. Wn^lkkl'iM QOOOfek
Public Document No. 9
Cbe Commontoealti) of ^nssacbusttts
ANNUAL REPORT
Commissioner of Insurance
FOR THE
Year ending December 31, 1920
PART II
LIFE, MISCELLANEOUS, ASSESSMENT AND
FRATERNAL INSURANCE
Department of Banking and Insurance
BOSTON
WRIGHT & POTTER PRINTING CO., STATE PRINTERS
32 DERNE street
Publication' of this Document
approved by the
Supervisor of Administration.
TABLE OF CONTENTS.
For Index to Companies, see end of volume.
Admissions, .
Withdrawals,
Legislation,
Life Insurance, .
Casualty Insurance,
Workmen's Compensation Insurance
Reports of Receivers,
Statutes enacted in 1921, .
Statistical Tables (Regular Life) : —
Table A. — Summary from other tables and amounts of partic
non-participating insurance,
Table B. — Income, ....
Table C. — Disbursements,
Table D. — Assets, . . * .
Table E. — Liabilities, ....
Tables A, B, C and E applied to savings and insurance banks,
Table F. — Policy exhibit of issues, terminations, etc.,
Table G. — Classification of policies and insurance in force,
Table H. — Mode of termination, .....
Table I, — Massachusetts business, . . ...
Table J. — Annual dividends, ordinary life.
Table K. — Annual dividends, 20-payment life,
Table L. — Annual dividends, 20-year endowment.
Table M. — Experience with new business,
Table N. — Gain and loss exhibit,
Table O. — Salaries,
Table P. — Bank balances,
Table Q. — Miscellaneous companies.
Table R. — Miscellaneous companies,
Table S. — Workmen's compensation.
Table T. — Workmen's compensation.
VI
vii
viii
X
xiii
XV
ipating and
. xxviii
xxix
XXX
xxxi
. xxxiii
xxxiv, XXXV
. xxxvi
XXX viii
. xlviii
1
lii
liii
liv
Iv
Ivi
Ix
Ixii
Ixiv
Ixviii
. Ixxviii
Ixxx
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Cfje Commontoeaitt) of giasgacfiumw
Department of Banking and Insurance,
Division of Insurance, Boston, Aug. 18, 1921.
To the General Court of Massachusetts.
In accordance with the provisions of the General Laws, chapter
175, section 17, Part II of the sixty-sixth annual insurance report is
hereby submitted. Information is contained herein relative to life
insurance companies and all other insurance companies transacting
business in this Commonwealth except fire and marine insurance
companies, the report of which is contained in Part I.
The following insurance companies, other than fire and marine, were
authorized to transact business in this Commonwealth subsequent to
the date of the last report and prior to the date of this report : —
Corporate Name.
Location.
Date of
Authority.
Indemnity Insurance Company of North America,
Union Indemnity Company, ....
Service Mutual Liability Insurance Company,
General Indemnity Corporation of America,
Utilities Mutual Insurance Company,
National Casualty Company, .
Federal Casualty Company,
Transit Mutual Insurance Company,
Eastern Mutual Insurance Company,
Mutual Trust Life Insurance Company, .
The General Casualty and Surety Reinsurance Corporation,
Philadelphia, Pa.,
New Orleans, La.,
Boston, Mass., .
Rochester, N. Y.,
New York, N. Y.
Detroit, Mich., .
Detroit, Mich., .
Boston, Mass., .
Boston, Mass., .
Chicago, 111.,
New York, N. Y.,
Aug.
Sept.
Nov.
Nov.
Deo.
Jan.
Feb.
Mar.
April
April
June
23, 1920
3, 1920
2, 1920
9, 1920
17, 1920
5, 1921
28, 1921
11, 1921
6, 1921
20, 1921
22, 1921
The Maryland Assurance Corporation of Baltimore, Md., re-
insured its accident and health policies in the Maryland Casualty
Company and withdrew from this Commonwealth on Aug. 1, 1920.
