Evening star., 1905-11-10
INSURANCE INQUIRY
Sessions Of the Investigating
Committee Resumed
IN NEW YORK TODAY
WITNESS BARNES OPPOSES RE-
PEAL OF INSURANCE LAWS.
Hot Scotch for Insurance Companies IL
Policy Holders Could Ask
Accounting.
IN NEW YORK TODAY

NEW YORK, November 1o-Wiliam
! Barnes, ST.. of Albany, was the first wit
ness before the insurance investigating
| committee when the sessions were resumed
| today. Mr.. Barnes appeared before the
committee at his own request He testified
| that he was a lawyer and was superintend-
ent of insurance from January l. 1850 to
January l. 1870. He identified the vouchers
| dated July /. 1901; July II, 1902: July 49,
1903. and July 1, 1904. each for the sum of
SG66.G6 for retainers and legal services rem
dered The services were for opinions to
the New York Life, Equitable Life Assur-
ance Society and Mutual Life Insurance
Company associated in several measures of
legisIa ton.
For the Equitable he had written several
opinions for the president and wee presi-
dent, recommending the mutualizing of that
| company. as provided in the original char
ter. The sum of each voucher from the
Equitable was a third of the enJi-e sum
witness received FOR the services to The
three companies. Vouchers OF the Mutual
| life dated June - 1901; june 70. 1902 and
July l. 1894, each for Sti6i.6B wee shown.
They represented the Mutual Life Insurance
Company's share in the payment of Mr..
Branes services.
$1,000 for Special Services.
Mr.. Barnes said he received 81 ro from
the Mutual Life for special services Sep
tember ]. 1905. This was for oral argu-
ment before a senate committee protesting
against the repeal of section 5s of the in
| surance laws. Witness said he represented
the three companies.
Were you paid by the New York Life
and the Equitabl asked Mr. Hughes,
counsel for the committee. The Equitable
did not pay anything" replied Mr. Barnes.
The Equitable had too much trouble
themselves to take care of their own mat
iTIltaiaH
opinion that / had given them that the
officers Of that company should mutualize
themselves, because the stockholders wanted
to pocket the whole power in that company,
which they hold to this day. That company
is one-man power today, just as much as
IL ever was except the change of the name
of the man from James Hazen Hyde to
Thomas F. Ryan-that is the only change
made, and the policyholders have no con-
trolling power in it,
Barnes Gives His ReasonA
Mr.. Barnes told at much length his rea-
sons for opposing the repeal of section 90
of the insurance laws. His main point OF
opposition the inadvlsabllity of allow
Ing pollcyholder without the consent OF
the attorney general to bring a suit in
volving the company. or appointing a re-
ceiver or asking for an accounting. Mr..
Barnes said he did not understand that
section So prohibits any action by policy
holders to dissolve the company pro-
hibit any action for accounting under a
policy. He said:
''It has been decided by the courts that.
If 1t require the accounting OF the whole
assets OF the company. something like s4o0.-
100000 and the valuation OF 900 policies.
In order to learn whether or not a policy
holder is TO get five ten dollars, the
courts do not want to assume the onus or
declaring the amount of dividend payable
to policy holders themselves. Instead the
courts have decided that power is best left
in the hands OF the president and the board
of directors, whose decision shall be final
so long as they act in good faith. This
was instead OF allowing policyholders TO
go into any OF the courts of this country,
in its forty different states, thus rendering
the affairs of the company in such con-
fused shape by reason of such litigation
that II would be practically impossible To
do business
Made an Exception.
Mr.. Hughes asked: What is there in sec
ton Sc which makes exception in case
the policy holder charges seeks to prove
bad faith? 1t says: No action for an ac-
counting shall be brought
Mr.. Barnes replied that the courts made
such exception prior to the passage of the
act II was Judge Peckham's decision that
it would not cover bad faith. Mr.. Barnes
said.
I'm order that the company should be
properly protected in maintaining it's re-
serve you think that these matters should
be left TO the discretion of the board of di-
rectors and the officers OF the company,
without any opportunity on the part OF the
court to review them and decide whether
the action of the board is proper?" asked
Mr.. Hughes.
Mr.. Barnes said in reply: Judge Peck
ham said that probably every policy holder
in the country would not commence such an
action but that still they could commence
al least a score of them in every county OF
this state and in every state in this Union
That would make a beautiful hot scotch for
our companies, and make an American in
surance company's name known all over the
country in a most unfortunate and unde-
served way.
Would Be Subject to Crusade.
Insurance companies which are unQues-
tionaby solvent and able to pay all their
liabilities at maturity would thus In a thou
sand ways be subjected to this same sort OF
crusade, not so much by counsel and this
commission as by our friends here turning
around and looking at the newspaper mem,
who send colored reports from Maine to
Texas and from the Great Lakes to the
Gulf of Mexico, to create excitement In this
matter. The reputation of an Insurance
company is like the reputation of woman.
and you cannot assail II, whether true or
not without having the stain last for gen
Grafton and that is where we are today, un-
necessarily, I claim. 1t has already been
decided that policy holders have the right
to commence action except an action 10
appoint a receiver and secure practical DIS
solution of the company. That is state
function.