The Redwood gazette. [volume] (Redwood Falls, Minn.) 1873-1940, 1906-09-19
PROTECTION FOR
POLICY HOLDERS
HON. ALBERT l.. COLE URGES
MEASURES TO MAKE INSUR.
ANCE POLICIES ABSOLUTELY
CAFE.

Hon. Albert L. Cole devoted a con.
siderable portion of a recent speech
to the consideration of the problem
of how best to protect the interest of
policy holders He said:
Until a couple of years ago most
people believed that life insurance
policy was good form of investment.
There was also general national pride
in the size and strength of our great
American life insurance companies.
The recent disclosures as to the scan
dalous business methods of some Of
have changed all this. Many policy
holders have allowed their policies tC
lapse comparatively little new bus
mess has been written, and the big
companies have become a subject of
criticism, gibes and sarcasm instead
of praise and pride.
1T would be serious misfortune
for the country If this were carried
too far. A life insurance policy in a
properly managed company is, for
most families, a valuable species of
saving. If the attack upon life insur-
ance companies generally becomes SO
fierce that the people acquire q per
manent distrust of all life insurance
and cease to insure their lives, one
Of the most valuable instrumentalities
for thrift will have been eliminated
from our national life. If the attack
is carried so far as to effect the sol
vency of the companies, the resulting
calamity will be appalling.
1T is the part of wise statesman
ship to so handle the present situa-
ton: -. s.st - -
"0.) That the solvency of the ex-
perilled.
"(2.) That the companies which
have not been guilty Of abuses should
not be made to suffer along with
those of a different character.
"(3D That the popularity of life
insurance as family protection may
be preserved, and
"(4) That it may be made safe so
that those who invest their money in
1t may not be deceived or disap
pointed.
Il do not think that these objects
are to be accomplished by change
Of management of the companies
alone. I am afraid that even if the
policy holders participate in the selec-
ton of trustees, as they have not
heretofore done, TIE trustees of their
selection, however fair their repute,
will find It difficult and perhaps i'm.
practicable to give that intimate SUI
pervisory attention to the several COM
panies affairs which, in the long run,
is essential if evils are not to creep in.
ITO secure permanent results, we
shall have to have continued regula-
ton and supervision by the state. We
think we have discovered some of the
sources of the evil. EXtravagant sal
aries, reckless expenditures, and the
use of trust funds for speculative pur-
poses and private gain, have been en-
cOuraged in the opinion Of experts by
the accumulation of great SURPRISES,
needlessly eXacted, from policy hold
ers. Legislation requiring at least the
apportionment among policy holders
of their excess payments at frequent
intervals will check some of the
troubles. But after awhile they will
return again In some other shape un-
less constant vigilance is employed.
The state owes 1t to it's people, to it.
self insure the financial institutions
within it's borders. The average citi-
zen has not the time nor the facilities
for personal investigations. The state
must assume the task It's methods
Of investigation should be so complete
that its license issued to an insurance
company or bank, should be equiv
alent to guaranty that 1t Is entitled
to public confidence An insurance
company dishonesty or incompetent
IL managed, or a bank becomes insol-
vent Is public disaster Of wide
reaching consequence, and should be
made an impessibility. This can be
accomplished IN one way, and In one
way only. and that is by a system Of
the highest publicity. The insurance
departments Of the several states
should devise and enforce the use Of
such forms Of reports that the condi-
ton of the several companies as to
assets, liabilities and expenses, should
be clearly disclosed. and should CO.
operate one with the other so that the
cost of Investigations from time to
time may be minfmized. The revela-
tions of the recent investigation COM
mittees would have come years ago
had such a plan been heretofore
adopted. But the vastness Of the
work for the insurance department
Of any one state has prevented its
being done in the absence of co-opera-
ton, and the reports furnished have
served to conceal rather than show
the truth. In other words, I think
publicity Is the great safeguard"
Stewartv1lle Times, Aug. Is: Do
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