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VOTERS OF GEORGIA, READ AND REREAD
of railroads having a Texas situs. Other outside companies at that
time had investments in Texas as follows:
Companies. Real estate mortgages. Bonds, etc.
Union Central $3,941,269 $ 95,030
State Life of Indiana . 264,700
Security Life of Virginia 34,786
National Life of Chicago 2,395
Kansas City Life 23,150 5,000
Franklin Life 10,000
Aetna 146,000
Metropolitan .583,170
$4,276,300 $829,200
This shows a total investment by outside companies at that
time, exclusive of the items of railroad bonds, of $105,500.
(The Metropolitan Life subsequently withdrew because of the
Robertson law.)
The combined assets of Texas companies at that time, as above
shown, amounted to s974,276.3B—practically all of which was in
vested in Texas. This makes a grand total of investments at the
time of the passage of the Robertson law by all life insurance com
panies—both foreign and home—of $0,079,776.
On January 31, 1912, investments in Texas by outside companies
were as stated in the attached official certificate of the commissioner
of insurance and banking.
INVESTMENTS BY OUT OF STATE LIFE
COMPANIES (LEGAL RESERVE) IN TEXAS
REAL ESTATE MORTGAGES AND TEXAS
BONDS, AS OF JANUARY 31»t, 1912.
Investments in Texas.
S Company. Real Estate Mortgages. Bonds.
Aetna, Hartford, Conn $1,929,604 30 $979,000 00
American Central, Indianapolis, Ind. 236,811 00
American National, Lynchburg, Va. 18,500 00
Bankers Reserve, Omaha, Neb. ... 86,252 50
Bankers Life, Das Moines, lowa ... 55,000 00
Capitol Life, Denver, Col 18,750 00
Central Life As. Soo., Des Moines, la. 23,144 34
♦Colorado National, Denver, Colo. ..
Federal Life, Chicago, Hl 5,050 00
Franklin Life, Springfield, 11l 55,100 00 200,877 10
Gt. Western Life, Kansas City, Mo 105,194 60 30,000 00
Hartford Life, Hartford, Conn 611,096 30
Home Life, Oklahoma City, Okla. .. 9,768 00
International, St. Louis, Mo 67,300 00 30,500 00
Kansas City Life, Kansas City, Mo. 232,789 27
* Louisiana National, New Orleans, La
Mr jatan Life, New York, N. Y 505,000 00
Meridian Life, Indianapolis, Ind. .. 15,000 00
Missouri State, St. Louis, Mo 378,449 20
National Life of U. S. A. Chicago, 111. 317,353 00
Northwestern National, Minneapolis 109,620 00 1,980 00
Occidental, Albuquerque, N. M 11,200 00
♦Oklahoma National, Oklahoma City
Pacific Mutual, Los Angeles, Cal.. . 888,320 70
Pittsburg Life and Trust, Pittsburg 467,565 00 119,070 00
Protective Life, Birmingham, Ala.. . 9,400 00 3,975 00
♦Prussian, Berlin, Germany
Reliance, Pittsburg, Pa - 100,000 00
Reserve Loan, Indianapolis, Ind 359,654 75
Security, Richmond, Va 43,206 75
♦Southern National, Louisville, Ky. .
State Life, Indianapolis, Ind 156,650 00
Union Annuity, Cincinnati, Ohio . 6,101,341 04
U. S. Annuity and Life, Chicago, 111. . 9,500 00 19,500 00
Volunteer State Life. Chattanooga. . 37,600 00
$12,822,968 25 1,626,154 60
$12,822,968 25
$14,449,122 85
. ~*Figures not available.
I hereby certify to the foregoing as a correct list of investments
by out-of-state life companies (legal reserve), in Texas real estate
mortgages and Texas bonds, as these investments are shown in the
Robertson schedules submitted to me by these companies.
(Seal)
Commissioner.
(The John Hancock Mutual of Boston, which has never written
insurance in Texas, and therefore makes no report to the depart
ment. has been doing a Lo«ui business in Texas for many years, and
we are reliably informed has investments in this state of approxi
mately $5,000,000.)
