Mr. DOBBINS. You speak of the insurance business as being the most strictly regulated business there is: As I understood Mr. Mills' statement, his business is not regulated by any insurance department. Mr. HUBBARD. Oh, yes, indeed. Mr. DOBBINS. Are you licensed in Iowa? Mr. MILLS. Oh, yes, sir, we are; we are examined strictly, every year. Mr. DOBBINS. Then I misunderstood you. Mr. HUBBARD. Every local insurance company is very strictly regulated by the State in which it is incorporated and doing business, so that we in New York, for example I refer to the Commercial Travelers must comply with every regulation of the department of insurance in New York and, similarly in Iowa with Iowa companies; in Illinois with Illinois companies; in Connecticut with Connecticut companies; in Massachusetts with Massachusetts companies, and so on. So that we are the most strictly regulated business today that you will find, with the possible exception of the banks. And if you can prohibit the use of the mails to these strictly regulated companies, then clearly you can and undoubtedly will apply those same regulations to the unregulated types of business which are now being carried on, and we will very shortly have a situation, I think, where Federal regulation will completely supersede and take the place of State regulation which business has heretofore had and which the makers of the Constitution, in drawing it up, clearly intended should be governed solely by the several States, under the tenth amendment. Now you probably know it, but I was interested to discover that this subject has already been discussed and considered for a period of some 2 years by the Judiciary Committees both of the Senate and the House, when the subject of Federal regulation or possible Federal regulation was called to the attention of the Congress, and in the Senate and House committees a resolution was submitted to the committees and their reports were submitted, and the Senate Judiciary Committee in January 1906, reported back: The Committee on the Judiciary, which has had under consideration the foregoing resolution, beg leave to report it is the unanimous opinion of the committee that the Congress is without authority under the Constitution to supervise and regulate the business of commercial fire and life insurance, except in the District of Columbia. And so forth. In the same year, the House Judiciary Committee reported: Now the States have the exclusive power of admission and regulation. If the States have the sole power of admission and regulation, what is there for Congress to regulate? The power of the States is explicit, and the corporation would be beyond the regulating power of Congress. That was the report of the two committees of Congress in the year 1906. There has been no constitutional amendment; there has been no Supreme Court decision which in any way modifies the resolutions and reports which were rendered by the two committees in the year 1906. Mr. ASHBROOK. I dislike to interrupt the gentleman in his very interesting and instructive presentation, but I was wondering if it would not be possible for you to file your brief with the committee, as there are other gentlemen here we want to hear, and this hearing must be restricted. Mr. HUBBARD. I will be glad to do that. But may I just for a moment, without referring any further to the citations which you will find in my brief, say it has been universally held in every case which has come to the Supreme Court that the regulating power of Congress under the taxing power, or under the interstate commerce power, or under any of its regulating powers, must be exercised for the purpose of regulating that particular subject matter, and that the use of that regulating power cannot be wielded as a club to accomplish by an indirect means a regulation of local affairs which it cannot accomplish by the direct means afforded to it by the Constitution of the United States, which I have cited, and the resolutions to which I have referred will fully cover the situation which I have just described. So I think we can convince the committee, by a reading of the brief which I will submit, that actually this is a situation for the States themselves to control by proper State regulation, and that that State regulation, if properly carried out, together with section 215 to which reference has already been made, will adequately cover the situation insofar as the fraudlent practices of a few of these concerns, known a "fly-by-night" concerns, are concerned. I thank you. Mr. ASHBROOK. We thank you very much. Now is Congressman Sisson present? STATEMENT OF HON. FRED J. SISSON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW YORK Mr. SISSON. Mr. Chairman and gentlemen of the committee, I shall take only a couple of minutes of your time, because I am sure my friend, Mr. Hubbard, counsel for the Commercial Travelers of Utica, has covered the situation fully. While I have not been present at the hearing but just for a few minutes, I am sure he has covered or will cover the situation