The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1932-11-26

Jall OF lie insurance operations. TnlS
committee will meet next month in
New York City and is expected to
draft a model law which will be pre-
sented by the various insurance de-
partments to the various state legis-
latures. Olsness expects to recon-
mend passage of the law in North
Dakota, he indicated.
Big Companies Favor It
The law, Olsness indicated, prob
ably will have the support of the
larger insurance companies and Of
most of the smaller ones which are
intent upon safeguarding the policy
holders of all insurance companies
for the benefit and good repute of the
insurance business as q whole, the
commissioner declared. He said the
interest of insurance commissioners
was aroused by the necessity Of &C
ton, in few cases in recent years.
to save policyholders from the effects
Of "high-finance" methods practiced
by few relatively small companies.
The nature of the proposed bill is
indicated by Olsness' address at Dali
las, in which he said, in part:
Investments in the stock of one
life insurance company by another
should be entirely prohibited and
legislation should be enacted to &C
complish this desired reform, all Of
which will lead to the placing of re-
sponsibility for the faithful admins
tration of the policy holders trust
funds and the fulfillment of the COM
pany's obligations under it's contract
in the hands of certain individuals
whose identity will be clearly estab-
lished, thus frustrating all attempts
to conceal the ownership of stock to
evade responsibility.
Legislation should likewise be
recommended that will absolutely
prohibit the investment Of any funds
Of life insurance company In the
stock Of any bond or any investment
company and no bond or investment
company should be permitted to con-
troll or own more than 10 per cent of
the stock of any life insurance COM
pany. Furthermore, the ownership or
control of life insurance company
through interlocking directorates be-
tween the life insurance company
and banks or investment companies,
or through joint ownership through
a holding company, having control
of two or more of the institutions,
should be covered by this prohibition.
Must Protect Pclicyholders
"We should have for our ultimate
goal a situation where each life in
surance company would be standing
on its own feet, free from all the en-
tangling alliances with outside inter-
ests, managed by officers whose ad-
ministration of their duties would be
in the interest of the policyholders
whose funds they have been hand
ling, rather than the interest of GER
tain stockholders whose primary OBJ
ject is the manipulation of these
funds to their own private benefit.
"Great care must be taken, how
ever, in putting these reforms into
effect that the remedy does not do
more harm than the disease.
REIMBURSEMENT of investments and
control by companies already in
volved in holding company or inter-
locking control must be accomplished
without loss to the policyholders and
without undue publicity which would
retard or handicap the growth of the
company or make 1t the object of
attack or suspicion by uninformed
persons or malicious enemies.
while prompt action is necessary
to prevent any further spread of this
evil, caution should be exercised and
ample time allowed for all companies
to come within the provisions of
whatever regulatory legislation
should be recommended or enacted.
Insurance department officials
should bear in mind that rash state
ments, hasty action and assumption
of authority not granted by law on
their part in dealing with problems
of this kind ofttimes cause as much,
if not more, harm than the evil they
are complaining OF or attempting to
curb"