New-York tribune., 1906-03-10
FOR FREE INVESTMENTS
NORTON ASKS CAUTION.
admits E5pls, but Wants Little
Chance in Restrictions.

Change in Restrictions.
Albany, March 9.-President Paul Mortons
letter on the recommendations of the Armstrong
insurance committee. read at the hearing to-
day. was, in part, as follows:
,sHs MY e5 experience snd observaton E the Equitable
that with certaia qualifications. insurance com
panies should have substantially the freedom
as heretofore with respect to the scope of their In
xestments Accepting your judgment that there
vestrnents. and that in the future investments Of
tea ire insurance M Gan companies should be practically linn
bonds, offer the following suggestions the adop-
Sf %hon % ScsRs RSsS fe
sp1Tlt OF the restriction which you recommend
surance companies which, come within the prohib-
oh ent of h. the law which you propose may convent
Collateral trust bonds Cb) railroad stocks. and (c
The nvestments @ Of the M life insuTanee companies
OF this state in securities of this character are
GSatsrsI Ra1osS ,ta trust bonds schedule 600 90
Hsnk si,;I, and trust company stocks:
Equitable ................... s2I76i60 90
Grand 500 2s5 447 60
These investments have been made under the
authority of the law heretofore existing, and it has
taken ia @ sny i5a Years yes to soeumu,ase them It seems
retain such Of these investments are sound and
do not tend to create any OF the evils which the
committee is seeking TO remedy.
TRUST BONDS AND RAILROAD STOCKS
ent rate OF return upon the collateral trust bonds
held by the Equitable and a brief description Of
nize that whatever may be said of collateral trus.
trust ae w secured and rnsh H sae m
vestments for trust funds. If the life insurance
large amount OF collateral trust bonds this could
only be done at serious loss and the society woud
a Wen nsR
In schedule Cd hereto annexed submit a state
ment OF the average return on the railroad stocks
these stocks are ssh that they may se Looked & g29n
unlike the case Of collateral trust bonds. these
STOCKS, having a wide market could probably be
have difficulty In investing the proceeds in other
Of interest.
BANK AND TRUST COMPANY STOCKS
accep. the conclusion of your committee ths.
should nor be permitted to control or dominate
eHeepon The Of life
so9nd and poae al and m
excellent return upon the yalues at WHICH they are
the Equitable of such stocks could not be market
ed within five years except at a very serious re-
The large holdings Of the life insurance companies
In banks and trust companies could only be sold TO
comparatively few of sufficient strength 10 acquire
aS H compeing the sale of these holdings il would
Of" Of compaTatiTeiy st small number Of men. Who
within certain mtts. could. by acting together. fix
Indeed there are INDICATIONS that movements Of
hs se % e Gn 5e0 sho
not be allowed TO retain controlling or dominating
be permitted to hold Investments. their present
holdings, provided they shall not exceed per cent
It s e Of Course assumed that further
OF to ySr 6e conclusion that
ance companies should not invest In stocks OF cor
that your restrictons might be nberalized in the
foSng @ Thqs b ssu Of 70 ery M
TALLY gidening the Of Of s3,, ,ond
issued by companies operating railroads Some Of
tho strongest bonds upon the market are bonds OF
command almost hish pricss as @ first I mortgage
'-i' Or Permit Investments in preferred or guaran
stocks have regularly paid dividends for fve years
at am proded however % that no
panr should thus acquire over per cent of any
such stock issue
STANDARD FORMS OF POLICY
While hesTy anayg m maSs fa Insurance
tracts plain and 70 prevent d deceit ] OF tn Sresesba
Standard sta forms of policies. Experience suggests
the public with respect insurance undergo radi-
cal Changes / believe that in the long m run both
il 1T the Companies free 70 adopt their own forms
OF PohSies 9ndey your commtee finally determines
90 recommend standard forms OF policies. strongly
advise that YOU do not adopt the forms now pro-
posed which have not received, and cannot receive
within the limited time at your disposal. the care
ful consideration by practical insurance men which
they require, and that you either postpone the
adoption of standard forms of policies until the
next the Legislature better stiti. that
vou empower the Superintendent OF Insurance TO
approve standard forms of policies.
While that theoretically lint
tations upon the amount of business which in
surance company take unwise nevertheless
subject qualification stated below. I offer
objection the limitation you propose | do
recommend. however that you modify your re-
stIictons that insurance company in any
may take enough new business to make good
the reduction suffered during the previous year by
examinations. though that amount exceed the
arbitrary limit which You propose.
: MINIMUM CONTINGENCY RESERVE
I think that q requirement that contingent
reserve Of large companies should ne but per cent
OF the legal reserve would be serious menace TO
the safety of policyholders. and that any fixing
maximum limit upon the contingency reserve is
nVise Indeed IL would be much safer for the in
terests OF the poltcyholders TO establish mipirnn,
limit which must be reached before any diyjSands
can be paid. There Is a general agreement amons
ectuaries that = contingency reserve of 2 per c.nt
Is entirely inads. .uate, and that COMPANY ritb
such a reserve would furnish adequate proytsion
against the iEsv!table fluctuations in the rn.rLs,
value 81 the securities II such law had hasn a..
force in 1893 am 1910 many important rornna n,an
would have be.onle involved with eonringane,s,
of ONLY uer