OCR Text |
Show Have You a Policy In the Northwestern Mutual of Seattle, Wash,? Underwriters' Itcport of February 4. 19IG. Tho California stntc Inturnnco department de-partment has refused to Issue a license li-cense to the Northwestern Mutual Fire association of Seattle, holding thnt tho company has deceived property owners by falsely claiming thnt the policies It isrues lire non-asscriablc. non-asscriablc. Tho California department depart-ment also charges that tho mutual' reserves ure Insufficient nnd that It has failed to observe the- California requirement to print Its bylaws In tho policy. The department has had the matter under tnxestlgntlon for six months, tho license under which tho company formerly operated having hav-ing expired Juno 30th of last year. Ilarrttl From 1'lnli Aloo. The charges mado by the Cullfor nlu department lire similar to those made against tho Northwestern Mutual Mu-tual by tho Utah Insurance department depart-ment lust year, which nlso refused to issue thu company n license. The I'tnh department also charged tho company with making n false statement state-ment nt Its financial condition, padding pad-ding Its assets with worthless securities se-curities After being denied a license li-cense for ii number of months, tha mutual wns rollcensed by I'tnh on it showing thnt tho company wnj solvent sol-vent under tho Utnh requirement. Ku-i it. t'leur uf t'tiurt. It has been known for somo time thnt the Northwestern Mutual was In trouble with the California tie- "undergrounder." was reported to hnvo forced 11 loss settlement with II. lovl ft Co. of Ban Francisco by representing thnt ns the compnny, then unlicensed, had violated tho California lawa In Issuing tho policy tho San Francisco property owner had no stnndlng In the California courts. It Js further stated on tho authority of tho lovl firm that tho niuutil company Insisted on a reduction re-duction of 12 H per cent from the settlement mado by the regular Insurance In-surance companies, at a condition to tho final settlement, which was mado five months after tho other companies had paid. In n signed statement describing Its cxerlence with tho Northwestern Mutual, H. I.uvl & Co. said thnt tho compromise comprom-ise was forced on It by tho Northwestern North-western Mutunl's threat that the 8rt Francisco firm would bo compelled com-pelled to como to tho company's headquarters nt Seattle to obtain Its money Pi-oimIm- of HuIiik Dlhpiititl, Tho Northwestern Mutual has been active In tho Pacific Const states for several yours, being licensed li-censed In Washington, Oregon, Idaho Ida-ho nnd Hrltlsh Columbia. Complaint Com-plaint tins often been mado thnt it secures patrouago by rate cutting nnd representing Hint by economical . management It Is nblo to return n substantial part of tho premiums to Commissioner Pholps' reasons for refusing a license to the Northwestern .Mutual nro three In number: First - Thnt the compnny anlsrepresents tho character of Its policy contracts by claiming that tho policy U non-nssessable. Second that the company does not mnlutnln sufficient reserves to carry Its policies to explrntton. Third Tho company violates tho California law In falling to print Its bylaws on each policy tisued. partment which It is stated has refused re-fused to license the company since July 1st of Inst year Strenuous efforts ef-forts hnvo been mndo ny tho mutual company officers to aecuro the desired de-sired nuthorlty. but Commissioner Phelps has Insisted thnt tho company's com-pany's practices nro Incompatible with sound Insurnnco principles, bo-sides bo-sides being contrary to tho California Califor-nia laws, Phelps has expressed a willingness to hnvo tho company refer re-fer tho question to tho courts, but thus far tho mutual hns not acted on tho suggestion. Fond of Tccliiilriilltli-N. Whllo tho legal nuthorlty to operate op-erate In California has been denied the Northwestern Mutual since July last, tho company has continued to write policies and tho question Is now raised that such policies might provo vuluoless In the event or tho company refusing to pay when a lots ensues. Under See. 580 ot tho political code, "All policies nnd othor contract of Insurance Istued without full compliance by nil parties par-ties concerned with tho laws of this stato shall bo null and void." Insurance men might point out that an unscrupulous company might easily ralso this point should It desire to evade tho payment of a loss. In this connection It may bo recalled that several years no the Northwestern Mutual, which was then active In California as an policyholders, thus effecting a saving sav-ing to proporty owners. Ineurnnco men who havo examined Its plans, however, stato that tho alleged aavlng Is obtained by loading tho premium -with tho sum tho company subsequently roturns wjth a flourish, flour-ish, as a socalled dividend. Bxports who have studied tho question hold that a comparlbjn of tho results of tho Northwestern Mutual policies with thoo ot the regular compnnles ahow that tho mutual policyholder' net coBt Is often actually in excess of the chnrges maiio by the regular companies. Hniip For Mutual OMenx. An oxhaustlvo examination of tho company sovoral years ago by tho Utah Insurnnco department showed ithat Its socalled dividend feature was arranged to Influence prospec- , t vo Insurers, being manipulate oy tho compuny's officers who wero In ' receipt of extravagant compensation for managing its affairs, it was Jhown that tho principal officer nad a half dozon sources of er-onal er-onal rovonuo through his connection connec-tion with tho company and thnt tho company appoared to be mutual in name only. Since tho Utnh report other Insurance departments havo criticised tho practice ot tho com-pany's com-pany's oUlcora In drawing largo ox salaries and jndorwrlltng profltH. Policyholders May He X-nH Ono of tho objection m4 tho California Insurance depins to licensing the Northwetttra 1 tunl Is tho practice of rtpnxi! that policyholders aro not til to assessment ns In other av companies. On tho cutsWt of policies tho compnny prints tU I lowing- "This policy jiirtklji lit the dividends nnd Is ilulr iion-OMessnblo." That the policies of the Nr western Muttinl are abtolnttlr ossessablo Is denied by the OL' nla department, which sUttt tt policyholders may not be uv only so long as the compit; sesscs a surplus nbovo llablUW SGO,000. Should the cotoptnj'ir plus fall below this sum, N-. western Mutual pollcyholdtri . bo In tho same unhappy cefitt-thut cefitt-thut has confronted pollcyhoWtn countless other mutuant called i; to pay their company's debts tr sejisment. '111 Kill-plus Dlwippesr? Another fenturo developed ;-California ;-California department Is tte p tko of tho mutual to undertake Its unearned premium rcHnti Is well known, this It an Impon llnblllty of tin Inturnnco eesr1 nnd dotermlucs lit tolvrntr I creasing the unearned prealosi-servos prealosi-servos Increases a ompsaji : surplus, whllo nn Increase l ' former diminishes tho surplei if portlenately While tho tsllfw lawa require mutual fire co to mnlutnln the same unearned 1' inlum reserves ns regular eo,1 Ioh, the Cullfornln department 1 found thnt the Norhtwestern Jltf-enters Jltf-enters practlenll) nil of U tr policies us nnnuitl nnd seml-anf policies, bntlng lu computation ' Installment premium payment. . tend of tho full premium. ; quired by Inw Tho effect w-U w-U to glvo the Northwestern Mi'-nn Mi'-nn extraordinary ndvantsje v other companies It has been estimated that u-mutual u-mutual churged Itself with tner sorves required by law. H '"J ties would bo practically do' with the result that Its prenl pIub would bo entirely wlp With Its surplus gone, CalUon policyholders may therefore i thcmselvea In a sorloun prwWiw ns Commissioner Phelps ban t ed thnt tho company mutt u Its opornltons to conform i California lnws, |