The citizen. (Honesdale, Pa.) 1908-1914, 1909-03-10
New York Governor Wants
New Insurance Law.
TO MANAGE DELINQUENT cos.
Says There Is Urgent Need of Civ
ing Power to the State to
Act Vigorously In Gases
of Emergency.

Albany, N. Y, March Ex-Governor
Hughes sent to the legislature the first
special message of the present session.
in which he recommends Amendments
to the Armstrong insurance law so as
to give the state superintendent of in
surance power to take possession of
the property and affairs of insurance
companies when necessary to conserve
the interests of policy bolders.
In his message the governor cites
the recent sale of the Washington Life
away of its books to Pennsylvania. He
says:
The serious delays and enormous waste
connected with receiverships, both of
banking and Of insurance corporations.
has directed attention to the advisabilty
of providing suitable means for econom-
tcal and speedy liquidation through the
agency of the respective state depart
ments.
Not only is it desirable to provide for
the economical and speedy liquidation of
insovent institutions, but also to make
proper provision that the superintendent
of the appropriate department, where the
corporation is delinquent or the interests
of depositors or policy holders are in
the property of the corporation and as
sumo charge of its affairs so that he may
be in position to conserve its assets and
take such steps as will prevent unneces-
sary waste or spoliation.
Circumstances may make the exercise
of such power OF the greatest impor-
tance to all parties in interest, even
though the institution may be solvent
and the exercise of such authority may
frequently save corporation from ruin
and make easy the resumption of busi-
ness under proper safeguards
The protection which is sought to be
given to our citizens by the supervisory
powers Of the state department is not
complete unless the superintendent is in
position in times of emergency at once
to take custody for purposes of conserva-
tion, and ample authority for this pur-
pose should be afforded.
Certain recent transactions relating to
q long established and solvent life insur-
ance corporation have emphasized the
need of such legislation. All the assets
of the New York corporation appear to
be claimed under a reinsurance contract
by an insurance corporation of another
state. Legal proceedings have been in
stituted attacking the transaction in ques-
ton, and a receivership has been asked
for. In such case 1t ought to be sim
pie matter to secure proper custodial care
through the state department and to take
summary steps to protect the interests of
the policy holders without recourse to a
recevership.
Power should be given to the siperin-
tendent of insurance to take charge of
Insurance corporations so situated. Pro-
vision should also be made by which all
arrangements for the transfer of assets
from one insurance company to another
with the design to bring about a prac-
tical merger or to turn over the business
of the one corporation to the other should
require the approval of the superintend-
ent of insurance.
I therefore recommend that such legis-
iation be enacted as will give to the SUI
perintendent of insurance powers with re-
spect to taking possession of the property
and affairs of insurance corporations and
their liquidation analogous to the powers
conferred last year upon the superintend-
ent of banks.
In view of the Importance of the matter
! respectfully urge that it receive as ear
iy attention as may be possible.
Bills carrying the governors recon.
mendations We're introduced in the leg.
islature by Senator Grattan and As
semblyman Hamn.