New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1907-08-11
BAR AND INSURANCE.
Report to Association Scores State
Departments-Urges Ne70 La7cs.

DepGrtnentS-CTS " e7C LdaCS.
Omaha. Neb. Aug. 1O.-The committee on in
surance of the American Bar Association of
which Ralph W. Breckenridge. Of Omaha. is
chairman, made public to-day the report which
it will present to the next meeting of the Bar
Association at Portland Me, August DC
The report. which is Of about fifteen thousand
words. scores state insurance departments, gives
reasons for the need of sane legislation and why
insurance should be supervised. takes shot at
deferred dividend surplus and the wildcat in
surance companies. advocates a state fire mar
shal law stands for federal supervision of in
surance and ends by recommending the passage
of six resolutions.
This year there is minority report of the
committee. The recommenda tons and scorngs
are given to the association without dissent
ing voice for the first time in the history of the
committee. The personnel of the present COM
mttee is R W. Breckenridge, of Omaha. chair
man: Burton Smith. Of Atlanta; r. A. Mercur.
of Towanda. Penn: w. r. Vance. of Washing
ton. and Robert Dunlap of Chicago.
After calling attention that the public pay
$1,on,00.o00 every year for insurance the re-
port says:
The system of state supervision is vague but
back Of that. I'm the opinion of the committee the
responsibility for corruption by company and state
officials with respect TO life insurance lies in the
extravaganza manipulation of investments. Excess
i''tONe oVSiio iot DlsueSS
which was developed out of the failure appor-
ton frequently and account for the immense sur
plus accumulated through the deferred payment
policy These immense sums of money in sight
have been regarded spells by insurance mana
gers. whose consciences have been commercialized
according 10 modern standards by the state In
surance departments and their hangers-On, and.
wors; OF all by a number of state legislatu lures
which with little knowledge and less scr1IpIa have
treated legitimate loot these moneys raised by
voluntary taxation to provide against disaster
and calamity.
ton Of the law without it, it is Just dishonest
for the state 10 Jay unhoIy hands on trust funds
as for an individual. and the states mon
strous injustice when they seek even partially TO
maintain themselves by legislati tive raids upon trust
funds; moreover. it is the climax of cowardice to
commit extortions in the name Of police power.
but Of them doing it, and thus commit
the Identical offence they condemn and punish in
the individual
sight belongs :" him who get hold OF IL and
keep out Of Jail and until that dishonesty which
is a part OF the foundation upon which our present
insurance legislation rests is pulled out Of it, and
the American people quit cheating themselves they
can have no absolute protection against the evils
under consideration.
Under the head Of defects of the system Of
insurance supervision the report says:
The other chief cause OF evils which infect in
suranCe is the incompetent corrupt adrninistra-
ton of the unsatisfactory insurance. laws in force
in the several states. Your committee does not
wish to be understood charging that all state
all of them incompetent The trouble Is
that the state insurance departments. always keep
ing in mind the few exceptions. are sineCures. They
produce rich. ripe political plums- knowledge II
the insurance business is the last thing required
They offer the most seductive opportunities
for fraud and graft in the United States
Fully thousand words of the report are de-
voted to the deferred dividend surplus as one
of the producing, causes of the existing evils
which must be cured. To the end that the
ba insists hat iVi-
0end surpluses be treated liability and
not asset
The committees report says that interstate
transactions in insurance should be regulated
by ar act of Congress under the commerce
clause of the federal constitution as Interstate
transactions in insurance are commerce, and
that federal insurance department, with Juris-
diction over Interstate transactions in insurance.
would furnish the American people a higher de
gree of protection against fraud than is possible
under the existing system of state supervision.
The committee recommends the adoption of
the following resolutions;
Re solved That this association disapproves and
condemns the prevalent custom which makes state
Insurance comnissionerships political prizes to be
distributed as such without regard to ntness or
knowledge of the insurance business
Second-That all companies created under the
laws or foreign countries be required to make
deposit in at least of the states before trans
cling business anywhere In the United States
Third-To repeal the valued policy laws
Fourth-The creation in each state of the Office
Of fire marshal
Eifth-The enactment of a federal statute for
h,dding the use of the mails to persons. associa-
tons copartnerships corporations conducting
anv kind of insurance business In the United
states who are not licensed 10 transact such hus-
pess bv the states where such persons, associa-
,,ons conartnerships corporations are domtcfled
or under whose laws such corporations are Gre
ated. 49,,
Sixth-The apportionment and contingent dstri-
bnion Of the deferred dividend surplus on exist
ING life policies of all compares as a condition
precedent TO transaction of business outside OF
the home states OF the several companies.
,he hoii'' S