LIFE INSURANCE METHODS.

Dominion, Volume 2, Issue 536, 17 June 1909, Page 8

LIFE INSURANCE METHODS.

A QUESTION FOR PARLIAMENT. Mt. Hogan, M.l\ for Wanganui, has given notice to ask the Prime Minister (Sir Joseph Ward) whether ho will set up a special committee next session to consider - the* petitions, to be presented praying / for protection'from the methods adopted by some life insurance companies. It is alleged that the questionable practice; of offering some policy-hjlders. lass in satisfaction of their claims than they paid in premiums is frequently resorted to by somo companies, anu as this'is- held to be equivalent to defrauding these policy-hoklorß. Mr. Hogan considers it is time that a searching inquiry was made, and also time that the House afforded the protection asked for. ; ( So far as can bo. ascertained—no specific cases having been stated—the question appears ;to be one peculiarly alfecting tontine policy-holders, who, under the terms of their policies, are entitled to receive,: on the ,expiration of the tenures of the same, the whole of their payments, 'plus a proportional share of the profits. These profits are not simply confined to individual policyholders. They represent the "pooled" profits on the whole of the tontine policies issued for tho period, and if, within the currency of. the period, certain policy-holders die, or surrender, tho profits on . their policies are added to tho sum to be divided .among the survivors. It is alleged that some of these policy-holders, whose policies had legally matured, have received amounts less than the total amounts of their actual payments, to say nothing of the profits. The matter was, to some extent, ventilated in Parliament last session, when a petition from certain policy-holders was presented to the House, and subsequently referred to the Publio Accounts Committee. for . investigation,. and the . collection of evidence.. Nothing of a definite nature was'-accomplished, it is although certain evidence was taken. -

Inquiries made in the more important life offices, elicited nothing in the nature of definite comment on what is implied by Mr. Hogan's question to the Prime Minister. f l, don't exactly see what he means," said "le head of one of the. companies. "If Mr. Hogan had given chapter and verse, I would have something to go ■ upon. The question is rather vague in its terms.' If he refers to surrender values—and.l presume that is what he means—then the answer is,'that'in certain cases the amount re.turned is less than, the payments, ,as the company, in equity, is entitled to claim for carrying the risk. If the policy has been in form for J number of years before being surrendered, the interest and other increments, of course ' would assist,to return to.the holder a larger sum than what, ho had actually paid in." Even assuming that the question refers to tontine policies,", observed another resident secretary, "I could not supply an explanation. It is impossible to admit' or refute i any allegations concerning life insurance policies without a knowledge of tie special circumstances of particular cases. Iney are all governed by clearly defined actuarial principles, differently appliea, according to circumstances. If- a'policyholder receives less than lie has paid in, it does not tollow that he has been treated unjustly, that depends upon the facts of the caseand, as we have not Mr. Hogan's facts, we cannot express any opinion either way."