Detroit evening times., 1942-08-30
Head
Defends Interest
OF PoIieyho|ders
Parkinson Declaration
on Taxing Members
Sets New Principle
BY M. s. RUKEYsER


Thomas I. Parkinson, presi-
dent of the Equitable Lie ~
surance Society, in q recent
statement on taxing policyhold.
ers, established an important
new principle. X
This inhered in an acl1nowl-
edgment that the management
was concerned with the welfare
of the policyholders as well a
with that of the artificial conn
pany, or society, Of which he was j
an executive.
After giving his tax views,
Parkinson pointed out that "
was unusual for the manage
ment of a life insurance ccun-
pany to make suggestions re-
specting proposed taxes not On
the company and its income, but
ON its policyholders and their
beneficiaries. He added, how
ever, that his board was con-
vinced that the management q
a mutual life Insurance. society
ought to take such action b.
cause Of the general expectation
of its policyholders that tn
company will look out for their
life insurance interests.
Nesu lnausnce
That Is q significant depar-
ture, and in this age OF govern
ment by pressure groups It may
set loose an important new inr
fiuence in the national HE.
There are 65, ,000, 900 policy
holders, but up to now thev
have been pushed around ~
demagogues, because they have
been unorRanized, and no one
wanted to stick his neck out -
defend their interests.
Prior to the Parkinson declos
ration, too many insurance ex.
ecutives rested on technical
niceties, and stood by while the
basic interests of the human BE-
ings behind the companies were
ruthlessly trampled on.
Thus, in pre-Nazi Germany.
when the old mark was wickedly
watered, the Teuton insurance
executives remained correct and
closed mouthed, feeling secure
| in the technical fact that the
4 company was not affected since.
both its assets and its liabilities
were written in the same type
of marks. Thus, no matter how
! worthless the mark became, the
insurance company In Germany
still remained solvent, but the
claims which it legally satisfied
in worthless marks were q ira
vesty on economic justice.
Too Much con1placsncy
Until Parkinson's recent ex-
preston, there was too much
complacency in insurance circIess
Executives. with too narrow 4
concept Of their business, re-
treated in the fact OF unjust
criticism.
For example, in the congress
sional hearings before the Social
Security Act was adopted, when
an executive of mutual inSur-
ance companies would testify,
some hostile congressman wa
prone to try to destroy TIN
value OF his observations b
pointing out that Mr.. So and
So is an officer of q private
insurance company"
Instead Of taking such q ray
!, lying down, the insurance q.
ecutive should have had tn
wit to answer:
This slur II not true. I d
not represent private interest
On the contrary, I Am . paid
official Of . mutual life insur'
ance enterprise, which 4 II u
nature Of q financial cOnsumeru
cooperative, which h owned u
Its members Or pollcyhoo6ogS
No one except policyholders ~
an ownershlp Interest h II
enterprise. Thus, mlne ID . pub
lie, not . private, OUTFIT"
The nearest approach to such
an expression was made By
Michael j. Cleary, able presi.
dent of the Northwestern Mu-
4. tual Life Insurance Company
: at Milwaukee. As a matter ol
! fact, federal inquisitors into the
insurance industry were espe-
8 cially impressed with the poai.
| cies of Cleary's company and
{ praised his operation in public
; and in private.
Artificial DeDice