The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1905-10-24
SEEKING TRUTHS
HID BY M'CURDY
New York Insurance Investigators
Ask Why Dividends Of Mu-
tual Life Fell.
ACTUARY ON STAND
FAvoRs PUBLICITY
Division of Profits with Policy
holders Discussed by Nc
Curdy's Aide.

New York, Oct. 24.-Emory McClin-
took, actuary of the Mutual Life Insur-
ance company, was before the insur-
ance investigating committee when it
resumed its sessions today to tell why
the dividends of the company had de-
creased while the salary of President
McCurdy was being increased to $780,
600 a year.
In previous hearing the counsel for
the committee produced letters from pol
icyholders Of the Mutual Life Insurance
company complaining that the dividends
Of their policies had been greatly re-
duced since 1876.
One New York city policyholder wrote
to the counsel for the committee that
dend Of $55.76, but that the dividend
had been gradually cut until in 1904
the policyholder received but So as
dividend. The writer inclosed state
ments from the company's reports and
declared that the reductions were made
in the face Of increases in the company 8
reserve year after year.
! Baked by McCurdy.
| To ell questions on that point Presi-
| dent McCurdy in the hearing on
Wednesday replied that he was not
fortified with the information required,
but that it could be obtained from the
actuary Of the company. When pressed
| for an answer, Mr. McCurdy had re-
heated al decline to discuss the ques-
/ tion.' He did not admit, however, that
he did not know.
MI. McKeen, of counsel to the com.
| mittee. conducted the examination OF
MT. McClintock. The witness said he
had been an actuary Of various COM
panies since 1868. He became actuary
of the Mutual Life in 1889. He was
president of the Actuarial Society OF
America from 1895 to 1897, and has
been a fellow of the Institute of Actu-
! aries Of Great Britain since 1874.
Mr.. McClintock supported the state
| ment made on the stand by John A. Nc
Call, president of the New York Life,
as to the causes leading to the many
failures during the early days of lnsur-
ance in this state. The companies
failed, said Mr.. McClintock, because
The current premiums. The Metropoi-
5 tan Life, the witness continued. was on
the verge of failure at one time, but
/ managed to prosper by adopting the IN
dustrial plan of insurance.
i Saved by Reserves.
I The three big companies, the Mutual,
Equitable and New York Life, the me Wit
i ness said. were able to comply with the
rules of the state insurance department.
by reason of having sufficient reserves:
! He thought the reserve requirements OF
the New York law as tstood prevented
the formation of many new companies.
The law, he thought, was defective III
giving no leeway for the expense OF pro-
curing new business
Mr.. McClintock said he favored hav-
ing no law governing the reserve, but
such supervision as would verify the
statements made public. Publicity, he
said. was the best law, and he thought
. the public could look after itself in. the
way Of it's protection in this matter.
Asked how far. his views in this re.
spect were shared by other q1 rG! OF
insurance COMPANIES, Mr.. McChntock
said he was somewhat Of mission
ary in this matter
3 Keep Hands OFF the Books.
Mr.. McClintock said he thought the
| state insurance department. should keep
| at a distance and not conduct close
examinations in the company s own OF
: fees.
J., Mr.. McKeen asked: "Would not
: trouble occur before the public have
; time to see it comingq'
j. WAs a matter of fact, the British
/ companies are managed safely and con-
servatively and no mushroom compa-
MES ever survive there MI. McCEn-
took replled. . ar.
Nc lintock stated he did not believe
in legislation against assessment COM
panies, as that might create preJu-
i dice against the regular hfe-lnsurance
: companies. The Mutual Life IS charter
| called for q division of profits among
the policyholders every five years pre-
yious to 1896, he continued. In lS42
q dividend was added to the policy.
The next division Of profits was IN
1853. and this dividend was payable
at death. All the policyholder knew
was that certain amount was added
| to his policy, which he was to receive
at his DEATH In 1858 and 1868 other
divisions were made. Witness was not
clear as to whether they were paid In
cash upon surrender of the policy.
What Competition Did.
Y In the sharp competition between the
D New York Life and the Equitable Life
y with the Mutual Life, the Mutual of
s fered new policyholders, in 1870, 80
p per cent rebate on the first years pre-
j MUM. This Mr.. cClintock said was
J. an open, public and avowed rebate.
s There was so much objection to Gnls
r that in 1878 the Mutual issued policies
at "a Is per cent reduction in rates.
: Outstanding policyholders were priv
ileged to avail themselves of the reduced
/ rate but with reduced dividend. Mr..
0 McClintock said it was one OF these re-
e duced-rate policies that was under OBJ
e servation last week when the letter OF
: the holder to the committee was read
: to Mr.. McCurdy reciting a gradual re-
(, duction from $55.76 to So in dividends