The Bennington evening banner. (Bennington, Vt.) 19??-1961, 1910-04-19
MUTUAL LIFE CRITICISED
Insurance Department Shows How
Law Can Be Evaded.

Deel COmpleleu Dy lHS NEW iOlh
state insurance department, whose
examiners have been at work on the
books of the company for more than
nine months.
The examination was on the finan-
cial statement Of Dec. 81, 1908. 1t
shows in a striking way the changes
which have been effected since the
time of the exposures which resulted
from the Armstrong investigation.
The expenses of the company have
been cut more than in half since the
year before the investigation
The amounts expended for leg
islative activities have fallen of
greatly, and the Supplies item, I'M
der which expenses for the so-called
yellow dog fund maintained by sew
eral companies to influence legisla.
tion we're concealed by the previous
administration, has shrunk to
small part of the amount previously
expended.
"The report on the whole is com
plimentary to the company" says a
statement given out at the insur-
ance department. THE examiners
find that the company has complied,
in the main, with the insurance law,
az amended by the Armstrong com.
mittee."
Severe criticism, however, is d.
rected at several points which we're
disclosed by the examination. Chief
among these is the manner Of settle
ment Of the suits brought by the
company against Richard A. Nc
Curdy, the former president, who has
since died, and others who were as.
ISOLATED with him under the old
regime for waste OF the companys
money as disclosed by the Arm
strong investigation. The examiners
discovered that the company actually
paid out s237,S49 more than it re.
ceived in final settlement OF these
claims.
The report also criticises adverse
ly the expenditure of large sums in
advance TO agents at the time OF the
election Of directors in 1906. In the
last quarter of that year s16S,351
was expended in this manner, and
the report says that some OF the
agents who received advances spent
some OF the time paid for by the
company working in the campaign
for the election OF directors"
Supt. Hotchkiss characterizes the
report submitted by the company's
committee which recommended the
acceptance of the compromise with
the McCurdy as untrue in at least
two particulars and deceptive in one
more. And II seems to u.s." the re-
port continues, that either the com
mlttee did not know the facts, or pur.
posely misled the board OF directors
The report takes up the bonuses
paid to agents in 1908. which Il cen
sured severely. The company paid
S354.i44 to agents as disbursements
for the care and supervision OF bust
ness prior TO 1907" This amount wai
disbursed. the examiners were told
as compensation for services in pre-
venting policy-holders from surrend
ering policies and for generally assist
ing In the care and supervision OF th'
old business.
There were no records In the home
Offices OF the company TO show how
this money was spent. At the Boston
branch Office the examiners fount
records which helped to clear up thi
point. These records showed tina
one agent had 40 assignments o
work relating to old policies and re
ceived no pay for H. Another agen
had "a assignments and received
$500. Another had 1903 assignment
and received $50, while another agen
drew $1,000 for looking after SO o
these cases.
The examiners concluded that, al
though the company's records do no
show H. the money went in the foru
OF bonuses to agents who were sue
cessml In obtaining new business
The report says that II companie
can pay agents beyond the amour
permitted by law. under the pretenc
OF protecting business, but really I
stimulate new business. the salutar
purpose Of the section Of the Arm
strong law limiting these expend
lures can be utterly defeated.
Charles A. Peabody president q
the Mutual life Insurance Compan!
was seen today In connection wit
this report. Asked TO comment upo
IL he said:
"The only subject In the report {
the examiner OF the departmer
which requires any comment is this
relating to the settlement OF N
company's claims against the forme