New-York tribune., 1901-02-07
INSURANCE MEN PROTEST.
HEARING AT ALBANY ON SENATOR
KRUNrS BILL TO TAX THEIR
SURPLU:

was crowded this afternoon with the representa-
1 tives Of insurance companies who had gathered 20
/ be present al the hearing the bill taxing insur-
ance companies, under consideration by both
/ branches OF the legislature good many of those
/ present addressed the members OF the Senate and
/ Assembly committees Taxation and Retrench-
/ ment, who have had charge Of the bill, upon its
chief features.
Among others present representing the insurance
/ companies were Charles c. Undel. Of the Fidelity
| and Casualty Company Henry c. Wilcox. OF the
( American Surety Company; Joel B. Erhardt OF the
! Lawyers Surety Company; Vice-President Kings
| ley of the New-Yor.S Life; A. S Weeks actuary OF
| the same company: William 3. Hornblower and
! Andrew Hamilton, counsel Of the New-fork Life;
| Charlton T. Lewis Emory McClintock. actuary'
and, A. c. Fields Of the Mutual Life; ex-Speaker
Charles f. Patterson. of Troy. representing the
! United States Life; William 4. Kreamer. Of the
/ GeTman-American Fire Insurance Company; w. E
Hutchins of the North River Fire Insurance Com
pany; ce-President John II. Washburn of the
Home Fire Insurance Company; f. r. Kennedy,
manager of foreign insurance companies doing
business in this country; Secretary Burche. Of the
I Queen Fire Insurance Company. and Vice-Presi-
dent Gage e TarbeIl of the Equitable Life.
Vice-President Tarbell of the Equitable, who
the first speaker said the insurance companies of
the State not only believed the bill to be unjust,
I but to be Illegal Su plus funds held trust
funds for periods of seventy years more. and
were paid intervals The Equitable" he
said has $50 OOOOO OF surplus and of this s55 0eocO
is of that class OF insurance. And while we SEEM
ingly have this gigantic surplus of SDOo000 our
F. resources are actually greater than when We
had only 100000 OF resources. We have assets on
the average Of S25 every 800 OF liabilities. Our
dividends stock limited 10 per cent,
and only 5000 is paid the stockholders, while
100000 is paid our policy holders This
bll would take one-quarter of the dividends
INCREASE IN COST OF INSURANCE
Florence. Torrey. representing the Manhattan
Life protested against the bill on the ground that
the taxation of the surplus would lead 10 an in
crease Of the cost OF insurance.
Emory McClintock. actuary of the Mutual Life.
said that the taxation OF the surplus OF life COM
panies must be separated into two groups. Every
life insurance company had ordinary surplus,
and then second part OF the surplus. due 20 a
particular kind Of contracts with its policy holders.
Three-fourths OF the surplus thus trust fund.
which compounded annually at per cent.
The tax on this part of the surplus would reduce
the earnings OF this fund from per cent 10 per
cent.
The objection 10 that is twofod" said Mr.. Nc
Clintock FIRST. that the per cent would not be
the legal due OF policy holders under the contract
they made at the time they took out their policies.
Secondly, the companys contract would be broken"
Charlton T. Lewis. counsel Of the Mutual Life.
said in part:
l have neen studying taxation questions, for
mind is in 6armonv With %eWYor5s pocY Of Of ex @
empting life insurance money from taxation. All
for the par6ose Of matnr the life insurance cons
tract secure. Hence TIE STATE OF New-York has
steadily protected that contract
We have said 70 The families Of The world that
not be taxrd NasstcI.isetts irnposed tax Of one
fourth OF ! per cent on the estimated value OF a
now5 They are crushed. Connecticut gave death
blow - her companies few years ago by imposing
4 tax. We are supposed to be rich concern. We
those polioes on the average is only 500 and We
promise pay the average only $50. THIS
is a most reckless and carclessly 3rawn bin
You mean that the tax is too large" said SEN
ator Krum
No a6sTergd Ts .,, Mr. LeEs ST = m mean caTesssy
reports BY the insurance companies OF their Imam
ca s9Pa9P aa6 b at %9 daTet s5 s In kP 4s
having the report made on January az the same
q only speak q IT," said Mr.. Lewis as an ex-
ample o. the careless way in which this bin is pre-
Tax, y is not analogous 10 any other franchise
~, Where you'd yogr Poucy holders be +: upon
is not the fact that YOU permitted 20 continue
in business franchise inquired Assemolyman
7 think il would Re difficult to estimate It's
value" answered MI Lewis
WILLIAM r. HoRNBLowER HEARD
William B. Hornblower. counsel for the New
York Life. said in part:
II has been pointed u You that It has been
anee fSds rom xa@on @ The 70 po5h e4smP or nsI Re
New-Y2rk Life is that his tax is oneT9us and
just We pay 70 Ee"-Nork County and this state
ana oner Sjates ne etd.naT% 70, taH HPon real es-
companies pay SJ.-5of5I The NewYork Life also
paws the Emitted States Government $6S.599 and
$3,4 80 a. in other States and countries What IS
surplUs2 II he onss equitahy to the polcyholders.
There various meanings of the word surplus"
When are dealing with railroad company. a
mauUfa acturing company. know exactly what
It's surplus IS. What are the liabilities OF life In
surance companies? Nominally the companies have
liabilities Of a thousand millions If
called upon tomorrow 10 pay OFF policies NJ
their face value could moi DO H. The companies
their rate OF interest shrinking. and they
beginning 20 adopt per cent basis OF pay
ing their insured. 50 millions stricken of the
real reserve in order 10 down the legal
| serve. This surplus is not one IN reality. but
| safety fund.