New-York tribune., 1909-03-09
HUGHESSENDS MESSAGE
HIS FIRST SPECIAL ONE.
To Permit Insurance Superintendent
to Manage UnSOurd mp0nles.
fPy Telegraph to The Tribune. !

Albany March S-Iegisation permitting the
Superintendent of Insurance to take charge OF
insolvent OF unsound insurance companies, as
the Banking Superintendent may do now win
banks WAS recommended tonight by Governor
Hughes in his first special message 10 the Legls-
lature. Bills TO carry out his recommendations
were presented by Senator Grattan and Assem-
bIyman Hamn. chairmen OF the Insurance COM
lr7ittees This action was taken because Of the
discoveries CT Superintendent Hotchkiss in the
threatened receivership for the Washington Life
Insurance Company. The Governors new insnT-
anoe Official saw then that such authority on his
part would effect a great Improvement over eH-
listing conditions and took up the subject With
the Governor
TENT OF THE MESSAGE
Governor Hughes in his message says:
i, my ANIMAL message I recommended that
authority should be given the Superintendent
Of Insurance to conduct the liquidation OF m
solvent insurance companies in q manner slllliti
20 that which has been authorized in the case OF
banking institutions The serious delays ana
enormous waste connected with receNersllls'
both Of banking and Of insurance corporations
have directed attention TO the adNisaohitN oI
providing suitable means for economical aIld
speedy liquidation through the agency OF tile re
spectVe state departments Last year tile peili 9H
ing law amended so as to provide Tor llquI-
datiOn CT banking corporations by a business
Ike method, and the wisdom or the pTotlsloH
has already been demonstrated by experience
Similar exigencies arise in connection with IN
s1zrance corporations, and should be dealt WIN
Not only is it desirable provide for the
economical and speedy liquidation Of lnsolNeht
institutions Of either class, but also 10 MAKE
proper provision that the superintendent OF the
appropriate department. where the corporation
Is delinquent or the interests of the deposItors
pOlicyholders are in jeopardy, may at once
take possession Of the property OF the corpora
ton and assume charge Of its analrs' so Ilat
he may Be in a position 10 conserve IT'S assets
and take such steps will prevent unnecessary
waste or spoliatiOn. The legislation OF the last
sessicn with regard to banks provided for this
and gave broad powers to the Superintendent OF
Banks 10 take possession of the property ana
business Of banking corporations whenever there
was good reason 10 conclude that they We're IN
unsafe condition. Or that If was unsa1e OF III
expedient for them TO continue in business 1t
remains TO provide similarly ef1ectNe remedy
IN the case Ct insurance corporations
MAY SAVE CORPORATION FROM RUIN
Circumstances may make the exercise of such
p power CT the greatest Importance 10 all par
ties in interest even though the institution may
he solvent. and the exercise Of such authority
may frequently save a corporation from ruin
and make easy the resumption of business under
proper safeguards. The protection which Is
sought 10 be given to citizens by the super
Nisory powers OF the state department Is hol
complete unless the superintendent is in a posi-
tion. in times Of emergency, at once TO take Gus
fOdy for purposes OF conservation ana ample
authority for this purpose should be afforded.
Certain recent transactions relating to a long
established and solvent life insurance corpora
lion have emphasized the need Of such legisla-
fion All the assets Of the New York corpora
ton appear 10 be claimed, under Reinsurance
contract. by an insurance corporation Of another
state Legal proceedings have been instituted
attacking the transaction in question and a
ceivership has been asked for In such a case
Il ought be simple matter 10 secure proper
custodal care through the state department and
10 take summary steps TO protect the interests of
the policyholdeTs. without recourse TO re-
ceivershfp.
ACTS SHOULD BE RATIFIED.
Fortunately in the case stated. the Superin-
fen0ent of Insurance. with the cooperation of
the Attorney General. has been able to procure
an agreement whereby the assets of the New
York corporation have been. or viii be. returned
10 this state and placed within the control or
the Superintendent OF Insurance. The matter is
TOO important however. 10 be left in this shape,
emo the acts Of the superintendent for the pur-
pose Of protecting the poiicyholders from loss
should be ratified anc appropriate powers should
be given him take charge Of the concerns Of
Provision