Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1907-09-18
CONDEMNS INSURANCE LAWS
President Kingsley of New York Life
Talks to Commissioners.
CRITICIsEs NEW LEGISLATION
Opposed to Taxes on Premiums and
Prohibition of the Use of Fed
eral Courts - Destruc-
tive Reforms.

RICHMOND. Va. Sept. 17.-An appeal to
the members of the convention of lnsur-
ance Commissioners Of the United states
for supervision based on a national rather
than a local view of life Insurance was
made by President Darwin T. Kingsley
| of the New York Life Insurance company
in his address before that body today. In
asking the commissioners to use their in
| fuence to have certain existing laws re-
pealed, laws which he declared to be false
in principle and dangerous in application,
Mr. Kingsley pointed out the fact. not
| withstanding the rulings of the supreme
court of the United states, that life in
| surance can be Justly supervised only II
! II Is treated as though 1t were interstate
| commerce and federal question.
| He denounced the destructive reformer
| and lauded the man or body Of men who
| seek reform by constructive methods; and
! he asked the commissioners to aid in sup
pressing the insurance politician" who,
he said, has seized the opportunity given
! by the destructive reformer to seek con
troll of the great mutual companies with
their many hundreds Of millions of dol
lars in assets.
The Insurance Politician,
"In the name of reform. taking sdvan>
tage of public passion, of serious mis-
! ready made a powerful effort to get con-
troll" said President Kingsley, speaking
of the insurance politician. He doubtless
has not made his last effort l in
clined to think that here lies your supreme
responsibility in the Immediate future. 1t
| may be your clear duty at some time to
help cast out dishonest administrations
of mutual companies. But it will always
be your duty to exercise a wise discrim-
! ination, TO see that reform is not done
I by violence, to see that in turning out un-
worthy men you do not invite in others
| infinitely worse. The danger that mutual
companies will fall into the hands Of
politicians is a very real one. The assets
of two mutual companies alone amount
to over a billion dollars What an oppor-
tunity for the demagogue! What field
for the insurance politician
| President Kingsley gave a brief sum-
mary of variety of legislation springing
from the demands of local interests and
ignoring the general character of the in
terests involved These included: laws in
New York state which put a limit on the
amount of surplus company may hold.
On the danger of this statute Mr.. Kingsley
dwelt at length; a law in Wisconsin hxing
the maximum premium company may
charge; one in Texas which would compel
securities, whether they approve Of them
or not and then place the securities within
reach of local authorities for taxation:
one in Missouri placing limit on the
amount of salary that may be paid to an
insurance officer under any conditions. In
many states the right of appeal to the
federal courts has been denied to foreign
corporations, and in nearly all the states
taxation of premiums, which is applied
without any uniformity whatever, has been
steadily increasing until It now amounts to
several million dollars a year more than
the cost of insurance supervision.
Taxes ON Premiums.
while / would not argue for entire
! exemption from taxation of premiums,
he said, II would review some reasons
why the premiums on life insurance ought
to be exempt. Life insurance on the
, mutual plan is not a money-making busi-
! ness; it is the collection and disburse-
, ment of money to prevent poverty. All
, money received is either paid out at once
in benefits or expenses is invested and
: pays taxes where it is invested. Life in
surance premiums are a self-imposed tax
which prevents burdens on the state, and
, tax upon a tax is barbarous. The taxa
tion of life insurance premiums is a tax
upon property not in possession and
, from which no present income is derived
Investment of Funds.
} Continuing he said in part:
Another tendency in legislation with
which you must deal is that which would
compel investments in local securities ana
require deposit of those securities where
they can be locally taxed. Here legislation
from the local as opposed TO the national
viewpoint takes on one of its radical forms
The doctrine that a state may prescribe
the conditions under whicn a corporation
may do business within its borders is prob
ably finally established. But the problem
as to the wisdom of sucn doctrine still
4 remains. The responsibility Of the selection
Y of securities for the investment of life In
4 surance funds cannot be safely shared by
the directors of company with the law
= making bodies of the various states of tn,
r union. Unless a state is willing to guar
Z antee the sufficiency of the securities whicl
: Il would compel a life insurance company
to purchase, and thereby give something
= in return for the discretion which II woulC
4 take away from trustees, II is inviting, al
. most compelling disaster II a state should
find a trustee OF any particular compan!
9 using his position and power to force secur
> tiles in which he was personally interested
upon the finance committee, IL could an'
would send him to Jail In what respec
= is the morality of law compelling financ
e committees to buy securities in which tn
n state is confessedly interested, better o
: higher than the morality or a trustee wh
uses his position for his own ,iSs benentg Tn tn
q they also have a right to say bluntly 70
: ! life company that II shall not transac
T business within its borders any condi
tions. This would be a more honorabl
plan. 60
J Closely allied to this kind OF Legislation
is the prohibition already written in tn
4 statutes of several states against removing
a case from the state to the federal court
Such laws exist in North Carolina, in NeV
York, in North Dakota, California, Colo
RADIO, Illinois. Kentucky, Mississippi, Mis-
/ ! souri,, Nebraska, New Hampshire, Ohio
South Dakota, Texas ana. in Wisconsin
s Some of these laws have been In eXistenc
:, for nearly thirty years. These states hay
a declared in effect that the trustees of
life Insurance company In the disehaTg
: OF their duty shall be denied the protectio
Q of the federal courts. This or no busines
I in these states
Another tendency which will probabl
. not run Far is to limit by law tn
d amount OF business which a company ma
II do. To thus limit the amount OF busines
after having limited the cost OF business
directly contrary TO the principle that
- everywhere else now so strenuOusly mair
| tanned, namely, the competition is tn
proper regulating force in business. Th
national government especially is movin
- heaven and earth to prevent the stihin
of competition. but New York state at leas
maintains that beyond a certain point
life insurance company shall not compel
for business on any terms. compan
Al may he furnishing insurance at the loves
o cost. but after furnishing a certain amour