The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1905-07-21
LEGISLATURE Is
TO INVESTIGATE
All New York Life Insurance Com
panies VIII Be Looked Up.
MESSAGE OF THE GOVERNOR
RESOLUTION QUICKLY OFFERED
AND PASSED.

LBAN4, \. L. July 1V-TONSAiAOA
n Higgins this afternoon sent 10 the
legislature a message recommend
ing for its consideration the appoint
ment of joint commission to investi
gate the business of life insurance as
carried on in this state.
In calling the attention of the legisla-
ture to the insurance matter. the gov
ernor says:
Policy Holders Alarmed.
The unfortunate scandals already
made public by the internal discussions
of the Equitable Life Assurance So
ciety and by the comprehensive investi-
cations of it's affairs by the superinten-
dent of insurance have not without
justification aroused a feeling of in
tense alarm in the breasts of thousands
of our citizens who have invested their
money in. policies of life insurance and
of the thousands of non-residents who
have been taught to respect the New
York companies as safe and secure.
Though the business of life insurance,
as at present conducted, is subjected
TO state supervision and regulation, it
is evident that earnings which should
be credited to the policy holders may
be diverted to other purposes, that
expenses of operation may be eX-
traVagant and wasteful; that unwiSe
investments may be legally made and
that trustees may deal indirectly with
the trust funds for their personal adj
vantage. That such condition of af-
fairs can exist casts discredit upon the
state. 1t is apparent that our insurance
law is in some particulars inadequate
and that the mana cement of the funds
Of these great companies is not suf-
hciently safeguarded.
Duty of the State.
THE state owes a duty to policy
holders and beneficiaries beyond that of
comparing assets or liabilities and per-
hitting the companies to justify their
existence by their exhibition of salts
factory balance sheet and the prompt
payment Of losses Investments must
be restricted, salaries must be limited
TO the amounts bearing a closer reIa-
ton to the commercial value of the
services rendered, trustees must be
held to stricter accountability
and the policy holders must be
given more effective share in
1t may well be that the harsh
and arbitrary remedy of dissolution
and receivership should be made not
only for insolvency, but also a sum-
mary check upon a solvent company
when it becomes irredeemably the
cannot permit the subjects of it's
supervision to exist as licensed prodi-
gals Of other peoples money without
becoming an accomplish to the offense.
I'VE cannot judge all life insurance
companies by the sins of one. A re-
vision of our insurance law is neces-
sary. but ii should be made after care
tul study and investigation"
Work of Hendricks.
Speaking of superintendent Hen
bricks investigation of the Equita BILE,
the governor says that within the
scope of his authority the superinten-
dent has performed his duty with i'm
partial thorOughness.
1t is, of course, of the highest i'm
portance.' says the governor that a
revision OF the insurance law should be
enacted as promptly is consistent with
q thorough knowledge of the subject
In order that you may be free to consider
and act on the subject at this session 1
therefore, pursuant to the constitution.
do hereby recommend for your consider
alton the question of the appointment of
a joint committee Of the senate and as
sembly with the usual powers of such
committees to investigate, after your adj
1ournment the operations of life insurance
companies doing business in the state for
the purpose OF preparing and recommend
ing to the next regular session OF the leeis-
lature such proposed legislation as may
be adequate and proper to resore public
confidence and to compel life Insurance
companies to conduct a safe honest and
open business for the benefit Of their