1936 - GOV (House) - Investigation of Real Estate Bondholders' Reorganizations - Part 20
- 1936 December 1, 2, 3, 7, 8 - GOV (House) - Investigation of Real Estate Bondholders' Reorganizations - Part 20 - Adolph J. Sabath (D-IL) --- [BonkNote]
- [1915p-GooglePlay] - Parts 19 and 20
- Part 19 - (p6-946) - 1936 - November 30, December 4, 5, 9, 10, 15, 28, 29 - Chicago, ILL --- [BonkNote]
- Part 20 - (p948-1906) -1936 - December 1, 2, 3, 7, 8 - Chicago, ILL
- House - Subcommittee of the Select Committee on Investigation of Real Estate Bondholders' Reorganizations or Subcommittee of the Select Committee to Investigate Real Estate Bondholders' Reorganizations
- General American Life Insurance Co., of St. Louis, Mo.
- Walter W. Head - president of the General American Life Insurance Co., of St. Louis, Mo.
- P. B. McHaney - attorney, of St. Louis, Mo., representing the General American Life Insurance Co
- J.M. CRUME - Chief Actuary of the Investigation
- James P. Sullivan - Special Actuary or the Investigation
- J. L. TUPY - Chief Investigator
- Missouri Insurance Department
- R. Emmet O'Malley - Missouri Insurance Department - Superintendent of Insurance - July 1, 1933-? - (p140-)
- Joseph Thompson, Missouri Insurance Department- Superintendent of Insurance - ?-July 30-? 1933) - (p72-73)
- Carrolle E. Nelson- Missouri Insurance Department - Actuary -Since (September 1, 1930-Current)
- For 5 years previous to that I was with the Missouri State Life Insurance Co., of St. Louis, Mo.
- People v. Dorsey, 363 Ill. 403 (1936), April 17, 1936 · Illinois Supreme Court · No. 23053
363 Ill. 403
- Machir J. Dorsey
- Arthur J. Morris
- Missouri State Life Insurance Co., of St. Louis, Mo.
- (p1) - J. L. TUPY, Chief Investigator: This morning, Mr. Chairman and gentlemen of the Congress, we are going to take up the receivership of the Missouri State Life Insurance Co., of St. Louis, and the matter will be presented by Mr. J. M. Crume, our chief actuary ; Mr. James P. Sullivan, our special actuary ; and Mr. Thomas Sheridan.
- CHAIRMAN. Have you, yourself, made investigation in the matter?
- Mr. TUPY. Yes, sir. The investigation has been carried out under my supervision by the gentlemen I just named, and although I know the general facts of the matter, they know the details and that is why they will present it instead of myself.
- CHAIRMAN. And you think it is a matter that should be heard?
- Mr. TUPY. Yes; unquestionably. I think it is a matter that should be heard by your committee. It is a matter involving a billion-dollar organization and several hundred thousand insurance policyholders, and, of course, the question of this reorganization of the receivership.
- (p3) - J.M. CRUME - (Chief Actuary of the Investigation)
- 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.
- 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.
- (p4) - J.M. CRUME - (Chief Actuary of the Investigation) - 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.
- (p7) - Mr. Sullivan - Now, it later developed that early in 1936 a deal was consummated which resulted in the sale by the Equity Corporation, or its associated companies, who were then owners of 90 percent of the General American Life Insurance Co.'s stock, of that stock to a newly formed holding company, organized in Dallas, called, I believe, the Southwestern Investors Holding Co. The exact name will come out in the testimony.
- This newly formed holding company in Dallas was created entirely by the use of money of the Southwestern Life Insurance Co. with the money secured by the holding company in three varied processes, the Eastern or Equity Corporation, the holders of the stock of the General American Life Insurance Co., sold their stock to this newly formed holding company in Dallas for $2,700,000. So that as the matter now stands the Southwestern Investors Holding Co., of Dallas, Tex., owns and controls the General American Life Insurance Co.
- The CHAIRMAN. Who sold that stock?
- Mr. SULLIVAN. The Equity Corporation and its affiliates that owned it. The exact ownership of the stock at the time of the sale will come out in the testimony.
- The CHAIRMAN. They sold it to the holding company.
- Mr. SULLIVAN. To the new Southwestern Investors Holding Co. of Dallas.
- (p7) - James P. Sullivan (Special Actuary or the Investigation)
- So that as the matter now stands:
- the Southwestern Investors Holding Co., of Dallas, owns and controls the General American Life Insurance Co.
