Norwich bulletin., 1913-08-04
ILL FORTUNE FOLLOWS
 ROYAL ARCANUM, Organization is Running at a Loss in Spite of Revision of Rates in 1905.

People in this vicinity who are con- nected with the Royal Arcanum are interested in the report of the insur- ance departments of Massachusetts and Connecticut on the examination which they made of the affairs of the organization.
 It was not undertaken because of a suspicion that 1t was not in good con- d1tion, but because it is one of the largest of the fraternals in the states. 1t seems that the order has not been on satisfactory basis since the rates were revised in 1905 The report says:
 The year 1905 and subsequent years were disturbed by factors which tend- ed to increase the lapses. The mor- tafty experienced during these years was considerably in excess of the table which was based on the history of the order previous to 1904 The actual claims which occurred during 1902 ex- ceeded the amount of claims which, according to experience. the order ex- pected to pay, by only S5,060 for every Sl,000. On the other hand. this ex- cess in 1905 was $141.s0 per $1,000; in $111.40; in 1909, $97.S0; in 1910, s170.30; in 1911. $111.50; and in 1912, $107. These comparisons are of the utmost importance to the order and it's mem bers. The facts presented prove that the lapse element is not sufficiently re- lnITOQucpQ as factor in arriving at the rates for the Royal Arcanum and agree with the soundness of the general practice, which is to ignore the lapse element in making rates for life insurance.
 In other words, the Royal Arcanum has been trying to capitalize it's lapse and has miscalculated.
 It is said at the department that the order has had some very hard ex- periences. It's rates are materially lower than the rates established by the national fraternal congress for a part of the table. Thus, for age 21, the Royal Arcanum rate, with four per cent, interest, Is S1 cents against 93 of the national fraternaI congress- and a similar difference runs through the table up to years. The department puts 1t that the hard experience of the Royal Areanum consists in the fact that its members, taken in under the old law, did net pay in enough to take care of themselves in old age. Very many statistics are given in the report, a most exhaustive study of the ease, and then the examiners say,
 These results indicate clearly that the mortality experience since the present rates were adopted has been decidedly adverse at the higher ages whether the comparison be made or the national fraternal congress table By referring to the annual state HeAts of the Royal Arcanum filed with the insurance departm it has been found that during the cores pending periods the n3oTtuary assess R8eHts actually collected from mem Aers SC years of age and over have not been sufficient te meet the cur rent death losses incurred at these same ages
 That is, the Id men have been a drag on the order. As the depart ment put it this tends to keep out young blood and even to drive 1t out Good risks will not quietly pay more than their share of the losses and will withdraw and go where they can get better terms. Members who are too old to do better elsewhere or who might not pass the physical ex- aminations to get into another order, cannot get out, but must stay and pay the larger dues.
 Regarding the recent policy of the order the report says: "In the light of the facts brought cue in his report it is clear that the order was not juSti- fled, from a mathematical point of view, in making the concession in rates to members at an advanced age which 1t did in 1905. The fact, how ever, remains tha the Royal Arcanum has paid out to the members of the age of 66 and over a large amount be- yond the total contributions of this class. It is possible that this fact is the chief cause for the shrinkage in the emergency fund Vhich has been referred to-"