Fort Worth gazette. [volume] (Fort Worth, Tex.) 1891-1898, 1891-07-26

OF the abuse, and the remuneration of re-
ceivers is now limited to a reasonable sum.
The insurance department officials, under
the law, had no voice in the selection of q
receiver, although in some instances they
appeared in court making recommendations
of individuals for such positions.
g. The companies that passed into the
hands of receivers, with scarcely an eycep-
ton, were in very poor condition financI-
ally, and in some cases gross frauds existed
III the management. You will find the re-
ceivers' statements of these companies in
the New York reports, which, l believe,
are accessible to you. They show that
more than So, 800, 900 i'll cash was returned
to policy claimants as dividends. A few of
the companies, though debarred from doing
new business, had the opportunity to re-
construct, and, if possible, retrieve their
positions. The management however, was
in the hands of men who cared little for the
policyholders' interests. The plan adopted
in a few cases was to scale down the poll
cies, 90 40 and 80 per cent, and induce the
policyholders to accept new policies fer the
reduced amounts at proportionately re-
duced premium, the liability under the re-
duced amount being thereby cancelled.
The trouble about this scheme was that the
best lives cleared out with what they could
get on surrender; the residue constituted
very inferior class of risks. As the income
often had to be realized on to a great dis
advantage. During this period they were
practically free from insurance department
supervision, being adjudged as in the
hands of the courts"
Investments: 1t is readily understood
that the character of life insurance COM
pany's investments is of the first import
ance. Their narrow limitation in the past
20 certain classes of property served its
purpose for the time being. But as the
West, fast becoming settled in every part,
and the newer South, prospecting as never
before, open wider fields TO life insurance
institutions for sound and profitable invest
ment, more liberty will have to be granted
in this direction, and the legislature, alive
TO the situation, with no little unselfishness
has met some of the demands for greater
latitude with liberal spirit. We were
formerly restricted to bonds and mortgages
on unencumbered property within fifty
miles OF New York city, and to stocks and
bonds, etc, of this state and the United
States. Now we can invest, TO a certain
limit, in the same classes of securities in
any other state or country that are per-
mitted to US in this state. The restrictions
in the past have doubtless rendered some
assets less remunerative than they other
wise might have been had no limit existed;
still it must be admitted that little loss has
been experienced from the restricted line of
Investments.
Annual valuation of property doubtless
possess disadvantages, still they have TO be
governed by well defined principles. The
market value of bonds and stocks is, of
course, subject to fiuctuation at any time.
Real estate or freehold property connot be
fixed at any arbitrary value under the law,
its value must follow similar property
under similar conditions, aud it is not often
difficult to arrive at equitable values. A
material variation in either direction at the
date of valuation from abnormal causes
must be duly considered in the distribution
of surplus. If the securities be maintained
at their cost value till disposed of there is
the danger Of surplus being distributed TO
the wrong people. We think that profits
can be divided much closer when the de-
ferred periods are of sufficient length to
level down Irregularities due to short
periods. The legislature of this state, re-
cognizing possible injury TO a company from
an arbitrary valuation of assets as of a
given date, and having in mind the great
fluctuations in values about January l of
this year, caused by disturbances on your
own side of the water, has prudently pro-
vided against such contingencies hereafter.
l send you herewith copy of an
act on the subject passed in New
York this session [Chapter 81
We believe that no life company doing
business in this state-and in that category
Is included every prominent and successful
company in the United States-has failed
during the past twelve years, which is GER
tainly meritorious to both managers and
supervision. At present there is an insur-
ance department in nearly every state, and
the people who, through their legislative
representatives, control their existence,
evidently believe in their usefulness. I'm
fortunately, we cannot, under the conStitu-
ton of the United States. have national SUI
peryision with one bureau having its
principal Office at the seat of government.
If that We're possible, it is reasonable to
say that majority OF the companies, and
governmental supervision from Washing
ton, admitting that in many instances the
state has supervising officials that are men
of high honor and ability.
In conclusion, we believe that SUPER
vision, when exercised within proper limits
brings companies under watchful and intel
hgent restraint but 1t should never be per-
mitted to hamper legitimate competition, or
NEEDLE with details of management. When
kept within proper bounds it begets conf
dence IN the community, and consequently
benefits insurance interests
We forward to you COPY of the insurance
laws of New York state, and blanks of the
New York and Massachusetts insurance
departments. The New York law, in its
present condition, is not useful as guide
for new act. \ commission appointed TO
revise all the state laws has had and still
has a new insurance code in view, and it is
believed that early next year the present
act will be annulled and d condensed and
much more effective measure will take its
place. -
About twenty years, ago the officers of
the several state insurance departments