so far as the effect of the bill is concerned upon that company. I merely want to say this, gentlemen, that they tell me this bill, unless modified, would make it almost impossible or very difficult if not practically impossible for them to do business without greatly increasing their expense. I am speaking of the company, and all I want to say is perhaps to make some slight contribution here in respect of my own personal knowledge of this company I am speaking of, from first hand knowledge. I happen to be a policyholder, as is almost every other professional man and business man in Utica, and that surrounding territory, by reason of the fact they are able, because they have no agents and they furnish a very sound insurance at a comparatively low rate-and that company, of course, has the very highest reputation-to obtain a large volume of the business. I appreciate that possibly the committee might have had in mind, in this bill, perhaps something in the nature of making it more convenient for the bringing of suits against the company. I do not know whether that was one of the purposes or not. Probably Mr. Hubbard has discussed that subject with you, or will. I want to say of that company I do not believe there is an insurance company, an accident insurance company, in the United States that has any higher reputation for fairness in dealing with its policyholders. I have experienced not only being a policyholder, but have had also the experience of having had a claim, quite a substantial claim, against the company by reason of an accident that occurred some years ago and, incidentally, they settled with me, and I may be said to be an interested witness by reason of that fact. But I just come here for the purpose, Mr. Chairman and gentlemen, of expressing the hope there would not be anything done that would make it difficult for this company of ours to do business, or to increase their costs to their policyholders. I thank you. Mr. ASHBROOK. Thank you very much. Now we will hear from some other gentleman who wishes to be heard briefly. STATEMENT OF HAYS KENNEDY ON BEHALF OF THE HEALTH AND ACCIDENT UNDERWRITERS CONFERENCE, CHICAGO, ILL. Mr. KENNEDY. I am appearing here on behalf of the Health and Accident Underwriters Conference which has its main office in Chicago, and I would like to present here my authorization from the executive secretary of that organization to appear on their behalf this morning. Mr. H. KENNEDY, HEALTH AND ACCIDENT UNDERWRITERS CONFERENCE, Chicago, Ill. DEAR MR. KENNEDY: This will authorize you to represent the Health and Accident Underwriters Conference at a hearing before a Subcommittee of the Post Office and Post Roads Committee on H. R. 6452 now pending in Congress. We are opposed to this bill for the following reasons: (1) Federal legislation is unnecessary to accomplish the purpose of this measure; (2) State insurance commissioners can correct to a great extent the evil now existing by irresponsible mailorder companies; and (3) the conference has in its membership several reputable members of long-established standing, who would be forced out of business by the enactment of this bill. Very cordially yours, HAROLD R. GORDON, The Health and Accident Underwriters is composed of 83 insurance companies that write a health and accident insurance business. All of these companies are authorized companies, organized under the laws of some State, having their principal place of business in the State where they are organized, and many of them authorized and doing business in every State in the Union; some of them doing business only from their home office by mail, but every one of them a member of this conference. The executive secretary asked me to appear here this morning and express to you gentlemen that it is the consensus of opinion of the members of this Health and Accident Underwriters Conference, composed of 83 insurance companies, that they are opposed to the passage of this bill. They feel there is no need for any Federal interference, or Federal legislation. They feel that whatever abuses may exist in the insurance field, if there be such, by a few "fly-by-night" concerns can adequately be handled by the insurance departments of the various States under which those "fly-by-night" companies may be organized. We feel that whatever the abuses may be, they can be properly handled by the insurance commissioners of those States. They feel that, if this act were to become a law, many legitimate companies that have been operating for 40 and 50 years would be compelled to go out of business, because this act compels them to comply with the insurance laws in all of the States in which they write or send mail. Many of the States have retaliatory and reciprocal laws that prohibit their becoming licensed in those States and, as a matter of result, they would automatically be barred from becoming licensed in those States and, of course, would be guilty under this act if caught with receiving mail or sending mail into those States. In addition to that, there is one other