The independent. [volume] (Lincoln, Neb.) 1902-1907, 1905-11-02
SUGGESTS A REMEDY
ANNUAL DIVISION OF INSURANCE
SURPLUS PROPOSED
Wisconsin Commissioners says Cause
of Evils Lies in the Fact That
Officials Seek to be MASTERS Instead
of PoIicyhoIders' Servants

Madison, Wis, Oct. Reinsurance
Commissioner Host, in his annual re-
port recommends the enactment OF
state laws to compel life insurance
companies to make an annu"l distri-
button of their surplus among policy
holders. He also recommends law
requiring companies TO furnish with
! their annual statements a gain or loss
exhibit.
Commissioner Host makes some
sarcastic comments on insurance
methods as revealed In the inves-
LEGATIONS now on. In reviewing the
life insurance situation he says.
Within the last year there have
been given to the pubic startling rev.
Citations concerning the methods en-
ployed by the arrangements OF some
life insurance companies in the con-
duct of business affairs, conspicuous
among which is the Equitable Life
Assurance society OF New York This
company has been ,.nder the knife
for about six months, during which
time there have been cut out OF 1t,
one right on the heels of the other,
the nature of which has seriously
shaken public confidence in life in
surance generally.
Evil Of Speculation
"Primitiyely every pOlicyholder in
a life insurance company was ac-
corded a square deal, not because
supervision and legislation were more
rigorous then than now, but because
then, officers were merely the SER
wants of the policyholders, selected
by the latter to administer the affairs
of the company. AS time sped on,
the speculation fever spread, becom-
ing more and more prevalent, until
finally the officers or tnes. companies
became it's victims, when they tired
of acting in the capacity of~servants
and in effect usurped the authority Of
the policyholders for their own ag-
grandizement and enrichment
"To crafty their speculative in
stinct, the deferred dividend contract
was introduced and there was then
formed the nucleus of the scandals
which recently have been revealed to
the public through the internal dis
sensons of the Equitable Life Assur-
ance society.
VIII Result In Economy
what shall be done? Let every
state enact legislation compelling life
| insurance companies to make an es-
sental distribution Of their surplus
annually, after the second policy year
An annual distribution of the surplus
i to the policyholders will do more to
bring about real reform in the bust.
I ness of life insurance than anything
i else With an annual distribution
of the surplus there ne ssarily mus,
follow economy In management In
order to show good results to policy
J holders and thus enable company Il
stay in the field of competition.
J "A law should be enacted In every
J state requiring life insurance com
panies to furnish with their annual
J statements gain and loss exhibit
which discloses valuable information
regarding internal operations OF tn,
: company"
! Commissioners Host { otes ooplousi'
! from reports Of the Prick COMMITTEES
/ and the superintendent OF insurance
; ~ New York ON the Equitable LII
! Assurance society, which SUSTAIN
J. COMMISSIONER Hosts contention 70
? short periods Of accounting TO tn
poiIcyholders.