The sun. [volume] (New York [N.Y.]) 1833-1916, 1906-03-31
BILLS REPORTED.
MR.. cox SAYS THEY DO NOT MEET
HIS APPROVAL.
Few Changes From Measures rs Originally
RepOrted-The Provision for the Mu-
tuaIIzatiOn OF the Equitable, Society
According 10 the Ryan Plan Stands.

: ALRASv, March so.-The revised insur-
ance bills from the Armstrong committee
were reported in the Senate and Assembly
to-day. They were referred to general
orders in each house.
In the Assembly, when the bills were
submitted, Assemblyman Cox OF the In
surance Investigating COMMITTEES gave
notice that the bills did not meet with his
approval. Mr.. Cox's objection is mainly
to the bill which permits foreign companies
10 do business in this State with the only
limitation placed on them that the cost
of getting new business here shall not
exceed a domestic corporations expenses.
In their own States foreign companies
may have deferred dividends, but In this
State the domestic companies are de-
prived Of that right. OF curse. a foreign
company cannot write any business in
this State on the deferred dividend plan.
Mr.. Cox also thinks it unwise to prohibit
the organization Of future assessment
companies and prohibiting foreign assess
ment companies from doing business in
this State in the future.
The bills as reported are not changed in
any material respect from the bills as origi-
nally reported by the committee. The
provision regarding the naturalization OF
the Equitable, according to ME-. Ryan's
plan, remains unchanged, for the reason
that the Legislature, according TO the courts,
has no right to interfere with the property
rights of the stockholders OF that company.
The companies must sell all their holdings
of stock within five yea rs, as at first de-
termined, but they may hold the collateral
trust bonds, though in the future they are
prohibited from investing in that class OF
securities or in unsecured bonds or other
unsecured obligations.
The original limitations "a to new business
are continued.
The committee has eliminated from the
bill the section regarding loadings and has
inserted a new section regarding the limita-
ton Of expenses, which Senate Armstrong
says deals justly with the agents and per-
mits this branch of the life insurance bust
ness to be carried on in the future about
on the same plane as the business of the
more co nserv ative life insurance companies
has in the past.
The committee has, 50 far as possible.
restricted provisions of the bill from apply
ing to foreign companies as regards their
business transacted outsi de of New York
State, feeling that this State will be looked
upon hereafter as the pioneer in insurance
reform, and that the other States will
quickly enact the reform insurance laws OF
New York. Power is given the SUPERB II
tendent Of Insurance to revise the standard
forms Of policies by October / next, which
go into effect on January |
The provision for the election Cf directors
by the policyholders is perfected by several
dments which do not change the
original scheme in any of its easentia
features. 1t is provided that policyholders
who have the right to vote secured TO them
by existing cts shall be qualified to
vote, that the lists shall contain the names
of all policyholders entitled to vote, and
that the inclusion of the name of any person
in the list shall not prejudice the company
in any suit upon a policy.
all cases be by ballot, identified by the
signature of the p~olicyholder and con-
tanning the number of at least one policy
held by him. The reason for this is that
the companies ordinarily keep their lists
by numbers, and it has been sought to
prevent anything in the nature OF a crowd
ing Of the meeting or an obstruction of the
election machinery by providing for writ
ten ballots. Proxies can be Joint OF several.
The administration nominations shall be
filed five instead of four months before
the election Of directors, so as to give the
policyholders the benefit of an extra month
in which to meet and determine their action
in the light of the administration ticket;
In the case Of stock companies that have
already given or shall hereafter give the
right to ~policyholders to vote for directors,
they are TO furnish lists, and the election
machinery is precisely the same as for
mutual companies.
With regard to the Equitable it was not
deemed advisable or necessary to have a
special act, as under the Ryan trust deed
the legal owners of the majority of the
stock in the Equitable. the trustees, and
the beneficiary owner, Mr.. Ryan, are COM
mitted in the most solemn and positive
manner to the plan Of giving the policy
the board Of directors, The committee be-
lieves there could be no reasonable doubt
that Immediately upon the passage Of the
new insurance legislation steps. will be
taken to carry that into effect, and that the
trustees and Mr.. Ryan would be hopelessly
discredite1 il they wen. back on their solemn
assurances.
" ew, ii it should happen" said a mem
Der of the committee, that the plans mis-
carried in securing for the Equitable policy
holders such a right, the Legislature sits
next January, and in the face of the reversal
of the declared policy o. the Equitable
legislation in the interest OF. naturalization
would be easily affected OF course it will
be remembered that the minority Of twen-
ty-four directors will continue to be se-
ltCltu ny tio ubltSS dib "lillS ioJ du
ideal form of government, looking at it
from the practical side, it secures to the
policyholder, through the twenty-eight
directors secured by them on the one hand
and the twenty-four directors on the other
hand, something pretty close to control.
1t is an actual control in numbers. The
desire Of the committee has been to avoid
throwing matters into n mess Of litigation,
with nothing to be accomplished and doubt
as the outcome. That has nothing to do
with the stock retirement. The question
Of giving the policyholders the right to vote
in a stock corporation is entirely different
from retiring the stock. The ownership
of the stock is q proprietary right and YOU
cannot take that away without due process
of law"
He said that the Legislature may provide
for the termination of a corporation, az, for
instance, a stock company, and the crea-
ton as a new mutual company by a rein
corporation; and as incident to that, the
wiping out of the stock without a technical
liquidation.
aThat theory he said, may be chal-
lenged by some, but it is the theory on which
the section is put in, and the only one upon
which there can be any stock retirement"
Regarding security investments" he
said, zone change carried the prohibition
only to stock and collatera trust bonds,
but also to unsecured bonds. There has
been a great deal Of insistence that the
disposition Of these prohibited securities
in five years will tend to a loss to policy