Throughout the industry during these months interest was building in the planned department of agent training at NALU headquarters. With his proposal at the 1944 convention in Detroit, Clifford Orr actually revived a project that had flowered in the late thirties, only to be crushed by the wheels of war. Under the auspices of local life underwriters associations, an experimental program of intermediate level, practical training of agents had been initiated in 1937. That year the St. Louis Life Underwriters Association offered classes in life insurance selling, using the popular series of textbooks published by Paul Speicher of the Insurance Research and Review Service, based in Indianapolis. On rotating basis, experienced agents volunteered to meet weekly with study groups to conduct the sessions. Encouraged by the NALU's Committee on Underwriter Education and Training, twenty-six local associations were offering courses modeled after the "St. Louis Plan" by 1939. Their popularity, naturally, attracted the notice of Huebner and his staff, who might have regarded the innovation as a threat. Eleanor Dowling comments:

The rising popularity of these local association classes soon became a matter of interest to Dr. Huebner, president of The American College, and Dr. David McCahan, its dean. Although everyone realized that the local association-sponsored courses were in no way a substituted for the CLU curriculum, there had nevertheless been a steady drop in the number of new enrollments and of first time candidates for the CLU designation, and life insurance leaders began to wonder whether a program of harmful duplication might be taking form.[ii]

These speculations prompted a series of private meetings in Hartford during the summer and fall of 1939 between McCahan, John Marshall Holcombe, Jr., who was managing director of the Life Insurance Sales research Bureau (LISRB) and executive secretary of the Association of Life Agency Officers (ALAO), and Benjamin N. Woodson, director of company relations at the LISRB. The whole issue of intermediate training for agents was discussed from all viewpoints. Others, including Huebner, Earl Trangmar of the Metropolitan home office and Irvin Bendiner, agent for the New York Life in Philadelphia, also sat in on the discussions from time to time. They later formed a "Technical Committee" which reported to the board of Trustees of The American College outlining a program very similar on the one eventually adopted.

Meanwhile, thirty-one local associations conducted courses for 3,651 students in 1940. By then, Holcombe and others had concluded The American College should withdraw from the project and that any program of practical training for the field force would have to emanate from the ALAO's Committee on Training in consultation with the NALU's Committee on Underwriter Education and Training. Obviously strong company backing would be needed. A committee called the "Discussion Group" that included McCahan and Woodson met with Earl Colborn, chairman of the NALU's committee, several times during the spring of 1941 to outline the course of study. The final details were worked out by Woodson and Speicher and the project was met with great interest during discussions of the NALU's education committee at their annual convention.

The idea was rapidly winning the endorsement of various segments of the industry. A final Committee on Training, headed by Chester O. Fischer, vice president of Massachusetts Mutual, and including Holcombe and Woodson, and fully authorized to put the program in action, set their meeting for December 8, 1941. Unfortunately, Pearl Harbor intervened and the whole project had to be set aside for the duration of the war.

Clifford Orr, a close friend of Bendiner's was familiar with these pre-war effort. Indeed, the accomplishment of those early groups inspired him to press the NALU Executive Committee to revive the idea. It was against this background that five years later, as chairman of the NALU's special committee for the project Orr reported at the Cleveland convention that full agreement had been reached by the various organizations within the industry and that a committee to implement the plan had been forged. Orr, Rutherford, Edward L. Rieley, general agent for Mutual Benefit at Philadelphia and Walter Barton, NALU treasurer and general manager for Union Central in New York, represented the NALU. Company representative were James A. McLain of the American Life Convention and Paul Clark of the Life Insurance Association of America. Besides Charles Zimmerman, the Life Insurance Agency Management Association was represented by Vincent Coffin, vice president of Connecticut Mutual, J. Roger Hull, vice president of Mutual Life of New York, and Benjamin Woodson, executive vice president of Commonwealth Life in Louisville. By this time, thanks to the combined generosity of the companies and the agents, there was about $50,000 on hand to begin operations. The committee met in New York City on December 12, 1946, and again on February 19, 1947. Their first step was to find a director to head up the new department. In March 1947, Life Association News announced that a "principal" for the new correspondence school had been found:

