Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1905-08-06
REGULATION OF LIFE INSURANCE.

REGULATION OF LIFE INSURANCE.
Discussion of the question of federal
regulation of life insurance companies
shows a very general public sentiment in
favor of giving the federal government
some such supervision Of the business Of
life insurance as il exercises over ma
tional banks. A valuable contribution to
the discussion is made by Mr.. James NJ.
Beck, formerly assistant attorney gen
eral Of the United States and now coun-
sci of one of the great life insurance com
panies He finds in the language of the
act creating the Department of Com
merce and Labor an implied declaration
by congress that insurance may be a
part of interstate or foreign commerce.
Mr.. Beck urges that there are peculiar
reasons why there should be strict gov
ernmental supervision of insurance. It's
success depends upon a multiplicity of
contracts in order to establish a safe av-
erage, and even when conducted on the
mutual plan, as distinguished from a
joint stock company, such multiplicity
necessarily makes it impossible for the
policy holders to exercise any but an in
direct control over the affairs of the COM
pany. Moreover, many of the contracts
are conditioned upon the death of one Of
the contracting parties, and 1t is emf
nently proper that the state should super
wise the faithful execution of the CON
tract by the surviving party. Mr.. Beck
points out that almost every civilized
country has appreciated the necessity of
governmental supervision of insurance
and in almost all the insurance depart
ments is a bureau of the department Of
commerce. The United States is the only
government in which such power is de-
centralized and permitted to remain in a
constituent state. Uniformity of CON
tract in a given class of insurance is n
basic principle of the business, but many
states attempt by legislation, often in
! judicious, to read into insurance con-
tracts statutory provisions which, apply
ing only 10 contracts in a particular
state, are destructive Of uniformity"
In regard to the decisions of the SUI
preme court of the United States. that
insurance is not commerce, Mr. Beck re-
marks that that tribunal has never had
occasion to consider the validity of a fed
eral statute to regulate insurance, it's de-
cisions having been predicated upon state
statutes. He expresses the opinion that
a law might be drafted which would re-
quire insurance companies to serve the
fiscal purposes Of the government to such
an extent as would bring them within
the scope Of federal power. These views
and suggestions by an able lawyer who
has given the subject of federal regula-
ton Of insurance careful consideration
should command attention and are likely
to exert a considerable influence. The
bill introduced in the senate at the last
session, proposing comprehensive
scheme for the regulation of life insur-
ance companies by the federal govern
ment, will undoubtedly be brought for.
ward at the next session and the sub
ject thoroughly discussed. The author OF
the measure, Senator Dryden Of New
Jersey, is president Of the Prudential
company, and the bill is understood to
have the Endorsement and support of all
the principal life insurance companies