The Grenada sentinel. [volume] (Grenada, Miss.) 1868-1955, 1912-03-15
AR0UT TEXAS INSURANCE LAW.
htprestinq Exposition of the Texas Statute or
Nv life Insurance.

'oH'Poihes " retlre, 10 re1uSe to play
n our back yari and climb our apple
tree or even to halo down our rain
oarrel?
The law simply provided that every
insurance company doing business in
this state invest here certain pro rata
Of the money they earned in this state.
Insurance laws of all states require
that certain amount of legal reserve
shall be maintained by the companies
on the business they write. Now the
obnoxious Robertson Law requires that
76 per cent of the legal reserve on
Texas business that the home state of |
the several companies requires them to
maintain, shall be invested in Texas se- !
curities and real estate. The amount
of the legal reserve that is subject to
this provision is rs per cent of the le-
gal reserve maintained on account of
policies of insurance in force Written
Upon the Lives of Citizens of this
State.
The big companies do not bring any
money to Texas. They are asked not
to take away more than one-fourth of
the legal reserve they must maintain
on business written in Texas on people
of Texas. The money is theirs, but to
stem this Amazon flood of Texas money
rolling New York-ward, the provision
was put in that Texas securities and re-
al estate must be invested in.
Texas securities are so defined and
safeguarded that under the law as it
now stands it would be practically i'm
possible for the companies to lose a
dollar on such investments and the rate
of interest on them is decidedly higher
than on similar securities nearer the
domicil of the big companies. Security
and profit are both assured, and, under
the law, as it stands today, these in
vestments need be made only at the
rate of ten per cent year. When this
Investment is fully made the tax or
premiums required by the state is to be
only 2 per cent.
With the law as It now stands, strip
ped of a few Objectionable features i
had in its initial form, there is no ques
ton as to the safety Of the investments
required or as to the profits on such in
vestments, so that the one thing tha'
the withdrawn companies are fighting
and have fought is the policy of ma
king investments in Texas when the!
want to make them closer home.
1t is silly to suppose that in burs
of generosity these companies, if tn
restrictions were removed, would d
the very thing they withdrew fror
Texas rather than do in 1907.
| If they do not propose to invest an
considerable part of their legal reserv
on Texas business, what then is tn
consideration offered to Texas for tn
repeal of the law? -.
There is no real consideration offere
but the bait they held out is that tn
silent boycott placed by Wall street Q
Texas securities, because of hars
and unfriendly legislation" would /
removed, and that gilt-edged stock
bonds and notes of Texas would
again more freely handled by the final
t ciers of the street.
In other words, the displeasure {
Mr.. Morgan and his associates wou
: Ebe dissipated and we would be free
offer Texas securities again, KNOWN
r that they would not be arbitrari
i turned down regardless of value
were the per cent bonds issued
, Dallas county, concerning which W.
Y Day, vice president of Mr.. Morgan
d Equitable Life Assurance Societ
v wrote to County Judge John L. Your
t of Dallas county: II have no doubt
tn, soundness of these securities al
f their desirability as an investment. v
v should be very glad to buy the bond
s but as under the extraordinary laws
IS Texas =. =. =. this Society,
8 gether with nearly all other strong a
8 reputable life insurance compani
" which had been doing business in Texf
e was compelled to retire from the stat
we cannot invest money in Texas sec
" rites, nor can we loan money in tn
n state without jeopardy. For this res
A. on we can not become bidders for
IS attractive bonds you submitted to US
t. This letter was referred to by t
IS new York World as disciplining Tex
,e for. its insurance code, and in prot
re that paper made this significant II
a. ther comment: Tomorrow cour
10 bonds in some other state may be b.
ts cotted because Of railroad legislat
). that. is offensive to the Money Tru
Ct iAenext day the United States G.
at ernment may feel the weight OF
On Money Trust displeasure because G.
gress has not been sufficiently cons
at | crate of vested rights"