The sun. [volume] (New York [N.Y.]) 1833-1916, 1906-06-16
INSURANCE COS. HARD HII.
aOsF INVEu aIlIlOVs ~
IAtSFg ~ 40 HrsIVgss
4 Nftes a9aees sea8 prStestel Aeolrat
SfshHa ieW Rffegse'tve swg tsWpss
Efes fegeefef tatgFatHe WeetuaH Piay
~ ths lgedeH tHaufaWee 0~sHpaHlss

eosupatlss 4fa ~ lnlriHa UySf fha oAitah
announcement iirtf fhH AWsfirth crfN
tHN,rs u,tat Htisrit w tis he's fa,futo'iva
fasuis1lres Fhirh Fefa bnhiiahmi yessef
dav srI sbirh sers atUuteHi irststs =
Protest ffws fhr tNiied s'ttss
fis feeuittlHnt htvs tseitst rirsiefht
tIoU Nv Afrefpph nstfsnrs raelwa. Shefe
= 10 tairvei fttf tha t~ipyefnH8enl adopted
tho freui ,tiana Ie,t'tsr " kneN Ametict's
tfp'est wa orl, MN h~tftei ~" insuf inc'
eo,npa niea t~inn a%etitliy itueueI Hrun
Nv thr WrsIursir M Uuvefnnent
ghnttli fhn rumfuhiss deriir ~ ftsnaia
IN h,.ircss In ffiurc " m~tna tho irtnafer
" \ iirRe amount ~ Amctletn money ~
this rpun,fv ths Fdui'able company Ia
Utmost certain Nv tSinain, having actually
invested In roll estate IN Paris m amount
MIN api sufficient to comply With tho reEuit-
fioha II IL hcti,ved ih,' this IA not the
rass 9TH tho NeN Ypti Life AMI Mutual
life conpa nies
An American inanrtnfr authority points
OIL, that the ultimate sufferers will lc Tho
French r~niicyholticra, aincc tho cotnpan MOS
must ]~econaidcr existing policies and re-
adjust hem ON the hEsi' ~ tho altered
]rctnnA'tnCc
WV NV 'N'llNNa'lfNH 10Y Nt 'l'' w.
nRrp, mcnt with tho French Government,
effcrtcd insurance thcy were able to give
better term, l~cca,sc they wrrc allie to in
vest their income in the t'ni'od states,
whrrc II WA more rcprodu tive than hero.
They we're able Ia inveat and rpinvost az
will, whereas their capital will now he sunk
In lesa productive Investments.
Tho Govcrnment'a action. according to
- -. 49, a.. .,,..R 10
a brea CHI of Justice, The French rivals OF
tho American companies were 40 powerful
that they compelled Tho Government 10 yield
To their demands in 'hr matter.
Some OF the American companies may
withdraw from France rather than comply
with the decree of the Council Of State.
President Peabody Of the Mutual Life said
a few days ago that II the law was declared
to be retroactive the advisability Of con-
tiuuirg the writing Of business in France
would he n matter for serious consider
alton in tina company. New York lhie
officers would not express an opinion last
night on what the attitude Of that company
would be, but they admitted that the situ-
alton would be considered with the great
est care at the earliest possible moment.
If the Mutual and New York Life COM
panies comply with the decree it means
that more than $40, 10000 600 OF American
money will 60 from these two companies
alone to France. Mutual Life officers have
estimated that it will cost them $25 1000, 900
and the New York Life, with about s7o,Ooo.-
900 of outstanding insurance in france.
will have to invest between SIS 100000 and
$40, OOO. 900. The amount Of reserve on the
Equitable Life policies in France 10 about
sll, oOo, 600. but that company owns con-
real estate in Paris and would not
have to advance much to make up the
amount.
Most of the business OF the American
companies in France has been very profit
able. The New York Life's business. in
D particular. was obtained at a very low cost,
and this circumstance may initiate against
he present conditions when that company
comes to IKE a definite stand in the matter.
The law compelling the American COM
to invest the amount Of the reserve
on French policies in French securities was
passed more thar a year go. The wording
the statute was ambiguous. and the ques-
ton arose at once whether it was to be re-
troactive The American companies started
a campaign in France, backed by the United
States Government. and they felt pretty
confident until he present Cabinet came into
power that the decree would he favorable
TO the American interests. But some con-
have been gained, as the decree
Just handed down provides that foreign
companies shall have a delay of five years
In which to replace by at least one-ffth
annually their present securities, guaran-
teeing their operations in France and Algiers
by securities selected from lists given OF
he various State. departmental and COM
munal bonds,
The law in effect places the American
on the same footing with those
Of France. The situation in regard to life
in France before the entrance
Of the American companies was that the
French companies, as stock corporations,
issued the ordinary straight life policies
provisions for participation in
profits or deferred dividends. The profits
and accumulations we're distributed among
stockholders and not among the policy
nolders. When the American companies
went into France Offering to write par
.~icipating and deferred dividend policies
hey met with great Success, and the legis-
alton enacted by the Chamber Of Deputies
8 regarded among American insurance
nen as the elimination Of the efforts OF
he French companies to hamper the bust
hess Of the American institutions.
Efforts to get such legislation began as
,arly as 1902. James Hazen Hyde testified
before the State Insurance Commissioner
hat it was in an effort to combat this pro-
posed legislation that he, together with
Depew, rendered his noted $l2 900
Inner to Jules Cembon, the French Ambas-
,ador, when the latter was leaving this
in 1908. That dinner was paid for
~ the Equitable po%licyholders' money, but
he si2, 900 was refunded by Mr., Hyde after
he life insurance exposures began. 1t was
n anticipation OF the enactment OF the
aw that the Equitable invested 90 exten-
in real estate in Paris.
The most serious objection raised by the
companies to the retroactive
iecree is, of course, the low rate of interest
they would get from the French
specified, averaging s per cent.
Or less.