New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1908-11-01

To the Editor of The Tribune
Sir: 1t seems to me desirable thai the two CUES
tons viz, the reelection Of Governor Hughes and
the amendment of the insurance laws Of the state
should be kept separate. The reasoning OF your
correspondent. EIIery Denson, is that because the
dividend on his policy in :he Mutual Life Insu--
ance Company has been increased therefore Gov
ernor Hughes should be elect SC. No one denies
to Governor Hughes his proper need of praise for
the part he took in the insurance investigation. and
If it has brought about a more equitable division
OF surplus In any company life insurance men will
rejoice. But when great body OF new legislation
has been enacted some parts of it may be bene-
fetal, while other parts may be hurtful. That is
the view I understand It, that President Kings
ley takes
The dividend records OF certain policies which
are being paraded in the public prints should not
however. be taken measure of the greater
economy OF life insurance companies under present
laws. Those cited in The Brooklyn Eagle Tho
Evening POST and The Tribune show too great
increase of the interest from 1-10 per
dends on running policies In the report Of the
Superintendent Of Insurance will show. In Mr.
McChntock's testimony respecting the small divi-
dends paid-up policies he said the only source
Of dividends for such policies the excess OF
interest there being premium loading, and the
mortality gains and surrender charges being used
for expenses of new business The excess Of in
terest for the year in which a small dividend had
been paid only one-tenth of / per cent. An
Az per cent would make n difference Of 400 per
cent in the rate of dividend. 1t is just possible
however the reported increase or 400 per cent
in dividend is a nisapprehension. Dividends on
policies with quarterly premium payments were
formerly paid quarterly: the law requires their
pay nent in sum. Perhaps The Evening Post s.
correspondent has overlooked the change OF
method.
company may change its method basis OF
dividing surplus. Mr.. McClintOck referred il. his
testimony to such change in the method of the
Connecticut Mutual, which, after paying dividends
during a series # years the scale, al
though the real earnings of the company de
CIeasing, finally decided that the lower rate os
earnings was likely be permanent. and there
fore, made the dividends conform to it. Possibly
the Mutual Life has decided that some part OF
mortality gains and surrender charges should go
to pad-up policies.
Life insurance problems are too intricate to be
settled offhand and by results a few policies.
and the reforms effected by the elimination Of real
abuses should not be confused with other and un-
related questions. Different parts of the Armstrong
legislation should stand each upon its merits.
If the most comprehensive and radical legislation
ever enacted At one time perfect, it is the
arst case of the kind on record, and until IT is
so demonstrated those sections of the law which
limit production the cost of insurance, the
methods of expending what Is paid and the
maximum amount of surplus company may hold
are still proper subjects of discussion
Nav YORK; October Is 1908 NJ. j.