Evening star., 1950-12-24

impact through spreading the b
With this thought in mind.
America, at a meeting recentl,
held in New York, presented /;
tentative program to protect tn
financial position of legal life in
surance companies in the event o
catastrophe bombing" on tn
home front in the event wa
should develop.
Under this proposed program
which is still in the early talk
ing stage-legal reserve life in
surance companies propose II
form a catastrophe pool of
part of their resources for tn
purpose of spreading among all o
them the risks arising out o
large-scale enemy bombing. Thu
basic idea behind the plan, &C
cording to Vice President Samue
Milligan of the Metropolitan Lift
Insurance Co., is that the insur'
ance industry reinsure itsel
through the pooling Of excess
losses due to enemy action in thu
home area"
Normally life insurance policie!
put in effect during non-wal
years do not have a clause exclud.
ing liability for death resulting
from war. Hence the risks o1
financial ruin arising out of large
scale mass bombing are very great
for the life insurance industry.
Three Pools Proposed.
The magnitude of the risks in
volved may be seen from the
fact that the more than 400
companies participating in this
proposed program to pool the haz-
ards of an attack from the air
currently have total of 1928 bill
lion of life insurance in force
while their total assets are valued
at around $64 billion. When one
considers that the recorded invest
ment value of all Glass railroads
In the United States is currently
stated at around $29 billion the
Importance of the life insurance
business in the economy of the
Nation begins to be appreciated.
Further emphasizing the i'm
portant role the life insurance
business plays in the economy oi
the Nation are such facts as, viz.
At the end of 1949 there were more
than 80 million individual life
insurance policyholders in the
United States; that the face value
or maturity value. of these policies
averaged around $1,000 per family;
that death benefit payments to
benef1ciaries in 1949 were nearly
SIS billion; that payments to liv-
ing policyholders in 1949 were
approximately So billion. More
over, consider the important role
played by life insurance companies
in the industry and business of
the Nation through the investment
OF their funds. For example, their
total assets of $59.5 billion at the
end Of 1949 consisted of $15,259,-
100000 United States Government
securities; $2,522.000,000 repre-
sented various other Government
bonds; $23,181 ,000,0 900 were secur-
tiles of business and industry;
$12.894, 100000 mortgages on real
estate and $2,216,000,000 miscel-
laneous investments.
Since approximately 23.8 per
cent of their total assets at the
end of 1949 were invested in real
estate and real estate mortgages
life insurance companies also have
an important interest in any
damage to property which may
arise out of enemy action. But
the revival of the old War Dam
age Corp, which is now being con.
sidered by Congress. will provide
coverage for these property risks
In fact. the House passed legis-
lation last week designed to re-
vive the War Damage Corp
which. except for purposes oi
liquidation, expired in 1947. This
bill is now before the Senate, anc
Is expected to be passed before
adjournment this year. It pro.
vides for insurance against dam.
age to buildings and personal
property.
Although nothing definite has
been as yet decided by the Life
Insurance Association, it was re.
vealed that the plan calls fol
three different pools-one for or.
dinary life insurance, another fol
industrial coverage and a thirC
for group insurance. Under this
tentative plan each participating
company will bear it's own losses
up to a certain percentage of each
$1,000 exposure. and all over this
will be pooled. AS yet the per-
centage of each $1,000 exposure
to be borne by the participating
company has not been decided.
When Mr.. Milligan was asked
by this writer for further informa-
ton regarding the plan, he said:
Perplexing Problem
GAS the matter stands at the
present time, a subcommittee OF
the large War Problems Commit
tee is studying the question of the
desirability and feasibility ano
the practicability of some sort o1
a plan for pooling the civilian wal
risk atomic bomb hazard. Tht
other day I simply reported prog.
ress because the subcommittee i.
not yet in a position to make 6
definite report. Very little def
mite information . is available