THE BATTALION
FRIDAY, JANUARY 18, 1980
Page 5
state
Insurance sales moratorium urged
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United Press International
AUSTIN — A Dallas insurance
agent Thursday called lor a
mordtorium on sales of life insur
ance in Texas until the State Insur
ance Board finds a way to prevent
deceptive sales pitches that he said
cost consumers $22 million a year.
Joe A. Mintz of Dallas, an insur
ance agent, said the sales presenta
tions allowed under current Texas
regulations and new rules being
considered for adoption by the state
agency encourage deception in in
surance sales.
“This department for 12 years has
pennitted deception in the sale of
insurance, ’ Mintz said. “You fol
lowed the recommendation of in
dustry spokespersons and complied
with their vested interest by adopt
ing methods of cost comparison and
replacement of existing life insur
ance that are profitable to industry
and costly to the consumer.”
Industry representatives ap
peared before the three-man insur
ance board Thursday to support
adoption of so-called model regu
lations developed by the National
Association of Insurance Commis
sioners.
Several representatives urged
exemptions for policies of $5,000 or
less or annual premiums of $200 or
less on grounds it would cost too
much to require all companies to
comply with regulations on such
small policies.
The insurance company represen
tatives said the model regulations
will require companies and agents
to provide a net payment index and
comparison data on dividends in
addition to the cash-surrender cost
information currently required
under Texas rules.
“The use of one index by itself can
put the individual in a position of
making a mistake,” said Robert D.
Nicholas, associate general counsel
of the American Council of Life In
surance.
Mintz, however, said the compu
tations used by the insurance com
panies prevent comparisons be
tween cash value or so-called whole
life policies and term insurance.
“Texans,” he estimated, are
“spending $22 million annually in
premium dollars because of mislead
ing, deceptive and fradulent sales
pitches. ”
Mintz said Texas does not need
new or additional regulations on
how agents or companies can solicit
business or encourage customers to
replace existing policies.
“You just need to crack down on
people using deceptive mathemat
ics,” Mintz told the insurance
board.
NTSU probe continues
United Press International
AUSTIN — An attorney assisting
a House investigation committee on
financial irregularities at North
Texas State University Thursday
said the university’s former presi
dent, C.C. Nolen, had authorized
the transfer of private funds into his
Legislature may
convene in fall
United Press Internationa]
AUSTIN — Gov. Bill Clements
said Wednesday he has narrowed
the possible dates for convening a
special session of the legislature to
consider such items as initiative and
referendum, tax relief and wiretap
ping, to August or September.
Clements told the Texas Real Es
tate Political Action Committee
Wednesday he ruled out March lie-
cause he needs more time to
evaluate the state’s fiscal situation.
He noted Comptroller Boh Bul
lock has projected a possible $300
million balance in unspent and
surplus funds by the end of the
biennium, and said his own esti
mates of the surplus are in the $600
million to $700 million range.
"Neither the comptroller nor I
know what the surplus is really
going to be,” Clements said. “A lot
depends on the national economic
climate. By August or September
our vision will he much more clear.
A September special session
would be only four months before
the Legislature convenes in regular
session in January, 1981.
presidential office account while in
office.
Robert Schultz told the House
General Investigation Committee
that Nolen’s salary was
supplemented with $10,000 to
$17,000 annually.
Schultz told the committee
$32,000 had been given to Nolen
during a four-year period by the
university’s foundation for schol
arships. The money had been used
to supplement Nolen’s salary and to
pay travel and entertainment ex
penses for which the Legislature
bars the use of state funds, he said.
Schultz said the president had
unrestricted use of the office fund.
Nolen, on the advice of one of his
attorneys, pleaded the 5th Amend
ment 17 times while being ques
tioned about the private financial
transactions.
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William P. Daves Jr., hoard
chairman, said the mathematics used
under Texas regulations would look
more favorable if inflation was not so
high, making interest returns of 3
and 4 percent less attractive.
“I would presume there hasn’t
been as much misrepresentation
about insurance as there has been
by the federal government about
money,” said Durwood Manford,
longtime hoard member.
Executive assures farmers
of enough capital in 1980s
He has refused for three days to
answer inquiries from the commit
tee.
An attorney for Nolen told the
committee the ex-president was not
being allowed a fair hearing and said
his client would not participate fur
ther in the hearings.
Dr. Robert Marquis, a former
NTSU education professor, testified
that $10,000 raised to honor a
former band director was trans
ferred into Nolen’s office.
He said an agreement with the
university called for the money to
be used to purchase a piano and a
serving table, but the items were
never purchased.
Schultz said the university foun
dation had been managed totally by
university officers, but the founda
tion had been removed from the
NTSU campus since the House in
vestigation began.
United Press International
WACO — A federal reserve bank
president told farmers and ranchers
Thursday their economic woes
would not be solved until inflation
problems were settled, but assured
them there would be enough capital
for the agriculture business in the
1980's.
Earnest Baughman, president of
the Federal Reserve Bank of Dallas,
told 350 farmers and ranches attend
ing the 18th annual meeting of the
Blackland Income Growth Organi
zation that Americans have not re
alized how grave the nation’s infla
tion problem is.
“I think inflation is a very serious
problem, more serious than most of
us are inclined to believe,’
Baughman said. “It’s going to have
to get worse before enough of us will
do something about it.
“If we have good markets, the
capital will flow,” he said. “I don’t
see any concern about having capital
to keep the agricultural business
going — so long as agriculture j^ets
its fair proportion of the capital.
Baughman, however, said the se
rious question concerning the avail
ability of capital to farmers and
ranchers would be the stability of fi
nancial institutions.
He said inflation over the past two
years has been so serious that
people have been borrowing simply
to buy goods. He said the situation
created pressure from both supply
and demand.
“People are borrowing money
today to buy goods because they feel
tomorrow the price will go up,” he
said. “And that creates pressure on
the lending institutions.”
Baughman said in order for com
munity banks to be effective, they
must have some link to outside fi
nancial institutions.
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