The sun. [volume] (New York [N.Y.]) 1833-1916, 1905-07-28
REPORT ON MUTUAL RESERVE
THE LIFE INSURANCE COMPANY
UNDER EXAMINATION.
II Shows That tho Company's sworn state
mont for 1904 Was Materially lnac.
curate and That II Has settied
Policy OF Delaying Payment Of Claims.

Policy OF Delaying Payment Of Claims.
Reserve Life Insurance Company has been
under examination at the hands OF state
Sup erintendent OF Insurance Francis Hem
dricks. The examination was made by
Isaac Vanderpoel, the chief examiner OF
the State Department located In New
York city, and bis method. OF expressing
and calculating the results Of his examina-
ton u extremely intricate, II not color
less. The report shows the condition OF
the company on Dec. 81 last and covers q
period back to 1869, Recently Supt. Hen
bricks gave hearing on the report to the
officers OF the company, and President
Frederick A. Burnhtm and vioe-President
George d. Eldridgs asked him not to file
the report or make 1t public. To-day
Supt. Hendricks filed the report, but re-
used to make any comment on 1t.
The last annual statement OF the COM
pany filed with the Insurance Depart
ment, and now appearing in it's published
annual report for the year 1904, produces
a 30 called surplus Of unassigned funds
amounting to $3.50 21l5s. The examina-
ton just completed fixes this item at $685.
4o2le, the difference being due to reduction
in real estate values on appraisal, rectifica-
ton OF reserve data from which policy
or certificate valuations we're made, and
further to the reduction In various credit
assets by bringing the net amount OF same
within the respective reserves charged
against the policies upon which these credit
assets rest.
The examination shows that in the com.
pany's report filed on Dec. 81 last was an
item OF 3ls4,9ls credited under the head OF
"other liabilities, due or accrued for ex-
penses, taxes, salaries and accounts,
whereas OF this amount 1882 1877 consisted
Of judgments entered against the COM
pany. Upon this point the report says
I am constrained to believe that the return
not have been the result OF an inadyertence,
| and certainly constituted concealment OF
or t s in
It's failure to return these Judgments under
their appropriate title,
] appearing in credit assets and policy reserve.
| as between the figures published in the, com
items embodied in this report, are produced
in the item Of unpaid death claims. Dec. 81,
1904. They are returned in the annual state.
result OF this examination, the amount is shown
to be 1881 .42sb9. The Investigation Of death
settled since. the prior examination Of Dec.
81. 1901. with balance outstanding Dec, 81.
the e OF oas
incurred. with accompanying evidence and
correspondence relating thereto.
Aside from materially reducing the
surplus of the company, Mr.. Vanderpoel's
report shows that during the last three
years the company has availed itself OF
every loophole to delay the payment Of
claims OF beneficiaries. On this point
the report says:
Il. A.
occupy TO thoroughly investigate all question.
able death claims, think that as the result
Of this examination it lie, quite, clearly in eyi;
policy OF delay In wit hholdng the approval
necessary to constitute an admission by II
or certificates issued while the company
R Rnasr he dss VI Of Of .u shs
proval ninety days Is the specified time within
which payment L to be made Ss a,,n The average
Ultimately found to be valid claims. is so
the to @ its
Of these benefciaries, many of whom must
be subjected to no little suffering and distress
ns sn Of 0R tue dsbPs R
lhus ssa7sfs a il! Yields ef ts
s908. 85e7t, there having been deducted e?es.
$3.50 on account Of an Indebtedness sscer e..
assured, with further deduction, of s722,-
8ss. 80 retained by the company for the various
| alleged violations of contract by the insured
n The report finds that the company has
not made annual contributions OF $l3 ,45O
for period oftwenty years to meet the cost
cost $4Os 200. The creation Of this sinking
fund was recommended by the Insurance
Department in 1895, and now would have
amounted to $185 900. AS it is, only $14,s4s
is credited to this sinking fund.
In September 1900, the Mutual Reserve
Fund Life Association reinsured practically
all the membership Of an assessment as
ISOLATION known as the Northwestern Life
Assurance Company, located in Chicago
Then receiver was appointed for the
ont In the report that some third party
made nearly $500 900 by this transaction. but
the report fails to state who got the money
and inquiry at the State Insurance Depart.
ment failed to elicit this information. Re.
garding this transaction, the report says:
The premium paid by the Northwestern
Life Assurance Company. to the Mutual Re-
serve Fund Life Association. as considers.
former company. vas ;2o 1921 4: 2i snbsei
Reserve Reserve Fund Life Association Of s277 ees 81
to certain parties for delivering to II such
portion q the hs Sntae 4 hs Sf f"nd
, As this membership has since the date OF
its reinsurance been placed In a separate
class BY itself paving It's GurTsn. mortality
, bership derived by a transfer for which II
gave q consideration to the Mutual Reserve
! Fund OF nearly 100000.
!, The commission paid by the Mutual Reserve
.. Fund for securing the membership Of this
association. never seems to have been re-
ceiyed by it. The receivers reports since
the reinsurance was effected show no revenue
\ from This. source. The eommission went Is Is
taken during the examination. which vii
' Inv before you the nature OF the whole trans
action so far as am able to present it t,
you.
. The report shows the assets and liabili
ties OF the company on Dec. 81 last to be a
follows:
! | tApprased value Of real estate. In
4 | Guiding lcasehod premises .....,... S8S3,S7l
. | BOND and mortgage loans. ......... 452,750
Policy loans and liens. policy debts
9 and special calls due and unpaid. 1887 49d 0
a | Premium notes policies In force. 25S506
Bonds and stocks owned market
value thereof Observation-Disclosures. 655l7S 8
Deposited In trust companies and
g banks ''.''.'''''.'.'''.' Hl'o4v
| auh in oNhce