AT/Open Book/Voices from the Field


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	• Finding Your Niche in the Women’s Market • The Seven Secrets of Seminar Success • Talking Points on Association Membership • Realistic Expectations in Real Estate • The Five-Question Interview • Unlicensed Sharing • The Changing Face of Estate Planning










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	Voices From the Field • Chapter 1 • Chapter 2 • Chapter 3 • Chapter 4 • Chapter 5 • Chapter 6 • Chapter 7


















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Part 4
Another innovative note struck at this convention was William Scott's idea of having extempore speeches by various members on topics of general interest. These "five-minute talks" became a regular feature of early conventions. "Our programme is generally made up without any allusion to the large number of delegates who are here with a great desire to participate," Scott commented. "We are too modest to get up and talk on the subjects as they are presented, and I propose to offer a suggestion...to those who get up the programme in the future," he said, "that they allow one afternoon, say, just for five-minute talks from everybody on subjects that we are all interested in...."

The second day of the convention was devoted entirely to a trip to Niagara Falls, Victoria Park and Queenstown in Ontario. Returning to business the third day, the delegates chose the scholarly-looking James L. Johnson of Springfield, Massachusetts, to succeed Cochran, and Register was again made chairman of the Executive Committee. Meanwhile, a luncheon was provided "for the visiting ladies" at the 20^th Century Club and a theatre party was formed for the early evening. This still allowed them time to get to the banquet hall at the Ellicott Club to hear the after-dinner speeches at the close of the convention.

Among the speakers that evening was Henry C. Lippincott who took the various state governments to task for their misguided supervision of insurance practices and taxation of companies. Emphasizing the need for wider understanding of the business, he said, "That life insurance is not understood is made manifest at every session of the legislature in almost every state. Well-meaning men, looking to the improvements of business and, with the best possible intention, introduce harmful measures." Enlarging on this point, Lippincott told the agents:

This must be ascribed to ignorance, to mistaken conception in the nature of the business. Legislators with rare exceptions regard the companies as money-getting machines, virtual monopolies exercising tremendous power. They look at one thousand millions of assets, every dollar of which, is as we know, necessary to meet all present and future liabilities, as so much wrung from the insurer in excess of what is required. They ignore entirely the relation of the members of the companies. To them the company is one thing, the membership another. The company is something standing apart and, with a despoiling hand, filching from the insured 'all the traffic will bear.' The legislative opinion is the public opinion. They share the public opinion and are the reflection of it. The confusion of thought is such that they do not realize that a tax upon a life insurance company is a tax upon the members who compose it, being just so much added to the cost of their insurance.... Failing to realize this, and understanding as little of the effect of taxation in general they regard the taxation of a life insurance company as meritorious, and do not hesitate to levy extraordinary tribute from funds which are in their very nature sacred trusts, mainly designed for the widow and orphan.[xxxii]

With these sentiments Lippincott naturally won the applause of his hearers. So did A.S. MacGregor, spokesman for the London, Ontario, Life Underwriters Association, who stressed the affinity between agents in the United States and their neighbors in the Dominion.

By December 1899, the anti-rebate compact expired. Reed's election as a trustee of the New York Life disqualified him from service any longer as referee. As company after company followed the Equitable's lead, the machinery set up to enforce it completely collapsed. In a last-ditch effort, E.W. Christy, secretary of the NALU, sent a letter to the secretaries of all the associations urging them to notify the companies of their support for the formation of a new compact, or a revival of the old one. But it was too late. The compact ended with the century. To stimulate more interest in the organization, Johnson continued Cochran's program of visitations to local associations. During this year in office he met with the leaders of sixteen associations, traveling as far north as Portland, Maine, as far south as Richmond, Virginia, and as far west as Chicago. By the end of his term of office, Johnson was able to report that nine associations had been formed, and five of them had joined the NALU. The four largest associations at this time were New York City (146 members); Chicago (99); Boston (78) and Philadelphia (64).