Edmund L. G. Zalinski, C.L.U., of New Haven, manager for the New York life for the state of Connecticut has been chosen as Director of the Institutional Plan for Life Underwriter Education and Training…

Mr. Zalanski…will develop plans for intermediate education and training for life underwriters throughout the nation under the direction of the Joint Committee set up by the four organizations.[iii]

Zalinski, who was thirty-two, held a B.S. degree from Cornell, where he majored in economics, an M.B.A. from Harvard and a Ph.D. from New York University. He had been associated with New York Life, first as an agent, then as an agency manager, since 1942. At the heart of Zalinski's pedagogy was the hypothetical case, presenting the student with typical selling situations to demonstrate how insurance can meet the needs of various types of prospective buyers. This approach to agent training became central to the LUTC curriculum.

Plans moved rapidly. "Terminating a series of conferences, the joint committee met last month to adopt a constitution and a new name for the guiding body," Life Association News reported in September 1947. "It will now be known as the Life Underwriter Training Council and will be governed by its own officers and a board of trustees." Emphasizing that the Council was an independent, nationwide organization with headquarters in New York City, the article explained that it was a joint project of the American Life Convention, the Life Insurance Association of America, the Life Insurance Agency Management Association and the National Association of Life Underwriters. NALU secretary Clifford Orr was named chairman and Vincent Coffin, vice-chairman; Charles Zimmerman served as secretary, and Rutherford became treasurer. Outlining the program, the editors explained:

The Council's two-year course is designed to fill the gap felt by so many to exist between company training and the advanced education of The American College. Its primary emphasis will be on the development of skills and the use of knowledge, rather than on the acquisition of information alone. In fact, the Council Course will follow the same direction the agent pursues in the performance of his job. It will begin with the prospect and the insurance situation in all cases.[iv]

In January, Levi E. Botten, who had been working with the curriculum committee as a volunteer, gave up his position at Teachers Insurance and Annuity to join the staff as Zalinski's assistant.

At the National Association's midyear meeting the following spring, Reiley reported, "Companies, managers and students themselves agree that the classes are not only stimulating but also that they train the agent to think constructively, increase production and develop greater confidence in himself and the institution of life insurance by providing a better knowledge of those facts which are essential to competent life underwriting." A year later Zalinski announced that over 1,200 students were pursuing the Council's first course in 55 classes in 45 cities. By 1950, over 4,000 students were enrolled in 225 classes in 164 cities.

The success of the program depended almost entirely on the cooperation of local life underwriters associations which usually sponsored organized class. For the local units of general agents and managers, the LUTC was a godsend. As it had done for The American College of Life Underwriter, Life Association News opened up its pages to help promote the new educational project, and Zalanski began a monthly column, "Trends in Training," which focused on the practical value of the program and tracked is growth and development. The magazine continued the column for nearly two decades.

Besides the new agent education project, other concerns occupying the delegates at the well-attended midyear meeting in Milwaukee included the acceptance of a model qualifications bill for agent licensing by the various states and proposals for tighter regulation of savings bank life insurance. "We are on sound ground," Hobbs told the delegates, "when we insist that those who compete with us should be required to operate under the same laws and regulations that apply to us and should be subject to the same taxes that are imposed upon us."

After World War II the multiplication of measures proposed each year before state legislators and Congress, along with a growing number of court cases dealing with the business of life insurance, made it almost impossible for the association leaders to track every proposed bill or monitor litigation to calculate the implications for agents and their clients. Most were not trained in the law. Moreover, they were busy men and women primarily occupied with the work of marketing and the burdens of management. While the officers and delegate expressed their general views on legislative matters and policy at both the annual and midyear meetings, it was usually left to Rutherford and his staff to follow up with the necessary details.

