The herald., 1898-12-18
LIFE ASSESSMENTS
THE FAMOUS DECISION, WITH
SUGGESTIVE STATISTICS
A RUSSIAN STEAMSHIP LINE
Refunding of War Premiums-The
Electrical Hazard-Dividends.
National Bank Changes
OFFICE OF THE HERALD,
Los Angeles, Dec. II, 1893.

OFFICE Wv LIE tlEI.ALl'f
Los Angeles, Dec II, 1893.
The decision of the supreme court OF Ohio
in the famous assessment insurance case is
discussed at length in Part II of the thirty
first annual report Of the Ohio Insurance
department, which has lately been issued.
1t will be remembered that Superintendent
Matthews some months ago refused to Ii
cense three assessment concerns because
they aimed to do practically an old-line in
surance business without, as he said, las
sumng any of its responsibilities" In COM
menting at the time upon the plan which the
associations desired to follow, Mr. Matth-
ews said: "Doubtless purely assessment
companies have useful sphere. 1t is not
my business to compare the relative merits
of the systems, but cannot fail to take heed
of the actual unfortunate experience of many
assessment companies that have promised
their patrons more than they could perform,
and more, in my judgment, than the law
permitted, and the great number OF peo-
pie that have suffered and are suffering
from their mistaken faith in such promises
The associations applied for a mandamus to
compel the superintendent to issue the Ii
censes. The court refused the writ and dis
missed the petitions, upholding the depart
ment.
The report also contains some suggestive
statistics affecting the old and new business
of life companies operating in Ohio. Mr..
Matthews says:
I'm life insurance there are constantly at
work two opposing and counteractng
forces; one is buildingup force, the other
q tearing-down force. If there were 229, $50
new policies issued in Ohio last year, there
were also III, 10 that terminated. The ratio
of policies terminated to policies issued in
the state was about II per cent There are
at least six different ways in which policy
can be terminated: BY death, by maturity,
by expiry, by surrender, by not being taken
and by lapse. From the statements filed OF
the entire business done by the forty com
panies above mentioned for the year 1897,
the total number of policies reported as
terminated was 2,322, ,4S4, divided as follows:
BY death, l42, 1850, or 6 lilo per cent; by ma
turity, 5643, or u per cent; by expiry, 1922,
or 20 per cent; by surrender, l49,40 or
6k per cent; by not being taken, 45,50S, or
9-l0 per cent by lapse, 1910, 1893, or IS per
cent Using these per cents as proper
basis of calculation, we find that the l77,-
170 policies that were reported as terminated
in Ohio last year would be divided as fol-
lows: BY death, l0,707; the actual number,
however, was 1878; by maturity, 443; by ex-
piry, 7S0; by surrender, 1916; by not being
taken, 1865; by lapse, l50,594.
"In considering the above statements it
must not be forgotten that they include
what we call industrial business, which is
only weekly or monthly term insurance,
CARRYING small amounts and requiring small
payments, weekly or monthly, and, there
fore, easy to lapse or liable to lapse at the
erd of the week or month. Eliminate this
business from the consideration of these
statements, and the indictment against life
insurance on account of lapses, surrenders
and policies not taken presents results en-
tirely different and much more assuring. Of
the 229, G50 new policies reported as written
in Ohio last year, three industrial companies
wrote 207, ,796, leaving only 81 ,854 written by
the other thirty-seven companies. Also OF
the l7T,l70 policies terminated in Ohio in
1897, 162, 1888 were from these three COM
panies doing industrial business. 1t will be
noted, therefore, that the thirty-seven regu-
lar life companies wrote 81 1854 new policies
and terminated 1852, which gives a ratio
of policies terminated to policies written
of about 81 per cent, as compared with II
per cent with the industrial business in
'cluded. Ninety per cent of policies termina-
ted in companies doing industrial business
are from lapses, while the per cent OF lapses
to total terminated in the other companies
is about As per cent"