Eagle River review. [volume] (Eagle River, Wis.) 1890-1927, 1906-12-14
INSURANCE PROBE
REPORT is FILED
MATERIAL REDUCTION IN PRE-
NUNS, 1T is HELD, CAN
SAFELY BE MADE.
COMPANIES FAULTS SHOWN
legislative Committee of Wisconsin EN-
bodies Twenty-one Bills in
Report.

| reduced without impairing the solvency
Of the companies of the security OF their
| protection is the chief feature Of the re-
port of the Wisconsin legislative lnsur-
ance investigating committee. made pup
| lie today. Most insurance authorities
have denied this, but the committee up
holds its claim at length, prescrlDes a
/ new table of premiums and declares that
any company that cannot comply with II
should be barred from the state. Inc
| committee also submits drafts OF TWEEN
ty-one bills intended to correct the varl-
Gus evils its Investigations have uncoV-
| cred i'll life insurance.
| Companies Are Criticised.
The committee investigated the North
western Mutual and the Wisconsin Lite,
| as Wisconsin companies. and the Union
| Central Life as a typical outside com
pany of conservative record. The WIS
| consin Life is ery severely criticised OF:
| almost every point, but 1t is small
| company with only few thousand pom
| cy holders. The other companies "re
also criticised on special points which
! were brought out during the hearings
| last summer, although their general cor
! dition is warmly commended. The
| Northwestern was criticised for proxy
voting, harsh loan provisions, the lssu-
ance of subagents' helpers contracts ana
discrimination against tontlne pollcy
holders to increase annual dividends
| The Union Central is charged with IA
voring stockholders at the expense of
policy holders, with charging varying
rates of interest on policy loans, aAd
with evorloading endowment policies.
Many Evils Found.
Based upor it's Investigations i"to
these companies and the information Sc
cured from various sources, the report
then summarizes the evils it has d:scov-
cred in the life insurance business as
follows:
ut has shown to the satisfaction of
the committee among other things, (a)
that the expense charges for insurance
management are excessive and appor-
toned unjuStly as between different
classes of policies; CD that premiums on
most classes of policies are unnecessarily
high (c) that the dividend returns sell
dom correspond to actual conditions; (d)
that discrimination is employed i'll the
apportionment of dividends as between
annual and deferred dividend policies.
and i'll interest rates ON policy loans; (e)
that excessive charges have been and
are now eXacted upon surrender of poll
cies for cash. or for paid-up or eX-
tended insurance; (f that unreasonable
forfeitures of the reserve are exacted
during the first three years of the policy;
(gl that the policies and loan agree
mentS OF many companies contain harsh
provisions"
Holds Premiums Too High.
The report then goes into q lengthy
technical discussion of the principles of
life insurance, and as its most i'm
portant conclusion declares that pre-
miums on life insurance can be safely re-
duced from the scale now in force with
out impairng the solvency of the COM
panies or the security of their contracts
of insurance. This point is generally
combated by insurance authorities, but
the committee upholds it at length, and
backs up it's conclusions by proposing a
law fixing table of life insurance pre-
miums which must be complied with by
any companies which continue to do
business in Wisconsin. The committee
limits the annual premium on an ordi-
nary life policy to the amount now
charged by two companies among the
oldest and safest doing business in the
United States and limits the premiums
on all other forms in proportion.
General Extravaganza
1t holds that the high commissions
paid, the large surpluses accumulated
and the general extravaganza of the big
companies, which have been possible
without lmpalrlng their SOlvency. show
that the premiums can safely be
duced. 1t recommends that table be
included i'll each policy. showing for each
year OF its existence the division of the
premium into mortality, expense and re-
serve elements. The minimum rate of
interest assumed is to be 21a per cent.
with per cent. as maximum.
Urges Many Bills
The following is list of the bills rec
commended by the committee:
l. Defining the terms used in legislation
relating to life insurance
2. To provide for and regulate the cleo
ton of directors and trustees of domestic
mutual life insurance companies.
+hs TO provide for the dnPIpontment by
upon the board of all domestic life insur.
ance companies.
4. To provide for the admission of life
insurance companies of other states, and
amending section 1913 Of the statutes OF
1898
). Prohibiting life insurance companies
from writing both participating and non
participating policies in this state.
6. Requiring stock companies to ascer-
tain. determine and report to the commits
sioner of insurance the respective rights of
policy holders and stockholders in unas-
signed surplus.
Z To amend the law with respect to
the valuation of policies
s. Relating to, the form of policies Of
life insurance and applications therefor and
prescribing certain standard provisions.
9. Prescribing limitations of the pre-
miums.
10. Prescribing limitations of expenses.
II. Prescribing limitations OF salaries.
To Prohibit Rebates.
IL To prohibit rebating
49, To prohibit misrepresentation
14-To provide for an original account
ing to classes of deferred dividend policy
holders, an annual accounting thereafter
and a report thereof to the commissioner
of insurance.
10 To provide for an annual accounting.
16 Repeating chapter 41S the laws
of 1899 chapter 17J of the laws of 1895
and chapter 27o of the laws. of 1899
IT. Requiring all companies transacting
business III this state to furnish policy
holders, upon application, copy of their
application for insurance.
is. Requiring life insurance companies
transacting business in this state to re-
port to the commissioner of insurance all
disbursements made, in opposing or promot-
ing legislation, and to keep an accurate
account thereof.
19. To repeal the insurance retaliatory
laws.