What is the Wisconsin State Life Fund

The Wisconsin State Life Fund is a life-insurance distribution system for Wisconsin residents.

BREAKING DOWN Wisconsin State Life Fund

The Wisconsin State Life Fund is a state-sponsored life insurance program. The state of Wisconsin underwrites and sells life insurance to residents of Wisconsin who apply. The Wisconsin State Life Fund is a nonprofit organization receiving no state subsidies, is restricted from using commissioned agents, does not make use of advertising or marketing and is exempt from federal income tax. This means that the the fund has minimal overhead expenses. The fund was set up to provide residents of Wisconsin with access to life insurance at the lowest possible cost.

The fund offers four whole life policies: an Ordinary Life policy, a Life Paid Up at Age 65 policy, a 20-Payment Life and a Single Premium Life policy. The fund also provides a Term to Age 65 policy, which may be converted to any kind of whole life insurance prior to age 55.

The Great Wall Street Scandal of 1905

The Wisconsin State Life Fund’s website says the fund was launched in 1911 as a reaction to a scandal involving improper practices by some life insurance companies operating within the United States. This likely refers to the Great Wall Street Scandal of 1905, which brought massive attention to the insurance industry and eventually led to regulations on the U.S. insurance industry.

The scandal involved three major insurance companies: Equitable Life Assurance Society, Mutual Life, and New York Life. The insurance companies were accused of misusing company assets for personal gain, excessive compensation for executives as well as commissions, investments using premiums and paying off politicians to ensure favorable legislation.  

In Patricia Beard’s "After the Ball: Gilded Age Secrets, Boardroom Betrayals, and the Party that Ignited the Great Wall Street Scandal of 1905," the writer explains that at the turn of the 19th century, “half of all American savings were held in life insurance or annuities.” Insurance was the largest sector of the financial services industry, and while Gilded Era policies (or lack thereof) routinely allowed conflicts of interest to go unquestioned or regulated, the insurance game was an outrageously competitive one and the excesses of its tycoons, particularly James Hyde, head of the Equitable Life Assurance Society, who threw the notorious “Hyde Ball,” would lead to increased scrutiny by reporters and other muckrakers, which eventually led to the tycoons' public disgrace and government action to prevent future corruption. Executives resigned or saw their careers derailed just before and after the New York State Legislature’s committee regulations, instituted in 1905.