Officials Exercising Executive Control

These usually comprise the president, one or more vice-presidents, each of whom has charge of a department, and the treasurer. The president is usually intrusted by the board of directors with large executive powers, and should not only be well versed in financial matters but should have a wide experience in the life-insurance business so as to interpret properly the results attained in the respective departments of the company, advise the board of directors in supervising the general business conduct of the company, determine the best policy for it to pursue, and direct the work of the subordinate officials. He is also intrusted with the duty of selecting subordinate officials and departmental heads. The several vice-presidents, each of whom usually has charge of a leading department of the company, must also keep in touch with the general business operations of the company so as to be in a position to assist the president in his duties, to assume his responsibilities (or that of a ranking vice-president) during his absence, and to be prepared to assume the office in the event of promotion.

The treasurer, besides passing on the merits of the company's investments so that those which meet his approval may be presented to the finance committee, is usually the custodian of the bonds, stocks and other investments held by the company, and is intrusted with the duty of collecting the interest and dividends thereon. To invest the company's money in securities that are safe and yet will yield a return from 1 to iy2 percent, higher than the rate assumed for premium and reserve computations requires skill and a wide knowledge of the various classes of investments in which life-insurance companies are permitted to invest their funds. Great care must be exercised especially with regard to investments in real-estate mortgages since these involve a knowledge of values, the character of the mortgagor, and an examination of the mortgages and abstracts of title. As previously stated, life-insurance investments also consist to a large and increasing extent of policy loans, whose sole security is the value of the policy against which the loan is effected. Since real-estate and policy loans constitute so large a proportion of the total investments in life insurance, it is common for large companies to have two special departments a real-estate department and a policy-loan department to manage and supervise the same.