Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1909-02-12
LIFE INSURANCE COMPANIES
Protest Before Taxation Committee
AGAINST Bill to Tax Reserve.

/ The life insurance agents of Maine were
present in body Thursday before the
committee on taxation to protest against
the tax commission bill to tax the life
companies at the rate of one-half of one
per cent on it's net reserve held against
Maine policies, less local taxes paid on
real estate.
These companies are now taxed at n
rate of Il per cent. on their premiums.
With this they are content and they say
that if there is to be any change in the
law it should be downward instead of
upward. To tax them at the rate pro-
posed in the tax commission bill, they
say, would drive the old established for
eign companies out of the State and
would impose an unwarranted burden on
the Union Mutual, which is Names great
life company. In the case of the latter,
the proposed law would operate in a Pc
cuiar manner; for while it would re.
duce the taxes which the company pays
in Maine it would through the retaliato-
ry laws Of other states, make the compa-
ny's total tax very much higher.
The Maine health and accident compa-
MES also added a word of protest and
the Grange mutual fire companies appear
ed to protest against section of the
proposed law which would increase their
assessments.
Chairman Drew Of the tax commission
was not present to defend the bill, and
Commissioner Milton l.. Merrill of ST. AL
| bans frankly admitted that he knew
nothing of it's provisions beyond the fact
| = t,,sr
| it on the assurance of some of the other
members of the commission that it would
| equalize taxation and be fair and just
| imposition. He asked the committee to
| allow Mr.. Drew to speak at some later
| day, and the attorneys for the insurance
companies said that they would make
| no objection.
| J. II. Drummond, Esq, of Portland
| opened the case for the life companies,
making very clear exposition of their
objections to the proposed measure. He
explained that outside of very few
| stock companies the life companies are
| mutual associations in the same way that
| savings banks are, and that even the
| stock companies are so limited by laws
and pressed by competition that they are
practically mutual companies today.
He pointed out that the law would
| work an injustice to the man who has a
straight life policy as he would be paying
| part of the tax of the man who has a
2O-payment life policy. 1t would oblige
| the company to pay an increased tax on
the reserve against the 2O-payment life
policy against which there would be
| nothing coming in after the policy was
! paid up. He showed further that it would
| work an injustice between the companies
that one company which had built up a
| large reserve would pay $4,000 where
another company would pay but $4,000.
| Discussing the application of the pro-
posed measure to the business of the
| Union Mutual Insurance Co. of Port
| land, he said that he assumed that
the committee would not wish to do
anything which would injure but would
| rather desire to encourage a company
which has investments Of nearly five
| millions in Maine. Under the bill the
net tax of the company In the State
| would be about $500, which Is less
than tn" company now pays, but under
the cctaliatory laws of other states it
would he required to pay greatly in
creased taxes elsewhere.
In answer to a question by Com
! missioner Merrill, Mr.. Drummond said
that he would be perfectly contented
to have the retaliatory law. repealed.
In conclusion he said: 1.-THE burden
which this law would impose would
be difficult for our company to bear
1t would cut down our field forces and
retard the growth of our company Just
so much"
Hon. 4. f. Tin,berlake of Portland,
former bank examiner, addressed the
committee in opposition to the bill,
speaking in behalf of the Union Mu-
tual
According to his view the Legisla-
ture should encourage these companies
just as much as it should the savings
banks for they are purely mutual.
trom their very nature, he said, their
business can't be confined to one state.
FOR their only safety lies in the d.
versity of their risks. Beyond that, he
SAID tn" committee should bear In mind
that we can't legislate wholly with
respect to this State but must Iegis-
iate with respect to the laws or other
states. for we must have, foreign cont
Eanles to come in and take part Of
he risks in this State
Hon. Oscar f. Fellows of Bucks
port and Hon. Charles +. johnson of
Waterville, representing the Maine
Underwriters. spoke briefly against the
bl.l, saying it imposed a burden al
together unbearable on the shoulders
Of the policy holder. Hon Don A. II.
Powers of Houlton. speaking as a pol
ICY holder. opposed the measure and
elized some applause when he said
that the people who drafted the law
didn't know any more about insurance
laws than he did
Henry w. Cakes of Auburn appeared
in opposition to the bill. speaking for
the health and accident companies of
Maine.
Messrs. G. w. c. Perham of Wood
stock, r. D, Leavitt of Turner, and
Ansell Briggs of Auburn appeared in
opposition to the section of the bill
which would apply the one-half of one
per cent to the business of the Gran
ger mutual fire insurance companies.
Commissioner Merrill said the Gran
gers had no right to be exempt. es
pecfally when they are advocating the