The Caucasian. (Shreveport, La.) 1900-192?, 1905-05-14

generally termed the old liners, co-ope
ratlve insurance associations. which tur.
::ish life insurance on the assessment
plan. and fraterna beneficiary orders OF
associations, BY referring to the com
nlissioner's annual report these three
divisions will be found
The old liners, the first class, are or
garlized under law and are business cor
porations.
The second class is a cross between
an old line company and fraternal So
ciety. Hundreds Of these assessment
companies or relief associations have
been organized. but most of them have
hcen failures They are in no sense fra
terral societies. The latest commission
crs' report shows only furtytllree still
in existence
The third class or fraternal beneficiary
orders has proved extremely POPULAR
For many years the insurance commis1
sicncr> III their annual reports have in
the eyes of the frater11alsts perpetrated
a great ms Justice upon the fratcrnal So
cittics by grouping under one head the
long list Of failures of the assessment
companies, together with the few frater-
nal societies that have ceased to do bu>-
ness.
| Less than a dozen fraternal societies
that had attained any size have ceased
business i'll thirtysiN years. The prln-
cipal failures are the following:
American Legion of Honor, of Bos-
ton. which once had membership of
$1,000; Chosen Friends, of indianapolis,
which had a membership of 10000
United Friends. of New York City,
which had membership of 10000
Royal Templars. of Buffalo, n. Y,
which had a membership of $4,000
Equitable Aid Union, of Columbus. Pa,
which had membership Of $4,000; En-
| pire Order of Mutual Aid. of Ballston.
N. y, which had membership of
10000. and the Order of the Golden
| Chain. of Baltimore. Md, which had a
membership of 10000.
On the other hand, what is the record
of the old line system? According to
| the insurance reports. there have been
since 184o eighty-nine legal reserve fail
| ,lres, and the companies had on hand
at the time Of the failures aggregate as
sets of $1oI,o26o33 This money was
paid by policy holders in excess of the
cost of insurance and expenses, under
the belief that those funds were an abb
solute guarantee against failure And
yet they failed.
The most colossal failure among them
was the Charter Oak, wfieh stopped stopfed
BUSINESS in 1877 with $13,ooo,ooo assets.
Receivers took possession and for years
these funds were dissipated in expenses,
SO that but eighteen per cent of the vast
assets were ever returned to the policy
holders who paid it in. This one failure
was a greater loss to policy holders than
the combined losses of all the assessment
companies and fraternal societies that
have ceased to exist. Some of the othae
notable failures were those of seven
New York Companies, with assets. re-
spectively. of 100000. $6ooooo S.
100000. $2,482ooo. $4,5oo,ooo. $4,000
and $3.25o,ooo; a New Haven company
with assets of $1.oooooo, two St. Louis
companies. with assets Of $2.8oo.ooo and
$6,ooo,ooo; Chicago concern with as
sets of 100000: Newark, N J., COM
pany with assets of $1,6oo,ooo. and a
Washington. D. c., concern with assets
of $3.6oo,ooo.
Even at this time one of the appar-
emily strong companies, the Washington
Life. of New York, is found by the in
surance commissioner to be in need of
reorganization. 1t has greater assets
than had the Charter Oak, more than
lS16.ooo.ooo and $4,000 policy holders.
F~om a careful study Of the old lin
ers record of failures it can be seen that
the legal reserve is. not guarantee
against feature, and that the big COM
panies with their millions of reserve are
no safer than the great fraternal sys-
TEN which simply collects the cost OF
insurance and does not accumulate a le-
gal reserve.
And since the publication of this ar
ticle the Equitable Life Assurance So
ciety has been and is now in the public
eye.