The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1906-02-23
STOPS SHORT OF
REAL REMEDIES
INSURANCE COMMISSIONER ON
TILE ARMSTRONG REPORT.
State Commissioners Make More Rad
ical Recommendations Would Have
District Representation and Compel
Distribution of Investments igures
In Examiners Report.

T. D. O'Brien, state insurance COM
missioner, made public today the re-
port Of the special examiners =! on the
New York Life. It is complete
cial management and present status, and |
contains some severe criticisms On the
same line as the Armstrong report. The
recommendations of the commissioners,
published Yesterday, 60 farther Mt n,R t6an
the Armstrong report, and MI; 1asr1 zen
not go far enough. He says Of their
report:
so far as it relates to facts, is entirely
in line with the conduct of the examlna-
ton, very complete and frank. Many
of the recommendations are excellent;
It is very strong report, think, and
the recommendation for the adjustment
of the deferred dividend, if carried into
effect, is of very highest importance.
I don't think the recommendations 60
| far enough in the matter of,investments,
tho I recognize that to be very diff
cult matter to deal with. There should
be system, not only for restricting the
character of investments, but requiring
their distribution. Here are three com.
panies in New York with assets, Of
$l,2OO,OOO. Their income is derived
from hundreds of thousands of policy
holders, scattered all over the world,
and it is only fair to say that those
companies should distribute their assets
territory from which they derive their
incomes The Armstrong report, while
absolutely sound as to the character of
the investments which should be per-
mitted, doesn It touch on the important
question of the distribution of these
assets, and I believe just as long as
these immense assets are INFESTED thru
| L, ii nc4y f1f1 in hn
large centers, in class of securities
the fotation Of which constitutes so
large a portion of the business of the
brokers or promoters, just so long will
the temptation exist to control those
companies in the interest Of persons 9th
er than policyholders.
"The suggestions in the Armstrong
report made fer the purpose of giving
the policyholders better control of the
value. The New York Life has prac-
tically adopted that system already.
The suggestion that lists of policy
| holders be filed with the insurance de-
partments for public inspection is very
important, and might have considerable
effect, but beyond that the plan pro-
posed is no improvement. Any group
of policyholders numbering 100 is
given the right to make nomination,
UuU AO oCCul SuSSCStCu Ny NlACu
the policyholders can take any united
action except as to the directors nom
mated by the trustees. There is nc
solution Of this problem except the in
= PRODUCTION of representative form OF
, government. Should the policyholders
be divided into districts for reasonable
size, and given the opportunity OF
electing a representative to the annual
meeting whose expenses should be paid
H. g.,
\ Of government would be introduced
The fraternal societies have this form
: Of government. Some of the largest OF
those organizations have nearly as
many policyholders as the three big ole
line companies, so it cannot be claimed
, that the mere size, of a company would
prevent the plan from being adopted
! However, if the legislature Of New
: York enacts into law the recommends
= lions of the committee, a great steI
= forward will be, taken.
= "The conclusions found by our com
n missioners were stated simply, in orde1
f not to confuse the public mind, as We
! believe the root of the whole trouble il
the deferred dividend system.'
J. The report of the examiners show
8 that only III voted in the annual meet
S ing of 1899, and that the number hat
J. grown to 1898 in 1905, but there wer'
!. 1901, 1869 policy holders, so only on
J. in five hundred was represented las
t year.
The report shows that salaries to ex
ecutive officers were 1928, 900 last year
and this year will be $24s,oOO. I
a shows that mortgage loans held de
% creased from $41,O0O,OOO in 1897, t.
= $25,5s6,OOO in 1905. Bonds held ar
!. valued at $317, 1896, 1854. Cash o.
y hand was ,77s,195.75, Of which tn
great part drew and per cent inter
est. The examiners thought more 0
y this should be invested instead of lef
I. in banks. Interest receipts were a
IL the following rates: Railroad and mu
nicipal bonds, 4.1S per cent; foreig
bonds, SOL; loans and mortgages, 4.44
. real estate, per cent; policy loans,
per cent; temporary loans, 4l9 pc
% cent. --7 a. ---=... -,.
j. The report covers 80 printed pages