Verhovayak Lapja, 1949 (32. évfolyam, 1-12. szám)
1949 / Verhovay Journal
PAGE 4 Verhovay Journal December 21, 1949 Verhovay Journal Journal of the Verhovay Fraternal Insurance Ass’n. OFFICE OF PUBLICATION "907 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—442 FOURTH AVENUE PITTSBURGH 19, PA. Telephone: COurt 1-3454 or 1-3455 All articles and changes of address should be sent to the VERHOVAY FRATERNAL INSURANCE ASSOCIATION 425—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 Matter at the Post Office at Detroit, Michigan under the Act of March 3, 1879. OFFICIAL COMMENT DO YOU KNOW HOW YOUR DUES ARE DISTRIBUTED? Fraternal benefit societies such as ours are operated bv and for the members. Inasmuch as these societies belong to the members, it is good sense for these societies to keep their members well informed on all matters concerning the welfare of the membership. The more intelligently we understand fraternal insurance practices the better off we shall be, should we be called upon to help operate the society for and in the best interests of the general membership. Each member, for instance, should know what happens to the money he pays to the Association in the form of monthly dues. He should know just how his money is distributed. It should be no secret to the members that it takes money, yes, much money, to operate a fraternal insurance association. He should know, too, that the sum of money which rightfully can be used j for the payment of operational expenses is only a very small part' of the monthly dues which he pays, and that this limited income for operational expenses creates tight economic situations at times. To better understand the rest of this article, and the official comments of future months, it is best that the member first know, in technical insurance language, what his monthly 1 clues payment consists of. He should know that the payment he makes is referred to as gross premium. He should know, also, that the gross premium is made up of two components, (1) the | net premium and (2) the loading. The net premium is that part of the monthly dues which after the first year — on Ordinary Life and Twenty Payment Life classes as well as partially on other classes, — is credited to the Mortuary Fund. The loading is the small part of the monthly premium which is credited to the Expense Fund. For example, a member who several years ago purchased a $1,000.00 Twenty Payment Life membership certificate, at the age of 35, pays monthly dues, due to the Home Office, amount- j ing to $2.96. This is called the gross premium. Of this sum $2.73 is deposited in the Mortuary Fund. This is called the net pre- ! mium. The small balance, $0.23 is deposited to the Expense Fund. This is called the loading. The money in the Mortuary Fund is used to pay death - benefit claims and additional accidental death benefit claims, ! (except first year claims which are paid from the Expense Fund.) Matured Endowments, cash surrenders, investment expenses and dividends when declared also are paid from this Fund. The loading which is credited to the Expense Fund must pavior all expenses incurred in the operation of the business of the society. To it are charged first-year death claims, commissions on new business, medical examination fees, inspection of risk costs. Taxes, licenses required by the insurance departments, Miscellaneous fees for matters in connection with requirements of .the insurance departments, certain l*gal expenses, actuarial and auditing costs, insurance — except on real estate — must be paid from this Fund. Collection fees which are paid to the branch-managers, salaries of all officers and employees and tra-Pennsylvania Fraternal Congress Holds Convention In Pittsburgh — “Key To Security Held By Insurance Industry, Not Government,” Insurance Commissioner Malone tells officers of 75 Societies at Annual Banquet. — Assembled at the William Penn , Hotel in Pittsburgh, Pa., on Novem- j ber 15-16, 1949, the officers of 75 fraternal societies discussed the current problems of fraternal life insurance at the Thirty-Eighth Annual j Convention of the Pennsylvania Fra-' j ternal Congress. Mr. Stephen M. j Tkatch of the Greek Catholic Union i of the U.S.A., presided, assisted by M. F. Loughner of the Mutual Beneficial Ass’n of P.R.R. Employees, the First Vice-President, and Coloman Revesz, National Secretary of the Verhovay F.I.A., the Second Vice- President. Miss Louise Patrick of the Supreme Forest Woodmen Circle, Philadelphia, Pa., served as Secretary- Treasurer during the last term. Greetings to the Pennsylvania Fraternal Congress, representing more than a million members of fraternal societies in the Keystone state, were conveyed at the opening