New-York tribune., 1908-01-16

company allowed before proceedings for dis
solution could be taken by the superintendent
Some similar fexibility Of the Hughes-Arrnstrons
New York insurance code could be formulated II
necessary, under existing circumstances Insur-
ence officials swearing to an incorrect statement.
based assumed and not the actual and real
value Of their companys assets. are approaching
too near the line of perjury for their own safety
and security Indictments have been found ana
are even now pending for alleged minor misstats-
ments,
The attempt to regulate by statute the details
Of the business Of life insurance. forms OF policies
amount of dividends and when to be declared,
amount Of agents commissions, amount OF SURPLUS
limitation Of the amount of business. ETC. is
Utopian and visionary It is not true or real
statesmanship. It may launch temporary "booms"
for half dozen politicians, but II will not per-
manenrly promote the best interests OF life In
surance the permanent welfare OF the common
wealth
statute limiting the amount Of counsel or
other fees and Of new business for law firm
would be considered ultra wires. 4 statute
limiting the amount Of business TO be done by &
bank. rust company or business corporation would
be as unjust and Inappropriate. Many Of the
members Of the Armstrong special insurance
committee Of 1895 had no knowledse-scientlhc.
actuarial legal or otherwfse-of insurance But
they had numerous well paid parte counsel,
against whom no lawyer was allowed to appear
TO defend individuals assaied or insurance COM
panies accused.
NV suggestions. Mr.. Editor, are not made as
mere tyro or dreaming theorist on this subject
have had more less experience as 4 lawyer
since the year 1s4o. and consulting counsel OF
various Insurance companies and also as the first
sfJperiutendent Of the New York State Insurance
Department in IFS formative stage and for longer
period than any other insurance official in the
United States any other country.
The supposed reform Hughes Armstrong in
s,1rance code of 1906 needs reforming great deal
more than did the old New York insurance code,
under the provisions of which New York COM
ranies had grown be the largest and most sue
cessful in the world. Now, ] see by recent anie
article in last Saturdays New York Times by
0arwiu 2 Kingsley. president of the New York
Life Insurance Company. that under the Hughes
Armstrong code the new business Of New York
state life insurance companies had decreased
from 1894 TO the year 1895 more than five hundred
millions OF dollars and that the decrease in the
year 1897 would be considerably larger than this
enormous amount
Calling the approximate average premium only
per cent the loss income IN New York State
life insurance companies for the year 1906 wouIo
be two millions of dollars and for the year 1901
Droba bly, considerably more than than sum. The
most important question in life insurance is as to
1ba soIvency OF the company. Is il able to meet
all its present obligations and the enormous load
of future claims? All legislative acts dikt
some of the Hughes Armstrong laws which
cripple the ability of company TO attain and to
maintain solvency with a safe margin for con-
tingencies pestiIence financial crises ex-
cessive deaths etc, should be speedily repeated
and wiped from the statute books.
The old New York statutes needed only some
,7juor amendments meet some existing minor
evils The few real reforIns in the Hughes-Arn
strong code have cost the poiicyholders very dear
" and probably many hundred times the evls oil
s,nnosed evils which they were intended 10 cure
,,orsiIerab BILE discussion has occurred as to the
resI causes of the recent existing financial crisis
In nv opinion its primary cause originated IN Ihe
.st-Ir- 4N7Oz flE
| +be honesty and integrity of the officers OF the
~ york state life insurance companies In the one
! s5de5 examination of 1905 and the enactment o'
tho crude unscentifc legislation contained IN th'
| Hughes ArrlstronG insurance code OF 1870 lL'
| roonIo of the whole world were for months daily
shocked by sensational reports and bulletins OF
irregularities and frauds enormously exaggerated
| nv leading New York fnancers of excellent repu
,ation and standing until all life insurance poIIc9
bo11ers were suspicious of even the very maine ol
life insurance when all the companies OF near -
| all of them. were perfectly solvent and even hao
| .,orr,o,1s s,lrpluses more than adequate 10 mee
| all their present and future Liabilities
E,rr, ..Tweed's Parlors" in the New York City
| Hall a hundred over modern reporters ai4U
| ao~eenondents megaphoned their mares nest dis
o,eries and revelations state and territory
= .1a Union and even to all foreign countries OF
the civilized world. No wonder that confidence and
tr,,st were lost in everything and everybody. The
word insurance" became obnoxious and the syno'
,vrne of dishonesty through the constant clamol
% both yellow" and white journals throughout al
of the United States, and even In foreign countries
e,,hsanuent events added fuel to the coniagratior
then started and finally eliminated in the terrible
manic and lack of confidence In all hnanciaI insutu
! ,ions OF the year 1g7-'0s
WILLIAM BARNES. SIR.
| Ex-Superntendent OF insurance OF 'he state oi
New York us60- 7o).
Nantucket Island. Mass, Jan. 1d 1908.