Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1907-03-31
STATE LIFE INSURANCE
Canadian Restriction and Regulation
believed to Point I'm that
Direction.

They have also been having a life insur- |
apce investigation in Canada, and the con-
illusions reached have just been made pub
lie through the report of the royal life
insurance commission" The recommended
lions of the commission follow In a general
way the reforms adopted in New York
subsequently, in relation to agents COM
missions and investments Stocks are ruled
out OF the list Of available investments,
excepting Canadian bank stocks, while the
provision as to agency commissions Is thus
/ described:
! ''The commissioners propose to prohibit
| the spending of more money to get new
business than is covered by the loading on
the first premium but with this provision
that to the regular level loading may be
added the difference between the regular
/ annual reserve value OF one-year policy,
which is much lower, owing to the low ex-
pectation of death within one year of medi-
cal examination. The companies will be
allowed to pay further commissions out of
the next four years premiums, except that
they must never impair the receipts on
policy to a point below the reserve value
under the select and ultimate" mortality
table of the commissions actuary"
Relating is to be prohibited under severe
penalties-th much closer limitation upon
commissions operating by itself to prevent
that practice.
The proposed provision restricting agency
commissions is patterned closely upon the
new statue of New York, the chief diff
ference being that the latter permits the
collection of limited commissions upon re-
newal premiums for a little longer period
than the Canadian commission would
, allow. This Limitation OF agency expenses
| e. h.,
, on first premiums is a radical departure
from the old methods under which com
missions absorbed a large part and often
the whole of the first premiums. and some
times a bonus in addition theretoi but 1t
is not so radical a step as is recommended
by the Wisconsin Insurance commission,
which would also place a hard and fast
limitation upon the loadings which may
not exceed a certain percentage Of the net
premiums If the Limitation upon the ex-
pense of obtaining new business, such as
!, the New York and the proposed Canadian
= law evidently aim to secure, 10 to be made
/, certainly effectual It would seem to bc
necessary to restrict the loadings also; fol
the companies otherwise can expand the
, loadings as they please and so expand the
. rates of commissions to agents
And to such an extent of restriction the
!. policy OF state regulation Is rapidly beini
: carried. The Canadian commission sets TT
!, face strongly against direct state insur
ance. but 1t seems to be unaware of tn,
!, fact that its restrictive policy tends to es
u tablish what in essence amounts to a sys
u tenn OF state insurance. II the state name
the table OF mortality 10 be followed II
fixing premiums. the rate Of interest OF
It reserve to be assumed in fixing premiums
u the rate OF commissions that may be paid
the way investments shall be made and s.
on-What do the life companies become ex
8 cept agencies of the state for conducting
= Insurance? II loadings for expenses ar
also restricted, then but one step remain
to make the companies direct agents OF tn
state, and that is the specification OF ON
!. cisl salaries which are to be paid. Then W
: should have nothing more than a system
20 of state life insurance-and 1t will not b
long apparently before the states take tn
Ia salary matter also under control.-Spring
y, ! field (Adass) Republican.