New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1906-03-04
A GRADED RENEWAL COMMISSION
Views of Field Expert on Proposed Insur.
ance Legislation.

To the Editor OF The Tribune
Sir: That I consistently indorse the earnest
and conscientious work OF the Armstrong commit
tee IN regard to the forms OF policies recommended
is borne out by the fact that for the last ten
years more than 90 per cent OF the business have
placed for my Cheats has been practically upon
the plans now recommended; but, in common with
all leading field experts, must take issue with
certain OF this committees recommendations in
regard TO the equitable and just manner of carry
ing on the life insurance business
II Is well known that large first commissions
have led rebating and rebates are the chief
factor Of agency decentralization. It is therefore
evident. not as theory but a matter OF prac-
tce, that the first commission OF 90 per cent
mended by the committee Is too highs per cent
should be the limit OF these commissions with a
compensation of & graded renewal commission
thereafter and SO long the policy is continued
in torce.
Under the system proposed by this committee
the thousands Of policyholders at the end of four
years would back into tbs hands Of the clerical
ONCE arrangements Of comprehensive agent would
know them no longer. This is not IN accord with
modern business principles and is hundred years
behind the times. In fact, IL Will defeat of the
chief purposes for which this committee
ated. The reform have taken place from
within. The drones to have been eliminated
but. instead OF this. the committee has struck at
the producer the builder and constructor Of the
business and has proposed TO iegislate against
what the best and successful business
Germs Of the country everywhere ncouraging
and developing After four years It is the tnten-
ton OF the committee TO leave the policyholder
foundering upon the rocks; else, II is asking the
real life insurance expert after the lapse OF this
brief period still advise his clients and to look
after their assignments and their policy loans and
all kindred matters without compensation. Is IT
not in this way taking from these polcyholders the
only men with whom they have been in touch and
the only men who Will help them out promptly and
properly in such contingencies may arise7
In fact. in the state Of life insurance rec
commended by the committee conditions would be
worse than before It began.
This legislation could result IN but one thing:
The skilled and constructive life insurance advo-
cate would go into another business where his
earning capacity would be even greater, leaving
thousands OF policyholders 10 be advised by the
butcher. the baker and the candlestick maker
Furthermore. the most remarkable thing about
this committee IS that II had the advice OF
these constructors of the business the very men
who IN touch with the insured Is there any
business IN this country where the head OF large
concern will consider changes so important IN his
business without calling together his producers?
All recommendations in regard TO the carrying on
of the business seem to me to be based upon the
theory Of the actuary In the last fifteen years
in practical life insurance these theories have been
cast aside as erroneous IT has been shown tnat
when the practical proposition had TO be faced these
theories were worse than guesses. To Illustrate:
values on policies raising objection that there
would be run upon companies IN Years OF OIL man
render as a consequence When. as a matter OF
fert The panic did come it was these very loan and
surrender values that were the bulwark of the
business and the option under the contract when
heiped men continue their insurance in force
In short. this committee has been so rushed ana
SO much Of its time has been taken up with the
financial side of life insurance that, II appears 10
me The real and potent issue the productive basis
Of the eosidefed so small factor that The idea OF
ore sctllary who had a theory Of the ultimate and
galect was accepted the only infallible rule
and guide and ! fear that the committee took this
,on6sjticn on faith rather than on expediency and
experience -, ala oro-. b,s bas, che
tive typo Of the braniest and best sales
80 this country has ever produced In rev
corn2anies ne has been fortunate enough to be a
,oTr aud parcel and a recognized factoI-ln many
Companies he has been prostituted and degenerated
80, aetna rial bond and other humbug policies con-
D99.ted in the home Office and enmeshed and en-,
Nv ned amid the advances subtIeties ana aonoIii@
o,orL 81 the agency departments. =,
The suggested legislation is most excellent 70
,racticaIlY wind up the large insurance companies
T. hout ten years and take care OF the financial
-, ;;te in Wall Street, with large salarted officers
ia the mean time ,t-..s g.. .bo ma, ,rbo
arnse7t me great constructive elem5nts OF the
tFPt,ses then and until then. VIII Hfe lnsuT-
n IKE lis proper place and meet the demands
~ ~ IN i,teinass conditions in American life
0i ,.estvlYorlt March 3. 1906. ALBERT TURNER