New York Life Insurance Company

“ I desire to emphasize that the New York Life Insurance Company, which I cited, is no different from the Equitable and the Mutual Life, or many of the other large companies. They are links in the chain of the "System"—necessary links in the device by which dollars are "made," by which the savings of the people are sucked from the people to the "System," the "Private Things." ”

“ One thing the policy-holder can always depend upon, however: he pays for everything he gets. The price rests upon certain scientific principles; no company can disregard them without disaster. What one company offers another can offer; and any policy that contains unusual opportunities also carries a premium that completely pays for them. All modern novelties are simply old forms of life-insurance under new names—and usually at greatly increased prices.
In recent years, for example, the New York companies have gone daft over "gold bonds," " consols," and "debentures." ”

“ The business of insurance is founded on the law of averages; that of life insurance eminently so. The average rate of mortality is the basis on which it rests. By spreading their risks over a large number of cases, the companies calculate on this average with reasonable certainty and safety. Any thing that interferes with it deranges the security of the business. If every policy lapsed by reason of the war should be revived, and all the back premiums should be paid, the companies would have the benefit of this average amount of risk. ”

“ A policy of life insurance is a peculiar contract. Its obligations are unilateral. It contains no undertaking of the assured to pay premiums: it merely gives him an option to pay or not, and thus to continue the obligation of the insurers, or terminate it at his pleasure. It follows that the consideration for the assumption of the insurers can in no sense be considered an annuity consisting of the annual premiums. ”

“ The widow who receives the life company's check, after the death of her protector, takes an entirely different view of the insurance agent's importunities from that taken by the husband who had to be hounded into a policy.
Under modern pressure, however, the New York companies have combed every social and professional class, in the search for solicitors. Each, in this country alone, has from 10,000 to 15,000 men. In New York City there are 5,000 life-insurance agents. Apparently, no citizen exists, in the companies' estimation, who does not possess abilities in this direction. ”

“ The plaintiff is a New York corporation, with its home office in New York city, and has transacted and does transact the business of life insurance on a large scale in all of the states of the United States, and with persons residing in every country of the civilized world. It commenced to transact its business with residents of Montana in 1869, and its business has progressively increased until its total insurance in force in that state amounts to $10,023,445, calling for premiums amounting to $343,664.93. ”

“ The year after that you take the same policy in the New York Life. The fourth year you come back to the Equitable; and repeat the performance indefinitely.
Occasionally, a rebated policy-holder becomes physically impaired;—what is known as a bad risk. Then sticks in the company into which he was last rebated. A sick man always hungers for life-insurance. A man who ordinarily could afford a $10,000 policy takes one for $100,000 at 90 per cent off. If he falls sick, his relatives and friends gladly pay the few remaining premiums; and his widow, at death, pockets a neat $100,000. ”

“ In the mutual company the assured themselves receive all the surplus premium or profit. The law of the State of New York passed in 1849 requires that all life-insurance companies organized in the State shall have a capital of at least one hundred thousand dollars. Mutual life-insurance companies organized in that State since 1849 pay only seven per cent on their capital, which their stock by investment may produce. ”

“ Section 700 states that 'any moneys held or owing' by life insurance companies in the following three classes of policies issued on the lives of residents of New York shall be deemed abandoned property: (1) matured endowment policies which have been unclaimed for seven years; (2) policies payable on death where the insured, if living, would have attained the limiting age under the mortality table on which the reserves are based (an age varying from 96 to 100) , as to which no transaction has occurred for seven years ”

“ A policy of life insurance, without restrictive words, is assignable by the assured for a valuable consideration equally with any other chose in action, where the assignment is not made to cover a mere speculative risk, and thus evade the law against wager policies ”

“ The applications were part of the policies, and from them it appeared, and was found by the circuit court, that McMaster applied for insurance 'on the ordinary life table, the premium to be payable annually.' He was solicited to insure by the company's agent, and might, according to the company's form which was used, have asked that the premiums be payable annually, semiannually, or quarterly, but he chose that they should be payable annually, and that the rate of premium should be calculated on that basis by the ordinary life table. ”

“ Pensions and Death Benefits at Policy-Holders' Expense The New York Life not only pays its agents well, but pensions them in their old age and, in certain cases, pays death benefits. It treats its agency directors with especial liberality. It has some two hundred and twenty each drawing from $2,000 to $6,000 salary a year. Besides this each gets $100 for each new agent secured. He also receives certain benefits if he remains with the company a certain time, and his widow receives a lump sum if he dies. In one year the New York Life has paid $259,000 to this pension fund. ”