- The General American Life Insurance Co. owns or rather controls as trustee, the Missouri State Life Insurance Co., or what is left of it.
- The Missouri State Life Insurance Co. assets holds or controls the Southwestern Life Insurance Co.,
- and the Southwestern Life Insurance Co. owns and controls the Southwestern Investors Holding Co.,
- so that now we have a complete circle.
- You can start anywhere in the circle and go around and end up where you started.
- What we desire to attempt to show the committee is the interlocking of these companies and the evils which attach themselves to the life insurance business as the result of those interlockings.
- (p12) - The CHAIRMAN. Do you mean to tell me that one of these companies, the Southwestern Life, advances the money to the holding company to buy stock that was owned by still another corporation?
- Mr. SULLIVAN. That's right; by still another holding company; that is correct.
- (p13) - Mr. Sullivan - Now, this case is an important case before this committee, because, in one way or another, it is a pattern, with few variations, of the system under which practically every tragic life insurance receivership of the last 6 or 7 years has been handled in this country.
- (p13) - Mr. SULLIVAN. As we go along, we would like to have the committee notice how these things have happened, and have been allowed to happen, because of faulty and deficient statutory regulation of life insurance.
- And we believe that we shall indicate, to an extent at least, the kind of statutory regulation which is necessary to eliminate these abuses.
- It is our understanding that this is the purpose of this committee, to ascertain the facts as to what has been done in past cases, in order that you may have the basis for an intelligent recommendation for remedial legislation and regulation.
- (p13) - Mr. SULLIVAN. As we go along through the evidence, though, the conversation between the examiner and the witnesses will be in the terms of millions and hundreds of millions of dollars.
- It is necessary, if the committee is to comprehend all the facts truly, that you remember that these funds are the savings of people who were very glad to be able to save $5, $10, $15, $20, or $100 a year.
- When we are talking about hundreds of millions, remember that somebody saved $10 at a time to help make it, and he saved it because he was horrified at the idea of his wife working in a laundry after his death, or his baby crying for milk after he wasn't here to buy it.
- That is what makes the tragedy of this proposition.
- We are not here for the purpose of harassing any person or company, and we are not going to harass any person or any company.
- The CHAIRMAN. The committee will not permit that.
- Mr. DIRKSEN. May I suggest you be extremely careful to offer no gratuitous observations that may in any way reflect upon the company and do it harm, when there is no necessity or justification for it. We must be very careful.
- Mr. SULLIVAN. I will certainly try to do that, and I will be glad to be stopped when I am stepping over. We are not here for the purpose of discrediting legal reserve life-insurance companies. Legal reserve life insurance is the greatest financial device that the mind of man has yet created.
- (p14) - Mr. Sullivan: Our investigation will not have the effect of disturbing anyone about his life insurance or his life insurance company.
- On the contrary, our investigation will show the great and huge strength of legal-reserve life insurance, which has grown in spite of the things that have happened to it, and the things that have been done to it by its managers.
- When this investigation, as a result of the committee's activities, has been completed, legal-reserve life insurance will be in far better shape than it has ever been.
- Compared with other human activities, life insurance is in its swaddling clothes.
- Banking is centuries and centuries old. Life insurance is about a hundred years old, as we know it in this country.
- Life insurance is growing; it needs to grow right, casting out the bad and changing to meet the new developments in society, just as much as every other human operation changes if it is to have continued existence.
- We don't learn through our successes. We are too busy being happy over them.
- If we learn at all, it must be through our failures.
- (p17-18) - Mr. HEAD. Mr. Chairman, may I for the benefit of the committee suggest that there have been pages and pages of newspaper articles?
- The CHAIRMAN. We haven't seen any of them.
- We have been busy investigating and getting information and trying to pass legislation to relieve conditions, bring about legislation that will eliminate those matters that were detrimental to the investors and, in this case, to the policyholders and bondholders and that's all.
- (p19) - Mr. O'MALLEY. That is not an answer to my question, Mr. Head.
- I think all of us can get along if you will try to help the committee instead of trying to confuse us.
- We know nothing about the insurance business, and we have open minds.
- Mr. HEAD. There is no attempt to confuse you.
- (p27) - Mr. SULLIVAN. And you declined the invitation?
- Mr. HEAD. If you can understand English, that is just what I said.
- Mr. HEAD. ... Why does this fellow take the rest of the day asking me the same questions two or three times?
