National Republican., 1877-09-11
THE COLLAPSE OF LIFE INSURANCE.

THE COLLAPSE OF LIFE INSURANCE.
No characteristic of true manhood is more
noble than that which induces men to strive
70 make provisions for the comfort and sup
port Of their families in case they should
be prematurely removed by death. The
strength of this sentiment eau in no way be
% well illustrated us by an examination of
the statistics of the lite insurance business
which is its outgrowth In the most civil
lied and refined nations of the world. The
patronage which has been bestowed upon
life insurance in America speaks we'll for
the iorethought and pateInal affection of
our citizens.
The extraordinary development which
this business had reached in 1876 is aston
ishing. In that year the assets of the COM
ponies authorized to do business in the
btate Of New York amounted to the sum of
HO3, 1i2, ,gs1.5s. The liabilities of the COM
panics, excluding capital stock, amounted
10 the sum Of S3l2, $3.50, ,952.s6 The aggrc-
gnte income of the companies for that year
was S1OS 645, ,OSi.i9, q revenue sufficient to
maintain the Government Of q respectable
Empire. The growth of this business was
very rapid. The assets of the companies
Included in this statement, which amounted
10 about S2O,OO0, 600 in 1859, had increased
10 S4O3, 142, ,9sI .5s in 1915, while the 49,10s
policy holders of 1859 hal multiplied to
b17,Usl in 1873.
II is not an agreeable task to dwell upon
the notorious fact that this enormous busi-
ness has been, to great extent, ignorantly,
earelessly and fraudulently mismanaged.
The subject is one in regard to which we do
not feel that there is any danger of using
Language which will be too severe. In say
Ing that the present system has utterly for
feited public confidence we are repeating
the sentiments expressed by eminent men
who have made this subject one of special
study.
As early as January, 1915, the New York
superintendent of insurance, in his annual
report, stated that the number Of lapscd
policies on the books of the best companies
proved that they were then staggering, not
bnly under the influence of hard times, but
chat other causes had sapped the found
htions of public confidence. He considered
the enon-fulhllment of the magnificent prom
hes made by companies and agents rs the
chief cause of this popular distrust, in con-
sequence of which in every neighborhood
insurance solicitors were then meeting with
blasted hopes and ruined fortunes, caused
by dishonest or incompetent management
kince that date the failure of numerous
companies has added to the calamties of
unfortunate policy-holders, so that it is now
Che opinion of well-informed observers that
The sufferings which have been brought upon
the people OF the United States by the fail
ures of life insurance companies far exceed
IN the aggregate all the blessings which the
payments of death losses have conferred
upon widows and orphans.
For many years Hon. ELIZUR WRIGHT,
Of Boston, a man of unquestioned integrity
and purity of character, has been a high
authority with all insurance companies as
10 matters relating to the scientific valua-
ton of policies according to the principles
upon which that business has heretofore
been conducted. The numerous failures
which have recently taken place have led
him to examine into the correctness of the
theory upon which the companies are now
conducting their business, and he does not
hesitate to pronounce it radically defective.
He has accordingly written book just pub
hshed in which he very clearly exposes the
errors Of the present system, and makes
some valuable suggestions as to the proper
remedies for its defects.
The title of Mr.. WRIGHTs book is q very
suggestive one, and of itself shows what he
thinks of the present system. 1t is as fol-
lows: Traps baited with orphan; or what
Is the matter with life insuranceY" The
suthor thinks the life insurance has abused
noble feeling of the human heart for an
unworthy end. He believes that the
young child of dead father who has made
no provision for his nurture is truly for
lorn being, but he sees no reason why the
idea Of a possible orphan should be used to
bait trap
1t is a pretty severe thing for the highest
life insurance authority in America to speak
Of the system as trap. But he does mo-
stop there, but characterizes it as the dis
grace of our civilization, and claims that it
shocking dishonesty has brought 1t int
complete disrepute. He says that the faul
II not so much in the men rs in the system
which is one that leads its officers int,
temptation. He forcibly remarks that it |
one which would corrupt even the angels o
heaven. We are quite sure that grea
many Of the people who have been victim
lied by broken companies would have n
trouble in believing that the managers o
the insolrent concerns who have swindle,
them are fallen angels Of the worst descrip
ti0n.
Thus it appears that the present life in
surance system is fatally defective. 1t !
not simply aquestion of present solvency
for howererstrongan any company may be nov
the same causes which have already prove
fatal to many other companies will destro
them likewise, unless radical reforms NJ
speedily instituted by those which still con
tinue to ask fol public patronage.