Register presided at the meeting of the Executive committee on April 23, 1900, at Haddon Hall in Atlantic City. Much of the time was given to planning the next convention. The site selected was the resort town of Saratoga Springs, New York, where there was no local association. This decision had apparently been reached before the members' departure from Buffalo. In July 1899, the Western Underwriter informed its readers: '" A place of meeting for the next convention will probably be selected remote from large centers, and the feature of lavish entertainment at the expense of local associations abandoned. This will give more time for business, and will satisfy the desires of a great many delegates who, while enjoying the entertainment, are often disappointed with the meager results reached in the line of discussion and action."

"The new departure," Register explained in his annual report, "imposed on your committee much detail work, which on former occasions was managed so successfully by the local association." Certainly the members of the various subcommittees had their work cut out for them. Among other matters dealt with at the meeting were the topics for the five-minute talks and the prize essays, the rules governing the contest, and the arrangements for notifying the local associations of these decisions. Also, the committee on transportation secured railroad rates of one and one-third "on the certificate plan," Register reported.

At this fashionable watering place, the center of the social life of the 1900 convention was the United States Hotel. Everything was compressed into two days, the 11^th and 12^th of September. According to the "Preface" of the Proceedings, allowing delegates to act as their own hosts instead of being guests of some local association was very satisfactory. "Saratoga proved to be an ideal place in which to try the experiment and the members thoroughly enjoyed the innovation. The attendance was large and the spirit of good fellowship much in evidence."

Once again Philadelphia supplied the national organization with a president. "The election of I. Layton Register as president," the recorder observed, "was a forgone conclusion, his long and active service in the interests of the association making him the natural candidate.' In presenting him to the convention, retiring president Johnson mentioned that Register was one of the organizers of the NALU. "No truer hand was ever placed upon the organized forces of this national body for its operation," he said, describing Register as "faithful, true, invaluable, a successful underwriter, and with all, a gentleman." Register was highly respected, both socially and in business circles. A founder of the Philadelphia Association and one of the city's leading citizens, he was a member of the Union League, an elder of the Second Presbyterian Church, a thirty-second degree Mason and a director of the Bank of Commerce. He had been associated with the Equitable Life Assurance Society since 1863, just four years after the company was established. For years his agency had been the Equitable's largest. Asserting that he was "worth a million and a half" in the early 1880s, Henry B. Hyde said that Register made more money than any agent he knew of.[xxxiii]

In 1900, he presented an imposing, if somewhat austere figure. His heavy eyebrows emphasized a penetrating stare, and enormous gray sideburns extended to meet a walrus moustache. His thinning close-cropped hair revealed a dome-like forehead. Responding to Johnson's introduction, Register observed, "I have been actively engaged in this congenial business for forty years. It is therefore my life work and I love it; and yet I regard that which you have done today as the crown in my insurance career. To say that I thank you for this mark of confidence sounds commonplace. I would like to frame my appreciation in kindlier words, for with your indulgence and cooperation I will endeavor to measure up to your expectations, and if I can follow out the lines so ably laid out by my predecessors, ... I shall be content."[xxxiv]

At this convention the NALU made further efforts to curtail rebating by asking the companies to insert in policy contracts a clause making it void if the assured failed to pay the first and all subsequent premiums in full.

In his opening address to the convention, Johnson proposed inaugurating a department of instruction. "In such a department," he said, "should be taught, by experts, the 'Elementary Principles of Life Insurance,' 'Theory and Practice of Field Work,' 'Ethics of Life Insurance,' and whatever else experience shall prove desirable. Instruction should be conducted along general lines irrespective of companies, so that it shall be mutually helpful to all solicitors, general agents and managers."

He also proposed the formation of a bureau of reference, which would possess "information regarding character and ability of all agents within the jurisdiction of the association, for the protection of general agents and managers." Besides urging continued warfare against rebating, he asked the delegates to consider ways of eliminating the "curbstone broker" and the "twister." In addition, Johnson suggested that they give some attention to the question of when negotiations with agents under fellow agents or managers are proper.

One cause of disappointment at this convention was the absence of Colonel Ransom who (for the second time) was too ill to attend. Before reading Ransom's telegram of regret, Johnson said, "We feel the loss of the presence, the cooperation and inspiration of one who is well known as the father of the life underwriters' association."

