New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1905-12-06
INSURANCE REGULATION.

The great insurance companies afford striking
examples of corporations whose business has ex-
tended so far beyond the jurisdiction of the
States which created them as to preclude strict
enforcement of supervision and regulation by
the parent States. In my last annual message
l recommended that the Congress carefully
consider whether the power of the Bureau OF
Corporations cannot constitutionally be extend
ed TO cover interstate transactions in insurance.
Recent events have emphasized the Importance
of an early and exhaustive consideration of this
question to see whether it is not possible to
furnish better safeguards than the several
States have been able to furnish against cor
rupt1on of the fragrant kind which has been ex-
posed. 1t has been only too clearly shown that
certain Of the men at the head of these large
corporations take but small note of the ethical
distinction between honesty and dishonesty
they draw the line only this side of what may
be called law honesty. the kind of honesty neces-
sary in order to avoid falling into, the clutches
of the law. OF course, the only complete remedy
for this condition must be found in an aroused
public conscience. q higher sense Afssthioal con-
duct in the community at large and especially
among business men and in the great profession
of the law, and in the growth of spirit which
condemns all dishonesty, whether in rich man
in poor man. whether It takes the shape of
bribery or Of blackman. But much can be done
by legislation which is not only drastic but prac-
teal. There Is need of far stricter and more
uniform regulation OF the vast insurance inter-
ests Of this country. The United States should
in this respect follow the policy of other nations
by providing adequate national supervision of
commercial interests which are clearly national
In character My predecessors have repeatedly
recognized that the foreign business of these
commercial relations During the adrninistra-
lions of Presidents Cleveland. Harrison and Nc
Ktnley the State Department exercised it's in
f1uence through diplomatic channels to prevent
unjust discrimination by foreign countries
against American insurance companies. These
negotiations illustrated the propriety of the Con-
gress recognizing the national character Of in
surance for in the absence of federal legislation
the State Department could only give expression
to the wishes of the authorities Of the several
States, whose policy was ineffective through
want of uniformity.
I repeat my previous recommendation that
the Congress should also consider whether the
federal government has any power or owes any
duty with respect TO domestic transactions in
insurance of an interstate character. That State
supervision has proved inadequate is generally
conceded. The burden upon Insurance cornpa-
MES and therefore their policyhoiders, of con-
ficVing regulations of many States is unques-
toned while but little effective check is i'm
posed upon any able and urscrupulous man who
desires to exploit the company in his in
terest at the expense of the policyholders and
of the public The inability of a State to regu-
late effectively insurance corporations created
under the laws of other States and transacting
the larger part of their business elsewhere is
also clear. AS remedy for this evil of con-
ficting. ineffective and yet burdensome regula-
lions there has been for many years a wide
spread demand for federal supervision. The
Congress has already recognized that interstate
insurance may be q proper subject for federal
legislation, for in creating the Bureau Of Cor
porations it authorized it to publish and supply
useful information concerning interstate cor
porationS, Including corporations engaged in
insurance" It is obvious that If the compilation
of statistics he the limit of the federal power it
is wholly Ineffective to regulate this form Of
commercial intercourse between the States. and
as the insurance business has ouCgrcWn IN mag
nitude the possibility of adequate State super
vision the Congress should carefully consider
whether further legislation can be had What
is said above applies with equal force TO frater-
nal and benevolent organizations which contract
for life insurance.