Mr. Bellino, before we introduced the check, we discussed the total premiums paid by the sheetmetal workers' welfare fund to the Occidental Life Insurance Co. Had the reporter got your answer on that?

Mr. BELLINO. The total premium amounted to $1,559,626.20.

Mr. MCCABE. What were the total claims paid by the Occidental Insurance Co. during this period?

Mr. BELLINO. They amounted to $1,308,624.28.

Mr. MCCABE. And how much of a refund did the Occidental Life Insurance Co. give to this fund as a result of this experience rating? Mr. BELLINO. The refund which was made to the sheetmetal workers' welfare fund, based on the experience for the year 1951, amounted to $22,537.73.

Mr. MCCABE. And on this transaction, how much was realized by the Occidental Insurance Co.?

Mr. BELLINO. The gross amount realized by the Occidental Life Insurance Co. was $228,463.29.

Mr. MCCABE. At the end of the first year, what was the balance that remained after claims were paid and the 15 percent retention was deducted?

Mr. BELLINO. The balance remaining at the end of 1951 was $92,785.23. The total premiums received in 1951 were $331,760; claims paid were $189,210.77; the excess received over claims paid was $142,549.23. Fifteen percent guaranteed retention was $49,764. The balance was $92,785.23.

Mr. MCCABE. And how much of a reserve was set aside for claims incurred at the end of that year?

Mr. BELLINO. The amount of the reserve set aside for claims incurred at the end of 1951 was $67,655. This would leave a balance or refund to the welfare fund of $25,130.23. However, the refund amounted to $22,537.73. Accordingly, there is a balance of $2,592.50 additional to be added to the reserve account held by the insurance company.

Mr. MCCABE. What is the total reserve which the insurance company has set aside for claims incurred as of the end of December of last year, 1953?

Mr. BELLINO. The total reserve for claims incurred, which are held by Occidental Life as of December 31, 1953, is $108,218.50.

Mr. MCCABE. In connection with the company's handling of these policies, do you find that they made any charges for conversion of life insurance under this plan?

Mr. BELLINO. Yes, sir. There was $130 charged for that purpose. Mr. MCCABE. $130, and how and on behalf of what individual was that money spent?

Mr. BELLINO. I understand that was a conversion on a policy by Tom Hanley.

Mr. MCCABE. What was the total amount realized by the Occidental Life Insurance Co. in connection with this policy?

Mr. BELLINO. Based on their retention rates, the total amount that this company has realized is $166,914.58.

The CHAIRMAN. Do you have any questions, Mr. Holt?

Mr. HOLT. I have just one question.

Would you go over this amount transferred, again? I did not understand about that, transferred from locals 88 and 26, in Las Vegas

and Reno. How were they transferred and what was the record of that transfer?

Mr. BELLINO. The moneys from local 26, the $8,298.52 was transferred by the Reno group to the Las Vegas group, that is, Walter Vickers and Emil Pahor, administrators for the Nevade sheetmetal workers' welfare fund. They endorsed the check. The proceeds from this check, however, never did get to the welfare fund in Los Angeles until 15 months later.

Mr. HOLT. Is there any record of where it was?

Mr. BELLINO. I believe that Mr. Hanley might be able to testify, because I understand that this check got into his hands and he may be able to tell us what happened to it.

Mr. HOLT. You made reference to some meeting. That was not clear to me. It was where Mr. Jones was asked a question.

Mr. BELLINO. That was at a meeting in September 1953, at which time Mr. Ely inquired of Mr. Jones, "When did your local become a part of this welfare group?" and before Mr. Jones could answer, Mr. Hanley said, "About 2 or 3 months ago." Mr. Jones then repeated it, "About 2 or 3 months ago." What was significant to us was the fact that here was Mr. Ely, an employer trustee, and he had no knowledge that these two Nevada groups were officially accepted in this local southern California welfare plan.

Mr. HOLT. Thank you.

The CHAIRMAN. Mr. Lucas?

Mr. LUCAS. You are not stating, are you, Mr. Bellino, that any funds were misappropriated?

Mr. BELLINO. The funds were not accounted for for 15 months. As far as I know, they were not actually used by anyone.

Mr. LUCAS. The entire amount that the Nevada groups were to deposit did eventually find its way into the fund?

Mr. BELLINO. Yes, sir.

Mr. LUCAS. That was 15 months later?

Mr. BELLINO. Yes, sir.