The Great Eastern Casualty Company ceased to write insurance
in this Commonwealth on Oct. 1, 1920, and reinsured all its busi-
ness in the Union Indemnity Company of New Orleans.
The Norwegian Globe Insurance Company, Limited, of Christiania,
Norway, ceased to write insurance in this Commonwealth on June
24, 1921, and reinsured all its business in The General Casualty and
Surety Reinsurance Corporation.
vi eeport of the
Legislation,
The statutes affecting companies of the classes comprehended in
this volume are printed as a part of this report as required by law.
The statute which will have the most marked and immediate effect
upon the Insurance Division and its policies with regard to life
insurance companies is chapter 213, An Act relative to valuation of
policies of life insurance. This Commonwealth was the first to estab-
lish a system of valuation of life insurance policies and has per-
formed this function for all companies doing business in this State
for nearly sixty years. In 1862, the then Commissioners, Hon. Elizur
Wright and Hon. George W. Sargent, noted the fact that the
Superintendent of Insurance of New York had taken measures to
undertake the valuation of policies on a plan similar to that in
vogue in this Commonwealth. "Should this design be carried out,'^
they stated, "it would be very desirable that some arrangement
should be made between the States by which the companies may be
saved the labor and expense of furnishing the data of their policies
to more than one State, and a single annual valuation of each com-
pany may be made to suffice for all of the States, as this is obviously
a work which, if well done in any one State, need not be repeated
the same year in other States." It would appear that practically all
States whose companies transact business in this Commonwealth
have established proper systems for the valuation of their policies.
In other States it is customary to accept the valuation made by the
supervising officials of the home State of the company. It seems
fit, at this time, that the statement made by the Commissioners in
1862 should be carried into effect. The law above referred to au-
thorizes the Commissioner of Insurance to accept the certificate of
valuation made by the supervising official in the State where the
company is incorporated, provided that such valuation is made in
accordance with statutory requirements of this State or produces
values at least as great as if made in accordance therewith. The
abandonment of this work which has so long been done by this
Department is a matter of some regret, but it is believed that the
avoidance of a useless duplication of work between the insurance
departments of the several States, the expense to foreign companies,
and the retaliatory expense visited upon domestic companies by
certain other States, are the complete justification of this somewhat
marked change of policy on the part of the Commonwealth.
COMMISSIONER OF INSURANCE.
Vll
Life Insurance.
The report of last year commented upon the enormous volume of
life insurance business written during 1919. The year 1920 witnessed
a continuance of the extraordinary conditions evident in the pre-
ceding year. At the end of the year the companies reporting in
Massachusetts had on their books a total of $33,776,282,777 life
insurance in force, including weekly premium and group life in-
surance, a gain over the preceding year of almost $5,000,000,000.
In the later months of the year, however, the nation-wide business
depression began to have its effect, and thereafter and during the
year 1921 there has been in evidence a marked decrease in new
business and an increasing lapse rate.
It was well recognized that the enormous amount of new life in-
surance written during the last four years was abnormal and due
directly to war conditions, which on the one hand operated to edu-
cate the public as to benefits of life insurance and on the other pro-
duced abnormal business activity, with large profits and high wages.
A reaction was inevitable and is indeed a condition operating to the
good of the companies, several of which gave indications of needing
a respite in order to digest the amount of business they had absorbed.
On the other hand, the business depression, accompanied by high
money rates and the curtailment of credit, has cast a heavy burden
on the companies by reason of their legal obligation to make loans to
their policy holders at a fixed rate, usually 6 per cent. The following
table will indicate the increase in this class of loans during the past
year over the average of the three preceding years : —
Year.
Policy Loans.
Premium Rates.
1917, .
$693,844,372
$28,799,617
1918, .
696,114,941
28,690,877
1919, .
681,005,225
28,366,873
1920, .
735,103,358
30,606,736
It will be seen from this table that the companies were com-
pelled to increase their credit to policy holders during 1920 by about
$50,000,000. The conditions which produced this increase were
effective throughout the first part of the year 1921, but it is to be
hoped that improved business conditions and the decline in money
rates, already evident, will put a stop to the increase in time to
render unnecessary any extensive forced liquidation of investments.
