The Lake County times. [volume] (Hammond, Ind.) 1906-1933, 1906-10-22
Life Insurance Quiz Com
mittee Raps Companies,
Especially Inter State.
ENORMOUS
Committee Files Report With Gov
ernor Hanly - Wants Com
missioner of Banking.
(special to Lake County Times.)


indianapolis, Oct 22.-In an exhaust
i've and voluminous report. filed with
Governor Hanly today the members of
the investigating committee. James
Noel of Indianapolis and w. B. Dur
borrow of Williamsport, who have been
at work in the office of the state audi
tor for more than year, made their
findings with reference to the life in
surance situation in this state.
The report covers over three hun
dred typewriter pages, and considers
each of the thirteen Indiana life in
surance companies in detail, including
exhibits of all contracts issued, adver-
tising matter, etc; it considers special
ly the special contract feature of Indi-
ana companies; gross extravaganza in
the cost of management of these com
panies; treats in detail of what are
known as the guarantee funds of some
companies; advises against the use OF
the preliminary term insurance charged
at level premium rates; advises against
the use of the commuted premiums;
recommends an entire reorganization
of the insurance department.. finding
fault with the niggardly provision
that the state makes for this depart
ment; makes recommendations for an
entirely new set of laws with refer
ence to the department and life in
surance business
Perhaps one of the most interesting
phases of the report concerns the an
alysis of the management expenses of
six companies. A table is given show
ing that the ration of operating ex-
penses to whole premium income
ranges from 81 to 81 per cent. of the
income. The ratio for the State Life is
AZ per cent; for the Interstate Life
81 per cent. The report continues:
"It appears from the above table that
the ratio of operating expenses to the
whole premium income is not excessive
except in the case of the State Life and
the Interstate Life. The ratio of AZ
and 81 per cent. are excessively high in
comparison with the rates of the great
majority of the companies of respecta-
bility."
Inc state 1lIe, the Interstate Lille
and the American Central Life are
most prominent of this class, and are
handled without gloves.
The Report Continues.
when, however, we have analyzed
the statements of our home companies,
and have separated the actual cash as
/ sets from the so-called policy loans,
and have ascertained what portion of
their income has been actual income,
we find the ratio of expense very much
/ greater. 1t is so high that it must be
subjected to severe criticism. For in
stance it appears that the State Life
Insurance company spends AZ per cent.
| of its entire cash income the Reserve
1 Loan 60 per cent, the Liberal Life 5S
per cent. the Meridian Life and Trust
/ 6S per cent. the Interstate Life SIS
per cent. and the American Central 50
per cent of the cash income for man
agement expenses These ratios of ex-
pense are extravagant in the extreme
and can be justified on no plausible
ground"
When the commission handed in its
report this morning it recommended
that department be created with COM
missioner Of banking as a title.