session by the representative of the Hon. David L. Lawrence, Mayor of the City of Pittsburgh, Coloman Revesz, President of the Greater Pittsburgh Fraternals, Leland J. Bayle, who spoke for the National Fraternal Congress, Norbert Weidner on behalf of the Penna., Association of Life Underwriters, and Oscar A. Kottler Deputy Insurance Commissioner of the Commonwealth of Pennsylvania. Addresses by outstanding experts on investment policies, promotional and actuarial procedures, public relations and similar topics were included in the program consisting of the reports of- the officers, the Legislative, Auditing, Social Contact, Lodge Activities, Field Promotion, Fraternal Ethics, Fraternal Progress, Junior Membership, Resolution, Publicity7, Banquet and Credential committees, and the election and installation of officers for’the next term. National Secretary Coloman Révész, who served as Second Vice- President at this Convention, was elected First Vice-President of the Pennsylvania Fraternal Congress for the following term. Highlight of the program was the Annual Banquet in the Pittsburgh Room of Hotel William Penn. Here the Hon. James F. Malone, Jr., Insurance Commissioner of Pennsylvania delivered his address “Life Insurance — Its Future,” in which he gave irrefutable proof of the superiority of Security provided by the insurance industry over the Social Security sponsored and managed by the Government. Referring to the dividends to be paid soon to the holders of National Service Life Insurance policies he pointed out that all claims in excess of a certain moderate estimate as well as the entire costs of the administration of National Service Life Insurance have been paid from taxes in an aggregate amount that far exceeds the total amount of dividends to be distributed. In other words, if the excess claims and the administrative costs had been paid from National Service Life Insurance Premiums, no dividends could be distributed. The dividend, therefore, actually7 is a bonus paid by the taxpayers. “No one objects to the veterans receiving such a bonus,” said the Insurance Commissioner, “but it should be understood that it is a bonus and not dividends paid from the profits of National Service Life Insurance administration.” Discussing Social Security benefits, he pointed out how the pricing policies of the Government had reduced the purchasing value of the old age and survivors’ pensions. This development as well as all past experience recorded in history prove that social security projects sponsored arid managed by7 governments inevitably lead to an ever increasing tax burden that is all out of proportion to the bene(Continued on page 5) veling expenses also are charged to this Fund. Rentals, general office maintenance expense, advertising, printing, stationery, postage, express, telegraph and telephone costs are Expense Fund items. Money used for the maintenance of Homes for the Aged, aid for the needy members, scholarship loan grants, donations and sports activities comes from this Expense Fund. Other items charged to the Fund are furniture and equipment costs, the official publication expenses, bureau and association dues and assessments, costs of books, newspapers and periodicals. Delegates’ per diem fees, traveling expenses,' and miscellaneous expenses of the District Sessions and the National Convention also are paid from the Expense Fund. One would hardly think that his monthly dues, especially the small part of his monthly dues — known as loading — is intended to pay for so many things. Yet it is the duty of the National Officers and the Board of Directors to see to it that all expenses are paid. It is not infrequent that the limited income of the Expense Fund creates economic headaches. To give the membership the best possible service, and to administer the business of the society in the best interests of the Association, and yet stay within the limited income of the Expense Fund, is quite a problem. We think that each and every member should know of these matters. If the Association is run by the members, for the members, we all have duties and responsibilities to shoulder. When we accept these responsibilities and we perform the duties required of us, we shall be better equipped to intelligently work in the best interests of the general membership if we are familiar with the practices of our society. The Association belongs to the general membership and its administration- must always be entrusted to honest, capable members who at all times will think of conducting the business of the society in such a satisfactory way that the members will feel satisfied. Each member is requested to look for the next installment of our Official Comment. I %