Among those who read papers at this convention was John M. Holcombe, vice president of the Phoenix Mutual Life Insurance Company. His subject was historical, tracing the development of life insurance from its origins to the end of the nineteenth century. Modern life insurance, he concluded, owed its direct origin to two events that occurred in England during the eighteenth century: (1) the publication of Dr. Price's mortality table and; (2) the petition submitted by the promoters of the Equitable Society for a royal charter in 1757, during the reign of George II. It was this document, Holcombe asserted, that first defined the limits and purposes of a life insurance company. Quoting the petition, he proceeded to explain its significance:

"That great numbers of His Majesty's subjects, whose subsistence principally depends on the salaries, stipends and other income payable to them during their natural lives, or on the profits arising from their several trades, occupation, labor and industry, are very desirous of entering into a society for insuring the lives of each other, in order to extend after their decease the benefit of their present incomes to their families and relations, who may otherwise be reduced to extreme poverty and distress by the premature death of their several husbands, fathers and friends, which humane intention the petitioners humbly apprehend cannot be effectually carried into execution without His Majesty'' royal authority to incorporate them for that purpose."

"Let those of us upon whom circumstances have placed the duty of framing plans of insurance, and those whose lives are devoted to presenting these plans to the public, carefully consider whether this declaration does not set forth all that is legitimate in life insurance. The banker has his own proper sphere, and without him the world of today would not transact its business. The capitalist invests his funds in that enterprise which promises the largest returns. The life insurance man should not seek to invade these fields. He cannot make profits in business by the use of the capital placed in his charge, for his funds are sacred and must not be subjected to the risks which attend ordinary commercial transactions, and they must, moreover, be available for the payment of the contracts he has undertaken to fulfill.

No one plan will meet the varied requirements which spring from the complex life of today, but in every policy let there stand forth clearly and unmistakably the sentiment contained in the petition which was, more than a century and a half ago, presented to the ruler of the people who make possible our own success and who today stands nearest to us of all the nations of the earth.[xxxv]

His listeners apparently found little to quarrel with in Holcombe's thesis. When he had finished, George A. Cantine, a delegate of the Hudson Valley Life Underwriters' Association, said, "I move you, sir, a vote of thanks to Mr. Holcombe for his clear, able and concise paper, and I hope that every insurance paper throughout our national commonwealth will publish it in full." The motion was seconded and carried by a rising vote. It is interesting to note that, while the borders of the life insurance business are comparatively more expansive today—and perhaps less clearly defined—the fundamental distinctions drawn by Holcombe remain viable and accurate.

William Scott's innovation, the five-minute talks, excited interest as well, though some complained that the Executive Committee should allow more freedom in the choice of topics. The initial subject for discussion was "Mental Force in Life Insurance." Not as many got to speak, however, as was originally planned. "Owing to the extreme heat," the session dismissed early.

On September 8, 1900, a terrific hurricane struck the coast of Texas, killing 6,000 people. In Galveston alone, 5,000 died when a tidal wave swept over the city. Understandably, this tragic news was very much on everyone's mind. The subject came up repeatedly during the sessions, always with proposals to send money to aid the victims' families. No definite steps were taken, however, until the final moments of the convention when Col. John W. Vrooman, a delegate from New York City, said, "I feel we cannot afford to adjourn leaving a record such as we have made regarding the Texas sufferers." His motion called for sending $100 from the NALU treasury to the governor of Texas. Corchran, Bowles and others, however, felt such a gesture—no matter how laudable—-would set an unwise precedent. Eventually everyone agreed it would be best to raise the money from individual contributions. The total collected was $705.

Since there was no local association president to act as host, former NALU president Charles H. Raymond served as toastmaster at the banquet on the evening of September 12. The principal speaker of the evening was James W. Alexander, president of the Equitable, who told the agents that he considered them the ones in the business who determine public opinion. "You are 'the people' so far as life insurance is concerned," he said. "What you say generally goes. You mold the character and method of the management of the companies. We cannot get along without you and we don't want to."

