Verhovayak Lapja, 1949 (32. évfolyam, 1-12. szám)
1949 / Verhovay Journal
PAGE 4 Verhovay Journal October 19, 1949 Verhovay Journal Journal of the Verhovay Fraternal Insurance Ass’n. OFFICE OF PUBLICATION 7907 West Jefferson Ave. Detroit 17, Mich. PUBLISHED MONTHLY BY THE Verhovay Fraternal Insurance Association Managing Editor: JOHN BENCZE Editor: JOHN SABO Editor's Office: 436—142 FOURTH AVENUE PITTSBURGH 19, PA, Telephone: COurt 3454 or 8455 All articles and changes of address should be sent to the VERHOVAY FRATERNAL INSURANCE ASSOCIATION 433—442 FOURTH AVENUE PITTSBURGH 19, PA. SUBSCRIPTION RATES: United States and Canada .......................................... $1.00 a year Foreign Countries ........................................................... $1.50 a year Entered as Second Class Mattéi at the Post Office at Detroit, Michigan under the Act of March 3, 1879. Changes Mean Progress The imuranpe business is a very technical one, in fact it is a science in itself. The study of the experience of the past has provided the life insurance industry with a strong foundaton for safe and sound operations. Such a strong foundation was attained only because the leaders of the industry had the courage to keep abreast of the ever changing periods of time. What was considere 1 normal business practices in the earlier years of life insurance, could not be construed as such in the 1920’s and likewise the practices of the 1920’s were not the same as those of today, Where the analyses of the past indicated that changes were necessary, changes were made, and these changes made the life insurance industry ever stronger, ever safer. The Verhovay Fraternal Insurance Association, too. has from time to time made changes. From the time of its foundation, February 21, 1886, changes, always beneficial to the membership, were made. From 1886 to 1924 our organization was operated as a beneficial society which offered term insurance protection to its membership. The membership dues and the death benefits payable were determined by the National Convention every four years. The membership certificates offered life protection oiily. There were no cash or loan values, no paid-up values, nor provisions for extended term insurance, the provisions now known as the non-forfeiture values. CHANGE TO LEGAL RESERVE SYSTEM On January 1, 1924, the Association adopted the legal reserve standard of life insurance. The monthly dues were scientifically calculated by actuaries on a level-premium plan, under which plan a uniform rate was payable. This level premium plan was the opposite of previous plans wherein rates were annually increased as a result of the increased mortality experience iat higher ages. The plan involved the accumulation of minimum reserves prescribed by state law. These reserves which arose from the excess premiums paid in the earlier years, together with future premiums with interest were set aside to enable insurance organizations to pay all present and future claims. Unlike the term insurance policies in effect prior to 1924, the new policies contained the non-forfeiture provisions which guaranteed certain benefits to the insured. In 1924 we had only two classes of life insurance: Whole Life and Twenty Payment Life. In 1928 we added the Twenty and Thirty Year Endowment classes. The net of mortuary rate was based on the American Experience Table of Mortality and the inUrest assumption was based at 4%. In those days interest yields were high and the net or mortuary monthly dues the members paid could easily be invested to earn 4%. The expense charge (for the operational costs of the organization), which is part of every premium, was set at a very low rate. LOWER RATES CHANGED TO 3%% INTEREST ASSUMPTION ^ On January 1, 1936, the Association introduced new net or mortuary rates. Interest earnings in the investment market de-NATIONAL OFFICERS HONORED BY THE BOARD OF DIRECTORS AT BANQUET IN SPRINGDALE — Degree of Illustrious Member Bestowed Upon National President John Bencze and National Secretary Coloman Revesz. — Acting upon a friendly invitation by the hospitable officers and members of Branch 296 ’ in Springdale, Pa., the Board of Directors, assembled for the semi-annual meeting in Pittsburgh, decided to make the Springdale Verhovay Home the scene of the presentation of the Verhovay Service Awards to National President John Bencze and National Secretary Coloman Revesz. Thursday evening, September 15th, was the date set for the event the memory of which will always be held dear by those who attended and enjoyed the unmatched hospitality and friendliness of our Springdale membership. Everything was in readiness, including a fine three-man band, when the chartered bus arrived with the guests, the members of the Board, the National Officers, nearly all of the Home Office employees and sereval others, who were given a heartwarming welcome by the splendid officers of this branch and its lovely Home on Colfax Avenue. The good people of Springdale don’t advertise their hospitably which, being their second nature, they take for granted, gTeatly enhancing, thereby, the surprised enjoyment of those for whom this was the first visit at the Branch 296 Verhovay Home. TRIBUTE PAID TO DECEASED DIRECTORS Seated in the dining room of the Verhovay Home, the guests, numberling about seventy-five, heard the opening address by Elmer Charles, Manager of Branch 296, a young man of excellent qualities and attractive personality whose every word reflected a great love for the Verhovay and a firm belief in its fraternal mission. After warmly greeting the National Officers, Board of Directors, Home Office employees and other guests, he called upon the assembly to pay a rising tribute to the memory of our late directors, Frank Brogley, Bertram Kun, and Vice-President Albert B. Ari. He introduced Dr. Andrew Kovács Vice-President as the master of ceremonies who called upon editor Rettmann to offer grace. Entertained by the fine music of the three-man band, the guests enjoyed a splendid dinner prepared by the Springdale ladies whose cooking was praised by everyone. Following the dinner, Manager Charles introduced each of the ladies who had manned the kitchen and served at the tables, all of whom were given a rousing ovation. V. P. Dr. Kovács, then, expressed the (Continued on page 5) h creased, so our rates were based on a 3 V2 % interest assumption, and the table or mortality again was the American Experience Table. In addition to the classes of insurance which were in effect, the Association added the Endowment At Age 60, Endowment At Age 70, and Twenty Year Payment V2 Endowment — V2 Paid Up Life. Another forward step was taken at the same time when the Juvenile Department was established. In this department the Association offered the following classes of insurance: Whole Life, Twenty Payment Life, Twenty Year Endowment, Endowment at Age 18, and 15 and 25 cent Term. The expense charge remained at the very low rate set in 1928. DOWNWARD TREND OF INVESTMENT EARNINGS CONTINUES The further tightening of interest yields made it necessary to adopt new net or mortuary rates once again, on January 1, 1945. Since interest earnings on safe and conservative investments were no higher on the average than 3% we adopted that percentage as our interest assumption, using again the American Experience Table of Mortality. The expense charge remained at the low rate adopted in 1928. With the further decline in interest rates, the Association, on January 1, 1949, adopted 2 V2 % as its interest assumption. It took another step when it changed from the outmoded American Experience Table of Mortality to the more modern American Men Table of Mortality. The mortality experience of the American Men Table was more in line with the actual mortality experience. The ever increasing costs of operation made it necessary to adopt a higher expense factor on our new business. The only change made in the classes of insurance was the substitution of the Endowment At Age 85 membership certificate for the Whole Life membership certificate. CHANGES STRENGTHEN ASSOCIATION These changes helped the Association grow from a small benefit society to a large legal reserve fraternal insurance organization. Each change was the result of our firm belief in a strong and sound organization for the benefit of our membership. As in the past so will it be in the future; as the progress and welfare of our Association require necessary changes, so will those changés be made. As one of the largest and one of the most progressive fraternal insurance associations we shall not flinch in our duty to maintain this organization in the best interests of our general membership.
