New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1906-01-04
GOVERNOR HIGGINS'S MESSAGE.
INSURANCE LEGISLATION "a aND Tax4z1oN DISCUSSED
CAS- RECOMMENDED ILLITERACY

the hopes and fears of our people find general e5-
enormous business has been done under laws most
generous to the companies. While the State per-
mts none to transact the business of life insurance
wihn Its borders WITHOUT an official certificate Of
the officers and agents of such companies under
oath with reference to their business. such ex-
ing solyency and not for the purpose Of otherwise
mang %tn me discretion Of the directors in
SURPRISES and other matters involving the internal
credit Of the State that no insurance company has
State. supervision not State regulation has been
authorized by law yet Inconsistency enough, Sec
from any but State action w which Shall lie nerfere
any way with the prosecution of the business of
sald companies through the equitable remedies Of
accounting or injunction.
The courts have been no less liberal than the
policy. even in e mutual company, is in sense
Icy that the relation between the polcyholder and
terms Of the policy that upon the payment Of of S
miums the money Immediately becomes the prop
any Of the that no rns sff ron e
between company and polcyholders and that no
distribution OF the surplus can be compelled by a
PohcSholder. except where wrongdoing or mistake
and managers OF life insurance companies have
been permitted. without let hindrance to fix the
Of the surplus should be distributed. to, policy
holders and when and how much retained by the
company. Funds have continued to grow until
their control for speculative purposes and various
vast fortunes for their custodians and until princely
salaries have become trifing compared with the
the control of the Equitable last winter Brought
Insurance. business and aroused the pubic from
confidence and indifference to the keenest interest
s9met6ng better from the State than a gaarsntee
will be cheaper and safer when the companies are
compelled to invest their assets for his benefit
to the individual Undertakings Of speculative d.
rect9rs and TO the payment Of vast salaries and
duence and contributions for political campaign
effectively
panies and their directors.
report of your committee which has conducted its
trying duties with ability. courage and success
legislative action prior to the presentation of the
You will be called upon to make a radical re
vision OF the law for the benefit Of investors life
the e2pediencY Of proVidng for more thorough reg
uIation by the Department of Insurance. Under the
new insurance law of Germany not only are thor
ough Investigation and publicity insured, but the
government director actually enters into the bust
ness methods of the corporation. The law requires
in certain prescribed securities. all Of which are
to corporate stocks Of every description; limits the
commissions of agents and regulates with much de-
learn much from careful examination Of this
law, although some OF its provisions may be deemed
ness and political life Objectionable as leaving
too much to the discretion Of the Insurance De-
The funds OF insurance companies should sacredly
and every element of personal gain eliminated from
their management. To accomplish this result IL
has been suggested that large amounts ought. for
the safety of the insured as we'll as for the good or
the community, to be invested in bonds secured by
mortgages on real estate at a conservative Valua-
ton: that deposits with or loans TO moneyed cor
porations should be subject to suitable restrictons
that the control of subsidiary companies should
have no conflicting business connections; that in
vestments in corporate bonds should be regulated
to prevent speculation and loss from an at
tempt to float doubtful enterprises; that policies
should be Of standard forms, that the abuses
arising from ambiguity, complexity and incom-
pleteness of tho contract may be eradicated and
that a uniform system of audits and accounts
should be prescribed by the Insurance Department;
sured: that deferred dividend policies should be
prohibited or greatly restricted; that policies should
be further safeguarded from forfeiture; that an
to the policyhoders entitled thereto should be
Quired: that poicyholders should have an effective
voice In the government of the companies and that
judicial or administrative review.
The eyes of the whole world turned
produce an insurance law which shall be drastic
but practicable radical but sane, in spirit which
shall be courageous but not hysterical 1T Will fail
to meet the expectations of those who have con-
fdence in the ability of popular government 10
solve its problems they arise.
Future effective action by Congress or the fed
Of such action should not retard for instant the
work of the State.
While life insurance has received almost excu-
sfye attention Il cannot be assumed that other cor
poratons dealing in indemnity and investment con-
tracts have been blameless, and a word of caution
may not be amiss regarding assessment associa-
fire insurance companies and the like, Better all
low free and unregulated insurance than permit
such concerns to exist under laws which do not
protect our citizens, but enable the promoter OF
doubtful schemes to beguile the investor to imam
cial disappointment and fatten himself on false
promises and deluded hopes