Vernon County censor. [volume] (Viroqua, Wis.) 1865-1955, 1905-01-25
ARGUES FOR TAX ON
LIFE INSURANCE
COMMISSIONER HOST WOULD
LEVY ON SURPRISES.
SPEAKS IN ROCK COUNTY
Addresses Pomona Grange Annua.
Gathering Proposes Advanced
Legislation to Collect Substantial
Rates Upon Premiums or Stock
Rate Policies.

Insurance Commissioner Host adj
dressed the annual gathering of the
Rock County Pomona Grange at Mil.
ton Junction yesterday on the subject
Of Mutual Insurance. This is the organ
ization before which Governor 10 Fc
lette made a notable address last yeal
The commissioner spoke at length on
farm mutual fire insurance and also
made some significant remarks regard
ing life insurance He spoke in part
as follows:
Il believe that the laws of Wiscon-
sin should be 50 amended as to pro-
vide for a tax on all premiums re
ceived on all non-participating plans
Of life Insurance written in this state
The non-participating or stock rate
policy is a form of contract issued for
the purpose of profit either to the
stock holder or other policyholder.
Issued for the purpose of profit to the
stock holders of a stock life insurance
company, premium tax is the only
reasonable method of taxation just as
IS the premium tax on casualty premi
ums which business is conducted for
profit by casualty compan ;. If is
sued by a mutual company, or one CON
Quoted on the mutual plan for the
purpose of profit for one class of pol
icyholders, then the tax is equally
justifable as it places the tax only on
the business for-profit end of the
company. The non-participating con
tract has no place in the business of
life insurance which can be conducted
only on the mutual plan as the whole
scheme Of life insurance becomes pos
sible only Y the combining of large
number of individuals contributing to
a common fund who so insure them
selves.
81 believe there should also be
placed a tax on the surplus savings
and accumulations of mutual compa-
MES derived from or on account of the
funds contributed by and the premium
payments received On policies written
in or on the lives of residents of this
state excepting only such amount OF
surplus accumulations set aside fov
actual distribution to policyholders
during the year,
The amount of surplus accumula-
ons of life Insurance companies
II usacting business in Wisconsin
am UNITS to the enormous sum of $500.
900, 900. A conservative estimate
would place the amount of surplus &C
cumulations Contributed by and de-
rived from the funds of Wisconsin
rolicyholders and to which they are
entitled. at about $4,000, 900. This
vast amount of surplus held by these
companies is not necessary for the
conduct of the business; is beyond all
their needs and requirements and does
not add one single dollar to the insur-
ance value of a single policy. It con
stitutes the gamble injected into the
business of life insurance, engendering
extravaganza of mana cement, and has
been the cause of forfeitures and con
fiscations when the insured or their
bene1ciaries most urgently needed the
benefit of the savings-in time of
financial embarrassment or death.
"Thls vast accumulation constitutes
the profit of the business. and is with
held from distribution to the policy
holders. who rightfully own it, for
long series of years, contrary to ev-
cry charter of these companies, filed
with..the insurance department as
prerequisite to transact business in
this state
There are hundreds and thousands
Of pOlicyholders in this state, who. by
every rule of equity and justice, are
Individually entitled to from five hun
bred dollars to amounts running up
into the thousands, not one of whom
is certain that there will be returned
to him his share of surplus accumula-
ton: circumstances beyond his con
trol,--death, or financial embarrass-
ment-may tomorrow deprive him Of
evay jolar of his share of e sur
pIt5 wings, accumulated out OF his
own premium payments. !Iot single
cen tax is now or mas ever been
coltr Led to the revenues of the
state On account OF THIS VAST anu Ut
necessary accumulation.
Taxing surplus accumulation may
re suit in giving to the owner the fund.
to which he is entitled. and which 9th
erwise may possibly be con35eatsd.
IF Instead OF a praa,u.a tax the
state had imposed a ten per cent tay
oil surplus accumulatjons there woul
have been maintained in life insurance
an econom IF management which
would have .aturned to each policy
holder his overpayment and given 70
each his Insurance At actual cos,
The commissioner of insurance con
teadS that mutual life insurance
means to the members who own the
company and are insuring themselves.
a return of their overpayments and
profits Just as soon and just as often
as the overpayment and profit can
safely be ascertained. and az such
short periods as win incur forfeiture
70 the least number"