New-York tribune., 1909-06-29
ARvSTR0NG LAW RESULTS.

/ Superintendent Hotchkiss in his report to
! Governor Hughes puts the case Tor the Arm
! strong insurance law with great force he
! says:
II &c difficult to gainsay the excellent practical
results OF the insurance laws OF lSVo taken @ aS d
whole The business Of life insurance has been
! purCed OF much that was undesirable. ana 70 tile
safety which has long been d characteristic vi
insurance in the large New 1ork companies mas mas
hon added a prospect of increasing economy
and of increasing returns TO pocY ;. .:
should add 10 the pTestlge OF ti.TSe &C - 1boIe
and greatly benefit the community as 4 "Hoio'
Thoupb the insurance in lorce in the larger
New York companies has stood STILL their
assets have grown enormously in value. Ihe
interest earned on investments has increased
and The cost of new business and general adj
ministrztive expenses have greatly decreased
under the restrictive provisions OF the law.
Certainly the policyholders of the New YORK
companies are better off through the reduc-
ton in costs and the increased returns from
investments There can hardly be room for
two opiuions on this side of the question.
But the real criticism OF the Armstrong law
has centred upon the pause in the growth
of the three major insurance companies OF this
state In the case of one company the lnsur-
ance in force actually declined last year. ana
the two others increased their business by
only relatively small amount. Mr.. HotchklsS
concludes that they are suffering not from
the law but partly from the. effects OF the
disclosures in the Armstrong investigation and
partly from some popularity of their business
which has resulted in excessive examinations
of insurance policies. The critics of the S1jO.-
100000 limitation of the Armstrong law have
been urging the objection that foreign insur-
ance companies, meaning insurance companies
of other states, were growing, that Is TO say
increasing their outstanding insurance, while
New York companies were standing still-that
they did not and could not, write enough bust
ness TO increase their total insurance in force
Mr. Hotchkiss replies that the fault is not
inability to write enough business under
the law but that excessive examinations
keep down the volume of insurance in
force with the big New York companies
He points out that in one New York company
the one whose Examinations last year exceeded its
new business, although the latter nearly reached
the S15OO0OO00 limitation-wth new business
for the year OF little more than Sl4O,OoOOOO
the examinations for other causes than death or
maturity amounted 10 nearly Sl41,0o00O0 while
by contrast, in the largest non-state company
whose new business was S1120o0OoO. the can
celIations for other causes. than death
turity were only S41O00OOO Thus. the nom
state company with S112,OO0OOO new business
grew-that is. increased its insurance in force
leaving terminatiOns for death or at maturity
out Of consideration-by $71,OOOOO0. while the
state company. with a total of new business ex-
ceeding S140O00000, increased its insurance in
force by only about 1000G00-excluding ter
limitations for death or at maturity. To put the
comparison another way, although the new busi-
ness Of the state company only one-quarter
larger than that of the nOn-state company its
examinations for other causes than death
turity were nearly three and One-haf times as
great. The statistics of Mr.. HotchkiSs show
that this situation prevails widely among the
New York companies and suggest that many Of
them are still suffering from the boom methods
by which their totals of Insurance were svelled
before the Armstrong law went into effect. At
any rate the contrast in cancellations for other
causes than death or maturity weakens the
effect of their complaints against New York's
insurance laws