Evening star., 1939-02-17
Northwestern Rule
By Po|icyho|ders
Is Explained
Neither Agents Nor
Proxies Are Used in
Elections, CIeory Says
BY JOHN G. HENRY.

Seven hundred thousand policy
holders of the Northwestern Mu-
tual Life Insurance Co. move in on
their management once each year,
the Monopoly Committee heard to-
day from Michael Cleary, president,
as he detailed for the committee his
company's conception of mutually
and it's efforts to remain without the
sphere of conflicting interests in its
ordinary functioning.
Revealing degree of mutually
quite in contrast to that of most
of the companies previously studied,
Mr.. Cleary explained that a special
policy-holders' committee of five is
formed each year and that this
group conducts three-month ex-
animation of company operation,
engages an auditing firm to review
its books and interviews company
officers on wide variety of
problems.
Three of these five are chosen
from a recommended list compiled
by local agents of the company, one
is a nominee of the directors and
the fifth is selected after consulta-
ton with the Wisconsin State In
surance Department.
Were kept conscious of the fact
that we are hired men and the
policy holders are the bosses." Mr.
Cleary said They give us a real
examination"
Proxies Not Employed.
Operating under Wisconsin law
that is appreciably more stringent
than that of New York, Northwest
ern requires that its directors be
policy holders and that neither
agents no proxies be employed in
their election.
do you like the Wisconsin law?'
Assistant Secretary of Commerce
Patterson asked.
Il d." Mr.. Cleary answered.
Contrasting also with the func-
tloning OF some other insurance
dlrectorates, Mr.. Cleary said North
Westerns has an attendance record
of about 80 per cent.
BY the Wisconsin statute, a direc
tor is dropped automatically if he
misses three consecutive meetings
a circumstance which, he said, re-
suits in an "active board"
Qualifications Closely Examined.
In the selection of directors, Mr.
Cleary explained that qualifications
OF policyholders are examined close
ly and many consultations held. On
several occasions, he said, men have
been eliminated because of the
danger of conflicting interests be-
tween the company and other cor
porate enterprise.
In addition, the company has
dropped from its board men con-
nected with enterprises in which it
has financial interest, following q
policy OF aversion toward such in
terlocking relationships as have been
revealed in connection with other
insurance firms.
we believe our set-up is prac-
ticable; that it functions efficiently
and that it recognizes the true con-
cept of mutually" Mr.. Cleary said
northwestern, with headquarters
in Milwaukee, has $4,000, 900 900 In
force and assets of s1,23O,OOO 900.
Earlier the committee reviewed
interlocking relationships between
Prudential Life, Federal Insurance
Co. and the United States Guar
anty Co.
No Conflict" in Role.
Hendon Chubb, Prudential direc.
tor, told the committee he had ex.
perienced no conflict" in his dua
role of director and representativ,
of fire and casualty insurance com.
panies handling some of Pruden
tails business.
In Is years as member of thu
Prudential Board of Directors" tn
witness added, Il have never seen {
case of conflict between a member
duties as director of Prudential ant
his duties to another company"
Mr.. Chubb conceded tha othe
persons connected with his firm O
insurance managers had solicited
fire insurance business from Pru
dental, but he told the committe,
he had kept a strict "hands-off
attitude in such matters