grievance that I might refer to here. Many of these companies automatically would be compelled to go out of business and hundreds of thousands, if not millions, of their policyholders would be compelled to seek insurance in some, of the old-line companies at largely increased rates. Many of them, of course, cannot afford it; others are too old to procure insurance in some of the older companies, and many of the older companies refuse to carry a man after he has reached the age of 60, no matter how sound or firm his condition of health may be, whereas many of the companies that belong to this conference continue to write men for health and accident insurance after they have reached the age of 60 and even up to the age of 70. So if this law became effective, these companies would be compelled to go out of business and hundreds of thousands of policyholders now, who have been carrying policies for 30 and 40 years, would be without insurance. I won't take further of the time of the committee, but will adopt the suggestions and recommendations made by Mr. Mills and Mr. Hubbard. Mr. DOBBINS. Would you file with the committee a list of the companies? Mr. KENNEDY. I had intended to; also my authorization. Mr. DOBBINS. And state what number of the 83 are agency companies. Mr. KENNEDY. I have hastily run over the list and I find 11 of them, to my knowledge-there may be more-are doing business exclusively through the mails. The others, my understanding is, are agency companies. I may be mistaken one way or the other on that. Mr. GOODWIN. Have you any idea how many policyholders your companies represent? Mr. KENNEDY. One hundred and seventy-two thousand-the company I personally am associated with. Mr. GOODWIN. You can not state, in regard to the Underwriters' Conference, how many policies would be affected? Mr. KENNEDY. As to this whole conference, I am not able to state, because there are 83 companies in this conference and the secretary just asked me to appear and file their protest. Mr. GOODWIN. My question is perhaps a little unfair in your present position, but I would like to know how many, if you are going to file a brief or, if you are not going to file a brief, the estimated number of policyholders. Mr. KENNEDY. I can find out from the secretary approximately the number of policyholders that are represented in these various companies that are members of this conference. Mr. DOBBINS. That would not be quite responsive to his question, because some of them, I understand, are agency companies, whose policyholders would not be affected by this legislation. Mr. KENNEDY. Yes, sir. Mr. GOODWIN. I understood the agency companies and mail order companies, so to speak, were all in this Underwriters Conference. Mr. KENNEDY. The companies that Mr. Hubbard represents I understand are members of this conference. Mr. GOODWIN. I wanted to bring out the idea eventually as to how many people would be affected by this proposal. Mr. KENNEDY. Well, just as an estimate, I would say there would be over several million policyholders. Mr. GOODWIN. Are these companies doing business in every State of the Union? Mr. KENNEDY. Yes, the large majority of these companies are doing business in every State, and are licensed in every State. I thank you. MEMBER COMPANIES HEALTH AND ACCIDENT UNDERWRITERS CONFERENCE Illinois Bankers Life Assurance Co., Springfield, Ill. American Casualty Co. Reading, Pa. American Income Insurance Co., Indianapolis, Ind. American Travelers Association, Indianapolis, Ind. Anchor Casualty Co., St. Paul, Minn. Ancient Order of United Workmen, Grand Lodge, Fargo, N. Dak. Bankers Health & Accident Co. of America, Houston, Tex. Bankers Indemnity Insurance Co., Newark, N. J. Boston Casualty Co., Boston, Mass. Business Men's Assurance Co. of America, Kansas City, Mo. Central Assurance Co., Columbus, Ohio. Colorado Life Co., Denver, Colo. Commercial Travelers Mutual Accident Association of America, Utica, N. Y. Craftsman Insurance Co., Springfield, Mass. Empire Life & Accident Insurance Co., Indianapolis, Ind. Employers' Reinsurance Corporation, Kansas City, Mo. Federal Casualty Co., Milwaukee, Wis. Federal Life & Casualty Co., Detroit, Mich. Federal Life Insurance Co., Chicago, Ill. Fidelity Health & Accident Co., Benton Harbor, Mich. First National Casualty Co., Fond du Lac, Wis. First Reinsurance Co. of Hartford, Hartford, Conn. Globe Casualty Co., Columbus, Ohio. Great Northern Life Insurance Co., Chicago, Ill. Illinois Commercial Men's Association, Chicago, Ill. Indiana Travelers Assurance Co., Indianapolis, Ind. Inter-Ocean Casualty Co., Cincinnati, Ohio. Inter-State Business Men's Accident Co., Des Moines, Iowa, Iowa State Traveling Men's Association, Des Moines, Iowa. Kentucky Central Life & Accident Insurance Co., Anchorage, Ky. Loyal Protective Insurance Co., Boston, Mass. Lumbermen's Mutual Casualty Co., Chicago, Ill. The Maccabees, Detroit, Mich. Massachusetts Accident Co., Boston, Mass. Massachusetts Bonding & Insurance Co., Boston, Mass. Massachusetts Indemnity Insurance Co., Boston, Mass. |