Message of [The] Governor to [The] General Assembly (Paperback)

This historic book may have numerous typos and missing text. Purchasers can download a free scanned copy of the original book (without typos) from the publisher. Not indexed. Not illustrated. 1873 Excerpt: ...and if contented with a moderate rate of growth the larger Indiana companies will have no possible occasion for dependence on the preliminary term, and with a suitable guarantee fund covering necessary advance expenses, no newly organized and small company will have any occasion to depend on such a plan. But for the fact that many of the advocates of the preliminary term plan appear to conscientiously believe it is the only equitable method of life insurance operation, I would recommend the inhibition of the plan altogether. In view of the situation, however, I concur in the recommendation of the committee that legislation shall be had which will insure placing the plan on a correct and equitable basis, to the end that applicants for policies embracing this feature shall not be misled as to the nature of the bargain into which they enter. There is yet one other matter in connection with the subject of life insurance which is entitled to your consideration. Among the assets of the companies are an excessive number of loans secured by assignment of policies. These are known as policy loans. They are not, however, bona fide loans, as they do not represent cash transactions. They arose out of a practice of dating back policies five to seven years and taking notes for amounts computed to be the value of the reserve upon the policies issued. Of the gross assets of one of these companies 41 per cent, are of this class of securities. In another instance 53 per cent, of the company's assets are of similar character; in another 64 per cent., another 72.5 per cent., and another 76.4 per cent. The practice of the companies in this respect is well told in the committee's report: These obligations have taken different forms. In one of its most complex forms the pol...