"American life insurance stands today as the veritable economic bulwark of the nation….Its purpose and service not only make of life underwriting a wholesome and dignified profession, but also a holy crusade."

—Lester O. Schriver

BY 1931, THE LIFE INSURANCE BUSINESS was feeling the unmistakable effects of the depression. There was a marked increase in demands for policy loans as well as the number of lapsed policies. (The Equitable, for example, reported that from 128,414 in 1928 the number of policy loans swelled to 375,641 in 1932.) [i]

Rising unemployment inspired a flurry of disability claims, and life insurance sales dropped dramatically. In August, the Association of Life Insurance Presidents (which represented the larger, old line companies) reported that for the first seven months of the year, new business was down 13.0 percent form the same period in the previous year. "New ordinary insurance amounted to $4,556,066,000 against $5,384,523,000—a decrease of 15.4 per cent," quoted Life Association News. "Industrial insurance amounted to $1,644,991,000 against $1,725,898,000—a decrease of 4.7 percent. Group insurance amounted to $542,616,000 against $639,072,000—a decrease of 15 percent." [ii]

It was now obvious to everyone that, with the great stock market crash of October 1929, the booming twenties had come to an end. "Though government officials and many leaders in the industrial and financial world endeavored to minimize the seriousness of the situation," observes Dr. Buley, "the fact was that the United States was entering upon one of the major depressions of its history. It was to be a trying time for life insurance—the most trying since the 1870s." [iii] Describing the economic climate during the early 1930s, Buley recalls:

As the weeks and months went by, the hoped-for recovery in the nation's economy did not materialize. Time and again the stock market staged a false recovery, then sank still lower. Unemployment increased to some 14,000,000 persons and, though there was plenty of credit available for those of productive enterprise, few desired to use it. The ebullient and rampant optimism of the late 1920s had gone into reverse and instead prevailed a Stygian gloom; people were now certain that what had gone down would never go back up; some even thought that the system of private enterprise—perhaps even the United States—was breathing its last. [iv]

When it became clear that the boom of the twenties was definitely over, it might have been expected that the NALU's boom was over, too. This was not the case. As Donald F. Barnes notes in his fiftieth anniversary history of the association, "In other similar organizations there came a definite decline in interest, membership and financial support. But all over the country life underwriters rallied to the challenge of the crisis; the association kept moving forward with new ideas, new high marks, new plans for the future and an ever-increasing interest." [v]

The association's resilience was due largely to a succession of forceful leaders who never lost sight of the NALU's fundamental goals and kept its spirit alive. As heads of successful sales organizations, they were totally committed to bringing the advantages of life insurance to the American people through educational publicity and the personal solicitation of informed, honest career agents. Insisting upon moving forward with the projects initiated earlier, these men continued to campaign for an ongoing program of institutional advertising. They kept up a nagging pressure on the companies and other industry organizations, reminding them of the possibilities for exploiting the various media with effective advertising techniques to awaken in the public mind the value and benefits of life insurance.

Leaders of the NALU also maintained a fatherly interest in the development of The American College of Life Underwriters, and placed the Association's full resources at its disposal. In fact, the NALU was practically the sole promotional vehicle for the CLU movement during this period, bringing it to the attention of the companies and agents alike. Besides holding commencement exercises at the annual conventions, giving Ernest Clark and Dr. Huebner a prominent place in the convention programs, the NALU allotted page after page of Life Association News to publicize the college's instructional program. Bibliographies and study guides to help students prepare for the Chartered Life Underwriter examinations appeared regularly in the Association's magazine.

Life underwriters associations nurtured the CLU movement locally as well. The natural haunts of the College's graduates, association gatherings became planting grounds for the American Society of chartered Life Underwriters, the College's alumni association. The Society, in turn, perpetuated the CLU movement through its members who formed a corps of mentors conducting study groups in localities all over the country. This tutorial method became standard practice. For even though The American College today has a large and impressive campus at Bryn Mawr, Pennsylvania, with a full compliment of faculty and staff, ample facilities, and a greatly expanded curriculum, the vast majority of CLU candidates still prepare for the examinations by studying privately and with study groups sponsored by the local Society chapters.

Most of the Association's leaders were enthusiastic members of that flourishing elite corps of agent, the Million Dollar Round Table of the National Association of Life Underwriters. It became their custom to meet for a few days prior to the NALU's annual convention at a nearby resort or similar meeting place. All converged on the convention, culminating their annual meeting with the Round Table breakfast at the height of the convention. The presence of these star salesmen, who were often inspiring speakers, brought added luster to the NALU conventions. Stimulating the delegates with practical selling ideas, new challenges and ever-higher standards for success in the business, these "Echoes of the Round Table" became one of the most attractive features of the annual meetings.

Nor did those who served as Association officers during this period overlook routine matters. Maintaining the organization on a sound financial footing in a period of stringency was no mean accomplishment. Though the budget was necessarily small, they nevertheless made provision for sustaining an operational headquarters sufficiently staffed to coordinate the various activities of the Association and its affiliates. Continually revitalizing the organizational machine at all levels, the Association leaders organized committees, launched membership drives, made personal visits to encourage local group efforts, and worked hard to produce annual conventions that offered productive work sessions, interesting speakers and pleasant entertainment.