ViU
REPORT OF THE
Casualty Insurance.
All of the principal casualty lines registered notable gains in premi-
um income during the past year. For the purpose of showing how the
conditions of the past few years have affected the companies writing
these classes of business a table is appended showing the experience
of the companies for eight years. This table shows the premiums
earned, the ratio of losses incurred to premiums earned and the acqui-
sition ratios, that is to say, the percentage of acquisition costs to
premiums. No figures are given as to the other expenses of the com-
panies, but by adding the loss ratio to the acquisition ratio an ap-
proximate idea can be obtained as to what portion, in any given year,
of the earned premiums was available for those other expenses.
Accident and Health.
Liability and Workmen's
Compensation.
Fidelity and Surety.
Year.
Premiums
Earned.
Ratio of
Losses
In-
curred
to Pre-
miums
Earned.
Acqui-
sition
Ratio.
Premiums
Earned.
Ratio of
Losses
In-
curred
to Pre-
miums
Earned.
Acqui-
sition ■
Ratio.
Premiums
Earned.
Ratio of
Losses
In-
curred
to Pre-
miums
Earned.
Acqui-
sition
Ratio.
1913, .
i914, .
1915, .
1916, .
1917, .
1918, .
1919, .
1920, .
829,672,311
29,760,327
30,135,509
32,909,714
36,721,220
38,076,024
42,173,470
53,210,475
49.18
47.42
50.15
49.09
48.43
52.49
47.01
50.34
37.23
37.41
37.84
36.84
36.06
35.38
33.54
35.49
$54,004,885
62,414,864
61,556,875
79,376,220
109,933,890
156,233,710
177,275,450
212,423,793
62.06
66.88
65.75
66.67
64.85
65.01
63.74
56.67
24.84
22.11
22.58
21.13
19.80
18.81
19.23
19.79
816,805,497
18,810,491
18,988,312
20,825,103
24,850,504
28,865,331
33,729,411
42,743,500
40.73
42.16
32.10
31.04
36.12
36.34
36.58
33.18
30.58
33.15
33.50
31.06
29.60
30.14
30.36
30.95
Plate Glass.
Steam Boiler.
BUKGLARY AND ThEFT.
Year.
Premiums
Earned.
Ratio of
Losses
In-
curred
to Pre-
miums
Earned.
Acqui-
sition
Ratio.
Premiums
Earned.
Ratio of
Losses
In-
curred
to Pre-
miums
Earned.
Acqui-
sition
Ratio.
Premiums
Earned.
Ratio of
Losses
In-
curred
to Pre-
miums
Earned.
Acqui-
sition
Ratio.
1913,.
1914, .
1915, .
1916, .
19'17, .
1918, .
1919,.
1920. .
$4,427,216
4,531.079
4,365,841
4,594,573
5,112,644
6,224,647
7,726,402
12,052,070
43.94
40.98
38.32
55,47
54.17
57.92
53.18
65.56
36.74
37.18
37.45
37.30
36.37
36.55
36.08
35.43
82,486,801
2,575,012
2,694,696
2,975,781
3,233,846
3,748,210
4,132,726
4,580,330
13.12
9.59
6.66
9.13
14.98
12.87
14.60
13.57
30.23
31.49
30.93
28.98
28.98
28.94
28.31
29.82
$3,650,857
3,917,465
4,094,295
4,050,017
5,538,032
7,022,832
9,946,267
15,742,580
39.53
41.85
41.14
42.23
55.99
43.57
65.91
71.88
32.16
34.50
34.10
34.07
33.63
33.50
33.34
34.11
COMMISSIONER OF INSUR^^lNCE.
IX
Cbedit.
Sprinklek.
Engine and Fly Wheel.
Year.
Premiums
Earned.
Ratio of
Losses
In-
curred
to Pre-
miums
Earned.
Acqui-
sition
Ratio.
Premiums
Earned.
