New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1907-01-30
TO AMEND REFORM LAWS
NEW INSURANCE BILL. |
Would .AILoaC Debenture Bond In
pestment- Unnecessary, Says TALLY.
[Rr Telerraph . rhe Tribune.l

(By Telegraph 20 The Tribune.1
Albany Jan. 29.-The first attempt 20 amend
the insurance reform laws OF last session. which
were drafted and urged by Governor Hughes.
then the insurance investigator, made to-
day In bill presented by Assemblyman Hol-
land s. Duell. Of Westchester. This seeks to
introduce into the laws more fexibility of in
vestment" in his words. According to members
Of the insurance investigating committee. it
would put into the law privileges forbid
den 20 insurance companies. and at the best
would be unnecessary legislation
Mr.. Duell himself when asked about the meas
ure took no pride Of authorship IN 1t. He said
IL had been given 20 him TO introduce by friends.
and he thought that It a proper measure.
II It should not be. public hearings and COM
mittee work It would promptly disclose that
fact
In brief. this amendment would permit the
investment by insurance companies in debenture
bonds. prohibited. which some concerns.
making a speciality of real estate mortgages.
now issue.
His measure amends Section 100 OF the in
surance law. which. as the Hughes bills made
II. reads:
No domestic life insurance corporation. whether
incorporated by special act under a general
law, shall after the first day of June, 1906, in
vest in or loan upon any shares Of stock of any
corporation other than a municipal corpora
ton. nor, excepting government, state
nicipal securities, shall It invest in, or loan
upon. any bonds or obligations which shall not
be secured by adequate collateral security or
where more than one-third OF the total value
Of the collateral security therefor shall consist
OF shares Of stock
This is done by adding this clause:
Any domestic life insurance company may in
vest IN or loan upon bonds OF individuals or SOL
and mortgages collateral security. provided
that such MORTGAGES are on improved unincum-
IN GrQ ne pOllo ara
security OF any such bond be one bond and mort
gage, the real property covered thereby shall be
worth 30 per cent more than the amount of the
principal bond. If the collateral security OF any
such bond be moro than one bond and mortgage
the amount for which each Of such mortgages is
accepted as collateral shall not be more than
two-thirds Of the value of such real property.
A second bill introduced by Mr.. Duen amends
The banking law relative TO savings bank in
vestments by providing that they may invest
in bonds OF individuals solvent corporations
secured as collateral security by bonds and mort
cages on unencumbered real property in this
state. II the collateral security of any such
bond be one bond and mortgage the amount lent
shall not be more than 60 per cent OF the value
Of the real property covered thereby. II the
collateral security of any such bond be more
than one bond and mortgage. the amount for
which each mortgage IS accepted security
shall not be more than 60 per cent of the value
OF the real property covered thereby.
Still a third bill inserts this same proposition
into the banking law governing the investments
Of capital. surplus and deposits Of trust COM
panies.
Without passing the merits of this ques-
tion.' said Senator Tully. one Of the active mem
bers OF the insurance investigating committee.
81 will say that I consider this a wholly I'M
necessary bill. 1t would permit insurance COM
panies to do indirectly what they have proper
facility fer doing, provided by bills Of last
year; and it might open to them avenues for
dealing in debenture bonds issued by guarantee
companies which take real estate mortgages
Debenture bonds are prohibited as insur-
ance company investments. We in our bill per-
NIT insurance companies, under proper restric-
tons and safeguards. to take mortgages on real
estate I should say this was wholly unneces-
sary, even IL not positively Objectionable"
Mr.. Duell gave somewhat the same explana-
ton of the powers conferred by his insurance
bill and the companion measures affecting
banks and trust companies
THE proposition is to permit banks trust
indirectly in what they handle directly
now" he said. THAT is, where insurance com
panies and banks now may invest in mortgages
on real estate directly, they cannot invest in
bonds issued by people who hold mortgages on
real estate. II is the custom for some concerns
10 acquire property and issue bonds against il
These bills would permit such Investments
They are designed 10 give a little more f1exf-
blity TO investments The bills were handed 10
me by friends who vouched for them as being
proper They are no particular pets Of Mines"