Omaha daily bee., 1906-01-07
sbFEqUlRDINg Observation-Disclosures.

tive investigating committee proposes to
make to the Legislature of that state
with a view to safeguarding policyhold-
ers has been made public. These recon
mendatiOns are:
/. That policyholders shall have effective
voice in the government Of the companies.
2 That there shall be full publicity to
the policyholders in regard to the manage
ment of the companys affairs.
g. That policies be limited to certain
standard forms.
T. That policies be safeguarded further
than at present against forfeiture.
8. That deferred dividend payments either
be prohibited or greatly restricted.
G. That the companies be obliged to make
an equitable distribution of surplus to
polcyholders at stated periods.
Z. That companies shall make larger in
vestments in real estate bonds and mort
cages.
s. That the control of subsidiary COM
panies. such as banks, trust companies and
real estate holding companies, be pro-
hibited.
! g. That the Investment in corporate bonds
be regulated so as to prevent speculation,
losses and attempts to float doubtful en-
| terprises
10. That deposits with or loans to monied
| corporations be restricted.
All these proposed reforms will COM
mend themselves to the rank and file of
life insurance policyholders, and cannot
| fail to meet with general popular APP
prevail The question is, Will they be
! lived up to?
/ h. MI nd mn
companies, whose headquarters are To-
Gated closely to Wall street have made
high-sounding promises of mutualiza-
ton, but have shown no disposition to
put their promises into practice. Mani
testify because the new inside rings, like
the old inside rings, are fearful Of losing
their grip by giving the polcy-hOlders a
voice. or share, in the management Of
their own affairs.
To be sure every policyholder has re-
ceived notice that an election of direc-
tors or trustees would be held on given
day in the city Of New York, but no pol
icyholder, excepting the inside few, has
been consulted regarding the candidates
and most, if not all, of the policyholders
have been politely notified to send their
proxies to members of the inner circle
In order to give the policyholders in
every section of the country an oppor-
tunity to have effective voice in their
government life insurance companies
should be required to publish the names
of policyholders in each of the various
states in which their pollcyholders re-
side at least sixty days before every
election, so that they may cooperate
and participate in the selection of di-
rectors or trustees. Incidentally, list
of all candidates for the board should
be submitted and the country should be
districted and directors should as far as
practicable, be apportioned to the vari-
GUS sections of the country.
The abolition of deferred dividend
policies and the equitable distribution of
the surplus to policyholders at stated
periods are desirable features, but why
should life insurance companies be per-
mitted to accumulate a large surplus for
distribution instead of reducing the pre-
miums in proportion to the risk as
sumed? The essential feature of life in
surance is protective. The great major
ity Of policyholders do not invest their
money in life insurance for the divi-
dends they expect, but for the protection
1t affords to their families, or their cred
itors.
Large dividends simply mean high
priced insurance, and high-priced insur-
ance means few policyholders, whereas
low insurance rates means an increase
In the number OF policyholders an
therefore, an extension Of the benefits Of
life insurance to the largest number.
The abolition of subsidiary trust COM
panies and syrdicates operated with in
surance funds, and the investment of
these funds in real estate mortga ges
would, go far toward safeguarding the
policyholders against loss through spec
ulative Investments and enterprises got
ten up by the officers of insurance COM
panies for private gain
The proposed restriction Of deposits or
loans to monied corporations would also
go far toward safeguarding the interests
OF policyholders, but above all things fire.
quent publicity of every important
transaction on the part of the officers
should be paramount among reforms to
be inaugurated in the future manage
ment Of insurance companies whether
they are organized on a mutual plan or
conducted by stock-holding corporations.