The Salt Lake tribune. [volume] (Salt Lake City, Utah) 1890-current, 1913-09-08
Defends Group Insurance.

Inc group plan OF life insura nee. which
Mds attacked at recent meeting o! the
American Lite convention at 81. Paul.
ago, has resulted ia q lively discussion
OF the question By leading life insurance
executives. President william Day OF the
r-iultahIe Assurance society OF New York
nas Issued a letter strongly defending
me plan. In his letter President Day
says:
Group insurance is safe and service
aoas- ns ne mortality on this class OF bust
ness Is much lower IN fact than that on
regularly medical examined risks X IS
therefore. mistake 20 assert that this
pan is In any way detrimental Group IN
hurance risks selected without medical
examination are none the less carefully
selected The group plan utIlizes Che se-
lection exercised BY the employer Iu en-
Sas!nS and continuing employees IN serv-
zee; as substitute for selection by med
lcal eNamina ton. which OF necessity must
OBTAIN IN insuring individuals In the alb
sence OF any other form OF selection.
employers hire only the physically nt.
The employees mus, rnaIntain this IT.
ness 10 hold their jobs. whereas IL IS well
known that the value OF medical eYarni-
nations wears or in a few years II Is
therefore self-evident that the mortality
Is lower and the element OF risk IL loss In
THIS group than II is among the ereat
body OF medically selected people Our
group risks are not sub-s,andard. but. on
the contrary, are super-standard This Is
one or the reasons VIII" the group lives
are segregated from the regular business
and kept In a sepa rate dividend class
MI. ar. Day accounts for the superior NOR
taIty showing Of group risks and the
large dividend earnings OF special group
class by the following fundamental prln-
ciples:
First-Better selection OF the risks
Second-C,ontinuanc OF selection
Third-EHmination OF moral hazard
Fourth-CentTsliZed premium collection.
t1fth-Economtcal administra ton
h lSgfNN .sa1 f..-z
Seventh-Low writing and renewal ex-
pense.
The criticism OF the fraternals. when
analyzed,' continued President Day, is
not at group Insurance at all. but at re-
insurance. or. as they call II. twisting
OF fraternal business Twisting Is a per-
nicious practice and no reputable COM
pany can afford to tolerate II in any form.
The use OF the word group in the re-
insurance OF fraternals is clearly mis-
nomer. Group insurance Is the insurance
or employees OF one employer, who can
qualify By standards OF employment, IA
vorabie environments. freedom from haz-
ards, etc, TO be included under one
blanket policy. Any endeavors, whether
old line or fraternal, TO insure lodges. as
soclations, societies or companies already
formed for insurance purposes Is not
group insurance in any sense OF the word.
II Is strictly re-lnsura nee. The Equita ole
has no desire 10 re-insure fTaternal lodges
or societies on any plan. and I deplore
the mistaken use OF the words group
insurance In the discussion OF the pos
sible reinsurance OF such societies"
Regarding the action OF the American
Life convention. President Day said:
ut Is true that the American Life
convention. made UP as it Is for the most
part OF the newer and smaller compa nies.
has not the same equality Of opportunity
in negotiating large insurance OF the
group variety None the less I am sure
that the action was taken hastily and
misunderstandingly. do not believe that
the rank and file OF that convention would
deliberate tely adopt a resolution condemn
ing what was good and sound for a large
company, even though the same might
not be advisable for the smaller institu-
ton"