The Barre daily times. (Barre, Vt.) 1897-1959, 1907-08-12
INSURANCE
LAWS ATTACKED
American Bar Association
Scores State Systems
----------
FUNDS TREATED AS SPOILS
Committee Unanimously Stands for Fed
eredal Supervision = The States
Stealing from "Trust
Funds"

Omaha. Aug. 12,The committee on
insurance Of the American bar associa-
tion, Of which Ralph W. Breckenridge
Of Omaha Is chairman, Saturday made
public at Omaha, Neb., the report which
it will present to the next meeting Of
the bar associations at Portland, Me,
the 2Bth. The report scores state in
surance departments, give reasons for
the need Of sane legislation, and why
insurance should be supervised, attacks
the deferred dividend surplus and the
wild eat" insurance companies, advo-
Gates state fire marshal law stands
tor federal supervision OF insurance, and
ends By recommending the passage Of
six resolutions. This year there Il no
minority report OF the committee. The
recommendation and scorings are given
TO the association without a dissenting
voice for the first time In the history
Of the committee. The personnel Of the
present committee Is r. w Breckenridge
OF Omaha, chairman, Burton Smith of
Atlanta, r. A. Mercur Of Towanda, Pa,
w. X. Vance Of Washington, d. G., and
Robert Dunlap Of Chicago.
After calling attention that the public
pays Sl,000,0O0o00 every year for insur.
ance, the report says The system OF
state supervision III vogue, but back Of
that, in the opiui0n of the committee.
the possibility for corruption BY com
pany and state officials with respect to
life insurance lies in the extravaganza,
manipulation of investments, excessive
commissions or riotous desire for big.
ness which was developed out Of the
failure to apportion frequently and ac-
count for the immense surplus accumu-
lated through the deferred payment pol
ICY These immense sums Of money in
sight have been regarded as spoils by
insurance managers whose conseiences
have been commercialized according to.
modern standards by the state insurance
departments and their hangers-on, and
worst Of all by number Of state legis-
latures which with little knowledge and
less scruple have treated as legitimate
loot these moneys raised by voluntary
taxation TO provide against disaster and
calamity.
1t il just az dishonest to steal under
the protection Of the law as without IL;
il is just as dishonest for the state to
lay unholy hands on tru& funds as for
an individual, and the states commit
monstrous injustice when they seek even
partially to maintain themselves by leg
islative raids upon trust fundsy more
over, it is the climax of cowardice to
commit extortions in the name Of police
power, but most OF them are doing 1t
and thus commit the identical oifense
they condemn and punish in the indi
vidual"
Under the head Of Defects Of the sys
tenn of insurance supervision" the report
says: The other chief cause Of evils
which infect insurance is the incompe-
tent or corrupt administration of the
unsatisfactory insurance laws IN force
in the several states. Your committee
does not wish to be understood as charg.
ing that all state insurance commission.
ers are dishonest nor that all Of them
are incompetent The trouble is
that the state insurance departments,
always keeping in mind the few except
tions, are sineeures. They produce rich,
ripe political plums. knowledge Of tho
insurance business Is the last thing re-
quired. They offer the most
seductive opportunities for fraud and
graft in the United States
Fully 1000 words Of the report are
devoted to the deferred dividend sur
plus as one Of the producing causes Of
The existing evils which must be cured.
To the end that the cause be removed,
the report insists that dividend SURPRISES
he treated as q liability aud not as an
asset Under the head al federal super
vision, the committees report says that
interstate transactions in insurance
should be regulated by an act Of Con-
gress under the commerce clause Of the
federal constitution; interstate transac-
tions in insurance are commerce. and
that a federal insurance department.
with jurisdiction over interstate tran
saetions in insurance, would furnish the
American people a higher degree Of pro.
lection against fraud than is possible
under the existing system OF state super
vision.