“ If no such request for paid-up insurance is made, the net amount that would have been payable as a death claim on the date to which premiums were duly paid will automatically continue as term insurance from such date, for such time as said excess of the reserve will purchase according to the Company's present published table of single premiums for term insurance, and no longer. ”

“ The net value of the policy, when the premium becomes due, and is not paid, shall be computed upon the actuaries' or combined experience table of mortality, with four per cent. interest per annum, and after deducting rom three-fourths of such net value, any notes or other evidence of indebtedness to the company, given on account of past premium payments on said policies, issued to the insured, which indebtedness shall be then canceled, the balance shall be taken as a net single premium for temporary insurance for the full amount written in the policy ”

“ The performances of these promises are not only separate, but inconsistent with each other: the payment of the 'surrender value' cancels the promise to pay the 'proceeds' and the promise to pay the 'proceeds' assumes that the insured has not demanded and received the 'surrender value.' The premiums when paid become the property of the insurer and the insured has no interest in them, although it is true that in New York, as in most states, a life insurance company's finances are regulated by statute in much detail in order to protect policyholders. ”

“ If, however, the insured became totally and permanently disabled before the age of sixty, the company, petitioner, was to pay him a monthly income at an agreed rate and was to waive the payment of any premium that would otherwise be due. Disability was to be considered total when the insured was so affected by bodily injury or disease as to be wholly prevented from performing any work, from following any occupation, or from engaging in any business for remuneration or profit. ”

“ By means of an accepted mortality table and an assumed rate of interest, the company calculates the amount that would be required to be paid by the insured each year in advance to cover policy claims if deaths occur as indicated by the table and if that rate of interest is realized on the investments. The amount so ascertained is called the net or mathematical premium. There is added loading to cover expenses and unforeseen contingencies such as excess mortality, diminished taxes. ”

“ Those in health can get new policies cheaper than to pay arrearages on the old. To enforce a revival of the bad cases, whilst the company necessarily lose the cases which are desirable, would be manifestly unjust. An insured person, as before stated, does not stand isolated and alone. ”

“ Provided, that * * * life insurance companies shall not include as income in any year such portion of any actual premium received from any individual policyholder as shall have been paid back or credited to such individual policyholder, or treated as an abatement of premium of such individual policyholder, within such year. ”

“ Group Health and Life Insurance Trust Programs and New York Life attributes the program’s demise to regulatory requirements put in place as a result of the Patient Protection and Affordable Care Act signed by President Obama in 2010. Company officials told trustees that the challenges of complying with provisions of the law that take effect in 2014 are the primary reason New York Life opted to quit the association health insurance market entirely. New York Life has underwritten the American Veterinarian Medical Association Trust medical coverage for the past 20 years. ”

“ Such is the form of the contract, and such is its character. It has been contended that the payment of each premium is the consideration for insurance during the next following year,-as in fire policies. But the position is untenable. It often happens that the assured pays the entire premium in advance, or in five, ten, or twenty annual instalments. ”

“ The company is a New York corporation without capital stock engaged in mutual life insurance on the level premium plan. It made a return for each of the years showing no tax. After auditing the returns, the Commissioner of Internal Revenue assessed the taxes in question. ”

“ The New York Court of Appeals sustained the power of New York to claim escheat on abandoned insurance maturities from foreign insurance companies doing business in New York on the basis of the insured's residence in New York at the time of the delivery of the policy in New York. According to this view, as Mr. Justice JACKSON points out, change of residence of the insured or of the beneficiary long before maturity of the policy, or nonresidence in New York of a beneficiary, other than the insured, at any time, become utterly immaterial. ”

“ Rep. 110, and in New York L. Ins. Co. v. Cravens, 178 U.S. 389, 44 L. ed. 1116, 20 Sup. Ct. Rep. 962. The latter case has special application, for the plaintiff in error here was the plaintiff in error there, and the case concerned life insurance companies and their policies. In that case it was contended that a policy of mutual life insurance was an interstate contract and the parties might choose its 'applicatory law.' The contention was made in many ways and with great amplitude of argument and illustration. ”

“ The same man has even drawn more than one advance from the same company. A few years ago the New York Life discovered that one man was drawing seven advances of $25 a week from seven different New York agencies under seven different names. Indeed, at times it has almost seemed that the best man was not the one who wrote the most insurance but the one who drew the most advances from the most companies at the same time. ”

“ But, under the policies on the lives of those who had become totally and permanently disabled and whose contracts provided for the waiver of the payment of future premiums, no future premiums will be received by the plaintiff, and therefore the net reserve reported for these policies in understated to the extent of the value of these future premiums. ”