The sun. [volume] (New York [N.Y.]) 1833-1916, 1905-03-07
TO MUTUALIZE THE EQUITABLE
SUPT. HENDRICKS COMMENTS on
TIE PROPOSITION.
No Legal Dlnioulty in the Way, lie Says,
but II Is OF the First Importance That
IL He Prosecuted with All Possible
Expedltlon-A Just and Wise step.

Expediton-A Just and Wise step.
ALBANY, March 0,-State Superintendent
| Of Insurance Francis Hendricks IN his
annual report. transmitted to the Legislat-
ure tonight makes the following COM
ments on the proposition to mutualize the
Equitable Life Assurance Society:
The publicity attendant upon the move
ment to transform the Equitable Life As
surance Society from n corporation, the
management Of which is In the control OF
the shareholders, to one in which the vot
ing power Is also vested in the polioyhoders,
makes it appropriate, if not essential, for
this department to outline its views upon
the subject which ia of 50 great an interest,
not only in this State, but in every part OF
the United States and throughout the
world
This company was organized in 1850
under the general life insurance law Chap
ter 4o9, Laws of 1859, which required that
every such company should have capt. al
stock Of at least 100000 This was OBJ
viously intended as a protection TO the
pocyholders during the inceptive period
of the company's exist ence against fnan-
cial danger. Il was never contemplated
that this amount OF capital stock should
become the arbitrary owner OF the interests
and property Of the holders OF policies is
sued on the mutual plan, especially when
the company should deliberately adopt
the mutual policy plan almost exclusively,
Rs the Euuita BILE did at the very outset
-The recent action of its board Of d.
rectors declaring its opinion that the right
10 vote for directors should be given to the
poliOyhodera has excited deep and wide
spread interest. Their action Is as yet
incomplete, a committee having been APP
pointed To arrange the details for carrying
the plan Of naturalization into effect, to be
passed upon at a subsequent meeting of tho
directors; but the public information of
the agreement that such action is to be taken
has given general satisfaction.
"Inasmuch "a the directors have COM
mitted themselves TO this praiseworthy
course 1t h not necessary at this time for
this department to interfere, but / deem
it of the first importance 10 the company
itself, an well as to its policyholders and TO
the public, that the steps inaugurated
should be prosecuted with all possible
expedition, and that the desired result
should be- secured without qualification
and limitation, 20 that whatever agitation
and uncertainty exists 10 disturb the minds
Of the polioyholders and intending appli-
cants should DO set at rest. AZ long as the
matter romans unsettled. however, now
that il has been publicly raised, disQulet
and unrest viii continue
mo legal difficulty appears in the way
of immediate final action. The property
rights OF tho stockholders are limited by
the charter TO an interest dividend Of 7
per cent. per annum The exercise of the
present power TO elect directors by the
stockholders constitutes an important
and responsible trust which has, legally
speaking however. no money value.
Besides the express power conferred
upon its directors contained in Article ",
OF its articles of incorporation it is clear
that under section So Of the insurance
law the directors may by majority vote
order the fling of an amended charter
carrying out proper plans of mutual2a-
ton This power to 80 amend under said
section of the insurance law was exercised
and the privilege more literally extended
to the policyhoders to vote in the cleo
tons OF its directors, notably in the case
OF the Germania Life Insurance Company,
which was organized in iseo, under the
Identical law under which the Equitable
was Incorporated,
-Said amendments in the direction OF
naturalization were adopted by the di-
rectors of the Germania Life Insurance
Company and the charter IA amended
fled in this department according TO law,
having been approved by the then At
torney- General Of the State on May 20 1901
THE feasibility of such q step has there
fore been demonstrated Its justice and
wisdom are beyond question