- The CHAIRMAN. He wants to know whether—
- Mr. HEAD. He knows. I have talked it over with him.
- Mr. SULLIVAN. No; I don't know.
- Mr. HEAD. He knows the whole story. I would like to tell this committee something about what he said to me about the General American Life Insurance Co.
- The CHAIRMAN. He is not testifying.
- Mr. HEAD. I hold in my hand here an article written by him which he circulate
- Mr. DIRKSEN. Let that be stricken from the record.
- The CHAIRMAN. All right.
- Mr. HEAD. He isn't as dumb, Mr. Chairman, as he lets on.
- The CHAIRMAN. He doesn't show any dumbness.
- Mr. HEAD. That depends upon who makes the interpretation.
- (p31) - Mr. HEAD. He told me that the demands of the policyholders on the company were so great that the resources of the company, in his judgment, would probably not be sufficient, with the ability of the management to convert them into cash, to meet the demands.
- Mr. DIRKSEN. You mean that the policyholders were borrowing on their policies?
- Mr. HEAD. That's right.
- Mr. SULLIVAN. And that the company was in such condition that it couldn't meet those demands?
- Mr. HEAD. That's correct
- (p31) - ... in cash that the company had to have, the old company, to continue in business.
- Mr. SULLIVAN. But he did suggest that they needed cash to stay in business?
- Mr. HEAD. He indicated they would have to have some new capital.
- Mr. SULLIVAN. Did he indicate that the Missouri State Life Insurance Co. at that time was in an insolvent condition and would remain so unless it got additional funds?
- Mr. HEAD. I am not sure that he ever said to me that the Missouri State Life Insurance Co. ever used the word "insolvent."
- Mr. SULLIVAN. What word did he use?
- Mr. HEAD. Mr. Chairman, may we stop until my picture is taken?
- The CHAIRMAN. Somehow or other it has become the custom of these newspapers to take pictures at all times, everywhere.
- Mr. SULLIVAN. Will you read the question? (Question read by reporter.)
- Mr. HEAD. I don't recall the words but I do recall that Mr. Nardin indicated to me that in his judgment the company would probably be unable to convert resources into cash in sufficient amounts to meet the demands of the policyholders.
- (p31-32) - Mr. SULLIVAN. At any time in these conservations with Mr. Nardin did he state to you that the insurance superintendent of Missouri, Mr. Joseph Thompson, had appeared before the board of directors of the Missouri State Life Insurance Co. in February 1932 and stated to that board of directors that an examination of the company which he had just completed showed their condition to be irretrievably insolvent, in February 1932?
- (p32) - Mr. HEAD. He told me he felt positive that the company would require additional capital and, if it couldn't get additional capital, there would have to be a reorganization.
- Mr. DIRKSEN. Would a reasonable and prudent person be justified in inferring, if he heard this conversation with Mr. Nardin, that the company was insolvent at that time?
- Mr. HEAD. I think that one who was accustomed to the conditions that existed there would readily understand that the company might be insolvent - yes.
- Mr. DIRKSEN. At least, it was on precarious ground?
- (p32) - Mr. HEAD. That's right. I had no connection with the Missouri State Life Insurance Co. in any way, shape, or form during the entire period of its existence, except as a policyholder. And I would like to say for the record that I am still a policyholder. I still keep my policy in force. It is a paid-up policy and the same lien was placed against my reserves as against everybody else's reserves.
- (p33) - Mr. HEAD. I want to answer your question because they do want to hear it. It was rather difficult for anybody, regardless of how serious they were, to determine the value of real estate, real estate mortgage loans, and the actual value of bonds.
- Mr. O'MALLEY. Mr. Head, you have been in the banking business ?
- Mr. HEAD. Yes, sir ; I have.
- Mr. O'MALLEY. You had a very fair idea, as a banker, what mortgages were worth at that time, didn't you?
- Mr. HEAD. I would like to be able to say yes or no to that question, but that doesn't answer the question. In 1933 there were many mortgages in default which subsequently were reinstated and subsequently paid in full or are regarded good at the present time. Now, the direct answer to the Congressman's question, in one of those instances, the depreciation of the bond account alone was in excess of the total capital surplus and undivided profits of the company.
- (p33-34) - Mr. HEAD. I'd like to say to the Commission, to the chairman and members of the committee, that I should be delighted to give the names, but both of them are still in business, and I would regard the publicity as being very dangerous.
- Mr. SULLIVAN. I think that is right. If they are both still in business.
