impressed with the
recommendations. and provided for twenty
one instead of seventeen assessments an
b nually. These are to be paid according to
the old scale) monthly, without notice. In
twelve instalments. The excess realized
lover current obligations) on any one as
sessment is to be turned into an emergency
fund.- which is expected to reach $500, 600
annually. The original plan, 1t will be re-
membered, provided increasing assessments
('step-rate'D till age ffty-four, then level
rates till sixty and after that decreasing
benefits $100 yearly till seventy-five.