\ N^ \vJ^N\\ ,^s £?q^ INDUSTRIAL Alio UIOR fiLiA^I COi^ELL. UNlVCfiSiTY Action of and Resolutions Adopted by the Foety- Second Session of the NATIOlsrAL CONVENTION OF INSURANCE COMMISSIONERS At Milwaukee, Wis., August 22-25, 1911, in Connection with an Investigation of Settlements with. Policyholders by Com- panies Doing an Industrial Health and Accident Business. Pursuant to the action of the Forty-second Annual Convention of the National Convention of Insurance Commissioners, held at Milwaukee, Wis., August 22-25, 1911, this volume — containing the report of the committee of such convention authorized to in- vestigate the settlements with policyholders made by insurance companies doing an industrial health and accident business, together with the examiners' reports upon which such committee's report is based — is published. At the Milwaukee meeting of such convention, the report of such committee was presented and, after consideration, received and filed. The convention thereupon — ^thirty-five States being repre- sented — unanimously adopted the following resolutions : Resolution No. 1 Resolved, that the action of the special oominittee cm industrial health and accident settlements, and of the executive committee of the convention, adopt- ing as its own the action of such special comami'ttee, in demanding asi to the industrial health and accident departments of certain companies which have been investigated by such special committee — 1. ITiat they make an investigation of their claim departments to the end that wrongs, such as those pointed out in said eommibtee's report, shall be undone and justice done; 2. That there be established in each company a board or committee of review; 2 National Convention- of Insueance Commissioners 3. That such companies dismiss certain officers and employees, or else retain them^ in positions where in the future they will have nothing to do vnth the adjustment of claims; 4. That hereafter no agent, collectocr, adjuster or manager of soich a company, who is compensated in whole or in part by a profit-sharing contract, have power to settle claims; all as is indicated under Requirements sliown on pages 92 and 93* of the printed report of such committee now before this convention, be ratified and approved and made the action of this convention. Kesolved, further, that the executive committee of this' convention, pend- ing the next session thereof, have power, either itself or through such special committee, to make similar requirements of any company in which, after investigation and hearing, similar conditions and practices to those developed on the investigation covered by such report shall be found. Resolution No. 2 Resolved, that it is the sense of this convention that conditions developed on the investigation of ind>ustrial health and accident settlements by the sub-committee of the executive committee, and reported by it to this con- vention, generally warrant the conclusions of such committees, and call for remedial legislation and a closer supervision of companies of this class. Resolved, further, that the recommendations of such committee as to remedial legislation be referred back to the special committee from which such recommendations come, with the general approval of this convention, but with the direction that such committee continue its investigation both into the facts and of proposed remedies, with authority to make public the results of such investigation, and that when sa.ich investigation is, in its judgment, substantially completed, such committee prepare the draft of a proposed uniform bill that will carrj- out its conclusions — so far as the same appear to require legislation. That in reaching such conclusions siich comanittee be authorized to confer with and grant hearings to the representa- tives of the companies affected. Resolved, further, that all supervising departments, members of this con- vention, co-operate in every possible way with such special committee, both in the examination of industrial health and accident companies relatively local .to their states and in supporting such committee in the enforoement of its demands of all such companies, already examined, or hereafter to be examined. Resolved, further, that the comanittee on blanks be instructed to prepare for submission to t!ie next session or meeting of this convention or to the execoitive committee a, S])ecial blank on which companies doing a health and accident business will be required to report the appropriate facts as to their settlements with policyholders. Resolved, further, that the examiners' reports on the companies already investigated and such reports on companies as shall be subsequently investi- gated, as well as the reports of suoh special committee, be preserved in book • See pages 86 and 87 following. Inditsteial Health and Accident Settlements 3 form, the expense of sucli book or books to be paid out of the funds of the convention. Eesol'\i:d, further, that shooild it develop that any company not examined shall attempt to poaeh upon the field forces of a company which has been examined in an effort to twist its business, such committee notify the com- missioner of the home state of the company so attempting to poach, to the end that such commissioner sihall, if the statute of such state be sufficient, take action against such company, or if such law is not sufficient for thaA pxirpose, that such committee notify the commissioners of all the states of the facts and request their co-operation in preventing further attempts of this char- acter by such company. Resolved, further, that in addition to the matters particularly specified in these resolutions, this convention approve and make its own each of the recommendajtions as to supervision found on pages 98 and 99* of the printed report of such special committee. Resolution No. 3 Resolved, that H. G. B. Alexander, president of the Detroit Conference, be requested to name a committee representative of the companies doing an in- dustrial health and accident business, such committee to confer as to legis- lation with the special committee of the executive committee of this conven- tion charged' with the duty of investigating industrial health and accident settlements and to consist of three memhers, of which one shall be Mr. Alex- ander, as chairman, another represent the com.panies which are memher® of the Detroit Conference, and the other represent companies which are not mem- bers of the Detroit Conference. * See pages 92 and 93 following. NATIONAL CONVENTION OF INSURANCE COMMISSIONERS Report of Committee on Industrial Health and Accident Settlements TO THE Forty-second Annual Session at Milwaukee, Wis., August 22-25, 1911 REPORT OF COMMITTEE ON INDUSTRIAL HEALTH AND ACCIDENT SETTLEMENTS Milwaukee, Wis., August 21, 1911. To the National Convention of Insurance Commissioners: The undersigned Committee on Industrial Health and Accident Settlements hereby makes a partial report covering its proceed- ings to date: At the regular June meeting of the Executive and other com- mittees held at the Manhattan Hotel, New York, June, 1911, at which sixteen States were represented, fifteen by the heads of the departments, action was taken whereby this committee was authorized forthwith to begin an investigation of settlements made with industrial policyholders by the various health and accident insurance companies doing that kind of business. Such action was taken as the result of conditions found to exist in the industrial department of the General Accident Fire and Life Assurance Corporation of Perth, Scotland, — a corporation domi- ciled, in the United States through its deposit in the New York department — after an examination of such company by such department which was finished in May, 1911. The New York Superintendent of Insurance presented to the meeting a report made by his examiners and read a memorandum prepared by him reviewing such examination and a personal investigation which he made after the company had had its statutory hearing. He also laid before the meeting various tables indicating the loss ratios in the industrial departments of the companies of this class authorized in New York, and called attention to numerous com- plaints which had been received concerning the practices of these companies in making settlements with industrial policyholders. Immediately on its appointment the committee, which was at such meeting declared to be a subcommittee of the Executive Committee, and which consisted of Commissioner Palmer of Michigan, Superintendent Potter of Illinois, Commissioner Har- dison of Massachusetts, Superintendent Hotchkiss of New York, Auditor of State O'Brien of Indiana, with Commissioner Button [7] 8 National Convention of Insurance Commissionees of Virginia, ex officio^ organized and arranged for a speedy exam- ination of the companies through boards of examiners, chosen from such departments. The examinations were begun imme- diately, the first companies visited being those whose loss ratios seemed to be such as to indicate that conditions found to exist in the General Accident Corporation might be found in their claim departments. To this date, inclusive of the General Accident Corporation, this committee has examined fourteen companies, while examinations of several others are in contemplation. The companies examined and the departments participating are as follows : General Accident Fire and Life Assurance Corporation of Perth, Scotland. — This company was examined by the New York depart- ment through examiners Leon S. Senior, W. A. Billingham, W. H. Derrick and C. E. Heath. As indicated, this examination had been completed before the committee was appointed. The committee at a meeting held in l^ew York on August 1st accepted such examination for the purpose of a hearing which it granted such company, and adopted the memorandum of Superintendent Hotchkiss as its report covering the same company. This report and memorandum have been filed in the New York department and printed copies have been furnished each of the supervising departments. Gj-eat Eastern Casualty Company of New York City. — The ex- amination of this company was conducted by representatives of the committee, they being Wilbur H. ISTangie of the ISTew York department and Tscharner M. Hobson of the Virginia department. The company was given a hearing at the meeting of the committee held in New York on August 2nd. American Assurance Company of Philadelphia, Pu. — This com- pany was examined by William J. Eoney of the Pennsylvania department, Tscharner M. ITobson of the Virginia department, and Wilbur H. JST angle of the New York department. A hearing was given the company at New York by the committee on August 2nd. Phoenix Preferred Accident Insurance Company of Detroit, Mich. — The examination of this company was conducted by rep- resentatives of the committee, they being Isaac Davenport, Actu- Inditsteial Health and Accident Settlements 9 ary, of the Virginia department, special examiner for the Michi- gan department, and C. E. Heath, examiner for the JSTew York department. Their report was completed early in August and a hearing granted the company thereon at Detroit on August 15th. Continental Casualty Company of Hammond, Ind., with principal husiness office at Chicago, III. — The examination of this company was conducted by John L. Train and W. A. Bil- lingham of the New York department and Freeman O. GuUifer of the Michigan department, representing the committee. A hearing on their report was granted the company at Detroit on August 14tK. National Casualty Company of Detroit, Mich. — This company was examined by the following representatives of the committee: Isaac Davenport, Actuary, of the Virginia department; Samuel Jeffery of the Michigan department; Samuel Deutschberger of the New York department. A hearing on their report was granted the company at Detroit on August 14th. North American Accident Insurance Company of Chicago, III. — The examination of this company was by George L. Brown of the Michigan department, Leon S. Senior and W. A. Billingham of the New York department, Lucius Pfoust of the Illinois de- partment. A hearing on their report was granted the company at Detroit on August 14th. Standard Accident Insurance Company of Detroit, Mich. — The examiners of this company were George Graham, Jr., of the Illinois department, Isaac Davenport of the Virginia department and Harold P. Johnson and Wilfort D. Gray of the Massachusetts department. Such examination was completed on August 5th. A hearing was given the company by the committee at its meet- ing in Detroit, August 15th. German Commercial Accident Company of Philadelphia. — The examiners of this company were William J. Eoney of the Penn- sylvania department, Tscharner M. Hobson of the Virginia de- partment, and Wilbur H. Nangle of the New York department. Such examination was completed August 7th. A hearing was given the company by the committee at its meeting in Detroit, August 15th. Fidelity Accident Company of Saginaw, Mich. — Examin- 10 National Conventiokt of Insueanoe Commissioneks ers, John L. Train of the N'ew York department and Samuel Jef- fery of the Michigan department. This examination was com- pleted August 12th, and the company given a hearing in Detroit on August 15th. Federal Casualty^ Company of Detroit, Mich. — Examiners, Samuel Deutschberger and Charles E. Heath of the New York department. This examination was completed August 12th, and the company given a hearing at Detroit, August 15th. United States Health and Accident Insurance Company of Sagi- naw, Mich. — Examiners, Leon S. Senior and William A. Billing- ham of the. New York department, H. A. Chapin of the Michigan department, and Percy E. Gleason of the Massachusetts depart- ment. This examination was completed August 12th, and the company given a hearing at Detroit, August 16th. Equitable Accident Company of Boston, Mass. — Examiners, H. L. Peabody of the Massachusetts department and "W. A. Billingham of the New York department. This examination was completed August 12th, and the company accorded a hearing at Detroit, Mich., August 16th. It submitted its views in writing. Massachusetts Accident Company of Boston, 2Iass. — Examiners, Freeman 0. GuUifer and George L. Brown of the Michigan de- partment, and Arthur E. Linnell of the Massachusetts department. This examination was completed August 14th, and the company given a hearing at Detroit August 16th. These examinations clearly indicate that the conditions devel- oped in the New York department's examination of the General Accident Corporation were typical of conditions in several other companies, particularly those doing a large volume of indiistrial business. Two or three of the companies have been found to be substantially undeserving of any criticism. Three or four others merely show in reasonable isolated cases either errors in adjust- ments, or that the bad practices of competitors were sometimes followed. About half the companies examined show serious con- ditions in their claim departments, particularly in the adjustment of specific claims of considerable amount; while in at least two of such companies these conditions are so shocking as to call for immediate and emphatic reforms. Indeed, we have deemed it Industrial Health and Accident Settlements 11 proper to give wide publicity to the practices of the companies whose conduct is criticised, believing this to be at present the most effective way to accomplish the necessary remedies. Such action was authorized at the Detroit meeting of the committee by a three to one vote, the chairman not voting and Superintendent Potter voting " No " for the reason that he desired the question of pub- licity to be passed upon by the convention. Following are the summaries prepared by the committee from the reports received and the hearings granted : General Accident Fire and Life Assurance Corporation, Limited, of Perth, Scotland The examination of this company by the iN^ew York department suggested the present investigation. Such company was organized under the laws of Great Britain in 1891 and became, in effect, so far as this country is concerned, a New York corporation, through a deposit in 1899 of $250,000 with the Insurance Department of that State. It now transacts business in thirty-eight States, writing general health and accident insurance in two main departments, one commercial, and the other industrial j in the latter of which 62.3 per cent, of its premium in- come for 1910, from health and accident insurance, was received. This department has a separate organism from the commercial de- partment and a United States manager responsible, not to the gen- eral manager of the United States branch, but to the Scotch home office. Hence, the criticisms in the examiners' report and in the review of such examination by the JSTew York Superintendent of Insurance (which was, on August 1st, adopted by the committee as its report on this company) do not apply to the commercial depart- ment. The New York examination indicates that such depart- ment is in excellent condition and that the adjustments with claim- ants made by it are not subject to criticism. The Superintendent's memorandum accompanying the report of the New York examiners is an elaiborate review of conditions de- veloped on that department's examination and should be referred to by all interested parties. Brief reference to and quotation from such memorandum is made in this report. 12 JSTational Convbntion- of Insueance Oommissioh"bes Loss Bwtio On an industrial premium income of $912,000, in 1910, the apparent loss ratio in this company was 35.29 per cent. Its loss ratio, however, on its weekly payment business was but 21.5 per cent. A very significant fact, developed by the ISTew York depart- ment's examination, is, however, that, whereas the loss ratio on monthly premium industrial policies payable to individuals is as above stated, such ratio on policies covering individuals but payable to the employer was 49 per cent. Seemingly, the insured who deals through his employer — in other words, a man presumably of intelligence and influence — is better treated than is the insured who deals directly with such claim department through a policy payable to himself. The policy fee of $3 on the regular monthly industrial policy is retained by the agent, does not enter into the accounts of the company, and was, therefore, not considered in establishing the above ratios. Profit-Sharing Contracts The characteristic feature of the industrial department of this company is the prominence therein of the profit-sharing contract. !N"ot only is the general manager, himself, largely compensated through his 15 per cent, of the net profits derived from the indus- trial business, but the general agents of the company, of whom there are between 40'0 and 500 and who have charge of all business on which premiums are payable monthly, are compensated through profit-sharing contracts whereby they receive 50 per cent, of the net industrial profits in their territory. When it is recalled that every dollar saved on an adjustment goes to swell the profits in which the home ofiice general manager and the general agents in the field are thus personally interested, and that — subject, of course, to control from the home ofiice — a very large percentage of the adjustments are made by such general agents, the chief cause of the conditions in the claim department of this company is apparent. Adjustments The examination of this large company by the New Tork department took many weeks. The investigation of industrial adjustments included the examination of all death claims reported Industeial Health awd Accident Settlements 13 during 1910, the examination of a large number of question- able death claims reported prior to that time, a test examina- tion by the selection at random of numerous disability cases, and a careful examination under oath of various officers of the company, which was, at a hearing granted by the New York Super- intendent, supplemented by a further examination under oath and by a personal examination on his part of the contents of the claim jackets produced at such hearing. It is understood by the com- mittee that the company claims that, in view of the very large number of claims adjusted by it in 1910 and recent years, those to which attention is directed by the ~New York examination are not sufficiently mimerous to be characteristic. The committee is, how- ever, of the opinion that there is a sufficient number of unjust set- tlements to warrant the conclusions of the New York department and to call for the severe criticism accorded this company by the action of the committee on a hearing granted it on August 1st. The criticised activities of such industrial departments seem to be connected with four clauses of its health and accident contracts ; viz., (1) that permitting pro-rating on a change of occupation presumptively increasing the hazard; (2) that reducing the in- demnity to one-fifth in case notice of the accident or illness is given more than ten days after the same; (3) that authorizing a like reduction in case the accident results from what may be called exposure to obvious risk or contributory negligence on the part of the insured, and (4) that which grants accumulations at the rate of 10 per cent, of the indemnity for each of the first five years of the life of the policy. As to the methods of the company in enforcing its rights or recognizing its obligations under these clauses, the examiners call attention to numerous cases. Some of these are set forth later in this report. Others will be found in the report of the New York department and the memorandum of its Superintendent. It is sufficient for this committee at this time to state that its investiga- tion justifies the criticism that the industrial department of this company strains after grounds whereby changes in occupation, which would reduce its liability, may be asserted, takes advantage of " late notice " in meritorious cases, is eager to assert " exposure to obvious risk " even where such exposure is assumed or theoreti- 14 NaTIO]N"AL OoNVEITTIOH" of lKSUEA2>rCE COMMISSIOXEES cal only, and persistently and consistently ignores accumulation benefits wliicli it has promised to pay. The industrial department of this company is, however, most subject to criticism because of its practices in lump sum settle- ments in advance of proofs, and also, and emphatically, because of its treatment of beneficiaries resident in foreign countries of laborers killed here. Its palpable attempt to evade responsibility and deceive not only beneficiaries but public ofiicials through pay- ments to undertakers for funeral expenses, vsrhere much more was due under its contracts, badly taints the moneys thus saved for distribution under profit-sharing contracts and by way of dividends. The above applies chiefly to specific claims resulting in death. Here the amount claimed is often considerable. Adjustment of disability claims, which are far more numerous and usually small in amount, are reasonably satisfactory. The following quotations from the ISTew York Superintendent's memorandum indicate his views, now the views of this committee, as to the methods of this company : " While the great majority of disability adjustments are for minor amounts (tlie average being about ten dollars) and are promptly and satisfa<;torily made, the cases of which those mentioned in this memorandum are but samples are far too numerous not to be characteristic of the methods used in most claims of substantial amount. More, the corresipondence of the responsible officers and employees indicates a, policy to cut do'^vn benefits'' or escape just liability and generally to take advantage of the teclinical clauses of its policy contracts that does not comport with right methods or proper treatment of policy holders and the public." " The files of this company as submitted to the examiners and produced at the hearing revealed numerous cases where so-called ' lump sum settlements ' have been madte, particularly with widows and beneficiaries of the assured, and usually but a short time after the accident or dea.th. Indeed, in the opinion of this department, it has been the policy of the industrial depart- ment of this company to take advantage of these conditions to accomplish settlements for sums considerably less than it would be compelled to pay were proofs filed and the beneficiaries given opportunity to recover from their grief and consult with friends or counsel. These may be the methods of the railroad and traction claim agent in settling damage claims; they should not be the methods of an insurance corporation which, at the time it makes a contract and accepts the premium, presumably intends to fulfill, not to ' twist ' tlie same. Such companies are not charitable institutions, as one of the letters indicates, but they do sell a public necessity to the people, and so selling, should, and if unwilling to do so voluntarily, nnist be forced to give in return everything for which they are paid.'' Industrial Health and Accident Settlements 15 "It is impossible in language fitted to an official' document aiptly to char- acterize what seem to have been the practices and methode of the industrial department of this corporation in settling with its policyholders. It appears to have resorted to every possible means', not merely to protect itseU against imposition — for which it could not be criticised — but also, and more par- ticularly, to cut and shave down claims, apparently without conscience and certainly without right." " The representatives of the industrial department in several cases' justify such defense as change of occupation and late notice on the ground of ex- traneous facts, in some instances not proved, but from' circumstances' reported to them and believed to exist. Such a course is proper in a case where there is strong and reliable ground to suspect or believe that the claimant or the beneficiary is attempting to defraud; but not otherwise. A mere suspicion based upon a suggestion sent to the chief adjuster as to what grounds there may be through which the com'pany can escape part of its liability is surely not eno"ugh; neither is newspaper gossip. A company such as this should, in mos't cases, lean backward rather than forward, particularly when dealing with the widow or dependent beneficiary of the bread winner who was the insured." The committee, therefore, felt it proper to summon the Scotch home office of this company to send duly accredited representatives to the United States, and a hearing was given such representatives on August 1st. At the conclusion of such hearing, the committee required that the United States industrial department manager, Charles H. Boyer; his wife, the industrial department's superin- tendent of agencies; his brother, its counsel; his brother-in-law, assistant to the chief of its claim department; such industrial de- partment's chief adjuster and the manager of its weekly payment branch, be dismissed from the service of the company; that such company hereafter maintain a committee on appeals, composed of persons in no way connected with profit-sharing contracts, which should pass upon all controverted claims; that the field force be furnished with written instructions, which would tend to prevent conduct and adjustments similar to those criticised; and that the company inaugurate a self-investigation, to the end that full pay- ment might be made of all claims in recent years which have not been adjusted properly. It is the understanding of the committee that the Scotch home office of the company will see that its re- quirements are met, and, in that event, the committee will have no recommendation for further action to make to this Convention or to the individual commissioners making up the same. 16 National Convention of Insueanoe Commissionees Cases. — Change of Occupation Claim 89,641, Fred W. Saicyer, disability benefit; $50 per month. Insured was burned while endeavoring to extinguish a fire in his house. On receipt of notice company wrote agent: " Jiiefore you dispose of the claim see if he was working as volunteer fire- man at the time he was hurt, in which case the claim should be settled! in class X." The agent replied that the insured lived out in the country; that his house took fire and burned, and that there wasn't a fireman within twenty miles. The company still insisted that the claim should be settled on the rating of volunteer fireman, relying on a technical interpretation of the words in its conitracit " while doing any act or thing pertaining to a more hazardous occu- pation " and thus forced a settlement at $135 though the insured was seriously burned and was incapacitated for work for many months. Claim 59,980, George \V. Siceatland, liability $300. Insured was drowned while engaged in the sport of hunting frogs. The company pro-rated the claim to $100 on the ground that the insured was a " hunter," asserting, " according to our manual classification on page 42, hunters are classified as Class X." Here the matter rested until the Indiana department took up the matter, whereupon the United States manager overruled the industrial department and paid the claim in full. Claim 56,325, G. M. Beasley ; liability $1,000. Insured was killed by a lightning stroke while sitting on a neighbor's porch. Ho was insured as " proprietor, siipervising in yard and oflace." The com- pany, however, on finding that at times he wenit out into his mill yard and assisted in the work, claimed it had the right to pro-rate this claim, the home office chief writing: " If we can pro-rate claim' to Class B, it would he a saving of about $200 * * * It may be also that he had his duties comprise the handling of bricks or assisting in a brick yard. If this were so or if he occasionally did this work, it would put him down to Class B or about $600." Though the insured was, as stated, killed at a time when he was not per- forming the duties of his vocation in which he was insured, this company was able to force a compromise at $875', and its agent to secure a. testimonial from the insured administrator which was generously circulated in the territory. Notices Late — Conitnbutonj Exposure Claim 56,775, William B. Hodges; liability $400. Insured was injured as a locomotive engineer and was killed on the evening of July 2, 1909. Notice was given the company July 13th, that is one day late. Though, so far as appears, the claim seems to have been meritorious, the company took advantage of late notice to reduce the claim on the one- fifth basis and accomplLsihed a settlement for $80. Claim 78,515, Vincent Headley; liability $200. Insured was drowned while bathing in the Mississipipi river. Company took advantage of exposure to obvious risk clause to reduce claim to $40, at which sum a settlement was made. On the hearing company ofiicers were asked whether when an insured went in bathing he made himself liablte to Industeial Health and AcciDEisrT Settlements 17 sadh a reduction. The answer was that that depended upon circiunstances, but that in this case the company relied upon the swiftness of the Mississippi river at the point of the accident. Oompany's reports show nothing warrant- ing this assumption. Vlaim 66,889, James J. Rogers; liabilily $500', plus five years' accumulation, $750' in all. Company offered to pay $50, asserting change in occupation to reduce indemnity to .$300, though there was no Change in occupation, and then that deceased 'had exposed himself to obvious risk, thus reducing this liability to one-fifth of $300, or $60. This second contention was overruled by the courts. The company also asserted that the deceased committed suicide, as to which there was not the slightest evidence, and further kept silent as to the bene- ficiary's right to accumulations. Judgment was recently rendered against it for the full amount of the claim and costs. Claim 30,004, Ernest Biehl; indemnity $30 per month. Claimant was confined to a hospital for one year. He was therefore en- titled to $360. ISiotice was given the liability department (not the industrial) of the company two days after the accident. The company defended the case on the ground of late notice, its theory being that notice to the liability department was not notice to the industrial department. The claim was finally compromised at $200. Claim 22,070, Sawa Ivaniech; liaMlity not given. Insured met his death by drowning but liability was denied by the com- pany on the ground of delay in furnishing proofs of death, though such delay was diie to the fact that benetioiary resided in Russia. Company refused to reopen ease on request of Russian Consul, asserting that owing to the delay it had already settled ^^ith its agent on his profit-sharing contract, in other %vords, paid him 50 per cent of the indemnity, and that therefore, " being clearly prejudiced by the delay " it would " have to stand upon the provisions of the policy." Company, however, ultimately paid claim after intervention of Maryland Insurance Department. Accumulaiions Claim , Crus Anderson; liability $300, plus five years' accumulations, or $4-50 in all. Insured was a stationary engineer and was drowned vrtiile fishing. Agent wired that he could settle for $300 " perhaps later there will be five tens," apparently referred to accumulation benefits. The company ignored accumu- lations and oft'ered to pay $200. Later it recognized accumulations and offered to pay $300. Agent, however, settled for $200, apparently obtaining a testi- monial. The following is quoted from the letter to the home office: " I had a h 1 of a time making those Swedes see where the $200 only came in, but got them going my way, as you will note. Will you have me 10,000 blotters printed with the letter upon it." Claim 90',«67, Charles F. Massey; liability $100. The insured was killed on a Saturday night and the settlement made on S'Unday. The agent reports thereon: " It was pretty hard to get this woman to sign anything. However, we got it bound up good and solid and saved about four 10 per cent, increases as he had been with us four or five years." 18 JSTational Ooxventiok of Instjeance Commissioners Claim , Harry L, Colby; liaUUty $100. Insured wns a brakemaii who had held a policy witJh tJhis company for over two years. He was killed. The agent in reporting the adj^ustment says: " This woman was wise to the 10 per cent, but I told her I could draw a draft for the $100 without the 10 per cent, and draw it right away. This looked good to her and we saved $20 Which she would have held out for." Lump Sum Settlements Claim 6566, Franeesca Spada ; liahility $100. Insured died from burns due to the upsetting of a lamp. The home oflBce manager wrote the local agent: " If you find this a legitimate claim you might oiler the beneficiary $50 in full and complete settlement, without having these papers completed." The claim was, however, paid in full, the agent replying: " I tried to make the sefttlement, but beneficiary refused for the reason tliat undertaker advised her not to as he would see that the company paid in full." Claim 76,950, Elmer R. Bailes ; liahility $500, plus one year's accumulations, $550 in all. Insured was a ticket agent and was drowned. Company promptly offered a quick settlement, without proofs, at $.300'. Special representative was un- able to accomplish such a settlement, and in the end paid $400. In his report he says: '■ This was a clear case and the best I could do. I had very little, in fact nothing, to talk about, you know. I only ' imagined ' I had and shaved off $100 by talk." Claim , I'hilip Purnell; liability $200. Insured met his death through accidental causes and under the terms of the contract the company was liable for the full sum. Company deducted $14 to cover cost of post mortem examination and paid beneficiary $186. The home office manager wrote the agent who made the adjustment instructing him significantly as follows: " Please get off the claim as cheap as you can. You may not be able to pay the full amount, as because in claims of this character considerable is saved in the payment by good talking and twisting of the contract." Foreign Beneficiaries — Undertaker Settlements Claim , Nicola Vonstantini ; liability $200. The insured was covered by a factory policy running to employer and was accidentally killed on June 17, 1908. Company promptly notified and names and addresses of relatives and beneficiary in Italy furnished. Nine days after death of insured, company paid undertaker $45 and marked claim as satisfied. Two months thereafter Italian Consul wrote concerning disposition of claim and for sometime endeavored to ascertain why the claim had not been paid to the beneficiary. ?lome office and its counsel resorted to dilatory tactics and only furnished information in response to specific questions. Thus case vir?s dragged along for two and one-half years. Employer finally ap- pealed to the United States Manager of the corporation who ordered the balance of $155 paid to the beneficiaries in Italy immediately. Industeial Health and Accident Settlements 19 The JMew York department, in commenting on this traJiB'axjtion, says: " ClearJy the industrial department of this company was informed immedi- ately after tlie accident that the decedent had a father and mother living in Italy and their names and addresses were given. It also knew that the employer was the trustee (under the policy) and that it could have paid to him. Instead, in pursuance of its policy of profit-sharing deception, where tlie beneficiaries were in distant lands, it took advantage of the presentation of an undertaker's claim; in eifect, to get rid of its obligation of $200 for $45, apparently deliberately intending to sit quiet until the period specified in its policy for presentation of claims by those legally entitled thereto should lapse, and thus take $155 from ignorant foreigners, whose representa- tive in the shape of the Italian Consul it later attempted to deceive as to the transaction, but who ultimately found it out." Claim , John FaUn ; liaMUty $200. This insured was also covered by a factory policy. His death was caused by sunstroke. The company wrote the agent that if there wa-s no beneficiary, agent might tell undertaker that company would guarantee his bill up to $50, adding: " Of course, you are aware, that in cases of this kind, the undertaker will run up a bill practically to the amount of the insurance every time, which is unfair to the relatives whoever they may be." Undertaker rendered bill for $72. Company cut it down to $60 and sent draft for that amount in full settlement of the claim. Undertaker then as- signed his claim againsit the decedent's estate to the insurance company. This was in September, IQliO: In November of that year company received a blank proof of death somewhat informally filled out, but signed by the widow who lived in Hungary. It did not Euoknowledge such proof — perhaips on the technical ground that the proof of death was not regularly filled out. There the mat'ter rested until February, 1911, when decedent's son wrote asking about the claim to which company replied: "We hold a release from the undertaker." Company had no release but only the assignment. The son persisted and company in March, 1911, writes that there was no evidence submitted "to show that this insured met his death so as to be entitled to indemnity under the accident clause of the contract." As to this transaction, the A'ew York Superintendent comments as follows: "To this letter the son did not reply; and the chief adjuster having, first, ' satisfied ' a claim of $200 by the payment of $60 to the undertaker ; second, ignored a notice of claim sent by the beneficiary, and third, deceived the son as to the facts and thus gotten rid of him, doubtless felt content." Claim , Luigi Belando ; liaiiJity $200. Insured accidentally killed. Company's Pacific Coast manager referred case to Philadelphia home office, giving such office address of beneficiary in Italy, and stating that such beneficiary was in dire circumstances. ;Siuch manager was thereupon asked to prepare proofs of death and same were furnished. 'JTie company, however, never communicated with beneficiary, and claim jackets bear the significant inscription, " Do not stir up." Claim never paid. Claim 77,148, Thos. Lavinsky; lialility $200. Insured was apparently covered by a factory policy. He was accidentally killed. The policy of the home office as to such eases is indicated in the following quotation from a. letter of its chief adjuster: " I beg to ask you to make investigation and report on same as to whether insured had any relatives in this country to make claim, and if not, whether you can get oflf for the funeral expenses as you have done heretofore." 20 JSTational Convention of Insurance Commissioners Claim 79,e0'8; George Uarinoff; liabiliiy $200. Insured covered by a factory policy and was accidentally killed. Employer wrote company stating that it had taken care of the hospital and burial expenses and wanted to send the beneficiary, who lived in Bulgaria, the full amount of insurance. Company replied that if employer would furnisih name and address of beneficiary and furnish proofs from agent, physician and under- taker, it would send claimant's blank to beneficiary. Name and addTess were promptly furnisdied. There the matter stopped. On January 31, 1911, about SIX months after the accident, industrial department of company informed liability department that " This claim has been cancelled on our records on account of the beneficiary failing to make claim f-jr the same." Great Eastern Casualty Company This company was organized under the laws of the State of JSTew York in 1892 and its capital is $250,000; It now operates in upwards of twenty-five of the iStates. It began doing an in- dustrial business in 1903 and in 1910, 34.8 per cent of its health and accident business was industrial. Its premium income from such business was in that year about $180,000. Loss Ratio On an industrial premium income of approximately $180,000 annually during the past four years, the ratio of losses to premiums has been, respectively, in 1907, 42.3 per cent; in 1908, 40'.2 per cent; in 1909, 39.2 per cent; in 1910, 40.7 per cent. Profit-Sharing Contracts Unlike the American Assurance Company of Philadelphia, the G-reat Eastern, which on this investigation makes substantially the same good showing, compensates most of its agents through profit-sharing contracts. Indeed, even the industrial department manager holds a contract of this kind. There are but eighty-four agents working on a strict commission basis and all except three of these do very little business. This company's agents are permitted to retain a commission for collection which varies from 15 per cent to 20 per cent, and at the end of every quarter, and in some cases every month, a statement is rendered the agent showing the condi- tion of his account, based upon the profits of the biisinees in his territory. These profits are arrived at by a rather complicated IwBUSTMAL Health and Accident Settlements 21 computation set forth in the lecsaminer's report. It is notable that in this company the evils seemingly incident to profit-sharing con- tracts are not noticeable. Adjustments This examination appears to have been a thorough one. The correspondence connected with upwards of 1,600 claims was ex- amined carefully. None of the tendencies to cut and scale claims unjustly, developed on examination of other companies, were found. All adjustments are made at the home office. Accumula- tion benefits are invariably paid, whether demanded or not. So far as noted, no claims have been wrongly pro-rated because of alleged change of occupation. JSTo lump sum settlements were found as to which complaint was subsequently made by policy- holders or the departments. The only ground for criticism in. adjustments is one concerning which conoededly there may be a fair difference of opinion. Thus, this company, as its president says, to avoid the possibility that it may waive its legal rights, always notifies a claimant of late notices. After having so notified, however, and its legal rights being thus established, it seems in meritorious cases to be willing to waive this technical defense and make a just settlement where the facts warrant. It should be said, however, that if a claimant, after being thus notified of his failure to comply strictly with the terms of the contract, makes no further effort to secure pay- ment thereon, the company considers the case closed. This un- doubtedly results in some meritorious claims remaining unpaid. Indeed, that this is so seems to appear in the high percentage of rejections and failures to make claim to notices received, such percentage for 1910 being 21.9 per cent as against 13.5 per cent for the company showing the next highest percentage, and an aver- age of about 17 per cent for all companies reporting to the New York department. This company should, if possible, develop some means whereby, without waiving its rights, it will pay all meri- torious claims when notice is not so late as to preclude proper inquiry by it into the facts. 22 ISTatiowal Convention" of Insurance Commissionees American Assurance Company of Philadelphia This company was organized under the laws of Pennsylvania in September, 1903. Its original capital stock of $25,000 has been increased several times and is at present $200,000. It is now authorized in nine States. While it does a small industrial life business in some States, its operations are chiefly in the industrial health and accident field. Its ix)tal premium income in 19 10' was $317,000, of which but $48,000 was in the industrial life field. Loss Ratio The company's loss ratio on all business for 1908 was 31.7 per cent, for 1909, 29.6 per cent, and for 1910, 32.9 per cent. The loss ratio on health policies for the same years was respectively 34.9 per cent, 30.3 per cent and 34 per cent; and for accident policies 37 per cent, 33.1 per cent and 33.7 per cent. In making up these ratios, however, the policy fee paid the company is not in- cluded, though the first month's premium, retained by the agent and aggregating $30,000 in the year 1910, is included in the figures for that year. Profit-Sharing Contracts This company has but one profit-sharing contract outstanding. It compensates its agents either by weekly salaries, the division and district managers being thus paid, or by a policy fee and goodly percentages of the earlier premiums paid on policies, this being the usual method of compensating the field agents. Adjv,stments The adjustments of this company, both death and disability, are made at the home office, though largely on the reports of the agents in the field. The company makes a specialty of what it calls quick settlements. Immediately on the receipt of a prelim- inary report the home office forwards the agent in whose district the claim arises a blank form upon which such agent makes his recommendations. Final reports showing actual time of disability are seldom requested. The company's preliminary report blank Industeial Health axd Accident Settlements 23 also contains the following statement: "If paid at once, I am willing to accept $ . . . . in full payment for my claim for this disability." Most of the claims presented are for disability. They are set- tled promptly and fairly. No evidence was found which indicated that the company took undue advantage of the " change of occupa- tion " clause in its contract, or resorted in meritorious cases to dilatory tactics or technical defenses. On the contrary, it seems to treat its obligations to policyholders in the spirit as much as in the letter of its contract. It does not grant accumulations and believes that clauses of this kind should be eliminated from health and accident insurance contracts. In short, its methods in adjust- ing the claims of the policyholders are so different from those noted elsewhere in this report as to entitle it to the hearty com- mendation of this committee which is here cheerfully given. Phoenix Preferred Accident Insurance Company This company is a Michigan corporation and is authorized in ten other States. It was incorporated in 1905 and now has an authorized capital of $100,000; Besides so-called commercial health and accident insurance, it writes industrial and factory policies, the premiums on which are payable monthly; while the indemnity in case of accidental death varies from $100 to $1,000, depending upon classification and premium. Its premium income on its commercial business in 1910' was only about $27,000, while such income from its industrial and factory business was about $175,000. Profit-Sharing Contracts Only about 10 per cent of this company's industrial business is done through agents holding profit-sharing contracts ; 90 per cent of its agents are compensated in part by salary and in part by commission, or in whole by commission. Loss Ratio On the figures submitted by the examiners the loss ratio for the entire business of the company in 190'9 seems to have been 33.2 per cent of total collections, and in 1910, 33.4 per cent of total col- lections. Included in the total of payments to claimants, by which 24 National Conventioit of Insubaijce Commissioneks such loss ratio is arrived at, are, however, most of the field adjust- ment expenses, including attorney fees, inspection fees, special medical fees, court costs and interest on judgments. Hence it is impossible to state the exact ratio. The loss ratio under profit-sharing contracts furni&hed the Nev? York department, viz., 29 per cent, was, therefore, erroneous. Adjiistments Substantially all adjustments are made at the home office. The investigation included the examination of all specific claims for 1908, 1909, 1910, and the examiners' report sets forth a sum- mary of every adjustment in those years where the illness or in- jury resulted in death. Such investigation included also all specific claims for 1911 to the date of the examination; as well as a test examination of the disability claims for the first nine months of 1910, claims being selected more or less at random, though an effort was made to examine the more important cases, without reference to whether the adjustment was good, bad or indifP:erent, It will be seen that the examination of this company's adjust- ments was complete and thorough. The conclusions of the com- mittee drawn therefrom are, therefore, the more emphatic and condemnatory. Indeed, it may be stated that as to the death claims a just adjustment is so far the exception as to call for comment. The committee has selected from the examiners' schedule a num- ber of cases, the adjustment of which is thought to be characteris- tic of this company's methods. There are many more such. The frauds — ■ or worse — perpetrated by this company vary in degree from those involving what is, in effect, the theft of the policy con- tract in a death case, and the unreasonable requirement that a beneficiary have an administrator appointed in order to become qualified to make a claim and receive the indemnity of $5, to ad- justments of disability claims whereby liability for partial dis- ability covering a few days is evaded by snap settlements on total disability, through misrepresentation on the part either of the home office or its field representatives. This examination, like those of other companies, shows cases where the company has taken advantage of " exposure to obvious risk." Beneficiaries living abroad rarely get anything. Many of its contracts include the accumulation benefit, and, where they do, Inbtjstkial Health and Accident Settlements 25 such benefit is apparently ignored. Eelatively few cases were found where " change of occupation " was asserted. Such com- pany, however, seemingly pursues a policy of silence and delay in the adjustment of claims. Its files — and this applies not naerely to death claims but also to ordinary disability claims, even where the amount involved is small — show scores of cases where by the simple process of either ignoring letters or postponing re- plies for unreasonable periods, the claimant has been worn out and liability thus evaded, or else forced to an unjust compromise. In carrying out this policy, unjust advantage has been taken of late notice and of failure to comply technically with the contract in making proofs ; while at times knowledge of the existence of the claim has been denied, when the facts were ftilly known at the home office. Indeed, petty subterfuges and lying statements are often resorted to in such a way as not merely to characterize the home office management, but also to tar some of the agency force with the same stick. This summary would, however, not be complete without specific reference to certain cases which perhaps suggest crime. Claim 31,805, Frank Harmanj liability $300'. Insured was killed December 5, 1908. He had had a policy in the Columbus Mutual Benefit, which expired December 7th. A Phoenix Preferred policy was issued and paid for on November 28th, it being understood' between the insured and the agent that the Columbus Mutual Benefit policy would be dropped. At the time of the insured's death, the Phoenix Preferred's agent had possession of both policies. On December 9th — four days after such death — such agent wrote to his company asking it to send him an indorse- ment to the ett'ect that the policy was not in force until the Columbus Mutual Benefit's policy expired. The company replied, asking the agent to forward the policy to the home office. The company then apparently put an indorse- ment on the policy in accordance with the suggestion of the agent. The com- pany was sued and defended as per such endorsement — and won. In the opinion of the committee that was not only fraud but forgery, and those responsible therefor should be presented to the criminal authorities for indictment. Claim 31,958, William hinh; liability $300. Policy concededly issued and paid for. Insured killed in grain elevator, while performing his duties. His widow, who had possession ot the policy, delivered it, within two days after the accident, to the company's district manager. The latter then forwarded the policy to the company with a brief memorandum on a slip of paper, saying, " Will write you to-morrow in regard to this. I don't want to keep it in this office." 26 National Convention of Insueance Commissionees The Mxt day the company replied: "You were wise is not retaining any- thing in your office." --Vnd, later reprimands its manager for sending in a preliminary proof, sug- gesting that " it may cause us trouble." A month later when written to by the attorney for the claimant, the com- pany states that it is unable to find such a claim and imagines that the widow has made a mistake in the name of the company and repeatedly there- after denies that there is any record of such a policy. As a result of this ilagrant larceny of the claimant's evidence, the company forces a compromise for $150 though informed that the claimant is a woman in destitute circum- stances, with two small children, one of them but four months old. Claim 160,500, Raimondo Diorio; liability $200. insured was a section-hand and was killed October 13, 1909. Policy had been issued to him on his agreement that he would pay his policy fee the next pay day, October 15', r9'09. On receipt of word from district manager that insured had been killed and that policy had been issued and delivered September 29th and that the policy fee was to be paid as above mentioned, home office instructed manager to secure possession of policy so that there would be nothing to show that application had been made. Local manager wrote back: " Will say the policy is no longer in existence. Mr. Calabrese beat the lawyers to it." For this home office thanked the manager. Later manager wrote home office: " Well I thought the claim as dead as Diorio, but this A. M. a lawyer appeared on the scene, representing the administrator. I had no information to give him." Home office then wrote: "Will you let us know what information is in their possession in order that we may not put our foot in it." Nothing was ever paid on this claim. In the opinion of the committee, this company should not only perform its full obligation to the claimants in the last two cases, with interest thereon, but should also pay whatever expense they have been put to, and the person or persons at the home office who thus colluded in the suppression of these policies should receive the attention of the criminal authorities. It should be apparent from what precedes and from the cases which follow that the management of this company is, by its own conduct, so completely discredited that its further continuance in business under such management is out of the question. At his request, however, the future status of this company has been by the committee referred to the Commissioner of Insurance for the State of Michigan ; upon whose advice in the premises the various States where such company is now authorized to do business are requested to act. IwDUSTEiAL Health and Accident Settlements 27 A hearing was granted at the Detroit meeting of the commit- tee. The representative of the company then present conceded that the adjustments criticized by the examiners, indeed that the whole attitude of the claim department of his company toward policyholders, was reprehensible and merited the severe criticism accorded. He claimed, however, in what seemed to be a desire to avoid personal responsibility, that most of the settlements so criticized had been made or authorized by the former secretary of the company who is now no longer connected with it, and that, since October, 1910, when he became solely responsible for such adjustments, there had been a marked improvement therein. While the committee was not able to agree with him that such improvement was marked, it accepted the views of the examiners that the settlements of this company were not now so much sub- ject to criticism as they had been. The committee was, however, of the opinion that, in this company as in others, radical changes in the claim departments were necessary, to the end that those who, by long service in that department had become hardened to the rights of policyholders, might be deprived of control over adjustments hereafter. Cases — Showing Dilatory Tactics Claim, 29,046, Joseph Kyllonin; liability $100. Insured was killed on jSiovember 25, 1'908. Comipany notified by letter mailed within ten days, but not received until twelve days after death. Bene- ficiary resident of Finland. Adjustment dragged out until September, 19€9, when company intimated that the claim was outlawed. Beneficiary finally forced to compromise for $30. Policies Nos. 156,925 and 148,566, Abraham DeBrine and Jacob DeWinde; liabilities respectively $300 and $200. Both insured accidentally drowned while fishing. Probably under the in- fluence of liquor at the time, and company asserted right to reduce to one- fifth of indemnit}'. Company advised its agent to keep away from bene- ficiaries and under no circumstances to look them up. Six weeks after accident, attorney for claimants writes company that he has talked with coon- pany's agent but " doesn't seem to get anywhere in regard to payment of loss." Company then writes attorney : " We are surprised to receive notice at this late day.'' Attorney replies that company had " written notice within ten days after the death " and " we at all times are ready to furnish you with affirmative proofs." Nothing ever paid on these claims. 28 National Convention of Insueanoe Commissionebs Claim 33,035, James Starron; liability $300'. Insured killed while coupling oars. Beneficiaries were six small children — penniless. Oompany reduced liability to $100, on claim of change of occu- pation, and then asserted that its liability was but $10 because of carelessness of insured — though he was killed while performing his regular duty. Com- pany later questioned its liability on account of delay in furnishing proofs, in spite of the fact that such delay was caused by company's want of prompt- ness in furnishing proof blanks. Representative of claimants writesi that he will put the case in court. Company replies that it will drag along for years. Company sends check for $50. Compromise six moaitha after dcafJh. Claimant replies that he will not accept less than $100. No further cor- respondence. Vlaim 29,935, Abraham L. Lease; liability $100: Insured accidentally killed on October 1, 1908; proofs promptly furnished. Without any apparent excuse, company adopts dilatory tactics, and claim not paid until fourteen months after death, and then only after the Michigan Insurance Department had taken the matter up with the company. Claim 29,424, Mary J. Austin; liability $100 plus three years' accumulation, total $130. Insured died April 20, 1909. Company notified by doctor on April 22d, on which date company's agent sends in policy. Insured's mother writes com^pany on May 26th regarding claim, but company gives vague reply. In- sured's mother writes company again on June 30th, but company replies intimating late notice. Claimant's attorney writes company July 9th, but company keeps up dilatory tactics until suit is brought on October 18th', when company's attorney writes that, though there is no doubt about the company's liability for $130, he can get a compromise at $90 — and the claim is com- promised at that amount. Policy 135,8n'5, Joseph Horioat ; liability $300. Insured accidentally killed on January 19, 1900. Company notified by agent two days thereafter. Company replies to agent, advising him to let matters rest. In i'ebruary, agent writes oompany and wants to settle claim, and again in March, forwarding copy of coroner's verdict. Beneficiaries live in Hungary. In April, the Austro-Hungarian Consul takes up matter with com- pany. Though company is fully informed as to facts, it keeps such Consul busy for several months filling out proofs. In January, 1910, Consul writes asking reply to letter of November 30, 1909. Then he apparently gives it up, and no payment is made on the claim. Claim , Theodore Linnenbrink; liability $400. Insured drowned on July 25, 1910'. Company adopted its usual dilatory tactics and dragged the case out; thus succeeding in evading any payment whatever. Policy 89,248, Mike Koran; liability $300. Insured died from fracture of the skull, March 29, 1907. The company, using first one excuse and then another, delays in every possible way settle- ment of claim, though its agent vrrites, on April 18, 1907, that there is not a sihred of evidence that the policy was delinquent. The beneficiary — who Indtjsteial Health and Accident Settlements 29 could not speaJj English — was thus forced to engage an. attorney. So far as the records show, these dilatory tactics were successful — and no payment was made. Policy 174,898, Louis Seelbach; disahility claim. Company claims policyholder did not furnish final proof. Policyholder viTites company twice, stating that the same was furnished agent, and asking whether he shall not fill out another. Company ignores such letters. (Jlaim 33,038, Laura A. Smith; disahiUty claim. Insured claims for 39 days total and 10 days partial disability, amounting to $54.66. Company claims occupation has been changed- — ^ which was not true. Company claims monthly reports were not furnished by physician — which was not true. Company claims over-insurance — which was not true. Claim finally compromised at $40. Claim 31,624, John Johnson; disahility claim. Insured's claim is at the rate of $35 per month. Claimant insured as a " carpenter-framer on building." Company pro-rated claim to $25 per month, asserting that claimant was a millwright; this, though the manual of rates applicable to this policy fixes the indemnity at $35. The company first ofiered $10; claimant asked for $20. Company then offered $16 and sent check. Claimant returned check and asked for blanks for final proofs. Weeks later, company returns original check as compromise and says settlement is very liberal. Claimant returns check and says, " You take me for a aoxcker." Company waits a month before answering letter. Claimant then writes say- ing that he will write the Michigan Commissioner of Insurance. Company then oft'ers $27, which is accepted. Claim 32,095, Mrs. Aretta Wilcox; disability claim. Final proofs received May 6, 1910. Company adopts its usual dilatory tactics, as to which the examiners say: " See correspondence for methods used in attemipting evasion." Michigan Department takes up case June 1, 1910. Claim paid in full June 28, 1910. Claim 32,508, Michael lingner : disahility claim. Preliminary proof received January 31, 1910. Company writes agent ask- ing if premium is paid. Final proof received Febraary '28. Company again writes agent asking if premium was paid. No attention paid to claim until ajttorney for claimant writes company on May 2-lth. Company then replies, on May 35th, that it has no record of the claim and that the policy was lapsed — ^both being falsehoods. Company forced to settle some time in August. Claim 32,349, J. J. Allenhaugh; disahility claim. Preliminary proof does not show that there were visible marks of injury. Agent writes company that rheumatism caused most of the disaibility; but that, as the insured had a Cadillac policy, the company should be liable, any- way; company writes that insured should be held to claim based upon acci- ' dent, though, if he had known more, he would have made claim based upon illness. Insured laid up nine weeks at least, and policy called for $40 a 30 National Convention of Insueance Commissioners month. Company, therefore, liable for about $100. By tactics indicated it brought about a compromise at $4{)'. Claim 33,959, diaries Zommers; liability $4C0. Insured accidentally killed August 18, 1910. Agent notified company by telegram and was advised by comipany to keep mum. Agent geits possession of policy. Company in every way attempts to evade and scale claim and linally settles with claimant's attorney, December 30, 1910, by a payment of $275. The examiners say: " Company had some grounds for claiming undue exposure to risk but the methods used in dealing with claim outrageous. See correspondence." Notice and Proof Late — Not in Benefit Claim 26,015, Joseph Loder; funeral benefit $100. Claimant died on May 12, 1908, of illness which began April 21st. Com- pany notified of death within five days after same. Company, however, began to claim late notice, on the ground that the notice should have becB given ■within ten days of the beginning of the illness — though the claim was for funeral benefit, which accrued only on the death of the insured. Thus, the company forced a compromise settlement at $50, which was paid about four months after. Claim 33,991, Harvey L. Cole; liaiility $300 plus four years' accumulations. Total $420. Insured accidentally killed on July 22, 1910. Agent of company notified live days after accident, but no notice given the home office by the beneficiary. Company sets up defense of late notice and thus forces a compromise at $200, payment being made January 6, 1911. Claim 31,192, Nicholas Dqody ; disability claim. Company's ovm physician neglects to notify company within the ten days. The company asserts this as a defense; first denying liability, tihem offering a 50 per cent, compromise. Claim being for $37, company finally settled at $30 — thus '■ saving " $7. Claim 31,062, Edward 8. Fischer; funeral benefit $100. Insured died in January, 1910, of typhoid, ilouthly premium due January 1st, a legal holiday. Insured's wife called at the company office that day to pay premium — office closed. She called the next day and made same effort, but agent refused to accept premium, claiming that it was overdue. I'resumably the agent knew that the insured was ill. It is asserted that he had a grudge against the insured and had been trying for some time to lapse the policy. Company took advantage of the agent's action and stated that the insured was not in benefit when he died. By this it forced a compro- mise of its liability at $50. Policy No. 00,253, Andy Feeula; liability $200. Insured accidentally killed while riding on a freight train. Hence 10 per cent, clause applicable, and the amount due only $20. Company, however, claimed that premium had not been paid for February, 1908, and that, there- fore, insured was not in benefit, the accident occurring on the 9th of the Industeial Health and Accident Settlements 31 month. The records of the company, however, show that a double payment was made by the inspired in February, I906, which, the subsequent payments having been made regularly, carried his policy over to March 1, 1908. Finally the company raised the defense that the claim was outlawed. Nothing paid by the company. The examiners comment: " If the company's defense is correct, this policy would never have been of any benefit, as the insured always paid his premiums about the fifteenth of the month." Disability SeUlements Policy No. 152,263, Charles Oberle; disability indemnity $20 per month. Preliminary notices of illness furnished company. Insured afterward died of pneumonia. Company forwarded final proof blank to agent who wrote that he did not dieliver the same. Company rtherefore has no ground on whioh to ignore liability since proofs were not completed. Widow therefore prevented from completing claim. Claim No. 32,301, Frank Kiefer; indemnity not stated. Examiners state, " Wheedled into compromise by lying agent." Policy No. 158,489, Charles Conklin; indemnity $50 per month. Insured writes company aboiit injury to ribs caused by a fall, evidently for the purpose of notifying company, but fails to ask for preliminary proof blank. Company sends a sympathetic letter in reply, but does not enclose blank or instruct insured how to proceed in case he has a claim. Policy No. 46,9'90, Alhrecht Hyf; indemnity $3i0i per month. Insured died after ten days' illness. Five days' disability or $5 had accrued. Company called for appointment of adlministrator and thus evaded claim. Policy No. 16,438, Grant Weaver; indemnity $40 per month. Cormpany authorized adjustment for $8, whioh was made. Local agent and attorney wrote company for check. Such letters ignored by company and claim then apparently dropped. Policy No. 156,6i68, Archie V. Collins; indemnity $60 per month. Agent writes application with understanding that policy is to be issmed to take effect March 26th. Pressure of business prevents agent from delivering policy until March 28th, though same dated 26th. Insured sufi^ers minor accident March 28th, which entitles him to $10. Company rejects claim assert- ing, apparently without warrant, that insured was not in good health when policy was delivered. Policy No. 143,711, Michael Linsing; indemnity $30 per month. Claim rejected because insured went to doctor's oifice instead of doctor attending him at home. Claim .3'3,148, Alfred Orapolik; indemnity $40 per month. Insured injured August 16, 1910. Resumed work September 12, 1910. Suffered relapse September 16, 1910, and confined to hospital for some time. Agent informs company of above facts on October 14th. Company at once sends check for $40', one month's indemnity. Agent goes to hospital and tells insured, who understands little English, that he is not entitled to more on 32 National Convention of Insurance Commissionees aecoumt of conflicting diagnosis by physicians, though agent knows the con- census of opinion of various doctors favors the diagnosis of the preliminary report. The ignorant claimant takes check and' larter finds that he has re- leased company. Policy No. 146,086, W. F. Maguire; indemnity $4)0 per month. Claim for $-19.33 regular in all particulars but liability ignored by com- pany. Accumulation Cases The company's practice is persistently to ignore tlie accumula- tion benefits. Under the wording of some of the clauses it may be claimed that the insured must pay his renewals on or before the first of every month in order to entitle him to same. The company, however, does not appear to have made use of this in- terpretation to avoid paying same, but ignores the accumulation entirely. Whenever the policy on its face shows it to have been in force long enough to entitle it to accumulations, the examiners noted same as ignored regardless of technical interpretations, as the company does not take the trouble to look the records up to see whether claimant is entitled to accumulations under any interpretation. Claim 29,3 IS, Herman Oetsil; liability $200, plus three years' accumulations, or $260. Claim settled at $200. Claim 29,821, John S. Bradus; liabiiity $300; with one year's accumulation, or $330. Company settles for face of liability, keeping silent as to accumulation, and asks for a testimonial. Claim 34,39'6, George Round; liability $200 plus $60 accumulations. Claim settled at $200; accumulations ignored. Claim 32,224, John G. Camp; indemnity $186.60 phis $18.67 accumulations. Claimant calls company's attention to same. Company then sends adldi- tional check for $18.67. Change of Occupation Cases Claim 25,2,51, Joshua C. Shaull; liability $200. Accidentally killed vrhile hunting crows. Occupation rediuoed from farmer to " hunter " and indemnity paid as if insured's occupation had been that of a hunter. Claim 30,844, Frank Beebe; indemnity $40 per month. 'At time of accident insured was engaged in ice fishing for recreation only. Company's manwal has no classification for fishing for recreation. Insisted, however, on pro-rating claim to classification of fishexmaa and paid claimant on that basis. Industrial Health and Accident Settlejients 33 Claim 35,2&6, W. B. Bevington; UaUliiy $300. Insured accidentally killed by a fall of 85 feet. Claim regular in all its particulars. Attitude of company indicated in following quotation from letter of its adjuster. " We do not see what benefit the words ' no derrick ' are going to be, unless it may be of gome assistance to you in ' blulting them down to $100.' " Company finally succeeded: in carrying out such bluff and secured testi- monial from the beneficiary. Miscellaneous Cases Claim 26,079, Joseph Kooijancio; liability $200. Insured accidentally killed. Local office of company notified within two days after fimeral, yet company writes attorney six weeks later that it was not aware that insured was killed. Beneficiary lived in Austria. Examiner states: "Apparently legitimate claim in every way, but the company delayed settlement in every possible way." Company finally settled claim for $200. Claim 29,745, Charles Spatz; liaWity $2C0. Insured, who could swim, was crossing canal about 300 feet wide in a leaky boat. Boat sank and insured was drowned. Company pro-rated liability on the ground that insured had exposed himself to obvious risk, in trying to assist companion who could not swim. Examiners comment: " In the correspondence are very interesting suggestions by the agent, among others, to pay the undertakers and secure possession of the policy in that way." Claim No. 34,370, M. C. Dolsen ; liability Insured drowned. . Company asserts right to pro-rate because decedent had exposed himself to obvious risk, it asserting that he was nearly drowned in the same spot a few days before. Claimant sues and recovers judgment in full. Best Policy Settlements Clavm Ko. 29,534, Waller H. Camil; liaUlity $400. Accidentally drowned. Agent writes: " The proper thing to do to save our clients is to pay in full ; otherwise it will make a great stir up among all our clients." Claim paid in full. Claim ]Vo. 35,516, Edward Gregg; liability Claim paid in full upon urgent request of agent, he asserting that prompt payment will undoubtedly help in building up a business of several thousand members. The examiners also state that the special factory policies issued to the employees of the Great Lakes Engineering Company appeal to be settled promptly and satisfactorily to the claimants. Tho reason for this is obvious, the premium of this company from this one source having been about $7,000 in 1910. '2 34 Natio.xai. Coxvextion of Insueaxce Commissionehs Continental Casualty Company This is the largest of the companies examined in the present investigation. It was incorporated under the laws of Indiana in 189'7, and, since 1900, has had its principal office at Chicago. Its capital is now $300,000. While originally it could do the busi- ness of life insurance, it has never written any business except that of personal accident and health insurance, and is now licensed to write such business in all the States and Territories of the United States. The company divides its business into the following gen- eral classes: iCommercial, railroad, factory, ticket, coal mine, industrial and monthly commercial. The present examination has had largely to do with its adjustments on industrial, monthly: commercial and railroad contracts. Its premium income on these classes of business, in 1910, was: Industrial, $810,000; monthly commercial, $60^7,000 ; railroad, $1,252,000. Its industrial poli- cies provide a maximum death benefit of $1,000, with a maxi- mum indemnity of $100 per month ; its monthly commercial poli- cies, a maximum of $2,500 for death benefit and $100 for monthly indemnity. Its railroad business is done through franchises or contracts with the various railroad companies throughout the United States, premiums being paid through pay orders signed by the insured employees and honored by deductions or cuts from their wages. For this service the railroad companies charge a small collection fee. For the more hazardous occupations, the indemnities in the railroad department are small, but, for officers and passenger conductors, the death benefits are as high as $5,000, with indemnities of $25 a week. The business done in the fac- tory and coal mine departments and in the ticket department (th? latter issuing travelers' accident tickets) is, thus far, relatively small. Loss Ratio Excluding the commercial and the ticket business, which can- not be classed as industrial, the total premiums of the company for 1910 amounted to $2,787,125.18, and the claims paid during the same period to $1,146,789.45, which indicates a ratio of losses paid to premiums collected, for that year, 41.14 per cent. The ratios for 1910, in what may be called the industrial department, are reported by the examiners to be as follows : Industrial policies IliTDUSTEIAL HeALTH AND AcCIDENT SETTLEMENTS 35 37.45 per cent; monthly commercial policies 35.32 per cent; rail- road policies 45.79 per cent; factory policies 43.28 percent; mines policies 55.91 per cent. The persons indemnified by the industrial and the factory policies are substantially of the same class ; hence, the difference in the two ratios — 37.45 per cent in the one case and 43.28 per cent in the other — ^probably indicates as in other examinations made by direction of this Committee that the laborer who settles with the company through his employer gets better treatment than does the laborer who settles direct. Profit-Sharing Contracts Eighty-two of the older agents of the company have profit- sharing contracts, which, in most cases, provide that the agent shall receive a percentage of the net profits of the business secured in his territory — this in addition to his regular commissions. Other ■agents are compensated by either salary or commission or by both. The company has no records from which it can supply loss ratios showing its experience on these various kinds of compensation. A policy fee is charged the policyholder in the industrial depart- ment, amounting to $5, which carries the policy in force for one month. This fee is retained by the agent. Adjustments The business of this company is so large that, though the examination covered a month, the examiners had little time to investigate the accident and sick benefit claims, but they appear to have made a cursory examination of the company's prac- tice in this particular. They concluded that a thorough exami- nation of the claims, such .as death, and limb and eye loss where the indemnities are specific, would fairly show the policy of this Company in making adjustments. All death, limb and eye loss claims in the industrial department filed with the company from January 1, 1909, to June 30, 1911, approximating 1,500 claims, were investigated, and the results are given in the report. Soma adjustments in the commercial department were also examined. Adjustments seem to be made at the home oflice, except in the cases of agents in the field, who, on a showing of fitness, have been given power to do this work. At present, there are seventy-nina 36 JSTaTIONAL CoNVEISTTION of InSUEASCE CoMillSSIONESS such agents. Each is required to furnish proof in justification of the amount alleged to be due on a claim, and his work is verified by an adjuster through frequent examinations. All questions involv- ing the medical phases of a claim are referred to the medical director at the home office. The number of claims filed in the office of the company for 1909 were 34,501, and for 1910, 47,462; such claims covering all the classes of business which the company writes. This company, in many claims, fails to recognize what this Com- mittee deems is its moral obligation to policyholders. Indeed, its policy may be indicated in the following phrases taken from its home office correspondence: " Disregard any notification which may be made, directly or indirectly, to your office." (i. e., the agent's office.) " When we receive notice by the proper party interested in the matter, will be pleased to give the same consistent atteHtion." " Certain requirements as to notice are made by the contract, and the company cannot take action in the matter until these requirements are com- plied with." " Whenever you hear from your sub-agents that somebody has been acci- dentally killed, immediately thank them for it and wait for notice from the beneficiary named in the policy before taking any notice of claim." " I feel constrained to say, without casting any reflection upon our claim department, that it is somewhat disposed to pro-rate claims by the ' rule of thumb.' " " We believe, however, that you will be able to justify the salvage." The word "salvage," applied to savings on adjustments, inevi- tably suggests profit-sharing and dividends; while the insistence of the home office on the " rule of thumb " in interpreting its con- tracts, and its frequent instructions to its agents, in effect, to keep mum as to liability evidenced by its contracts and which, through injury or illness have accrued against it, are far from the treatment which should be accorded the insuring public by this or any other insurance company. It is to be noted, also, that there are many compromise settlements — the reason for which does not appear in the correspondence of the company, whose of- ficers and representatives are, in this respect, less frank than are those of other companies which follow the same practices. The policy indicated results in numerous cases where the com- pany, though informed of the accident by agents or undertakers, escapes making payment because the beneficiary is not as well Industrial liEAi/ni aiXd Accident Settlemea-ts 37 informed; in "change of occupation" cases, where the change is more shadowy than real; and in quite a large number where, either through technically late notice or failure to notify by the exact person specified in the contract, a " salvage " is accom- plished, which cannot be justified save on the " rule of thumb " — and, in some cases, not even on that. As in other companies examined during this investigation, this company also persistently evades the payment of accumulations; evidently considering the claimant's right thereto in the same category as the right of the claimant who does not know that he is such, and, therefore, makes no claim. There are also evidences of a willingness to keep silent about claims where the beneficiaries live in foreign lands ; and the desire to evade payment entirely, in a goodly number of cases, where, at least, the company was liable under the contract for one-fifth of the indemnity. iWhile the volume of business transacted by this company is large the number of cases cited by the examiners for comment or criticism is more than 12 per cent, of the cases examined and re- ported on. More, if the so-called railroad cases are eliminated on account of the fact that the insurance company is forced for business reasons usually to make fair settlements, the cases sub- ject to criticism appear to be at least 20 per cent, of those exam- ined. Indeed, a majority of the industrial and monthly commer- cial policies seem to be cut down for one reason or another. The exhibits attached to the examiners' report thus make clear a con- dition of things which calls for prompt and efficient reform in the claim department of this company, or, in the alternative, drastic action by the various States. The facts brought out on the examination of this company, with the views of the Committee thereon, were called to the attention of such company at a hearing granted to it, at Detroit, Mich., on August 14, 1911. At such hearing the examiners' report was accepted by the representative of the company, who then stated that not only the criticised adjustments would be re-examined under his personal supervision and just restitution would be made, but that he already had established in his company a board or committee of review, to which would be referred hereafter all im- portant claims adjusted by his claim department for less than the 38 National Convention of Insukance CoMiiissioNEKS principal sum. Such representative quite franklj deplored the conditions in his company developed by this investigation^ and assured the 'Committee that every effort V70uld be made to prevent a recurrence of such conditions. In the opinion of the Committee the conditions referred to are to a considerable extent traceable to a callousness in the claim de- partment of the company, due perhaps to natural causes, the same man or set of men having for years been charged with the same duty and having thus become indifferent to the rights of claim- ants. For this reason the Committee at the Detroit meeting deter- mined to suggest to this Company certain changes in such department. Cases. The following cases have been selected from those reported by the exaniiners as being indicative of the adjustment tendencies in this company: Company Methods Claim 410,070, A. W. Vaught; liahilitij $100. Company was notified of accidental death of insured by his employer and liy his agent. Employer requested that proofs be sent to him personally. Company replied to employer as follows: " Certain requirements are made of the beneficiary under the policy in a case of this Icind, and until these requirements are complied with the company could take no action with reference to this matter." It may be asked why the company did not point out such requirements. Company also replied to notice from agent as follows : " We are, however, unable to take your letter as a notice of the claim ; for as you possibly know the policy requires that notice must come from the beneficiary direct and in writing." Xo final proof blanks were sent to anyone and nothing further seems to have been done in the case. Claim 406,010; Joe Washington; liahilily ,$300. Policyholder insured as a fireman of locomotive. Claim pro-rated to $100 on classification of " brakeman, log train." Company's agent wrote advising of death of insured, requesting proof blanks. Company replied: " We have not as yet received notice from the beneficiary and will take no action until same is received. Wlienever you hear from your sub-agent that someone has been accidentally killed, immediately thank them for it, and wait for notice from the beneficiary named in the policy before taking any notice of the claim." Claim 379,715, JTanison Goodwin; Uahility $300. Insured probably killed by another, hence liability could have been pro-rated under one-fifth clause. Insured was a negro and company was notified of death by his father. Company replied " When we receive notice by the Industeial PIealth and Accident Settlements 39 proper party interested in the matter, will be pleased to give same consistent attention." It apparently was not consistent with this home office's sense of duty to the beneficiaries of this negro to point out how proof could be made and furnish blanks. Claim jacket is indorsed " not proven." Nothing paid. Claim 339,493, 8. F. Jenkins; liability $1,000. Insured mxirdered and company entitled to reduce liability to one-fifth. Company was notified of death by the recording secretary of the I. 0. 0. F., at Anaconda, Mont. In acknowledging letter the company says : " The matter will have consistent attention." It evidently did, for no proof blanks were sent and nothing has ever been paid on this claim. Claim 377,487, /. G. Allen; liahility $2,000. Insured killed by a fall from a scafl'olding on wliicli he was iit work plaster- ing overhead. I'eceased was a negro. Company had claim investigated by Hooper-Holmes Information Bureau, and requested coroner to furnish copy of findings at autopsy. The facts developed by examiners indicate that com- pany was liable. On receipt of notice of death from agent company wrote latter : ■' Xotification lias not been made to this office of this death or desire on the part of the beneficiary to file a claim for any indemnity which might be due and payable. Therefore, I am taking no recognition of this claim and will not until notice is formally filed here hy the beneficiary, and I will thank you to disregard any notification which may be made directly or indirectly to your office." Company has filed jacket away " not proven '' and nothing has been paid on the claim. Claim 401,678, Fred liloers; liahility $300. Insured was a carpenter. Agent wrote that beneficiary had been in his office about the claim a number of times but had never furnished a written Kotice, and asked for instructions as to whether or not it would be best to furnish proof blanks and formerly reject claim on the ground that the man died from causes, or " let it drag along for the past several weeks ? " Home office replied : " We have yours of the 8th inst., Fred Rivers matter, and in reply to same will say that we believe that it will be best to let it sleep for the present, and porhaps we will never hear anj-thing from it." It evidently did sleep. Jacket indorsed "not proven.'' Nothing paid on claim. Claim 341,965, ?(elson Gerom; liability $200. Insured was a track laborer and met his death through a sunstroke while Tinloading a coal car, the day being intensely hot. Home office brought about a settlement for $100, by calling attention to the provisions of the policy covering this casualty, by stating to its agent: ." You will observe that the policy does not provide that th.e principal sum shall be payable for death from sunstroke merely, but only when the sun- stroke is the result of purely accidental means. Now the company has never refused this claim but we have asked proof of the accidental feature upon which this claim is based. On reflection it will clearly appear to you that this was a claim, ordinary sunstroke from exposure, and there was no 40 National Convention of Insdkance Commissioners accidental' feature involved therein, which, of course, would be necessary to entitle the beneficiary to recover. However, in the company's liberal manner, I am tendering the beneficiary, through you, a compromise allowance." Claim 341,951, Alfred Smith; liability $200. Insured died as the result of a sunstroke. Agent holds a profit-sharing contract. Home office wrote agent: "There is a clause in the policy wliich provides full indemnity for death from sunstroke accidentally received. You will remember the phraseology: ' if sunstroke — due to external violent or purely accidental means shall result — the company will pay full indemnity.' Kow if you can figure out what sunstroke accidentally received is, in distinction from sunstroke as the legiti- mate result from exposure you will be able to figiire out whether or not this is a condition covered fully under the contract or one in which some sort of a compromise should be efl'eoted." On the agent replying that he could not solve the puzzle, and on his report that he had " tried to figure out what would be accidental sunstroke," and " 1 really believe that if there ever was a claim that ought to be paid in full according to the terms of the contract, this is one, but in view of your letter I have simply bamboozled this negro out of .$50 on his policy. I tried every way in the world I could to figure out some excuse for pro-rating this claim, but he had advice upon the policy and stood pat for $200." and that therefore he had only been able to compromise the claim at $150, the Home office wrote : '■ Xow that it is all over I may say to you that this sunstroke clause as it appears in ours and other policies is not the work of insurance companies but the draft prepared by an ex-insurance commissioner of the State of Ohio and which he required the several insurance companies to incorporate in their policies if they put in anything on the subject. Just what he meani or just what his idea was of a sunstroke from purely accidental causes has never yet been disclosed." Claim 378,307, Hugh McQuire; liahilily $2,000. Policyholder i^as insured as a " foreman, outside of mine." He was killed by an explosion of powder in the mine. Assured's duties were the same at the time he was killed as when he was insured, and the files show that when killed he was performing the regular duties of a " foreman, outside of mines." The company, nevertheless sought to pro-rate claim. Beneficiary brought suit. Attitude of company indicated in the following quotation from letter to its counsel to local attorney: " I agree with you in believing that by attempting dilatory tactics, taking depositions, etc., we will finally bring Mr. Quinn (beneficiary's attorney) into a more reasonable and receptive frame of mind." Clearly his mind did become more reasonable, for the case was settled before trial at $1,200. Claim 371,700, Samuel Kirk; liaUlity $500, plus one year's accumulations. The insured was killed by accidentally falling down stairs. Home office v.riting claim adjuster instructs him as follows; " Our cases need to be worked up more completely in detail,, to get the benefit of every possible defense, and to sliow in every possible way the in- justice of the claim, rather than to depend as much as in former years on what may be termed strong arm methods." Claim 338,423, Grant Davenport; liahiUty $1,000. Insured was killed while in the occupation as to which he was insured. Ultimately suit was brought and counsel for company wrote attorney: Industrial Health and Accident Settlements 41 " If all efforts in the way of bluff and diplomacy fail, I believe we will have -no difficulty in settling the cases on the basis heretofore proposed at any time before it goes to the jury." and later, in connection with the instructions to make overtures for a com- promise, " If you are totally unable to do so, you are authorized to draAv draft on this company, on any sum up to the face of the policy and dispose of the case, rather than let it go to the jury." A compromise settlement of $900 was effected. Claim 382,335, R. t\ Kellogg; liaMlUy $100. This case is chielly interesting in that it contains a letter from the Home office to the district manager of the company from which the' fdllowing is quoted, the Mr. Sipe referred to being, apparently, the undertaker in the case: " It is our suggestion that the next time you see Mr. Sipe you suggest to him in your usual diplomatic way that by allowing notice to come to the company through the usual channels he will confer a great favor on us ; and at the same time if you can advise him that the company does not desire to hurry death claims along, especially where we have no address of the beneficiary — or anything of that kind — you might suggest a line of thought that would change his erroneous conception, if he has any." Claim 376,229, A. G. Smith; IkMlity $400. The policyholder was insured as " stationary engineer, not firing." Com- pany pro-rated claim to fireman, death benefit $300, though it appeals that he was a stationary engineer at the time of the accident and had merely assisted the regular fireman at times in firing the boiler. This was doubtless accomplished as the result of the following suggestion from the Home office: " We are wondering if it is not possible to show that he at times did firing and pro-rate the claim. This is only conjecture, but it is our experience that we have found a great many men insured as stationary engineers who also do firing to a great or less extent." Claim 370,911, C. D. Ililliard; liaUIity $200. When suit was brought on behalf of the beneficiary, company set up as one of its defenses breach of warranty because insured was forty-seven years of age when he took out the policy though lie stated he was but forty-six. Claim 319,356, -John Petropolas; accident benefit, $300. Though policyholder was insured as a stationary engineer, he had at the time of the accident changed his occupation to that of a common laborer and was therefore not entitled to the full sum of $300. He was, however, paid $200. The reason is indicated in the following quotation from a letter from the Home office to the district manager: "If we remember correctly, there was a likelihood of your securing a fran- chise on this smelter, and probably the adjustment of this claim might affect the business. We are enclosing a partially completed draft, with which you are authorized to adjust this claim to the best interests of all concerned, from anywhere from $50 to $200." Suppi'ession of Policy Claim 384,710, O. Chamla; liahility $200. Insured was a coal miner, and was murdered. Company could, therefore, pro-rate claim to $60, under the one-fifth clause. Beneficiary resided in Italy. The undertaker was under obligations to the company for previous favors 4:^ Xatioxal Co.wkntion of Insueance Commissioners ill assisting him in secnriiig payment of liis bills. On August 8, 1910, tlio district manager wrote the Home office: '• We herewith enclose you Policy No. 1,437,948, issued to Guiseppe Chamba. Mr. Chamba was murdered here about two weeks ago, and through the kind- ness of Mr. B. B. Sipe, who was acting coroner, we have received the policy. We are now turning it over to you, and we believe you will never hear any- thing further regarding the same." On August 19, 1910, the company replied: " Beg to thank you for your letter of the 8th inst., in relation to the murder of Guiseppe Chamba, miner, Trinidad. We will await formal presenta- tion of this case before taking up the matter in any way. Thanking you for your courtesy, etc." Nothing further was done by the company. Nothing whatever has been paid on the claim. Jacket indorsed " disallowed." This company, there- fore, to save $60, took advantage of the act of its agent and the friendship of the coroner to suppress a policy contract on which it was clearly liable. Foreign BeneficiMries Claim 241,0SG, John Mcslen; liaUlity $100. Insured was accidentally killed in coal mine. Agent notified company next day, stating that beneficiary was decedent's sister. Latter was a resident of Hungary. Company replied to agent : " It will be necessary that the beneficiary named as Agnes, sistei', whom we understand is in the old country, shall by power of attorney authorize someone conveniently located to act for her " and a few days thereafter again wrote the agent: " When anyone asks you about this claim, the proper thing for you to do is to say that you do not handle these matters, and that all you can say about it is that if the conditions of the contract had been complied with that undoubtedly the claim will have consistent attention." Nothing further seems to have been done concerning this claim, and the jacket is marked " not proven." Claim 350,205, Stoyn MitcU ; death lenefit $200. Insured was an ore miner and was killed. Beneficiary lived in Bulgaria. Agent wrote company that they had investigated the case and that every- thing appeared straight. Later, power of attorney was furnished the com- pany, which the latter claimed was not sufficient. Jacket indorsed " not proven." Nothing ever paid on claim. Claim ,395,104, Albion Letislcha ; Uahility ,$200. Insured was a miner and was killed by an explosion. Notice furnished com- pany through its local manager. Company replied: "On receipt of formal notice from the beneficiary, now located in Eussia. wc judge, or any one authorized by her to act for her, the matter of the claim wilt have immediate attention." Nothing was done by the company to secure proof or to notify the bene- ficiary. Jacket indorsed "not proven." Home office of company, six months after notice, wrote local manager: " Kindly note that we have marked ' not proven ' th€ claim of Albion I>euskha." Industkial Health and Accident Settlements 43 Claim 334,742, Morris Krant; liability Insured killed by ruffians, who threw a stone, striking him on the temple. Company, therefore, entitled to pro-rate under the one-fifth clause. Bene- ficiary lived in Russia. Case take up by Russian Consul. Company in- structed that power of attorney to make proofs should be executed by bene- ficiary. Power of attorney seems to have been furnished. Death proof blanks sent to attorneys, but not found in the jacket. Latter marked " disallowed, not proven.'' Nothing paid. Change of Occupation The industrial manual used by the company in 1909 stated that the insured was " not debarred from performing such labor about his home as may be necessary for the comfort and convenience of his family, nor from indulgence in usual or occasional recreation, hunting, riding, fishing, boating, etc." In spite of this, the com- pany made adjustments as follows, in the year 1909 : Claim 319,158, Eli Shumpourd; accident henefit $100. Policyholder was insured as a " millhand, yard duties," and changed his occupation to '"' farmer.'' He lost his hand, by the accidental discharge of a shotgun while hunting. Company, nevertheless, pro-rated the claim to $50, writing the insured: " However, your injuries were received while performing the duties of a hunter, and in class F, where a hunter is placed for a monthly premium of $1.00, you are entitled to but $50 for the loss of the limb." The company's manual for 1910' and 1911 contains no specific reference to hunting and iishing, as shown in the manual of 1909, but defines the word " occupation " as the " profession, business, ■trade or employment followed as a means of livelihood at the time of making the application constitutes the occupation." In spite of this, the following adjustments were made in the years mentioned : ' Claim 353,999, M. 0. Harmon- accident benefit, Insured lost his hand by the accidental discharge of a shotgun, while hunt- ing. Claim pro-rated to the classification of hunter, and settled at $100. Home office, in instructing this adjuster as to this claim, writes as follows: " We have recently pro-rated several hunting cases, and before you get to this I expect to conclude negotiations in $j1,300 foot loss claim for injury received by a capitalist while out hunting." Claim 349,927, Louis Moquin; liability $1,000. Insured was on a hunting expedition, and in order to reach the hunting ground, he and a friend were riding on a railroad speeder which ran off the track, throwing their guns forward and discharging one of the guns. As the result the insured was killed. The home office, discussing its rights in the matter, concludes: 44 National Convention of Insukance Co.mmissioneks '■ XherefoTe, the limit of liability in his case should be somewhere between .$100 and $750, and an even split might be a fair adjustment of the claim." and, later, wrote its adjuster: " In order to give a little moral backing to your iloquin claim, the rail- load employee who was killed while starting hunting, I beg to advise you I had just closed a limb loS't hunting case accident in Pennsylvania, settlement in New Yoi-k, involving $13,000, under the $2,190 (policy foi-m) and an an- nuity, for an allowance of $5,500 on the two claims. This is considerably less tiian half and slightly in arlvance of the pro-rate to which we are properly entitled. A compromise at $500 is 'thus accomplished in the iloquin case. Claim 385,451, I'resion White; liability, $1,200. Insured was a farmer, and was killed while hunting. Company asserted its claim to pro-rate its claim under the one-fifth clause, under the assump- tion that the decedent's occupation was that of a hunter, and thus forced a compromise settlement of $775. Claim 337,153, Anton Anderson; liability Insured was a commercial salesman and was drowned while fishing. Com- pany asserted both change of occupation to shipping clerk and also right to pro-rate to fisherman, on the following ground: " If we conceive the plaintiff's contention to be correct, then is it not true that the insured was engaged at the time of his death in the occupation of a fisherman ? " Suit was brought, but a, compromise settlement was made, before trial, for $440. The following cases illustrate the tendency of this company to take advantage of occupation, where sports such as hunting and fishing are not involved: Claim 391,821, F. C. Hull; liability $1,500. Insured was a chauffeur and was killed while inflating the rear tire of an automobile. The company insisted that, inasmuch, as in addition to his duties as chauffeur, he also assisted more or less in the work of his employer's garden, the claim should be pro-rated to what the company claims to a more hazardous occupation, viz. : gardening, and ultimately forced the settlement on this basis and only $1,200 paid. Cliiim :i94,4nn, Jim TicJlr : liabilitt/ $300. 'J'he policyholder was insured as "(lri\ir, dump car." He was killed while endeavoring to get pome cement in a cement bank where it was stacked in piles, apparently to load the same on the cart he was driving. As to this case the company stated: " 'Jliis man was insured as a driver of a dump cart, but he also loaded and unloaded, and therefore, he was performing the duties of a laborer when he did so. Ilo was actually killed while he was performing the more hazardous duty. Because a man is insured as a driver it does not necessarily mean tlvat he is entitled to take care of his horse, load his wagon, and do those tilings." The company ultimately prorated the occupation to '' common laborer " and paid $200. Industeial Health and Accident Settlements 45 Claim 384,138, J. W. Finfrockj liability $400. The policyholder was insured as a stationary engineer, and was killed while sitting in his engine room by a portion of a steel smokestack falling in such a way as to strike him. The district manager — who holds a profit-sharing contract — settled the case hurriedly for $300, asserting that the occupation of the assured was both engineer and watchman and, thus, that the company had the right to pro-rate to the classification " watchman." He was also able to secure a testimonial letter, and asked that 2,000 copies of this be printed for circulation in his territory. In reporting the quick adjustment the man- ager says: " I know this is not exactly according to the regular system of handling accidental death claims, but this was so clear, and no question whatever as to the cause of death. Further, as an older son is expected to arrive home to- night, and as I have worlied to save the company $100, which under my con- tract means a saving to me, I pro-rated this claim from th« fact that the claimant was filling the occupation of both engineer and watchman at the time the accident occurred, but on the arrival of the son I feel positively it would not have been easy to settle for less than $400." Claim 329,867, J. F. Devore; accident benefit $1,250. The policyholder was insured as proprietor of a grocery store. The proofs showed that some one had borrowed his shotgun and had returned it to the store and that the insured took up the gun with his left hand and set it back, striking the hammer against something, discharging the gun and thus losing his hand. At the time, the insured was in his office making out state- ments. The company pro-rated the claim to $1,00€', explaining its action as follows: " You applied for insurance in this company as ' proprietor of a grocery store, office duties only,' class A, for select classification. The proofs which you have filed as well as our investigation, show conclusively that your occupation was that of proprietor of a grocery store, covmter and general duties, which entitles you to Class C instead of Class A." Arbitrary Eedudions Claim 391,739, L. C. McQueen; accident benefit $750 plus $10 surgeon fee. Claimant in making proof of loss of arm through gunshot wound, for which under the terms of the policy he was entitled to $750, wrote $140 after the question, "what indemnities are you claiming?" Company wrote adjuster : " He makes out his proof asking for $140, and we have had a little cor- respondence with him which indicates that that is the amount he is claiming in settlement of his claim on the basis of time indemnity. It might be well to feel of him and issue draft for that amount if we properly interpret his claim." Adjuster replied: " I felt him cautiously for draft for $140, and he then said ' What about $750 for the loss of arm, and the surgeon's fee also? ' I did not get into the hole too far to get out gracefully, but I called his attention to what he had written in the proofs, and he said, ' Yes, and up at the top 1 put $750, and the company also said I was entitled to the surgeon's fee.' * * * It took me two hours to get him convinced that he was not entitled to both benefits, and did my best to get away from it on $500, but could not. I went $650, and he refused. I finally stripped him with check for $700, and he took release and the policy." 46 National Convention of Inscji!ance Commissioneks Claim 388,888, /. B. Fisher; liability $1,200. Death due to tetanus following puncture of foot from a nail. No reason stating why claim was reduced but adjuster was able to accomplish settlement with beneficiary for Claim 334,720, Jcthro Murphy; UaUlity $200. Insured murdered; hence, company entitled to pro- rate under one-fifth clause. Adjuster, however, settled loss for $25, no reason for such reduc- tion being shown in the jaclcet. Breach of Warranty Claim 333,909, Harry Baldwin; liability $500. No question as to cause of death or identity of decedent. Company, how- ever, asserts that insured did not give his correct name, possibly because he was a, deserter from the army. Memorandum found in claim jacket states: " Tlie attorneys in the Harry Baldwin case wrote to the Steel company asking about settlement. Ihe Steel company replied that they had already paid the widow $10,000. Mr. Halsted reports this and states that probably it would be well to determine whether or not the proper parties are at interest in the east and that possibly we will hear nothing further from the claim." No further correspondence in the jacket. Nothing paid on claim. Check indorsed " disallowed." Claim 398,533, Harry L. Eggling ; liability $500. Insured was a freight brakeman and killed while engaged in his regular occupation. No question raised as to accidental cause of death. Insured had, however, named as his beneficiary, Margaret Eggling, his wife. It ap- peared after assured's death that she was not his wife. Company, therefore, denied liability on breach of warranty. Attorney for beneficiary later writes company stating that beneficiary was affianced wife of the assured at the time he took out the policy. No attention paid to this communication and claim not paid. Claim 356,066, William Smith; accident benefit $66.66. Assured lost an arm. No contention on part of company as to accident. It sought to establish a defense on breach of warranty as to age and claim was settled for $50 by agent who reports as follows: " It seems there was notiiing for me to do but to get a compromise in this case, inasmuch, as this party was willing to make oath that he was not over forty-seven years of age. However, I am of the opinion that he was flftv years of age or more." Nothing else warranted company's claim as to breach of warranty. Intoxication Claim 394,250, E. J. Close; liability $400. Assured met with accident causing death by falling tlu-ough a plate glass window. Company endeavors to establish that he was intoxicated, but the agent reports that the whole matter regarding the use of intoxicants by insured was one of conjecture, and that the more he inquired into the matter ihe more it appeared that the character and habits of the insured would Industrial Health akd Accident Settlements 47 preclude even sueli a possibility. Attitude of liome office indicated irom tlie following quotation from a letter of instruction to agents: " While there is perhaps some merit in your suggestion that some of the defenses mentioned in my letter of March 9th cannot be sustained, I believe that you had better take the position strongly in the negotiations for settle- ment that we will be able to substantiate all the defenses." Thus prodded agent was able to force a compromise settlement at $325. Claim 397,506, J. M. Carter; liahilHy $1,500. Company's investigator reported that after thorough investigation there was absolutely no proof of intoxication. Company then endeavored to establish breach of warranty as indicated in the following quoted from a letter of its adjuster : " I made a strong stand on the breach of warranty clause, as in the appli- cation for the policy Carter failed to mention the fact that he already car- ried $2,000 policy with the Aetna. The beneficiary placed the entire matter in the hands of Mr. Cunningham and his attorney, and if it had not been foi that fact, we could have made a much larger salvage." Claim settled for $1,000. Claim 402,924, 8. C Compton; UaUUty $1,500. Some evidence to show that the insured was intoxicated at the time of the accident. Mental attitude of the adjuster indicated in inclosed quotation from his report: " They had us on this claim. We could not prove intoxication and I simply got desperate at their refusal to come down and took a team and went out and brought beneficiaries in and buffaloed them * » * j pinned those alleged statements of intoxication and they all backed up. None of them ever saw Compton take a drink and that is what you have to have when you go into a court of law, and then we get licked * * * If I ever had to use my cunning it was at Tiptonville for the odds were against me." Adjuster, however, succeeded in forcing a compromise settlement at $350. Claim 351,632, Arthur Alaiverte; liaUlity $2,000. Assured was killed by a collision while riding in an automobile which ran into a tree. He was not driving himself.. Company endeavored to prove that the assured, together with the rest of the party, had been indulging in intoxi- cants. Report showed that the insured was not a drinking man, but that likely the man who ran the machine was intoxicated. On this state of facts, company forced a compromise settlement at $1,000. DoiCble Indemnity Claim 396,803, Dan Languire; UaUliti/ apparently $1,000 with one year's accumulation. This is a case of double indemnity. Assured was a brakeman and was killed when the train on which he was working ran into an open switch and was ditched. Company first raised question as to whether beneficiary was lawful wife of assured. Attitude of its claim adjuster is indicated in the following quotation from letters, the first written before the adjustment and the second after: 1'. "If she (mother) does not show up, I will take this nigger down to Meehan Junction and drive out five miles from there to where the mother of deceased lives. I am going to do all I can to get out for $500, but we one the $1,000. There is no doubt about it." 48 NaTIOA^AL CoXVEXTJON of 'InSURA.XCE CoilillSSIONEES 2. " 1 have put through successfully the settlement with Susan and Sallie Languiie for tt>j25 * * * satisfactory to me and should be to you * ♦ * ] found on opening the policy that the bottom part is gone. Still we have the main part of it and the double clause which we actually owe." Claim 344,021, James F. Moore; liability $1,000. Policy entitled beneficiary to double indemnity. Insured was killed in a wreck on a, railroad while engaged in the occupation of fireman. He was insured as a car repairer. Company therefore claimed the right to pro-rate the claim to the classification of car repairer. As to double indemnity, home office wrote: " I assume double liability is not claimed in this case. If when you come to deliver the draft the question of double indemnity is raised you can make investigation to determine its proprieity, and if yoai find the company is properly indebted for the double amount, please allow it." The agent so found and paid beneficiary, $1,363.20. Claim 354,219, Anton Lund; liability $5,000. Policy covered double indemnity. Insured held a traveler's ticket policy and was killed in a railroad wreck. Company had no defense, save late notice, it seems to have been asserted because adm^inistrator — who was prevented from securing possession of the ticket policy by the coroner who took charge of the insured's body — did not make timely proof. As soon as adminis- trator secured such policy he made proof. Beneficiary later sued company. Company then adopted dilatory tactics in the courts, its legal department writing the local attorney, as follows: "As I have repeatedly advised you, the company does not desire that this case should ever come to trial, and our only intent is to adopt dilatory tactics, file demurrers, etc., and thus force an equitable settlement." and later : "If you find that you cannot dispose of the suit within this limit ($2,500) I think we had better stand pat a while longer, putting the trial off as long as we possibly can and adopting all possible diTatoTy tactics. * * * To be absolutely frank, rather tlian let this suit go to trial, J would advise the company to pay on the eve of the trial consirlerable more than the maximum mentioned." The local attorney finally suceeded in making a compromise settlement for $2,500, the face of the policy, thus evading the double indemnity. Accumulaiions Claim 378,094, J. M. Spelman; liahilifi/ $300, iDith four years' accumulations. Policyholder insured as a "wood dealer, delivering;" company pro-rated to " laborer," the death benefit being $200. Home office wrote local attorney as f ol lows : "As they arc only asking for $200, you might just as well go ahead and draw draft for same. He is probably entitled to the increase, but as they have not the policy you can perhiips evade this." The company thus avoided the payment of at least $50 accumulations. Claim 394,322, G. H. Owens; liability $500, loilh one year's accumulations. District manager made settlement ignoring accumulations and writes home office that he will secure a testimonial from the beneficiary and that there was $50 saved. Such manager operates under a profit-sharing contract. Industeial Health and Accident Settlements 49 Claim 399,865, PlasiJo Valdex; liability $200, imih one year's accumulations. Insured killed by an explosion in a mine. As to claim for accumulations made in this case, resident manager writes home office: " We believe this is the first instance, however, where we have ever been asked to include accumulations on one of these policies." National Casualty Company This is one of the larger companies covered by the present investigation. It was organized under the laws of Michigan in 1894, has its home office at Detroit and operates in about thirty States. Its capital is $200,000. In addition to its home office, it has three branch offices — one in l^ew York, for its eastern de- partment, one in San Francisco, for its western department, and one in Minneapolis, for its northwestern department. It does a general health and accident business, though largely upon in- dustrial lines, the percentage of industrial health and accident premiums to total health and accident premiums, in 1910, being 82.3 per cent. About 5 per cent, of its industrial business con- sists of so-called factory policies, but all such run direct to the insured. Loss Ratio On an industrial premium income of $550,000, in 1908, its loss ratio was 36.8 per cent. On a like income of $629,000 in 1909, its loss ratio was 37.1 per cent., and on practically the same income, in 1910, such ratio was 37.4 per cent, on its regular in- dustrial business 'and 56.8 per cent, on its factory business. The significance of the last mentioned ratios is lapparent. Profit-Sharing Contracts The company's records do not permit the statement of any definite conclusions on this important subject, but it is 'apparent, from data recently furnished the ISTew York department, that it compensates some of its agents through profit-sharing contracts and others through salaries and commissions. Such figures in- dicate that the loss ratio on business done in profit-sharing terri- tories was a trifle higher than the ratio where agents are com- p'ensiated by salary or commission. The examiners note, however, that this company's figures were erroneously computed. 50 ]S^ATIo^'AL Co^n'E^-TIO.^■ of Ixsl'eance Commissioners Adjustments The importance of the personal equation on adjustments in the industrial health and accident field is nowhere more noticeable than in this company. Such adjustments are made not only at the home office but also in each of the three departments. Many of those made in the eastern and western departments are subject to severe criticism. Those made in the northwestern department appear generally to be fair. The same is true of those made at the home office; though, as the examiners comment, the branch offices being always under instructions from the home office and the correspondence in some cases directly connecting the officers of the company with unjustifiable — nay, dishonest — settlements in 'the two branch offices mentioned, the home office cannot be absolved from responsibility. The examiners went over carefully every death claim for the years 1908, 1909, 1910 and 1911 to the date of the examination. They also examined about 1,200 disability claims. The home office and each of the branches were covered in this examination. Disability adjustments at the home office ordinarily are fair, but the treatment of claims of this class particularly by the eastern department impressed the examiners with lack of fairness, and a number of oases were selected by them for the consideration of this Committee. As in other companies, however, the settlement of death claims, where the amounts ^are considerable and a beneficiary — not the in- sured — the person with whom they are made, furnishes the cor- rect test as to the methods and policy of this company in meeting its obligations. ]^[o one can read the schedule of adjustments of claims of this class, attached to the report, without being shocked at the devices used, particularly iu the eastern and western de- partments and apparently countenanced by the home office, to evade liability and cut down claims. As in other companies, accumulation benefits are ignored unless demanded ; unwarranted changes in occupation arc asserted to force compromises or to pro-rate liabilitj'. Late notice is sometimes relied on, though this technical defense in this company is not much availed of. Nor is the record bare of the disreputable practice of seizing and sup- I.XBUSTBIAL Health and Accident Settlements 51 pressing 'a policy contract and thus, in effect, appropriating the indemnity evidenced thereby. In view of what appears in the report, it is to be regretted that approximately 25 per cent, of the claim jackets of the eastern department are missing from the files, and that the files of the western department are similarly incomplete. !N"or is the ex- planation of the company — that the missing jackets of the eastern department were used by some boys, now no longer employed by the company, in a pillow fight some time since, and that the missing files in the western department were left where the janitor had access to them and were destroyed by him, in the belief that they were waste paper — exactly satisfying. In this connection, it should,' however, be stated that there has been a change of management, or, rather, representation, in both the eastern and western departments. That in the eastern de- partment dates from March, 1910, and there seems to have been a material improvement in its adjustments since that time. That made in the western department took place in January, 1911 ; but the two death claims found in the files for 1911 do not. in the opinion of the examiners, warrant the statement that con- ditions are to be improved. It should also be stated that the examiners report that the home office does not, as a rule, adopt secretive tactics when notified by claimants other than the beneficiary, nor does it take ad- ■('antage, as a rule, of late notice and other technicalities to evade just claims; and further, that the home office adjusters also pay the beneficiaries of death claims the accrued sick benefits at the time of death, without requiring — as some companies do — the appointment of an administrator. Indeed, the examiners state that the home office officials in adjustments made there are not disposed to use the restrictive provisions of the policy as weapons of oifense against claims, but rather as weapons of defense against unjust payments. lA well-defined practice of this company, which calls for criticism, is the following: Though the application of the in- sured often names a beneficiary, the policy is written payable to the "estate." This is done without the consent of the insured, though the agent is instructed to inform the insured of the change. 