New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1892-01-24
LIFE INSURANCE METHODS

The report of the Superintendent OF Insurance
exposing the mismanagement OF the New-lo rk
Life Insurance Company is valuable, not mclci!
for the reforms it must bring about in that com
pany's affairs. but for the light it throws upon
life insurance methods generally. We take 1t
for granted that the trustees of the New-lork
Life will promptly require the designations Of
the officers who are involved in these disclosures.
They certainly will not increase the measure OF
blame that already attaches to them by any
course that excuses them There is no form OF
trus. association in the world that should be so
sensitive of its good reputation as life insur-
ance company, and If the trustees Of the New
York hesitate to do their full duty after their
managing officers have been officially adjudged
guilty Of gross neglect, extravaganza, lncom-
potency and iIlegality of method with the result
that three or four millions of assets have been
wholly lost and twice as much placed in serious
peril, they will arouse public sentiment against
themselves which may produce a reform far mole
sweeping than now seems necessary.
But even when this company has been re-
established in public confidence, much will re-
by Superintendent Pierce have had their just
effect Although it is not intlmated that other
such corporations have been spending two and
three times as much for property as 1t Is worth
or lending money by the half million to lrle-
spon>ible agents of known bad character on
flimSy security. it is plainly implied that our
laws governing the investments OF these COM
panies are inconsistent, and that far too much
is left to the discretion of the companies man
ayers. 1t is implied also that the Newly orkS
method of stimulating agents by enormous com
missions and extra allowances is one too generally
initiated by its rivals. There is, beyond doubt,
great deal OF serious fact in these hints. eS-
pccially when they arc considered in the light
Of Mr.. Shannons declaration. referring to the
company under scrutiny, that :" the premiums
charged are 50 large that gross mismanagement
may exist and the company still remain perfectly
solvent" Life insurance is not only good
thing, but it has come to be almost necessary
thing. No man who attempts to support a fam
ily on a salary can feel safe without it, Its
mathematics has been reduced to a science, and
a proper observance Of the principles of the
business is sure to render wel-founded companies
opulent. 1t follows that the polcy-holder is en-
titled and especially in mutual companies, to the
lowest premium rate that is consistent with
safety
An examination under the Legislatures drec
ton of the body of our insurance laws with a
view to the removal Of all antiquities and in
consistencies and to the passage of new laws
limiting investments to certain safe lines of Sc
curities, and limiting the amount Of such hold
ings TO a certain percentage Of the total invest
ment, defining clearly the methods by which
fhov Sh1l la acnlTirpd and contrcnp tho oy-
penditure which shall be made in the pursuit of
new business. is a logical and necessary public
demand in view of Superintendent .Pierces re-
port When the extent 10 which insurance has
gone and the right Of The vast public of the
insured TO feel secure in its contracts are con-
sidered, it must be admitted that good laws COW
cring these points are due as we'll to honest
companies as to their poicy-holdcls.