The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1900-09-14

1885 Its provisions are not applicable to
present conditions. In fact, it is extreme
~ difficult to utilize it in governing the
situation that has evolved since its pass
ard non-fraternal has long since passed
the experimental stage. It may be said
that the evidence is all in, and 1t now
becomes the plain duty of the legisla-
lection of the states citizens. Under the
present act nine persons, with only $l1
among them to pay the required filing
fees, may organize a company to trans
act life, endowment, health or old-age
insurance.
COMMISSIONERS REMARKS.
The insurance commissioner has been
given but little discretionary power in
controlling the affairs of such concerns.
If the articles of Incorporation conform
to the specifications of the statute he Is
compelled to turn the venture loose
upon the public, regardless of the integ-
rlty, business reputation, experience or
natural applicability of the promoters"
to the business contemplated. l am con-
strained to the opinion that the present
law should be repealed A new law spe-
cially adapted to fraternal societies,
should be enacted. If non-fraternal as
sessment societies must be had then the
legislature should prov de for them only
in law carrying with it every possible
safeguard against the ills they are natur-
ally heir to. Such concerns should be
compelled by statute to conform them
selves to rational dues of business econ
omy and to the standard deductions from
the life insurance experience OF the past.
The law should provide against the posi-
blllty of dishonesty and pIohigacy Of
managers. Expense accounts and ratios
should be limited. Minimum rates, bas-
ed upon recognized mortality tables,
should be fixed by law. The increasing
mortality experience of old life insurance
societies should be cared for in such
manner as would effectively remove the
present objections urged against young
members entering old orders Unless -
icles are issued strictly upon the depend
ency plan, or written for a tel m
TO cease ease at a fixed age, this can be ac-
compiished in no other way than through
the accumulation of a reserve sufficient
TO OFFSET the old age mortality expert
ence. which would practically place them
upon level premium basis.
There is but one charge to be made for
life insurance, and it matters not
whether person is insured in level
premium or an assessment company or
is the holder Of a certificate in frater-
nal society. The mortality cost is the
same. IL there is any difference shown
IN the actual cost of insurance in the ex-
perlehces of different classes of compan-
les, 1T is reasonable to suppose that 1t
would be less in level premium compan-
les that select and examine their risks
Germs.
When assessment companies were first
organized 1t was thought that by charging
the members the current mortality cost
OF vast sums Of money and the resulting
danger OF poor investments. and would
! leave to the policy holder the use of this
money It was held that this plan would
| leave the reserve element in the hands
| OF policy holders, to be drawn upon
| whenever increasing death ratios might
make mar 1t necessary. However correct
| TINS may be in principle, it has been fully
demonstrated that this pretty theory
is a miserable failure in practice Every
such experiment brings age to the mem
la TETnII
In the number of deaths and in the num-
| her or amount of assessments follow as
natural consequence. Naturally too
new organizations then spring I'D to offer
insurance at less rate than is being
charged by the older concerns. The
young and healthy members of the old
organizations lapse their memberships to
join the new ones for the advantages
OF cheaper rates. The old and physically
unsound risks, unable to get other insur-
ance, cling to what they have and endure
Ih n4i,y death rates and rapidly acculnu-
!atlng assessments until the practically
Impossible is reached, and the society
dies. Such is the history, past and to
come of all such associa tons, and today
nearly every one of them, except posi-
Oily; the very young and unintiated, is
making an effort to get on a level pre-
MUM basis. reinsure its risks, consou-
career
Having but little latitude given me by
the law as commissioner. in supervising
the aHalrS- OF assessment life as well as
accident societies, [ have deemed it wise
to establish the rule of requiring all such
concerns seeking admission from other
states. to give evidence of at least Two
years successful operation in their home
state, and of the. successful and practi-
cal business experience of their officers.
am also of the opinion that the Stat
utes should, likewise provide for min
mum rate to be charged by fraternal So
cieties, which charge should be based
upon some recognized table of mortality
and that they shall have q representative
lodge system with ritualistic form of
work. Payment of death benefits should
be restricted to the family or to persons
dependent upon the members If a
minimum rate is not provided for. the
fraternal society can hope for no better
results from its operation than any other
Kind of assessment life concern.