The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1906-08-14
LAWYERS HAVE
IDEAS TO OFFER
Report of the Committee on
Insurance of the American
Bar Association.
FEDERAL LAW is PROPOSED
MATTER WILL COME UP AT ST.
PAUL MEETING.

Omaha, Aug. 13.-The report of the COM
mittee on insurance law of the American
Bar association, to be submitted to con-
vention of the association, which meets
at St. Paul Aug 29-31, was made public
today by Ralph w. Breckenridge of
Omaha, chairman of the committee. The
report goes into the subject exhaustively
and the conclusion is summed UP in the
following recommendations:
Conclusions Reached.
/. That the insurance committee be
directed to draft and report to the next
annual meeting of the association a bill
that shall safeguard the interests Of the
life insurance companies and their policy
holders, but which shall require deferred
dividends on life policies to be biennially
appOrtioned, credited and notified to the
holders of such policies.
?. The repeal of the so-called reciprocal
or retaliatory tax laws.
3. The repeal of the valued policy laws.
4. The creation in each state Of the Of
flee of fire marshal.
5. Stricter incorporation laws in the
several states, with particular reference
to the capital stock and stockholders OBJ
legations in insurance companies.
Federal Statutes Proposed.
6. The enactment of a federal statute
forbidding the use of the mail to per-
sons, associations, cOpartnerships or cor
porations conducting any kind of insur-
ance business in the United States who
are not licensed to transact such business
by the states where such persons, asso-
Citations, copartnerships or corporations
are domiciled, or under whose laws any
such corporations are created.
Z. The enactment of a federal statute
providing for the supervision of inter
state transactions in insurance.
These recommendations are signed by
Ralph w. Breckenridge Of Omaha, Bur
ton Smith OF Atlanta, Ga, and Rodney A.
Mercur of TowanGa, Pa. OF the two
other members of the committee, w. r.
Vance of Washington dtssents from the
recommendation for government control
on constitutional grounds. and Alfred
Hemenway of Boston took no part in the
work of the committee.
Appended to the report Is a copy of
bill proposed for enactment by congress
to establish in the department of COM
merce and labor a bureau of insurance.
This committee made recommendations
on insurance laws at the last cOnven-
ton. but the matter was referred back
for further consideration.
Many People Concerned.
After giving figures to show the i'm
of the insurance business in the
United States, the report says
More people are, therefore, directly
concerned with insurance than any other
institution of modern life, and the public
interest in insurance is intense; but the
almost universal ignorance with regard
to IL and the principles upon which it
is based has made possible, through leg
islation ostensibly supervisory, but ac-
tually destructive in its tendency, a great
er menace to the interests of the policy
holders than they have suffered through
the mismdnagement and dishonesty Of
officials and the incompetence
or unfaithfulneSS characteristic of the
state Insurance departments. The most
exhibition of legislative I'M
wisdom is found in the bills prepared for
the Armstrong committee and passed by
the New York legislature-the most con-
spicuOus because it has the widest adj
Vertisement and because of the things
which the committee might have done,
but failed to do. and it's Ignorance OF
the subject is confessed"
Cause of Corruption.
The opinion is expressed that the ac-
of deferred dividends Is re-
sponsible for the corruption developed in
the conduct of life insurance companies.
Government supervision of insurance
is urged as necessity, but
the burdensome tax levied against the
by the various states are de-
clared to be unjustifiabie. These taxes,
which are said to amount to $4,000 a year.
are ultimately paid by the policy holders
The policy of some states of taxing
outside companies more hardly than home
the report declares, is hostile
to the spirit of the federal compact
OF state Insurance departments, the re-
port saws: THE trouble is that the state
insurance departments are snecures.
They are political prizes. knowledge of
the insurance business is the last thing
required. They are mere collecting agen-
cies They offer the most and active op-
portunites for fraud and graft that exist
in the United States"
Demand for Federal Control.
The report then quotes figures to show
that the great mass of insurance business
Is interstate in character and gives many
authorities to show that the popular de-
mand is for federal rather than state con-
troll 1t also answers the arguments that
the supreme court has held that insur-
ance business is not commerce. After
analyZng many supreme court decisions
with the purpose of showing that they
do not have the effect attributed to them
by opponents of federal supervision, the
report says:
''The real opposition to the federal su-
DerVison of insurance does not rest upon
the absence of congressional power, but
rather in the disineination to exercise it.
That objection is political in character
md has no solid alton :"