New-York tribune., 1912-02-25

counted. and the men Of the Insurance
Department soon realized the point The
fact that merit alone counted, the retiring
superintendent feels, is the real reason Tor
the loyalty of his force.
Although the general fire insurance in
vestigatlon. which barred the corruption OF
the fire insurance field as the Hughes In
vestieation did the life insurance field, Is
probably the outstanding event OF the
Hotchkss administration TO the public gen
orally. the former superintendent feels that
the most beneficial accomplishment In hS
term has been the enactment OF the 'liqui-
dation law Strange as it may seem,
previous to the HOtchkiss administration
the Superintendent OF Insurance, supposed
~ i'm a position 10 control insurance com
pauies for the benefit Of the public, was
practically helpless to proceed on his own
initiative against a company which he be-
lievCd to be or which was about TO become
insolvcnt.
HE SiMPLIFIED LIQUIDATION.
The first matter Of Importance that came
before Mr.. Hotchkiss when he entered his
Office on February IS, 1909, was the puzzle
Of the Washington Life Insurance Com
panv. Proceeding without the direct au-
thorization Of any statute, HOtChkiss solved
this puzzle by getting the various parties
interested to agree to make the Superin-
tendcut Of Insurance practically the liqu-
dating custodian Of that company. Under
that agreement the policyhOlders Of the
| Washington Life were rcinsured in another
company without the unnecessary and cost
~ proceedings Of a receivershp. That was
the germ Of the liquidation law, which
Governor Hughes recommended in his mes
sage to the Legislature IN 1899 in these
words:
The Superintendent Of Insurance should
also have the authority TO conduct the
Iiquidaton of insolvcnt insurance companies
in A manner similar 30 that which has been
authorized in the case OF banking institu-
! tiOns.
As Mr.. Hotchkiss secs it, the greatest
| rublic benefit Of this liquidation Law
comes. not I'm the opportunity II gives the
| head Of the state Insurance Department
TO liquidate a company that has become
| insolvent but in the chance it gives the
! Superintendent to step I'm before company
/ Incomes insoIvent, and by curtailing eX-
/ pense and properly directing the manage
ment obviate the necessity for reinsurance
| or a rcCclNelSnlp. j Ht law i'S'Il hOcS ho'
! explicitly give that power to the Insurance
! Department, but as matter of practical
! working a company which Is discovered
/ 10 be in a dangerous condition welcomes
! the advent OF the Superintendent as an
! alternative TO the impending bankruptcy
| With a company which has financially
wrecked itself, the liquidation law serves
| to allow an economical post mortem which
! heretofore has been notOriously not the
way things worked Oat. At one stroke,
! then, this law does away with the big "H-
! pensc Of receiycTships, and as All eAhinpls
! Of the BENEFITS OF the law Oh this one point
/ Superintendent IIotchkiss points 10 tht
/ handling uf the Washington Life situation
/ iu which under liquidation by the lnsur'
| aucc Department all the pOlicyhOldcrs were
! reinsurcd, the entire cost Of liquidation
| coming to Sl1,sSi, which was At the rate OF
less Than ! per cent on the amount oi
/ large percentages Of cost for similar work
! under the old outside rcceivership plans
/ can readily note the saving, particularly
/ when IT Is added that OF the amount named
! lust .SGS was spent for legal expenses. The
/ SSs went 10 q Virginia attorney, who wa
able to handle an end Of the situation
which came up IN That state, while al the
| rc~t of the legal work. including the coun-
sci fees for lawyer to the lquidator-in
this case the Superintendent 0l Insurance