The Telegraph-courier. [volume] (Kenosha, Wis.) 1888-1946, 1910-09-22

advance of most other states. A law
was passed in 1907 providing that no
new societies should be organized in
the state and no new societies admitted
from other states unless they charge
premium rates at least as high as those
deduced from the National Fraternal
Congress table of mortality and 4 per
cent interest. The societies which were
licensed at that time, however, were
permitted to continue on the old basis.
Since the passage of that law, no new
societies have been organized in the
state, nor have any been admitted from
outside. A number of the societies in
the state have taken steps to adjust
their rates on adequate as well as equit-
able lines, and the department has tax
| en- the stand that more can be accom-.
plished by voluntary conferences with
the officials by indicating to them what
can be done, as well as what ought to
mont and to make their insurance equit-
able, than in any other way, and it is
not felt that compulsory legislation is
needed.
In our conference with the societies,
an effort has been made to show the
necessity of making the rates ample to
protect them against any unforeseen
contingencies. 1t is impossible to
adopt any mortality table that will
be, in exact accord with the actual ex
perience of any society, and for this
reason, an adjustment must be made by
crediting the overcharge and surplus
earnings arising from the excess in
terest and savings in mortality. The
keeping of such accounts is compare
lively simple and can be mastered by
any clerk of ordinary ability with a
little guidance from competent act
uary. Especially is this true when the
societies adhere to what is simple ana
fundamental in their policy contracts.
There is difference between frater-
nal insurance, when conducted in the
manner here outlined, from that of the
old line insurance; namely, in the ad-
justment of the loading for expenses.
The well-nigh universal method of as.
sessing the expenses in old line com
panies is to add fiat percentage of the
net premium with some slight modif-
cation in some instances. This results
in excessive amounts being collected
at the higher ages, while the expenses
actually incurred in handling the poll
cies at the higher ages is not materially
greater than that at the younger ages.
The fraternal societies have some
very important advantages in that they
can secure business at less cost than
the old line companies. The lodge
system which is in vogue in all Of them
makes soliciting particularly easy, and
the matter of keeping the members
from lapsing, largely takes care of it.
self.
Some opposition has been expressed
against the plan Of issuing policies with
surrender values, on the theory that
the amount contributed by the members
should, in case of lapse, be confscated
to those who remain. We are not
aware Of any law, either statutory
of moral, that would justify the confs-
cation Of the entire reserve, even on an
ordinary life policy, for the benefit Of
those who remain when a member
may cease the payment of premiums,
1t brings to mind the agitation which
perhaps through no fault of his own,
was carried on in the time of EIizur
Wright, when the old line companies
confiscated the entire reserve in case
OF lapse. By the adoption of the stan
dard Of solvency in 1858, method was
devised for finding the policy values or
equities, and the law Of 1861 which
followed as natural consequence, made
it obligatory on the old line companies
to grant surrender values in some form.
on the ground that it was unjust to
confscate the reserve when the policy
holders ceased to pay premiums. The
department has therefore advocated
the granting of surrender values in
the form Of extended insurance at least,
and paid up policies in case the socie-
ties SC provide in their contracts. The
attorney general has held that the adj
justment of values in that manner is
in accordance with the laws of the
state.'