The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1906-02-23
MANAGEMENT BLAMED FOR
THE CORRUPT SITUATION
Lobbying Is Condemned and Legisla-
ton Is Recommended That VIII
Prevent Any Sort of Politi-
cal Contribution.


+aa annointed at the last session of the
New york legislature to investigate life
insurance. made its report today. The
report is extremely voluminous, extending
70 31e printed pages 1t embraces long
review of the testimony taken by the
committee and its recommendations ana
conclusions as to remedial legislation
In addition there is a chapter devoted
to the state insurance department in
which the committee declares that IL
would seem that the superintendent OF the
department has had ample power to as
certain the transactions of insurance COM
anies, but that the supervision of the
denartn1ent has not sufficient protection
against extravaganza and maladministra-
tion.
Instances are given of reports made on
the affairs of the Mutual Life Insurance
company, the New York Life and the
Equitable Assurance society in which
nothing was brought out to show the
conditions developed in the testimony
given before the committee. No substan-
tial amplifications of the powers OF the
department seemed necessary. according
to the committee which holds that most
of the evils which have been disclosed
by the investigation would have been inn
possible had there been a vigorous per-
formance of the duties already laid upon
the insurance department.
Remedial Legislation Suggested.
The remedial legislation recommended
by the committee provides for the safe
guarding Of the rights of policyholders
in mutual companies In the election of
directors recommends that stock COM
panies be given authority to retire their
mutual companies, but that such mu-
tualization shall not be compulsory; va
rious regulations are urged to prevent
unwise investments and improper syn
dictate operations; a recommendation for
the limiting of the new business to $780,
100000 a year is made; the committee IA
vors the prohibition of contributions by
insurance companies for political pur-
poses Lobbying is condemned and the
wisdom of economical management is
urged, but the committee does not deem
II advisable that the legislature should
attempt to prescribe the expenditures of
insurance companies.
Further Recommendations Made.
the valuation of policies, surrender
values, surplus. forms of policies and
publicity of all facts pertaining to a
companys business. An amendment to
the penal code is recommended to provide
that the person receiving a rebate should
be equally guilty with the one giving 1t.
In its detailed report of the investiga-
ton of the companies. the committee
finds that in spite of the Irregularities
shown there is no reason to question the
solvency of the Mutual Life Insurance
company; the New York Life Insurance
company nor the Equitable life Assur-
arlce society.
Report Is Volumlnous.
The report of the joint committee of
the Senate and assembly of the state of
New York appointed to investigate the
affairs of the life insurance companies,
covers a printed pamphlet of 3l9 pages
After recting the resolution authorizing
the work and the plan adopted for the
investigation by the committee, each indi-
vidual company is passed In review. There
are fifteen companies organized under
the laws of New York issuing level pre-
MUM policies and in a single instance
only the committee departed from the
policy of limiting its investigation to conn
panies organized under the laws of New
York This company was the Prudential
The matters demanding the concentra-
ton of the legislature for the purpose of
remedying of existing evils and of estab-
listing more securely the business of life
insurance In this state are grouped under
the following heads;
Grouped Under is Heads.
l. Organizations of life insurance cor
porations
2. Control for the rights of policyhold-
ers in the election of directors.
8. The retirement of stock.
T. Investment including syndicate par
ticipations.
s. Limitation of new business.
6. Political contributions.
Z. Lobbying.
s. Limitation of expenses.
9. Valuation of policies.
10. Rebates
H. Surrender values.
12. Ascertainment and distribution of
surplus. =
49, Remedies of policyholders, Or right
to resort TO the courts.
IA. Forms of policies.
10 Publicity and state supervision.
16. Penalties
The committee recommends that article
II of the insurance law be so amended
as to permit the formation hereunder
of mutual corporations without capital
stock to transact the business of life in
surance. and for such other purposes a s
are authorized to be connected herewith h
In the case of stock corporations; pro-
vided at least 500 persons have subscribed
TO become members therein in the aggre-
gate amount of at least 81 100000 to be
insured on their lives. and shall have each
paid In one full annual premium in cash
on the insurance subscribed for and pro-
vided further that 1t shall make the same
deposits with the superintendent of lnsur-
ance that are required of stock corpOra-
tions formed for similar purposes.
Section 200. permitting the incorpora-
tion of companies on the cooperative or
assessment plan. should be amended so