Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1906-08-25
Insurance Commissioners in
ST, Paul Frame Up Scheme
to Prevent Officers JuggI-
ing POIiCyhoIderS' Funds.
OFFICERS TO BE HELD
TO STRICT ACCOUNT
If Passed by All States Ex-
perts Believe Bill viii Do
Much Toward Getting Econ
omicaI Management.

st. Paul. Minn., Aug. 24.-Millions
will be held I'm reserve for the policy
holders of life Insurance companies.
and the cost of Insurance will be ma
terially lowered if bill approved Ivy
the insurance commissioners at their
session today meets with the approval
of the various legislatures next winter
The bill, which requires an annual
apportionment and accounting of sur
plus of life insurance companies, 1t is
maintained by many of the commits
soners. strikes at the root of all the
evil of life insurance company man.
agement by holding their officers a,
countable for the enormous surplus
funds accumulated under the deferred
dividend contracts under which nearly
all of the large companies operate.
The matter of apportionment of the
surplus was brought before the COM
mission in a report printed by Zeno
M, Host, uperintendent of insurance
of Wisconsin, on "annual accounting
and distribution of surplus of life in
Isurance companies"
Associated with him on the commits
sion which has this subject under
consideration are Henry r. Prewitt.
insurance commissioner of Kentucky:
Thomas Drake, superintendent of in.
surance of the District of Columbia
and b. f. Carroll, auditor of the state
of Iowa
Some animated discussion followed
the introduction of a bill by Mr.. Host
which was deemed too radical ~
most of the commissioners present.
After some charges, however, the
bill requiring an accounting and dis
| tpih Of 4 b,
| Is thought that this bill, if passed h,
all of the states. will do more towart
securing economical management n
insurance companies than anythins
else The commissioners believe this
the competition which exists betwecC
! the companies will make them eager
to show larger credit of dividends t,
| policyh0lders than their competitors
/ This will result. 1t is declared, in {
substantial decrease IN the expense OF
management and will also prevent tn,
! management from using the acCumu
! lated surplus for speculation or fol
! private emoluments such as the receu
/ Investigations by the Armstrong com
mittee revealed.
The bin provides that "every life in
surance company conducted on tht
Mutual plan or in which policyhoder'
are entitled to share In the profits 81
surplus, shall make an annual appor
| tionment and accounting of divisiblC
surplus to each policyholder beginntul
on or before the second policy year
or on all participating policies hereaf-
ter issued and each such nolicyhold.
/ er shall be entitled to and be credited
with or paid I'm a manner provided
such a portion of the entire divisib5
surplus as has been contributed there
to by his policy"
Under the terms of the bill these
dividends are to be carried as credit'
and shall in the event of the death q
the insured, be payable with the ooi.
ley Another important feature of th
bill Is a clause providing for a contin.
gency reserve fund on sliding scale
of percentages such as has recently
been enacted by the New York legs!l.
ture.