Year: 1875

| THE METHOD OF TAXING NsUBNCE Coni A'A'S


AN MJUsTcE-THE MODE )F RATING LIFE
INSURANCE AN ABsURD1TY.


The National Convention of In arance Commissioners
and superintendents continued its sessions yes'er-
day at No. 156 Broadway President Chapman vas IN
the chair The minutes of the previous nieesns we'o
read and adopted The COMMITTEE on Blanks ahu on
Legislation being still in ses~'h no repor' WIS pre-
sented.


~, -, - - member of the Committee on Legsla-
49,. .a1 n important address the subject Of the
t.1.,e. OF insurance companies He said that 1t was
-. -nwise thing for insurance companies to be taxed
& all except upon their actual capital Tho
tax should be considered rather in the light
Of payment for the license or privilege to do business
in any particular State and hence should not be laid
upon the values in gross but upon the values in net
that ls upon the income of the companies. Where a
companys gains are only about ten per cent of the in
snrance they are now taxed for the remaining ninty
per cent or about times much they ought to
be In seven years of his company's business in
Michigan their payments $67S 600 and their
penses being s267 000 there would be left out Of
O total OF 81, 070 600 apparent gain OF $l24 000
Under the present system Of taxation however, they
taxed the gross amount the sum of $32 l4S
about thirty eight per cent of all their earnings
Would any in business MAINTAIN such a tax
as thatP There was no Justice 70 property in it, In
the year 1871 their losses exceeded by S3 900 their
premiums and yet they had TO $5 900 " the State
OF Michigan for the privilege OF doing business there.
Some more sound principle ol taxation should be
adopted The speaker advocated the plan OF taxing the
value of the premiums for the year. the net
ings of the company He also earnestly opposed the
present system Of being obliged to pay taxes to the diff
ferent districts towns and counties OF State instead
of the State itself Much trouble to all parties thus
occasioned in the collection of these taxes. He oon-
tended that proper dd pdore tax, fixed by the State
upon the net value of the privilege granted to the
pany and paid to the State alone the
proper thing If the privilege s proved to be of
no value to the company they should certainly
not be taxed. Another suggestion was also made by
him that the legal advertising which required Of
every company should be in or two of the large
papers in the State rather than in great many. In
Ohio for instance, they obliged to advertise in
every county If this could be done away with, about
one per cent OF their premiums could be saved.


Dr. Lambert President of the American Popular Life
Insurance Company, was the next speaker. He an
nounced his subject the Fctions and Realities of
Life Insurance. - He defined the sole function of in
surance of any kind to be to relieve the mind from
anxiety Life was property like any other, and life
insurance was a solemn contract These were some OF
the realities. AS at present managed, however,
the system of life insurance was about one-third
gambling and one-third speculation He opposed
very strongly the custom of fixing the rates OF all per
sons according to their age He would rather make
according to the health of the persons insured
He likewise said that life insurance companies should
combine in their own Defence and never accept com
promise in any suits growing out OF policies. Either
the whole amount of insurance due to the relatives
deceased persons payable to them mono of Il
was and il cowardly part TO accept compromises


The Chairman, Mr. Chapman who during the las
speakers remarks had transferred the chair to Mr.
Welsh Superintendent of the Insurance Department
Kansas then and moved that the Convention ad
journ to meet at two P. NJ in the Fifth Avenue Hote
in executive session The motion was carried withou
opposition, and the public sessions were consequently
declared adjourned sine die