1936 - GOV - Investigation of Real Estate Bondholders' Reorganizations - Part 20

Mr. CRUME - (Staff Actuary)

  • Let me state, Mr. Chairman, that the investigation made into various receiverships in which millions of our citizens' savings and investments have been involved, has included quite properly an investigation of many large insurance receiverships that have occurred in this country during the past depression era.
  • These insurance receiverships have involved some billions of insurance and the savings and investments of millions of our people.
  • These insurance receiverships include life, fire, title, and other types of insurance companies that have gone down in the business crash .

Your investigation into insurance receiverships developed some rather startling situations with respect to their liquidations and reorganizations.  (p3)

  • We find that companies have been operated with all the appearance of solvency for periods of months, and even years, while it was known that they were actually insolvent.

Mr. Crume: re: the Missouri State Life Insurance Co. of St. Louis, Mo.

  • This company had approximately one billion of life insurance in force when it failed.
  • It held approximately $160,000,000 of premium payers and widows' and orphans' savings funds.
  • This is the largest serious failure of any old-line legal-reserve life-insurance company in the history of this country.
  • Its failure was preceded by manipulations involving numerous other insurance companies that leave one amazed when recited . (p4)