New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1877-01-13

Two opinions radically opposed to each other
| have successfully prevailed at Albany respect
ing the best method of treating life IN
surance company that has fallen behind the
official standard The first Of these might be
called the theory of nursing. 1t prevailed until
within a few months. TIE second is the kill
or-cure theory, which, 1t is understood. mas
been latterly adopted in practice. The ola
method did certainly succeed in saving several
companies that were in trouble. They were or
dered to suspend business only so far as taxing
new polcies was concerned. The runOr OF their
troubles 1Oated about among their pohcy
holders. Policies upon which much money had
been paid were allowed to lapse. After while'
by the accumulation of such lapses, the ma
bilitics of the company were so far dinllnlShed
that its figures again showed sOlycncy by the
official standard. The restriction on its bust
ness WAS then removed by the State Superin-
tendent, and the concern went on Its way re-
;oicino. Most of these details never reached
the public ear, and companies that had gone
through that experience held their heads up
aftcrward, level with their peers.
Those were the days before amalgamatOn
came into fashion. That process, by which
weak companies were absorbed by those OF
supposed greater strength, seemed at first a
better method for the pOllcy-holdrrs than the
older one of starving them out. When weak
company was consolidated, its policy holders
at least got something in the shape of policy
from the absorbing company that was better
than being frightened into letting the i'll
surancc lapse, and getting nothing. But after
few experiments in consolidating companies
10 Xhof thn Inns
could be so managed IA to he very pr0htabie
70 all cOncerned-OliCogs OF both concerns,
canvassing agents, lawyers-all except inc
policy holders. There were lnnumeraDle 1at
pickings in the process Of transfer; the peo-
ME who had paid their money for insurance
brinp the geese who were plucked. When
this discovery was made, the next step was 70
use the machinery of State superintendent
for tbe purpose of breaking down companies
and compelling them to go into consolidation.
The courts helped rather than hindcred this
Dart of the performance by their decisions.
Evidently a powerful lever was supplied to
the ilackmailcrs of insurance companles-a
class of people that have made very COM
Portable living in recent years.
Recent failures have shown that some OF the
companies were in such rotten condition that
amaIgamation would only have spread to other
concerns disease which was incurable. In the
face of such revelations the Superintendent of
Insurance may be fully justified in adopting
the kill-Or-cure method, and driving the weak
concerns into the shambles of the receiver.
Considering tho Matchmaking use that would
now be made of any embarrassing reports from
State Departments if the object OF such reports
was simply TO enable a concern to tide over It's
present trouble. il seems scarcely worth while
70 attempt the nursing system again. But on
no other hand there is not the slightest rea-
SOL for making the present an occasion to
drag down into the dust any companies that
are really solvent. A State examination that
should pronounce wrongly on the Question OF
solyency would do almost as great damage 10y
making a mistake one way as the other. In
communication published in another column
there will be found a strong and wel-sus-
tanned argument showing that the method in
use by our State Superintendent for valuing
the assets and liabilities of companies IS open
TO doubs. The State test may do certain
class of concerns a grave injustice. The
Superntendent Is not obliged by law to take
the method he has adopted for valuing the
liabilities of a company; another method Is
open TO him, which. it is argued, is fairer and
will still require the concern to keep within
the limits of safety. The argument certainly
deserves a hearing. Not by any means that
sick companies should he nurscd, but that
well ones should not be chopped to pieces on
PIocrustean bed.