The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1905-07-20
SPECIAL MESSAGE.
Sent to the New York Legislature
About Life Insurance.

Albany. N. Y, July 20.-Governor
Higgins this afternoon sent to the leg
islature message, recommending for
its consideration the appointment of a
joint committee to investigate the
business of life insurance as carried OH
in this state.
In calling the attention OF the legis-
lature to the insurance matter, the gov
ernor says: "The unfortunate scandals
already made public by the internal
dissensions in the Equitable Life As
surance society, and by the comprehen-
sive investigation of its affairs by the
superintendent of insurance have not
without justification, aroused a feeling
of intense alarm in the breasts of the
thousands of our citizens who have in
vested their money in policies OF life
insurance and of the thousands of nom
residents who have been taught to re-
gard the New York companies as safe
and secure. Though the business of life
insurance, as at present conducted is
subject to state supervision, and regu-
lations, 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 extrava-
CANT and wasteful; that unwise invest
ments may be legally made and that
trusts may deal Indirectly with the trust
funds for their personal advantage.
That such condition of affairs can exist
casts discredit upon the state. 1t is
apparent our insurance law is in some
particulars inadequate and that the
mana cement of the funds Of these
great companies is not sufficiently safe
guarded.
THE state owes duty to policy hold
ers and benefciaries beyond that of
comparing assets with liabilities and
permitting the companies to justify
their existence by the exhibition of
satisfactory balance sheet and the
prompt payment of losses. Investments
must be restricted, salaries must be
limited to the amounts bearing closer
relation 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 the government OF
the companies. It may well be that
the harsh and arbitrary remedy of dis
solution and receivership should De
made not only penalty, for insolvency
but also a summary check upon a SOL
vent company when 1t becomes ire
deemably the plaything of laWless
greed. The state cannot permit the
subjects of it's supervision to exist as
licensed prodigals of other people
money without becoming an accompIiee
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 it should be made after careful
Study and investigation"
Spea king of superintendent Hen
bricks, investigation of the Equitable,
the governor says that within the
scope of his auth ority and the limits OF
his time the superintendent has per-
formed his duty with impartial thor
oughness.''
1T is, however. of the highest i'm
portance,' said the governor, that a
revision of the insurance law should
be enacted, as promptly as is consist
ent with a thorough knowledge OF the
subject In order that you may be
free to consider an act upon the sub
ject at this session therefore. pur-
suant to the constitution. do hereby
recommend for your consideration the
question of the appointmags az joint
committee of the senate and assembly
with the susual powers of such commit
tees to investigate, after your adjourn
ment, the operations of life insurance
companies doing business in the state.
for the purpose of preparing and rec
ommending to the next regular session
such proposed legislation as may be
adequate and proper to restore public
confidence and to compel life insur-
ance companies to conduct a safe, hon
| est and open business for the benefit
| of their DOlicy holders"