In July 1947, the NALU announced the foundation of the John Newton Russell Memorial Award through an endowment established by the former NALU president's son, John Henry Russell. It was to be an annual award honoring someone who had contributed in a remarkable way to the life insurance business. The NALU agreed to administer the award. Presentations were to be made at the NALU annual meeting where recipients would be given an engrossed citation, a plaque, and an engraved watch, or some suitable memento of the occasion. Life Association News explained:

Under terms of his [Russell's] offer, which NALU's Board of Trustees accepted selection of recipients will be made by a committee composed of the following: chairman, the Immediate Past President of the NALU; members, the second and third immediate past presidents of the NALU, the chairman of the Million Dollar Round Table of NALU, the president of The American College of Life Underwriters, the president of the American Society of Chartered Life Underwriters the president of the Institute of Life Insurance and the managing director of the Life Insurance Agency Management Association…

Both Mr. John Henry Russell and this Committee hope that this award will become one of the most honored and respected gifts that the institution of life insurance can bestow upon its leaders.[v]

To assure its continued funding after his death, Russell took out an insurance policy, naming the NALU as beneficiary. But he was also eager to ensure the integrity of the award. Writing to NALU past president William Andrews in March 1946, Russell was insistent: "I trust that all the details as recommended by me will be carried out literally, because the manner of the elections and of the functioning of the committee to determine the recipients of the Awards is most important over the long range if the evil influence of bad politics, of pressure groups, or of favoritism is to be forever kept out in making the John Newton Russell Memorial Award." [vi]

Within a very few years, the Russell award gained a unique and impressive position. It is probably the most coveted honor in the business. "When I first heard of the award, I expected it to acquire great prestige," Holgar Johnson recalls, "and I'm glad to say that it has. As long as they continue to reserve it for the most worthy contributors to the business, its eminence is safe. You have to be very careful to keep the award above petty politics and free of company influence and personal prejudice." [vii]

To give the award monumental permanence, Russell commissioned a large bronze tablet, with space for listing the names of all the recipients, to be installed at NALU headquarters. Surmounted by a bas-relief likeness of his father, the tablet reads: The John Newton Russell Award for Outstanding Service to the Institution of Life Insurance, presented annually through the National Association of Life Underwriters. Donor, John Henry Russell.

The NALU's 58th convention, held at Boston's Statler in September 1947, was the occasion of conferring the first of these awards. Ceremonies took place on Friday, September 12. The recipients were: Dr. Solomon S. Huebner—1942; Julisn S. Myrick—1943; J. Stanley Edwards—1944; Paul F. Clark—1945; M. Albert Linton—1946; Holgar J. Johnson—1947. Linton, the only one in the group without a long and prominent association with the NALU, was president of Provident Mutual Life in Philadelphia.

In their reports to the convention both outgoing president Hobbs and Veterans' Affairs Chairman John Marsh mentioned that the NALU and the life insurance companies were actively seeking a termination date for National Service Life Insurance. Hobbs Also reiterated the NALU's interest in obtaining a broader base for Social Security so agents could be brought under the Old Age and Survivor Insurance (OASI) benefits of the Act.[*]

The delegates, representing 499 local associations and 50,818 members, followed the long-established custom of elevating the NALU's vice president to the position of president, naming Jul B. Baumann, general agent for Pacific Mutual at Houston, to be president for the 1947-48 Association year.

Considerable controversy surrounded the subject of group insurance at this time. Many companies were making life insurance available to groups usually members of unions, local government employees, such as teachers or employees of a company—without the counsel of an agent who would determine the suitability of coverage in each case. Many viewed this rapidly expanding market with alarm. They saw it as an undiscriminating, wholesale way of promoting insurance that deprived the insured of advice and personalized service. In his annual message to company executives a few weeks after his election, Baumann requested the cooperation of ALC, LIAA, and LIAMA "in determining the spheres for mass selling and individual coverage." Insisting that the new mass marketing programs would not substitute for the tailoring services of an agent Baumann said, 'With respect to plans to mass coverage by our companies we have had little in the way of joint action…. It is the agent who tailors the superb plans developed by the home office to meet the needs of the individual policy owners. It is the aggregation of individual policy owners. It is the aggregation of individual policy owners, not an amorphous mass, which still and fortunately is the primary concern of our system. Mass selling can never do the full job."[viii]

Leroy A. Lincoln, president to the Metropolitan, who was present on that occasion and discussed the question with Baumann, agreed that mass selling had gotten "way out of bounds." He suggested "an approach to the original concept of employer-employee, plus such of the other phases of the Group Life definition as may be determined to be sound group underwriting.

