Evening star. [volume] (Washington, D.C.) 1854-1972, 1905-10-04
MCCALL ON THE STAND
President of the New York
Life Testified
IN INSURANCE INQUIRY
SYSTEM IN MAKING REPORTS DE-
SCRIBED IN DETAIL.
Interesting Revelations of Company
Enthusiastically Tables
Explained.
IN INSURANCE INQUIRY

NEW YORK, October 4-John A. Mccall,
president of the New York Life Insurance
Company, was again called to testify be-
fore the special legislative committee in
vestigating life insurance companies of this
state, when the sessions of the committee
were resumed today.
For the first time since the investigation
began James McKeen, associated with Mr..
Hughes as counsel for the committee con-
Quoted the examination. Mr.. McKeen, who
has been studying the technical end of life
insurance, opened by outlining to Mr.. Nc
Call the power and scope of the committee
and said its report to the legislature will In
way be limited by the testimony taken
at these sessions.
Mr.. Mccall, in answer to questions by Mr..
McKeen, then described in detail the system
used in making reports to state insurance
departments, and also explained the NOR
tality tables followed by the New York Life
Insurance Company.
MIR. McCul said the New York Life In
surance Company began to make loans to
its own pOlicyholders in 1892.
You know it is against the law for COM
panies To make loans against their own
polcies?' asked Mr.. Mckeen.
Il never heard that before" replied Mr..
McCalo.
Senator Tully asked how general this
practice is among the companies.
Mr.. Mccall said: I'VE have been forced
into it lately, and there is really no differ
ence between loans upon policies and sur
render values except that in the latter case
the policy does not continue in force"
Mr.. Mccall was questioned as to surren-
der values under the M1ssa chusetts laws,
ana also as to non-forfeiture laws. He said
the first nOn-forfeture law was known as
the law of 1861, and was the result of a
general demand that policy holder should
be remunersted for premiums paid If the
policy was surrendered before its expira-
ton.
A Company's Surplus
Mr.. Mccall said companys surplus is
earned by lesser mortality than that as
sumed to be probable. and also by securing
a rate of interest on money and investments
better than that counted upon in the actu-
aries tables. Asked as to the difference be-
tween government supervision in England
ana state supervision in New York Mr.
Mccall said there was practically no gov
eminent supervision in England The only
thing of this nature was, he said, the filing
or a statement by life insurance companies
with the board of trade
Mr.. Mccall then went into A history nf
lie insurance in this state, telling of the
greater number of companies started from
1870 TO 1880. and of the failure of most of
tence.
Mr., Mccall said that the increasing COM
pehsatlon TO agents was temptation for
agents TO rebate. but Mr.. Mccall said under
the 'Nylic'' system the agents Contracted
not TO do so and forfeited all benefits of
mat system II they violated their agree
mehts. he then went into a detailed state
ment OF general legislation, saying:
With the beginning of every year, I dare
say IL Is the feeling of every executive Of
hcer-I know it is of myself-that for the
ensuing five or six months of the year we
ShaIt be badgered and harassed to death in
every state in the Union by the Introduction
OF bad bills of every kind Sometimes men
OF honor will feel they have n right TO
amend a law and their motives are ali rieht
but mainly the general insurance legislation
OF this country emanates from people who
are aeslrous OF striking at insurance COM
panies.
Matchmaking Legislature Bills.
I believe that three-fourths of the IN
surance bills introduced in the United States
are blackmailing bills. The management
OF these companies really tremble in the
beginning of the year as to what they have
TO encounter during the following six
months of the year
1T is a condition which think vour
committee can do much to provide against
II 1t Will but pass a law similar to the
Massachusetts sS@,ats law-which has been very
eHectlVe, think-that every bill intro
duced shall be lodged or reported in the
once OF the secretary of state"
Mr. Mccall said that the New York law
or 1879 did not wholly prevent rebating
but that II had done much good, and that
the New York Life Insurance Company
il''d uOIle ei9 HLuCn as possible 10 make the
law effective. He had discharged many
agents for rebating.
After explaining the tontine and deferred
dividend plans of insurance, Mr. Mccall
said:
Every fund of the New York Life In
surance Company has a class. There is
no fund which may be expended for the
motives of its officers. There is no re-
serve or surplus that does not come under
the provisions of the laws of New York;"
Property of Policy Holders.
Mr.. Mccall was asked if he agreed with
Elias Wright, sponsor for the Massachu-
setts forfeiture law of 1861, that life in
surance companys reserve should be the
absolute property of the policy holders.
The witness replied that he did no. he
thought Mr.. Wrights view was an extreme
one. His own view, Mr.. Mccall said was
that charge against the reserve on sur
rendered policy was legitimate. The policy
holder who surrenders a policy breaks a
contract, said Mr.. Mccall. and It was only
just that a charge be made against his re-
serve toward the expense the company
would have in writing a new policy
In reply to a question, Mr.. Mccall said
that the New York Life Insurance Com
pany did not make reduction in favor of
German subjects in order to keep its hold
On German business
Lawyer McKeen said to him:
IT mas been alleged that there was a
discrimination in favor of Spanish soldiers
against American soldiers during the late
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