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	Voices From the Field • Chapter 1 • Chapter 2 • Chapter 3 • Chapter 4 • Chapter 5 • Chapter 6 • Chapter 7 • Chapter 8 Book Marks


















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Besides gaining recognition in legislative circles and providing leadership to the nation's agents, the NALU also extended its influence beyond our national borders. It was primarily to encourage and assist organizational efforts among leading agents in Canada that Scovel had journeyed to Montreal and Toronto. The widespread impact of the Armstrong hearings affected the agents in that country too where a Royal Commission was appointed to investigate the practices of the life insurance companies operating throughout the Dominion. The Canadian agents received more immediate recognition than had their counterparts in New York, however. So eager were the royal commissioners to have representatives of the life underwriters associations testify that the Montreal delegation had to apply for special permission to attend the NALU convention. With their appearance at the St. Louis convention (led by George H. Allen) the Life Underwriters Association of Canada formally became part of the NALU. The union lasted for ten years. By that time the Canadians were fully capable of standing on their own. Still, it is likely that Canadian resentment of America's reluctance to join the British Empire in its war against the Central Powers helped sever their relations. This is evidenced by the two organizations joining forces in 1918 (after the United States had entered the war) and on subsequent occasions to stage "international conventions."

Making it clear that the NALU was in no way a creature of the companies, the delegates at St. Louis underlined the fact that the organization was to be composed solely of associations representing agents. The reporter of this convention notes:

An important amendment of the constitution was adopted, making other than strictly field men ineligible as delegates to the annual conventions, or to hold any official position in the National Association or to serve upon the executive committee, and limiting the tenure of service of future ex-presidents of the Association, as members ex-officio of the executive committee, to a term of three years.[xxiv]

The delegates elected Frank E. McMullen of Rochester, New York, and a manager for Aetna, as president of the NALU for the 1906-1907 term. Ernest Clark agreed to serve again as secretary, and Stephen F. Woodman became chairman of the Executive Committee, a post he had held twice before. At their midyear meeting, held at the Hotel Gotham in New York City on April 3, 1907, reports of committees revealed there were seventy-four associations having membership in the national organization, including twenty in Canada. It was also announced that the next NALU convention would be held in Toronto in August. That evening the members and their guests were entertained by the New York Association at the Hippodrome, followed by an informal supper at the Gotham.

Charles Jerome Edwards, general agent for the Equitable at Brooklyn, was elected president of the NALU for 1907-1908 at the Toronto Convention. The King Edward Hotel was the central gathering place, but sessions met in convocation Hall at the University of Toronto. With so many Canadian representatives—and even some from Mexico—it was the most international meeting the organization had ever held. In an expansive mood, outgoing President McMullen told the delegates, "For twenty-three years our movement was confined to the United States; until last year our association was national. Then our brothers on this side of the imaginary line joined with us, and we became international in fact, if not in name. We are banded together in a common cause, the purpose of which is to make the life insurance business the most honorable and equitable in the world."

There seems little doubt the delegates enjoyed their stay in Toronto. Commenting on their reception there, the reporter of the convention wrote enthusiastically:

Such hospitable and lavish entertainment has never been accorded the delegates and convention guests as that dispensed by the Toronto and other Canadian hosts. Tally-ho drives, luncheons at the Lambton Golf Club and Royal Canadian Yacht Club, the moonlight sail on Lake Ontario, reception at the beautiful home of Mr. And Mrs. Herbert C. Cox in Queen's Park, closing with the annual banquet at McConkey's, will not only constitute one of the brightest pages in pleasure's memory, but has cemented a bond of international friendship and co-operation.[xxv]

The Proceedings of this convention, however, reveal that entertainment was not the paramount concern of these delegates. During the business sessions discussion repeatedly centered on legislation resulting from the Armstrong hearings. As Proscansky notes, "Speaker after speaker poured out vials of wrath upon Section 97 of the New York Insurance Code which had set sharp limitations upon earnings of agents."[xxvi]

Since March 1906, when members flocked to Albany for the hearings on the Armstrong legislation, the five life underwriters associations in New York State had been united in an effort to have these restrictions modified. Though they had some success in convincing the legislature to liberalize the original proposals, most agents felt the law was too restrictive:

There were sharp limitations on commissions, both initial and renewal. The latter could not exceed 7 1/2 percent for nine years (5 percent in the case of short-term endowment policies). This was still a liberalization over the original bill, which called for renewal commissions of 7 1/2 percent of only four years. Premium collection charges were to be limited to 2 percent after the tenth year. An especially harsh feature of the Armstrong legislation as the provision prohibiting advances or loans to agents upon the security of renewal commissions unless proper collateral was furnished. Bonuses, prizes, rewards, or extra commissions for a large volume of new business was prohibited. All these restrictions did not apply to industrial (i.e., weekly premium) insurance.[xxvii]

In his opening address, McMullen said, "Section 97 is so drastic as to actually menace the future of the business." Reviewing the Association's efforts through the years to discourage rebating and twisting, fostered by high commissions and bonuses, McMullen declared, "Had the voice of the National Association been heeded by those in executive authority, the recent troubles would have been averted. But as a result of the flagrant misdeeds, mismanagement and false ideals of a few, the honorable agents of this country…are today bearing the burden of hasty legislation, which however honestly intended to correct these evils, was largely unnecessary for that good purpose and has had the actual bad result of seriously interfering with the proper conduct and progress of the business…

"We are and have always been opposed to high commissions and in favor of moderate first-year commissions and liberal renewals," he added. "But we must oppose the present extreme reductions in compensation, not merely because they cut it too low for present agents, but because they leave no provision for the cost of developing new agents. Long experience has demonstrated that the general agency system of developing agents, in vogue among nearly all of the companies, is the most effective and economical. The present general agency contracts provide little or no margin, either in first year or renewal commissions, to compensate the general agent for the time and money necessary to develop new agents, and therefore is economically unsound."[xxviii]

During the five-minute talks on "Reflections and Observations on Section 97 of the New York Law," William Scott of Philadelphia summarized the general feeling: "It would have been a happy circumstance if the legislature in deliberating upon the measures proposed by the Armstrong Committee could have freed itself from excitement and political influence and given to the subject calm and judicial consideration."

Aware that the New York insurance laws would have national repercussions, the issue continued to receive the attention of the National Association and its affiliates for the next several years. After the law had been in force for a year, the companies and the associations in New York joined forces to seek further modifications. "At a hearing held on May 15, 1908," Poschansky relates, "representatives of various insurance companies as well as the NALU urged the adoption of a compromise bill on the subject. Governor Charles Evans Hughes vetoed this particular bill but he signed another bill in 1909 which substantially liberalized Section 97."[xxix]

In January 1908, Life Association News informed its readers that some serious questions had been raised about the possibility of holding the next convention in Los Angeles. It was the Philadelphia agents who precipitated the crisis, having passed a resolution that, "owing to the time it will consume and the amount of money it will cost, the Philadelphia Association of Life Underwriters finds it impossible to obtain enough pledges from its members to attend." They asked that the Executive Committee obtain "an expression of opinion as to the desirability of a change of location to one more central."

But the agents in Los Angeles proved unwilling to accommodate Philadelphia, or any other Eastern association. In the magazine's February number an open letter from their executive committee, by implication at least, criticized Edwards, Scovel and their colleagues, expressing the opinion "that the various articles published in the insurance journals all over the United States and Canada knocking Los Angeles as a meeting place must, to some extent, emanate from headquarters."

In a letter published in Life Association News, Edwards vehemently denied having contemplated a change in plans. By the midyear meeting, held in New York's Manhattan Hotel on March 27, the question had been settled and plans went forward for a national convention in Los Angeles.

The January issue of Life Association News also reminds us that Everett H. Plummer was as active as ever in serving the interests of the national body during this period. Throughout 1907 he worked as chairman of the Special Committee to revise the NALU constitution, and in 1908 continued as a member of the Committee.

Plummer also lent his support to the Editorial Committee of Life Association News. Headed by Charles Jerome Edwards, the committee included Scovel, Wyman, Clark and NALU Secretary Will A. Waite of Detroit. Since Nathan H. Weed, editor of Life Insurance Independent, who had acted as publisher, announced that he had no interest in renewing his contract with the NALU, the committee decided to assume responsibility for publication—at least until the midyear meeting of the Executive Committee. "This means, of course," the editor explained, "that the members of the committee individually will guarantee its appearance and its expenses. In this Mr. Pummer participates equally with the members of the editorial committee." [xxx]

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