The evening times. [volume] (Grand Forks, N.D.) 1906-1914, 1906-01-25
F'|A|'V|||0R'S CRED||TINC
1
INSURANCE
DIVIDENDS
7. Is They Accumulate, Not At
Maturity Cooper on
Insurance.

state Commissioner Cooper is home
from Bismarck for few days. and
talked at length on insurance mat
tiers to the Evening Times. Asked
as to the effect the New York insur-
ance investigations would have on the
continuation of the business of these
concerns in North Dakota, he said
there would be no radical action TAX
en- In the matter. The companies in
vestigated with proper legislation re-
strtctiOns as to premium accumu-
lations apd other features would be
deprived of the means of injuring the
policy holders. 4 81
On this point Mr.. Cooper believes
the great trouble with the insurance
companies is in not crediting the pol
Icy with the annual dividends where
the, policy cayries an accumulation
plan. To illustrate. Suppose two
men take ont policies, one provides
Tor the return of the dividends in a
bulk at the maturity of the policy. the
other provides for the annual nav
ment of the dividends to the policy
holder. Now, the company sets apart
a fixed amount for current expenses.
It can only use this amount SO far as
its books show. During the year the
contest for business becomes strenu-
GUS and it is necessary to use more
money in the effort than was appro-
priated. This money must be drawn
from some of the fund. It can not
be taken from the annually accredit-
ed dividends for the books of the
company would show this at once. But
the dividends that run to the matur-
fty of the policy are not shown on the
books until the period of accumula-
ton is completed Consequently the
company takes from this fund to meet
the additional expense and no inves-
tigation can detect the change. This
is why 30 many policies cost far more
than they should. Mr.. Cooper favors
a law prohibiting the issuance of any
policy on which the dividends need
not be credited till maturity. The
character of the investment policy is
not bad, provided the annual dividend
is credited on the policy account and
the policy holder notified of the
amount.
Some peculiar developments are
being brought to light In some of the
policies of the Mutual Reserve COM
pany. 1t sold number of policies
few years at what seemed to be q
reasonable annual premium, but on
the back Of the policy in small print
was a condition providing for NOR
tuary assessments after certain age,
and while none Of the policy holders
knew Of this condition when the pol-
Icy was issued, it is binding upon
them, and policy holders that began
paying $38-premium are now nav
Ing $50 and 800. There seems to be
no certain relief from the condition.
Another phase of Insurance trouble
is what might be termed closed cor
porations in insurance which are be-
Ing. organized under the naane. of sad.
visory boards. The commissioner is
of the opinion that they are a men
ace to insurance, and in most states
they are prohibited by law. a !.
He thinks that insurance is really
stronger now than it was before the
recent agitation. The bad side OF the
Investigation is that it has scared
many people who were carrying In
surance for protection to drop # 90
that many families will be left With
out means Of support because of the
abandonment of their policies.