Unquestionably, those prominent in Association affairs during the 1930s were very dedicated men. Like their predecessors, they were also intelligent, well-informed men of wide experience. Many possessed a liberal education and all shared a broad vision for the Association's future. Beyond keeping the national organization on course, these leaders were sharply alert to current developments in the economy, in government and within the industry. Always sensitive to movements through out the field force, they listened closely to the agents growing concerns and interests, which they undoubtedly shared. They did not always agree on how to approach each problem, but their willingness to respond to these needs and aspirations kept the NALU in a position where it remained preeminently the agents viable organization, not only during the crisis of the Great Depression and the trials of Wold War II, but also for the post–war generation of life underwriters. America's life insurance agents, they realized, had to keep pace with changing markets, evolving products, expanding services, and shifts in company policies. Thus, the special requirements of general agents and managers, the particular interests of women agents, the organizational problems of local associations and the emerging state life underwriters associations, as well as political trends signaling new legislative challenges, all occupied their thoughts and energies.

Recalling the associated agents' major concerns during the 1930s, Holgar J. Johnson, one of the decade's most dynamic leaders, explains, "The kinds of things we were working on in those days centered on agent education and everything that helped build the stature of life insurance agents. We were much closer to the political environment in many respects than the companies were because the agents knew a lot of the political people at the state level. We weren't very much involved at the federal level; it was state legislation and regulations that most concerned us at that time. Licensing, for instance, in most states was still a very primitive affair. When I was a young agent in Pittsburgh, we had three general agents who acted for the state and held examinations for anybody who wanted to become a life insurance agent. Members of life underwriters associations wanted to see much stricter standards in licensing." [vi]

An important solidifying influence for the NALU continued to be the warm friendships developed among the life underwriters. "The social camaraderie of the national association was of itself a very important element," Johnson comments. "I think that the fellows who were active in the Association in those days all knew each other better than they seem to now. It was a much closer social contact."

The NALU's good fortune in leadership resulted partly from its organizational structure that assured a perennial team of officers and committeemen mad up of older, experienced leaders and a continual supply of eager, fresh "new men," groomed in local association management, ready to take over the reins when their turn came. This arrangement meant there was always leadership continuity. Working closely with the older leaders, each generation of officers was familiar with the traditions of the Association through personal contact. At the same time, the organization was never at a loss for fresh talent, alert to the current mood of the field force and the business at large. [*]

Another reason for the NALU's surviving the '30s with so much aplomb was the talent, dedication and stability of its headquarters staff. As managing director and general counsel, Roger B. Hull displayed the kind of confidence and managerial adroitness needed to keep the Association machinery functioning, if not always running with perfect smoothness. An effective orator with an incisive, well-informed mind, Hull was frequently in demand at association gatherings. He, Hoffman and Jones remained at their posts throughout the decade, competent, trusted and generally popular with the officers and local leaders. As far as the division of labor was concerned, Hoffman took care of much of the business and financial arrangements while responsibility for producing the magazine fell more and more to Jones. In 1939 Jones was given the title Editor and Manager of Life Association News.

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

Leading Figures—Ransom, Carpenter, Blodgett and Plummer

Conditions Leading to the Foundation of the NALU

Rise of Modern Life Insurance and the General Agency System

Issues and Accomplishments of the First 15 Years

Chapter 2

In the Wake of the Armstrong Investigation

A Royal Commission Investigates Life Insurance Operations in Canada

A Period of Growth and Visibility for the NALU Under Strong Leadership

The NALU Plays a Leading Role in Insurance Education

The NALU During World War I

Chapter 3

The Post-War Decade

The NALU's Extension of Activity

The Agents Move for Recognition

Chapter 4

The Depression and Aftermath

Annual Conventions and Midyear Meetings

The NALU Celebrates Its 50th Anniversary

Chapter 5

The Agents Earn Their Wings

World War II

The NALU Joins the Industry in Legislative Battles

The NALU Establishes the National Quality Award

Chapter 6

Controversies and Schisms (1946-1956)

The Foundation of LUTC

The Nola Patterson Affair

GAMC Formally Organized

Chapter 7

The NALU Goes to Washington

Dispute Over Minimum Deposit Insurance Plans

GAMC Stages First LAMP Meeting

The NALU Celebrates Its Diamond Jubilee Year

The NALU Increases Political Activity

U.S. Senate Antitrust and Monopoly Subcommittee Investigate Life Insurance

The NALU Responds to Consumerist Activism

Chapter 8

The NALU Reaches the Century Mark

FTC Releases a Study Critical of the Insurance Industry

Formation of the Women Life Underwriters Conference

Drop in Local Membership

The NALU Issues Statements on AIDS

The NALU Combats a New Wave of Attacks

The NALU Celebrates a Century of Service

Open Book

Book Marks

[i] Cf. Buley, Op. Cit., Vol. II p. 1030.

[ii] Op. Cit., September 1931, p.34.

[iii] Buley: Op cit., p.986.

[iv] Ibid., p. 987.

[v] Barnes Op. Ct p.41.

[vi] Johnson: Interview, May 1985.

[*] In assuring a mixture of old and new, the selection of officers in the 1920s and early 1930s was similar to the present arrangement, though not exactly as it is today. The Board of Trustees was composed of the president, the chairman of the Executive committee, two vice presidents, the secretary, treasurer, and three previous presidents. (As a result, in 1931 Myrick, Paul Clark and Whatley, as Board of Trustees as late as 1938.) Likewise, by having five vice presidents who often "moved up year to year, starting as "Fourth Vice President," eventually go to "First," and finally plain "Vice President" the year before becoming president, the Association always had a supply of well-seasoned officers. (thus the names of C. Vivian Anderson, Theodore M. Riehle, Lester O. Schriver, Alexander E. Patterson and O. Sam Cummings appear on the lists of officers several years before they assumed the office of NALU president.) In 1934, the revised constitution provided for a composition of officers that still obtains today: president, immediate past president, vice president (now called "president-elect"), honorary vice president, secretary, treasurer, managing director (now designated as executive vice president), and twelve trustees.

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