53 ISTatiONAL CoNVEXTIOX of InSUEAXCE Co,M>riSSIONEES Until the present year, this practice was carried on to such an extent as to accomplish the change in nearly all cases where the beneficiary's Christian name was not given in full. The result is that, if the company desires to contest or evade a death claim, its position is strengthened by the change; while the beneficiary, in effect, is put to the expense of securing the appointment of an administrator. At the hearing granted on the report of the examiners at the Detroit meeting of the Committee, this company's representative appeared before the Committee and urged with considerable em- phasis that the criticised adjustments had been made under an administration of which he was not the head, and under a system which had now been superseded. He, however, admitted that in a considerable number of cases wrong had been done, and reprehensible practices had been followed by the representatives of the companies, particularly in the eastern and western de- partments. He therefore stated that where wrong had been done it would be undone, and assured the Committee that he would give his personal attention to important adjustments in the future. The attitude of this company toward the supervising depart- ments of the country is indicated in the following cases : Cases Claim 7,323, Win. F, Maker; disahilHy benefit. Insured broke his leg. Agent notified company. Premium had been paid to agent, but latter had appropriated same. Agent made attempt to switch its liability to the Continental Casualty Company, in which the insured had a policy. Experiencing considerable difficulty in getting attention, insured, who was a resident of New York, brought the matter to the notice of the New York Insurance Department. Company took matter up with its eastern department by a letter from which the following is quoted : " We inclose copy of letter from Wni. F. ilaher, letter from Superintendent Ilotclikiss :.rd copy of our reply to liira. Ifotchkiss seems to be meddling with matters that are none of his business, and wo are not particular about fiiidinff out V'l-y much about this. Tho claimant has his remedy ovitside the Insurance Department, and we presume Department will get wiser after a while and proceed according to lines luid down by the law and the custom of other Insurance Departments." The eastern department of company replied, showing company cleai-ly liable, but ultimately pro-rated the claim on a one-flfth basis, asserting that notice was late — which was not the fact. liXDTJSTKIAL liEALTH AND AcGIDENT SETTLEMENTS 53 Claim 7,370, Gennario De Fcis; disahility benefit. Insured claimed injury to his eyes, as the result of accident. The company tired out claimant, who then sought relief from the L«gal Aid iSociety and through private counsel. Failing to secure relief, counsel wrote the New York Department, which brought the matter to the attention of the secretary of the company. The latter then referred it to the eastern department, in- closing a copy of the New York Superintendent's letter, and stating : " You are aware, of course, of the necessity of discretion in all our dealings with the Insurance Department. You are also aware that it is none of his business and that, if there is any other remedy in the contract, the attorney will not go to the Department of Insurance for that remedy." In this case, the attorney ultimately brought suit and the company com- promised the claim before trial. Not only was the company thus contemptuous of proper inquiry and inter- ference from supervising State departments, but its officers and agents were guilty of practices in accomplishing adjustments and in evading liability which this Committee must most emphatically condemn. The following are -typical cases: Claim 6,222, William Mayers; liability $300. Insured killed by a fall fromi a scaffold. Though apparently in the same occupation as that stated in his application, this claim was pro-rated to $100. How this was accomplished is indicated from the following quotation sent by the head of the eastern department to the home office: " The case got into an attorneys hands and it was perfectly apparent to me that Campbell was going to go against us. Seeing that $300 was likely to be paid, it was I who suggested to Campbell that he try to remember a little more carefully exactly what the conversation was between the fssured and himself when he took the application. Under the stimulus of $25, his memory revived to a wonderful extent. * * * What I meant when I said Mr. Campbell succeeded in effecting settlement with the adminis- trator for $100 was that he told tlie administrator that he had remembered the assured had told him. Then administrator was willing to accept our proffer of $100." Claim 7,763, Olehehtson ; disability benefit. Company sent its doctor to make adjustment. The doctor reported as follows : "I called on claini.int yesterday and found his arm in a very serious con- dition. I told him he would probably be able to use his arm in two weeks. I question very much if this will be so as the arm may get worse before the disability is ended." Claim 95,337, James I. Robinson; indemnity $300. Insured killed by cave-in while working as ditch digger. For this rate- book provides $200 indemnity. Secretary of company wrote to beneficiary that rate-book provides for $100 indemnity and sent check for that amount. The methods of this company and its accredited representatives in the eastern and western departments are further illustrated by the following characteristic cases : 51 JSTatioxai. CV)xvention of Insueaxce Commissioners ChAtnge of Occupation Claim 1,971, Alexander Don; liahility $500. Insured as a "stationary engineer" and killed by falling into a mine shaft. Company promptly notified but ignores notice. Ko attention paid to claim .until notice received from administrator; then attempted to settle for $20 by pro-rating on the gi-ound that any one entering a mine is insured under class X, which would have entitled the beneficiary to but $100, and a further reduction to one-fifth of the latter sum on account of late notice. Later, suit brought and company settled at face of claim, but ignored accumulations. Claim 3621, Kalkili ilulli, liahility $400. Insured as a " luinber piler in yards and sheds " but drowned by being thrown from an aerial tram-way car going to a boat off shore to be loaded with lumber. Company reduces classification to " sailor " and settled on that basis at $100. Claim 5,120, Knute Anderson; Uabilili/ $1C0. Insured as a " general laborer," but lost a leg because of an injury while chopping down a tree. The company attempted to classify as " woodsman " and thus escape liability on payment of $50. After a year's delay claim finally compromised at $80. Claim 108,158, Seiert Stedman; liability $700. Insured as " foreman, overseeing work in well-digging." Policy for dis- ability benefits; relatively few for specific losses tlue to death. As digging crew. Company attempted to classify as " well-borer, handling dynamite,'' indemnity $100, and tendered such sum. Later, suit brought and judgment for $50-5 recovered. Claim 115,492, William L. Walker; liability $200. Drowned while crossing a river in n boat returning from a hunting expedi- tion. Classified as " hunter " and claim paid on that basis. Claim 107,856, ; liahility $800. The insured was an undertaker. He was killed in a. passenger elevator in a railroad station while accompanying a corpse. Company changed occu- pation to " express messenger " and ofl'cred $450 ; later $600. Claim com- promised at $700. Claim 111,267, : liahility $400. Insured was drowned while fisliing for pleasure. Company attempted to classify as "fisherman" and settle for $100. After the Michigan department interfered, paid claim in full. Accumulaiioiis Claim 1,596, Joseph Granger; liability $400, plus accumulations. Company ignored accumulations and in settlement deducted twelve months' premiums. Industrial Healtu and Accident Settlements 55 Claim 123,910, /. H. Hazel; UabiiUij $300, plus 50 per cent. accumulaUons. Though the attention of the company's adjuster was called to the accumu- lation clause, the same was ignored and settlement made at the face of the policy. Disability Claims Claim 7,420, Charles F. Twidy ; disahility benefit for seventy-four days' sick- Insured was classified as a civil engineer and was sick with typhoid fever, concededly, for seventy-four days. In settling with claimant, company de- ducted ten of these days on the ground that they were Sundays, asserting: The intention of the policy is to provide for loss of time, meaning, of course, the loss of time when the insured sustained the loss by reason of dis- ability from being employed at his occupation." Claim 7,831, Patrick Greeley; disahility claim for thirty-four days. Insured was hurt February 3d, and was attended by a physician until March 9th, but went to work on the 10th. In the preliminary proof claimant offered to accept one month. The eastern department settled with him for twenty-eight days, stating "As there are twenty-eight days in February, we have accordingly allowed him twenty-eight days." Foreign Beneficiaries Claim 6,699, Steve Jura; liability $100. Insured killed in a mine. Beneficiary's wife lived in Hungary. Company made no attempt to locate beneficiary or estate. Claim 3,084, Ignatio Paneuka; liability $100. Beneficiary lived in Hungary. Company made no effort to trace beneficiary. Claim 82.743, ■ ; liability Insured murdered and one-fifth indemnity clause therefore operative. Beneficiary in Sweden. Company counsels delay, apparently hoping to evade settlement. Miscellaneous Cases Illustrating Methods Claim 1,218, Jesse E. Parker; liability $300'. Insured as " foreman, supervising only." Killed by a fall from a platform in performance of his duty as supervising foreman. His wife on starting east from Arizona with the body left power of attorney with company's agent to collect claim. Agent notified western department two days after accident. No attention paid to notice. After several letters, such department wrote stating that notice must come from beneficiary herself. Beneficiary notified company one month and six days after accident. Two months thereafter company sent her check for $40, claiming right to pro-rate indemnity to $200 and then to pay one-fifth of the latter on account of late notice. Check returned. File of case closes with several letters from^ plaintifl''s attorney apparently unanswered. Nothing yet paid. Claim 5,957, Benjamin Jones; liability $200. Insured bitten by a dog. Died from rabies. Company claims this a case of poisoning and under appropriate clause of policy settles case on one-fifth basis. ,56 National Convention of Insurance Commissionehs Claim 6,190, W. T. Hawgarth; indemnity $100. Claimant lost an eye. Company asserted premium not paid. Evidence on this examination shows that policy was in force. Claim compromised at $75. Claim 6.300, Charles Hopkins; Uuhility $400. Insured fractured skull causing death. Examiners comment: "Compro- mised without justification and a misleading testimonial obtained for adver- tising purposes." Claim 88,242, Peier Sehuskej liability $100. Insured killed by a fall of sla/te. Company promptly notified. Application blank made brother beneficiary. Company at home oflSce changed beneficiary to " estate." Father of insured in Russia. Brother in America. Russian Vice-Consul makes inquiry. Company answers that policy is payable to the estate. Consul writes asking what course to pursue. Letter not answered. Company, however, writes its afjent: " Of course this company is not under obligation to pay anything because of lateness of notice. Yours of July 22d can hardly be considered as a notice in compliance with condition of the contract. We do not know any- thing about the nature or cause of his death, but we merely suggest that possibly you can fix this up and take up the policy for a very small amount, F.iy $25." Russian Vice-Consul again takes the case up and company wears him out with dilatory tactics. Nothing was ever paid on this claim. Claim 93,00S, John Boylicsih; Uaiility $200. Wife the beneficiary. Agent reports death, stating that man was killed in drunken fight. Company writes agent: " We would advise that you listen and wait without taking any further interest. Oet all the facts you can ■v\ithout appearing to be at all interested." Claim 96,329, Zack Lewis; Ualility 4300. Insured killed by explosion of dynamite. Company makes no attempt to inform beneficiary and agent gives impression to insured's friends that the policy was not in force. Claim 99,470, Lawrence Engach; Uahility $200. Insured commits suicide and beneficiary, therefore, entitled to one-fifth of the indemnity. Agent reports to company: "I told the claimants the com- pany pays nothing for suicide, so I hear nothing about it." Claim not paid. Claim 99,749, ; liability if-tOO. Insured committed suicide and ordinarily company would have met its obligation on the one-fifth basis, but this claimant lived in Missouri where law probably prohibits such a clause ; therefore, company settled for $375. North American Accident Insurance Company. This company is the fourth in rank in the amount of industrial health and accident business done. in 1910. Its home office is in Chicago. It was organized under the laws of Illinois in April, 1886, and began business as an assessment company. It became a stock company in Aug-ust, 1889, and took up industrial health Industeial Health and Accideht Settlements 57 and accident insurance in 1901. In 1910, 67.7 per cent, of its total health and accident premiums were received in its industrial department. iSuch premiums are payable monthly and on the first day of each month. Its industrial policies seem to be issued generally throughout the United States and Mexico ; this company being admitted to do business in about 40 States. It does not write on what are known as the factory and railroad install- ment plans; all its policies being issued directly to the insured, without the intervention of the employer. Its industrial premium income in 1910 was approximately $690',0'00. Loss Ratio The k^s ratio of the industrial department of this company, in 1910, was 37.4 per cent. In making up such loss ratio, how- ever, the policy fees retained by its agents are not included. In 1910, these amounted to $155,530. If such sum is included in the premium income of the company, its loss ratio for such year would be 30.12 per cent, instead of that given above. Profit-Sharing Contracts This company employs approximately 150 agents on the profit- sharing basis. In addition, it compensates a number of agents on a salary or co)nmission basis. As a nile, new and inexperienced agents receive a commission or salary, and those who have be- come more proficient and familiar with the work hold the profit- sharing contracts. Abiout 45 per cent, of the premiums received seem to be from the territories where agents are operating on the profit-sharing plan. Figures elicited on this investigation show that the loss ratio of this company, in 1910, on business conducted on the profit-sharing plan was 36.2 per cent; while on business conducted on the salary and commission plan, it was 38.45 per cent. Adjustments These are made directly from the home office, upon advice and information furnished by local agents. jSpecial adjusters are employed to make investigations in the more important claims. The present investigation covens the business for the past four years. Approximately 2,000 claims — 300 of which were death 58 I^ATioNAL Convention of Insurance Commissionees claims — ^were gone over by the examiners. The great majority of the claims are for disability benefits ; relatively few for specific losses due to death. As evidencing the volume of this company's business, upwards of 14,000 claims were made against it in the year 1910; of which 11,667 were paid and 1,627 were rejected — about 900 were still pending at the end of the year. Some of the principal reasons assigned for the rejection of claims are: Proofs not filed ; first week not covered ; breach of warranty ; premiums not paid ; lack of notice, and the like. As a rule, disability claims seem to be paid promptly and fairl}-. As in other companies, a tendency to scale and reject meritorious death claims was noted. As seems to be characteristic in this field, accumulation benefits are only paid when the beneficiary, himself, discovers that ho is entitled to the same and makes demand. If no demand is made, this feature of the company's contract is in most cases, ignored and its policyholders thus cheated of a part of their due. Change of occupation is at times asserted without decent warrant. Agents are instructed to keep silent as to claims for rights of which they know but of which the beneficiary or claimant is apparently not yet aware, while in one case the home office has seemingly colluded with its agents in suppressing a policy and thus evading liability. The cases cited by the examiners seem also to indicate a willingness not only to take advantage of technical defenses, but also, in some cases, to resort to dilatory tactics both in the correspondence between the claimant and the company and in the progress of any suit which may be brought. This company was also granted a hearing at the Detroit meet- ing of the Committee. The examiner's report was then accepted by the representative of the company as showing substantially the conditions in the claim department of such company. Assur- ances were also given that iinniediate and efficient measures would be taken to remedy the cmidilidiifi found and to make a return to such conditions imlikely. Such i"epre&entativc further agreed not merely to readjust claims at present criticised, but also, so far as possible, to in\'estigate the adjustments of his company for a reasonable period, to the end that all persons who have been injured by the practices here criticised would be fully compen- sated under their respective contracts. Industeial Health and Accident Settlements 59 The following ca.^es have been selected from the report of the examiners as indicating tendencies and practices: Oases — Claims Ignored Claim 84,889, WilUaiit H. Hughes; indemnity $1,000. Company notified of death of insured from accidental poisoning. Policy in possession of its agent, who was operating under a profit-sharing contract. Superintendent of agents in agent's territory wrote company as follows: " Concerning the above party, beg to ndvise that Mr. McDowell has the policy in his possession and no report has ever been made or a claim notice given; and I am strongly under the impression that if we let this case alone and do not disturb there will be no claim filed." Tie premium on this policy was paid one year in advance and it was clearly in force at the time of the insured's death. The home office took the hint and kept quiet, and though insured died early in 1910 no claim had been made on this policy at the time of examination. Claim 62,208, Frederick Harsch; lialiliiij $300. Insured committed suicide. Company therefore entitled to pro-rate the liability to one-fifth the principal sum. On receipt of notice home office wrote local agent: " I have yours of the 2d advising of the death of the above insured. Policy is payable to the wife. I suggest that you do not take any action in llie matter unless you hear from her. We are only liable for one-flfth anyway." Claim 57,107, David Coles; liahility not stated. Insured apparently murdered and company's liability therefore one-fifth the principal sum. Attitude of home office indicated in following quotation from letter of instructions to local agents: "Allow me to say that there is no action for you to take in the matter but just await developments. It may be that the people will never put in a claim. If they do we can then give the matter proper attention." Claim 83,551, Will Wright; liability not staled. Policyholder was insured as a brakeman and apparently was killed while at work in his regular employment. Local agent wrote company notifying of death and asking that proof papers be sent so that he could have the matter attended to. Home office replied: " I would suggest that you let the matter rest quietly. It is not our busi- ness to establish the claim, and there is nothing that we can do or suggest that would be of any benefit to any one in the matter, only to let it entirely alone." Accumulations Claim 76,149. John W. Arnold; liability $500. Insured was accidentally killed while verifying car manifests, by taking the car numbers shown thereon from the ears standing in his employer's coal yard. He was insured as a "clerk, office duties only." Hence, the liability was reduced to $300. Nothing was said about accumulations, and settlement was made without the payment of $30 due thereon. CO National Convention of Insueance Commissioners Claim 85, S33, Charley Stewart; liahility $300. Insured's estate was entitled to 10 per cent, accumulations; whicli amount was only paid as an extra inducement to persuade beneficiary to accept $100 in full of claim, on alleged '' change of occupation." Chiiin 93,802, Harvey Dunn; liability $400. Insured was a ranchman, and was killed while roping a bull. He had been insured as " ranchman, proprietor, supervising only." Company changed his classification to "cowboy" and paid beneficiary $100, ignoring the 20 per cent, accumulations. How this was accomiplished may be suggested by the following quotation from a letter of one of the company's agents: ■• When I Avired you, Xov. 28th, T was under the impression that we would have some trouble in settling tbi=! claim, as the parties interested refused to accept settlement in the sura of $100, claiming the full $400. In the meantime, they took this matter up with an attorney who is a personal friend of mine and, a.s soon as I talked the matter over with him, he advised >rrs. Dunn to accept the $100 in full payment of the claim." The beneficiary's attorney seems to have reminded the company that the policy carried accumulations, but no attention was paid to this feature in the settlement which was accomplished. Claim 78,099, Henry Hoberg; liability $300, plug aocumulutions for three years. In adjusting this claim, the agent wrote the company: '• Will you please look up your record, and what do you suggest if they fail to notice the 50 per cent, accumulation, as someone may call their atten- tion to it after an adjustment and payraent thereon and then there would be trouble. In a small community like this, there are always some wiseacres." The company replied indicating what should be done '' if the accumulations are asked for." The agent was ultimately able to " save " $16 on the sum which should have been paid for accumulations. Claim 72,267, Joseph Hack; liability $300, plus 10 per cent, accumulations. In making this settlemeni, the accumulations were ignored. The claimant evidently noted this fact, and the company then forwarded its check " re- gretting the oversight and any inconrience caused you thereby." Claim 95,510, Isaac T. Davis; Uabilily $300, plus 50 per cent, aecinnulations. The policyholder was insured as a stationary engineer. At the time of his accidental death he was driving a team. The company, therefore, reduced the indemnity from $300i to $200 and kept quiet as to the $100 due for accumulations. Claim 80,776 (name of insured nut giren) ; liabiliiy $500, plus 50 per cent. aDcumulntions. Company forwarded check for $500. Same A\as returned, calling attention to the accumulations, and company then forwarded check for $750, claiming that its previous remittance was a mistake. Claim 87,192 (name of insured not giren) ; liability .$400, plus 50 per cent, accumulations. Check for $400 forwarded to agent. Agent called company's attention to accumulations and company wrote him: "Accumulations on this policy were overlooked. We take pleasure in handing you herewith check for $200." Industiual Health and Accidext Settlk.mexts (ii Changes in Occupation Claim 100,116, Otis K. Hubhard ; liahility $400. Policyholder insured as " stationary engineer." A. piece of iron flew off engine and struck him, breaking his neck. Company pro-rated claim to $200, on alleged change of occupation to " oiler of stationary engine.'' Beneficiary refused to accept check. Matter still unsettled. Claim 97,232, Borialomeo Gaspinni; liability $600. Policyholder insured as a " talljinan in yard and mill." ^^'as accidentally killed by being run over by an engine. Compa,ny's agent — who operated on a, profit-sharing contract — reported to company that claim should be pro-rated to $400, the accident having occurred while the insured was working as a section man clearing the track of snow. Such agent, however, significantly adds : " I am going to try, however, to pay same in ' F ' as yard laborer, $150, or as work train laborer, $100." The agent succeeded in settling the claim for $100 and also ignored 'accumulations. The beneficiary lived in Italy. Claim 70,162, Wm. J. Milsonj liability $300. Policyholder was insured as " machine repairer, cement plant." He was killed while engaged in his regular occupation, attempting to start the ma- chinery in the mill. A settlement was made at $200 by the agent — who ap- peared to hold a profit-sharing contract — on the somewhat shadowy claim of " change of occupation." The examiners comment : " There appears to be no just cause for reduction of indemnity in this case." Such reduction appears to have been pursuant to the suggestion of the home office that there might " be a chance for salvage as to occupation." Claim 89,034, C R. Masoh; disability benefit $100 a month. The insured was a merchant, and was injured while fixing a hinge on his barn door. Disability continued for a period of six months. Adjustment was made at $290, the insured being pro-rated to the classification " car- penter." The home office writes to the adjuster: "The fact that he was injured while doing carpenter work can be used as a talking point at least in effecting compromise settlement." After adjustment, the adjuster wrote the home office: " I find the fact that he had been working at carpenter work at the time he was injured a very good talking point, a settlement was made in class 'D' and the man was perfectly satisfied with that. It was a just claim, lie could have claimed full benefit much longer, as in the time allowed him for partial indemnity he was confined to the hospital for four weeks on second operation." The home office replied: "Am certainly pleased with the settlement you have obtained, and I am proud of myself that I selected you for tlie mission." Claim 80,528, Wm. E. Kelley; liability $1,200. Insured was killed by being run over by a street car. _ Policy of home ofiice is indicated in the following quotation of letter of instruction to local in- vestigator : " What we want specially to ascertain is whether he was injured while attempting to get on a moving car, or whether he was under the infiuence of intoxicants or had been drinking at all, or any other information that may have a bearing on the case. Also, we would like to definitely learn about his income." 62 National Cokvention of Insurance CoixtMissiONEES The investigatoi' reported that insured ran in front of the car, slipped and fell immediately in front of it and was struclt before car could be stopped. Also that he was not under the influence of intoxicants, and that his income was about $150 a month. The examiners comment that tlie papers in this case do not disclose any reason for the reduction of the indemnity to ifDOO, the sum ultimately paid. At an informal hearing, held by tlie examiners for the purpose of giving the company an opportunity to explain tliis and other doubtful cases, the com- pany officers stated that reduction was advised on ground of occupation, that insured was not a barber proprietor but u, barber employee. The report of the company's investigator clearly showed that the insured was a proprietor. Claim 79,563', Paul Jameson {hahility not staled). Policyholder was insured as " clerk in hotel, office duties only." He was killed while returning fromi a hunting excursion, and classification reduced to that of " hunter " and claim pro-rated accordingly. Foreign Beneficiaries Claim 52,600, John Sidowslci; liability $100. Insured accidentally killed. Left wife and two children. Agent asked prompt settlement as widow had no money with which to pay the funeral expenses. Proof of loss duly received by company on' September 10, 1907. Company forwarded check to its general agent in the territory the next day. Such agent returned check on October 5, stating that he believed the party had left the country. A few days thereafter the beneficiary wrote reminding the company that proofs had been made and asking tliat the matter have attention. No attention seems to have been paid to this letter. Local agent nearly a year after wrote reminding company that it had issued check, that same had been returned to the company by the general agent, but that no payment had yet been made to the beneficiary. Xo reply was made to this letter. On the claim jacket appears the following notation: "Mr. St. C. (evidently the attorney for the claim department of the com- pany, Mr. St. Clair), agreed with me that letter should not be answered." This claim is still unsettled. Claim 50i,640, J. P. Landrum; indemnity $1,400, plus 10 per cent, accumula- tions, $1,540 in all. Policyholder was insured as a deputy sherift' and was killed by a person whom he had previously arrested. Company claimed that luider a Texas decision its liability was limited to one-fifth or $308. Such sum was reluc- tantly paid after it had written its local agent: " There is a liability against us under the terms of the liability contract at one-fifth the face of it. If you can make settlement by the payment oi $100 I would do it and get the matter out of the way." Claim 67,789, Seymour L. Clark. Policyholder was insured as a deputy sheriff and was killed while attempting to make an arrest. The company attempted to pro-rate the claim under the one-fifth clause on account of intentional injuries inflicted. Home office wrote agent as follows: Industrial Health and Accident Settlements 63 "As Clark was killed as deputy sheriff making an arrest, I assume we are liable, although if it were not for the danger of injuring a well-established l)usineS3 I feel that it could be compromised. I wish you would wire me what you think best to do in this case, whether to pay in full or make a satisfactory compromise or stand pat on the one-fifth. I presume your in.struclions will be the same as A. E. sent me some time ago. Use your God-given brains." Agent evidently followed such instructions and claim was ultimately com- promised at $260. Claim 62,355, Henry J. Leonard; disahility ienefit at $25 per month. Notice of claim was received at the San Francisco office immediately after the accident and was suppressed by the agent, who was acting under a profif- sharing contract. Claimiant was entitled to eleven months' indemnity, or $275. On representations made by attorneys for claimant settlement was finally effected about a year after the accident at $200. Claim 64,212, Charles Coleman; liahility Insured was killed by the accidental discharge of a, revolver. Adjuster reports that death was undoubtedly due to purely violent and accidental means and adds: " However, you wiil note on referriing to the application that he warrant? himself to be a. white man, and he is about as black a negro as ever was killed. Another thing, you will note that this application is not signed bv the applicant and was made payable to his wife, Lular G. Coleman, and that the application is signed by Lular C. Coleman. It occurs to me that the best way to handle this would be to reject the claim on breach of warranty ; First, that he made a misrepresentation concerning his color; second, that ho fully described his occupation as Hagman, when as a matter of fact he was not only a flagman bvit a police officer; third, that the policy was taken out without his knowledege, the application being signed Lular C. Coleman. Of course, the last defense is pretty slim as the applicant evidently knew what he was about. In fact all of our defenses may be rather slim, but I believe that if the claim is rejected and they are made to think they vvil! perhaps not get anything we will be able to get them to take something within reason or compromise." Later the adjuster in accordance with these instructions tendered the bene- ficiary the return of the premiums, which she did not accept. Her attorneys later succeeded in obtaining a compromise settlement for $150. Claim 72,106, Myron J. Ellison; liability $400. Insured killed in an accident due to a collision while driving on the public highway. Claim finally settled at $250, accumulations being ignored. How this was accomplished is somewhat indicated in the following quotation from a letter to the home office: "Tlie coroner's inquest — simply proved that he was not murdered but that his death was purely accidental. It is not known by the family that he had in the seat with liim the proprietor of a lov/ grog shop when he was killed, and this we can use as a bluff to show that we can prove that he was drunk, l.hey cannot prove that he was sober." Claim 76,171, Fred Williams; IMility Company apparently made a desperate effort to show that the insured, who was a clerk in a wholesale grocery store, and who was killed by being kicked by a horse, was addicted to intoxicants, but could do no more than to secure the statement of the policeman to the effect that the odor of whiskey was 64 National Convention of Insueance Commissioneks distinctly smelt by him while he was in the act of carrying the deceased into the house. Such policeman would not, however, state that the odor came from the insured's breath. The local agent adds : " We used this statement vipon the beneficiary and succeeded in settling the claim for one-fifth of the indemnity." Later the claim was sued on and ultimately compromised at $200. Claim 69,851, Thomas E. Kimiall; liaUliiy $500. Policy was issued to insured as a " window dresser.'' He was drowned while on a hunting expedition. Company not being able to classify claimant as a hunter and thus avail itself of the one-fifth clause — this owing to an adverse ■decision in the State of Iowa, where the claimant lived — succeeded in forcing a settlement at $375 on the ground that the insured had unnecessarily ex- posed himself to apparent danger. Standard Accident Insurance Company This company was ineorporated under the laws of Michigan in 1884, and now has a capital of $50'0,0'00. While its charter pow- ers permit it to do a fidelity, plate glass and steam hoiler business, its activities thus far have been confined to accident and health insurance, both commercial and industrial, and general liability insurance. Kated on total premium income, this is a large com- pany, but such income from industrial health and accident poli- cies was in 1910 only $250,000. Hence, as to volume of business, it does not take high rank among the companies investigated by this Committee. Loss Ratio The report on the Standard brings out the facts that this com- pany's industrial loss ratio in 1909 was 35 per cent., in 1910 46 per cent., and in the first six months of 1911, 50.2 per cent. The foregoing percentages, however, are based upon a premium in- come which excludes policy fees, the latter in 1910 being $47,589, as against a premium income of $250,313.72. Profit-Sharing Contracts The industrial business of this company is handled through salaried representatives and agents operating on both renewal and profilrsharing contracts. Prior to 1908 all agency contracts were on the profit-sharing plan. About the middle of 1907 or the beginning of 1908, however, this company discontinued altogether making contracts with new agents on this plan, and many existing Industeial Health and Accident Settlements 65 contracts were changed to the renewal form. The examiners re- port that the loss ratios on the various plans of agency compensa- tion were : Profit- Renewal sharing commissions Salary 37.7% 39.8% 38.3% 36.4% 49% 46.9% 43.9% -I 52.9% 47.2% 1909 1910 First six months of 1911. These figures indicate a rising loss ratio, also that in each case the ratio for the profit-sharing business was less than that on the other plans, and also considerably less than the average loss ratio of all plans for the year. In explanation, the examiners in sub- stance report that the present investigation having failed to re- veal any discrimination 'against claimants in profitTsharing ter- ritory, the low loss ratio in such territory is probably due to the fact that such contracts exist only in old established and seasoned agencies, where by general experience the losses are light; while, particularly as to the renewal commission business, especially in the south, the losses are universally heavy. It should perhaps be added that the above ratios, also, are computed on a premium income which excludes the policy fee. Adjustments The files of this company were thoroughly examined, all claims for 1910, whether for death or disability, having been gone over, as well as all death claims for 1908, 1909 and 1911 to date, and a large number of disability claims for 1909. It is notable that in three and one-half years the death claims presented to this com- pany approximated only 100. Claim adjustments are, with few exceptions, made under the direct supervision of the home office ofiicials of the industrial de- partment. 'As to such adjustments the examiners state : " The company's adjustments are, with few exceptions, liberal and fair, and the restrictive features of the contracts, as applied by the company, seldom operate to defeat a just or reasonable claim." This company seems to take advantage of late notice only when it has been prejudiced by the delay, though the examiners call attention to a few cases where the agent in the case has been over- 3 66 ISTational Convention of Insurance Commissioners zealous in enforcing the technical language of the contract. Criti- cised adjustments in other companies, due to alleged changes of occupation, are not noted in this company, somewhat for the rea- son that its manual does not debar the insured from labor about his home or occasional recreation, such as hunting, fishing and boating. No evidence was found of high pressure methods to force settlements in advance of proofs. Accumulations are as a rule paid without being demanded. The examiners conclude that certain settlements where such benefits were ignored were due to oversight and that they will be corrected. Further, while the policy contract permits the company to require the appoint- ment of an administrator in all cases where sick benefits accrued at date of death from natural causes are legally payable, the com- pany usually makes such payments direct to the beneficiary. The shovsdng made by this company is so generally excellent in its treatment of policyholders that certain cases — ■ in one of which the company's adjuster wrongly informed the agent that it was not liable in case of suicide ; in another of which, though informed of the death of the policyholder, the company made no effort to communicate with the beneficiary, who lived abroad; and in an- other of which it kept silent, though its agent had gotten hold of a policy contract, and in two or three othera of a similar char- acter which this examination developed — ■ are deemed by the Committee to be due to oversight and have been called to the com- pany's attention, merely that on a re-examination of the facts it may properly adjust such claims. The Committee heartily concurs in the following conclusions of the examiners: " It is the policy of the company to make prompt and full payment of all legitimate claims presented. None is rejected except for good and sufficient reasons. In doubtful and disputed cases it endeavors to avoid litigiation, preferring compromise vpith the claimant on a basis which will be mutually advantageous. At times this results in the company paying more than the contract appears to call for, but, on the other hand, the expenses of a law suit and the trouble both to the home office and the field force which would in- variably follow are avoided. This company's treatment of its policyholders is such that it is fully entitled to the confidence of the insuring public." This company was also granted a hearing at the Detroit meet- ing of the Committee. Its representatives stated that, save in a few minor particulars, the report of the examiners was satisfactory. Industrial Health and Accident Settlements 67 In connection with, such report the 'Committee deems it proper, ■while calling attention to the high loss ratio in this company, to note that it seems in almost ever case to recognize what this Committee feels to be the extra-legal responsibility of companies operating amongst the industrial masses. Such representatives stated, at such hearing, that they not only welcomed the present investigation, but upon receiving notice from any source what- ever that the company's claim department had made what was thought to be an erroneous or unjust adjustment, the same would at once be reopened, and in case of injustice a just settlement made. GermEin Commercial Accident Company. In this examination the Committee's examiners were assisted by a representative of the Pennsylvania department. This company is a small one, having commenced business in May, 1908. It is the successor of the Commercial Mutual Accident Company and has reinsured the risks of the Girard Health and Accident Com- pany. It has a capital stock of $100,000 and is licensed in twenty- three States. Loss Ratio On a premium income, respectively, of $6,573 in 1908, $19,437 in 1909, $21,218 in 1910 and $11,003 in the first six months of 1911, the loss ratio on its industrial business, first month's pre- miums, which are retained by the agent, being excluded, was in the respective years 22.4 per cent., 26.5 per cent., 30.6 per cent., and 43.2 per cent. With such first month's premiums included, such loss ratio was as follows: 1908, 15.3 per cent.; 1909, 22.2 per cent. ; 1910, 26.7 per cent. ; 1911 to date, 35.9 per cent. The relatively high ratio in 1911 is due to the payment of a number of claims which were unadjusted on December 31, 1910. While these ratios are so low as to suggest criticism, the Committee notes that this company is still very young. Profit-Sharing Contracts. This company has but three profit-sharing contracts in force. Most of its agents are compensated by a policy fee in the shape of a first month's premium and considerable percentages on the re- newal premiums thereafter. 68 National Convention of Instjeance Commissionees Adjustments To date this company has had few death losses. The examin- ers' report, therefore, largely covers disability claims. All claims are adjusted at the home office but with the assistance of the agents in the field. As to the methods followed by this company in mating adjustments, the Committee concurs in the following summary of the examiners : "A thorough examination of the claims indicates that over 60 per cent, are compromised or scaled by the company. The correspondence in a great per- centage of claims is voluminous and of a haggling and bargaining nature. The moment the company is advised of either an accident or an illness case, and es- pecially where the ciases appear to be of a serious nature, it uses a high-pressure system to adjust the claim at once, practically forcing the claimant by shrewd ingenuity on the part of the agent and the physician to settle before illness ceases or length of disability is determined. The company arbitrarily de- cides as to length of total and pairtial disability regardless of information furnished. Final proofs are seldom requested. As in other companies, the .accumulation benefits are persistently ignored." The attitude of the home office toward claimants is indicated in the following quotations from its correspondence: " It will be absolutely impossible to make any profits in the business unless advance settlements are made. We fear very much that these big claims will eat up most of your returns to us." " Please remember that notices must come direct to the home office and that notice to an agent is not sufficient." " We understand that Michael Ryan of 1909 Brown street is practically ready to settle and needs the money. We request that you immediately call upon him and try to pin him down to the nimiber of days for total and partial. Then we will proceed with adjustment." " We might say for your information that this is an opportunity for you to demonstrate your ability and also demonstrate that it is your purpose to liold down these claims to a proper figure. You know the man is a foreigner.'' At the hearing accorded this company at the Detroit meeting of the Committee, the head of its claim department appeared as its representative. His statements on behalf of the company empha- sized the criticisms of the examiners. In his own behalf, how- ever, he claimed that the adjustments noted in the examiners' report had been largely those of his predecessor, and cited as evi- dence of a change in practices the high loss ratio for the first six months of 1911, during which he took charge. The Committee however, after hearing him, was unable to agree that there had IisrousTsiAL Health and Accident Settlements 69 been sufBcient improvement in the conduct of the claim depart- ment of this company, and asked the assurance of its representa- tive, not merely that wrongful adjustments V70uld be taken up and claimants given their full due, but that much needed reforms in such department be immediately put into effect. The practice of this company in making changes in the application blanks of its policyholders after the receipt of such application blanks, and thereafter in certain cases in availing itself in alleged breaches of warranty, based somewhat upon such changes, is severely criti- cised by the Committee. 'The Committee also noted, as bearing upon the good faith of certain representations made to it at the hearing accorded the Gen- eral Accident Fire and Life Assurance Corporation, that the claim adjuster who had been substituted for W. I. Mullen, former claim adjuster of the last mentioned company, was the same man whose settlements as the adjuster of the Germ^an Commercial had been so severely criticised by the examiners in this investigation. Cases Claim 6,666, William Nightioay ; disahiUty ienefit $133.33. Insured lost sight of an eye through accident. Company first ofl'ered $45. Insured offered to take $100. Company then offered $72.50, splitting the difference, and settlement agreed on at that figure. Claimant, however, then had to threaten suit before he finally received indemnity agreed upon. Claim 5,948, N. S. MacCraclcen; UaliUty $500. Insured was killed while performing his duties as an electrician. Claim adjusted at $100, though absolutely no reason shown for reduction. Adjuster in reporting settlement, comments: "Clean case of liability for $350, but got off for $100 — Staid until almost two o'clock but finally adjusted for $100." Claim 6,174, George Kusenic; liability not stated. Insured killed December 23, 1909. Comrpany wrote agent: " This is a new policy on which we have never received one penny of premi- ums, and as it would he a calamity to have such a large loss on such a small agency, we expect your co-operation in this case and believe we can depend upon you giving it." Agent replied: '■ It may be a terrible loss to your company, but it is also true that yoii represent to policyholders that as soon as they receive their policy and they pay the fee, they are immediately entitled to benefits for accidents, and I do not care to deceive any one, even a foreigner." On February loth, company sent a settlement agreement for $25 to widow, who lived in Hungary. Same returned undelivered. Later company received 70 National Convention of Insurance Commissioners power of attorney appointing brotlier of widow to collect indemnity, also communication froon a clergyman concerning the claim. No attention, paid to these two communications. Claim unpaid. Claim 5,047, Ivan Skorm; disability benefit at $40 a month. Insured taken ill August 1, 1908. Settlement attempted by agent on Sep- tember 1st. Agent wrote home office on September 25th. " If I had had a release blank this afternoon I would have likely got him to sign a settlement for considerably less than he is entitled to." Claim finally adjusted at $55 on October 2d. Company asked agent to secure a letter of thanks. Correspondence in claim jacket No. 5,207, tends to show that this claim would have amounted to $260 had not an early settle- ment been made. Agent on December 31, 1908, wrote company: " Had I known the case as I know it to-day, I would never have let him accept the $55 draft at the time. Of course this was taking advantage of the ignorant for the interests of the company." Claim 8,038, James B. Davis; disability benefit, amount not stated. Insured had appendicitis. Settlement blank for $4 was rushed to claimant, evidently on account of nature of illness. Settlement actually made at $7. Claim 78,067, Harry Walters; disability benefit $25 a month. Insured lost a portion of a finger through an accident. Estimate of dura- tion of disability from 28 to 30 days. Company first offered $10, then $15, and finally settled at $16.16. Claim 3,337, Guiseppi Nicasia; disability benefit $20 a month. Insured's collar bone broken January 12, 1911, and a settlement agreement for $20 forwarded to the insured on January 19th, and signed by him. Agent stated that if he did not accept the money it would go back to the company and he would get nothing. Correspondence tends to show that the insured did not know what he was signing. Company refused to reopen the case. Claim 5,127, Bernice B. Bates; accident benefit, amount not stated. Insured met accident on October 25th. Policy fee, which includes first month's premium, had been paid, and policy in force to November 1st. Com- pany rejected claim on the ground that the insured was injured before his premium was paid. Claim 5,291, Charles W. Underwood; accident benefit, amount not stated. On receipt of notice of injury company wrote its agent: " Please take notice that this is merely a, trifling injury and not aptly a disability claim, and we feel that you will use your usual masterful way in settling this claim." Agent apparently made no effort so to do. Later, when insured wrote com- pany as to claim, latter replied: '■ We would not be inclined to attach very much importance to a slight injury from which tlicre could not possibly be a total disability for a man engaged in the occupation of a barber. Accident insurance is not intended to pay for hurt feelings, it is only intended to pay for loss of time." Proof blanks not furnished claimant. Claim not paid. Industeial Health and Accident Settlements 71 Claim 5,642, D. Gonmountouris; accident benefit, amount not stated. Premium due May 4, 1909. Insured injured May 29th. Notice of injury received June 7th. Company rejected claim for the reason that the June pre- mium had not been paid, although accident occurred while policy was in force. Claim 5,623, John J. Seiter, Jr.; accident benefit, amount not stated. Policy issued to insured as the driver of a delivery wagon for telephone line. He was injured while drawing poles in their yard. Ciompany pro-rated to classification of laborer; first ofi'ered $37.67, then $42.50, then $50, then $90, and finally settled at $100: In the correspondence on this case is the follow- ing interesting statement from the home office to the agent: " We have had years of experience in this field and have at all times with- out exceptions make advance settlements in cases of this kind and find this way the only way to make a profit in the business." Claim 7,950, Harry F. Werthley; disability benefit $60' a month. Policyholder was insured as manager, but injured his hand while assisting his employees to open a freight car. Company pro-rated claim to laborer, thus reducing indemnity to $25 a month, and deducted Sundays in settlement of claim. Claim 7,942, George R. Lindsay; disability benefit $80 a month. Insured was a dentist and injured his hand while moving his office. Com- pany pro- rated claim to classification of furniture mover or laborer and settled disability for $41.12. Fidelity Accident Company This is a Michigan corporation. It is authorized in eleven States and the District of Columbia. It began business as a mutual co-operative casualty company, 'and in June, 1909, it be- came a stock company with $100,000 capital. Its premium in- come for 1910 was slightly under $100,000. Loss Ratio Its loss ratio for 1910, policy fees not being included in total premiums, was 36.9 per cent. Its loss ratio on profit-sharing con- tracts was 37.6 per cent.; on business compensated in other ways 35.5 per cent. Profit-Sharing Contracts This company does an industrial business only. It is a strong advocate of the profit-sharing plan, its representatives claiming at the hearing ^accorded the company that thereby it secured a better class of business and a better class of agents. About two- thirds of its premium income comes from agents holding contracts of this kind. 72 National Convention of Insurance Commissionees Adjustments All profit-sharing agents are allowed to make adjustmentB of claims under $25, and about one-third of such agents do so regard- less of the amount of claims. It is worthy of note, therefore, that few of the adjustments made in this company have been criti- cised by the examiners. The latter examined all specific losses, as for death, eye and limb loss, from January 1, 1909, to June 30, i911, as well as a few such cases in the latter part of 1908. •Approximately 200 accident claims filed during the year 1910, as well as 160 sickness claims filed during the same year, were also investigated during the course of the examination. All claims criticised or commented on are attached to the exam- iners' report. Such report indicates that this company does not take advantage of late notice unless it has been prejudiced thereby ; and that there are few cases where the company and the examiners disagree as to the alleged change of occupation. The practice of the company in itself notifying foreign beneficiaries of their Tights, and furnishing them proof blanks without application therefor, is both unusual and refreshing. In common, however, with that of other companies examined, the practice of this company as to accumulations is somewhat subject to criticism. Its representatives, however, stated that there would be no further cause for complaint in this particular and that all ignored accumulations found to be due would be paid. The examiners also noted that this company at times made changes in the application after the same had been received at the ofiice of the company, and also made some of its policies payable to the estate of the insured and not to the beneficiary where the name of the beneficiary stated in the application was not clearly legible. It assured the Committee, however, that these practices would be discontinued. While the examiners call attention to a number of oases in which they disagree with the claim department of the company as to adjustments made, the methods of such department seem to be so generally excellent that this Committee does not deem it ap- propriate or necessary to call particular attention to any such cases. Industeial Health and Accident Settlements T3 Federal Casualty Company. This company was organized under the laws of Michigan in 1906, and now has a capital stock of $200,000 ; it does business in twenty-seven States. It writes health and accident insurance on the industrial plan only. Its premium income for 1910' was approximately $140,000. Loss Ratio Excluding policy fees the industrial lose ratio of this company for 1910 was 40.5 per cent. Indeed, it has averaged about 41 per cent, for the past five years. The company asserts that in 1910 such ratio on its profit-sharing business was 49.9 per cent. ; on its nonprofit-sharing business 36.7 per cent. The examiners found, however, that such ratio in 1909 on profit-sharing business was 37. 9 per cent. ; and on nonprofit-sharing business 47.2 per cent. Profit-Sharing Contracts This company favors the profit-sharing plan as applied to agents. !N^one of its ofiicers or employees, however, had such contracts. About 71 per cent, of its 1910' business was done through profit- sharing agents. Such agents usually received 10' per cent, of the premium income and 50 per cent, of the net profit of the business. The agents of this company working on the straight commission plan never receive more than 25 per cent, of their premium collections. Adjustments Practically all claims are adjusted at the home ofiice, though in some districts agents have authority to adjust claims and issue drafts, subject, however, to approval or revision at the home ofiice. The examination covered all accidental and natural death claims from January 1, 1909, to the date of the examination, as well as several thousand disability claims. It appears that the home office (answers correspondence without unnecessary delay, that proof blanks are promptly furnished, and that the filing of proofs is facilitated. While in common with other companies in this field the accumulations are at times ignored, and while also occasion- ally, though infrequently, an adjustment falls below the usual high T-1- National CoNVEM'Tioisr of Insueance Commissioners standard of settlement, this company's claims are promptly dis- posed of and payments are made to beneficiaries with a minimum of red tape or expense. Beneficiaries residing abroad are treated as well as those residing at home. Foreign consuls are promptly informed of the necessary steps to be taken to secure the indem- nities due such beneficiaries. Indeed the methods of this company in these particulars are noticeable owing to the absence of ob- structive tactics developed elsewhere on this investigation. Some change of occupation cases are commeaited upon by the examiners, but the only pro-rating in connection with recreations are those which seem to be warranted by the terms of the contract or the company's manual. On the whole this company's practice in its settlement with policyholders has the commendation of the Committee. It does not overlook the moral while availing itself of the statutory law. More, while its loss ratio is higher than the average in this field, it is commonly understood to earn a fair return to those who have invested in its stock. For reasons already indicated, it is not thought necessary to make specific reference to certain of the adjustments criticised by the examiners. These will be found in the schedule annexed to the report. United States Health and Accident Insurance Company. This company, which is a Michigan corporation and operates from Saginaw, ranks third in the United States in industrial health and accident insurance in force. It operates generally throughout the country, chiefly as an industrial company. Its business is divided into two main branches, known as the monthly industrial and the railroad installment. Its premium income in these two branches in 1910 was $741,000 in the former and $166,000 in the latter. Loss Ratio The loss ratio for 1910, on the monthly industrial plan, was 44.27 per cent. ; and at the hearing was stated to have averaged for the past seven years 47.76 per cent. Its loss ratio on the rail- road installment plan in 1910 was but 41.31 per cent., its loss Industrial Health and Accident Settlements 75 experience in this field being, apparently, thus quite different from the experience of other companies operating therein. Profit-Sharing Contracts This company compensates its agents by commissions with additional contingent profits based on the loss ratio in their ter- ritories, by straight commisisions, and by fixed salaries. There are, approximately, 100 district managers or agency directors who hold contracts providing for contingent profits. Adjustments are as a rule snade at the home office. Seven of the district managers, however, have authority to adjust disability losses not exceeding $100 in amount. The examination of the claim papers 'also in- dicates that the lagents, especially those holding profit-sharing con- tracts, take an active interest in the adjustment of claims, and that the home office is largely guided by their information and ad- vice. The examiners furnish no ratios indicating the experience of the company under these various plans. During the course of this investigation about 3,000 claims were examined, 1,000 of them being for serious or fatal injuries. JSToii- serious claims for illness and accident under the disability pro- visions of the policy appear to be paid with fairness and in accordance with proofs submitted. The same is largely true of claims for specific losses, though, as will appear from examination of the cases cited, this company hews rather closely to the line, particularly when it can avail itself of some court decision bearing thereon, in interpreting its obli- gations for death loss under its contracts. Thus, the examiners call attention to a considerable number of cases where accumula- tion benefits have been ignored, and in some of them to written evidence indicating th.at the home office of the company was willing to evade its obligations in this particular. Attention is also drawn to a number of cases where advantage has been taken of so-called changes in occupation by a somewhat strained construction of the contract, even where the change was temporary or, though rarely, the " occupation " relied on was one of recreation or pleasure. The practice of the company, however, which merits the emphatic criticism of this Committee, is indicated in the following quota- tion from the examiners' report: 76 .Nation"al OoisrvENTioN of Insueajstoe Commissionees "All applications for insurance are signed by the assured and forwarded by the agent to the home office. We have examined 500 such applications and find that in 172 oases the applications were amended at the home office, by inserting some phrase limiting the duties of the assured in his given occupa- tion so as to conform to the description of his duties in the company's manual." In brief, after the insured has represented in his application what he deems his occupation to be, if such occupation does not correspond literally with one rated in the company's manual, tht' company, without notifying the insured, has been accustomed to change such representation so that it will conform to its manual. This practice has been noted in other companies. While it appeared at the hearing given the company at the Com- onittee's Detroit meeting that this practice has now been aban- doned, the effect of such practice in the past seems in some cases to have been to make .available to the company defenses such as " breach of warranty " and " change of occupation " where such defenses should not have been asserted or relied upon. The ex- aminers cite the following cases as indicating this: Claim 167,768, Clarence Ward; indemnity $400. This policyholder stated in his application that his occupation was " sorting ivory bulbs in button factory." When the application reached the home office of the ■ company some one inserted in the application the words " not using machinery." The insured was injured by a small buzz saw at the place of his usual employment, causing tetanus, which resulted in his death. The company availed itself of the words " not using niiachinery," pro-rated the claim accordingly, and cancelled its liability for $1C0. Claim 193,018, Silas Taher; liaUlity $300. This application indicates that after it was received at the home office the words " barn boss " used therein were supplemented ■ by the words " not hostler." The proofs show that the occupation of the assured at the time he was killed was " ranch farmer, in charge of barns and horses." The company reduced the indemnity to $200 on the claim that the occupation of the assured at the time of his injury was " teamster or farm hand." Clearly there is enough elasticity in the words of the occupation clause which, technically construed, permits pro-rating, whenever the insured is injured " while doing any act or thing " pertaining to a more hazardous calling, without this or any company increas- ing its contractual rights through a modification in the representa- tions made by the policyholder, without such policyholder's knowl- edge. On the other hand, it should be stated that in the majority Ii^DUSTEiAL Health and AcciDE]srT Settlements 77 of the cases of this company where the applications have been changed, the added words do not really change the occupation in which the insured was actually engaged at the time he signed the application. The practice is criticised simply as a wrong one and capable of much evil in any company where settlements are not, as in this company, reasonably fair and in acoordanoe with the obligation assumed. For a company as large as this, few cases were found where positive wrong was done by the claim department in making set- tlements with policyholders. The Committee, however, could not but note that the legal advice given this company, if not, perhaps, warranting the description shrewd, is rather too skilled, and that,, therefore, the technically literal meaning of the clauses of its con- tract is too often asserted. Indeed, as has been indicated else- where in this report, insurance companies which deal with the poor and those unfavored by fortune or education may well at times forget the law and simply do justice. While some of the cases which follow are cited because the ad- justments made have been properly criticised by 'the examiners, most of them are included in this report only to indicate the possi- bilities and temptations, both to the company's claim department and to its legal advisers, in the industrial health and accident pelicy now commonly used in this field. Claim 151,167, Oscar Hiller; liability $4fl0. Insured was a harness maker and met his death while out in the country on a day's hunting for pleasure. Company pro-rated its liability to classifi- cation of " hunter," relying upon certain legal decisions a,s its warrant there- for. How far such a practice could go seems to have appealed strongly to the attorney representing the beneficiary, from whose letter to .the company the following is quoted: " Oscar Hiller was not engaged in any other occupation than harness mak- ing at the time he received the gun shot wound which caused his death * * * If you are to apply any such ruling as you attempt here, then it would be impossible for the insured to leave his work-room or harness bench and to do anything in the line of pleasure or necessity without losing his indemnity. For instance, if he found it necessary to nail a shingle, on a leaky roof of his hen house, he would then become a carpenter. If he went skating on the ice for pleasure, he would be classified as a skater. If he drove out with his family horse he would be a professional driver or jockey. If he fell on a slippery sidewalk while engaged in delivering an article of merchandise from his harness shop, he would he a messenger or delivery boy." In this case the company seems to have recognized the force of the attor- ney's argument, for it ultimately paid the claim in full. 78 National 'Conveittiow of Insurance Commissionees Claim 181,796, Cleveland J. Osborn; liability $400. This policyholder was insured as "farmer, fruit grower, duties: gardener." He sustained a fatal injury while loading hay. The company therefore ad- justed the claim by reducing his classification to " farmer," this in spite of tiie fact that in California farmers are also — indeed, if not chiefly — fruit growers as well. The beneficiary accepted the lower amount and the home office, when its attention was called to the wrong, based upon the occupation stated in the application, replied that " the circumstances under which this man's death occurred, as brought out in the proof, justifies pro-rating the claim," and added that inasmuch as the payment was accepted promptly it did not " believe, therefore, it is necessary to take up the question of an additional payment." Claim 184,049, John W. Bruening; liability $1,500. This policyholder was insured as the proprietor of a grocery store. The proofs showed that connected with such grocery store was a saloon. The insured was killed by robbers who attacked and attempted to rob him. The company reduced his occupation to " Class D " which covers the occupa- -tion of a saloon-keeper, tending bar, and sent its check for $100. In so doing It also ignored accumulations, though when its attention was later called to :the fact it forwarded the same. The examiners state: " It is to be noted that in this case there was no change of occupation at any time since the issuing of the policy, and that, the agent who sold the insurance evidently knew exactly the nature of the man's occupation." 'Claim 178,026, Walter M. Wilsey; liability $400. The policyholder was insured as a creamery employee. He was killed at a railroad crossing, and at the time of his death was technically a " finisher of casein," though there was no classification of this latter occupation in the manual, and though the difference between such occupation and that of creamery employee is so shadowy as to be difficult of expression in words. The company reduced the indemnity to $300 and paid the claim at that amount. Claim 150,370, Alfred J. Dunn; liability $400. This claim: was settled at $100 on what was apparently a justifiable pro- rating. It is referred to only as indicating the attitude of the agent who acted as the company's adjuster in the matter. Note the following quotation from such agent's letter: " Now the reason that I am hurrying this claim is due to the fact, which no doubt it true, that it will be pro-rated to $100, but I wanted to get it cleaned up and adjusted and paid before it got into the hands of relatives or other parties." Claim 131,470, Andrea Oopels; liability not stated. Policyholder was insured as a " farmer, proprietor " and sustained fatal injury while engaged in unloading lumber from a wagon. The claim was pro- rated and is referred to here only to show by quotation a frank statement on the part of the counsel of the company, such quotation being taken from the papers in the claim jacket: "Change of occupation is a mighty poor defense, even in a good case otherwise." Industrial 'Health and Accident 'Settlements Y9 Claim 193^446, Mike Evancheck; liability $400. Policyholder was insured as an " ore filler, shoveling ore into an automatic basket." He was killed in the performance of his usual duties. In making the adjustment his classification was reduced on the ground that he was not an ore filler shoveling ore, but a top filler shoveling coal into the furnace, and payment thus reduced from $400 to $225. Claim 170,753, Herman Jacobi; liahility Policyholder stated in his application that he was a " stationary engineer, not firing." Proofs show thajt he was working at a, hoisting engine when his feet slipped and he fell backwards, resulting in his death. The company pro- rated his occupation to that of repair man and endeavored to settle at $300. Claimant's employer protested, stating: "As you admit he was insured as an engineer, and he was following his occupation of engineer at the time he was killed, and was acting as a sta- tionary engineer and was not firing. Now I do not see how this could be made plainer. Your policy does not say what kind of an engineer he should be, and I should consider it absolutely absurd if it did. An insurance policj' that has a thousand little kinks to escape by when an accident happens I consider no insurance at all." Suit was subsequently brought on the claim and it was then compromised for $335. Claim 174,654. P. B. Blake; di/sability benefit. Insured was disabled from an illness beginning June 1, 1909, which termi- nated in his death February 12, 1910. Company was not notified of disability but final proof showing death was received by it February 18th. Because of want of notice of disability company rejected claim. Its agent, however, clearly believed that under the terms of the policy the widow was entitled to $100 funeral benefit. Company, however, notified the agent that it did not think there was any liability on the policy, adding, " Unless the parties interested take this matter up again we would suggest that you let it rest." Claim was, however, finally adjusted for $100, apparently funeral benefit referred to by the agent. Claim 134,030, Daniel B. Miller; disability benefit. This policy clearly gives a funeral benefit of $100 to the wife of the insured if death result through injuries or illness that originates after same has been in force ninety consecutive days. Examiners' report indicates that it had been in force for this period, but company for three months insisted in its correspondence that it was not liable, thus forcing beneficiary to bring suit, whereupon the claim was settled for $100. Claim 152,814, John A. Rhoad; liability $200, plus one year's accumulations. Company forwarded draft for $200. Agent called its attention to the accumulation, whereupon home office wrote agent: " We beg to state that this matte-r was overlooked by us, and if you are unable to deliver the draft sent you kindly return same and we will add 10 per cent." Claim 169,966, Charles Zeller; liability/ $200, plus one year's accumulations. Company's agent apparently attempted to evade accumulation benefit, he writing home office: "We also inclose the policy for cancellation, and if you will send com- pany's check for exactly $200 I will be able to satisfy claim with that amount." 80 JSFational 'Conveiv'tiox of Insurance Commissioijees Claim 148,089, Charles McGrillis; liability $300, plus one yeai-'s accumula- tions. Insured met his death through accidental poisoning and the one-fifth clause of the contract was therefore applicable. Company recognized accumulations and senit draft for $66. Agent, however, returned the draft and aslfed for one for $60. Company then cancelled draft first issued and paid the claim as suggested by the agent. Claim 183,8017, Charles E. Twitchellj liabilip, I he insured was a policeman and was insured as such. Company's agent, apparently straining for some means to pro-rate, called attention to the fact that the insured was a, mounted policeman. Company, however, replied that it was " inclined to the belief that there will be no opportunity to pro-rate." In this case the insured had had a policy which gave acciunulation benefits and which after being in force five years had been exchanged for another form which also contained the accumulation clause and which had been in force more than three years when he was killed. Superintendent of claim depart- ment first took the position that under these circumstances beneficiary was entitled to accumulations for five years, or $200 in all. Such superintendent later changed his view and the company met its obligation by payment of the principal sum and the three years' accumulations called for under the second policy. Claim 17'2,488, George Gridzhanckes ; disability benefit. This case is cited merely to quote the following from a, letter of the super- intendent of the claim department: '■' There will be a 10 per cent, increase due under this policy, and if it is claimed by the insured please return the draft which was sent you and we will forward a new draft with the accumulations included." The insured did not make claim and the accumulations to which he was entitled were not paid. Claim 168,407, Silas Kirk; liability $400'. The policyholder was insured as a stationary engineer. His policy had an omnibus clause providing that if sunstroke, freezing, hydrophobia, gas or other poisonous vapor, due to external violent and accidental means, should result in the death of the insured, the company would pay in lieu of all other indemnity one-half. When the insured met his death he was employed in a mine. The company properly pro-rated this claim to the classification miner, for which the indemnity was $100. Presumably, however, one of the hazards connected with this occupation is asphyxiation. Indeed this insured was as- phyxiated. Inspite of pro-rating to the classification miner, the company availed itself of the clause quoted and the claim was adjusted at one-half or $50. Claim 156,502, Anthony Peterson; liability $.'?00. This policy contained the same provision as to asphyxiation. The policy- holder, however, at the time he was insured, was employed in an occupation, namely, as stillman, watching and testing still in an oil refinery, where pos- sible asphyxiation was incident to his occupation. Company, on the suggestion of its agent, who held a profit-sharing contract availed itself of the clause mentioned and settled the claim at $150. Industeial 'Heal,th a^^d Accident Settlements 81 Cladm 16f),53.'), Frank Jackson; liability $300. Insured sustained an injury to his arm' which caused blood poisoning result- ing in death. Beneficiary was entitled to one year's accumulations. Attitude of home office toward this claim is indicated in the following quotation from a letter of the superintendent of its claim department to its local manager: " I am inclosing, herewith, a sight draft which I have signed, but if you de-sire to go tiiere and try to make a settlement of the claim for less than $oOO you mky do so. Otherwise forward draft for $300 to the beneficiary, which draft will be honored when presented through the bank with the policy attached." This claim, after an apparent effort to compromise it, without any apparent reason therefor, was settled by the payment of $300, the accumulation benefit thus being ignored. Claim 129,850, William Sandman; liahility $400. Insured was a restaurant keeper and subsequently changed his occupation to a carpenter and was killed while so employed. Company was therefore entitled ito -pro-rate its liability to $300. Insured died September 22, 1907. Company's local collector, October 14th, notified its district manager at St. Louis of insured's death and requested blanks for final proof. On November 18th, home office sent draft tor $30 to beneficiary, apparently availing itself of the 10 per cent, late notice clause. In reply to protest made by the beneficiary company stated: " Kotice to the agent does not constitute notice to the company, as you will note by referring to the conditions of the policy." Later the attorney for the beneficiary wrote: " The day after his death the widow took the policy and delivered it to the agent of the company, one Mr. Steele, who lives at Bismark, and requested him to notify the compajiy. Mr. Steele neglected to notify the company until alter ten days had expired and refused to pay more than $20, being 10 per cent. Mrs. Sandman of course thought the agent had notified the company 11 nd consequently neglected to give the company notice herself." Though the local collector subsequently wrote urging that the late notice clause be waived, nothing further was done i-n the matter and the claim stands adjusted at $30. It should be added that the district manager at St. Louis operates under a, profit-sharing contract. Claim 168,713, Frank L. Harris; liaUlit]i $500. Assured met his death while he was endeavoring to save money and papers from his residence, which was destroyed by fire. Company asserted the un- necessary exposure to danger clause in its policy and settled the claim for $100, plus two years' accumulations. Claim 181,590', Will R. McPeak; UaUlity $750. The insured was a policeman and the policy was issued to him as such. He was killed while in the discharge of his duty by a prisoner whom he had arrested and brought to the city jail. Presumably a person so employed is liable to injury initentionally infiicted by others. The company, however, availed itself of the clause in its contract permitting it to pay 10 per cent. of the principal sum in case injuries are intentionally inflicted. Claim 193,506, Delbert H. WhitmarsK; disability benefit. This policy was issued September 29, 1910, and remained in force until February 1, 1911. Insured was injured January 30', 1911, and notice of injury 82 National Convention of Insueance Commissioners mailed to the company on February 15th. Company apparently took advan- tage of the fact that the premium for February, which began the second day after the injury, was not paid and rejected the claim. The facts are some- what indicated in the following quotations from the correspondence in the claim jacket. Company's agent wrote home oifice: "He was injured by a fall January 30, 1911, and has been unable to walk since and is now in bed. February 4, 1011, a notification card was mailed at Smithville Flats informing him that his February dues were due. His brotiier 'does not know whether you havf; been notified of his injury and thinks that the dues have not been paid from the fact that aiter his injury he being without means and no one being particularly interested that was near him would attend to it." From a letter of the company's agency director: " In referring to our records I find that Mr. Whitmarsli allowed his policy to lapse on February 1st and there is no liability on the part of the company." From the district manager, indicating that at the time he wrote the letter last quoted from he knew he was making a misrepresentation: '■ I wrote this man, Luther Fowlstop, of Cincinnati, N. Y., this letter because I thought perhaps we could stand him off on account of his policy lapsing the first of the month. It seems that he was hurt on January 30th, but I have made these things go before, and he and a lot of others lapsed on February 1st on account of the claim that we turned down in December when the claimant was not entitled to one penny. I wrote him about this some time ago, but if he comes back at us we will give him the 10 per cent, propo- sition (evidently referring to late notice) but I think this will be the end of it." In spite of having this correspondence before it, the claim de- partment of this company made no effort to meet its obligation to its insured and the claim jacket is stamped " Rejected." Toward the close of the investigation the general counsel of the company submitted to the examiners the claim papers in seventy- two cases selected by him at random from the files, where adjust- ments had been made which in his opinion were in excess of the company's liability. As to these the examiners comment: "All of the cases thus submitted were examined by us at his request and we found them to be disability claims of a non-serious class. The adjustments in all such cases were made in accordance with the proofs as submdtted by the assured. The period of total disability appears to have been computed fairly and the provision of the policy requiring medical attention during the entire period of the disability was given a liberal interpretation." The examiners also comment as to litigated claims as follows: " Considering the size of this company, the number of resisted claims is relatively small. Tliere are now pending in the courts fifteen suits under policy contracts. From an examination of such claims it appears that the defenses interposed are meritorious, and that the policy of the company is to compromise rather than to litigate claims involving doubtful questions of law or facts." Industrial 'Health and Accident Settlements 83 Massachusetts Accident Company The Massachusetts Accident Company was incorporated in October, 1908, as the successor of the Massachusetts Mutual Acci- dent Association, which had been in business for about fifteen years. Its capital stock is $100,000. Its home office is in Boston and it does business in all of the New England States and in six other States, besides the District of Columbia. Its business is divided into three departments, two of them being strictly industrial; one on the monthly premium plan, and the other on the weekly. On these two plans its total premium income for 1910 was about $220,000, its monthly premium busi- ness being tenfold as much as its weekly business. Loss Ratio In the monthly department its loss ratio for that year was 40.85 per cent. ; in the weekly, 24.45 per cent. In computing such ratio, however, policy fees were excluded. Profit-Sharing Contracts This company advocates the profit-sharing plan of compensa- tion; indeed, it asserts that agents so compensated can be safely trusted to make adjustments. It adopted this plan less than a year ago and at present has twenty-three profit-sharing agents. At the hearing granted this company at the Detroit meeting of the Committee, its president claimed that this plan seems to work out very satisfactorily. This, for the reason that the agents take a greater interest in the business, are more careful in the risks they secure and more often make personal investigation of the claims presented against the company. At present practically all of this company's agents are compensated in this way and authorized to adjust claims, not in excess of $25, in some cases the limit being fixed at $60. Adjustments This examination covered all claims involving amounts above $50 and all those where the jackets were marked " late notice," " no claim," and where there were any other markings which appeared to require investigation; also all death, eye and limb 84 Xatioxal Cohvextiux of Ixsuea]s;ce Commissioners losses, whether paid or not from January 1, 1909, to January 1, 1911. Approximately 6,00'0 claims were gone over. The report of the examiners warrants the statement that this company is one of the few that pay accumulation benefits whether demanded or not. It is prompt in making settlements of the claims which bear the stamp of its approval and gives assistance to those desiring to make proof of claim instead of throwing obstacles in their way or refusing to allow them to make same. It was, however, brought out that the company stands for a strict observance of the policy requirements, particularly in respect to the giving of notices of disability from injury or sickness, and that it very frequently settles claims in advance of the determina- tion of the disability by the offer of a lump sum for immediate payment. Thus, in a few instances, it has paid the amount figured out as his clue by the claimant when, as a matter of fact, it ap- pears that a somewhat larger amount was due under the terms of the contract. The representative of the company at the hearing contended that these latter cases can all be explained by additional information obtained by the adjuster, but not contained in the j ackets, and also that all other settlements have been made strictly within the tenus of the contracts. The Committee, however, is of the opinion that a company which does stand on its strict legal rights with respect to the time within which notice can be given cuts off meritorious claims in some cases and that the technical defense which the company has should only be used to defeat the designs of fraudulent claimants. It also believes that advance set- tlements may have the eft'ect in some cases of inducing the claim- ant, in order to secure needed funds at once, to settle for a smaller amount than what the termination of the disability would entitle him to. Aside from these practices, the company is to be commended for its methods in settling with its policyholders. The examiners cite a number of cases which suggest how easy it is, even for a company which desires to be fair — as apparently this company does — to cut and scale claims on the occupation clause of an industrial health and accident contract. The Com- mittee, however, does not deem it necessary to do more than to make this reference to the report of the examiners and therefore cites no cases. Industrial Health and Accident Settlements 85 Equitable Accident Company This also is a Massachusetts corporation. It began business in 1891 as a fraternal benefit society. In 1895 it became an assess- ment corporation .and in 190)9 a. stock company with a capital of $100,000. For the first few years its membership was limited to the Masonic fraternity. Its home ofiice is at Boston. Considered as an industrial health and accident insurance company, this is the smallest of those covered by the present investigation. It does business in three departments, only one of which is strictly industrial. In the latter its premium income for 1910 was about $21,540'. Loss Ratio This company's lose ratio for 1910 was 38.6 per cent. It is perhaps interesting to note that in its so-called intermediate de- partment where it does business on the quarterly premium plan, its ratio for that year was nearly the same, that is, 40.5 per cent. Profit-Sharing Contracts This company has about 150 agents in all, 100 of whom are fairly active, and of these lY are operating under profit-sharing contracts, though for industrial business only. Of the seventeen agents working under profit-sharing contracts, only three are per- mitted to make adjustments without the approval of the home ofiice, and these only for amounts of $50 or less. The records of the latter were, however, found in such a condition as to make it practically impossible to determine whether premiums had been paid promptly and thus all accumulation benefits properly met. In the opinion of the Committee there is room for considerable improvement in the practice of this company in this respect. Adjustments The examiners investigated all claims of $50 or over and most claims of $30 or over, from January 1, 1908, to April 1, 1911, and from the latter date all claims of $15 or over. Of the claims examined only nine were for death losses, the vast majority being for sick and accident benefits. Little, if any, evidence was found of practices developed by this investigation in some of the larger companies. Indeed, the exam- 86 National Convention of Insurance Commissioners iners conclude that, aside from the relatively minor matters pre- viously mentioned, and the fact that there seems to be evidence in some, cases that the policyholder's application has been changed in the home office so as to make the same conform more literally to the wording of the company's manual, the Committee concluded that the settlements of this company were in .almost every case fairly and equitably made. This company did not appear at the hearing accorded it, but submitted its views, in writing. Requirements At its meeting at Milwaukee on August 21st, the Committee de- termined to demand of the companies already examined that such companies at once: 1. Make an investigation of their respective claim departments, ito the end that wrongs, such as those pointed out in this report, shall he undone and justice done. Several of the companies most criticised have already under- taken to do this. This requirement does not cover merely the cases referred to by the examiners, but all cases, for a reasonable period of time, of a similar character. The companies will be expected to inform the Committee of their plans for carrying out this work and to make frequent reports to the chairman of the Committee. No person who has been in any way directly responsible for the criticised adjustments of a oompany should be employed or have part in any review of the same now to be made. 2. Establish in each company a hoard or com,mittee of review, of which at least the active executive officer and a member of the hoard of directors in no way connected with the claim department shall he members. This committee or board should, either before or after adjust- ment, review each claim as to which there shall be dispute, as well as each settlement by agrec'ment or compromise where less than the stipulated amount of indemnity set forth in the policy shall have been or is to be paid. Such committee or board may also well take cognizance of the review of past adjustments to be made in accordance with the requirements of the last paragraph. Industeial Health and Accident Settlements 87 3. Either dismiss from their employ, or else retain in positions where in the future they will have nothing whatever to do with ad- justments, the present heads of the claim departments of the Con- tinental Casualty Company, the National Casualty Company, and the Phoenix Preferred Accident Insurance Company, which per- sons have by their acts demonstrated that the adjustment of claims carmot properly he entrusted to them hereafter. The recommen(ia,tioiis of the 'Oommittee as to like officers in ithe North American Accident Insurance Company and the Ger- man Commercial Accident Company are withheld pending further investigation as to their responsibility for conditions shown. At the New York meeting of the Committee, the General Accident Fire and Life Assurance Corporation was required, for reasons indicated in this report, to dismiss from its service its industrial department manager, its superintendent of agencies, its chief ad- juster and his assistant, its manager of the weekly branch and the head of its legal bureau. 4. Each agent, collector, adjuster, manager or other representa- tive in the field of the companies covered hy this investigation and all companies doing a similar hv^ness, as well as any employee or officer at the home office., who is compensated in whole or in part by a share in the profits accruing on the industrial business of the company, shall' have no power to adjust or s&ttle claims prior to receiving approval as to each such adjustment from the home office. The approval of the convention of this action of the Committee and the support of each commissioner in case a company fails to comply with these demands is asked by the Committee. Recommendations. The investigation thus far has been conducted with such celerity, and the reports of the examiners and the hearings thereon are of such recent date that the Committee is loath at this time to make final recommendations. The evils existing are, it is thought, clearly indicated in what precedes. Deplorable condi- tions have been found in the claim departments of companies which do easily 75 per cent, of the business done by all of the companies yet examined. While in the total of adjustments, those 88 WatiOI^AL iC0NVENTI0:S' of IxSURA^'CE CoilMISSIONEES criticised or selected for comment tare probably less than 2,000 cases, it will be noted that approximately 90 per cent, of the claims examined were for minor amounts, due to disability from sicknesd or accident, where the adjustment is usually fair. Of the specific claims examined, where the amount involved is usually consider- able, the percentage of scaled or rejected claims is high — indeed, very much too high to be explained by error of judgment or care- lessness. Indeed, the Committee feels warranted in concluding that when dealing with companies doing an industrial health or accident business, the policyholder public of the country — par- ticularly those who through ignorance or poverty are unable to protect themselves land, therefore, are peculiarly the wards of gov- ernment as represented in this convention — has too frequently been the victim of unconscionable practices in the claim depart- ments of the companies criticised in this report. Promises of reformation made at the hearings are, therefore, not enough. This convention should take action which will guarantee the just treat- ment of policyholders in the future. More, it should be clear to every one familiar with preseait social and political conditions that, unless the policyholders among the laboring masses are to be treated fairly by these companies — indeed, if the policy settlements of industrial health land .accident companies cannot be made fair and clean — the public will demand, not the mere regulation of the companies now under in- vestigation, but the prohibition of this kind of insurance by private corporations; in other words, the furnishing of it by government itself. As it is, the signs of the times point in that direction. Meanwhile, however, it is clearly the duty of the governments represented in this convention that there be an immediate cleaning up — perhaps even a cleaning out — -and that hereafter the com- panies involved be kept clean. We, therefore, recommend to the convention the following, indicating some of the possible remedies for existing conditions: As TO Legislation I. A standard industrial health and accident policy provision law, or amendments to the present law. It is clear that the statutes regulating the policy contracts of Industrial Health and Accident Settlements 89 companies, both general and industrial, writing illness and casualty insurance, do not sufficiently protect those who are oMiged to pay for their insurance on the industrial plan. While the v.ast ma- jority of the criticised cases are based on contracts made before the adoption of the standard provisions law of 1910-11 by the States now having such .a law, it is equally clear that had such law been in force generally throughout the period covered by this investiga- tion, many of the same practices would have been possible, in- deed, in some particulars, apparently ratified by this law. Hence, changes are necessary. Whether in the form of a new law or of amendments to the present law, this convention should consider the following suggested remedies: 1. Pro-fating for change of occupation should he permitted only where the insured has actually changed his occupation or means of livelihood. The elasticity of the present clause, which permits a company to lower the classification of an insured, provided he is doing "lany act or thing pertaining to any occupation more hazardous than that stated in the policy," as enforced by many companies, is re- sponsible for a goodly part of the criticisms here made. The policyholder should have indemnity depending upon his occupa- tion as such, and should be charged accordingly. 2. Pro-rating should^ he up as well as down. When the insured changes his occupation to one less hazardous the company should pay accordingly. 3. The indemnity promised hy a given policy should not he re- duced or increased more than once. Cases of double and triple reduction were developed on this investigation. 4. The one-fifth, one-tenth and similar clauses should he strichen out. The experience of the companies in this field is now sufficient so that they ought to know what risks, either of illness or accident, they should not insure against. The policyholder should be in- sured in full or not insured at all. The clauses in question, while in some cases intended to give the insured something rather than 90 National 'Oonvention of Insurance Oommissioneks nothing, lare usually aviailed of to force settlements and to fight suits. 5. All " limited liability" provisions should he stated in the policy proper. At present some of them are hidden in the manual, a copy of Which is not delivered to the policyholder, though it is, in terms, mad© a part of the contract. 6. Notice of illness or injury given hy the agent of the company or the employer of the insured should he notice within the terms of the policy, and the company, whether notified hy agent or em- ployer or hy insured or heneficiary, should he required to deliver or forward proof hlanks and instructions to the insured or hene- ficiary within three days after the receipt of sv£h notice. In case of its failure so to do, the insured should he entitled to douhle indemnity. 7. // the company asserts that notice is late and relies on this as a defense, the hurden should he on it of showing that it has heen prejudiced thereby, and on its failure to meet such hurden, such defense should fail. It was conceded at the hearings that the notice requirement was merely to give the company opportunity to investigate. In meritorious cases it should, therefore, not be used. 8. Prior to the end of disability, partial or total, all payments made to the insured should be on account merely and he m/ide at least every thirty days; with no settlem,ent in full releasing com- pany until the period of disahility is ended. 9. Settlements for specific claims, such as death and eye and limb loss, should be evidenced in every case by a written release signed and aclcnowledged before an officer authorized to administer oaths, and contain a certificate on his part that, at the time of such signatune and achnowledgiuent, the contents of such release and its purpose was explained hy him to the person signing the same. 10. Failure to pay each of the special benefits mentioned in the policy, such as accumulations or double indemnities, when such benefits are payable hy the terms of the contract, or, in case the Industeial Health and Accident Settlements 91 company denies liability therefore, failure on its part to notify the claimant of such denial, with Us reasons therefor, should mahe such company liable for double indemnity on the benefits so ignored or denied. II. Remedial legislation may also well include provisions such as the following: 1. That any modification of the application, without the consent of the insured, shall be a misdemeanor, chargeable to the person making the same and, if he is a home office officer or employee of the company, to the company. 2. That the present doctrine of waiver enforced by the courts in some of the States be modified by statute so that the company shall not waive any of its rights by corresponding with or furnishing proof blanks or information to a policyholder with ivhom it is hav- ing or may have a dispute. 3. That the policy fee be abolished, or else treated as the first month's premium, and receipted for in the contract; and that re- bating to the policyholder either of such fee or of the first month's or other pr\emium shall he a misdemeanor, and also be ground for revocation of license. A. That all industrial agents and collectors he licensed hy the State, with power in the supervising departments to withhold or revoke a license for rebating, or subject to review by the courts, any improper conduct connected with a contract of industrial in- surance, or any violation of the Insurance Law. 5. That the supervising departments have power to revoke the license of companies flagrantly offending in the particidars indi- cated in this report. Tlie 'Committee does not overlook that tkese requirements — just though it belieives them — may, if enacted, compel companies operating in the industrial health and accident field to increase their premiums or reduce their benefits. 'The facts developed on this investigation and at the hearings, however, shovr that competi- tive practices in this field have from year to year resulted in in- creasing the promised benefits, though the premium has remained stationary much of the time. Indeed, it vi^as asserted at the hear- ings by several company executives that the policyholder in the 92 XatIO^^AL 'CoiVVENTION OF INSURANCE COMMISSIONERS industrial field was in the policy promised much more for the premium he paid than the policyholder in the general accident field. This may be, but, in the opinion of the Committee, the time has now come when companies doing this kind of business should recognize that, if they are to make a fair return to their stockholders, such return should not be tainted by trick clauses and cheese-paring adjustments, or the frauds perpetrated on the companies by dishonest policyholders be set off lagainst the frauds perpetrated by the company on honest insured. Under such re- strictions as those suggested companies may not grow as fast as they have grown, but they will grow straight and strong. Policy contracts will not from year to year become more complex and in- clude additional " talking points." 'Rather such contract will be simple and the man who holds one will know that either he or his widow or beneficiary will get their just dues. As TO SUPEEVISION In addition to the requirements on the companies already in- vestigated, and looking more to the future than to the past, the Committee recommends such laction by this convention as will re- sult in the following: 1. The continuance of the present investigation, either hy this Committee or hy another to he named hy this corwention, where the companies not yet examined do husitiess in several Staies, and hy the home department ivhere companies are local, such de- partment to furnish a copy of its report to the chairman of siich Committee. 2. For a time at least, frequent, not less than annvM, examina- tions of the claim departments of all companies doing an indus- trial health and accident husincss, such examinations to he con- ducted either by the Itome S'Uilcs or hy a committee of this con- vention, as it may deterinine. '■'). All fidure examinations of companies doing an industrial licalth and accident business to include not only financial condi- tion hut treatment of policyliolders. i. Companies in this field hereafter to report on a separate blank, to be prepared by the committee on blanks, their settle- ments tvith policyholders. Industeial Health and Accideiv't Settlements 93 5. Ample publicity to be given to such examination, to the end that the public may be fully informed. 6. The preservation, in the form of a booh, of the reports of the examiners representing this committee and of this report — this to the end that the facts here reported may 'be kept in per- manent form for the information of the public. 7. That the supervising department suggest to the companies doing an industrial health and accident insuranoe business that such companies co-operate one with the other in improving condi- tions in the agency field, particularly in the matter of instructing their argents, to the end that the latter may not misrepresent when a policy is sold, or deceive or seeh to deceive when a loss is paid. 8. That should it develop that any companies not yet examined shall attempt to poach upon the field forces of companies which have been examined, in an effort to " twist " their business, this Committee, or the home State, immediately examine the company so poaching to develop th\e conditions therein, and, when such ex- amination is completed, give full publicity to the facts. 9. That companies which have been examined and which agree to meet these requirements, be furnished by the Committee ivith an official statement worded substantially as follows: To the Puhlio: In connection with the recent investigation of the settlements of industrial health and accident companies, this certifies that the company has been examined at the instance of the undersigned Committee on Industrial Health and Accident Settlements of the National Convention of Insurance Commissioners, and that such Committee is satisfied from such examination that its treatment of policyholders is just and fair (or, in case the company has been criticised, that it vrill promptlj- inaugurate reforms to meet the views of such Committee and hereafter make its settlements with policyholders just and fair), -and is therefore entitled to the confidence of the insuring public. The Committee selected for the earliest examination the companies doing the largest amount of business. Information which has reached it, however, suggests that the conditions developed on such investigation exis.t in other companies which have not yet been examined. The public, therefore, should be cautious in transferring business from a company which has been examined, and, as above indicated, has the approval of the Committee, to one which may not yet have been investigated. Chairman. 94 jSTational 'CoxvENTioivr of Insueakce Commissionees Al:taclied to this report is a table giving the loss ratios for 1910 in tiie industrial departments of the companies thus far examined. Respectfully submitted, C. A. Palmee, Feank H. Haedison, William H. Hotchkiss, Jos. Button. While agreeing with the Committee in the report as a whole, yet I find myself unable to indorse its action in the reference to the publicity given the findings of the examiners. I feel that a mat- ter of such importance should have been referred to the convention. Feed W. Potter. Table A Loss Ratios for 1910 (Monthly Premium — Industrial) (Policy fee excluded.) Per cent. Standard Accident Insurance Co., Detroit, Mich 46 . U. S. Health & Accident Ins. Co., Saginaw, Mich 44.27 Massachusetts Accident Company, Boston, Mass 40.85 Great Eastern Casualty Co., New York 40 . 7 Federal Casualty Company, Detroit, Mich 40 . 5 Equitable Accident Company, Boston, Mass 38.6 Continental Casualty Company, Hammond, Ind 37.45 North American Accident Ins. Co., Chicago, 111 37.4 National Casualty Company, Detroit, Mich 37.4 Fidelity Accident Company, Saginaw, Mich 36.9 General Accident F. & L. Assur. Corp., (U. S. Branch) 35.29 American Assurance Company, Philadelphia, Pa 33.9 *Phoenix Preferred Accident Co., Detroit, Mich 33 .4 German Commercial Accident Co., Philadelphia, Pa 30.6 * This company's ratio includes adjustment expenses, court costs, etc., and the real ratio is, therefore, somewhat lower. [95] Memorandum of the Superintendent of Insurance of the State of New York AND THE Report of Examiners on United States Branch of The General Accident Fire and Life Assur- ance Corporation, Limited, of Perth, Scotland Examiner: Leon 5. Senior, New York Assisted by W. A. Billingham, W. H. Derrick, C. E. Heath, New York The following memorandum of the -Superintendent of Insur- ance of the State of New York was, at a meeting of the Com- mittee on Industrial Health and Accident Insurance Settle- ments, consisting of Commissioner Palmer of Michigan, Chairman, Superintendent Potter of Illinois, Commissioner Hardison of Massachusetts, Superintendent Hotchkiss of New York, Auditor of State O'Brien of Indiana (who, however, was not present or represented), and Commissioner Button of Virginia, President of the National Convention of Insurance Commission- ers, ex-officio, held at the Hotel Manhattan, New York City, August 1, 1911, adopted as the report of such committee on the United States Branch of the General Accident Eire and Life Assurance Corporation, Limited, of Perth, Scotland. The following report of the examiners of the New York Department, dated May 16, 1911, was, at a hearing granted such company by such committee at such meeting, accepted without change for the purposes of such hearing by the home office repre- sentatives of such company. [98] In the Matter of the Examination of the United States Beanch oe The General Accident Fire and Life' Assurance Corporation, Limited, of Perth, Scotland. MEMORANDUM OF THE SUPEEINTENDENT The importance of this examination and the developments as to- the methods of the industrial accident and health department o£ this company, particularly in its treatment of policyholders, sug'- gests that the report itself be supplemented by a somewhat detailed review, covering not merely such report but additional facts brought out on the statutory hearing and by a subsequent personal examination of the claim jackets and correspondence then produced. The Greneral Accildent Fire and Life Assurance Corporation was organized under the laws of Great Britain in 1891. Its United States Branch, through a deposit in 1899 of $250,000, is, so far as this country is concerned, in effect a New York cor- poration, though its principal place of business is in the city of Philadelphia. Though thus domiciled in New York for the past twelve years, this company has never been previously examined by this department. As a New York company, this foreig-n corporation has the right to do a general casualty business, the same including accident, health, liability, burglary and automobile insurance. Its im- portant lines are accident and health, and liability. As an American corporation, however, the General Accident, unlike its competitors, is bifurcated in its organism and management. Its health and accident business is conducted in two departments — one called the commercial and the other the industrial ; over one of these departments is the United States manager ; over the other is the United States industrial department manager. In liheoTj, the United States manager is the president of this company as an [99] 100 JSTational Convention of Insurance Commissioners American corporation. In practice, in the health and accident field, it has two heads, one a little larger than the otiier, but each apparently independent of the other, save, as will be seen, when an insurance department becomes inquisitive as to methods. This examination shows that this company, as an American cor- poration, is entirely solvent, and, aside from its industrial depart- ment, managed in a way to entitle it to official commendation. The policy of its industrial department, particularly in the set- tlement of claims, and again particularly in the adjustment of death claims, calls for emphatic condemnation and requires im- mediate reformation if this company is to continue to do business in ISTew York. Hence, both to inform the public as to such jmethods, and to give proper warning to other companies in the -same iield, the following review of this company's transactions as ;an industrial health and accident company is made. As already indicated, the industrial department of this com- pany is so far separated from the company itself, as represented ■ by the United States manager and the American advisory oom- anittee, as to be, in effect, a separate corporation. Even the mail addressed the corporation itself is, so far as possible, marked by the sender, to the end that the industrial department's mail shall be delivered to it without being opened in the general office ; while industrial policies are not valid unleiss countersigned by the in- dustrial department manager, nor, it is claimed, is notice of dis- ability or death under such a policy good if it is given to the gen- eral offices of the company and not to the industrial department itself. We have, therefore, a condition whereby a corporation re- sponsible to this and thirty-seven other supervising departments — it being admitted to do business in thirty-eight of our States and Territories — apparently has within itself another corporation re- sponsible to the home office of the company in Scotland, but, seemingly, save in 'extreme cases, under no control, so far as the United States manager of such corporation is concerned. The industrial department of this oompany operates from Philadelphia. Its home office force is large. Such office has the usual bureaus or divisions of executive, agency, claim, accounting, policy, legal and the like. A fact worthy of note as fixing the responsibility for existing conditions is that at the head of several Ikdusteial Health and Accident Settlejlents 101 of these bureaus, or at least occupying places of influence therein, are relatives of the industrial department manager. Thus, Charles H. Boyer is such manager. liis wife is the superin- tendent of agencies. His brother, J. B. Boyer, is at the head of the legal bureau. His brother-in-law, J. C. Steinbach, is assistant to the chief of the claim department. Another brother-in-laW; Geo. H. Summers, is at the head of the policy department ; while J . Warren Isett, a cousin, is at the head of the accounting depart- ment. Another significant fact is that the industrial department manager, whose family is thus apparently in charge at the home office, is largely compensated through a profit-sharing contract, under the terms of which such manager receives 15 per cent, of the net profits derived from the industrial business, based upon the premium income, expenses, loss payments, etc. He thus shares financially in all gains which may be made through adjustments in the claim department. His profits under this contract in 1910 were $14,564.85, while his flat salary was $4,800. The agency force is extremely large. So far, however, as the records of the home office are concerned, it consists of between 400 and 500 general agents in that branch of the business where premiums are payable monthly, and 17 superintendents in that branch where premiums are payable weekly. Under these general agents and superintendents there is an army of subagents and col- lectors. The superintendents are paid salaries based upon the im- portance of 'their territory and work; they have no share in the profits. The general agents, however, are compensated by their earnings under a profit-sharing contract whereby they are entitled to 50 per cent, of the net industrial profits of their territory. They, therefore, like the industrial department manager, are personally interested in what is saved on settlements with policyholders. The testimony of agents produced at the hearing indicated, however, that while the personal equation due to the profit-sharing contract might get into settlements, such equation, in the form of keeping their policyholders satisfied and thus preventing a loss of business, was at least equally as important. Thus, this company's in- dustrial adjustments, which are usually made by its field force, will in a great majority of cases, unless there is definite instruc- tion from or significant example in the home office, depend upon 10'2 Xational Convention of Insueance Commissioners the kind of man who is the agent. There is a marked absence of such instruction from the home office, while, as shown on this examination and by the testimony of witnesses on the hearing and the correspondence then produced, the example of such home office has been bad and its influence frequently exerted to accomplish wrong. In common with other companies operating in this field, this company uses a long and technical contract, which contains some provisions that are intended to be protective rather than, in most cases, availed of. It issues to its agents what is known as a manual of rates. The premiums collected are small; in the monthly payment department, averaging about a dollar a month, and in the weekly, about twenty-five cents a week. The insured are usually workmen and artisans ; some of the policies are issued direct to the insured, and others to the employer as a trustee, the latter covering all or part of the employees on the pay-roll at given periods. The indemnities are against accidental loss of life or limb, total or partial disability resulting from accident, and total disability resulting from illness. The premiums are uniform, but the indemnity varies with the occupation of the insured. The business done by companies of this class among the in- dustrial masses differs, therefore, from the business done by ordinary life companies having industrial departments, in that the latter insure only against death from any cause, not merely from accidental cause, and do not insure at all against disability due to illness or accident. Some of the important clauses in these contracts, to which reference is made later, are the following : Change of Occupation. — In what is known as the Schedule of Warranties — which is almost invariably filled out by the agent, is rarely, if ever, seen by the insured, and becomes a part of the contract only because such schedule is printed on the policy de- livered to the insured and, therefore, it is claimed, is brought to his notice and made immediately binding upon him — are the following words : " I understand and agree that if I contract illness or am injured, fatally or otherwise, after having changed my occupation to one classified by this corporation as more hazardous than that herein stated, or if I am injured while doing any act or thing pertaining to any occupation so classified, the Industrial Health and Accident Settlements 103 liability of the corporation shall be only for such proportion of the principal sum or other indemnity as the premium paid by me will purchase at the rate fixed by this corporation for such more hazardous occupation." Late Notice. — In the policy contract proper the following words are usually found : " Written notice of any accident or injury, fatal or nonfatal, or of any illness, by reason of which claim is to be made, must be given to the cor- poration at its office in Philadelphia, Pa., within ten days of date of accident or beginning of illness. Failure on the part of the assured or the beneficiary to comply strictly with said notice requirement shall limit the liability of the corporation to one-fifth the amount which would be otherwise payable under this policy. Notice to an agent does not constitute notice to the corporation." Exposure to Obvious Bisk. — Under this heading is usually the following : " In event of injury, fatal or otherwise, * * * or disability, wholly or in part due to or resulting, directly or indirectly, * » * from exposure to obvious risk of injury or known danger, * * * the limit of the cor- poration's liability shall be one-fifth of the amount that would be otherwise payable under this policy." Accumulations. — The following is a sample of the accumula- tion clause used in these policies, though the percentage of ac- cumulations in some policies depends upon 'the nature of the accident : " For each consecutive period of twelve months premium, paid monthly or annually in advance, the benefits for specific losses under clause — of this policy shall be increased ten per cent, but all such increases shall never exceed fifty per cent of the benefits therein provided for any loss.'' The methods of the industrial department in interpreting or taking advantage of these and other clauses of its contracts, as well as its so-called lump sum settlements without asking for proofs, its treatment of foreign beneficiaries and its transactions with undertakers, are considered in detail later. It was claimed on the hearing that its transactions in these partiteulars — or, at least, in some of them — are not characteristic, but that the ex- aminers have selected cases which are the exception and not the rule. I am unable to agree with the representatives of the in- dustrial department in this. While the great majority of dis- ability adjustments are for minor amounts (the average being about $10) and are promptly and satisfactorily made, the cases of which those mentioned in this memorandum are but samples 104 National Convention of Ixsueance Commissioneks are far too numerous not to be characteristic of the methods used in most claims of substantial amount. More, the correspondence of the responsible officers and employees indicates a policy to cut down benefits or escape just liability and, generally, to take ad- vantage of the technical clauses of its policy contracts that does not comport with right methods or proper treatment of policy- holders and the public. Change of Occupation Cases The following cases indicate the policy of this company in the interpretation of the so-called occupation clause of its contracts: Fred W. Sawyer of 'Winchester, N. H. — This claim was for accidental injury while endeavoring to extinguish a fire in the insured's house. As soon as notified of the accident the industrial department's chief adjuster wrote its general agent at Con- cord, N. H. : " Before you dispose of the claim see if he was working as a volunteer fire- man at the time he was hurt, in which ease the claim should be settled in Class X." After the receipt of the certificate of the attending physician saying that the insured had been burned in trying to save his house, the chief adjuster again wrote such agent, '' calling atten- tion to the fact that be was working as a volunteer fireman at the time he was hurt, the claim should be settled under Class X." To this letter the general agent replied: " Now, Mullen, if you knew the facts in this case, which I will tell you, the man was at home and his house, which is located out in the country, took fire and burned down. There wasn't a, fireman within twenty miles of the house and I don't believe we can settle the claim in Class X." To this the chief adjuster replied : " Your letter looks good to us, but that doesn't alter the claim or the duties the insured was performing when he sustained the injuries that dis- abled him." To this the general agent replied: " Tell me, if your house got afire and you rushed in after your wife's $1,000 sealskin sack and should get burned, would you want to be rated as a volunteer fireman. Class X? I don't believe you would, Mullen. Now, this man done what any other man would do if he discovered thait his house was on fire. He attempted not only to save the house, but when he was saving that, he attempted to save some of the furniture. Now, Mullen, is Industrial Health axd Accidejstt Settlements 105 this right to cut him down to iClass X? I really think the claim should be settled under Class D as a fa-rmer, supervising. I think he was doing some farming as well as writing some insurance." To which the chief adjuste^r replied, among other things : "Are we not to adjust our claims according to the manual of rates and the contract which is sold and which is bought by the policyholder? If we were to adjust all of our claims according to the interpretation and according to the wishes of our claimants, or even according to the wishes ,of some of our agents, how long do you suppose we would remain in business? Mr. Cros- sett, accident insurance is strictly a business proposition. I don't know of any accident company that is posing as a charitable institution, nor do I know of any company giving away money gratuitously. It is right and it is within our rights to adjust this claim in Class X. On the other hand, if this man had been prudent and had the forethought to have his household goods insured to their full value, it Would not have been necessary for him to have entered the burning building in order to save his things. This is as near as I can get to agreeing with your idea in the adjustment of this claim." ThiM, prodded from the home office on a contention which, it is believed by this department, would not be tolerated in any court of justice, namely, that a citizen who was an insurance agent by occupation and who held a contract under that occupation, had, when seeking to save his property from fire, suddenly changed his occupation to that of volunteer fireman, under a technical inter- pretation of the words, " while doing any act or thing pertaining to a more hazardous occupation," the agent took the matter up with the injured party and at a later date writes : " I visited this F. W. Sawyer and iind he is not yet able to move about any. (This was three months after the fire.) I consider he will not be able to work at any work the coming summer. I worked with him for some time and finally got an agreement to settle for $135, and am yours truly. I considered it better to get off the claim. I presume this may look too much to you, but knowing the man's condition (having visited him frequently) and was pleased to get off even at that figure." This insured was entitled to indemnity at the rate of $50 per month, and undoubtedly should have been paid a considerably larger sum. Nothing developed on this examination more clearly illustrates the methods and purposes of the claim bureau of this industrial department, than these very illuminating documents in evidence. George W. Siueailand of Crawfordsville, Ind. — This claimant was insured as an electrical worker and was drowned in. Septem- ber, 1909. The proofs show that after returning from work he 106 National Convention of Insurance Commissioners and several companions went out in the evening hunting frogs, and that, while engaged in this sport, he stepped into a deep pool and lost his life. As soon as the proofs were received, and when fully informed both as to the occupation of the insured and as to the cause of death, the chief adjuster wrote the general agent at Crawfordsville, enclosing a draft for $100 in full settlement of the claim, stating : " We have adjusted this claim to Class X as the insured was hunting at the time he met his death,'' The claimant's widow was under the contract entitled to $300, the occupation of the deceased having been that of an electrical worker. The draft was refused and the claim placed in the hands of attorneys, to whom the chief adjuster wrote: "According to the warranties on the application which the insured signed and which he accepted, it specifically states that if he meets with an injury, fatal or otherwise, while doing an act or thing pertaining to a more hazard- ous class, the insurance will he pro-rated accordingly. Now, our manual provides for just such contingencies, and a policyholder engaged in this line of sport is classed as X, with indemnity of $100. Therefore, in making the adjustment of this claim on this basis, it seems to us that we were perfectly justified according to the facts presented." This general agent also remonstrated in 'the following words: " He had not changed his occupation at all. Now, would a man classed in AA at $600, accidental death, as office duties only, if he should take a half- day off to kill a squirrel or a few quails, and meet with death, would you settle with him as a hunter? If this is the ease, I want to know it. I don't think this is a square way of doing business and would advise that you take this matter up and reconsider it." To which the chief adjuster replied: " Relative to your query regarding the 'AA risk,' should he go on a hunting trip it would make absolutely no difference whether lie went to hunt squirrels or buffaloes. The risk would surely be pro-rated, and this is done by every accident insurance company doing business to-day. You will cer- tainly recognize the fact that the hazard assumed by the insured while engaged in this line of sport is considerably more than if he attended to his usual duties in the oflice or in the shop. Therefore, the pro-rating of risks along this line is giving the public a square deal, as the policy is not intended' to cover these risks only as presented and it takes care of same automatically.'' This case was later taken up by the insurance commissioner of Indiana, and, therefore, under the practice of the company was Industrial Health and Accident Settlements 107 referred to the United States manager of the corporation. His office took it up with the industrial department manager, whose attitude as to the matter is indicated in the following quotation from a report later sent by him : " Our contention is that he was doing an act or thing pertaining to a more hazardous occupation at the time he was drowned. According to the statements of the claimant in the final proof, and other eye witnesses, they state he was drowned while hunting frogs. According to our manual classi- fication on page 42, hunters are classified in Class X. Now, my idea is to advise the department of our stand and give our reasons for same and then see what they have to say." This was done. The Indiana department insisted that the action of the industrial department of the company was not proper, and the case was closed without suit, by the United States manager sending a draft of $300 to the attorneys representing the widow. C. M. Beasley of Benson, N. C. — This insured, whose policy called for the payment of $1,000 in case of accidental death, was killed by a lightning stroke while sitting on the porch of a neigh- bor's house. He was insured as the member of a firm engaged in the brick and lumber business, technically, as " proprietor, super- vising in yard and office." Though there was no question as to the cause of death, and though it was apparent that it had nothing to do with his duties in the occupation in which he was insured, the industrial department manager, apparently in an effort to re- duce the indemnity, sent a special agent to the residence of the administrator, calling such agent's attention to the occupation stated in policy and adding: " It would appear to us that he is not entitled to Class A, although the ap- plication and policy are properly written if his duties are strictly those men- tioned in the application. However, we believe at times he did more or less work and it may be that he had a saw-mill and his duties would properly come under that of supervising saw-mill and possibly doing some work in connection with the same, which would put him in Class B or lower, accord- ing to the rates on page 46 of the manual. If he at any time took hold and handled any lumber, brick or anything of the kind, he is not entitled to the A classification, but would be classed in B. If we can pro-rate the claim to Class B it would be a saving of about $200, as his policy is written for $1,000 death benefit. It may be also that he had his duties comprise the 108 !N^ATioNAL Convention of Insueance CoiiMissioNERs handling of bricks or assisting in a brick yard. If this were so, or if he occasionally did this work, it would put him down^ to Class D or about At the time this letter was written, the writer had no informa- tion on which to base his suggestion as to change of occupation, save a comment in a newspaper clipping, detailing the death of the insured, which indicated that he was a manufacturer of lum- ber and brick and had mills or plants for that purpose. The investigation developed the fact that the insured did at times " work around his mill and brick yard." In other words, this decedent probably did what any other proprietor engaged in this manufacture would do. The industrial department of the company presumably insured him as a proprietor with that knowledge. It should have paid his estate the full amount. It was able, however, to compromise the claim for $875 and thus abstract $125 from his estate and add that sum to its profits for the year ; moreover, its local agent was able to secure a testimonial from the insured's administrator which seems to have been gen- erously circulated in that territory. Whoever is responsible for this transaction, the foreign home office or the industri'al department manager, is chargeable with promising one thing and performing another. John Simon of Pittsburg, Pa. — This insured was killed by a fall from a ladder when apparently trying to thaw out or repair an overhead pipe in his factory or place of business. When in- sured, his occupation was given as the proprietor of a wool puller company. In that occupation his estate was entitled to $600. The industrial department took advantage of the above facts to reduce the occupation of the insured from the classification at the time of the policy to that of a " steam fitter," made a further reduction on alleged misstatement of age, and thus canceled its liability on the payment of $200. How this was done is indicated by the following quotation from a letter from the decedent's daughter written shortly after the above amount was paid : "Am writing you in regards to the insurance which was due to my father John Simon. There was a man around here a few weeks ago who said the company had sent him and told him to give me $200 and if I did not accept that I would not get anything. He was very anxious to get out of town. He told me if my attorney would send in a bill, which he did this morning, Industeial Health and Accident Settlements 109 the company would pay the attorney's fees. I think there is something wrong somewhere. I ran across the young man who brought the gentleman in a taxicab, which he hired on my expense, told me this man came here to pay me $600 which was due to me; instead of giving me the $400 he sticks it down his pocket and cheats a poor girl out of it and gives the fellow fifty cents to hurry and get him out of town.'' No attention seems to have been paid to this letter. These changes of occupation cases are many. Some undoubt- edly have been adjusted properly. The point made by the exam- iner — and seemingly with reason — is that the claim bureau of the industrial department, both in meritorious cases and those that are somewhat questionable, strains after ways to reduce liability by asserting changes in occupation when no actual changes exist. and by classifications that are as technical as they are unmoraL In questionable cases, this may be proper. In cases not question- able, it smacks of fraud. Late ISTotice Cases The following oases characterize the methods of this company's industrial department in interpreting the " notice " clause of its contract previously quoted: Walter B. Hodges of Gardner, Mass. — He was insured as a locomotive engineer and was killed early in the evening of July 2, 1909. The record of this case in the files is not complete, but the facts seem to be that the insured was killed by falling from his engine. ISTotice was given the company on July 13, though it did not reach the company's office until July 15, and was there- fore held by the company to be three days late. The indemnity agreed to be paid was $400. Advantage was taken of this so- called late notice to reduce the claim to $80, and a settlement was accomplished on that basis. H. L. KicTclighter of Olenville, Oa.