Arizona republican., 1915-04-02
HERA[DS 0F
 LIBERTY OUT

Fratel'nal Insurance SO-
 clety to Garry on Busi-
 ness in Arizona
 On the ground that the Heralds of | Liberty had not complied with the in surance code Of Arizona and that the ! operations of its representatives in this state were in violation of the rules of the society the corporation commis- sion yesterday revoked the authority of that organization to do business in ! Arizona.
 From the evidence adduced at tlIe 1 hearing, the order states. it was clear!' revealed that the society's representa- tives took applications for benefit cer- tificates and caused same to be issued to said applicants, when as a matter oe fact, under the terms of the certificates | issued no death claims can be main tained against the society until each holder has been duly elected and in ducted into the lodge, and accepted as a member in good standing. The order further says:
 l provides that the payment of death | benefits shall be confined to wife hus- l band, relative by blood to the fourth degree, ascending or descending-in other words the beneficiary must have an insurable interest. Under the. pro- visions of this section alone, the plan 1 of insurance adopted by the Heralds of Liberty cannot legally be permitted in this state. One of the most vital re- | quirements of practically all the old | and well established life insurance companies in the United States is that the beneficiaries in any policy of in | surance must have an insurabe inter est in the insured, and this require ment is based upon the calculations and knowledge of the best experts and actuaries known in the history of life | insurance.
 We maintain that it was shown at the hearing that the claim of the rep resentatiVes of the Heralds of Liberty that the average payments of members of only s89.90 would yield them an av- craze return of $622.00 in three years and nine months was contradictory to reason and fully refuted by actuarial calculations based upon the American Experience Table Of Mortality and sus- tainad by leading life insurance experts | throughout the country
 investigation has revealed the fact that the Heralds of Liberty have been denied admission into more states than into which they have been admitted and has further revealed the fact that q majority of the states into which they have been admitted would have refused them admttance had their in | surance laws been adequate in giving the insurance departments the power to regulate and control the operations of fraternal beneficiary societies of that character.
 Thus We have preponderance of evidence that the plan of insurance offered by the Heralds of Liberty is held as unsound by a majority of the states and they have been denied ad- mission because of the character of the plan of insurance offered and the if | nancial weakness revealed by such a plan. For the reasons that: Ga The society has not complied with the in surance code of this state regulating the admission and operation of such Socletles; (b) The plan of insurance offered with reference to the benefi- | clarleS provided in the contract is eX- pressly prohibited by the insurance code regulating the form of insurance to be used by Fraternal Benefit socie- ties; Co The plan of insurance is spec ulative and partakes of a species of l a innn sound and legitimate life insurance; (d) The plan of taking the certificate holders money and creating a fund With which to pay living members who | have no insurable interest in the in- sured Is unjust and against public pol icy; (e) The advertisements placed by the duly authorized representatives of the society are misleading and together with the evidence herein prove that the fraternal feature of the society is high ly dominated by the commercial feat 1 uroS:
 ''It is the decision of this commis slon, and 1t is therefor ordered: That the authority heretofore issued Heralds Of Liberty to do business in the state of Arizona be and the same is hereby revoked. The order is signed by all three members of the commission. The application of the Sterling Mutual Benefit Association, an organization operating under a similar plan, and which was filed some weeks ago was denied yesterday by Insurance Com l missioner Thompson. The investiga- ton If the Heralds of Liberty which carried on an active campaign in the state. was watched with great interest by representatives of old-line compan- les and attracted a great deal Of atten- tion.
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