- The CHAIRMAN. You will give it to us privately?
Mr. O'MALLEY. The only comment I want to make...
- The CHAIRMAN. I am not going to permit anything to be done that would embarrass any company that is now operating.
- Mr. O'MALLEY. Mr. Chairman, after the statement, I don't think anything could affect these companies.
- Mr. HEAD. Mr. Chairman, as a life insurance man, I object to this statement from a member of the committee.
- The CHAIRMAN. You will give us a statement later on?
- Mr. SULLIVAN. If they are companies that have been put in receivership, we would like to have their names.
- Mr. O'MALLEY. I would suggest, Mr. Chairman, if all this is so mysterious, that we ought to have an executive hearing on it.
- Mr. HEAD. There is nothing mysterious about this.
- Mr. O'MALLEY. The same thing came up in Philadelphia, Mr. Chairman. And I was under the impression that this committee was to gather information to submit to our colleagues in the House. If we can't get the information, we might as well quit.
- The CHAIRMAN. We will get it.
- (p38) - Mr. TUPY. Mr. Chairman, this gentleman who has just come in and is making stenographic reports was not summoned or asked to come here by the committee.
- Mr. McHANEY. Mr. Chairman, I requested the stenographer to be here.
- There are five or six people taking notes. Newspapermen are here taking notes.
- We want to be sure what is said.
- The CHAIRMAN. We made a rule not to permit any outside reporters.
- (p40) - Mr. SULLIVAN. I have been trying to get there for 2 hours.
- Mr. HEAD. Why didn't you ask me?
- (p60) - Mr. HEAD. It did not commit itself to pay me any salary until after the Missouri State Life had been purchased. So far as the question, if you just ask me what you want I could give it to you in a minute, but you go clear around the barn and all over the lot.
- You wanted to find out if I wanted to go into the life insurance company business if the Missouri State was not purchased by us, and the answer is "no."
- (p62) - Mr. SULLIVAN. And you told them if you couldn't get it the way it was drawn originally you wouldn't take it at all?
- Mr. HEAD. No; I didn't.
- Mr. SULLIVAN. What did you tell them?
- Mr. HEAD. Why didn't you ask me that in the first place?
- The CHAIRMAN. Don't argue, please.
- Mr. SULLIVAN. What did you tell them? There is no intent to keep...from answering any questions.
- Mr. HEAD. Won't you please ask me the questions you want me to answer and not put three or four in one?
- Mr. O'MALLEY. Try to accommodate the witness, Mr. Sullivan. You must bear with us and with our staff.
- Mr. HEAD. I have no animosity,
- Mr. O'MALLEY. Because of the inability of Congress to furnish us with the funds necessary, we sometimes cannot spend the hours on preparing these questions that could be done by the attorneys of a powerful corporation.
- Mr. HEAD. You understand this gentleman [Mr. Sullivan] and myself have argued this case days at a time, don't you?
- The CHAIRMAN. We don't know anything about it. We want the information.
- (p63) - Mr. HEAD. Does anybody in the audience know what he is asking me?
- Mr. O'MALLEY. Now, wait a minute. Mr. Chairman, I am either going to withdraw from this hearing now-I have other things to do-unless the witness will indicate in some way that he has some respect for the Congress of the United States. I don't care whether he has any respect for me or not. I have never seen him before; but his appeal to the audience, his appeal to other places, is the sheerest contempt which I have seen in 4 years.
- Mr. HEAD. I offer my apologies to the Congress.
- The CHAIRMAN. Now, will you please answer the question
- Mr. HEAD. I don't even know what the question is.
- Mr. SULLIVAN. A contract was drawn under which these.
- Mr. HEAD. Why don't you ask me the question?
- The CHAIRMAN. He is asking you the question.
- Mr. HEAD. I can't understand that.
- The CHAIRMAN. And I am nowhere near as intelligent as you are, and I understand that question.
- Mr. O'MALLEY. He is just making sport of the committee.
- Mr. HEAD. No; I am not.
- Mr. O'MALLEY. I will cite you in a minute for contempt. Now you observe some courtesy here. If you don't like the way he puts the questions.
- (p70) - Mr. O'MALLEY. It is a public record insofar as the States are concerned, isn't it?
- Mr. MCHANEY. No.
- Mr. O'MALLEY. Do you mean to tell me that a policyholder in my State cannot go into the examiner's office and look over that preliminary report ?
- Mr. MCHANEY. That is exactly right.