Assuring them of his unswerving opposition to rebating and other unsavory practices that marred the image of the business, Alexander concluded by asking the members to join him "in having a high ideal in this business and in endeavoring to look up to it. Let us endeavor, let us determine to eliminate from our business all that is base, unworthy, that is vulgar; let us stand on principle.'' Other speakers carried the festivities far into the evening. It was well after midnight when they all left the dining room and returned to their rooms.

Later that morning when the new officers met for the first time, they took up Johnson's proposal, "requesting our life companies to consider the advisability of inserting in their policy contract a provision making such policy null and void in case the insured does not pay the first and subsequent premiums in full." The task of presenting the idea to the company heads fell to Register. Thirteen companies responded, but all declined to act on the suggestion. Register and the others seemed to take the rebuff philosophically, consoling themselves that at least their recommendation showed the companies that the NALU was in earnest about eliminating rebating.

One of Register's first acts as president was to seek the endorsements of all the presidents of the life insurance companies for the association movement. His letters, outlining the purpose and nature of life underwriters associations, elicited very positive responses which Register arranged to have published in insurance journals. The letters were also printed in pamphlet form and widely distributed. In addition, he sent copies of insurance journals featuring highlights of the Saratoga meeting "to 500 managers in important places where no association existed." These mailings included a letter asking the recipient's support in forming an association in his locality.

When Congress met in December of 2000, circulars were sent (at Register's expense) to managers throughout the country making an appeal for the abolition of the revenue tax on policies. Register commented in his report to the 1901 convention:

It is believed that the effect of this circular, in conjunction with the effort of the fire underwriters, and...the approval of the National Association, had some share in creating a strong sentiment in favor of repeal and that the sentiment had due weight with the senators and representatives. Now that the war tax has been repealed we can all rejoice that life companies have received the same considerate treatment as savings banks that were not taxed.[xxxvi]

Besides conducting these mailing campaigns, Register spent a considerable amount of time in railway coaches, visiting as many associations as possible. In the same report, for instance, he mentions attending "the dainty breakfast given by the New England Women's Association in Boston last winter." This is a reference to his being entertained, along with Stephen F. Woodman of Boston (chairman of the NALU Executive Committee that year) by this group at the Parker House in November 1900.

The results of Register's efforts were extremely gratifying. As Woodman later reported:

Your president has devoted extraordinary fertility of resource, constant thought, and unremitting effort to the maintenance of the advance movement so well inaugurated by his predecessors. By stirring circulars, personal visitation, and inspiring speech, he has sought to stimulate the faithful to new zeal and to arouse the indifferent to action. The reward of his fidelity has been a quickened enthusiasm in existing associations and the formation of twelve new associations, including several reorganized.

Register was obviously pleased. Reviewing his administration in the fall of 1901, he said, "The good seed sown has brought forth fruit throughout the country, and even abroad; for there now exists an underwriters association in Germany, due to the influence of Mr. Bernhard Goldsmith, a delegate last year at Saratoga from Chicago and now the representative of the New York Life Insurance Company in Germany. I had the pleasure of expressing the greetings of the National Association to our new ally, which is officially know as "Bund der Versicherungs Vertritter." The new association was located in Berlin.

Before sailing for Europe, Register had met with his Executive Committee on May 7, 1901, in New York's Motel Manhattan. The meeting's agenda provides insight into the day-to-day management of the Association during this period, as well as the officers' chief interests. Fifteen attended. As chairman of the committee on topics, William Carroll of Philadelphia reported that the subjects recommended for local associations to consider derived essentially from ex-president Johnson's agenda. These included, for instance, the proposed bureau of information, the exclusion of "curbstone agents" from the business and how to suppress twisting. George H. Sutton, chairman of the prize essays committee, reported that the topic selected for the next convention was "The Influence of Life Insurance Upon Character." The judges secured for the competition were Dr. William H.P. Faunce, president of Brown University, Dr. J.S. Bloomingston of Chicago, publisher of The Investigator, and Dr. Andrew Raymond of Schenectady, president of Union University. The committee also drafted a resolution for the consideration of the members at the next convention requesting that companies cease hiring agents on a part-time basis.

