The evening star and Newark advertiser. [volume] (Newark, N.J.) 1907-1908, 1907-07-01
IS
OUT OF STATE
OF TEXAS
New Laws Relating to In
veStmentS Cause Of
Company's Decision.

President Dryden, of the Prudential
Insurance Company, has sent to all of
the company's policy-holders in Texas
the following notice of withdrawal
from that State. on account of new
laws which require investment of part
of its reserve fund in Texas local Sc
curities:
by the requirements of the statute re-
Gently enacted and known as the Rob
ertson act this ompany IL 1t continues
to do business In the State Of Texas, must
invest 70 per cent. of the reserve value OF
policies issued by 1t upon the lives of resi-
dents Of the State of Texas In certain
specified local securities, which 1t Is re-
quired to deposit In certain named de-
positories located within the State, no Sc
curity being giver to 1t by the State for
their proper custody. and a burdensone
rate of local taxation being imposed
while this act was pending in the
Legislature, this company, in conjunction
with other companies doing business in the
State, opposed in every proper way lts
passage. The act having been passed and
approved by the Governor, the company is
now confronted with the alternative OF
! either complying with the provisions OF
the act or ceasiRg to do business within
the State of Texas.
After a most careful consideration of
the question the company has come to the
conclusion that 1t cannot, In justice to
its policy-holders and with due regard to
the proper conduct of Its business, comply
with the requirements OF the statute, and
1t has therefore reluctantly determined to
cease doing business within the State of
Texas.
this act and the discussion which has
taken place, both ia the Legislature, be-
fore the Governor and In the public press,
in a. general way, to state the reasons
which have impelled this company to
adopt the unwelcome alternative Of with
drawing from the State rather than COM
THE company is compelled by this
statute to invest a portion of its assets
In certain designated securities. One CT
the chief essentials in the successful con-
duct of the business of life insurance is
the investment by a company of Its funds
at the highest rate of interest it can pro-
produce results satisfactory to It's, policy
holders 1t is necessary both to be able
securities obtainable, as well as to have
the investments which II has made in Sc
c~urities readily convertible IL a more at
tractive investment shall offer itself.
In addition to this limitation of Invest
ment the statute in question deprives the
company Of the custody Of u portion OF Its
assets, the State furnishing TO &c no seeur-
ity therefor. 1t imposes upon the securities
which 1t requires the company TO deposit
a rate of taxation almost as high as the
ireome yield therefrom. If other States,
lOlit" Ills ttC IA hOAh La0- Hff'%
lar laws. Il would be impossible for any
insurance company to procure for its
p~olicy-holders a proper return from the
funds entrusted to It. The losses which
would inevitably result from a compliance
with the conditions imposed by this
statute would. of course. fall upon our
policy-holders, and In justice to them all,
those within the State of Texas as well as
those without, we have determined to
withdraw from the state rather. than TO
subject them to the losses which they
would sustain were we to continue to do
business in 1t. 1t seems needless to add
that this action on the part of the COM
pany will not in any degree impair the
security of the policies issued to the citi-
zens of Texas. 1t is their protection, equal
iy with that Of our other policy-holders,
that necessitates a refusal TO comply with
the Drovifinns ~ This statute.
THE company leaves the State of Texas
with regret; 1t has been its desire to
largely Increased its business within that
State. and the relations which have ex-
listed between it and its policy-holders
have been of the most cordial character.
We are. loath to believe that the policy
which has, by the enactment of This
statute. prevented our continuance of bust
ness in Texas will be perpetual, and we
sincerity trust that at no distant date the
with benefit to it's epo~licy-holders resume
business In the State. Until such time ar
rives. however, it will be necessary for us
to subject our present ~policy-holders of
Texas to some slig Inconvenience In the
remittances OF premiums, the applications
for policy loans, etc. OF course, pains will
be taken to see that all business is trans
acted with the utmost expedition.
ION and after July 10. 1897. remittances
OF premiums, applications for policy loans
and surrender values, notices and proofs
of death, etc, should be made to Farlow
& Avery. POI Norton building.
u remain. very truly yours,
JOHN r. DRYDEN: president"