New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1875-06-18
LIFE INSURANCE LEGISLATION

The sessions of State legislatures during the
past Winter and Spring have been more than
usually prolific in crops of insurance bills. Most
of these, and especially the more pernicous ones,
devised by the section of the lobby known as
" Strikers have como to naught. We have
already described many of the absurd measures
that were started into life at Albany last Winter,
but died of general debility before the close OF
the session. There was no lack of similar
efforts in other States, Illinois being the field
of one of the hottest contests. The real object
of the proposed law there was to sustain some
local company. The measure purported to be
based ON principle of reciprOcity-"h you
"wOn't let our companies do business In your
estate, you shan't do business in ours" The
possible inability of an Illinois company to
make strong enough exhibition of assets to
satisfy the stringent laws of other States was
not to be taken into consideration.
Among measures which passed, there was at
least one, in Michigan, deserving cOmmenda-
ton. 1t reduces the tax on gross receipts OF
companies from three per cent to two. we
hope to see the day when the taxes on lie In
surance, which now disgrace the statute books
of other States, will be entirely removed. An
act of great Importance to insurance interests
was passed in our own State, and has become
a law. Its first section permits the Superln-
tendent to direct the sale OF any securities
among a company's investments that may have
fallen below par. The second section is re-
markable; it gives to life, fire and marine
insurance companies tho privilege OF investing in
the securities of other States. The classes OF
securities selected for investment are to
be the same as those to which the companies
have been hitherto confined in New-YOrk; but
so far as investment i'm mortgages on real es
tate il concerned the area is only extended to
States adjacent to New-YOrk. All these in
ycstments in securities of other States will
apply only to funds required to meet oblIga-
tions incurred there. 1t is to be said in behalf
of this law that it meets to some extent an
anomalous feature of insurance business.
Western and Southern people are largely
insured in the companies of New-Iork. The
remittance Of their premiums is con-
SANITY transferring funds from the West and
South to the East. The permanent investment
of such funds in Eastern securities, it is ar
gred, withdraws capital from sections where
if is most needed, and places it where 1t Is
least in demand. The ultimate payment OF
policies does not liz general restore the funds
thus transferred, till after many years Of the
depicting process. But there are, on the other
hand serious objections to this law. 1t gives
permission to our companies to invest their
money where it is not as safe as 1t was before
The securities of most of the other States are
subject to far greater fluctuations in value than
those of our own, and are hence less suitable
for the investment of trust funds. This law,
in fact, leaves the question OF conservative
mana cement in the hands of the officers OF
insurance companies. We trust they will be
slow in departing from the beaten paths.
A question of great interest to companies
doing business out of the State is expected
shortly to b. decided in the courts The en-
deavOr is to be made to apply the Massachu-
sets law Of life insurance to a lapsed policy of
a PENNSYLVANIA company; to require the pol
icy TO he held in force so long as four
fifths of its surrender value would extend it.
The argument is, that the contract for the pol
icy was made in Massachusetts,; for although
the instrument was prepared and issued in
PENNSYLVANIA, il was cOuntcIsigned on delivery
by the New England agents of the company.
Whatever may be the decision i'll this ease,
there is no room for doubling the wisdom and
Justice of the Massachusetts law. AS Prof.
Simon Newconb has very clearly demonstrated
in a recent number of The International Re-
riem, the only blOts on life insurance IA prac-
ticcd in this country are the forfeiture of lapscd
policies and the expensive methods by which
new ones are obtained.