— This insured died as the result of a sunstroke while plowing in a field. He was insured as a school principal. The chief adjuster instructed one of the in- dustrial department's general agents, D. J. Jordan, in Georgia to investigate; his letter of instructions, so far as it is material, is as follows : " The case does not look very good to us, and we further note that the preliminary (notice) is made out and dated on August 25, which is fifteen 110 JSTatiojstal Convention of Insueance Commissionees days late. This would therefore limit the amount of the indemnity due under the terms of the contract. The claim, if otherwise straight, will have to be pro-rated to Class E." In other words, the home o£&ce called attention to two ways to reduce the claim, one late notice and the other change of occupa- tion. The following is quoted from Jordan's first reply as indicat- ing the attitude of the man thus used for this investigation : " Will say that there is no one hates to see the claims so much any worse than I do as it is money out of pocket. But there has been several old standing ones paid this month and I cut them for all they were worth. The only ones I want you to adjust are those I am not certain of. So you can rest assured I will do everything in my power to hold them down." The methods of this agent are indicated in the following from his report on this case : " I found it to be a fact that this death was caused by sunstroke. I did not let the people know what I was after the first day I was there but made inquiries about Mr. Kioklighter as if he was a friend of mine, and when they told me the cause of his death I wanted to know if there was any further trouble with him. The reply was he was enjoying the best of health up to that day and was going to leave the next day to take charge of his school. He wanted to finish a little piece of work on his farm and overdone the thing, and fell in the field and never was conscious. But a few hours afterwards I had to go to see his brother who lives ten miles out in the country and then after I got him the wrangle started; they claimed the full .amount. As the policy was made payable to his estate and there had been :»io administrator appointed at the time to make the claim on the company '.and they had two or three lawyers there who wanted to take it to law and ifight for the $500, but I carried my point and got them to accept the $100, as I told them I would keep it in court for the next ten years to come before I would pay another cent on it. I carried Mr. Kicklighter (evidently the brother) to dinner with me and finally got him to give the release by telling him the lawyers were after getting all that was in it and it would be impossible to get the $5'00. So I am enclosing the release and notice of the draft I gave him for same, which I hope you will find to be all 0. K. By settling in Class E would not have done us any good as $2 in the new manual would give him a little more than $500. So I did not mention that part to them at all." To understand the above letter it should be remembered that the notice of death was received fifteen days late, and that it was on the basis of late notice that this claim was settled, the claim having been properly for $500 and the payment being for $100. The agent was evidently wiser than the home office, as indicated in the last sentence of his letter. Inbusteial Health akd Accident Settljs.ments 111 ExPOSUEE TO Obvious Risk Cases The following cases illustrate a numerous class, where the " ex- posure to obvious risk " clatise has been availed of : Vincent Headley, of Bettendorf, near Davenport, la. — This insured was drowned while bathing in the Mississippi river. His estate was entitled to $200. The company took advantage of the " exposure to obvious risk " clause and reduced the claim to $40, at which sum a settlement was made. On the hearing the question was asked whether, when an insured went in bathing, he made himself liable to such a reduction. The answer was that it de- pended upon the circumstances, and that in this case the com- pany relied upon the swiftness of the current in the Mississippi river at the point in question as its reason for taking this position. There seems to have been no investigation as to whether the cur- rent was swift at the point where the accident took place; it was simply assumed and $160 saved to the company thereby. James J. Rogers, of Camden, N. J. — This insured was killed while a trespasser on a railroad track. After the accident the in- dustrial department sought by several means to escape liability, its practice in this and other cases being indicated by its reducing the agreed indemnity of $500, plus $250 accumulations, or a total of $750, to $60. This was accomplished by assuming that, while the insured received his policy as the foreman of a shipyard, he was really the captain of a tug boat (which he was not), thus by change in occupation reducing the indemnity to $300; then by taking advantage of the obvious risk clause, reducing the $300 to one-fifth of this sum, or $60, which the company offered to pay. The beneficiary refused the payment and called attention to the fact that, under the terms of the policy, she was entited to accumu- lations. The industrial department then offered 50 per cent, ac- cumulations, on the basis of the previous reduction, and tendered the sum of $90. Later on it offered as a compromise settlement $150. Suicide was also assumed, though with no facts to support it. The matter was subsequently taken into court, the only de- fense there apparently being exposure to obvious risk, in that the insured while walking on the track, facing in the direction of ap- proaching trains, stepped aside to avoid one and was killed by an- other train coming up from behind on the other track. In a 112 National Convention of Insurance Commissioneks memorandum de&ision in this case made by Justice Garrison of the Supreme Court of New Jersey in May, 1911, it is held that " The word ' obvious ' must be taken in its ordinary sense, viz. : ' evident or clear to the senses;' as a fact, not as a duty, as in the technical sense. In fine, the policy refers to a danger that the deceased was aware of, not to one that under an implied contract he had agreed to be bound by if he ought to have become aware of it." While there was some ground for the claim that the deceased contributed to his death, and therefore the contention of the indus- trial department that he had exposed himself to obvious risk, on all of the facts this claim should have been promptly adjusted, and, as the facts and law now appear, for $750. It is significant, also, that, though setting up two technical defenses in the claim, and alleging one, suicide, behind which there is no evidence, the industrial department of this company was careful to keep silent as to the clause in the contract which entitled this beneficiary to accumulation benefits. Accumulation Cases The following cases illustrate the attitude of the industrial de- partment of this company toward granting accumulation benefits : Gus Anderson, of Concord, N. H. — This insured was drowned by the overturning of a boat in which he and two companions were proceeding to fishing grounds for the purpose of engaging in the sport of fishing. The policy had been in force five years. Hence, the death being accidental, the estate of the insured was entitled to $300, plus the accumulations, or $450 in all. At the time the policy was issued, the occupation of the insured was stated' to be that of a stationary engineer. The telegram notifying the com- pany of the accident stated that the insured was employed " as operative upon steam drill, also as foreman on quarry," and added : "Can settle right away for $300. Perhaps later there would be five tens." (Apparently referring to accumulation benefits.) The chief adjuster replied: "According to the manual, foreman, overseeing only, is ' C Therefore, his occupation will have to be placed as a, quarryman, not blasting. This is classed in ' E,' under 1905 manual and entitled the insured to $200, and you have my permission to pay this amount without further proofs." Industrial Health and Accident Settlements 113 It will be noted that no mention is made in this letter of the accumulation benefits. The agent in reply writes : " Now, Mullen, I would be only too pleased to settle for the $200, but the man was a steam driller, which comes under head of quarryman, page 73, I think, and calls for Class D rating when not running a steam drill. He was foreman in the quarry, not working, supervising only, the Class D at least. He has paid his premiums without a skip for over five years and is really (or his family are) entitled to five ten per cent, accumulations. Even at the $200, it would be $300. I believe it would be just a whole lot better, Mullen, if there was no quibble, no trying to cut in this case, but just pay the $300." and, later, in a postscript : "Does the ten per cent, for five years mean anything?" " Does the rating in manual mean anything? " to which the chief adjuster replied : " Referring further to the Anderson case, of course, you quote page 73 of the manual as entitling the insured to Class D. You will have to refer back to the 1905 manual. Where quarrymen are listed there are no steam drillers listed for quarrymen, not blasting, and foreman overseeing only, pro- prietor and office duties only, and therefore I can see nothing but just as I told you. However, if we reduce the indemnity to $200 and allow the five per cent aggregating for five years, of course, we would be in for $3€0. Therefore it is just as well for you to adjust the claim at $300, if you can- not get anything less." To this the agent replied: " I had a h 1 of a time making those Swedes see where the $200 only came in, but got them going my way, as you will note. Will you have me 10,000 blotters printed with the letter upon?" To this the chief adjuster replies : " I am quite surprised and well pleased to see that you have settled the Anderson claim for $200. I imagine that you were jollying me a little in your telegrams and letters relative to this case, because when my permission was given to pay for the face of the policy, you then turned around and paid the original amount as mentioned in my first telegram. However, this is doing business in the right way. My translation of the contract and the manual convinced me that $200 was the correct amount to pay in this case. By the agent and the home office watehing these cases closely we are enabled to keep the loss ratio down to where it properly belongs. I wish to thank you, Mr. Crossett, for co-operating with me in this case." Thus, not only was the home office and the agent able to co-oper- ate in redu.cing this payment so that accumulation benefits amount- ing to $150 were not paid, but also to secure a testimonial of 114 National Coavkntion of Insueance Commissioners which the following is a copy, and of which a thousand blotters were printed for advertising circulation in the agent's territory: " THE GENERAL ACCIDENT FIRE AND LIFE ASSURANCE CORP., LTD. " United States Offices, " General AccaDENT Building, Philadelphia, Pa. " €. H. Boyer, United States Ind. Dept. Mgr. " Monthly Premiums. Monthly Benefits. "Our Motto: "ALWAYS A SQUARE DEAL. " Octoher 10, 1910. "A. W. Cbossett, Adjuster, Concord, N. H.: " Dear Sir : I will say that my husband. Gust Anderson, carried a policy with your company. The General Accident, Fire and Life Assurance Corp., Ltd., of Philadelphia, and who was drowned October 1, 1910. As beneficiary I received to-day, October 10th, a, check for $200.00 payment in full of the principal sum. This was a very prompt and satisfactory adjustment." " Yours truly, " HANNAH ANDERSON. " General Accident, " Philadelphia. "A. W. Ckossett, Adjuster. " 55 North ilain Street, Concord, N. H." Charles F. Massey, of Concord, N. H. — This insured was at the time the contract was made a railroad signalman. When he was killed, he was a brakeman in the yard. The company was, therefore, entitled to assert a change in occupation and a reduc- tion in the benefit from $300 to $100. The accident occurred on a Saturday night and the settlement was made on Sunday. The at- titude of the agent in the matter of accumulations is indicated by the following quotation from his letter : " I will say, Mullen, it was pretty hard to get this woman to sign any- thing. However, wc got it bound up good and solid and saved about four ten per cent, increases as he had been with us four or five years." The attitude of this same agent toward claimants, which seems generally to have been approved by the chief adjuster, is also in- dicated in the following quotation from a letter referring to the claim of Elvin F. Culver, who, thotigh insured as a car repairer, and in that occupation at the time he was injured, died from lock- Industrial Health and Accident Settlements 115 jaw resulting from a gun shot wound received while he was hunt- ing deer. The general agent in announcing his death, says : " It never rains, Mullen, but it pours, but we can stand it all right. I suppose this claim should be adjusted on basis of Class X as sportsman. Shall try it that way anyway." In this claim, also, the accumulations were ignored, though a lump sum settlement was made for one-half the indemnity to which the insured seems to have been entitled. Lewis Herbert, of Rochester, N. Y. — This claimant was a night watchman, who, while performing his duties, fell through a door and fractured his skull. The following significant comment is taken from the letter of the chief adjuster to the general agent : " I would, therefore, thank you to see that a thorough investigation is made, and if you find anything by which the terms of the contract have been violated, you may use the same to effect an immediate settlement without furnishing any further proof." The beneficiary in this case was entitled to acciunulations, but such clause in the contract was ignored and claim paid for the face of the policy without such accumulations. Harry L. Colby, of Concord, N. H. — This insured was a brake- man, and under his policy his beneficiary was entitled to accumu- lations. The agent, however, succeeded in securing a settlement for the face value of the policy. In reporting his success, he com- ments : " This woman was wise to the ten per cent., but I told her I could draw her a draft for the $100 without the ten per cent, and draw it right away. This looked good to her and we saved $20 which she would have held out for." Calvin A. Batten, of Enterprise, Ala. — This insured was killed while working at a cotton gin. He was insured as a merchant selling light goods at a counter, and in that occupation his bene- ficiary was entitled to $500. The company reduced such occupa- tion to that of farmer and millwright, seemingly, for good cause, and settled with his estate for $300, the indemnity payable in the latter class. This insured had been a continuous policyholder for more than three years. Nothing whatever was said by the home office or the agent as to the beneficiary's right to accumulations, and the settlement was therefore for $90 less than it should have been. 116 Xatioxal C'oxve:stiox of Ixsueaxce Commissioners This company, like other companies in the same field, uses as one of its talking points and to encourage persistency amongst its policyholders, the so-called accumulation benefits. Presumably, many of its policies are placed on direct oral representations to that effect. Though so representing both orally and in the written contract that claimants who have been persistent as policyholders shall be entitled to these additional benefits, its practice, when the policy has matured into a claim, seems to be one either of silence or deception. So general is this practice that the examiner in his report says : " The provision, however, is so frequently ignored in the settlements that the payment of accumulations forms an exception rather than the rule." On the hearing, this statement was called to the attention of the industrial department manager and of his brother, the heaJ of the legal bureau, who, in rejoinder, said only that it was pretty broad, but added that they were satisfied that the payment of ac- cumulations had been neglected and in a very large number uf cases. That this is so is also indicated by a letter written while the examination was pending by the industrial department managc-i to the chief adjuster, which calls attention to a dispute which "has arisen as to vi^hether or not (a condition of which I was not aware if it has existed) the accumulations on the death benefit have been properly adjusted by your department. However, in order to avoid any misunder- standing in this particular in the future, I instruct you in all cases on and after this date to ascertain before you adjust any death claims whether or not the claimant is entitled to accumulations under the policy contract, and if so, to pay them in full." Thus, now that the matter has been brought ofiicially to the at- tention of the industrial department manager, this practice, by which apparently hundreds of workmen or their beneficiaries have been, by silence or deception, deprived of their rights, will be dis- continued. This, however, is not enough. This department's re- quirements toward the righting of these wrongs are given later. Lump Sum Settlements The following oases indicate a very general practice of the indus- trial department of this company : Francesca Spada, of Bridgeport, Conn. — The occupation of this insured was that of a housewife. She died from burns due to Industeial Health A^'D Accident Settlements 117 the upsetting of a lamp. Her estate should have been paid $100. The manager of the weekly department, however, on being in- formed of the accident, wrote the local general agent as follows: " If you find this a legitimate claim, you might offer the beneficiary $50 in full and complete settlement, without having these papers completed. You will understand the above as being a fair off'er." The agent replied: " In re above claim, I tried to make the settlement, but beneficiary refused for reason that undertaker had advised him not to, as he would see that company paid in full." On receipt of this letter the company paid the claim in full. Elmer B. Bailes, of Murpliysboro, 111. — This insured was a ticket agent and was drowned. By the terms of the policy his estate was entitled to $500, plus one year's accumiilations. The accumulations were ignored and a settlement offered the beneficiary, without proofs, at $300; this in accordance with the instructions of the chief adjuster to the local agent as follows: " I think it would be well for you to get off this claim as soon as possible. If you can make a. quick adjustment, provided everything points to the fact that the claim is just according to the terms of the contract, for $300, with- out furnishing further proofs, I will take care of your draft when presented." The local agent evidently did not act very promptly, but after one or two reminders the claim was placed in the hands of a special representative, who settled the claim at $400, as to such settlement writing as follows: " I made a trip to Charleston, 111. and adjusted the death claim of Elmer R. Bailes, who drowned in Big Muddy river near Murphysboro, 111., June 26, 1910, for $400. This was a clear case and the best I could do. I had very little and in fact nothing to talk about you know. I only 'imagined' I had, and shaved off $100 by ' talk.' " Peter Mettendorf, of Westfield, N. Y. — This insured was a coaling and coupling engineer. He was killed at a public railroad crossing in the night time, apparently while driving a team along the highway. Under the terms of his contract his estate was en- titled to $200. This liability was settled, without the filing of proofs, for $100. Anthony Dielil, of Buffalo, N. Y. — This insured was a teamster, both at the time the policy was written and of the acci- dent which resulted in his death. Under the terms of the policy 118 National Convention of Insurance Commissioners his beneficiary was entitled to $300. The chief adjuster wrote the local general agent concerning this claim as follows : " We are enclosing herewith a set of death proofs to be completed by the proper parties providing you cannot get a settlement of this claim for less than the principal sum which is $300. If you can dispose of this claim for $200 without making out these papers, do so. If not, have the death proofs completed and returned to us and we will adjust the claim from this end." The -agent was apparently able to procure an adjustment at $1Y5, of which he says: " I consider this a very good settlement and trust that it will meet with your approval." In this connection, and as indicating the policy of this company in these matters, the following letter written in March, 1909, by the present chief adjuster of the claim department, who was then superintendent of agencies, to the local general agent at Brooklyn, concerning the claim of Philip Purnell, is quoted: " The post in this case certainly reveals the fact that this death was due to accidental causes, and under the terms of the contract the amount of our liability is $200. Please get off the claim as cheap as you can. You may not be able to pay the full amount as because in claims of this character considerable is saved in the payment by good talking and twisting of the contract.'' The files of this company, as submitted to the examiners and produced at the hearing, reveal numerous cases where so-called " lump sum settlements " have been made, particularly with widows and beneficiaries of the assured, and usually but a short time after the accident or death. Indeed, in the opinion of this department, it has been the policy of the industrial department of this company to take advantage of these conditions, to accomplish settlements for sums considerably less than it would be compelled to pay were proofs filed and the beneficiaries given opportunity to recover from their grief and consult with friends or counsel. These may be the methods of the railroad and traction claim agent in settling damage claims. They should not be the methods of an in- surance corporation which at the time it makes a contract and accepts the premium presumably intends to fulfill, not to " twist " the same. Such companies are not charitable institutions, as one of the letters indicates, but they do sell a public necessity to the people, and so selling, should, and if unwilling to do so voluntarily, must be forced to give in return everything for which they are paid. Industeial Health and Accident Settlements 119 Settlements with Undeetakeks The examiner calls attention to a practice of the industrial de- partment of this company, by means of which, in cases where the insured meets accidental death, leaving no relatives or where relatives reside abroad, the policy obligation is, in effect, wiped out by paying the undertaker the expense of burial. In most of these cases, the policy runs to the employer, as trustee for employees whose names are given on the weekly or monthly payroll. There seenis to be some dispute as to whether, if the benefit is paid to the employer, his receipt is sufficient. Without passing in any way on this legal proposition, it does not, in the judgment of the department, justify -the practice in question. Some of the numer- ous cases of this nature are the following: Nicola ConstcmUni^ of Martin's Creek, Pa. — This workman was insured by a factory policy running to the Alpha Portland Cement Company of Martin's Creek, Pa., as trustee. His death was caused by a fracture of the skull. Under the terms of the policy, his beneficiaries were entitled to $200. The local general agent furnished a coroner's certificate, stated that the man had no relatives in this country and enclosed the name and address of his father and mother in the old country. 'Such agent later forwarded the bill of the undertaker to the home office of the industrial department and requested that $45 be sent to pay such bill. Such office, apparently as a matter of routine, forwarded a draft for $45 in payment of the claim. The accident took -place on June 17, 1908, and the undertaker was paid on June 26th of the same year. Apparently no effort was made to locate the de- ceased's father and mother in Italy. The prospective addition to profits from this case was, therefore, $155. Subsequently, in the following September, the matter was taken up by the Italian Consul at Philadelphia. The attorney of the industrial department, on JSTovember 17, 1908, called to the atten- tion of the industrial department manager that, in this case, the company had paid the undertaker's bill, and asked what course was to be pursued. Ten days later, such attorney wrote the Italian Consul as follows: " In reply to your favor of November 12th, relative to the claim of Nicola Constantini (check No. 284), desire to say that our records indicate that this claim vpas disposed of shortly after the accident.'' 120 National Conventiok of Insueance Commissioners On November 28th the solicitor of the Italian Consul wrote to the attorney of the industrial department for further information, stating that he had received a communication from the Italian authorities to the contrary, and that he desires " the amount paid, the date and the person to whom it was paid," so that he may report upon the case to the authorities in Italy. To this, the attorney of the industrial department replies, nearly three weeks later: " I am advised that payment was made to A. C. Hutchinson as payment of funeral expenses." This letter, however, being written only after another reminder from the solicitor for the Italian Consul. To this, the solicitor for the Italian Consul replied, stating: " I note what you say about having paid the money to Mr. Hutchinson as part of the funeral expense, and I will thank you to be kind enough to send me a copy of the section under which this was done, together with a copy of his bill, so that I may report the same to the Royal Consul." The attorney of the industrial department thereupon replied : " The payment was not made in accordance with any particular part of the contract. The undertaker buried this party and had no person to pay him. No claim was presented against us and we paid the money direct to him and took his receipt therefor." After another exchange of letters, the solicitor for the Italian Consul wrote : " I do not quite understand as yet what claim the undertaker had against your company, and am, therefore, asking you to be kind enough to inform me whether or not the $45 was the entire benefit payable." To this, the attorney of the industrial department replied, on January 11, 1909: " Desire to say that the $45 was not a payment of the full face value of the policy, but was in payment of all claims which were presented within the time required by the provisions of the policy and on which action has been barred. The undertaker buried this party and informed us that there were no living claimants for the estate, and requested that we pay the undertaker's bill. We did so, understanding, as I am informed, that there would be no further claim presented." It is unnecessary to detail this correspondence further. Clearly, the industrial department of this company was informed immedi- ately after the accident, that the decedent had a father and mother living in Italy, and their names and address were given. It also Industbial Health and Accident Settlements 121 knew that the employer was the trustee and that it could have .paid to him. Instead, in pursuance of its policy of proiitmaking deception where the beneficiaries were in distant lands, it took advantage of the presentation of an undertaker's claim, in effect, to get rid of its obligation of $200 for $45; apparently deliber- ately intending to sit quiet until the period specified in its policy for presentation of claims by those legally entitled thereto should elapse, and thus, take $155 from ignorant foreigners, whose repre- sentative — in the shape of the Italian Consul — it later attempted to deceive as to the transaction, but who ultimately found it out. Subsequently this outrageous transaction was brought to the at- tention of the United States manager by the employer, and, on the facts — which, presumptively, were fully known both to the in- dustrial department manager and to his brother, the attorney of the industrial department — the United States manager reversed their rulings and saw to it that the sum of $155 was paid to these poor people. In spite of these facts, the industrial department manager, on December 15, 1910, wrote the United States manager as follows: " Replying to your recent communication regarding the payment of the $155 claim to Nicola Constantini, beg to advise you that you have the wrong impression of my desires as to the payment of this claim. You should very clearly understand that I took the position with you that final proofs were not submitted, and that there was no appointment of an administrator, and, as tlie insurance would be payable to his estate, we certainly could not countenance the payment of the claim with any degree of safety until such appointment was made. Nor do I approve of the method in which this claim was paid. This is an industrial claim and should have been paid in the regular way and not by your personal check » * ♦. Your action in this matter is anything but what it ought to be under the circumstances and anything but what I could approve of or any other individual who would look upon the matter in an unprejudiced light." Having said which, however, is not a sufficient excuse for keep- ing silent until the contract period had elapsed, meanwhile not notifying this man's relatives in Italy, and, after the termination of such period, practically marking the claim cancelled. Such conduct on the part of the responsible officers of the in- dustrial department of this company is given the emphatic con- demnation of this department ; as it will be by every person who believes in the motto at the head of the company's stationery, "A Square Deal." 123 ]SlATioiirAL CoNVENTioisr OF Insukais'ce Commissioners Mike Tauber, of Coatsville, Pa. — This insured was killed at Coatsville, while employed by the Worth Bros. Company, and was covered by a factory policy held by such corporation. The local general agent — by the way, the son of the undertaker in the case — shortly after the funeral, wrote the home ofBce at Philadelphia : " Kindly see if any claim has been made. If not, draw up a draft for $40 to E. S. Landis, to help pay funeral expenses." The chief adjuster promptly sent the draft, enclosing " release to be signed," and adding: "As we have no papers on this case other than your communication, we will ask that you see that we are furnished with the doctor's report for our files." Mr. Landis — who seems to have been the undertaker — promptly executed a paper, which is not a release at all but merely an assignment to the insurance company of the claim of $40 against the estate of the deceased. This was in October, 1910. On November 10th of that year the Austrian Consul called atten- tion to the death of the insured and asked for information. The company promptly replied, enclosing blanks for proof of death and, at the same time, wrote its local general agent as follows : "We are enclosing you a copy of communication which we are sending Mr. D. Winter, the Austro-Hungarian acting consul of this city. This is in the claim of Mike Tauber, check No. 1609, in which case we paid your father $40 for undertaker's services. This is for your information." On December 23d, after the receipt of the proofs of death, the chief adjuster wrote the Consul as follows : " I beg to acknowledge the receipt of proofs in the case of ilike Tauber, and I desire to say that, according to our records, this claim was disposed of by taking the undertaker's release for the burial of the said Mike Tauber, amounting to $40. The insured was killed while trespassing on the railroad track, which is not the property of Worth Bros., the concern which he was employed in. The contract limits the amount of indemnity paid for this more hazardous risk. Our records, therefore, are marked satisfied." There seems to be nothing in the files which warrants the con- tention indicated in the second sentence of such quotation, namely, that the insured had exposed himself to obvious risk. It may' be suggested that such contention was an after thought. It proved sufficient, however, to hold the $160 thus saved in the bank ac- count of this company. Indtjsteial Health and Accident Settlements 123 John Fahin, of Martin's Creeh, Pa. — This insured was also covered by a factory policy, the same running to the Alpha Port- land Cement Company. His death was caused by sunstroke. In response to notice from the local general agent, the chief adjuster wrote : " Beg to enclose herewith set of proofs to be completed, provided there is a beneficiary to claim indemnity in this case. If, however, there is none, you may tell the undertaker that we will guarantee his bill up to $60 only, taking his release for the same. Of course, you are aware that, in cases of this kind, the undertaker will run up a bill practically to the amount of the insurance every time, which is unfair to the relatives, whoever they may be." The undertaker later rendered a bill for $72. The chief ad- juster then sent a draft for $60, in full settlement of the claim. The undertaker took such $60 and assigned his claim against the decedent's estate to the insurance company. All this was in Sep- tember, 1910. Thus, apparently, was $140 added to the profits of the industrial department in that year. The company seems to have made no effort to ascertain whether there was a beneficiary or, if so, where such beneficiary resided. On November 2d, however, it received a blank proof of death, which, though signed by the widow, who lived at Taliandorogd, Hungary, was not filled out, but which was enclosed with a cer- tificate issued by the town clerk of Taliandorogd township that (as translated) asserts that she is the widow and is entitled to $200 less the funeral expenses, payment of which she asks. ISTo atten- tion was paid to this communication — perhaps on the technical ground that the proof of death was not regularly filled out. Sub- sequently, in February, 1911, a letter was received by the in- dustrial department, which was referred to its agents in that terri- tory, with the result that one of them, located at Allentown, replied : " It appears that the letter attached was written by the son of a man killed at one of the mills of the Alpha Portland Cement Co. some time ago, and he desires to know if the family will get any insurance. The family are living in Hungary, so the letter states." To such a letter from the son, the chief adjuster replied: " In reply to the same, would state that we hold a release from the under- taker who buried this party, in settlement of this claim. Therefore it would appear that there is no further indemnity due." 124 National Convention of Insueance Commissionees The company at this time held no release, but only the assign- ment above mentioned. At this time, also, it had on its files the imperfect proofs of claim previously mentioned. The young man again vs^rote, insisting that the $200 mentioned in the contract belonged to his mother, and expressing the opinion that the burial expenses had not totaled up to that sum. He added: " Kindly be frank with me, as I do not wish this matter drawn out any- longer and I know you wish to do the square thing. If you feel that the company is entirely exonerated from any misrepresentation, will you please forward me the address of the undertaker who had the burial of my father in charge. I have just recently been informed of father's death, and for that reason was unable to look into the matter." To this the chief adjuster, on March 1, 1911, replied: " I beg to say there was no evidence submitted to us to show that this insured met his death so as to be entitled to indemnity under the accident clause of the contract. As I remember the case, we reimbursed the under- taker for the expense he incurred in preparing the body for burial. Our records appear to be as above stated and are marked satisfied." The clause "As I remember the case" is significant; for the number of the claim' is typewritten at the top of such letter, thus indicating that the man who wrote it was familiar with the facts in the files. To this letter, the son did not reply; and the chief adjuster, having thus first " satisfied " a claim of $200 by a payment of $60 to the undertaker; second, ignored a notice of claim sent by the beneficiary, and third, deceived the son as to the facts and thus gotten rid of him, doubtless felt content. This was the status of the case when this examination was begun. On May 6, 1911, while such examination was pending, the chief adjuster sent $140 to the widow of this insured at her residence in Taliandorogd, Hungary. Thomas Lahinshy, of Coatsville, Pa. — The record in this case contains a letter from the chief adjuster, addressed to the agent at Coatsville, Pa., reading as follows : " Relative to the death of cheek No. 883, which happened on June 27th, beg to ask you to make an investigation and report on the same whether the insured has any relatives in this country to make the claim, and, if not, whether you can get off for the funeral expenses, as you have done hereto- fore. If so, take whatever steps necessary to get the proper release.'' Industeial Health and Accident Settlements 125 Evidently the agent could not " get off for the funeral ex- penses," for the files show the payment of $200 to the adminis- trator of the decedent's estate. Luigi Bellando, of Benton, Wash. — This insured had a contract running direct to himself. While no undertaker intervened in this case, the industrial department caused an investigation to be made which resulted in the Pacific Coast manager referring the case to the home office in Philadelphia, stating that inasmuch as the beneficiary lived in a foreign country the case could be better handled from Philadelphia than from Seattle. In so doing, he gave the chief adjuster the address of the beneficiary in Italy, commenting : " The Mayor of the town in which the beneficiary lives in Italy has written friends of the deceased here to the effect that she has never received any- thing yet and is in dire circumstances, and asking them to investigate from this end." Such manager was thereupon asked to prepare proofs of death, which was done and the proofs furnished later. At the end of the examination, the claim had not been paid, though the proofs were received late iii February, 1911. The significant fact, how- ever, is that on the jacket of this claim — which resiilts from an accident on March 10, 1910 — are the following words, in quota- tion and apparently in the handwriting of the chief adjuster: " Do not stir up. See W. I. M." Such jacket also shows that, though the matter of an adjustment with the foreign beneficiary was suggested by the local agent to the claim adjuster as far back as in April, 1910, nothing had been done by such adjuster prior to December 15th of the same year. The significance of the above quoted words is, therefore, apparent. Raymond Nabatsko, of Coatsville, Pa. — This insured was in- eluded in a factory policy written to the Worth Bros. Company. The industrial department agent at Coatsville wrote the home ofiice in Philadelphia that he would have an administrator ap- pointed in a day or two, adding : " This is a $200 case." The chief adjuster replied the next day: " I can see no reason for your hurrying the settlement of this claim." Notwithstanding, two days thereafter, the local agent replied: "This claim will have to be paid. Have you any special reason for delay?" 126 National Coa-vbntion of Insurance Commissioners The claim was paid in full to an administrator named Landis, which is also the name of the local agent and of the undertaker who usually was employed at Ooatsville, the two latter being son and father. George Marinojf, of Cement City, Mich. — This insured was employed by the Peninsular Portland Cement Company, which held one of these factory policies. He was injured while at work and subsequently died. The chief adjuster referred this matter to the general agent at Jackson, Mich. This brought a letter from the Peninsular Portland Cement Company, from which the follow- ing is quoted: " We mailed your company a full report on the 16tli inst. This man recently came from Bulgaria, where he has a wife and three children. We are taking care of the hospital and burial expenses, so that we may be able to send to the wife the full amount of his insurance, $200.00. He has several relatives working for us, one of them a brother to his wife. Just what course it will be necessary to pursue we do not know, unless you send us the check as trustee and we will forward it direct to his wife." To this letter the chief adjuster replied: " Will you kindly give us the name and address of the beneficiary in Bul- garia, and we will send her a claimant's blank to be filled out and signed by her before the United States Consul in that town, in order to release us of all liability. We are, however, enclosing you blanks to be filled out by the attending physician and undertaker, also the employer, which you can have completed and return to us. On receipt of the address of the beneficiary, we will forward her the papers and have the draft drawn in her name and send direct to her." In due course, the Peninsular Portland Cement Company re- plied, stating that it would fill out such blanks and forward them and adding: " We find the address of the beneficiary is Mrs. George MarinofF, Pergos, Bulgaria.'' The industrial department of this company then lapsed into silence. It did not keep its promise to notify the widow but let the weeks and months slip by. Then, on January 31, 1911, there was inserted in its files relative to this claim a memorandum, addressed to Mr. Christie of the liability department, apparently made by J. C. Steinbach, the assistant chief adjuster, as follows: " In reply to your memorandum of the 2oth inst., referring to the claim of George Marinoff, check No. 143, employee of the Peninsular Portland Cement Industrial Health and Accident Settlements 127 Co., your claim No. 51,626, would state that this claim has been cancelled on our records on account of the beneficiary failing to make claim for the same. Should she do so at any time and we reopen the claim, we will advise you." While this claim is not strictly one of a settlement with an un- dertaker, it indicates that the industrial department of this com- pany, upon learning that the undertaker was settled with and that the beneficiary resided abroad, undertook to notify such bene- ficiary, failed to do so and then cancelled the claim on its records because the beneficiary had not made proof. It thus added $200 to the profits of the year. The cases from which the above are taken are numerous. The purpose of the claim department to avoid payment in full is clear- Legal quibbles, such as absence of an administrator, inability to secure a binding release from the employer — who, be it noted, is the trustee of the beneficiaries under the terms of the contract — and disagreement between the laws of the States affecting such contracts, are no justification. The industrial department of this company and its chief officers knew what they were about. The chief adjuster speaks of getting releases. What he got were assignments of debt — nothing more. But, with those assign- ments safely pigeon-holed and silence the rule, it was easy to cheat the beneficiaries of these ignorant foreigners. As indicating the relation between cause and effect, it is perti- nent to note that the ratio of losses to premiums in the industrial branch of this company — this on a premium income of $912,077.- 71 in 1910 — was but 35.29 per cent, which, with a single excep- tion, is the lowest of all the companies doing this class of business in ITew York ; while the loss ratio on its weekly payment business was, during the same period, but 21.5 per cent, much the lowest, apparently, of any company operating in this field in this State. While, as suggesting greater care and perhaps decent fairness in adjustments made with employers as distinguished from those made with individuals insured, the loss ratio on factory business during the same period was 49 per cent. ; but on individual busi- ness, that is, where the adiustments were made with the policy- holder or his beneficiary, the loss ratio was 31.65 per cent. These ratios, in the opinion of the department, are highly significant. They do not indicate, as they might in other fields of insurance, 128 National Convention of Insurance Commissioners clever underwriting — industrial health and accident policies be- ing sold practically to all who will buy — but, rather, a technical or deceptive treatment of loss claimants, as is pointed out in this memorandum. Indeed, if, a^ is stated, this company has found this class of business unprofitable in Europe and abandoned it, it should either promptly do the same here, or else, by decreasing the benefit or increasing the premium, lift its loss ratio where it be- longs, and thus give its policyholders, at last, a " square deal." The first impression made by the examiner's report was that he had been hypercritical. The testimony brought out on the hear- ing and a personal examination of the files indicate that he was properly conservative. It is impossible, in language fitted to an ofiicial document, aptly to characterize what seem to have been the practices and methods of the industrial department of this corporation in settling with its policyholders. It appears to have resorted to every possible means, not merely to protect itself against imposition — for which it could not be criticised — but also, and more particularly, to cut and shave down claims, appar- ently without conscience and certainly without right. Its repre- sentatives assert that, dealing as it does with the industrial classes, it must properly protect its stockholders and assets from the numerous frauds which, it .is said, are perpetrated on companies doing this kind of business. That may be ; but, protecting itself from imposition and fraud is a very different thing from using clauses inserted in contracts for that purpose as a means to impose upon and defraud those who have contracted with it. Protective clauses in insurance contracts have the same purpose as extreme penalties in the criminal law. They are meant to protect — in the one case ■ — the corporation, and — in the other case — society, itself, against the man who is intentionally unmoral or habitu- ally regardless of the rights of others. They make it easy to mete out justice against such. But, it is unmoral to use protec- tive clauses and heavy penalties against those who do not prac- tice fraud or habitually commit public wrong. Tried by this test, the management of the industrial department of this corpo- ration is found wanting and, to that extent, is here ofiicially con- demned. The representatives of the company challenge the conclusions of IifDusTEiAL Health and Accident Settlements 129 the examiner, and attempt to minimize the effect of such conclu- sions in several of the cases cited by him in his report. Each has been carefully examined by me ; as has the rejoinder of the com- pany. I am satisfied that, in the main, his recital of the facts is ■correct and his conclusions just. His report has, however, been amended in certain particulars where, upon hearing all the facts, I was unable to agree with him. It is asserted on behalf of the industrial department manager that, until this examination, he was ignorant of these practices; that he now condemns them and will do everything in his power to make amends for the wrongs which have been done. As to the future, the view.s of this department will be expressed a little later. As to the past, it is not prepared to grant absolution. There is enough in the quotations from letters and memoranda contained in what precedes to indicate that the industrial depart- ment manager was, to a considerable extent at least, cognizant of what was going on. His family and himself are practically in con- trol of, or emphatically influential in, every function of the indus- trial department's work. That their chief is largely interested in savings — not only through adjustments, but in other ways — is clear, from the nature of his profit-sharing contract. Irrespective, therefore, of his technical responsibility as the head of this de- partment, he is, in my opinion, chargeable with the conditions and results here enumerated. " Like master, like man " is an old saying; and it is nowhere more apt than in an insurance corpo- ration. The representatives of the industrial department, in several cases, justify such defenses as change of occupation and late notice, on the ground of extraneous facts, in some instances not proven, but from circumstances reported to them and believed to exist. Such a course is proper in a case where there is strong and reliable ground to suspect or believe that the claimant or the bene- ficiary is attempting to defraud; but not otherwise. A mere suspicion based upon a suggestion sent by the chief adjuster as to what grounds there may be through which the company can escape part of its liability is surely not eUough; neither is newspaper gossip. A company such as this should, in most cases, lean back- ward rather than forward, particularly when dealing with the 5 130 National Convention of Insurance Commissionees widow or dependent beneficiary of the bread winner who was the insured. Nay, more; since the smaller benefit and the weekly premium contract usually indicate that the insurance is kept up by the poorest and least favored of the community, so much th^- more should a company of this class use care and evenly balanced judgment — yes, to the point of sympathy — in dealing with its policyholder. Indeed, where there is a doubt as to the obligation of the corporation, it should — unless such doubt amounts to a well-supported conviction — be resolved in favor of the insured, and not, as in the present instance, usually in favor of the company. Who — besides the industrial manager, Charles H. Boyer — is- responsible for these conditions ? Joseph J. Keist, who is the manager of the weekly premium branch of this industrial department. Several adjustments made by his direction have been criticised by the examiner. The prac- tices followed in the monthly premium branch were, to a consid- erable extent, followed by him. His testimony is illuminating. In one case, he wrote tho assured, Herman Kash, that " when the policy was issued his occupation was stated as a merchant tailor,, not working;" and, when the records were brought to his attention and he was asked whence he obtained this information, he re- plied : " I took it for granted ; it was not written that way." In another case, that of Walter Jackson, he wrote: " It appears from the facts you have sent in that, without any question at all. the one-fifth basis is the proper settlement, of $40. If you can settle the case in full for this, do so. If you can shave it, do so." In response to the question of the examiner, " Why shave ? " and, after a long wait and another question from the examiner, " Is it difficult to answer, Mr. Krist ? " he replied " Yes ; " and, to an- other question, "You have no answer?", said "No, sir;" and, when asked, " Is it your method to ask your agents to shave claims that are legitimate ? " he replied, " Not as a rule." Doubtless because of developments on this examination, Mr. Krist was — by action of his chief, 0. H. Bbyer, taken on April 27, 1911 — displaced as the head of the weekly payment depart- ment, Mr, Boyer then saying to him : Industrial Health and Accident Settle^fents 131 "Having understood from Mr. Mullen, who heard you give testimony before the New York Insurance Examiner yesterday, that you admitted, in several instances, having written to agents in reference to death claims that were all right and honest, directing them to settle them for less than their face, and you having admitted same when I took the matter up with you, I feel it my duty to say that, inasmuch as you ought to have known that I would not approve such a treatment of a policyholder, because repugnant to the motto 'A Square Deal ' that you have often heard me insist upon with agents — that you are not the right man for adjusting and settling claims, and therefore have instructed Mr. H. A.. Riggs to act from this day as adjuster of the claims formerly under your management." Mr. Kiggs is a bookkeeper in the office of the industrial depart- ment, without any experience in this work. J. C. Steinbach, who is the next in line to Chief Adjuster Mullen. At least in one of the cases cited — that of Marinoff — he is responsible for the deception attempted. He cannot be held entirely blameless for the numerous wrongs perpetrated by the claim department itself. W. I. Mullen, who is the chief adjuster, and once was super- intendent of agencies. His name occurs frequently in the corre- spondence. Whatever reference is made to the chief adjuster in this memorandum, such reference is to Mr. Mullen. More than any other man at the head office, he has set the pace as to the set- tlements with industrial policyholders. In such settlements he seems to start from the premise that every claim is fraudulent and must be proven honest. He is fertile in suggesting ways to avoid liability or to cut down amounts due. He is expert in the tech- nique of this technical contract. The opinion of his chief con- cerning him is indicated in a remark made by C. H. Boyer to the examiners, while they were questioning witnesses, to the effect that W. I. Mullen was the most expert claim adjuster in this country and that he had the utmost confidence in him. This is perhaps a reason — though the counsel of the industrial depart- ment says he is waiting for the completion of this investigation before advising his client, Mr. Boyer, what to do in Mr. Mullen's, case — why, when Mr. Krist was deprived of power (as pre- viously indicated), Mr. Mullen, whose letters to agents were far more brutally selfish than were Mr. Krist's, was instructed merely to see to it that, in adjustments, claimants entitled to accumula- tions be given them. 132 !Xatiokal CoNVENTiois' OF Insurance Commissioners J. B. BoYEE, who is the head of the legal department of this branch of the company's business. As indicated at the hearings, he is expert in the technique of the technical legal decisions inter- preting this technical contract. His methods in dealing with even such officials as foreign consuls are shown in the quotations from the records in the Constantini case; while his willingness, in meritorious claims, to rely upon change of occupation or late notice is indicated in several other cases reviewed by the examiner and by me. Perhaps such willingness is due to his environment ; but the technique of the law should be the last resort of the claim department lawyer of an insurance company, save in cases of probable or palpable fraud. C. H. BoYER, who is the industrial department manager. The views of this department as to such gentleman's methods are suffi- ciently indicated in what precedes. The Home Office of the Company in Scotland. Such home office is a long way off. On a record such as this, one is tempted to wish that it were nearer home. More even than Charles H. Boyer, is such office, in the judgment of this depart- ment, responsible for the conditions here condemned. The for- eign directors of this company cannot hide behind distance and ignorance. Ships and cable make communication easy; and the general maiiager, Mr. F. ISTorie-Miller, seems to have been fre- quently in the United States. No evidence has been found that Mr. ISTorie-Miller or his associates on the board of directors sought to check the industrial department manager and his subor- dinates in what they were doing. The sole slight evidence of real interest in these conditions is found in a letter written by Mr. Norie-Miller to C. H. Boyer, in November, 1908, in which, com- menting upon some of the settlements which led to criticism from the insurance commissioners, it is said: " We have decided that any matter in connection with your department coming into the hands of insurance commissioners must be at once handed over to Mr. Moore (the United States manager) to be dealt with as he may Bee fit, in the best interests of tlie company. We are pleased to learn from Mr. Moore that this arrangement will be quite satisfactory to you, recogniz- iiig as you do the difficulty of dealing with these departments. I am bound to say that the cases which have gone into the hands of the departments are such as to surprise me; for instance, I do feel that you are taking to(v Industrial Health and Accident Settlements 133 great an advantage of your assured by adhering to the ten days' notice in cases that are otherwise genuine. We have a similar notice in our policies in Europe (although it is a twenty days' notice instead of ten) but, outside of cases of fraud, we never take advantage of that condition. This must be the course of action that you must follow on your side." The eifect of this, now nearly three years old, admonition on the industrial department is, from present conditions, not appre- ciahle. Mr. Moore, the United States manager, however, from that time on, did undertake the difficulties of dealing with such departments; and, in every case developed on this examination, seems to have insisted upon settlements which were in good con- science and in accordance with the spirit rather than the strict letter of the contract. In this connection, also, it should not be overlooked that, after the general agent has deducted his 50 per cent, saving on the ad- justment, C. H. Boyer his 15 per cent, of what is left, the balance goes into the general funds of the company; or that, in the correspondence between the Scotch home office and the United States branch, frequent mention is made of the goodly profits and small loss ratio in the industrial department. Can it be that, at the distance of Perth, Scotland, the interests of the stockholders seem more weighty than justice to the policyholders in the United States ? Having thus reviewed the facts developed on this examination, both as indicating the conduct of the industrial department of this company and as showing what may be going on in this field if other companies are doing the same thing, it is proper to indicate some conclusions as to what must be done by this company if it is, after the expiration of its present license, to continue to do business in the State of New York. 1. The industrial department of the General Accident, Fire and Life Assurance Corporation, Limited, must immediately inves- tigate itself; to the end that the wrongs which have been com- mitted by it may be undone and full payment or restitution made. This is emphatically so as to its so-called undertaker settlements, as to the accumulation benefits which have been withheld, and as to lump sum settlements and those based upon unwarranted claims of change of occupation. In the cases like those developed upon 134; National Convention of Insurance Commissioners this examination which do not fall within these categories the same steps must he taken. Such other cases as shall be developed on this self-examination must be treated in the same way. Eurther, the company must make frequent reports of cases thus in process of readjustment, with its conclusions thereon. Such examination must be made by a person or persons in no way re- sponsible for present conditions or connected in any way with the industrial department or its management. 2. Eor the future : (a) There must be such a reorganization of this department as will, so far as possible, separate any person holding a position of influence or decision at the home office who holds a profit- sharing contract from any control, supervision or suggestion as to the settlement and adjustment of claims. (b) Definite written instructions must be given the general agents and weekly department superintendents as to the adjust- ment of claims; which instructions, let it be said, should render permanently effective- — -not merely trumpet — the motto of "A Square Deal." (c) It may also be well to establish at the home office in Phila- delphia a committee on appeals; with the provision that all im- portant claims as to which there shall be the slightest doubt or a substantial controversy between a claimant and the company shall be referred thereto for final decision. (d) Generally, such treatment of the policyholder public in all matters, but particularly in the settlement of claims, as will satisfy this department and the other insurance departments in States in which the company does business that the evils and wrongs developed on this examination and reviewed in this memo- randum are no longer possible. The lessons of the past should also result in the substitution for the present bifurcated organism of the United States branch of an organism in which the United States manager will be what this department feels that he should be — not only the titular but the actual responsible head of the corporation in this country. It is not impossible that the publicity which wiU be given to these transactions by this memorandum and the examiner's re- port will be a sufficient warning both to this company and to Industeial Health akd Accident SETTLEMEiSTS 135 others, if any, whose practices have been similar. But, that there may be no misunderstanding as to the attitude of this depart- ment, it is here stated that a prompt, complete and non-technical compliance with these requirements is essential, and that any «vasion thereof or return to old methods will be added ground for a refusal to relicense at the proper time. Those familiar with recent legislation in this Stat© will recog- nize that the policy contracts herein referred to are those used by this company in the State of New York prior to January 1, 1911. Thanks to the action of the Legislature of 1910 and to that of Massachusetts for the same year, as well asi to an extent to that of Minnesota for the year before, such policy contracts have been largely reformed, and those now issued in the States men- tioned have modified clauses which make impossible some of the contentions and defenses relied upon by this claim department. That there is room for improvement and stiffening even in the present JSTew York and Massachusetts standard contract is, how- ever, now apparent, and that work may well be undertaken soon. Meanwhile, this company — should it meet the views of this department — may well evidence its repentance by hereafter us- ing such- standard form not only in itsTew York, Massachusetts and Minnesota — ^ where, by law, it must — but in the other States — where it should. In justice to the United States manager, Franklin J. Moore, it should be stated that, owing to the complete separation of the industrial department from the other departments of the cO'm- pany, he is not chargeable with knowledge of the transactions in such department, other than in the cases which, through the intervention of the insurance departments, have been brought to his attention. His handling of such cases has already been com- mented upon. Also, in justice to the American advisory committee, it should be stated that, while presumptively it corresponds to the board of ■directors of a domestic corporation, its functions are advisory only and it has no power to execute or control. The examiner's report, as amended on the hearing, together with the testimony and exhibits, will be made a part of the pub- lic files of this department. This memorandum will be trans- 136 National Convention of Insurance Commissioneks mitted to the home office of the company in Scotland, and to the United States manager and United States industrial department manager at the American home office in Philadelphia, and, wheo so transmitted, will be attached to the examiner's Beport so on file, and, when printed, will be transmitted to each of the snpervisiiig insurance departments in the States in which this corporation does business. WILLIAM H. HOTCHKISS, Superintendent of Insurance. Dated Albany, N. Y., July 3, 1911. STATE OF NEW YOEK — Insurance Department New York Office — 165 Broadway. New York, May 16, 1911. Hon. William H. Hotchkiss, Superintendent of Insurance, Albany, N. Y. Sir: Acting under your appointment No. 2589, dated Tan- uary 4, 1911, and annexed hereto, I have made an examination of the affairs of the United States branch of the General Accident, Eire and Life Assurance Corporation, Limited, of Perth, Scot- land. History This corporation was organized on February 23, 1891, as The General Accident Assurance Corporation, Limited, under the laws of Great Britain. On March 2, 1906, the name was changed to " The General Accident, Eire and Life Assurance Corporation, Limited." In 1899, the corporation established the United States branch in the city of Philadelphia and deposited the sum of $250,000 with the Superintendent of Insurance of the State of New York. On May 2, 1899, the corporation was authorized to transact the busi- ness of insurance specified in subdivisions second, third and fifth of section 70 of the Insurance Law of New York. With the ad- dition of subdivision 9 to section TO the powers of the corpora- tion were enlarged to include the class of insurance provided for in the said subdivision. Industeial Health and Accident Settlkjients 137 The corporation now operates in thirty-eight States and Ter- ritories of the United States and is transacting accident, health, liability, burglary and automobile insurance. Management United States Manager. — The management of the affairs of the United States branch of the corporation is vested in the United States manager, who is assisted in his work by an advisory com- mittee and a finance committee. Messrs. William S. Muir and J. Paul Haughton, represented the corporation as United States managers from 1899 to 1906. In 1906, Franklin J. Moore suc- ceeded to the office and is the present United States manager of the corporation. Finance Committee.— The United States finance committee of the corporation is composed of Messrs. Franklin J. Moore, Louis C Madeira, Joseph S. Clark and S. Eoger Mitchell. Advisory Committee. — The United States advisory committee of the corporation is composed of Messrs. Franklin J. Moore, Louis C. Madeira, John L. Dudley, Jr., "Walter E. Hoag, Charles H. Boyer and Henry G. Brengle. The functions of this committee are advisory only, as its name implies. It has no power over any of the departments of the corporation. Comptrollers. — 'Merwick, Mitchell & Company, chartered accountants, audit the accounts of the United States branch and act as auditors and comptrollers for the corporation. Trustee The Girard Trust Company of Philadelphia acts as trustee for the corporation under a trust deed, dated March 9, 1907. Following are the principal provisions of the trust deed : 1. The trustee agrees to hold certain assets of the corporation as a trust fund, to invest, reinvest and keep invested the principal of the trust fund in such securities or real estate as the finance committee of the corporation for the United States may, from time to time, direct and to hold the same for the protection of the policyholders of the corporation in the United States. 2. The corporation agrtes that the fair value of moneys, securities and real estate, comprising the principal held under the deed of trust, shall never be less than the amount of a reserve fund sufficient to comply with the laws of the several States into which the corporation is admitted to trans- act business. 138 National Convention of Insurance Commissioneks 3. The trustee is required to pay any judgment arising under or by virtue of any policy within thirty days after notice, if the corporation de- fault in payment. 4. If the principal of the trust should become impaired to the extent of 25 per cent., and the impairment is not made good wthin thirty days after notice, the trustee is required to apply the income of the trust fund to make- good such impairment. 5. In the event of insolvency, the trustee is required to apply the trust fund pro rata among the claimants. 6. The corporation may terminate the trust on notice in writing at least one year before such termination and the trustee may resign on like notice. Geneeal Accident Insueance Company of Philadelphia In 1899, the directors of this corporation organized a company under the laws of the Commonwealth of Pennsylvania and named it " The General Accident Insurance Company of Philadelphia."^ On June 30, 190'8, an agreement of reinsurance was entered into between the General Accident lire and Life Assurance Corporation, Limited, of Perth, Scotland, and the General Acci- dent Insurance Company of Philadelphia, by the terms of which the former absorbed all the assets and assumed all the liabilities of the latter. The General Accident Insurance Company of Phila- delphia has on deposit with the insurance department of Ohio^ securities of a par value of $50,000. Under the laws of Ohio^ this deposit cannot be released until all the obligations of the com- pany under its policy contracts have been discharged. Reinsueanoe Following is a list of companies which have reinsured all, or part, of their business with this corporation : New England Mutual Accident Association of Boston, Mass., May 25, 1899,. writing only accident insurance. Provident Mutual Accident Association of Philadelphia, Pa., March 12, 1900, writing only accident and health insurance. National Indemnity &, Insurance Company of Baltimore, Md., November 1, 1901, writing health insurance. People's Surety Company of New York, September 3, 1907, the reinsur- ance covered only burglary, theft and personal accident risks. United American Life Insurance Company of Delaware, with offices in Philadelphia, Pa., March 24, 1908, the reinsurance covered only accident and health risks. General Accident Insurance Cotfipany of Philadelphia, Pa., June 30, 1908 writing only accident and health insurance. Metropolitan Surety Company of New York, December 24, 1908, the re- insurance covered only burglary and theft risks. r Industejal Health and AcciDEiirT Settle jiexts 139 Statutory Deposits The corporation maintains the following statutory deposits with insurance departments in the United States : New York, $260,000. Held for the benefit of all policyholders residing in United States. Ohio, $150,000. Held for the benefit of all policyholders residing in the United States. Ohio, $50,000. Held for the benefit of policyholders of the General Ac- cident Insurance Company of Philadelphia. Virginia, $13,500. Held for the benefit of policyholders residing in Vir- ginia. FiNANCLAL Statement The following statement shows the condition of the United States branch on Deceniber 31, 1910 : Income Gross premiums : Accident and health $1, 638, 014 41 Liability 1, 596, 106 37 \ Burglary and theft 203, 453 06 Auto property damage 558, 225 98 $3, 995, 799 82 L«ss reinsurance and return premiums 913,172 00 Net premiums $3, 082, 627 82 Policy fees 72, 220 00 Interest on bonds and stocks 55, 677 85 Interest on deposits in banks 4, 972 16 Interest on accounts receivable 125 25 Gross rents 16, 999 80 Amount received from home office 1,222 21 Gross profits on sale of bonds 1, 169 45 From all other sources 604 05 Total income , $3, 235, 618 59 Ledger assets (as per balance on December 31, 1909).... 2,407,553 83 Total $5, 643, 172 42 DiSBXJESEMENTS Gross amount paid for losses: Accident and health $648, 6o2 20 ; Liability 387, 632 53 ; j 140 National Convention of Insueance Commissioners Burglary ami theft $G8, 149 37 Auto property damage 186, 469 69 $1,291,203 79 Less reinsurance and salvage 49, 540 41 Net amount paid for losses $1,241,663 38 Investigation and adjustment of claims 126, 944 47 Policy fees retained by agents 72,220 00 Commissions and brokerage 907, 650 03 Salaries, fees and all other compensations... 189,882 51 Medical examiners' fees and salaries 21,263 30 Inspections (other than medical or claim) ... 13,353 85 Rents, including $16,999.80 for company's oc- cupancy of own building 36, 849 65 Repair and expenses (other than taxes) on real estate 4, 755 64 Taxes on real estate 1, 930 50 State taxes on premiums 52, 576 94 Insurance department licenses and fees 9, 088 92 State taxes on securities 2, 039 60 Federal tax 562 50 Legal expenses . . . 5, 221 46 Advertising 3, 624 30 Printing and stationery 25, 781 26 Postage, telegraph, telephone and express.... 22,676 08 Furniture and fixtures 4, 183 88 Remitted to home office 100, 010 19 Traveling expenses 17, 383 38 OfiBce supplies 2, 279 69 Entertainment 1, 210 93 Petty office expenses 4, 222 84 Insurance association dues 2, 875 42 Auditors' fees 10,219 97 Trustees' fees 1 , 002 22 Subscriptions to publications 779 52 Premiums on bonds 123 75 Christmas donations 557 50 Committee fees 1, 135 00 Traveling agents' expenses 3, 154 43 Agents' balances charged off 2, 731 87 Gross loss on sale of bonds 143 50 Total disbursements $2, 890, 098 48 Balance $2, 753, 073 94 Ledger Assets Book value of real estate $213, 160 58 Book value of bonds 1, 718,850 73 IWDUSTEIAL HeAXTH AND ACCIDENT SETTLEMENTS 141 Book value of stocks $136, 185 35 Cash in company's office 563 43 Cash in trust companies and banks 158, 443i 89 Premiums in course of collection: On business written . on or after October 1,1910 488,437 02 On business written prior to October 1, 1910 26, 794 75 Accounts receivable 2, 138 19 Cash in branch offices 8, 500 00 Total ledger assets $2 , 753, 073 94 NON-LEDQEB ASSETS Interest accrued on bonds $21, 567 43 Interest accrued on bank deposits 617 12 Total non-ledger assets 22, 184 55 Gross assets $2, 775, 258 49 Deduct Assets Not Admitted Premiums in course of collection on busi- ness written prior to October 1, 1910 $26, 794 75 Book value of bonds and stocks over market value 85, 646 08 Book value of real estate over market value.. 43,160 58 Accounts receivable 2, 138 19 157, 739 60 Total admitted assets $2, 617, 518 89 Liabilities Losses and claims: Accident and health $170, 254 84 Burglary and theft 11, 620 00 Auto property damage 87, 820 00 Special reserve for unpaid liability losses.... 134,793 85 Total unpaid losses and claims $404, 488 69 Unearned premiums: On risks running one year or less 1, 013. 116 40 On risks running more than one year 68,022 20 Advanced premiums 38, 889 72 Commissions on business written on and after October 1, 1910 162, 812 34 Bills and accounts due or accrued 32, 629 93 Taxes due or accrued 58, 143 12 Total liabilities, except capital $1, 778, 102 40 342 National Convention of Insurance Commissionees Capital ( statutory deposit) $250, 000 00 Surplus over all liabilities 689,416' 49 Surplus to policyholders $839, 416 49 Total liabilities $2, 617, 518 8» j Assets Beal Estate. — The real estate owned by the corporation consists of a six-story ofBce building situated at the southwest corner of Fourth and Walnut streets, Philadelphia. The corporation ac- quired the land in 1902 at a cost of $98,000, and constructed a building thereon in 1907 at a cost of $115,000'. The entire building is occupied by the United States branch as its home office. The rental charged by the corporation for the year 1910 amounted to $17,000, and the expenses of maintenance and taxes amounted to $6,6&6. The title to the property is held by the trustee. The property was appraised in 1908 for the corpo- ration by real estate experts at $190,000, and the probable rental estimated at $20,000 per annum. The market value of $170,000, as given in the annual statement to this Department, appears to be a reasonable and conservative estimate and was allowed as thfe proper value in the foregoing financial statement. Bonds and Stocks. — All of the securities owned by the corpo- lation appearing in 'Schedule " D " of the annual statement, were examined and appraised at their market value. The statutory de- posits were verified from certificates issued by the States of ISTew York, Ohio and Virginia. Deposits in Banhs. — Deposits in banks were verified from cer- tificates furnished by the respective banking institutions and reconciled with the records of the corporation. Cash in Agencies. — This item represents deposits maintained in the agencies of the corporation in the cities of New York, Chicago and St. Louis. Premiums in Course of Collection. — This item represents the gross amount due from agents in all departments, except the in- dustrial department, on business written subsequent to September 30, 1910. The amount was reduced by $7,2i4'6.52. Industeial Hkalth and Accident Ski-tlejiekts 143 Liabilities Unpaid Claims 1. Accident and Health — The accident and health business of the corporation is divided into two departments : Commercial and Industrial. (a) Commercial. — A critical examination of the unpaid claims in the commercial department has convinced your examiner that the reserves provided by the corporation specifically for each •claim, are adequate. While it vi^as found necessary to increase the Joss reserve for the outstanding claims in the commercial depart- laent by the sum of $7,420.55, this increase is due almost entirely to the provision made for claims that have accrued prior to De- cember 31, 1910, notice of which reached the corporation subse- •quent to that date. (b) Industrial. — A comparison of actual payments with the specific estimates provided for unpaid claims by the industrial de- partment, shows that the claims in this department are undei^ ■estimated and the reserve inadequate. The reserve for unpaid claims in the industrial department has "been increased by the sum of $22,592.93, as follows: Increase over company's estimates '$8, 355 38 Heserve for claims accrued prior to December 31, 1910, but not reported until after said date 14, 237 55 $22,592 93 Outstanding losses in the industrial department are chargeable to the agents, in accordance with the provisions of their profit- sharing contracts. This provision of the contract has a tendency towards influencing the manager of the industrial department to underestimate the liability of his department. Liberal estimates for outstanding claims are, as a rule, objectionable to the agency force. 2. Burglary and Theft. — The reserves on unpaid claims in the above department have been increased by the sum of $3,045, due principally to claims that have accrued prior to December 31, 1910, but not reported to the corporation until after that date. 3. Automobile Property Damage. — The loss reserve in this de- partment was found to be adequate. 144; ISTational Convention oit Insueance Commihsionees 4. Special Reserve for Unpaid Liability Losses. — The special reserve for unpaid liability losses, as computed by the corporation, in accordance with the provisions of section 86 of the Insurance Law, was found to be erroneous and the reserve was increased by the sum of $3,189.71. The following table shows the liability reserve on the basis of the corporation's specific estimates, and on the bases provided by the laws of New York, Connecticut and Michigan : Reserve under New York law $134, 793 85 Reserve under Connecticut law 344, 540 57 Reserve under Michigan law 376, 440 00 Corporation's estimate of present value of outstanding lia- bility losses 397, 872 OO It will be observed that the reserve • obtained under the New York method is lower than that obtained under the Connecticut, or under the Michigan, rule. In looking for the causes of thi& material difference, I find that it is due to the fact that the aver- age cost for each notice and suit has materially increased on ac- count of the automobile liability business during the past five years, but this increase of the average cost does not affect the New York reserve, the latter being based on the experience of the corporation on policies issued during the years 1901-1905, in- clusive. Kecognizing the inadequacy of the liability reserve, as computed imder the New York method, the corporation has, in its annual statement for 1910, charge(f itself v§th a voluntary reserve of $250,000 to provide for the deficiency resulting imder the New York method. Unearned Premiums With the exception of a few items properly chargeable as pre- miums paid in advance, the liability for unearned premiums was found to be computed correctly, and represents approximately the reserve required under the provisions of section 86 of the New York Insurance Law. Commissions Due to Agents This item represents a commission of 33% per cent, on the un- collected premiums of the business written subsequent to Sep- tember 30, 1910. i Indtjstbial Health and Accident Settlements 145 Bills and Accounts Due and Accrued The corporation provided an estimate of $15,00(5 to cover the liability for accounts due and accrued on December 31, 1910. An examination of the vouchers paid subsequent to the above date shoves that the above provision is inadequate. On the basis of actual payments, the above liability amounts to $32,629.93, or an increase of $17,629.93 over the amount given in the annual state- ment. Premiums Paid in Advance ■ With the exception of $1,215.10, this item represents premiums paid in advance by the policyholders in the industrial department. Taxes Due and Accrued Liability for taxes has been increased by the amount of accrued taxes on real estate and for taxes payable to the Federal gov- ernment. Surplus The surplus to policyholders, as shown in the foregoing state- ment, amounts to $839,416.49. It should be noted, however, that the provision made for the liability loss reserve, in accord- ance with section 86 of the New York Insurance Law, does not adequately represent the true reserve for such losses. If the lia- bility loss reserve were computed upon the basis provided by tho Michigan law, the surplus to policyholders would be reduced b^ approximately $242,000. CONTEACTS WITH MaNAQEES The contract with Franklin J. Moore, United States manager, provides for a salary of $20,000 per annum and a commission of 2% per cent, on the net underwriting profits. The contract with Charles H. Boyer, manager of the industrial department, provides for a salary of $4,800 per annum and a com- mission of 15 per cent., based upon the net profits of the industrial department. In March, 1911, the directors of the corporation au- thorized the industrial department, under certain restrictions, to write liability business in connection with factory insurance. The contract with Victor C. Vette, manager of the railroad 146 National Convektion of IsstrEANCB Commissioners •department, provides for a compensation based upon the net profits ■of the department, after a deduction of 20 per cent, for the ex- penses and profits of the home office. The account with this agency as of December 31, 1910, shows a balance due from the manager amounting to $8,136.78. This balance represents a sum remaining uncovered after a deduction •of 20 per cent, due the home office. Under the terms of the con- tract, the manager will not be entitled to any profits until this balance has been repaid. Inditsteial Department The industrial department of the corporation — under the man- agement of Charles H. Boyer — is segregated from all the other departments, and is treated as an independent agency of the corporation. It maintains a subsidiary system of accounts with its agents and policyholders, and its business methods differ ma- terially from the other departments of the corporation. It issues policies on the monthly and weekly premium plan — principally to wage earners — providing for insurance in cases of NEK3 Ratio of Losses to Premiums An analysis of the premium income and losses in the industrial department shows that the loss ratio is highest in the factory class, reaching nearly 49 per cent, of the premium income. As the employer is the trustee for the employees under the provisions of the factory policy, and is frequently a policyholder of the corporation under the employers' liability policy, he takes more or less interest in the adjustment of claims and in the fair treatment of his employees by the agents of the corporation. The loss ratio in the next important class, i. e., regular monthly policies, is equal to 35.29 per cent, of the premium income. This class forms the largest part of the business of the industrial department. The lowest loss ratio is to be found in the weekly department. The policyholders in this class receive only 21.5 per cent, of the premium income. The weekly department was organized in 1908. It is claimed by the company that the business is experimental as to rates and benefits and that there has been no adequate tabu- lated experience to serve as a guide. Claim Department William I. Mullen, chief adjuster of the industrial department, is in charge of the claim department and is responsible for his acts to the manager of the industrial department. In the adjustment of losses, the claim department proceeds upon the theory that one claim oat of every five is fraudulent, and that the loss ratio must not exceed 40 per cent, of the premium income. The assumption that 20 per cent, of the claims reported to the industrial department are fraudulent is not based upon the ex- perience of this, or any other, corporation. While it is true that approximately 20 per cent, of the claims reported to the industrial department are rejected by the corporation and its adjusters, this large percentage of rejections is due principally to the restrictions of a narrow contract, the provisions of which are technically con- strued, and to the methods in vogue in the claim department of the corporation. In the States of Xew York and Massachusetts the policy con- Industrial Heaztii akd Accident Settlements 149 tract issued by the corporation from January 1, 1911, has been Teformed to comply with the standard provisions prescribed by the laws of these States. Methods of Settlement It is the policy of the industrial department to strictly enforce the provisions of the contract — where such enforcement is of bene- fit to the corporation — and to ignore the provisions that are of benefit to the policyholders. The following illustrations indicate the methods employed by the industrial department of the corporation in the adjustment of losses : Occupation. — The policy provides for a reduction of indemnity in cases where the insured has changed his occupation, or was injured while doing any act or thing pertaining to a more iazardous occupation. The reduction of the indemnity under the above provisions ia frequently based on technical grounds and, in some cases, is not even warranted by the manual of rates in use at the time of the issue of the policy. The extent to which the practice is carried on may be judged from the following cases: In the case of George P. Sweatland, Olaim No. 59,908, the insured, whose occupation was that of an electrical worker, was drowned while engaged in the sport of hunting frogs. The policy provided an indemnity of $300. The company reduced the occu- pation of the insured to that of " hunter," and offered the bene- ficiary $100. In the case of Fred W. Sawyer, Claim No. 89,641, the insured, "whose occupation was that of an insurance agent, was injured while engaged in saving his house from fire. The company re- duced the occupation of the insured to that of a " volunteer fire- man." In the case of Robert O'Brien, Claim No. 4,617, the policy- holder was insured as a structural ironworker. When injured tisi occupation was "painter of bridges." The manual of rates provides the same indemnity, viz. : $200 in either of the above occupations. The company reduced the indemnity to $100 on account of change of occupation, without reference to the manual. 150 !N"ATiO]srAL Convention of Insurance Commissionees Late iVoiice.— Notice of disability must be given within teji days after the date of the accident. If not given within the ten- days the policy provides for a reduction of the indemnity to one- fifth of the principal amount. Ernest Biehl, Claim 'Eo. 30,004, was insured under a factory policy which provided an indemnity of $30 per month. The in- sured sustained serious injuries which confined him to the hos- pital for the period of one year. The accident occurred on No- vember 11, 1907, and the liability department of the corporation, was notified of the accident on November 13, 1907. Under the provisions of the policy the insured Avas entitled to $360. The claim was legitimate in every respect and presented no meritorious defenses. The company contested the case in the courts on the- ground of late notice — on the theory that notice to the liability department was not notice to the industrial department — and on; the further ground that the employee was not- the proper party plaintiff, the policy being written in the name of the employer as trustee for his employees. It is claimed by the United States industrial department man- ager that he relied upon these defenses believing that there was- collusion and for the purpose of gaining time for a proper in- vestigation. The claim was finally compromised for $200. In the case of Walter B. Hodger, Claim No. 56,775, the in- sured was killed on July 2, 1909. Notice was two days late and^ although the claim appears to be legitimate in all respects, the company reduced the indemnity from $400 to $80. Contributory Negligence. — Exposure to obvious risk of injury or known danger reduces the indemnity to one-fifth of the amount that would otherwise be payable under the provisions of the- policy. Eeductions under the above provision are numerous. la nearly all cases where the insured sustained injury while cross- ing a railroad track the company has interposed the defense of contributory negligence. In the case of Vincent Hadley, Claim No. 78,515, the insured was drowned while bathing. The indemnity was reduced on thd ground of exposure to obvious risks of injury or known danger. Industrial Health and Accident Settlements 151 C onditionless Policy. — ■ This policy is descriibed in the manual issued to agents as follows : " This combination accident and health policy contains none of the usual conditions and restrictive provisions, thereby making it practically a promise to pay upon presentation of satisfactory proof of loss." Certain diseases — which are excepted under the provisions of the regular policy — are, covered by this policy, and the clause which reduces the indemnity to one-fifth of the original amoimt in certain events — ■ among others contributory negligence — is eliminated from its provisions. An additional premium of 35 per cent, is charged in considera- tion of the increased benefits provided by this policy. Thomas Prater, a policyholder, who was insured under the above form of policy, was killed by a street car. The policy pro- vided an indemnity of $200 in case of accidental death. The claim department attempted to reduce the indemnity tO' $100 on the theory of contributory negligence, regardless of the fact that the " conditionless " policy offered no valid reason for such re- duction. The attitude of the chief adjuster is shown in the fol- lowing letter written to the agent, and dated December 7, 1910: "Relative to the claim of Thomas Prater, I beg to say that we offered an adjustment of $100 in this case, owing to the fact that it was not clear to us that this man met his death without obvious risk of injury or danger to- himself. Of course we understand that the policy makes no exception to this, but at the same time, every agent has the interest of his business at heart and the low loss ratio in his district, and if there were any signs of care- lessness on the part of the assured, surely it is the agent's duty to take- a,dvantage of the same and try to compromise the case for the lowest sum possible under the circumstances." Double Indemnity. — -W. E. Stevenson, Claim No. 82,347^ carried a policy providing an indemnity of $500', with a rider attached to the policy doubling the amount of insurance for acci- dent due to collisions, derailments and wrecks. The insured was killed in a collision September 18, 1910. On ISTovember 22, 1910, the chief adjuster writes the following letter to Mr. V. C. Vette, the general manager of the railroad department: "Relative to the W. E. Stevenson claim I beg to say that if you can get off this claim with full release for $500 at this time, do so at once. If, how- ever, you feel that you must pay $1,000 in the case, or if $1,000 is demanded by the beneficiary, do not pay same until further notice from this office. It seems to me I would take a chance at this time of getting off the claim for $500 and pay no attention whatever to the rider." 133 National Convention of Insurance Oommissionees On November 23, 1910, Mr. Vette forwarded draft for $500 to the beneficiary, requesting a testimonial letter on account of tbe promptness in paying the claim. The beneficiary declined the tender, employed attorneys, and the claim was finally com- promised for $900. On June 12, 1911, V. C. Vette writes to the chief adjuster ad- vising him that he succeeded in saving $100 under the rider feature. Total Confinement. — To be entitled to illness indemnity, the insured must establish total and continuous confinement within the house. Sufferers from tuberculosis find it difficult to establish such con- finement, since the nature of the disease requires outdoor treat- ment. In the case of Frank A. Danforth, Claim No. 37,424, the lia- bility was denied on the ground of non-confinement. The insur- ance department of Maine intervened on behalf of the claimant and the company adjusted the claim on the basis of one-fifth in- demnity. Double Reductions. — The following case is an illustration of the method which enables the industrial department to apply two or more reductions to the same claim : James J. Rodgers, Claim No. 66,689, whose occupation is given as superintendent of a shipyard, was killed by a locomotive while crossing a railroad track on January lY, 1910. The policy provided for an indemnity of $500 and, as the policy was five years in force, the accumulations under the clause providing an additional 50 per cent, increased the face value of the policy to $750. The industrial department reduced the occupation of the in- sured, without good reason, to that of a captain of a tug boat, made a further reduction on account of contributory negligence, ignored the accumulations, and offered the widow the sum of $60. This offer was declined by the beneficiary in a letter dated Feb- ruary 9, 1910, which reads in part as follows: " I consider your attempt at sharp practice towards a widow and four small children as despicable as can be imagined, and if you have been success- ful heretofore in your dealings with beneficiaries who have accepted your Industeial Health and Accident Settlements 153 meagre settlement, either from poverty or idiocy, you will find that I am not to be placed in either class. Am intelligent enough to know my rights and have friends enough to see that I get justice." The industrial department increased its offer from $60 to $90 and from $90 to $150. The case is now pending in the courts of ISTew Jersey. The compamy abandoned all defenses except that of contributory negligence. Injuries Intentionally Inflicted. — The policy provides for a reduction of the indemnity to one-fifth of the principal amount if the injuries are intentionally inflicted upon the assured by any person other than himself. In the case of Peter Drost, Claim No. 89,212, the policy pro- vided an indemnity of $300'. The insured was killed by his son while the latter was believed to be insane. The claim department construed the injury as intentionally inflicted, reduced the in- demnity from $300 to $60 and made a further reduction from $60 to $40 on account of occupation. Breach of Warranty. — ■ It is not the practice to obtain a written application from all of the assured. The agent fills out the appli- cation, which becomes part of the contract and the schedule of warranties contained therein is binding upon the assured upon his acceptance of the policy. The following claim was rejected on account of breach of warranty : Arthur L. Stone, Claim ISTo. 68,616. — The assured was induced by the agent to change his form of contract from a " regular monthly " to a " business and professional." The application was filled out by the agent and forwarded to the Philadelphia office. The agent omitted to state in the application that the applicant was previoiisly insiired. This omission was treated as a breach of warranty and the claim was cancelled. Accumulations. — The policy contract provides that each con- secutive full year's renewal of the policy shall add 10' per cent, of the original principal sum of the policy to the benefit provided for loss of life, but all such additions shall never exceed 50 per cent, of the principal sum. While the language of this clause differs in the various forms of the policy contract, the same intention exists in all of the contracts, namely, to encourage and reward persistent, policyholders. 154 National Convention of Insueance Commissioners The provision, however, is so frequently ignored in the settle^ ments that the payment of accumulations forms the exception rather than the rule. But few beneficiaries appear to be familiar with this provision and the adjusters take advantage of their ignorance. In the case of Charles F. Massey, Claim No. 90,667, the agent, A. W. Crossett, under date of February 25, 1911, writes as follows : ■" W. I. Mullen : "Dear Sir: Yours of Feb. 21, regarding the Massey settlement received. I will say, Mullen, it was pretty hard to get this woman to sign anything. However, I have got it bound up good and solid and saved you about four 10 per cent, increases, as he had been with us four or five years." The agent succeeded in obtaining a testimonial letter from the beneficiary in the above case. Compromising Death Claims. — There appears to be a well-de- fined policy which encourages the compromise of all legitimate death claims for reduced amounts regardless of the provisions of the policy. In the case of M. Beasley, Claim No. 56,325, the policy pro- vided an indemnity of $1,000 in case of accidental death. The insured was killed by lightning and the indemnity reduced to $8 75. The facts in the case did not justify the reduction. In the letter to the agent dated July 26, 1909, Mr. C. H. Boyer writes in part as follows : " I would like to have you go to Benson immediately and malve a thorough investigation and report to us the full findings, in order that we may adjust the claim at as early a date as possible. This is the only deatli claim we have ever had from lightning and if it is good and straight and all right, we want to pay it as quickly as possible. If you can cut anything out of the principal sum of $1,000 we would be more than glad to have, you take it up with the executor, J. W. Neighbors, who would be their authorized repre- sentative. If he will sign an agreement to settle for anything under $1,000 kindly take same and submit it to us." In the case of Elmer E. Bailes, Claim No. 76,950, the policy provided for an indemnity of $500. On June 30, 1910, Chief Adjuster Mullen writes to the agent as follows: " The policy calls for $500. The occupation is given as that of ticket agent a,t station. I think it would be well for you to get off this claim as soon as possible. If you can make an adjustment, provided everything points to the Inbusteial Health akd Accident Settlements 155 iact that this claim is just according to the terms of the contract, for $300, ■without furnishing further proofs, I will take care of your draft when presented." In the case of Francisco Spado, Claim So. 6,566, the insured ■carried a policy providing an indemnity of $200. As the policy "was less than six months in force, the beneficiary was entitled to ■one-half the amount, or $10'0. On February 7, 1911, Joseph J. Krist, the manager of the weekly department, writes to the ageut ^s follows: " I know that this policy is not yet in full benefit. It is not yet six months old and therefore full indemnity would be $100. If you find this ia .a legitimate claim you might oflfer the beneficiary $50 in full and complete " settlement." It is asserted on behalf of the United States industrial depart- ment manager that this claim, as well as the claim of Elmer E. Eailes, previously cited, was adjusted without his knowledge or •direction and that he does not approve the attitude assumed by the department heads under him. Settling Without Proofs It is the practice to offer a compromise settlement immediately after an investigation of the cause of death and before the bene- ficiary has submitted the final proofs. The following will serve as an illustration: In the case of Peter Mettendorf, Claim No. 74,812, the policy ■provided an indemnity of $200. The preliminary notice filed by the assured and the investigation by the agent showed that the ■claim was legitimate. The agent was thereupon instructed to adjust the claim for $100 without proofs. Settlements of this character are frequent. The offer of an .immediate, cagh payment comes at a time when the beneficiary is in distress and willing to accept a reduced amount. To take ad- vantage of such a situation is unfair and unjust. The manager of the industrial department defends the practice on the ground ■ that the company has a right to compromise claims in all cases -where the beneficiary is willing to accept the reduced amount, which he terms a " lump sum," in settlement of the claim. llessrs. Mullen and Krist of the industrial department regard these settlements in the nature of speculation. 156 National Convention of Insurance CoiorissioNEES Undertakers In all cases where the insured meets with accidental death leav- ing no relatives, or whose relatives reside abroad, it is the practice to dispose of the claim by paying the undertaker an amount of from $40 to $60, and to mark the claim as satisfied on the records of the corporation. The cases that have come under my observation were all factory policies where the employer is named as the assured and trustee for his employees. The manager of the industrial department defends this practice on the ground that in the absence of an administrator there is no claimant and that a payment to the trustee will not release the corporation from all liability. An examination of the several cases shows, however, that the practice is consistent with a desire to avoid payment of the full amount of the claim. The Case of Nicola Constantini. — This policyholder was in- sured under a factory policy of the Alpha Portland Cement Com- pany providing an indemnity of $200 in case of accidental death.. He was killed on June 17, 1908, and the company was imme- diately notified of his death. The names and addresses of the relatives residing in Italy were also furnished to the company. On June 26, 1908, the company paid the undertaker the sum of $45 and marked the claim as satisfied on the records. In Sep- tember, 19'0i8, the Italian Consul became intex-ested in the claim and on behalf of the claimants in Italy, demanded inforaiation re- garding the disposition of the claim. On Xovember 27, 1908,. after consulting with the manager of the industrial department^ the attorney for the industrial department writes to the repre- sentative of the Italian government as follows : " In reply to your favor of November 12th, relative to the claim of Nicola Constantini, check No. 284, desire to say that our records indicate that this claim was disposed of shortly after the accident." The correspondence in the case continued in this evasive manner until June 17, 19i09 — exactly one year after the occurrence of the accident. On that date the manager of the industrial department writes to the Italian Consul as follows : " Replying to your communication referring to the beneficiary of Nicola Constantini, beg to advise you that no evidence has been submitted that any IwDusTEiAL Health and Accidekt Settlements 157 ■one has any claim as beneficiary under the policy of the Alpha Portland Cement Company, and in the absence of such information there can be no recovery at this time under the contract, as the above named party died more than a year ago." The case dragged along for a period of two and a half years, the correspondence showing clearly a desire on the part of the in- dustrial department to avoid the payment of this claim which was legitimate in all respects. The employer finally appealed to the United States manager of the corporation who ordered the pay- ment of the balance of $155 to the trustee for the benefit of the claimants, against the protest of the manager of the industrial department. In the case of Thomas Lavinsky, Claim No. YY,148, the chief adjuster writes as follows: " I beg to ask you to make investigation and report on same as to whether insured has any relatives in this country to make claim, and if not, whether you can get off for funeral expenses as you have done heretofore. If so, take whatever steps are necessary to get the proper release.'' Greorge Marinoff, Claim ISTo. 79,608, was insured under a factory policy as an employee of the Peninsular Portland Cement Company. On August 19, 1910, the employer writes as follows: " We are taking care of the burial and hospital expenses, so that we may be able to send to his wife the full amount of his insurance — $200. He has several relatives working for us, one of them a brother of his wife. Just what course it will be necessary to pursue we don't know, unless you send us check, as trustees, and we will forward it directly to his wife." This demand was ignored and the claim cancelled. The follow- ing memorandum appears in the file : " This claim has been cancelled on the records on account of the bene- ficiary failing to make claim for same." Workmen's Indemnity Policy In States outside of New York and Massachusetts, the corpo- ration issues a workmen's indemnity policy containing the follow- ing clause: " The acceptance by an employee or other person who may be entitled thereto to a benefit under this policy for injury or death of the employee shall operate as a release of all claims for damage against the insured arising because of any such injury or death which could be made by or through the employee or any other person and the person so accepting the benefit shall «xecute such further instruments as may be necessary formally to evidence «uch acquittance." 158 JSTational CoixvEA'TiON OF Ia'sueaxce Commissioners In the case of Robert Mullen, Claim ISTo. 84,629, the adminis- trator brought suit against the employer, for the sum of $20,000 and refused to accept the indemnity of $200 under the policy of insurance under the belief that the acceptance of such indemnity might prejudice his rights in the suit pending against the em- ployer. Influence of Profii-Sharing Contract In the case of Sawa Ivanieck, Claim Xo. 22,070, who met his death by drowning, liability was denied on account of delay in furnishing proofs of death. The delay was due to the fact that the beneficiary resided in Russia. In a letter addressed to the Russian Consul under date of March 1, 1909, the attorney for the- industrial department writes in part as follows : " Thinking this claim had been fully disposed of, we settled with the agent by whom the party was insured, and said agent is no longer in our employ. He was employed on a profit-sharing contract and if we were to- consider this claim at the present time, we would be a loser in an amouni; over one-half of the sum paid on account of delay on the part of the claimant in presenting the necessary proofs. We have been clearly prejudiced by thia delay and feel that we will have to stand upon the provisions of the policy not being complied with." The profit-sharing contract with the agents has a tendency tO' influence their judgment in dealing with the claimants. As to whether this influence is exercised for the benefit or detriment of the policyholders depends entirely upon the character of the agent and the class of policyholders affected by the settlement. Attitude of the Home Office. — ^Mr. F. Norie-Miller, the gen- eral manager of the corporation at the home office, Perth, Scot- land, is not in sympathy with the methods employed by the in- dustrial department and, in a letter dated November 3, 1908, ad- dressed to Mr. C. H. Boyer, manager of the industrial depart- ment, expresses himself as follows : " I have now to touch upon other serious matters brought before us by Mr. Franklin J. Moore at the directors' meeting to-day. This matter is in regard to the insurance commissioners. We have decided that any matter in connection with your department coming into the hands of insurance com- piissioners must be at once handed over to Mr. Moore to be dealt with as. he may see fit in the best interests of the company. We are pleased to learn from Mr. Moore that this arrangement will be quite satisfactory to you^ recognizing as you do the difficulties of dealing with these departments. I am Inbtjsteial Health and Accidektt SETTLEME:srTs 15!) bound to say that the cases that have gone into the hands of the depart- ments are such as surprise me. For instance, I do feel that you are taking too great an advantage of your assured by adhering to the ten days' notices in cases that are otherwise genuine. We have a similar notice in all policies in Europe (although it is twenty-one days instead of ten) but except in cases of fraud, we never take advantage of that condition. This must be the course of action that you must follow on your side." Intervention of Insurance Departments According to the decision of the general manager of the cor- poration, all matters in connection with the industrial depart- ment which come into the hands of the insurance commissioners of the various States are submitted to the United States manager of the corporation for such action as he may see fit to take in the best interests of the corporation. An examination of the cases which have been reported to the United States manager shows that the claimants have received proper consideration and fair treatment. Legal Department The experience of the company in its litigation with industrial policyholders has been of an unfavorable character. From sixty to seventy suits are now pending in the courts, covering amounts from $14 to $750. The defenses available under the provisions of the contract are numerous. Litigants seeking justice in the courts of law, unless defeated by dilatory tactics and the process of law's delay, have, in a ma- jority of the cases, obtained favorable decisions from courts and juries. Accounts and Records of the Industrial Department J. Warren Isett is the auditor and cashier of the industrial de- partment. Remittances from agents and policyholders, in the form of checks and money orders, are remitted daily by the auditor of the industrial department to the general cashier of the corporation for deposit in bank. It is the practice to retain the cash receipts for the purpose of meeting the necessary dis- bursements of the department. 160 National Convention of Insueance Commissioners From March 1 to November 1, 1910, remittances from policy- holders, amounting to $291.10, did not reach the hands of the auditor of the industrial department. The subject of maintaining correct records of premium re- ceipts in the office of an insurance company is an important one, since questions affecting the lapse of policies and the forfeiture of the indemnity thereunder are of frequent occurrence. Recog- nizing the importance of the subject, the United States advisory board, at its meeting held on October 25, 1910, appointed a com- mittee to investigate the losses herein referred to. The commit- tee made a thorough investigation of the subject and reported to the board on December 14, 1910. It veas found that $60 of the missing money was appropriated by an employee who confessed and made restitution. The balance could not be definitely traced to any individual connected with the corporation. An exhibit annexed to the report of the committee contains a statement signed by J. Warren Isett, auditor of the industrial department, reflecting upon the integrity of George H. Summers, manager of the policy department, and accusing him of altering and destroying the records of the corporation for the purpose of personal gain. Until May 18, 1910, Mr. Summers was employed under a profit-sharing contract. Mr. 'Summers and Mr. Isett appeared at this examination and were examined under oath. While one affirmed and the other denied the truth of the charges contained in the statement herein referred to, the denial was not absolute, and there exists — in the opinion of your examiner — a. preponderance of evidence to sup- port all the facts given in the statement. Division of Authority The minutes of the United States advisory boai-d of December 29, 1910, contains a reference to the fact that the United States advisory board has no authority over the affairs of the industrial department, and that the United States manager is such in name and not in fact. This division of authority is not conducive to a good business administration. Industrial Health and Accident Settlexeexts 161 Compensation of Officers The following schedule shows the compensation of the officers of the corporation: Per annum. Franklin J. Moore, U. S. Manager, salary $20, 000 00 Commissions for 1910 2, 284 99 Chas. H. Boyer, U. S. Industrial Department Manager ■ 4, 800 00 Commissions for 1910 14, 564 85 W. E. Hoag, Assistant U. S. Manager 6, 000 00 O. R. Maynard, Treasurer 3, 250 00 H. C. Allen, Attorney 7 , 000 00 H. A. Talbot, Attorney 4, 000 00 Marwick, Mitchell & Co., Auditors and Comptrollers 8, 000 00 Exhibits Exhibit "A" filed with this report shows a list of 180 claims. The adjustment of these claims fairly illustrates the methods and policy of the management of the industrial department. Testimony Franklin J. Moore, United States manager, Charles H. Boyer. the United States industrial department manager, and the fol- lowing employees of the industrial department: William I. Mul- len, chief adjuster; Joseph J. Krist, manager of the weekly de- partment; J. Warren Isett, cashier and auditor, and George H. Summers, manager of the policy department, were examined under oath and a transcript of the testimony has been filed with this report. Examinees Assistant examiners W. A. Billingham, W. H. Herrick and C. E. Heath have participated in the work of this examination. Conclusion The activities of this corporation are largely devoted to a field of insurance which has for its object workmen's compensation. In the liability department, the corporation assumes the protec- tion of the legal rights of the employer; in the industrial depart- ment, the corporation obligates itself to indemnify mechanics, artisans, factory and railroad employees. This examination 6 163 National Convention of Insueance Commissioners shows that the policyholders of this corporation — in all of its departments excepting industrial — are treated fairly and in d manner consistent with good business methods. Different methods prevail in the industrial department. The facts related in this report, supported by the exhibits and the testimony hereto annexed, show conclusively that the contract in the industrial department is interpreted in a technical manner and that the rights of the policyholders are disregarded; ad vantage is taken of their unfamiliarity with its provisions, and a disposition is shown to compromise, delay and avoid the pay- ment of legitimate claims. Accident and health insurance in the industrial field should be encouraged. Companies transacting this character of business under a franchise from the State are required, not only to give good evidence of their solvency and ability, but also willingness to meet their obligations in a spirit of fair play. In my opinion the abuses existing in the industrial department are principally due to the manager's profit-sharing contract, and the influence which such contract obtains over the adjustment of claims. The remedy suggested here points to the separation of the claim department from such influence. The claim depart- ment should be administered by a person or committee of recog- nized integrity, not directly interested in the profits of the in- dustrial department. KespectfuUy submitted, Leon S. Seniok, Examiner l\ State of New York, County ott Nf.w York, Leon S. Senior, being duly sworn, deposes and says that the foregoing report subscribed by him, being an amendment of the report of examination of the same company bearing the same date and sworn to by him on the 19th day of May, 1911, is true to the best of his knowledge and belief. Leon S. Senior. Subscribed and sworn to before me ) this 2d day of June, 1911. \ Kate P. Cahill, [seal] Notary Public, New York County. Industeial Health and Accident Settlements 163 Exhibit A Reduced on Account of Alleged Change of Occupation Claim No. 5,027 — Harrison Byrd. Insured as " fireman " in Class " D," $200 indemnity. Was injured and classified as " furnaceman," and reduced to Class " X," indemnity $100. The company's manual of occupation does not contain " furnaceman." Claim No. 4,617 — Rolert O'Brien. Insured as " structural iron worker " in Class " E," indemnity $200. Occu- pation at time of accident was " painter of bridges." Reduced by company to Class " X " and paid $100 indemnity. Company's manual of occupations classified " painter of bridges " in Class " E." Claim No. 57,317 — Owen W. Johnson. Insured as a clothing merchant; injured while playing ball as a recreation. Company oiTered settlement by reducing to Class " X " — baseball player. In- sured sued. Company's defense is that action is barred by virtue of provision in policy requiring that suit be brought within six months of date of filing final proofs, although Kansas Statute of Limitations nullifies and voids the limitation on the policy. Claim No. 88,684 — Tom A. Irvin. Insured as a " millwright not using machinery " in Class " D." At the time of death, insured was removing a pipe which conveyed water into a reser- voir when he lost his balance, fell into the water and was drowned. Com- pany arbitrarily reclassified claim to " millwright using machinery " — from " D " to " is," reducing indemnity from $300 to $200. Beneficiary protested, but without avail. Claim No. 45,774 — Jach It. Gaskin. Insured as "decorator" — reclassified by company to "paper hanger and painter." Indemnity reduced from $152 to $133. Claim No. 65,394 — John B. Pence. Insured as " teamster " in Class " D." At time of accident insured was hauling logs on a mud boat. Eeclassifled from " D " to "X " and indemnity reduced from $90.99 to $60.66. Claim No. 89,641 — Fred W. Sawyer. Insured as " agent " in Class " A." Insured was badly burned about hands and face while attempting to extinguish a fire which destroyed his home. Company claims he should be reclassified as " volunteer fireman " in Class " X " and indemnity reduced. Agent wrote to company : " The man was at home, and his house, which is out in the country, took fire and burned down. There was not a fireman within twenty miles of the house, and I don't believe we can settle the claim in Class ' X.' " Claim still unpaid. Claim No. 64,638 — Alton J. Culvers. Insured as a " car repairer," Class " A." Indemnity $200, plus accumu- lations. Killed by a gunshot wound while hunting. Reclassified by company as " hunter " and indemnity reduced to $100. Accumulations ignored. 164: National Co:s'Vention of Insurance Commissioners Claim No. 80,672 — Calvin A. Battui. Indemnity reduced on account of change of occupation and accumulations ignored. Claim Xo. 71,018 — Nicholas Erickson. Insured as - contractor." Killed while hunting in the woods. Company reclassified him as " hunter " and ignored accumulations. Claim 7\'o. 85,309 — James A. Joiner. Insured as " car repairman." Company claims occupation when killed was " locomotive fireman," indemnity was reduced from $1,000 to $699. Claim Xo. 86,985 — Joseph !o claim was presented. Cancelled. Mullen writes to agent, " From the tone of your letter 1 would judge that it is your idea to allow this claim' to die a natural death." ■69,430. Keduced from $600 to $200 on account of occupation and misstate- ment of age. Insured is a proprietor of a wool-puller company. Was killed by a fall by thawing out or repairing some pipes in his place of business. Indemnity reduced on account of occupa- tion and misstatement of age. Company issued draft for $200 on May 13, 1910. On June 7, 1910, daughter of insured wrote to company that the adjuster, who paid $200, told her that if she did not accept that she wouldn't get anything. ■69,691. Reduced from $200 to $40 on account of "exposure to obvious rifik,'' and payment made to undertaker. No claimant appeared. ■09,714. Claim of $200 cancelled; cause of death disputed. •69,779. Keduced from $200 to $45 and accumulations ignored. No good reason for reduction. 70,219. Keduced from $400 to $300 on account of cliange of occupation, and further reduced to $200 on account of alleged misstatement of age. 70,337. Claim of $200 cancelled on accovmt of lapse. 71,01S. Keduced from $400 to $100 on account of change of occupation. 71,157. Claim of $100 cancelled. Keneflciary resides in Italy. Memoranda attached to claim papers, " Don't stir up." 71,242. $100 paid in full. 71,340. Cancelled; liability denied. Policy- not in force. 71,336. $200; cancelled and liability denied. Kolicy issued March 8, 1910, policy fee paid but agent did not deliver policy to insured. Killed March 22, 1910. Company returned $5 to beneficiary. 71,452. Cancelled and liability denied. Suicide. Entitled to one-fifth. 72,266. $100; cancelled and liability denied on account of lapse. 72,274. Drowned; reduced from $200 to $100. 72,335. Claim of $300 paid in full, but accumulations ignored. 72,361. Cancelled on account of lapse. 72,467. $300; cancelled on account of lapse. 72,481. Upon demand of employer, claim of $200 was paid to him in full as trustee. 72,558. Keduced from $600 to $120 on account of " exposure to obvious risk." 72.948. Claim of $300 cancelled on account of lapse. 72^950. Paid in full at $100. 72,988. Claim of $400 settled at $80 on account of suicide. Accumulations ignored. 73,136. Policy contains rider releasing employer of liability in event of acceptance of any benefit under the contract. Proofs not sub- mitted. Claim of $200 cancelled. 73,269. Claim of $600 cancelled on account of lapse. 73,347. Claim of $100 paid in full. 73,551. Claim of $100 paid in lull. 176 NaTIOXAL CoNVEKTIOX op IiS'SUEANCE CoMMISSIOXEES Claim No. 73,552. Reduced from $300 to .?175 without proofs. 73,705. Company attempted to reduce but beneficiary employed attorney. Claim of !f400 paid in full. Accumulations ignored. 74,078. Conditionless policy for $400. Insured assassinated. Cancelled, lieneficiary killed insured in self-defense. No claim made. 74,224 and 74 22.5. Full amount of claims, including accumulations, waa $1,720. Besisted on account of late notice and alleged misstate- ment of age. Attorney employed and claim compromised at $1,155. 74,558. Claim of $100 paid in full. 74.579. Claim of $400. Cause of death not accidental. Cancelled. 74.580. Claim of $500; entitled to one-iifth; attempt to settle for one- tenth; but finally paid $100 in full. 74,646. Reduced from $500 to $100 on account of change of occupation. 74,812. Reduced from $200 to $100; no p'roofs. 74,8r0. Reduced from $200 to $40 on account of change of occupation. 75,177. Paid in full at $200. 75,258. Paid in full at $^"00. 76,362. Claim of $300; suicide; beneficiary entitled to one-fifth, or $60, pltis accumulations. Company returned $4 premiums and can- celled. 76,388. Reduced from $200 to $40 on account of " exposure to obvious risk," also intentional injury inllicted by another person. 76,533. Claim of $312 paid in full. 76.950. Reduced from $.500 to $400. Droivned while bathing. 76.951. Reduced from $500 to $100 on account of change of occupation. 77,074. Claim of $000 cancelled on account of lapse. 77,148. Attempted to settle claim by payment of funeral expenses. Finally paid, in full at $200. 77,249. Claim of $100 paid in full, but accumulations ignored. 77,258. $300; in suit; defenses are, nonpayment of premiums and action barred by limitation. 77,308. Claim cancelled and liability denied. Insured was killed in a mine. Doctor's certificate gave " heart failure " as cause of death. 77,451. Cancelled and liability denied. Cause of death not accidental. 77,630. Claim of .$200 paid in full upon advice of agent. 77.983. Cancelled and liability denied. 78,138. Claim of $1,000 paid in full, after a delay of six months, due to a dispute as to payment of premiums. 78,420. Reduced fiom $100 to $60 as result of compromise. Company claimed liability for one-fifth only, on account of " exposure to obvious risk." 78,515. Drowned while bathing. Reduced from $200 to $40 on account of " Exposure to obvious risk." 78,769. Cancelled and liability denied. Not accidental death. 78,827. Attempt to reduce to one-fifth on account of " exposure to obvious risk," but finally paid in full at $150. 78.838. Cancelled; no claim. 78,969. Drowned while fishing. Reduced from $500 to $100. on account of change of occupation; accumulations of $100 ignored. 79,101. Claim of $200 cancelled; no proofs. Suicide. 79,222. Undertaker's certificate received in August, 1910; still unpaid; beneficiary resides abroad. Address of beneficiary known to com- pany August 9. 