, 1906-01-17
MESSAGE OF GOVERNOR OF NEW
YORK TO THE LEGISLATURE
is FULL OF INTEREST.
Average PoIioyhoIder Has Rested Con-
tent in Belief Of Financial Sound
ness of Companies and Integrity
of Their Officers and Are III Pre-
Pared for Disaster.

-
the people, and are full of information
as well:
THE magnitude and extent of the
business of life insurance is startling,
even after a year of discussion and ag-
itation. At the end of December, 1904,
forty-two companies doing business in
the state of New York had total gross
assets of s2,454, 669, 1868. For the
year ending December 81, 1904, these
companies had received in premiums
$4S9, 542, 1922. 04, and they had a total in
come from all sources of S5S0,743,-
$50. IA, The disbursements for commits.
sions TO agents on this business
amounted to $67, 0S6,SS7.97; the sala-
ries, medical fees, and payments to en-
ployes were $50, 537, 255.9S, and other
disbursements were 1888 1895, 6S6.55. The
total number of policies in force De-
cember 81, 1904 of the forty-two COM
lpanies named, was 9,949, 1872, insuring
$40, 02S ,090, 1881. The business may be
roughly divided in halves between
three great companies existing under
the laws of New York on the n side,
and the remaining companies on the
other. The problem of state regulation
of insurance has become one of over
Swallowing Importance. 1t calls for
calm, courageous, and intelligent treat
ment. We must aim to cure, not to
kill; to preserve, no to tear down.
Great companies have, in the past ten
years, been heaping up riches almost
beyond the dreams of avarice. They
deal with amounts rivalling in magni-
tude the cost and Indebtedness of ma
tional governments. The average pol
icyholder has rested content in a belief
in their financial soundness and in the
integrity of their managers. Self-de-
NAL, prudence, foresight, and a desire
to protect the family, and to provide
for old age have given a ready ear to
the eager n persistent solicitations
of lavishly paid agents, until the hopes
and fears of our people find general
expression in their life insurance in
vestments. This enormous business
has been done under laws most gen.
erous to the companies. While the
Estate permits none to transact the bus
mess of life insurance within its bor-
ders without an official certificate of au-
thorization, n provides for the exam
ination of the officers and agents of
such companies under oath with refer
ence to their business, such examina-
lions are conducted with a view to as
pertaining %solvency, and not for the
purpose of otherwise interfering with
the discretion of the directors in max
ing investments, paying salaries, dis
tributing surpluses, and other matters
Involving the internal management of
a solvent company. 1t is to the credit
of the state that no insurance company
has fallen in recent years.
The eyes of the whole world are
now turned towards New York, and if
this legislature does not produce an
insurance law which shall be drastic
but practicable, radical but sane, in a
spirit which shall be courageous but
not historical, it will fail to meet the
expectations of those who have conf
dence in the ability of popular govern
ment to solve its own problems as they
arise.
Future effective action by congress
or the federal government is not proba-
bic, nj the possibility of such action
should not retard for an instant the
work of the state.
while life insurance has received
almost exclusive attention it cannot be
assumed that other corporations deal
ing in indemnity and investment con
tracts have been blameless, and a word
of caution may not be amiss regarding
assessment associations, accident in
surance companies, cooperative fire in
surance companies, and the like. Bet
ter allow free and unregulated insurs
ance than permit such concerns to ex-
list under laws which do not protect
our citizens but enable the promoter.
of doubtful schemes to beguile the in
weston to financial disappointment and
fatten himself on false promises and
.deluded hopes. G
THE funds of insurance companies
should sacredly be safeguarded for the
.policyholders of the state and every
element of personal gain eliminated
from their management. To accom-
plish this result it has been suggested
that large amounts ought, for the good
of the community, to be invested in
bonds secured by mortgages on real
estate at a conservative valuation, that
deposits with or loans to moneyed cor.
lporations should be subject to suitable
restrictions; that the control of sub
sldlary companies should not be per-
mitted; that insurance directors should
have no conflicting business connec-
tons; that investments in corporate
bonds should be regulated so as to pre-
vent speculation and loss from an at
tempt to float doubtful enterprises;
that policies should be Of standard
forms so that the abuses arising from