New-York tribune., 1907-06-22
NEW INSURANCE RULE.
Mutual Reserre to DO A7coy 7citb It's
Investigators of Claims.

The Mutual Reserve Tribune reporter learned
yesterday. now plans in effect, to choroform it's
claims investigation department originally con-
stituted It is believed that this the
placing of the company a solid foundation is
the ultimate aim of the drastic system of retrench-
ment all along the line started by the Haynes
Harper reform management. and which. told in
The Tribune already involves economies to the
Of least 100000 a year. In other words, the
company, a high official euphemistically put it.
| aims at broad policy in paying and adjusting
claims and to this end has recently cut down the
personnel of the department by least 30 per
So far as the practical public is concerned the
Strengthening of this policy, it is declared. is
the most drastic and important reform thus far
planned by the new management For many years
the principal objection TO the Mutual Reserve
among insurance and would-be life insurers
has been its reputation well founded or otherwise.
for contestins each and every claim to which the
remotest suspicion attached. contesting 1t through
the courts or its Investigators until it had been
proved beyond peradventure. and even then, if
possible in certain seeking to compromise
or adjust the claim. The result has been that not
only IN TINS state, but all over the country wher-
ever the policyholderS scattered the Mutual
Reserve has been known much for It's
sessment activities as for its alleged practice Of
hghting its claims to the extreme inch
In numberless instances, especially where
claim has been disputed successfully this princi-
pie, it is said. has wrought injury the company
out of all proportion to the amount of the claim
involved. Not only has the company had to pay
heavy fees for the employment of special counsel
and so on. but the of the verdict has spread
like flame throughout the district; neghbors and
friends OF the unsuccessful claimant have trans
ferred their insurance elsewhere; other policyhod
ers have been shy of insurng in the company.
and the Mutual Reserve, in fine it IS alleged. has
acquired that bad name which, merited
merited, goes far to hang life insurance COM
pany- In the past il is believed, this has done
1nuch TO cripple the Mutual Reserves prosperity.
The new management purposes so far possible
TO change all that and plans already have been
forLnqiated whereby death claimant in the Nu-
tual Reserve, in other companies. will have the
strongest possible benefit of the doubt.
In support Of the Companys former attitude II
Is argued % that a large number OF pocyholders
VINO insured between the years 1859 and bought
their insurance less than cost price. and that.
therefore, in settling any death claims against
these policies the claims should be submitted to
the stricteSt letter of accountabity: C9 that
fully one-half of the claims contested after nves-
ugauon, are contested the discovery that the
policyholders originally understated. and
inent such claims, at least, should be "adjusted";
C@ that with the relatively limited assets at the
disposal OF the Mutual Reserve every remotely
picious claim should, If Investigation warrants.
he adjusted or contested. in common fairness To
the other policyholders. and ca that the Mutual
reserve m the past has been sinSularly rnfortu-
nate alike in It's agents and the risks these
agents have insured.
1t is added on behalf Of the company that the
Mutual Reserve has never yet refused to Pay
clear claim II seems now 10 be conceded. how
ever. that-purely as a matter of policy Of course
the Mutual Reserve. with advantage. might follow
the example OF OF the larger companies and
pursue tho more r,lsasant and ultimately more
classes OF claims with the same alleged deep seated
suspicion. Estimates vary a TO the probable cost
of this policy to the Mutual Reserve II IS
thought that it will high into i've md possibly
into six figures annually To offset II will be only
the consequent reduction IN counsel fees, ssti-
mated $1,000; the reduction Of the per
sonnel Of the investigating staff estimated at few
thousand dollars. and the future increased busl-
ness looked for the result OF the companys
reputation From this 81 Is apparent that there viii
be a heavy showing the debit side OF the in
vestgating department the result OF tho
policy. Hence part. II IS said. the $3.50 r"duc-
tion in the salaries paid the former three pTIn
cipa officers Of the company. the $4,000 reduction
in the home office force. the contemplated $1,000
combined reduction IN home Office expenses and in
creased leasing income. the industrial department
economies, and so on.
Although. following the hammcring' Of this
counsel fees phase 81 the Mutual Reserves bust
ness IT the hands or the Armstrong committee the
company cut down its investigating staff 81 per
cent it has recently the reporter learned dispensed
with tho services of three or four more 'invesu-
gators until the investigating department IS now
only a skeleton OF its former self. II is considered
a. not improbable that the department viii be
virtually merged with some other Mutual Reserve
bureau in the near future. By the strengthening
Of this new policy. # IS said the new management
hopes not only gain the good Will OF the pubic
and insurance generally. bur TO enlist the ser
vices OF first class agents. many Of whom have been
thrown on the market by the Armstrong laws
limiting the amount OF new insurance company
may write annually. the commissions OF. and ad-
vances TO- agents, etc
public announcement OF this departure is
looked for soon