Mr. LUCAS. There was no withdrawal or no withholding of any of that money?

Mr. BELLINO. Not finally; no, sir.

Mr. LUCAS. Can you give this committee any information growing out of your knowledge of the facts as to the reason why these funds were withheld for 15 months?

Mr. BELLING. I do not know the real reason. I could give you a conjecture from a confidential informant. But the real reason I thought Mr. Hanley would tell us.

Mr. LUCAS. That is the third time you have refused to answer that question and referred to Mr. Hanley. We do not have Mr. Hanley on the stand now. What reason can you give us for these funds being withheld?

Mr. BELLINO. The reason I can give is that when the money is not deposited immediately and turned over to the person entitled to receive it, in some way an individual is trying to get the proceeds of this check if he possibly could.

Mr. LUCAS. But the check was finally deposited. No funds were ever realized from it. That money was still in the bank until it was finally deposited in the southern California office; it that not right? Mr. BELLINO. Eventually; yes, sir.

Mr. LUCAS. What I mean is that that was just a piece of paper. It was not money.

Mr. BELLINO. Well, from this a cashier's check was drawn eventually. In other words, an effort was being made. It just didn't work. That is why I say it might be that Mr. Hanley could really tell you what actually happened.

Mr. Lucas. I think from your inferences we have several questions to ask Mr. Hanley.

That is all, Mr. Chairman.

The CHAIRMAN. Mr. Miller?

Mr. MILLER. I have no questions.

Mr. LUCAS. I have another question, Mr. Chairman.

Mr. Bellino, have you investigated any other welfare funds?

Mr. BELLINO. Yes, sir.

Mr. LUCAS. Is the profits which Occidental made out of their insuring these groups of people inordinate? Is it greater than other insurance companies make on like contracts?

Mr. BELLINO. I might say that the Occidental, even on some of its own policies, makes less. In other words, it appears that Occidental obviously being in business tries to make as much as they can wherever they can make it. If they have to cut down and make less on other policies which they have, they will cut down, too. But in this case, it is a very good realization for them.

Mr. LUCAS. You have not answered my question. Do other insurance companies make that much money on like policies?

Mr. BELLINO. On the ones that I have seen, I wouldn't say that they have made as much on like policies; no, sir. But there are a good number more that I haven't seen.

Mr. LUCAS. What I am trying to say, Mr. Bellino, is that no finger should be pointed at Occidental for making a profit. That is perfectly all right. But what I want to know is, Was there any reason why they made such a big profit if other insurance companies are not charging these groups that much? Can you give us any reason why they charge this group so much?

Mr. BELLINO. No, sir; I can't understand the reason, either.

The CHAIRMAN. Í might say at this time it was our hope to get our complete list of witnesses finished today. They will have to go over until tomorrow. I notice that the name of Thomas B. Hanley is here. We have mentioned his name, and also the vice president of Occidental Life Insurance is to testify. I think we can very properly ask those questions of him direct. That will be done tomorrow.

Is there anything else?

Before I adjourn, I want to make a statement about something.

Mr. GRAHAM. Mr. Bellino, during this period of time that this money was kicking around and so on, were any claims being paid to members of the Reno local for which no money to pay premiums had been received?

Mr. BELLINO. In April of 1953, Mr. Fuller sent a telegram to Mr. D. M. Clore, the secretary or business agent of local 26 at Reno, and told him to send in all claims that he had. They started paying the claims in May 1953. In the meantime, this $8,398.52 was floating

around.

Mr. GRAHAM. But Occidental had actually not been paid a premium to cover those?

Mr. BELLINO. No, sir; not at that time.

Mr. GRAHAM. But they were paying them?

Mr. BELLINO. The office was issuing the drafts. Occidental was, of course, paying the drafts.

The CHAIRMAN. That is all, Mr. Bellino.

I wanted to make an announcement about tomorrow. We are going to continue on questioning. The questioning will deal with the same welfare fund and so on, and the names of the men who have been mentioned here, particularly Mr. Hanley and the vice president of Occidental, will be called in order to clear up certain points.

At this time, I would like to state that there was an interruption by the counsel for Occidental. I do not know if he realized he was not sworn at the time and that we planned to question them later. Therefore, I am ordering that that statement be withdrawn from the record. Are there any objections? It is so ordered.

We will recess until 10 o'clock tomorrow.

(Whereupon, at 4:55 p. m., the committee recessed to reconvene at 10 a. m., the following day.)