Ratio of
Losses
In-
curred
to Pre-
miums
Earned.
Acqui-
sition
Ratio.
Premiums
Earned.
Ratio of
Losses
In-
curred
to Pre-
miums
Earned.
Acqui-
sition
Ratio.
1913,
1914,
1915,
1916,
1917,
1918,
1919,
1920,
SI, 540,200
1,478,786
1,436,884
1,366,765
1,572,909
1,780,443
1,973,509
2,992,430
51.63
53.14
61.16
18.18
20.22
26.08
9.63
34.52
27.92
28.05
28.14
26.62
28.39
26.39
28.14
27.37
$168,377
189,104
204,949
233,619
269,326
343,056
427,443
631,049
49.20
53.46
39.06
44.07
78.64
86.91
46.52
99.95
25.11
28. 36
28.69
28.55
26.56
27.13
26.65
28.39
$169,209
191,354
207,012
250,058
320,908
396,677
581,376
837,958
37.40
28.30
15.37
23.72
13.56
30.45
19.02
38.78
29.28
30 12
31.59
30.65
31.54
30.97
31.66
30.94
Auto, and Teams Prop-
erty DAMAGE.
Workmen's Collective.
Live Stock.
Year.
Premiums
Earned.
Ratio of
Losses
In-
curred
to Pre-
miums
Earned.
Acqui-
sition
Ratio.
Premiums
Earned.
Ratio of
Losses
In-
curred
to Pre-
miums
Earned.
Acqui-
sition
Ratio.
Premiums
Earned.
Ratio of
Losses
In-
curred
to Pre-
miums
Earned.
Acqui-
sition
Ratio.
1913, .
1914, .
1915, .
1916, .
1917, .
1918, .
1919, .
1920, .
83,834,933
4,552,264
4,820,876
6,278,786
8,294,539
10,850,603
14,908,635
22,465,289
47.52
44.22
45.81
55.81
61.92
60.42
73.50
77.36
26.54
27.94
28.50
27.92
26.37
26.32
26.48
26.78
8563,960
382,723
243,411
204,262
264,705
249,520
299,544
270,548
61.98
62.86
52.35
63.63
55.75
50.41
44.43
42.68
21.94
24.28
26.14
28.35
25.85
23.34
28.58
22.45
$87,399
277,423
633,457
764,857
903,507
1,144,847
59.98
48.31
62.90
73.96
54.47
64.31
40.61
25.57
25.34
23.74
21.09
24.94
It appears from this table that the largest casualty branch, lia-
bility and w^orkmen's compensation, has increased in the eight years
nearly fourfold- The factors of this increase are, of course, the great
increase of pay rolls during the war, with a resultant increase of
workmen's compensation premiums, and conditions in the auto-
mobile business resulting in the great increase in the automobile
liability premiums. It will be noted, also, that in plate glass,
burglary and theft, and auto, and teams property damage, simul-
taneously with a large increase in earned premiums, there has been
a very ominous increase in the loss ratio. In all three of these lines,
during the past year, the loss ratio and the acquisition ratio amount
X REPORT OF THE
together to more than 100 per cent of the premium, thus indicating
a heavy loss in these lines. These facts are worthy of attention not
only from their effect on the companies and the probability of an
increase in insurance rates in these lines but from their social aspect
as well. The increased burglary and theft policies point to an in-
creased menace to the ownership and enjoyment of property on ac-
count of the activity of criminals. The increased auto, and teams
property damage ratio points to an increased menace to property on
account of conditions on the highways. In connection with these
figures it may further be noted that the losses in marine insurance
and in fire insurance, as compared to premiums, would appear to
justify a conclusion that, whatever be the cause, the ownership and
enjoyment of property is, on the whole, far less secure to-day than
it was a few years ago.
Workmen's Compensation.
Since the date of the previous report the following companies have
been authorized to transact workmen's compensation insurance in
this Commonwealth: —
. Commercial Casualty Insurance Company.
Indemnity Insurance Company of North America.
Union Indemnity Company.
