Aberdeen herald. [volume] (Aberdeen, Chehalis County, W.T.) 1886-1917, 1905-07-27
Will Investigate
new YORK LEGISLATURE TO LOOK
into life INSURANCE.
Special Joint Committee OF House
and Senate With Ample Powers
Will Conduct Inquiry-r1essaqe
on the Subject by Governor
higninS.

Albany, N. Y, July 24.-There will
be a legislative investigation Of life
insurance as carried on in the state
both by New York state corporations
and those in other states doing business
in this state.
This investigation will be made by
a special joint committee with ample
powers, OF which the chairman will be
Senator william Armstrong, of Roches.
ter, a Republican. The other senators
on the committee will be William g.
Tully, Of Corning, Republican, and
Daniel j. Riordan, of New York city,
Democrat. Senators Armstrong and
Tully are lawyers; Riordan is a real
estate and insurance agent. The two
Republicans were selected by Governor
Higgins and Senator Raines, Republi.
can leader in the senate. The assem-.
bly, members Of the committee will be
named by Speaker Nixon within the
next day or two.
Chairman Armstrong said that while
the actual hearing by the committee
would probably not begin for some
time, the preliminary preparations
would be set in motion as soon as pos
sible and the organization Of the com.
mittee would take place as soon as the
assembly members had been appointed.
Higgins Sends r1essage.
The institution of the committee fol-
lowed hard upon message of Gov,
Higgins to the legislature, which came
as surprise. The message was re.
ceived in the senate after the conclu.
sion Of the Hooker case, and was not
read until late in the afternoon session.
In the course Of his message, Gov.
Higgins said:
1.-The unfortunate scandals already
made public by the internal disseneiona
of the Equitable Life Assurance Soci.
ETY. and by the comprehensive investi.
cations Of its affairs by the superin.
tendent Of insurance have not without
justification aroused feeling of in.
tense alarm in the breasts of thousands
of our citizens, who have invested
their money in policies Of life insur.
ance, and of the thousands of uon-resi-
dents who have been taught to respect
the New York companies as safe and
secure.
Though the business of life insur.
ance, as at present conducted, is sub
jected to state supervision and regula-
ton, it is evident that earnings which
should be credited to the policy hold.
ers may be diverted to other purposes,
that expenses of operation may % ex-
travagant and wasteful; that unwise
investments may be legally made, and
that trustees may deal indirectly with
the trust funds for their personal ad.
vantage. That such condition Of
affairs can exist casts discredit upon
the state. 1t is apparent that our in
surance law is in some particulars in
adequate and that the management Of
the funds Of these great companies il
not sufficiently safeguarded.
Duty of State.
1.-THE state owes duty to policy
holders and beneficiaries beyond thai
of comparing assets or liabilities ant
permitting the companies to justify
their existence by their exhibition Of
a satisfactory balance sheet and tn,
prompt payment of losses. Investment
must be restricted, salaries must b.
limited to the amounts bearing a clos
or relation to the commercial values o.
the services rendered, trustees must b.
held to strict accountability and thu
policy holders must be given a NOR
effective share in the government O
the companies. 1t may we'll be tina
the harsh and arbitrary remedy of dis
solution and receivership should b'
made not only a penalty for insolvency
but also summary check upon a sol
vent company, when it becomes ire
deemably the plaything Of lawles
greed. The state cannot permit tn
subjects of its supervision to exist a
licensed prodigals of other people
money without becoming An accom-
plice to the offense.
"We cannot judge all life insuranc
companies by the sins of one. A re
vision of our insurance law is neces
sary, but it should be made after care
full study and investigation"
nlKIJCI CC0TT lM0NT