Evening star. [volume] (Washington, D.C.) 1854-1972, 1906-10-24
Experimental Legislation.

After the appointment of the nominating
committee an address, was delivered by Mr..
Frederick H. Nash, former deputy attorney
general Of Massachusetts,, on the subject Of
Experimental Insurance Legislation" He
spoke, in part, as follows:
THE law must follow business" said
Lord Justice Bowen in the course of his IA
nous opinion in the Mogul case. The law
must follow business not seek to drive it
into untried paths, as to which the opinions
of experts differ. Varying economic opin-
ions ought not to be crystalized into I'M
changeable form Lord Justice Bowen was
speaking Of court law, but the sentiment is
even more true when legislation is con-
cerned.
We would all trust the courts to work out
a business problem, sooner than put our
faith in the unframed original ideas of leg
! islators. For in no civilized country is so
little respect paid to requirements Of prep
| aration and training for lawmakers as in
the United States. No one should dare
| make a law upon any subject unless he is
equipped with three fundamental qualica-
tions-frst, knowledge of the existing law
upon the subject; second, experience with
the technical conditions of the business to
be affected; third, skill in the proper con-
struction of words and phrases. Some of
our assemblymen have the last quality, a
few the first, almost none the second. Yet
they meet and say, Come, let us legslate
together" and in few short weeks they
ness, in detail, which a century of work by
trained men has built.
My text is in these few words, The law
should follow business" They are pecu-
liarly fitting to the business of insurance
1t Is rot a simple easy matter to know
about insurance, though the constant ac-
ceSsion to the ranks of life agents, of
clergymen without cures, lawyers without
practice, and boys without general s-e
cial education, has created popular i'm
preston that the business is refuge where
the unfit may survive. 1t is profession
complicated and highly technical, not to be
conducted in my opinion. by savings banks
through the employment of an extra clerk
or two. / have spent eight years In learn
ing very little about it, and as you OBJ
serve | do not venture from home upon
an insurance excursion without actuary
at my side.
Cost of New Business
If Adam Smith, author of the Wealth of
Nations were to take a view of the pres
ent situation 1 think he would be most
forcibly impressed by New York's recur-
renee to the obsolete theory current in the
reign of Elizabeth that the price of services
ought to be limited by law OF late years
in this country much criticism has justly
been expended upon laws which have
sought to provide minimum price for la
Dor. This present year has furnished the
first modern instance of law providing a
| maximum price which companies may pay
to their employees.
One of the most delicate questions which
life insurance and managers have to deal
with is the question of how much 1t Is
worth while to pay for new business II
the company stands still the death rate
rises and the gain from vitality diminishes
If the company pays too much for new
business, the cost more than offsets the
gain. 1t is not matter which legislation
can properly fix.
Against Standard Policy.
The zeal of lawmakers to get the better
Of business instead of helping it has reach
ed its examination in the present craze for
standard forms of life policies. 1t is well
enough to provide by law that all policies
must contain certain standard provisions
and that no policies shall contain certain
Objectionable restrictions, but the iron-cad
form, Interchangeable except by more legisla-
ton, has nothing to commend it but the
mistaken notion that man ought to be
couraged to make an important contract
without reading 1t.
Much Of the popular discomfort with life
insurance Is due to the needy agent who
will say anything to sell policy. Laws d.
rected against false estimates will not ac-
complish much. The remedy lies with your
associations. 1t is your opportunity. While
the states are passing elaborate acts, which
beat around the point, your organizations
can do much to purify the business. Just
as q bar association of lawyers Is watching
to GUST from practice unworthy members of
their profession. so you may bring to the
insurance commissioners, having power to
withhold agents licenses, information of
the transgressfons of insurance shysters
Individual complaints may be ascribed to
personal feeling, but the considered action
Of fla life underwriters association will be
treated with respect In making your call
in a profession / wish