"The whole trend of our thinking," he said, "has for years been against certain expansions of group insurance which have come to be adopted here and there during the last few years, and which we believe are not in the best long-time interest of the insuring public."[ix]

It was during the staff party on Christmas Eve that a telegram arrived informing Rutherford that Insurance Field, one of the most respected trade journals of the day, had named him the industry's "Man of the Year" for 1947.

In citing him for the award, editor Fred C. Crowell, Jr. observed, "Faced with may perplexing and difficult problems, Mr. Rutherford has advanced the cause of the career underwriter on many fronts…Paced by his energy and active leadership, the multi-phased program of the National Association of Life Underwriters has made greater strides in directions affecting the overall welfare of the industry and its patrons than in any single year in memory. Mr. Rutherford has been primarily responsible for spear-heading the converted drive for improved field conditions and improved relations between agent and company organizations…

"He has led the drives for elimination of improper uses of mass selling techniques, the enactment of life agent qualification laws, the bringing of life agents under the OASI benefits of the Social Security Act, the setting up of the Life Underwriter Training Council, …the inclusions of prestige-building copy for the career agent in the national advertising of the Institute of Life Insurance, and the tremendous upsurge in the membership of the National Assosication."[x]

In January, the NALU's general counsel, Edward Schmuck resigned to accept a similar position with the Acacia Mutual Life in Washington, DC. He was replaced by James B. Hallett, an athletic young man with rather impressive credentials who has served with Schmuck on General Patton's staff. A biographical sketch appearing in Life Association News indicated that Rutherford selected well:

Born in Denver, where he received his early education, Mr. Hallett prepared for Harvard College at Milton Academy in Massachusetts. In 1937 he graduated cum laude from Harvard where he won his letters in football and crew and he received his legal education at Yale Law School, from which he graduated in the upper third of his class in 1940.

Entering the Army as a private in March 1942, he was graduated from Infantry Officers Candidate school in December of that year and subsequently served as counter-intelligence officer, both in the united States and in Europe. During the last two years of his service in Europe, he was commanding officer of the Counter Intelligence Corps as third Army Headquarters, serving under General Patton. For his service in counter-intelligence office, both in the United States and Europe, He was commanding officer of the counter-espionage and counter-sabotage work he was decorated with the Bronze Star Medal and the Croix de Guerre. He was discharged as a captain.

Prior to going the National Association, Mr. Hallett was associated wit the well-known New York firm of Alexander and Green which has represented the Equitable Life Assurance Society in various capacities since its organization in 1859. In this position, he has gained wide experience in wills, trusts and in corporate law.[xi]

As Crowell's "Man of the Year" citation implied, Schmuck and Rutherford has supported every move to have life underwriters classified in such a was as to enjoy the benefits of OASI. Confusion about the agents' status arose from whether they should be regarded as independent contractor as employees. Obviously, most were not employees in the sense that they worked for a set number of hours on a fixed salary. Passage of the so-called Gerahart Resolution in 1948 gave at least some life underwriters an opening. The ruling said that eligibility depended on one's status in a "covered employment." (The life insurance business was considered a "covered employment.") "As life insurance companies are covered the act, agents who are 'employees' of a life insurance company are entitled to OASI benefits," NALU actuary Gordon D. McKinney told the readers of Life Association News in his Column, "Actuarially Speaking." But he was cautious:

The Gearhart Resolution with reference to "the usual common law rules" has been too recently enacted for the courts to have laid down a clear pattern of interpretation. It may well be that the courts will interpret the statute as establishing merely a guide for the Federal Courts had not as a requirement that they follow conflicting interpretations of "the usual common law rules" found in the forty-eight several states. There is the possibility that the courts may construe liberally the phrase, "the usual common law rules." [xii]

In July Life Association News reported the resignation of the NALU's director of research. "It is with regret that I tell you that Donald F. Barnes had resigned to accept a staff position with the Institute of Life Insurance," Rutherfold the members of the board. "We congratulate Holgar Johnson and the staff and members of the Institute and with Don the greatest success in the new connection."

