The New York herald., 1875-09-24
Life Insurance.

The stability of life insurance is of such
extreme Importance to the hundreds of
thousands Of families who depend in a
greater or less degree upon it for security
against sudden. poverty or dire misfortune
that in most of our States commissioners,
who ought to be and oftenest are skilled men,
are appointed to watch over the management
OF companies, to examine their assets from
time to time and to prohibit companies
not solvent or doing business in an un-
satisfactory way from entering the State.
Aside from this safeguard, the competition of
companies, the watchfulness of actuares
and the occasional investigations of stock
holders, who are generally the insured, all
combine to keep the managers of companies
on their guard, to force them to adopt inn
provements and to lead them to maintain
conservative course in all the details of their
business which is their highest duty
Every man who keeps a watchful eye on
the management of this great interest does a
public service, and such n meeting as that of
the Insurance Commissioners of different
States, which has been in session in this city
address of Mr.. Finch, of Indiana will prob
ably attract a good deal of attention, but
some of his views will be contested by most
of the actuaries and other experts. He errs
it seems to us, in making the interest of the
companies hostile to those of the insured.
In fact, most of the life insurance companies
of this country are now conducted on the
Il Il. Al.
managed for the benefit of the assured and
not for that of stockholders He appears to
think that some wrong is done to persons in
suring their lives because great many of
them discontinue their payments. But as
they insure voluntarily and drop their insur-
ance at will also it is difficult to see how they
are wronged except by their own voluntary
act.
Mr. Finch seems also to reverse the posi-
tions Of the assured and the insurers. In
fact, the person who desires to insure his
life is the applicant; he has number of
companies to choose FROM he has the oppor-
tunity to examine the conditions ON which
they will grant assurance, and if, as
Mr.. Finch asserts, and as may be true, soli-
citors sometimes make ''undue and unfair
representations, it is the place of the insurer
to make due inquiry as in any other busi-
ness transaction. The solicitor is not SER
want of the insurance company, and many
companies openly state that they will not be
held responsible for the representations or
promises of such persons. For the return
made by medical examiner of the condition
of an insured person we believe the compa-
nies are held responsible, as they ought to
be. 1t may be added that life insurance
companies are very averse to disputing the
payment of a claim, because it brings them
into i'll favor with the public. Nothing would
so quickly cripple company as the fact
that it frequently hesitated to pay claims or
disputed them. But the private history of
any Of the great companies will show that
they are almost constantly the objectives of
swindlers, who attempt to obtain money by
fraudulent insurance claims, and it is duty
which managers owe to their constituents to
be on their guard against such attempts.
Mr.. Finch's suggestion that after five
annual payments have been made company
should be debarred from pleading false
representations by an insurer is probably
sound. Such q regulation would put upon
the companies the just responsibility of
satisfying themselves that the representa-
tions made are accurate, and would remove
cause of dispute which it is but fair to have
settled while the insured is alive to defend
his interest. But, as we said before, life
insurance companies are very loath to dispute
claims, and when they do juries are very apt
to give q verdict against them unless clear
case of fraud is proved.