1910. Proofs forwarded to beneficiary on February 4, 1911, but not correctly addressed. 79r,427. Suggestion made by W. I. Mullen, that if the man had no relatives in this country to pay burial expenses as usual. Finally paid in ! full $200. 79.608. Employer asks that payment of claim of $200 be made to him as trustee; cancelled; beneficiary resides abroad. 79.609. lieneficiary entitled to $100, plus $10 accumulations. Settled for 79.639. Claim of $400 paid in full. Industrial Health and Accident Settle^ients 177 Claim No. 79,835. Claim of $100 paid in full, upon urgent request of agent. 80,484. Reduced from fSOO to $100 on account of late notice. 80,672. Reduced from $400 to $300 on account of change of occupation. Accumulations ignored. 80,843. Face of claim $200; $60 paid undertaker. Company wrote bene- ficiary " Claim satisfied." 81,353. Reduced from $200 to $40 on account of " exposure to obvious risk." 81,409. Claim of $200 delayed, but paid in full after the matter was taken up by employer of insured. Injury to thumb caused by circular saw. Death resulted from anfesthetic during operation. 81,497. Claim of $1C0 paid in full after unsuccessful effort by agent to reduce. 81,5fl8. Claim of $300 cancelled on account of lapse. 81,710. Cla-m of $200. Offer to settle for $40 on the ground of exposure. Administrator refused otter and claim was finally paid in full. 81,718. Pa'd in full at $429. 81,889. Cancelled and liability denied on account of lapse. 81,993. Indemnity $200. Paid in full. Suggestion was made to dispose of ^ claim by payment of undertaker. Accumulations ignored. 82,347. Face of policy $500, carrying a " rider " providing for double in- demnity. Company attempted to settle for $500, but finally com- promised at $S00. 82,371. Claim of $W0 cancelled on account of lapse. 82.546. Claim of $300 cancelled on account of lapse. 82,576. Reduced from $300 to $200 on account of change of occupation; also accumulations of $150 ignored. 82,714. Reduced from $200 to $40 on account of " exposure to obvious risk." Killed on railroad. 83 270. $1,000 paid in full. 83,273. Factory policy for $100; paid in full. 83.338. Claim of $800 paid in full, upon urgent request of agent. 83,351. Reduced from $300 to $60 on account of " exposure to obvious risk." It is claimed that insured fell from a bridge while under the in- fluence of liquor. 83.411. Factory policy for $100; paid in full. 83.547. Reduced from $300 to $60 on account of " exposure to obvious risk," but acceptance of draft refused. 83,647. Factory policy for $200. Draft issued in full payment, but returned; still open. 83,952. Attempted to reduce from $200 to $40 on account of " exposure to obvious risk." Compromised at $100. 84,052. Claim of $200 cancelled; cause of death disputed. 84,033. Reduced from $200 to $40 on account of " exposure to obvious risk " and payment made to undertaker. Company wrote to Austrian- Hungarian Consul in response to his inquiry " Claim satisfied." 84.412. Claim o'f $1,000 cancelled and liability denied on account of inten- tional injury. 84,422. Reduced from $500 to $100 on account of death by asphyxiation. 84,629. Claim of $200 cancelled. JSio proofs. Suit pending in liability department. 85,012. Cause of death disputed; suspicion of fraud. 85,059. Claim of $200 cancelled on account of lapse. 85,164. Paid full indemnity of $100. 85,166. Conditionless policy. Attempt to reduce indemnity on account of " exposure to obvious risk." Claim of $200 finally paid in full. 85,194. Death subsequent to ninety days after disability. Claim of $200 cancelled. 85.309. Reduced from $1,000 to $639 on account of change of occupation. 85,507. Cancelled and liability denied. 8=i.704. Claim of $200 cancelled; cause of death disputed. 85,735. Reduced from $300 to $60 on account of " exposure to obvious risk." 85,978. Claim of $200 paid in full, including accumulations. 178 National Convention of Insueance Commissioners Claim No. «6,361. Factory policy for $200 paid in full. 86,733. Beneficiary resides abroad. Claim for $200 cancelled on account of late notice and " exposure to obvious risk." Address of bene- ficiary given to claim department, February 2, 1911. S6,845. Claim of $200 paid in full, after attempt to delay. 86,985. Reduced from $300 to $100 on account of change of occupation. 87,093. Claim of $100 paid in full, upon advice of agent. 87,401. Claim of $.500 paid in full. 87,793. Factory policy for $100, paid in full. 88,135. Kedueed from $200 to $40 on account of " exposure to obvious risk." Insured resisted arrest and was shot by an officer. 89,782. Claim for $200 still open. Company wrote to agent "By keeping quiet we will be in position to cancel." ■90,227. Claim for $500 cancelled; cause of death disputed. 90,617. Claim for $330 paid in full. fl0,651. Claim of $600 cancelled on account of lapse. 91,406. Reduced from $300 to $275 on account of alleged misstatement of age. 4,343. Claim of $75 compromised at $60. 4,617. Reduced from $200 to $100 on account of change of occupation. 5,027. Reduced from $200 to $100 on account of change of occupation. 86,279. Beneficiary in Italy. Proofs received in Philadelphia, February 3, 1911. Indemnity of $100 paid April, 1911, upon urgent request of agent. 74,926. Indemnity of $200 paid in full. Suggested by Mullen to adjust for less than the face of policy. 71,571. Indemnity of $500 paid in full. After unsuccessful attempt to com- promise for a reduced amount. 70,371. Indemnity of $200 paid in full. €6,500. Indemnity of $200 paid in full. Accumulations ignored. REPORT OF EXAMINERS ON THE GREAT EASTERN CASUALTY COMPANY OF NEW YORK, N. Y. Examiners: Wilbur H. Nangle, New York TSCHARNER M. HOBSON, Virginia [179] liEPOET OF EXAMINEES ON THE GEEAT EASTEEN CASUALTY COMPANY OE NEW YOEK, N. Y. New York, July 15, 1911. Hon. Calvix a. Palmer, Chairman of Special Committee of Insurance Commissioners on Industrial Health and Accident Business, Lansing, Mich.: iSiE. — Pursuant ito instructions contained in appointment N'o. 274:7 from Hon. William PI. Hotchkiss, Superintendent of Insurance of the State of New York, and letter of instruction from Hon. Joseph Button, Commissioner of Insurance of the ■State of Virginia, we have made and completed an investigation for your Committee into the methods employed by the Great East- ern Casualty Company of New York City in conducting its in- dustrial health and accident business, and respectfully submit the following report thereon: Agencies The company employs district managers and general agents, whose powers are exactly the same and who have prescribed ter- ritories with the right to appoint subagents in their respective territories. The subagents report directly to the district man- agers and general agents. In addition the company has agents or general agents who have only a small territory and usually have no subagents, although not prohibited from having them. No distinction is made between district managers, general agents or agents, and there are about 500 employed. Agency Contracts Approximately 95 per cent, of the company's business is writ- ten by agents working under profit-sharing contracts. There are eighty-four agents working on a straight commission basis, and all except three of these do very little business. [181] 182 'National Convention of Insueance Commissioners The agents retain a commission for collection each month, vary- ing from 15 to 20 per cent., and at the end of every quarter or,, in some cases, every month a statement is rendered to the agent showing the condition of his account and giving him a percentage- of the net profits shown thereby. The amount of such net profits- are ascertained as follows : On the credit side of the account there shall be credited: 1st. The gross premiums received by the company from the agent and his collector in said territory on said business. 2d. The losses and claims, if any, outstanding from the preced- ing settlement; and any other items returned to the company previously charged in the account. On the debit side of the account there shall be charged : 1st. The amount paid in losses and claims by the company upon such business in said territory. 2d. The losses and claims outstanding in said territory. 3d. The amount paid in return premiums on policies canceled by the company in said territory. 4th. The amount paid to the State in taxes on gross premiums collected on said business. 5th. From 15 to 20 per cent, of the gross premiums on the industrial business in said territory (retained by agent as com- mission for collection) and 15 per cent, of the gross premiums received on said business in said territory to cover general operat- ing expenses of company, together with any other special expenses that may be incurred by the company in conducting said business in said territory. After deducting the total of debits from that of the credits the balance remaining is termed " net profits," and is the basis for the payment of the contingent commission. The percentage of net profits payable to the individual agents varies from 30 per cent, to 50 per cent., very few contracts, however, providing for less than 40 per cent. Contract with Manager of Industrial Department Mr. C. Montagu Nettleship has a contract with this company as manager of its industrial department at a salary of $3,600 per annum and 10 per cent, of the profits of the industrial depart- Industrial Health and Accident Settlements 183 ment on any excess of profits over $25,000 per annum. The profits of this department for 1910 were $16,935.62. This contract was entered into May 1, 1911, and we quote here- with from a letter (dated July 15, 1911) of Mr. Fibel, the presi- dent of this company, in reference to Mr, Nettleship's dutieis : " Mr. Nettleship hnn only been with us a very few months. His duties will be the general management of the department, and pi'incipally the building up of its agency force and the increasing of its business. He will have nothing whatsoever to do with the claim department, excepting that in some few cases where a claim would be rejected for cause and where the company would not be liable, he might be asked if the rejection of the claim would create ill-will and injure valuable business. This would not happen one time in five hundred claims. With the handling of claims for which the company is liable he will never have anything whatsoever to do and the only influence he can at any time bring to bear is to have the company pay claims in excess of its liability." Premiums and Indemnities The regular industrial policy issued by the company provides for indemnity for loss of life, limb, limbs, sight or time by acci- dental means and for loss of time by sickness. Under the provi- sions of this form the accidental indemnities take effect from the date of policy and, in case of disability, indemnity is paid for the time the assured is disabled, not exceeding twenty-four months. Illness benefits take effect after the expiration of sixty days from the date of policy and are paid for the time assured is confined to the house after the first week, not exceeding six months. A rider attached to the regular policy form and called " special pol- icy agreement " provides for indemnity for the first week of ill- ness. The regular form provides, under certain conditions, for double indemnity, partial indemnity, accumulations and 10 per cent, increase of indemnities. Monthly premiums are due and payable without notice on or before ■the first day of each month, in advance, to duly authorized collectors. Approximately 98 per cent, of the premiums are col- lected by authorized collectors, the balance being remitted directly to the home ofiice. The premium in the regular form ranges from 50 cents to $4 per month, and on the special form from 16 cents to $4.40 per month, the amount of the premium and classi- fication by occupation governing the amount of indemnity pay- 184: ISrATIOS"AL CONVENTION OF INSURANCE Co^MillSSIGNERS able. An initial payment of $5 is charged and this pays for the policy and the insurance for the month during which the policy is written. This policy fee is retained by the agent. The amount necessary to carry the insurance for the first month on all policies in which the first regular monthly payment has been made is as- certained at the end of the year and reported as a premium in- come and a disbursement for commissions. The amount of the re- maining part of such policy fees is represented in income as '' policy fees required or represented by applications " and as a disbursement for " policy fees retained 'by agents." This seems to be the proper method of treating the item of policy fees. The following table gives the amount payable for indemnities under the different classifications for a premium of $1 a month (Class F, $1.30), imder the regular form, and also the cost of the special form providing for the same indemnities with the addition that indemnity is payable for the first week of illness : Cost per Cost per month month Monthly Monthly Accidental regular special accident illness death Classification policy. policy. indemnity. indemnity. indemnity. AA $1 00 $1 50 $60 00 $50 00 $600 00 A 1 00 1 40 50 00 40 00 500 00 l'> 1 00 1 40 40 00 40 00 400 00 C 1 00 1 35 35 00 35 00 300 00 C 1 00 1 30 30 00 30 00 300 00 E 1 00 1 25 25 00 25 00 200 00 F ] 30 1 50 20 00 20 00 200 00 X 1 00 1 20 20 00 20 00 100 00 XX 1 00 1 10 10 00 10 00 50 00 The largest indemnities payable under these forms are under classification AA and are $120 a month accidental indemnity, $100 a month illness indemnity and $1,200 accidental death in- demnity, the cost of whicli is $2 per month on the regular form and $3 per month on the special form. Male persons betM-een the ages of IG and 65 are eligible to in- surance. For applicants over .TO years of age an increase of 50 per cent, over the regular premium is charged and for per- sons over 60 years of age, 100 per cent. Women between the ages of 18 and 4.") inclusive, engaged in occupations from which they derive a xegular income, and on Industrial Health ajstd Accident Settlkments 185 which they depend for bupport 'are granted insurance under the regular form of policy in the sum of $25 per month accident and illness indemnity, with $200 accidental death insurance for a premium of $1 per month. A form of policy designated " Apex Accident and Illness Policy " is sold outside of the States of l^ew York and Mas- sachusetts. Ratio of Industrial Health and Accident Business to Total Health and Accident Business This company commenced writing industrial health and ac- cident business in the latter part of 1903, and during the year 1910 thirty-four and eight-tenths of its health and accident busi- ness was industrial. The following table shows the total health and accident pre- miums received and the ratio of the latter to the former for the years 1907, 1908, 1909 and 1910: Total health and accident premiums. 1907 $395,488 08 1908 411,810 28 1909 458,886 57 1910 51.5.948 79 Total in- dustrial health and accident premiums. $177,689 61 Ratio of industrial to total premiums. 44.9% 181,334 80 44.0% 185,978 31 40.5% 170,450 32 34.8% It will be noted that the amount of industrial premiums re- ceived has remained practically stationary during the past four years and the ratio of industrial to total health and accident busi- ness declined from 44.9 per cent, in 1907 to 34.8 per cent. in 1910. Adjustment and Settlement vf Claims A few of the agents have authority to ^adjust and settle small disability claims in their respective districts, although this privilege is not used in all instances. All claims calling for a specific indemnity are adjusted and settled by the home office. Approximately 95 per cent, of the claims are adjusted and settled through the home office. The checks issued in payment of death claims are made payable to the beneficiary and those issued in payment of disability claims in favor of the assured. 186 National Convention of Insurance Commissioneks During this investigation all of the paid claims calling for specific indemnities were examined for the years 1908, 1909 and 1910 and for 1911 up to the time of the completion of this in- vestigation. All rejected claims for the year 1910 were investi- gated and all notices for the month of January, 1910, and a por- tion of May, 1911. In all over 1,600 claims were examined. During the year 1910, this company received 5,151 industrial claim notices, 717 of which were rejected and 411 of which failed to make claim after notice. The company has very few claims for specific indemnities, there having been only twenty-two during 1910, two of which were rejected. In the preliminary notice of accident which is fiUed out by the assured is found the following question, " To secure quick pay- ment what number of days' indemnity are you willing to accept in full settlement for this injury ? " The company also has a blank form styled " Proposition for advance settlement," the use of which is frequently recommended to agents by the company. An examination of the claims shows that many advance settlements are made for disabilities received on account of accident, and un- doubtedly the larger part of such quick settlements are advan- tageous to the company. In considering this matter it must be remembered that the company is dealing directly with the assured. The following table shows the total industrial premiums re- ceived, total industrial losses paid, and the ratio of latter to former for the years 1907, 1908, 190'9 and 1910: Ratio of industrial losses Industrial Industrial to industrial premium income. losses. premiums. 1907 $177,680 51 $75,300 36 42.3% 1908 181, 334 80 72, 906 82 40.2% 1909 185,978 31 72,982 34 39.2% 1910 179, 450 32 72, 994 19 40.7% This company does very little factory business. The total col- lection in the Fairbanks plant during 1910 amounted to $1,588.52, and losses paid $905.52 or 56 per cent. This high loss ratio is accounted for in part by reason of giving extra benefits to the policyholders working in this plant. The total collections on all other factory business during 1910 amoimted to $1,747.53, and losses paid $782.22 or 44 per cent. T Industrial Health a^id Accident Settleme:n'ts 187. As previously stated, 95 per cent, of the company's business is written by agents working under profi't-sharing contracts. The three agents producing the largest business on a straight commis- sion basis collected, during 1910, $4,319.05 in premiums, and the losses paid on their business amoimted to $1,194.80 or 27 .per cent. The volume of business produced by agents working on a straight commission basis is not large enough to give a fair aver- age as compared with the total business. This also applies to the factory business, for this investigation has shown to us that the home office treats all claimants alike, whether the business is factory or general, or whether written by an agent with a profit- sharing contract or with a straight commission contract. In examining the correspondence of over 1,600 claims we find very little that calls for special comment. In one in- stance the company sent a check to the agent for the payment of a sickness claim. The agent returned the check, stating that the assured, who died, had no one particularly dependent upon him, and that there was no one to deliver the check to. The company xfiade no further effort in this case and marked it disposed of. The company states that this will be carried in the outstanding «laims for a reasonable time and it will endeavor to ascertain "whether there is any one to whom this claim can be legally paid. In another instance t:he assured made claim for a sick benefit. The home office sent a check for $9.16 to the agent in settlement. The agent returned check, stating assured was not under benefit. The company again sent check to agent calling attention to the fact that the assured had attached to his policy form No. 627, calling for benefit during first week's illness, which would bring him under benefit. The agent again returned the cheek and the company let it stand that way and wrote the agent as follows : " We have yours of the 9th returning for the second time check that we «ent you in the above. We will have to leave to you the rejection of the cvj-:.\tiox of Ixwueaa'ce CoMiLisssioxEiis niiinr No. 32,300. Factory advance settlement, $200. Claim No. 33,110. Settled on final proof.s, Jp35. ( laim No. 20,!1S7. 0]ie week's partial disability ignored. Claim Xo. 31.233. Advaiire settlement, .$34..")0. Claim So. 33,38.5. Advance settlement, factory. Settled on final proofs, .*42. Claim No. 31.72S. Advance settlement, factory, .'{136. Claim Xo. 32.775. Insured in such condition c^nld not furnish no- tice in time. Company suggests scaling benefits on account of late notice. Agent objects and company pays for full disability according to final pioofs, but ignores three weeks partial indemnity. No. 62. Claim No. 31..)n5. R. N. Kidney. Agent writes ilay 10. 1010, in- sured made proposition for thirty days settlement or $60, which would have been very good for the companx'. However he told claimant that company did not like to make advance settlements, but he would submit a proposition for twenty-five days compromise. On twenty-five day basis insured received .f.jO. Claim No. 30,826. Advance settlement on preliminary. .f40. Claim No. 32,793. Advance settlement for .$30. Claim No. 31,384. Company first sent a check at $3.5 a month rate. Refused correct settlement at $40 per month rate; then offered and accepted. Claim No. 31,890. Final proofs show thirty days' full disability, and an estimate by doctor of seven days' partial. Prompt payment of full disability. Partial indemnity ignored. Claim No. 31,623. Company intimates to agent that claimant is entitled to one-fifth indemnity only on account of late notice. Called down by agent and pays promptly in full. Claim No. 32,.'JB9. Final proofs submitted, $S0. 0. K. Claim Xo. 30,312. Factory. Claimant ill November 10; called on doctor December 14, 1910. Company claims K;te notice of thirty- five days, from November 111. ami siiggests compromise on limited liability basis. Agent objects and company complainingly agrees to his compromise. No. 63. Claim X"o. o2,!12.'J. E. P. t.hiillan. Settlement satisfactory. Sc-.- adjuster's letter under date .July 22. 1910. No. 64. Eejected claim. Policy No. 14l),;!2n, JIary Holnian. Agent claims February premiums jiaid ab;ts 237 Claim Department The claim department of the company is in charge of L. E. Brown, superintendent, with thirty clerks regularly employed. Mr. Brown came to the company from the old Railway Officials' and Employees' Accident Association of Indiana, and has been continually employed for twenty-two years in practically the same capacity. Mr. Brown is assisted by Mr. W. M. Martin, examiner, in charge of railroad, factory, mining, commercial and ticket claims. The monthly commercial and industrial claims are in charge of B. \\'. Brown, examiner, with four 'assistant checkers. The company employs one traveling adjuster, G. AV. Donalson, whose territory is Texas, but who makes trips into surrounding States. Mr. J. IT. Donan of St. Louis, Mo., is also used by the company for road work when his services are required. The company has branch offices located in Xew York city, in charge of G-. S. Galloway ; Washington, D. C, in charge of G. M. Harmison; Denver, Colo., in charge of F. P. Kellogg, and San Francisco, Cal., in chai-ge of IT. ^I. j\liller. Duplicates of all claim records are sent to the general office at Chicago, except from the branch office located in San Francisco, Cal. It is estimated that the number of claims per year in that department are about twelve hundred. Jso investigation has been made by your examiners of these claims. Every claim that is filed in the general office receives a number and a jacket. All correspondence and other papers relating to that claim are filed in the jacket. When the claims are paid checks are drawn in duplicate, the original being sent to the bene- ficiary or assured, and the duplicate to the cashier of the company for reference. The checks are examined and approved by one of the examiners in each department selected for that purpose. Some of the claims are adjusted by agents in the field who have been granted that privilege on a showing of fitness, and payments are made by draft supplied the agent which requires the claim department's approval before payment. At present seventy-nine agents make such adjustments. The agent is required to furnish proof in justification of the amount alleged to be due on a claim, and his work is verified by an adjuster by frequent examinations. 338 National Convention of Insueanoe Commissionees The claims filed are investigated by examining surgeons and confidential investigators located in practically every town of any consequence wherein the company transacts business. All ques- tions involving the medical phase of any claim are referred to the medical director, Dr. D. H. Keller, located at the general office of the company. Mr. Manton Maverick, the general counsel for the company, has charge of all legal questions which may arise. The claims are filed in steel filing cases located within a fire proof vault. Claims Investigated Attacihed hereto as Exhibit "A" is a synopsis of claims which it is believed will indicate the policy of the company in regard to claim adjustments. Exhibit " B " contains all the death, loss of limb and loss of eye cases which have been investigated during the course of this examination, with the exception of those cases where the policy was undoubtedly lapsed. Sick and Accident Claims During the course of the examination we made a cursory inves- tigation of accident and sick benefit claims. It seemed apparent that many of the cases were settled before final proofs were filed. Your examiners concluded that a thorough examination of the claims, such as death, limb and eye loss, where the indemnities are specific, would fairly show the policy of the claim settlements. MlSCELLANEOTJS The number of claims filed in the office of the company for the year 1909 were 34,501 ; for the year 1910, 47,462. These claims cover all the classes of business which the company writes. Filed with the report are the manuals of rates and occupations used by the company for the years 1908, 1909 and 1910, also a copy of all the policy contracts which are referred to in Exhibit "A ;" also a copy of the policy contracts which the company is now issuing in the States of Massachusetts and New York. IwDtrsTEiAL Health and Accident Settlements 239 Loss Eatio Excluding the Commercial and Ticket business the total pre- miums for the year 1910' amounted to $2,787,125.48, and the claims paid during the same period $1,146,789.45; the ratio of losses paid to premiums collected for the year 1910 being 41.14 per cent. Eecapitulation of Loss Ratios, 1910 Loss ratio Collections Claims paid (per cent) Industrial $810,505 41 $303,555 61 37.45 Monthly commercial 607,388 18 214,546 03 35.32 Railroad 1,252,75135 573,665 56 45.79 Factory 80,008 58 34,628 12 43.28 Mines 36,47196 20,394 13 55.91 Totals $2, 787, 125 48 $1, 146, 789 45 Average 41.14 Officees The present officers of the Company are : President H. G. B. Alexander. First Vice-President L. C. Eose. Second Vice-President A. C. Southard. Third Vice-President E. W. Hyman. Secretary W. H. Betts. Treasurer W. H. Eoberts. EespectfuUy submitted, John L. Teain, W. A. BlLLINGHAM, Examiners for State of New York. Feeeman O. Gullifee, Examiner for State of Michigan. Exhibit A Synopsis of 110 Claims, Classified as Follows: Page I. Bouble Indemnity 241 IT. Acemaiulatioiis '■ 24(i III. Foreign Beneficiaries '. -i^ IV. Sunstroke i'>l V. Occupation . i'l'-^ VI. Compromise Settlements 'i(i(i Vlll. Attempt to Compromise 270 VIII. Arbitrary Reduction 271 IX. Breach of Warrranty 273 X. Intoxication 27.'> XI. Unnecessary Exposure 27!) XII. Trespass 2S1 XIII. Intentional Injuries 2S2 XIV. Xotice 2SS XV. Suicide 2S7 XVI. Miscellaneous 2SS ( a ) Premium Paj'ments 2SS ( b ) Ko Final Proofs 290 (c) Proof Blanks not Sent 202 ( d) Poison Without Suicidal Intent 202 [240] Industrial Health and Accidknt Settlements I'-tl T — Double Indemnity Examiners Xo. 1; Claim No. 339078; Industrial — William C. Turner — Death — P. F. 2112. ( a ) While riding as a passenger : P. F. 2112-A, Part IV, provides: " Such injury as is described in Part I is sustained by tlie insured while he is riding as a passenger witliin the enclosed part of any railway passenger car, provided for the exclusive use of passengers, and propelled by steam, cable, compressed air or electric- ity; * * * then the company will pay double the indemnity otherwise payable under Parts II, III, V and VI, of this policy." Benefit single $300, insured as " Plumber, working " Class " XC " pro- rated to " water service man " Class " X-D " benefit $200. Assured killed while traveling as a passenger on a railroad train on the tt'abash railroad. He resided in Moberly, Mo. On September 2, 1909, the claim agent of the railroad reported to the company that the trainmen stated that Turner was riding on the front plat- form of the coach at the time the wreck occurred. On October 15, 1909, the company received the following letter from the same claim agent of the railroad: " Referring to your No. 339,078 upon further investigation I find that William Turner who was drowned in the Hull's Point wreck on this road, July 24th, 1909, was not on the platform of the car at the time of the accident, but was inside of the car at the front end. There were two colored men on the front end of the platform at the time wlio were drowned, but I am now advised Turner was not one of them." The company sent Claim Adjuster James H. Donnan to investigate the case. On JSTovember 26, 1909, he writes to the company as follows: " In reply to your letter of November 9th, which was among the accu- mulated mail awaiting my return, the conductor and brakeman on the train state positively the man Turner was inside one of the coaches (the smoker) which went into the Missouri River. Whether the beneficiary knows this or not I am unable to say. If no lawyer has nosed into the case she probably does not know it." On the same date Mr. Donnan wrote a further letter to the company from which the following is an extract: " My suggestion is to get it off as quick as possible, for if a lawyer gets it you will be held not only for double benefit, but for the 10 per cent, additional." Under the double indemnity clause of the policy the benefit payable would be $400, even if under the circumstances the prorate is justifiable, inasmuch as the insured was not killed in any occupation. Dr. D. H. Keller made a personal compromise settlement of this loss and paid $300. Examiner's Vo. 2; Claim Vo. 348809; Railroad — Garrett Moore — Death — P. F. 2184. (b) While engaged in occupation: The policies under which the double indemnity is payable contain the fol- lowing provision: P. F. 2184, Part V: "The company will pay double the indemnity other- 242 JSTational Convention of Insukance Commissionehs wise payable under the terms of this policy for loss of life if the injury causing the loss is sustained by the insured: "(a) By reason of the wreckage by collision or the wreckage by derailment of any engine, car or train, propelled on rails by steam or electricity, in or on which the insured may be riding while engaged in his occupation." Single benefit $500, double benefit $1,000. Assured resided in Strasburg, Mo. On October 31, 1909, the agent notified the manager of his district that the accident occurred in the following manner: " As to the accident, I don't know anything about it only what I have heard and read in the ' K. C papers the following evening. It seems that some cars of wheat had been placed on a side track at Independence, Missouri, and from all accounts they were not blocked, or did the brakes keep them in place. From the top of the hill at Independence to the yard is about seven miles and the grade is about one hundred feet to the mile, making a very steep incline. These cars of wheat got started down this grade and when they reached the bottom they were going seventy-five miles per hour. This freight crew which Mr. Moore was a member of had just come to a standstill at the foot of the grade on account of the Kansas City Southern crossing. While they were standing there with the brakes all set on the train, those cars of wheat collided with the rear end, destroying all of the cars of wheat and five cars in the train. The caboose was a total wreck. Mr. Moore was killed and the conductor was badly injured." The proofs in the case show that the beneficiary made affidavit that the assured was killed by the wreck of a Missouri Pacific freight train while the assured was engaged in his occupation of brakeman. The trainmen of the railroad company make afiidavit that the assured while engaged in his occupation of freight brakeman, was killed by a col- lision. The eye witness makes affidavit that the assured was killed while in the caboose in performance of his duties as brakeman. The company paid only the single death benefit of $500 while the double indemnity benefit under the terms of the policy quoted above would entitle the beneficiary to a benefit of $1,000. Examinor's No. 3; Claim No. 396803/ Railroad — Dan Languire — Death — P. F. 2116. Single death benefit $500 with accumulation of $25. Assured resided in Meridian, Miss. Provisions of policy relative to double indemnity are the same as quoted above under policy form 2184, Examiner's No. 2. The assured was a brakeman on the Xortheastern railroad and the train upon which he was working at his regular occupation, ran into an open switch and was ditched and wrecked. The company sent Claim Adjuster J. H. Donan to see the beneficiary and adjust the loss. The company raised the question in the case as to whether the beneficiary was the lawful wife of the assured. This was investigated by the claim agent of the New Orleans & Northeastern Railroad Company and he reported that the assured procured a marriage license and that he and the beneficiary were married and proper return made to the county clerk. A letter to the claim superintendent of this company under date of February 19, 1911, explains the procedure in the settlement of this claim. The letter was from J. H Donan. "If she (mother) doesn't show up I will take this nigger do'wn to Meehan Junction and drive out five miles from there to where the mother of the deceased lives. I am going to do all I can to get out for $500 but we owe IifDusTBiAL Health and Accident Settlements 243 the $1,000. There is no doubt about it. Deceased was on duty and the train was wrecked and ditched and he was killed. The claim agents of the road I can see have been using our policy with her to pull themselves down easy, which is an old story with Bill Jones, and J guess all the rest; put us in the hole to pull themselves out. She has it on them and Blue wants to get off on $1,000 but doesn't think he can. He asked me to tip her off and 1 told him I would. But I will forget it if I can get out on our figure. Anyhow, I will try awful liard." After the claim was settled the adjuster on February 20, 1911, writes to ■ the claim superintendent of this company as follows: " 1 have put through successfully the settlement with Susan and Sally Languire on $525 » » * satisfactorily to me and should be to you, and I have the policy and renewal and identification card and release duly signed by Susan and Sally Languire. I find on opening the policy that the bottom part is gone; well, 1 have the main part of it and the double clause which we actually owed * * *. 1 would have had a nightmare if the check had stayed in Susan's hands. As it is the settlement is made absolutely." The jacket contains the policy referred to by the adjuster and shows, as he states, that the bottom part is missing. The double benefit under this policy would be $1,025. Mr. Donan succeeded in settling the loss for $525. Examiner's No. i; Claim No, 329139; Railroad — Anson Woolman — Death — P. F. 2118. Provisions of policy as quoted under Examiner's No. 2. Single death benefit $1,000. Assured was employed as a fireman on the Northern Pacific railway and was killed when the engine ran into the dirt and rock caused by a land slide, as sworn to in the affidavit of the beneficiary. The trainmaster of the railroad in his affidavit states that the assured was killed by the train running into a land slide and the eye witness who was on the engine states that the assured was engaged in his occupation as fireman when killed. The company claims that to obtain the double indemnity under the pro- visions of the policy as quoted above, that wreckage by collisions means collision with another train and that under that construction running into a land slide would not be a wreckage by collision. If the engine was derailed as a result of the wreck then the double benefit would apply. A letter has been addressed to the oflicials of the Northern Pacific Railway Clompany, asking whether the engine or the train was actually derailed as a result of the collision with the land slide, but reply has not yet been received. Double benefit under this policy would be $2,000 ; the company paid only the single indemnity of $1,000. Examiner's No. 5; Claim No. 344021; Railroad — James F. Moore — Death — 1\ F. 2116. Deceased was insured as a " Car repairer," special class, benefit $1,000, and resided in Roanoke, Va., and was killed while employed as a " Fireman," Class "F. & F." Single benefit $681.60. The assured was killed in a wreck on the Norfolk & Western, details of which are shown in a newspaper clipping in the jacket, under date of September 7, 1909. This clipping shows that the assured while engaged in his occupation as fireman was killed by a collision between two freight trains. With this information in his possession the 244 Natioxai. Convention of Insurance Commissionees superintendent of the claim department of this company wrote to its agent on October S, 1900, the following: " Can you inform us just how Mrs. Moore, the beneficiary, is figuring this matter? That is, what she is expecting in the way of settlement. 1 make this inquiry without the intention of asking you to interview the lady, but incidentally if you know what she expects. We would like to know to assist us in disposing of the case." On October 1.5, 1909, the claim superintendent addressed a further letter to its agent fi'om which the following is an extract: " The prorate from a car repairer to fireman entitles the beneficiary to $G81.60. I am therefore enclosing you an open draft with which to adjust this loss on consistent basis. I assume double indemnity is not claimed in this case. If, when you come to deliver the draft, question of double in- demnity is raised, you can make investigation to determine its propriety and if you find the company is properly indebted for the double amount, please allow it, letting the circumstances be set forth in your report of disposition of the case." The agent settled the loss for the double benefit and paid the beneficiary $1,36.3.20. Double Indemnity and Xotice Examiner's A'o. G; Claim Xo. 354219; Ticket — Anton Lund — Death — Ticket Policy. Single death benefit $2,500 ; double benefit $5,000. Assured lived in XorLh- east. Pa. The ticket policy issued by the company, and in force at the time of the accident, provides in section " D " : "If the insured is a male, and if such injury is caused (1) by the wreckage of a railway passenger car propelled by steam or electiicity, while the in- sured is riding as a passenger and is actually within the car ♦ * » the company will pay double the amount otherwise payable under this policy." The face of the policy shows that the insurance was issued for $2,500, and that the premium was paid. The policj' ticket umler which the deceased was insured was good for a, period of seven (7) days, and he was killed before the policy expired. The proofs show that there was no question about tiie death of the assured in a wreck which occurred on the Lake Shore & Michigan Southern, when the assured was in a sleeper, — the train upon which he was riding having been struck by the " 20th Century Limited." Company seems to have set forth no defense whatever except late notice, as they admit all the facts in the cahc. Tlie following correspondence sets forth in detail the manner in which the claim was handled, and the defenses set forth by the company. On December 15, 1910, W. S. Phelps, the attorney retained by the company, wrote to L. E. Brown, superintendent of claims for the Continental Casualtj Company in part: " I needn't say. you having Griffin's letter, that he was furious at the company for not having settled this claim sooner, and it did not make him any more sensible to call attention to his own delays in the matter. He had all of th« dates down and charged the company with delays in replying to his letters as the cause for not getting in proof, etc., and disavowed all informa- tion i^s to facts enabling him to present any proof until a few days before ,Tune 20. when he wrote you. I found a surprise for him and a pleasant one Industrial Health and Accidejnt iSi:ttle.me>;ts ■24:ij for you, whicli I enclose in the form of a letter which he had filed in the estate of Anton Lnnd. It was from the coroner of Eiie county ; is dated the 14th day of March, 1910, and was filed in the estate by him on the 24th day of March, 19 10. In the enumeration of the eflects found on body of deceased, it specifically refers to 'Certificate C-47332, the Continental Casualty Co., of Chicago, 111.' He appeared to be much surprised to find that he had any possible knowledge of existence of this policy prior to .June, but the petition for letters of administration which was filed on the 16th day of February, 1910, stated that the deceased 'had one accident insurance policy for $2,500.' I immediately ordered certified copies of the letter, and the petition, which our contention will be, charges them with information which required them to notify the company about March 20, instead of June 20, as they have contended." On December 23, 1910, F. A. Hruska, claim agent ol Xew ^"ork Central Lines, wrote to company, in part: "Our correspondence shows that Mr. Griffin (attornej' for beneficiary) made effort after effort to get Coroner Hanley to send him the eff^ects of the deceased, and !llr. Grillin wrote us asking us to take tlie matter up with Mr. Hanley and referred to the fact that he believed this man had some sort of an insurance policj'. and that if Hanley did not furnish him with the policy or policy ticket he might not be able to collect the insurance. As we remember it. Coroner Hanley refused to send the effects of ilr. Griffin until he had a certified copy of the appointment of administrator. For your in- formation will say that on December 15, 1909, we wired yoiir company from Erie, calling attention to the fact that this man carried one of your policy tickets and asking you to look up your records and locate his relatives for us." On December 29, 1910, company, by its assistant g.iieral attorney wrote W. W. Phelps, the attorney, in part: "A review of the files also indicates, that you are entirely familiar with the facts involved and with the defenses which the company has to present suit, and these appear to be failure on part of administrator to give notice and file proof within tiie time required by the policy." riaintiff's amended complaint shows that death occurred December 14, 1909; that plaintiff' did not know of existence of insurance policy till March, 1910; that upon ilarch 31, 1910, letters of administration were procured; that plaintiff was not able to get policy from coroner until .June 15. 1910, notwithstanding repeated requests; that on June 20th, plaintiff notified de- fendant of death of insured and requested necessary blanks ; tliat not until July 30, 1910, did defendant send plaintiff proof blanks; tliat immediately after receipt of proof blanks, plaintiff filled out as far as possible and for- warded such blanks to company; that the only person wlio could forward the necessary proof of death was the coroner; that said coroner was repeatedly requested by plaintiff to make affidavit and proof of death and forward same to defendant, but did not do so until Septemlier 10, 1910. On March 8, 1911. W. \V. Phelps, the attorney, wrote to M. P. Cornelius, attorney for comjjany at home office, in part; " I think this case is of sutticient importance to justify your going to Erie county. Pa. and find out what letters passed between the coroner and Griffin the attorney for the estate." On March 13, 1911, the company, by its assistant general attorney, wrote to W. W. Phelps, Attorney, Los Angeles, in part : " I note your suggestion that it would be well to go to Erie count>-, Pa., for the purpose of finding out what letters passed between coroner and 24G National Convention of Insueance Commissionees attorney for estate of insured. When suit was first brought I myself was ot the opinion that it would be better to do this. Upon further reflection, how ever, and in the light of other information which has recently come to me * * * I am of the opinion we had better leave coroner severely alone. " * * * As I have already repeatedly advised you, the company does not desire that this case should ever come to trial and our only intent is to adopt dilatory tactics, file demurrers, etc., and thus force an equitable settle- ment." The attorneys engaged by the company in Los Angeles, Cal., indicate that they had used all possible technical defenses to prevent the case from. going to trial. The attorneys for the company, on May 5, 1911, write to their attorneys in Los Angeles, and said letter contains the following: "As indicated in my wire, I feel that $2,500 would be about the maximum which we should pay at this time, and I sincerely trust that you will be able to get a much better offer. If you find that you cannot dispose of the suit wittin this limit, I think that we had better stand pat a while longer — put- ting the trial ofif as long as we possibly can and adopting all possible dilatory tactics. There are many things which may occur which will be likely to bring the -plaintifT's attorneys into a more receptive frame of mind. To be absolutely frank, rather than let the suit go to trial, I would advise the company to pay on the eve of the trial considerably more than the maximum just mentioned." The attorney for the company succeeded in making a compromise settlement before the trial for $2,500. II — Accumulations Each policy contract has a provision as to accumulations. The provisions Of the various contracts provide for either a 10 per cent, increase only on the amount of the benefit or 10 per cent, for each consecutive year that the premiums are regularly paid for an aggregate amount not to exceed 50 per cent, of the face of the policy. Tolicy Form 764 provides: "The indemnities herein provided shall be increased 10 per cent, on any claim accruing after this policy shall have been in continuous force without default for not less than one ( 1 ) year immediately preceding." Policy Form 2112-A provides, in Part VI, Section A: " Each consecutive full year which this policy shall be carried without default in the payment of premium therefor shall add 10 per cent, to the indemnities payable under Part II, but the total of such additions shall not exceed 50 per cent." Examiner's No. 7; Claim, No. 378,094; Industrial — J. M. Spellman — -Death — P. F. 893. Insured as a wood dealer, delivering; death benefit $300. Prorated to a laborer, death benefit $200. Policy contract provided that the beneficiary was entitled to 10 per cent, increase on the amount of the death benefit for each consecutive year for which the policy was in force. Premium card shows all premiums paid for four years on or before the due date. On July 13, 1910, superintendent of the claim department wrote a letter to Mr. D. H. Jilvans, of Minneapolis, Minn., as follows: "We have the proof in the J. M. Spellman claim. As they are only asking for $200, you might just as well go ahead and draw draft for same. He is Industrial Health and Accident Settlements 247 probably entitled to the increase, too, but as they haven't the policy, you can perhaps evade this." Accumulations under this policy were $80, and as suggested in the fore- going letter, the company evaded the payment of any accumulations. Examiner's No. 8; Claim No. 394,322; Monthly Commercial — G. B. Owens -^ Death — P. F. 2124. Death benefit $500; assured lived in Springfield, Ohio. Under the provisions of the policy contract the assured was entitled to accumulations of $50. Concerning the accumulations the District Manager George G. Eoth writes to the company on October 19, 1910, as follows: " I got after this case at once for two reasons ; the widow needed the money very badly; there was no possible chance for us to get any pro rate * * *. Further, policy was dated December 21, 1908, and Mr. Owens was never late one day in making premium payments, the ten per cent, accumulation would amount to $50 and that much saved. * * *." The district manager also states that he will secure a testimonial from beneficiary and that there was " $50.00 saved." In another letter to the company dated November 27, 1910', the same dis- trict manager refers to the $50 saved. District Manager Eoth has a profit sharing contract. Examiner's No. 9 ; Claim No. 385,927 ; Industrial — ■ TF. M. Richardson — Death — P. F. 2112. Death benefit $400, assured resided in Chicora, Miss. Under the policy contract beneficiary was entitled to accumulations of $40 as premium card in jacket shows premium paid on or before the date. Accumulation ignored. Examiner's No. 10; Claim No. 407,000; Industrial — Alex McElwer — Death — ■ P. F. 2112. Death benefit $400 ; insured resided in Wilson, Arkansas. Premium card shows premiums paid on or before due date for twenty-five months previous to the date of death. Beneficiary was entitled to accumulations of $80. Accumulations ignored. Examiner's No. 11; Claim No. 346,322; Industrial — W. G. Kenwell — Death — P. F. 764. Death benefit $100. Assured lived in North Creek, jSf. Y., and under policy contract was entitled to 10 per cent, of the death benefit, which would be $10. Premium card shows that premiums were paid on or before the due date. Accumulations ignored. Examiner's No. 12; Claim No. 400,551; Industrial — Henry Miller — Death — P. F. 893. Death benefit $200. Assured lived in Newark, Ohio. Policy contract provided for accumulation of 10 per cent, on the amount of the death benefit, which would be $20. Premium card shows that premiums were paid on or before the date due. Accumulations ignored. Examiner's No. 13; Claim No. 389,394; Industrial — J. B. Miller — Death — P. F. 2060. Death benefit $200. Assured lived in Dunmore, Pa. Under the terms of 248 National CoxvJiiVTiox of Ixsi-ieaxce Co.m.missioxek.s the policy contract, tlie assured "was entitled to accumulations of $20. Accu- nuilations ignored. J'l^rii miner's No. 14; Chiiin Xu. 328,703; Industrial — J. L. BaU-h — Death — P. v. 2112. Death benefit $300. Reduced to one-fifth on ground tliat assured was killed as ii trespasser while walking along the railroad tracks, and $60' paid. Accumulations on this policy would be $(i. Accumulations ignored. Edoiiiiner's No. 15; Claim So. 351,499; Industrial — B. T. Kmith — /v.i/r — /'. F. 2112. lif.nefit for eye loss $li().G7. Assured lived in Bloomfifld, 111. Beneficiary entitled to accumulations of $f).(i7. Acoiimulations ignored. Kxaminer's No. 16; Claim No. 325,938; Industrial — Hubert Hchnitz — Death — F. F. 1076-A. Death benefit $300. Reduced to one-fifth because assured committed suicide, and $60 paid. The accumulations would be at least $6. Accumulations ignored. E.Tii miner's No. 17; Vlaim No. 399,865; Coal Mine — Plaeido Valdez — Death — P. F. 2152. Death benefit $200. Assured resided in Delagua, Colorado, and was killed by an explosion in a mine. Death benefit was paid, plus 10 per cent, accu- nnilations or $20 — a total of $220. On Jamiary 19, 1911, Resident Manager Kellogg, of Denver, Colorado, writes to the superintendent of the claim department, in part as follows: " Referring to j'our letter of January 11, returning us adjustment in death loss claim under policy issued to Plaeido Valdez, in connection with which Bennett & Wilson wei-e asking for the accumulation of $20. In reply, desire to say that the statement of Bennett & Wilson is correct in every particular. We believe this is the first instance, however, where we liave ever been asked to include the accumulation on one of these policies." E.rirminer's No. 18; Claim No. 327,825: Industrial — John HeimiacJc — Death — P. F. 2112. Death benefit $300; assured lived in Allentown, Pa. Insured as inspector, ■Hlieel tunker. Class D, prorated to ear repairer. Class XD. death benefit $200. Accumulations 10 per cent, of the principal amount. The following cor- respondence is self explanatory respecting accumulations- Extract from a letter from the company to E. S. ilillor, Allentown, Pa., dated April 28, 1909: •■Vou will note we have not allowed the 10 per cent, increase. We have no means of knowing whether he is entitled to it or not as our records show same paid on the 1st of the month, but so do all the rest of the policy holders show paid on the first of the month we believe when actually paid at all, and therefore this man may have paid as you explained recently before the first of the month or after. Doubtless you will be able to dispose of the claim without making it necessary to pay the increase." The agent replies on ihe 30th of April, 1909, as follows: " I did explain the pro rate when I seen ilrs. Heimback the first time she was solicited. I will try and settle without the 10 per cent, increase if Industrial Hkalth a.nd Accident iSettle-ments 24!) possible. Mrs. Heiniback never paid after tlie first. ' ' * April preiniuiu was paid Marcli 20tli." Tlie beneficiary later demanded the accumulations which were then paid by the company. Exauiinei's \o. 19; CUiini \o. 400,937; /ndiistrial — Ckus. ^\'iIhor(/ — Dniih — l\ F. 893. Peath benefit $200. Assured resided in Cleveland, Ohio, t'lider the policy contract beneficiary was entitled to 10 per cent, of the amount of the death benefit, which would be $20. Accumulations were ignored. Exainiiier's So. 20'; Cldiiii Xa. 346,294; Industrial — D. L. Kane — Deatli — F. F. 70.5. Death benefit $iOO. Assured resided in ^Minneapolis, .Minn. Policy contract entitled beneficiary to 10 per cent, of the death benefit, which would be $4(1. Accumulations ignored. Fj:amin€r's Xo. 21; Claim Xo. 372,039; Railroad — ./. W. J'inlurd — Liiiih — P. F. 2184. Loss of limb benefit '}i7o0. Assured resided in Pulaski, Va. Policy Form 2184 provides in Part HI: " Each annual renewal of this policy for the next ten years, and which is made on or before its expiration or the expiration of the preceding renewal, shall add 5 per cent, to the indemnity payable under Part II, but the total of such increase shall never exceed 50 per cent." In a letter to the agent of the company, dated April 2S, 1910, superintendent of the claim department writes: ' 1 beg to state that while the policy is credited with $107.50 accumulation, the transfer rider 2011 transfers certain accumulations payable only in case of death; therefore, the accumulation accruing under this form of policy, 2184, and amounting to $37.50, will be payable for loss of limb in this case in addition, of course, to the principal sum." The total amount payable would therefore be $787.50. \^'hen the claimant sent in his proof, he wrote after the question, " \^'hat indemnities are you claiming,"' $7(15. The company acknowledges a liability of $37.50 for accu- mulations but inasmuch as the claimant only asked for $15, they paid only the $15. Ill — Foreign Beneficiaries Examiner's Xo. 22; Claim Xo. 384,710; Coal Mine — 0. Cliamba — ItcaHi — P. F. 2196. Death benefit $200. Insured AVas a coal miner, working in Trinidad, Colo. Tlie following correspondence shows clearly how the case was handled: " Trinid.M), Colo., August 8, 1910. Mr. L. E. Brow.v, Hupt., Chicago, 111. Dear Sik. — We herewith enclose you policy Xo. 1.437,948, issued to Guiseppe Chamba. Mr. Chamba was murdered here about two weeks ago. and through the kindness of Mr. B. B. Sipe, who was acting coroner, we have received policy. "We now have turned it over to you, and we believe that you will never hear anything further regarding same. Very truly yours, ■(Signed) BENNfETT & WILSON", District Managers." 250 ]S"ational CoH-vENTiow OF Instteance Commissionees (In explanation, the coroner, B. B. Sipe, was an unriertaker in the coal mining district, for whom this company had done previous favors in assisting him in securing payment of his bills.) Company's reply to Bennett & Wilson's letter was dated August 19, 1910, and is as follows: " Beg to thank you for your letter of the 8th instant, in relation to the murder of Guiseppe Chamba, miner, Trinidad. We will await formal presenta- tion of this case before taking up the matter in any way. Thanking you for your courtesy, etc." Th« application shows that the assured made his wife, Berardine Ardobella, residing in Pocanic Aquala, Italy, his beneficiary. Nothing further was done bj the company. Nothing whatever has been paid on this claim. Jacket endorsed " Disallowed." Examiner's No. 23; Claim No. 341,686; Industrial — John Meston- — Death — ■ F. F. 2112. Death benefit $100. Assured was a coal miner, residing in Uniontown, Pa. On August 19, 1909, the agent of the company notified the company that John Meston was instantly killed in a coal mine August 18th, and states that the beneficiary is his sister, Agnes Meston. Company in answer to the agent's letter replies on August 24, 1909 : " It will be necessary that the beneficiary, named as Agnes, sister, whom we understand is in the old country, shall, by power of attorney, authorize some one conveniently located to act for her. Certified copy of this power of attorney, or the original copy, is to be filed with this department. We can then take up the adjustment of the claim with same, and dispose of it on con- sistent basis. We presume there is a liability of $100, the proceeds of which should get to the beneficiary through the attorney." Company further replies to the notice of agent on August 27, 1909: "We are in receipt of your letter of August 19, referring to the death of John Meston. When anyone asks you about this claim the proper thing for you to do is to say that you do not handle these matters, and that all you can say about it is that if the conditions of the contract have been complied with that undoubtedly the claim will have consistent attention." Nothing further seems to have been done concerning this claim, and the jacket has been marked " Not Proven." Nothing paid. Beneficiary lives in Fremicn Komittor, Hungary. Examiner's No. 24; Claim No. 350,205; Coal Mine — Htoin Mitell — Death — P. F. 2152. Death benefit $200. Insured as an ore miner, living in Bingham, Utah. The agents of the company write on the 6th day of November, 1909, that tliey have investigated r,he case, and that everything appeared straight. The beneficiary under the policy lived in Bulgaria. Power of attorney was fur- nished the company, which the company claims was not sufficient to pay the claim. Nothing whatever has been paid on the death benefit, although there seems to be liability on the part of the company for $200. Jacket endorsed " Not Proven." Industeial Health and Accident Settlements 251 Examiner's No. 25; Claim No. 395,104; Coal Mine — Albion Leuskha — Death — 1'. F. 2152. Death benefit $200. Insured as a miner, residing in Starkville, Colo. This miner was killed in an explosion in a mine in Starkville, which killed several other policyholders insured in this company. Initial notice of death was signed by Hanson, and states that the insured was killed in the Stark- ville disaster. The notice was sent to the company by Manager F. P. Kellogg. In answer to that notice the company, on October 31, 1910, writes as follows: "I am in receipt of your initial notice 1556, death of Albion Leuskha, Starkville, October 8. Upon receipt of formal notice from the beneficiary, now located in Russia we judge, or anyone authorized by her to act for her, the matter of the claim will have immediate attention.'* On April 25, 1911, letter was received by the company from the ofiSoe of District Manager Kellogg, as follows: " Kindly note that we have marked as ' Not proven ' claim of Albion Leuskha, Starkville, Colorado, policy 2,111,250." Nothing was done by the company to secure proof or notify the beneficiary concerning the claim. Beneficiary lives in Poineldsk, Kornmor, Russia. Nothing paid. Jacket endorsed " Not Proven." Examiners No. 26 ; Claim No. 334,742 : Industrial — Morris Krantz — Death — P. F. 2112. Death benefit $300. Assured lived in Fall River, Mass. The beneficiary lives in Povolock, Kuff State, Russia. The Hooper-Holmes Information Bureau states that the assured was killed by ruffians who threw a stone, hitting the insured in the temple, killing him. The police department of Fall River states that autopsy was held over the body of the assured, and that the medical examiner stated that the assured was killed by a stone. The attorneys for the Imperial Russian Consul corresponded with the company in regard to how the proofs should be made out. Company suggests that tlie beneficiary, who lives in Russia, should execute power of attorney to someone in this country, so that the person receiving the power of attorney could make out proofs. Power' of attorney seems to have been furnished by the beneficiary and forwarded to the Company. The death proof blanlis were sent to attorneys in Chicago on June 15, 1910, but are not foimd in the jacket. The jacket is marked " Disallowed, not proven," and nothing has been paid on the claim. IV — Sunstroke Policy Form 2112, Part V-A: "If sunstroke, freezing, or hydrophobia, due, in either case to external, violent and accidental means, shall result, inde- pendently of all other causes, in the death of the insured within 90 days from date of exposure or infection, the company will pay said principal sum as indemnity for loss of life." Eacaminer's No. 27; Claim No. 341,965; Industrial — Nelson Qerom — Death — P. F. 2112. Insured as track laborer; benefit $200; pro-rated to common laborer, bene- fit $100. Resided in Rouses Point, N. Y. The certificate of death issued by 252 A'atio.nal C'o.nve>;tion of lKsuBA:>rcE CoMirissioxEKS tlie Xfw York State Department of Health gives the cause of death as sun- stioke. The Ho(iper-Holmes Information Bureau upon investigation state that the assured died from sunstrolie received while unloading a coal car, the (lay hejuy intensely hot, and that the assured had not drank any intoxicating liquors for five years. The final death proofs are not found in the jacket. The company does not rai^e anj' question as to the fact that the assured actually (lied from sunstroke. Indemnity would be $100, after the benefit has been pro-rated, and following extract from a letter of the superintendent of the claim department, dated January 14, 1910, explains the attitude of the com- pany : "It appears that \oii have not carefully read the provision of the policy under which this claim is filed. If you would you would observe that the policy does not provide that the principal sum shall be payable for death from sunstroke merely, but only when the sunstroke is the result of purely accidental means. Xo\\ the Company- has never refused this claim, but we have asked proof of the accidental feature upon which this claim is based. " On reflection, it will clearly appear to you that this was a plain, ordinary sunstroke from exposure, but there was no accidental feature involved therein, which, of course, would be necessary to entitle the beneficiary to recover. However, in the Company's usual liberal manner, I am tendering the beneficiary through you, a compromise .allowance. The reports show, and your explanation corroborates, that the insured was a common laborej' at the time of his death, and that therefore the limit of liability, \vere there no contention whatever, would be .$100. '■ Tills being the fact, I hereby oil'er Mr. Joseph Dupro, through you, one- half of the amount which accrued, were there no question involved: namely, .1)50. I make this an even split of the amount involved, as such a compro- mise is universally regarded as fair where each party is sincere, believing they are right.'' TTie amount paid on this policy was $50. Kxaminei's .Vo. 2K : ('liiii)i A'o. .341,0.")!: liKbi.ihiul — Alfred Smitli — Death — 1'. F. 2112. Death benefit .$2'0(l. Insured resided in Xew Orleans. I,a. Died from sunstroke, which fact not questioned by the company and is borne out by the proofs submitted and from the correspondence with the agent who had charge of settling' claim. Agent holds a profit-sharing contract. On August 26, 1900, the superintendent of the claim department wrote to the agent who had charge of the adjustment of the claim a letter, from which the following is an extract: "There is a clause in the policy wliich providi»s full indemnity for death from sunsti'oke accidentally received. Von will remember the phraseology, — ' If sunstroke * * » due to exterufil, violent and purely accidental means shall result, c(mi]iany will pay full indemnity.' Xow if you can figure out just what sunstroke accidentally received is, in distinction to the ordinary sunstroke, the legitimate result of ex]iosiire, yon will be able to figure out whether or not this is .i conditiini covii'ed fidly under the contract, or one in which some sort of a compromise shiinld be ed'ected. The amount is not large, we are glad to say, but the accidental feature appears to be altogether lacking. We leave the matter in your hands, and whatever you are able to do with it will he entirely satisfactory to the company. I enclose draft and the proof of death for use if necessary." In reply to this letter the agent wrote to the company on August 28, 1909, that he believed that this cas" was covered under the sunstroke clause in the IxDusTKiAL Health and Accide.xt Sktti.k.mexts 253 policy and that he thouglit that the company owed the face of the policy. On September 3, 1909, the company answered this letter and said: " ■■ A sunstroke due to unintentional exposure to intense heat,' as suggested in your letter can scarcely he regarded as a sunstroke due to accidental causes, and as previously stated, about the only instruction I can give you in this case is that the policy agrees to pay full indemnity only if there is an accidental liappening in connection \\ith the sunstroke, and leave you to work out the disposition on the best terms available. It looks like a nratter of compromise and they ought to see the point." On September 7, 1909, the agent writes a personal letter to Jlr. L. E. BroMu, .Superintendent, Chicago, from which the following is an extract: " I have always tried to be fair with the company as well as the policy- holder, and I have studied the wording of Part V of this policy thoroughly and tried to figure out what would be accidental sunstroke, and I really be- lieve that if there ever was a claim that ought to be paid in full according to the terms of the contract this one should, but in view of your letters, I have just simply ' bambuseled ' this negro out of $50 on his policy, absolutely forced him to be satisfied as his letter hereto attached will indicate. I tried every way in the world I could to figure out some excuse for pro-rating this claim, but he had advice upon the policy and stood pat on $200; and, as I found it entirely impossible for him to complete the death proof according to blanks submitted, I told him that inasmuch as the death proofs were incom- plete we would have to compromise the case, which I did." In answer to the foregoing letter the superintendent of the claim depart- ment writes to the agent, on September 16, 1909: ■' Xow that it is all over I maj^ say to you that this sunstroke clause as appears in ours and other policies is not the work of the insurance company, but the draft prepared by an ex-insurance commissioner of the State of Ohio, which he required the several insurance companies to incorjx)rate in their policies if they put in anything on the subject. Just what he means, or just what his idea was, of a sunstroke from purely accidental causes has never yet been disclosed and all insurance companies are at a loss to under- stand its construction. We are reliably info]-med that no one was ever acci- dentally sunstroked, but the condition being the result of disease invariably. Xo one in good health is supposed to ever succumb to the sun's rays. It is really the result of sickness." The agent compromised the loss for .$150. T" — Occupation The policy forms used in the cases hereinafter cited contain a provision iu the policy contract to this effect: Policy Form 2112 — "'Xon- forfeitable Provision." "If the insured is in- jured fatally or othenvise, or contracts disease after having changed his occu- pation to one classified by the company as more hazardous than that herein stated, or while he is doing any act or thing pertaining to any occupation so classified by the company, the company's liability shall be only for Such pro- portion of the principal sum or indemnity herein provided as the premium paid by him will purchase at the rate and within the limits fixed by the company for such more hazardous occupation." The industrial manual used by the company for the years 1908 and 190fl contains the instructions to agents and under that heading, on page S. under a sub-heading "Change of Occupation" appears the following: " The insured is not debarred from performing such labor about his home 254 National Convention of Insueanoe Commissionees as may be necessary for the comfort and convenience of bis family, nor from indulging in usual or occasional recreation such as hunting, riding, fishing, boating, etc." On page 11 the following paragraph appears: " iScope of Policies : " The accident insurance features of industrial policies issued by this com- pany cover injuries sustained while riding or traveling for business or pleasure ijvithin the civilized limits of the globe; while discharging the usual duties pertaining to the occupation named in the policy; while pursuing any ordinary form of pleasure or recreation (including base ball playing, yacht- ing, hunting, fishing, horseback riding, bicycling, skating, etc.), and while engaged in athletic exercises usually indulged in by business and professional men." ,_!j Hunting — 1909 Examiner's No. 29; Glaitn No. 319,158; Industrial — Eli Shumpourd — Limb — I'. F. 2112. Benefit for loss of limb, $100. Insured as mill hand, yard duties, class " XD " and changed occupation to farmer, class " XD." Assured lost liis hand by the accidental discharge of a shotgun while hunting. In settling the loss the company wrote to the assured the following letter, dated January 16th, 1909: " Enclosed herewith is the company's draft in payment of your claim on account of the loss of your hand. In explanation as to the amount allowed will say, you were insured as a mill hand, yard duties, class XD, and had j'ou been injured while performing the duties of that occupation you would have been entitled on account of this limb loss to $100. However, your injuries were received while performing the duties of a hunter, and in class F, where a hunter is placed, for a monthly premium of $1, you are entitled to but $50 for the loss of the limb. The pro rate is made under the non-forfeit- able provision of your policy and we trust same is fully understood by j'OU." Under the provision of the manual as quoted above the insured was en- titled to a benefit of $100. The monthly commercial manual used by the company for the year 1909 contains the following on page 9 under heading of occupation of " The trade or business which is followed as a means of livelihood, constitutes the oc- cupation." On page 15 under " What he is insured against " is the following : " The policy issued by this company provides against bodily injuries, such as dislocations, fractures, bruises, cuts, pun shot wounds * ♦ * effected through external, violent and accidental means, whether such accident hap- pens while traveling on the street, on the farm, in the store, office, mill or work shop or in any of the lawful or useful vocations of life." Examiner's No. 30 ; Claim No. 353,998 ; Monthly Gommeroial — M. G. Harmon ~Limh — P. F. 2124-A. Benefit for loss of limb $600. Assured resided in Lumpkin, Georgia. As- sured also had another policy in the industrial class in this company with a limb benefit of $200 and had been paying on both policies. Premium cards show that premiums were paid on both policies. The assured lost his hand by the accidental discharge of a shotgun while hunting, the gun being discharged while the assured was getting over a wire fence. The company requests its claim adjuster J. H. Donan, to proceed to Industeial Health and Accident Settlements 255 Lumpkin and adjust the loss. The instructions to Mr. D'onan from the company dated January 7, 1910, read as follows: "You will notice the files in the Mike G. Hiarmon claim that we had in force an industrial and a monthly commercial policy and notice by letter of the 5th that I am not admitting liability under either policy and leaving the whole transaction up in the air. The strict construction would be, I pre- sume, account of false warranty in the application for the monthly commer- cial policy as to the industrial policy already held, which would work a forfeiture of the monthly commercial policy. On the other hand, the acceptance of the monthly commercial, if it had been done with our full knowledge, would cancel the industrial. On either policy we are entitled to a proration to the hazard of a hunter which puts it to $400, authority for whicli you will find in the synopsis of certain State decisions here enclosed. If we accept the monthly commercial policy it must be with the distinct understanding that our liability is limited to the indemnity which can be purchased in the occupation of a hunter. " I have sent an eye witness statement blank in order to fix more clearly the fact that Harmon was out hunting. "We have recently pro rated several hunting cases and before you get to this I expect to conclude negotiations in a $1300 foot loss claimed for injury received by a capitalist while out hunting. Hence the pro rate theory in a case of this character is fully, established. If you settle under the industrial policy we will not insist on the pro rate, hut will refund premium paid on the other policy regardless of which one you adjust under." The assured was injured on November 17, 1909, when the 1909 manual was in use by the company. Claim Adjuster Donan succeeded in settling the loss by the payment of $100. The company writes to Adjuster Donan February 15, 1910: " I have received the files in the Mike G. Harmon claim, which you disposed of for an allowance of $100. * * * I regard the settlement as a very good one indeed." Examiner's 'No. 31; Claim No. 350,244; Monthly Commercial — C. L. Hough — Death — P. F. 2124. Death benefit $1,200; deceased lived in Jacob Creek, Pa. Was insured as a " Stationary Engineer." Death proofs show that the assured was out hunting and when endeavoring to pick up his gun it was discharged and he was shot in the left side through the heart. For the same reasons as stated in case quoted above the assured was pro-rated to the classification of hunter and the claim was adjusted 'by Dr. Keller of the home office for $400. Examiner's jSTo. 32; Claim No. 349,927; Railroad — Louis Moquin — Death — ■ P. F. 2115. Death benefit $1,000. Assured lived in Kingsville, Texas, and was insured as an engine watchman. On November 9, 1909, the assured was on his way to go hunting and in order to reach the hunting ground he and a friend were riding on a railroad speeder which ran off the track throwing their guns forward and discharging one of the guns, the entire discharge of which entered the hip and right side of the assured causing his death. The company sent its Claim Adjuster G. W^. Donalson to adjust the loss and the superintendent of the claim department wrote him the following letter on December 9, 1909; " The facts in the case are that Mr. Moquin was off duty and was going hunting on a hand car. From some cause the hand car was wrecked and he was 2'>i> Xatioxal C'(.)2sVEyTiox of Ixsueaxl'e Co-mmissiuxehs thiOMii in supli a manner that tlie gun exploded and shot liini, resulting fatally. There is, tliercfore, two phases to this cast-. Was Mr. iloquln a trespasser at the time, using a luind car without permission on private ]irope.rty, and second, he was e.xposed to the liazard of a hunter, classified by our printed table of rates as ' Hazardous.' As to the second proposition we enclose an abstract of a few decisions; one in your State made last fall, the other in Xew York, in which it is decided that on contract drawn similar to ours the company has the right of a proration to the classifica- tion of a hunter, not as a change of occupation but as an exposure equivalent to that of a hunter. Our printed table of rates classifies a hunter as ' Hazardous.' See commercial manual. Therefore, figuring on separation of premium the casi^ would pro rat-e do-wn to about $750. Therefore the limit of liability in this case ought to be somewhere between $100' and $750; an even split might be a fair adjiistment of the claim. However, I leave this for determination after yovi liave gone into the case thoroughly from all angles." In answer to that letter ^Ir. Donan reportr;d that '' liiere was no trespass in this case, it was pro-rate only." He endeavored to settle the case for $425 but did not succeed at that time. The claim superintendent also sent >Ir. Donalson the following letter dated January 11, 1910: " In order to give a little m6ral backing in your Moquin claim, the railroad employe who was killed while starting hunting, I beg to advise that we have just closed a limb loss hunting case accident in Pennsylvania, settlement in New York, involving $13,000 under a 2190 (policy form) and an annuity for an allowance of $5,500 on the two claims. This is considerable less than"Tialf and slightly in advance of the prorate to which we are properly entitled." The case was compromised by the company by the payment of $500. Tlie assured was insured as an engine watchman and was employed as such as per the ahidavit of his employer at the time he was killed. 7/Mnfm(/ — 1910-1911 The manual in use from December 1, 1909 and used in 1910 and 1911 for industrial and monthly commercial policies contains no specific reference to hunting and fishing as shown in the manual of 1909 quoted above, but does contain the following: On page " Y " under Occupation; " The profession, business, trade or employment, followed as a means of livelihood, at the time of making the application constitutes the occupation." HxatiiinPi's Xo. 3.3; Claim Xo. 385,451: Monthly Commercial — I'reston White — Death—]'. F. 2124 A. Death benefit $1,200, assured lived in China Springs, Texas, and was insured as a farmer. An attorney was employed and undtr the provisions of Texas law providing penalties, if the suit had been won by the assured it would have cost the company $1,800. The insured was a farmer and he was killed while hunting. The company claims the right to pro-rate the claim on the occupation of the assured to that of hunter, giving th.c same reasoning as appeared in the cases cited above. The attorney employed by the beneficiary states that every farmer in the State of Texas while engaged in his regular oocupation and as a part of his duties, finds it necessary to kill beasts that were eating up his early crops, and that the deceased was hunting for that purpose when he was killed. Industeial Health and Accident Settlements 257 The attorney for the company in writing to its Claim Adjuster G. W. Donalson under tlie date of December 19, J 9 10, states in answer to the argu- ment of the attorney: " The argiunent advanced by the plaintiff to the effect that he was endeavor- ing to rid his farm of animals that were eating up the crops, and that there- fore his action in carrying a loaded gun was an act pertaining to the occupa- tion of a farmer, is ingenious, but it does not appeal to me as being sound." Adjust-er G. W. Donalson effected a compromise settlement before the trial for the sum of $775. Examiner's No. 34 ; Claim No. 388,941 ; It. It. Cash — ■ Q. W. Parker — Death — P. F. 7.50--W. Death benefit $5,000 plus accumulations of $2,000; insured as a passenger conductor. Resided in Forest Grove, Oregon. The assured changed his occupation to that of farmer. The Retain Credit Company stated in its report of the accident that the assured took his gun to go out hunting for liawks which had been killing his chickens and that he was found dead from a bullet hole in the back of his head; that the cir- cumstances indicated that he had stum.bled and they did not believe it was a case of suicide, but was an accident. The asstired owned his own farm and the inquest before the jury showed that the insured had taken his gun to go hunting for hawks and the jury rendered a verdict as follows: " That the jury fully believe said shooting to have been accidental." The assured was not a common laborer on the farm. The company claims that they can reduce the occupation to either hunter or farmer, general work. I'rom the evidence in the ease it does not seem that the assured could be pro-rated to a farm laborer, class " XD " under the circumstances, but to farmer, class " D," the benefits of which are three times in advance of class " XD." The company pro-rated the assured as they sta.te in their letter of October 7, 1910, to the beneficiary, to either hunter or farmer, which would entitle the insured to one-third of the benefit under the policy, and under that con- struction they paid the one-third of the benefit, which was $2,333.35 in set- tlement of this loss. Fisherman Examiner's No. 35; Claim No. 337,153; Industrial — .'Lnton- Anderson — Death — P. F. 2112. Death benefit $600. Assured resided in Minneapolis, Minnesota, and was insured as a commercial salesman selling to dealers and was drowned while fishing. The company claims that the assured had changed his occupation to shipping clerk. An attorney was employed by the beneficiary and he claimed that as the assured was not injured while engaged in any occupation the full amount should be payable and that the duties of tlie two positions were equally hazardous. The counsel for the company Mr. Maverick in a letter dated December 14, 1909, to the State agent for the Continental, located at 9 258 National Convention of Insueance Commissioners Minneapolis, Minn., after taking up the provision of the policy for pro-rating on change of occupation, states as follows: " There is, however, an alternative proposition which would operate more to our advantage than the one just advanced. If we concede the plaintiff's contention to be correct, then is it not true that the insured was engaged at the time of his death in the occupation of a fisherman. Part IX of the policy also provides for pro-rate if the insured is injured while he is doing any act or thing pertaining to anj' occupation classified by the company as more hazardous than the one in which he was engaged at the time the policy was issued. He was certainly doing an act or thing pertaining to the occupation of a iisherman at the time of the accident, and you will note that the rate book classifies fisherman, river and inland lakes, as Class ' XE,' with a death indemnity of $100." A compromise settlement was made before trial for the sum of $440. Miscellaneous Occupations Examiner's No. 36; Claim No. 391,821; Monthly Commercial — F. C. Hull-^ Death — P. F. 2124-A. Assured resided in Norwich, Conn., and was insured as chauffeur, private car. The assured was killed while inllating a rear tire of an automobile. The steel rim on rear shoe blew off butting him in the head and killing him instantly. He had paid eleven months premiums in advance so that after the date of the accident there was still six months premiums paid in advance. The company requests the Hooper-Holmes Information Bureau to investigate the loss and on November 9, 1910, they reported as follows: " He was at time of his death chauffeur for Miss Pope and this was his sole employment as I learned, and he had no other work or duties excepting that he may have assisted at odd work about the premises if called upon to do so, but his regular and only services were as chauffeur of iXiss Pope's automobile." November 25, 1910, the same agency made the following report: " * ** * she (Miss Pope) had in her service at time of Hull's death a man who attended regularly to her lawn, gi-ounds and garden and Hull to run and attend to her automobile, but as Hull's time was not fully taken up with his duties as chauffeur he also helped about the garden and attended more or less to the furnace, and I understand was paid extra for such work. * * », He was neither hired nor employed as a gardener, furnace man or chore man, but he assisted more or less in these last mentioned capacities and was paid for what he did therein." On January 7, 1911, the claim superintendent wrote to Adjuster R. W. Hyman in part as follows : " This is a monthly commercial loss wherein the assured originally written as chauffeur in ' XC ' with a principal sum of $1500 appears to have been also a gardener, which would reduce the indemnity to ' D ' or $1200 * » * The only question involved is whether or not his occupation and duties required of him included work more hazardous than that of chauffeur and I think our investigation has resulted in showing he was also a gardener. You can verify this and adjust accordingly. If your investigation should estab- lish to your satisfaction that Hull's occupation was really that of chauffeur, nothing more, you are authorized to issue a draft for the full principal sum. We believe, however, that you will justify the salvage and be able to deliver $1,200." Industrial Health and Accident Settlements 259 Mr. Hyman succeeded in delivering the $1,200 and the claim was settled at that amount. Examiner's No. 37 ; Claim 'No. 346,825 ; Industrial — J. Charles Qeorge — • Death — P. F. 2112. Assured lived at^Latrobe, Pa., insured as "general painter," death benefit $300. In application for the insurance the deceased stated his occupation was " General Painter and Glazier,'' and the policy insured him in the same occupation. The assured was killed while engaged in painting a smoke stack of a ateel mill. Assured was working under the roof, painting a smoke stack when a traveling crane crushed him to death. On October 27, 1909, the claim superintendent wrote to an agent of the company at Greensburg, Pa., in part as follows : " There appears to be a probable pro-rate in this case. This man was insured as general painter. This includes almost any kind of painting but will not include a bridge painter or stack painter. The rating department is at present engaged in putting together a new manual. I have just had a talk with the head of that department who says he has placed a stack painter in the new manual as ' FF.' That seemed a little too high to me and he has agreed to put it in as ' XE.' This would make this claim amount to about $100 and I hope you will be able to dispose of it on that basis without any considerable trouble." The proofs show that the assured was required to paint and glaze any- where about the plant wherever needed. An attorney waa engaged by the beneficiary. In a letter to the attorney for the beneficiary the superintendent of the claim department says: " It, however, is developed by our investigation that the assured at the time of his death was painting a smoke stack which is a hazard not con- templated in our ' D ' classification for painter and glazier." In a letter to General Attorney Maverick of this company under date of November . 5, 1909, the Superintendent of the claim department writes as follows : " Our rating department accepted application written by W. M. Pletcher, of Greensburg, Pa., for insurance of J. Charles George, Latrobe, Pa., in July last, as ' General Painter and Glazier ' and issued him a class ' 13 ' policy $300, $30 and $30. The general account card was written showing the occupa- tion ' General Painter ' leaving off the words ' and glazier.' We are informed that Mr. Pletcher is one of the greatest ofi'enders in matter of not following the phraseology of the rate book. The word ' general ' in this case is likely to cost us an extra $100 as class 'D' duties only were contemplated, whereas he was killed painting a smoke stack of a steel mill." Claim was settled for $200. The premium card does not show that any premiums were paid after the due date and the beneficiary is entitled to accumulations of $40. Accumulations ignored. ' Escaminer's No. 38; Claim No. 382,33.5 Coal Mine — R. F. Keller — Death — P. F. 1021-C. Death benefit $100. Insured as electrician, and resided in Delagua, Colorado. The application of assured stated that his occupation was " Electrician " and, although his policy is not in the jacket, in accordance with the system of the company, it is assumed that the policy was mride out in the same manner. The assured was killed in a sub-station electric power house, while 260 National Oonventioit of Insurance Commissioners showing his fiancee how the machinery was run. The death certificate stated that the cause of death was accidental electiocution. The company writes to district manager Kellogg, at Denver, under date of September 16, 1910, as follows: " Mr. Keller was insured in ' Special Classification as electrician, low ten- sion.' The fact that he was killed by a very high voltage reduces the principal sum to $500." There is nothing in the jacket to show that the deceased was insured as anything but an electrician. Incidentally, the correspondence shows that the coroner notified the company of the death of the assured, and company on July 23, 1910, writes to its agent as follows: " I have your letter of the 20th inst., enclosing clippings in regard to the death of Roy F. Keller, and inquiring what had best be done under the cir- cumstances. We can see nothing to do at present. All you can tell the coroner is that you do not know the address of any relatives. So far as his claim with the company is concerned, we will have to await formal notice. Therefore, it seems that the thing to do is to say nothing and to await results." In a letter to the district manager of the company, F. P. Kellogg, dated July 27, 1910, superintendent of the claim department writes as follows: "We have done Mr. Sipe (the coroner) quite a few favors lately, one in particular in the Helm case, wherein the beneficiary under the policy, who was then located in Minnesota, refused to sign him an order for $50 funeral expenses. We deducted this $50 from the draft and forwarded it to the beneficiary without any authority so to do, in order to protect the rights of Mr. Sipe. The policy contract states in what manner official notice of a claim is to be given. It is our suggestion that the next time you see Mr. Sipe you suggest to him, in your usual diplomatic way, that by allowing notice to come to the company through the usual channels he will confer a great favor on us, and at the same time, if you can advise him that the company does not desire to hurry death claims along, especially where we have no address of the beneficiary or anything of that kind, you might suggest a line of : thought which would change his erroneous conceptions, if he has any." iExaminer's No. 39; Claim A'o. 394,499; Industrial — -Jim Belle — Death — P. F. 2112-A. Insured as " Driver, Dump Cart," death benefit $300 class " D." Insured resided in Ensley, Ala. Pro-rated to common laborer class " XD," death benefit $200, paid at that amount. The assured was endeavoring to get some cement out of a cement bank where it was stacked in piles, to put on his wagon, when the pile of sacks fell on him killing hiiu. His occupation was given, cart-driver and cart- loader, by his employer. In a letter from the superintendent of the claim department to W. Mclvy, dated November 26, 1010, the company gives its reasons for reducing the claim as follows: " The result of investigation in this case showed clearly that there was a pro-rate to ' XD.' This man was insured as a driver of a dump cart, but he also loaded and unloaded and therefore he was performing the duties of a laborer when he did so. He was actually killed while performing the more hazardous duty. Had he been sitting on his cart allowing the laborers to load his wagon he would not have been killed. This shows the justice of our position. Because a man is insured as a driver it does not necessarily mean that he is entitled to take care of his horses, load his wagon or do those things." Company paid $200 in settlement of claim. Indxtsteial Health and Accident Settlements 261 Examiner's No. 40 ; Claim No. 348,625 ; Monthly Gommercial ■ — Elijah Scritch — Death — P. F. 2124. Insured resided at Carthage, Mo., and was insured as " Street laborer on water line or trencli,'' class "XD," death benefit $1,000. Death proofs show that deceased was excavating for the water company at Carthage when his pick accidentally struck some powder which had been left in the ground some days before. The powder exploded and the assured was burned to such an extent that his death followed. His employer stated that the duty in which he was engaged at the time of the accident was " Helping excavate for the water line." At the time of the accident he was working in the reservoir which was eight feet deep by 160 feet square and that at several places running into the reservoir were ditches being dug for water lines. Despite the fact that he was insured as street laborer on water line or trench class " XS " the company pro-rates the occupation to " common laborer," class " F," and endeavors to settle the loss for $400 under tha/t classification. The company succeeded in adjusting the loss by paying $450. Examiner's No. 41; Claim No. 364,839; Industrial — -Frank Bardnell — Death —P. F. 2112. Tlie assured lived in Kentwood, La., and was insured as " Foreman, super- vising duties only, lathe mill," death benefit $400. Proofs of death show that his occupation at the time of death was foreman of lathe mill and he was killed by a pulley bursting while he was throwing on clutch on line shaft in order to start machinery. The Wisbey Insurance agency who had charge of settling the loss has a profit-sharing contract and they wrote to the company under dat-e of June 2, 1910, as follows: " This party was killed, we understand, while in the act of starting macliinery, which I believe would clearly give us pro-rate to machinist or mill- wright, and after investigating further learn that he had no extra man in his department and we therefore have taken the stand that he doubtless had more or less work about the lathe mill and should be classed in ' XD,' and on this basis paid $200 in settlement." All the evidence in the jacket shows that his duties were that of a foreman of the lathe mill only. Examiner's No. 42; Claim Ko. 384,138; Industrial — J. W. FinfrocJc — Death — P. F. 2112. Death benefit .$400; assured lived in Springfield, Ohio. Deceased was insured as a stationary engineer, class " C," and was killed while sitting in the engine room of the Springfield Pure Milk Company by a portion of the steel smoke stack falling in sjich a way as to shoot through the door, striking him while sitting in a, chair talking with a friend. The district manager, G. G. Roth, who holds a, profit-sharing contract, settled the loss hurriedly without waiting for final proofs. The newspaper account of the accident states that the insured had been an engineer at the plant for five years. The agent claims that the assured was filling the occupation of both en- gineer and watchman at the time the accident occurred, but there is nothing in the jacket to show that he filled both positions and the evidence sub- 262 JSTatiois-al Convention ob Insueancb Commissionees mitted does not show any change of occupation or that he was engaged in the two occupations. The agent, G. G. Roth, writes to the company under date of August 6, 1910, as follows: "Having to date received no reply to my letter under special delivery stamp of the 1st instant, regarding above mentioned claim, and further as I succeeded in pro-rating the claim to class ' D,' being $300 instead of $400 as policy calls for * * * and I have settled the claim for $300 and given ordinary claim draft for same in full payment. I know this is not exactly according to the regular system of handling accidental death claims, but this was so clear, and no question whatever as to the cause of death. Further, as an older son is expected to arrive home to-night, and as I have worked to save the company $100 which under my contract means a saving for me, I pro-rated this claim from the fact that claimant was filling occupation of both engineer and watchman at the time the accident occurred, and on the arrival of the son I feel positive it would not have been easy to settle for less than $400. To be sure we could have won out in the end, but in handling the claim as I have we not only win out but gain some strong friends." The agent further states that he has obtained a testimonial letter and desires 2,000 printed in circular form. In another letter written to the company under date of August 6, 1910, District Manager Eoth, says: " You will note that -I have also saved the 10 per cent, increase on the Finfrock accidental death claim, which would amount to $60 more, and I feel, considering these efforts on my part, that the haste should be overlooked, as there was just cause for haste, when we consider that the claim was paid at a saving of $60 even counting at the pro-rate, and if it had been counted at the regular rate given in policy, then $220 is saved, which I feel is doing very well when all concerned are left fully satisfied. What do you think about it? This is the result of having a man on the field to get after such things. I regret this claim coming as it did on account of my profit sharing con- tract, as well as the interests of the company, but I shall try hard to make it bring returns to make it back in the near future." The premium card shows that the beneficiary of the assured was entitled to accumulations of $60. The accumulations were entirely ignored. Examiner's No. 43; Claim No. 337,322; Industrial — G. W. Gainer — Death — P. F. 2112. Death benefit $300; assured lived in Bemis, W. Va. Insured as "Tally- man in sawmill." Pro-rated on change of occupation to " turn-down man," death benefit $200. Drowned while not engaged in any occupation. Claim was reduced to $200 and paid. Examiner's Xo. 44; Claim No. 384,428; Factory — Rohert Fenton — Death — P. F. 1021-C'. Death benefit $1,000; assured lived in Bufi'alo, N. Y. The deceased was insured as ninoliiiiist in power house. No evidence in the jacket showing that there was any change of occupation and the assured was killed by electric shock Avhile trying to attach wires to a switch in order to secure light to work by in the repairing of a gas engine. Tlie company does not show on what basis the prorate is made but the claim is reduced to $725 and paid at that amount. Industrial Health and Accident Settlements 263 Eccaminer's No. 45; Claim No. 376,229; Industrial — E. E. Smith — Death — P. i\ 2112. Assured resided at West Beaver Creek, Pa. Death benefit $400. Insured as stationary engineer, not firing. Company prorates claim to fireman, death benefit $300, and paid the $300 plus $30 accumulations: On July 1, 1910, the claim superintendent wrote to L. Goldstein, at Philadelphia, as follows: " We have a death loss at West Beaver Creek, Pa., as stationary engineer, H. E. Smith. The claim amounts to $400 as it stands. We are wondering if it is not possible to show that he at times did firing and pro-rate the claim. This is only a conjecture but it is our experience that we find a great many men insured as stationary engineers who also do firing to a more or less extent." On July 14th, Adjuster Goldstein wrote to the company as follows: " I have this day settled the claim of Harry W. Smith * * * per your suggestion and pro-rated the claim to ' D ' class and issued a draft for $330, including the 10 per cent. The claimant was not firing, only at times when - the fireman was away or sick, but succeeded in settling the claim as such." On July 19, 1910, Mr. Goldstein wrote to the company in part as follows: "As reported to you from Hagerstown, and as I have already informed you, after close investigation, I found deceased was a stationary engineer and only did firing at occasional times. It seems that the firing of that par- ticular boiler was done by a fellow workman who worked around the place. At the time the accident occurred the claimant was not firing the boiler nor performing any oth-er duty pertaining to a fireman." On the basis that the deceased was stationary engineer at the time he was killed the amount of the claim would be $440. It was settled as stated above for $330. Examiner's No. 46; Claim No. 354,271; Industrial — J. H. Johnson — Death — P. F. 1027. Death benefit $600 ; assured lived in Knoxville, 111. Insured as " Bookkeeper, oflice duties only," changed occupation to " prospector of mines." Was drowned while rowing across a river on a pleasure trip and under the prorate the benefit was reduced to $200 and paid. Examiner's No. 47; Claim No. 326,397; Industrial^ B. L. luce — Death — P. F. 1075-4. Assured resided in Minneapolis, Minn., and was insured as chief engineer, stationary, not firing. Death benefit $400, class " C," prorated to stationary engineer, firing, death benefit $300, class " D." Proofs of death show that the insured was stationary engineer in charge of power plant and all machinery, and the employer states that he was killed while engaged in his usual duties as engineer. The agent writes to the company that upon investigation he found that the assured was a stationary engineer firing, and he had settled the claim for $300 plus the accumulations of $30. In a letter from the superintendent of the claim department dated April 2, 1909, to the agent, appears this phrase: " There is also the point of the 10 per cent, increase. We do not know whether this is being claimed or not." 264 National Convention of Insurance Commissionebs There is no evidence in the jacket other than the letter from the agent that the engineer did any firing and the proofs of death sworn to by the claimant, employer and eye witness all state that the assured was a stationary engineer. tlxaminer's No. 48; Claim No. 329,867; Monthly Commercial ■ — J. F. Devore — Limb — P. F. 2124. Limb loss benefit $1,250; assured lived at Chickasha, Okla. Insured as proprietor of a grocery store. Ihe report of the Retain Credit Company shows that some one had borrowed the shot gun of the insured and had returned it to his store, and that he picked up the gun with the left hand and set it back, striking the hammer against something discharging the load in his left hand, thereby causing the loss of his hand. At the time the accident happened the assured was in his office making out statements. The company pro-rates the claim to $1,000, and gives its reason as follows in a letter to the assured dated June 14, 1909 : "You applied for insurance in this company as proprietor of a grocery store, office duties only, class ' A,' for select classification. Ihe proofs which you have filed, as well as our investigation, show conclusively that your occupation was that of a proprietor of a grocery store, counter and general duties, which en- titles you to class ' C ' instead of 'A.' " Examiner's No. 49; Claim No. 381,401; Monthly Commercial — Peter Karas — Death — P. F. 2124. Assured lived in Salt Lake City, Utah, and was insured as a " Section man," class " XD;'"' death benefit $1,000. At the time of his death, he was employed by the Warren Construction Company in their quarry at Twin Falls, Idaho, and they state that his occupation was that of a laborer employed at break- ing and handling stone, and that he was in no way connected with the handling of explosives when he was killed. His occupation is given in the death proofs as a " laborer OLitside, breaking and handling stone in a quarry." He was killed by dynamite explosion. The manual rates a laborer in quarry class " F," a laborer on surface, class " XD." From the proofs submitted, it would seem that the proper classification of the occupation of the insured was " Laborer on surface " in a quarry, which would be the same classification, " XD," as he was originally insured at. However, the company prorates the occupation to the general classification " Laborer," class " F," and pays $400 in settlement of the claim. Examiner's No. 50; Claim No. 370,911; Industrial — C. D. Billard — Death — P. F. 1075-A. Assured resided in Waukegan, 111., and was insured as a " real estate agent," class " B." For change of occupation the company prorates to " Fireman's helper," class " XD," death benefit $200. The final proofs are not found in the jacket, but from the correspondence contained therein the company admits a liability of $200. A suit is brought on behalf of the beneficiary, and the company sets up the defense of breach of warranty, because the assured was forty-seven years of age when he had stated that he was forty-six, and also that suit had been brought prior to the expiration of three months after the right of action accrued. The com- Industrial Health and Accident Settlements 265 pany advises the attorney it had engaged to defend the case to endeavor to settle for $100, and then agreed to settle for $150. Case vras compromised for $150, although the company admits that the liability was at least $200 unless advantage is taken of the defense of breach of warranty and time when suit should be brought. Examiner's No. 51; Claim No. 319,356; Industrial — John Petropolas — Limb — P. F. 2112. Assured resided in Salt Lake City, Utah; employed by the Garfield Smelting Company. He was insured as a, " Stationary Engineer," class " C," limb loss benefit $300', and had changed occupation to a common laborer and was killed while working on the crane. Claim superintendent on February 26, 1909, writes to its District Manager Kellogg at Denver as follows: " If we remember correctly there was a likelihood of your securing a fran- chise on this smelter and possibly the adjustment of this claim might affect the business. We are enclosing a partially completed draft with which you are authorized to adjust this claim to the best interests of all concerned, any- where from $50 to $300." Mr. Kellogg adjusted the claim for $200. Examiner's No. 52; Claim No. 378,307; Monthly Commercial — Hugh McGuire — Death — P. I\ 2124. Insured resided in Salt Lake City, Utah, and was insured as a " Foreman, outside mine." Death benefit $2,000. The assured was killed by the explosion of powder in a mine. The assistant attorney of the Harriman lines upon request of this company investigated the claim and in his report stated that the duties of the assured were the same when killed as when he took out his insurance and that the policy seemed to cover; also that the deceased did not work in connection with underground mining and that the agent was aware of the occupation when the policy was written, and further he did not believe the company's defense was very strong. Suit was commenced by the beneficiary and this company also engaged an attorney to defend the suit in their behalf. The company endeavors to pro- rate the occupation of the assured to " Foreman, inside mine." The cdunsel for the company writes to the attorney engaged by them to defend the suit in letter dated OctoberlS, 1910, which contains the following, in reference to a letter sent by the claim department to an agent of the company : " I have never seen that letter and feel constrained to say without easting any reflection upon our claim department, that it is somewhat disposed to pro- rate claims by the ' Rule of thumb ' and I do not know whether or not we can legally justify the position they are taking." The assured's duties were the same at the time he was killed as when he was insured and the files show that the assured was performing the regular duties of a, " Foreman, outside mine." Counsel further writes to its attorney under date of February 20, 1911: ' I agree with you in believing that by adopting dilatory tactics, taking depositions, etc., we will finally bring Mr. Quinn (the other attorney) into a more reasonable and receptive frame of mind." 266 National Convention of Insurance Commissionees The company rests its basis for prorating on the clause " While he is doing an act or thing pertaining to any occupation so classified by the company as more hazardous than the one in which he was engaged at the time he was insured." Compromise settlement was reached before the trial and $1,200 was paid in settlement of the loss. VI — Compromise S&ttlements Examiner's No. 53; Claim No. 371,700; Industrial — Samuel Kirk — Death — P. F. 879. Death benefit $500 plus $50 accumulations, total $550. Assured lived iu St. Louis, Mo. The proof of death shows that assured was killed by accidentally falling down stairs. The coroner's jury rendered the following verdict: " Death from concussion of brain due to falling down stairs." The following letters will explain the method used by the company to compromise the claim. On June 24, 1910, claim superintendent wrote to the district agency superintendent in part as follows: " It is my opinion although investigation is not completed, that disease was a very important factor in this case. If the assured did fall down stairs in all probability the fall was occasioned by his weak condition from disease and not by any accidental injury." On July 6, 1910, the claim superintendent writes to Claim Adjuster J. H. Donan as follows: " Our cases need to be worked up more completely in detail, to get the benefit of every possible defense and to show in every possible way the in- justice of the claim, rather than to depend as much as was done in former years on what may be termed strong arm methods. I believe this claim wholly unworthy." On July 18, 1910, Mr. Donan writes the company: " Mrs. Kirk refuses to accept any amount less than $500. Dr. Kraus refused to say that the fall down stairs was caused by or contributed to by disease existing, or a weakened condition of the deceased at the time, or that there was any appearance or indication of apoplexy or vertigo, but told me that if such had been manifest in the case as he -saw it he would say so, but he could not say so and would not say so. * * * I made an offer of 50 per cent, amounting to $275, which she refused." On July 21, 1910, Claim Adjuster Donan writes to the company in part as follows: "Dr. Barr (attending pliysioian to deceased) looked up record of his diagnosis which I attach. He says he saw nothing of a serious nature on his examination and that Mr. Kirk * * * ^^as treated for neuralgia and constipation." On July 21, 1910, the claim superintendent again writes to Mr. Donan; " Replying to yours of the 18th instant in Kirk matter in which you say beneficiary seems more strong than ever in her attitude of demanding $550 on this claim. This simply necessitates a little more diplomacy and ingenuity on your part md I make the suggestion that possibly Mr. Stone, who has Industeial Health and Accident Settlements 267 certain connections, can pull a few wires in our interest if you will afford him the opportunity to do so, and at same time further some of his own interests." On July 27, 1910, Mr. Stone, the district superintendent writes to the company as follows: " I have gone over the papers with Mr. Charles H. Brock in whose ability as a lawyer both Mr. Bradford and I have great confidence, and he says that our Supreme Court has ruled that even though the illness contributes to the accident which causes death, yet that will be no defense. Of course on the other hand, we can never tell what a jury may do." On August 7, 1910, Mr. Stone, district superintendent, wrote to Claim Adjuster Donau as follows: " Regarding our conversation of yesterday regarding the claim of Bertha Kirk, widow of Samuel Kirk, my plan of procedure would be as follows: Kaise your offer to say $375 and then stand pat, and tell them to sue if they wish. I think it is about 8 to 2 that they will sue if you stand on your present offer of $275, and at $375 I think the chances are about even. Any- way you force their hand. If they do sue then go into court next day and pay the $550 with the costs which will only be about $6, and it is worth that to make them show their hand, and if we get any publicity in the papers we can easily get out by saying it was simply an oversight; that we expected to pay and that as proof of the fact we have paid the amount sued for without trying the case. It is as you say useless to fight on so small an amount and besides the courts of this State will not hear our defense as to illness con- tributing." Mr. Donan succeeded in compromising the case for $300. Examiner's No. 54; Claim No. 389,112; Monthly Commercial — Enmn Fulmer — Death — P. F. 2124-A. Assured resided in Cropwell, Ala., and was insured as a machinist — ■ Cotton mil] — -class "D." Death benefit $1,200. Changed occupation to car repairer, class "XD," death benefit $1,000. Retail Credit Company reports the accident happened as follows : "At the time this party was killed he was a machinist with A. B. & B. Rail- road at this place. He was killed in the following manner: While repair- ing a car which was standing on a siding, he failed to put up the danger signal; and a switch engine in passing kicked a, car over the siding, which hit the car which he was repairing, causing it to pass over his body. He lingered for about twelve hours before death resulted." The company makes some question as to the payment of premium, and the agent of the company, on September 3, 1910, writes that the assured paid his insurance on the first day of July for July and August, and that he had credited the book on that day with the July and August premiums. The premium book shows that the July and August premiums were paid on July and August 1st respectively. The company sends Claim Adjuster J. H. Donan to adjust the loss, and he has an interview with the agent to whom the premium was paid. Mr. Donan states: " I could not break down or vary his statement of record that the $5 was paid to him by the deceased July 1., 1910, and that he gave deceased a receipt bearing date of payment. " The beneficiary is about four miles out, and I drove out and found her, and went over the case, and she had the receipt for the $5 — • which she said her husband had turned over to her about the middle of July, and that she 268 National Convention of Insurance Oommissionees would make affidavit the premium was paid promptly July Ist. * * » Mr. Corn (the agent who received the premium) stands well here, and there are no charges against him for acts of dishonesty. And while it is a hard matter to understand how he would collect $5 and forget it and not discover he had the extra and unaccounted for cash is hard to reconcile, but I do not want to take any chances in Alabama courts, so rejected her claim and re- viewed the facts of the failure of Mr. Corn to remit, and finally offered $500 and gave check for that amount, taking release and the policy. This woman is left penniless with five little children, and her father is so poor he can- not do anything for them. * * *" Final proofs are not filed in the jacket. From the evidence in the jacket, company seems to have no direct proof that the premium was not paid on July 1st. Examiner's 'No. 55; Claim No. 343,344; Industrial — H. H. Gordon — Death -^ P. F. 2112. Death benefit $500. Assured was burned in his house, the result of these burns causing his death. As far as the proofs show the company seems to raise no question as to the facts in the case, the compromise being based upon the payment of premium. The assured did not pay premiums for the months of June and July, but, as admitted by the agent, the assured did pay on August 10, two months' premiums. Agent claims that the assured told him that these premiums were to be applied for the months of June and July, inasmuch as the agent had out of his own pocket advanced the premiums for those two months. The receipt book of the assured enters the premiums as paid for the months of June and July. The records of the agent in the office of the company show that the agent reported June paid, but did not report July paid, thereby lapsing the policy for the month of July; so that if the assured had been killed in the month of July, he would have been under no benefit whatever. When the agent sent his report in for the month of August to the company, he marked on his report after the name of this policyholder, " Re-instated August 1st,'' indicating that the two premiums that had been paid by the insured would apply for both June and August. There seems to be no reason why policyholder should paj- the July pre- mium, as during that month he was not under any benefit as shown by the records of the company, and the payment of back premiums would be abso- lutely useless as far as any benefits accruing were concerned. Dr. Keller, of the company, adjusted the loss for $406. The agent claims that the August premium had not been paid. On the advice of the agent, the company endeavored to pay back to the beneficiary the August premium and not pay any benefit under the policy. The matter was placed in the hands of an attorney by the beneficiary, and the compromise settlement made for $405. Examiner's No. 56; Claim No. 381,210; Industrial — C. A. Johnson — Death — P. F. 2112-.!. Assured resided in Chicago, 111., and was insured as a '■machinist, bench;" death benefit $400, and was drowned while bathing. Eye witness stated that deceased was on a plank when in some way the plank got away from him and he was drowned. Industkial Health and Accident Settlements 269' The files do not indicate why the loss was compromised, but the jacket seems to show that it was personally settled by L. E. Brown, claim superin- tendent, for $275. Examiner's No. 57; Claim No. 332,925; Monthly Commercial — -John Jordan — Death — P. F. 2124. When the assured, who resided in 'X'roy, N. Y., was on the street some one tossed an umbrella out of the window, which he endeavored to catch but missed, and >i part of it struck him in the eye, injuring the same, and causing his death a week later. The surgeon who examined the assured stated that, the assured was killed " By having point of umbrella rib punctured into eye." The medical examiner of this company wrote to Dr. Emmott Howd, of Troy, N. Y., requesting he make an investigation concerning the accident. Dr. Howd reports as follows, on .Tune 18, 1909: "Your claimant, John Jordan, was injured about May 15th, by puncture wound passing through the inner can thus of the eye and presumably from the description of the wound, through the base of frontal portion of brain. Tetanus set in a, few days later and the man died from this cause on May 22, 1909. Claimant's health and eyes were in normal shape before injury." No final proofs were in the jacket and the claim was adjusted for $1,000 by L. E. Brown, Claim Superintendent personally. No reason is given for the reduction from the benefit $2,000 to the compromise settlement of $1,000. Examiner's No. 58; Claim No. 338,423; Monthly Commercial — Grant Daven- port—Death — P. F. 2124. Death benefit $1,000. Assured resided in Argenta, Ark. Proofs show that insured was employed as a creosote laborer, and was struck in the stomach by the breaking of a chain cable with which he was working. The proofs seem to indicate that there was no other reason for the cause of his death. The Hooper -Holmes Information Bureau reported that three witnesses to the accident had stated that the deceased was injured as set forth in the proofs. The company endeavors to settle the loss with the beneficiary for $200, also desires to have a, post-mortem examination made of the body of the deceased. A suit is brought by the beneficiary. The company writes to the lawyer whom they employed that " undoubtedly the company will have considerable difficulty in defeating liability in the event that this suit should ever come to trial." On March 14, 1910, counsel for the company writes to the attorney it had employed to defend the case, as follows; in speaking especially of the external evidence of the injury: " In this connection I might say that I have not been unmindful of the provisions of law and fact suggested by you, and am inclined to agree with you in believing that our defense is not as strong as it might be. I am, however, disposed to believe that there is still a possibility of our being able to effect some salvage if we keep up a strong bluff to the last minute. ♦ * «- If all efforts in the way of bluff and diplomacy fail I believe we will have no difficulty in settling the case on the basis heretofore proposed at any time before it goes to the jury, and am inclined to think that if it becomes necessary the best interest of the company will be served by so doing." The attorney they had employed states that as the deceased was a negro it would be practically impossible to prove that there were no external marks 270 National CoirvENTioBr of Insurance Commissioners of injury. With this in mind the counsel for this company writes a letter to the attorney which it had employed on March 18, 1910, from which the following is an extract: "You are already aware of the fact that I am not strongly impressed with the strength of our defense in this case. I have stated that I practically agree with you in your conclusion as to the defense that there was no external mark of injury." The attorney then takes up the question of the prorate on change of occupa- tion, but from the proofs submitted there seems no question but that the assured was actually killed while engaged in his regular duties. In con- clusion he writes to the associate attorney to make overtures for a com- promise and says: " If you are totally unable to do so, you are authorized to draw draft on this company in any sum up to the face of the policy and dispose of the case rather than let it go to the jury." The compromise settlement was effected before the trial for $900. The total expense incurred by the company in resisting the payment of this loss amounted to more than the face of the policy. VII — Attempt to Compromise Examiner's T^'o. 59 ; Claim No. 340,6.36 ; Industrial — • Henry L. Mosley — Eya — P. F. 2112. • Benefit $100. Assured resides in Mobile, Ala. Company does not raise any question as to the justice of the claim. The agent who settled the claim holds a profit-sharing contract. On August 10, 1909, the agent, A. Strauss, writes to this company as follows: "Henry Lee Mosley, policy No. 1505094. While working at ^Vhistler Car Shops a piece of iron flew in his eye while striking chises with a sledge ham- mer, and completely put his eye out. I paid him $30 and told him to go to work as soon as he could and he need not return the balance if he could get to work before the month was up. He is very much elated and so is his aunt, who thinks he will be able to go to work in a week. If no one gets on to it we may not have to pay him for the loss of his eye." On September 6, 1909, the agent writes again to the company and in speaking of the loss says: " I tried to get rid of it with one month and would have succeeded had not Dr. Dixon put in a bill for $75 and put him wise. I have advanced him $30. The claim is straight and honest, so please send me a final proof, if you want one filled out, and if not advise me and I will pay the other $70 due and take up the policy." In answer to the above letters the superintendent of claim department writes to the agent on September 16, 1909, as follows: "We have your report in the H. L. Mosley case. We trust that the action you attempted to take in this case will work out the way you intended it, and have every reason to believe it will." The agent was compelled under the circumstances to pay the full amount of the claim. Industrial Health and Accident Settlements 271 Examiner's No. 60; Claim No. 355,691; Goal Mine — P. Garcia — Death — P. F. 2152. Death benefit $200. Assured resided in Gibson, N. Mex., his occupatioi) being a coal miner. Company endeavors to reduce the loss to one-tenth under its policy, which provides that death by asphyxiation reduces the claim to one-tenth of the death benefit. The assured was a coal miner, and a fire broke out in the air course of the mine, and he was Icilled by the smoke when endeavoring to get out of the mine. The manager of the Inter-Mountain division of the company, Mr. Kellogg, writes to the claim department of the company that the fact of his having been overcome and finally died on account of asphyxiation would hardly, in his opinion, justify the company in settling the claim on a basis of $20. The same manager writes further to the company on January 25, 1910, after he had settled the loss in full: " We cannot afford to take a chance on this business just now by cutting a claim to $20 that we all know positively could collect through the courts for $200." Examiner's No. 61; Claim No. 325,252; Factory — ■ Martim Piute — Limi — /••. F. 10210. Benefit $500. Assured resided in Pueblo, Colo. The proofs show that the assured lost his hand by having same injured in a steel roll and amputation was necessary. The company endeavors to prorate the loss on change of occupation and on March 17, 1909, the following letter was sent to the agent of the company: " I have always been led to believe that a roll hand is not the same as a greaser in a rail mill, and that a, roll hand did not have to perform the duties of a greaser which Piute was performing when this accident hap- pened. It looks to me considering our excessive loss rate, that it might be well to study duties and requirements quite closely and see if this cannot be made a. $400 claim instead of a $500." In reply to that letter the agent writes, on March 24, 1900, as follows: " In this connection beg to advise that it is the writer's desire to keep the loss rate at this point down as low as possible, but I cannot see where we can consistently malce any salvage on this loss." The letter further states that the assured was engaged in his regular occu- pation when injured. The agent settled the claim in fiill. VIII — Arbitrary Reduction Examiner's No. 62; Claim No. 391,739; Railroad — L. G. McQueen — Limi — P. F. 2182. Benefit for loss of limb $750, plus $10 surgeon's fee; total $760. Assured resided in Pratt City, Alabama. Insured as storekeeper's helper and changed occupation to convict guard. The proofs of loss and other information contained in the jacket showed that when the assured was walking around cells he dropped his gun into an opening between two planks; the trigger caught, firing off the gun, the shot entering his arm, making it necessary to amputate same. Company raises 272 National Convention op Insueanoe Commissionees no question of fraud. In the afSdavit of the claimant in the proofs as to his limb loss he wrote after the question "For loss of limb" "$750;" after the question " What indemnities are you claiming " he -wrote " $140." Uhe company requests Claim Adjuster J. H. Donan to see the assured and on February 9, 1911, the superintendent of claim department wrote to Mr. Donan as follows: " You will observe the insurance was taken out as store-keeper's helper for the Southern; tliat he was working as a convict guard at the time he lost his hand. A guard and a. store-keeper are about the same hazard, hence we do not believe there is any reduction on that score. There was originally some question as to whether McQueen was a convict or guard, but it seems to be decided in his favor that he was guarding, not guarded. He makes out his proof asking for $140 and we have had a little correspondence with him which indicates that that is the amount he is claiming in settlement of this claim on the basis of time indemnity. It might be well to feel of him and issue draft for that amount if we properly interpret his claim." After seeing the assured, Mr. Donan writes to the company on March 2, 1911, as follows: " I found Leonard G. McQueen today, two miles out from Pratt City. He has long since resumed guard duty. I felt him cautiously for draft for the $140 and he then said what about the $750 for the loss of arm, and the surgeon's fee also. I did not get into the hole too far to get out grace- fully but I called his attention to what he had written in the proof and he said yes, and up at the top I put in the $750 and the company also said I was entitled to the surgeon's fee. It took me two hours to get him convinced that he was not entitled to both benefits, and did my best to get away from it on $500, but could not. I went $650 and he refused. I finally stripped him with check for $700 and took release and the policy." Examiner's No. 63; Claim No. 388,808; Monthly Commercial — J. D. Fisher — Death — P. F. 2124-A. Death benefit $1,200. Assured lived in Waycross, Ga. The certificate of death in this case shows that the assured had tetanus, and other proofs show that the cau.se of tetanus was the puncture of the foot from a nail. An attorney was employed by the beneficiary. The proofs filed in the case show that the circumstances of the accident were as stated above and that death occurred from tetanus. Claim Adjuster Donan was sent to adjust the loss. He writes on March 29, 1911, as follows: " I settled this claim today by going to Greenland and driving out ten miles to where the beneficiary and her son were. $900 was the best figure to attract them and I gave check for that amount and took release and testimonal letter." No reason stated why the claim was reduced from $1,200 to $900 unless advantage taken of late notice. Examiner's No. 64; Claim No. 359,061; Industrial — D. W. Thomas — Eye — P. F. 1075-A. Benefit for loss of eye $133.33. Assured resides in Conneaut, Ohio. There is no question as to the loss of the eye and the letter referred to in the following letter does not seem to be in the jacket, unless it refers to the preliminary notice of injury which states that the assured was unable to Industrial Health and Accident Settlements 273 work for nine weeks. The company writes a letter to the assured on February 1], 1910, as follows: " We are in receipt of notice from you of disability beginning January 17th. We note you say that a settlement on nine weeks basis will be satisfactory to you. Enclosed herewith you will find our draft for $80 which is practically the same as your proposition. If you care to accept it place the draft in your bank and same will be taken care of on presentation here." A memorandum in the jacket shows the computation which made the disability benefit come to $84. Under that computation appears the following : " Eye loss one-third $400 =: $133.33 " and then below that, underscored, appears the word " cheapest " with a mark pointing to the $84. The loss was settled on the basis of $80', although the specific benefit for the loss of an eye is $133.33. Examiner's 'No. 65 ; Claim No. 347,557 ; Industrial — Cormick McGarvey — Death — P. F. 2112. Benefit $200. Assured resided in New York City, N. Y. The evidence taken before the coroner's jury shows that the assured was working for the American Express Company, New York City, and accidentally fell down a flight of stairs and was killed. The witnesses examined before the coroner state there was no evidence of intoxication. Final proofs of death show that the physi- cian who examined the deceased stated that the insured was not under the influence of liquor at the time of his death. The papers in the jacket do not show why the claim was compromised, but only $156 M'as paid. Examiner's No. 66 ; Claim No. 334,726 ; Industrial lethro Murphy — Death — P. F. 2112. Policy Form 2112 provides that where the injury causing loss reesults from the intentional act of the insured, or of any other person, the benefit payable under the policy shall be one-fifth of the amount which otherwise would be payable. The proofs of death show that the insured was murdered by another negro, and the report of the Retail Credit Company was to the same effect. Under the one-fifth reduction clause beneficiary was entitled to $40. The adjuster compromised and settled the loss for $25, the reason for such reduction not being shown in the jacket. IX — Breach of Warranty The policy forms contain this provision: "In consideration of the war- ranties and agreements contained in the application herefor " the company agrees to pay the respective benefits cited in the policy. Examiner's No. 67 ; Claim No. 333,909 ; Factory — ■ Harry Baldwin — Death — P. F. 1021-C. Benefit $500. Assured resided in Gary, Ind. The correct name of the assured was ?Ienry Marren, but he took out the policy under the name of Harry Baldwin. From the proofs submitted and other information contained in the jacket there seems to be no question but that the Harry Baldwin who was insured was the man who was killed while in the employ of the Illinois Steel Company at Gary, Ind. The company in its letters admits that the 274 Natiujyal Convention of Instjkance Commissionees man insured was the man killed. The company claims that because the as- sured did not give his correct name, possibly because he had deserted from the United States Army, there was a breach of warranty. No final proofs seem to have been filed, at least they are not in the jacket. There seems no question as to death from accidental causes. A memorandum dated July 8, 1910, found in the jacket and signed by R. B. Webster contains the following: " The attorneys in the East in the Harry Baldwin case wrote to the Steel Company asking about a settlement. The Steel Company replied that they had already paid the widow $10,000. Mr. Halsted reports this and states that probably it would be difficult to determine whether or not the proper parties are at interest in the East and that possibly we will hear nothing further from the claim." No later correspondence appears in the jacket and nothing was paid on the claim and jacket endorsed " Disallowed." Examiner's 'Ko. 68; Claim No. 339,371; Railroad — Hutch Gamhle — Death — P. F. 1020-C. Death benefit $1,000. Assured lived at Memphis, Tenn. Assured was a freight brakeman and was run over by an engine. Company raises no question as to the cause of death. In the application the assured stated that the beneficiary was to be Robbie Gamble, his wife. It appears from the docu- ments filed in the jacket that the assured had been married to a Mandy Gamble, but had left his wife and was living with the woman by the name of Robbie Gamble. The company resists payment of the loss on ground that there was breach of warranty in that the beneficiary was not actually the wife of the assured. The statutes of the State of Tennessee state that no written or oral mis- representation of warranty, made in the negotiations of a contract or policy of insurance or in the application therefor, by the assured, shall be deemed material or defeat or void the policy or prevent its attaching, unless such misrepresentation is made with actual intent to deceive, or unless the matter represented increase the risk of loss. The company states that this breach of warranty increased its risk of loss, although it is admitted that the as- sured was killed by an engine while engaged in his regular occupation. Suit was brought and compromise settlement made before trial for $oC0. Examiner's No. 69; Claim No. 398,533; Railroad — llarnj h. Eggling — Death — P. F. 1021-0. Death benefit $500. Assured lived in Cedar Rapids, Iowa, and was em- ployed as a freight brakeman and killed while engaged in his regular occu- pation. The company raises no question as to the accidental cause of death. The assured in his application named as his beneficiary Margaret Eggling, his wife. It appeared after his death that the woman named as beneficiary was not the wife of the assured. Company denies all liability under the policy on account of this breach of warranty. An attorney for the bene- ficiary writes to the company on May 29, 1911, stating that upon investiga- tion he had ascertained that the beneficiary was the affianced wife of the assured at the time he took out the policy, and threatened to bring suit. No further correspondence appears and nothing whatever has been paid on the claim. Industeial Health and Accident Settlements 2Y5 Examiner's jVo. 70; Claim No. 355,336; Monthly Commercial — Dan Crowley — Veath — P. F. 2124-A. Insured as " stationary engineer, firing also," benefit $1,200; pro-rated to " common laborer," death benefit $400. Assured lived in Buffalo, N. Y. In his application for a policy assuTed made the beneficiary Olive Crowley, his ■wife. After his death it appeared that the beneficiary was his brother's wife. The company paid $400 after the prorate, and on January 3, 1910, the superintendent of claim department wrote to its agent the following letter: " If your statement is correct and there can be no doubt about it as your investigation makes the point clear to you, there was false warranty in the application which designated Olive as wife, which would justify the company rejecting the claim and refunding any premium which may have been paid, but as there is a prorate in the case and probably no fraud intended it probably would be best to accept the construction which you have outlined to those interested, namely, the payment of $400 to Olive, and to that end I am enclosing you a draft drawn for that amount payable to the party named as beneficiary without designation of the relationship." Examiner's A'o. 71; Claim No. 365,'066; Industrial — William Smith — Eye — ■ P. F. 2112-A. Benefit for loss of eye $66.66. Assured lived in Platter, Okla. Company resists full payment on the ground that insured was older than stated in the application. The agent, W. L. Brimon, stated that he had disposed of the claim on the oasis of $50 and in his letter of May 21, 1910, further states: '■' It seems there was nothing for me to do but to get a compromise in this case, inasmuch as this party was willing to make oath that he was not over 47 years of age. However, I am of the opinion that he is 50 years of age or more. I find that this party has paid an annual premium in advance, so I have lifted his policy contract and return same herewith. * * » You will note that premium is paid up to December 1, 1910." Policyholder lost his eye on January 31, 1910, so that the policy had still ten months to run, which would make the advance payments $13.00. Company does not raise any question as to the justice of the claim itself except as to the age of the assured, but the jacket or proofs do not show that the assured was older than he had claimed. The full benefit under this policy would therefore be $79.66. The policy was cancelled, and the advance premiums were not returned to the policyholder. X — Intoxication Examiner's No. 72 ; Claim No. 360,252 ; Industrial — Ned Johnson — Death — P. F. 2085. Policy Form 2085 has no specific reference to intoxication. Death benefit $200 ; assured resided in Buxton, lo'Wa. It seems from the proofs and letters in the jacket that the assured had been carried to the house late in the afternoon of the accident, and the boarding-house in which he lived was burned to the ground about eleven o'clock at night, and the assured was burned to death. The company resists payment on the ground that the insured was so intoxicated that he was unable to escape from the house at the time of the fire. There is nothing whatever in the jacket to show that the assured was still intoxicated at the time the fire occurred. 