The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1878-03-22

The new Life Insurance bill now under
consideration by the Legislature is IN I'M
portant measure and should be carefully
considered before being put to final vote.
Many of its provisions seem to be improve
ments on the present laws, while others
may be open to objection or at least to i'm
provement. The main object of law regu-
lating insurance companies is, OF course, to
protect the insured and to shield them as
thoroughly as possible from the loss of the
provision they have made for their families at
great sacrifice to themselves. To accomplish
this end it is necessary first to guard against
unsound and fraudulent companies, and
next to endeavor to save the policy holders
from total loss and to continue their policies
if the company in which they are insured
should for any reason become bankrupt.
The bill re-enacts the law which the pres
ent Superintendent of the Insurance De-
partment is charged with disregarding, and
provides that all bills for making examina-
ton of insurance companies by attorneys,
appraisers or others shall be rendered in
items, approved by the Insurance Superin-
tendent. audited by the Comptroller and
then paid by warrant on the State Treas
urer after the companies examined shall
have deposited the necessary amount with
the department. This law is said to work
disadvantageously for the State, mas
much as capable attorneys and appraisers
will not undertake the duty of investiga-
ton unless paid their own charges without
such delay, and it is insisted that the class
of men who would accept the business on
such terms would be likely to take secret
brides from companies, which no law could
reach, to make friendly reports. 1t would
probably be better to require all the in
surance companies to pay properly gradu-
ated annual fees into the State Treasury as
an examination fund, out of which attor-
neys and appraisers employed by the de-
partment could be paid fees fixed by law
Immediately on the conclusion Of an exami-
nation. This would be fair to all compa-
MES, would remove the power to dispute
or cut down the charges of the attorneys and
appraisers, and would at the same time pre-
vent any payments by the companies di-
rectly to the examiners.
good feature of the BILL under proper
regulations, seems to be the provision by
which solvent companies are allowed to bid
for the reinsurance of the policy holders in
bankrupt companies, and to receive the as
sets of the latter when their bids are &C
copied by the courts. But some objection
may be made to this on the ground that the
reinsurance might lessen the security Of the
regular policy holders in the solvent COM
pany and thus be unjust to them. 1t seems
very desirable that the unfortunate policy
holders in bankrupt company should be
enabled to continue their insurance and be
protected against loss. 1t is possible that
this might be accomplished by such
tax on the profits Of insurance
companies as would form on insurance
safety fund on the principle of the old State
banks safety fund. Into this fund might 60
all the assets of bankrupt companies.
The policy holders in bankrupt companies
would then continue to pay to the safety
fund their premiums, and the amounts OF
their policies would be paid out of the fund
as they fell due. We offer this crude hint
to the Legislature for its consideration, in
asmuch as there appears to be some weight
in the objection that the reinsurance of
the policy holders OF bankrupt company
by solvent company might possibly i'm
pair the security of those originally insured
in the latter. and would be done without
their consent