Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1906-08-17
Attempt to Fix a Minimum Rate
For Fraternal Insurance
Will Be Opposed
GREAT p9A'r'cAL POWER
Membership of 100000 Votes if En-
ployed to Defeat What It Believes
to be Adverse Legislation Likely to
be uccessfuI-Fraternal Side of the
Argument.
Special to Times-Republican.

Special to Times Republican.
Des Moines Aug. 17--Gravest of diff
ficulties in the shaoe of 100000 votes
of the state who believe that fraternal
insurance rates ought not to be touch
ed, stand in the way of any legislation
along the line of fixing minimum
rate from fraternal insurance men are
limiting that every fraternal insurance
man in the state will get together to
defeat or whip into line any legislator
who dares think of meddling with fra
ternal insurance rates,
State Auditor b. F. Carroll his dep
uty in the insurance department, Ole
o. Roe, every member of the insur-
ance commission and the officers of
most of the big fraternal insurance
companies believe that the limit for
most of the companies has been reach
ed and that in order to pay the death
claims the assessments must multiply
or the rates go up. They recognize
that the old fraternal companies can
not raise the rates unless the younger
companies are compelled to do so also
for a company that Is just starting out
or one that is but few years old, has
no difficulty in running on very low
assessment. The rank and file of the
members Of fraternal insurance COM
panies, however, cannot see why there
is any need of legislation. They argue
that their fraternal society is paying
it's bills each month and as long as It
is paying it's bills they argue that they
are getting their insurance at cost and
the company Is safe. They can see no
need of raising the minimum of the
rates so long as the company has mon
ey enough to pay Its expenses. This
argument, has been made this summer
to the insurance commission now in
vestigating the question OF rates and
the argument is made by officers of
some Of the fraternal insurance COM
panies.
The other position which is taken by
the state auditor, the members of the
insurance commission and the officers
of some of the, older and larger frater-
nal companies Is that the only way the
companies are able to keep paying
their bills is by increasing the mem
bership each month by taking in young
men. Only by taking in new members
faster than the old members die off
are the fraternals able to pay their
bills. But there is limit some time
argne the members of the insurance
commission. The membership cannot
be increased forever and some of the
older fraternal companies are already
beginning to reach the limit
Here is about the way the state au-
ditor. members of the insurance COM
mission and officers of some OFT the
older fraternal insurance companies
figure the matter out. The six fra
ternal insurance companies having the
largest membership have rates Of from
l5O cents to 80 cents per 900 of in
surance for members from the age OF
1s to "a years, the assessments being
about monthly, or rate OF from $6
to $1OS0 year per $1,000 OF insur.
ance. At these rates the person paying
Sc year would have to live ard re-
main in the order and pay dues 167
years before he would pay into the
fraternal company as much money as
the fraternal contracts to pay back to
his heirs. The person paying the
$1,000 a year on the 80 cent rate would
have to live and pay eSsments 90
years to pay in the $1,000 his heirs
would receive. The only source OF
revenue of fraternal insurance COM
pany is the assessmen from it's mem
bers. Few have reserve fund which
they put out at interest, and the re-
reserve fund must in tbesfrst instance
come from the membs assessments.
Since no one since = 11Ie times has
been known to live 1.67 or even 92 years
after having reached maturity, those
who are taking this side of the case in
the controversy over fraternal insur-
ance rates argue that such companies
cannot long exist and pay their bills,
unless their rates go UP. Further
more, very large per centSof people
die in middle and early'life. Since those
who live to the extreme limit of the
wears allotted to man fail to pay in as
much as the soiety will pay their heirs
when they die. where" ask the MEM
bers of the iowa insurance commis-
sion, "will the society secure The re-
mander of the amount which it has
contracted in the policy to pay the
heirs of the deceased members"
But while this matter is very clear
in the minds of the insurance ommis-
sion and state officials, and is no doubt
apparent to every member of the leg
islature, the fact is that the member
ship of the fraternal insurance COM
panies are opposed to any change.
The deputies and solicitors are opposed
because they want to write Insurance
at the low rate. They can get more
members and make more money at
those rates. The officers of the young
er societies want the low rates contin-
ued, for their stock and trade is their
low rates, which is simple as long as
they are young and rapidly taking in
new members. The grand lodge meet
ngs Of these orders are composed OF
delegates who are chiefly the deputies
and agents who do the soliciting. The