The Texas companies, as above shown, have assets of approxi-
• A History and Discussion of the Results of the
Operation of the Robertson Law
The first official suggestion that such a law be passed was in
a message from Governor Charles A. Culberson to the legislature
in 1897, as follows:
‘‘Legislation requiring these companies to invest an
nually a reasonable percentage of the premiums re
ceived from this state in propertv here is not only
manifestly reasonable and just hut dictated In sound
public policy. It is time that the resources of tin
state should be devoted to her own growth .and prog
ress and the adoption of the policy indicated will
strongly tend to keep capital here and build upon it.” t
In 1906 lion. John IL Kirby said, in a speech made before a
banker- convention:
“Now what I propose is that the reserve fund ap
portioned to insurance policies carried by the citizens
of Texas in foreign corporations doing a life insurance
business shall be invested in Texas."
n 1 ebruary. 1912, Mr. Kirby said:
“My own opinion is that that proposition to require life insur-
THE ATLANTA GEORGIAN AND NEWS. SATURDAY, JULY 27, 1912.
mately $10,500,000, practically all i* which is invested in Texas —
making a grand total of investments in the state by life insurance
companies the John Hancock and all other companies not
doing life insurance business in this state) on January 31, 1912, of
$24,949,122.85.
Eighth--Statistics concerning rate of interest and dis
count chargedi by outside companies and Texas
companies on money loaned or invested in Texas securities.
Reports of insurance companies to the department do not show
the rate of interest charged in any particular state, answer to this
inquiry is consequently not available. The Union Central has the
largest amount of loans in Texas of any of the outside companies,
and it is our information that it charges about the. same rate of in
terest as the home companies.
Ninth--Statistics concerning funds loanable by Texas
companies in Texas and funds loanable by outside
companies in Texas.
The amount loanable by Texas companies will be the present as*
sets and the net accumulations of such companies each year, which
can only be estimated. On the basis of $116,000,000 in force now
and the writing of $50,000,000 of new insurance each year, Texas
companies will accumulate funds available for loans at the rate of
about $1,500,000 this year, $2,000,000 next year, with a more rapid
increase thereafter—proportionate to the amount of business trans
acted.
The amount available for loans by outside companies is 75 per
cent of their Texas reserves, and will be dependent upon the amount
of business they transact in the state. Seventy-five per cent of the
legal reserve is approximately equal to 50 per cent of the premiums
charged by any life insurance company.
Under the Robertson law the actual investments by outside ,
companies have increased from approximately $4,600,000 in 1907 to
$14,449,123 on January 31, 1912. A reasonable estimate of the
amount which they will invest during 1912 is $3,000,000. Os
course, the investments required from companies obtaining a license
to do business in the state for the first time and companies which
formerly withdrew and come back will increase this amount.
Tenth---Data concerning success of insurance com
panies organized in Texas
We think this inquiry answered by above statements.
Eleventh -How do premiums of outside companies
and Texas companies compare?
The Texas companies are charging about the same premium
rates for insurance as have been charged by other old-line compa
nies on the same forms of policies for the past 50 years or longer.
Twelfth---Has there been any change in the cost of
insurance to the people of Texas since passage of
the Robertson law?
There are several questions involved in this inquiry. The
rates charged now are practically the same as were charged here
tofore, but the actual cost to the people in the aggregate would nat
urally be less if the money remains in the state.
Thirteenth—Has there been any change in the rates
paid for money obtained by persons in Tfexas from in
surance companies?
We believe that the rates of interest charged for money loan
ed are regulated by the law of supply and demand, and insurance
companies, like all other financial institutions, usually get the
prevailing rate of interest. We believe that the interest rates are
lower now than at the time of the passage of the Robertson law.
Fourteenth--Number of‘Tfexas policy holders in out
side companies and in Tjexar companies and aggregate
amount of policies.
December 31, 1906. was the last report covering the business
of all outside companies, which discloses, as above shown, that
they had on that date $262,818,590.80 of outstanding insurance on
169,475 lives, while Texas companies had only $18,000,000. On
December 31, 1911, Texas companies had, as above shown. $116,-
000,000 of outstanding insurance on the lives of about 35,000 pol
icy holders. The amount held by outside companies on that date
is $262,818,590.80, less what has lapsed and otherwise termi
nated since December 31. 1906, plus the business of the outside
companies that did not retire upon the passage of the Robertson
law and plus the business of the other outside companies that
have since come into the state to do business. We have no means
available for obtaining the exact amount, but we doubt if the whole
outstanding insurance now held by outside companies would show
ance companies to invest in I exas the reserve apportionable to
policies on the lives of Texans has come to be a part of our fixed
public policy. I think I was the father of this idea in Texas, as f
had made several speeches which were extensively published ad
vocating a law of this kind. Judge Robertson took up the idea and
the original legislation upon the subject initiated in a bill which he
introduced and put through, therefore the law bears his name. I
did not agree with the deposit features of the Robertson law, but
was in hearty accord with the principle of requiring insurance com
panies to make this investment.