276 Natioital Convention of Insueance Commissionees Even if it is admitted that the assured was intoxicated at six o'clock, it is not shown that he was intoxicated at eleven o'clock, and the policy contract does not mention intoxication as a reason for reducing the amount payable under tlie policy. The claim was compromised by Dr. I). H. Keller for the sum of $50. Examiner's Ko. 73; Claim No. 369,118; Monthly Commercial — E. G. Bower — Death — P. F. 2124. Policy Form 2124, Part VI, Section B, provides: " Where the injury causing the loss is sustained while the insured * » • is under the iniiuence of any intoxicant, narcotic or aniesthetic * * « the amount payable shall be one-fifth of the amount which otherwise would be payable under this policy." Death benefit $2,200. Assured resided in Glenco, Ohio. Insured as " Post office clerk, office Avork." Company resists payment of tho loss on the ground that insured was intoxicated when injtired. The company sent its adjuster, G. W. Donalson, to adjust the claim. The adjuster interviewed the ticket agent of the Baltimore & Ohio railroad with whom the assured was talking a few minutes before his death. This ticket agent informed the adjuster that the assured was sober when he talked with him and that he had never informed any one that the assured was drunk as had been previously claimed by the company. His investigation showed that from the evidence he received the man was not intoxicated at the time he was killed. The general claim agent of the Baltimore & Ohio Railroad Company on May 4, 1910, wrote to this company that in the papers he had in relation to the accident there was no reference to this man being intoxicated. The coroner writes to the company that he had been informed by the doctor (Dr. Moffatt) in attendance and also by the ticket agent that the man was intoxicated. As explained before the ticket agent absolutely denied ever having made such a statement and Mr. Donalson in his investigation learned from the ticket agent himself that the assured was not intoxicated. In the proofs of death filed. Dr. Moffatt states in his affidavit that the de- ceased was not, to his knowledge, under the influence of liquor at the time of the accident. An attorney was employed and a compromise settlement effected for $1,600. Examiner's No. 74; Claim No. 394,250'; Industrial — E. J. Close — Death — /'. F. 2112-4. Policy Form 2112- A, Part V, Section B, provides; " Where the injury causing the loss is sustained while Ihe insured • * * is under the iniiuence of any intoxicant, mircotic or anaesthetic * * * the amount payable shall be one-fifth of the amount which otherwise would be payable under this policy." Deatli benefit $400. Asslired lived in St. Paul, Minn., and met with an accident causing death by falling through a plate-glass window. The attorney employed by tlie company writes to the company that there would be a great deal of difficulty in endeavoring to prorate this man, as he was per- forming the same duties when he was killed as when he was insured. The agent also states that the only point upon which the company has to stand in resisting a suit was the intoxication clause referred to above. The agent Indtjstbial Health and Accident Settlemeitts 2Y7 states, in a letter to the attorney of the company dated March 9, 1911, that after much research he had been unable to find any proof of intoxication, and the whole matter regarding the use of intoxicants by the insured was one of conjecture and that the more they inquired into the matter the more it appeared that the character and habits of the insured would prerlude even such a, possibility, and that they could not find any proofs. The company's correspondence indicates that they had a very weak case and in a letter written to the agent on March 11, 1911, in answer to the letter of the agent, the following extract appears : " While there is perhaps some merit in your suggestion that some of the defenses mentioned in my letter of March 9th cannot be sustained, I believe that you had better take the position strongly in the negotiations for settle- ment that we will be able to substantiate all of these defenses." On March 29, 1911, the agent writes, to the company further and says that although the accident looked peculiar, in that it occurred after eleven o'clock, he stated that the assured came out of a theatre about eleven o'clock at which time he was not intoxicated, and was killed within half an hour, and that it appeared unreasonable to suppose that he had time to become intoxicated. Also this expression: " As a matter of fact our inquiries have elicited nothing whatsoever deroga- tory to the deceased in the matter of habits as to drink and attending vices." The company, however, made a compromise settlement before the trial of the suit and paid $325. Examiner's No. 75; Claim Wo. 397,506; Monthly Commercial — /. N. Carter — ■ Death — P. F. 2124. Policy form extract appears above under Claim No. 369,118. Death benefit $1,500. Assured lived in Jersey City, New Jersey. Com- pany had S. 7j. Goodstein investigate the loss and his report as filed in the jacket shows conclusively that after a thorough investigation there was absolutely no proof of intoxication. The assured was killed by falling down stairs and the company was especially endeavoring to prove intoxication. The adjuster sa,ys in his report dated December 22, 1910: " I have gone over with the Aetna Claim Adjuster all those points and we have tried to establish some grounds upon which to deny liability, or to get sufficient footing to effect a liberal settlement with the representatives of the beneficiary and we found very little ground for that." It appears that the claim agent of the Aetna settled their $2,000^ policy for $1,400. This company succeeded in settling the loss for $1,000. The adjuster states further: " I made a strong stand on the breach of warranty clause as in an applica- tion for the policy Carter failed to mention the fact that he already carried $2,000 policy with the Aetna. The beneficiary placed the entire matter in the hands of Mr. Cunningham and his attorney and if it had not been for that fact we could have made a much larger salvage." Examiner's iVo. 76; Claim No. 402,924; Monthly Commercial — S. G. Comp- ton — Dcath — P. F. 2124. Extract from policy contract is quoted above under claim No. 369,118. Death benefit $1,500. Assured resided in Tiptonville, Tennessee, his occu- pation being general merchant; general store. An agent of the company, 278 NATioifAL Convention of Insueancb .Oommissionbes F. B. Smith, investigated the loss and sends to the company four letters from individuals who claim that the assured was drunk and the Retail Credit Company and the Hooper-Holmes Information Bureau also reported that their correspondents had learned that the assured was drunk. The assured was driving and fell out of the buggy, fracturing his skull and soon after died. Qhe company desires to settle the loss for one-fifth of the face of the policy, or $300. The coroner stated on January 31, 1911, that the cause of death was that he was thrown from his buggy and killed. The company on February 9, 1911, writes to Claim Adjuster J. H. Donan, St. Louis, and this letter contains the following: " Our agent, T. B. Smith, is perfectly reliabl-e and all right, and has made for us quite a good investigation resulting in showing first, that Compton was drunk; second, the policy was lapsed, in all probability, unless we accept the theory that it was paid to the agent and never reached us. In any event the first defense should enable you to settle for one-fifth, or $300." Mr. Donan made his investigation and in a letter dated February 19, 1911, writes to the company that without question the premium had been paid to the agent, but that the agent had stolen the premium. In speaking of the Compton claim he says: " They had us on this claim. We could not prove intoxication and I simply got desperate at their refusal to come down and took a team and went out and brought the beneficiary in and bufi'aloed them. The lawyer Donaldson owns the plantation where Compton was in charge and he said Compton had lived there six years and he had never seen; him drunk. I pinned those alleged statements of intoxication and they all backed up. None of them ever saw Compton take a drink and that is what you have to have when you go into a court of law and then we get licked. * * * If I ever had to use my cunning it was at Tiptouville, for the odds were against me. I gave Mr. Smith, our representative at Dyersburg, some useful hints and I look for improvement in future cases arising." Mr. Donan succeeded in settling the case on a compromise basis for $350. Examiner's No. 77; Claim No. 351,632; Monthly Commercial- — Arthur Lalii- erte — Death — P. F. 2124. Policy provision referred to above in case ^fo. 369,118. Death benefit $2,000. Assured resided in Holyoke, Mass. Attorney em- ployed. Proofs show that assured was riding in an automobile which ran into a tree, the collision thereby resulting in his death. He was not driving the car. Tlie company endeavors to prove that the assured, together with the rest of the party, had been indulging in intoxicants. The Retail Credit Company reporting on the accident states that the assured was not a drinking man, although a moderate drinker, and that very likely the man who ran the machine was intoxicated. Also that the habits of the assured were not bad. A report from the Guardian Mercantile Agency dated December 20, 1909, states that it had learned from its correspondent that the assured was a moderate drinker and did not use intoxicants to excess. A letter from the Hooper-Holmes Information Bureau dated January 14, 1910, states that so far as they were able to learn there was nothing to show Industeial Health and Accident Settlements 279 that the assured drank any intoxicating liquors previous to the time lie was killed, and that there was no evidence in the report of their correspondent that the assured was actually under the influence of liquor at the time of the accident. G. W. Donalson, who was sent to adjust the claim, stated in a telegram dated March 25, 1910, that in his opinion the party was under the influence of intoxicants, but that he thought they would be unable to prove it. The claim was compromised for $1,000. XI — ^Unnecessary Exposure Examiner's ^o. 78; Claim 2Vo. 366,168; Industrial — F. E. Oosa — Deaths P. F. 879. Death benefit $200, plus accumulation of $20. Assured lived in Xunbridge, Vermont. The assured was injured by falling off the edge of a chair during a friendly frolic; died a few days afterwards. The division superintendent of the company, located at Burlington, Vt., wrote to the company on April 1, 1010, as follows: " This party was a man weighing about 230 lbs., was at a neighboring town attending the Sons of Veterans' meeting. Before the meeting began they got to scuffling and pulling sticks, etc. It seems that Mr. Goss chal- lenged the boys to down him. They tried without success. He supposed that they were through scuffling, when some one of the crowd clinched him and got him to swing. He lost his balance, struck a chair and broke his rib." On April 15, 1910, the Hooper-Holmes Information Bureau reported in part as follows: " The accident happened on March 8th. He struck on the edge of a chair. * * * He was suffering from no disease, bodily infirmity, or defect at tirhe of accident, and was not under the infiuence of liquor or drugs. The accidental injuries were the sole and proximate cause of death. ♦ * * No reason to suspect that the death was not purely accidental." On April 25, 1910, the company wrote to J. W. Green, its agents, as follows: " Herewith a partially completed draft for use in the Goss case. It is our custom to consider ourselves liable for one-fifth only under such condi- tions. There was no accident in this case. None whatever. Everything happened just as they intended it should, — with, of course, the exception of the injury. In other words, they int-ended to do what they did do, but the result was different from what they expected, which does not constitute an accident. Furthermore, we would call this unnecessary exposure to obvious risk of injury. For your information will say that we do not have a great deal of trouble in disposing of small claims, at least, on this basis. We think it quite likely that you will in all probability be able to secure a compromise, and we suggest that the claim be for business reasons com- promised on a one-fifth basis, which the late policy would provide under such conditions." As stated above, the policy was written on Form 879, which did not carry any reference to " voluntary exposure to unnecessary danger or obvious risk of injury," but contains the clause that the contract does not cover " voluntary over-exertion " and " unnecessary exposure to apparent danger." Eve'n on the one-fifth basis company does not pay the full amount, as the accumulations would amount to one-fifth of $20. The claim was compromised for $40. 280 National CoNVENTioisr of Insueance Commissioners Examiner's No. 79; Claim No. 329,425; Railroad — E. V. Long — Death — P. F. 2183. Death benefit $1,000. Inaured lived in North McAIester, Oklahoma, In- sured as oar repairer or oiler. The employer in the proofs of death swears that the occupation of the insured was as stated in liis policy, " car re- pairer or oiler '' and while riding on an engine coming back to the tool shanty after having oiled the stock train, he was killed by jumping off the engine. The company claims that he therefore exposed himself to unnecessary danger and Claim Adjuster G. W. Donalson compromised the loss and settled the same for $400. Mr. Donalson in a letter dated May 22, 1909,- states as follows: " A car repairer and oiler would have no business on the foot board of a switch engine, and if he should take the chances to do so to get about the yard, why would he not be assuming a greater risk than it was intended to cover in his contract, or in other words, would he not be liable to have his settlement prorated to that of switchman or brakeman ? " It is Eomev'hat indefinite as to whether the claim was reduced to on the ground of unnecessary exposure or whether it was on the basis of a pro-rate from a car repairer or oiler to switchman or brakeman. There fcema to be no question but what the assured was actually engaged in his regular occupation when killed. Examiner's No. 80; Glaim No. 334,758; Bailroad — Fred Johnson — Death — P. F. 2115. Death benefit $1,000. Assured lived in Yoakum, Texas. Insured as " Caller of Train Crews." He was killed while riding on the side of a car and his employer stated that at the time ho was killed he was delivering a message to the yard master. He was riding on the side of a box car which did not clear another car standing on the siding and he was knocked off and rolled between cars and killed. The company reduces the claim but does not state just why it should be reduced. He was engaged in his regular occu- pation and when killed was performing duties under orders from his employer. Claim was settled by Claim Adjuster Donalson for $400, the reduction seemingly being on the ground of exposure to unnecessary danger. The com- pany in writing to Donalson June 21, 1909, states that this appears to he another case of salvage similar to the Long case at North McAIester. The facts concerning the McAIester case are cited above under " Examiner's No. 79, Claim No. 329,425. Examiner's No. 81; Claim No. 348,776; Monthly Commercial — J. M. Oill — TAmh — P. F. 2124. Policy Form 2124 provides that: "Where the injury causing the loss results wholly or in part from voluntary exposure to unnecessary danger or obvious risk of injury the amount payable shall be one-fifth of the amount which would otherwise be payable." Death benefit $600. Assured resided in Waycross, Georgia. Assured, while engaged in his occupation of car checker in yard, attempted to board a moving locomotive on his way to another part of the yard, but stumbled and fell over a switch stand, his right leg being caught under the train. Industeial Health and Accident Settlements 281 Compjiny defends on the ground of unneoesbary exposure to danger. Com- promise settlement was made for the sum of $240. Examiner's jfi'o. 82; Claim Wo. 339,782; Railroad — Louis Crump — Death — P. F. 1020-O. Policy Form 1020-C provides: "Where the accidental injury causing the loss results from violating the law, the amount payable shall be one-eighth of the face of the policy." This provision presumably refers only while the assured is not engaged in his occupation. Section B, of Part III, of the policy provides that: " Where the accidental injury causing loss results from voluntary exposure to unnecessary danger or obvious risk of injury while the insured is engaged in his occupation, « » * the amount payable shall he one-fourth of the amount otherwise payable." Death benefit $2,100. Assured resided in Chicago, Illinois. Assured was employed as a sleeping-oar porter, and missed connections with the car which he was to take in the yard. While walking up the railroad track to take another car at the railroad station he was struck by a, train and killed. Company defends on the ground of unnecessary exposure to danger. Suit was brought and compromise settlement made before trial for $1,000. Examiner's No. 83 ; Claim No. 372,07.5 ; Railroad — J. E. Braninger — Limb — P. F. 2156. Policy Form 2156 provides: " Where loss results from voluntary exposure to unnecessary danger or obvious risk of injury * * * the amount payable shall be one-tenth of the amount otherwise payable." Limb loss benefit $300. Assured resided in Hammond, Louisiana. The company claims that the assured was endeavoring to board a moving train, when he slipped and fell under, thereby losing his limb. Company resisted payment on ground of exposure to unnecessary danger. Admit that they have no proofs and would probably lose in court. Suit was brought and a compromise settlement made before trial for $237.50. XII • — Trespass Examiner's No. 84; Claim No. 321, 1S2; Railroad — Joe Castrianni — Death — P. F. I020-B. Policy Form 1020-B, Part 3-A, provides that " Where the accidental injury causing the loss results from or is received while quarreling, fighting or violating the law," the benefit shall be one-eighth of the amount otherwise payable. This section seems to apply only when the assured is not engaged in his occupation, because section B of part 3 of the policy contains this provision: " Where the accidental injury causing the loss results from voluntary ex- posure to unnecessary danger or obvious risk of injury, * * * while the insured is engaged in his occupation, the amount payable shall be one- fourth of the amount otherwise payable." Death benefit under policy $1,000. Assured resided in Kansas City, Mo. Assured had left the service of the Missouri, Kansas & Texas Railway Co., and was sleeping in a bunk car of that company without permission, and 282 Natiojstal Conven"tion of Insueance Commissionees was killed by a train which collided with the car in which he was slseping. The assured was waiting for the pay ear to arrive,, in order that he could "receive his pay check. Tliis company claims he was a trespasser, and there- fore entitled to one-fifth only. Attorney was employed and suit brought, and the case was compromised before trial and settled for $500. Examiner's No. 85; Claim No. 375,767; Industrial — -I. E. West — Death — /•. F. 2112-A. Section B, Part V, provides : " Where the injury causing the loss results wholly or in part from voluntary exposure to unnecessary danger or obvious risk of injury " the indemnity payable shall be one-fifth of the amount other- wise payable. Death benefit $200. Resided in Andrews, N. C. Assured killed while walk- ing on the tracks of a railroad. Reduced to one-fifth, and $40 paid. XIII — Intentional Injuries Examiner's No. 86 ; Claim No. 325,991 ; Factory — Joe Zergarats — Death — • P. F. 102 1-C. Policy Form Xo. 1021^C, Part III, provides: " Where the accidental injury causing the loss results from voluntary exposure to unnecessary danger or obvious risk of injury or from the in- tentional act of the insured or of any other person (assaults committed upon the insured for the sole purpose of burglary or robbery excepted), * ♦ * the amount payable shall be one-tenth of the amount which otherwise would be payable under this policy." Death benefit $500. Insured lived in Gary, Indiana. The Retail Credit Company reporting on the loss states that a dispute arose between the aa- sured's cousin and another. The assured interfered as a peace-maker and tried to prevent them from fighting but did not participate in the fight nor provoke same in my way. His cousin, whom he was trying to protect, drew his revolver and shot at his adversary but missed him and hit the assured. A further report on the case from 0. W. Packard, who seems to be a physi- cian, states that the assured was not mixed up in the iiyht in any way and was not under the influence of intoxicants. The report from the Chief of Police states that the assured was accidentally shot by his cousin while the assured was endeavoring to act aa peace-maker. Xo final proofs are in the jacket, the outside of which is m.arked " Not proven " and nothing what- ever has been paid thereon. Examiner's No. 87; Claim No. 395,530; Monthly Conunercial — Ed. Haywood — Draih — P. F. 2124-A. Policy form provides, part VI, section E: " W'here the injury causina; the loss results from the intentional act of the insured, or any other person, the amount payable shall be one-fifth of the amount which would otherwise be payable." Deceased was insured as ti carpenter foreman, supervisor, class "C;" death benefit $2,000. He was pro-rated on account of chance of occupation to car- penter, class " D ;" benefit $1,200. Q^he aflSdavit of the beneficiary filed in the jacket stated that the insured was killed while accidentally playing, and he was shot in the left leg, just above the ankle. The eye witness to the accident Industrial Health and Accident Settlements 283 makes affidavit that the assured was phiying, and was aecideiitally shot. The person who did the shooting was indicted for murder, and the following letter from Adjuster Donalson, to the company, under date of May 21, 1911, shows how the case was disposed of: " Settled to avoid law suit, for $525. Draft out in favor Hattie Haywood and Green and Boyd. All the bunch of negroes got together and have gone before the grand jury and have sworn that Haywood and Henderson were playing, and that the-shot was accidental. County attorney told me he would have to dismiss the case against Henderson. This, of course, left us no defense, and it was a straight question of how much 1 could talk them out of." Loss vras compromised for $525. Examiner's Ifn. 88; Claim No. 401,978; Monthly Commercial — W. K. At- water — Death — P. F. 2.124-A. Policy form 2124-A provides in Part VI, section B: " Where the injury causing loss results wholly or in part from the in- tentional act of the insured or of any other person (assaults committed upon the insured for the sole purpose of burglary or robbery excepted) * * * the amount payable shall be one-fifth of the amount which otherwise shall be payable under this policy." Death benefit $1,200. Assured was a negro living in the City of Milner, Georgia, and was killed by white-caps. The code of the State of Georgia states that burglary is the breaking and entering into the dwelling, mansion, or store-house, or other place of business of another, where valuable goods, wares, produce, or any other articles of value, are contained or stored with intention to commit a felony. Under this provision of the code the case seemed to resolve itself into a question of fact as to whether the assured was inside of the house when killed. The death proofs filed state that the assured was at his home in bed when murdered by the night-riders or white-caps. The company sent its claim adjuster, J. H. Dorian, to settle the claim. His report, after his investigation,' shows that the assured was in his night-clothes and in bed, He further states: " While all the facts in this case seem against us when it comes to a question of law, at the same time behind it all, above it all, and over it all is the undisputed fact of intentional injury infiicted. No doubt this case, put to the jury, would go against us for the full amount, and a greater injustice could hardly be imagined. When you sift it down, the deceased was murdered in cold blood at his fireside, — for in this room there was a fireplace, and he was shot down standing just to the side of it, — when they sprung a fasten- ing on a, door and entered." Mr. Donan further states that he went over the situation with some rela- tives of the deceased and " Pushed the settlement over for $400." XIV — Notice Examiner's No. 89; Claim No. 338,197; Industrial — To7n Watson — Death — P. F. 2112. Death benefit $100. The assured was a miner living in Searles, Ala. The agent of the company, W. A. Brown, at Birmingham, Ala., writes to the company on July 20', 1909, the following letter: " While at Searles, Ala., last week I learned that Tom Watson, Policy 1,659,077, got killed about the 20th of June. There has never been any notice 284 I^ATIOlSrAL CONVEBTTIOIT OF INSURANCE COMMISSIONERS of it given in to this ofFioe and the timekeeper at that place was my informant. I suspect we will hear from it within the next few days, however. The return list for the month of June from Searles showed that he was cut for $4.80 for that month." In answer to that letter the company writes on July 27, 1909, the following letter : " We have your letter of July 20th referring to the death of Tom Watson. No notice has been received at this office as yet. The beneficiary lives at Wyland, Ala., we believe, and is required to notify the company in order to receive the full amount within ten days from the happening of the accident causing the death. We will hold the claim until we hear something further from him." Nothing further appears in the jacket and nothing whatever was paid on the claim. Examiner's No. 90; Claim No. 401,678; Industrial ^ Fj-ed Rivers — Death — r. F. 2112-A. Death benefit $300; assured was a carpenter; living in Polatka, Florida. The agent for the State of Florida writes to the company on March 8, 1911, as follows: " Beneficiary under this policy has never furnished this office with a written notice. However, she or her representative has been in this office a number of times in reference to the claim. We are quite sure that this man died from natural causes and the company is due no liability whatever. However, it is a question whether or not it will be best to furnish the beneficiary with proof blanks and formally reject the claim, or let it drag along as it haa for the past several weeks. What do you think about it? " March 16, 1911, the company answers the letter of this agent in the fol- lowing manner: " We have yours of the 8th instant, Fred Rivers matter, and in reply to same will say that we believe it will be best to let it sleep for the present and perhaps we will never hear anything from it." Proof blanks vere not sent and nothing paid on claim. Jacket endorsed, '■' Not proven.'' Examiner's No. 91; Claim No. 322,959; Coal Mine — -S'fcre Radulovitch — > Death — P. F. 2152. Death benefit $200. Assured lived in Berwind, Colorado. The insured was a miner and was killed in a coal mine. A doctor in Berwind, Colo., wrote to the company on June 2, 1909, asking that proof blanks be sent to him. Company replies on June 13, 1909 : " In this case it will be necessary that those interested secure from the father a power of attorney, entitling some one in your vicinity to act for him in connection with this matter, in order that some one be legally qualified and in position to receive any settlement which may be due." In a. letter to the company's agents, Bennett & Wilson, dated June 24, 1909, the superintendent of the claim department states, in part as follows: " The death claim is having attention, proof of death having been furnished Dr. Lee June 1 1th. As early as they can get that proof in shape, we are pleased to pay anything we owe, which we judge is $200." The final death proofs do not seem to have been filed, and nothing has been paid on the claim. Industeial Health and Accident Settlements 285 Examiner's TV'o. 92; Ciaim No. 337,111; Monthly Commercial — Eugene Mul- ling — Death — P. F. 2124. Death benefit $2,000. Assured lived in Brewster, N. Y. As to the payment of premium, the city manager of the New York office writes on July 10, 1009, that: "Policy was written December 5th, first premium due January 1st; Janu- ary and February paid. What more was paid is a matter of speculation, but it would not surprise me if the account were receipted up four or five months in advance. * * *. You will recall that Cross disappeared short in his accounts in March, with a good many advance collections. * * *. Let us hope there is no receipt book out against us." An attorney in White Plains notified the company on July 9, 1910, that the assured was killed at Brewster on July 6, 1909. The Hooper-Holmes In- formation Bureau reported that the assured was killed while in charge of the change of the location of a steam shovel, and that his death was due to an accident. Company, on July 27, 1909, addressed a letter to G. S. Galloway, of the New York office, asking him to make an investigation as to whether the premiums on the policy were paid. On October 2, 1909, the company again addressed a letter to Mr. Galloway, asking what he had done regarding investigation of the premium payment. On October 11, 1909, Mr. Galloway addresses a letter to the company, stating that it would take a day to go to Brewster and back, and that it would not be convenient for him to go. Also: " As nothing further ever came up about the claim, I thought it would die a natural death, the claim having been forfeited on account of the failure of the estate to file proof within the required time. * * * Don't you think it would be safe to file the claim away not proven ? " On October 15, 1900, the company replies to Mr. Galloway's letter as follows: " Ordinarily I would feel satisfied to let this matter drag. The $2,000 principal sum is the only feature in the case that is causing any uneasiness. But, at this date, it would not be advisable to stir up the claim. If there is any information you can secure regarding the payment or non-payment of premium without arousing any suspicion, you will of course do that, but we will take chances on the claim coming up again." Xo final proofs were sent to any one, and nothing further seems to have been done concerning the claim. Examiner's No. 93; Claim No. 359,672; Industrial — John Srok — Death — P. F. 2112. Death benefit $200. Resided in Flat River, Mo. Proofs show that assured was shot hy another in the leg, making it neces- sary to amputate same. The benefit for loss of limb is $100. The proofs and other correspondence show that there was no question that the assured actually lost his limb. In a letter to the assured, under date of May 7, 1910, the following appears: " We are in receipt of proof from you of the loss of your limb. Your policy pays one-half for the loss of the limb under certain conditions, and if you will refer to paragraph V, Special Accident Indemnities, you will see that when injuries are received in the manner in which yours were, the amount of the company's liability is one-fifth of what would otherwise have been payable. " We also refer you to the notice provision. This provides that unless notice is received in ten days, the company would not pay to exceed one- 286 National Convention of iNstrEANOE Commissionbes fifth of what would otherwise have been payable. For either of these reasons the company could cut your claim to one-fifth, and if it desired to do so, it might pay you one-fifth of one-fifth — which would be $4. We presume you understand that you are entitled to a fifth only." The company writes to its agent that its tender of $20 is full limit of its liability. Xothing whatever seems to have been paid to anyone on this claim. Jacket marked " Not Proven." Examiner's No. 94; Claim No. 410,076; Industrial — A. W. Vaught — Death — P. b\ 2112-A. Benefit $100. Resi'ded in Tliurman, Va. Occupation of the insured was " Teamster, hauling logs, lumber and supplies." Company was notified by J. C. C. Blair, his employer; also by J. F. Telley, agent, of the accidental death of the assured. Mr. Blair stated that the wife of the assured had been in bad health since the accident, and for that reason requested proofs sent to him personally. The premium card shows that all premiums were paid. On February 28, 1911, the company addresses a letter to its agent, respecting the notice received from him containing the following: " We are, however, unable to take your letter as a notice of the claim ; for, as you possibly know, the policy requires that notice must come from the beneficiary, direct, and in writing." Company also writes his employer, Mr. Blair, on March 10, 1911, as follows; " Certain requirements are made of the beneficiary under the policy. In a case of this kind, and until these requirements are complied with, the company could take no action with reference to the matter." No final proof blanks were sent to any one, and nothing further seems to have been done in the case. The full benefit under the policy, together with a 10 per cent, accumulation, amounting to $10, would be $110. Exaniiner's No. 95; Claim No. 381,335; Monthly Commercial — -Chas. Dennis — Death — F. F. 2124-A. Benefit $1,200. Assured lived in Bingham, Utah. Assured was killed intentionally by another, and the benefit reduced to one-fifth, and $240 was paid. Respecting notice, letter from Manager Kellogg, of the Inter-Mountain Division of the company, to District Manager Ewing, of Salt Lake City, Utah, dated July 19, 1910, contains the following: " In fact no action lias been taken, as the Claim Department have repeat- edly r\]led that they have not received notice of death of any assured until the beneficiary, or some legal representative of the beneficiary, furnishes them with proper notice." Mr. Ewing had written on July 6, 1910, to Manager Kellogg, stating that death benefit on the policy would probably by $240, and also: " We are in no hurry to adjust this claim, feelingr that it would be better to let the matter go slow until such time as the widow will leave Bingham, which we feel confident she will do in the very near future." Beneficiary later gave notice, and claim was settled under the one- fifth pro- vision, for $240. Industrial Health and Accident Settlements 287 Examiner's No. 96; Claim No. 406,640; Industrial — Joe Washington — Death — P. F. 2112-A. Insured as '' Fireman of Locomotive." Death benefit $300. Class " E," pro- rated to " Brakeman log train " class " FF," death benefit $100. Paid in full. On January 24, 1910, the agent of the company in New Orleans writes to the company and states that they have been advised of the death of the insured and requests death proof blanks to be sent to them. On February 1, 1911, the company writes to Wiseby Insurance Agency, of New Orleans, as follows: '■ We have yours of January 24th with the notice of the death of Joe Washington. We have not as yet received notice from the beneficiary and will take no action until same is received. Whenever you hear from your sub- agents that some one has been accidentally killed immediately thank them for it and wait for notice fiom the beneficiary named in the policy before taking any notice of the claim." Examiner's No. 97; Claim No. 411,005; Industrial — Charles Kaylor — Death — P. F. 2112-A. Death benefit $200 ; insured as a " Farm laborer ; " resided in Oskaloosa, Iowa. The agent of the company notifies the company of the death of the insured and requests the company to send the necessary papers in order that they may be sent to the widow. The company replies to the agent on March 8, 191 1, as follows: '■' We have yours of March 2nd advising us of the death of Charles Kaylor. Certain requirements as to notice are made by the contract and the company caimot take any action in the matter until these requirements are complied with. We thank you for the information given us." The beneficiary's lawyer notified the. company and proper papers were sent and the claim was paid in full. XV — Suicide Examiner's No. 98; Claim No. 334,436; Industrial — John Redman — Death — P. F. 2112. P. F. 2112-A, Part I provides: " If the insured while this policy is in force, shall receive personal bodily injury (suicide, sane or insane not included), the company will pay indemnity as provided in the policy contract." Part V-B: "If any of the losses covered by this policy (1) where the injury causing the loss results * * ♦ from the intentional act of the insured, or of any other person (assaults committed upon the insured for the sole purpose of burglary or robbery excepted ) , the company agrees to pay one- fifth of the amount which would otherwise be payable under the policy." Benefit .fSOO. Assured committed suicide. Company denies liability under policy; nothing paid. Examiner's No. 99; Claim No. 331,803; Railroad — ■ Zenas S. L. Potter — Death — P. F. 1020-C. P. F. 1020-C, provides that indemnity is payable if assured, " Shall receive personal, bodily injury which is effected directly and in- dependently of all other causes through external, violent and purely accidental means, ( suicide sane or insane not included ) ." 288 National Coh^vention of Insueanoe Commissionees Part III-A, provides that the indemnity is payable: " ( 1 ) Where accidental injury causing the loss results from the intentional act of the insured, or of any other person, while the insured is not engaged in his occupation (assaults committed upon the insured for the sole purpose of burglary or robbery excepted), in which event the amount payable shall be one-eighth of the amount which would othervnse be payable under the policy." Death benefit $2,000 with transfer rider No. 2011 attached but not filed in jacket, 'this rider increased the death indemnity payable under the policy by $300. The agent states on June 18, 1909, in a letter to the claim de- partment of this company that he had adjusted the claim on the basis of $250 and states: " Ihe proper adjuatm.ent is probably $287.50, as indicated by your own figures on face of jacket." Ihe insured killed himself while at home and if the company is liable under this policy for suicide the amount of benefit would be $287.50. The amount paid was $250. XVI — Miscellaneous ( a ) Fremium Payments Examiner's No. 100; Claim No. 329,293; Industrial — -W. E. Huckaby — Death — /'. F. 2112. Death benefit $100. Insured was a miner, living in Attalla, Ala. The question in this case is as to the premium payment, which was due on April 1st. Ihere is no question but what the assured was accidentally killed in a mine while regularly employed in his duties. The assured was employed by the Alabama Consolidated Coal & Iron Company, and the cashier who col- lected the premiums for the mine wrote to W. E. Kice, Manager for the Continental Casualty Company at Birmingham, Ala., on April 15, 1909, and the following is an extract from that letter: " This is to advise you that W. E. Huckaby was killed in our mines here yesterday evening, by slate falling on him. I don't know his status on your books. £ do know, however, that he sent you his policy and demanded a release therefrom ; also forbidding me to cut his time for any more premiums, * * * I had not informed Mr. Huckaby that I intended to cut him this month, though I intended to do so unless I heard to the contrary from you. * * * His premium is paid if you have not discontinued or lapsed his policy." On April 17, 1909, the agent, W. E. Rice, writes to the claim superintendent of the company, and an extract from this letter is as follows: " Enclosed please find a letter received from ilr. \Y. J. Davis, cashier at Attalla, Ala., of the Alabama Consolidated Coal & Iron Co. Mr. Davis does the collecting for us at this mine, and you will note that he states that the premium for the month of April has been paid. ♦ » * Huckaby returned his policy on the 2nd of April, and I did not notify the pay- master not to cut him for his insurance. I wrote to Mr. Davis' today and told liim that the policy had been cancelled, as Mr. Huckaby had requested us to cancel his policy and stated that he would not, under any circumstances, pay another cent for this insurance." In answer to the letter of Mr. Rice, claim superintendent writes: " In answer to your inquiry as to where we stand, I assume that you have the policy. It may be that it is too late for you to get into telephone IHTDTISTBIAL HbALTH AND AcCIDENT SETTLEMENTS 289 communication with the Deduction Clerk and have the item overlooked. If it is, and the item should be placed on our roll in regular course and claim should be filed within the time limit by the beneficiary or legal repre- sentative thereof; as far as I now see the circumstances would indicate their right to present claim promptly. We had better await developments to know jubt exactly how to proceed. If there is yet time to suggest the compliance with request for cancellation, you might attend to that by phone. Forward policy to this oflioe at your convenience, returning this letter with your reply." On May 3, 1909, the agent writes to the company as follows: " I received the pay-master's return list from Attalla, Ala., and have for- warded it to Chicago. This is the mine where Mr. Wm. E. Huckaby was employed. You will note by referring to this roll, that no deduction was made on account of Huckaby's insurance for the month of April. The pay- master for this mine called at the office yesterday and he stated that he had already cut Huckaby for his insurance for the month of April, when he was killed, but had not included it on our list yet. When the widow called for Mr. Huckaby's wages, he paid her in full, not retaining anything for the insurance. He stated that he explained to the widow that Mr. Huckaby had returned his policy and the same had been cancelled, and that there was no possibility of us hearing anything more about the claim. " Mr. Davis is the pay-master who stands to lose the $24 in the Fox Hall ease, which I have written you about several times. He undoubtedly saved us $100 in this instance, and it might be a good plan to show our apprecia- tion by remitting him a check fbr $24 to reimburse him for the expense he went to on account of the Fox Hall funeral." From the correspondence shown above there seems no question but that the policy was not cancelled prior to the date when the assured was killed; that his premium had actually been deducted from his wages on April 1st, tliereby keeping the policy in force for one month, and that the policy was actually in force on the day the insured wiis killed. Under the circumstances the widow did not file any proofs, and nothing whatever has been paid on the claim. Examiner's No. 101; Claim No. 350,366; Monthly Commercial — Ernest Camp — Death — P. F. 2124. Death benefit $1,500. Insured as a machinist in a garage, general duties not testing, and he resided in Chicago, 111. The assured was driving an automobile, which ran into the river, and he was killed. Tlte facts as to the premiiim payments are that the policy was lapsed in October, but that on November 2d the assured paid to the agent for the company premiums for the months of October and November. The company claims that, even though the premiums was actually paid to the agent on the 2d, tiiat it had not reinstated the policy at the time the assured was drowned on the 7th of November, five days later, although the insured lived in Cliica.go, the liome office of the company. Company claims that when the premium was presented with request for reinstatement, it was refused, claiming that the premium did not reach the home office until after the accident had occurred. Suit was commenced, and a compromise settle- ment made before trial for $300. Kxammer's No. 102; Claim No. 325,355; Monthly Commercial — W. H. Mor- gan — Death — P. F. 2124. Death benefit $2,000. Assured resided in Pratt City, Ala. The company does not seem to dispute the fact that the deceased met his 10 290 National Convention" of iNstrEANOj; Commissioners death from accidental means. The question in the case seems to be as to whether the policy was in force at the time of the accident on March 4th, or whetlier the policy expired on March 1, 1900. The policy was issued on July 16, 1908, and the premium payments from the evidence in the jacket are shown as follows: Policy fee $3 00 August 1 50 September 1 50 October '. 150 November 1 50 December and January 3 00 February 1 50 Total $13 50 The company does not charge a policy fee on monthly commercial policies and it has been stated by the superintendent of the claim department that the reference to policy fee in the above table of premiums paid was a mis- take and also that all other reference in the jacket to policy fees is a mis- take and that the company did not mean what it said in referring to policy fee. With that construction it is shown by the above column that the premiums paid were sufficient to cover insurance for nine consecutive months which would include each month from July to March, inclusive. The above table of premiums paid appears in a letter written by the superintendent of claim department to its agent on March 20, 1909. In the correspondence in the jacket the company seems to contend that the $3 was a policy fee and not a premium, although this does not seem possible when the company states that no policy fee is ever collected on monthly commercial policies. If the above statements of the company are correct then the policy was in force on March 4, 1909, the date on which the assured met his accidental death. The company seems to have tried to impress upon the attorney for the beneficiary that the $3 was a policy fee and did not apply as a premium payment. Suit was commenced and a settlement made before trial for the sum of $500. (6) A'o Final Proofs; Nothing Paid Examiner's No. 103; Claim No. 368,564; Industrial — J. H. Boiven. — Eye — P. F. 2112-4. Benefit for loss of eye $100. Assured lived in Milltown, Ga. The preliminary proofs of loss show that the assured lost his eye by an accident while driving n nail in a, board. Proofs were sent to the assured but nothing further appears in the jacket. Final proofs do not seem to have been returned. Nothing was paid on the loss. Examiner's No. 104; Claim No. 379,715; Industrial — Harrison Goodmn — Death — P. F. 2112-A. Death benefit $300. Assured lived in Wheatley, Ark. The evidence in the jacket shows that the assured was killed probably by another, which would reduce the benefit to $60. The assured was colored and no final proofs Indttsteial Health and Accident Settlements 291 seem to have been returned. The benefit due in this case would be $60. Nothing paid. Father notifies company of death; company replied on July 5, 1910, as follows: " We have your favor in the Harrison Goodwin matter. When we receive notice by the proper, party interested in the matter will be pleased to give same consistent attention." Jacket endorsed " Not proven." Nothing paid. Examiner's No. 105; Claim No. 369,044; Industrial — D. A. Van Dyne — Death ~P. F. 2112-A. Assured resided in Bartlesville, Okla., and was insured as an " Oil well driller no explosive." Death benefit $300. Assured was killed by the ex- plosion of a squib used to fire a well shot. The company states in a letter to its agent April 8, 1910, as follows: '■' In this case I think it is advisable to ignore everyone except the bene- ficiary and take no action until notice is received. When notice is received it would appear that our extreme liability would be $100, as the old manual makes ' Oil well driller using explosives ' an ' FF ' with $100 limit. The latter manual, however, decides that using explosives render the occupation non-insurable. A fair compromise of the matter might be a. 50% or $50." The final proofs do not seem to have been filed and nothing has been paid on the loss. The jacket shows that the premiums were paid up until the time of the death of the assured. Examiner's No. 106; Claim No. 339,493; Factory — 8. F. Jenkins — Death — ■ P. F. 1021-C. Death benefit $1,000; assured resided in Gary, Indiana. Report from the Hooper-Holmes Information Bureau in the jacket shows that the assured had undoubtedly been murdered. The company was notified of the death by the recording secretary of the I. O. O. F. of Anaconda, Mont. In acknowledging this letter, the company says: " The matter will have consistent attention." No proof blanks sent and nothing paid on claims. Examiner's No. 107; Claim No. 346,303; Industrial — Tracy Shannon — Death — P. F. 2112-A. Death benefit $300, assured resided in HoUisterville, Pa. Letter from the mother and the Erie railroad states that the assured was killed while tres- passing upon the tracks of the Brie Railroad Company. Final proof blank was sent to the mother but does not seem to have been returned. The lia- bility on the part of the company would be one-fifth of the face of the policy, or $60. Nothing has been paid. Jacket endorsed "Disallowed." Examiner's No. 108; Claim No. 377,487; Monthly Commercial^!. &. Allen — Death — P. F. 2\2i-A. Death benefit $2,000. Assured resided in Charleston, S. C. The investiga- tion of the claim was made by the Hooper-Holmes Information Bureau, and their correspondent wrote them on July 1, 1910, as follows: "I have personally investigated this matter, and I inquired from several persons who were intimately acquainted with him. He does not appear to 292 Natiottal Contention or Insurance Commissionbes have suffered from any disease or infirmity that I have been able to learn of. I think the evidence establishes beyond a doubt the fact- that he was plaster- ing overhead, and fell from the scaffolding, and that he immediately died before a physician could be summoned. I talked with a woman next door, who endeavored to get a physician and failed to do so in time. * * * The physician, Mr. McGuire, who held a post-mortem, claims that the death was caused by the rupture of the aorta. He was never known to have been sick before, and I would therefore judge that the rupture must have been caused by the fall. I saw the scaffolding from which he fell, and from the close quarters I would judge he must have been badly wrenched in the fall." Company requested the coroner to furnish copy of the findings at the autopsy. This shows that the physician gave the cause of death as rupture or aneurism of ascending aorta. The deceased was a colored man. In regard to notice, company wrote to its agent on .Tune 21, 1910, that " Notification has not been made to this olfice of this death or a desire upon the part of the beneficiary to file claim for any indemnity which might be due and payable. Therefore I am taking no recognition of this claim, and will not until notice is formally filed here direct by the beneficiary, and I will thank you to disregard any notification which may be made directly or indirectly to your ofiice." Company has filed the jacket away, marked " Not proven,'' and nothing has been paid on the claim. (c) Proof Blanks Not Sent Examiner's No. 109; Claim No. 325,226; Industrial — B. B. Hanson — Death — P. F. 893. Death benefit $200 ; assured was a farmer, residing in Osseo, Wisconsin. The daughter of the insured writes to the company on March 4, 1909, stating that her father had met with a violent death on the 22d of February last. The company replies to the daughter as follows: "We beg to acknowledge receipt of your letter of March 4th advising us of the death of your father, H. B. Hanson. Policy formerly held by your father is made out to his estate and it will of course be necessary therefore for the administrator of the estate to take this matter up with us." The State- Bank of Osseo writes to the company stating that the original policy of the assured had been destroyed by fire and asking for a duplicate. Company replies that as copies of these old policies were not then in their possession it would not be necessary to furnish a duplicate policy. There was no question that the premiums had been paid, nor that the person mentioned as having been killed was the assured. No final proofs were sent out by the company. Nothing was paid on the loss. Jacket en- dorsed " Not Proven." (d) Poison Without Suicidal Intent Examinei's No. 110; Claim No. 348,158; Monthly Commercial- — Eugene E. King — Death — P. F. 2124. P. F. 2124, Part VI, Sec. B, provides: "Where the injury causing the loss, or the loss itself results wholly or in part » * * from any poison, vapor or gas * ♦ *^ the amount payable shall be one-fifth of the amount which otherwise would be payable under this policy." Death benefit $1,200. Assured resided in Pendelton, Ore. Proofs filed show that at the suggestion of his wife the assured took laudanum for toothache. Industrial Health and Accident Settlements 293 the use of the drug causing his death. Under the one-fifth clause of the policy the beneficiary claimed $240 and an attorney was employed. In letter to the attorney written by the superintendent of the claim departmo7it on June 15, 1910, the following statement appears: " In this case nothing accidental happened according to the reports filed. The assured voluntarily and knowingly took certain poi.'son for certain pur- pose with a result merely different from that which he is supposed to have expected. Therefore such action was not in any sense accidental but the necessary and legitimate result of a deliberate, voluntary act on his part. However, in order to dispose of the matter, and as a compromise merely, we tender you herewith for your client a draft for $100." The claim was settled for the $100. Exhibit B Deaih, Limb and Eye Loss Claims Investigated Industrial and Monthly Commercial — Xo. of Cases. Totals. 1909 161 1910 141 19U 40 342 Railroad — 1909 168 1910 153 1911 61 384 Coal Vine — 1909 .■ 20 1910 24 . 44 Factory — 1909 19 1910 13 1911 1 33 Ticket — 1910 1 Grand Total 804 Industrial and Monthly Commercial Claim 1909 Number 320,172. Industrial. Death loss. Benefit $500. Killed by another and re- duced to one-fifth. $100. 321.023. Industrial. Death loss. Benefit $400. Reduced to $200. 327.034. Monthly commercial. Death loss. Benefit $500. Paid in full. 326,964. Industrial. Death loss. Benefit $200. Reduced to $40 on account of death bv disease. 327,825. Industrial. Death loss. Benefit $300, plus $30 accuTnulations. Re- duced to $220 on account of occupation. (See Exhibit "A," Ex- aminer's No. 18). 294 National Convention of Insurance Commissionees L'laim Xumber 329,867. iloiithly commercial. Limb loss. Benefit $1,250. Reduced to $1,000 on ground of change of occupation. (See Exhibit "A," Ex- aminer's No. 48 ) . 331,411. Industrial. Limb loss. Benefit $50. Paid in full. 331,4!l(i. Monthly commercial. Death loss. Benefit $1,000. Pro-rated to $400, account change occupation and exposure. Insured as coke drawer; killed while setting brake on car. 334,323. Industrial. Death loss. Benefit $1,000. Company claims suicide. Coroner's report "Accidental drowning." Nothing paid. 334,210. Industrial. Limb loss. Benefit $50. Paid in full. 334,635. Industrial. Death loss. Benefit $600. Pro-rated to $150. Occu- pation changed from "inspector and overseer' — office duties" but that he also did janitor work. Also some doubt as to cause of death. 334,726. Industrial. Death loss. Benefit $40, being one-fifth of principal sum $200. Paid $25. Should have paid $40. (See Exhibit "A," Ex- aminer's No. 66 ) . 335,633. Industrial. Death loss. Benefit $300. Eeduced to $60 account tres- pass and exposure. Attorney employed. Reduction seems to be justifiable. 326.230. Industrial. Death loss. Benefit $300. Murder case. Settled for one-fifth, $60. 325,938. Industrial. Death loss. Benefit $300. Suicide. Paid one-fifth, $60. 332.925. Monthly commercial. Death loss. Benefit $2,000. Insured as Musician and Concert Hall Singer. Paid $1,000. Nothing in jacket to show why benefit was reduced. (See Exhibit "A," Ex- aminer's No. 57.) 333,911. Industrial. Death loss. Benefit $400. Company paid $400. Bene- ficiary entitled to $40 accumulations. 333,126. Industrial. Death loss. Benefit $500. Paid in full. Letter from company suggests that agent figure out a pro-rate. 332,722. Monthly commercial. Death loss. Benefit $2,500. Suicide. Com- pany denies liability. 334,456. Industrial. Death loss. Benefit $300. Suicide. Nothing paid. 330,931. Industrial. Death loss. Benefit $500. Intentional shooting. Com- pany paid one-fifth. 328.231. Monthly commercial. Death loss. Benefit $1,000. Disallowed. Death from natural causes. 325,226. Industrial. Death loss. Benefit $200. Papers incomplete. 324,734. Industri,al. Death loss. Benefit $100. Paid $100. 325,041. Industrial. Death loss. Benefit $300. Nothing paid. Claim death from natural causes. 325,096 Industrial. Death loss. Benefit .¥200. Paid in full. 324,895. Monthly commercial. Death loss. Benefit SI .500. Settled for $100. Company claims lapse, also intentional shooting. Attorney emploved. 320.821. Industrial. Death loss. Benefit $200. Paid in full. 326,800. Industrial. Eye loss. Benefit $166.66. Company claims injury was rppoived hrfore policy was issued. Substantiated by news- paper clipping. 32(i.687. Imluatiial. Death loss. Benefit $300. Suicide, and company denies liability. 328.576. MoTithlv commercial. Evo loss. Benefit $250. Paid in full. 326,397. Industrial. Death loss! Benefit $400. Paid ?!330. Insured as "Chief Fni'inper, Pt-itionarv — ^not firins." Pro-rated to "Sta- tionary Engineer, Firinsr." (See Exhibit "A," Examiner's No. 47). 329.412. Industrinl. Deiith loss. Tienefit .f400. Paid in full. 329,293. Industrial. Death loss. Benefit $100. Nothing paid. Important correspondence. (See Exhibit "A," Examiner's No. 100.) Industeial Health and Accident Settlements 295 Claim Number 329,440. Monthly commercial. Eye loss. Benefit $500. Suit and compromised for $350. 330,413. Industrial. Death loss. Benefit $600. Paid in full. 330,231. Industrial. Death loss. Benefit $300. 330,645. Industrial. Death loss. Benefit $200. Company claimed died from natural causes. Nothing paid. 329,352. Industrial. Death loss. Benefit $300. Pro-rated to $100. Insured as " Hostler Assistant." Class XD. Changed occupation to coal miner. Justified. 329,193. Industrial. Death loss. Benefit $100. Miner. Paid in full. 330,956. Industrial. Death loss. Benefit $1,000. Insured as "Traveling Liquor Salesman." Company claimed intoxication. Suit and compromise for $550. 328,703. Industrial. Death loss. Benefit $300. Killed while walking on railroad track. Reduced to one-fifth and $60 paid. Company does not consider notice from agent valid notice. 331,384. Industrial. Death loss. Benefit $200. Paid in full. 319,030. Monthly commercial. Death loss. Benefit $1,000. Murder case. Reduced to one-fifth, and $200 paid. 319,356. Industrial. Limb loss. Benefit $600. Pro-rated to $200. Insured as " Stationary Engineer," killed while acting as crane man in smelter. (See Exhibit "A," Examiner's No. 51). 319,429. Industrial. Death loss. Benefit $300. Conductor electric railway. Paid in full. 319,924. Industrial. Death loss. Benefit $200. Paid in full. 320,128. Industrial. Death loss. Benefit $100. Miner working underground. Paid in full. 320,095. Monthly commercial. Limb loss. Benefit $500. Paid in full. 321,290. Industrial. Death loss. Benefit $100. Intentional killing by wife. Attorney employed. Suit, and compromised for $50. 341,467. Industrial. Eye loss. Benefit $100, plus $10 accumulations. Paid in full. 321,370. Industrial. Death loss. Benefit $100. Paid in full. 320,023. Industrial. Death loss. Benefit $300. Paid $60. Question as tff whether death resulted from alcoholism or fractured leg. Paid one-fifth, ignoring accumulations which should have been paid, $6.00. 319,060. Industrial. Death loss. Benefit $200. Paid $40. Claiming trespass. 320,905. Industrial. Limb loss. Benefit $150. Reduced to $100. Insured as " Cabinet maker not using machines." Injured while operating machine. 319,424. Monthly commercial. Death loss. Benefit $3,000. Company claims death not due to accident. Justified. 318.030. Monthlv commercial. Benefit $1,000. Killed by another. Paid one- fifth,' $200. 354,271. Industrial. Death loss. Benefit $600. Pro-rated to $200 on account of change of occupation. Insured as " Bookkeeper, office duties only." Reported as "Prospecting miner."' Drowned while cross- ing river with party for pleasure. (See Exhibit "A," Examiner's No. 46). 319,620. Industrial. Death loss. Benefit $200. Insured was murdered and benefit reduced to one-fifth. 319,080. Industrial. Death loss. Benefit $300. Insured as " Packer in cement mill." Pro-rated to "laborer." Company paid $200. 319,158. Industrial. Limb loss. Benefit $100. Insured as " mill hand, yard duties." Changed occupation to " laborer." Killed while hunting. Company in letter acknowledged owed $50. (See Exhibit "A," Examiner's No. 25 ) . 322,667. Monthly commercial. Death loss. Benefit $1,000. Paid in full. Employed by railroad. 296 National Convention of Insueance CoiiiiissiONEES Claim Xumber 322,455. Industrial limb loss. Benefit $100. Paid in full. 322,377. Industrial. Eye loss. Benefit $133.33. Insured as " proprietor restaurant." Injured as " off bearer in saw mill." Pro-rated and company paid $66.67. 323.924. Industrial. Limb loss. Benefit $150, plus $15 accumulations. Paid in full $165. 322.925. Industrial. Death loss. Benefit $200. Paid .$40, one-fifth. Com- pany claimed intentional murder. 324,600. Industrial. Eye loss. Benefit $133.33. Attorney employed. Com- pany paid $10. Company claims fraud in the case and their contention would seem to be correct. 324,900. Industrial. Eye loss. Benefit $100. Company claimed eye was diseased prior to accident. Paid $33.83. 325,524. Industrial. Death loss. Benefit $300. Keduced to one-fifth, $60, on ground that insured was resisting arrest. Verdict of coroner's jury same. 325,355. Monthly commercial. Death loss. Benefit $2,'000. Suit begun and compromised for $500. Company contested claim on ground that premium for month of March, 1909, was not paid. Insured was killed March 4, 1909. From the correspondence it is hard to tell whether premium was paid or not. It looks as though premium was paid and called " policy fee " after man died. (See Exhibit "A," Examiner's No. 102.) 325,451. Monthly commercial. Death loss. Benefit $300. Paid in full. 334,857. Industrial. Limb loss. Benefit $100. Paid in full. 335,740. Industrial. Eye loss. Benefit $133.33. Paid in full. 336,084. Industrial. Death loss. Benefit $300. Company claimed death partly due to pneumonia, and settled case on seven (7) months sick benefit, paying $210. 336,073. Industrial. Death loss. Benefit $100. Question as to cause of death. Relatives living in Germany. Nothing paid. 336,672. Industrial. Death loss. Benefit $100. Paid $50. Nothing in jacket to show cause of reduction. 336,742. Industrial. Death loss. Benefit $200. Claim raised that insured died from natural causes. 336,738. Industrial. Death loss. Benefit $200. Paid in full. Section man on track. 337,153. Industrial. Death loss. Benefit $600. Paid $440. Insured as " Commercial Salesman, selling to dealers." Pro-rated to " Ship- ping Clerk " and claim made that he should be pro-rated to " Fisherman " as he was drowned while fishing. (See Exhibit "A," Examiner's No. 35.) 338,123. Industrial. Limb loss (both). Benefit $300, Paid in full. Con- ductor, electric railway. 338,197. Industrial. Death loss. Benefit $100. Notliing paid. Company refuses to consider notice from agent valid and requires notice from beneficiary. Nothing paid. (See Exhibit "A," Examiner's No. 89.) 337,322. Industrial. Death loss. Benefit $300. Accidentally drowned. Pro- rated from " Tallyman " to " Turndown man." Paid $200. 337,457. Industrial. Eye loss. Benefit $133.33, and accumulations, $13.33. Paid. 338,911. Industrial. Death loss. Benefit $300. Paid iu full. Foreman on pier. Drowned. 339,036. Monthly commercial. Death loss. Benefit $500. Policy lapsed and reinstated August 7. Insured killed August 8 at 1 a. m. Com- pany claimed reinstatement did not take place until 12 o'clock noon. Nothing paid. 339,852. Industrial. Death loss. Benefit $400. Insured as " Electrician Supervising." Pro-rated to '" Electi'ieian, general duties." Paid $300. Industrial Health and Accident Settlements 297 Claim Number 340,206. Monthly commercial. Eye loss. Benefit $333.33. Paid in full. Re- insurance from National CasnaltA* Company. 340,197. Industrial. Eye loss. Benefit $33.33. Paid in full. 339,092. Industrial. iJeatli loss. Benefit $300, plus $30 accumulations. Suicide. Paid one-tenth, $33. 340,883. Monthly commercial. Death loss. Benefit $2,500. Insured as " Planing Mill Proprietor, office duties." Killed by fall from house he was building. Insured was also an architect and con- .tractor. Pro-rated and settled for $2,000. 340,872. Industrial. Death loss. Benefit $300. Murder case. Company paid one-tenth, $30. 338,423. Monthly commercial. Death loss. Benefit $1,000. Paid $900. Suit and compromise. (See Exhibit " A," 'Examiner's No. 58.) 340,868. Monthly commercial. Death loss. Benefit $2,000. Settled for $325. Company claiming death by accident not proven. (Colored.) 339,219. Monthly commercial. Death loss. Benefit $2,000. Suit and com- promise for $450. Question as to cause of death, also intoxication. 342,437. Industrial. Death loss. Benefit $400. Claims death from disease and no liability. 337,111. Monthly commercial. Death loss. Nothing paid. Jacket marked, "Not Proven." (See Exhibit "A," Examiner's No. 92.) Im- portant case. 339,078. Industrial. Death loss. Benefit $300, accumulations $60, and double indemnity: total $660. Settled for $300. (See Exhibit "A," Examiner's No. 1.) 340,906. Industrial. Eye loss. Benefit one-third of principal sum $100, $33.33. Paid in full. 340,968. Monthly commercial. Death loss. Benefit $1,200. Settled for $250. Question whether death was due to accident. 343,751. Industrial. Death loss. Benefit $300. Pro-rated to $150 on ac- count of change of occupation, the amount being a compromise. 341,038. Monthly coinmercial. Death loss. Benefit $1,000, plus 10 per cent, accumulation, $1,100. Pro-rated to $400, plus 10 per cent., $40 on account of occupation. 344,787. Monthly commercial. Death loss. Benefit $1,000. Pro-rated to $400 on account occupation. Insured as " Car Repairer," engaged with wrecking crew at time of accident. 346,493. Industrial. Death loss. Benefit $300. Claim is made that insured was drowned. Coroner gave " heart failure " cause of death. Final proof not filed and nothing paid. 346,524. Industrial. Death loss. Benefit $300. Liability denied by company on account of suicide. Attorney employed, but case dropped. 348,405. Industrial. Death loss. Benefit .$200. Died as result of accident reopening an old gun-shot wound. Company denies liability. 348,425. Industrial. Death loss. Benefit $200. Paid 'in full. 349,029. Monthly commercial. Death loss. Benefit $1,500. Settled for $300 on account of being ahot by another. 350,244. Monthly commercial. Death loss. Benefit $1,200. Insured as " Stationary Engineer." Killed while hunting, and claim pro- rated to "Hunter," $400. (See Exhibit "A," Examiner's No. 31.) 350,551. Monthly commercial. Death loss. $2,000. Settled for $225. Com- pany claimed death resulted from disease. 334,742. Industrial. Death loss. Benefit $300. Claim disallowed. (See Exhibit " A," Examiner's No. 26. ) 340,872. Industrial. Death loss. Benefit $300. Paid one-tenth, $30, because shot by another. 328,576. Monthly commercial. Eye loss. Benefit one-fourth of $1,000, $250. Paid in full. 349,544. Industrial. Death loss. Benefit $100. Paid in full. 351,499. Industrial. Eye loss. Benefit $66.67, plus accumulations. Paid $66.67. Accumulations ignored. Referred to in Exhibit " A." 298 National Convention of Insueance Commissioners Claim Number 350,3'U6. Monthly commercial. Death loss. Benefit $1,500. Paid $300. Re- ferred to in Exhibit " A," under " Premium Payments." 351,632. Jlonthly commercial. Death loss. Benefit $2,000. Paid $1,000. Kelerred to in lixhibit " A," under " Intoxication." 351,631. Industrial. Death loss. Benefit $200. Pro-rated on change of occupation and $100 paid. 350,993. Industrial. Death loss. Benefit $300'. Died from disease. Xo liability. 352,539. Industrial. Death loss. Benefit $600. Paid in full. Killed while hunting. IJiis company lea.rns that United States Casualty Co. will pay hunting cases in full. 340,636. Industrial. Eye loss. Benefit $300. Paid $100. See Exhibit " A." 352,993. Industrial. Death loss. Benefit $200. Paid in full. 345,758. Industrial. Death loss. Benefit $300. Paid in full. 353,529. Industrial. Death loss. Benefit $100. Paid in full. Coal miner. 345,599. Industrial. Limb loss. Benefit $50. Paid in full. 346,828. Industrial. Death loss. Benefit $400. Paid' disability benefit only, as direct cause of death was disease. Paid $75. 437,557. Industrial. Death loss. Benefit $200. Paid $156. Referred to in Exhibit " A " under " Compromise Settlements." 346,599. Industrial. Death loss. Benefit $66.67. Paid in full. 346,332. Industrial. Death loss. Funera.1 benefit $100. Accumulations $10. Accumulations ignored. Referred to in Exhibit " A " under " Accumulations." 346,303. Industrial. Death loss. Benefit $300. Nothing paid. Referred to in Exhibit ■' A " under " No Final Proofs." 348,776. Monthly commercial. Limb loss. Benefit $600. Paid $240. Re- ferred to in Exhibit "A" under "Exposure." 348,625. Monthly commercial. Death loss. Benefit $1,OCO. Paid $450. Re- ferred to in Exhibit " A " under " Occupation." 349,336. Industrial. Death loss. Benefit $300. Paid in full. 350,008. Monthly commercial. Death loss. Benefit $2,000. Died from natural causes. No liability. 348,158. Monthly commercial. Death loss. Benefit $1,200. Paid $100. Re- ferred to in Exhibit "A" under " Poison without suicidal intent." 340,294. Industrial. Death loss. Benefit $400, plus $40 accumulations. Ac- cumulations ignored. Referred to in Exhibit " A." 346,197. Industrial. Death loss. Benefit $500. Paid $300 as compromise settlement. Killed by train, but manner of death not known. 341,686. Industrial. Death loss' Benefit $100. Nothing paid. Referred to in Exhibit " A " under " Notice." 341,414. Industrial. Limb loss. Benefit $2,50. Paid in full. 341,206. Industrial. Limb loss. Benefit $200'. Paid in full. 343,344. Industrial. Death loss. Benefit $500. Compromised for $405. Re- ferred to in Exhibit "A" under "Premium payments." 343,024. Monthly commercial. Death loss. Benefit $2,000. ' Pro-rated. Com- pany claims intoxication. Compromised hy J, H. Donan for $250. 343,880. Montlily commercial. Death loss. Benefit .'t2'.00(l. Died from natural causes. No liability. 342,511. Industrial. Death loss. Benefit $1C0. Paid in full. 341,965. Industrial. Death loss. Benefit $200. Pro-rated to $100 benefit. Paid $50. Referred to in Exhibit " .\" under "Sunstroke." 341,951! Industrial. Death loss. Benefit $200. Paid .*150, Referred to in Exhibit ' A " under " Sunstroke," 341,875, Industrial, Death loss. Benefit $100, Paid in full, 340,340. Industrial. Death loss. Benefit $100. Paid in full. Miner. 344,999. Monthly commercial. Death loss. Benefit $2,000. Died from over- dose of chloroform. Company resists on g)ound that assured had a disease before policy issued. Compromised for $250, Industrial Health and Accident Settlements 299 Claim Number 346,825. Industrial. Death loss. Benefit JSOO. Pro-rated on change of occupation and $200 paid. Referred to in Exhibit " A " under " Occupation." 354,223. Industrial. Death loss. Benefit $200. Paid in full. 353,998. Monthly commercial. Limb loss. Benefit $600. Paid $100. Ee- ferred to in Exhibit " A." 354,171. Industrial. Death loss. Benefit $100. Paid in full. 354,803. Industrial. Death loss. Benefit .$300'. Paid in full. Assured was a street railway conductor. 354,535. Industrial. Death loss. Benefit $300. Paid in full after agent objects to any pro-rate by company. 355,159. Monthly commercial. Death loss. Benefit $2,500. Paid $250. Keferred to in Exhibit " A." 355,336. Monthly commercial. Death loss. Benefit $1,200. Paid $400 on change of occupation. Referred to in Exhibit " A " under " Breach of warranty." 354,856. Industrial. Death Joss. Paid in full. 354,621. Industrial. Death loss. Benefit $100. No final proofs. Nothing paid. 345,470. Industrial. Death loss. Benefit $300. Died from disease. No liability. 353,695. Industrial. Death loss. Benefit $200. Paid in full. 1910 358,054. Industrial. Limb loss claim for $100. Liability denied because premium was not paid to collector designated in premium receipt book. Premium was paid to agent who secured application. 359,990. Industrial. Death claim for .$200. Compromised at $30. Com- pany claimed that insured was suffering from tuberculosis at time he made application. Policy issued Nov. 12, 1909; first medical treatment January 17, 1910; died March 4, 1910. 361,050. Industrial. Eye loss claim for $66.65. Paid in full. 303,389. Industrial. Death claim for $100. Murdered. Indemnity reduced to $20' (one-fifth), under provisions of policy. 365,271. Industrial. Death claim for $300 reduced to $100 by pro-rate on account of change of occupation. Correct per manual. 365,465. Industrial. Death claim for $100 reduced to .$'i0 (one-fifth), because insured was killed by another. 366,168. Industrial. Death claim. (See Exhibit " A," Examiner's No. 78.) 366,312. Monthly commercial. Death claim for $300. Killed Avhile evading arrest. Reduction to $60 justifiable under terms of policj'. 367,978. Industrial. Death claim for $10'0' reduced to $25 on account of breach of warranty; misstatement of age. 369,351. Industrial. Death claim of $300 paid in full. 367,930. Monthly commercial. Annuity death claim. There appears to have been contributory negligence and a compromise at $3,000 was effected. 370,735. Monthly commercial. Death claim for $2,000. Liability denied on account of fraud. Justified. 371,700. IndXistrial. Death claim benefit .foOO, compromised for $3C0. (See Exhibit "A," Examiner's No. 53.) 374,526. Industrial. Death claim for $200 reduced to $100 on account of change of occupation. Pro-rate correct per manual. 374,990. Monthly commercial. Eye loss claim for $500 paid in full. 376,229. Industrial. Death claim. (See Exhibit "A," Examiner's No. 45.) 381,010. Industrial. Death claim benefit $300. Agent reported suicide. Liability denied. Suit brought and settled for $330 which in- cludes 10 per cent, accumulations. 300 ISTatioxal Co:s'ventiox of Insueance Commissioxees Claim Kumber 3S2,459. Monthly commercial. Limb loss claim of $1,0<10 paid in full, but not until after attempt had been made to pro-rate. o&4,761. Industrial. Death claim for $300. Found dead on railroad track. Company claimed not an accident; that he was killed before train struck him. Company offered $60. Attorney employed and suit brought. Compromised at $200. 386,134. Industrial. Death claim for $500. Shot and killed by another. Company urged limited liability under clause in policy which provides that if injury results from intentional act of another, indemnity shall be one-fifth. Also claimed change of occupation. Attorney employed and compromised at $150. 389,112. Monthly commercial. Death claim for $1,200. Compromised at $500. (See Exhibit "A," Examiner's \o. 54.) 389,206. Monthlj' commercial. Death claim for $2,000. Records in jacket indicate suicide. Xo proofs in jacket. Xo indemnity paid. 390,630. Industrial. Death claim for $2,000 paid in full. 390,680. ilonthly commercial. Death claim foi; $400. Death by inhalation of gas. Keduction to $80 (one-fifth) justified under terms of policy. 391,050. Industrial. Death claim for $300 paid in full. 389,483. Monthly commercial. Death claim for $1,500. Records show policy had lapsed at time of accident. Suit begun and claim compromised at $1.50. 389,394. Industrial. Death loss. Benefit $200 plus 10 per cent, accumula- tion. Premium card shows all premiums paid promptly. Settled for $200. 394,499. Industrial. Death loss. Benefit $300. Pro-rated to $200 on ac- count of occupation. Insured's occupation given in application as " Driver of dump cart." Pro-rated to laborer because he loaded and unloaded his cart. Letter from company says in part: "He was actually killed while performing the more hazardous duty. Had he been sitting on his cart allowing the laborers to load his wagon he would not have been killed. This shows the justice of our position." (See Exhibit "A," Examiner's Xo. 39.) 394,918. Industrial. Death loss. Benefit $100. Reduced to $20 (one-fifth) on account of intoxication and trespass. 391,157. Industrial. Death loss. Benefit $400. Pro-rated to $115. Insured as " Foreman of Foundry, Supervising," pro-rated to laborer. 387,226. Monthly commercial. Death loss. Benefit -$2,000. Pro-rated to . $1,200 on account of change of occupation. 386,638. Industrial. Death loss. Benefit $300. Reduced to $75 on ground of unnecessary exposure and suicide. 391,821. Monthly commercial. Death loss. Insured as "Chauffeur" for $1,500. Pro-rated to gardener, $1,200. (See Exhibit " A,'' Exam- iner's Xo. 36.) 388,417. Monthly commercial. Death loss. Benefit $1,200. Company claimed death from disease. No final proofs. 395,077. Industrial. Death loss. Benefit $100. Paid in full. 3S)'6,196. Industrial. Death loss. Benefit lOO. Paid in full. 395,530. .Montlily comnitrcial. Death loss. Benefit $2,000. Settled for $525. Company claimed this was a, case of intentional killing. (See Exhibit '"A," Examiner's No. 87.) 395,009. Industrial. Death loss. Benefit $200. Paid in full. 390,724. Monthly commercial. Death loss. Benefit $2,000. Pro-rated to $1,350 on account of occupation. 397,161. Monthly commercial. Eye loss. Benefit $300. 401,447. Industrial. Death loss. Benefit $400 plus 10 per cent, accumula- tions. Reduced to $80 on account of exposure to danger. 384,332. Monthly commercial. Doath loss. Benefit $1,200. Reduced to $300 on account of change of occupation. Insured as a " Machinist." Engaged in occupation of " Electrician " at time of death. Ibtdusteial Health and Accident Settlements 301 Claim Number 390,393. Industrial. Limb loss. Benefit $50. Paid in full. 388,808. Monthly commercial. Death loss. Benefit $1,200. Reduced to $900 on account of occupation. (See Exhibit " A," Examiner's No. 63.) 356,898. Industrial. Eye loss. Pro-rated from " Stationary Fireman," bene- fit $100 to " Common Laborer," benefit $33.33 and paid. 357,580. Monthly Commercial. Eye loss. Benefit $333.33. Company re- sisted payment on ground of fraud. Suit commences and settled before trial for $25. 357,664. Industrial. Death loss. Benefit $300. Eeduced to one-fifth because assured died from asphyxiation and $60 paid. 357,678. Monthly commercial. Eye loss. Benefit $600. Insured as " Car- penter, Eramer on Buildings." Injured while cutting timber with circular saw. Occupation pi'o-rated to " Carpenter using ma- chinery," benefit $200. Paid $250 in settlement. 357,876. Industrial. Death loss. Benefit $300. Paid in full. 357,851. Industrial. Death loss. Benefit $300. Insured as " Scrap slinger," pro-rated to " Shearsman's helper " and $200 paid. 358,317. Industrial. Death loss. Benefit $200'. Paid in full. 358,323. Monthly commercial. Death loss. Benefit $1,200. Company claims assured died from chroiiic disease. Compromised for $225. 359,061. Industrial. Eye loss. Benefit $133.33. Company raises no question as to loss. Paid $80. Referred to in Exhibit " A " under " Com- promise Settlements." 359,672. Industrial. Limb loss. Intentional injuries. Benefit $100. Re- ferred to in Exhibit " A." 360,587. Industrial. Death loss. No liability. Dies from disease. 360,417. Industrial. Death loss. Benefit $300. Intentionally killed by an- other and reduced to one-fifth or $60 and paid. 360,420. Industrial. Death loss. Died from disease and disability benefit paid in full. 360,252. Industrial. Death loss. Benefit $200. Burned to death. Company claims intoxication. Paid $50. Referred to in Exhibit " A " under " Intoxication." 360,492. Industrial. Death loss. Benefit $300. Assured murdered. Benefit reduced to one-fifth or $60 and paid. 360,105. Monthly commercial. Death loss. Benefit $2,000. Assured mur- dered. Benefit reduced to one-fifth or $400 and paid. 361,791. Monthly commercial. Death loss. Benefit $1,200. Paid in full. 361,447. Industrial. Death loss. Benefit $100. Paid in full. 361,200. Industrial. Death loss. Benefit $200. Paid in full. 303,582. Industrial. Death loss. Euneral benefit $100. Paid in full. 305,006. Industrial. Eye loss. Benefit $66.66. Reduced to $50 by company. Referred to in Exhibit " A." 364,876. Industrial. Death loss. Benefit $100. Company settles for $60 on ground of lapse. 364,868. Industrial. Limb loss. Benefit $220. Insured as " Engineer in mill." Prorated to "Oiler." Injured while waiting for a street car and not engaged in either occupation. Compromised for $150. 364,839. Industrial. Death loss. Benefit $400. Pro-rated and settled for $200. Referred to in Exhibit "A" under "Occupation." 364,748. Industrial. Death loss. Benefit $200. Insured as " Inside laborer at mine." Killed while firing a shot.. Pro-rated to " Shot fire- man," benefit $100 and paid. 305,881. Monthly commercial. Death loss. Benefit $1,000. Paid in full. 366,876. Industrial. Eye loss. Benefit $66.66. Paid in full. 366,862. Monthly commercial. Eye loss. Benefit .$500. Insured as " Laundry hand." Company attempted to pro-rate to " clothing cleaner," benefit $300. Company claiming fraud but no evidence of same in jacket. Suit commenced and compromise settlement made before trial for $326.66. 302 National Convention of Insueanoe Commissioners , Claim Number 3(i8,564. Industrial. Eye loss. Benefit $100. Xo final proof and nothing paid. Referred to in Exhibit " A." ."1>S,6S9. Industrial. Eye loss. Benefit $100 plus $10 accumulations. Paid in full after endeavoring to settle for $75. 370,431. Industrial. Death loss. Benefit $200. Assured killed while walk- ing on railroad track. Company reduces to one-fifth on groimd of exposure and pays $40. 369,044. Industrial. Death loss. Benefit $300. Insured as " Oil well driller " and killed by explosion of nitro-glycerine which he was not hand- ling. Company attempts to pro-rate on ground of using explosives to $100. Nothing paid. Eeferred to in Exhibit " A." 369,970. Industrial. Death loss. Benefit $300. Reduced to one-fifth on ground of " exposure." 369,118. Monthly commercial. Death loss. Benefit $2,000 plus $200 accumul- ation, liilled by train. Company claims assured was intoxicated. Compromised for $1,600. Eeferred to ia Exhibit " A " under " Intoxication." 370,911. Industrial. Death loss. Benefit $500. Paid $150. Suit brought and settlement made before trial. Company admits liability of $200. Referred to in Exhibit " A." 372,418. Monthly commercial. Death loss. Benefit $1,200. Intentionally killed. Benefit reduced to one-fifth and $240 paid. 373,010. Industrial. Death loss. Benefit $200. Died from over-exertion. Nothing paid. 371,968. Monthly commercial. Death loss. Benefit $2,000. Settled for $50. Died from bursting blood vessel caused by over-exertion. Attor- ney for company cites case 143, Fed. R. 271 : "A person may do a certain act the result of which may produce what is com- monly called accidental death, but the means are exactly what the man intended to use, and did use and was prepared to use. The means was not accidental, but the result might be accidental." 372,075. Industrial. Limb loss. Benefit $300. Assured lost hand by car running over it. Company resists on ground of exposure, but admit that they have no proof and would probably lose in court. Compromised for .$237.50. 373,722. Industrial. Death loss. Benefit $300. Insured as "Carpenter framer on buildings." Out of employment and had men doing some garden work. Pro-rated and $200 paid. Killed while cross- ing railroad tracks. 373,636. Industrial. Death loss. Benefit $400. Assured died from blood poisoning caused by driving rusty nail in hand. Also question as to change of occupation from " Jlillwright, head miller " to " mill- wright." Compromised for $200. 374,134. Industrial. Death loss. Benefit $200. Company claims suicide be- cause Erie Railroad Company states that assured committed suicide on their tracks. Nothing paid. 374,845. Industrial. Deathless. Benefit $30fl. Insured as " Grader." Killed while employed as " edger." Pro-rated and $200 paid. 375,767. Industrial. Death loss. Benefit .$200. Reduced to one-fifth on ground of exposure and $40 pnid. Killed on railroad tracks. 370,539. Industrial. Death loss. Benefit $600. Company claimed that death was duo more to infection than .accident. Compromise settlement for $200. 377,012. Industrial. Death loss. Benefit $100. Paid in full. Assured a coal miner. 377,707. Industrial. Limb loss. Benefit $50. Beneficiary employs attorney. Paid in full. 377,825. Industrial. Deatli loss. Benefit $300. Reduced to one-fifth or $60 on ground of intoxication and paid. Industrial Health and Accident Settlements 303 Claim Number 377,487. Monthly commercial. Death loss. Benefit $2,000. Company claims assured died from natural causes. Xo final proofs and nothing paid. Keferred to in Exhibit " A." 378,094. Industrial. Death loss. Benefit $300. Pro-rated on change of occu- pation to $200. Accumulations ignored. Referred to in Exhibit " A " under " Accumulations." 377,454. Industrial. Death loss. Funeral benefit $175. Paid in full. 378,499. Industrial. Death Joss. Benefit $500. Paid in full. 379,268. Industrial. Deathless. Benefit $100. Paid in full.. 379,549. Industrial. Death loss. Benefit $200. Insured as " Laborer Smoke House " and while working for same employer changed oocupa- patiou temporarily. Pro-rated to " Common laborer " and $100 paid. 378,307. Monthly commercial. Death loss. Benefit $2,000. Paid $1,200. Pro-rated on change of occupation. Referred to in Exhibit "A" under " Occupation." 382,865. Industrial. Death loss. Benefit $400. Paid in full. 382,999. Industrial. Death loss. Benefit $300. Paid in full. 3So,451. Monthlj' commercial. Death loss. Benefit $1,200. Suit commenced and compromised before trial for $776. Referred to in Exhibit "A" under " Hunting." 385.926. Monthly commercial. Death loss. Death benefit $1,000. Facts of death not clearly shown. Company secures policy on payment of $5. 385.927. Industrial. Death loss. Benefit $400. Paid death benefit but ac- cumulations ignored. 384,332. Monthly commercial. Death loss. Benefit $1,200. Pro-rated on change of occupation and $400 paid. 384,138. Industrial. Death loss. Benefit $400. Paid $300. Referred to in Exhibit "A" under " Occupation." Accumulations ignored. 382,000. Monthly commercial. Death loss. Benefit $1,500. Pro-rated on change of occupation from " Machinist in shop " to " Brake Re- pairer " and $1,200 'paid. Company claims no accumulations due under policy as premium was paid late one month after having been promptly paid for sixteen months. 390,890. Monthly commercial. Death loss. Benefit $1,500. Investigated and found to be a fraud case perpetrated by agent. Nothing paid. 381,210. Industrial. Death loss. Benefit $400. Paid '$275. Referred to in Exhibit "A." 381,335. Monthly commercial. Death loss. Benefit $1,200. Attorney em- ployed by beneficiary. Intentionally killed in strike and reduced to one-fifth and $240 paid. Referred to in Exhibit "A" under " Notice." 381,401. Monthly commercial. Death loss. Benefit $1,000. Pro-rated to $400. Referred to in Exhibit "A" under "Occupation." 390. S93. Industrial. Limb loss. Benefit $50. Paid in full. 389,438. Industi-ial. Death loss. Benefit $300. Proofs incomplete, nothing paid. 387,610. 'Monthly commercial. Eye loss. Benefit $375. Pro-rated and paid $300. Seems that agent knew occupation of assured when ap- plication ■was written. Iniured in same occupation. 394,322. Monthly commercial. Death loss. Benefit .$500. Death benefit paid, accumulations ignored. Referred to in Exhibit "A" under "Accumulations." 393,194. Monthly commercial. Death loss. Benefit $1,500. Company claimed that assured died from disease. Paid $30. 394,325. Industrial. Death loss. Benefit $100. Died from natural causes, no liability. 394,250. Industrial. Death loss. Benefit $400. Paid $325 after suit com- menced. Referred to in Exhibit "A" under " Intoxication." 304 National Convem-tion of Insubance Commissioners Claim Number 388,720. Industrial. IJeath loss. Benefit $100, paid in full. 396,121. Monthly commercial. Death loss. Benefit if2,U00. Died from nat- ural causes, side benefit paid. 396,899. Industrial. Death loss. Benefit $400>. Paid in full. 397,055. Industrial. Death loss. Benefit $300. Paid in full. 397,506. Monthly commercial. Death loss. Benefit $1,500. Attorney em- ployed. Company resists on ground of intoxication which it can- not prove, and breach of wananty as assured carried other in- surance. Compromised for $1,000. 398,651. Industrial. Eye and limb loss. Company claims only liable for one specific loss. Pays loss of limb benefit $100. 398,629. Industrial. Death loss. Benefit $330. Reduced to one-fifth on ground of asphyxiation and paid. 390,764. Industrial. Death loss. Benefit $100. Paid in full. 400,551. Industrial Death loss. Benefit $200, plus $20 accumula.tions. Paid benefit but accumulations ignored. Referred to in Exhibit "A" under "Accumulations." 400,937. Industrial. Death loss. Benefit $200 plus $20 accumulations. Paid benefit and accumulations ignored. Pieferred to in Exhibit "A'' under "Accumulations." 401.678. Industrial. Death loss. Benefit $300, no final proofs. Referred to in Exhibit "A." 402,996. Monthly comiuercial. Eye loss. Benefit $1,000. Company claims breach of warranty because injury occurred before policy issued. Nothing paid. 403,310. Industrial. Eye loss. Benefit $100. Paid in full. 403,270. Industrial. Death loss. Benefit $300. Paid in full. Railroad em- ployee. 402,924. Monthly commercial. Death loss. Benefit $1,500. Paid $350. Re- ferred to in Exhibit "A" under " Intoxication.'' 402,998. Industrial. Death loss. Benefit $300. Paid $200. Change of oc- cupation. 401,978. Monthly commercial. Death loss. Benefit $1,200. Paid .?4o0. Re- ferred to in Exhibit "A" under " Compromise Settlements." 392,509. Industrial. Death loss. Benefit $100. Paid in full; assured a "miner." 393,604. Monthly comnierci;il. Death loss. Benefit $1,500. Insured as " Foreman Outside " was employed as " Common Laborer " al- ways. Pro-rated to $400 and paid. 392,870. Industrial. Death loss. Benefit $300. Insured as " brickman," pro- rated to "common laborer" $200 benefit. Comiiany claims in- tentional shooting. Suit commenced and compromise settlement made before trial for $65. 393,099. Monthly commercial. Limb loss. Benefit $500. Company claims blood poisoning was cause of amputation. Attempt to settle for $300. Compromised by company for $475. 393,300. Industrial. Death loss. ' Benefit '$300. Pro-ratod on change of oc- cupation to $100 and paid. Railroad employee. Railroad com- pany notifies company that none of its agents will be allowed on its propeity thei'eafter. 1911 404,770. Monthly commercial. Death loss. Benefit .'f2,00O. Died from nat- ural causes. No liability. 405,014. Monthly commercial. Benefit $2,000. Killed in fight. Comprom- ised for $550. 400,640. Industrial. D.-atli loss. Benefit $300. Nothing paid. Referred to in Exhibit "A." Industrial Health, and Accident Settlements 305 Claim Number 408,363. Monthly commercial. Death loss. Benefit $1,300, paid in full. 407,000. Industrial. Death loss. Benefit $400, murder case. Reduced to one-fifth under policy and $80 paid. Accumulations of $16 are ignored. 407,876. Monthly commercial. Death loss. Benefit $2,000. Assured mur- dered and benefit reduced to one-fifth or $400 and paid. 407,785. Industrial. Death loss. Benefit $200. Died from natural causes, no liability. 411,005. Industrial. Death loss. Benefit $200. Paid in full. 412,152. Industrial. Death loss. Benefit $300. Paid in full. 412,796. Industrial. Death loss. Benefit $300. Assured murdered. Re- duced to one-fifth and $60 paid. 413,719. Industrial. Death loss. Benefit $500. Paid in full. Assured was a railroad employee. 407,876. Monthly commercial. Death loss. Benefit $2,000. Insured mur- dered. Reduced to one-fifth and $400 paiB. 404,238. Industrial. Dea,th loss. Benefit $200. Reduced to $100 occupation. Insured as "Bookkeeper;" killed when engaged in occupation of a " miner." 406,114. Industrial. Death loss. Benefit $300. Payment resisted on ground of lapse. Suit begun and compromised at $200. There appears to be question as to exact time of mailing premium and com- promise probably justifiable. 406,244. Industrial. Death loss. Benefit $300. Reduced to $100 on account of occupation. Insured as a " Cement worker," killed while en- gaged in work as a " telephone lineman." 407,723. Monthly commercial. Eye loss. Benefit $300. Paid in full. 408,577. Industrial. Death loss. Benefit $200. Paid in full. 409,620. Monthly commercial. Death loss. Principal sum $1,500. Killed by another, reduced to $300, one-fifth. 409,761. Monthly commercial. Benefit $1,200 plus 10 per cent, accumulation. 410,571. Industrial. Death loss. Benefit $400 plus 10 per cent, accumula- tions. Paid in full. 410,692. Industrial. Limb loss. Benefit $500. Paid in full. 404,238. Industrial. Death loss. Benefit $^200, pro-rated to $100. Insured as barkeeper and pro-rated to coal miner. Justifiable pro-rate. 416,149. Monthly commercial. Eye loss. Benefit $1,000. Paid in full. 394,499. Industrial. Death loss for $300 reduced to $200. (See Exhibit "A," Examiner's No. 39 ) . 394,934. Industrial. Death loss. Benefit $400. Paid in full. 394,918. Industrial. Death loss. Benefit $100. Killed on railroad track. Company claimed " trespass " and reduced indemnity to one-fifth or $20. 394,903. Industrial. Death loss. Benefit $100. Paid in full. 391,157. Industrial. Death loss. Benefit $400. Reduced to $115. Insured as "Foreman Foundry, supervising. Class C;" pro-rated to " Laborer " class " F." 387,226. Monthly commercial. Death loss. Benefit of $2,000 reduced to $1,200 on account of change of occupation. The pro-rate seems to have been correct. On October 26, 1910, company wrote to F. B. Kellogg in part as follows: "Any saving you can make will be appreciated." 386,658. Industrial. Death loss. Benefit $300. Reduced to $75 on account of exposure and suicide while insane. 391,821. Monthly commercial. Death loss. Benefit $1,500 reduced to $1,200 on account of change of occupation. (See Exhibit "A," Ex- aminer's No. 36). 388,417. Monthly commercial. Death loss. Benefit $1,200. Company claimed death due to disease. Claims non-liabiljt}'. 306 National Convention op Instjeance Commissioners Claim Number 396,1S6. Industrial. Death loss. Benefit $100. Paid in full. 395,677. Industrial. Death loss. Benefit $100. Paid in full. 395,530. Monthly commercial. Death loss. Benefit $2,000. Eeduced to $525. (See Exhibit "A," Examiner's No. 87.) 395,009. Industrial. Death loss. Benefit $200. Paid in full. 396,724. Monthly commercial. Death loss. Benefit $2,000; paid $1,350. Pro- rated on change of occupation. 397,161. Montlily commercial. Eye loss. Benefit $300. Paid in full. 401,447. Industrial. Death loss. Benefit $400 plus 10 per cent, acciunula- tions, reduced to $80 on ground of " exposure." 401,496. Industrial. Death loss. Benefit $500 plus 10 per cent, accumula- tion. Eeduced to $300 plus 10 per cent, accumulation, or $330. Insured as "Clerk — dress goods;" killed while working as a " sign painter." Pro-rate. Railroad 1909 319,629. Death loss. Benefit $1,000. Assured killed while walking home with wife. Company tried to reduce to one-eighth, claiming that assured was not engaged in his occupation when killed. Attorney employed by beneficiarv and company paid one-fourth, or $250. 320,062. Death loss. Benefit $1,000. Paid in full. 320,088. Death loss. Benefit $500, but as assured was killed by derailment of engine, double indemnity, $1,000, paid. 321,458. Death loss. Benefit $2,000. Paid in full. 320,006. Eye loss. Benefit $250. Paid in full. 319,113. Death loss. Benefit $500. Eeduced to one-eighth, $62.50, and paid, as assured was intentionally killed while not engaged in his occupation. 319,748. Death loss. Benefit $1,500. Insured as " Freight Conductor." Pro- rated to " Brakeman " and $754.30 paid. 321,912. Death loss. Benefit $2,000. Paid in full. 319,077. Death loss. Benefit $2,000, plus $100 accumulation. Paid in full. 323,248. Limb loss. Benefit $1,025. Paid in full. 322,071. Limb loss. Benefit $1,000. Paid in full. 324,175. Death loss. Benefit $2,600. Paid in full. 324,228. Death loss. Benefit $1,200. Paid in full. 325.219. Death loss. Benefit $1,000. Died from disease. No liability. 325,953. Eye loss. Benefit $500. Paid in full. 326.240. Limb loss. Benefit $500. Paid in full. 320,686. Death loss. Benefit $1,000, plus $100 accumulation. Killed in wreck. Paid double indemnity, $2,100. 328,457. Limb loss. Benefit $2,000. Paid in full. 326,685. Ticket policy. Death loss. Assured jumped from train while in- sane. Beneiit $2,500. Nothing paid. 328,365. Death loss. Benefit $1,000. Paid in full. 329,299. Death loss. Benefit $2,000, plus $100 accumulation. Paid in full. 329.6.10. Limb loss. Benefit $2,000. Paid in full. 329,263. Death loss. Benefit $1,575. Died from disease. No liability. 330,403. Eye loss. Benefit $500. Question as to premium payment. Com- promised for $100. 330.241. Limb loss. Benefit $250. Paid in full. 330,150. Limb loss. Benefit $500. Paid in full. 330,110. Denth loss. Benefit ,$2,100. Died from heart disease. No liability. 329,191. Death loss. Benefit $1,000. Died from heart disease. No liability. 327,951. Limb loss. Benefit $500. Lost limb while hunting. Paid. 329,139. Death loss. Single benefit $1,000. Train ran into landslide. Ee- ferred to in Exhibit " A " under " Double Indemnity." Industrial Health and Accident Settlements 307 Claim Number 329,074. Eye loss. Benefit $500. Paid in hill. 329,071. Death loss. Benefit $2,000, plus $700 accumulation. Paid in full. 331,803. Death loss. Benefit $2,300. Suicide and paid $250. Referred to in Exhibit "A " under " Suicide." 331,802. Death loss. Benefit $1,000. Paid in full. 331,370. Death loss. Benefit $700. Paid in full. 325,878. Limb loss. Benefit $1,000. Paid in full. 333,466. Death loss. Benefit $1,000. Reduced benefit to $650, on ground of unnecessary exposure to danger. Insured as "Hostler's helper" and killed by falling under a locomotive which assured was try- ing to board on way to work. 333,252. Death loss. Benefit $1,000. Paid in full. 333,869. Eye loss. Benefit $125. Paid in full. 333,142. Death loss. Benefit $1,000, plus $150 accumulation. Killed in wreck and paid double indemnity, and $2,150 paid. 334,438. Eye loss. Benefit $500. Paid in full. 330,984. Limb loss. Benefit $1,000. Paid in full. 328,195. Death loss. Benefit $1,250. Paid in full. 3"4,756. Death loss. Benefit $200. Attorney employed. Company claimed policy lapsed. Compromised for $50. 325,276. Death loss. Benefit $2,000. Paid in full. 325,440. Death loss. Benefit $1,500. Paid in full. 325,504. Death loss. Benefit $1,000. Paid in full. 325,607. Limb loss. Benefit $500: Paid in full. 335,240. Limb loss. Benefit $500. Paid in full. 334,947. Limb loss. Benefit $1,000. Insured as " Yard Master, supervising." Inj'Ured as " Engine . Foreman coupling oars." Pro-rated and $240 paid. 335,440. Death loss. Benefit $2,000, plus $600 accumulation. Paid in full. 336,055. Death loss. Benefit $1,000. Paid in full. 336,145. Death loss. Beneficiary case. No liability. 337,670. Death loss. Benefit $2,000. Died from disease. No liability. 336,944. Death loss. Benefit $2,000. Paid in full. 337,859. Limb loss (both). Benefit $2,000. Paid in full. 338,134. Death loss. Benefit $1,500, plus $2'25 accumulation. Suicide case in State of Virginia. Paid $690. 338,513. Eye loss. Benefit $500. Paid in full. 338,952. Limb loss. No specific indemnity. Paid disability twenty-six weeks. 340,087. Limb loss. Benefit $500. Paid in full. 339,782. Death loss. Benefit $2,100. Referred to in Exhibit "A" under " Exposure." 340,397. Death loss. Benefit $2,500. Insured as " General Yard Master, office duties," and paid $1,566.15. Pro-rated to " Yard Master, yard duties." 340,388. Limb" loss. Benefit $500. Paid in full. 339,371. Death loss. Benefit $1,000. Paid $500. Referred to in Exhibit "A" under " Breach of Warranty." 341,047. Death loss. Benefit $1,000. Paid in full. 341,559. Limb loss. Benefit $500. Paid in full. 341,562. Limb loss. Benefit $250. Paid in full. 341,256. Limb loss. No specific benefit under policy. Paid seventeen weeks disability, $170. ' 343,408. Death loss. Benefit $1,500. Paid in full. 343,032. Eye loss. Benefit $500. Paid in full. 344,670. Death loss. Benefit $500. Paid in full. 344,669. Death loss. Died from disease. No liability. 344,728. Death loss. Benefit $500'. Paid in full. 344,057. Death loss. Benefit $1,250. Paid in full. 344,028. Limb loss. Benefit $500. Paid in full. 308 ISTatioxal Convention of Insurance Commissioners Claim Number 344.021. Death loss. Benefit $1,000. Insured as "' Car Kepair Special," l)ro-rated on change of occupation to " Foreman." Benefit $681.60. I'aid double indemnity, $1,363.20. Referred to in Exhibit "A" under " Double Indemnity." 344,019. Death loss. Benefit $700. Paid in full. 343,598. Death loss. Benefit $1,000. Paid in full. 342,974. Death loss. Benefit $1,000. Died from disease. No liability. 342,827. Death loss. Benefit $1,000. Paid in full. 342,822. Limb loss. Benefit $1,000. Paid in full. 342,025. Death loss. Benefit $700. Paid in full. 342,563. Death loss. Benefit $1,000. Paid in full. 342,268. Limb loss. Benefit $250. Paid in full. 342,039. Death loss. Benefit $1,000. Paid in full. 348,621. Death loss. Benefit $1,000. Paid in full. 348,926. Death loss. Benefit $1,400. Paid in full. 348,533. Death loss. Benefit $2,000. Company claimed death resulted from an old strain. Settled on disability basis and $120 paid. 348,873. Death loss. Benefit $1,000. Insured as " Wiper, pit man " special class. Killed while employed as fireman " Class D," death benefit $558.85 and pro-rated to that amount. 348,809. Death loss. Benefit $500. Killed in wreck and entitled to double indemnity or $1,000. Referred to in Exhibit " A " under " Double Indemnity." 349,839. Death loss. Benefit $700. Paid in full. 349,837. Death loss. Benefit $1,000. Paid in full. 348,088. Death loss. Benefit $1,000. Intentionally shot while oflF duty, and company paid one-eighth, or .$125. 350,594. Death loss. Benefit $700. Paid in full. 350,583. Death loss. Benefit $700. Paid in full. 350,277. Death loss. Benefit $1,000. Paid in full. 350,783. Death loss. Benefit $500. Paid in full. 349,473. Eye loss. Benefit $175. Paid. Agent writes that there is a pos- sibility of assured losing sight of other eye and considers settle- ment very good for the company. 351,029. Limb loss. Benefit $700. Paid in full. 344,903. Death loss. Benefit $1,000. Assured intentionally shot. Company claimed only one-tenth liability, but made a compromise settle- ment for $.300. 351,469. Limb loss. Benefit $500. Insured as ''Machinist Helper," changed occupation to " Switchman.'' Pro-rated and $93.75 paid. 351,431. Death loss. Benefit $700. Paid in full. 351.126. Limb loss. No specific benefit under policv. Paid thirty weeks disability, $300. 347,005. Death loss. Benefit $5,000, plus $1,250 accumulations. Assured killed in a lunaway accident while off duty. Company claims he was murdered, but has no evidence. Compromise claim for $5,150. 342,411. Death loss. Benefit $1,000. Company resists payment on ground of voluntary exposure. Ofl'ers $300 in settlement. Suit brought and company wins and settles for $100. 351.022. Death loss. Benefit $700. Paid in full. 351,592. Death loss. Insured as " Passenger Brakeman," death benefit $2,000, plus $200 accumulations. Changed occupation and killed while employed as " Freight Switchman.'' Pro-rated and $531.68 paid. 352,609. Death loss. Insured as " Extra foreman of extra gangs," class " Medium," benefit $2,000. Changed occupation to " Section fore- man," class " ,S. M." Pro-rated and $1,000 paid. 352,755. Death loss. Benefit $1,500. Paid in full. 352,201. Eye loss. Fraud case. Not insured. Claimant " George Kelley." Industrial Health and Accident Settlements 309 Claim Kumber 345,730. Death loss. Benefit $1,000. Killed Septemljer 28, 1909. Lapse notice mailed to assured September 9, 1009. Otherwise policy would have been in force. No liability. Attornej' explains pay- master's order blank in jacket. 353,487. Death loss. Benefit $300. Paid in full. 353,414. Death loss. Benefit $300. Paid in full. 345,081. Death loss. Benefit $2,000, plus $100 accumulations. Proofs in- complete. 346,912. Death loss. Benefit $5,000. Paid in full. 346,911. Limb loss. Benefit $700. Paid in full. 354,204. Death loss. Benefit $1,000, plus $100 accumulation. Paid in full. 353,934. Limb loss. Benefit $250. Paid in full. 354,487. Limb loss. Benefit $1,000. Paid in full. 354,078. Death loss. Benefit $2,000. Paid in full. 355,029. Limb loss. Benefit $500. Paid in full. 355,237. Death loss. Benefit $2,000. Paid in full. 345,530. Death loss. Benefit $1,000. Paid in full. 345,522. Limb loss. Benefit $1,500. Paid in full. 345,438. Eye loss. Benefit $125. Paid in full. 355,857. Limb loss. Benefit $1,000. Paid in full. 345,378. Limb loss. Benefit $1,000. Paid in full. 343,544. Death loss. Benefit $1,000. Company claims that assured bad paresis and that he fell on tracks while suffering from that disease. Compromised for $225. 349,927. Death loss. Benefit $1,000. Assured killed while hunting. Com- promised for $500. Referred to in Exhibit " A " under " Hunting." 352,360. Death loss. Benefit $1,000. Assured intentionally shot by another. Reduced to one-tenth, or $100, and paid. 350,583. Death loss. Benefit $700. Paid in full. 356,153. Death loss. Benefit $100. Reduced to one-fifth, or $20, on ground of unnecessary exposure to danger. Assured was walking on railroad tracks in Wyoming. 329,423. Death loss. Benefit $1,000. Pro-rated to $400 on account of change of occupation. Insured as " Car Repairer and Oiler." Killed in railroad yard while riding on foot-board of engine and classified as " Switchman." (See Exhibit "A," Examiner's No. 79.) 319.677. Death loss. Benefit $2,000, plus $100 accumulations, $2,100. Paid in full. 352,323. Death loss. Benefit $1,000. Paid in full. 351,850. Death loss. Benefit $2,000. Paid in full. 349,465. Death loss. Benefit $2,000, plus $500 accumulations; paid in full, $2,500. 346,955. Death loss. Benefit $1,000. Paid in full. 346,951. Death loss. Benefit $2,000. Paid in full. 355,696. Death loss. Benefit $2,000. Paid in full. 355,738. Death loss. Benefit $700. Paid in full. 356,006. Eye loss. Claim for $500. Resisted and compromised at $237. Some doubt about loss of eye being result of accident. 320,184. Death loss. Benefit $5,000. iPaid in full. 320,327. Death loss. Benefit $1,000. Paid in full. 321,182. Death loss. Benefit $1,000. Reduced to .$500. (See Exhibit "A," Examiner's No. 84.) 323,826. Death loss. Benefit $1,000, plus 10 per cent, accumulations, $1,100. Paid in full. 327,753. Death loss. Benefit $1,000, plus $150 accumulations, $1,150; re- duced to $484.35, plus $72.45 accumulations, $555.80 on account of occupation. Insured as " Freight Conductor." Killed while acting as " Freight Brakeman." 327,811. Death loss. Benefit $1,000. Paid in full. 310 National Convention of Insueange Commissionees Claim Number 331,436. Death loss. Benefit $1,000. Paid $500. Killed on railroad track. Company claimed trespass. 331,451. Death loss. Benefit $50U. Paid in full. 331,503. Limb loss. Benefit $1,500. Paid in full. 331,528. Death loss. Benefit $1,000. Paid in full. 333,665. Death loss. Benefit $1,000. Paid in full. 334,540. Death loss. Benefit $1,000. Paid in full. 334,605. Death loss. Benefit $700 and 5 per cent accumulations, total $735. Paid in full. 334,758. Death loss. Benefit $1,000. Pro-rated to $400, on ground of change in occupation. Evidence shows Insured to have been on duty when killed. (See Exhibit "A," Examiner's No. 80.) 335,898. Death loss. Benefit $700. Paid in full. 335,570. Death loss. Benefit $1,000. Paid in full. 337,052. Death loss. Benefit $1,000. Paid in full. 338,285. Death loss. Benefit $1,000. Paid in full. 339,051. Death loss. Benefit $1,000. Paid in full. 340,588. Eye loss. Benefit one-fourth principal earn $1,000' =$250. Paid in full. 340,976. Death loss. Benefit $100'. Paid in full. 347,440. Death loss. Benefit $300. Paid in full. 347,466. Death loss. Benefit $2,000, plus $650 accumulations. Paid in full. 348,391. Death loss. Benefit $1,000. Company claimed death not caused by accident. Attorney employed. Compromised at $131.25. 349,121. Death loss. Benefit $2,000. Company resists payment on account of lapse. Suit brought and compromised at $1,850. 1910 357,129. Death claim for $1,000. Insured as a "freight conductor;'' pro- rated to a " yard foreman," and indemnity reduced to $540. 357,153. Death claim of $500 paid in full. 368,782. Death claim for $1,000 paid in full. 369,252. Limb loss claim for $250 paid in full. 369,202. Death claim. Principal sum $2,000; accumulation $700. Killed in a wreck and $5,4C0 (double indemnity) paid. 369,543. Limb loss claim paid in full, including accumulation and surgeon's fee, $535. 371,712. Death claim for $1,000 paid in full. 373,802. Death claim for $500. Liability denied because death was not due to accident. Justified. 374.907. Limb loss claim for $750 paid in full. 375,015. Death'claim for $1,000 paid in full. 376,030. Death claim for $1,000 paid in full. 376,178. Death claim for $1,000 reduced to $454.54 — on account of change of occupation. Pro-rated from " transfer conductor " to " switch- man." 377,316. Death claim for $500 paid in full. 378,695. Death claim for $700 paid in full, 379,346. Death claim for $1,000 paid in full. 379,368. Death claim for $1,000 paid in full. 379,822. Death claim for $1,000 disallowed on ground that death was due to disease. Justifiable, 379,967. Death claim for $1,000 paid in full. 380,788. Death claim for $2,000 reduced to $200 on ground was engaged in a fight. There appears to be doubt as to whether he was not defending himself from an assault. 382,379. Limb loss claim of $500 paid in full. 383.908. Death claim for $2,000 paid in full after about three months delay and after an attorney had been employed. Industrial Health and Accident Settlements 311 Claim Number 384,755. Limb loss claim for $700 paid in full. 387.796. Death claim for $1,000 paid in full. 387,864. Death claim for $1,000 paid in full. 389,218. Death claim for $1,400 paid in full. 390,618. Limb loss claim for $500 paid in full. 381.119. Death claim for $2,000, reduced to $500. Injured while diving, from blow on head. Post-mortem showed an old case of mastoid- itis, but no evidence of fracture of skull. Company claimed death not due to accident. Compromised. 381.120. Death claim of $100 paid in full. 388,613. Limb loss. Benefit $500. Paid in full. 390,255. Death claim. Principal sum $3,000; accumulation $450. Paid in full at $3,450. 390,281. Limb loss claim for $700 paid in full. 390.215. Death claim for $700 reduced to $550. 390,293. Railroad death claim of $1,000. Killed in a wreck. Double in- demnity of $2,000 paid in full. 389,576. Death loss. Benefit $2,000. Suicide. Liability denied. 394,740. Limb loss. Paid full benefit of $195 for 26 weeks disability at $7.50 per week. 391,911. Death loss. Benefit $500'. Paid in full. 391,730. Death loss. Benefit $1,000, plus $50 accumulation. Paid in full. 387,006. Death loss. Benefit $1,500, plus $75 accumulation. Paid in full. 388,981. Death loss. Benefit $1,0€0, plus $100 accumulation. Paid in full. 396.797. Limb loss. Benefit $250. Reduced to $215 on account of change of occupation. Pro-rated from " Yard Clerk and seal clerk " to " Hostler's helper." 395,601. Death loss. Benefit $1,000. Killed by another. Paid $125, one- eighth. 395,590. Death loss. Benefit $500. Paid in full. 398.216. Limb loss. Benefit $250, Paid in full. 395,840. Limb loss. Benefit $1,500. Paid in full. 395,286. Death loss. Benefit $700. Compromised at $500 — "Exposure.'' 401,402. Death loss. Benefit $1,000. Paid in full. 402,028. Death loss. Benefit $1,000. Suicide. Company returned $10 pre- miums. 356.770. Limb loss. Benefit $250. Compromised and settled for $50. 367,892. Death loss. Ueneflt $2,400. Paid in full. 370.246. Death loss. Benefit $5C0. Paid in full. 370,279. Death loss. Benefit $500. Paid in full. 370,045. Death loss. Benefit $1,000. Paid in full, after attempt to pro-rate. 369,113. Limb loss. Insured as fireman, benefit $1,000. Pro-rated on change of occupation to brakeman, benefit $000. .lustified. 369,166. Death loss. Benefit $1,000. Paid in full. 369,701. Limb loss. Benefit $250. Paid in full. 370,588. Eye loss. Benefit $250. Paid in full. 372,419. Death loss. Benefit $500. Suicide and company denied liability. Nothing paid. 371,811. Death loss. Benefit $1,100. Company claims assured committed suicide. Attorney employed, and compromise settlement for $125 without knowledge of attorney. 371,755. Death loss. Benefit $1,000. Paid in full. 371,836. Death loss. Benefit $1,000. Paid in full. Company endeavored to reduce the claim on ground that assured had exposed himself to unnecessary danger. Company writes to agent, " If there is any salvage, let us have the advantage of it." 404,201. Limb loss. Benefit $520. Paid in full. 372,039. Limb loss. Benefit $750. Referred to in Exhibit "A," under "Accumulations." 372,028. Death loss. Benefit $1,000. Paid in full. 312 National Conveittion of Insueajstce Commissioners Claim Number 373,485. Death loss. Benefit .'foOO. Double indemnity was claimed, but as car was not actually derailed and was able to proceed, single in- demnity of $500 only was paid. 375,553. Death loss. Benefit $2,000. Paid in full. 375,557. Death loss. Benefit $700. Paid in full. 374,612. Limb loss. Benefit $500'. Paid in full. 375,433. Eye loss. Benefit $750. Paid in full. 375,471. Eye loss. Benefit $500. Paid in full. 375,332. Death loss. Benefit $700. Paid in full. 375,060. Death loss. Benefit $500. Paid in full. 375,661. Death loss. Benefit $2,000. Paid in full. 370,354. Limb loss. Benefit $150. Paid in full. 376,008. Death loss. Benefit $700. Paid in full. 377,690. Limb loss. Insured as fireman, benefit $500. Pro-rated on change of occupation to brakeman, benefit $242. Paid $288 in settlement. 377,686. Loss of two limbs. Benefit $.500. Paid in full. 377,453. Death loss. Benefit $1,000, plus $250 accumulations. Paid in full. 377,439. Death loss. Benefit $1,000. Paid $700 as a compromise settlement after suit had been brought and before trial. Company resists payment of full amovmt on ground of intoxication. Conflicting evidence in jacket. 378,479. Death loss. Benefit $2,{J00. Paid in full. 378,883. Death loss. Single benefit $1,000. Killed by derailment of engine. Paid double indemnity, $2,000. 379,205. Death loss. Suicide. Company denies liability and nothing paid. 379,987. Death loss. Benefit $1,000. Paid in full. Company makes an ad- vance payment of $100 to benefieiarv. 378,848. Death loss. Benefit $700. Paid in full. 378,279. Limb loss. Benefit .$500. Paid in full. 377,569. Death loss. Benefit $2,000, plus $600 of accumulations. Paid in full. 382,167. Death loss. Benefit $1,000. Suit brought. Company defended on ground that cause of death was not proven. Verdict in favor of comp.any. 382,290. Limb loss. Benefit $1,000. Paid in full. 382,302. Limb loss. Insured as " Switch tender.'' benefit $1,000. Changed occupation to " Freight Switchman." Pro-rated and $286.75 paid. Justified. 382,632. Death loss. Benefit .$2,500. Paid in full. 382,753. Death loss. Benefit $1,000. Paymaster's order provided that in case of discharge from employment with railroad, assured must notify company within three days. No notification to company, . and killed ten davs after discharge. Nothing paid. 385,501. Limb loss. Benefit' $1,000, plus $15 for operating fee. Paid in full. 384,905. Eye loss. Benefit $500. Paid in full. 384,954. Eye loss. Benefit $250. Paid in full. 384,325. Eye loss. Benefit $375. Insured as a car repairer. Pro-rated on change of occupation to " Farmer." Sight of eye not entirely lost and paid disability benefit of $56. 384,096. Death loss. Benefit $1,000. Paid in full. 3S],939. Death loss. Benefit $1,500. Paid in full. 381,646. Death loss. Benefit $2,000, plus $300 accumulations. Paid in full. 390,408. Death loss. Benefit $2,000. Paid in full. 380,942. Eye loss. Benefit $250. Paid in full. 388,941. Death loss. Benefit .$5,000, plus $2,000 of accumulations. Referred to in Exhibit "A,"' under "Occupation," subdivision "Hunting." 391,266. Death loss, Benefit $1,000. Paid double indemnity as engine turned over and crushed the assured to death. Paid $2,000 in full. Ia'dusteial Health and Accident Settlements 313 Claim Number a94,018. Death loss. Benefit $1,000. Paid in fall. 384,279. Death Idbs.' Benefit $1,000. Paid in fulL 394,349. Death loss. Benefit $1,000. Attorney employed. Company defends on ground that assured died from natural causes. Nothing paid. No suit brought. 391.290. Limb loss. Penefit .$700. Paid in full. 391,739. Limb loss. Benefit $750, plus $10 surgeon's fee. Paid $700. Re- ferred to under " Compromise Settlements " in Exhibit "A." Not a railroad employee when injured. 388,392. Eye loss. Beuefit $.500. Paid in full. 388,613. Limb loss. Benefit $500. Paid in full. 388,699. Death loss. Benefit $1,000. Assured died from ptomaine poisoning. Reduced to one-tenth and $100 paid. 388,683. Limb loss. Benefit $750. Paid in full. 395,800. Death loss. Benefit $1,000. Paid in full; 396,803. Death loss. Benefit $500, plus $25 accumulations. Assured killed in wreck and entitled to double indemnity. Referred to under " Double Indemnity " in Exhibit "A." 396.447. Limb loss. Benefit $2,000, plus $75 accumulations. Paid in full. 395,406. Limb loss. Benefit $500. Paid in full. 397,296. Death loss. Benefit $1,500. Paid in full. 395.405. Death loss. Benefit $500. Reduced to one-fifth on ground of in- toxication and paid $100. 398,444. Death loss. Benefit $2,000, plus $700 accumulations. Assured jumped from train before a wreck. Not externally injured, but died from heart rupture. Compromised for $500. 398,715. Limb loss. No specific benefit, but paid 26 weeks' disability benefit in full, amounting to $325. 398,533. Death loss. Benefit $500. Referred to in Exhibit "A," under " Breach of Warranty." 399,371. Limb loss. Benefit $750. Paid in full. 399,608. Death loss. Insured as " Fireman," benefit $1,000. Pro-rated to " Freight Brakeman " and paid $480. Justified. 399,998. Limb loss. Benefit .