- Mr. O'MALLEY. Then by gosh, we have got to change the laws in our State.
- 96 - Mr. SULLIVAN. Mr. Head, I am not criticizing you at all, I am simply trying to develop the facts as to how the company is managed and who knows what in the organization of the company, that is information which this committee wants, if life insurance companies are being operated along lines which keep one officer, the chief officers, from knowing all about the company perhaps.
- 96-97 - The Chairman: What we want to know more or less regards the manipulation of the assets of these corporations and the various interests that are held on the part of one company in another company, whether that is within the law, whether it is wholesome and beneficial or whether it should stop , or whether it should be encouraged. I, myself, look with a great deal of disfavor on one life insurance company holding stock in another, and I do not know whether it is within the law, or whether they are permitted under the law to hold stock in a great many other companies doing the same kind of business, and that is what we want to ascertain. And furthermore, what I would like to know now is this: Here was a corporation, a life-insurance company you say with assets of about $150,000.000 which has been sold, and you have read the contract, is the money of the very corporation that has been sold to another
Mr. SULLIVAN. That is right.
The CHAIRMAN. So the corporation that acquired it did not pay anything for it , but they bought $150,000,000 of assets without paying in any money whatsoever, is that right?
Mr. SULLIVAN. That is correct and the sale approved by the court, for $100,000, and that $100.000....
- 97 - The CHAIRMAN. That is what I am going to try to ascertain, what is the underlying reason for acquiring a life-insurance company whose assets, we will say, are about $25,000,000 less than their liabilities. Why anybody wants to buy and pay anything for a $25,000,000 liability I cannot understand.
Mr. SULLIVAN. I will explain that to you.
The CHAIRMAN. Well, I have an idea, of course, that it is done to get control of the business, and then they do as they please with it.
Mr. SULLIVAN. No ; they first wipe out that $25,000,000 deficit, Congressman, by reducing the liabilities to the policyholders in the sum of $25,000,000 or more, so that the new company is O.K.
The CHAIRMAN. How can that be done ?
- 97 - Mr. SULLIVAN. It is done by a court order. Congressman, they received an order of the court reducing its obligations to the policyholders. Suppose the policy has a $ 100 cash value, or a reserve, that is an obligation which the company does not have enough assets to meet, we will say, so by court order they put a lien against that.
The CHAIRMAN. So by court's order the benefits under the policy are reduced and that was the reason why the deficit on the part of the outside State examiners was only $14,000,000, but on the part of the Missouri insurance commissioner or investigator or examiner was $29,000,000?
Mr. SULLIVAN. That is right.
The CHAIRMAN. So that the court deducted the $29,000,000?
Mr. SULLIVAN. Instead of $ 14,000,000.
The CHAIRMAN. Instead of $ 14,000,000 from the value of the policies that the people had been paying their premiums on for years.
Mr. SULLIVAN. That is correct. Except for the actuarial and legal terminologies you have got it exactly right.
The CHAIRMAN. I would like to get the facts.
- 98 - Mr. SULLIVAN. About $25,000,000, and that is income which this new company has had out of that business since they took it over. Of course that has decreased some, because there has been a good deal of lapsation of the business.
- 98 - Mr. GOODMAN. There is just one thing, Mr. Chairman, I would like to bring out on the benefits, and that is that none of the death benefits, by virtue of this contract, approved by the court, were handled in any way detrimental to the policyholders. They got full payment as their policies originally called for. I just wanted to point out to this committee that you could not get the cash value of the policy, temporarily the policy cash value had a 50-percent lien against it , but death benefits have right along been paid in full and are being paid in full now and up to the present time this lien won't impair that. In other words, when this contract was entered into, these liens have been materially reduced.
The CHAIRMAN. Were all the benefits paid since 1933 in full, according to the policies?
Mr. GOODMAN. All death claims have been paid in full; all maturing policy obligations have been paid in full.
Mr. O'MALLEY. Taken out of the assets of the defunct company?
- 98-99 - TESTIMONY OF COURTNEY S. GOODMAN - I am associated with James P. Aylward, of Kansas City, Mo., as counsel for Mr. O'Malley, commissioner of liquidation of the Missouri State Life
- Mr. SULLIVAN. Do you know the provision in the reinsurance contract which provides that the company shall carry an extra $50 of insurance on his life for 15 years?
- Mr. GOODMAN. An extra $50 of insurance?
- Mr. SULLIVAN. That is right.
