Omaha daily bee., 1906-02-23
OFFICIALS TO BLAME
Armstrong Insurance COMMITTEES Makes Its
4 Report Public
ESTATE DEPARTMENT HAS AMPLE POWERS
4 Irregularities Gould Have Been Unoov-
cred Had officials Been Diligent,
ACTIONS OF COMPANIES CRITICISED
Hamilton, Moourdy and Hyde Transactions
Are Roundly Condemned.
MANY CHANGES IN LAW ARE SUGGESTED
Poiicyhciders should he Given Greater
Power of Companies. but the
Hfgbt should BE Care
fully Guarded.

pointed at the last session OF the New York
legislature TO investigate life insurance
made its report today The report is ex-
tremely voluminous. extending to 31s
printed pagcs. 1t embraces a long review
of the testimony taken by the committee
and It's recommendations and conclusions
~ to remedial legislation. In addition there
is a chapter devoted to the state insurance
department. In which the committee de-
clares that II would seem that the super
intendent OF the department has had am
pie power TO ascertain the transactions of
insurance companies. but that the super
vision by the department has not proved
q SUFFICIENT protection against extravaganza
and maIadministration. Instances given
of reports made In the affairs of the Mu-
tual Life Insurance company the New
York Life Insurance company, and the
Equitable Life Assurance society, In which
nothing was brought out to show the con-
ditions developed in the testimony given
before the committee.
No substantial amplhcation of the
powers OF the department seems necessary,
according to the committee which holds
that most of the evils which have been
disclosed by the investigation would have
been impossible had there been a vigorous
performance of the duties already laid
upon the insurance department.
Remedial LegisIation Suggested.
The remedial legislation recommended by
the committee provides for the safeguard
Ing of the rights of policy holders in
mutual companies in the election of di-
rectors, recommends that stock companies
be given authority to retire their stock and
become mutual companies. but that such
naturalization shall not become compulsory.
Various regulations are urged to prevent
unwise investments and unwise syndicate
operations; the sale of prohibited securi-
ties within five years is advocated. A
recommen ndation for the limiting of new
businesses to s15,0o0,Oo0 year is made,
the committee .favors the prohibition of
contribution by insurance companies for
political purposes; lobbying is condemned.
and the wisdom of economical manage
ment is urged. but the committee does
not deem IL advisable that the committee
attempt to prescribe the expenditures OF
insurance companies. Further recommen-
dations are on the valuation of policies.
surrendered values. and publicity of all
facts pertaining TO a company's business.
An amendment TO the penal code is rec
commended to provide that the person re-
ceiving a rebate should be equally guilty
with the one who gives it.
In its detailed report of the investiga-
ton OF the companies. the committee says
the accounts of the Mutual Life Insurance
company should be thoroughly examined
In order that the extent to which moneys
have been misapplied and the responsibility
for any misapplcation which may be
shown may be determined.
Action of Companies Criticised.
Concerning the New York Life company
the committee found that its transactions
with Andrew Hamilton showed extraordi.
nary abuse and the statement sent from
Paris by Hamilton was without suitable
specifications.
In taking UP the Equitable Life Assur.
ance society the committee tells of the dis
sensions last February which resulted II
the reorganization OF that society and IN
the disclosures which brought about the
legislative inquiry. The syndicate opera
tions OF the Equitable and James Fl. Hyd,
and the relations between the society ant
Kuhn. Loeb & Co.. as brought out In ties
timony before the committee, are referred
TO at considerable length, as is the S50,OO0
0o0 Union Pacific pool under the manage
ment of Il. IA. Hartman, Jacob Schiff anC
james Sullman Participation in this poo
by the Equitable. the committee holds, wai
clearly an Improper transaction for an in
suranee company.
Former Governor Odelrs shipbuilding sui
against the Mercantile Trust Co., whicl
was settled by that company. is treateS
Of. the committee holding that the circunl
stances OF the introduction OF the Anble
bill might have been sufficient to induc
that settlement on the part OF the officer
of the trust company through fear tina
proceedings inimical to its interests Nigh
be taken. II those who could initiate then
were not appeased. The committee repor
contains full statement OF loans made q
E. H. Hartman and Kuhn, Loeb & co
by the Equitable. The payment of 5000
q year TO Senator Depew the committe
holds MAS not warranted. the services rem
dered by Senator Depew not being ade
quate. The committee also sets forth tina
II does not appear what services wer
rendered by former Senator Hin. who wa
paid 5000 year In justice to Mr.. Hill
the comfitsee says, It was not able TO &c
his testimony on this subject. because h
was too i'll to appear. The committe
hnds that in spite of the irregularitie
shown there is no reason to question tn
solvency OF the Mutual Life Insuranc
company, the New York Insurance con,
pany and the Equitable Life Assuranc
society.
Abstract of the Report.
Atet lecltihS tHe ieSolutlon hutnoflzln
the work and the plan adopted for IN
inVestlhonon by the committee. each In
divit NOmpany is passed In review
Thee nfteen companies organize
under u'e laws of New York. Issuing lev,
premium policies aud in a single instanc
only the company departed from the polio
of limiting it's investigation to companie
organised under the laws of New Yorl
This company was the Prudential Lii
Insurance company of New Jersey
The matters demanding the considers ito
Of the legislature for the purpose of rem
edying existing evils and of establishin
mote securely the business Of life insul
anoe In this state are grouped under III
Following heads;
Etrst-.orea MIA tion OF life incorporat ton
Second-Control or the rights Of polic
holders in the election OF direcs ors.
Third-Retirement Of stoci-