Omaha daily bee., 1906-04-01
NEW LAWS FOR INSURANCE
Something Of the Trend of Present Day
Legislative Activity.
DANGER THAT LIES IN STATE CONTROL
Too Much Power in the Hands of
the Department 81 New York
~ Matters Now
stand

The public interest in the business of in
surance and the management of the com
panies conducting II has given rise TO much
proposed legislation in the various states,
some Of which is wise and desirable, but
most of which is foolish and not only I'M
necessary, but positively harmful
The tendency to interfere by drastic
measures I'm insurance matters is the
natural outcome OF the conditions which
have been recently exposed. Until the
Equitable row began the public confidence
In the great life insurance companies was
unbounded, immense sums were annually
paid to them and no questions were asked
by the policy holders that smaclSed Of i'm
pertinent curiosity regarding such trifling
things as expense Of management, or the
squandering or manipulation of trust funds
The exposure OF corruption and incom-
potency in men who have long lived in the
odor Of sanctity. the disclosure OF whole
sale blacknail and the faithlessness OF both
company and state officials, whose duty
required them to protect funds impressed
with the most sacred trust known in our
modern life. have inspired the agitation
about insurance that will not end until the
utmost publicity is achieved in all that per-
tains to solvency and management; until
competent state insurance departments are
thoroughly cleaned out, and a system Of
efficient supervision is established that shall
mean something more than the collection of
tolls and license fees and the maintenance
Of fat jobs for political shysters.
Tho startling revelations of incom-
Potency in the Insurance department Of the
state of New York. and the wanton and
fraudulent waste of public money in the
Pennsylvania department, to say nothing
of more insignificant cases of dishonesty
and ignorance, have created feeling OF
general distrust with the insurance laws
in force, and their administration.
Reasons for Insurance Legislation.
The two things responsible for flooding
every legislature now in session with bills
Of one sort and another relating TO in
surance. are the public dissatisfaction al
ready spoken OF, and the fear that some
movement may be put on foot through
public condemnation of the present system
of Insurance supervision that shall dis
place recreant or incompetent public Of
fcials There Is seen,i an active though
newly born, desire on the part of legis-
lators and insurance commissioners to earn
the public confidence. ana stop unfriendly
criticism; but this desire manifests itself
by striking at the business to be super
vised; and in obstructive and not construc-
tive measures. B
In many states bills have been introduced
requiring the life insurance companies who
have issued what is known as deferred
dividend policies. to annually apportion
and credit the so-called surplus from the
accumulations thus created to the several
policy holders. Legislation along this line
hok
the question is a step towards a needed
reform. The most searching Investigations
have shown the solvency OF the principal
life Insurance companies to be unimpaired
The stock fire companies have not been
subjected to a similar scrutiny. for these
companies have for hundred years pro-
tected the people against disaster from fire,
and have been factors in building up
our commerce, and the credit that under
lies It, Though the fire waste of
the United States Is at least $l50,OOO.00O an
nually, these enormous returns by the fire
companies to their insured have not weak
ened the resources of those companies that
do business outside of the states of their
creation, though In the great conhagra-
lions that have taken place some of the
smaller companies have gone to the wall
Even so, the risk of loss through the in
SolNency OF nTe companies is pracucaLy
nothing. Notwithstanding these facts, II
is proposed to add to the burdens already
imposed on those companies and to increase
the expense Of doing business by taxation
and otherwise, under a variety of schemes
which the genius of ignorance has pro-
dueed. All of these burdens are borne by
the policy holders ultimately. and every
fresh exaction from either fire or life COM
panies. whether under the pretense OF
supervision, which in twenty-elght states
during the fiscal year 1902 was 100000 more
than 1t cost, or by oppressive and unequal
taxation, is a tax on a tax. Such legisla-
ton Is vicious In principle and is rooted In
the theory that the loOting of trust funds
is proper when the state does it. Every
wild-eyed theorist, every individual who
has grudge against corporate enterprise.
every legislator with a socialstic tendency