The St. Louis Republic., 1905-08-27

wiih - thas cee-sessieth 6 % ~
70 hanaie pay salar3cs q - % =
!saSoe per yeaf % their p.es!4eaeG Snses =
the Tesp0asi5att.es.
HIGH 6AI.ARIEA
It can b stated as the oplnton oS eno
maturity Of life Insurance 0eo tha8 =
whole. salaries and expenses neve 0ee1
Of those who keep in close toueh WITH
events that tie present sSitat1oo WI u9t1.
nsately result f . material redoctloo N
companies. In facf. effort vim be uaads
In several Of the States at the next meet
ius Of the legislatures to ensct LAWS una-
isins the sg:nses q T.. sn SSmei ne. sc 'nc IS
the amount Of the premium over ana
above what Is known In insurance par.
lance as the net premium. that amount
policy. As an indication Of what amount
Of the expense portion q the premium -
being used at the present time. the n:
Wisconsin. covering the business for 1SeA.
shows that the companies In that State
used for expenses Sf all kinds. except pay.
the .n pSgy Ths !. ee
average for all the companies reporting
to that department. A large number ct
the companies keep their expenses With
mium. Taking all tbs. companies a. .
whole In the Crited States. It Is likely
that the amount provided tOs expenses -
from mortality savings and interest earn
inGs In excess OF the legal requirements.
RUNNING EXPENSES.
One OF the items cf expenses which =
becoming msre end more burdsnSome
imposed by states and municipalities.
Some conception Of the magnitude OF this
item can be had when II is stated that the
HE insurance. % companies IN this county
ties for licenses and taxes per cent OF
thei: Ircn:iu:n income. or Z. In tax for
every 500 In premiums received. The to-
tai for the year lsea vas $s.Ss.:Ss. paid By
tho htnety-three active companies. As
practically all the companies arc either
mutual stfat is. nons;ocE) or conduct their
enas ase on IN sses ai the pbs
holders. and thereby diminish the profits
Of policy holders to that extent. The levy
ing OF these taxes Is due primarily to =
misconceptica .oy; the part OF tho law
making arm Of the States. LEGISLATURES
see vast suias leld sy life insurance CONF
pan,es. a:,d u; impcsinS :. tax on these
sums belong to the policy holders and
that taxing tho companies Is bit \ round
eo1ut way OF taxing individuals. for every
OF the surplus that belongs 10 policy hold.
ers. That these taxes are burdrrscme is
demonstraied when il Is shown that taxes
the saaries ,ai@ os oess uen .ns %
home Office employee
According to the Massachusetts, State re-
ESss covering transactions for the year
=. per cent OF the total income. while tho
taxes and fees were approximately the
same. Included in these figures IS the
amount paid to the various insurance de-
nartments for agents licenses. filing of
annual statements and similar iiefis. The
pr,nSsipa! sum. hoEever. comes from the
which In most States Is !: per cent Of the
premiums collected In that State. \ few
states impose a tax OF ~ per cent. which
States. empowers such states TO impose y
like tax Oh the companies OF that State.
One of the reforms looked for as the es,iIt
On tile Part OF the public Is the material
reduction Of these excessive taxes. which
are tantamount TO a tax on thrift This
the public. and the seat metropolitan iai-
lies ot the land are the most potent factors
In mo!dinS public opinion.
HIGHER RATES.
Touching the question Of rates, there can
reason that life insurance rates are based
of intseest. All OF the states have what
Witch All oa;n cS legal Ss , Nth
sufance companies must comply. These
laws Tx her premiums. and tho only part
.. 'hse nat y s the
ment Of the premium varies in tho various |
companies and likewise varies on Jifyeren: |
Policies !Sa IN The The same : ssmpany Tai'ns q!
forms OF policies ranges from ~ 70 - per I
cent or the gross premium. A. a matter /
OF fact. the rats for the came form uf |
policies are higher TOW than they weyO
twenty years ago. for the reason that at I
the former period mentioned, the rate Ot l
Interest assumed was and 4: per cent. |
cent. T:,is reduction IN the rat. O: interest |
assumed Is dl. u ID. decrease In the l
earning power Of the dollar.
Tha; interest rates are lower than they
were twenty years ago Is well known. and /
while ii IL t!us that at the prssen: time /
most OF the lie companies reaiize on their
assumed. it should not be overlooked that
some forms " policies issued are liable 10
extend over a period cf nifty o. seventy
It absolutely necessary. In order TO carry
out tts contracts, tha, n lie insurance
company no; criv CONSIDER tic Present
earning power OF tie dollar. but to Look
Tar into the future and 50 safeguard its
contracts that when these contracts ma
turs tn, money will 10 on hand TO NEE:
! hem The paramount; question o: a life
company. and ore ,h;.t admits
cf 70 conjecture. IL that OF ability 70 meet I
eacn anu every guarantee set forth in its
P1ncy contracts. The actuary. in making
ms computation. takes into consideration
all possible contingencies. and ia making
the rate all such contingencies are pro-
vided for; The mortality table used ty
most OF the companies and Incorporated
In the laws Of mos, Of the states In what
ls known as the. American experience Ia.
bic This table Is based os the. experience
0: certain American life Insurance conn
eAnf-s. .'pverinS a considerable period II
Years. Tho death rate assumed II, that
tahie Is higher than the actual mortality
eSp.rieTice d a:y Of the companies. A..-
cofdins 20 tho Wisconsin report the COM
panh'S r.portiIS To that department eS.
.'sT:en,"i curing ti:c ycar lsS q deafh rats
or ny Of the eSrected or assumed NOR
taE;y. o.. ~ pu; !: :r another Ma. n
N" ceatt rate q: these coInps aics had
oeea cNact!y ;ae number given In tiis t.i-
kW"s...-i while II" s,rou2I actually paLi
Nss s'2'-i..!i. Il viii thus ~. seen ii.a:
~, ae 'tt.i'l ':e.ih fa'.' . !e., than provs;.i
:Sa inus, zbeI i. .ns ,nsrsl,i 81, Is none
poiicies 'asy ccrcr I long peri.c oc years.
In this connection y: should 20: b.. ;o.- |
soften that n, s.vtigs from mortality is
ss sc,. i.si IS 10, ~ ;he poEey hoMsr h:' como
!. aGs During the earlier years Of a policy
n. mortality experience - more HAvoYab!. |
t.an IN late. years, ard this fact Eas lead |
10 TIE discussion among sorns q. tie
actG2f..s az tie feasibility % rejoicing ;as
tate s!is Hiiy. a. least during N. earlier |
= a;s oc 10 po!icy'. The suggestion. how
.ver: !s ~ Looked u:on with favor ty
eAoin.: ac;,:a-irs
THIS phase o: Il. subject las hen
!we.; on 81 some length he-s. TO Sow
hat Il - &c: possible 70 make any ma
eEiai rSiuc1ior in rates. g the absolute
eriai;ty o: tie con,plcy't ability 20 meet
aired II has tsse,, stowa ;ha: there can
~ 70 material reduction II rates. ard is
:as likewise tS~n Ic!S,a,l out that tho
ases ptY..de for icss!eie con,,ne-ncies
lot. then the charge made for these con-
:aSsnc.Hs - III eNec: AZ. oSerctarxe. and