Eastern Mutual Insurance Company.
Service Mutual Liability Insurance Company.
Transit Mutual Insurance Company.
During the past year the Massachusetts Rating and Inspection
Bureau, which files rates for all the companies except a few of the
smaller mutual companies, completed a new manual of classifications
and rates which was approved by the Commissioner and placed in
effect at the beginning of the year 1920. A change of manual was
found necessary as the experience at hand warranted a revision of
rates and changes of classification. The revision resulted in a re-
duction of manual rates over the former provision of about 12 per
cent as well as a decrease in the number of classifications. For this
revision the Massachusetts Rating and Inspection Bureau was able
to use the data compiled by the National Council on workmen's
compensation insurance and the rates established were on the basis
of national experience supplemented by the experience in Massa-
chusetts for the policy years 1916, 1917 and 1918. The individual
COMMISSIONER OF INSURANCE.
XI
experience rating plan was also revised and became effective at the
same time as the manual. The results of its application to the data
of this report appear beneficial.
The audit of Schedule Z, as filed by the companies, indicates that
the Massachusetts loss ratio on the basis of the law as it stood
Jan. 1, 1919, and the rates in effect Dec. 31, 1919, was 47.72 per
cent. This ratio is in excess of the result produced for the experi-
ence of 1919, issued in schedules filed during the current year. Un-
doubtedly the audit of the completed 1922 schedules will bring these
two results nearer together.
A change in business conditions has not as yet been reflected in
the returns of the companies, inasmuch as those returns cover no
policies written after Dec. 31, 1919. The audit indicates that, on
policies written during the year 1919, the stock companies exhibit a
loss ratio of 45 per cent and the mutual companies a loss ratio of
41 per cent.
Expense Ratios on Massachusetts Compensation Business.
The expense ratios of the various companies have been determined
according to the usual procedure, and are shown by Schedule W for
the calendar year 1919, as follows: —
Expense Ratios for 1920, Schedule W {Workmen's Compensation Business in
Massachusetts) .
Companies.
Stock Companies.
JEtna.,
Columbia Casualty,
Continental Casualty,
Employers Indemnity,
Employers' Liability,
Fidelity and Casualty,
General Accident Fire and Life, .
Globe Indemnity, ....
Hartford Accident and Indemnity,
London and Lancashire,
London Guarantee and Accident,
Manufacturers Liability,
Maryland Casualty,
Massachusetts Bonding and Insurance
New Amsterdam Casualty, .
Ocean Accident and Guarantee, .
Royal Indemnity,
Expense
Rktio
(Per
Cent).
39.84
70.06
63.26
27.15
36.26
43.11
32.99
44.08
36.90
103.87
43.27
69.35
34.74
46.28
36.53
32.90
41.10
Companies.
Standard Accident, . . .* .
Travelers, ......
United States Casualty,
United States Fidelity and Guaranty, .
Zurich General Accident and Liability,
Average for stock companies.
Mutual Companies.
American Mutual,
Arrow Mutual,
Federal Mutual,
Hotel Mutual,
Liberty Mutual,
Rubber Mutual,
Security Mutual,
Service Mutual,
United States Mutual Liability,
Average for mutual companies
Average for all companies,
Expense
Ratio
(Per
Cent).
37.23
42.98
44.70
30.90
33.03
38.81
18.30
14.53
19.00
23.37
16.65
11.74
7.92
59.66
13.56
16.49
28.48
Xii REPORT OF THE
It will be noted from this table that the average expense ratio for
stock companies is 38.81 per cent, indicating an increase of .7 per
cent above the ratio shown in the last annual report. The mutual
companies show an average expense ratio of 16.49 per cent, an in-
crease of 1.49 per cent over that shown in the last annual report.
The most notable increase has been on the part of the smaller
mutuals. The large expense of the ratio of the Service Mutual is
due to the fact that it had been doing business only a few months
when the return was made. The average for all companies was 28.48
per cent, as against 27.26 per cent for the preceding year.
Respectfully submitted.
