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This newspaper page contains 15 articles. Subscribers can read the full text of each article.
Newspaper
Boston Post
Location
Boston, Massachusetts, United States of America
Date
Apr 10, 1907
Page
9
A Massachusetts hearing features a remonstrance against Brandeis’s bill to allow savings banks to establish life insurance departments. The speaker defends industrial life insurance, critiques Brandeis’ arguments, compares claim-to-premium ratios, and defends Metropolitan Life’s practices and surpluses as prudent and misrepresented.
In this analysis the author argues that industrial insurance yields little profit after expenses. The main costs come from agent visits, premium collection, and death claim processes. The piece contends Brandeis overstates inefficiency, notes agents are fairly compensated, and warns against plans that reduce expenses by cutting commissions or guaranty funds.
A debate cites variability in Massachusetts death rates from 13.1 to 21.9 per thousand, warning savings banks may face higher mortality than Metropolitan experience. Medical selection won’t fully exclude substandard risks, and local tables may hurt pooled or independent bank schemes.
The article questions Brandeis figures on Massachusetts industrial premium receipts, policyholder payments, and reserve growth. It argues the data may be inaccurate or misrepresented, noting that reserves rise with increasing liability and that most earnings are legally retained for policyholder benefit. It cites Metropolitan Life figures to contest Brandeis’ 50 percent expense claim and 34 percent cash return to policyholders.
The argument claims premiums for Industrial Insurance are much higher than ordinary insurance. It notes mortality differences between Industrial and American Experience tables drive premiums, not expenses alone. Actual Industrial mortality often exceeds the Massachusetts standard, while ordinary company mortality lags behind. New benefit tables use mortality up to 155 percent of the state standard at some ages.
The piece argues the Metropolitan Life Company charges higher loads on Industrial policies than on Ordinary ones, claiming a 66 2/3 percent loading rather than the 100 percent Brandeis alleges. It examines Brandeis claims about dividends and the distribution to stockholders and officers, noting 28 percent returns to original 1883 subscribers and smaller gains for newer holders, amid shifts in capital stock.
The piece compares Brandeis’ proposed guaranty fund with Metropolitan stock dividends, noting Massachusetts banks must accumulate about 4 million dollars from Industrial Insurance profits to back guarantees. It questions the impact on net premiums, citing 11,200 dollars in Metropolitan dividends and 189,000 dollars interest on funds, arguing the burden falls harder on small banks than on Metropolitan stockholders.
Mr Brandeis charges that large officer salaries inflate premiums at Metropolitan and harm Massachusetts policyholders. He notes 361,823 total officer salaries last year, about 0.6 percent of premium income, lower than other large firms yet higher than small nonindustrial companies. He argues even if charged to industrial policies the hit is minor, and applies the figure to banks to critique Brandeis’ plan.
The discussion centers on why large premiums are used to build surplus, reportedly thirty times original capital in Metropolitan. Brandeis argues the surplus is pledged for policy holder security, not stockholders, and warns the phrase thirty times original capital is misleading.
The article argues Brandeis overstated causes of high premiums. It cites Metropolitan and Prudential rates matching Hancock, which pays no dividends and keeps salaries low. Surplus largely returns to policy holders, with investments yielding substantial profits already.
The piece argues against funding a savings bank scheme as a government program. It questions why the state should pay the actuary, forms, and medical examiners while banks cover other costs. It contends that medical examiner expenses are unavoidable and. by leveraging high application volumes, costs per application can be kept low.
The text argues that England's forty year savings bank scheme, backed by the government, fails to reduce overall risk as deficits shift between towns. It notes only about thirteen thousand policies remain, questions the lapse loss figure, and contends that policyholders bear little loss while insurers face a substantial aggregate burden.
A critical analysis of Brandeis on Industrial Insurance and the proposed savings bank plan argues that Industrial Insurance is a beneficent, popular system teaching thrift and self-denial, with faults shared by its patrons. It warns that proposing imitation by state help or charitable loans risks breaking a proven system and duping the public to abandon trusted insurers for a questionable substitute.
The passage argues against criticisms of Industrial Insurance schemes and claims a long practical plan by industrial companies to save policyholders’ costs. It notes Metropolitan’s $500 policies issued ten years ago with annual, semi annual, or quarterly premiums, and explains agents market both Industrial and Intermediate Insurance, boosting commissions without charging lapse costs for replacements.
A Metropolitan Insurance spokesman defends Industrial Insurance against attacks as unjust and baseless. He outlines reduced expenses, large policyholder dividends, and planned three million dollars in 1907 benefits, including a four week premium dividend, mortuary dividends, free paid up policies at ages 75 and 80, and updated net premium tables reflecting improved mortality. He emphasizes faithful policyholder care and rejects misleading charges.
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