Evening star. [volume] (Washington, D.C.) 1854-1972, 1907-03-06
LIFE INSURANCE PROBE
Notable Report of New Jersey
Senate Committee.
Many RECOMMENDATIONS
Declared Capital Stock of Any Com
pany Should Be Limited.
10 PER CENT DIVIDENDS
Inquiry Reveals That Companies In
vestigated Have Been Care
fully Administered.
} PER CENT DIVIDENDS

TRENTON, N. j., March 6.-When the
senate convened today Senator Hilery of
Morris county presented the report of the
special committee appointed last year to in
vestigate the subject of life insurance in
New Jersey. At the same time he present
ed seven bills, drafts of which were en-
bodied in the report, to carry out the COM
mittee's recommendations.
Many important recommendations for
the regulation of life insurance COM
pames in New Jersey are included in
the report of the select committee of
the senate, appointed more than a
year ago to investigate the subject of
life insurance in the state which was made
public today. In it's recommendations the
committee has drawn freely from the re-
port Of the committee Of fifteen which was
submitted at the conference on uniform
insurance legislation last December The
committee Of fifteen was appointed at a
conference Of governors, attorney generals
and insurance commissioners at Chicago
February 1, 1905. The report which that
committee made has been adopted prac-
tically in it's entirety by the select COM
mittee with certain changes required by al
vestigation.
By far the greater part of the report is
devoted to the Prudential Insurance Com
pany of America, the largest of the four
companies under investigation. Principal
among the recommendations is one that a
bill be enacted limiting the amount of capt.
tai stock which any life insurance company
may have to $20OO,OOO and the dividends
which may be paid thereon from future
earnings, so long as the company contin-
ues to conduct the participating life insur-
ance business, to 10 per cent upon the
stock, and providing that upon the dissolu-
ton of the company the stockholders of the
company shall have, out of the ultimate
distribution of assets, nor more than So
for one of the face value, of their shares.
DISTINGUISHED Directors. 1870
Among other recommendations were: Pro-
visions for the appointment by the governor
of three directors of every stock life in
surance company, these directors to be per-
sons having no interest in the stock of the
corporation; limiting the amount of stock
which any insurance company may hold
in any other company to Is per cent of the
whole, and that where company holds
more than the amount so limited it shall
dispose of the excess within five years, pro-
viding that no life insurance company shall
invest more than 2 per cent of it's own as
sets in the stock of any other corporation
or more than 10 per cent of it's assets in the
bonds Of any other corporation; restricting
child insurance: requiring more detailed
statements of the affairs of insurance COM
panies for the purpose of securing more
publicity with respect to their affairs; re-
quiring the examination of insurance COM
panies at least once in three years, the X
animation to be brought more Immediately
under the direction of the insurance COM
missioner; prohibiting contributions to po-
litical campaign committees; that after
January l. 1908. no domestic company shall
I1%I, ff.,fn two Nd
pating policies. and requiring all stock COM
panies to elect or before September of
this year whether they shall conduct par
ticipating or non-participating business
after the following first day of January;
and a provision that an annual accounting
be made to policy holders by classes of the
portion of the surplus belonging to them,
and the setting aside of such apportioned
part of the surplus to their credit. No rec
concentrations were made bearing upon for
eign insurance companies, except those
which prescribe certain provisions which
must be in every policy and those which
forbid the putting of certain provisions in
policies.
The committee reports that on the whole,
it found that the companies under investi-
CATION have been carefully administered,
their funds generally well invested, and the
salaries of their officers not SO high as to
require restrictive legislation. The Mutual
Benefit Life Insurance Company was found
to be purely mutual company and to
have shown a steady and uninterrupted
growth. while it has not attained to
the great size of some of the greatest COM
panies in the country says the report,
sit appears to stand in the very first rank
with respect to conservatism, stability and
good returns to policy holders. There is
little suggested by an examination of this
company which calls for any criticism or
reformatory legislation. 1t presents
markedly uniform record Of safe and sound
life Insurance. Its policyholders, although
aggregating a very large number of per-
for tO IA
exercised to any great extent their privi-
lege of voting for the directors.
Directory Carefully Selected.
1.-The directors seem to have been selected
with care. When a vacancy has occurred
the practice has been for the board itself
to look about for some proper representa-
tive man to fill the vaancy. 1t cannot be
denied that this practice has resulted in
substantially self-perpetuating board
The committee has no special recommen-
dations to make with respect to the Colon
tai Life Insurance Company of America,
the funds of which, it says; appear to be
carefully invested, or the North American
Life Insurance Company of Newark, Nj
The latter company was organized only
about month ago.
The report contains an extended review
of the Prudential from the time of it's or
ganization In 1873 under the name Of the
widows and Orphans Friendly Society
with share capital of $4,000, until the
present, Wuetl, DIS tie ETuu6Ulldl insurance
Company of America, it has capital stock
Vt 100000 and a surplus Of SIS, GOO.
at Is claimed" says the nport, that this
surplus belongs to the stockholders SUBJ
ject to contingent liability to policyholders
1t would appear from the presidents testi-
mony that certainly in the past. and per-
haps at present. some, at least, of the stock
holders would, If they could, divide this
surplus or part Of it, in the shape Of cash
,r stock dividends.
Remarkable State of Affairs
The case presents remarkable state OF
affairs. By the investment Of sol 900 in
cash. three stockholders were able to ac-
cumulate capital stock of $1,000, 600. where
on they have always drawn 10 per cent, or
500 600 per year, and still to accumulate
beyond that sac. 100000. Nor is this all. So
rapid were the gains and SO great the pros