The Lexington intelligencer. [volume] (Lexington, Mo.) 1901-1949, 1905-12-02
INSURANCE LEGISLATION

legislation aimed az the evils recently
discovered in the management Of life
insurance companies will hC
attempted during the approaching
session Of congress. A bill providing
for federal Incorporation and super.
vision was introduced last year by
Senator Dryden, himself president Of
a life insurance company; aud II is
known that President Roosevelt has
had during the past summer several
conferences with leading senators and
life insurance men, including Dryden.
1t is more than likely that the
presidents message will inclu7e some
specific recommendation upon this
subject, In fact his last message
treated Of this matter tentatively.
There are grounds for fear that some
action may be taken that will result
in more harm than good,
The Dryden bill introduced last
year provides that any insurance
company may by fling its charter
and a financial statement and
~depositing 500, 900 in securities with
the treasurer of the United states,
secure a United States license, which
will entitle 1t to do business in any
state unless and until the license is
revoked by the federal superintendent
for failure to pay a judgment or
because the company is deemed
unsafe. This bill omitS many Of the
provisions of state laws inserted for
the protection Of policy holders aud
adds none by which they will be the
protected. Under this bill the
New York Life Insurance Company,
recently excluded from this state,
could continue to do business here
under the provision Of its federal
license. The people may be sure that
they will be far better protected by
four state insurance departments
than by one federal department, even
though some state departments may
be Incompetent and some corrupt.
In fact the Dryden bill appears to be
an effort to free the insurance
companies from the restraints of
state inspection. The heads Of all
,he great insurance companies favor
The measure, and their approval Of it
S a just cause Of alarm.
The greatest and most threatening
wills Of life insurance arise from the
ize of the companies. or the ninety
Id line life Insurance companies in
he United States the Big Three have
Ialf Of the total assets, or 81 ,247, 331
80. This sum is more than one and
ne-half times the aggregate capital
I all the national banks In the
United States, aud twc-fifths Of the
ggregate deposits in these banks
collection Of such a vast amount
I what is called ''quick capital" in
be hands Of a few men Of unlimited !
in the management of it con. |
the greatest financial menace !
the day. We have vast amounts !
| capital In some OF our great rail.
systems and 10 some OF our great d
ldustrial corporations, like the steel [
ust; but this capital consists 10 Y
ornament investments in bridges, =
Ills, stations, machinery and equip !
ent. These concerns are dependent l
pom the general prosperity of bust :
ess and can never be interested in
-omOting panics aud business dis. '
ess. Not so with insurance
'mpanies. Their interests are as a
kelly to lie on the side of a disturbed '
,ock market as on the other. Their a
lcomes are nominated IN the bond
nd have little to do with general I
rosperity, They make money out of /
Ipses, since on the level premium I
the insured at first pays more :
IAN he should. 1t is the insurance |
ompanieS that furnish the ready {
honey for the vas promotions Of 8
years. And the deferred q
ividend scheme gives them such
asst surplus funds as to afford
'mptation to the risk Of sensational |
No plan Of insurance regulation is :
orthy Of consideration which does {
ot limit the size Of the companies, [
polish deferred dividends, prescribe '
lrrowlY the character Of invest. /
entS, insure publicity of company
devise some better way of .
lection of directors and othar