"'The Robertson law was passed in 1907. Tn 1909 the deposit
feature of that law was repealed. A bill known as house bill No.
89. approved April 2. 1909. substantially repealed the whole Rob
ertson bill, but re-enacted certain features of it, and especially the
investment feature. The investment feature is a just provision
and it is one at which none of the insurance companies have any
right to complain. The deposit feature, however, was, in my
judgment, a piece of reckless experimentation. The legislature.
more than a slight increase over tne amount outstanding at die
time of the passage of the Robertson law.
Fifteenth- --Is maintenance of present Texas insurance
laws desirable from standpoint of Texas companies—if
so, why? If not, why? Is maintenance of same law
desirable from standpoint of outside companies---if so
why? If not, why?
The laws now in force in this state governing the formation
and control of home insurance companies were drafted with great
care. It follows very closely the Armstrong bill, passed a few
years ago in New York. As a matter of fact, the act reflects the
most modern and progressive thought on the subject. The forms
that policies may take is controlled. Forfeitures on account of
lapses arc dealt with, and the policy holder in this way protected
against injustice. The character of investments that may be made
are fixed. Discriminations are forbidden. Departmental supee.
vision is provided for. While it would be impracticable to under
take to go into all of its features, speaking generally, it may be
said to safeguard the business with all of the particularity that the
advanced thought of the day demands. If it be subject to criti
cism. it is on account of the fact that it, in truth, imposes an ex
cessive tax on home companies. The taxes that these companies
now have to pay is disproportionately large when compared with
the tax that outside companies would have to pay upon equal pre
mium receipts. We do not think that, for the present at least, this
law should be experimented with. The home companies have
been, and, we think, will continue to prosper under it, and in time
become strong and helpful factor” in the economics of the state.
We can see no fair objection that can be made by the outside
companies to the Robertson bill, which was intended for their con
trol. The tax put upon them is no larger,than the average tax
imposed upon outside companies by the other states, and there
never has been a sane or tenable argument advanced against the
requirement that they be compelled to invest in this state a por
tion of the money collected from the citizens of the state. Those
of them that have fairly investigated the subject know that they
can get just as safe investments here as elsewhere. For instance,
here is a statement from the president of the Pittsburgh Life and
Trust Company, now doing a large business in Texas:
Pittsburg, Pa., March 1, 1912.
“In answer to your inquiry as to the amount that the Pitts
burgh Life and Trust Company has invested in your state, would
say that this company qualified to transact business in Texas
since the enactment of the Robertson law and has invested more
than half million dollars in first mortgages and now has more
than th* amount necessary to be invested under that law to entitle
the company to the lowest tax charge. We have found the invest
ments satisfactory so far and have made and are still making ad
ditional loans, notwithstanding the fact that we have already com
plied with the law.”
Sixteenth -What is the interest of the people of the
State of Texas?
Keep Texas money in Texas. Tn saying this, however, we do
not wish to be understood as committing ourselves to the advocacy
of a narrow or provincial policy. We know, and all well informed
people know, that investments are to be found any and everywhere
in this state as safe as those offered by New York or any other
stats, and companies.^wishing to come here ought to be willing to
deal fairly with us. They should be willing to leave in our com
merce a portion at least of the money that they get from our peo
ple. As we understand it, this is all that is put upon them by the
law that they now complain of.
RESPECTFULLY SUBMITTED;
Pubiicky Coxamittee ©I Texas Life Convention
v,ith Judge Robertsons full approval, rose to the emergency ana
eliminated the deposit feature from the law.
“There is no question but that the enactment of the Robertson
law did drive a great many foreign insurance companies out of this
state in the sense of soliciting insurance in this state, but your let
ter stated that the effect of this was to destroy a source of cheap
money to Texans.
“If you will investigate as to the amount of money loaned or
invested in this state by life insurance companies prior to the en
actment of the Robertson law and compare it with the very large
investments made since that enactment, I think you will be as
tounded at the figures. To my mind thev suggest that instead of
tb.e Robertson law depriving us of an opportunity to secure money
in the development of this state, just the opposite is true."
Eicept section 5, which related to taxation and which was
superseded by an act passed at a called session of the same legis
lature, and already quoted herein, the following is a copy of the
Robertson law. It will be seen that it is now shorn of the features
urged as objectionable by the 21 outside companies that withdraw
from Texas at the time the law was enacted:
*