Evening star. [volume] (Washington, D.C.) 1854-1972, 1905-11-22
INSURANCE INQUIRY
An Equitable Official on the
Stand Today.
AGENCY SYSTEM SHOWN
METHODS OF COMPANY ON PRE-
NUNS EXPLAINED.
An Extra Compensation Offered Agents
IN Cat paon1a 70 rpe,,ra C;noa
AGENCY SYSTEM SHOWN
An Extra Compensation Offered Agent:
to Get People to Insure Since
Revelations.

NEW YORK, Nov. 22-Gage E. Tarbeil
second vice president of the Equitable Life
, Assurance Society. who was on the witness
stand when the insurance investigation
committee adjourned last night, today
sumed his testimony regarding the agency
system of the Equitable. He submitted
specimen Of contracts made with agents.
which was offered in evidence. also were
letters which accompany contracts explain
atory of the allowance OF commissions.
Mr.. Tarbell said the system of loading
premiums originated to insure the
ability of companies to meet any contin-
gency Of claim or expense. He said that
premiums are placed higher than are nee
essary for safety, and the excess loading
is returned to policyholders in dividends
OF sS0,00o,00O surplus of the Equitable So
ciety at the end Of 1894 Mr.. Tarbell said
about S700000O0 Is set aside for deferred
dividends. but the company does not recog-
nize any right Of the policyholder In the
$I0,OoO.C00 until the policy has matured or
reached the point at which 1t has earned
its dividend This sI0,Oo0;O0O could be used
to .defray any contingency that may arise.
Mr. Tarbell said that an extra commits
sion of 10 per cent was allowed general
agents on business written between jury
15 and December 81, 1908. This was done.
witness said to enable the agents to make
a compensation upon which they could
live because of the difficulty OF getting
people to insure.
Tarbell and Family insured.
Mr.. Tarbell said he and his family were
insured for about $5eo,0OO in the Equitable
Society He said he received the agents
commissions on this insurance, and also re-
ceived the renewal commissions. although
the insurance was written through gen
era, agency. OF this insurance 500, ,00O was
lNr- 'E1r rhn1 m
became an officer OF the Equitable Society.
and on this. TOO, he received the regular
maximum commission. and is receiving the
renewal commissions. He paid the pre-
MUM 10 the Equitable Society and received
the commission through the general agency.
He also has insurance of $4,000 In the New
York Life Insurance Company. $4,000 In
the Travellers Insurance Company ana S2',-
OOO In the Aetna Life Insurance Company.
In all these cases he received the agents
commissions and the policies were taken
out about ten or fifteen years ago. All eX-
cept that with the New York Life Insur-
ance Company were taken out In Chicago,
and the latter was taken out since he came
to New York. Witness said he also re-
ceived the renewal commissions on these
policies. He arranged his poEcy and com
missions in the New York Life with George
w. Perkins. He did not know that Per-
kins had any insurance with the Equitable.
Thought It Was the Practice.
Witness said ne thought this has always
been the general practice for officers of the
insurance companies 10 draw commissions
on their own policies. either in their own
company or in others. He declared that it
was not rebating.
He thought he was entitled to the cam
mission. Any man who devoted himself
entirely to a business he considered was en-
titled to legitimate commission In con-
nection with the business.
Revertng again to the agency system, Mr..
Hughes questioned Mr.. Tarbell as to the
comparative advantages OF the general
agency system and the salary system.
Mr.. Tarbel told OF an enormous increase
IN the business done at Plttsburg. q general
agency office in charge OF T.. a. Woods,
who, Mr. Tarbell said. had made more than
any other agent OF the company. Mr..
Woods profits in 1904. Mr.. TarSell said.
were sJ0.5