New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1906-02-04
INSURANCE AWAKENING.
I NEW LIGHT D4WNS.
c.nde Methods and EuI Practices
Hare Had Their Day,
ETpert Says.

sns little. or rather. as time IS reckoned at
80 ,-,e-tous perlod-wi:en important events.
9 ~ coming along singly, crowd upon
..,cr,s heels as 10 often render II difficult to
e. scar view OF any one OF them amid the surg
81 -,ronc and each so big with meaning for the
- ~ IN of The body polite that the last in the
- ~ vision would seem 10 obscure all those that
-. before-Some considerable time having
49, since the adjournment Of the Armstrong
s-.- assurance Investigating committee the per-
&c may enable one to form better estimate
60 thoroughly take stock. of its findings
~, vas possible during its active session. But It
\, cleo froba bic that even now, the laymar viii
- eaide through the maze OF its proceedings
-o-ber an Interpreter Of It's achievement. for the
sor thar she average man, having his own af-
- IN look after could hardly have given up
-. ,,r,e 10 read and study the page after page of
...-,cp- presented, day after day in the news
.,ers and, If lie could have done so. II is ex-
.-e-,elv doubtful TO whether he would have
.-osns5 the significance OF each and every phase
NJ he proceedings. ana OF exon ana every item VI
fhA results obtained.
a keener interest than the layman's, however.
= ,tsr Of the professional life insurance man. To
,ir, every question which arose was more or less.
vital one: and his education and training made
q ,ossiile for him note and understand every
ont IA the game, ana 10 Jet nothing escape MN II
Ia summary Of results
IL z dinner given recently 10y a notable life
assurance man Of this city, Mr.. John l. u. Bristol,
bs made q speech IN which he seemed TO recognize
,ss situation and II is probable that had his re
,,srks reached larger audience they might have
rendered the service which is undertaken here As
rsucb of tie information sought to be conveyed
i1 this article was obtained from that gentleman,
and as he possesses in marked degree the gift OF
snparting lesson in an understandable way, II
nav be veil where possible. 10 quote him literally.
II nav facilitate the reader II II be explained
- 10.
article is divided into a presentation Of the evil
practices which IN time have been grated upon
The life insurance business-b0th those which were
developed and those which were not brought out
By the Armstrong committee investgation-and the
suggested remedies or cures for those evils.
EVILS DEVELOPED BY INVESTIGATION.
E-heH asked 10 summarize the first OF these, the
svs shown by the investigation to exist. the expert
quoted gave them IL categorical form, and tersely:
'FIrst, Xtravagance-vId. reckless extrava-
accounts IN way 10 mislead insurance depart
nents, aud their experts 10 the expenses Of the
phi''hes ana as 20 the proper adlus lment Of
Thy profits that should accrue 10 policyholders:
thAo me enormous added cost Of life insurance
tesllti.s from the encouragement Of rebates
through this the permanelcy OF policies was
greatly reduced with The nnal result of continual
Los -- ne main, bN impaired risks fourth, one
man power under which the president mad excu-
slf control az a companys asseJs-frcm this
s,ose CaiApalEh contributions, the payment OF
enormous sums 10 influence legislation. advance
~ agents 20 The extent OF millions o dollars. and
other uHTaTTanted expenditures not found IN any
Viher business; fifth aepotisrn 10 a sirbcning ex-
NAt' SKIN, the danger 10 the solvency Of compa-
mes ron continuation Of present conditions in
he companies themselves the Certainty Of in
s9yencE, mind but OF an impairment which would
utterly prevent the return 81 fair diyidends-in
otheF words, he loading ample for safety and
ARG cl'laends. under conservative conditions is
t t3 GsslIgle4 through present practices and
l,sna- oi increasing oriality-indeed i was
trayaEaut engagements not oaly nsde use of the
ne sacred funds or the older policies 10 make
~ ceaIeHcies; seventh the most vicious mis-
use Oh Ihe iunds u p1iievholders by high sal
el!ta oneltls. Iof example, in private syndi-
cate operations where blt small portion OF
ene Tie larger share went INTO the pockets of its
ga,.i.IiIl sie"aTcs Ead Polcyhoders We're made
imaginable crime the officers Of a cornnanv car
commit Is 10 fisk, FOR their own private gain
foAcynoders eighth, millions upon millions Of dol
~ ill aAlea ~ AGENTS upon the poor cola
ness ano these advances not borne upon the
9 y S y ne company IA their proper guise-some
"a ealie company, tie item appearing on that
co!lpanys books as a loan made 10 it by its sub
rue one which was 10 adtaace to agents on re-
osto business and conceal The fact from Insurance
LOADING" THE SAFETY FACTOR.
vas here suggested 10 Mr.. Bristol that while
pahsIs, the laynan might be aware of the fact
laoF of safety allowed IN fixing premium rates
f" doubtful whether lac has a very conlpre-
--A'e UNDERSTANDING Of its value. and that an
Ns9t Interpretation would probably prove ac-
@PAot Acting upon this suggestion he gave
-s'e Details and explanation Of loading:
ri. Assuming per cent interest. and deaths as per
sr s aaL-,ll@sn .4Lle OF mortality. il requires at
, 80 S-'D policies. issued for that age during
- yes.s ano ln addition pay $1,000 IT the end OF
y years Il lie insured is alive. This is a ten
sS5a5 Hou a i-etl To this net premium must be
M e'gss commissions and contingencies that may
tf or5,as Wy, Is tNresslEe mortaity. etc. On
aesS s y ir Plan, me loading is Uniform at all
-.- "do ls percentage Of the net life premiums
r5s l. 70 > u per cent, as 10 companies. on
rer, IT, a's, slen as endownents and limited pay
n - iol-,it7. lne loading, with the exception
n n 1-.I,ei.l IS of lreaky character consist
/ M - tti- 'ttti..aHe u the net premiums any
49,. we plans with 4 percentage OF the net
49, aS 9n The life plan at the same age added
\ 49, some OF The actuaEies who wish 10
--s mystify. add or take OF a cent or two here
5oless iis ssSiy age on mountaineering
\ ~ sst ana on every Dian. The same is true
ta am -, ec-'s =. annual dividend policies where.
rwet ',sse'il. me company cannot pay a dividend,
ne q dividend: and where the companies do
an WITH eer 1"o, me dividend OF course must
Ne losdg-s ..s a,sse: ~ the same proportion as
e F 9ys tafles TINS is part Of the wholly use
ssaesssssSe that aetuaries have thrown into the
1 rpr
1'l-s INVESTIGATION DID NOT SHOW.
-s'Ag given this lucid explanation Of the feat
4 s'nncaIly termed loading" Mr. Bristol pro-
ss- !. 70 enumerate the evils which he knew TO
1 =, ne life Insurance business, but which had
Il brought out by the committee
4 - N'sl q these" said he ARE the laws in
1 49,. 70 lAe polcyholders and which unduIy
\ 4. ne companies-ss for example. section Sc OF
\ "a ioik law, which faVors the companies at
\ 49, o. the policyholders and should be
\ ay SECOND. the extravagant Inanagements not
4 The entire loading Of a policy but the
4 - I% The first year in addition, this crime
1 ~ eO''eh over by making q term policy OF ono
Il winch there IS no reserve Of any amount,
/ NE regular policy applied for. and counting
II t.e As such only after the first year; third.
4 a.~Aoent q Z company not alone in the
4 e. q Tie oDe-Tnan power. for reports OF medi-
1 gsISl SINNERS IN cases Of impaired risks were fire.
A &c. VoeTeu overTidoen, or disregarded ano