New-York tribune., 1879-01-28
INSURANCE SUPERVISION.

DEPARTMENT BY MR. KNOwLES-THE DEPART
MENT SHOULD BE MADE MORE Efficient
IBY TyLEGRAPH THE TRIBUNE.
ALBANY, Jan. 27.-GOvernor R0binson's rec
ommendaton that the Insurance Department he abol-
isled, it is now evdent, viii he the cause
OF many debates in the Legislature during the
Winter. Charles Il. Knowles, Of Albany, a member Of
the Insurance Committee of the Assembly, made an
elaborate speech tonight, in defence Of the
Department, in view Of the fact that
the Governors message unler consid-
Grafton in Committee of the Whole He said that
the Governor sought TO poison the mind the Legisa
tire against of the most deservedly popular and
effective departments of the State, ana that the
result OF adoption OF such advice would be
the robhing OF the assured OF the only
protection they have against irresponsible COMPANIES
thar would food the state but for the existence OF the
admirable preventive. The Governor had argued
that every legitimate business most success
fully conducted when left 10 the management Of
those who understood 1t. The speaker would
reply that insurance companies enjoyed life solely
by law, and their affairs should Therefore
no supervised by the State. From 1927 until
the Department organized. the insurance
companies in the charge OF the Controllers Of the
state From $40 70 SEQ every Controller spoke his
annual report the of the insurance laws and
OF the faacOus reports of the companies Finally IN
1851 Governor Morgan recommended that separate
department devoted to this interest should be organ
iZed and that IL be gwen power TO examine
into the affairs Of insurance companies.
Insurance business enormously increased under state
supervision. In 1855 there flfy-fve State com
panies. who had gross assets Of S16.G9i,959 In
there Isl companies, having gross assets OF
500. 3.jjOO12. In 1877 there 2I7 companies,
with gross assets of S561,Sl6,662. A return to
an exploded practice. after such experience,
would be unwise. The Department had been
so wisely managed that, aside from the
disasters caused by great Chicago and Boston fires
OF 1871 ana 1872, in whIch about seventy mil
lions of insurance paid by the companies. the
policy holders this state had not suffered
the loss OF single dollar by the failure Of single
fire insurance company organized under the rnes Of
the Insurance Department and up 10 the present time
New York stock fire insurance companies with total
assets amounting to 900. ana with in
vesment Of capital 10 the of 80 600 600 only
company exhibited an impairment to the extent Of
$1,000 Durag its existence the Department
had denied certificates OF incorporation TO -
companies Of this state aud 100 companies of
other States Forty-uine companies had been called
70 make UP impsirments OF capital. and twenty
eight life companies OF this STATE had had their cItf
Gates OF authority revoked During the year 1875 oe
department disaOwed items Of assets aggrecatng
follows: Life companies, $500 ,0OO fire
snrance companies 50 800 900 The Governor declared
that he had informed that during tho past
years thirty companies had failed involving
loss to the citizens of this State of $3G,972OO The
liabilities and assets OF the companies that failed
as follows liabilities 500 916,46j 80 assets Sl097f-
7O2 IS loss, S9.961 762 80 Fen millions OF dollars
was indeed large loss, bat 1t must be
that a large part OF the loss was due
to the laxty OF existing laws respecting the
department. rather than to inefficient supervision
As a matter OF fact the laws OF the state do
me nS5 sSs o he ey nSer Of o
call upOn the Stockholders of the life companies
to make good the impairment of capital stock. In
fire insurance companies the power IL given to HIM
absolutely, and hence the good results that follow.
Another cause for the failure Of large number OF
hie insurance companies Is TIE permission given them
by law their outstanding risks IN other
panles Of the Department insured
The evils growlng the ama2anatlOns that have
occurred have been h chief of complaint by the
pohcy holders; hat the d. partment pll wear
powcesS prevent such transactions Mr Knowles then
referred 10 superintendent Smyths recent circular 10
the insurance companies, asking their opinion
of Governor ROb.nsons recommendation about
the Department. OF the ia replies
tn % nqnFies TO the companies 100 are in favor
OF state supervision and are against IT,
The companies favor Of supervision represent
n cauaI Of So 52s, $50, and assets Of ~ l8S325532
The companies opposed to supervision represents capt.
tai, III 100000; asSets, $3.5G1,56l. MT. Knowles.
in conclusion. said that tt would be
far better u make the department more efficient than to
destroy it, The interests represented too
vast and vital 10 admit OF any experimenting the
par, o. the legislature.
Mr. GRADY and Mr. skinner said that future
day they desrrd ply Mr. Knowles speech. The
Governors Message accordingly laid over for fur
,uslda ap4fl ian