The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1906-02-26

q. ( Z - /, -
The ambition Of the great life insur-
ance companies to increase the volume
of their business has brought serious
consequences, in the opinion of the five
state commissioners who have Just fin
4 ished their investigation of the New
York Life Insurance company. This
ambition has caused too heavy outlay
] in getting new business, and has in
creased the cost of insurance far be-
You'd what it should be. ;s
The report signed by Commissioner
] y 'Brlen of Minnesota, together with
| the commissioners of Wisconsin, Ken
lucky, Tennessee and Nebraska, makes
some drastic comment on the facts
shown by the actuaries. It says in
part: %tssf ia b f5i. s.
Reflect on Management.
Many of these facts reflect serious
| ~ upon the management of the COM
pany, indicating that extravaganza has
obtained 4bta in the conduct Of the business;
kept, and misleading statements in some
instances made to the supervising pub
lie officers in annual reports prior to-
1905, the report for that year having
been verified by the examiners, and
that portions Of the funds of the DOM
pany have been improperly diverted
H for the purpose of political contribu-
Some restitution Of the funds SO gdi-
verified has already been made and we
believe that proper steps should be at
once taken to secure a restitution Of
the remainder. 5s.l IS ss.
Upon the other hand, the facts
show that the assets exceed in value the
amount claimed in the last annual state
actually amount to $435, 800 $3.50 IS; that
the company is possessed Of $50 $685.
626.82 Of surplus or additional reserve
funds, without Including the excess in
the market value Of the securities Of
the company over book value, which
appears to be St, 448,472.18.
facts in full Just as we believe them
to be, we leave them to carry their own
iurther comment, our main concern be-
] ing the adoption in the future Of such
> remedial methods as will eliminate the
abuses here revealed, and prevent their
recurrence, ..4 ~
~ Cost of Insurance.
.s"During the last ten wears this com.
pany has received 1915 ,S47,776. has re.
turned to its members, $278, 1855 has
dlsbursed in operating expenses $685.
l27,204, and has still on hand assets
representing its reserves and accumu,
lationss amounting to $435, 1920, 36O---aa
gam IN assets within that period of
$273,S08,5S9. RI s
, TX An examination5e of the tables con
tanned IN this report demonstrates the
fact that the cost Of insurance has been
excessive, q condition which we believe
exists in most other companies, and that
in producing this excessive cost the
: general administratfye policy. Of thu
4 has any diversion Of funds to politica
purposes, unlawful legislative expenses
e or kindred OUTLAWS? The moral ques
0 tion connected with the making Of these
]. unlawful expenditures is that which
g makes them of such great Importance
t their corrupting effect upon the officers
L Of the company and the public generally
= being such as to call for the strictes
. guarantees against their recurrence.
? we are impressed with the belle
. that the management has erred inS yield
ing too far to desire to secure al
! enormous volume of business. A rea
sonable and legitimate ambition to ex
: eel is at the base of the best efforts O.
Z which humanity is capable, but whel
q the interests Of the policyhS1ders ar
IS sacrificed to the end that the volum
). of business shall beeincreased, the man
v agelnent. is not, in our Judgment serv
o ing the interests of those who have
8 right to demand that what is best TO
O them shall be the sole test applied t.
, the Instability of any otherwise legi
n anate policy