New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1911-04-27
H0TCHKISS OPPOSES BILL
Against Repeating Law Requir :
ing Sale of Securities.

Albany. April S-The Senate and As
sembly Insurance committees gave a Joint
hearing to-day on the Frawley- Hoey bill
repeating that portion Of the insurance law
which requires life insurance corporations
TO sell their bank. trust company. railroad
and similar stocks. as we'll as certain col
lateral trust bonds, which were owned by
them al the time Of the Armstrong Com
mittee investigation and which must be dis
posed Of before December 81, 1911. under
the present law.
The bill was opposed by Superintendent
Of Insurance Hotchkiss, who suggested in
an argument that this law be amended so
as TO extend the time. say. three years,
within which such stocks and bonds may
be sold The argument is summarized in
part as follows:
Reports recently asked show that the
three large New York companies which are
affected by this law have since the invest-
cation disposed Of only IS per cent Of their
holdings IF this kind, and still possess
among them upward Of sS0.0D.0t0 at present
market values or these more than half
are held by the Mutual Life. about one
third by the Equitable and about one-tenth
by the Metropolitan.
The department further urges that il this
bill should pass II will easily prove the en-
tering wedge for a total repeal of Section
10, and mat II SuCn section sNOOiG De re-
pealed life insurance companies would be
able. under another section of the law. 10
invest I'm the securities of any solvent cor
poration organized under tn" laws Of the
United States or Of any state-a wide open
provision that would permit much that was
condemned by public opinion as result OF
the investigation OF 1916.
SuDpemenunG its suggestion mat the
present situation may be met by an extern
sion Of time rather than by repeal-which
latter would mean that the companies IN
question could retain their present large
holdings even though prohibited from tu'-
IRE purchases Of the same kind--uperln-
teudent Hotchkiss further suggests sci
entific revision Of the investment section Of
the insurance law. lie argues that the
present test stocks being Illegal ard most
urges that the safer way 10 meet condi-
lions would be 70 limit the PERCENTAGES
both Of the amount Of such a corporation
assets which can be invested ~ the secnrl-
tic Of anv other corporation and or the
iesues Of an outside corporation which may
he invested in BIZ a life insurance company.
This seems 10 be the law IN some " the
states. ,,.- -..,,.. rem
eore vhv such 2 revision IS needed at ms
time and concludes that the real problem
tefore the Legislature and the department
A. the enactment OF an entlrely ne" sec
tor NJ the Law in substitution for present
sections rs and 100 which, while permit
ting insurance companies 10 secure, ne
bssf classes % investm ents, VIII aVplO tIS
dangere Of uroprietorship and permanently
divorce these trustees O. the people from
large finance
Charles A esbody. president If the
,Iutusl Life Insurance COMPANY, ana
George Lynn Cox. counsel for the Assocla-
ton Of Life Insurance Presidents were
among those who appeared in favor Of the
measure Mr. Peabody said IT was quite
tr-,e that II the company were required 10
dienoee or its securities by December 81,
sucb course would involve large loss
- the rolicvhoders. A. the same time
ne insisted that il would be better 70 lace
- iesus now than 70 adopt the suggestion
of +pe Insurance Department for mere
extension Of time.