The sun. [volume] (New York [N.Y.]) 1833-1916, 1907-08-11
The BAR ON INSURANCE EVILS
REPORT Of THE COMMITTEE OF
AMERICAN ASSOCIATION.
Immense SURPRISES Lea Company Ofncials
Into Temptation state Has No night
to Make Legislative Raids Upon Funds
MANY Reforms Recommended.

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MANY Reforms Recommended.
OMAHA, Aug. i0.-The committee IN n
surance OF the American Bar Association,
of which Ralph W. Breckenridge Of Omaha
is chairman. to-day made public the report
which it will present to the next meeting
of the Bar Association at Portland. Me.
August 30. This year there is no minority
report Of the committee The recommend
atoms are given without a dissenting voice
for the first time in the history Of the
committee.
In the way of introduction the report
says: The American people are Justly
indignant at the corruption. incompetency
and reckless extravaganza disclosed by
that greatest inquisition Of modern times.
which followed close upon the heels OF the
Equitable controversy A general nom
discriminating distrust Of insurance COM
panies and their management thereby was
generated. much Of which lie unreasonable
and unmerited, and due to the ignorance
Of the public respecting the principles upon
which insurance is based and the methods
which should be employed in supervising
il. There is no occasion for general dis
trust Of the life insurance companies of
America. though it may well be doubted
whether all Of the schemes Of life insurance
which enjoy current popularity will bear
scrutiny.
The responsibility for corruption by
company and State officials with respect
to life insurance lies in the ~extravagance,
manipulation Of investments. excessive
commission or riotous desire for bigness
which was developed out Of the failure to
apportion frequently and to account for
the immense surplus accumulated through
the deferred payment policy says the re-
port
These immense sums of money in sight
have been regarded as spoils by insurance
managers whose consciences ave been COM
mercialized according to modern standards
by the State insurance departments and
their hangers-on. Inc worst OF all by a num-
Der Of State Legislatures which. with little
knowledge and less scruple, nave treated as
legitimate loot these moneys raised by
voluntary taxation to provide against dis
aster and calamity.
1T is as dishonest to steal under the pro-
lection Of the law as without IL; IL is just as
dishonest for the State TO lay unholy hands
upon trust funds as for an individual. and
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when they seek even partly to maintain
themselves by legislative raids upon trust
funds. Moreover il is the climax Of cow
ardice to commit extortions in the name Of
police power. but most OF them are doing il,
and thus commit the identical offence they
and punish in the individual
But we nave not risen above the idea that
money In sight belongs to him who can get
a - gn A.
dishonesty which Ii a part OF the foundation
upon which our press 1t insurance legislation
rests is pulled out of il and the American
people quit cheating themselves they can
have no absolute protection against the
evils under consideration. The American
people should wake up to a sense OF their
responsibility
Under the head OF Defects OF the System
of Insurance Supervision" the report says,
in Introduction: The other chief cause Of
evils which infect insurance il the incom-
petent or corrupt administration OF the
unsatisfactory insurance laws In force in
the several States. Your COMMITTEES does
not wish TO be understood as charging that
all State insurance commissioners are dis
honest, nor that all OF them are Incompetent.
The trouble is that h State Insurance. de-
partments, always keeping IN mind the few
exceptions. are sinecures. They produce
rich, ripe political plurns. knowledge OF
the insurance business II the last thing
required. They ofer the moet seductive
opportunities Tor fraud and graft in tho
United States"
Under the caption The Need OF Sane
Legislation. " the report says In part: But
the legislation demanded must not only
prevent future evils, but correct those now
existing. The fire insurance contract in
common use is about as complex a docu-
ment as was ever devised and IL ought TO
be very much simplified."
Fully I ,OOO words Of the report are devoted
to the deferred dividend surplus as one Of
the two producing causes OF the existing
evils which must be cured. The report
suggests that dividend SURPRISES be treated
as a liability and not an asset, and that In
surance companies be compelled to make
more accurate public reports with respect
to their liabilities, actual and contingent,
than they have done.
Under Federal supervision. the commit
tee report says, interstate transactions
in insurance should he regulated by an act
OF Congress under the commerce clause OF