Year: 1875


commercial history is full of such instances; !;
we have no lack Of them in this country. Not
until within two or three years. however. has
there been any successful attempt among our
insurance companies at combination. Now,
we have it both in fire and life insurance, and
already we may Judge of it by its fruits. AT
the East there is little doubt concerning the
wisdom of the recent united refusal of the
fire underwriters of New-York to renew risks
in Chicago. At tho West their action was
heartily denounced as the oppression of q COM
bined monopoly. The Board scarcely gave
time for the reforms they had suggested; !;
tho suddenness Of their resolution took the
peoDle Of Chicago by surprise. Had the re-
striction continued long, it would have been
grave injury to property in that city; as it
resulted, it was a great benefit, for it fastened
reforms which have made Chicago a safe field
for insurance. AS soon as this object was
effected the Board rescinded its resolution aud
left the companies free to act independently.


Whether the first result of combination in
life insurance will be equally fortunate re-
mains to be seen. Ever since their formation
until within year or two, our life companies
have been engaged in contests with each
other. Much time, temper, and printers INK
have been wasted in these disputes. 1t is by
no means certain that the public fully under
stood, or indeed took deep interest in them !;
but in so far as it did, they benefited the
companies by bringing into view the COM
parative merits Of the different modes of in
surance and management. With the extinction
of a large number of small companies, the
business has fallen into fewer hands, and a
majority of existing concerns have formed
combination known as the Chamber of Life
Insurance. They propose to do business in
conservative way, guarding their own interests
and keeping out of quarrels as much as pos
sible. The misfOrtunes of the companies that
have gone under, are traceable for the most
part to imprudent efforts at competition.
The instances of bad investment in loans
or of dishonesty on the part of officers
have been exceedingly few. The histories of
the unfortunate concerns are chiefly the record
of extravagant commissions to agents, of in
surances on impaired lives of contracts giving
undue advantages to policy-hOlders and OF
dividends paid to them which had not been
earned. But even the prosperous companies
are q prey to fraud. They can point out on
their ledgers policies paid on proofs of death
every year. as to which they believe that the
allegations of death are false, and that the
recorded corpse is really walking about in good
health and with their money in his pocket
no, not their money, but that of the other
pOlicy-hOlders. whose dividends these frauds
diminish. The amount to which life insurance
companies are defrauded is estimated as
amounting in the United States to over S500,000
O year. The figures seem extravagant, but
there is this to be considered: unless COM
pany is in full possession of facts to prove a
fraud, it could do nothing more foolish than
to dispute claim. Rather than hazard their
popularity by lawsuit in which they can
rarely hope for the sympathy of court or jury,
much less of the press and the public, life
underwriters pay claims of which they doubt
the justice, in perhaps nineteen cases out of
twenty.


Hoping to diminish some of these causes Of
loss, the companies that are combined in the
Chamber of Life Insurance have prepared uni
form blanks for policies and forms for appG-
cation, which it is expected that a majority OF
the companies will substitute for those now
in use. 1t is quite possible that in some
respects these forms will prove a hinderance
rather than benefit to their business, though
in many particulars they are notable I'M
provement. They take q large class of ques-
tions out of the hands of the agent and put
them where they properly belong-in the GER
tifcate of the examining physician. The
questions are more searching than before.
For instance, it was shown in recent suit in
Brooklyn that candidate for life insurance
had been dragged around from one company
4. 4 IL k.x,
eral doctors before he was at last accepted.
To the usual question as to whether he had
ever been refused on application to any COM
pany, he could answer no, for he never made
application till he was assured of accept
anee. The new form asks, I" Has any unfavOr-
cable opinion on the insurableness OF yOur life
"ever been gwen by any physician If so,
state" &c. The direction In which these
changes have possibly been carried too far, and
about the wisdom of which there is salready some
doubt, is this: the contract of insurance, refer
ring TO these questions and answers, makes the
exact truth Of the latter the basis Of the policy.
The phraseolOgy is siDgnlarly stringent the
applicant warrants the answers TO be full,
= complete, and true ~ and admits them =" 10
4" be material that h, that then correctness
is material TO any claim against the company.
Mr.. Reverdy johnson, in letter 10 The Bait
moro Enquirer, referring to this clause, and
the fact that some Of the answers. according
to the form originally issaed by the Chamber,
specify as to the health of the grand parents
and other matters about which an applicant
has little personal knowledge, says that he
thinks 1t win be almost impossible for the sur
vivors 70 recover from o company choosing 70
dispute . policy based upon this form.