John D. MacArthur, the late insurance tycoon who set up a foundation now poised to become one of the nation's wealthiest, dropped out of school in the eight grade.

He joined an insurance company owned by his brother Alfred, grew unhappy with the job although he was the top salesman, and became a police reporter at the old Chicago Herald Examiner.

There be joined his brother Charles, who went on to become a playwright and co-author, with Ben Hecht, of "The Front Page." John went on to rejoin Alfred, then to quit, and then to become a hero in World War I.

In 1929, he and his first wife bought a small insurance company. It became the cornerstone of an insurance empire that boomed after 1935, when he bought Bankers Life & Casualty Co. and started selling $1 policies through newspaper ads.

Between 1948 and 1951, 14 state insurance departments examined his practices. But perhaps the most revealing insight into Bankers Life and similar sellers of health insurance policies came at a Senate hearing in 1972.

The discolosure concerned the proportion of each dollar collected in premiums that was being returned as benefits to policyholders. While members of Blue Cross group plans were getting back 96.1 cents, in-members of private groups plans were getting back 86.1 cents, individual buyers of Bankers Life hospital and surgery policies were getting back 51 cents.

In addition to the insurance empire that will become the sole asset of the John D. and Catherine T. MacArthur Foundation, MacArthur had visit real estate and other holdings, making him one of the country's two reputed billionaire (the other is shipping magnate Daniel K. Ludwig). He bequeathed much of his non insurance estate to another charitable trust, the Retirements Research Foundation.