Evening star. [volume] (Washington, D.C.) 1854-1972, 1939-12-21
Insurance Firm Head
Shared in $4,000
'Kick-back'
Use Of Money Admitted
In Martins Testimony
At Monopoly Hearing
BY the Associated Press.

=
Hugh T. Martin, president of the
Illinois Bankers Life Assurance Co.,
Of Monmouth, ILL.,, told the Monopoly
Investigating Committee today that
he shared directly in a $4,000 kick
back" which he said was paid by an
insurance rewriting agent employed
by his company between 1890 and
1882.
The money was paid, Mr.. Martin
said, by Herbert G.. Shrimp, president
of the American Conservation Co. of
Chicago, to John P. Nichol, who was
associated with Mr.. Martin in for
nation of the Illinois Bankers Life
Assurance Co. The company now
operates in Is States, has $27, 900 900
of assets and about $4,000 600 of
insurance in force.
Mr.. Martin told the committee
all of the money paid Mr.. Nichol was
used to retire Indebtedness for which
he. Mr. Martin, was at least partly
liable, or was turned over to him
directly. Thus he told the commit
tee all of the money was used either
directly or indirectly for his benefit.
S1,5OO, 900 Commissions.
The American Conservation Co.
was employed by the Illinois Bank
ers' Life Assurance Co. to reWrite
as legal reserve policies the policies
of the Illinois Bankers Life Associa-
ton, an assessment group which the
stock company took over in 1929.
Committee records showed that
the stock company paid Mr.. shrimp
commissions totalling approximately
81 100000 for soliciting the trans
fer of policies in the association to
rewritten policies in the new COM
/ pany.
Mr.. Martin agreed with an asser-
ticn by Gerhard Gesell, committee
council, that the expense of the
transfer, borne by extra premiums
paid by policyholders, could have
been less had Mr.. Shrimp not turned
over a portion of his commissions
to the owners of the company.
| Mr. Martin commended, however,
that lit made no difference whether
| the profit of the stockholders was
| taken in the matter of commissions
from Mr.. Shrimp or taken out Of
dividends"
Shrimp Tells of Contract.
He added that disclosure of the
return to officials Of the company
was not made to policy holders, and
he expressed the opinion that they
would not care who received COM
missions on the rewriting of insur-
ance policies.
Mr.. Shrimp testified that he had a
contract with the insurance COM
pany for 70 per cent of the initial
premium on rewritten business and
80 per cent of the first premium on
new business.
He had entered into a contract. he
explained, to pay Mr. Nichol Is per
cent IN exchange for the latters
efforts to obtain the rewriting bust
ness from the insurance company.
! III dIIiSlpdliOH OI obtaining tne
rewriting business. Mr.. Shrimp said
he once loaned Mr. Martin shares
OF stock in real estate company
with a par value which Mr.. Gesell
said was 100000, to be used as COL
lateral for loan which Mr.. Martin
was about to obtain from another
| source.
He said he did not know what the
loan was for nor who made it, and
he had not received the stock back
from Mr. Martin
He did not ask its return, he
added, because the real estate COM
pany had gone into receivership in
1888 and the stock now had mo
! value