$500. Paid in full. 398,017. Limb loss. Insured as " Car Repairer," benefit $500. Pro-rated to " Fireman," benefit $267.85 and paid. 399.012. Death loss. Benefit $700. Paid in full. 398.406. Death loss. Benefit $1,000, plus $150 of accumulations. Paid in full. 398.424. Death loss. Benefit $2,000, plus $600 of accumulations. Paid in full. 400,308. Death loss. Assured died from natural causes, typhoid fever. No disability paid. 401,873. Limb loss. Benefit $250. Paid in full. 401,883. Death loss. Benefit $1,000. Paid in full. 402,012. Death loss. Benefit $1,500. Paid in full. 400,808. Death loss. Benefit $1,000. Died from natural causes. No liability. 402.336. Death loss. Benefit $700. Paid in full. 402^560. Death loss. Benefit $500. Killed in wreck and double indemnity $1,000, paid. 402.692. Death loss. Benefit $1,650. Paid double indemnity. 402^809. Eye loss. Paid 13 weeks' disability in full, $195. 402,813. Limb loss. Benefit $1,000. Paid in full. 402,575. Death loss. Benefit $1,000. Paid in full. 403,070. Limb loss. Benefit $250. Paid in full. 403,225. Benefit $750, plus $107.50 of accumulations. Paid in full. 403,066. Eye loss. Benefit $25(f. Paid in full. 403.448. Death loss. Benefit $500. Paid in full. 403,592. Death loss. Benefit $700. Paid in full. 314 ]SrATIO]SrAL OONVENTIOI^ OF InSUEAJSTCE CoMMISSIOlTEES Claim Number 403,283. 403,4.57. 402,703. 392,341. 302,601. 393,422. 303,398. 392,858. 392,939. 393,165. 393,150. 393,302. 404,201. 388,613. Death loss. Insured as " Round-houseman," benefit $1,000. Killed while employed as a " Fireman." Pro-rated and $575 paid. Death loss. Benefit $700. .Paid in full. Ej'e loss. Benefit $375. Company resists on ground that injury ■was caused before policy was issued. Compromised for $200. Death loss. Benefit $1,000. Paid in full. Death loss. Benefit $1,000. Paid in full. Death loss. Benefit $500. Paid in full. Death loss. Benefit $500. Paid in full. Death loss. Benefit $1,500. Paid in full. Death loss. Benefit $1,0-00. Paid in full. Death los.s. Benefit $1,000. Paid in full, plus $11.40 for disability prior to death. Death loss. Benefit $2,000. Paid in full. Death loss. Benefit $5,000. Paid in full. Limb loss. Benefit $520. Paid in full. Limb loss. Benefit $500. Paid in full. 1911 404,201. 404,2.55. 406.182. 406.296. 406,874. 407,134. 408,579. 408,593. 408,740. 408,709. 408,800. 408,817. 405,820. 410,230. 410,701. 416,149. 404,861. 404.618. 404,674. 404,823. 404,771. 405,411. 405,510. 405,513. 404,854. 404.861. 405,156. 406,505. 406,.'i00. 407,492. 407,823. 408,163. 408,143. 410,030. 409,569. 409,572. Weekly indemnity claim of $520. Paid in full. Benefit $100. Paid in full. Benefit $700. Paid in full. Benefit $500. Paid in full. Benefit $1,000. Paid in full. Benefit $1,000. Paid in full. Benefit $1,500. Paid in full. Benefit $1,000. Paid in full. Benefit $700. Paid in full. Benefit $1,000, being double indemnitv. Paid in full. Benefit $1,000. Paid in full. Benefit $1,000. Paid in full. Benefit $500. Paid in full. Benefit $1,000, plus 10 per cent, accumulation. Limb loss. Death loss. Death loss. Death loss. Death loss. Limb loss. Death loss. Death loss. Limb loss. Death loss. Death loss. Death loss. Death loss. Death loss. Benefit $1,000, plus 10 per cent, accumulation. Paid in full. Death loss. Benefit $2,000. Paid in full. Eye loss. Benefit $1,000. Paid in full. Death loss. Benefit $1,000. Paid in full. Benefit $500. Paid in full. Benefit $2,000, plus $700 of accumulations. Paid in full. Benefit $1,000. Paid in full. Benefit $1,050. Paid in full. Benefit .$2,000. Reduced to one-tenth injuries inflicted by another and .$200 paid. Death loss. Benefit $1,300. Died from over exertion. Benefit $1,000, plus $450 accumulations. Benefit $700. Paid in full. Benefit $1,000. Paid in full. Benefit .$2,000, plus $300 accumulation. Benefit $500. Paid in full. Benefit $1,000. Paid in full. Benefit $1,000. Paid in full. Benefit $2,000. Paid in full. Benefit $500. Paid in full. Benefit $500. Reduced to one-eighth because negro was killed by another, and $62.50 paid. Death loss. Benefit $.500. Reduced to one-tenth because intention- ally killed by another. Limbless. Benefit $1., '^00. Paid in full. Eye loss. Benefit $250. l';ud in full. Death loss. Death loss. Limb loss. Death loss. Death loss. Death loss. Death loss. Death loss. Death loss. Limb loss. Limb loss. Death loss. Death loss. Death loss. Death loss. on ground of Nothing paid. Paid in full. paid in full. Industeial Health and Accident Settlements 315 Claim Number 40«,548. 409,415. 410,849. 410,963. 408,823. 411,208. 411,97". 411,784. 413,413. 413,683. 413,706. 413,251. 414.648. 417,090. •116,959. 416,077. 416,437. 415,327. 416,338. 416,473. 417,595. 4)7,975. 407,142. 406,280. 407,492. Paid in full. Limb loss. Benelit .$1,500. Paid in full. Limb loss. Benefit $2,000. Paid in full. Limb loss. Benefit $1,000. Paid in full. Beath loss. Benefit $700. Paid dn full. Death loss. Benefit $1,000. Paid in full. Limb loss. Benefit $1,000, plus $75 accxmiulation. Eye loss. Benefit $750. Paid in full. Death loss. Benefit $700. Paid in full. Death loss. Benefit $2,000. Paid in full. Death loss. Benefit $700, plus $35 accumulation. Paid in full. Death loss. Benefit $1,000. Paid in full. Limb loss. , Benefit $350. Paid in full. Limb loss. Benefit $1,000. Paid in full. Death loss. Benefit $700. Paid in full. Death loss. Benefit $700. Paid in full. Death toss. Benefit $1,000. Paid in full. Limb loss. Benefit $500. Paid in full. Limb loss. Benefit $1,000. Paid in full. Death loss. Benefit $1,000, plus $100 aceimiulation. Paid in full. Death loss. Benefit $1,000, plus $S0 accumulation. Paid in full. Limb loss. Benefit $390. Paid in full. Limb loss. Benefit 551 ,000. Paid in full. Death loss. Benefit $1,000. Identification of assured not satis- factory to company. Nothing paid. Limb loss. Benefit $700. Paid in full. Death loss. Benefit $1,000. Paid in full. 327,303. 331,836. 328,825. 331,164. 328,813. 331,005. 332,500. 324,758. 341,777. 348,909. 346,194. 351,662. 353,429. 353,563. 355,402. 350,205. 329,896. 340,953. 322,959. 355,691. Franchise. Company waives reduc- C-oal Mine 1909 Death loss. Benefit $1,000. Paid $500. Pro-rated from motorman, outside, Dawson Fuel Co. to " Laborer, washer." Death loss. Benefit $100. Paid in full. Benefit $200. Paid in full. Benefit $100. Paid in full. Benefit $200. Paid in full. Benefit $400. Paid in full. Benefit $100. Paid in full. Benefit $1,000. Paid in full, tion on account of blood poisoning or infection. Death loss, benefit $1,000. Company claims intoxication but agent admits it would be hard to prove. Settled for $125. Death loss. Benefit $200. Paid in full. Benefit $200. Paid in full. Benefit $200. Paid in full. Benefit $200. Paid in full. Benefit $100. Paid in full. Paid in full. No final proofs, nothing paid. Referred ' Foreign Beneficiaries." reduced to one-tenth or $50 by reason of being killed by another. No final proof. Jacket contained no proof of being killed by another. Compromised by company agent. Limb loss. Benefit $200. Paid in full. Death loss, benefit $200, nothing paid and jacket endorsed "Not proven." Beneficiary lives abroad and no efl'ort appears to have been made to locate beneficiarv. (See Exhibit "A," Examiner's No. 91). Death loss, benefit $200. Company paid $200. Important corre- spondence. (See Exhibit "A," Examiner's No. 60). Death loss. Death loss. Limb loss. Death loss. Death loss. Death loss. Death loss. Death loss. Death loss. Death loss. Death loss. Death loss, Benefit $200 Benefit $200. to in Exhibit "A" under Death loss. Benefit $500^ 316 National Convention ob' Insurance Commissionees Claim i910 Number 362,188.. Death loss. Benefit $1,000. Paid in full. o7l>,406. Death loss. Benefit $200. Paid in full. 382,.33&. Death loss. Benefit $1,000. Pro-rated on change of occupation and $500 paid. Referred to in Exhibit '"A" under " Occupation." 384,710. Death loss. Benefit $200. Nothing paid. Policy sent to company by coroner. Referred to in Exhibit "A" under " Foreign Bene- ficiaries."' 393,009. Death loss. Benefit $200. Paid in full. 393,910. Death loss. Benefit $500. Paid in full. 393.908. Death loss. Benefit $500. Paid in fuU. 393,907. Death less. Benefit $100. Paid. in full. 395.104. Death loss. Benefit $200. Killed by explosion. Nothing paid, no final proofs. Referred to in Exhibit "A." 395,453. Death loss. Benefit $100. Paid in full. 395,101. Death loss. Benefit $200. Paid in full. 395.105. Death loss. Benefit $200. Paid in full. 397,812. Death loss. Benefit $500. Paid in full. 399,887. Death loss. Benefit $500. Pro-rated on change of occupation and $200 paid. 399,805. Death loss. Benefit $200, plus $20 accumulations. Paid in full. 400,396. Death loss. Benefit $1,000. Paid in full. 402,826. Death loss. Benefit $200. Paid in full. 377,299. Death claim for $200. Paid in full. 379,881. Death claim for $100. Paid in full. 394,553. Death loss. Benefit $200. Paid in full. 398,140. Death loss. Benefit $2,500. Paid in full. 399,865. Death loss. Benefit $200 plus ten per cent, accumulation. {See Exhibit "A," Examiner's No. 177 ) . 402.028. Death loss. Benefit $1,000. Suicide. Company returned premiums, paid $10. Factory 1909 325,991. Death loss, benefit $500, company paid $50, claiming insured was mixed up in a fight. Retail Credit Company report man was acting as peacemaker. (See Exhibit "A," E.xaminer's No. 86.) 325,252. Limb loss, benefit $500, paid in full. Interesting correspondence. (See Exhibit "A," Examiner's No. 61.) 326,336. Death loss. Nothing paid and juckct endorsed " Not proven." Com- pany claims policy lapsed yet continues correspondence on the subject three months. 328,334. Deatli loss. Benefit $1,000. Paid in full. 331,744. Death loss. Benefit $1,000. No final proofs, data incomplete. Nothing paid. 333.909. Death loss. Benefit .$500. Company paid nothing. (See Exhibit "A," Examiner's No. Cu^. 333,635. Death loss. Benefit $1,000. Insured as " Pumpman," Lackawanna Steel Co. Prii-rated to "millwright."' Company paid $800. 333,330. Limb loss. Benefit $500. Paid in full. 332,462. Death loss. Benefit $1,000. Paid in full. 339,493. Death loss. Benefit $1,000. JIurder case. (Sec Exhibit "A,'' Ex- aminer's No. 106.) 340,678. Death loss. Benefit $2,000. Death from asp)ivxiation. Company paid one- tenth, $200. 353.029. Eye loss. Benefit .fi.iO. Paid in full. 352,773. Limb loss. Benefit $250. Paid in full. 346,190. Eve loss. Benefit $500. Paid in full. 320,301. Eye loss. Benefit $125. Paid in full. Industrial Health and Accident Settlements 317 ■Claim Nvunber 329,899. Death, loss. Indemnity $1,000. Liability denied by company on ground of suicide. Coroner found " Suicide T.'liile temporarily insane." 347,982. Death loss. Benefit $1,000. Paid in full. 356,038. Limb loss. Benefit $1,000. Paid in full. 356,068. Death loss. Benefit $1,000. Paid in full. 1910 374,254. Limb loss. Benefit $250. Paid in full. 374,355. Eye loss. Benefit $250. Paid in full. 385,098. Death loss. Benefit $1,000. Paid in full, after endeavoring to pro-rate. 381,817. Death loss. Benefit $2,000. Pro-rated on change of occupation from " stationary engineer " to machinist and $1,200 paid. 393,805. Eye loss. Benefit $125. Company claims injury not due to acci- dent. Nothing paid. 399,306. Death loss. Benefit $3,750. No final proofs. Seems to be a suicide case. Nothing paid. 392,278. Eve loss. Benefit $500. Paid in full. 379,964. Limb loss claim for $250. Paid in full. 380,892. Death claim for $1,000. Policy provides one-tenth payable in event of " exposure." Killed while attempting to board a moving train. Paid $125. 384,428. Death claim for $1,000, reduced to $725 on account of change of occupation. (See Exhibit "A," Examiner's No. 44). 390,528. Limb loss. Claim of $500. Paid in full. 396,161. Limb loss. Benefit $1,000. Paid in full. 376,301. Death loss. Benefit $1,000. Paid in full. 1911 408,331. Death loss. Benefit $1,000. Died from natural causes, no liability. Ticlei 1910 354,219. Anton Lund, Northeast, Pa. Insured under ticket No. C-47,332 for $2,500. Ticket provides for double indemnity in case of death in railroad wreck. Case settled for $2,500. " Company's defense appears to be "late notice" only. (See Exhibit "A," !Examiner's No. 6). REPORT OF EXAMINERS ON THE NATIONAL CASUALTY COMPANY OF DETROIT, MICH. Examiners: Isaac Davenport, Virginia Samuel Jeffery, Michigan Samuel Deutschberger, New York [319] EEPOETOF EXAMINEES OS THE ISTATIOXAL CASU- ALTY COMPANY OF DETEOIT, MICH. DeteoxTj Michigan, July 27, 1911. Hon. C. A. Palmee, Chairman of the Investigating Committee of The Executive Committee of the National Convention of Insurance Commissioners : iSiE. — In accordance with the instructions of your committee we have made an investigation of the Industrial Claim Settle- ments of the IsTational Casualty Company of Detroit, Michigan, and have the honor to submit the report of same herewith. The investigation was commenced June 29, 1911, and the following examiners have, at various times, participated in the work : Isaac Diavenport, Actuary, Bureau of Insurance, Commonwealth of Virginia ; Samuel Jeffery, representing the Michigan Insurance Department; Samuel Deutschberger, representing the New York Insurance Department. The company was organized under the laws of Michigan, late in 1894, with a capital stock of $100,000. It transacts health and accident insurance, chiefly on the industrial plan. In the course of its career the company has reinsured the risks and taken over the business of a number of corporations transacting the same kind of business, among which may be mentioned: Na- tional Protective Society of Detroit, Mich., American Casualty Company of Buffalo, N. Y., Northern Accident Company of De- troit, Mich., New York Casualty Company of New York, and the Consolidated Casualty Company of Minneapolis. The first president of the company was David E. Thomas, and after his death, in 1909, he was succeeded by W. G-. Curtis, the present president. In 1910 the company's capital stock was in- creased to $200,000. The company has its home office in Detroit, Mich., and branch offices in New York (Eastern Department) ; San Eranciaco (Western Department), and Minneapolis (Northwestern De- partment). 11 [321] 322 National Convention of Insueance Commissioners Tie home office is in direct charge of the president of the com- pany, and the branch offices are in charge of managers who derive all their power from the home office. The branch offices cover the following territory: Eastern Department: New Jersey and New York State from New York City to, but not including, Albany. Northwestern Department: Minnesota and South Dakota. Western Department: California. Operating under the department heads are division managers, district agents, laud local agents. Managers of the Eastern De- partment and Western Department receive fixed salaries, which salaries are not affected by the business or the adjustment of claims in their respective departments. Managers make contracts with agents, such contracts being subject to the approval of the home office. Some of these contracts provide for straight com- mission only, and others are on a profit sharing basis. The straight commission contracts average above twenty per cent, of the renewal premiums. In addition to the renewal commission, the agents are entitled to the first month's premium, and any policy fee they may collect when the policy is issued. Managers of the Northwestern Department work on a renewal commission contract, paying out of their commissions the agent's commissions, and all expenses, except claims, taxes, legal fees, supplies and adjustment expenses. The renewal premiums on the policies are collected either by the insured making payments at the branch office, or by a collector calling on the policy holder. In the latter case the collector is supposed to start on his rounds from three to five days before the first of the month, so as to permit the col- lections of all premiums due on the first of the month. The col- lector has until the tenth of the month to forward his collections to the home office. An interesting comment by an agent of the company with re- ference to the promptness of collecting premiums by profit and non profit sharing agents (See Claim No. 5,690, exhibit " B," letter of April 16, 1908, Kenneston to Corey) would indicate that profit-sharing agents often intentionally collect premiums late in order to keep the policy holder out of benefit. Industrial Health and Accident Settlements 323 A small proportion of the Company's business is of the class known as factory or franchise business. Policies outstanding are of several hundred forms, many of which are inherited from the companies and associations rein- sured by this company. Some of the forms provide for natural death benefits, funeral benefits, endowments or dividends as well as the usual indemnities for accident and sickness. The investigation was made for the purpose of ascertaining the co'mpany's treatment of its claimants. The death claims were selected for particular examination, as indemnities payable are specific, land 'as such claims offered the best opportunity of ^as- certaining the attitude and disposition of the company in the ex- ercise of its trusteeship towards beneficiaries, who are less apt to know their rights than the living policy holder. The examiners accordingly examined every death claim for the years 1908, 190tJ, 1910 and 1911 to date, which could be located in the company's files, and a synopsis of these claims is given in a schedule lattachect to this report, exhibit " B ". In this connection it is noted that the home ofiice files are in excellent shape; that the files of the Eastern Department and Western Department are very incom- plete. App:'0ximately twenty-five per cent, of the Eastern De- partment files are missing, the explanation being that some of the boys, now no longer employed by the company, engaged in a pillow fight using the files for that purpose. The missing files of the Western Department was explained by the statement that when the files were received at the home ofiSce they were left where the janitor had access to them, land he destroyed them in the belief they were waste paper. As the claims found in the eastern and western files show a very much more unfavorable attitude towards claimants than those found in the home office files, the examiners are not at all satisfied that the full practice of the company in the eastern and western territory has been re- vealed. The manner of settling the claims in the Eastern and Western Departments stands in sharp contralst with the home office settlements, but inasmuch as the branch offices were under instruc- tion from the home office, and correspondence in some cases directly connects the officers of the company with the adjustments, 324 National Convkntion of Insukance Commissionees it is difficult to see how the home office can avoid responsibility for the adjustments in these two departments. About twelve hundred disability claims of all departments were examined. The treatment by the home office of disability claims is ordinarily fair, but an examination of the treatment of such claims by the Eastern Department, especially impressed the examiners with the lack of fairness, and a number of such claims have been selected for the consideration of your committee. (See exhibit "A".) There has been a change of management in both the Eastern and Western Departments. The change in the Eastern Depart- ment occurred in March, 1910, and there has been a material improvement in the handling of such claims in that department since. The change of management of the Western Department took place in January of this year, and the two death claims found in the files of this department for 1911 would not warrant the statement that there had been any improvement. The home office does not, as a rule, adopt secretive tactics when notified of claims by parties other than the beneficiary, nor does it take ■advantage, as a rule, of late notice and other technicalities to avoid just claims. The home office adjusters also pay the bene* ficiary the accrued sick benefits at date of death without re- quiring the appointment of an administrator. On the other hand, the home office has practically up tO' the present writing ignored the accumulation clauses in the policies. There has been a slight improvement in this respect since the fall of 1910 with respect to the ten per cent, accumulation clause. The fifty per cent, ac- cumulation clause, as interpreted by the adjusters at the home office, is never effective where premiums are paid monthly. While the wording of most of -the fifty per cent, clauses tends to bear out the interpretation of the adjusters, the wording of this clause in some of the forms would indicate that the accumulation was due in case the insured had kept his policy in force one or more years without delinquency. As noted above the clause is universally ignored regardless of the wording of the policy under which claims are being made. A well-defined practice of the company that should be noted is, when issuing a policy to make the same payable to the " estate " Industrial Health and Accident Settlements 325 in place of the beneficiary named by the insured. This is done without the consemt of the insured, though the agent is instructed to inform the insured of the change. Until the present year this practice had been carried to such an extent as to make the change in nearly all cases where the beneficiary's Christian name was not given in full, but merely his or her initials were given in the application. The company's position, if it desires to contest or evade a death claim, has been strengthened by the change, and on the other hand, a heavy cost has been 'arbitrarily placed upon the collection of the indemnity. This practice is worth dollars and cents to the Company. (For example, see claim 88,242, exhibit " A".) The practice still exists to a marked degree. The premium collections and claim payments for the years 1908, 1909 and 1910 are submitted below: iNDuSTRlAt (Including factory) Year. Premiums. Claims. Per Cent. 1008 .$3.'53.47i2 20 $203,727 89 36.8 1909 (129,530 97 234,525 08 37.1 1910 ''■''''^'' ««" 239,738 711- { ^ [Ht \ * Including factory premiums, $25,026.40. t Including factory claims, $14,248.05. In this connection it should be mentioned that the statistics submitted to the New York Insurance Department, purporting to show the ratios of claims paid to premium receipts under various plans, are erroneous, as compared to the aljove, since the company's figures were based upon actual collections by the company, while the above premium receipts include the first month's premiums, which arc retained by the agents as comniis?;ioiis. Conclusion The home office officials do not seem disposed to use the re- strictive provisions of the policy as weapons of offense against claims, but rather as weapons of defense against unworthy claims. However, there are a number of unfair adjustments; and in view of the same, we desire to call attention to the attitude of the company towards the investigation of complaints by the Insurance Department. (See Claim 7379, Sec'y's letter to Corey, Dec. 8, 326 National Convention of Insurance Commissioners 1909, and Claim Y723, sec'y to Corey, date, Feb. 23, 1910.) As the settlement of one of the claims referred to was exceedingly unfair, the sentiment expressed in the correspondence is par- ticularly noteworthy. Respectfully submitted, Isaac Davenport, Actuary, Bureau of Insurance, Commonivealth of Virginia. Samuel Jeffery^ Representiyi-g the Michigan Insurance Department. Samuel Deutschberger, Representing the New York Insurance Department. Exhibit A Schedule of Claims Selected for the Consideration of Committee No. 1,218. Jesse E. Parker, Roosevelt, Arizona. Policy issued May 26, 1908. !^300. Foreman, supervising only. Killed by fall from platform, December 12, 1908, in the performance of his duty as supervising foreman, as certified to by his employers and other proofs. His vpife brought her husband's body to the East, leaving power of attorney with the company's agent to collect claim. The agent notified the Pacific coast managers December 14th, to which no attention was paid. The agent wrote several letters before receiving reply from the managers. They then wrote telling him that notice must come from the beneficiary herself. Tlie beneficiary notifies company, Janu- ary IS, 1909. Under date, ilarch 26, 1909, company sends check for $40, pro-rating the amount of the indemnity to $200, and then allowing only one-fifth of that amount on account of late notice. Check returned. The file in this case closes with several letters from the claimant's attorneys, apparently unanswered by the company. Evidently nothing paid on this claim. The address of the beneficiary, jlrs. Loiss I. Parker appears to be Otselic, N. Y. No. 1,596. Joseph Granger. Killed in oil explosion April 9, 1909. Death indemnity $400, plus accumulations. Company paid $382, deducting twelve months' premiums, and ignoring accumula- tions. No. 1,971. Alexander Don. Indemnity $500. Stationary engineer. Death by falling into mine shaft. 'Company promptly notified but ifjnores notice. Finally answered notice from administrator. Attempt to settle for $20 by pro-rating from C. to X, on the eround that anyone entering the mine is insured under clause X. See letter" dated January 26, 1910, from Pacific coast manager to C. T. Rily, agent. Late notice also claimed. Ad- ministrator employs attorney and sues company. Company pays $500 before the day of trial. Accumulations ignored in final eettlement. Industrial Health and Accident Settlements 32Y No. 2,347. Adalpho Martine, Courtland, Afizona. Policy issued July 18, 1909. Cage-tender in mine. Company pro-rates to X. Proper amount to be paid in accordance to premium paid should be $215. Amount of policy $500. Amount paid $100. No. 2,721. Walter C. Kreuz, Eay, Arizona. Policy issued November 28, 1909 for $800. Insured killed by explosion of blasting charge while passenger in automobile. His ohaufTeur disregarded warning of foreman. Company attempted to settle at 20 per cent, or $160 on ground that insured met death while breaking a rule of a corporation. Final settlement after suit began, $600. No. 2,550. Phil Corpin, Jerome, Arizona. Policy issued November 7, 1909. $400. Insured killed after disregarding order of mine foreman. Company claimed only liable for 20 per cent., or $80, as insured violated rules of company. Settled for $210. No. 3,084. Ignatio Paneuka, Tucson, Arizona. Policy issued May 21, 1910, for $100. Beneficiary lives in Hungary. Company apparently makes no effort to trace beneficiary. No. 3,621. Kal Kili Mulli, Albion, California. Policy issued December 2, 1910. Indemnity $400. Occupation EE; lumber piler in yards and sheds. Accidentally drowned January 18, 1911. Agency Director, Gerald Bunker, notified January 21, 1911. Western manager notified by letter from agency director dated January 26, 1911. Pro-rated to Class X. Sailor. In- demnity $100. Settled for same. The insured was in aerial tramway ear, going to boat off shore to store lumber when cable broke and insured thrown in water. See letter, March 8, 1911, signed assistant manager addressed to G. Bunker which says in part: "We believe the claim is being stirred up by this Mr. Williams, and feel that the amount of busi- ness that is in existence around Albion will hardly warrant the payment of $400 on this claim." Albion Lumber Com- pany forwarded coroner's certificate at the request of agent. See letter March 17, 1911. Verdict, "drowned through acci- dent to cable swing." See letter April 17, 1911, signed "As- sistant Manager " to Albion Lumber Company, in which company claims late notice. Proof not furnished within thirty days; and that insured was not following the occupa- tion, hazard, or exposure for which policy was applied for. See letter to the company from Albion Lumber Company, April 11, 1911, in which they say company delayed one month in answering the communication, and that Agent Williams notified the company within three days of accident, etc. Com- pany's acknowledgment completes the files. This claim was adjusted by the new western managers with the aid of the home office. No. 5,120. Knute Anderson, Two Harbors. Minnesota,. Policy issued No- vember 30, 1908, for $200. Insured as a general laborer. In- jured while, chopping down tree. Loss of leg. Company at- tempts to classify as woodsman. $50 indemnity. Finally compromised at $80 after a year's delay. No. 5,297. John Buck. New York Cit}'. Pol'cy issued January 29, 1906. Insured $300. Drowned. See letter, Cory to Miville, January 16, 1908, which says in part: "If yovi efi'ect settlement for less than $100, we will pay you $25 for your services." Cory was manager, Miville was agent. Asent compromises case for $65. No attettipt to have the proofs elicit the facta. See 328 National Convention of Insurance Commissionebs letter, Uecemher 13, 1907 from secretary of the company to Corey, reading in part as follows: "It has always been our practice in such cases to prepare a set of questions, not wiitiiig the answers ourselves, but so framing the questions that we know practically to a certainty what the answers will be if they are truthfully given. We endeavor to have these questions answered in the presence of the agent, or person appointed to secure the answer, and to take the paper away at once without leaving any copy. . . . You will observe the main idea is to get the questions to show that the party knew practically nothing about the death, and to avoid those questions that are general, such as : Was he acci- dentally drowned ? . . Vou Avill in all probability be aiming for one thing, that is, for the one-fifth." 'So. 5,690. Elbridge J. Kimball, Brooks, Maine. Policy issued February 27, 1907. Natural death. Questionable tactics to avoid lia- bility for sick benefits. April 16, 1908, Jl. G. Kenniston, Dis- trict Manager for Maine, writes to Cory; "In the claim of Elbridge J. Kimball, E, 200,847: This claim, as I understand is for bronchitis, and under date of April 3d, you wrote me that the physician stated that it was chronic bronchitis. Isn't there some way that you can turn this down as a breach of warranty, or else settle it for one-fifth. The collector in this case is not tinder profit sharing, therefoie, of course, would not say hut ichat his premium was paid on the first of the month." Ihe company sends physician to make examination of patient, and on May 14, 1909, Kenniston again writes to Cory as follows : " I attach letter received from Dr. Cook. I had him exaUiine Elbridge J. Kimball, policy Xo. E, 200,847. See if you can make this case out as a chronic trouble. We certainly do not want to stand for total disability since the 20th of February. Probably the man has consumption. Turn the claim down and return the man all his premiums. The settlement of the same will not do us any good, and we ought to save the money. If he accepts tlie money we can get out of the claim all right, and I guess he will accept it. My experience has been that Avlien they get a check, no matter how small, they say to themselves: 'It is more than I expected.' Also send check to Dr. Cook for $3 for examina- tion." Company attempts to prove tuberculosis, and has sputum examined with negative results. Under date June 15, 1908, company sends $14 return |iremium, and claims breach of warranty as to medical history. The assured's physician retarses tlie company's statement, but the company decides to ignore it. See letter JanuarA l."), 1908, Corey to Kenniston. Insured dies, and liis sister makes claim' for indemnity. Company denies li:>hility. and again sends return premium check, this time made payable to beneficiary. Un- der date, December 15, 1908, Curey ailvanees another defence, in the follnwing letter: "We enclose copy of letter received from Dunton & .Moss in relation to claim of John H. McKin- lay. I am uncertain whether the stsnographer who wrote the beneficiary, Mrs. ilay J. McKinlay, on October 7th sent you ii cii])y or not. I now send you a copy of the letter. I also enclose copy of the final proofs, showing erasures and all. You will note how incomplete they are. I also enclose copy of our reply to Dunton & Moss. The man was injured as a carpenter, in Class E. He was a teamster in the woods, in Class X when disability commenced. That, how- ever, would not aflfect his monthly indemnity. But as the attorneys would not have one of our manuals in their pes- Industrial Health and Accident Settlements 329 session, it might be a talliing point. In my judgment, if they sue us, we will be beat, and as the claim is preitty heavy, I think you had better go down there and see what can Be done towards patching the policy up. If you want the claim papers you can let us know. The only point we have to hang our hands on is the fact he had drawn in- demnity before. This we cannot prove. All we have got is the statement of Agent Lane. The disability commenced Ii'ebruary 20th, and notice was received on March 4th, but this is rather a slim defense, because the preliminary is dated February 27th, while our dating simply shows March 4th — we have no post-marked envelope to prove it by. It may have been sent to Detroit, or it may have been sent to you, which would account for date we received it. Anyhow, the fact we have furnished him final proofs would act as a waiver for late notice. We have certainly no defence here we could win out with, except possibly the breach of warranty, and that we cannot prove except by the vague statement of Lane, and Lane would be against us, and Dr. Truworthy would be against us. I think you can patch this suit up better before they start than you can afterwards. Let me hear from you in relation to the matter." By this time the claimants had hired attorneys. Under date of October 6, 1908, Kenniston writes to Dr. H. L. Truworthy the following letter : " Dear Doctor Truworthy. Recently we had occasion to investigate the claim of the late E. .1. Kimball, and notice in the paper.s that you were the attending physician; and from the final proof blank it shows that you took oath Isefore J. W. Harding, a notary, that the late Mr. Kimball was actually confined to the house from March 4th to July 13th. Do you wish to change this statement? In answer to the question — • ' Has the claimant any local or constitutional disease which would contribute to cause or continue the disability;' you answer 'No.' You also state the party had chronic bronchitis; would yoii kindly advise us how chronic bronchitis can be brought on at once, if the party has not suffered from some similar disease before? From our investi- gation of this claim, we have found that certain statements made in your report were absolutely false. We have positive proof that this party was not confined actually in the house on the dates as you have stated. We only want the facta in this case, and trust j'ou will supply them to us. Trusting we may hear from j'ou at your convenience, we are. Very truly, H. J. Kenniston, Manager for Maine." Doctor Tru- worthy replies to the above, under date October 10, 1908. The claim was compromised for $90. The claim apparently ought to have been settled for $155. Xo. 5,957. Benjamin Jones, New York City. Policy issued August 21, 1907. $200 indemnity. Insured bitten by a dog. Death from rabies. 'Company claims death from poisoning and settles at 20 per cent., $40. No. 6,190. Williams Thomas ITowgarth, Williamsport, Pa. Loss of eye. Indemnity, $100. Company raises point that premium was not paid. Evidence shows that policy was in force. Com- promised for $75. No. 6,222. William Mayers, New York City. Policy issued July 21, 1908. Indemnity, $300. Insured fell off scaffold. Pro-rated. In- sured apparently had same occupation at death as when in- sured. Bribe offered to solicitor to remember. See letter from Corey to Curtis, September 14, 1908, which reads as 330 National Convention of Insurance Commissionees follows : " I have yours of September 11 in relation to settlement of death claim of William Mayers, and the $25 paid to Mr. Campbell. I do not think you quite understood ray letter. I meant you should read between the lines. Camp- bell did not make a charge. The assured was written as stockman assorter, rivets and bolts. Jarvis and Miles ought to have incorporated in the policy, shop-work only. The man was climbing over the building when he was killed. The case got in an attorney's hands, and it was perfectly ap- parent to me that Campbell was going to go against us, seeing that $300 was likely to be paid. It was I who sug- gested to Campbell that he try to remember a little more carefully exactly what the conversation was between the as- sured and himself, when he took the application. Under the stimulus of $25 his memory revived to a wonderful extent. You can rest assured I would not allow him to make any charge for adjusting any claim. What I meant when I said Mr. Campbell succeeded in effecting settlement with the administrator for $100 was that he told the administrator what he had remerabered the assured had told him, then the administrator was ready to accept our proffer of $100." No. 6,300. Charles Hopkins, Paterson, N. J. Policy issued September 16, 1908. $400. Insured fractured skull causing death. Com- promise without justification, and a misleading testimonial obtained for advertising purposes. See letter Corey to Curtis, Xovember 11, 1908. Ko. 6,020. Stephen Berry, Machiasport, Me. Policy issued December 30, 1908. Insured commits suicide after five months illness. Company attempts to settle for sicl11. The claim was adjusted by J. L. Drniscomb who is an agent oper- ating on a profit sharing contract. On February 13, 1911, Mr. Dimsoomb writes the following letter: " I left San Francisco last night to iuTestigate and pay the death claim of B. Gaspanni of Hobart Mills, who was killed there by an engine on 6th or 7th by being run over. The beneficiary is Jim Gaspanni whose residence on application is Italy, but I heard he was here. Instead I find the man here is John Gaspanni, a cousin, so that even though I could get to Hobart I could not settle. Will write a letter to Agent Lawson to give to this cousin who is from same point in Italy. He can transcribe it into Italian and send it to the brother beneficiary. This letter will call for a release and on its return I can send draft to him. It will be a claim of $400, class ' E.' The man while insured in ' D ' as a tallyman in a lumber yard, was killed while work- ing as a section man clearing the track of snow. I am going to try, however, to pay same in ' F ' as yard laborer, $150, or as work train laborer, $100." Mr. Dunscomb succeeded in making a settlement for $100 and the home office of the company commended the settlement on May 6, 1911, as per fol- lowing letter: " Mr. J. L. Dunscomb, 759 Phelan Bldg., San Franicsco, Cal. — ■ Ee-claim D. Gaspanni, 502 ISf. 85, Hobart Mills, California. " I have your favor enclosing release for $100 on policy in above case. You have made a very excellent settlement." The policy appears to have been in force for more than one year, which would apparently entitle the insured to accumulations. This was ignored. Examiner's No, i; Claim No. 70,162; William J. Wilson, Independence, Kan. This policy was issued on October 28, 1908, the occupation is given as " machinist repairer cement plant," and the policy provided an indemnity of $S0O in case of death. The insured was killed on February 15, 1909, and the proof of loss shows that the accident happened while insured was engaged in his regular occupation, attempting to start the machinery in the mill. The adjustment was made by Mr. V. B. Scott, who appears to be a profit sharing agent and the indemnity paid to the beneficiary was reduced from $300 to $200. In explainii^ this adjustment the agent writes the following to the beneficiary : " Mrs. Olive Wilson, Ft. Scott, Kansas. "Dear Madame.^ I have just received from Mr. Hockett, Independence, final proof blank filled out on account of the death of your husband, Mr. W. Wilson. I have also just returned from a trip to Lehunt and Independence, where I have made personal investigation as regards manner in which his death was sustained, also his occupation at the time of tame. '■ When he originally applied for policy with us his occupation was given as machinist and he was written in Class ' D,' providing death benefit of $300 at cost of $1 per month, and provision in the policy is that, in the event of death, injury or disability, to insured while engaged temporarily or other- wise in any act, calling, occupa'tion, risk or exposure classified as more hazardous than classification herein given, insurance shall not be forfeited but the insured or beneficiary shall be entitled to recover indemnity on which premiums paid theretofore would have purchased of the more hazardous class. " From investigation 1 have made and from the statement I secured from his employer, it appears that his occupation was that of machine repairer, also to start the machinery which grinds the cement find to see that they were kept in proper order. It also appears that in the act of starting the machinery the belt which he used undoubtedly wound up on shaft, thus pulling him into same and causing the injury which resulted in death. Classification Ijsdusteial Hbaxth and Accident Settlements 357 for such oocupatiou as he was doing at the time of his injury was ' E ' and his premiums that he has heen paying are on death benefits, $200, and en- close herewith check for that amount, also a release which I will kindly thank you to execute and return to this ofiice." There appears to be no just cause for the reduction of indemnity in this case. The letter addressed to the beneficiary is misleading and is not in accord- ance with the facts. It should be noted on February 22, 1900, the claim ex- aminer of the home office suggested a reduction of the indemnity in the fol- lowing letter: "Mr. B. P. Scott, 801 Scarrit Bldg., Kansas City. Mo. " Dear Sir. — Re Wm. J. Wilson, 445 N. 39. I have your favor advising of loss as above and am enclosing herewith blanks for formal proof. There may be a chance for salvage as to occupation. " Very truly yours, "M. K. GORDON, " Claim Ecaaminer." Examiner's No. 5; Claim No. 89,034; C. li. Masch, Galeton, Fa. This policy holder was insured as a merchant. He was injured while fixing a hinge on his barn door. The policy provided for indemnity at the rate of $100 per month. He was injured on July 15, 1910, and his disability contin- ued for a period of six months. The adjustment was made on January 24, 1911, for $290 and the insured was pro rated as carpenter. Tlie following letters show the method: On December 27, 1910, the adjuster writes as follows: "I expect to be in this vicinity next week and will endeavor to make a settlement on the above claim. What is the limit that you would think wc should get on this? Would you advise pro-rating him? It seems that he was doing carpenter work on a barn, fixing the hinge, " Kindly let ms hear from you at your earliest convenience." The claim examiner in the home office replied as follows: " Your favor of September 27th has been received. We did not keep copies of papers in this case so I am unable to advise you what the limit we would be willing to pay would be. However, you will be able no doubt after seeing the man to decide this point for yourself better than we could here. The fact that he was injured while doing carpenter work can be used as a talking point, at least in eflecting compromise settlement." On January 20, 1911, the adjuster writes as follows: " Draft given on the above claim for $290, allowing three months and six days full benefit and three months at two-fifths. I find the fact that he had been working at carpenter work at the time he was injured a very good talking point and settlement was made in class ' D,' and the man was per- fectly satisfied with that. " it VMS a just claim. He could have claimed full benefit much longer as in the time allowed him for partial indemnity he was confined to the hospital for four weeks on second operation." The settlement was commended by the claim examiner of the home office in the following manner Januai-y 25, 1911: "Mr. D. M. Snyder, Auburn, N. Y., " Dear Sir. — I am in receipt of draft for $290 in the above case which has been honored and I am certainly pleased with the settlement you have obtained, and I am proud of myself that I selected you for the mission." 358 National Convention- of Insueance Commissionbes For four months total and two months partial the insured was entitled to $480. Examiner- s No. 6; Claim No. 80,528; William E. Kelly, Minneapolis, Minn. Policy issued October 22, 1909, occupation harbor operator, death benefit $1,200. The insured was killed by a street car at Minneapolis on December 12, 1909. On December 21, 1909, the company instructed Dr. Lucius E. Foote of Minneapolis to make an investigation. The letter reads as follows: " On receipt of this letter will you kindly advise the particulars surrounding the injury which Mr. Kelly received and which resulted in his death De- cember 12th at 7 : 30 P. M. It is reported that he was proprietor of the Beaufort barber shop of Minneapolis and it is also stated when lie was about to go on a street car he was injured, but whether by falling or in what way it is not indicated. " Evidently the injury is very severe. The attending physician, Dr. Ting- dale, says that he does not think Mr. Kelly can live. The doctor's report was made out on the loth and Mr. Kelly had not yet recovered consciousness. " What we want specially to ascertain is whether he was injured while he was attempting to get on a, moving car, whether he was under the influ- ence of intoxicants or had been drinking at all, or anj- other information that may have a bearing on the case. Also we would like to definitely learn about his income. The policy was written on October 22d for an indemnity of $100 per month." Under date of December 22, 1909, in reply to this letter, Dr. Lucius E. Foote reports the result of his investigation as follows : ■■' In the matter of W. E. Kelly, 2024 Columbus avenue, I have to state, I went as you directed in your communication of the 21st inst., and discov- ered the man was dead. He had been struck by a street car and received fracture of the skull; in fact two of them, one on top, a compound fracture, and one at the base. I then interviewed the head of the claim department of the Twin City Transfer Company whose car struck him. They state that he ran in front of the car, slipped and fell immediately in front of it, and before the car could be stopped he was struck. I asked them if he had been drinking or was under the influence of liquor at the time. They said he was not. I am satisfled that the street car company would have discovered the fact if it were otherwise as it would be of material benefit to them in settling with his family to be able to prove intoxication as the cause contributory to the accident. " Since writing the above, [ interviewed Mr. Kunderling, Proprietor of the Hotel Beaufort who stated that the understanding of the people about the hotel is that Mr. Kelly was struck by a car coming in the opposite direction from the one he was trying to catch. " He also states that in his opinion, Mr. Kelly who owned two shops, and his wife who acted as his superintendent, cashier, etc., probably earned as much as $150 per month. This would only be a guess as he had no means of ascertaining the exact amount, — it might be a little more or a little less. " Hoping my report covers the case, I am. Yours very truly Lucius E. Foote, M. D." This claim was adjusted by J. L. McKee, State Manager, New Eockford, N. D., who operates under the profit sharing contract. The first notice of loss given by Mr. McKee on December 24, 1909, reads as follows: " Dear Mrs. Gordon : It makes my heart ache to advise that this office has been notified that Mr. W. E. Kelly, 513 N. 39, Fessenden, N. D., was killed in Minneapolis by being i-un over by a street car. I have written health and accident insurance for 15 years and this is my first death loss." Industrial Health and Accident Settlements 359 Mr. McKee in his adjustment succeeded in reducing the amount of indem- nity to which the insured was entitled under the provisions of his policy from $1,200 to $900. On January 27, 1910, he advised the home office of the ad- justinent in the following letter: " My Dear Mrs. Gordon : I am pleased to herewith enclose papers in the ease of Wm. E. Kelly, Fargo, N. D., which represents the final disposition of this case. Honestly, Mrs. Gordon, I think the company in all fairness, should reimburse me for the expense I incurred in the adjustment of this loss. One thing I am quite sure about; that the matter could hardly be closed up for $900 without personal attention. It cost me $15 railroad and Lotel expense. Whatever you think is right in this case, I will be governed by your decision. I am. Sincerely yours, J. L. McKee." In reply to this letter Claim Examiner M. K. Gordon writes on February 1, 1910, as follows: "Mr. J. L. McKee, New Kockford, N. D. "Re Wm. E. Kelly, 513 North 79. " Dear Sir : I am in receipt of papers given you in the above case, also the draft for $900 which has been honored and we are very much pleased that we are able to effect this saving. " While I am not authorized to allow expenses incurred in cases of this kind, inasmuch as it has been understood an agent who renders the company assistance in such matters derives sufficient benefit in the way of other insurance or in keeping down his claim ratio to reimburse him for any ex- pense incurred, I am enclosing check for $10." The claim papers in this case do not disclose any reason for the reduction of the indemnity from $1,200 to $900. At the informal hearing held by the examiners for the purpose of giA'ing the company an opportunity to explain this and other doubtful cases, it was stated that the reduction was advised on the grounds of occupation; that the insured was not a barber proprietor or barber employe. This information is based upon the newspaper article filed with the papers. The facts, however, are contradicted in the letters of the company's investigator. Dr. Lucius E. Foote. Examiner's No. 7; Claim No. 66,551; William J. Karsek, Seattle, Wash. This policy holder was insured as a Stationary Engineer. He was acci- dentally killed during a deer hunting expedition. The company reduced his classification to " Hunter for pleasure or profit," and reduced the indemnity from $400 to $100. Beneficiary protested against this settlement and was advised that the company's position in this matter was based on the decision of the Texas Courts in Lane vs. General Accident Insurance Company, 113 S. W. Report, 324. Examiner's No. 8; Claim No. 85,333; Charlie Stewart, Carrizo Springs, Tex. Insured as " Engineer, Stationary Engineer and firing by wood or coal " in class "D". Policy was in force for one year, dated February 8, 1909, and carried an indemnity of $300 in case of accidental death. At the time of the accident which resulted in death insured was engaged according to the proof submitted at " Carpenter work in putting up a wind mill tower." Pro-rated to " Wind-mill maker, erecting ", class " X ", indem- nity $100. There was a 10 per cent, accumulation due on this policy but the 360 Natioi^al Convention of Insueance Commissioners company did not pay it until after it received a letter dated March 20, 1910, from Mr. Wm. H. Davis, the company's agent, from which the following is quoted : " I had some trouble in adjusting the matter as proof submitted to me was that he was not working on the mill or the tower but was working on the ground. However, it can be adjusted by adding $10 to which they are clearly entitled." From the foregoing it would appear that the pro-rate was questionable. There is nothing in the jacket to show that the insured was a windmill maker at all. The company has no classification " Carpenter erecting windmill," but it would seem that the classification of " Carpenter, house," would ap- proximate the same hazard and the classification for that occupation is " D ", which is the same as the original classification and would entitled the insured to $300 instead of $100. Examiner's A'o. 9: Claim No. 66,360; George D. Howard, Bumford Falls, Me. Policy issued January 15, 1908, and carried an indemnity in case of acci- dental death of $300. Date of injury October 21, 1908. Deceased was in- sured in class " C " as " Lumberman Foreman " Proof says he was injured "While working as a repairman for the Rumford Lumber Company ; » » » while walking along the conveyor he fell onto the logs below." Letter dated December 18, 1908, Ralph A. Curtis, Rumford Falls, Maine, and signed " M.K.G.," claim examiner, reads as follows: " We are in receipt of a letter from the Rumford Lumber Company to the effect that Mr. Howard was a laborer employed by them and was killed while repairing a trestle." The letter to which the claim examiner referred above was undoubtedly one dated December 15, 1908, which reads as follows; " M. K. Gordon, " North American Accident Insurance Company, Chicago, 111. '■ Dear Sir : In reply to your letter will state that Howard was working on repairs of the trestle at the Oxford Paper Company's mills at the time referred to. " Very truly yours, "Rumford Lumber Company." The above indicates that this man was employed as a. carpenter in the re- pairing of a trestle. The company reduced him to laborer class " X " and paid $100 to the beneficiary. The lowest classification given a, carpenter in the company's manual is "E ", indemnity $200. J •^ * resulting wholly or in part, directly or indirectly * * » from unnecessary exposure to ap- parent danger, » » « the limit of the company's liability shall be one- fifth of the amount that would otherwise he payable * * *." Examiner's No. 36; Claim No. 69,851; Thos. A. Kendal, Council Bluffs, la. This policy holder was insured as window dresser. He was drowned at Lake Manawa while engaged on a hunting expedition. The instructions to the adjuster, B. P. Scott, Kansas City, Mo., are contained in the following letter: " I am enclosing herewith newspaper accounts and preliminary report in the above case, also sample of policy. You will observe that 'Sir. Kendal was drowned while on a hunting expedition. Mr. St. Clair tells me there is a decision in Iowa directing against pro-rating on a risk who is killed while hunting; however, it seems to me that with the .tbove we have a good opportunity to get a compromise. I do not want to put any limit on what should be paid, but it is a case that we want settled at the lowest figure. * * *." The adjuster succeeded in reducing the indemnity from $500 to $375 using as a defense " Unnecessary exposure to apparent danger.'' Kivamincr's No. 37; Claim No. 71.841; S. t'. Wtmsch, Chicago, HI. Policy issued March 21, 1908. The insured while getting off a street car on April 5, 1909, met with an accident which caused his death. Industrial Health and Accident Settlements 371 Tlie company reduced indemnity from $400 to $300 on the ground of " ex- posure to apparent danger ", and omitted accumulations of 10 per cent, to which the insured was entitled under the provisions of the contract. Illxaminer's No. 38; Claim No. 55,626; Edwin JJ. Writer, Otisville, N. Y. Policy was issued September 23, 190-1, and the insured was killed t)y a train on the Erie R. E. on November 2, 1907. The circumstances under which the deceased met with the accident do not appear in claim papers, no proof hav- ing been fi-led. The indemnity was reduced from $400 to $200 and accumula- tions ignored. The adjustment was effected by Dr. Mason who is connected with the Pa- cific Mutual Indemnity Company. Compromised Death Claims Examiner's No. 39; Claim No. 94,202; Christ Miller, Buffalo, N. Y. Policy issued December 11, 1906. Died December 7, 1910. Death benefit $200. Insured met death by falling from wagon while engaged in the duties of his occupation as a teamster. On December 14, 1910, Mr. Bart J. Shanahan wrote to Charles F. Hoen, the company's agent at Buffalo, as follows: " On December 7, 1910, Christ Miller who was insured on your policy ISTo. Y-245,239, The North America Accident Insurance Company, was killed * * *. Before he was killed his wife Fannie Miller sent you one dollar for the December dues * * *. On December 8, you returned that one dollar claiming that you refused to accept it. Enclosed find said one dollar in payment of the dues of Christ Miller for December on said policv. We claim by your custom in accepting dues after the first of the month you waive the condition of the policy which obliged payment on the first of the month. I have already sent notice to the secretary in Chicago as required, by your policy and will sue if the claim is not paid." On December 12, 1910, agent Charles F. Hoen wrote to company in part as follows : " I have turned down the claim for the following reasons : Mr. Miller was killed early in the evening of December 7th and his premium was re- ceived at this office in the mail on the morning of the 8th. I refused this payment by returning book and money * * *. " Mr. Miller was always from five to ten days late in paying his premiums, and I consider it very unfortunate for them in having this occur during the period of the lapse of this policy as Mrs. Miller, the widow who is in very poor health, has three children to support." On December 13, 1910, company wrote to C. F. Hoen in part as follows: " I have your favor with newspaper clipping regarding the above case. It was perfectly right for you to decline the claim under the circumstances, but it was not sufficient that we could allow the case to go to court because of the fact that Mr. Miller made a practice of paying his premium late in the month and it being accepted without any question would be held by a court as sufficient to warrant his believing the policy to be in effect up to tiie time of his death. However, it should be a strong point in getting a compromise of the case." The premium card shows that premiums were uniformly paid late, and it also shows that the December payment was credited on December 16th in red ink, which indicates receipt by the home office direct. Settled for $150. 372 National Convention of Insttrance Commissioners Examiner's No. 40; Claim No. 93,229; John Smajlis, South Chicago, III. Ihis policy was issued May 26, 1910, and provided a death benefit of $300. The occupation of the insured as stated in the application was " Car repairer, sliop worlv only." The insured was killed on the 8th day of November and notice of death reached the company's office on November 16, 1910, on a card of the local agent Paul Droppa. This notice reads as follows: "South Chicago, November 15, 1910. "North American Accident Insurance Company: ■'Mrs. John Smajlis has called on me today. Her husband -was killed on the 8th day of November at B. & 0. E. R. shops. Have you been notified of same? Whenever you are ready to settle with her, please do it through me as it will help me in business. I am yours, " P. Droppa." The company also received notice from Physician A. W. McLaughlin which reads as follows: " Mr. A. E. Forrest, Chicago, 111. " My Dear Sir : Mr. John Smajlis holding certificate No. y-547,274 in the North American Accident Insurance Company was killed November 7th while employed by the B. & 0. R. R. Please send the necessary papers for proof of claim to Mrs. John Smajlis, 8736 Houston Avenue, South Chicago, Illinois, and oblige. Yours trull', "A. \Y. McLaughlin.'' On receipt of this letter, the company's claim examiner under date of No- vember 16, 1910, replied as follows: "A. W. McLaughlin, M. D. "Dear Sir: This will acknowledge your favor of the 14th advising of the death of the above named. According to our records this policy expired for non-payment of premium on November 1, 1910. " Very truly yours, " M. K. G., Claim. Examiner." Apparently no investigation was made prior to the writing of this letter as to whether the policy had actually lapsed for the non payment of pre- mium. It is to be noted that the local agent in his notice does not mention the fact that the insured has not paid his premium for the month of Novem- ber. It further appears that the beneficiary or some one on behalf of the beneficiary called at the office of the company and showed a, receipt book which contained entries of payments for the months of July. August, Sep- tember, October and November. The files contain a copy of a receipt issued to the widow of the insured reading as follows: " Received of Tofolia Smajlis policy 527,274 issued by the North American Accident Insurance Company and receipt book showing payments for the months of July, August, September, October and November." No further documents appear in the file. The claim jacket contains the following notation: " Check to Tofolia Smajlis widow and beneflciar>- $22.i." The reasons for the reduction of the indemnity from $300 to $225 are not shown by the claim papers. Examiner's No. 41 ; Claim No. 75,481 ; Preston P. Springston, Weston, W. Xa. Insured June 26, 1908. Died as a result of injury July 25, 1909. Indem- nity $400, plus $40 accumulation. Industeial Health and Accident Settlements 373 Claimant states in death proof that at the time of accident he was " At his home and in an attempt to rise from bed on which he was lying, he fell on hearth and sustained injury from which he never recovered." The attending physician states in death proof that the cause of death was " Concussion of the brain from fall from bed on hearth." Disinterested friend or neighbor stated in death proof that the cause of death " Injury from fall was in my judgment cause of his death." On preliminary notification blank in reply to the question " What is the precise nature and extent of injury"? the doctor stated: "Concussion of brain from falling on and striking head on hearth from which he died in two hours and thirty minutes; never gained consciousness." On September 10, 1909, the company wrote, per " claim examiner " the letter being initialed " MKG-HK ", in part, as follows : " They were totally unable to establish any claim of death from accidental causes." There appears to be no evidence in the jacket to warrant this statement of the company, though the claimant states insured was suffering from bil- liousness. Claim settled for $67. Examiner's No. 42; Claim No. 60,368; Boiert Turner, Corsica, Tex. Policy was issued September 17, 1906, and was in force for over one year. The death benefit as provided by the policy is $300. The insured was killed under circumstances which limit the liability of the company to one-fifth of the principal amount or $60. On March 31, 1908, company wrote to B. P. Scott, the agent, as follows: " I have yours of the 24th advising us regarding the above matter. I trust you may be able to settle it without any difficulty on the one-fifth basis." On June 1, 1908, company again wrote to B. P. Scott in part as follows: " I have your favor enclosing papers in Lundrum case ; also your advice of settlement of the Turner case for $35. You certainly have done good work in both of these matters and it goes to show how much better a claim can be handled with the right party on the ground than from the home office which cannot know conditions. You are certainly to be congratulated." Intoxication. Policies provide that: " In the event of injury, fatal or non-fatal * * \ resulting wholly or in part, directly or indirectly, from intoxicants * * i* or while under the influence of intoxicants * * * the limit of the company's liability shall be one-fifth of the amount that would otherwise be payable * * *." Examiner's No. 43; Claim No. 72,106; Myron J. Ellison, Brooklyn, N. Y. On April 22, 1909, company was advised by its agents, the Northeastern Agency Company, of the death of the insured. The investigation showed that death was caused by accident which was due to a collision while driving on the public highway. The adjuster in the case was Dr. Birdsall. The claim was reduced from $400 to $250 and the accumulations ignored. The basis of the adjustment is as shown in the. following letter: 374 Natioh"al Convention of Insueance Commissionees "M. K. Gordon, " He M. J. Ellison. '■Dear Sir: The Coroner'a inquest was lield on the 30th of April, and developed nothing that would help us. It simply proved that he was not murdered and that his death was purely accidental. It is not known to the family that he had in the seat with him a keeper of a low grog shop when he was killed, and this, we can use as a bluff to show we can prove that he was drunk. Ihey can not prove that he was sober. Mr. St. Clair and I are going to do some work on this case tomorrow." Examiner's No, 44; Claim No. 76,171; Fred Williams, Rome, Ga. Policy issued May 25, 1909, occupation " Grocery Clerk." Insured was in- jured on August 11, 1909. Policy provided for a death benefit of $400. On August 19, 1909, H. O. Bird, Manager of the company's Southern de- partment, writes as follows: " This party was insured as ' Grocery Clerk not delivering ' in class ' B.' The accident occurred while Williams was returning from a wholesale grocery store where he had been for some goods. The horse began kicking and in some way throw Williams from the wagon kicking liim several times in the head. You will note I have secured statements from several different people in regard to the matter, one being Williams' employer ilr. J. N. Crozier which states that Williams Iiad been employed by him for six years and bore an excellent reputation. " Mr. Jacobs and myself however, spent a good deal of time on the case and finally succeeded in securing a statement of policeman G. 0. Cliner, which you will find attached, to the effect that the odor of whiskey was distinctly smelt while he was in the act of carrying Williams in the house. Mr. Cliner, however, would not state that the odor came from the fellow's breath but he stated that there were no other men present and that he did not think the women had been drinking. We used this statement upon the beneficiary and succeeded in settling the claim for one-fifth of the indemnity." A check was issued for $85 on August 28, 1909, in full settlement of the claim but apparently the beneficiary refused the tender and the case was evi- dently put in the hands of attorneys. This matter dragged along for a period of one year, suit was brought by the beneficiary and was compromised for $200. Breach of Warranty Examiner's No. 45; Claim No. 64,212; Charles Cotman, Wichita, Kan. This policy holder was insured on February 3, 1908, as a train flagman. Policy provided an indemnity of $200 in case of accidental death. The in- sured was killed by the accidental discharge of a revolver on August 9, 1908. The company's adjuster B. P. Scott who made the investigation reports as follows: " On investigation of the case I find that the claimant's death was un- doubtedly due to purely violent and accidental means. He was flagman for the Santa Fe E. R. and as such was a duly sworn oflicer of the law so our defense concerning his having firearms on his person is of course very slim. However, you will note on referring to the application that he warrants him- self to be a white man but he is about as black a negro as ever was killed. Another thing you will note is that this application was not signed by the applicant but was made out payable to his wife, Lular C. Colman and the application is signed by Lular C. Colman. It occurs to me that the best way to handle this would be to reject the claim on breach of warranty, Industrial Health akd Accident Settlements 375 first, that he made a misTepresentation concerning his color; second, that he fully described his application as flagman when as a matter of fact he was not only a flagman but was a police ofiicer; third, that the policy was taken out on him without his knowledge, the application being signed by Lular C. Colman. " Of course, the last defense is pretty slim inasmuch as the application evidently slipped through our policy department and was issued. In fact, all of our defense may be rather slim, and I believe if the claim is rejected and they are made to think they will perhaps not get anything, we will be able to get them to talk something within reason on compromise." On September 5, 1908, the claim examiner writes as follows: " Of course the breach of warranty on any of the points mentioned is not material and Mr. St. Clair is of the opinion that it would be hardly ad- visable to commit ourselves at this time. At least we would like to know more about the case before acting, and wish you would advise us as to whether they have a lawyer and whether it is the lawyer who is holding out or simply the beneficiary. As you could not get a compromise, we presume they held out for the full amount, but possibly they would be more reason- able if the matter was allowed to stand until you return to Kansas." On September 16, 1908, the claim examiner writes as follows: " Your letter does not indicate whether you tendered the return premiums but 1 assume that you did. In any event I would suggest that at your convenience you call on the lady and start out with a proposition that we are only liable for the amount of the premiums and get the best proposition you can up to $200." In accordance with his instructions the adjuster tendered the beneficiary the return of the premiums which she did not accept. The case was eventu- ally placed in the hands of attorneys who have succeeded in obtaining a com- promise settlement for $150. Final Proof Examiner's A'o. 46; Claim No. 77,465; (ieorge Wilson, LuibocJc, Tex. The policy was issued on July 23, 1909, and the insured was killed on Sep- tember 18, 1909. The death benefit as provided by the policy is $600. The local collector notified the company of the accident on September 19, 1909. This letter was received in the company's oifice September 24, 1909. On the same date, that Is, September 24th, the claim examiner at the home office wrote the following letter: "Mr. P. B. Scott, 306 Garrit Arcade, Kansas City, Mo. "Be George Wilson, 498,769, Lubbock, Texas. " Dear Sir : Enclosed please find notice of death as above with blank for proof of loss. It is too bad that this did not go to Mr'. B. P. (B. P. Scott) before he got out of Texas, as there might have been a chance for him to have effected a saving. He may be down there again before the case is disposed of." Proof blanks were forwarded on September 27, 1909, in a letter to W. E. Buchanan, who appears to have been the local collector. On November 13, 1909, a letter was addressed to Mr. Buchanan, reminding him of the fact that the proofs had not been filed in the above case. In reply Mr. Buchanan writes as follows: 376 National Conventioh" of Insueance Commissionees "November 16, 1909. " Mr. P. B. Scott, Kansas City, Mo. "Dear Sir: Yours of recent date at hand and will say that I turned those papers over to a close friend of Mr. Wilson's who said he would look after same at once. They had to be sent some place in Alabama, to his mother, she being the beneficiary. Hope you have had those papers before this, though, if not, I will be glad to look up the cause." The proof blanks were finally received by the company on December 22, 1909. On December 27, 1909, the claim examiner writes to the district agent as follows: " H. V. Byrd, Atlanta, Ga. " Proof of loss has just been filed in the above case. Mr. Wilson it is claimed was killed on September 18th by a stroke of lightning. The policy provided that proof of loss in the event of death must be made within 30 days from the date of death. It may be we have waived our rights to avail ourselves of this provision, owing to the fact that Mr. P. B. Scott wrote ou November 13th to ascertain why the proofs had not been filed. He followed the precedent of handling indemnity blanks." Beneficiary under the policy is Margaret E. Wilson, 218 Smith Street, Chattanooga, Tenn. She writes on the letter head of Wilkinson & Wilkin- son, Temple Court, Chattanooga, Tenn. "We believe that we are entitled at least to a compromise settlement, owing to the failure to file papers as required by the policy and Mr. St. Clair and I after duly considering the matter have decided to refer to you and ask you to go personally to Chattanooga, see the beneficiary and close the case up, getting her release duly witnessed, and take up the policy. " For your information, I am enclosing herewith the original proof of loss, copy of the application, and copy of agent's letter to whom Mr. Scott w^rote on November 13th. " I understand that this Buchanan is wholly unreliable and for this reason we are anxious to thoroughly investigate the matter and satisfy ourselves that everything is correct. " You will note that there is no certificate of the officiating clergyman and there is also a change in classification on closer investigation, although there has been nothing sent in to indicate this. " Will you kindly give the matter attention, as early as possible, and oblige." On January 6, 1910, Mr. Byrd replied as follows: '■■ M. K. Gordon, Chicago, 111. " Re Geo. Wilson, Y-496,768. . " Dear 5Iadam : I first saw Mrs. Wilson but was unable to induce her to take any action towards an adjustment other than for the full amount. She preferred to leave the matter to her attorney, Sam H. Seymour. I have seen him and he also holds out for the full amount, but finally made a proposition to settle for $575. I told him I would refer to you. and if accepted check would be sent at once. I am unable to develop anything new in the case. Mrs. Wilson understands her son was supervisor of the crew and had been engaged in this kind of work for some time. " I did my best to induce compromise by citing delay, etc., that would be necessary to litigate the case, but they will not think of accepting less than the amount mentioned. If there is any thing further that I can do, please advise. " Kindly let me know what disposition you make of the matter. "Yours truly." I'he claim was finally compromised at $500, Dr. Mason acting as Special Adjuster for the company. This Dr. Mason is the Chief Adjuster for the Pacific Life and Pacific Mu- tual Indemnity Company. Ih^dtjsteial Health and Accident Settlements 377 Sunstrohe Examiner's No. 47; Claim No. 76,341; Elmer E. Knipper, Ligoner, Ind. Policy issued May 24, 1909, indemnity $400. Sunstroke August 23, 1909, died August 25, 1909. Settlement by Dr. Mason for $100. Policy covers accidental sunstroke. No explanation in jacket why the principal sum was not paid. Undertaker Examiner's No. 48 ; Claim No. 96,414 ; James Johnson, Chicago, III. This policy provides an indemnity of $400. The insured met with acciden- tal death December 15, 1910. The circumstances do not appear in the files. Claim was disposed of by payment of $40 to Messrs. Nee & Spindler, Under- takers, who had the policy in their possession. Settlement was adjusted in the Chicago oflfice of the company. The following memorandum appears in the files: "Mr. St. Clair, Attorney, Room 835, 217 La Salle St. " This is Mr. Spindler the undertaker who buried our policy holder Jim Johnson; as per telephone talk we will pay $40 being one-fifth of the face 01 the policy. He will make proof and return the policy. (Signed) Geo. L. Forrest, Manager." The following is a copy of another memorandum in jacket which is un- signed but appears to be in same hand writing as foregoing, viz. : "The undertaker called with this policy January 31, 1911, and asked settlement on the basis of one-fifth. However he knew nothing of the particulars of Johnson's death so I told him to wait for Mr. St. Clair." On February 14, 1911, a check was issued for the sum of $40 payable to the order of the undertakers. Freezing Examiner's No. 49; Claim No. 86,237; Charles Jiayless, Denver, Colo. Policy issued January 7, 1908. Insured died on or about the 2nd day of April 1910, exact date not given. Deceased was a, Homesteader in Colorado and during a blizzard was frozen to death in his cabin. Letter of May 9, 1910, to F. J. Forrest, Ass't. Secretary, Denver, Colo., claim examiner Gordon writes as follows: " If any claim whatever is presented you understand that it would only be under the illness feature of the policy * * *." Claim examiner M. K. Gordon writes the beneficiary, Sarah J. Snowden, letter of June 14, 1910, as follows: "I have your favor of the 11th inst., with statement as to manner in which Mr. Bayless met his death. The policy does not indemnify for death from natural causes, as the circumstances indicate in the proof. If a period of disability instead of death had resulted from this condition the case would haVe been adjusted under the illness feature of the policy. Under the cir- cumstances I have to advise you that we cannot consider any claim." On June 17, 1910, F. J. Forrest, Ass't Secretary, Denver, Colorado, writes M. K. Gordon, as follows: " I am in receipt of your letter of June 14th, rejecting claim of the above named, and I wish you would write me an explanation on what grounds you 378 Watiokal Convextiojvt of Insueaitce Cojijiissioitees rejected this claim under series Y-26, as under the Special Benefits, para- graph ' (h) ' it seems to me that we cover freezing. It appears that you place some diflferent interpretation on this clause, and I wish you would write me in regard to it so that I can give proper explanation." Letter dated December 2, 1910, from 1"'. J. Forrest, Ass't Secretary to M. K. Gordon, claim examiner: " I spent yesterday afternoon with the attorneys in this case and we will have to make a settlement or else a lawsuit will be commenced and I cannot get a reliable lawj'er to take this case and give me any hope of winning. The Travelers Insurance Company had a similar case for |5,000 last year here which they paid. If you had followed my advice and got some attorney in New Orleans to take this matter up with the Colorado beneficiary a settlement could probably have been made. You must know, yourself, that a jury will give a verdict against the company, as the only question would be, did he commit suicide, or could he have avoided being frozen to death situated as he was. It does not appear that he committed suicide. " The blizzard was unexpected at that season of the year and he could not prevent being frozen to death; consequently it was accidental * * *." Claim settled for $200. Principal sum $300. Intentional Injuries Policy forms contain the following provision, viz. : " In the event of * » « intentional injuries inflicted by insured or other person * - * the limit of the company's liability shall be one- fifth of the amount that would otherwise be payable under this policy, any- thing to the contrary herein nothwithstanding." Examiner's No. 50; Claim No. 95,002; Henry Deurden, Seattle, Wash. This policy was issued on June 15, 1910; the death benefit is $400. No proofs filed, but correspondence indicates suicide, which would entitle the beneficiary to one-fifth of the principal amount or $80. On January 5, 1911, claim examiner writes to Sir. G. S. Dunscomb, com- pany's agent at Seattle, Washington, as follows: " We received report in the above case, also newspaper clipping and I note on the side of the blank that you have returned the premium of $17.4&. Did you at the time take up the policy? If so, please return it for our files. If you did not dispose of the case by the return of the premium, liability would be limited to one-fifth or $80." Tlie agent replies as follows : "Replying to yours of the 5th, beg to advise that ilrs. Deurden was unable to find either policy or annual receipt. The unearned premium under the policy was $17.25 and we disposed of the case in this way ajid cancelled check for tliis amount was returned with my December report. Mrs. Deurden was informed that she could not recover the Indemnity under the circumstances of the death and seemed satisfied with the return of the unearned premium as she stated she did not even expect that." Examiner's No. 51; Claim No. 50,640; J. P. handrum, Odelia, Tex. The insured was a deputy sheriff and was killed by a person whom he had previously arrested. The amount of the death benefit as provided by the policy was $1,400', plus accumulations of 10 per cent, which would bring it to $1,540. As the accident occurred while the deceased was performing his duties as Industrial Health and Accident Settlements 379 a deputy sheriff, unde^f which occupation he was insured, the right of the company to reduce to one-tifth would seem to be questionable. The company claimed, however, that under a decision in Texas, this lia- bility was limited to one-fifth and settlement was effected for $308. This sum was paid reluctantly after an attempt to dispose of the claim by pay- ment of $100, as will .be seen in the following letter by the head of the claim department to the company's adjuster: " D. V. Scott, Dallas, Texas. " Re : J. P. Landrum. "Dear Scott: Referring to that part of your letter which deals with tie above claim, there is a liability against us under the terms of the policy contract at one-fifth the face of it. If you can make settlement by the payment of $100, 1 would do it and get the matter out of the way." Examiner's No. 52; Claim No. 67,789; Seymour L. Clark, Ogden, Utah. Policy issued April 6, 1908. Indemnity in case of accidental death, $300. Date of injury, November 27, 1908. Occupation, Deputy Sheriff. Insured in class " C." Death caused by being shot while attempting to make an arrest. Company attempts to pro-rate claim to the one-fifth clause on account of in- tentional injuries inflicted. Letter dated December 10, 1908, reads as follows: " North American Accident Insurance Co., " Claim Department, Chicago, Illinois. " Dear Sir : As Clark was killed as a ' Deputy Sheriff ' making an arrest I assume that we are liable, although if it were not for the danger of injuring a well established business I feel that a good compromise could be made. 1 wish you would wire me what you think best to do in this case; whether to pay in full or make a satisfactory compromise or stand pat on the one-fifth. I presume your instructions will be the same as 'A. E.' sent me some time ago — Use your God Given Brains. " Very truly vours, " F. J. FORREST, "Assistant Secretary," Claim was placed in the hands of Hoyt & Fuller and same was compro- mised for $260. Examiner's No. 53; Claim No. 100,770; Jti'rank E. Trash, Benson, Ariz. (Compare with claim No. 67,789.) Date of policy April 12, 1909. Indemnity $300. Occupation constable class " C." Death caused by being shot while attempting to make an arrest. J. L. Dunscomb, Manager Pacific Coast Department, writes for instruc- tions for payment of claim. Telegram dated May 23, 1911, reads as follows: " Mr. J. L. Dunscomb, Benson, Arizona. Letter just here. Pay full in- demnity if making arrest. M. K. G." Claim settled for $300. Policy in force for two years. Accumulations ignored. Accident Claim Suppressed by Agent Examiner's No. 54; Claim No. 62,355; Henry J. Leonard, ChoiocMlla, Gal. The insured sustained serious injury on October 11, 1907, and was entitled to indemnity at the rate of $25 per month. Notice of claim was received by the San Francisco office immediately after the occurrence of the accident and was suppressed by the agent, who was acting under the profit-sharing con- 380 ISTational Convention of Insukance Commissioners tract. The case was subsequently revived upon representation made by at- torneys for the insured and settlement effected for the sum of $200 on Sep- tember 4, 1908. J. L. Dunscomb, who effected this settlement, writes in part as follows under date of August 26, 1908, viz.: " 1 consider this a fortunate compromise. Leonard is entitled right now to 11 months indemnity and you will note from attached letter from Dr. Kil- berg, of October 26, 1907, that he is still unable to work and will be at least for six months to come. Mr. Wall advised me personally that Leonard is still on crutches. " Trusting that I have made disposition in this matter satisfactory to you, I remain, yours very truly." The settlement was agreeable to the company, as shown by the follow- ing letter: September 5, 1908. "Mr. J. L. Duuscomb, "Dear Sir: We are in receipt of your favor of August 26th with release in above case, and we are today crediting your account with $200 to reim- burse you for the settlement made. The settlement aou secured id very satisfactory to us and we wish to thank you for the same." Exhibit "A," hereto annexed, contains a list of all the death claims examined in the course of this investigation, excepting those set forth herein. Respectfully submitted, George L. Beowx, Representing tlie Insuraiice Department of tJie State of Michigan. Leo:s^ S. Senior, W. A. BiLLINGHAM, Representing the Insurance Department of the State of Neiu Torh. Lucius Pfoust, Representing the Insurance Department of the State of Illinois. Exhibit A This exhibit consists of all death claims for the years 1908, 1909, 1910, and 1911 to July 1st, except such death claims as are fully set forth in the original report hereto attached. Exam. Claim No. No. 1 101,637. David L. Cook, Broeton, Illinois. Occupation " Foreman." Indemnity $300. Deceased was doing the work of a la- borer at the time he was injured. Death caused by being struck by lightning. Company attempted to settle claim for $100, plus accumulations of 10 per cent., but this was re- fused by beneficiary. Claim reduced to class " E " as la- borer and paid in accordance therewith, amount $200, plus 10 per cent, accumulations. Total $220. Industrial Health and Accident Settlements 381 Exam. Claim No. No. 2 85,809. Indemnity $300. Death caused by suicide. Pro-rated to "in- tentional injury clause" to one-fifth. Claim settled for $60, plus accumulations 10 per cent. I'otal $66. 3 71,899. Indemnity $300. Paid $300, plus 10 per cent, accumulations. Total $330. 4 82,674. Indemnity $300. Paid in full $300. 5 63,560. Indemnity $400. Paid in full $400. 6 70,717. Indemnity $200. Death caused from gun-shot wound in- flicted by himself, accidentally. Claim examiner suggested to pro-rate from class " E " to class " X," but this was not done for business reasons. Claim paid in full $200. 7 86,569. Geo. E. Dahl, Vii-ginia Point, Texas. Indemnity $300. Occu- pation " Boat Captain," class " D." Claim resisted on account of non-payment of premium. Letter August 10, 1910, E. J. Rath, District Manager to M. K. Gordon, Claim examiner : " I decided that it would be best to write you fully and frankly concerning the details of this matter; to get the benefit of your experience and await your instruc- tions as to what course I shall pursue. It has been my habit and that of my predecessor here, Mr. A. D. Robinson, Jr. (now located at Philadelphia), to advise policy holders that it will be all right for them to pay any time between the 1st and 10th of the month and that we will give them receipts showing payment made on the 1st of the month. This is done to allay their fears as to the lapsing of policy if it is not paid promptly on or before the 1st, and, as stated, I got into the habit from Mr. Robinson. As to the case in hand will say that our local agent, Mr. Norris proceeded to Virginia Point the early part of the month to make collections, but advises that he could not find Mr. Dahl. On the evening of August 8th, about 5:45, Mr. Irving Dahl, son of deceased, and one of the beneficiaries under Policy No. 531,655, called at my ofiice, and inquired as to how his father, Mr. Dahl, stood with reference to the pre- miums on the policy; I looked up the collection list and advised that he owed $1.50 for the month of August. He then asked on what date it was due and I told him it was due on the 1st, but that if it was paid before the 10th, I would give him a receipt showing it paid on the 1st. He said that Mr. Norris had not yet been to the Point to collect but had just come in from the Point and that our policy holders there had told him that Norris had not yet been there. Although the accident happened at 3 o'clock that morning and he must have known that his father was at death's door." Agent accepted premium but after accident the premium was returned. Suit was commenced and claim adjusted for $100 and costs, a total of $105.35. 8 100,116. Otis k. Hubbard, Buffalo, N. Y. Indemnity $400. Occupa- tion " Stationary Engineer," class " B." A piece of iron flew off engine and struck neck breaking it. Statement of dis- interested friend showed occupation as " Oiler of Stationary Engine." Letter was written June 16, 1911, by Claim Ex- aminer M. K. Gordon to J. M. Snyder, Assistant State Mana- ger and he replied stating that he had investigated the claim and found that Mr. Hubbard was carried on the books as an oiler. Pro-rated to class " E." Sent check for $200. This check was refused by the beneficiary and returned to the company and cheek is now in jacket. 382 National Convention op Insitbanoe Commissionees Exam. Claim No. No. 9 87,191. Robert K. White, Carruthersville, Mo. Indemnity $400. Oc- cupation " Contractor, Supervising only " class " B." Death caused by gun-shot wound inflicted by himself accidentally. The deceased was engaged " In clearing a piece of land as foreman and overseer in woods." Pro-rated to class " E." Paid $200 as per classification class " E." 10 71,664. Michael McGinn, Green Bay, Wisconsin. Indemnity $400. Occupation " Superintendent Repair Work," class " B." Oc- cupation at the time of injury " Bridge Tender," pro-rated to class " D." Paid $300 in full for class "D," plus 10 per cent, accumulations, or total $330. 11 91,817. Paul Genth, Chicago, Illinois. Indemnity $400. Memoran- dum appears on jacket. " Told Bro'. over phone Pol. lapsed 10/1/10." Jacket contains no information. 12 94,580. Death caused by illness beginning November 20, 1910. First notice of illness received by company December 20th. Com- pany declined claim, illness benefit, on ground of late notice. 13 66,827. Indemnity $300. Death caused from drowning. Paid in full $300. 14 58,335. Elehanan Blood, Wambay, S. D. Indemnity $200. Date of policy December 4, 1905. Date of death January 24, 1908. Paid $200. Accumulations ignored. 15 77,652. Kenneth Sublett. Indemnity $400. Occupation " Watchman," class " D." It appears from the proof that deceased was injured by stepping on tack and subsequently blood-poison- ing developed and company relied on clause in policy — " Loss resulting wholly or partially from blood-poisoning, or contact with infectious substances, as classified, as result- ing from sickness, the original cause of sucli loss, but the ailment causing the loss notwithstanding; and indemnity iiot payable therefor only as provided under paragraphs ' F ' and ' G.' " Suit was threatened and claim was adjusted with attorneys for $200. 16 70,217. Indemnity $300. Death caused from opium poisoning, pro- rated "Intentional Injury" clause (one-flfth). Paid $60. 17 77,401. Indemnity $100. Occupation "Miner,'' class "X." Injury occurred while performing duty as miner. Company at- tempted to pro-rate claim under "unnecessary exposure" clause, and matter was taken up by the deceased's former employer. Claim was settled in full for $100. 18 87,026. Policy lapsed. Non-payment of premium. 19 59,803. Oolvin R. Bowdin, Forsyth, Ga. Indemnity $200. Notice of death received by company March 11, 1908, from J. M. Fletcher, Attorney at Forsyth, Ga. Proof of loss forwarded direct to attorney by company. No claim filed by bene- ficiary. 20 100,950. E. D. Thompson, Marlin, Texas. It appears from correspondence in jacket that deatli occurred from natural causes. Claim pending. Industrial Health and Accident Settlements 383 Exam. Claim No. No. 21 82,242. Insured as " Book Solicitor," class " D," indemnity $300. Deatli caused by suicide, and at time of death deceased was em- ployed as laborer. Pro-rated to class " E," indemnity $200; reduced to $40 under tbe "Intentional Injury" clause (oha- fifth). 22 82,546. Indemnity $300. Paid in full $300. 23 82,855. Indemnity $100. Paid in full $100. 24 83,047. Indemnity $100. Paid in full 25 83,658. Indemnity $600. Death caused by murder. Reduced under "Intentional Injury inflicted by another." Paid $120, plus one year's accumulations. Paid $132 in full. 26 83,699. Death caused by heart trouble. Natural cause, no liability. 27 84,702. Indemnity $600. Insured was burned to death. Paid in full 0, plus $120 accumulations, total amount paid $720. 28 84,706. Indemnity $100. Death caused by suicide. Eeduced to one- fifth under " Intentional Injury " clause. Paid in full $20. 29 84,713. Indemnity $600. Beneficiary killed in railroad wreck. Policy provides as follows: "If the beneficiary named herein is some one person and such beneficiary while between the a,ges of 18 and 60 years and while not insured in any way by any policy of this company, shall sustain such personal bodily injury as described in paragraph '(b),' and which further is sustained under the circumstances described in paragraph '(e),' the company will pay said beneficiary the amount specified for such loss in paragraph '(b),' except for loss of life which shall be paid to the insured." Beneficiary was killed in a railroad wreck, and indemnity provided in paragraph " (b) " $600 paid in full. 30 84,822. Indemnity $200. Death caused by explosion. Paid $200 plus $20 accumulations. Paid in full $220. 31 85,994. Policy lapsed on account of non-payment of premium. 32 86,239. Indemnity $200. Paid in full $200. 33 86;665. Indemnity $400. Paid in full 34 86,892. Indemnity $600. Paid in full 35 87,022. (Mexican claim). Policy lapsed, account non-payment of premium. 36 87,189. Indemnity $300. Insured as " Foreman," class " D. " Was killed while attempting to get on train, he being a tres- passer. Company admits liability of $fiO, under " Unneces- sary Exposure " clause, but to avoid litigation settled claim for $100. 37 87,192. Indemnity $400. ■ Check forwarded to agent for $400 and agent called company's attention to accumulations of 50 per cent, amounting to $200, and company in letter of June 21, 1910, writes as follows: "Accumulations on this policy were overlooked. I take pleasure in handing your herewith check for $200." Paid in full $600. 384 National Convention of Insueance Commissionees Exam. Claim No. No. 38 87,615. Indemnity $350. Death caused by suicide and reduced under " Intentional Injury " clause, one-fifth basis. Company paid $50. 39 87,862. Indemnity $300. Death caused by being struck and instantly killed while walking on Lake Shore & Michigan Southern R. R. tracks. Same was reduced one-fifth owing to " Un- necessary Exposure to Apparent Danger " clause. Paid $60. 40 88,362. Indemnity $200. Paid in full $200. 41 88,699. Indemnity $200. On August 9. 1910, company sent check pay- able to beneficiary for $200. On August 15, 1910, letter to Agent Brooks, as follows : " We enclose herewith check for $100 additional on the above case. Regretting that this was overlooked when sending former check. E. H., Claim Examiner." The total amount paid $300, which includes fifty per cent, accumulations. 42 89,104. Indemnity $300. Insured as "Laundry Worker," class " C." The deceased was engaged in doing washings and domestic work at the time of death, and pro-rated to class " E." In- demnity $200. Death caused by murder and reduced under " Intentional Injury " clause one-fifth. Paid $40. 43 89,106. Indemnity $400. Death caused by murder, reduced under " In- tentional Injury " clause one-fifth, $80. 44 89,177. Indemnity $200. Paid in full $200, plus 20 per cent, ac- cumulations. 45 89,407. Indemnity $200. Paid in full $200. 46 89,512. Indemnity $350. Insured as " Barber " class " C." Death caused by scalp wound on head while engaged as a laborer. Suit was commenced in municipal' court, city of Chicago, and claim was adjusted for $85. 47 87,948. Natural death. Cholera morbus. No liability. 48 87,895. Death caused from operation. No liability. 49 87,694. Death caused from fever. No liability. 50 87,712. Death caused from apoplexy. No liability. 51 87,447. Death caused from stomach trouble. No liability. 52 87,710. Deatli caused from dropsy. No liability. 53 87,378. No record in jacket showing cause of death. Policy lapsed, on account of non-payment of premium. 54 86,762. Death caused from Icidney trouble. Indemnity paid in amount $30 premium. No further liability. 55 85,403. Nothnig in file to show cause of death. Policy lapsed ;iccount non-piiyment of premium. 50 89,672. Death caused by tuberculosis. No liability. 57 88,832. Death caused by heart trouble. No liability. 58 88,814. Death caused from gastritis. No liability. 59 82,057. Death caused from blood poisoning. Paid $24 sickness in- demnity. No further liability. Industrial Health and Accident Settlements 385 Exam. Claim No. No. 60 81,888. Dea,th caused from pneumonia. No further liability. •61 82,881. Death caused by scarlet fever. Paid $27 sickness indemnity. No further liability. ■62 88,961. Death caused from hernia. No liability. €3 85,030. Death caused from la grippe. No liability. ■64 88,815. Death caused by rupture of the aurarism of the thoracic corta. No liability. *5 84,957. Death caused by complication of diseases. No liability. 66 84,675. Death caused from cancer. No liability. '67 84,655. Death due to inflammation of tongue. No liability. <)8 83,530. Death caused from indigestion. No liability. •69 84,551. Death caused from heart disease. Paid $57 siclinesa indemnity. No further liability. 70 94,247. Death caused from malaria fever. No liability. 71 93,701. Death caused from Bright's disease. No liability. 72 92,792. Death caused from typhoid fever. No liability. 73 92,489. Death caused from bronchitis. No liability. 74 90,583. Death caused from heart trouble. No liability. 75 86,231. Indemnity $100. Lapsed on account of non-payment of pre- mium. 76 85,970. Jacket shows death due to natural causes. No liability. 77 85,179. Death due to tonsilitis. No liability. 78 85,852. Death due to blood poisoning. No liability. 79 85,098. Death caused from apoplexy. No liability. 80 85,082. Death caused from typhoid fever. No liability. 51 85,031. Death caused from bronchitis. Paid $25 sickness indemnity. No further liability. 52 85,523. Jacket does not show cause of death. Letter in file of April 14, 1910, states that "Mr. Bacon was taken sick some time back and died the other day. I do not know what Mr. Bacon died with." Apparently no liability. 53 85,402. Death caused from Bright's disease. Piad $12 sickness in- demnity. No further liability. 54 91,916. Deatli from appendicitis. No liability. •85 91,965. Death caused from illness, but jacket does not state what kind. No liability. 36 91,478. Death caused from typhoid fever. Paid $29.32 illness in- demnity. No further liability. 87 87,157. Death caused from tumor. Paid $44 sickness indemnity. No further liability. 13 386 National ■Oonventiow of Insurance Oommissionees Exam. Claim No. No. 88 86,369. Death caused from pneumonia. Xo further liability. 89 80,972. Death caused from spinal trouble. Paid $35 monthly in- demnity. No further lifibility. 90 91,428. Indemnity $400. Insured as ".Fireman" of "Portable En- gine," under class " K." Injured while engaged as fireman on locomotive. Jacket does not state to what class pro- rated. Company's manual shows " Railway Fireman," class " F." Sent check for $150. 91 89,105. Indemnity $1,200. Paid in full. 92 72,844. Indemnity $600. Lapsed on account of non-payment of pre- mium. 93 71,349. Death caused from apoplexy. Xo liability. 94 80,261. Proof shows that deceased was confined to his bed for eight weeks but does not state nature of illness. No liability. 95 80,592. Death caused from neuralgia of the heart. No liability. 96- 73,576. Indemnity $300. Paid in full. 97 72,574. Indemnity $300. Death caused by suicide. Reduced to one- fifth under " Clause Intentional Injury." Paid $65. 98 72,444. Indemnity $100. Paid $100 in full. 99 72,208. Death notice received from attorney. Company replied in- quiring cause of death. Attorney made no response. Com- pany did not investigate further. • 100 70,688. Indemnity $600. Death caused from asphyxiation. Claim reduced to one-fifth clause — ■ $120, plus accumulations of 10 per cent., total amount paid $132. 101 79,292. Death caused by heart trouble. No liability. 102 68,585. Policy lapsed on account of non-payment of premium. 103 75,853. Death caused by typhoid fever. No liability. 104 75,384. Death caused by typhoid fever. Paid sickness indemnity $80. No further liability. 105 69,523. Death caused from kidney trouble. Paid $17.60 sickness in- demnity. No further liability. 106 69,320. Death caused by heart trouble. No liability. 107 68,559. Death caused by acute gastritis. No liability. 108 79,293. Indemnity $300. Death caused by suicide, reduced to one- fifth, clause " Intentional Injury." Paid $60 in full. 109 70,272. Death due from appendicitis. Paid $132.14 sickness indemnity. No further liability. 110 70,()57. Death due lo typhoid fever. Paid sickness indemnity $20. No further liability. HI 72,761. Death caused from hernia. Sickness indemnity paid $9.33. No further liability. Industrial Health and Accident Seittlements 387 Exam. Claim No. No. 112 73,987. Death caused from kidney disease. Paid $38.50 illness in- demnity. No further liability. 113 72,076. Death caused from bronchitis. jSTo further liability. 114 79,622. Letter states death caused from illness. No particulars. 115 74,296. Death caused from meningitis. No liability. 116 69,612. Indemnity $400. Paid $400 in full. 117 69,830. Indemnity $300. Paid $300 in full. 118 69,163. Indemnity $300. Injured while under influence of intoxicating liquors. Reduced to one-fifth. Paid $60. 119 69,565. Indemnity $300. Reduced to one-fifth account of intoxication. Paid $60, plus 10 per cent, accumulation. Payable $66 in full. 120 69,433. Indemnity $200. Paid $200 in full. 121 69,258. Death caused from pneumonia. Sickness Indemnity paid. $452.84. 122 75,600. Death caused from cerebral hemorrhage. Sickness indemnity $12.82, paid. No further liability. 123 77,103. Death resulting from natural causes. Sickness indemnity paid $17. No further liability. 124 76,206. Death caused fi'om pneumonia. Xo liabilitj'. 125 72,251. Brain trouble. $16.32 sickness indemnity paid. No further liability. 126 72,551. Pneumonia cause of death. No liability. 127 70,720. Death caused from heart trouble. Sickness indemnity $30 paid. No further liability. 128 72,452. Insured as a brick-mason under class " C." Death benefit $400. Proof shows that insured met death by an accident while taking down a, smoke stack at gin plant. Pro-rated to laborer under class " X." Paid $100. 129 89,833. Indemnity $400. Occupation described in application as " ma- chinist lathe mill and machine planer." Deceased was killed while driving an automobile on his way with machine tools for the purpose of repairing automobile and while driving across railroad crossing was struck by a train. Deceased was insured under class " B," and was pro-rated to class " D," provided for machinist to repair in shop or ovitside. Claim pro-rated $300. 130 60,660. Death due from natural causes. Policy did not cover first week's illness. No liability. 131 59,225. Death caused from peritonitis. Paid $11.31 sick benefit. No further liability. 132 52,537. Indemnity $300. Paid $300, plus 20 per cent, accumulation, total $360. 388 Natiowai, 'Convention of Insueance Oommissionees Exam. Claim No. No. 133 55,318. Indemnity $200. Emil Harris, laborer, class " E." Injury caused while attempting to cross in front of a moving street car. Company relied on " Unnecessary Exposure " clause, and attempted to settle claim for $40. Action commenced, claim settled for $120. 134 54,632. Indemnity $500. Proof shows that death was caused from operation on account of disarrangement of the intestines. Beneficiary claimed that same was caused from a fall. The attending physician would not corroborate the statement made by beneficiary. Claim adjusted for $110 by attorney. 135 52,171. Indemnity $100. Paid in full. 136 67,909. Death due from natural causes. No liability. 137 53,715. Death caused from typhoid fever. Paid $23 sickness indem- nity. No further liability. 138 55,163. Death from gastritis. No liability. 139 53,842. Death caused from typhoid fever. No liability. 140 55,378. Death caused from la grippe. No liability. 141 55,527. Policy lapsed, account non-payment of premium. 142 55,512. Death caused from la grippe. No liability. 143 53,513. Death caused from pneumonia. $10 sickness indemnity. No further liability. 144 57,669. Indemnity $100. Paid in full $100. 145 53,660. Indemnity $500. Paid in full, plus 10 per cent, accumulations, total paid $550. 146 53,215. Indemnity $200. Was killed when attempting to board a moving train. Pro-rated under " Exposure clause," one-fifth, paid $40. 147 52,360. Indemnity $600. Death caused by getting oflf moving train. Pro-rated under unnecessary exposure clause to one-fifth. Company sent check for $120 which was refused. Bene- ficiary employed attorney. Claim was settled for $150. 148 51,801. Indemnity $300. Paid in full, $300. 149 55,208. Indemnity $300. Paid in full, $300. 150 58,866. Indemnity $200. Paid in full $200. 151 50,866. Indemnity $300. Paid in full $300. 152 55,475. Indemnity $300. Paid in full, plus 10 per cent, accumulations, total .$330. 153 57,394. Indemnity $100. Paid in full $100. 154 55,721. Indemnity $300. Occupation " freight checker," class " E." " Occupation at the time of death locomotive fireman, class ' r,' but insured as a freight checker in class ' E ' for $300, death benefit, paying premium of $1.25 per month, whereas a locomotive fireman would be in class ' F ' and the pre- mium for $100 death benefit is $1.30 per month. We have allowed the claim at a proportionate rate." Claim paid in full $96.16. Industejal Health and Accident Seittlements 389 Exam. Claim No. No. 155 68,107. Death due from tuberculosis. No liability. 156 55,490. Indemnity $100. Paid in full, plus 10 per cent, accumulation, paid $110. 157 53,361. Policy lapsed, account non-payment of premium. 158 80,737. Indemnity $100. Paid in full $100. 159 80,776. Indemnity $500. Company forwarded check for $500; check was returned calling attention to the 50 per cent, accumula- tions, and company claiming the same was a mistake, for- warded their check for $750. 160 96,016. Indemnity $200. Paid in full, plus 10 per cent, accumula- tions, $220. 161 95,836. Indemnity $100. Paid in full $100. 162 98,166. Indemnity $600. Paid in full $600. 163 98,297. Indemnity $700. Paid in full $700. 164 99,229. Indemnity $100. Paid in full $100. 165 96,320. Indemnity $525. Death caused by mvirder, pro-rated under " Intentional Injury " clause one-fifth. Paid $105 in full. 166 9'6,915. Indemnity $200. Death caused by blow on head inflicted by unknown person, pro-rated under " Intentional Injury " clause one-fifth. Paid $40. 167 96,580. Death due from erysipelas. No liability. 168 96,190. Death due from natural causes. Illness indemnity $72, paid. No further liability. 169 74,754. Indemnity $100. Paid $100 is fuU. 170 75,073. Indemnity $300. Paid in full $300. 171 73,925. Policy lapsed. Non-payment of policy. 172 75,514. Indemnity $500. Occupation "hotel clerk," class "A," em- ployed as ■■' Lineman " at the time of death, pro-rated to class "X." .Paid in full $100 in accordance with classifi- cation " X." 173 75,213. Indemnity $600. Paid in full, plus 10 per cent, accumula- tions, paid $660. 174 75,270. Policj' lapsed, account non-payment of premium. 175 76,232. Policy lapsed, account non-payment of premium. 176 76,501. Indemnity $400. Paid in full $400. 177 74,823. Indemnity $700. Death caused by murder, pro-rated " In- 178 78,466. Policy lapsed, account non-payment of premium. 179 90,851. Mack Noland, Marshall, Texas. Claim in suit, pi warded to attorney. 180 96,106. Notation on jacket " Natural Death." No liability. 390 National Convention of Insueance Commissioners Exam. Claim No. No. 181 90,585. Indemnity $500. Death caused by suicide, pro-rated under " Intentional Injury " clause one-fifth to $100, which was paid. 182 90,612. Policy lapsed, account non-payment of premium. 183 94,008. Policy lapsed, account non-payment of premium. 184 94,239. Indemnity $300. Death caused by murder. Pro-rated under " Intentional Injury " clause one-fifth. Paid $60. 185 94,551. Indemnity $400l Death caused by murder. Company de- fended under " Intentional Injury " clause and attempted to settle claim for $80 which was refused. Claim was after- wards settled by attorney for $200. 186 94,686. Indemnity $600. Paid in full, plus 50 per cent, accumulations, $900. 187 94,734, Indemnity $600. Paid in full, plus 50 per cent, accumulations, $900. 188 97,552. Indemnity $300. Paid in full $300, plus 10 per cent, accumul- ations, $330. 189 100,165. Indemnity $100. Paid in full, plus 10 per cent, accumula- tions, total $110. 190 101,872. Obie Lawn, Binghamton, X. Y. Indemnity $200. "Killed by gas." Proof shows found dead in bed. Company de- fended on " Intentional Injury " clause one-fifth. Claim not settled. Indemnity $400. Death caused from falling out of wagon. Was insured imder class " E." Claim not settled. Indemnity $600. Occupation '" Hardware Clerk," class ''AA." Death caused bv falling from step-ladder. Xote on jacket "Class?" Claim not settled. Indemnity $100. Paid in full $100. Indemnity $700. Paid in full $700. Indemnity $400. Occupation " Truckman," class " E." Death occurred while working in a ■ saw-mill. Pro-rated to class " X." Paid in full under class " X," plus 1 per cent, per month accumulations for five months, total $106. 196 101,641. Indemnity $200. Death caused by burning. Claim not settled. 197 101,636. Indemnity $300. Killed by being struck by a passenger car. Claim not settled. 198 101,309. Indemnity $400. Paid in full, plus 1 per cent, per month accumulations for eight months, total $432. 199 100,907. Indemnity $600. Occupation '■' Contractor," class "AA, office duties only, not superintending." The deceased was killed while doing the work of contractor superintending. Pro- rated to class " D." Paid $400 in full in accordance with classification " D." 200 100,891. Indemnity $350. Paid in full $350. 201 100,882. Death caused from heart disease. Xo liability. 191 102,136. 19i 102,137. 193 100,509. 194 102,089. 195 101,807. Industbial Health and AcciDEJsrT Seittlembnts 391 Exam. Claim No. No. 202 100.709. Indemnity $500. Paid in full $500. 203 102,133. Indemnity $30o! Death caused by roelc falling through roof of house from a stone quarry. Claim not settled. 204 92,727. Indemnity $300. Paid in full, plus 30 per cent accumulations, $390. 205 91,144. Indemnity $200. Paid in full $200. 206 79,549. Death caused by valvular disease of the heart. No liability. 207 80,511. Indemnity $300. Death caused by dysentery. Claim vpas settled by adjuster for $60. 208 91,630. Death caused by pneumonia. No liability. 209 70,295. Death caused by pneumonia. Sickness indemnity $8. 210' 74,244. Indemnity $200. Paid $200 in full. 211 62,786. Indemnity $500. Paid $500 in full. 212 71,887. Indemnity $300. Insured murdered. Reduced to one-fifth " Intentional Injury " clause. Paid $60. 213 85,096. Indemnity $400. Paid $400, plus 10 per cent, accumulations, total $440. 214 61,213. Indemnity .$300. Paid $300 in full. 215 63,123. Indemnity $200. The papers in jacket do not disclose cause of death, but the following memorandum appears on the back of jacket, "Laborer drunk on track and run down by car (electric)." Settled in office. Settled for $50. 216 64,329. Death caused from typhoid fever. Paid $6 sickness indemnity. 217 64,942. Indemnity $100. Paid $100 in full. 218 65,176. Indemnity $500. Policy lapsed account of non-payment of premium. 219 61,256. Death caused from tuberculosis. No liability. 220 67,856. Indemnity $500. Insured as " Restaurant Proprietor," class "A." Death caused by accidental discharge of revolver while under the influence of liquor. Indemnity reduced to one-fifth. Paid $60. 221 66,663. Indemnity $300. Death cavised from tuberculosis. No lia- bility. 222 66,637. Insured as a " House Painter,'' class " D." Killed while riding cars into a mine. Pro-rated to class " X." Paid $100 in accordance with classification " X." 223 66,706. Death caused by uraemia. Illness indemnity $8 paid. 224 93j390. Death caused from diarrhoea. No !ia,bility. 392 National Convention of Insurance Oommissionees Exam. Claim No. No. 225 92,219. Indemnity $600. Occupation " Car Repairer," class " D." Notice of death received November 7, 1910, from F. A. Arnold, attorney for beneficiary. Letter of November 8,. 1910, to F. A. Arnold, Anson, Texas, from " M. K. G." Claim Examiner: " This will acknowledge your favor of the 4th regarding above case. According to our record this policy expired for non- payment of premium October 1st. * * *." Deceased was killed while on duty as ear inspector October 31, 1910. Letter from The Home National Bank, Baird, Texas, to North American Accident Insurance Co., dated November 30, 1910: " For several days I have been waiting to hear from you in regard to the death of Herman Bauman of this city. Mr. Bauman held policy in your company. He had paid me up to November." Letter dated January 20, 1911, from Supreme Lodge of the Knights of Pythias, to M. K. Gordon, Claim Examiner : " Replying to your communication under date of January 18th, in re Herman Bauman, Baird, Texas; permit me to say that we paid this claim under date of July 31, 1910. We made a thorough investigation and came to the conclusion that we could not sustain action in the court against said claim. We had careful investigation made with results practically as follows; the evidence of suicide were contained in the statements of two railroad employes, one of whom at least would not make a reliable witness, and both of which would be inclined to favor the corporation giving them employ- ment. Opposed to the theory of suicide is the statement of several reliable people of Baird, and all tend to show that the deceased was a man of reliable standing and well thought of in the neighborhood, and we cannot establish any reason why he should have committed suicide. It may pos- sibly have been a case of suicide yet we are convinced that we could not establish that fact; hence paid the claim." Claim now in the hands of B. P. Scott, agent of the com- pany for adjustment. 226 79,087. Indemnity $300. Paid in full $300. 227 69,102. Death caused from bronchitis. No liability. 228 54,399. Indemnity $300. Paid in full $300. 229 84,990. Indemnity $300. Paid in full $300. 230 52,869. Death due from natural causes. No liability. 231 57,107. Death due from natural causes. Sickness indemnity paid $20. 232 52,883. Death due from natural causes. No liability. 233 51,059. No liability. Policy lapsed account non-payment of premium. 234 67,689. Indemnity $300. Occupation painter, class " D." Deceased was working as a teamster at time of death. Pro-rated to class " E." Paid $200, plus 10 per cent, accumulations, total $220. REPORT OF EXAMINERS ON THE STANDARD ACCIDENT INSURANCE COMPANY OF DETROIT, MICH. Examiners: George Graham, Jr., Illinois Isaac Davenport, Virginia Harold P. Johnson, Massachusetts WiLFORD 5. Gray, Massachusetts [3931 REPOET OF EXAMINERS ON THE STANDARD AOCT- DENT INSURANCE COMPANY OF DETROIT, MICH. Detroit, Mich., August 5, 1911. To the Investigating Committee of the Executive Committee of the National Convention of Insurance Conwmssioners, Hon. C. A. Palmer, Commissioner of Insurance, State of Michigan, Chairman: GrEifTLEMEN. — In accordance with, your instructions, we have made an investigation of The Standard Accident Insurance Com- pany at its home office, Detroit, Michigan, with particular refer- ence to its methods of settling disability and death claims in the industrial department. We have the honor to submit our report herewith. History The company was incorporated and first licensed to do a general accident business in 1884, with a paid up capital stock of $100,000, which has since been increased to $250,000, and later to $500,000. The charter has been amended from time to time, extending the company's authority to do a general liability, fidel- ity, plate glass and steam boiler business. So far attention has been confined to accident and health and general lia;bility insur- ance. The total premium income for the year 1910 was $2,528,- 257.20, of which $1,268,9-90.22 related to general accident and health business, and of the latter $250,313. Y2 was collected by the industrial department. The industrial business is handled through salaried representa- tives and agents operating on renewal and profit sharing contracts. The following table shows the distribution of the business handled under these different contracts: [395] 3i9i6 National Convention of Insurance Commissioners Comparison of Gross Collections and Claim Loss Under Different Forms of Contract 1909 GrosB Loss ■ Form of contract collections. Claim loss Ratio P. C . Profit sharing • $81,214 88 $30,607 31 37.7 Salary 28,84179 11,032 10 38.3 Renewal commissions 72,536 58 28,875 94 39.8 Total $182,593 25 $70,515 35 39 1910 Profit sharing $52,186 93 $18,992 45 36 . 4 Salary 43,992 19 20,636 60 46 . 9 Renewal commissions 154,134 60 75,564 56 49. Total $250,313 72 $115,193 61 46. 1911 January 1st to June ^Mh. Profit sharing $24,869 41 $10,927 89 43 . 9 Salary 26,742 70 12,608 17 47 .2 Renewal commissions 89,646 06 47,418 77 52.9 Total $141,258 17 $70,954 83 50.2 The amounts of gross collections shown atove do not include policy fees, all of which are retained by the agents, and which vary from $1 to $5 for each application. The policy fees for 1910 reported by the company to the various insurance depart- ments amounted to $47,589'. Prior to 1908 all agency contracts were on the profit sharing plan. About the middle of 1907 or the beginning of 1908 the company discontinued altogether making contracts with new agents on the profit sharing plan, and many existing profit sharing coa- tracts were changed to the renewal form. It will be seen that the volume of business covered by the profit sharing contracts has been steadily diminishing. The difference in the loss ratio under profit sharing contracts as compared with those on the renewal basis can be partly explained by the fact that the busiuess now under profit sharing contracts is in old estab- lished seasoned agencies, where by general experience the losses Indtistbial Health and Accident Settlements 397 are liglit, while under renewal contracts covering newer agencies, by virtue of the fact that the .business is new and raore or less un- settled, lapses high, etc., losses are heavier. A further explanation can be found in the fact that a large per cent, of the " Renewal " business is located in the South where the losses are universally heavy, while all " Profit Sharing " contracts are in agencies in the North where the claim experience is more favorable. The foregoing is the company's explanation of the loss ratios shown, and as the present investigation fails to reveal any dis^ crimination against claimants in profit siharing territory, we arc of the opinion that the reasoning is sound. Scope of Investigation The scope of the investigation was limited to a study of the methods of adjustment of claims in the Industrial Health and Accident Department. The entire file of claims intimated during 1910 was examined, particular attention being paid to death claims, claims for specific benefits, those indicating a more or less serious disability, and re- jecctions. The total number of notices was 6,079'; of these 924 were rejected, or, more strictly speaking, were notices on which no indemnity was paid. A large number of disability claims of 190i9, all death claims of 1908, 19'0i9 and 1911 to date, and the present pending files were likewise examined. Here also the death claims were very care- fully scrutinized. The total number of death claims disposed of during the three and one-half years covered by this investiga- tion was approximately 1.00. A schedule of these, giving a brief synopsis of each case, was made in the course of the examination, but is omitted from the report on the recommendation of Com- missioner PaJmer as being unnecessary. Adjustments All claim adjustments are made under the direct authority of the home office oflScials of the industrial department. Some few agents, however, have the power to make adjustments and issue 3i98 National Convention of Insueance Commissionees drafts in settlement, not in oxce&s of $35, but the homo office is at all times kept fully advised as to the progress and disposition of these claims. The company's adjustments are, with very few exceptions, liberal and fair, and the restrictive features of the con- tracts as applied by the company seldom operate to defeat a just or reasonable claim. Late. Notice.- — As a general rule, the company does not take advantage of' the ten day notice clause in the policy, to escape just liability. When the claimant can give a reasonable excuse why notice was late and the company's right of investigation has not been prejudiced by such delay, the late notice provision is not ordinarily enforced against the claimant. There are cases, however, where the agent takes upon himself to deny liability under this provision and the company usually endorses the agent's actions. (Loss Nos. 6'7,094, T0,928, 72,081, 70,977.) Change of Occupation. — According to the company's manual, the insured is not debarred from labor about his home, such as is necessary for the comfort or convenience of his family, nor is he debarred from occasional recreation such as hunting, fishing, boat- ing, etc. Occasional indulgence in labor or recreation does not constitute a change of occupation. What appears to be an ex- ception to the foregoing is that a claimant injured in a base ball game is frequently rated as a "base ball player." On the other hand, oases are not unknown where the company has given the claimant a more liberal rating than would be called for by the terms of the policy. (Loss No. 74,194.) Advance Settlements. — The practice' of making advance set- tlements, though fairly common, is not used to a marked degree bv the company. Assistance to Claimants. — The company does not seek to avoid liability by dilatory tactics. When claim is presented, the com- pany advises the agent or the claimant how to proceed in pre- senting proper proofs, pointing out the provisions of the policy in regard to same. Accumulallon Feature. — The accumulation clause incorporated in editions of the company's policies issued in the past, and some of which are still outstanding, reads as follows: (a) " Each consecutive full year's renewal of this policy shall Industrial Health and Accident Settlements 399 add 10 per cent, of the original principal sum, etc,, with a limit of 50i per cent. The present clause used on the standard form reads : (b) " Each consecutive full year's renewal of this policy, with- out delinquency, etc.," with a limit of 50 per cent.; or (c) " Each consecutive month's renewal, without delinquency, shall add 1 per cent., etc.," with a limit of 60 per ccent. Clauses worded similarly to (h) and (c) require the payment of the premiums on or before the due date; clauses worded simi- larly to (a) are not so interpreted by the company. The com- pany's home office records are arranged to show whether or not claimant is entitled to accumulation and the company makes a practice of paying these without demand. A number of cases were found, however, on which the accumulations had been ig- nored. This would seem to indicate that the system in use at the home office is not as effective in identifying accumulation benefitj as it ought to be. We are satisfied that these cases were due to oversight on the part of the adjusters and the clerks preparing the schedules of particulars, rather than to deliberate intent. The secretary and assistant secretary of the company have expressed themselves as being of the opinion that these errors should be corrected so far as possible. (Loss ISTos. 