The Waterbury Democrat., 1939-01-19
New York's ''Over The Counter"
 Low Cost Life Insurance Plan Expected To Prove A Good Policy
BY PAUL ROSS NEA Service Stan Correspoudent

New York, Jan. 19-The nations most populous state, already famous as the home of advanced social leg islation, has launched another serv- ice for its own "one- third" who are ill-housed, ill-clothed, ill-fed-and not insured.
 i Under law passed by the 1888 New York legislature, three sav- ings banks-two in Brooklyn, one in Manhattan--were licensed to begin selling low-ccst, over-the- counter life insurance policies. New Workers are quick to re- spond to the new opportunity. Tn only five recent business days, for instance, over one-half million dollars worth of policies were sold.
 The Empire States system is similar to the Massachusetts sys- tenn originated in 1907 by Louis D. Brandeis, now an Associate Justice of the U. s. Supreme Court. Today, there are 26 savings banks selling insurance in Massa- chusetts on this plan.
 In the opinion of Louis H. Pink, New York State Superintendent of Insurance, the new system will prove to be "a wholesome influence" in the insurance field.
 The system is based on the idea that if commissions to salesmen and collectors, as well as large overhead costs, are eliminated the price of insurance can be reduced for the purchaser. To carry out such an idea, savings banks form an ideal medium for people are accustomed to going into 8 bank for over-the-counter transactions. It is but step to lead them to make application for insurance there, to pay premiums and col- lect dividends.
 Any New York savings bank found to be in sound condition by the state superintndent of bank ing may enter the insurance busi- ness by setting up an insurance department, separate and distinct from the bank, although its quar- terS may be on the premises. The transactions and assets of both are kept apart, so that if one should fail the other would not be affected.
 The insurance policies sold 'are backed in the regular manner by surplus and legal reserve funds set aside out of premium payments in the same manner as the old-time companies do with their funds, and on the same statistical basis. The surpluses and legal reserves are then invested, just as is done with the funds of the old-line companies.
 But there are additional safe- guards. A special expense guaran- ty fund of not less than 5000 in cash and special insurance guar anty fund of not less than $2O,000 in cash are subscribed by the banks trustees out of their own pockets. The first fund is intended to meet the expenses of the insurance de- pertinent, the second to meet the policy obligations should the need arise.
 The state superintendent of in- s,lrance, who has direct jurisdic- tion over savings banks insurance departments, also sets up a gen. eral insurance guaranty fund. The insurance departments pay into this fund 4% of their premium collec- tions of the previous month. This general insurance guaranty fund is set up as & body corporate, is in- vested, and is used if and when members need funds to meet obliga- tions growing out of policies.
 Finally, there's 8 fund for the ''unification of mortality" Banks which have had good year and and have escaped paying on large number of policies are assessed a proportionate sum. Banks which have had a bad year and have paid on large number of policies, then draw approximately against these assessments. The transaction takes place at the end of the fiscal year. In due time, the assessments are evened out or capitalized among the member banks and no one is the loser.
 Anybody who is a resident of the state or who works in it is eligible for insurance. He simply makes ap- plication at the bank. The bank asks him to go to doctor, retained and paid by the bank and one of a panel of doctors selected and super vised by medical director who is himself appointed by the state su- perintendent of insurance. This medical director must pass finally on the physical records of all those accepted by the bank doctors as in- Surance risks.
 On passing the physical examina- | ton, the purchaser may buy from