The Birmingham age-herald., 1906-02-23

may be made of the duty accredited eoun- sel of municipalities, public boards and | public services in drafting bills or advis- ing clients as to the construction and effect of proposed or pending legislation, where the professional service Is not otherwise connected with legislative ac- tion. Violation of the law should be made misdemeanor and the failure to file the | statements required should subject the offender to appropriate penalties.
 Expenses.
 The committee deems 1t inadvisable to recommend that the legislature attempt to prescribe the expenditures of insurance | corporations. The legislature cannot un- | dertake the management of the busi- | ness. In seeking to secure economical administration it should not overstep the l line which divides suitable state super ' vision from an utterly impraetlcable of | fort to prescribe details. The legislature should aim to permit freedom of man | agement subject to general regula tions and complete publicity.
 1 For example, 1t is deemed unwise to l limit salaries by statute but It should be provided that all salaries of officers and | the compensation of any other person ! receiving over a certain amount. say s5oo0 In any year. should be fixed by the | board of directors and not by any conl- mittee thereof or by an executive officer
 
 statement to the superintendent of insur- anoe.
 The evidence, however makes 1t clear l that most wasteful expense lies in the | amount paid for new business Every | company professed to depore this, plead ing that the competition rendered 1t unavoidable.
 By the limitation of their new business the three great companies will be able very largely to diminish their agency expenses. This will also relieve the l smaller companies to a marked degree 1 of competition to which they have hther- to been subjected. Some limitation of the | expense in doing business Is imperatively | required: otherwise there Is little reason to doubt that there will be a continuance i Of the present eXtravagant measures. The committee does not recommend that | the rate of commission be prescribed by law. It is recommended that the com l missions should be uniform-that Is to say l that while the rate might vary according ' to the plan of insurance, the eompeu- ! sation should not be greater in amount ! for any 5000 of insurance at the same | age, and should be determined by the ! amount paid In the case of an ordinary | whole life policy. Bonuses prizes and l rewards and other special inducements | based upon the size of particular poli- l cles or upon the aggregate of insur- l ance written should be prohibited All l | upon in advance and should be q fixed percentage of the premium for each 5000 1 of insurance. It ts also recommended i that regular commissions should be lim- l tied to four years and to q certain per centage say 10 per cent of the hrst l years commission so that general re- strictions placed upon the first years expenditures should not be evaded. Loans and advances to agents should be pro- hibited.
 Valuation of Policies.
 The report recommends that the law be amended so that minimum stand for valuation of policies other than in- dustral should be established. and 30 that the preliminary terms in the yalua- ton of policies issued after 1906 should not permitted The superintendent of in- 1 surance should be required to fix legal | minimum standard assessment and CO., operative companies should be compelled | to maintain reserve not only equal 10 the proceedings of one death or disability assessment, but also at least equal to the cost of insurance for two policies in ac- cordance with the experience table Of mortality until the next call. Any re- serve provided for by the articles Of as- sociation or bylaws or by the contract with the members of any life insurance | company should be charged as lia- | biity in accordance herewith.
 ReDate6.
 The law as to rebates Is sufficiently stringent bat as a further precaution It is recommended that the penal code | should be amended so as to provide that a. person receiving rebate should be equally guilty with the one who gives l 1t.
 Surrender Values. | With regard to new policies, the provl- l sions of the statutes should be liberalized 1 and the insurance in the absence Of mo- 1 tice from the policy holder should be 1 automatically continued for It's fun amount as long as the reserve on his policy will justify
 ! Surplus.
 The committee recommends an annual i accounting and an annual distribution; the companies protecting themselves | against fluctuations in values by the ac- | emulation and the retention Of a req | sonable contingent fund. The maximum | Of this fund to be based on n percentage | of the net values of outstanding poh- cies.
 Non-PartlcIpating Policies.
 The committee of the Mutual companies l and stock companies chartered to trans act business on the mutual basis or nold- | ing themselves out as transacting busi- | ness on this basis should be forbidden i from writing non-participating policies' Remedy of PoIlcyholders. ! Assuming that the funds belonging to | policy holders through the opportunities arsorded hy deferred contracts have vast | cd through lax and corrupt edministra- | tion and that not only the shares or prof ! It's for policy holders been deternheo | by secret and arbitrary methods or com i pptation. but that policy holders have been denied an opportunity to seek re- l lief in the courts the committee recon | nends A repeal of the existing law which l provides that action by the attorney l general should be a condition precedent | to an order, judgment or decree Tor an | accounting, and that the matter should | he left subject to the general provisions of the articles of the code relating 10 l actions against corporations.
 | Forms of Policies. | The committee recommends the adop- | ton of standard forms of policies sim | ple in form and in clear and concise lan- | guage to be approved by the superntend- ents of insurance and that the issue Of | other policies than those thus provided | should be prohibited. The recommenda- | ton as to the compulsory Issue of stand ard forms does not extend to the policies | issued by assessment or cooperative as- | sociations or fraternal societies. Publicity. The companies should be required to set forth in their annual statement apart eroY, {hnua matters which the sunarin-