Evening star. [volume] (Washington, D.C.) 1854-1972, 1907-02-04
LIFE INSURANCE LAWS
Changes Recommended by New
York Superintendent.
THE CONDUCT OF ELECTIONS
Notifications Suggested Since the
Armstrong Investigation.
FOR A BIG SURPLUS RESERVE
Largest Companies Night Carry $40,-
oOO, 600 Free Assets Under Plan
Of State Department.
THE CONDUCT OF ELECTIONS
FOR A BIG SURPLUS RESERVE

ALBANY, Februaft lin his annua1 re-
port to the Legislature for 1906, which was
made public at Albany last night Superin-
tendent Otto T. Kelsey of the state insur-
ance department makes suggestions for
many changes In the insurance law as 1t
has stood for nine months. since the Arm
strong investigating committee got it's bills
enacted at the last session. Mr.. kelsey's
ideas are based upon his observations OF
the everyday" workings of his Office since
he was appointed by Gov. Higgins last win
ter. He recommends several notifications
of the sections that the Armstrong commit
tee drafted relating to life insurance and
comments on other sections in a way to sug-
gest future amendment.
So far as the report concerns life insur-
ance, the most important topic treated is
the subject of electing directors and trus-
tees in mutual companies. Mr.. Kelsey
makes note of the struggle for the control
Of the Mutual and New York Life last year,
and says:
1T is believed that a decision will be
made and certified to by the inspectors of
election after such careful examination and
rigid calculation of the votes lawfully cast
as will preclude questioning the result. A
disputed count and legal controversy can
not but prove disastrous to the corporations
involved. and injurious also to the entire
business of life insurance"
Election OF OmcerS.
Subsequently in the report the state su-
perintendent discusses possible notifications
in the law governing elections, based on the
results in the campaign just closed. 1t Is
noticeable that he does not adopt any of the
material suggestions made by the interna-
tional committee save that proxy voting be
abolished in elections in which a mail ballot
| is allowed. He remarks that lit is question
able if regulations for filing and maintain
| ing lists of policy holders should remain in
the present form" He thus opens the ques-
ton whether the lists should be made public
at ALL which the companies have strenuous
ly opposed.
Mr.. Kelsey further recommends that all
ballots for directors should be returned to
one address and in sealed envelopes. The
adoption of this would prevent in future
elections such plan as the international
committee put into effect this year of send
ing out its own ballots, and then correcting
those improperly executed. AS no recon-
mendation is made that voting should be
confined to the official ballots. Mr.. Kelsey S
to have their agents canvass with any
form of administration ballot, provided
they were eventually sealed and mailed to
one address.
Validity Of Ballots
Mr.. Kelsey states his belief also that a
ballot should not be inva1idated because Of
a defective Endorsement on the envelope;
that a definite date should be fixed as the
first when a ballot can be executed; that
the appointment of inspectors of election
should not be restricted to policyhOlders:
that the law should state whether or not
the number of a policy should be inserted
by a policyholder In his own handwriting
He holds that provision should be made for
removing the name Of a person nominated
against his will, and that Ito some extent
the privilege of minority representation on
every ticket should be acceded to.
The other important sections of the new
laws governing life insurance which he
suggests for amendment are those relating
to the contingency reserve ana standard
forms of policies He fears that the exist
ing sliding scale for q contingency reserve
will not prove sufficiently safe, and there
fore recommends that a fixed percentage OF
10 per cent of the reserve liability OF any
company in addition to the aggregate mar
gin of market value over par value Of all
bonds held should be allowed Such modi-
fcation in the new law would allow the
largest sized insurance companies to pile up
and carry a contingency reserve an amount
equal to one-hah the largest surpluses they
ever showed under the old regime. The
three largest companies have an insurance
reserve Of approximately 4OOOOO,OOO and
Mr. Kelsey's recommendation, If enacted.
would allow them to maintain q "conttn-
gency reserve" Of nearly $4,000. 900 each
The law as the Vert
serve in each of the three largest compa-
MES.
Supt. Kelsey gives eleven variations tnat
he has allowed from the four standard
forms of policies laid down by the Arm
strong committee and tnen calls attention
| to what he terms an anomalous condition
| of AFFAIRS" in the fact that under q ruling
| of ex-Attorney General Wayne on Septem.
| Der 1, 1906. life insurance companies OF
other states already licensed in New York
| are not required to follow the act, whereas
| domestic companies must do so. Foreign
| companies may write both participating
and nonpa rticipating insurance, whereas
domestic companies must choose between
| them -.
.'It remains to be seen whether or not
~ .nnarant discrimination against our
| own state companies is really harmful" ne
remarks.