- Mr. GOODMAN. You mean by that the lien, and if he should die within the year; yes.
- Mr. SULLIVAN. Just a minute, do you know that provision?
- Mr. GOODMAN. I don't understand your question.
- Mr. SULLIVAN. I will try to make it simple: Are you familiar with the fact that this contract provides that from the date of this contract the company shall carry an extra $50 of life insurance on his life; are you familiar with that?
- Mr. GOODMAN. I still do not understand that; I may not be familiar with it, but I don't understand it.
- Mr. SULLIVAN. You would not understand it near as well if I read it to you?
- The CHAIRMAN. Give him the provision in the contract.
- Mr. SULLIVAN. You won't understand it near as well.
- Mr. GOODMAN. Maybe I will if you read it correctly, but I don't understand your question, frankly.
- Mr. SULLIVAN. I will ask you to step down and I would like to call Mr. Coburn to the stand. Later we may want you back.
(Witness temporarily excused. )
- 105 - Mr. CRUME. They would have to account for them in some way. Now, when this man dies, was there a reduction in that book account of any amount for the lien that had existed against that policy?
- Mr. COBURN. Yes, sir; $50 was struck out of that lien account.
- Mr. CRUME. Was taken off that book account?
- Mr. CORURN. Yes, sir.
- Mr. CRUME. All right. Now, when you credit an account, I say lien account, what account is that debited against?
- Mr. COBURN. The Missouri State Life account.
- Mr. CRUME. But doesn't this contract provide that the costs of handling that item would be charged against the profits, the profits and so forth, that we are talking about?
- Mr. COBURN. That is part of the Missouri State Life account.
- Mr. CRUME. Then in substance the earnings made do pay for the liens - is that right?
- Mr. COBURN. Yes, sir.
- Mr. CRUME. And that is what we have been asking you all this time?
- Mr. COBURN. I didn't understand it.
- Mr. CRUME. I am trying to explain it, that in the matter of lien costs the earnings are used to pay the liens, do provide for the payment of the liens; is that right ?
- Mr. COBURN. Yes, sir.
- Mr. CRUME. Does that answer your question?
- TESTIMONY OF ARTHUR COBURN
(The witness was duly sworn by the chairman. )
Mr. SULLIVAN. Now, Mr. Coburn, your name?
Mr. COBURN. My name is Arthur Coburn.
Mr. SULLIVAN. Your address ?
Mr. COBURN. Dallas, Tex.
Mr. SULLIVAN. Your occupation ?
Mr. CORBURN. Vice president Southwestern Life Insurance Co., Dallas, Tex.
- 108 - TESTIMONY OF WALTER HEAD-Resumed
- 125 -
- 140 - TESTIMONY OF ROBERT EMMET O'MALLEY - Missouri Superintendent of insurance (Since July 1, 1933.)
- Commissioner Emmett O'MALLEY. Yes; I would say so. The business fell to $700,000,000 from $1,000,000,000 in 2 years. The business suffered from the inevitable widespread publicity, and people had drawn out; the younger policyholders who could get insurance elsewhere got out of that company, so the business dropped to $700,000,000, including that same group insurance and term insurance that I am talking about. The average age of the policyholder now is 43 years.
- Mr. SULLIVAN. None of your actuaries or legal advisors upon whom you depended and upon whom you had a perfect right to depend, called your attention to this sentence ?
- Commissioner O'MALLEY. I didn't say that, I said I don't recall any of them specifically calling it to my attention. If they had, it passed out of my mind just as well as if they didn't.
- 155 - Mr. DIRKSEN. Mr. O'Malley, were you engaged in insurance practice before you became insurance commissioner?
- Commissioner O'MALLEY. Merely as a life-insurance underwriter; I never had any executive experience or actuarial experience.
- Mr. DIRKSEN. How long had you been a life-insurance underwriter?
Commissioner O'MALLEY. Seven years.
- 156 -
- 156 - Mr. NELSON. No; it is customary that they make up such a statement, but it does not say anything about where that statement shall be filed. In other words, the company must have that statement in its files.
- The CHAIRMAN. Would it only be for the purpose of keeping it locked up in the safe of the office, so it would not be called to the attention of the policyholders or to the State department?
- 156 - TESTIMONY OF CARROLL E. NELSON - Actuary of the Missouri Insurance Department - Since September 1 , 1930.
- For 5 years previous to that I was with the Missouri State Life Insurance Co., of St. Louis, Mo.