Deseret evening news. [volume] (Great Salt Lake City [Utah]) 1867-1920, 1906-08-25
Insurance Commissions Prepare
Bill 10 Submit 10 Various
State Legislatures.
TO EFFECT GREAT ECONOMIES
Provides for Annual App0rtionmcnt-
Dividends 10 be- Credited Con-
tlngcncy Reserve Fund.

81 Paul, Aug. 2i-Mnlions will be-
held in reserve for the policyholdcrs Of
life insurance companies ANA the cost
Of insurance win be- materially lowered
n a bill approved by the insurance CONF
missioners at their session today meets
with the approval Of the various lexis
latures next winter.
The bin, which requires an annual
sppOrtionmCnt and accounting of sur
plus OF life Insurance companies, DO Is
maintained by many of the commission
ers. strikes at the root of an the cvll Of
the ne Insurance company. by holding
their officers accountable for the cuOr-
nous 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 CONF
mission IN report printed by Icno VI.
Host. insurance commissioner OF Wis
consin ON annual accounting and dis
trihution of surplus OF life Insurance
companies
Associated with him on the commits
sion which has this subject under con-
sideration are Henry K. Prewitt. i'm
surance commissioner OF Kentucky.
Thomas Drake. superintendent OF insur-
ance. District OF Columbia, and b. +.
Carroll, auditor. state Of Iowa.
Some animated discussion followed
the introduction Of the bill by Mr. Host,
which was deemed too radical for most
OF the commissioners present
After some substantial changes, how
ever. the bill requiring an accounting
and distribution Of surplus was adopt
Cd. II Is thought that this bill II
passed by all OF the states, viii do
more toward securing the economical
MANAGEMENT OF insurance companies
than ANYTHING else. The commissioners
believe that the competition which ex-
lists between the companies Will make
them eager 10 show a larger credit
Of dividends 10 the uolicyholders than
their competitors This viii result, Il
IL declared. IN a substantial decrease IN
the expense OF management and viii
also prevent the management from
using the accumulated surplus for spec
ulation or Tor private emoluments. such
az the recent Investigations by the
Armstrong commission revealed.
The bill provides that every life
insurance company conducted on the
mutual plan. or In which policyholders
are entitled 20 share in the profits or
surplus, shall make an annual appor-
tlonment and accounting Of diyisible
surplus 10 each' policyholder beginning
on or before the second policy year. or
on all participating policies hereafter
issued and each such pollcyholder
shall he entitled 10 and be credited
with or paid In a manner provided
such portion ~ the entire divisihle
surplus as has been contributed there
90 by his policy
Under the terms Of the Hill these
dividends are 90 be carried as credits
and shall in the event of the death OF
the insured, be payable with the policy.
Another important feature Of the bill ls
clause providing for contingency
reserve FUND. on a sliding scale Of per-
centaecs. such as has recently been en-
acted by the New York legislature.