The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1906-02-23
AS to Mutual Companies.

IuS SUITE
AS to Mutual Companies.
Concerning the so-called mutual
companies, the committee says:
Notwithstanding their theoretical
rights, policy-holders have had little
or no voice in the management. En-
trenched behind proxies easily collect
ed by subservient agents and running
for long periods unless expressly re-
voked the officers of these companies
have occupied unassailable positions
and have been able to exercise despotic
power. Ownership the entire stock
of an unmixed stock corporation scarce
ly could give tenure more secure The
most fertile source Of evils in admin
istration has been responsibility of Of
fetal power. However much this may
be expected in the case of absolute
stock control in that of a mutual COM
pany it proceeds from a fragrant dis
regard OF the law of its being. While
II would be plainly unwise that the
management of a life insurance com
pany should be rendered unstable or
that its personnel should be frequently
changed, it is of the first Importance
that officers should realize their direct
responsibility to those whom they rep
resent aud should rely for their con-
tlnuance in Office upon proved efficien-
cy ana not upon a practical inability
OF the policy-hOlders to depose them.
with these objects in view, the fol-
lowing plan is recommended:
AT least five months prior to. each
election, lists of policy-holders having
al least 1900 of insurance in force,
properly classified by states and coun-
tles' giving names and addresses, be-
tween the amount of insurance. should
De nled with the superintendent of in
surance and similar lists should be
open TO inspection at the home office of
the corporation. Lists. also open to
inspection OF policy-holders within each
state and foreign country should be
HIeo at the general agencies of the
company IN such jurisdictions. Voting
should be limited to those who have
peen insured at least one year before
the election and whose policies are still
IN Iorce when the election is held. The
BOARD or trustees or directors should
annually nominate candidates TO he
voted for OF the next election and
SHOULD ME its nominations with the su-
PerHltSndent Of insurance at least four
months before the election toee+bar
with a designation of persons to receive
proxies 10 vote for such candidates. II
siouto also be provided that any group
oI 1OV members should be privileged IN
make and file with the SUPERINTENDENT
nominations, together with names of
persons who will receive proxies TO vote
IOr the candidates, at least three
IiLolItns OeIore the election The cor
pofdllon should be required at least
Two months prior to the election to mail
70 each policy-holder notice of the
electloh, together with a suitable ballot
CONTAINING the names of ali the can
GIaateS whose nominations have been
uuiy hIeo, with properly addressed en-
h HeiIpe enclosed for the return Of the
L pelIoI; Inc periods above mentioned
nave Deen fixed in order TO give Onnor-
UNITY to reach distant poIicv-boIdare
votes should be limited to the nominal
ed candidates and suitable nroI-ieio,7s,
sHould De made for new nominal ioye
ana the casting of votes under proxfee
III case OF the death or incapa civ of
any person nominated Provision
snoulG also be made for the proner
CUSTODY Of ballots received bv mail a,,5
disinterested persons should he -
ton" VI eIec-
AS 10 stock companies. the commit
Tee recommends naturalization.
Objections to syndicates.
On the subject of investments Of life
insurance companies the comrittee
aIoer declaring against "syndicates."
recommends that the law be amended
so as to provide: VI
l. That no investment in the s+ool,
OF any corporation shall be permitted
except IN public stocks of mutual cor
porations N''i OoI-
Z mat investments in bonds secured
20 the extent of more than one-tI1ird
UL the VaIue OF the entire security
Iheretor oy the hypOthecation of cor
poration stock shall be provided
j. That no loans shall be made ~,
such stocks and bonds which are moi
the subject of purchase under the
above provisions
+ mat every company now owning
STOCKS or bonds of. the prohibited class
shall be required to dfspose of tbo
same within five years from Decer-
per 81, 1916, and each year prior thereto
shalI make a reduction of the amount
OF such investments to an extent an
proved by the superintendent of in
surance III
.. The statutes should also forbid oil
syndicate participations. transactions
Tor purchase and sale on joint account
ana the making of any agreement pro-
Wong that the company shall with
hold from sale for any time. or sub
Ject to the discretion of Others anv
securities which it may own or aco71ire
8. 1t should also be provided that no
officer or director should be pecuniarfIv
n
cipal, agent or beneficiary in anv nur-
chase, sale or loan made by the corner
alton except in case of q loan upon
his policy.
The committee recommends limiting
the amount of new business which
each of the larger companies NAV take
to $50, 100000 a year, and that no com
pany doing business in the state ex
cept the industrial companies, shall is
sue policies in excess of certain pre-
sCribed limits.
Drastic Remedy Needed.
Contributions by insurance CORPORA
tons for political purposes should be
strictly forbidden. The committee rec
ommends the passage of an uneuuiyo
cal and drastic measure to remedy this |
evil. Not only should it be expressly
prohibited and treated as a waste of |
corporate moneys, but any officer. di |
rector or agent, making, authorizing
or consenting to any such contribution /
shall be guilty of a misdemeanor and /
the prohibition should be extended TO |
all corporate contributions of this
character.
Nothing disclosed by the investiga-
ton deserves more serious attention
than the systematic efforts Of the Iar.1e