Credit Life Insurance

1973 1120 - NYT - Obituary: Arthur J. Morris of Credit Plan, 92 - [link]
- Arthur J. Morris, the banker and financier who created the Morris Plan, which made consumer credit available to working people, died yesterday at Phelps Memorial Hospital, North Tarrytown. He was 92 years old and lived here.
- On April 10, 1910, he opened the first Morris Plan bank, the Fidelity Savings and Trust Company, capitalized at $20,000.
  - Within two years it had loaned $159,000.
  - Other Morris Plan banks soon opened in Atlanta, Baltimore, Washington and Richmond.
- ⇒ Mr. Morris also was credited with beginning the first bank holding company and establishing credit life insurance.
- For initiation of credit life insurance, President Lyndon B. Johnson wrote him in 1967,
  - “Today, half a century later, credit life insurance provides protection for approximately 70 per cent of some $100‐billion worth of consumer credit.”

1978 - FDIC - Annual Report of the Federal Deposit Insurance Corporation - 214p

Credit life insurance : hearing before the Subcommittee on Antitrust, Monopoly, and Business Rights of the Committee on the Judiciary, United States Senate, Ninety-sixth Congress, first session ... November 14, 1979

1976 0317-23 - GOV (House) - The Financial Reform Act of 1976 - Part 2 - [PDF-761p-GooglePlay
- (p1160)
  - 14 / See, National Association of Insurance Commissioners, A Background Study of the Regulation of Credit Life Insurance and Disability Insurance, November 1970.
  - The credit insurance industry has been examined in several Congressional Committee hearings; in 1954 and 1967 by the Subcommittee on Antitrust and Monopoly of the Senate Committee on the Judiciary, in 1961 by the same subcommitteee on the House side, and in 1969 by the Subcommittee on Financial Institutions of the Senate Committee on Banking and Currency.
  - See also, Federal Reserve Bank of Chicago, Commercial Banking : Structure, Competition and Performance, August 1967 .
- (p1165)
  - On November 19 , 1974 , the Federal Trade Commission provided the Federal Reserve Board with an extensive analysis of the credit life insurance problem.
- (p1195)
  - (Federal Reserve)- As you will recall your Truth in Lending bill , S. 5, as passed by the Senate last June, requires the itemization of charges for credit life insurance, and, if so itemized and disclosed by the creditor to the customer, such charges need not be included in the "finance charge".
    - Governor Robertson supported this treatment of the matter when he testified before your Subcommittee on May 10, 1967, and before Mrs. Sullivan's Subcommittee on August 7 , 1967.
    - However, the bill recently reported by the House Committee on Banking and Currency (H.R. 11601) would include such charges in the "finance charge".
  - (p1197- ) - Federal Reserve Report - Report On The Sale Of Credit Life Insurance By Or Through Banks In Connection With Their Lending Operations
- (p1205) - Model Act for the Regulation of Credit Life Insurance and Credit Health and Accident Insurance " which was promulgated by the National Association of Insurance Commissioners
- (p1265-) - Statement Of Wayne L. Naugle, Vice President, National Association Of Mutual Insurance Agents And Chairman, Federal Legislation Committee ; Accompanied By Ralph J. Marlatt, Vice President Of Government Affairs -
  - (p1266) - Let us now examine the record of the Federal Reserve Board.
    - In 1975, there were 242 applications for one-bank holding companies to engage in insurance agency activities.
    - Of this total, 109 have been received, 72 permitted, 32 approved, 11 delayed, 6 withdrawn, 1 denied, 2 returned and 10 reactivated.
    - Now, we attach exhibit I to our paper, which gives a more graphic illustration of those submissions.
    - It is inconceivable to us that out of all those applications, only one was denied. It is our contention that the Federal Reserve Board has chosen to support the broadest possible interpretation of the 1970 amendments.
  - (p1267) - The question is, what public benefits are achieved by the mass migra tion of bank holding companies into the insurance agency business?
    - Do lender affiliated agencies obtain for the customer a better price for the cost of insurance, or do they provide better services, or are they more convienient?
    - Have the bank holding companies provided the lowest cost of credit life insurance for their borrowers?
  - It is our contention that continued entry into insurance agency activities by large financial institutions will ultimately result in the demise of the small independent agent.
  - The record of the Federal Reserve Board speaks for itself.
    - They have demonstrated a rather one-sided viewpoint in their decisions in this particular area.
    - We are pleased to note that in the proposed creation of the Federal Banking Commission, it will consist of five members devoted to the public interest.
- (p1280) Mr. ST GERMAIN.
  - Mr. Jesser, when you discussed the provision in the committee print directing the FBC to issue regulations requiring that the name, corporate symbol, and other identification of a holding company be separate , distinct, and readily distinguishable from a name, similar idea of parent holding company, you state, and I quote:
    - There is a fundamental question whether the public interest is served by making it more difficult for the public to know the institutions they are dealing with.
  - By the same token, it occurs to some of us on the subcommittee that it is more confusing to the public to hide the common identity of companies of which they are customers than it is to reveal it.
  - I don't know if you recall the incident that occurred when the Citicorp notes were first issued 2 years ago.
    - At that time we conducted hearings, and brought to our attention was an internal memorandum of a brokerage house that was sent to all the account executives, and it read, and I quote:
      - As Citicorp, formerly known as First National City Bank of New York, is the second largest commercial bank in the world.
- (p1280-1281) - Edward Jesser (chairman, Association of Bank Holding Companies and chairman, United Jersey Banks.) - Well, Mr. Chairman, I don't know the facts. I just know what we have done.
  - This is an accommodation to our customer that obtains an auto mobile loan.
    - If he should die and has the insurance, the car loan is automatically paid off.
  - I know that in our application to the Federal Reserve we had to state that our premiums would be lower than the premiums in the market, and I presume that that is true today.
  - We don't look on it as a big deal.
  - We look on it as an accommodation and a very minor source of income.
  - So I am a little bit at a loss, personally — I'm speaking personally now—as to what all the fuss is about.
    - To us it is an accommodation to take care, if somebody wants to make an automobile loan, with just a little income for ourselves.