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I'd like to consult you about it." Kennedy expressed his entire willingness to be consulted, and after the usual formalities were over, Mr. Andrews proceeded. "I suppose you are aware that the large insurance companies maintain quite elaborate detective forces and follow very keenly such of the cases of their policy-holders as look at all suspicious.
Thus Insurance Companies, while they take heavy risks off the shoulders of policy-holders, incur relatively trifling risks themselves; they can predict the aggregate sums which they will be called upon to pay within a small margin of error.
Wright, after arguing his case with the insurance companies for nearly a year without effect, appealed to the public through the newspapers. This, however, had unexpected consequences. Mr. Wright's letters produced the impression, which he did not intend at all, that the insurance companies were unsound, and policy-holders rushed to the offices to make inquiries. Many surrendered their policies.
Laws were passed for the purpose of enabling the policy-holders to select their trustees, but the only result has been a ridiculous and rather expensive fiasco. As in politics, the rank and file select the managers selected for them by a few men who understand the situation.
They do believe however that their methods of conducting the business will conserve the interests of a far greater number, and relieve them of a large proportion of the burdens imposed by the older and more cumbersome form. Assessment companies call upon their policy-holders for such sums as are required to meet actual losses, together with a small amount for expenses and for an emergency fund.
I therefore announced that I would not favor a bill that limited volume of business, and would not sign it if it were passed; but that I favored legislation that would make it impossible to place, through agents, policies that were ambiguous and misleading, or to pay exorbitant prices to agents for business, or to invest policy-holders' money in improper securities, or to give power to officers to use the company's funds for their own personal profit.
This meant in cash about two thousand dollars, but it necessitated defending any or all of them whenever they were so unfortunate as to run foul of the police, and as luck would have it out of the two hundred policy-holders forty-seven of them were arrested within the first six months fifteen for burglary, eleven for robbery and assault, sixteen for theft, and five for murder.
The reader knows that the present writer has no great confidence in the principle of Carmen; but if she had been married, and her husband had wrecked an insurance company and appropriated all the surplus belonging to the policy-holders, I don't believe she would have nagged him about it. And yet Margaret loved Henderson with her whole soul.
It seems so unselfish a luxury to revel in these comfortable statistics, that one is tempted to broaden his vision, and take in the four or five billions of assets heaped up by the six or seven millions of people who have insured their lives, and the one hundred and fifty or two hundred millions of dollars paid out yearly to lighten the distress attending the death of husbands and fathers of families, to say nothing of a much greater sum repaid policy-holders.
Thus in the life insurance companies, and the Hughes investigation supports this, the real power was held not by the president, not by the voters or policy-holders, but by men who were not even directors. After a while we took it as a matter of course that the head of a company was an administrative dummy, with a dependence on unofficial power similar to that of Governor Dix on Boss Murphy.
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