84:y6i72, 88,150, 53,942, 67,894, 106,008). Payments to Beneficiaries. — The sick benefits accrued at date of death from natural causes are legally payable to the estate of the deceased, and the company could technically require the appointment of an administrator, thereby evading many small claims of this kind. The general practice of the company is to make payment direct to the beneficiary named in the policy : Conclusion It is the policy of the company to make prompt and full pay- ment on all legitimate claims presented. None are rejected except for good and sufficient reasons. In doubtful and disputed cases it endeavors to avoid litigation, preferring to compromise with the claimant on a basis which will be mutually advantageous. At times this results in the company paying more than the con- 40O ISTatiowal Convention of Insukance Commissionees tract appears to call for, but on the other hand the expenses of a law suit and the trouble both to the home office and the field force, which would invariably follow, are avoided. The company's treatment of its policyholders is such that it is fully entitled to the confidence of the insuring public. Schedule A We attach hereto a brief synopsis (Schedule A) of the few cases, the disposition of which by the Company did not appear satisfactory to the examiners. These are exceptional and are not at all indicative of the usual policy of the claim department. Considering the exhaustive and searching nature of this investi- gation, your examiners are of the opinion that the paucity of cases open to criticism speaks well for the efficiency of the manage- ment of this department, and we respectfully recommend that this Schedule A be detached from and be not made a part of the final report. Respectfully submitted, Geoege Graham, Je., Examiner Representing Insurance Department, State of Illinois. Isaac Davexpoet, Examiner Representing Bureau of Insurance, Commonwealth of Virginia. Haeold p. Johnsox. WlLFOED S. GeAT^ Examiners Representing Department of Insur- ance, Com-moniuealth of Massachusetts. Schedule A Loss No. 00,8.39 : Insured stabbed in a fight. District agent's letter to insured, dated January 28, ]!110, states contract does not cover liabilities inflicted in a figlit. Contract specifies one-fifth benefit in such cases. Lia- bility evaded by false statement of agent. Claim apparently should have been for disability allowance. Loss No. 81,478: Insured committed suicide on February 26, 1911. Com- pany's traveling adjuster informed agent that there is no liability. By the terms of the contract the company is liable for one-fifth benefit, $80, if proof is submitted. No proof has been presented. Company discouraged this. Industkial Health and Accident SErrTLEMENTS 401 i Loss No. 78,370: Indemnity $200. Company although notified by its agent of accidental death of policyholder makes no effort to communicate with beneficiary who lives abroad and no claim has been presented. Loss No. 50,407 : Indemnity $200. Policy issued July 7, 1908, payable to estate. Policy fee of $5 paid by boarding house keeper with whom insured lived. Shortly afterwards insured was killed. By payment of $17 agent obtained policy from hoarding house keeper, who held it as security. About two months afterward the agent sent the policy to th« company and no claim has been presented. The agent took this action on his own responsibil- ity, the company, however, being an accessory after the fact. Loss No. 77,477 : This is a death claim for $300 and 40 per cent, accumul- ations, $120, making a total claim of $420. Accumulations ignored and claim settled for $300. Loss No. 72,.577 : The company finally paid this disability claim for $177.15, after a delay of three months from the date of final proofs. The company suspected the claimant to be malingering and after considerable correspond- ence attempted to cancel on the grounds of breach of warranty. The facts as shown by the papers on file did not justify this action. REPORT OF EXAMINERS ON THE GERMAN COMMERCIAL ACCIDENT COMPANY OF PHILADELPHIA, PA. Examiners: William J. Roney, Pennsylvania TscHARNER M. HoBSON, Virginia Wilbur H. Nangle, New York [403] EEPORT OF EXAMIl^EES ON THE GEEMAN COM- MERCIAL ACCIDENT COMPANY OE PHILADEL- PHIA, PENN. Phiiadelphia, August Y, 1911. Hon. Calvin A. Palmeb, Chairman of Special Committee of Insurance Commissioners on Industrial Health cmd Acci- dent Business, Lansing, Michigan: SiE. — ^Acting under instructions from the investigating com- mittee of the executive committee of the National Convention of Insurance Commissioners, -we heg to submit the following report of our investigation into the health and accident business of the Oerman Commercial Accident Company of Philadelphia, Penn. Oegaktization The company was chartered April 19, 1907, under the laws of the State of Pennsylvania, and commenced business May 20, 1908, with a capital stock of $iliOOi,0'0'0. Upon commencing busi- ness the company took over the Commercial Mutual Accident Company, which compan,y was officered by the same men as those in charge of this company, and The Grirard Health and Accident Company was also re-insured in this company. The company is licensed in twenty-three States. Premium Eeceipts, Claims PAid and Loss Ratio The following statement shows the premium receipts, claims paid and loss ratio from the commencement of business. May 190i8, to June 30, 1911. Premium Claims Receipts paid Loss Ratio 1908 $6,577 53 $1,476 00 22.4% 1909 19,437 56 5,160 35 26.5% 1910 21,218 37 6,500 13 30.6% 1911 11,003 42 4,758 30 43.2% The company does not take into account the premium income for the first month's premiums, and as a consequence the above [405] 406 IvTational Convention of Insueance Commissionees statement does not show the proper loss ratios. The following statement shows the income, including the first month's premiums, and the correct loss ratios. Premium Claims Eeceipts paid Loss Eat i 1908 $9,615 78 $1,476 00 15.03% 1909 23,220 84 5,160 35 22.2 % 1910 24,308 24 6,500 13 26.7 % 1911 12,945 34 4,758 30 35.9 % The marked difference in the ratio for 1911 over the years l'9'0'8-09-10, is due to the payment of a large number of claims which were unadjusted on December 31, 1910. In omitting the first month's premiums above referred to, the various States in which the company is licensed are deprived of a portion of taxes due them. Agency Conteacts Below will be found a schedule of the various commission con- tracts of the company : Policy fee and 50% next 3 months, and 20% thereafter. Policy fee less 50^, and 20% renewal. Policy fee and 25% renewal. Policy fee and 50% first 5 months, and 20% thereafter. Policy fee and 20% renewal. Policy fee and 15% renewal. Policy fee and 50% next 6 months, 25% thereafter. Policy fee and 50% next 5 months, 25% next 6 months, and 15% thereafter. The company has three profit sharing contracts in force. The renewal commissions under these contracts are 20 per cent, 25 per cent, and 40 per cent, respectively. Recoeds of Claims The company employs a very inaccurate method of keeping ac- count of its claims, numbers not being given until after reject- ment or settlement of the same. The company keeps no book for the entry of notices. Under these conditions it is impossible to determine as to whether a record is taken of all notices received. Adjustment of Claims A thorough examination of the claims indicates that over 60 per cent, are compromised or scaled by the company. The claims are adjusted by the home office, and with the assistance of the Industrial Health and Accident Seittlements 407 company's agents. The correspondence in a great percentage of claims is voluminous, and of a haggling and bargaining nature. The moment that the company is advised of either an accident or illness case, and especially v^here the cases appear to be of a serious nature, it uses a high pressure system to adjust the claim at once, practically forcing the claimant by shrewd ingenuity on the part of the agent and the physician to settle before illness ceases, or length of disability is determined. The company arbitrarily decides as to length of total and partial disability, regardless of information furnished. Final proofs are seldom requested. The following is a schedule of specific claims which speak for themselves, and no further comment is necessary. Serious Cases In the case of (ieorge 8. tialbraUh: Claim No. 5,540. In this case assured met with an accident, and thereby lost one of his arms, the amount of indemnity to which he was entitled being $150. The company oflfered in the way of settlement at various times, $50, again $65, and finally $75, at which amount the claim was adjusted. The following is an extract from a letter from the company to its profit sharing agent, Mr. L. B. Smutz, St. Louis, dated April 24, 1909: " It will be absolutely necessary for you to use the greatest of care in adjusting this case, and we advise that if possible you visit the man im- mediately, and endeavor to buy the claim off for a small amount." In the case of William t^ightway: Claim No. 6,363. The claimant in this case held a policy which provided for the payment of indemnity amounting to $133.33, for the loss of the entire sight of one eye. The insured met with an accident and completely lost the sight of an eye. The company wrote to the assured under date of February 23, 1910, as follows : " No benefits are paid unless under regular or special attention of a surgeon or physician, and consequently as you have not been under the care of a physician for this period, we cannot pay benefits for the same." Upon receipt of correspondence by the company of a nature which led them to believe that it was a question as to whether this man's eyesight could be saved or not, settlement agreement calling for $15 was forwarded to the claimant. On June 3d a settlement agreement was sent for $45, with a state- ment to the effect that if it was refused, it would be necessary for the com- pany to have plenty of time to arrange for special examination and tests. On June 6th the claimant wrote to the company as follows: "Answering your favor of the 3rd instant in which you offer to settle my claim for the loss of the sight of my eye for $45, will say that I will make you an offer to settle same for $100, rather than take the matter into the 408 National Conventioit of Insurance Commissioners court to compel settlement of my just claim for $133.33. If I do not hear from you by Friday, June 9th, will place the matter in the hands of my sittor- uey for collection of the claim, namely, $133.33." The following is an extract from a letter written by the company to the claimant on June 8th: " Without prejudice to our interests, and Avithout acknowledging liability. we attach herewith a settlement agreement for $72.50, which if signed and returned immediately will be honored by draft. This will really be splitting the difference between our offer of $45, and yours of $100. If accepted we will waive all further tests and examination. We make you this offer on the above conditions, and also in order to prove to any court that we are trying to do all that is fair, and if you take a friend's advice you will accept it." Settlement at $72.50 was agreed upon between the claimant and the com- pany. It was necessary however for claimant to threaten suit before he finally received the indemnity agreed upon. In the case of N. 8. McCraeken: Claim No. 5,948. In this case the assured was killed while performing his duties as an elec- trician. The indemnity to which he was entitled was $500. The claim was adjusted at $100, and absolutely no reason being shown for the reduction from $500. Notes appearing in the correspondence in this case, made pre- sumably by the manager of the Industrial Department, read as follows: " Deceased's brother is Superintendent of Electrical Department where brother was employed. Could not tell exactly how the accident happened, only that he might have been oiling, as an oil can was found near ♦ * *. Clean case of liability for $350, but got oflf for $100 * * *. Stayed until almost 2 o'clock and finally adjusted for $100." In the case of George Kusenio: Claim No. 6,174. The assured was killed December 23, 1909. The following are extracts taken from letters of the company to its agent, Mr. M. P. Garner. One dated De- cember 28th states: " Furthermore this is a new policy, on which we have never received one penny of premium, and as it would be a calamity to have such a large loss on such a small agency, we expect your co-operation iu this case, and we believe Ave can depend upon you giving it to us. Please say nothing to any person regarding it, excepting in the following manner * * *." " I now ask you to tell me honestly and confidentially as to what date you received the application for this policy, and also if you knew the man was a foreigner and laborer, or otherwise, and how vou ascertained the informa- tion." The following is an extract from n letter of Agent Garner to the company dated December 28, 1909: " It may be a terrible loss to your company, but it is also true that you represent to the policyholders that as soon as they receive their policy and they pay the fee they are immediately entitled to benefits for accidents, and I do not care to deceive any one, even n foreigner, any more so than one M'ho is not. I shall not agree to longer represent your company unless I can assure my people that they will receive a straight deal." On February l,''i, 1910, a settlement agreement for $25 was sent to the widow of the assured in Hungary. This settlement agreement was returned undelivered. On May 31, 1910, the company received an instrument, duly signed and certified, appointing a brother of the widow as attorney to collect the indemnity due, and on June 4, 1910, the company received a communica- Industrial Health awd Accident Settlements 409 tion from the Rev. Dr. E. Kajie, referring to this claim. No attention paid to these communications whatever, and the claim remains unpaid, and ap- pears as a filed claim in the records of the company's office. Compromised and Scaled Claims In the case of Fred P. Davis: Claim, No. 7,306. The assured in this case from the proofs vras actually entitled to an in- demnity amounting to $23.32. No final proofs sent, although they were asked for on three occasions by the assured. The following is an extract from a letter sent Agent McGowan by the company, dated December 7, 1910: " Will you kindly immediately call upon this man, and advise us as to his present condition. Please remember that as soon as he is able to leave the house his disability will practically cease." This sort of a letter prac- tically constitutes instructions to agents to deny all liability on account of partial disability. The company on December 13th, offered a settlement of $10 and on December 20th, offered $12.50. The company in its offer of December 20th, stated: " Without prejudice to our interests we attach herewith a settlement agreement for $12.50, which is our limit in this case." The above letter vias sent in face of the fact that no final proof had been received by the company. In the case of Ivan Skorin: Claim No. 5,047. The assured in this case was taken ill on August 1, 1908, with typhoid and pneumonia. The indemnity to which he was entitled to under his policy was $40 per month for illness. A settlement was attempted on the part of the agent on September 1st,, when the man was still critically ill in the hos- pital. On September 25th, while the claimant was still confined to the hospi- tal, the agent of the company states: "If I had had a, release blank this afternoon I would have likely got him to sign a settlement for considerably less than what he was entitled to." On September 30th the company writes the agent as follows: " We might say for your information that this is an opportunity for you to demonstrate your ability, and also demonstrate that it is your purpose to hold down these claims to the proper figure. You know that this man is a foreigner. You also know very well that you can settle this claim for $50 by using the proper kind of an argument. I trust that you will im- mediately call on this man, and let us know positively by return mail what you can do with him. I do not mean to have you call next week or two weeks after, or in four days, but call immediately, because our Board of Directors desire to know just what yon can do with this claim." This claim was finally adjusted for $55, and a draft sent October 2d. The following is an extract from a letter of transmittal accompanying the draft: " If you secure a nice letter of thanks from this man, we will consider having it made into a special blotter or circular for you, providing vou can guarantee for such expense production of more business for us immediately." Correspondence in Claim No. 5,207 tends to show that this claim would have amounted to $260. Agent Haas, in reporting on the above settlement of $55, in a letter to the company dated December 31, 1908, states as follows: "Had I known the case as I know it to-day, I would never have let him 410 National Convention of Insueance Oommissionees accept the $55 draft at the time. Of course this was taking advantage of the ignorant for the interests of the company. You will have to do some- thing for this man, as I fear there will be trouble, and I assure you that if they press any criminal charges against me, and I should be arrested, that you will be held responsible for a great deal more than the claim will ever amount to." In the case of Lorenz Barmouth, Jr.: Claim No. 5,043. In this case the assured was ill with typhoid-pneumonia. Disability com- menced on August 2, 1908. Indemnity to which he was entitled under his policy on account of illness was $30 per month. On August 25th the com- pany wrote its physician, Dr. Albert G. Miller, as follows: " September 7th would practically make one month in his case. The first five days of total disability do not count, therefore if you can secure release for $30 which will be the amount due him for total disability up to and including September 7th, we will promptly forward check for same." On August 27tli Dr. Miller wrote the company as follows: " In accordance with your letter of August 2oth, I have settled the claim of Lorenz Barmouth, Jr. for $30. This I feel is a good settlement, as the man is still confined to bed and is in a very weak condition. I enclose his release, and my bill for examination, etc." in tfie case of Charles R. Robinson: Claim No. 7,670. In this case the proofs show very clearly that the assured was entitled to indemnity covering a period of total disability for 33 days, and partial dis- ability days, amounting to $37.50. The company submitted a, statement to the assured accompanied by a set- tlement agreement for $30.50, which covered a period of total disability 29 days, and partial disability 3 days. How they could arrive at this basis of settlement from the proofs produced is unexplainable. In the case of John Trola: Claim No. ,7,897. The preliminary report in this case, which was received on June 2, 1911, shows that the accident occurred on !May 19, 1911, and that the claimant would be able to perform some of his duties on June 2d. Some days after the preliminary notice was received the company wrote the assured as follows: " Vi'e take it from the nature of said accident, and also the statements of yourself and atteiidirg physician that you were wholly disabled and pre- vented from performing any duty for a period of six days, and thus totally disabled and further that you were partially disabled for an additional period 6f seven days, but during which time you were probably able to perform one or several duties pertaining to some occupation. We therefore enclose you herewith a settlement agreement for the sum of $11.08." The company in this case arbitrarily decided the total number of days, both total and partial, with. no other statements before them than those con- tained in the preliminary report. In the case of James B. Davis: Cluim No. 8,038. Preliminary report in this case showed that the assured was sick with ap- pendicitis. Settlement blank for $4 was rushed, evidently on account of the nature of the illness. No final proof asked for and finally settled at $7. Actual amount due in this case in excess of the settlement figure, but noth- ing to show the actual amount due. Industrial Health and Accident Sbittlements 411 In the case of Marry Walters: Claim No. 7,867. The assured in this case, whose occupation was that of a draw pressman, lost a portion of one of his fingers through accident. The estimate given in the preliminary report as to the duration of disability on account of said accident was given at 28 to 30 days. This preliminary report was received on May 16th, and on May 20th settlement agreement covering total disability for 12 days, and amounting to $10, was sent to claimant. On May 24th agent wrote the company as follows: " This claim cannot be decided on at less than 1 8 days, and if not done at once may be more." Settlement blank was then sent the assured for $15, covering a period of disability of 18 days. This claim was finally adjusted for $16.16, covering 20 days' total disability. No final proofs in the case were made to show actual length of disability. In the case of Frederick W. Evans: Claim No. 6,043. It appears from the correspondence in this case that the claimant had a just claim for indemnity on account of illness amounting to approximately $83.33. The business was contracted for through Agent T. S. Tully of Niagara Falls, State of New York, in which State the company had no license to do business. The final proofs show that claimant was totally disabled for a period of one month and a half, and were received by the company on Jan- uary 17, 1910. On January 18th the following letter was written by the company to the assured: " Without prejudice to our interests we attach herewith settlement agree- ment for $30. We would advise you to sign and return this immediately, and the same will be honored with a draft." The claimant finally signed settlement blank for the reason stated as follows in his letter to the secretary of the company: "After receiving a letter from the New York State Insurance Department informing me that your company was soliciting business in that State with- out authority of law, and finding that I cannot proceed in a legal action against you, I consider that I will be compelled to accept your original offer of a settlement of $30. I herewith send in the settlement agreement accepting the ofl'er." In the case of Kohert W. Kastetler: Claim No. 6,989. The final proofs in this case show that the claimant in this instance was totally disabled with typhoid fever for two months, and practically disabled for 20 days. Indemnity due him amounted to $116.66. Claim finally settled for $75. In the case of Ouiessipi Nicasia: Claim No. 3,337. This was an accident case, the assured breaking his collarbone. An esti- mate as to the length of disability given in the preliminary report was from 40 to 50 days. The accident occurred on January 12, 1911, and on January 19, 1911, a settlement agreement for $20 was forwarded to the assured and signed by him. The correspondence in this case tends to show that the as- sured did not know what he was signing when he signed the settlement blank that agent gave him. The agent stated to the assured that if he did 412 Naxiokal OoiirvENTioN OP Insurance Commissioneks not accept $20, which was one month's indemnity, that it would go back to the company, and that he would not get anything. The company refused to reopen this case. In the ease of Lewis Hamilton: Claim No. 5,010. The physician's estimate as to the total length of illness in this case was 60 days. Settlement was made at the end of the month for one month's ill- ness, the assured still being sick and needing the money. In the case of lien Kauff: Claim No. 7,920. An estimate during the disability on account of an accident incurred by the claimant as shown in the preliminary report was 10 days. Settlement blank immediately sent for 5 days' total and 5 days' partial, or $7.50 in- demnity. Assured sent a letter to the company stating that he was disabled for 16 days, and would not accept offer. No final proof asked for or any further attention paid to the matter. In the case of Edward Dougherty : Claim No. 8,071. This is an accident case, and the doctor's estimate in the preliminary re- port as to the length of the disability was 20 days. Agent's statement, two- weeks after the accident, was to the effect that the assured was still laid up, and suggested three weeks' settlement. The company deducted Sundays and computed the disability at 10 days' total and 7 days' partial, which amounted to $11.28, and paid at that figure. The correspondence shows in this case that the claim should have been settled on a total disability basis. No final proof or evidence sought as to actual length of disability. In the case of George Hushaclc: Claim No. 5,013. The doctor's estimate in preliminary report as to the length of disability on account of accident incurred was 38 days, which would amount to $56.66. Settlement blank for $30 was sent, and finally raised to $40, and so adjusted. No final proofs in this case. In the case of William Sipf: Claim No. 7,.'!65. The claimant in this case was totally disabled with the grip for 19 days, and the amount of indemnity due him was $46.66. The company at first of- fered $17.50, and finally $27.50, in settlement of the claim, it being finally adjusted at the latter figure. In the case of Curtis: Claim No. 6,959. The claimant was totally disabled on account of illness for 43 days and partially disabled for 10 days. The amount of indemnity due the assured in the case being $64, the disability ceasing in this case on November 6, 1910. On November 15th the company offered a settlement of $20; on November 19th, $32; and on November 25th, $45, at which figure the claim was adjusted. In the case of Strosko: Claim No. 5,336. The claimant in this ease was totally disabled on account of pneumonia for 23 days. Indemnity due him was $38.33. The company first offered $12, then $17, and finally compromised at $25. Industrial Health and Accident Settlements 413 In the case of H. A. Post: Claim No. 7,377. This was an accident case, and the estimate as to the length of the disabil- ity given in the preliminary report was 30 days. The amount of indemnity to which the assured was entitled, as per the estimate, is $50. No final proofs, and finally settled for $25. In the ease of Busse: Claim No. 6,945. On account of broken leg the claimant was totally disabled for approxi- mately two months. The amount of indemnity due was $50. This was finally adjusted by the company's physician for $32. In the case of Freeman S. Deuel: Claim JVo. 8,224. In this case the assured, from the proofs furnished, was entitled to the sum of $290 on account of disability owing to sickness. Settlement blank for $243.32 was sent, and settled at this amount, covering a period of illness up to May 28, 1911, at which time the assured was still ill, and also the day on which total disability ceased. No proofs show actual length of disability. The following is a copy of a letter from claimant, dated July 31, 1907, to the company: " Your letter of the 27th at hand and contents noted, and I have been thinking the matter over, as to whether I should sign or not. I know I should not, but as it would cost me all I would get to sue your company, I will therefore let you take advantage of me and agree to the settlement offered. I was totally disabled from March 2nd to May 29th, and my partial disability should be dated from the later date up to the present time, as I am not able to perform my work as yet, but I need the money so I will let tlie partial disability claim go, but it took two months to do what you have done, so if you think that you have done the right thing and acted justly in this matter all well and good, but I do not, nor your representatives here do not, and no one else does not, in fact the doctors regard my re- covery as remarkable in so short a time. Hoping that it will do you good, and also your company, to do me out of what justly belongs to me, I am, etc." In the case of Josef 1 State op Pennsylvania, County of Philadelphia, William J. Roney, Tscharner M. Hobson and \^'ilbur H. Nangle, being duly sworn, depose and say that the foregoing report, subscribed by them, is true to the best of their knowledge and belief. William J. Roney, Tscharner M. Hobson, ^=\'ILBUR H. NANGLE. Subscribed and sworn to before me this [SEAL] ^^^ ^^^ ^^ August, A. T>., 1011. Samuel C. Millward, Notary Public. Commission expires January 26, 1913. REPORT OF EXAMINERS ON THE FIDELITY ACCIDENT COMPANY OF SAGINAW, MICH. Examiners : John L. Train, New York Samuel Jepfery, Michigan [419] EEPOET OF EXAMINERS OE" THE EIDELITY AOOI- DEITT COMPANY OF SAGINAW, MICH. iSagiwa-w, Michigan, August 12, 1911. Hon. Calvin A. Palmer, Chairman of Special CommiUee ap- poinied hy the Executive Committee of the National. Con- vention of Insurance Commissioners to investigate the settlement of claims hy Industrial Accident and Health Companies: iSiE. — Pursuant to your instructions we liave made an ex- amination of the claim department of the Fidelity Accident Com- pany of Saginaw, Michigan. This examination was made by the Insurance I>epartment of the State of Michigan, represented by Examiner Samuel Jeffery, and the Insurance Department of the State of New York, represented by Examiner John L. Train. The examination was coramenced on the 27th day of July, 1911. The company issues only industrial policies, all premiums therton being paid monthly. During the course of this examination we examined approximately six hundred claims, and the examination was completed on August 12, 1911. HiSTOET This company was originally organized on July 28, 1899, as a mutual ooK>perative casualty company xinder the name of the Fidelity Accident and Protective Society. On June 16, 1909, the society was incorporated as a stock com- pany with a capital stock of $100,00'0 undei the name of Fidelity Accident Company and took over all the business of the co- operative society. The charter of the company provides that accident and health insurance can be written. The company transacts business in the States of Michigan, Illinois, Indiana, Ohio, Pennsylvania, New York, New Jersey, District of Colum- bia, Minnesota, Wisconsin, California and Washington. [421] 422 National Convention ov Insueancb Oommissionees Claim Depaetment This department is under the supervision of George W. Cobine who has been engaged in the same line of work for about six years. Every claim that is settled by this company passes through Mr. Cobine's hands. Each claim that reaches the home office of the company is given a jacket which contains all records and memo- randa relating to the claim and these ]a:ckets are filed according to the date received. During the year 1910 2,530 claims were received at the home office of the company. All legal questions regarding claims are referred to K. P. iShorts, an attorney of Saginaw, Michigan. The medical questions are referred to Dr. J. ]!T. Kemp. Peoeit Shaeing Agents The company makes a practice of employing agents on the profit sharing basis. At the present time thirty-three agents have profit sharing contracts, eleven of whom are allowed to make ad- justments of claims in their territory, regardless of the amount of the claims. All of the profit sharing agents are allowed to make adjustment of claims under $25. The company makes a practice of issuing profit sharing contracts to new agents as well as to those who have been connected with the company for a longer period of time. Industeial Business Both as a mutual co-operative and a stock ooonpany, only in- dustrial business with monthly payment of premiums has been written. The maximum benefit in case of death is $600 with a maximum vveekly indemnity of $25. The co-operative society issued a policy providing a funeral benefit of $100 in case of death from natural causes. Twenty-two of these policies still in force provide that the assured is entitled to indemnity both from disability and death. One thousand one hundred and nine of these policies provide that the death benefit shall be paid in lieu of all other indemnity and the assured is not entitled to both disability and the death benefit. Three policies in force are not subject to cancellation. Industrial Health and Accident Settlements 423 Loss Eatio The total premiums (not including policy fees) collected by the company for the year 1910 was $97,507.69', and the amount of the claims paid during the same period $3'6,0i38.38. The ratio of claims paid to premiums collected being 3'6.9 per cent. The premiums collected in the districts wherein the agents hold profit sharing contracts amounted to $66,644.86, and the claims paid, $25,07'9.01. The ratio of claims paid to premiums collected being 37.6 per cent. Premiums collected in the territory where the agents do not hold profit sharing contracts amounted to $30,8i6i2.83, and the claims paid, $10,969.37. The ratio of claims paid to premiums collected being 35.5 per cent. Claims Investigated The claims investigated by your examiners covered all the specific losses for death, eye and limb, for the period from January 1, 1909, to June 30', 1911, and a few cases in the latter part of 19'0'8. Inasanuch as the company was not organized as a stock corporation until July, 1909, no investigation of dis- ability claims was made prior to that date. Approxim'ately 200 accident claims were investigated which were filed during the year 1910 and 160 sickness claims filed during the same year were investigated during the course of this examination. Attached hereto as Exhibit "A " will be found a synopsis of various cases which we believe will show the policy of the com- pany regarding claim adjustments. Attached hereto as Exhibit " B " is a memoranda of all the cases which have been investigated during the course of this ex- amination, with the exception of those cases wherein the policy was lapsed. Applications An examination of the applications made by the policyholders for insurance shows that it has been the policy of the company to make various changes above the signatures of the applicant. If the applicant leaves the space blank wherein the name of the beneficiary usually appears, the company amends the application and makes the policy payable to the estate of the policyholder. 424 Nation^u:, Convention or Insuhance Commissioners In some cases where the company has been una;ble to decipher the name of the beneficiary, a change has been made by making the policy payable to the estate instead of the 'beneficiary. Ee- garding occupation, descriptive phrases have been added to the occupation as given by the assured in his application, such as, "not working," "supervising only," "not underground," "ofiice duties only," etc. It has not been the practice of the company to notify the policyholder directly that the application has been changed in any particular, it being contended that the fact the policy itself contains the occupation in which the policyholder is insured should be deemed sufficient notice. JSTOTICE The policy contract provides that in case of late notice either on the preliminary notice or final proof blanks that the claim can be reduced to one-fifth of the amount otherwise payable under this policy. The company does not seem to hare taken advantage of this provision in the case of death claims ; however, in a few instances, advantage has been taken of this provision in the case of disability claims, but in the majority of instance^ no reduction is made by reason of late notice. Officers The present officers of the company are: President Hon. J. W. Fordney. First Vice-President M. N. Brad}-. Second Vice-President J. J. Williams. Secretary & General Manager W. H. Howland. Treasurer W. L. Paxson. Miscellaneous Filed with this report is a copy of the manual used by the company, containing instructions to agents, classifications of oc- cupations and rates. We also file with this report a copy of all policies which have been used by the company, together with a copy of the policies now being issued in the States of Massa- chusetts and New York. The company issues two riders, which on payment of an ad- ditional premium are attached to the policy. One rider provides Industrial Health and Accident Settlements 425 for benefits for sickness, immediately on the issuance of the policy, and the other agrees to pay a 'benefit for the first week of disability caused by sickness. Respectfully submitted, John L. Teain^ Exammer for Siaie of New York Samuel Jeffeey, Examiner for State of Michigan Exhibit A Synopsis of Sixty-rwne Cams Illustrating the Method of Claim Settlements and the Interpretation of the Policy Contract hy the Company, Classified as Follows: I. Occupation. II. Exposure. III. Accumulations. IV. Foreign Beneficiaries. V. Profit Sharing Agent. VI. Notice. VII. Old Form Policy. VIII. Advance Settlement. IX. Arbitrary Reduction. X. Breach of Warranty as to Age. XI. Premium Payment. XII. Advance Premium Deduction. XIII. Deduction for Sunday. Note: Claims numbered up to 8,912 were filed prior to incorporation as a stock company. I — ■ Occupation The earlier contracts issued by the company contain a, provision, similar to the following: " Provided always that should the member be injured while engaged in an occupation, temporary or otherwise, classed as more hazardous by the society than the one under which this certificate is issued, the member or beneficiary shall receive under this certificate only such a sum as is given by the society for the occupation engaged in by the member at the time of injury." The policy forma issued after December 10, 1904, have the provision relat- ing to the occupation in the application, such provision reading as follows: " I imderstand and agree that if I conitraet illness or am injured fatally or otherwise after having changed my occupation to the one classed by this society as more hazardous than that herein stated, or if I am injured while doing any act or thing pertaining to any occupation so classified, tlie liability of the society shall be only for such proportion of the prinicpal sum or other indemnity as the premium paid by me will purchase at the rates fixed by this society for such more hazardous occupation." 426 National Convention of Insurance Commissionees The policy contracts state that the policy covers all bodily injuries caused solely by accidental means such as: "Riding, Driving, Bicycling, Boating, Fishing, Skating, Hunting, Horseback riding," etc. The Manual defines occupation as " The trade or business which is followed as a means of livelihood constitutes the occupation." Jixaminer's No, 1; Claim No. 11,128; Hoy Bingham, Harrison, Mich. — Acci- dent Disability. Claimant was insured as " machinist latheman " Class D, accident benefit $40. He was injured while playing baseball, and the company pro-rates his occupation to Baseball Player Class I. Accident benefit $20. An investiga- tion was made imder instructions from your examiners in this case, and the agent reports on August 4th that the assured " never played on any ball nine in Harrison, unless it was some little scrub nine, and if he did, I can get no trace of it, nor can I get any trace of his being hurt in June 1910. Nobodj seems to know anything about it." The claim was settled on the basis of change of occupation to " ball player " for the sum of $10. If no pro-rate had been made, the benefit would have been $20. Examiner's No. 2; Claim No. 11,067; William F. Fritz, Linton, Ind. — Acci- dent Disability. Benefit under this policy amounted to $40. The assured was injured while playing ball, and the company endeavors to pro-rate the occupation of the assured to that of ball player, inasmuch as he was injured while playing ball. The agent protests against such a pro-rate as the assured was merely playing in the evening with a few friends. The company then paid the benefit in fulL The assured was entitled to a 10 per cent, accumulation amounting to $4, but this was ignored. Examiners No. 3; Claim No. 10,643; Charles Brosey, Terre Haute, Ind.— Accident Disability. The policy bolder was insured as a "butcher cutting meat." He was in- jured in a run-away while on his way to a slaughter house, where he intended to do some work. A letter to the assured from the company on June 1, 1910, explains the adjustment of the claim. " We note that at the time you were injured you gave your occupation as proprietor cutting meat only, which is classed as ' F " and payable at the rate of $30 per month; but at the time of injury you were engaged in the occu- pation of slaughtering. As you state the disability prohibited you from attendiuf; to your occupation, "such as slaughtering, etc. We also note that you were on your way to the slaughter house at the time of your in- jury, therefore wo are "obliged to adjust the claim under one class lower, or at the rate of $20 per month, to the occupation of butcher slaughtering." The company settled the claim by the payment of $54.60. E-ramUicr's No. 4; Claim No. 10,5§4; Jacob S. ZooJc, Peru, Ind.— Accident Disabititii. 'I'lie assured took out his policy, giving his occupation as " machinist run- nina wood-working machinery", and was insured in Class F with an accident benefit of $30 per month. He was injured while working on a rip-saw and the comp""'y pro-rates his occupation to " rip-sawing, Class G "- Industeial Health and Accident Settlements 42Y In a letter to the assured dated May 3, 1910, the company states that he was insured as a machinist. Tliis was not correct, as the application s'.iowed that he was insured as " machinist running wood-working machinery ". The company reduced the benefit to $26 per month and paid $39.87. ■ If no pro- rate was considered, the amount of the benefit would have been $46. Examiner's No. 5; Claim No. 8,126; John Vappello, Laurium, Mioh. — Acci- dental Death. Death benefit under this policy was $300. The assured gave his occupa- tion as " dryman " at the time he took out the policy, and was killed in a mine on March 1, 1909. After receiving notice of the death of the assured, the company wrote to its agent, S. W. Eva, at Calumet, Mich., on March 6, 1909, the following letter: " We have your letter of March 2d, requesting us to send necessary blanks for proof of accidental death in the above claim of John Cappello. " We enclose you, herewith, the blanks as requested and trust that on account of change of occupation or for some other reason you maj' be able to trim this down as the $300 claim hits pretty hard." However, the occupation of the assured was undoubtedly elianged to that of pump-boy, and he was so engaged at the time he was killed and the com- pany paid $100 at the time. He was paid in accordance with the provisions of its Manual. II — Exposure The policy contracts contain a. provision similar to the following : " In event of injury fatal or otherwise from exposure to obvious risk of injury, or obvious danger, the limit of the society's liability shall be one- fifth of the amount which would otherwise be payable under the policy." Examiner's No. 6; Claim No. 7,416; Arthur Harford, Searight, Pa. — Acci- dental Death. Death benefit under this policy was $300. The Hooper-Holmes Information Bureau reported that the assured was killed by street oar while trying to flag the motorman, and that he was not under the influence of intoxicants when killed. The agent for the company investigated the accident and made the follow- ing report thereon: "Arthur Harford, together with several other persons was inside a small store at the place where they intended to flag the car, but the car was not flagged by any person. When they heard the car coming, they rushed out. Mr. Harford and one other started to cross the track to get on the opposite side, although they were on the proper side to get in the car. Just as ilr. Harford reached the track he was struck and thrown to one side. The motorman had no intention of stopping as he had not been flagged and did not think there were any persons to get on the car at that point." The company claimed that the assured had exposed himself to obvious risk of injury and $60 was paid in settlement of the claim. Ill — ■ Accumulations The policy contracts contain a provision regarding accumulations which appears after all the indemnities for which the company agrees to pay; that is, the company agrees to pay accumulations of not to exceed ten per cent, on 428 ISTational Convention of Insueance Commissionees specific losses, accident disabilities and sicliness. All the contracts contain a provision similar to the following: "The indemnities above provided (not including double indemnity) shall be increased 10 per cent, on any claim accruing hereunder if the premiums hereon are paid annually in advance; or on any claim originating after this policy shall have been maintained in continuous force without default for not less than one year immediately preceding." Examiner's No. 7; Claim No. 10,268; Vharles R. Nordyke, Andrews, Ind. — Aocident Disability. The benefit under this policy was $11.50, and that amount was paid. On February 28, 1910, the claimant wrote to the company as follows: " My pol- icy calls for 10 per cent, increase after being in force one year, and policy has been in continuous force four years without default." The premium records of the company show that the premiums were paid on or before the due date for the year previous to the accident, and the claimant was entitled to an accumulation of $1.15. No answer was made to the letter above quoted, and the accumulations were ignored. Eocaminer's No. 8; Claim No. 11,518; Anderson Lawson, Lexington, Ky. — Sickness. Disability benefit under this claim amounted to $25.50. That amount was paid. The assured had paid an annual premium in advance and was entitled to the 10 per cent, accumulation amounting to $2.55, but the accumulation was ignored. Examiner's No. 9; Claim No. 12,823; William F. Campbell, Rielly, Pa. — Sickness. The disability henefit under this claim amounted to $27.32, and that amount was paid. Respecting the 10 per cent, accumulation, the company wrote to its agent in Wilkinsburg, Pa., on March 9, 1911, as follows: " We are not adding the 10 per cent, increase as the collection sheet does not give the dates when the premiums were paid. However, if he puts up a kick and his receipt book shows the premiums were paid on or before the first of each month, you can turn the same in as advance premiums." The accumulation, amounting to $2.73 was ignored. Examiner's No. 10; Claim. No. 11,329; Abram H. Reid, Saginaxo, Mich. — Acci- dent Disability. Disability benefit under this claim amounted to $20 and that amount was paid. Assured was entitled to a 10 per cent, accumulation amounting to $2, but the accumulation was ignored. Examiner's No. 11; Claim No. 11,344; Matti Barkki, Laurium, Mich. — Acci- dent Disability. The disability benefit under this claim amounted to $26. The assured was entitled to the 10 per cent, accumulation, amounting to $2.60, but the ac- cumulation was ignored. Agent holds profit sharing contract. Industeial Health and Accident Settlements 429 Examiner's &'o. 12; Claim A'o. 11,371; Lynn Smith, Lanesboro; Fa. — Accident Disability. The disability under this claim a.mounted to $40. Assured was entitled to 10 per cent, accumulation amounting to $4. The $4 accumulation was ignored. Examiner's No. 13; Claim No. 7,909; James A. Hornbake, California, Pa. — Aoeidental Death. Death benefit under this policy amounted to $300 and that amount was paid. The policy was in force for one year previous to the date of the accidental death. The premium records of the company do not show the date upon which the premiums were paid and beneficiary was presumably entitled to accumulations amounting to $30. The accumulations were ignored. Examiner's No. 14; Claim No. 8,574; C. F. Warnick, Calumet, Mich. — Acci- dental Death. Death benefit under this policy amounted to $300 and that amount was paid. The beneficiary was entitled to the 10 per cent, accumulation, amount- ing to $30, but the accumulations were ignored. Examiner's No. 15; Claim No. 10,221; Thuman Lytic, Owosso, Mich. — Acci- dent Disability. Benefit under this claim was $21.42. That amount was paid. The as- sured was entitled to 10 per cent, accumulation of $2.14. This accumulation was ignored. Examiner's No. 16; Claim No. 10,802; Peter Banando, Ahmeek, Mich. — Acci- dent Disability. The benefit on this claim was $26 and the company paid that amount, but ignored the 10 per cent, accumulation, amounting to $2.60. Examiner's No. 17; Claim No. 10,569; William Williams, Laurium, Mich. — Accident Disability. Disability benefit amounted to $49 and that amount was paid. Premium records show that premiums were regularly paid on or before the due date for the year previous to the date of the accident, and the assured was enti- tled to an accumulation of $4.90, which was ignored. Examiner's No. 18; Claim No. 10,364; Harrison Marshall, Contnna, Mich. — Accident Disability. The benefit under this policy was $35.71. This amount was paid. The pre- mium records of the company do not show on what dates the premiums on the policy were paid, but the policy does not appear to have been lapsed. The assured is probably entitled to the 10 per cent, accumulation, amounting to $3.57. Examiner's No. 19; Claim No. 10,113; Edicard P. Hashing, Alloues, Mich. — ■ Accident Disability. Disability benefit $25. This amount was paid. Premium card shows pre- miums for year previous to disability paid on or before due date. Assured entitled to 10 per cent, accumulation, amounting to $2.50. The accumula- tion was ignored. 430 jSrATioN"AL Convention of Insurance Commissionees J^xu miner's No. 20; Claim A'o. 12,405; Feter Welsh, I'lasburgh, Pa. — Sick- ness. The disability benefit under this claim amounted to $33.83, and that amount was paid. The beneficiary was also entitled to the 10 per cent, accumula- tion amounting to $3.38, but the accumulation was ignored. The agent holds a profit sharing contract. Kxamincr's A'o. 21; Claim No. 11,614; /. S. Keyser, Flint, Mich. — Sickness. The disability benefit under this claim amounted to $31.50. The assured was also entitled to the 10 per cent, accumulation amounting to $3.15, but the accumulation was ignored. Examiner's No. 22; Claim No. 12,114; C. A. Mock, St. Johns, Mich. — Sick- ness. Tlie disability benefit under this claim amounted to $53.33. The assured was entitled to the 10 per cent, accumulation amounting to $5.33, but the accumulation was ignored. Examiner's No. 23; Claim No. 12,196; Z. A. Wilbur, Oreenville, Mich. — Sickness. The disability benefit under this claim amounted to $35, and that amount was paid. The assured was entitled to the 10 per cent, accumulation, amount- ing to $3.50, but the accumulation was ignored. Examiner's No. 24; Claim No. 12,218; Charles Markovich, Allouez, Mich. — Sickness. The disability benefit under this claim amounted to $20, and that amount was paid. The assured paid an annual premium in advance and was entitled to the 10 per cent, accumulation amounting to $2, but the accumulation was ignored. The agent holds profit sharing contract. Examiner's No. 25; Claim No. 11,985; William Axford, Munith, Mich. — Sickness. The disability benefit under this claim amounted to $36, and that amount was paid. The premium records of the company do not show the dates on which the premium was paid by the assured, but it is probable that he was entitled to the 10 per cent, accumulation, amounting to $3.60, but the ac- cumulation was ignored. Examiner's No. 2ti; Claim No. 11,949; Hans Kot~cn, Chicago, 111. — Sickness. The disability benefit under this claim amounted to $28, and that amount WHS paid. Tlie assured was entitled to the 10 per cent, accumulation amount- ing to $2.80, but the accumulation was ignored. The agent held a profit shar- ing contract. E.ramincr's No. 27; Claim No. 11,904; John Donovan, Negaunee, Mich.— Sickness. Disability benefit under this claim amounted to $98.50 and that amount was paid. The beneficiary was entitled to the 10 per cent, accumulation amount- ino- to $9.85, but the accumulation was ignored. The agent holds a profit sharing contract. Industrial Health and Accident Settlements 431 Mxaminer's 'No. 28; Claim, No. 11,895; William -/. lioberts, Negaunee, Mich. — Sickness. Disability benefit under this claim amounted to $65.87, and that amount was paid. The assured was entitled to the 10 per cent, accumulation amount- ing to $6.58, but the accumulation was ignored. The agent had a profit shar- ing contract. Examiner's No. 29; Claim No. 11,702; H. H. Lovett, Wilkinshurg, Fa. — Sick- Disability benefit under this claim amounted to $38.66, and that amount was paid. The assured was entitled to a 10 per cent, accumulation amount- ing to $3.86, but the accumulation was ignored. The agent holds profit shar- ing contract. Examiner's No. 30; Claim No. 12,668; J. A. Meisinger, St. Marys, Pa. — Sick- Disability benefit under this claim amounted to $33. The assured was also entitled to the 10 per cent, accumulation amounting to $3.30', but the accumu- lation was ignored. Examiner's No. 31; Claim No. 12,677; F. P. Boyle, Pittsburgh, Pa. — Sickness. The disability benefit under this policy amounted to $34.66 and that amount was paid. The premium records of the company are lacking for three months of the twelve months prior to the date of the disability, all the other pay- ments having been made on or before the due date. The assured was prob- ably entitled to the 10 per cent, accumulation, amounting to $3.46, but the accumulation was ignored. Agent holds profit sharing contract. Examiner's No. 32 ; Claim No. 12,526 ; Verne Tucker, Fort Wayne, Ind. — Sickness. The disability benefit under this claim amounted to $28 and that amount v.'as paid. The assured was also entitled to the 10 per cent, accumulation amounting to $2.80, but the accumulation was ignored. Examiner's No. 33 ; Claim No. 12,566 ; Benjamin Daavittila, Hancock, Mich. — Sickness. The disability benefit under this claim amounted to $38, and that amount was paid. The assured was also entitled to the 10 per cent, accumulation amounting to $3.80, but the accumulation was ignored. Agent holds profit sharing contract. Examiner's No. 34; Claim No. 12,586; H. Snider, Levering, Mich. — Sickness. The disability benefit under this claim amounted to $36. This amount was paid. The assured was also entitled to the 10 per cent, accumulation amount- ing to $3.60, but the accumulation was ignored. Examiner's No. 35; Claim No. 12,753; L. F. Cook, Northville, Mich. — Sick- ness. The disability benefit under this claim amounted to $29.50. That amount was paid. The premium records of the company are not complete as to when the premium was paid, but no record is shown of any lapses. It is probable that the assured was entitled to the 10 per cent, accumulation, amounting to ?2.95. This accumulation was ignored. 432 ISTational Coh^vehtioh' of Insurance Commissionees Examiner's No. 36; Claim .Vo. 12,794; E. ^¥. Taylor, Depew, N. Y. — Sickness. Disability benefit under tliis policy was $90 and that amount was paid. The assured was entitled to the 10 per cent, accumulation amounting to $9, but the accumulation was ignored. Examiner's No. 37; Claim No. 12,817; Thomas Faull, Ishpeming, Mich. — Hic/cness. Disability benefit under this claim amounted to $27.84 and that amount was paid. The assured was entitled to a 10 per cent, accumulation amount- ing to $2.78, but the accumulation was ignored. Agent holds profit sharing contract. Examiner's No. 38; Claim No. 12,377; Charles W. Williams, Leicistown, Pa. — Sickness. The disability benefit under this claim amounted to $74, which was paid. The premium records show that all premiums prior to the date of the disa- bility for the year were paid on or before the first of the month, with the ex- ception of May 1910, when payment was made on the 2nd day of May, the 1st falling on a, Sunday. The assured was entitled to the 10 per cent, ac- cumulation amounting to $7.40, but the accumulation was ignored. Examiner's No. 39; Claim No. 12,399; William J. Uren, Ishpeming, Mich. — Si-ckness. Disability benefit under this claim amounted to $26.50 and that amount was paid. The assured was entitled to the 10 per cent, accumulation, amount- ing to $2.65, but the accumulation was ignored. Examiner's No. 40; Claim No. 12,773; William Clear, Fort Wayne, Ind. — Natural Death. The funeral benefit under this policy "was $100, and this amount was paid. The premium records of the company show that the beneficiary was entitled to a 10 per cent, accumulation amounting to $10, but the accumulation was ignored. Examiner's No. 41 ; Claim No. 12,434 ; J. P. Cryder, Pittsburgh, Pa. — Sickness. Disability benefit under this claim amounted to $131.84. The agent, who holds a profit sharing contract, stated that he had a suspicion that the as- sured's disability was caused by tuberculosis, and in a letter to the company dated May 16, 1911, the agent writes: "If you pay without referring final to me, would suggest omitting 10 per cent, increase, as I still have my doubts re T. B. (tuberculosis)." The premium records of the company show that the premiums for the year previous to the date of disability were paid on or before the due date and as- sured was therefore entitled to the accumulation of $13.18. but the accumu- lation was ignored. Examiner's No. 42; Claim No. 9,481; A. A. McDoncU. Ontonagon, Mich.— Accidental Death. Death benefit under this policy was $300, and that amount was paid. Bene- ficiary was also entitled to the 10 per cent, accumulation, amounting to $30, but the accumulation was ignored. Agent holds profit sharing contract. Industrial Health and Accident Settlements 433 Examiner's Ao. 43; Claim No. 8,5(i5; O. W. Smith, Jr., I'Ucairn, Pa.— Acci- dental Death. The full death benefit under this policy amounted to $400, but as assured was killed while walking on railroad tracks, the company reduced the amount of the benefit to one fifth on the ground of exposure to obvious risk of injury. The premium records show that the premiums were paid without default for a year previous to the date of death, and the beneficiary was entitled to the 10 per cent, accumulation, amounting to $8. Examiner's No. 4A; Claim No. 12,283; Joseph Strauss, Batesville, Ind. — Natural Death. The death benefit under this claim amounted to $100, and that amount was paid. The beneficiary was also entitled to the 10 per cent, accumulation, amounting to $10, but the accumulation was ignored. IV — ■ Foreign Beneficiaries Examiner's No. 45 ; Claim No. 13,594 ; Richard H. Wherry, Negaunee, Mich. — Accidental Death. The death benefit under this policy was $100, and the assured was killed in a mine. The agent of the company located in Marquette, Mich., notified the company of the death of the assured and the company replied to that notice as follows: " We have your letter of tlie 6th stating that one of our policyholders, Richard H. Wlierry, was killed May .5th. We enclose herewith final proof blank for death from accident and request that you have the same executed by the several parties named therein with the exception of the beneficiary, whom we note is In England." The agent secured the proofs of death as requested and forwarded the same to the company, on receipt of which the company writes on May 23, 1911: " We enclose herewith our check drawn to the beneficiary and trust that you will forward same to the correct address in England." The check for the death benefit, amounting to $100 was forwarded to the beneficiary direct. Examiner's No. 46; Claim No. 13,293; John Neicm.an, Ironwood, Mich. — Acci- dental Death. The death benefit under this policy amounted to $100. The company is notified by the agent of the accidental death of the assured and the agent secures the final proofs of death and forwards them to the company without requesting the beneficiary, who lives in Finland, to make the usual affidavit required by the final proofs. The company then forwards its check for $100 to the beneficiary living in Finland. The premium records of tlie company show that the beneficiary is also enti- tled to an accumulation of 10 per cent, amounting to $10 but the accumula- tion was ignored. Examiner's No. 47; Olaini No. 13,662; Anion Uadovich, Midland, Pa. — Acci- dental Death. The death benefit under this policy was $100. The assured was killed in a mine. The agent of the company notified the Home Office of the death of the 484 National Cojtvejsttion" op Insurance Commissionees assured, and in reply to this notice the company writes on May iJ3, 1911, as follows: " We have your letter of the 17th informing us of the death of Anton Rado- vich. V\'e enclose herewith final proofs of death, and request that you have the same executed by the several parties named therein with the exception 01 the beneficiary, who it appears, is in Austria. * * i> Upon receipt of same we will draw our check for the amount due the beneficiary, and will return to you to be mailed to the proper address of the beneficiary." Ihe check was mailed by the company to the address of the beneficiary given as Croatia, Austria, as shown by the application, but the check was returned undelivered. The company then writes to its agent in Liverpool, Ohio, on July 21, 1911, as follows: " We will^be obliged to you if you will make all possible inquiries that may enable us to deliver the check, which, in the meantime is held by us subject to the order of the beneficiary. Explain the conditions in Midland if any questions are asked, showing that the company has done everything possible for the payment of this death claim." Under the circumstances, the company was unable to pay the beneficiary the $100, and the check is now held subject to the order of the beneficiary. The premium records of the company show that the beneficiary is entitled to the 10 per cent, accumulation, amounting to $10. The reason this was not paid is explained by a letter from the company's agent in Wilkinsburg, Pa., dated May 26, 1911: "Would suggest that we pay Mr. Marshall's (a sub-agent) expenses in executing death proofs and then deduct, or rather omit the 10 per cent, in- crease to which beneficiary is probably entitled." Examiner's A'o. 48; Claim 'No. 11,319; John Foppovich, Homestead, Pa. — Accidental Death. The death benefit on this claim was $300 and the beneficiary lived in Aus- tria. The company wrote to its agent in Wilkinsburg, Pa., on July 19, 1910, as follows; "We have your letter of July 11th informing us of the death of John Pop- povich of Homestead, Pa. I also note that the beneficiary is the father of Mr. Poppovicli and that he lives in Austria. Under the circumstances, the statements of the beneficiary will have to be omitted in the final proof blank of death which we enclose herewith. Kindly have the blank executed by the several parties named therein; also procure a copy of the burial per- mit and death certificate, and a copy of the findings of the coroner's inquest, providing an inquest was held." In a further letter to the same agent dated September 16, 1910, the com- pany writes: " In acordance with your suggestion we are issuing our check for the $300 as stated, drawing same to beneficiary and giving the full address as we have it. Now, we are of the opinion that it would be a good idea to look up some person of the same nationality and have them verify the address, or perhaps it could be done at the post-office, before you mail the check to the bene- ficiary in Austria as stated." The company did not require the beneficiary living in Austria to send no- tice to the company or to file proofs of death, but the check for $300 was sent to the address of the beneficiary in Austria. Industeial Health and Accident Settlements 435 The pi'emium records of the company do not show that the policy was lapsed for the year previous to the date when the assured was killed, and it is probable that the beneficiary was entitled to an additional $30 of ac- cumulations. Agent holds a profit sharing contract. V — Profit Sharing Agent Examiner's i^o. 49; Claim A'o. 8,735; Jaines Totoro, Ishpeming, Mioh. — Acci- dental JJeatli. Death benefit under this policy amounted to $100. The policy was issued on June 4, 1909. The assured was killed by a fall of rock in a mine on June 9, 1909. The premium receipt book showed that the next premium would be due from the assured on July 1, 1909, and that therefore the policy was in force at the time of accident. Adjustment was handled by Thomas Treloar, a profit sharing agent, and he requests the company to send to the beneficiary $3.75, the amount of the policy fee paid by the assured when the policy was taken out and also requests the company to write to the beneficiary and state that the policy was not in force for the first week after it was issued. In answer to this request of the agent, the company writes to Mr. Treloar on June 28, 1909, as follows: "We have your letter of June 2'5th, in re the death of James Totoro of Ishpeming in which you inquire whetlier we are liable for the death indem- nity on account of the death occurring within seven days after the date the policy was issued and the fact that the first week is deducted for indemnity where the disability is from accident. Will say that it is our opinion that we are liable for this accidental death indemnity. " You will note disability for accident takes efi'eot on the date the policy is issued and indemnity for accidental death would be the same. If we are not liable for this claim, we would not be liable for any where death resulted within seven days, or in other words, a claimant must be injured and die after the first week in order to be entitled to indemnity; however, perhaps by using this argument you can get a compromise on this matter and adjust the claim at one-half or less than the amount called for, or you may be able to pass the same up entirely. " In accordance with paragraph ' J ' of the policy they cannot commence suit within three months and of course we never let the same come to a suit and if it was put in the hands of an attorney, we would settle same; but usually this can be done for about one-half the amount otherwise due in order to save costs, etc." The company wrote a further letter to Mr. Treloar on July 1st, as follows: " We have your letter of June 29th, in re the above claim of James Totoro of Ishpeming and in accordance with your request we are mailing you our check for $3.75. You will note that the same is drawn to you and would suggest that you get same cashed and pay claim, in cash, at the same time take up the policy and return to the home office. Be sure to procure the policy before you pay the claim." Adjuster Treloar endeavored to convince the beneficiary that the health provision in the policy applied to accident and that the benefit for accidental death did not take effect on the issuance of the policy. On July 3, 1909, he wrote the following letter to the company: " Enclosed fiind policy of Mr. James Totoro of Ishpeming, Mich. I have been there and paid the $3.75 in cash and explained the class ' K.' They took same in the light of an accident. I don't think we will hear any more about it." 436 National Convention of Insurance Commissioneks On July 20, 1909, agent Treloar wrote to the company the following letter; " Mr. Fox called me up today regarding the death claim at Ishpeming, Mich. — James Totoro, policy number 39,546. This is the party you remem- ber you returned the $3.75. It appears to me that some of his friends have taken the matter up. A. Felix Chioabotti, claimed to be a king among the Italians, came to Mr. Fox's today and wanted the policy, and asked the rea- son why the $3.75 was pa;id back, wanted to know whether the company gave the widow a present or not. It looks clear to me that this Felix Chioabotti has had a talk with an attorney. Please advise me what step to take. Of course we want this settled the best and easiest way. Answer by return mail and oblige yours truly." In answer to the above letter, the company wrote to Mr. Treloar on July 22, 1909, the following: " We. have your letter of the 20th, in reference to the above claim of James Totoro of your city, and we are of the opinion that the easiest way out of the matter is to pay same at as early a date as possible. " We enclose you herewith our check drawn to yourself for $96.25, which together with the $3.75 already paid will amount to $100, and we would suggest that you draw the money on the cheek the same as payable to your- self and call on the beneficiary and pay her the balance in the presence of two disinterested witnesses; have her sign the enclosed receipt, the same wit- nessed, and return to the home office which will close the matter up. We are of the opinion that the less said about this matter the better it will be for all parties concerned." The claim, as shown above, was finally paid in full. VI — Notice Jilxaminer's No. 50; Claim No. 12,639; Clark C. Field, Shepherd, Mich.— Sickness. This claim was settled by agent Von Dusko of Clare, Mich., and the fol- lowing letter from him dated Jan. 26, 1911, is self-explanatory: '' You will see by the enclosed release that I have settled with C. C. Field for $75. They wanted $300, the full six months' indemnity, as he has been confined to the house siuce September and probably will never get out again, but after spending almost two days I got them down to $75. Their failure to send preliminary notice probably saved us $225, as that is what he would have been entitled to. I trust this settlement meets your approval, as is the best I could do and I think we are fortunate to get out of it for $76." The preliminary notice of the disability was not filed at the home ofiice of the company until Jan. 14, 1911, although the disability commenced some months prior to that date. No final proofs were filed by the claimant. Examiner's No. 51; Claim No. 11,170; Frank Grdic, Ellsworth, Pa.— Accident Disability. The total benefit under this claim for disability would have been $312. The company reduced the claim to one-fifth, on the ground of late notice, and $62.50 was paid in settlement. The assured was injured on March 17, 1910, and notice was not filed with the company until June 20, 1910. The facts in the case seem to indicate that the assured would be injured for over one year. Attorneys were employed by the insured. Industbial Health and Accident Settlements 437 Examiner's No. 52; Claim No. 13,173; Henry Kangas, Republic, Mich. — Acci- dent Disability . Disability benefit under this claim amounted to $107.47. The company reduced the claim to one-fifth on ground of late notice and paid $21.49 in settlement of the claim. The assured was injured on February 3, 1911, and notified the company on March 17, 1911. Examiner's No. 53; Claim, No. 13,315; C. A. Treanor, Loogootee, Ind. — Acci- dent Disability. Disability benefit under this claim ajnounted to $91.94. The company re- duced the benefit to one-fifth on ground of late notice, the assured having been injured on March 7, 1911, and notified the company on March 31st. The company mailed a check to the assured for $18.38. The assured placed tlie claim in the hands of an attorney. No further action has been taken on the claim. VII —Old Form Policy Examiner's No. 54; Claim No. 10,886; Levi Ayers, Silverwood, Mich. — Death from Sickness. The policy held by the assured provided for a funeral benefit of $100, when death was due to natural causes. The old form policy, issued by the company when it was a Mutual Co-oper- ative Society, provided that the beneficiary is entitled to both the death bene- fit and disability benefit preceding the death. The disability benefit would amount to $26 additional, which was ignored by the company, and only the $100 funeral benefit was paid in settlement of the claim. YIII — • Advance Settlement Examiner's No. 55; Claim No. 11,246; John Westerlund, Big Bay, Mich.— Accident Disability. A letter from agent Thomas Treloar, who holds a profit sharing contract dated August 15, 1910, is self-explanatory: " Find release of settlement for jST. J. Westerlund of Big Bay, Mich. I went to see claimant on Saturday last. I found his head in very bad shape, so I settled with him for $60. I Icnow we have saved $-10 on this claim, and he may not be able to do any bolting for a year. Of course, he will be able to do some other light work about October 1st." The company paid $60, less six monthly advance premiums in settlement of this claim. IX — Arbitrary Reduction Examiner's No. 56; Claim No. 10,897; /S. 0. Feck, Washington, D. C. — Acci- dent Disability. The agent of the company, located in Washington, D. C^ writes to the home office on May 19, 1910, as follows: ^ I have investigated the above claim and find that claimant was unable to be at his office for a period of twelve days from May 5th to May 16th, both 438 National Convention of Insurance Commissioners- dates inclusive, which, at the rate of $60 per month, amounts to $24; how- ever, I have made settlement for $20, which I suggest he be paid with no reductions if satisfactory to the company." The company paid $20 in settlement of this claim. Examiner's A'o. 57; Claim No, 10,980; John Paris, Latham, Md. — Accident Disability. A letter to the company from the District Manager, located in Washington, D. C, dated June 7, 1910, is self-explanatory: " I have made an investigation of the above claim and find that claimant has been unable to do any part of his work for a period of twenty-one days from May 17th to June 6th, both dates inclusive, notwithstanding the fact that his doctor estimated the time he would be able to go to work as June 1st. This at the rate of $35 per month amounts to $24.50, but as the claim- ant is satisfied with a settlement of $23.50, I would suggest that he be given that amount with no reductions if satisfactory." The claim was settled for $23.50. ilxaminer's A'o. 58; Claim No. 10,129; Leiois M. t'ox, Baltimore, Md. — Acci- dent Disability. The agent for the company located in Washington, D. C, writes to the home office on Feb. 12, 1910, and the following is an extract from that letter: " Claimant was injured on January 21, as stated in his preliminary, and called on a doctor on the 22d, and was not able to go back to his work until the 7th of February, making a total of sixteen days he was unable to work, which at the rate of $50 per month would amount to $26.67. However, claimant was satisfied with a settlement of $24, and I recommend that he be paid this amount in full, if satisfactory to the company." The claim was settled by the claimant for $24. X — Breach of Warranty as io Age Llxaminer's No. 59; Claim No. 12,804; James Trehilcock, Ironwood, Mich. — Death from Hickness. The benefit under this claim would amount to $43.60. The company writes to its agent in Ironwood, Mich., March 29, 1911, as follows: " From this, in accordance with your suggestion, -we have deducted 50 cents each on sixteen premiums paid on account of the deceased being over fifty years of age at the time he was insured. This leaves a balance of $35.16, for which we enclose you herewith our check." The beneficiaries were also entitled to the 10 per cent, accumulation amounting to $3.51, but the accumulation was ignored. Agent holds profit sharing contract. XI — Premium Payment ilxaminer's No. 60; Claim No. 13,996; Andrew Bozic. Monongahela, Pa. — • Accidental Death. Death benefit under this claim amounted to $300. The assured did not pay the premium due on July 1st, until 2 p. m. on July 5th. The assured was accidentally drowned at 7 p. m. on the same day and the company claims that the policy would not have been in force until 12 o'clock noon of July 6th. Nothing was paid on the claim. Industrial Health and Accident Settlements 439 Examiner's No. 61; Claim No. 13,978; Ueo. H. Jilllis, Columbus, Ohio — Acci- dent Disability. Disability benefit under this claim would amount to $9.80. Policy was issued by the company on May 22, 1911, and assured was injured on June 18, 1911. The question in this case is as to whether the policy was in force at the time of the injury. The assured had possession of the policy and claimed to have paid the policy fee which would have carried the policy in force until July 1st. The district manager in Columbus, Ohio, wrote to the company on July 19, 1911, and stated that the assured refused to pay his premium on July 1st, until he learned if the company would settle his claim, and stated further that he had made up his mind not to recognize the claim. This disposition of the case met with the approval of the company and nothing has been paid on the claim. XII — Advance Premium Deduction The policy contracts provide: " Tlie company may, at its option deduct at the rate of one monthly pre- mium for each $10 or fractional part thereof of indemnity from any sum payable under paragraphs (a), (b), (d) or (e) (accident, partial disability, double indemnity and illness indemnity) to be applied as advance premiums." Examiner's No. 62; Claim No. 10,401; A. W. Heisler, Lewistown, Pa. — Acci- dent Disability. The benefit under this policy amounted to $31.32. From this benefit the company deducted five monthly premiums, and the following is an extract from a letter written by the company to the assured on May 10, 1910: "From this we are deducting five monthly premiums. Two of these pre- miums we are crediting as delinquents for the months of April and May, and three premiums we are crediting as advance payments, which is in ac- cordance with Section 5 of conditions on the bacli of policy." Under the provisions of the policy the company is authorized to deduct only four advance premiums, but five were deducted. Examiner's No. 63; Claim No. 11,283; Leonard Frulhiere, Brazil, Ind. — Acci- dent Disability. The disability benefit under this claim amounted to $131.73. From this the company deducted seventeen monthly premiums. In explanation of this the company writes to its agent in Brazil, Ind., on December 1, 1910, as fol- lows: "We wish to acl^nowledge receipt of final proof, letters, etc., in the above claim of Leonard Prulhiere of your city, from which it appears that he was totally disabled by accident for 152 days, or five months and two days; at the rate of $26 would amount to $131.73. From this, in accordance with your instructions, we are deducting seventeen monthly premiums. Five we are crediting as delinquent premiums, and the twelve in advance as an annual." The company undoubtedly was authorized to deduct $14.00 as advance pre- miums under the provisions of the policy contract quoted above, but it does not seem entitled to deduct seventeen premiums from the face of the policy. A check was mailed the assured for $114.73. 440 National Convention of Insdeance Commissioners Examiner's No, 64; Claim No. 11,284; Mrs. Lucy Miles, Cincinnati, Ohio — Accident Disahility. The assured was injured on the 4th of July by a stray shot fired from the window of a house which she was passing. The question in this case was ae to whether the June and July premiums were paid prior to the accident. The receipt book held by the claimant showed that the June and July pre- miums were paid on or before the due date. The assured agreed to settle her claim for $20, and in sending the check to the claimant on September 13, 1910, the company writes as follows: " From this we are deducting four monthly premiums which we have placed to your credit for the months of June, July, August and September, and which we have entered on your receipt book. As the June and July premiums have not been received at the home office, we suggest that you look to Mr. Eobinson (the agent) for same, as it is evident that he has the money in his possession. This leaves a balance of $16 for which we enclose you herewith our check." Examiner's No. 65; Claim No. 11,313; Viska Zupan, Negaunee, Mich. — Acci- dent Disability. Disability benefit amounted to $137.80. From this amount the company deducted $12 monthly advance premium, and a check was sent to the assured for $125.80. Examiner's No. 66; Claim No. 11,250; G. 8. Shannon, Litchfield, Mich. — Accident Disability. Benefit under this policy was $86.66, from which the company deducted eight advance monthly premiums amounting to $8.00, and sent a check to the assured for $78.66. XIII — Deduction for Sunday Examiner's No. 67; Claim No. 10,724; Peter Messlles, Homestead, Pa. — Acci- dent Disability. The letter addressed to the company by George Jacobs, an agent located in Wilkinsburg, and dated April 29, 1910, is self-explanatory: " Check received, but amount is shy one day's indemnity. By referring to my letter re. this case you will find that I did not suggest adjusting at eighteen and one-half days. I informed you that claimant could resume work 25th inst. This would give him nineteen and one-half days. However, I will have Mr. Kondrot try to have claimant accept the check on the strength of tlie fact that claim terminated on a Sunday, although it is a hard proposi- tion to work this reason with men who work on Sundays. The man is a Lithuanian, and I cannot talk to him without an interpreter, so I will have Kondrot try to fix him up, but I would suggest that hereafter claims be ad- justed according to"my advice, or use final proof blanks, as I have troubles enough without trying to explain why a day is shaved off now ajnd then and 10 per cent, increase omitted in so many cases. In cases where these things should be done for good reason, 1 will advise it in my letters re. settlements. " In this particular case, will say that he is one of Kondrot's people, and he is having hard work to hold his policy holders, as when one gets dissatis- fied he goes to the whole ' colony ' with his tale of woe. " I assure you that I will keep the claims down as much as possible without jeopardizing our business, so it will not be wise to do any shaving at the other end." Industeial Health aistd Accident Settlements 441 Mxaminer's No. 68; Claim A'o. 10,879; li. E. Stoutenberg, Bay City, Mich. — Accident Disability. The company paid a, benefit amounting to $20 under this policy. In a letter to the assured dated May 31, 1910, the company writes as follows; " We wish to acknowledge receipt of your final proof, from which it appears that you were totally disabled by accident for twenty days, from May 2d, to and including the 21st. (As you stated, you were able to resume work on the 23d, and assume you would have resumed work the day previous had it not been Sunday or a holiday.) This, at the rate of $30 a month, amounts to $20." Esaminer's No. 69; Claim No. 11,093; E. 0. Bennett, Edwardsport, Ind. — Accident Disability. The following letter from the company dated July 11, 1910, is self-explan- atory : " We are adjusting the claim at $35, total disability from illness from May 29th to and including July 2d (as we assume you would have resumed work on the 3d or 4th had they not been holidays or Sundays. ) This at the rate of $26 per month amounts to $31.83." Tlie claim was settled for $31.83. Exhibit B Memoranda on all Cases Investigated, Except Lapsed Policies Number Specific Claims (Death, Eye and Limb) 63 Accident 195 Sickness 152 Total 410 Note: All claims numbered up to 8,912 were filed prior to incorporation aa a stock company. Specie-ic Claims Death, Loss of Ey'e, Loss of Lirrib Claim No. 1908 7,496. Death. Benefit $100. Died from natural causes. Paid in full. 7,545. Death. Benefit $200. Paid in full. 7,201. Death. Benefit $200. Company claims impaired eyesight and also possible suicide or murder. Paid $40 and returned nineteen premiums. 7,628. Death. Benefit $100. Paid in full. 1909 7,842. Death. Died from natural causes. Benefit $100. Paid in full. 8,073. Limb loss. Benefit $100. Paid in full. T,!>2S. Death. Benefit $100. Died from natural causes. Paid in full. 7,670. Death. Benefit $100. Died from natural causes. Paid in full. 7,966. Limb loss. Benefit $200. Paid in full. 7,743. Limb loss. Benefit $150, plus $15 accumulatious. Paid in full. 442 JSTational Convention of Insurance Commissioners Claim No. 7,753. Death. Beuclit $200. Company claims policy not in force. Paid ijiSO in settlement. 8,378. lijt loss. Benefit $100. Paid in full. 7,y09. Death. Benefit $300. Paid, but ignored accumulations. (Exhibit "A," Examiner's No. 13.) 8,854. Limb loss. Benefit $150. Paid in full. 9,7 82. Limb loss. Benefit $50. Paid in full. 8,279. Death. Benefit $100. Died from tuberculosis. Reduced to one- fifth and $20 paid. 8,735. Death. Benefit $100. Paid after attempt to return premium. (Ex- hibit ''A," Examiner's No. 49.) 8,805. Death. Benefit $100. Company claims exposure to unnecessary danger. Paid $50. 8,608. Death. Benefit $100. Died from tuberculosis. Reduced to one-fifth and $20 paid. 9,071. Death. Benefit $100. Paid in full. 8,514. Death. Benefit $100. Reduced to one-fifth on ground of exposure and $20 paid. 9,481. Deatii. Benefit $300. Paid, but accumulations of $30 ignored. (Exhibit "A," Examiner's No. 42) 8,743. Death. Benefit $100. Paid in full. 8,505. Death. Benefit $400. Reduced to one-fifth on ground of exposure and $80 paid. Killed on railroad tracks. Accumulation of $8 ignored. 8,603. Death. Benefit $100. Paid in full. 8,574. Death. Benefit $300. Paid. Accumulation of $30 ignored. (Ex- hibit "A," Examiner's No. 14.) 8,210. Death. Benefit $100. Died from tuberculosis. Reduced to one- fifth and $20 paid. 8,432. Death. Benefit $100. Died from natural causes. Paid in full. 7,416. Death. Benefit $300. Reduced to one-fifth on ground of exposure and $60 paid. (Exhibit "A," Examiner's No. 6.) 8,179. Death. Benefit $100. Paid in full. 8,126. Death. Benefit $300. Change of occupation and $100 paid. (Ex- hibit "A," Examiner's No. 5.) 1910 10,470. Death. Benefit $200. Paid in full. 9,875. Death. Benefit $100. Reduced to one-fifth on ground of intoxication and $20 paid. 10.077. Limb loss. Benefit $100. Paid in full. 10^152. Death. Benefit $100. Paid in full. 10,009. Death. Benefit $300. Pro-rated on change of occupation from " Stoker in Gas House " to " Keeper of furnace in steel and iron ■works " and $l'0O paid. 9,556. Death. Benefit $100, plus $10 accumulation. Reduced to one-flith on ground of late notice and rheumatism and $22 paid. 11,891. Death. Benefit $300. Reduced on ground of exposure, settlement made for $150. 10,886. Death. Benefit $100, plus $26 for illness, death occurring from natural causes. Paid $100. (Exhibit "A," Examiner's No. 54.) 9,922. Limb loss. Benefit $150. Pro-rated on change of occupation from " Dynamo Engineer " to " Employee working on switch engine " and $50 paid. 12,000. Limb loss. Benefit $150. Paid in full. 11,754. Death. Benefit $100, plus $10 accumulation. Reduced to one-fifth on ground of exposure as assured was killed by live wires, while climbing a telegraph pole. $22 paid. 11,319. Death. Benefit $300. Beneficiary lived in Austria. Accumulations ignored. (Exhibit "A," Examiner's No. 48.) Industrial Health and Accident Settlements 443 Claim No. 11,791. Death. Benefit $100, plus $10 accumulation. Paid in full. 11,944. Death. Benefit $200. Paid in full. 11,314. Death. Benefit $100, plus $10 accumulation. Died from dose of carbolic taken by mistake and one-fifth or $22 paid. 10,236. Death. Benefit $100. Di«d from natural causes. Paid in full. 11,316. Death. Benefit $100, plus $10 accumulations. Reduced to one-fifth on ground of death from poison and $22 paid. 11,891. Death. Benefit $300. Killed by railroad train. Settled for $150. 1911 12,283. Death. Benefit $100. Paid. Accumulations $10 ignored. 12,165. Death. Benefit $100, plus $10 accumulations. Reduced to one-fifth on ground of intoxication and $22 paid. 13,107. Death. Benefit $100. Paid in full. 13,594. Death. Benefit $100. Paid in full. 12,773. Death. Benefit $100, plus $10 accumulations ignored. {Exhibit "A," Examiner's No. 40.) 12,568. Death. Benefit $300. Reduced to one-fifth on ground of suicide and $60 paid. 13,134. Death. Benefit $100. Paid in full. 13,662. Death. Benefit $100, plus $10 accumulation. Beneficiary lived in Austria. (Exhibit "A,". Examiner's No. 47.) 13,293. Death. Benefit $100. Paid. Accumulation $10, ignored. Bene- ficiary lived in Finland. (E'xhibit "A," Examiner's No. 46.) 13,467. Death. Benefit $300. Pro-rated on change of occupation from " Stationary Fireman, boiler, outside," to " Top lander, or lander on surface " and $100 paid. 13,247. Eye loss. Benefit $66.66. Paid in full. 13,594. Death. Benefit $100. Paid in full. Beneficiary lived in England. (Exhibit "A," Examiner's No. 45.) 13,996. Death. Company claimed policy did not go into effect until follow- ing day. (See Exhibit "A," Examiner's No. 60.) Accideni Claims 1910 9,806. Benefit $75, plus $7.50 accumulations. Paid in full. 9,808. Benefit $32.94. Paid in full. 9.810. Benefit $18. Paid less two advance monthly premiums. 9.811. Benefit $42. Paid $42. 9,820. Disability ten weeks. Settled on basis of six weeks, and paid $36.40. 9,827. Benefit $26. Paid in full. 9,832. Benefit $45.33. Paid in full. 9,834. Benefit $40. Paid in full. 9,838. Benefit $25. Paid less two advance monthly premiums. 9,842. Assured crippled for life. Asked for $200 and was paid that amount. Limit would have been $480. 9,871. Benefit $9.33. Paid in full. 9,961. Benefit $60.66. Paid less five advance monthly premiums. 9,999. No final proof filed. Nothing paid. Letter sent to agent two months after accident enquiring about claim. 9,955. No final proof. Settlement made for $40 before injury was healed — • cut off thumb. 9,951. No final proofs. Settled for $70. 9,908. Disability benefit $20. Paid in full. 9,906. Injury to wrist. No final proofs. Compromised for $36, less three advanced premiums. 9,902. Benefit $31.50. Paid less two monthly premiums. 9,926. Disability $51. Paid less five premiums. 9,924. Disability $60. Paid less six premiums. 9,920. No external marks of injury. Nothing paid. 444 National GoNVEWTioiir oe Insurance Commissionebs Claim No. 9,919. Benefit $39. Paid in full. 10,000. Benefit $8.48. Paid in full. Pro-rated from "Mason, tending" to " Common Laborer." No final proofs. 10,003. Benefit $13.60. Paid in full. No final proofs. 10,005. Final proofs state that claimant will accept $15. Paid in full. 10,015. Claimant agreed to accept $40 in settlement which was paid. Later at the end of five weeks period for which he settled he was still laid up and asks for more money. Company refuses on ground of previous payment. Profit sharing agent. 10,021. Benefit $10.40. Paid in full. 10,026. Loss of hand below wrist. Benefit $75. Paid in full. 10,031. Benefit $28. Paid in full. 10,040. Benefit $56.65. Paid in full, leas six monthly premiums. 10,048. Benefit .$227.07. Paid in full. Endeavor to make settlement in ad- vance, but without success. 10,062. Benefit $50. Paid in full. 10,079. Benefit $28. Paid in full. 10,101. No final proofs. Settled in advance for $21.54. 10,105. Benefit $42.47. Paid in full. 10.112. Benefit $26.56. Paid in full. 10.113. Benefit $25. Paid. $2.50 acctmiulations ignored. (See Exhibit "A," Examiner's No. 19.) 10,118. Benefit $7. Paid in full. 10,124. Claimant agreed to accept $17. Paid. 10,126. Insured as "traveling salesman." Pro-rated to ofiice duties. Paid $51.70. 10,129. District manager writes that claimant is entitled to $26.67 and that as claimant was satisfied with $24, he paid that amount. (See Exhibit "A," Examiner's No. 58.) 10,155. Claim settled for $8. 10,160. Benefit $81.67. Paid in full. 10,392. Settled without final proofs for $22.47. 10,364. Benefit $35.71. Paid in full. Accumulations $3.57 not paid. (See Exhibit "A," Examiner's No. 18.) 10,356. Benefit $45.94. Paid in full. 10,341. Benefit $78. Paid in full, less eight moutlily advance premiums. 10.340. Benefit $32.22. Paid in full. 10,317. Benefit $20. Paid in full. 10,307. Benefit $20. Paid in full. 10,304. Benefit $10. Paid in fuU. 10,514. Benefit $20.54. Paid in full. 10,5S0. Benefit $21. Paid in full 10,536. Benefit $26, plus $2.60 accumulation. Paid in full. 10,562. Benefit $26. Paid in full, less three monthly advance premiums. 10,564. Benefit $46. Paid $39.87. Insured as " Machinist, running wood working machinery " class " F." Pro-rated to " Eip sawing " class " G." Company claims he was insured as machinist. (See Exhibit "A,"' Examiner's No. 4.) 10,569. Benefit $49. Paid. Accumulation $4.90 ignored. (See Exhibit "A," Examiner's No. 17.) 10,584. Benefit $30.67. Paid in full. Pro-rated on change of occupation. 10,589. Benefit $40. Paid less four monthly advance premiums. 10,598. Benefit $44. Paid in full. 10,688. Benefit $41.20. Paid in full. 10,685. Benefit $32.07. Paid in full, less three monthly advance premiums. 10,673. Settled without final proofs for $18, less two monthly advance pre- miums. 10,070. Settlement without final proof for $25. 10,643. Insured as "Butcher, cutting meat" class "F." Pro-rated to " Butcher Slaiigliterins " class " G." Was driving buggy on way IlTDTJSTEIAL HeALTH AND AcCIDENT SETTLEMENTS 445 Claim No. to slaughter house. Horse ran away and assured was thrown out breaking his ankle. Paid disability under last occupation and paid $54.60. (See Exhibit "A." Examiner's No. 3.). 10,636. Settled without final proofs for $88.33, less one monthly advance premium. 10,626. Settlement made for $8. 10,609. Insured as " moulder not handling hot metal," injured while hand- ling hot metal. Pro-rated and $26 paid less one monthly advance premium. 10,401. Benefit $31.32. Paid, less five monthly advance premiums. Advance premiums deducted $5, should have been $4. (See Exhibit "A," Examiner's No. 02.) 10,444. Benefit $39.87. Paid in full, less four monthly advance premiums. 10,458. Benefit $36.52. Paid in full. 10,461. Benefit $26. Paid in full, less three monthly advance premiums. 10,482. Benefit $26. Paid in full. Change of occupation from " assistant bookkeeper "'to "car rider in mine." • 10,497. Benefit $29.33. Paid in full. 10,802. Benefit $26. Paid. Accumulation $2.60 ignored. (See Exhibit "A," Examiner's No. 16.) 10,809. Settled without final proofs for $10. 10.812. Settled without final proofs, and before disability ended for $15. 10.813. Benefit $45. Paid in full, less five monthly advance premiums. 10,821. Benefit $37.62. Paid in full. Change of occupation from "bench work in stove factory " to loading and unloading goods " on crane." 10,835. Benefit $33. Paid in full. 10,857. Benefit $32, plus $3.20 accumulation. Paid less annual premium $12. 10,877. Benefit $13. Paid in full. 10,879. Benefit $20. Paid less two monthly advance premiums. (See Ex- hibit "A," Examiner's No. 68.) 10,887. Benefit $35, plus $3.50 accumulations. Paid in full after assured asked for accumulations. 10,897. Benefit $24. This liability acknowledged by agent. Settled by him for $20. (See Exhibit "A," Examiner's No. 56. ) 10,901. Benefit $56. Paid in full, less six monthly advance premiums. 10,904. Benefit $20.80. Paid in full. 10.911. Benefit $29. Paid in full, less two monthly advance premiums. 10.912. Benefit $32.94. Paid in full. Occupation changed from " stationary engineer " to " cutting wood on circular saw." 10,914. Benefit $28.60. Paid in full, less two monthly advance premiums. 10,921. Benefit $79. Paid, less eight monthly advance premiums. Injured while getting off moving train. Not reduced on ground of ex- posure. 10,933. Settlement without final proofs for $18. 10,953. Settled at home office without final proofs for $50. 10,969. Benefit $10. Paid. 10,980. Benefit $24.50. Agent writes that assured would be satisfied for $23.50 and that amount paid. No final proofs. (See Exhibit "A," Examiner's No. 57.) 10,983. Settlement made before disability ended for $20-. No final proofs. 10,995. Settlement made without final proofs for $18.15. 10,999. Pro-rated from " Mining " class " D " to " painting " class " P." Benefit claimed $255. Paid $255 in settlement. 10,717. Benefit $75. Paid in full. 10.723. Benefit $34.66. Paid in fxill. 10.724. Benefit $24.66. Ten per cent, paid $2.46; one day deducted. (See Exhibit "A," Examiner's No. 67.) 10,733. Benefit $72.80. Paid in full. 10,739. Advance settlement made for $32. Claim was made for $50. Claim- ant evidently satisfied. 10,748. Benefit $25. Paid in full. 446 National Convention of Insueancb Commissionees Claim No. 10,741). Advance settlement made for $75. Jacket says loss of sight of right eje. Sight of eye not entirely lost. 11,3U0. JSettlement made without final proofs for $76. 11,313. Benelit ifl37.SU. Paid, less twelve monthly advance premiums. (See txhibit "A,'' Examiner's Ao. 65.) 11,329. Benelit $2.0. i'lus $2 acciimulation. Paid benefit, but accumulation ignored. (See Exhibit "A," Examiner's No. 10.) 11,344. Beneht $26. Paid. Accumulations of $2.60 ignored. (See Exhibit "A," Examiner's No. 11.) 11,362. Benelit $51. Paid in full. 11,340. Compromise settlement for $30, less annual premium of $12, less 5 per cent, discount. Assured received $18.40. 11,371. Benelit $40. Paid, less four monthly advance premiums; accumula- tion of $4 ignored. (See Exhibit "A," Examiner's No. 12.) 11,381. Claim $115. Settled for 50 per cent, and $57.50 paid. Company claims breach of warranty. 11,388. Benefit $33. Paid, less three monthly advanae premiums. 11,395. Benefit $33, plus $3.30 accumulation. Paid in full. 11,404. Benefit $28.17, plus $2.83 accumulation. Paid in full. IMl 13,978. Company claimed policy was not in force. Benefit $9.80. (See Ex- hibit "A," Examiner's No. 61.) 11,008. Benefit $37.27. Paid in full, less three monthly advance premiums. 11,016. Settlement made without final proofs for $72. 11.039. Settled without final proofs for $41. 11.040. Insured as " leamster and Driver." Injured while unloading logs from wagon. Pro-rated and benefit of $39 paid. 11,042. Benefit $34.67. Paid in full. Late notice but as this was not fault of assured claim was not reduced to one-fifth. 11,044. Benefit $34. Paid in full, less three monthly advance premiums. 11,067. Benefit $40. Paid. Accumulations $4 ignored. Playing baU. Com- pany wants to reduce but as agent explains he was not a regular ball player, claim was not pro-rated. (See Exhibit "A," Examin- er's No. 2.) 11,078. Settled without final proofs for $10. 11,093. Claimed thirty-nine days, paid thirty- five days disability or $31.83. (See Exhibit "A,'' Examiner's No. 69.) 11,113. Benefit $31.66. Paid in full. 11,118. Settlement made without final proofs for $72. 11,126. Benefit $32.80, plus $3.28. Paid. Claim reduced to one-fifth, full benefit $164. Reduced on ground of late notice and no external marlis of injury. 11,128. Pro-rated from "machinist, class 'D' benefit $40 a month" to "baseball player $20," class " I;" paid fifteen days disability $10- (See Exhibit "A," Examiner's No. 1.) 11,149. Benefit $27.32. Paid in full, less three monthly advance premiums. 11.156. Benelit $40. Paid in full. 11.157. Benefit $30.83. Paid in full. 11,170. Benefit $312. Reduced to one-fifth on ground of late notice and $62.50 paid. Injured on March 17, 1910; notice filed June 20, 1910. (See Exhibit "A," Examiner's No. 51.) 11,180. Benefit $24.50. Paid in full. 11,172. Benefit $94.50. Paid in full. 11,212. Disability $20.87. Paid less two monthly advance premiums. Sun- day deducted. 11,222. Benefit $24. Paid in full. 11,232. Benefit $27.73, plus $2.77 accumulations. Paid. Pro-rated on change of occupation from " stationary fireman " to " coal miner." 11,234. Benefit $25.14. Paid in full. Industrial Health and Accident Settlements 447 Claim No. U,246. Settled by profit sharing agent Treloar for $60. He states in letter that he had saved $40, as claimant was still unable to work. Also deducted six monthly advance premiums. No final proofs. (See Exhibit "A," Examiner's No. 55.) 11.249. Benefit $29.17. Paid less three monthly advance premiums. 11.250. Benefit $86.65. Paid less eight monthly advance premiums, $8. (See Exhibit "A," Examiner's No. 66.) 11,262.. Benefit $30. Paid in full. 11,279. Benefit $31.20, plus $3.12 accumulations. Paid less three monthly advance premiums. 11.283. Benefit $131.73. Paid less $17 monthly premiums, $5 back and $12 advance. (See Exhibit "A," Examiner's No. 63.) 11.284. Agreed to settle for $20. Premium for June, July was paid to agent per receipt book. Company deducts $4 including June and July premium and tells assured to look to agent to recover $2. (See Exhibit "A," Exalniner's No. 64.) 10.202. Benefit $20. Paid in full. 10.203. Pro-rated from class " H " to Trammer class " J." Settlement made for $80 — 162 days 0. K. No final proofs. 10.204. Benefit $30. No final proofs, advance settlement made for $25. 10,206. Benefit $10.84. Paid in full. 10,208. Strained back. No final proofs, but company twice requested same. 10.210. Benefit $7.80. Paid in full. 10.211. Pro-rated from miner to laborer. Claim $14.67. Paid in full. 10,215. Benefit $9.33. Paid in full. 10.219. Benefit $8. Paid in full. 10.220. Benefit $6.07. Settled at one-fifth, account no visible signs of injury. 10.221. Benefit $21.42. Paid $21.42. Not paid accumulations one-tenth. (See Exhibit "A," Examiner's No. 15.) 10.222. Benefit $16.90. Paid in full. 10.225. Settled for $52, compromise. No final proofs; agent thought claim- ant would be laid up all summer. 10.226. Benefit $9.50. Paid in full. 10.227. Benefit $13. Paid in full. 10,229. Benefit $19.36. Paid two-fifths and accumulation. 10.231. Benefit $25.33. Pro-rated from miner to trammer. Paid in full. 10,234. Benefit $10.40. Paid in full. 10.237. Paid two-fifths of claim, or $4, account partial disability. 10.238. Benefit $27.73. Paid. Pro-rated from carpenter to farmer. 10.240. Benefit $14.73. Paid one-fifth or $2.95. Account of endeavoring to enter moving car. 10.241. Benefit paid $26. Compromise. 10.242. Claim five days. No final proofs. 10,245. Benefit $34.66. Paid in full. 10,247. Benefit $14.30. Paid in full. 10,249. Benefit $46.86. Paid in full. Pro-rated on change of occupation. Class " C " to " G." 10.251. Benefit, fourteen days partial. Paid .*2.43. Reduced one-fifth ac- count rheumatism. 10.253. Benefit $7.80. Paid in full. 10.254. Benefit $16. Paid in full. 10,256. Benefit $26.67. Paid in full, pro-rated from " miner " to " trammer." 10.263. Benefit $26. Paid in full. Pro-rated from class " F " to " G." 10.264. Benefit $11.27. Paid in full. 10.267. Benefit $11.70. Paid in full. 10.268. Benefit $11.50. Paid $11.50. Claimant wrote for 10 per cent. accumulation, but same was not paid. (See Exhibit "A," Examin- er's No. 7.) 10.269. Benefit $21.33. Paid in full. 10,275. Claim made but no final proofs submitted. Nothing paid. 448 Natioital Convention of Insueance Commissionees Claim No. 10,279. Benefit $49. Paid in full. 10,288. Benefit $13. Paid in full. 10,290. Benefit paid at $4.33 on preliminary proof. No final proof required. 10.292. Benefit paid $26. Settled at two-fifths. Account partial disability. 10.293. Claim made and rejected 0. K. Account premium not paid until after accident. 10.705. Benefit $4.33. Paid in full. 10.706. Benefit $8.67. Paid in full. 10.710. Benefit $7. Paid in full. Pro-rated from class "D" to " F." Account change of occupation. 10.711. Benefit $15.60. Paid in full. Pro-rated from class "E" to " G." Account change occupation. 10.712. Benefit $9. Paid in full. Pro-rated from class "T>" to " F." Ac- count change of occupation. 10,716. Paid $4, settled at one-fifth. Account no visible sign of injury. 13,315. Benefit $91.94. Reduced to one-fifth, account late notice. Check was refused by claimant. (See Exhibit "A," Examiner's No. 53.) 13,173. Full benefit $107.47. Reduced to one-fifth, account late notice. (See Exhibit "A," Examiner's No. 52.) Siokness Claims 1910 12,399. Benefit $26.50. Paid. Accumulations $2.65 ignored. (See Exhibit "A," Examiner's No. 39.) 12,396. Benefit $53.33. Paid less six monthly advance premiums'. 12,382. Benefit $39.50. Paid in full, no reduction on late notice. 12,367. Settlement made without final proofs for $20.37. 12,377. Insured as " station porter inside work " class E, pro-rated to " Janitor washing windows." Benefit $74. Paid. Premiums paid on or before the first, except in May, when paid on the second — the first falling on a Sunday. Accumulations $7.40. (See Exhibit "A," Examiner's No. 38.) 12,350. Benefit $89.27. Paid in full. 12,347. Benefit $57.33. Paid in full. 12,343. Benefit $36, plus $3.60 accumulation. Paid in fuU. 12,329. Benefit $70, plus $7 accumulation. Paid in fuU. 12,328. Benefit $42.80. Paid in full. 1911 12,730. Full benefit $210. Reduced to one-fifth on ground of tuberculosis or $42. Added $4.20 accumulation and paid $46.20. 12,722. Settled without final proofs for $25. 12,703. Reduced to one-fifth on account of rheumatism and $77.35 paid in- cluding $7.03 accumulation. 12,882. Benefit $30.91. Paid in full. 12,859. Benefit $45. Paid in full. 12,836. Benefit $33. Paid in full. 12,823. Benefit $27.32. Paid. (See Exhibit "A," Examiner's No. 9.) 12,817. Benefit $27.84. (See Exhibit "A," Examiner's No. 37.) Paid. Accumulation $2.78 ignored. 12,810. Benefit $28. Paid less four monthly advance premiums .$4.40. 12J804. Benefit $43.16. Deducted $.50 each for 16 premiums and paid $35.16> (See Exhibit "A," Examiner's No. 59.) 12,606. Benefit $55, plus $5.50 accumulation. Paid in full. 12,605. Benefit $26.50. Paid less three monthly advance premiums. 12 794. Settled without final proofs for $90. Draft shows that he was al- lowed 87 days total and 6 days partial disability. Accumulation of $9 ignored. (See Exhibit "A," Examiner's No. 36.) 12 787. Benefit $45.33, plus $4.53 accumulation. Paid in full. Industrial Health and Accident Settlements 449 Claim No. 12,785. Benefit $55.66. Paid in full. 12,771. Benefit $28, plus $2.80 accumulation. Paid in full. 12,765. Benefit $40.66. Paid in full. 12,758. Benefit $34.66, plus $3.46. Paid in full. 12,755. Benefit $24, plus' $2.40 accumulation. Paid in full. 12,753. Benefit $29.50. Paid. Accumulation $2.95, ignored. (See Exhibit "A," Examiner's No. 35.) 12,752. Benefit $20.96. Paid in full. 12,750. Settlement without final proofs. Paid $35, less 4 monthly advance premiums. 1910 12,326. Benefit $41.41. Paid in full. 1911 12,586. Benefit $36. Paid. Accumulations $3.60, ignored. (See Exliibit "A," Examiner's No. 34.) 12,572. Benefit $40.50. Paid in full. 12,566. Benefit $38. Paid, less 3 monthly premiums, accumulation $3.80 ignored. (See Exhibit "A," Examiner's No. 33.) 12,556. Settlement made for $45.50. Claimed $120. Accumulations $4.55. 12,555. Benefit $57. Paid in full. 12,539. Benefit $36.66, plus $3.66 accumulations. Paid in full. 12,530. Benefit $36. Paid in full. 12,529. Changed occupation from " hotel, office and supervising only," Class A, to "carpenter," Class F. Paid $55.55 including $5.05 accumu- lation. 12,528. Settlement made without final proofs for $30. 12,526. Benefit $28. Paid. Accumulation $2.80, ignored. (Sue Exhibit ''A," Examiner's No. 32.) 12,511. Benefit $141.66. Reduced to V5 on ground of rheumatism ;ind $28.33 paid. 12,699. Benefit $58.66. Paid less 5 monthly advance premiums. 12,693. Benefit $49. Paid in full. 12,677. Benefit $34.66. Paid. Accumulation $3.46. Card incomplete. (See Exhibit "A," Examiner's No. 31.) 12,674. Benefit $35.33. Paid in full. 12.668. Benefit $33. Paid less extra charge of $7.50 because a.^sured was over age. (See Exhibit "A," Examiner's No. 30.) 12.669. Benefit $43.50, plus $4.35 accumulation. Paid in full. 12,649. Settlement without final proofs for $72.50. 12,639. Settlement without final proofs for $75. (See Exhibit "A," Exam- iner's No. 50. ) 12,608. Died from natural causes. Paid sick benefit $15.60. 13,084. Paid $54.83 benefit in full. 13,076. Benefit $47.84. Paid in full. 13,069. Settlement without final proofs for $32.50. 13,058. Benefit $38. Paid in full. 13,053. Benefit $36. Paid In full. 13,015. Benefit $26.87. Paid in full. 13,008. Benefit $28. Paid in full. 13,006. Benefit $63, plus $6.30 accumulations. Paid in full. 1910 10,735. Compromise settlement $25. 10,760. Benefit $79,77. Paid in full. 10,'765. Compromise settlement made for $45. Pro-rated from " D " to " F." 10,775. Rejected account sixty day clause. 10,777. Compromise settlement $32.66. 10,791. Benefit $49.50. Leas 3 monthly advance premiums. 15 450 National Coxvextion of Insueaxce CoMMissiowExts Claim No. 11,509. Benefit $47.33, plus actumulations $4.73. Paid in full. 11,518. Claim $25.50 paid. (See Exhibit "A," Examiner's No. 8.) 11.550. Benefit $37. Paid in full. 11.551. Claim made for $171. Compromise settlement- effected for $100. 11,500. Benefit $30. Paid, less 3 monthly advance premiiums. Pro-rated from " E " to " Q." Change of occupation. 12,108. Settled without final proofs for $25.67, less 2 monthly advance premiums. 11,655. Benefit $36.50, plus $3.65 accumulation. Paid in full. 11,682. Compromise settlement for $60. 11,756. Benefit $25.14. Paid in full. 11,739. Benefit $33.99, plus $3.40 accumulation. Paid in full. 11,735. Benefit $37, plus $3.70 accumulations. Paid in full, less 3 monthly advance premiums. 11,732. Benefit $42. Paid in full. 11,702. Benefit $38.66. Paid. Accumulation $3.86. Ignored. (See Ex- hibit "A," Examiner's No. 29.) 11,705. Benefit $37.99, plus $3.80 accumulation. Paid in full. 11,725. Benefit $27.50. Paid, less 2 monthly advance premiums. 11,895. Benefit $65.87. Paid, less 6 monthly advance premiums. Accumu- lation $6.58 ignored. (See Exhibit "A," Examiner's No. 28.) 11,865. Benefit $42.50. Paid, less 3 monthly advance premiums. 11,839. Benefit $49.50, plus $4.95 accumulations. Paid less $3 policy fee not paid when policy was issued.. 11,820. Benefit $41.66, plus $4J6 accumulation. Paid in full. 11,803. Settled without final proofs before disability ended for $24.50. 11,904. Benefit $98.50, Paid less 10 monthly advance premiums, accumu- lation of $9.85 ignored. (See Exhibit "A," Examiner's No. 27.) 11,919. Benefit $49.33. Paid in full. 11.941. Benefit $31. Settled by 'agent for $20 on ground of breach of war- ranty. 11.942. Benefit $22.61, plus accumulation $2.26. Paid in full. 11,949. Benefit $28. Paid. Accumulation of . $2.80 ignored. (See Ex- hibit "A," Examiner's No. 26.). 11,963. Benefit $80.50, plus $8.05 accumulation. Paid in full. 11,985. Benefit $36. Paid. Accumulation $3.60 ignored, no premium dates. (See Exhibit "A," Examiner's No. 25.) 11,999. Benefit $117. Reduced to Vs on ground of rheumatism. Added $2.34 accumulation and paid $25.74. 12,286. Benefit $44. Paid in fuU. 12,271. Benefit $81.33. Paid in full. 12,259. Benefit $23.50, paid less 6 monthly advance premiums per request of claimant. 12,252. Benefit $18. Paid in full. 12,222. Benefit $54.66. Paid less 5 monthly advance premiums. 12,219. Benefit $38.50. Paid, less 3 monthly advance premiums. 12,218. Benefit $20. Paid. Accumulation of'$2 ignored. (See Exhibit "A," Examiner's No. 24.) 12,196. Benefit $35. Paid. Accumulation of $3.50 ignored. (See Exhibit "A," Examiner's No. 23.) 12,171. Benefit $37.50. Paid, less 3 monthly advance premiums. 12,160. Benefit $89.33, plus $8.93 accumulation. Paid in full. 12,156. Benefit $89.50, plus $6.95 accumulation. Paid in full. 12,155. Settlement made without final proofs for $25. 12,148. Full benefit $156. Eeduced to % o" ground of chronic disease, $31.20; added accumulation of $3.12 and $84.32 paid. 12,139. Benefit $42. Paid, less 4 monthly advance premiums. 12,123. Benefit $36. Paid in full. 12,126. Benefit $27.50. Paid, less 3 monthly advance premiums. 12,118. Bene'fit $66, plus $6.60 accumulation. Paid, less 7 monthly advance premiums. Industeiai. Health and Accident Settlements 451 Claim No. 12,114. Benefit $53.33. Paid. Accumulation of $5.30, ignored. (See Ex- hibit "A," Examiner's No. 22.) 12,112. Benefit $55.83. Paid, less 5 monthly advance premiums. 11,416. Benefit $32. Paid in full. 11,420. Benefit $22'. Paid, less 2 monthly advance premiums. 11,441. Benefit $110.66. Paid, less 10 monthly advance premiums. 11,462. li'uU benefit $232.66. Paid one-fifth on ground of rheumatism and tuberculosis — $47.33. 11,473. Bied from natural causes and paid $160 in settlement. 11,470. Full benefit $129. Eediiced to one-fifth on ground of rheumatism and $25.80 paid. 11.482. Benefit $61.54. Paid, less 6 monthly advance premiums. 11.483. Benefit $27. Paid in full. 11,614. Benefit $31.50. Paid. Accumulation $3.15 ignored. (See Exhibit "A," Examiner's No. 21.) 11,616. Full benefit $104. Paid $75 in settlement after final proofs filed. 11,623. Benefit $30. Paid in full. 12,006. Advance settlement made for $60. 12,041. Benefits for $49. Paid in full. 12,045. Benefit $88. Accumulation $8.80, paid $96.80 — February 4, 1911 — add for partial disability $15. Paid March 16, 1911. 12,051. Claim paid in full $105. Less four monthly advance premiums. 12,077. Advance settlement made for $100. 12.404. Benefit paid $32.50. Settled for above amount, being one-fifth, account rheumatism. 12.405. Paid $33.83. Ten per cent, accumulation ignored. (See Exhibit "A," Examiner's No. 20.) 12,434. Benefit paid $131.84, less seventeen monthly advance premiums. (See Exhibit "A," Examiner's No. 41.) 12,442. Benefit $42.20, plus $4.20—10 per cent, accumulation; $46.20 paid. Agent Jacobs recommended addition of 10 per cent in this case. 12,451. Benefit $66. Paid in full, less five monthly advance premiums. 12,454. Benefit $35.50. Paid in full, less three monthly advance premiums. 12,472. Benefit $35. Paid in full, less three monthly advance premiums. 1911 12,491. Benefit $05.86. Compromise settlement made for one-half, account late notice, instead of one-fifth. 12.921. Compromise settlement made for $40, and one monthly advance premium deducted. 12.922. Compromise settlement made for $53, five monthly advance premiums deducted. 12,927. Benefit $30.66. Paid in full. 12,929. Advance settlement made for $90, at request of claimant. 13,188. Settled, without final proofs, for $75. 13,160. Benefit $34.50. Paid in full. 13,142. Benefit $26, plus $2.60 accumulation. Paid in full. 13,141. Benefit $30.50. Paid in full. 13,123. Benefit $49.33. Paid. 12,940. Benefit paid in full $46.66, less five monthly advance premiums. 12,977. Compromise settlement made for $25. 12,979. Benefit paid, $35.50, in full; 10 per cent accumulation added, less three monthly advance premiums. 12,991. Benefit $37, plus 10 per cent, accumulation $3.70, $40.70. Two monthly advance premiums. Total $37.40. Paid. 12,993. Benefit paid in full $63.50. REPORT OF EXAMINERS ON THE FEDERAL CASUALTY COMPANY OF DETROIT, MICH. Examiners : Samuel Deutschberger, New York Charles E. Heath, New York [453] EEPORT OF EXAMINEES ON THE FEDERAL CASU- ALTY COMPANY OF DETROIT, MICH. Deteoit, Michigan, August 12, 1911. Hon. C A. Palmee, Chairman of the Investigating Com-mittee of the Executive Committee of the National Convention of In- surance Commissioners, Lansing, Michigan: iSiE. — In accordance with the instructions of your committee, ■we have made an investigation of the Industrial Claim Settle- ments of the Federal Casualty Company of Detroit, Mich., and have the honor to submit the report of same herewith. The investigation was commenced July 28, 1911, and in addi- tion to the undersigned, Messrs Davenport and Hobson partici- pated in the work, devoting respectively two and three days to the examination of the claims. The Federal Casualty Company was incorporated in 1906, with a capital stock of $100,0'0O. The capital stock of the com- pany was increased to $20'0',0'0'0 in January, 1910. In 1906 the company reinsured the American Relief Society of Bay City, Michigan; The Universal Indemnity Company of Syracuse, N. Y., and the Columbian Insurance Company of Indianapolis, Ind. All three of these companies had been operated on the as- sessment plan. The present officers of the company are: V. D. Cliff, President and Treasurer. Peter Patterson, Secretary. V. D. Cliff, M. M. Cliff, Peter Patterson, L. E. Daly, J. A. McCoy, Directors. The company transacts health and accident insurance on the industrial plan only. The premiums, receipts and claims paid since the organization of the company are as follows : Claim Year Premiums Claims Percentage 1906 $32,483 75 $13,188 69 40.6 1907 292,225 92 122,246 42 41.8 1908 284,980 12 121,934 87 42.8 1909 312,466 27 125,457 91 40.1 1910 345,320 87 139,871 23 40.5 [455] 456 JSTational Conventioh" of Insukance Commissioners Previous to 19'0'9 the premium income did not include the first month's premiums which were retained by the agent. Policy fees are not included in the above figures. Following are the policy fees as annually reported by the com- pany: 1906 , $19,425 1907 32,660 1908 24,732 1909 31,046 1910 36,120 The proportion of the com^pany's premium income colleQ,ted through profit^haring agents was 77 per cent, in 1909' and 71 per cent in 1910. The claim averages were as follows : Year 1909 1910 General Profit- Non Profit- Average sharing sharing 40.1 37.9 47.3 40.5 41.9 36.7 The wide variation shown by the above figures requires a verifi- cation of the results obtained, and they are, therefore, subject to amendment. The officers of the company favor the profit shai'ing plan as applied to the agents. None of the ofiicers or other employees of the company have profit-sharing contracts. The company's business is conducted on the district agency plan, the district agents being assisted by the subagents. Tha compensation of profit-sharing agents is usually 10 per cent, of the premium income and 50 per cent, of the net profit of their busi- ness. Agents working on a straight commission l)asis never re- ceive more than 25 per cent, of their premium collections. The claims are all practically adjusted in the home office. In fifteen of the Company's districts, the agents have authority to adjust claims and issue drafts. The authority, however, is limited, and the adjustments are subject to approval or revision at the home office, and all but one of those adjusters are profit- sharing agents. Though the adjustments are made at the home office, the home, office adjuster frequently relies upon the reports and recommendations of the agents in the field. Oocas-ionally a special adjuster is employed to adjust the larger claims which the I:n'dustkial Health and Accident Settlements 457 oompany^ is unable itO' settle , through corresrpondence, his methods being illustrated by a number of cases cited in the exhibits. An examination of several tho'Usand disability claims indicates that the co'mpany's adjustments are fair. 'Correspondence is answered without unnecessary delay. Proof blanks are promptly furnished, and the filing of proofs is facilitated. Attention of the claimants is generally called to the policy conditions, though such conditions are rarely invoked. Penalty for late notice is seldom enforced. The ten per cent, accumulations are quite often ignored and occasionally, but infrequently, the adjuster falls below the otherwise high standard of settlements. A short schedule of disability claims (Exhibit "B") is at- tached. All the death claims, whether natural or accidental, arising in 1909, 1910 and 1911 (to date) were examined and scheduled. (iSee Exhibit "C") Barring the accumulation features, the death claims are, as a rule, promptly and fairly adjusted. Claims are promptly disposed of, and in the event of death, payments are made to beneficiaries with a minimum of red tape or expense. The beneficiaries residing abroad are treated as well as those residing at home. Foreign consuls are properly in- formed of the necessary steps to be taken to secure the indemnities due the foreign beneficiaries, and the methods are noticeable owing to the absence of obstructive tactics. Accumulations are generally ignored, and advance premiums are seldom returned when a policy is cancelled by death. " Change of occupation " is an occasional reason for reducing indemnities, even though such change took the form of recreation. A schedule of death claims' selected for the consideration of the committee is attached as Exhibit "A." The claim files of the company are well kept and apparently complete. Attention, however, is called to the fact that the register is a loose leaf index book, which is used in conjunction with! a card system. Respectfully submitted, Samuel Deutschbeegeb, Charles E. Heath, Examiners representing the New YorJc Insurance Department. 458 National Convention of Insurance Commission urs No. of Policy Exhibit A 31,436 William xMoshier, Flora, Ind. Killed by a fall from a wagon Octo- ber 19, 1909. No eye-witnesses. Company receives report from various sources hinting at intoxication, but no proof. Agent re- ports that insured was not a man to drink enough to become in- toxicated. Adjuster instructs agent to inform beneficiary that evi- dence shows that the insured man was, at least to some extent, intoxicated when he met his death, and that the company's liability was only one-fifth of the indemnity named in the policy. Agent finally adjusts claim for $77.50, the cost of the funeral expenses. Policy provided for $200. 33,511 Joshua H. Staley, Fairmount, W. Va. Killed by a fall January 7, 1910. Correspondence incomplete, company apparently considering sui- cide and insanity clauses. Preliminary filed by the widow, but company makes no other effort to adjust claim beyond writing to the coroner for information. 36,286 L. B. Dowley, Mattoon, 111. Insured was killed April 22, 1910, while sleeping in a " boarding car.'' The car was on a, siding, and the accident occurred through a train running in the open switch. The company settled with the beneficiary on the basis of class E, " Sec- tion man " or " Track laborer," $200. The beneficiary claimed that the insured had not changed his occupation for four or five years preceding his death. The application blank, dated October 21, 1909, shows that the insured stated his occupation to be " black- smith in railroad service." The application blank was changed in the oflice of the company to read, " Blacksmith in railroad shop," and presumably the policy was issued accordingly. The company could produce no evidence that the attention of the insured was called to the change. The inspection of the rate book shows that under " Railroad Employees " the company rates " blacksmith " in class D, indemnity $300. The words " in shop " do not appear, ._ although a number of other occupations are so restricted. Proofs show that the insured was a blacksmith in railroad service. 38,186 Willis A. Wright, Harrisburg, Pa. Policy provided for a natural death benefit of $100, which was paid. Claim was made for 30 per cent, accumulations under clause reading as follows: " Each consecutive year's renewal of this policy by the payment of the premiums as herein specified shall add 10 per cent, of the principal sum to the amount paid for loss of life by sickness or accident as stated in regular indemnity <' * * but said addition shall never exceed 50 per cent of said principal sum." Policy was issued January 14, 1907, and premiums were paid to September 15, 1910. Death occurred September 7, 1910. Com- pany's premium card shows a clean record. Company's adjuster refuses to allow the accumulations, stating under date of Septem- ber 16, 1910, as follows: " * • * Regarding the 30 per cent accumulation, will state, as we Industrial Health and Accident Settlements 459 understand it, this policy provides this increase only when the premiums are paid annually in advance, vrhioli was not done by Mr. Wright." See Claim No. 42,157. 38,262 L. A. Besson, Los Angeles, Cal. Natural death benefit, $100, paid August 8, 1910. Insured died July 27, 1010. Paid August pre- mium of $1 to agent on July 20, 1910. Agent writes to the com- pany whether premium should be returned to family of insured or sent to home office. Company's adjuster writes to agent on August 4, 1910, to remit to home office. Unearned premium not returned to beneficiary when final adjustment is made. 39,050 Jacob Cleichauf, Rochester, N. Y. Scalded to death while following his usual occupation. Application blank reads: " Brewer, not com- mon laborer," and policy was issued in Class C, $500 indemnity. The above classification appears in company's manual under " Brewery Employees." September 8, 1910, company sends a dummy letter stating that insured exposed himself unnecessarily to danger, and that liability would be limited to one-fifth, and, furthermore, that insured was only a laborer, causing a further reduction in indemnity. Accompanying this letter was a compro- mise offer of $100. Beneficiaries hired attorneys, and case was finally settled for $380. Special adjuster J. V. E. Wyatt, in set- tling the claim, wrote the company in part as follows: " Rochester, December 10, 1910. I figured that in Class E, we owed the man $357.15 under new rates and from which the premium in his policy was written. I hid the new rates and used the old one which would pay $262.15 in class E, and we fina.lly got together a.t $380." Agent states insured was a " Kettleman,'' not a brewer. Kettle- man not classified in manual. 39,172 Jesse Moore, Port Huron, Mich. Policy issued July 21, 1910. In- sured drowned August 28, 1910. August 29, 1910, the mother (beneficiary), Mrs. Eosetta Elton, 2323 Cherry street, Port Huron, notifies company, and aslvS for proof blanks. August 31, 1910, company writes to coroner, Lansing, Mich., for information, and received report that the drowning was accidental while insured was swimming. August 10, 1910 (this should undoubtedly have been September 10, as company's stamp shows received September 12), the mother again writes for blanks. September 12, 1910, company writes to Mrs. Elton asking for further information be- fore sending blanks. September 12, 1910, Mrs. Elton replies, send- ing newspaper clipping. September 15, 1910, Agent J. A. Bobier, Port Huron, Mich., writes to company that insured " never paid me a cent for fee or premium.'' He also states that the ad- juster for the People's Health & Accident Company said that the insured held a policy in that company. September 15, 1910, com- pany writes to J. A. Bobier in part as follows: " If policy fee and first month's premium were not paid, of course, there would be no liability on the part of the company, and we would like to ask why you should have delivered the policy to him without any payment. If they hold a policy, of course, the inference would be that it had been paid 460 National Convention of Insueance Commissionees for, and his first premium would be due to this office on September 1st, while his death occurred! August 28th." " However, we will write the beneficiary, Mrs. Elton, requesting receipts." On September 15, 1910, the company also writes to Mrs. Elton stating that they cannot find that Jesse Moore ever paid policy fee or first month's premium, and asking for the receipts. Sep- tember 17, 1910, the following letter appears: "Gentlemen; Find enclosed 'policy No. 185,736 of Jesse Moore, as I got it from his mother as beneficiarj', as .she said she had no claim, as he was transferred from you to the Peoples, as the Peoples would of tried to of made trouble for us. No doubt you would of had to of paid something, but I got it all settled. Yours truly, J. A. BOBIEE." October 17, 1910, Mrs. Elton writes from Port Huron: " The Federal Casualty Company. Dear Sir : I have been sick, and neg- lected answering your letter, asking if I had the last receipt of my son, Jesse J. Moore, which I have, and you have also, but that is the way that all Ins. Co. try to get out. Now, I have waited long enough for those blanks, so send them at once." October 17, 1910, the company replies: "Dear Madam: Eeplying to yours of the 17th, will state that we received information showing that Jesse Moore never paid his policy fee, or his first month's premium, and informed the solicitor that he did not care to accept the policy, having taken one out in another company." The jacket shows no further correspondence. 39,461 Bennie B. Stockton, Kansas, City, Mo. Insured killed while in per- formance of his duties. Insured as Railroad Machinist, Class C. Occupation when killed " Car repairer," same occupation as when insured. Wrong classification by agent of company, and insured could have no knowledge of the special classification in the com- pany's manual. The special adjuster concedes the above (see let- ter to company September 25, 1910) as a deliberate misrepresenta- tion on the part of the agent, but claim is compromised for $300. 39,550 William A. Lewis, Nederland, Col. Insured as foreman of crusher, supervising only, Class D. Same occupation when killed. Killed while superintending the raising of a crushing machine on a freight car. He saw a block required placing under the lifting jack and crawled under the machine to place the block when the machine fell on him. Adjusted in Class X, as a laborer, for $200. Agent reports adjustment satisfactory to the beneficiary and her hus- band. Beneficiary no relative. One month's premium, $2.75, paid in advance, ignored. 39,563 E. Warren Lindermore, Baltimore, Md. Policy issued June 28, 1910. Applicant killed in a wreck June 29, 1910. Policy not delivered and no policy fee or premium paid. Agent, however, had entered into an agreement with applicant to wait until July 24, 1910. (See letter of agent 9-20-10.) Claim rejected. 30,686 Isaac Cunningham, Peru, Ind. Insured as " Car Inspector." Proof shows insured was killed while in performance of his duties. Com- Industeial Health and Accident Settlements 461 pany manual classifies " Car Inspector " or wheel tunker not " re- pairer," Class D. Manual also classifies Car Tunlcer inspecting passenger trains only, Class E. Settlement made in car tunker, Class E. 40,946 Charles H. Conrad, Elvins, Mo. Occupation when insured " Section- man," Class E. Indemnity $200. Occupation when killed " Coal passer in gas producer plant." Company pro-rates insured in Class X, indemnity $100. Apparently lowest possible classification according to rate book should have been Class E as " laborer in gas works " or " laborer above ground in mine." Indemnity $200. 41,017 Jas. O. Smith, Mitchell, 111. Policy issued Aug. 22, 1910, payment carrying same to October 1, 1910. October premiums paid Sept. 29, 1910. jSTovember premium paid Nov. 17, 1910, A. M. Insured met his death at 6:40 P. M., being hit by a train. Company claims policy lapsed, and was not in force for twenty-four hours after payment of premium on Nov. 17. Premium $1, returned. 41,058 Guy Sinclair, St. Louis, Mo. Killed in the performance of the duties of his occupation. Insured as " hoisting engineer " Class C. In- demnity $600. Same occupation when killed. The adjustment of this claim was turned over to Special Adjuster J. V. E. Wyatt. On Deo. 1, 1910, he writes to company in part as follows : "This beneficiary was entitled to $600, plus three years' accumulations, $180, or a total of $780. . . . Used every possible means to reduce lia- bility, opposed by relatives and friends of the widow and an attorney. Am pleased to report settlement at $520." Company's premium card shows that all premiums were paid promptlj' except for October, 1910, which is reported as having been paid on Oct. 12, 1910. Policy issued Sept. 3, 1907. Insured killed Nov. 16, 1910. 41,517 Douglas Martin, Coalwood, W. Va. Insured accidentally killed 12-6-10. Policy issued Nov. 25, 1910. Agent claimed that policy fee and first month's premium were not paid, although policy was' delivered. At the same time, agent admits that the policy fee and premium to be paid when insured received his wages. Agent was sick and left town before insured received his wages and the in- sured had no opportunity to see the agent, although there is a statement that 'he called at the agent's office. Claim turned over to attorneys and company denies liability, explaining the above facts to tiie attorneys. Apparent!)- no further action taken by the attorneys. 41,851 Abraham Miohelson, Bay City, Mich. Insured was ill and confined to the house four months; sick indemnity $35 per month Amer- ican Relief Association policy. Company paid funeral benefits which were accepted by beneficiary. Attorneys for beneficiary made claim for "sick benefit, but company claims that none is due. Policy contract not clear on this, whether both are payable, or if optional with insured. 462 National Convea'tio:n' op Insueance Commissionees 38j976 Peter Ilogenseii, Minneapolis, Minn. Coroner's verdict " death from accidental inhalation of illuminating gas." Covered by the policy. Company attempts to settle by sending check for $80, one-fifth, called for by the policy, on ground that insured was intoxicated. No proofs to that effect. Claim finally compromised for $200. Policy called for $400. 41,374 Dominico Lonbard, Munhall, Pa. Killed Dec. 1, 1910, at 2:30 P. M. Occupation, labor sectionman. Claim rejected on ground that policy lapsed. Policy issued Nov. 9, 1910. Agent writes that in- sured was expecting the collector to call for his premiums on the fifth or sixth of the month; railroad employees being paid around that time. A number of references are made in the correspond- ence of the special adjuster to letters written by the president of the company in which he authorizes the acceptance of premiums from railroad men on or about the 6th of the month, that is, on or about the day that the railroad company pays off its men. The beneficiary was a son of the insured living in Italy and apparently a minor. The president being requested by the examiner for a copy of the letters referred to above stated that he had no recol- lection of the letters, but would have the files searched. A letter dated Feb. 2, 1911, addressed to a policyholder at Pittsburgh, Pa., was found, which said in part as follows: " Note that your ' pay day ' on the railroad comes on the 4th to the 6th of each month. Such being the case we will grant you the privilege of pay- ing your premiums on or before the 6th day of each month, and by so doing will keep your policy in continuous force." The date of this letter is subsequent to the day of Lonbard's death. 42,157 Gus T. Baldwin, Indianapolis, Ind. Natural death. Policy provides $100 indemnity with 50 per cent, accumulation feature. Policy issued Dec. 13, 1906. Insured died January 9, 1911. Widow claimed $140. District manager adjusts for $100, plus .10 per cent, for accumulations under the 10 per cent, accumvilation clause. Home office adjuster wrote to District Manager, Jan. 21, 1911, as follows : " Regarding the case of beneficiary of G. T. Baldwin will state that by reading the two sections, it seems to us that this 10 per cent, accumulation each year is added where all premiums are paid on or before the 1st of each month, the same as the 10 per cent increase. These increases are intended as an inducement for policy holders to pay their p-emiums on or before the firist of each month, and unless the premium is so paid, of course, the increase should not be added. By examining the receipts held by Mr. Baldwin you will be able to determine as to whether he paid his premiums always on or before the 1st, and if so, he Avill 'be entitled to 10 per cent, each year." See Claim No. 38,186; the policies issued to Willis A. Wright, and Gus T. Baldwin were written on the same policy form. 42,907 L. H. Bncher, Reading, Pa. Natural death. Indemnity $100. Fifty per cent, clause operative. Policy in force since 1902. Agent writes company Jan. 25, 1911: "I have just learned of the death of L. H. Bucher; if you send me check at once, I think I can save $50, by taking lip policy as soon as possible." Industeial Health and Accident Settlements 463 January 28, 1911, Secretary writes In part: "In your first letter you stated you thought you could save $50, by taking up the policy as soon as possible. Under these circumstances we do not Icnow the amount for which to draw check, so are enclosing a draft showing it should be made out. Fill this out for $50, if you can settle the claim on that basis, or for such amount not exceeding $100, as settlement can be made, then sign it and deliver to them on surrender of the policy properly receipted. We trust that you will be able to dispose of the case for $50." Case settled for $]00. Accumulations ignored. 