.^•^-— «- 6:/?^.^^
Commissioner of Insurance.
COMMISSIONEE OF INSURANCE. XUl
EEPORTS OF RECEIVEES OF INSURANCE COMPANIES AND
FRATERNAL INSURANCE CORPORATIONS.
Home Circle. — J. Butler Studley, 161 Devonshire Street, Boston,
receiver; appointed Jan. 16, 1911. Since the last report under date
of Oct. 9, 1920j a final decree was entered requiring the receiver to
turn over to the Supreme Judicial Court the balance in his hands as
receiver, and under date of Oct. 13, 1920, the receiver transmitted
to the clerk of the Supreme Judicial Court his check as receiver for
$417.47, being the balance of the account. The receiver reports that
since that time he has had no funds of the Home Circle in his
possession.
New England Equitable Insurance Company. — • Walter H. West,
105 Federal Street, Boston, receiver. The receiver has rendered a re-
port covering the period from April 16, 1920, to April 16, 1921. This
report shows assets amounting to $767,021.11 and liabilities amount-
ing to $577,290.35, leaving a balance of $189,730.76. This compares
with a balance shown by the last report of $127,704.13 and by the
preceding report of $95,567.21. It must be borne in mind that a
large proportion of these assets is represented by stock of the
Equitable Surety Company, which is being liquidated by the Super-
intendent of Insurance of Missouri, and, therefore, a considerable
time will elapse before it is available for distribution. The report of
the Equitable Surety Company indicates a book value of the stock
of $308,714.29, as compared with $295,534.29 of last year. The cash
balance of the receiver of the New England Equitable Insurance
Company shows balance on hand April 16, 1920, of $9,069.29, re-
ceipts of $67,635.02, disbursements of $67,317.75; cash on hand April
16, 1921, of $9,386.56. Further progress has been made in reducing
contingent liabilities by the cancellation of outstanding bonds, the
reduction by cancellation and expiry amounting to $3,905,664.80.
There are remaining outstanding 1,351 bonds, amounting to $7,-
835,404.69. These figures indicate that while progress is being made
XIV REPORT OF THE COMMISSIONER OF INSURANCE.
a considerable time must elapse before the receiver is in a position
to pa}^ claims.
Supreme Colony, United Order of Pilgrim Fathers. — Henry M.
Hutchings, receiver, appointed Sept. 25, 1917. On March 19, 1921,
the receiver rendered his first account to the Supreme Judicial Court.
This account showed receipts of $13,314.81 and expense of $610.16,
leaving a balance of $12,704.65 on deposit in the Bay State National
Bank of Lawrence. On March 30, 1921, the Supreme Judicial Court
ordered the payment of a dividend of 3^ per cent on all claims proven,
and allowed $3,500 to the receiver as compensation for his services
and $250 counsel fees.
STATUTES ENACTED IN 1921. XV
STATUTES ENACTED IN 1921 PEETAINING TO THE CLASSES
OF INSURANCE COVEEED BY THIS YOLUME, PUBLISHED
BY DIRECTION OF THE GENERAL LAWS, CHAPTEE 175,
SECTION 17.
Chapter 136.
An Act relative to blanket policies of accident or health insurance.
Be it enacted, etc., as follows:
Section one hundred and ten of chapter one hundred and seventy-five of
the General Laws is hereby amended by adding at the end thereof the fol-
lowing: — Where the premium is to be paid by the employer and employees
jointly and the benefits of the policy are offered to all eligible employees, a
policy covering not less than seventy-five per cent of such employees, or cover-
ing members of an association of such employees if the members so insured
in fact constitute not less than seventy-five per cent of all eligible employees,
shall be considered a general or blanket poHcy within the meaning of this sec-
tion, — so as to read as follows: — Section 110. Nothing in the two preceding
sections shall apply to or affect any general or blanket policy of insurance
issued to any employer, whether an individual, corporation, co-partnership, or
association, or to any municipal corporation or department thereof, police or
fire department, underwriters corps, salvage bureau or like organization, where