Considerable time was give to R.B. Moyer of the Underwriters' Protective Association and William Hooper of the National Insurance Information Bureau, listening to their proposals for the creation of a bureau of reference. (These consulting firms had apparently been performing a similar service for the fire insurance industry for some time.) As Johnson had suggestion at the last convention, the idea was to compile a national list of life agents who would be rated according to their qualifications and performance records. The list was also to include incidents of misrepresentation, twisting, or rebating, as well as agents guilty of such dubious and unethical practices. Among other decisions reached at this meeting was the selection of Portland, Maine, as the site of the next convention.

As guests of the New York Association, the members enjoyed a luncheon at the Union League Club, "tendered by Col. John W. Vrooman." After attending a performance at the Criterion Theatre, where Julia Marlowe was playing in "When Knighthood Was in Flower," they were given a dinner at the Manhattan Hotel.

The nation was in a state of shock in the morning of September 11, 1901, when the national organization convened in Portland. Owing to the tragic news from Buffalo that President McKinley had been shot, the convention began with a resolution expressing sympathy for the president's family and a recommendation for the enactment of "a federal law declaring an assault or attempt on the life of a chief executive as treason, punishable by death." H.S. Munson of Buffalo proposed amending the resolution with a call for the suppression of groups advocating violence. Persuaded that the wording of the resolution was adequately forceful as it stood, however, he withdrew his motion. In view of the prevailing mood it was decided to forego the banquet planned for the close of the convention. The president died at 2:15 the next morning.

We meet today under the depressing shadow of a national calamity....The dreadful news came like an electric shock into every home, into every heart. Our natural grief for our beloved President is only equaled by a deep execration for the heinous crime. The cheering news received leads us to hope that the assassin's bullet was misdirected.

But death had struck the life underwriters at closer quarters. For Register, the passing of two former NALU presidents probably represented personal losses. There is an emotional note in his address to the convention:

To those who knew Charles H. Ferguson and David S. Hendrick there was disclosed the character of men who, though human in their feelings and failings like ourselves, were yet overflowing with gentleness and goodness, which, while not obtrusive, won all hearts. It is cause for thankfulness that such lives have become conspicuous in our business....

The afternoon session of September 11 began with a discussion of how the Underwriters' Protective Association proposed to develop its register of life insurance agents. The comments of Buffalo delegate Munson offer some insight into the extent of unethical practice, as well as how local associations were dealing with the problem:

We got together and drew up an agreement. We would report the name of any man who was disreputable in any way in the business and that man's name was sent by the man to whom we reported him to each one of the subscribers. Of course, it was subject to the criticism that possibly it might be blacklisting. That did not necessarily exclude him from employment. If the report was made from prejudice he had a chance to be heard....

Here is a list of the names, a whole lot of them, probably a hundred and fifty of them, that we kept in Western New York....But of course an organization like that described by the gentleman, a corporation which could furnish names from all over the country, would be of much more service to the general agent, would be much more effective in freeing our business from those disreputable people who travel around from one city to the other and roast us out of our money.[xxxvii]

The views of A.C. Otis, a delegate from Philadelphia, reveal some of the problems facing managers and general agents during this period. "This certainly interests me, as it does everyone who has had the misfortune to make advances to unreliable agents," he said. "It seems to me that we suffer most in that particular in advancing money to a man who comes to us with all the earmarks of ability, honesty and integrity and yet lacks them all." His chief objection to the proposal stemmed from a fear of lawsuits and charges of blacklisting. Moyer explained that, since it would also include profiles of many reputable agents, such a reference list would not be open to criticism on those grounds. This seemed to satisfy Otis.

The NALU, of course, could only endorse such a program. It was up to individual general agents and managers to subscribe to the service.

Foreword by Alan Press, 1988-1989 NALU President

Preface by Jack E. Bobo, 1989 NALU Executive Vice President

Introduction

Acknowledgements

Chapter 1

Laying the Foundation—A Meeting at the Parker House