Wausau pilot. [volume] (Wausau, Wis.) 1896-1940, 1913-11-11

every thinking person, as lar as pos
WAUsAU, OCT. sc, 1913
Dear Mr.: | have for ac-
acknowledgement your letter of the
inst. in which you request an
opinion of the Wisconsin State Life
Fund, i. e., its establishment, work
ings, and the effect upon the regu-
lar life companies.
Let me say first, that | am not at
all opposed to the States invading
the sphere of private enterprise to
any extent that it is needful in
order TO obtain Justice for its people,
or even when competition with
private enterprise-on an equal
basis will prove salutary and of
benefit to the people enjoying such
competitive service on the part of
the state and without imposing an
additional burden upon that portion
of the people who do not desire
such state service.
If the Wisconsin State Life Fund
does this, then the enactment of
Ch. 249, l.. 1911, Wis, and it's,
amendment Oh. 291, l., 1913, Wis,
was justified and necessary. Does
it Z?
Wisconsin has six domestic life
insurance companies, five of which
are comparatively new companies
honestly striving to build on a firm
foundation and giving splendid
service. These Companies have
hundreds of employees and hundreds
of agents and representatives in
this state, who expend their wages
within its borders and who paw
taxes. These Companies pay fees
of all kinds to the State and are
soaked three per cent. on every
dollar of premium received in this
state and on all their interest and
rent receipts as Il license fee to
transact business.
Ten life insurance companies of
other states also do business in
this state and for such privilege
pay fees, license fees and taxes, and
their hundreds of agents, represent
atives and employees expend their
earnings here and pay taxes.
All these companies are compelled
by law to compute their insurance
premiums upon standard tables of
mortality and in every case in
which the actual premium charged
is less than the net premium for
such insurance according to the
table of mortality and rate of inter
est assumed the company is charged
with the present value of an anlauy
ity to equal the amount of such |
deficiency. 1t is the duty of the
Wisconsin Commissioner of InSur-
ance to see that the law is complied
with, and for the domestic com
panies the Wisconsin Department
values each policy-for which a fee
is also paid
There can, therefore, be little or
no competition between companies
as to the insurance premium
charged Even the State Life Fund,
assuming the same interest rate
would have identically the same net
or insurance premium.
The difference then in the prem
ium rates of different companies,
would be the difference in the amount
added to the insurance premium
for expenses, and even as to this
the Wisconsin Law (Sec. 1950m,
Ch. Cos, 1907 prescribes the ''limi
tation of expense provision in pre-
miums' for first and subsequent
years.
Then too, no state has a more
stringent law to prevent discrimina-
tion between policyholders, or goes
into more statutory details to safe
guard the interest of policyholders
than does Wisconsin, and ali these
laws were in force and effect when
the Bill establishing the Wisconsin
State Life Fund was presented and
enacted.
| am at a loss to know what evils
il was intended to correct, what
special benefits it was to confer,
what crying necessity it was tol
meet, or what public or personal
opportunity it was intended to cater
TO for experiment. And frankly,
too, | do not know what evil it can
correct, what benefit it can confer,
what necessity it can meet or what
problem of life insurance the eXper
iment can solve, except that it be
necessary to prove to the people OF
Wisconsin that life insurance can
he furnished At less cost to policy
holders whose premiums are not
taxed by the state, apd where the
other people of the state who carry
no insurance in the State Fund are
taxed to pay the salaries of the
managers of the Fund, the rent,
the printing, postage, etc. and the
many items of expense that perforce
must be met out of the premiums
of the policyholders in the regular
companies.
And vet with it ali the Premiums
charged by the Wisconsin State
Life Fund are not lower than those
of the regular life companies, ex-
cept on a few forms of policies, and
but for the fact that the regular
companies are taxed three per
cent. on the premium receipts and