Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1904-08-29


If said business was far in excess of
the surplus earnings available for the
general or expense fund Of the North
western National
.It 10 quite clearly apparent that
the very material reduction IN tne
son1pany's surplus as OF December 81.
rs disclosed thru this examination IS
due in large measure to the cost or
liability incurred in the reinsurance OF
the Northwestern Life and Savings
Company. While it is true that the
company acquired considerable VOL
ume of first years premium notes, all
of which belong to and are available
for general expense purposes, az the
same time 1t is apparent that the net
revenue from this source will not equal
the rnanagement's anticipations.
"That the absolute guaranteed cash
surrender value to the policy contracts
Of said company reinsured Will be re-
allied by the policy holders. is evidenc-
ed thru the fact that securities bearing
not less than per cent annual interest,"
-epre senting the reserve accumulations
necessary to cover such payments, are
held on deposit by the state auditor OF
iowa. and furthermore under the terms
ne the reinsurance contract such de-
.nosit is required to be made annually
anring the term that the contracts nave
to run.
Aside from the showing which these
examinations have made OF the fact
that the sale Of the Northwestern Lie
and Trust, the largest insurance dea'
ever made in the west, turned out bad
ly for the purchasers, and this largely
because held strictly to its promises
by the state of Iowa. the report SHOWS
that the officials who went from Des
Moiues under long time contracts nave
continued their thrifty ways. The
company is scored for having bought
off some Of the former officials. Ine
report of Mr.. Wolfe touching some or
tha transactions which have recently
taken place reminds one Of the kind or
transactions which were exposed here
in Des Moines and which finally drove
the company out OF the state. he
writes:
.The records Of this company are In
very poor shape and 1t Is essential tnat
a radical reform be made in these rec-
ords. While it Is appreciated that the
amalgamation Of so many companies
makes this difficult proposition, there
is no excuse for the present conditiof
OF affairs. 1t is likewise important
that a more strict account be kept or
the various funds from which the pro-
fits to policy holders will arise.
"It is also recommended that the
nersonal accounts of the officers be
kent separate and distinct from the
romnany's funds. The necessity for
this can best be realized when | ex-
ulain that check for s3.500 was paid
during 1903 for personal oDilgatlon
of one of the officers and the amoune
charged to commissions. Upon the at
tention of the officer being called to,
this. he has agreed to repay this sum
to the company with the explanation
that the matter had slipped his atten.
ton entirely.
"The large sums paid to the officers
of companies which have been reinsur-
ed lin many cases in the most secret
and underhanded manner), is, in my
opinion. unjustifiable. Any profits
which resulted from the reinsurance of
these corporations belonged to the pol
ley holders themselves, anu Hol " VI
flcers chosen by them to administer
sacred trust.
The mortality experienced upon
these reinsurance policies has been in
excess Of the expected or tabular NOR
.ality, notwithstanding the incorrec,
exhibit in reference to this item made
oy the company in its gain and loss ex-
nibit, filed with your department. The
attention of the actuary has been call
I'd to the error made by him and am |
confident will not be duplicated this
year. - - ,s-.>y --,..a-