44,500 James H. Eamage, Monongahela, Pa. Insured drowned 3-4-11. Claim rejected on account of lapsed policy. Agent writes after death of the inuiired that he wrote the application on February 14th or 15th, received $5, and told the insured in the presence of a third party that the next premium would be due April 1, 1911. The agent further writes tl)at he saw tlie insured the next day, and that he told him, if policy was issued before February 21, that lie would have to pay $1, on March 1, 1911, and that insured told him to go ahead and get policy issued. Policy was issued Feb. 18, 1911. 25.228 Jeremiah Keating, Minneapolis, Minn. Killed by fall. Company suspects intoxication. Information bureau reports insured has ■' No bad habits and steady.'' Company compromises for $85. Pol- icy called for $300. 46.298 W. E. Buck, Indianapolis, Ind. Conductor on passenger train. Killed May 31, 1911. June premium of $1, paid on May 15, 1911. Agent inquires if June premium should be refunded. Adjuster answers : " Make settlement in the usual manner.'' Claim set- tled for $100. Advance premium not returned. 42,631 Geo. Lott, Cleveland, 0. Killed while attending to his duties as porter. Insured as porter, Class D. Indemnity $300. Claim com- promised for $200. Reason for compromising not apparent. Exhibit B Disabilities 20,491 James H. Dempsey. Anderson, Ind. Insured in Class D, assistant shipping clerk at $30 per month indemnity. Disabled April 2, 1908; lacerated scalp; while splitting wood for kitchen stove, a tree falling upon him which had just been cut down by two men. Attempt to pro rate claim from Class D to X, reducing indemnity from $30 to $20 per month. Settlement made on advance propo- sition. Mar. 25, 1909. Indemnity paid $304. The following letter appears in the jacket signed by special adjuster J. V. E. Wyatt, Mar. 25, 1909: " Had the claim come before a jury, they surely would not reduce the class below E, at $25. Had he been cutting wood for somebody else, or for hire, exception might be made as to class. As he could not read or write the agent's ruling as to class would hold the company before any jury, at least, the class could not be below E. Dempsey is partially paralyzed, and to my belief, will be permanently disabled for life. Drs. Arm'ington and WoM 464 National Coxvention op Insurance Commissiowejks gave him up. * * * Dempsey did not want to settle at all as lie felt he would be able to claim the two years by waiting. I think he could collect 24 months at $25 per. The only way I secured an adjustment was to frighten him on a possible law suit, and the mis-statement as answering question 7 of the first notice, after fighting all day, and by arranging secretly with Dr. Sears to treat him for a month at a cost of five doBars to the company, making Dempsey believe the cost was about $30; we finally adjusted at $320, and one month's treatment. After I had the advance settlement signed up, I made a claim for premiums from May 1st, 1908 to date, $16.50. Then he went crazy, and wanted to cancel the whole affair. However, I managed to de- duct the $16, threw off the 50 cts. on account not a full month in March. "I issued cheek No. 4821 for $304, and gave him a receipt for a month's treatment by Dr. Sears. When I gathered up the policy with my papers there was a new row, as he wanted to pay future premiums. I finally satisfied him by writing a new application, which I told him would apply as soon as he was well. This application I destroyed as he will not be insurable. I feel (as does Baker and Dr. Sears) that a settlement at $325, less $16 premium, is very favorable to the company. He surely is entitled to more." 23,468 N. L. Eothermel, Temple, Pa. Disability, fractured leg received while playing game of ball. Occupation, when insured, school teacher. Class " A " Was a salesman by occupation at time of accident. An attempt was made to re-classify the insured to Class X, amateur ball player. Finally paid according to Class A, $161.66. 29,960 William F. Martin, Saginaw, Michigan. Disability', injured hand while plaj'ing base ball. Insured as a, machinist, bench work. Class B, $40 per month indemnity. Eeclassified by company to class X, ball player, $20 per month. Indemnity paid $10.67. 30,016 D. E. Robertson, Palmyra, 111. Disability, injured hand while play- ing base ball. Insured as u. barber. Class B, $40 per month indem- nity. Company wrote Aug. 31, 1909, in part as follows: " Strictly speaking, he would be entitled to indemnity only in Class X, at the rate of $20 per month. However, as a compromise settlement, in view of the fact he has carried his policy for some time, we are allowing full indemnity." 31,831 Elmer N. Pixler, Morgantown, W. Va. Disability, loss of arm. Pol- icy calls for $100 indemnity. Accident occurred Oct. 29, 1909. Insured claims premium was mailed to agent, the latter part of September. Agent claims that he never received ■ the premium. Company's special adjuster compromised the claim for $25, and under date of Nov. 29, 1909, writes the company in part as follows : " They could not stick us for the claim as they had no receipts for the premium, and the father only paw the boy mail the letter containing the premium. * * * By making the boy believe he can write insurance, I finally settled at $25, although they had us lined up for $100, plus ten per cent, equals $110. I am satisfied agent received the premium by mail, for I proved him a liar and thief in other cases." 35,250 Charles F. Benham, Delphi, Ind. Disability, dislocation of knee joint. Policy issued in Class E; accident benefit $50 per month, occupation, bartender in saloon. Adjuster writes to insured un- der date April 28, 1910, as follows: " We have your final report and upon looking up your application for policy, we find an error was made in the amount of indemnity by the solicitor ISTDirSTEIAL HeALTH AND AcCIDENT SETTLEMENTS 465 wlio wrote the application, and we presume tie same error was carried on the policy; Class E, proper rate for bartender, provides indemnity of $25 per month for accident, as you can determine for yourself by having any agent show you the Manual of Classifications. The time covered by your disability seems to have been from Feb. 23 to April 11, or one month and 12 days, and we have figured this length of time at the rate of $25 per month, and enclose check for $35, full compromise settlement." Insured protests without avail. 39,016 Prank Stewart, Mercer, Pa. Disability, crushed finger. Injured while playing base ball. Insured as barber working, Class B, in- demnity $40 per month, pro-rated to Class X, ball player, indem- nity $20 per month. Insured receives $6.66 for ten days' disability. 40,463 George H. Berlinger, Detroit, Mich. Disability, sprained shoulder. Injured while playing foot ball. Insured as machinist. Class B, $40 per month. Pro-rated to X.X., indemnity $20 per month. 32,542 Henry C. Berry, Pittman, N. J. Disability, sprained knee. Injury received while playing foot ball. Insured as electrician. Class B, $50 per month indemnity. Claim not pro-rated. Company's home office adjuster, writes to the local adjuster, in part as fol- lows; under date of Dec. 11, 1909: " It is customary with us where a person is playing foot haU simply for amusement to make no reduction in the classification, if the claim is one for a few days. However, when one is insured in a preferred class, and where the claim is likely to be prolonged to some extent, we think it advisable that we take advantage of the conditions of the policy, and make settlement ac- cording to the hazard of the act in which he was engaged at the time of the injury." Exhibit C Accidental and Natural Death Claims arising in 1&09, 1910, 1911 to date Indemnity 1J09 Claim provided Amount No. In policy, paid. Remarks. 25,408. $100. . Suicide. Policy lapsed. 25,519. 100. $100. Natural death benefit. Accumulation ignored. 25,629. 100. 100. Natural death benefit. 25,746. 100. 100. Natural death benefit. 25,786. 100. . Accidental death. Policy lapsed. 25,809. 100. 150. Natural death indemnity. 50 per cent accumulation paid after being reminded by agent. 25,867. 100. — . Accidental death. Policy lapsed. 26,017. 100. 100. Natural death benefit. 25,093. 100. 100. Natural death benefit. Accumulations ignored. 26,097. 100. 100. Accidental death. 26.402. 100. 100. Accidental death. 26.403. 100. 100. Accidentally killed. Foreign beneficiary. Prompt payment. 26,488. 125. 125. Natural death benefit. 26,631. 100. 100. Natural death benefit. 26,675. 100. 100._ Accidental death. 27,264. 400. 400. Accidental death. Accumulation ignored. 466 National Convjention of Insueanoe Commissioners Indemnity Claim provided Amount No. in policy, paid. Eemarlis. 27,543. $300. ■ . Suicide. Policy lapsed. 27,628. 108. $108. Natural death benefit. 27,663. 300. 300. Accidental death. 28,234. 400. 100. Change of occupation. Killed by fall from roof while working as roofer. Insured as " tinner, shop work." 28,476. 100. 100. Accidentally killed. 28,503. 125. 25. Suicide. 20 per cent, clause applies. 28,536. 100. 100. Natural death benefit. 28,924. 100. 100. Accidental death. 29,194. 300. . Accidental death. Policy lapsed. No claim filed. 29,284. 200. . Policy lapsed. 29,337. 100. ■ . Death from sunstroke, not covered by policy of the Am. Relief Society. 29.597. 400. . Policy lapsed 29,618. 150. 150. Natural death benefit. 26,633. 150. 2'5. Suicide. 20 per cent, clause applies. Indemnity should . have been $30. 29,656. 100. 100. Natural death benefit. 29,749. 300. . -Accidental death. Policy issued July 10, 1909. Next premium due August 1, 1909, Sunday. Insured killed August 2, 1909, at night while at work. August premium not paid. Company denied liabil- ity. Insured, J. Benesura, Duquesne, Pa. 29,765. 100. 100. Accidental death. 29,818. 300. . Accidental death. Policy lapsed. 29,860. 300. - — . See Exhibit "A." 30,076. 100. 100. Accidental death. 30,083. 200. 40. Murdered. 20 per cent, clause applies. 30,210. 100. 100. Natural death benefit. 30,245. 300. 398.88 Murdered. 20 per cent, clause applies. Suit brought against company. Judgment obtained for principal sum, accumulations and interest. 30,270. 400. 80. Murdered. 20 per cent, clause applies. 30,306. 300. 300. Accidental death. Accumulations ignored. 30,339. 200. 200. Natural death benefit. 30.598. 100. 100. Accidental death. 30,647. 100. 100. Natural death benefit. 30,782. 100. 100. Accidental death. 30,999. 500. 250. Killed while walking on track. Circumstances sur- rounding death unknown. Possibility of suicide, as- sault, and unnecessary exposure to danger suggested by company. Claim compromised for $250. 31,140. 100. 100. Natural death benefit. 31,339. 100. 118. Natural death benefit and accrued sick benefit. 31,417. 100. 100. Natural death benefit. 31,436. 200. 77.50 See Exhibit "A." 31,459. 300. . Insured found dead in a ravine in a decomposed con- dition. Beneficiary unable to furnish affirmative proofs as to date or cause of death. 31,550. 100. 124.42 Natural death benefit and accrued sick benefits. 31,680. 200. 40. Suicide. 20 per cent clause applies. 31,890. 100. 100. Natural death benefit. 31,897. 100. 100. Natural death benefit. 32,372. 100. 100. Natural death benefit. 32,510. 100. 100. Natural death benefit. 32,538. 150. 150. Natural death benefit. 32,713. 300. . Accidental death. Policy lapsed. 32,840. 100. 100. Natural death benefit. 10 per cent, clause operative; accumulations ignored. 32,968. 100. 100. Natural death benefit. Industrial Health and Accident Settlements 467 Indemnity 1910 Claim provided Amount No. In policy, paid. Remarks. 33,378. $200. $200. Accidental deiith. Accumulations ignored and $1 ad- vance premium not returned. 33,445. 100. 100. Natural death beneilt. 33,511. 30O. . See Exhibit "A." 33,753. 100. 100. Natural death benefit. 33,902. 100. 100. Accidental death. Foreign beneficiary. Company noti- fies consul and facilitates settlement of claim. 33,943. 300. 100. Accidental death. Insured actually changed his occu- pation from " stationary engineer " to " pumpman in coal mine." Pro-rated. 34,208. 100. 100. Natural death beneiit. Fifty per cent, clause operative. Accumulations ignored. 34,268. 200. 200. Accidental death. 34,235. 600. 120. Suicide. Ivi'enty per cent, clause operative. Accumu- lations ignoied. 34,698. 100. 100. Accidental death. Ten per cent, accumulations ignored. 34,779. 100. 100. Accidental death. Accumulations ignored. 34,852. 200. 200. Accidental death. Accumulations ignored. 35,303. 200. 200. Accidental death. 35,628. 100. 100. iS'atural death benefit. 35,862. 300. 3L0. Accidental deatl;. 35,010. 400. 80. Murdered. Twenty per cent, clause applies. 30,031. 100. 100. JSatuiai death bcnelit. 36,130. 200. 50. Killed wLile in the occupation of " brakeman on a freight train." Insured as " farmer and laborer." Pro-rating 0. K. 56,179. 100. 100. Natural death beneiit. Accumulations ignored. 36,199. 200. 40. JVlurdeiecl. 'iuenty per cent, applies. 36,260. 30O. 200. See Exhibit "A." 36,2!)S. 150. 150. Natural death benefit. 36,330. 100. 100. Accidental death. 36,619. 100. 100. Natural death benefit. 36,854. 400. 400. Accidental death. 37,000. 100. 100. Natural death benrfit. 37,071. 1(0. 100. Natural death benefit. 37,087. 500. 100. Insured was a ioieman in a manufacturing concern, and met his death while switching cars in the com- pany's private yards. Company pro-rates to class "X," switchman. 37,125. 400. 80. Murdered. Twentv per cent, clause applies. 37,134. 108. 108. Natural death benefit. 37,195. lOO. 100. Accidental death. 37,203. 100. 50. Drowned. Company's adjuster suspects intoxication. No proof. Widow forced to compromise or sue. 37,215. 300. 66. Killed on railroad track while intoxicated. Twenty per cent, clause applies. Company's agent adds 10 per cent, accumulations. 37,239. 600. 220. Ki Ir"' while e-vplored as machinist helper in foundry works. Indemnity paid accordingly, plus 10 per cent, accumulations. Originally insured as "mer- chant — grocery proprietor." 37,356 . . Suicide after four months' illness. Suicide not covered by policy. Accrued sick benefits paid to beneficiary, $170.85. 37,763. 20O. 100. Insured as " carpenter helper in employ of railroad company." Killed while performing his duties as a carpenter helper on a trestle of the railroad com- 38,186. 100. 10.0. 38,262. 100. 100. 38.305. 100. 100. 38,852. 400. 3C0. 468 Natiojs^al Convention of Insueance Oommissionees Indemnity Claim provided Amount No. in policy, paid. Eemarks. pany. Pro-rated as carpenter, bridge or trestle work class "X." No evidence that policy contained restrictions as to work on bridge or trestle, although classified in the manual. 37,786. $400. $400. Drowned. Accumulations ignored. 37,832. 1,500. . Ivilled July 3, 1910, apparently in a motorcycle race, a prohibited occupation. Xo proofs in jacket. Company also claims that July premium was un- paid, although affidavits were furnished that June and Jvily premiums were paid to agent. Company refused to furnish proof blanks, and claim does not appear to have been pushed. See Kxhibit "A." See Exhibit "A.' Natural death benefit. Killed by accidentally coming in contact with live wire while doing the work of a carpenter in the employ of an electric light company. Company sends check for $100, attempting to pro-rate as " lineman." Check refused and claim finally com- promised at $300. Originally insured as " foreman construction, supervising." No real change in occu- pation, but probably written in wrong class when insured. Natural death benefit. See Exhibit " B." Accidental death. Accumulations ignored. See Exhibit "A." See Exhibit "A." Murdered. Twenty per cent, clause applies. Natural death benefit. See Exhibit '-'A." See Exhibit "A." See Exhibit "A." See Exhibit "A.'" 169.40 Natural death benefit and accrued sick benefits. American Relief Society policy. Natural death benefit. Murdered. Twenty per cent, clause applies. Insured died after an operation. Insured had been in a fight before the operation but coroner and pli^ - sician state that there were no visible marks of injury. Conipaiiy's maximum liability apparently .$■200. Claim placed in hands of attorney, and $250 compromise settlement offered. Suit is brought but claim is compromised for $300. See Exhibit "A." See Exhibit "A." See Exhibit "A." Accidental death. Accidental death. See Exhibit "A." Accidental death, 12-8-10. Lapsed, 12-1-10. Appar- ently no claim filed. | Natural death benefit. Natural death benefit. Accidental death. Accumulations paid on demand. See Exhibit "A." 38,945. 100. 100. 38,976. 400. 200. 39,047. 300. 300. 39,050. 500. 380. 39,172. 40O. 39,182. 400. 80. 39,347. 100. 100. 39,461. 400. 300. 39,550. 600. 200. 39,563. 300. 39,686. 300. 200. 39,871. 100. 169.' 39,999. 150. 150. 40,440. 400. 80. 40,526. 1,000. 300. 40,946. 200. 100. 41,017. 41,058. 200. 600. 520. 41,079. 41.201. 100. 100. 100. 100. 41,517. 41,551. 100. 1,500. 41,589. 41,735. 41,803. 41.851. 100. 100. 100. 100. 100. 100. 110. 100. No. In policy . pall 41,374. $300. 42,157. 100. $110. 42,166. 300. 85. 42,907. 100. 100. 42.953. 100. 100. 42,956. 100. 100. 43,302. 100. 100. 43,358. 100. 100. 43,368. 500. 300. Industeial Health and Accident Settlemein^ts 469 Indemnity 1911 Claim provided Amount I. Remarks. See Exhibit "A." See Exhibit "A." Killed while coupling cars. Occupation when insured, " passenger brakemaii," class " t)." Occupation when killed, " freight brakeman," class " XX." Company apparently liable for $50 only. See Exhibit "A." Xatural death benclit. Xatura! death benefit. Accumulations ignored. X.uld like for you to make this claim for the month of April one- half as I think that I can deliver the check on the ground that this man was able to leave the house and in fact the way that I construe the policy he was not entitled to any indemnity when he could leave the house at all, if that be tlie case I may be able to deliver the check and cut out April en- tirely." As this agent couldn't deliver the check by cutting out the indemnity for the month of April entirely, he reduced the indemnity to one-half. 78 Claim -Vo. 172,767, Ceorge W. Burnette, Whitesburg, Ga. This policyholder sustained an injury and, according to the proofs sub- mitted, was disabled January 12, 1910, to March 9, 1910. Notice of accident was received in the company's office January 18th. Claim was rejected on the ground that the assured failed to furnish the company every thirty days with a report of his condition, in writing, from his attending physician. On March 12, 1910, the assured writes: " I have been confined as totally disabled for seven weeks and have only gotten so I can do about half work. Now I was going to send in my papers next week but I guess it is all up; from what you say it was an oversight in me or my doctors in not writing you. Write me whether the ease can be re- opened or not." H. C. Conly, the manager of the southern department, referring to this let- ter, writes as follows: " It would seem that he thinks the jig is up, and if this clause is legal, and I assume it is, else it would not be incorporated in the policy contract, I wish that you would write me a letter, such as I can forward to Burnett denying liability." Such letter was written on March 25, 1910, as follows: " We regret that you did not comply with the conditions of the policy, but in view of your failure to do so, we of course could not admit of any liability at this time, or entertain any claim." 502 National Convejsttion of Insurance Commissionees Towards the close of this investigation, the general counsel for the company submitted to the examiners the claim papers in 72 cases selected by him at random from the files where adjustments were made in his opinion in excess of the company's liability. All of the cases thus submitted were examined by lis at his request and were found to be disability claims in the non-serious ela'SS'. The adjustments in all of such cases were made in ac- cordance with the proofs as submitted by the assured. The period of total disability appears to have been computed fairly, and the provision of the policy regarding medical attention dur- ing the entire period of disability was given a liberal interpre- tation. Litigated JJlaims Considering the size of this company, the number of resisted claims is relatively small. There are now pending in the courts fifteen suits under policy contracts. From an examination of such claims, it appears that the defenses interposed are meritorious and that the policy of the company is to compromise rather than litigate claims involving doubtful questions of law or facts. Respectfully submitted, Leon S. Senioe^ W. A. Billingham^ Examiners Insurance Department, Neiu YorTc. H. A. Ghapin, Examiner Insura/nce Department, Michigan. Percy E. Gleason, Examiner Insurance Department, Massachusetts Claim Principal No. sum 134,470. $500 00. 133,701. 1,000 00. 132,907. 400 00. 132,765. 150 00. 132,465. 200 00. 129,725. 100 00. Exhibit A Specific Losses I — Monthly Industrial Department Paid in full. Paid in full. Loss of eye. Liability under policy one-third of the principal sum. Paid in full. Loss of limb. Paid In full. Paid in full. Funeral benefit under old form policy. Paid in full, plus indemnity due for illness. Industrial Health A;^'D Accident Settlements 503 Fatal injury sustained by beneficiary. Liability under policy limited to one-half of principal sum. Paid in full. Cause of death disputed. Compromised for $135. Killed by train while stealing a ride. Reduced on ac- count of exposure to unnecessary danger to one-fifth of the principal sum. Paid in full. Paid one-fifth plus 10 per cent, accumulations. Reduc- tion due to intentional injuries inflicted upon assured. Paid in full. Paid in full. Loss of eye. Paid in full. Death due to blood poisoning. Compromised for $300. Paid in full. Loss of limb. Paid in full. Reduced to one-tenth on account of exposure to un- necessary danger. Insured killed on railroad track. Paid in full. Paid $100 as funeral benefit and $91.42 as indemnity for illness. Loss of limb. Paid in full. Loss of eye. Paid in full plus 10 per cent, accumulation. Paid in full. Funeral benefit. Paid in full. Loss of eye. Paid in full plus 10 per cent, increase. Funeral benefit. Paid in full. Loss of limb. Paid in full plus 10 per cent, increase. Injury resulting in loss of eye. Entitled to one-third of principal sunl plus 10 per cent, increase. Paid $133.33 omitting the 10 per cent, increase after attempt to reduce indemnity to one-fifth on account of inten- tional injuries inflicted upon assured. 135,626. 700 00. Paid in full plus 10 per cent, increase. 139,772. 300 00. Paid in full: 138,561. 600 00. Paid in full. 137,735. 500 00. Reduced to one-fifth on account of suicide. Paid $110 which included a 10 per cent, increase. 136,556. 20O 00. Cause of death disputed. Compromised for $100. 134,558. 100 00. Paid $100 as funeral benefit and $94.58 for disability due to illness. 137,270. lOO 00. Paid funeral benefit of $100 and illness indemnity of $108.84. 140,086. 200 00. Loss of eye. Paid one-third of principal sum plus 10 per cent, increase. 141.136. 500 00. Paid in full. 141.137. 200 00. Policy was issued July 22, 1907, and apparently in force until September 1, 1907. Insured sustained fatal injury on August 30, 1907. Company claimed that policy fee was not paid. Agent succeeded in obtaining policy from attorney for beneficiary on the payment of $5. 143,133. 500 00. Paid in full. 139,576. 100 OO. Paid funeral benefit of $100. Proof shows illness for period of sixty-five days. Illness indemnity not paid. 138,191. 300 00. Company questions cause of death. Compromised for $150. Physician asserted that injury caused pneu- monia, resulting in death. 130,989. 100 00. Paid funeral benefit of $100 and indemnity for illness of $48. Claim Principal No. sum. 128,8471/2. $300 00. 128,095. 200 00. 125,771. 300 00. 134,580. 300 00. 134,814. 500 00. 134,813. 100 00. 130,961. 100 00. 129,249. 133 00. 131,530. 500 00. 13.'i,778. 100 00. 130,762. 50 00. 125,211. 200 00. 127,251. 100 00. 130,023. lOO 00. 134,031. 50 00. 134,783. 100 00. 137,653. 100 00. 138,753. lOO 00. 135,347. 133 00. 135,735. 100 00. 133,637. 150 00. 119,768. 400 00. Claim Principal No. sum. 142,503. $66 UO. 141,344. IGO 00. 143,763. 100 00. 142,751. 50 00. 144,B00. 200 00. 142,650. 100 00. 144,91)2. 150 00. 114,901. 400 00. 144,595. 400 OO. 143,573. 1,333 00. 142,990. 100 00. 146,401. 300 00. 504 iN^ATi02s"AL Cu:sve:s'ti(jx of Ijs-sueance Commissiowbes Loss of eye. Reduced to oue-tentli on account of late notice. Paid $6.66. Paid $100 as funeral benefit. Paid $100 as funeral benefit. Loss of limb. Paid in full. Paid in full. Funeral benefit. Paid in full. Loss of iimb. Paid in full. Paid in full. Paid in full. Paid in full plus 10 per cent, increase. Loss of arm. Paid in full plus 10 per cent, increase. Insured in the occupation of " Foreman of coal heavers, not coupling." Pro-rated to switchman. Indemnity reduced to $100. Insured was crushed to death while performing his duties as foreman of coal dock, load- ing engine witli coal, and was caught between the cars. 146,912. 200 00. Reduced to one-fourth on account of intentional injuries inflicted upon assured by another person. Paid $50. 147,844. 200 00. Paid in full. 145,954. 150 00. Loss of limb. Paid in full. 147,428. 200 00. Insured entitled to $210. Company forwarded draft for $200, agent called attention to 10 per cent, increase. Company forwarded draft for $220. 147,417. 20O 00. Paid in full. 147,297. 200 00. Paid in full plus 10 per cent, increase. 146,869. 300 00. Loss of hand. Insured was classified as carpenter, bench work only, and was injured while running a planer. Policy provided indemnity of $150. Com- pany reduced occupation to class ' X," and paid in- sured $50. 146,277. 1,000 00. Paid in full. 148,037. 300 00. Paid in full. 146,105. 500 00. Insured as clerk, office duties only. Ivilled in a rail- road yard checking up coal cars. Reduced to $300. 147,631. 300 00. Paid in full. 148,123. 200 00. Paid in full. 149,279. 100 00. Loss of eye. Paid in full. 148,562. 300 00. Paid in full. 148,185. 200 00. Paid in full. 148,576. 400 00. Insured as machinist running light lathe. The insured was drowned while bathing. Occupation reduced to machinist, general work. Indemnity paid $300. 149,585. 500 00. Paid in full after attempt to pro-rate to $300 on ac- count of occupation. 104,409. 300 00. Death from sunstroke. Paid one-half of the principal sum as provided by policy. 144,129. 66 00. Loss of eye. Insured as farmer, injured as lumberman. Pro-rated on account of occupation, to ^33. 141,155. 600 00. Insured as electrical engineer, consulting and office work. Killed by electric current while connecting live wires. Company pro-rated insured on account of occupation, to $400, made a further reduction on account of exposure to unnecessary and apparent danger and ofl'ered beneficiary $40. This oiTer was declined and the claim was eventually compromised for $300 and interest. 170,161. 100 00. Paid principal sum as funeral benefit, also illness in- demnity of $35. 147,570. 300 00. Insured as baggagemaster. Killed while coupling cars. Indemnity reduced to $100 on account of occupation. 152,007. 151,328. 149,272. 148,728. 750 00. 300 00. 100 00. 100 00. 147,826. 100 00. 98,829. 300 00. 154,007. 150,871. 149,100. 100 00. 400 00. 500 00. Industrial Health and Accident Settlements 505 Claim Principal No. sum. 148,395. $500 00. Insured as pattern maker. Killed while loading lumber. Reduced to $300 on account of occupation. 149,424. 100 00. Paid principal sum as funeral benefit. 149,740. 400 00. Paid principal sum plus 50 per cent, accumulations. 149,991. 700 00. Paid in full. 150,220. 150 00. .Loss of foot. Insured as fireman. Injured as miner. ReduTced on account of occupation to $50. 152,136. 100 00. Reduced to one-fourth on account of intentional in- juries inflicted by another person on assured. Paid $25.' Paid in full. Paid in full. Paid in full. Paid $100 as funeral benefit and $83.14 as indemnity for illness. Paid principal sum as funeral benefit. No attention given to forty-three days illness. Doubt as to whether death was caused by accident. Compromised $150. Paid in full as funeral benefit. Paid in full plus 10 per cent, increase. Policyholder was insured as shipping clerk, was killed as foreman construction gang. Indemnity reduced to $375. 153,759. 100 00. Reduced to one- fourth on account of intentional injuries. Paid $25. Paid in full. Principal sum paid as funeral benefit. Principal sum paid with 10 per cent, increase. Paid as funeral benefit. Paid as funeral benefit. Paid as funeral benefit. Reduced to one-tenth on account of hernia. Paid $30 plus $3, representing 10 per cent, increase. Principal sum paid as funeral benefit, also $11 as in- demnity for illness. Paid in full with 50 per cent, accumulations. Paid in full. Reduced to one-fifth on account of intentional injuries. Paid $40. Funeral benefit paid in full. Reduced to one-fourth on account of exposure to un- necessary danger. Insured killed on railroad track. Principal sum paid with 10 per cent, increase. Reduced to one-fourth on account of intentional in- juries. Paid $50. Funeral benefit paid in full. Reduced to one-fourth on account of intentional in- juries. Paid $150. Reduced on account of intentional injuries to $50. Principal sum paid as funeral benefit. Payment of premium disputed. Beneficiary brought suit and recovered judgment. Paid in full, with costs. Paid in full. Reduced to $100 on account of intentional injuries in- flicted upon assured. Reduced to $75 on account of intentional injuries in- flicted on insured. Reduced to $100 on account of intentional injuries in- flicted on insured. 154,814. 154,612. 154,635. 154,651. 154,300. 153,769. 151,489. 400 00. 100 00. 200 00. 100 00. 100 00. 100 00. 300 00. 156,504. 100 00. 151,130. 153,101. 154,971. 300 00. 300 00. 200 00. 156,567. 156,436. 100 00. 200 00. 156,317. 155,508. 300 00. 200 00. 154,905. 156,220. 100 00. 600 00. 159,117. 157,458. 70,027. 200 00. 100 00. 300 00. 157,934. 150,339. 600 00. 400 00. 152,488. 300 00. 154,972. 400 00. 506 JSTATioisrAL CoNVEWTioiiT OF Insueajstce Oommissionees Claim Principal No. sum. 157,296. $400 00. Policyholder insured as butter maker. When killed his occupation was stone cutter. Indemnity reduced to $300. 154,415. 300 00. Assured sustained an injury which required an amputa- tion resulting in death. Investigation showed that disability was not entirely due to accident. Claim compromised for $66. 158,640. 100 00. Principal sum paid as funeral benefit. 158,865. 500 00. Injury to arm developed tetanus. Indemnity reduced to $100 under provision which limits company's lia- bility to one-fifth the principal amount in case of blood poison. Policy was issued August 25, 1904. It shows prompt payments for a period of three years immediately preceding the accident, with the excep- tion of three days in March, 1909. Accumulation feature appears to have been rigidly construed. 153,949. 100 00. Principal sum paid as funeral benefit. 168,341. 300 00. Compromised for $31.50 on account of breach of war- ranty and misstatement of age. 161,445. 400 00. Paid in full. I 'I' 102. 300 00. Paid in full. 161,893. 100 00. Paid in full. 157,861. 100 00. Loss of foot. Paid with ten per cent, increase. 160,657. 100 00. Principal sum paid as funeral benefit, plus $1 indem- nity for illness. 153,014. 300 00. Death caused by infection. Compromised for $170 on the ground that injury was not accidental. 163,103. 500 00. Reduced to $125 on account of intentional injuries in- fiicted upon assured. 162,195. 200 00. Paid in full with ten per cent, increase. 162,985. 600 00. Agent suggested pro-rating the claim. Company de- clined to carry out suggestion and paid principal amount in full. 144,548. 300 00. Late final proof. Company denies legal liability, con- cedes, however, moral liability. Claim paid in full. Paid in full with ten per cent, increase. Paid in full plus fifty per cent accumulation. Reduced to one-fifth under the provision which limits the company's liability on account of narcotics or in- toxicating liquors. Paid in full plus fifty per cent, accumulation. Insured as collector and solicitor. Killed as carpenter. Indemnity reduced to $300. Paid in full. Principal sum paid as funeral benefit. Paid in full. Paid in full. Paid in full. Paid in full. Paid in full. Reduced to one-fourth on account of intentional injuries. Paid $50. 168,990. 200 00. Insured as electrician, " inside, not running dynamo." Injured repairing trolley and cars. Indemnity re- duced to $110, which includes a ten per cent, i icrease. 167,390. 300 00. Paid in full. 169,148. 100 00. Paid funeral benefit $100. Illness indemnity, $3. 168,432. 200 00. Reduced on account of exposure to one-fifth. Assured was killed on railroad track while gathering coal. Paid $40. 163,707. 300 00. 165,784. 500 00. 162,108. 200 00. 164,766. 500 00. 163,840. 500 00. 160,930. 200 00. 167,110. 100 00. 160,203. 100 00. 165,179. 500 00. 166,209. 400 00. 168,241. 300 00. 168,581. 200 00. 167,177. 200 00. Claim No. Principal sum. 139,202. $300 00. 171,090. 167,296. 169,796. 168,278. 184,599. lOO 00. 100 00. 100 00. 150 00. 200 00. Industrial Health and Accident Settlements 507 Reduced to one-fourth on account of intentional in- juries. Paid $75. Paid in full. Paid funeral benefit $100. Illness indemnity, $29. Paid $100 as funeral benefit. Loss of arm. Paid in full. Insured drowned, supposed to be an act of his own in- tent. Liability limited to one-fourth. Company for- warded forms for proof of death with letter calling attention to late notice to administrator of the estate of deceased. ,Proofs not returned. Claim jacket stamped, " Rejected." 190,902. 300 00. Name of insured Mihaly Fabian, Maurer, N. J. In- sured met with accidental death July 1, 1910, on the date that the premium was due. Agent at Perth Amboy, N. J., who was notified of the accident in- formed the Austria Hungarian Consulate General on August 23rd, that policy had been cancelled on account of non-payment of the regular moutlily premium due on the first of July, the date of the accident. On January 27, 1911, the Consul General addressed a letter to the district manager at Perth Amboy requesting an investigation of the claim and a copy of the policy. The district manager referred the matter to the home office. The home office, how- ever, did not reply to such letter. On March C, 1911, Consul General addressed the Home Office making further inquiries in this case. On March 14, 1911, home office writes : " You do not state in your letter what you have requested of our agents, therefore we are unable to intelligently reply to your letter." On March 23, 1911, Consul General writer again re- questing blank forms. Such forms were forwarded on March 30. On May 20, 1911, Consul General writes stating that undertaker in Rondout, N. Y. lias a claim against the estate of the deceased. On June 20, 1 91 1, Consul General writes stating that he has so far been unable to obtain proof of death from undertaker, nor to elicit any answer from him. Matter still pending. 180,782. 600 00. Walter W. Jones. Reduced to one-fourth on account of intentional injuries inflicted upon assured. Draft issued for $150 to beneficiary, who is a minor, and to father of beneficiary as guardian. Draft refused. Guardian consulted attorney. Subsequently with- drew the claim from attorney's hands and wrote stat- ing that he was willing to accept $150. Company refused, stating that it would insist upon a formal appointment of a guardian by the court before mak- ing any payment. Case brought to the attention of the General Counsel for the company during this investigation. He thereupon immediately ordered that draft for the sum of $150 be forwarded to beneficiary and guardian. 170,826. 100 00. Funeral benefit paid in full. 170,235. 500 00. Reduced to one-fifth on account of intentional injuries infiicted by another person. Paid $100. 169,730, 100 00 Principal sum paid as funeral benefit; also illness in- demnity, amount, $50. 508 Xational Convejsttion of Insurance Commissionees Claim No. 168,177. rrlnclpal sum. $400 00'. 165,113 100 00. 147,769. 300 00. 146,024. 300 00. 170,126. 173,055. 165,695. 350 00. 66 00. 300 00. 167,622. 151,273. 500 00. 300 00. 175,483. 175,407. 173,293. 172,663. 100 00. 100 00. 100 00. 400 00, 172,382. 75 00. 174,022. 100 00. 176,513. 100 00. 175,803. 176,634. 176,649. 177,142. 300 00. 400 00. 300 00. 100 00. 177, HS. 177,214. 177,397. 166 00. 100 00. 100 00. 177,468. 600 00. 175;764. 170,237. 200 00. 1,000 00. Killed by accidental discharge of gun while striking another man. Liability denied on account of expos- ure. Made offer of $225. Increased same to $300. Finally paid $400. Paid as funeral benefit the principal sum. Claim for disability due to illness, preceding death, rejected on ground that claimant is not entitled to both dis- ability and funeral benefit. Insured drowned. Investigation produced evidence of in- toxication. Compromised for $275. Insured drowned. Beneficiary resides in Germany. Re- sisted and suit compromised for $60. The defenses in the case consisted of late notice, failure to file proofs of death within the required time and the absence of external or visible marks on the body. Compromise advised on the ground that a jury trial would result adversely to the company. Loss of hand. Policy-holder insured as superintendent of milling department not handling machinery. Oc- cupation reduced on the ground that insured was actually working on machinery at the time of ac- cident. Paid $330, which includes ten per cent, increase. Loss of eye. Paid in full, plus ten per cent, in- crease. Insured as foreman in pumping station. Met with accidental death by drowning. Some evidence to the effect that occupation of insured prior to accident was that of common laborer. Beneficiary resides in Italy. Indemnity reduced to $200. Paid in full. Cause of death disputed. Suit brought -and com- promised for $175. Paid funeral benefit $100 illness indemnity $8. Funeral benefit $100. Illness indemnity $20. Funeral benefit $100. Illness benefit $24. Insured killed on railroad track. Resisted on the ground of exposure to unnecessary danger. Benefici- ary contends that accident occurred on crossing. Matter pending. Principal sum paid as funeral benefit also illness in- demnity, amount $30. Principal sum paid as funeral benefit, also illness in- demnity of $36. Paid principal sum as funeral benefit, also illness in- demnity $2. Paid in full. Paid in full. Paid in full. Reduced to one-fourth on account of intentional in- jury. Paid $25. 'Loss of eye. Paid in full. Paid as funeral benefit. Principal sum paid as funeral benefit. Also indemnity of $20 for illness. Reduced to one-fifth on account of intentional injuries. Paid $120. Paid in full. Killed bv a fall. Evidence of intoxication. Compromised for $100. Industeial Health asd Accident Settlemexts 509 Claim Principal No. sum. 175,189. $500 00. Claim department admits liability for $500 and issues check for this amount. District manager compromised claim for $350. 178,185. 750 00. Intentional injuries reduced to one-tenth, paid $75. 178,171. 100 00. Paid as funeral benefit. 177,063. 300 00. Occupation when insured was given as " Riveter, hand work." Assured killed by a fall in his home. Com- pany pro-rated occupation to " Riveter, holder on " and paid $200. 177,088. 300 00. Paid in full. 177,808. 300 00. Paid in full. 177,973. 300 00. Loss of foot. Liability one-half principal sum. Paid in full. 179.203. 400 00. Paid in full. 181,033. 100 00. Paid in full. 179,601. 100 00. Principal sum paid as funeral benefit, also illness in- demnity of $5. 179,452. 100 00. Principal sum paid as funeral benefit, also illness in- demnity of $7. 179,329. 400 00. Insured as instrument inspector, not lineman. Killed while climbing a telegraph pole. Pro-rated to line- man. Indemnity reduced to $100. 179,073. 400 00. Paid in full. 166,869. 100 00. Principal sum paid as funeral benefit. Claim for illness preceding deatli not pressed by beneficiary. 180,802. 600 00. Paid in full. 180,488. 100 00. Principal sum paid as funeral benefit, also $4 as illness indemnity. 179,706. 150 00. Loss of foot. Paid in full. 172.204. 133 00. Loss of eye. Reduced to one-fourth on account of in- tentional injuries inflicted by another person. Paid $33. 178,665. 300 00. Paid $360 which included accumulations. 181,469. 400 00. Insured as coach cleaner. When killed was motorman on turn-table. Reduced to $300. 181,424. 200 00. Death due to sunstroke. Liability limited to one-half of principal sum. Paid in full. 182,913. 150 00. Loss of arm. Paid in full. 182,457. 100 00. Paid $150 which includes 50 per cent, accumulation. Superintendent of claim department in forwarding draft writes : " We inclose herewith draft for $loO which in- cludes five years accumulations, and the attorney especially refers to this." 181,522. 75 00. Principal sum paid as funeral benefit; also $43 as ill- ness indemnity. 177,815. 1,000 00. Paid in full. 188,013. 1,000 00. Paid in full. 182,644. 300 00. Insured as laborer in lumber yard. Killed while cutting down a tree. Reduced to laborer in woods. Paid $100 to public administrator. Beneficiary resides in Den- mark. 182,018.' 500 00. Paid in full. 180,217. 50 00. Loss of arm. Paid in full. 174,279. 100 00. Principal sum paid as funeral benefit. Also $160 in- demnity for illness preceding death. 182,059. 300 00. Assured's occupation given as conduit man. He sustained injury resulting in the loss of an eye while climbing a pole. Liability under policy limited to one-third principal sum. Company attempted to pro-rate to 610 National Convention of Insurance Commissionees Claim Principal No. sum. lineman, and offered $33. Attorney employed and compromiae effected for $75. 182,858. $133 00. Loss of eye. Paid in full. 183,817. 300 00. Paid in full. 184,412. 300 00. Paid in full. 184,460. 400 00. Insured as hydraulic engineer. Killed by an automobile while crossing the street. Eeduced to $300 on the ground that insured's occupation at the time of death was oiler and polisher. 184,571. 200 00. Paid in full with 10 per cent increase. 184,577. 400 00. Eeduced to one-fifth on the ground that accident oc- curred while under the influence of intoxicating liquors. Ten per cent, increase at first omitted from settlement, but subsequently paid on request of bene- ficiary. Reduced to one-fourtli on account of intentional injury. Paid $75. Paid in full for loss of eye, $165, which amount includes 10 per cent, increase. Paid in full with 10 per cent increase. Insured as bookkeeper. Lost hand while coupling and setting brakes. Pro-rated on account of occupation. Paid $28.75, which includes 10 per cent, increase. Insured as foreman. Killed as lineman. Indemnity reduced to $100. Resisted on account of exposure to unnecessary danger. Insured stepped off a train while same was in motion. Compromised for $155. Reduced to one-tenth on the ground of intentional in- juries. Reduced to one-tenth on account of intentional injuries. Paid $78 which sum includes a 10 per cent, increase. Paid in full. Killed by railroad train. Accident occurred at a time when insured was under treatment at a sanitarium for nervous diseases. Paid one-fifth of principal sum, plus 10 per cent, increase on account of provision in policy which limits liability in the event of ac- cident occurring while insured was suffering from illness. Cause of death disputed. Also evidence showing mis- statement of age. Compromise for $200. Paid in full. Ixjss of eye. Liability limited to one- third of principal sum. Insured as laborer in mill yard. When injured was working wood chopping. Pro-rated on account of occupation. Paid $33. Paid in full. Cause of death in doubt. Compromise of $150. Principal sum paid as funeral benefit. Also indemnity for illness amounting to $03.14. 182,633. 600 00. Death caused by sun stroke. Liability limited to one- half of principal sum. Investigation shows, that in- sured was overcome by heat. Compromised for $150. Paid in full with 50 per cent, accumulation. Paid ill full. Paid in full. Paid in full. Paid in full. Loss of limb. Insured as paperhanger, injured in poul- try plant while operating pressure. Pro-rated on ac- 185,171. 300 00. 186,050. 150 00. 186,135. 186,225. 300 00. 600 00. 184,304. 400 00. 108,072. 500 00. 183,486. 1,000 00. 188,002. 600 00. 186,403. 186,235. 300 00. 600 GO. 185,499. 300 00. 184,031. 300 00. 186,773. 187,160. 183,423. 1,250 00. 400 00. 100 00. 187,480. 300 00. 172,043. 100 00. 188,440. 600 00. 190.356. 100 00. 189,990. 100 00. 189,904. 400 00. Industrial Health and Accident Settlements 511 Claim Principal No. sum. count of occupation. Agent writes: "We do not find this occupation classified in manual, but from similar occupations we believe E would be proper, and we know we can deliver check if claim is pro- rated E." Paid $100, and 10 per cent, increase. 189,304. $450 00. Paid in full. 189,068. 300 00. Insured as saloonkeeper, killed as farmer. Indemnity reduced from $300 to $200 and 40 per cent, accumula- tion paid. 188,940. 400 00. Paid principal amount plus 10 per cent, increase. 188,972. 1,000 00. Paid in full. 180,856. 600 00. Injured while attempting to steal ride on freight train. Indemnity reduced to $150, on account of exposure to unnecessary danger. 192,232. 150 00. Insured as lumber surveyor, injured as brakeman. In- demnity reduced to $50. 191,663. 250 00. Paid in full with accumulations. 189,242. 300 00. Injury to thumb; developed blood poison, resulted in death. General counsel of opinion that company might be held liable for full amount. Compromise for $150. 188,903. 300 00. Insured as saw blocker, lumber yard; was injured lay- ing pipes for gas company. Pro-rated to laborer, indemnity reduced to $200. Accumulation of ten per cent. paid. 188,044. 400 00. Loss of hand. Liability limited to half of principal amount. Insured as Rural Mail Carrier. Investi- gation showed that his occupation was also partly farmer. Pro-rated farmer and indemnity reduced to $100. Accumulations of twenty per cent. paid. 188,744. 100 00. Paid in full, with thirty per cent, accumulation. 151,638. 200 00. Reduced to one-tenth on account of intentional injuries. Paid $20. 188,123. 500 00. Insured as photographer. Injured while racing an automobile. Adjusted on one-fifth basis on ground of exposure to unnecessary danger. 192,577. 300 00. Paid in full. 192,623. 500 00. Injured by a fall. Investigation by agent showed evi- dence of intoxication. Indemnity reduced to $125. Company at first issued draft of $500 which was returned by the agent, who succeeded in effecting the compromise settlement. Policy limits company's lia- bility to one-fourth, in the event of any injury sus- tained while under the influence of intoxicating liquors. In forwarding draft for -$125, company writes as follows: " We are enclosing draft for $125, but of course, if you can get rid of this policy without payment of any amount, or for a, smaller sum, and take up the policy, we should be glad to have you do so, as we do not think any company should pay loss in any amount, where the injury is sustained on account of insured getting drunk." Accumulation of twenty per cent, was omitted from the settlement. Agent operates on profit sharing plan. Paid rn full. Reduced to one-tenth on account of intentional injuries. Loss of eye. Paid principal amount with ten per cent, increase. 193,204. 800 00. 193,896. 1,000 00. 190,011. 33 00. 512 National Convention op Instjeance Commissionees Claim Principal No. sum. 195,395. $350' 00. Paid in full. 196,145. 100 00. Paid in full. 100,419. 100 00. Paid in full. 196,713. 200 00. Killed by a fall. Suspected suicide. Settled by payment of $50 to undertaker, and $5 to landlady. Deceased left no relatives and the policy was surrendered by the landlady. J 92,260. 100 00. Principal sum paid as funeral benefit; also indemnity for illness amounting to $111.68. 193,515. 350 00. Insured as driver of light parcel delivery in retail grocery store. When injured was driver of heavy truck. In- demnity reduced on account of occupation and mis- statement of age. Paid $166. 193,649. 300 00. Paid in full. 196,161. 500 00. Paid in full. 196,581. 100 00. Paid in full. 196,590. 300 00. Loss of eye. Insured as fireman, stationary engine. Pro-rated to locomotive engineer. Indemnity reduced from $100 to $33. Accumulations ignored. 196,978. 100 00. Paid in full. 197,088. 250 00. Paid in full. 197,536. 100 00. Paid in full. 197,942. 300 00. Paid in full. 195,544. 250 00. Paid in full. 190,151. 224 00. Paid in full. 190,104. 100 00. Principal sum paid as funeral benefit. Beneficiary made claim for additional $38 as illness indemnity. The company at first declined to recognize liability for such claim, but eventually paid it. 198,628. 100 00. Paid in full. 198,632. 300 00. Loss of eye. Liability limited to one-half of principal amount. This was paid in full. 199,228. 300 00. Paid in full. 199,659. 500 00. Reduced to one-fifth on account of intentional injuries. 195,064. 166 00. Paid in full. 197,687. 1,000 00. Cause of death disputed. Compromiised for $100. 193,013. 350 00. Reduced to one-quarter on account of intentional in- juries. 197,705. 100 00. Paid in full. 198,907. 100 00. Paid in full. 199,135. 1,500 00. Paid in full. 199,292. 2,000 00. Paid in full. II — Railroad Installment Department 134,657. $500 00. Paid in full. 135,034. 2,000 00. Paid in full. 132,425. 750 00. Loss of eye. Paid in full. 132,428. 1,000 00. Loss of eye. Paid in full. 128,983. 2,000 00. Cause of death question. Suit begun and compromised for $875. 137,949. 1,000 00. Paid in full. 139,346. 1,000 00. Paid in full. 139,015. 1,500 00. Paid in fiill. 140.451. 1,000 00. Paid in full. 142,884. 750 00. Loss of foot. Paid in full. 141,812. 1,000 00. Paid in full. 142,732. 1,000 00. Loss of limb. Paid in full. 145,936. 1,000 00. Paid in full. Claim Principal No. sum. 144,676. $1,000 00. 145,935. 500 00. 147,061. 1,000 00. 146,385. 500 00. 145,108. 500 00. 140,157. 1,000 00. 168,468. 1,000 00. 157,698. 1,000 00. Industeial PIealth and Accident Settlements 513 Loss of limb. Adjuster attempted to establish intemper- ate habits. Claim compromised for $700. Paid in full. Paid in full. Paid in full. Loss of arm. Paid in full. Paid in full. Paid in full. Insured as signalman in tower, injured as watchman and signalman at crossing. Indemnity reduced to $787.50. 158,018. 1,000 00. Paid in full, including funeral benefit and return pre- mium. 161,951. 1,000 00. Paid in full. 159,408. 2,000 00. Injury caused paralysis, resulted in death. Settled on basis of one-tenth of principal amount. Doubt whether death was due to natural or accidental causes. 162,022. '1,000 00. Paid in full. 146,975. 1,000 00. Paymaster could not locate assured, and failed to deduct premium for monthly earnings. Company denied lia- bility and compromised claim for $500. 165,391. 2,000 00. Paid in full. 164,674. 2,000 00. Paid in full. 165,228. 1,500 00. Paid in full with accumulations. 162,676. 1,000 00. Loss of eye. Paid in full. 167,121. 1,000 00. Paid in full. 168,516. 1,000 flO. Paid in full. 169,989. 500 00. Loss of foot. Paid in full. 168,231. 500 00. Paid in full. 169.338. 960 00. Loss of limb. Paid in full. 171.834. 1,000 00. Paid in full. 172,449. 1,000 00. Paid in full. 173,908. 1,000 00. Paid in full. 173,365. 200 00. Loss of arm. Paid in full. 172,092. 960 00. Loss of foot. Paid in full, 178,345. 1,000 00. Paid in full. 176,109. 700 00. Loss of foot. Paid in full. 176,606. 1,000 00. Paid in full. 179,168. 1,000 00. Paid in full. 180,233. 5,000 00. Paid in full. 178,514. 1,000 00. Paid in full. 176,889. 750 00. Paid in full. 180,308. 1,500 00. Insured as freight conductor. Injured as brakeman. Reduced to $900. 181,384. 700 00. Paid in full. 179,710. 1,000 00. Loss of foot. Paid in full. 168,069. 500 00. Loss of eye. Medical examiner doubts whether insured sustained total loss of vision. Suit brought and com- promised for $400. 185,794. 2,000 00. Paid in full. 184,862. 500 00. Loss of limb. Paid in full. 188,006. 1,500 00. Paid in full. 188,068. 1,000 00. Paid in full. 191,726. 2,000 00. Paid in full. 190,657. 3,000 00. Paid in full. 190.339. 1,000 00. Paid in full. 189,570. 1,000 00. Paid in full. 189,369. 1,000 00. Paid in full. 189,368. 1,000 00. Paid in full. 190,341. 1,000 00. Paid '"n full. 17 514 National Convention- of Insurance Commissionees Claim Principal No. sum. 190,132. $1,000 00. Insured as paymaster. Occupation changed to switch- man. Indemnity reduced to $361.50. 191,194. 1,500 00. Paid in full. 191,713. 1,000 00. Baid in full. 193,227. 1,000 00. Paid in full. 193,963. 1,000 00. Insured as switch tender. Occupation when injured switchman. Indemnity reduced to $354.10. 184,805. 2,000 00. Payment of premium disputed. Beneficiary claimed error made by paymaster. Compromised- for $1,000. 191,326. 1,000 00. Insured as locomotive fireman. Occupation changed to bralceman. Indemnity reduced to $600. 195,016. 500 00. Loss of foot. Paid in full. 195,580. 2,000 00. Insured as freight conductor, injured iU freight brake- man. Indemnity reduced to $900. 189,911. 480 00. Loss of limb. Paid in full. 193,593. 1,000 OJ, Paid in full. 195,469. 500 00. Paid in full. 195,749. 1,000 00. - Paid in full. 196,357. 1,000 00. Insured as boiler worker, injured as locomotive fireman. Indemnity reduced to $649. 196,909. 2,000 00. Paid in full. 197,083. 1,000 00. Paid in full. 195,992. 1,500 00. Paid in full. 196,928. 1,000 00. Paid in full. 198,934. 1,000 00. Paid in full. 191,959. 1,500 00. Payment of premium disputed. Facts indicate error oh part of paymaster. Compromised, $750. 197,975. 1,000 00. Compromised for $236 on the ground that cause of death not clearly established. REPORT OF EXAMINERS ON THE EQUITABLE ACCIDENT COMPANY OF BOSTON, MASS. Examiners : W. A. Billingham, New York H. L. Peabody, Massachusetts [515] KEPORT OF EXAMINERS ON THE EQUITABLE ACCI- DENT COMPANY OF BOSTON, MASS. BosToiT, Mass., August 12, 1911. Hon. Calvin A. Palmee, Chairman of Special Committee. Ap- pointed hij the National Iiisurance C ommissioners' Converir tion to Investigate the Settlement of Claims by Industrial Accident and Health Insurance Companies, Lansing Mich.: SiE. — Report of an investigation of the methods and practices of the Equitable Accident Company of Boston in the adjustment and settlement of its industrial claims, together with a brief his- tory of the organization, is herein submitted. The Equitable Accident Company was incorporated December 11, 1891, as the " Masonic Equitable Accident Association of the World," under the fraternal laws of Miassachusetts, to conduct the business of personal accident insurance. The membership was confined to members of the Masonic fraternity. In 1895 the company changed from the fraternal to the assess- ment plan, and the mem.bership was not thereafter confined to Masons. In 1896 the company changed its name by dropping the words " of the World." In January, 1901, the company voted to issue policies of health insurance as well as of accident insurance, and the issuing of such policies was begun early in that year. In April, 1901, the name of the company was changed to Equit- able Accident Company, the present name. In 1'905 the company began issuing policies on the Industrial plan. In November, 1900, the company was re-incorporated as a stock company with a capita] of $100,000. The company reinsured the United States Masonic Company of Fitchburg, Mass., in 1893, but issued its own policies to all the policyholders of the United Sitates Masonic who became members of the Equitable. [517] 518 National Convention of Instjeanoe Commissionees Prior to the issuing of industrial policies, most of tlie policies were issued on the quarterly payment plan. In January, 1910, the business was divided into three depart- ments, namely, an intermediate department, comprising the quarterly payment business, an industrial department, comprise ing the monthly payment business, and a commercial department comprising preferred business. The business is secured through solicitation by agents. Col- lections are sometimes made by agents, and sometimes by col- lectors appointed for that purpoise. All losses are paid by the home office by means of a draft with release attached. The company has at this time seventeen (lY) agents, who are under profit sharing contracts for industrial business only. No agent is given exclusive territory. The terms and conditions of these contracts' with p'rofit-sharing agents vary, but in general, a percentage is allowed to agents for collections, a percentage comes to the home office for home office expenses, claims paid are charged up to the agent, and the balance, sometimes called the " profits," is divided between the agent and the company, never more than 50 per cent, going to the agent. In some cases, other agency expenses such as rent, postage, clerical expense and so forth are charged up as items of expense under the contract. The amount of premiums actually received 'and losses paid by the company in 1910 were: Premiums Losses Paid Ratio Commercial department $1,206 53 $100 00 8.3 Industrial department 21,540 63 8,320 98 38.6 Intermediate department 53,718 97 21,800 53 40.5 $76,466 13 $30,221 51 39.5 No railroad, factory, mining or ticket policies are issued. Some of the agents are expected to assist in settling claims, and during the larger part of 1910 profit-sharing agents, W. E. Eussell of Leominster, Mass., A. 0. Decker of Waterbury, Conn., and A. G. Sprague of St. Johnsbury, Vt., were allowed to settle small claims. At the present time no 'agent is allowed to settle any claim without first referring same to the home office. Com- pany has no branch office. Industrial Health and Accident Settlements 519 The work of investigatioii was begun on August 5, 1911, and the cases examined covered the following periods : From December 1, 1910, 200 consecutive cases. From January 1, 19'0'8, to April 1, 1911, all claims of $50' or ov-er and most claims of $301 or over. From April 1, 1911, to date all claims of $15 or over. From January 1, 1910, to date the company has settled ap- proximately 900 industrial claims. The total number investi- gated by your examiners covering the periods above stated was approximately 400'. During the period covered by the investigation the company paid nine death claims and the facts relating to each case are given in Exhibit A hereto attached. Most of the cases investigated are believed to have been fairly and equitably adjusted. Such exceptions as your examiners de- sire to submit for your consideration are given in detail in Exhibit B hereto attached. Exhibit C contains a list of all claims examined of $50 and upwards, and in some cases' as low as $30, excepting death claims scheduled in Exhibit A, and accident and illness claims scheduled in Exhibit B. Also all claims of $15 -and upward, excepting death claims, since April, 1911. The company's method of recording premium payments is de- fective, and as a consequence in many cases it is difficult, and, in some cases, impossible to ascertain whether a claimant had actually lapsed and whether he was entitled to accumulations. In no case where premiums are collected by agents does a premium card show the actual dates of premium payments, but rather the dates that remittances' therefor were received at the home office. This necessitates reference to the premium reports of agents in order to ascertain whether the premiums on a given policy had been promptly paid vnthout default so as to entitle a claimant to indemnity under the terms of his policy. These premium re- ports are filed away in packages and not in convenient form for ready reference; in fact, your examiners were informed that such reports for the years prior to 1909 are kept in a storeroom at some distance from the company's office, and, in many instances, where such reports were requested dating back three or four or five years the company was unable to produce them 520 National Convention of Insurance Commissionees Further, it evidently is not the unifonn practice with agents to fill out these premium reports with accuracy as to dates pre- miums are paid. This was evidenced by the fact that in some cases agents have repoi^ted a list of as many as sixty or seventy premium payments as being made on 'the same date, such date being the date upon which the 'agent made his return to the company. In some cases the dates of premium payments were given as several days after the first of the month, thereby placing all of 'the policyholders so reported in default. It is not reason- able to believe that such reports faithfully represented the facts, for it is incredible that so many policyholders should pay their premiums on one and the same date and each and every one of them after the due date. If such records are to be accepted as correct in the event of a claim for accumulations arising, the claimant would be deprived of his full indemnity because of false accounting on the part of the oompany and its agents. He also might be rejected altogether on the ground that the premium card showed a lapse. Tour examiners believe that it is practically impossible for the company to' do full justice to its policyholders in the matter of settlements until snch time as it changes its system in this respect so 'as to show upon the premium cards the actual dates that pre- miums are paid. Respectfully submitted, W. A. BiLLIXGHAir, Examiner, Neiv York Insurance Department. H. L. Peabody, Examiner, Massachusetts Insurance Department. Exhibit A Death Claims Claim No. 50,867, A. K. Weatherice, Bangor, Me. Tlie amount of indemnity under this policy for accidental death was $400, with 10 per cent, accumulations if the policy had been continued in fores without default for twelve consecutive months immediately preceding claim. Cilaim papers do not indicate that any attempt was made to determine whether claimant was entitled to accumulations or not. Policy was issued in Decem- ber, 1906, and death occurred in May, 1908, after a period of sixteen months. Premium card shows every month paid on date due or in advance, except Industrial Health and Accident Settlements 521 March, 1908, which was dated March 5th, or four days in default. Reference to agent's premium report for this month gave no light as the " day of pay- ment '' column was lieaded " March 3," or the date on which report was made up by agent. It is reasonable to believe that the beneficiary was entitled to the accumulation, but the company was unable to determine from its records whether the accumulation was due or not, and no accumulation was paid, the claim being settled for $400, the face of the policy. Ulaim J^o. 50,921, K. E. Rudolph, Boston, Mass. Indemnity under policy for accidental death was $400. Claim settled promptly and in full. Vlaim No. 51,652, E. H. Mann, t'oxioro, Mass. Insured as a milk dealer for $300. Occupation when killed was that of a freight brakeman. Pro-rated and indemnity reduced to $100. Vlaim No. 50,751, Anthony Baril, Laicrence, Mass. Indemnity under policy for accidental death was $300. The claim was paid ih full. Claim No. 51,415, John Murray, Marhlehead, Mass. Indemnity under policy was $400. Claim paid in full. Claim No. 51,567, Lee W. Billiard, Island Pound, Vt. Indemnity of $200 paid in full. Vlaim No. 51,542, Arthur W. Torsey, Wiuthrop, Me. Policy for $300. Insured July 2, 1908; death resulted from injury received November 9, 1909. Policy provides for a, 10 per cent; accumulation if kept continuously in force for one year. Agent's premium reports called for in order to ascertain whether premium payments had been promptly made, but company could not furnish same for the months of August, 1908, to February, 1909, inclusive. The premium reports which were found show that payments were made promptly when due. Vlaim No. 51,749, Frederick H. Chase, Orange, Mass. Policy issued November 26, 1907; killed March 28, 1910. Insured as " plumber and hardware," and duties given as " proprietor, oflice, supervising." Policy provided for a death indemnity of $400. Proof shows that insured was killed while working as a plumber. Pro-rated to " working plumber " and indemnity reduced to $300. Policy provided for a 10 per cent, accumulation for each year it was kept continuoiisly in force. Agent's reports were called for, but could not be found. Vlaim No. 52,457, E. A. Hedgell, Vornish, N. U. Indemnity under policy for accidental death was $300 with 10 per cent, accumulation if in force twelve consecutive months without default. Premium card shows date of receipt at home oifice only. Agent's premium reports omitted dates of payment. Impossible to tell from date at hand Whether ac- cumulation was due or not. Claim manager stated that he had, through oversight, made no effort to determine whether accumulation was due, but admitted that unless the agent could have furnished at time of settlement in- formation as to the dates upon which the premiums were actually paid he could not have told whether accumulation was due or not. 522 Natiom-al Conveittion of Insurance Commissionees Exhibit B Claim A'o. 52,171, A. Fitagno, Brooklyn, N. )'. Assured notified company (received at liome office January 20, 1911) of injury which occurred January 17th. On January 20th Mr. P. A. Piceiano, the agent, wrote to tlie company in part as follows: "When you receive the blank one — ^109,785 — A. i'ltasno, write him a letter that his premium was not paid in time. It was paid on the 14th and he is not entitled to any benefit until thirty days after. Of course, if he makes fuss over, I will see that I may be able to settle him for little of something." On January 21st the company wrote to Agent Piceiano in part as follows: " Was just about going to write you about Pitagno. Will write him now- just as you advise." On January 21st the company wrote assured as follows: " Your claim blank has been received, and I am much surprised that you were recently injured, but as your premium was only paid a few days ago, we regret to state that you have not been a member thirty days from rein- statement. See Mr. Piceiano for explanation." The above letter written by the company to the assured was returned by Agent Piceiano to the company bearing the following written on the bottom thereof : " Relating on the above claim, he came over to see me. I would advise you to send him a week's benefit and state to him that he was not entitled to a penny only through Mr. Picoiano's advice and to help you to pay your doctor bill and no more." On January 25th the company wrote to the assured as follows: " Have just heard from our agent, Jlr. Piceiano, on your claim and al- though there really does not seem to be any claim under the terms of the policy, we think we ought to allow you one week. Find draft herewith for $7. Kindly see him and have it cashed." Tlie claim papers show the disability was due to injury and not to sickness; consequently, the thirty-day reinstatement provision did not apply and the insured was actually in benefit. Ulaim No. 50,760, William Walker, Jr., North Hartland, Vt. Illness claimed. Agent's notice to company stated that premiums were paid annually and in advance. Draft was sent for $94.67, ignoring a 10 per cent, accumulation. Agent wrote to company advising that assured was entitled to $102.63 because of accumulation due on account of premium payment annually in advance. Claim manager wrote to agent as follows: " Replying to yours of the 26th regarding Walker, we allowed him $94.67 in full settlement of claim. It appears from files tliat the payments have been turned in monthly. Anyway, he made a proposition for seventy-eight days and we deducted seven, allowing him seventy-one and he accepted same in cash draft and nothing further has come up regarding it, so I think we had better let the matter drop where it is and not stir up things any more. If there was any question about it, it should have been brought up at the time of settlement and not now as it is really too late to reopen the matter." The above letter was dated September 29, 1909, and the claim was paid on April 18th previous. Industrial Health and Accident Settlements 523 Vlaim No. 51,021, Harry R. Vassidy, Methuen, Mass. Insured as " Superintendent, care of Poor Farm '' with indemnity of $40 per month for accidental injuries. Proof shows that accident resulting in injury occurred while insured was driving a sulky plow. On November 16, 1908, the company wrote to S. R. Sheldon, agent, in part as follows: " It appears that he was thrown from a plow while working on the grounds of the Poor Farm, and when his claim is adjusted the benefits will be reduced in accordance with rate book. " He makes a proposition of $50, but from what we know of the matter we do not beleive we care to allow it at the present time; so the thing to do now is to forward him a final report for completion, which is enclosed. He is in- sured as superintendent, supervising only, or $40 per month and his benefits will be reduced to about $25, so kindly guide the claim along these lines." The insured did not use in his application the words " supervising only," as stated in above letter. The claim was settled for one and one-half months' disability at the rate of $25 per month, amounting to $37.50. Claim No. 52,095, Warner Bingham, Concord, Vt. Accident claim for two months and ten days at $35 per month which would amount to $81.66. Settled for $70. Claim No. 52.239, 0. E. Eakanson, Danbury, Conn. Accident claim. Application shows occupation as " kindling wood dealer," and duties as " wood merchant ". After the words " wood merchant " have been added the words " supervising in yard only," the added words being written apparently in another handwriting and with a black lead pencil, whereas the remainder of the application is written with an indelible lead pencil. Proof shows that injury was received " while helping the men — stick of wood flew from saw." Under date of April 26, 1911, the company wrote to the insured in part as follows : "At time of applying to this company for insurance you gave your occu- pation as ' wood merchant, supervising in yard only,' and a policy providing $40 per month was issued. At the time of injury you were performing duties much more hazardous and which are classified in the company's manual as class X and provided $20 per month. Your indemnity is computed for duties according to this classification." The indemnity paid was $25.66 whereas under the original classification it would have been $51.33. Claim No. 52,205, M. B. Martin, Waierbury, Conn. 'J'his appears to be an accident claim, but no proof was found in jacket al- though reference is made in correspondence to receipt of preliminary proof. ■Date of injury was February 1, 1911. Agent's premium report shows that premium was paid February 2, 1911. On February 18, 1911, A. 0. Decker, the agent, wrote to the company in part as follows: " The premium on this policy for .January was paid the first day of Febru- ary, sometime in the forenoon, and Mr. Martin was injured in the evening of that same day. His premium for February was paid on the 2nd of the 524 JSTational Coxvextiox of Ixstjkance CoMirissioisrEES month. The statement made in the preliminary form that he paid his premium on the first of January and had paid it to myself was in error. I am having most of the street car men's premiums collected by a Mr. West, who is connected with the company, and he paid the premiums to him." The statement in the above quoted letter that premiums were paid to Mr. West should be particularly noted as bearing on the date of payment. On February 20, 1911, the company wrote to A. 0. Decker, Agent, in part as follows : " ICow that the February premium was paid on the 2nd, the policy had lapsed and I do not think he is entitled to a claim. If he says anything you might return his money for these months." On February 23, 1911, A. 0. Decker, the agent, wrote to the company as follows : " Your letter of February 20, in regard to the ilartin claim received. In taking up this matter with Mr. Martin, he takes the stand that as he had paid his premium for the month of January previous to his injury, which would put his policy into immediate benefit, and he had also paid his pre- mium for the month of February on the 2nd of the month, he claims that he is entitled to benefits for the number of days he was laid up. " Now, I do not see how we can get out of it without making an adjust- ment of the claim and believe the facts I have just stated are according to the policy contract." An examination of agent's premium reports shows history of payments as follows : September, 1910, premium paid August 31st. October, 1910, premium paid October 5th. November, 1910, premium paid November 1st. December, 1910, premium paid December 3rd. Jaiuiary, 1911, premium paid February 2nd. February, 1911, premium paid February 2nd. The date of the January and February premium payments as shown in the agent's premium reports should be considered in connection with the above quoted letter of February 18, 1911, wherein the agent states that the Janu- ary premium was paid on February 1st and the February premium on Feb- ruary 2nd. His report shows tJiat both premiums were paid on the same date. No final proof was found in the jacket and no indemnity was paid. Claim No. 52,121, Charles B. Esancij, lAberty, Me. Accident claim. Application gives occupation as " Cooper, farming, general labor." Injured «liile chopping down a tree, and pro-rated from $25 to $20 a month, thereby reducing the indemnity from $10 to $7.99. Claim No. 50,909, Clarence 11. Chick. Winthrop, Me. Claim for illness — -tuberculosis — benefit $30 per month; maximum dura- tion of liability six months. The company wrote the assured in part as fol- lows: " You will note that the company's liability for tuberculosis is one-fifth so >our claim would be six months at $30, or $180, and one-fifth would be $36. Industrial Health and Accident Settlements 525 Therefore, if you care to settle now, we would be glad to send draft right off for this sum." The assured wrote the company and inquired why he was not entitled to 10 per cent, accumulation. The company then sent draft for $39.60, being the; amount of their original offer, plus accumulation. Exhibit C Containing a list of all claims examined of $50 and upwards and in some cases as low as $30, excepting death claiins scheduled in Exhibit A, and accident and illness claims scheduled in Exhibit B. Also all claims of $15 and upwards since April 1, 1911. Claim No. 51.348. Accident claim of $60 paid in full. 51.349. Accident claim of $140 paid in full. 61,352. Accident claim of $42 paid in full. 51,362. Accident claim; advance settlement for $35. 51,364. Accident claim; advance settlement for $40. 51,375. Illness; advance settlement for $30. 51,378. Accident. Insured as "Grocery and Fruit Store," with duties " handling light goods at counter." Injured by catching hand in ice cream freezer. Disability one month. Indemnity reduced from $70 to $50 on account of change of occupation. 5), 382. Accident claim of $50 paid in fiill. 51,386. Illness claim of $70 paid in full. 51.389. Advanced settlement of accident claim for $35. 51.390. Advance settlement for illness claim for $70. 51,398. Advance settlement for illness claim for $65. 51,404. Accident claim of $58.93 paid in full. 51,306. Advance settlement of accident claim for $200. 51,314. Insured as "Machinist" with an indemnity of $70 per month. Occupation changed to " Plucking skins over plucking machine." Indemnity reduced to $60 per month, amounting to $54 for twenty- seven days disability. 51,341. Accident. Insured as " Stationary Engineer " with an indemnity at the rate of $40 per month. Occupation changed to that of farmer and indemnity reduced to $25 per month. Indemnity paid at the latter rate for full period of disability but accumula- tion of 10 per cent, was not paid until insured reminded company it was due. 51,192. Illness claim settled for $100. Nothing in jacket to show basis of settlement. 50,987. Advance settlement of accident claim for $300. 51,004. Advance settlement of illness claim for $50. 51,025. Advance settlement of accident claim for $100. 51,091. Accident claim rejected on account of late notice. Attorney em-- ployed and compromised at $118.80. 51,035. Illness claim of $82.83 paid in full. 51,030. Illness claim of $121 paid in full. 51,057. Illness; proof indefinite as to disability period; paid $50. 51,198. Illness claim of $75 paid in full. 51,213. Accident claim of $110 paid in full. 51,251. Illness claim of $59 paid in full. 51,474. Advance settlement of accident claim at $60. 51,501. Illness claim of $50 paid in fuU. 51,523. Illness claim of $130.66, including accumulations, paid in full. 51,535. Advance settlement accident claim for $175. 526 National Convention op Insueance Commissionees Claim No. 51,706. Accident claim of $65 paid in full. 51,712. Advance settlement of illness claim for $50. 51,741. Advance settlement of accident claim for $100. 51,885. Illness claim for $46.66 settled for $45. 51,56'J. Advance settlement of illness claim for $63.49. 51,582. Advance settlement of illness claim for $75. 51,745. Advance settlement of accident claim for $194.04. 51,762. Advance settlement of illness claim for $85. 51,793. Illness claim; no final proof, settled for $120. 51,864. Advance settlement of accident claim for $60. 51,879. Advance settlement of accident claim for $365.40. 51,474. Advance settlement of accident claim for .$60. 51,501. Illness claim of $50 paid in full. 51,523. Illness claim of $130.66, including accumulations, paid in full. 51,535. Advance settlement accident claim for $175. 51,706. Accident claim of $65 paid in full. 51,712. Advance settlement of illness claim for $50. 51,741. Advance settlement of accident claim for $100. 51,885. Illness claim of $46.66 settled for $45. 51,569. Advance settlement of illness claim for $63.49. 51,582. Advance settlement of illness claim for $75. 51,745. Advance settlement of accident claim for $194.04. 51,762. Advance settlement of illness claim for $85. 51,793. Illness claim; no final proof, settled for $120. 51,864. Advance settlement of accident claim for $60. 51,879. Advance settlement of accident claim for $365.40. 52,285. Advance settlement of illness claim for $98.33. 52,100. Accident claim. Insured as "Carpenter" with a disability indem- nity 01 $30 per month. Preliminary proof shovps that eye was injured while sawing boards on a buzz saw. Pro-rated and in- demnity reduced to $25 per month for three months' disability. 52,294. Accident claim of $74.66 paid in full. 51,769. Illness claim of $58.33 paid in full. 52,305. Advance settlement of accident claim for $50. 52,311. Illness claim of $129.07 paid in full. 52,327. Advance settlement of illness claim for $30. 52.391. Illness claim of $30 paid in full. 52.393. Illness claim of $40 paid in full. 52,396. Accident claim for $4)0 paid in full. 52.392. Accident claim for $22.50 paid in full. 52.394. Accident claim for $21.94 paid in full. 52,403. Advance settlement of accident claim for $20. 52,412. Illness claim for $20.25 paid in full. 52,421. Accident claim for $24 paid in full. 52,426. Advance settlement of accident claim for $15. 52,431. Advance settlement of accident claim for $17.50. ■ 52,449. Advance settlement of accident claim for $17.50. 52,447. Advance settlement of illness claim for $24. 52,446. Illness claim of $20.42 paid in full. 52,443. Advance settlement of accident claim for $20.02. 52,441. Illness claim of $24.49 paid in full. 52,438. Illness claim of $25 paid in full. 62,349. Accident claim of $17.49 paid in full. .52,352. Accident claim of $20.56 paid in full. 52,359. Accident claim of $32 paid in full. 52,302. Accident claim for $17.50 paid in full. 52,363. Accident claim of $53.90 paid in full. 52,366. Illness claim of $23 paid in full. ,52,368. Illness claim of $28 paid in full. 52.378. Advance settlement of accident claim for $23.33, 52.379. Illness claim of $32.66 paid in full. Industrial Health and Accident Settlements 527 Claim No. 52,-11)0. Accident claim of $16.67 paid in full. 52,381. Accident claim of $18.50 paid in full. 62,410. Accident claim of $36 paid in full. 52.451. Accident claim of $16 paid in full. 32.452. Accident claim of $25 paid in full. 52,462. Advance settlement of accident claim for $25. 50,857. Advance settlement of accident claim for $45. 50.809. Advance settlement for accident claim of $60. 50,884. Illness claim of $60 paid in full. 50,801. Accident claim for $120 paid in full. 50,842. Illness claim for $35 paid in full. 50,844. Accident claim for $45 paid in full. 50,848. Illness claim for $75 paid in full. 50,851. Accident claim for $30 paid in full. 51,905. Accident claim for $85 paid in full. 51,955. Illness claim for $70 paid in full. 52,032. Illness claim for $75 paid in full. 51,989. Illness claim for $75 paid in full. 50,939. Accident claim for $50 paid in full; maximum of one month. 60,941. Illness for .'{65; advance settlement. 51,595. Advance settlement of accident claim for $70. 50,779. Illness claim for $73 paid in full. 50.787. Accident claim for $43 paid in full. 50.788. Illness claim for $36.66 paid in full. 50,800. Accident claim for $30 paid in full. 50,806. Accident claim for $75 paid in full. 50.810. Accident claim for $40; advance settlement. 50,823. Illness claim of $30 paid in full. 50,833. Illness claim for $114.63 paid in full. 50,937. Accident claim for $37.50 paid in full. 51,640. Illness claim for $63 paid in full. 51,662. Accident claim for $50 paid in full. 51,670. Accident claim for $160 paid in full; doutle indemnity. 50,738. Illness claim for $36; paid $45, a little in excess of maximum. Tuberculosis. 50,763. Illness claim for $143.33 paid in full. 50,972. Accident claim for $50 ; advance s-ettlement. 50,902. Illness claim for $35 paid in full. REPORT OF EXAMINERS ON THE MASSACHUSETTS ACCIDENT COMPANY OF BOSTON, MASS. Examiners : Freeman O. Gullifer, Michigan George L. Brown, Michigan Arthur E. Linnell, Massachusetts [529] EEPOET OF EXAMINEES ON THE MASSACHUSETTS ACCIDENT COMPANY OF BOSTON, MASS. Boston, Mass., August 14, 1911. Hon. Calvin A. Palmer, Chairman of Special Committee, Ap- pointed at the National Insurance Commissioners' Co7iven^ tion, to Investigate the Settlement of Claims by Industrial Accident and Health Insurance Companies: SiE. — In accordance with, the instructions received from your committee, we have made an examination of the industrial claim department of the Massachusetts Accident Company of Boston, Massachusetts. The states participating in this examination were Michigan and Massachusetts, Michigan being represented by Freeman 0. GuUifer and Geo. L. Brown, and M^assachusetts by Arthur E. Linnell. The examination was commenced Friday, August 4, 1911, and completed Monday, August 14th. In making this examination, we investigated practically all the claims involving amounts above $50' and all those where the jackets were marked "Late Notice," "No Claim," and where there were any other markings which appeared to require exami- nation. We also examined all the death, eye and limb losses, whether paid or not, from January 1, 1909, up to July 1, 1911, on file at the home office. The offices of the Bay State branch are in the same building as the main office of the company, but the business is kept separate. This branch looks after the business coming through the rein- surance of the Bay State Casualty Company by the Massachusetts Accident Company and in this report is treated as though the business was all done in one office. [531] 532 Natioj^al Coxvextion op Instjeance Commissionees In addition to these, 474 claims were received from the Rochester department and examined. The total number of jackets looked over amounted to approximately 6,000'. HiSTOEY OF TPIE CoMPANY The Massachusetts Accident Company was incorporated under the laws of Massachusetts, October 1, 1908, being a successor to the Massachusetts Mutual Accident Association (an assessment company) which was incorporated December 8, 1883. The capi- tal stock of the company is $100, OOO and their president reports that it is all invested in Massachusetts Municipal Bonds. There have been no changes in the articles of incorporation. The original assessment company was founded by George E. McNeill and m'anaged by him up until the time of his death, May 19, 1906. He was succeeded by his son, G. Leonard MclSTeill, who has been president and general manager from that time until the present. On May 1, 1910, this company reinsured the Bay State Casualty Company, an assessment company with a premium in- come of about $40,000. The officers of the company are : G. Leonard McNeill, Pres. & General Manager. Albert C. Warren, Vice President. Miss I. M. Hathaway, Secretary. Geo. E. Bacon, Asst. See'y & Mgr. of the Claim Dept. E. P. Eowe, Treasurer. C. W. McNeill, Asst. Treas. & Claim Adjuster. E. G. West, M. T>., Medical Director. Chas. M. Adams, Mgr. Agency Dept. For the first nine years of its existence the business of the company was confined entirely to Massachusetts. In the year 1892 admission to the other New Englaiid States, also to Penn- sylvania and the District of Columbia was secured. No other changes were made until after the re-incorporation in 1908, since which time the company has been admitted to write business in New York, Michigan, Ohio, Maryland and Missouri. Prior to the year 1901 only accident insurance was written, but in that year health insurance was added. In 1904 the com- pany added the industrial accident and health insurance depart- Industeial Health and Accident Settlements 533 ment, and since that time this department has produced the larger part of the business written. The company has three branch ofSces, which are practically independent departments, one being located at Eochester, JST. Y., in charge of F. E. Dooley, one in Detroit, Mich., in charge of E. E. Pointer, and one at Chicago, 111., in charge of Eobert B. Thorne. The business of the company, is now divided into three departments : (1) The commercial department in which are sold the Devon- shire Accident policies at $'25 per annum, and the Massacco Dis- ability policies at $6'0' per annum. (2) The ordinary department in which are sold policies issued on a monthly premium basis — those policies which are generally known as industrial policies. (3) The industrial department in which is sold a policy on the vs'eekly pre-mium basis. In October, 1910, the company opened an employes' indemnity department, for the purpose of selling what is termed a " Factory Policy." It continued this department for about six months, but at present any business coming through that department is handled in connection with the ordinary department, the factory department as such being discontinued. The business in the first two departments is secured through the usual method of appointing general and local agents. The industrial business is secured through the lappointment of a superintendent on a salary, who employs agents on commission and supervises their work. The company insures women under the same form of policy as that provided for men in its ordinary department. From March 1, 1910, to April 15, 1911, the com- pany collected from its women policyholders $2,29'9.75, and paid in claims $1,017.64:, the ratio of claims paid to premiums col- lected being 45.63 per cent. The collections of premiums are made largely by the agents ; a certain percent of the insured pay their premiums at the home office, and others make payments through the 57 pay stations which have been established principally throughout what is known as " Greater Boston." 534 National Convention op Instjeance Commissioners Peoeit Shaeing Agents On November 1, 1910, the company entered into a profit shar- ing contract with a number of its agents who were thought by them to be capable of properly conducting an agency under such a plan. On January 1, 1911, the company had 17 agents working under profit-sharing agreements. Since that time two of these agents have severed their connection with the company, and eight more have been added, m'aljing 23 profit sharing agents at present with the company. The president states that up to the present time the plan has seemed to work very satisfactorily. He says the ■agents take a greater interest in the business, are more careful in the class of risks they secure, and more often make personal in- vestigations of claims that are presented against the company. Claim Dbpaetment For about fifteen years prior to February, 1910, the claim de- partment was in charge of Mr. Charles M. Adams. At that time Mr. Adams was promoted to the position of agency manager, which position he now holds. Mr. Geo. E. Bacon, who had acted as assistant to Mr. Adams in the claim department for six years, was promoted to the posi- tion of claim manager 'and is now in charge of that department. He has under his S'upervision one assistant and three clerks. When claims are received at the ofiice, two blanks, one to be filled by the claimant and the other by the attending physician, are at once sent to the claimant with a return stamped envelope, also a printed postal card to be filled out by the claimant and mailed to the company when he has resumed any of the duties of his occupation (in case he has been injured) or the date when he is first able to leave the house in case of sickness. Proposiiion for Settlement In the blank to be filled out by the claimant is the following: " Do you wish to make a proposition for immediate and full settlement of your claim ? " I liereby agree to accept $ in full discharge of all claims against the company which I have or may have on account of the accidental injuries herein described." Industrial Health and Accident Settlements 535 There is another blank used by the Rochester agency, of which the following is a copy : " Policy No Claim No MASSACHUSETTS ACCIDENT COMPANY Home Office Boston, Mass. New York State Office, Granite Bldg., Rochester, N. Y. PROPOSITION FOR SETTLEMENT OF CLAIM For an Immediate Payment in Lieu of a Sum on Termination of Disable- ment. Having to this day been totally disabled for .... days, if immediate pay- ment be made, I hereby agree to accept days' indemnity at the rate of $ per month, which when paid shall be in full discharge of all claims I have or may have against the Massachusetts Accident Company, on account of injuries received 191 ( Signature ) (Witness) Date 191 I recommend the above claim. ..■ Agent." A large majority of the claims are settled upon receipt of the preliminary proofs. The company claims the average period of disability to be between two and three weeks. Where cases run until the termination of the 'accident or illness, the claimant is furnished with a final claim blank in which he and his physician give full information in regard to the period of disability. Settlements by Agents Nearly, if not all, of the agents who are under a profit-sharing contract, are furnished with claim blanks and authorized to ad- just claims not in excess of $2'5 (in some instances the limit is fixed at $50), but all claims where the limit is higher are ad- justed through the home ofiiee or by an agent after a consultation with the home office. In cities, where the number 'of policyholders is large enough to warrant it, a local physician is appointed, who makes examina- tions of all claimants when requested to do so by the company. Many claimis occur in Boston and its immediate vicinity and are settled at the oflSce by the claim manager or by some agents sent out by the company. In such instances there are no final 536 National Convention of Instjeanoe Commissionees proofs in the jacket and no means by which an examiner can tell whether the claims were settled satisfactorily or not, generally the only evidence being a copy of the letter transmitting the check to the iagent or claimant. We suggested to the manager that where claims are settled at the home ofBce or by agents sent from the home office that a full typewritten account of the settlement be filed in the jacket. He promised to have this done hereafter. The company issues a monthly publication called " The Bul- letin." From this publication it appears that during the seven months ending July 31, 1911, the company paid 3,447 claims. Of this number they report 2,682 as having been paid on the same day that the proofs were received at the offi'Ce; 311 were paid one day after the proofs were received; 136 on- the second day, and the balance, 318 claims, paid within twenty days after receipt of proofs. Premiums Eeceived and Claims Paid— 1910 The following table shows the premiums received, losses paid, and the ratio for the year 1910: Class Premiums Losses Paid Ratio Ordinary (monthly prem.) $200,118 52 $81,74166 40.85% Commercial 50,098 59 16,765 47 33.46 Industrial 20,655 05 5,050 86 24 . 45 Total $270,872 16 $103,5.i7 99 38.23% In the computations made above, no account is taken of the policy fees collected during the year 1910. The amount of such fees was $41,266.Y0. By adding this amount to the premiums as given above, we have total premiums of $312,138.86, which would make the loss ratio 33.81 per cent. As a policy fee is paid but once and the policy may run years, the loss ratio obtained by adding the policy fees is not a true ratio for any one year. Office Conditions The books of the company are well kept and show at a glance almost any information desired ns to the business of the company. The books and the original applications (which are bound into Industkial Health akd Accident Settlements 537 books) 'are kept in a steel vault whicli does not go to the founda- tion of the building and would be very little, if any, protection in case of fire. The jackets are kept in a small room in wooden cases and are entirely unprotected from fire. Eemaeks If the examiners have the right to criticise the management of the claim department of this company, it would be for a too strict adherence to the " l^otice " provisions of its policies ; for its at- tempts- to settle claims before the termination of the sickness, or recovery from accident, and for settling claims for the amount asked for by claimant when its books show a larger amount due. Claims are paid promptly after a decision is made. ISTotices of accident, sickness or death are accepted from any source and the machinery at once put in motion to ascertain the facts. There is no evidence that profit sharing agents attempt to settle claims unfairly and, except as above noted, the business seems to be well and honestly conducted. Exhibits Attached hereto is " Exhibit A" in which will be found the particulars of snach cases as, in our judgment, should be brought to your notice. In " Exhibit B " we have noted some of the large cases which have been settled promptly and to the satisfaction of the claimants. KespectfuUy submitted, FeEEMAN 0. GuLLIEEE, Examiner for Michigan. Geo. L. Beown, Examiner for Michigan. Aethue E. Linnell, Examiner for Massachusetts. Exhibit A In most of the policies in use prior to January 1, 1911, there was the fol- lowing provision: " Written notice of any injury or sickness must be received by the Secretary at the home office within ten days of the occurrence of the accident or sick- ness, and failure to give such notice shall invalidate all claims under the policy. Provided that in the event of the receipt of such notice after ten days and before the expiration of thirty days from the date of accident or beginning of sickness, the liability of the company shall be one-half the amount other- wise payable under the policy." 538 National OoNvjsNTioisr of Insueanoe Oommissionees Policies issued since January 1, 1911, conform to the Massachusetts law as passed by the last Legislature and allow twenty days from date of acci- dent, and ten days from beginning of sickness in which to file notice, and immediate notice, when reasonably possible, in case of accidental deaths. Claim No. 31,294; James F. O'Day, Somerville, Mass. — Accident. The claimant received an injury to his knee February 22nd, and notified the company on March 11th. Company acknowledged receipt of notice but claimed that it was too late under the policy. Claimant replied: " The reason I did not send you notice, I was not thinking of any claim against the company. Thought it might be a swelling that would be better in day or two. Since, I have had to have it opened in four places and thought I had a claim. I am not in the habit of entering a claim if I thought I was not entitled to it." Later the company sent C. W. McNeill to examine this claim and settled it on April 4, 1910, by paying $60. Claim A'o. 33,569; Ellis F. Bryant, Jonesport, Me. — Accident. Claimant insured against accident at the rate of $30 per month. October 17, 1910, the company's agent at Rockland, Me., H. E. Mansfield, wrote the company as follows: "Some time ago Mr. Ellis F. Bryant, insured under policy No. 116,050, met with an accident (a nail stuck in his foot) and wrote you regarding the same. He has heard nothing from youj nor have I. I knew of the accident but wrote yooi nothing about it as I thought you had probably paid the claim. He is certainly entitled to a week's pay, but was willing to settle by you paying doctor's bill. I should consider it a favor and feel that you are doing the right thing by sending him check by return mail for one week's indemnity." The company replied under date of October 19, 1910, that his (Mansfield's) letter was the first notice they had received, and continued: " If he wishes us to send a check for surgeon's fee as covered under his pol- icy, it will be necessary for him to furnish statement from the doctor showing that he attended Mr. Bryant for said injury." October 31, 1910, Dr. M. P. Hambleton wrote the company in part as fol- lows : " Mr. Bryant came to me in August with a badly inflamed foot in which he had stuck a rusty nail. This trouble laid him off from work three weeks. I filled out one of your blanks for him and he says he mailed it to you but re- ceived no reply." On October 26, 1910, the claimant wrote the company: " Your agent passed me letter from your company stating that you never received any notice from me. You sent me blanks and I had them filled out by myself and doctor and sent them to your company, but never heard from you. There is no reason you should not have got this notice. It was in one of your envelopes." The claim manager replied on November 3, 1910: " We have gone over our records very carefully and find no record of ever receiving a notice from you advising us of your accident or even sending out any blanks upon which you were to present facts in regard to the matter." Industrial Health and Accident Settlements 539 November 12tli the company's agent at Rockland again wrote as follows: " Mr. E. F. Bryant sent you a notice of his accident to my knowledge and I wrote you a week or ten days ago regarding same. This claim is a per- fectly just one and you will be doing the proper thing by sending him check for a week's indemnity under his policy." The claims manager replied November 28, 1910, saying in part: "The first notice of Mr. Bryant's disability to reach this office was on Octo- ber 18, and came from you. No blanks were sent from this office. Evidently Mr. Bryant has some other insurance and has got it mistaken with ours." Nothing further in the case, and nothing paid. Claim No. 31,805; Frank C. Wells, Deer field, Mass. — .Occident. Insured for $12 per week against accident. Was injured March 30, 1910, by falling from a scaffold about seven feet and striking on his side. The company denies liability on account of late notice. Policy provisions quoted above. The claimant in writing the company said he expected his wife to notify them. The wife was sick with consumption and forgot it. The com- pany received notice through agent April 26, 1910. On May 21 the President of the company wrote the agent at Deerfield: " We shall have to decline to make any payment in this case, notice not having been received on time." Under date of June 18, 1910, the President wrote the agent in part as fol- lows: " I/egally, he has no claim because of failure to notify the company in proper season .... I think that possibly I could get the Board of Directors to award him $75 or $100, but of course would not want to do this unless I knew Mr. Wells would accept it in the proper spirit." On June 22d the Board of Directors voted to pay $100 in settlement of this claim, and that amount was forwarded to the agent June 23, 1910. Ukdm No. 35,199; Ida Li. Duncan. — Accident. Claimant received injury to knee October 28, 1910, while traveling in France. The notice was received from her banker at Cleveland, Ohio, Feb- ruary 18, 1911. The company forwarded blanks and on April 3, 1911, wrote that notice must be received at home office within ten days from date of acci- dent. On May 13, 1911, J. E. Johnston of Cleveland, Miss Duncan's agent and banker, writes in part as follows: " She did not know the policy was in force as I had paid her premiums for her, and she failed to get the notice sent her." On May 16, 1911, the company writes J. E. Johnston: " In reply will say that we are unable to change our previous decision, as notice was not received within the required time." Claim No. 32,322; John Miller, Hartford, Conn. — Sickness. Insured December 11, 1909, for $40 per month sick benefit. Claimant noti- fied company June 17th. In the formal notification he said he was taken sick May 25th. Doctor attended him first on May 25th. The company had first claimed that the policy had lapsed on March 15th. The agent at Hartford reported that the premiums had been paid. The company later sent a. check for $13.33, claiming it was one-half the regular benefit under the policy by 540 National Convention of Insueanoe Commissionees reason of notice being received after ten days and witliiu thirty days from the beginning of the illness, and that claimant was not entitled to benefit for the lirst seven days. The agent returned the cheek and asked the company, why the claimant was not entitled to benefit for the first seven days, as there was no such provision in his policy. The company apologized for its mistake and sent a check for $18. The insured claimed benefit, conflriing illness sev- enteen days, and non-confining illness twenty days, which would amount to $30. Claim ^'o. 24,410; B. J. Schofield. — Illness. Claimant notified the company December 21, 1910, from Balboa, Canal Zone, that he was in hospital from November 17th to December 20th, and claimed ■$84.70 benefit. He was insured for $80 per month against sickness. The claim manager replied January 24, 1911, claiming that the notice was thirty-five days late. The company \\-as notified under date of June 3, 1911, that the claimant had died May 13, 1911. The claim manager acknowledged receipt and again denied liability " on account of notice not being received within the required time." There were no travel restrictions in the policy and nothing was paid. Claim jVo. 30,887; Michael Butgar, Center Harbor, X. H. — Sickness. Report of illness was received by the company February 17, 1910. In his formal notification the claimant says he was taken sick January 9th. The company's agent at Plymouth, N. H., writes May 3d.: "He is a. man who lefl.ves everything to the doctor, and ought not to be cut (iff without his check." Again on March 7th the agent again writes : " He is a man that can only write his name, and he left it to the doctor to notify you, and that is why the notice was late." Under his policy he was also entitled to 5 per cent, accumulation. Nothing paid. Claim No. 31,559; John S. Storey, Kittanning, Pa. — Sicliiess. In formal notification the claimant says: "Was tjiken sick ^rnrc,h 1, 1910, a.nd- employed physician April 2d, and notified the company on April 4, 1910." The company disclaimed liability on account of late notice, also because claimant was not wholly and continuously disabled. Nothing paid. Claim: A 0. 30,612; Qeo. 11' Miller, Boston, Mass. — Sickness. Claimant in statement dated February 1st, says he was taken sick Decem- ber 24th. Jacket says "Notice received January 27, 1910." Doctor says he made twenty-five visits to the claimant's house between December 27th and February 1st. The claimant was insured on April 17, 1905, and had kept his policy in force nearly four years. Nothing paid. Claim A'o. 30,970; P'. U'. Carleton, Wiiitcrport, Mc. — Sicliiess. Insured for a $2r) per month sick benefit. Notice sent company February 19th. In formal notification the claimant says he was " ailing through Jan- uary, practically no work since January 1st." Doctor first attended him February 1st. Claimant through agent asked for one-half indemnity for one month. Nothing paid. Industeial Health and Accident Settlements 541 Vlaim No. 35,323; Harriet A. Began, Weirs, N. B. — Sickness. Insured for $20 a month sick benefit. Notice was received by the company at the home office February 23, 1911, from its agent, E. A. Bradbury. On March 21, 1911, the agent wrote that the physician had lost tlie blanlc sent. Agent writes again April 14, 1911: " I do Itnow the woman was siclc for a week or ten days, the doctor told me so. I don't see the reason for delay." April 21, 1911, the doctor's report was received. The agent again writes under the same date: " I told her the other day that it had been so long that there would be no claim paid." On April 24, 1911, the claim manager wrote to the agent: "As you have informed her there would be no claim, we think the best thing to do is' to let the matter rest until we hear from her." The doctor's report shows fifteen days' confinement to house. Nothing paid. Claim No. 35,330; Charles S. Reese, Franklin, Mass. — Accident. Injured January 13, 1911. Notice received at home office February 16, 1911. On March 7, 1911, the company wrote,: " Claim not received within required time.'' Nothing paid. Claim No. 33,113; Samuel Stein'berg. — Accident. Accident to finger, resulting in blood poisoning August 9, 1910. Notice to company September 7th. Company denied liability on account of late notice. Nothing paid. Claim No. 25,116; M. H. O'Brien, Roxhury, Mass. — Sickness. Insured for $25 against illness. Was taken sick November 12, 1910, and the first notice was received at office, February 14, 1911, from an agent who wrote as follows: " Reported at office by friend of claimant that he has been sick since the 17th day of November. Gave him blank. Policy is in force." Physician's report filed shows thirty-two days' confinement to bed. Febru- ary 12, 1911, the company writes: " Notice was not received within the required time." Nothing paid. Claim No. 32,649 ; Miss Delia Gendron, Nashua, N. H. — Sickness. Insured for $20 a month against sickness. She was taken sick about June 17th and notified the company July 20th. Claim rejected on account of late notice, and nothing paid. Claim No. 25,136; Charles H. Richardson, Boston, Mass. — Sickness. Insured for $25 per month. Illness commenced January 16, 1911. Notice received by the company February 15, 1911. February 17th the company wrote : " Notice was not received within the required time." Nothing paid. 542 National Conventiost of In-sueancb CoMMissioisrEES Claim No. 35,219; Paul Remey, South Bethlehem, Pa. — Sickness. Monthly indemnity $35. Taken sick December 26, 1910. Reported to agent February 17, 1911. Agent writes home office: "He states he had not read it (his policy) and did not understand it." Claim rejected on the ground of late notice and nothing paid. BAY STATE BRANCH Late Notice Claim No. 4,484; Ellen L. Williams, Springfield, Mass. Date of illness April 28, 1910; notice of illness received May 13, 1910, letter to agent May 27, 1910, in part as follows: " The policy which she holds, provides that notice of sickness must be received at this office within ten days from commencement of same, and failure to give such notice will invalidate any claim thereunder." Nothing paid. Claim No. 4,486; Thos. C. Heywood, Waterville, Me. Date of illness April 2, 1910. Notice of illness received May 13, 1910. Letter to insured, dated May 23, 1910, stating " No claim on account of late notice." Claim No. 4,539; Mrs. Hilma B. Nelson, Natidk, Mass. Date of illness April 26, 1910. Notice of illness received May 24, 1910. Letter to insured May 28, 1910. No claim on account of late notice. Claim No. 4,790; John Harris, Quinoy, Mass. Date of illness July 3, 1910. Notice of illness received August 3, 1910. Company wrote insured August 12, 1910, "No claim, late notice." Claim No. 4,947; Elzar Yokel, Pall River, Mass. Date of illness August 26, 1910. Notice of illness received September 16, 1910. Wrote insured September 19, 1910, " No claim, late notice." Claim No. 4,988; Marinna E. Mendose, Fall River, Mass. Date of illness September 6, 1910. Notice of illness received September 27, 1910. Company wrote insured " No claim, late notice." Claim No. 5,055 ; Michael Vincignera, Franklin, Mass. Date of accident September 15, 1910. Notice received October 21, 1910. Company wrote insured November 2, 1910, "No claim, late notice." Claim No. 5,130; Andrew Trusheele, New Yorh City. Date of sickness September 20, 1910. Notice received November 23, 1910. Company wrote agent January 19, 1911, "No claim, late notice." Claim No. 5,179 ; Samuel Levitt, Roxiury, Mass. Date of sickness October 20, 1910. Notice received December 20, 1910. Memo on back of jacket " Dec. 21, 1910, claimant called, explained to him that he had no claim owing to late notice." Industrial Health and Accident Settlements 543 Accumtdations Claim No. 30,582; Chas. C. Haywood. Randolph. Vt. — Accident. Insured against accident only at $30 per month. Injured January 22, 1910, by falling on ice. Claimed sixty days' benefit at $30 per month and ten days at $12 per month, total $65. Company does not dispute claim but figures on a slip in the jacket: 67 days $67 00 12 " 4 80 10% accumulation 7 18 Total $78 98 The company sent check for $65, the amount asked for by the claimant. Ulaim A'o. 31,019; Frank J. Harvey, Amesbury, Mass. — Accident, Insured December 30, 1904, benefit $43.75 per month. Injured February 2, 1910. In his application for indemnity the claimant asked for fifty-eight days at $43,75 per month, amounting to $87.50. Correctly computed, the amount would be $84.57, and with 10 per cent, accumulations added (which he was entitled to) would be $93.03. The company sent check for $87.50, the amount asked for, ignoring both error and accumulations. Claim No. 32,951; Harry H. Bogart, Salem, Mass. — Accident. Insured January 18, 1910, $40 monthly accident benefit. Injured August 17, 1910. The insured claimed forty days' benefit at $40 per month, the amount $48. The correct amount should have been $53.34. Claimant was also entitled to 5 per cent, accumulations, amounting to $2.66. Total amount due, $56. The company paid him the amount asked for — $48. Claim No. 24,162; Chas. H. Leavitt, Lynn, Mass. — -Sickness. Insured October 4, 1905. Injured by being thrown from wagon December 7, 1910, C. W. McNeill, son of the President, visited claimant a number of times. On December 28 he reported that the claimant did not care to make proposition for settlement. On January 13th he again reported: " I offered him up to Thursday, the 19th, or $61.60. Did not care to accept." On January 13, 1910, the insured made application for indemnity, claim- ing seventy days at $40 per month, amounting to $93.33. The company paid the amount asked for, ignoring accumulations amounting to $9.33. Probate and Advance Settlement Claim No. 31,585; Edward A. Crosby, Wakefield, Mass. — Accident. The claimant was insured as a mortor-man and had his leg broken while loading a roll of wire on a fiat car. Mr. C. W. McNeill, son of the President, holds the official position of Assistant Treasurer. It also appears to be a part of his duties to visit claimants, observe conditions and try to make set- tlements of claims. In this case it appears from memoranda in the jacket 544 National Oonven-tion op Insueanoe Commissiottees that Mr. McNeill called at the hospital April 20, 1910, but was unable to see the patient. That he again called on April 25th, and made the following re- port: "He did not care to settle for 10 weeks as he stated that the doctor had told him that it would be about 12 weeks before he got out of hospital, and a few more weeks when he went home. This man needs money but would not settle." On June 13, 1010, he reported: " I asked the claimant to make some offer of settlement, and he stated he would settle for 5 months, which would be until Steptember 7." On June 22 he reports: " Called at the home of claimant and offered him four months' indemnity, which he would not accept." On July 8, 1910, he reports: "Called at the home of claimant. * ♦ * OHe stated he would like to settle his claim and would stick to his proposition for five months." July 14, 1910, the claim manager wrote Mr. J. S. McNeill at Wakefield, Mass., as follows ; "On July 14, I called on Mr. Edward A. Crosby and adjusted his claim. We have settled the claim of Mr. Crosby by paying five months' indemnity, amounting to $150." The claim manager stated that the man was hurt on a flat car, and was only entitled to $30 per month. He was insured for $35 accident indemnity. Claim No. 31,433; Chas. W. Burr, Oldtown-, Me. — Accident. Insured January 18, 1909, as manager of a lumber company, for $50 acci- dent benefit. Received a compound fracture of the left leg March 21, 1910. Was attaching a block to a beam in his barn to hoist hay, when the beam gave way resulting as above stated. The notice was on time, March 25, 1910. The claim manager wrote to the claimant April 6th asking if he would accept check for ten weeks. July 14th claim agent wrote the company's agent at Bangor, Me., Mr. C. D. Dennett, asking him to see Mr. Burr and arrange set- tlement. July 26th the claim manager again wrote Mr. Dennett, asking him if he had arranged settlement. August 5th the claim manager again wrote Mr. Dennett asking him if he had seen Mr. Burr, and further said: " We should like very much to have this claim settled up as soon as possible." August 16th the claim manager again wrote ilr. Dennett on this subject, saying: " Wish you would attend to this AT ONCE." August 22nd Mr. Dennett wrote the company that he had seen Mr. Burr and that he (Mr. Burr) thought he ought to have what his policy called for — .1)50 per month. August 24th claim manager wrote Mr. Dennett, acknowl- edging receipt of letter and said: " When the claim is settled it will not be settled under the preferred claim." October 4th Mr. Dennett wrote that Mr. Burr had called at his office but would not take anything less than $325. The company pro-rated Mr. Burr Industeial Health and Accident Settlements 545 to a farmer and paid him for ten months at $30 per month plus 10 per cent, accumulations, total $330. Claim No. 27,833, Marcellas J. Walker, Westwood, Mass. — Death Loss. Insured against accidents $35 per month, and accidental death $350. Claim- ant's leg was broken March 4, 1909, by a stick flying from a wood-saw and hitting it. He died May 4, 1909, from blood poisoning, result of the acci- dent. Application gives occupation as " Contractor working — care of busi- ness." Claim manager interviewed vi^ife of deceased and reported that she told him that Mr. Walker was a, contractor, taking teaming work. Had his own horse and team and did general teaming. Had a portable wood-saw which was run by gasoline engine and people would bring wood cut in four feet lengths for him to saw up for kindling wood." Company pro-rated case to wood sawyer and amount of indemnity was reduced from $350 to $250. Claimant was insured in the United Workmen for $2,000, and the claim was paid. Claim No. 29,147; Ovan Moonoogian, Worcester, Mass. — Death Loss. Insured as confectionery maker under popular premium policy, as a pre- ferred risk for $400 death indemnity. The deceased and his sons owned some land on which there was an old house. Mr. Moonoogian was assisting in tearing down this house preparatory to building another, when he was knocked off the building, the accident resulting in death the same day. The company reduced the claim and paid $250. False Wammty Claim No. 32,867; H. A. Maouen, Milford, Mass. — Death Loss. Mr. ilaeuen was insured August 8, 1910, for $1,000 death indemnity, $60 accident and $40 sick benefit. He fell through a trap door in his store August 10, 1910, and broke both bones of the right leg below the knee,- dying from the result of the accident August 28th. On August 20, 1910, the claim manager wrote the claimant saying: " Do you wish to accept $60 at this time in full settlement of your claim? " The wife of claimant replied August 25th declining to accept the offer. On August 30th the agent at Milford notified the company of Mr. Macuen's death. E. E. Tropitter, an agent of the company in Boston, examined this case and made a report September 7, 1910, which reads in part as follows: "Learn from son that his father had been disabled (partially) by having broken his thigh bone when a lad of twelve years of age, a tree having fallen on it. He had always been lame since. "Met Mr. McKenna (agent who wrote the policy). He informed me that he delivered policy to Macuen's son on Thursday following the .accident. Asked him if he read questions to claimant. He replied- ' He did not.' Asked him why he delivered policy after party was injured and at the hospital. He said ' Because he had paid for the poUcy.' Although his children in his presence told him that Mr. Macuen was lame, he refused to admit the fact. He said ' Not having considered him sufficiently lame to decline the applica- tion he sent it along.' " The company returned the premium paid, $5. 18 546 National Convention of Insueance Commissionees Claim No. 33,542; Charles Rich, St. Albans Bay, Vt. — Accident. Insured for .$20 per month. Company agent writes tliat claimant fell Sun- day, October 9, 1910, and cut a deep gash in his right arm. Claimant offered to settle for $20. Company rejected claim on the ground that claimant at one time had a policy in the Equitable Accident Company of Boston, which said company had cancelled and which he had not reported in making his appli- cation to this company. Directed agent to return premium and take up policy. Claimant signed his application with a cross. Miscellaneous Claim No. 31,330; Alian A. Mason, Watertown, Mass. — Accident. Claimant had rupture of nine or ten years' standing. Doctor reported accident occurred " while lifting with crow-bar the rupture started to pain him." Claimant taken to hospital and operation performed. Claimed sick benefit six weeks, at $15 per week. Memoranda in jacket dated April 14, 1910, signed C. W. McNeill, says: " Called on claimant at his place of business. Talked over length of disa- bility which is 6 weeks and one day. Offered him $3 per week as per special provisions on account of hernia. He then stated he would not accept it and was mad and began to talk about court, ' bum ' company, etc." Nothing paid. Claim No. 32,462; Albert Ringioald — Eye Loss. Accident happened July 24, 1910. Claim paid in full August 4, 1910, $100. Physician in memo, says " Better pay for loss of eye at once. I am afraid of the other eye." Policy still in force but agreement made with insured exempting the company from loss should this accident affect the other eye. Claim No. 39,986 ; Frederick Belloios — Death Loss. Insured under the model policy March 18, 1898, edition of May 1, 1897, accidental death $1,250. Weekly indemnity $10. Accident occurred Decem- ber 6, 1909. Slipped on ice and struck head against brick building. Died January 5, 1910. Company claimed death was not entirely due to accident. In May, IfllO, Mr. Adamis, for the company, offered to pay one-half ($625), which the claimant refused. On May 7, 1910, the company sent to R. T. Shorts, Saginaw, Mich., Managing Attorney of the Insurance Law Reporters Company, all the papers and proofs in the case and asked as to whether he would recommend payment in full or leave the case with the court. May 9, 1910, Mr. Shorts replied fully and on May 12th the company forwarded check for $1,220, being full amount of indemnity, less $30 paid to the deceased on account of an injury in 1905. No reason given as to why the $30 was deducted. Settlement with Beneficianes Claim No. 27,477, Dr. Chas. E. Lancaster, Brunswick, Me. — Death Loss. Insured under full protection Jjolicy for $500, $50 and $50. Injured in a runaway by being thrown from wagon and striking on his head, March 16, 1909. Died April 5, 1909. Mr. Chas. M. Adams, at that time claim manager Industrial Health and Accident Settlements 547 for the company, and at present manager of the agency department, in a long letter to the company dated April 12, 1909, says in part: " Dr. Donovan fully agrees with Drs. Fuller and Elliott. All three iloctora were very cordial and willingly gave me their time. They understand our posi- tion in regard to no immediate disability and realized the necessity of such a clause in the policy and all agree that judging from the symptoms there is practically no doubt that the remote cause of death was traumatic; that had paralysis been due to other causes, one side would have been much more marked than the other. While the three doctors do not feel friendly to Dr. I(, they would not let their personal feeling do an injustice to Dr. L. I shall get an interview with Mrs. Lancaster to-morrow morning and call attention to policy in regard to immediate disability, also ascertain if she will consent to an autopsy. Also if it will be possible to get a settlement on the basis of two months' indemnity." The next day Mr. Adams reports the result of his call on Mrs. Lancaster and says in part: "I called upon Mrs. Lancaster to-day. I made request for an autopsy. Mrs. Lancaster positively refused same. I then made an offer to pay her $100 as provided by the policy where accident may have been complicated by disease. Made an offer for an additional $100, which would probably be the expense incurred in case an autopsy was held. She accepted the prop- osition without any hesitation whatever, and gave a clean receipt." Paragraph 5 of the policy under which Dr. Lancaster was insured reads as follows : " If such injury as described in paragraph three shall within ninety days from date of accident result in the death of the injured * * * the com- pany will pay * * * $500." Dr. Lancaster followed his profession for some days after the accident, before he took to his bed, when partial paralysis set in and increased until he died. Arbitrary Settlements Claim No. 50,380; Thos. O'Loughlin, Buffalo, N. Y. — -Accident. Locomotive engineer. Insured on November 1, 1910. At $60 per month. Injured February 13, 1911, both wrists being sprained. The claimant sent a postal to the company's office at Rochester, K. Y., dated March 20, 1911, saying : " I go to work to-day." The Buffalo agent wrote the department agent at Rochester, March 28th in part as follows: " Jlr. Thos. O'Loughlin was in the office to-day and made out final proof. Said he sent card that he would be able to go to work on Mjarch 20, bvit when he made the effort' found that he was unable to work yet. The Doctor's state- ment was to the effect that he was not able to work on the 24th of March and he claims he is not able to work yet, but I told him that he could not draw any pay after the 24th from the company; that I would isubmit his statement for twenty days in February and twenty-four days in March." Mr. Dooley, department agent at Rochester, sent check for $78 to Mr. Squires (the agent in Buffalo) in settlement of Mr. Dooley 's claim and wrote in explanation as follows: " We received postal from him on the 2 let, stating that he resumed work on March 20. As we presume you know, all papers relating to a claim are 548 National Convention of Insueanoe Commissioners subject to the examination of the Insurance Commissioner, and it would be a pretty tough proposition for us to submit a claim for forty-four days when we have a notice over the man's signature that he resumed work on the fortieth day of disability, which would entitle him to thirty-nine days. The Commissioner would at once say we were paying $10 in excess of what we were liable for, and we would get called down from the department just as quick for an overpayment as if we refused to pay actual time the man was disabled. * * * It is very unfortunate that Mr. O'Loughlin stated that he was going to work on the twentieth if he was actually unable to do so." Unnecessary Exposure to Danger Claim No. 31,761; Jos. McAlden. — Accident. Was injured by getting off electric car while in motion. Insured claimed twenty-five days' benefit at $10 per week. Company raised point of unneces- sary exposure to obvious risk of injury and offered to pay $2.50 per week. Claimant applied to Commissioner of Insurance of Massachusetts. Claim was settled at $2.50 a week. Eye Loss — Proposition for Settlement Claim No. 31,425; Chas. Jones, West Deerfield, Mass. — Accident. Company was notified by its agent at Deerfield March 24, 1910, that Chas. Jones had received an injury to his eye but would not look for claim unless he loses his sight. Policy provides for indemnity of $100 in case of loss of sight of one eye. April 2, 1910, the claimant wrote the agent at Deerfield that he had been to see Dr. Craig who told him the blow had spoiled the sight of his eye. April 26th the claim manager wrote the claimant as follows: " It is provided under your policy that in case the insured should suffer the irrecoverable loss of the entire sight of one eye on account of receiving an injury, which immediately, wholly and continuously from date of accident, disables him from the performance of each and every part of the duties of his occupation, the company will pay $100." " As the conditions in your case are not in accordance with the terms of the policy, we do not see how you would be entitled to any indemnity." The case was later given to Henry J. Field, Attorney, who wrote the agent under date of May 21st inquiring about the case. On June 23rd, the case came before the Board of Directors of the company who offered the claimant two propositions: " One to pay him $30 in full for all claims for the accident, and another to pay him $100, the claimant to return the amount with interest should he recover his sight." The claimant accepted the latter proposition, signed the agreement to re- turn the money with interest if his sight was restored. Exhibit B Claim, Ao. 26,314; Jos. Blesanak, Norwood. — Death loss. Killed on railroad track. Railroad employee. Telegraph operator. Death benefit $400. Paid in full. Accident occurred January 16, 1909. Paid Jan- uary 20, 1909. IwDUSTEiAL Health and Accident Settlements 549 Claim No. 26,430; Henry Deruscha, Boston, Mass. — Death loss. Death caused by " poisoning by illuminating gas." Paragraph 7 of policy provides two months' indemnity for accidental death by gas. In this case the amount would be $50 and was paid in full. Vlaim No. 26,168; Jas. E. Parker, Manchester, N. H. — Death loss. Insured for $350. Killed by being thrown from carriage and skull frac- tured. Accident occurred January 8th and insured died March 2nd. Claim paid in full March 5th. Claim No. 28,010; James M. Bennett, Washington, D. C. — Death loss. Structural iron worker. Insured for $200. Killed May 24, '09. Com- pany paid $200 and $80 accumulation, total $280. Claim No. 28,215; Jos. W. O'Hara, West-wood, Mass. — Death loss. The deceased was insured for $300 and was drowned. Claim was paid promptly in full. Claim No. 28,641; Bolaston Pietroski, So. Ueerfield, Mass. — Death loss. Insured for $300. Was killed by being thrown from train. Company paid claim in full. Double Benefit Claim. No. 33,582; G^eo. F. Crawley, Norwood, Mass. — Accident. Arm broken by pole falling on him while riding in an electric car. October 16, 1910. Wrote company October 23rd, offering to settle for one month, double benefit, $70, as provided in his policy. The company sent him check for $70 October 29th. Claim No. 33,518; Walter I. Nicherson, Melrose, Mass. — Death loss. Insured May 27, 1901, for $5,000 death indemnity. Injured by falling from top of tree while picking apples October 11, 1910. Died from tetanus resulting from injury October 18, 1910. Claim paid in full October 27, 1910. Was reinsured in General Accident for $2,500. The following death losses were all paid promptly: John W. Steele, Paid in fuU. Harry O. Bartlett. Paid in full. Perley E. Jones. Paid in full with accumulations. Jas. M. Crane. Paid in full. S. W. Hollingshead. Paid in full with accumulations. Cecil D. Booth. Paid in full. F. W. Berryman. Paid in full. Geo. C. Wahl. Paid in full. Claim Principal No. sum. 34,418. $250 00. 31,502. 300 00. 31,695. 300 00. 32,824. 400 00. 33,344. 400 00. 34,278. 350 00. 32,967. 300 00. 400 00. Date Due i f Cornell University Library HD7102.U4N27 Investigation of settlements witli policy 3 1924 002 431 827