The sun. [volume] (New York [N.Y.]) 1833-1916, 1906-03-10

keep the new business within that limit. I
that you modify your restrictions
80 that an insurance company In any year
may take cnough new business 10 make good
the reduction suffered during the previous
year by nations. even though that
amount exceed the arbitrary limit which you
propose.
| think that a requirement that the %contin-
Rency reserve Of large companies should be
but . per cent, Of the legal reserve would be a
serious menace to the safety Of policyholders
and that any la " fixing 4 ma Ximum limit upon
the contingency reserve Ia unwise II such
q law had been In force In the low security
markets of 1909 and 1894 many important
companies would have become insolvent
with a contin gcncy reserve OF only 2 per cent.
agree that the total expenses OF insur-
ance companies should be limited to the total
loading upon the premiums. and that some
Limitation should be placed upon the cost of
securing new business. 1t seems to me, how
ever, that In n lumber OF respects the precise
scheme Of limitation which YOU propose Is
unavoidable.
1t seems to me that the purposes you have
In view will be accomplished II, after reQuir-
ing that the aggregate expense OF a company
must be kept within the aggregate loading.
you then prescribe the maximum percentage
OF premiums which may be paid 10 agents
by way Of commission. salary or other COM
pensation for securing new business.
PARTICIPATION IN s~YND1oATEs.
A life insurance company should be per-
mltted to take a participation in a syndicate
holding securities which 1t Is authorized to
purchase. In such a case a syndicate p%artici-
patton would ordinarily simply be Q means Of
purchasing the securities at the lowest price.
To prevent an insurance company from par
ticipating In such syndicates would be TO
compel 1t to pay a higher price for its bonds
than is paid by the participants In the syndi-
Gates.
II your committee deem such q ~restric-
ton necessary 1t might restrict the partici-
patton of insurance companies In syndIcates
to syndicates holding securities which the
insurance companies are authorized by law
to purchase and under which the insurance
companies would be permitted by the terms
of the syndicate agreement 10 withdraw the
bonds for investment. While the officers and
members Of financial committees OF life In
surance companies should be prohibited from
participating in a syndicate selling securities
TO their company. ! question your proposal
that directors OF life insurance companies who
are not officers or members Of financial COM
mlttees should be prohibited from having an
interest in such syndicates.
MR.. oRR PEAKS.
Alexander +, Orr, president Of the New
York Life Insurance Company, said that
II the Dllls now De1ore tne Legislature De-
came laws the business Of his company
would be cut in half. He argued that the
bills should not go into effect Immediately,
as it would not give the companies time
to get in a position to comply with them.
He said the bills also Invested the large
corps of agents Of opportunities to get new
business by ourtailing the amount of bust
ness any company can take in a year. He
also declared that life insurance was a
philanthropic work and in conclusion said:
al trust that whatever you do in the way
of legislation, and the responsibility rests
with you, you will not injure this phil
anthropic work"
President Peabody OF the Mutual said
that in three or four instances great and
irreparable injustice would be done to life
insurance workers and their interests by
the bills now pending, as pointed out in Mr..
Morton's remarks and as would be detailed
by William G. johnson, chairman of the
legislative committee of the various large
underwriters associations.
PROTEST OF SMALL COMPANIES.
George L. Ide, president of the Home Life
Insurance Company, who represented all
the rassage OF the bill containing the sec
ton which limits the amount OF reserve
fund carried by the companies and prohibits
a contingent reserve fund. Hedeclared that
be carried out even II they became laws.
Mr.. Ide argued that the responsibility
OF fixing the limit of the surplus fund should
be intrusted solely to the board Of directors
of the company.
Senator Armstrong asked how the section
could be amended 80 as to incorporate Mr..
Ide's views.
Eliminate it entirely, he replied. "Why
shouldn't the New York Life carry a larger
ratio of reserve than the Home Life?"
ARGUMENTS OF THE AcTUARIEs.
Mr.. Ide was followed by Joel g. Vancise,
who informed the Legislature that he had
Assurance Society for thirty-nine years
and therefore he claimed to be in a position
to speak from actual knowledge of con-
ditions.
Mr.. vancise made an earnest appeal for
the retention of the deferred dividend
He said it had been the most
popular and that there were no W in existence
in the United States nearly two million such
contracts, representing S. 900, OOO, 900.
Henry Moir of the Provident Life, repre-
senting the committee of ~actuaries. con-
deferred dividend policies, He declared
the danger to the insurance company
greater from distributing too much
than from distributing too little.
At | O'Clock the committee took a recess
for luncheon.
PLEA OF a AGENTS.
William c. johnson, the representative
Of the Life Underwriters Associations
Of New York, has prepared a brief against
90 Of the proposed new insurance
law, which he will present to the committee.
This section proposes to regulate the ex-
penditures in obtaining new business.
Mr.. johnson argues that this is an attempt
10 have the State take part in the detailed
management Of the companies.
1T would mean" said Mr.. johnson, 'the
OF the agency organization
Of the companies complying with the New
York laws. 1t would deprive Of an occu-
patton and a means Of livelihood thousands
citizens of this State. And 1t would be
an injury to the polioyholders as we'll"
THE PRUDENTIAL HEARD.
R. V. Lindabury, representing the Pru-
said it was foolhardy for New York
to attempt the internal cement of
companies Of other States. For
instance, he thought that the provision
hat no single company should issue both
participating and non-participating poll oies
should only apply to business written in
State. He also thought that the pro-
that no company could dispose of
estate except with the approval Of
he New York State Superintendent OF In
'urance should only apply to real estate
coated in this State.
Mr.. Lindabury made some telling points