Evening star., 1939-09-23
Insurance
Reorganization
Recommended
Shenandoah Life
Needs Manager,
Report Soys

NSSoS NsuHuSeTs
Report Soys
Making public an audit Of thI
Shenandoah Life Insurance CO
for the years 1936-37-3s, the Viz
ginia State Corporation Commits
sion disclosed in Richmond toda
that insurance commissioners d
Virginia. Tennessee and the Dis
trict of Columbia-supervisors O
the audit-have recommended
complete reorganization" of TIL
company's management.
The audit report showed the com
pany entirely solvent and its bust
ness on the increase, but renewed
some criticisms of the company
management recently made publil
BY the Virginia insurance commits
sloners, and added others, accord,
ing to the Associated Press.
The Roanoke firm has writer
$113,576,9O9 in group insurance or
the lives of $4,000 Federal employe,
In Washington, it was testified a
hearings before the Federal Monopl.
oily Subcommittee.
George A. Bowles, the Virpinid
commissioner, who emphasized tina
the solvency of the company did
not excuse practices he criticized.
specifically recommended that there
be "a change or reorganization o1
the executive officers of the com.
pany" and that there "be created
the position of vice president and
general manager, and that thd
position be filled by a thoroughly
experienced and competent life in1
surance man."
Favors Cut in Others Pay.
Ihls executive, he said, should
pe vested with all the power.
usually inherent in the position q
general manager, including suf1
f1cient powers to direct the fisca
and business affairs and policies,
OF the company"
He recommended such a salary
"as will attract a first-rate man
and that the salary be provided by
"a proper reduction" in the salarie,
OF the president, vice president and
general counsel, and medical di-
rector. He listed the present sala-
rles for these officials as $4,000 fol
E. Lee Trinkle, former Governor OF
Virginia and president of the firm
$4,000 for j. P. Saul, jr., executive,
vice president and general counsel
and $4,000 for DR.. j. H. Dunkley
medical director.
The corporation commission alsd
made public letter from the board
OF directors of the firm, received
after a conference with the COM
mission Thursday, in which tho
board gave assurance that the COM
pany would comply with the law
and regulations of the State gov
erning life insurance companies.
In correspondence concerning tha
audit Mr.. Bowles was sharply crit
ical of number of the company'd
practices, some of which were shown
to antedate the years covered by the|
examination. One letter to the COM
mission said:
mo three officers of a life insur-
ance company who have so care
lessly and recklessly managed thd
companys financial affairs as Is
disclosed by the record should be
intrusted with the management Of
the trust funds of the widows and
orphans of this State and of thd
other States in which the company
is licensed"
Favor Declared Lost.
A statement signed by Chairman
William Meade Fletcher and Cor
poration Commissioner H. Lester
Hooker and Thomas w. Ozlin said
at one point that lit goes without
saying that the Shenandoah Life
Insurance Co. has lost a great dea
in public esteem and favor as
result of the recent publicity from
Washington"
The commission referred to the
testimony of Mr.. Saul before tho
Monopoly Committee during which
he said numerous loans we're made
to officers, directors and members
of their families by Shenandoah
Life until such loans were prohibited
by Virginia statute in 1894. y
Among alleged practices criticized
by the commission were:
Salary advances to certain officers
Loans from the petty cash fund
to certain officers.
Sale Of certain unsecured notes to|
Liberty Trust Co., December 81 j
1886, and repurchasing the same
on February l. 1887.
Discrimination in IL instances by|
charging a f1rst-year premium sol
per cent to rs per cent less than
the regular premium to persons not|
home Office employees, in violation|
Of Virginia insurance laws.
President Trinkle, in a letter to|
Mr.. Bowles made public by the
commission, differed with the excl
aminers in several points, defended
a number Of points on which criti-|
cism was made, called attention.
to instances in which officers ac-I
ceded to views Of examiners and|
suggested a number of deletions
from the audit report.
ILL., NL.1:. NJ.