New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1907-02-21

State of New York
Executive Chember. Albany, Feb 20, 1907.
To the Senate 7 recommend the removal OF
Otto Kelsey from Tho Office OF superintendent Of
Insurance.
With respect TO life insurance New York is
easily the most important i'-isdicton In tho
United States II not IN the world. and the vast
interests involved mperatively require and it
should he a point OF honor for the state to
maintain fearless and efficient administration
Of its supervising department. commanding the
confidence OF the people.
l recommend Mt. Keseys removal because. rs
head Of this department. he has COnspiCuously
failed 10 perform Obvious duties Of the first i'm
portance. and his neglect has demonstrated his
unftness for the trust Contded to him.
Mr.. Kelsey took Office MAY !. 1906 His ap-
pointment was made soon after the investiga-
ton by the joint committee Of the legislature.
which disclosed gross irregularities in the man
agement Of life Insurance corporations.
Official position had been used for private
gain and the money contributed bv the policy
holders for their mutual protection had been
wasted in a sCandalous manner.
Extra RGnt salaries had been paid. favoritcs
had been permitted 10 enrich themselves at the
expense Of the policyholders. an elaborate sys-
TEN had been established for the purpose Of con-
trolling legislation in this state and throughout
the country, and enormous sums had been
cretly disbursed without proper vouchers
Tho revelation Of those grave abuses in con
neCtion with greatest iduCiary institutions
shocked the civilized world. aud by the discredjt
which justly attached to the administration ot
the Insurance Department humiliated state
During the period Of those abuses every life
insurance corporation doing business within the
ports, TO give prompt and verified reply to all
inquiries OF the superintendent, and vas subject
TO the examination Of tho superintendent as
often as he deemed eXpedient. Upon such ex-
animation the production Of all books and
papers could he required and officers and agents
examined under oath. Not only did this power
Of supervision exist, but II was supposed 10 he
exercised and official assurances from time to
time given from which the noliCyholders
had the right to infer that their interests were
properly conserved.
The Equitable Life Assurance Society had
been examined by the department in 1902. the
Mutual Life Insurance Company I'm 1902 and
the New York Life Insurance Company in 1904
In each case the examination continued through
many months and purported to he exhaust
i've, but disclosed none Of the improper prac-
tces which actually existed and which were sub
sequently brought to light by the legislative
committee.
In the case of the Equitable the chief exam
iner reported under date Of October IL. 1902 as
follows
The examination was begun in April last
and has occupied the entire attention Of the ex-
amining force until the present time. Every IA
cility has been accorded them by the representa-
uves of the company In its endeavor to expe-
dite the work, and ample opportunity has al
ways been afforded to investigate and verify
the nature of all transactions relating To th.
conduct Of It's affairs"
At the close Of the examination of the Mutual
in September, 1903, the examiner said
IF the scope OF the investigation were con-
fined solely 10 ascertaning the fact that the
corporation solvent under the law-that is
that its assets We're properly invested tbera-
under and equal to or IN excess of liabilities
the time occupied in determining this question
would be relatively limited, compared to that
required 10 determine likewise whether the COM
pany had been managed In the best interests os
policyhOlderS the cost of whose insurance TO
them in a purely mutual company depends
largely upon an intelligent administration of it's
affairs.
IAN examination, therefore. Of receipts and
disbursements for a series of years becomes
necessary. II we are to arrive at any idea of the
conduct OF COmpanys business, with the view
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