Delegates arriving in St. Louis for the 1948 convention on September 14 were shocked to learn of the death of NALU treasurer Walter Barton only hours after giving his final report to the Board of Trustees. Barton was extremely popular in Association circles, and had served that NALU well. Lauding Barton's character past president Lester Schriver, the NALU's silver-tongued orator, said, "News of the sudden and to us tragic death of Walter E. Barton, the well-loved and highly respected treasurer of the National Association of Life Underwriters, has fallen upon this convention like a shroud." Reviewing his success as a businessman, he praised Barton for his executive ability, leadership qualities and his devotion as a husband a father and a good churchman.

During the opening business session of the convention, a note was struck which was to be repeated many times at Association gatherings in the future. In his report, trustee Simon D. Weissman, chairman of the Committee on Field Practices, said that the committee had given serious attention to "the bank loan-policy purchase plan of selling life insurance," and called upon companies and field men "to condemn this practice in the interest of long-range good of agents, companies and policyholders."[xiii] The problem continued to loom larger in the insurance marketplace. Finally, in 1955 the NALU created a special committee on credit life insurance to monitor the situation and recommend countermeasures.

Among the platform speakers was Paul Speicher who, as president of Insurance Research and Review Service, well known as a lecturer and the author of a number of important books on effective methods of selling life insurance. His reputation rested largely on his considerable success in supplying companies with programs for training new agents. Some were also aware of his influence on the development of the LUTC curriculum. Focusing on the nobility of the underwriter's vocation, Speicher told the agents:

Sometimes someone has to die before an agent gets the life insurance business inside of him. Sometimes it is necessary for the agent to leave the office with the claim papers in his pocket, and then when he faces the window and the family, he finds himself saying to himself, "Without my persuasion, without my attempt to secure action today, I would not be arranging to deliver to this woman the proceeds of this policy…."

And when you return to the office and you find yourself saying, "Once I wondered whether the life insurance business was good enough for me. Now I wonder if I am good enough for the life insurance business."

And the moment you make that statement, then the life insurance business is inside of you, and from that moment it will be to you what it is in truth and in deed, the most wonderful business in the world.

The Russell award that year went to Frederick H. Ecker, chairman of the board of the Metropolitan Life, whom the committee applauded as a progressive and civic-minded company leader.

Philadelphia's Clifford Orr assumed the presidency of the Association. A graduate of the Wharton School of Finance and Commerce at the University of Pennsylvania in 1924, Orr could look back on a successful twenty-four year career in life insurance selling. A general agent for the National Life Insurance Company of Vermont in Philadelphia, he had received his Chartered Life Underwriter designation in 1932. Along with his years of leadership in both the local and national associations, he had earned everyone's respect for his devotion to the cause of agent education, particularly for his efforts in the creation of the Life Underwriter Training council. "A very able man," Woodson observes, "Cliff Orr deserves credit for moving the NALU form a mere passive supporter of institutional, intermediate agent training a positive action. That should be his monument." For everyone in the business, post war expansion offered new opportunities as the industry extended its services and experimented with innovations in products and marketing. It also introduced a whole new set of challenges. As it ranks continued to swell and its services to the associated agents expanded, the NALU's resources became stretched to the limit. There were a lot of legislative issues demanding attention, and the workload a the Associations headquarters weighed heavily on Rutherford and his staff, but more threatening to the NALU's future were the rifts developing within the agents' ranks.

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

[*] The government did eventually phase out NSLI, but by that time the United States was committed military in Korea. The new package of benefits that Congress offered those service in the armed forces was looked upon by the agents as merely another form of NSLI, in competition with private insurance plans. Beginning in 1950, the companies and the NALU waged an on-going campaign to keep the government-sponsored benefits programs to reasonable limits.
[ii] Dowling, Op. Cit., p.3.

[iii] LAN, March 1947, p. 633.

[iv] LAN, September 1947, p.21.

[iv] Op. Cit., July 1947, pp. 997-998.

[vi] NALU Archives: Papers of W.H. Andrews.

[vii] Johnson: Interview, 1985.

[viii] LAN, November 1947, p. 245.

[ix] Ibid., p. 246.

[x] LAN, January 1948, p. 441.

[xi] Op. Cit., January 1948, p. 441

[xii] Op. Cit., November 1948, p. 273

[xiii] LAN October 1948, p. 108.

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