The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1903-02-18
DEARTH EXPOSES
IOWA COMPANY
Insurance Commissioner Crit
icises Its Methods Of
Business.

Insurance Commissioner Dearth crit
icises rather severely the representa-
lions made by agents securing business
for the Northwestern Life and Savings
Company of Des Moines, and he also
has something to say about the man
been securing dividends.
The report of the insurance commits
siOner, made after an examination by a
deputy commissioner for the depart
ment, says among other things:
"The original report covering this ex-
animation was submitted under date of
Dec. 8, 1902, but upon request of the
company such subsequent investigation
was instituted, and the same was
brought down to Dec. 81, 1902. In no
material respect does this report differ
from that originally submitted other
than that the impairment of the COM
pany's capital stock, which existed as
of Dec. 81, 1901, is shown to have been
liquidated during the year 1902, and
surplus accumulated to the extent of
over $4,000; otherwise the facts dis
closed still warrant the various COM
mentS and criticisms to which objec-
tons were made on the part of the
company in the original report.
1T is clear that the home office man
agement, as we'll as the field force Of
the company, is at fault in the ques-
it's business. The special bond or ten
year endowment contracts..wh COM
prise practically the entire business
written as of late, appear to have been
secured through the influence of ex-
travagant estimates as to the amount
that would be realized at the end of
the endowment period, in short, sum
far in excess Of that which the ex-
perience of the company demonstrates
is within the bounds of even posi-
bility.
Agents have implicitly, if not in
plain, direct terms, given applicants to
understand there would be realized at
the end of the ten-year or maturity Of
the contract a sum equal to double it's
face guaranteed value. In the further
prosecution of business in Minnesota
at least no misleading or impossible
estimates should be given to policy
holders, and none will hereafter be per-
mitted.
1.-The disclosures made through this
examination that the sworn statements
filed with the Minnesota insurance de-
partment have shown as a disburse-
ment under the head of Agents and
managers accounts representing sal
aries. allowances, ETC., moneys actually
paid to and received by the stockhoId-
ers on account of the Stockholding cam
not be too severely condemned, as it
involves q pam VOCATION OF the stat
utes. The only reason for thus err
roneously entering such a disburse-
ment is that of keeping from the policy
holders and the general public the
large profits enjoyed by the stockhold-
ers, which cannot be commended as
valid excuse on the part Of the officers
who are responsible for the offense.
"The total amount which has been
paid and received by stockholders, thus
incorrectly entered on the sworn state
ments as disbursed on account of sal
aries and allowances for agencies, ex-
ceeds $104, during the past four
years, the same being in addition to
the disbursement of $4,000 entered as
stockholders surplus capitalized and
regular stockholders dividends declar-
ed-certainly handsome profit within
a period of four years on the original
capital stock subscription of 800, 000."