New-York tribune., 1909-02-14
O'MALLEY ENTERS
INSURANCE CASE
NEW YORK LIFE A PARTY
IN ACTION TO TEST LAW.
State Officer VIII Not Leare De
fence of Measure to Com pany
Which Opposes 1t.
nv rslesraph to IN. tribune ]

Albany Feb. 13-Through the announcement
of Attorney General o'Malley that he would
intervene in the case. it came to light to-day
that suit had been brought. in which the New
York Life Insurance Company was party. to
test the constitutiona1ity of that section OF ths
insurance reform laws limiting the amount OF
business TO be done yearly. The New York Life.
sued by Charles H. Bush. its agent. because Il
refused TO accept his business. was put into the
position of defending the laws But Justice
o'Gornan. after some questions he asked Of the
company's lawyer regarding the company's atri-
tuds on the constitutionality Of the Law. re-
quested the Attorney General to intervene
This case presents many interesting Legal
phases. among them this one. that the company.
which through its officers has been objecting
vigorously to this section of the Insurance laws
and advocating its modification, should become
through this suit a sort OF agency TO uphold the
law The case. II is understood. is what lawyers
know as a private" one. and there We're no
papers of record TO call the attention OF the At
torney General or the public to it until Justics
O'Gorman asked the state official to defend ths
insurance law As it proceeds now, the COM
pany's ability to take new business under that
limiting law the point at issue. VIII have TO Be-
thrashed out in detail and the exact state OF the
company's business at the time the agent tried
to have accepted the policy which tae company
refused will become material question,
Mr. Bush a member Of the 'FNylic'' organiza-
ton, according to the facts learned here. needed
$1,000 more insurance in 1905 TO round out the
$4,000 necessary TO retain his membership in
that association. He presented a policy for
$4,000 to the company, accompanied by certt-
fed check for the premium and the necessary
medical certificate Of the would-be pohcyholder
in perfect form The company refused TO accep<
this business on the ground that It had written
in that year all the insurance business it legally
could Attorney General O'Malley to-day made
this statement regarding the case.
In December Of 1903 Charles H Bush. one q
the agents of the New York Life Insurance.
Company and a member OF the association OF
against the New York Life Insurance Company
TO compel the defendant TO eccept policy which
he had secured on the life OF aaron " SurneIt
for $4,000 which policy had been declined HE
the insurance company upon the ground 1har
during the year fsns i had reached the limit Tor
new insurance which IL might write under sec
ton sS OF the insurance law The plaintin also
asks that the insurance company be restrained
from cancelling his membership in Nylic
on the ground that he had failed to write
$50 900 of new insurance in the year 1908. which
would be the case If this policy we're not M
cluded: and also 10 pay him his commission on
the first premium said policy OF insurance
It is claimed that the New York Life Insur.
COnDanE,
Section 96 of the insurance law. IS prohibited
from doing an insurance business IN any one
wear to exceed $3.50. 100000 According 70 tns
allegations Of the complaint. the defendant. the
insurance company. declined to write the arore-
said policy on the ground that the S25,OOO on rn6
life of Burnett would exceed this limit OF new
insurance for the year 1908 The Insurance.
COMPANY fled demurrer, through its attorneys
on the ground that the complaint did not state
facts SUFFICIENT to constitute a cause OF action.
and the matter was brought on for argument
before Justice O'Gorrnan on February I, 1903
f1a 11TcE q
f11tionalitv Of the Armstrong insurance law IN
so far as the Legislature attempted 70 limit new
Insurance business in any one year After the
hearing Justice O'Gorman decided TO hold the
r1atter and asked the Attorney General 10 m
tervene The matter in this way was brought
to tre attention Of the Attorney General for ths
first time.
have decided to intervene in this action
and take such steps as may conclude are nee
essarv to uphold the constitutionality OF the IN
surance law in far as its provisions are as
sailed by this action
This matter OF limiting the amount OF new
insurance that might be written annually by IN
s1,rapce companies Of this state was one OF the
innportant matters considered by Governor
Hughes and the Armstrong committee az the
time OF the insurance investigation am in
formed that many Of the leading actuaries ana
Insurance. men in this country advised that such
a provfsion would be wise one TO adopt ana
insert in the law. One OF the basic reasons Tor
This seems to have been that there was no oens.
Ar 70 poltcyholders by further enlargement OF
+hA business after the same had reacnsd Ger
tain volume and that it would cut on the ex-
nense of irving to secure enormously in
creased business These various reasons seem
to have appealed 70 the Legislature when <
enacted Section e6 Of the Insurance. law