|
|
|
 |
||
|
October 2008
   VOICES FROM THE FIELD
A Period of Growth and Visibility for the NALU Under Strong Leadership The nineteenth annual convention of the National Association was held in Los Angeles on August 18-20, 1908. The Alexandria served as the principal hotel. Business sessions were conducted at the Berean Hall in the Auditorium building, and the closing banquet was given at the Hotel Virginia at Long Beach. For the first and only time in the history of the NALU the delegates reelected their president, Charles Jerome Edwards, to serve a second term. McMullen replaced Scovel as head of the Executive Committee. For the easterners attending the convention, the journey itself took on the aspects of a major event. Forming a special train at Chicago, the travelers enjoyed the hospitality of various local associations joining then along the route. The first leg of the journey took them to Kansas City. An article appearing in the September number of Life Association News, described the journey:
The article also described the two days' excursion to the Grand Canyon including a 6,000 foot descent "by a winding and precipitous trail, muleback, to where the Colorado River, muddy and swift, rushes through, biting off with its avid teeth pieces of the canyon." Instead of going directly to Los Angeles, the delegates stopped for more receptions and sightseeing at Riverside and at Fullerton, California. Besides spreading the influence of the association movement in the western states, the Los Angeles Convention is significant for adopting a revised constitution, putting Life Association News on a sound footing and launching a vigorous attack against "twisting," indiscriminate hiring of part-time agents and other abuses within the industry. In his discussion of the NALU's efforts to reform business practices during this period, Dr. Proschansky notes, "The 1908 convention vigorously denounced twisting and also condemned the practice of certain banks in 'displaying advertisements and acting as agents for disreputable or unsound insurance companies.'"[xxxii] He also points out that the revised constitution of the national organization reinforced its identification with only full-time career agents. "Aware of the heavy responsibilities facing it," he says, "the NALU realized that its machinery had to be modernized and its structure perfected. In 1908, it adopted a revised constitution which was designed to accomplish this. It also reaffirmed that only field men were eligible for membership, and specifically disallowed membership to any person clearly identified with the home office of companies."[xxxiii] On the subject of twisting policies, Edwards stated in his opening address to the convention, "It should be the business of this convention to declare …to the world our belief in correct methods for all agents to follow. We must emphasize that the practice is not only unfair, but immoral. We know that a policy, which is twisted or transferred, is not new life insurance, but energy wasted. We know that it entails a positive loss to the policyholder. We know that the twister creates suspicion, destroys confidence generally and, perforce, assails the reputation and honesty of the agent who originally created the demand for insurance." When Edwards had finished, William G. Carroll (the only Philadelphian present) offered the resolution of acceptance and thanks."I am glad," he said, "that today we have a president who is not afraid to express his conviction. This is the most manly, the ablest, the most fearless address that I have ever heard a president deliver to this association; and with that kind of official in command we need have no fear of the future and welfare of the great cause we represent."[xxxiv] Having gained the approval of the associations for a dues increase, the NALU at last had a permanent office—at 56 Pine Street, New York City, which also housed two trade journals, the monthly Insurance Age and The Survey, a bi-weekly publication. Everett M. Ensign was hired to handle day-to-day operations of the association with the title "Corresponding Secretary." In concluding his report to the twentieth annual convention in Louisville's Seelbach Hotel, Frank McMullen, retiring chairman of the Executive Committee, announced that he and Edwards had also engaged Ensign to manage and publish Life Association News. Some, however, objected to these expenditures—especially the added cost of the Association's magazine. W.G. Harris of the Central Massachusetts Association, for example, complained that the increase in dues "militated against securing new members." Clark, Buffalo's William Justice, William Scott of Philadelphia and a number of others rushed to the magazine's defense. Scott drew a warm response from the members when he said:
The Louisville convention devoted considerable attention to part-time agents who often proved incompetent and unethical. As Proschansky explains, "They did not consider themselves as full-fledged solicitors and were not especially proud of their association with the profession. They were often accused of rebating and twisting…. "In 1908, the campaign to eliminate them began in earnest. For several years thereafter, in many issues of the Life Association News and at various conventions, this was a favorite topic. Numerous were the diatribes aimed at the 'one-case' broker, the 'helpers,' and the 'side-liners.' The NALU applauded the action of the New York Life in dismissing 1,000 part-time agents by 1909."[xxxvi] In his opening address, Edwards forcefully denounced these irresponsible types. "The crusade," he said, "is against the part-time man who is not an agent, who never seeks or creates a prospect, who does not know the premium rate on any policy in the rate book—I mean the clerk, the bookkeeper, or other employee, who plays the part of an eavesdropper; sometimes the lawyer or the physician, whose advice may be sought, and knowing that some hard-working agent has educated a prospect, straight away runs to another agent and tries to use him as a fence, and if he can get the commission he is generally willing to largely rebate."[xxxvii] The subject received further attention when time came for the five-minute talks. The assigned topic for the first sessions was "Should the Practice of Employing Part-time Agents be Abolished?" As various delegates addressed the issue, it became clear that not all temporary appointments were under attack. William Camp of Buffalo, with incisive perception, pointed out that a lack of any program for agent education lay at the root of the problem in many instances:
William Scott pointed out that part-timers were often the only type feasible in sparsely populated areas. "Our agency has both city and country work," he said. "In our city we will not trust a part-time man." But in outlying communities, he insisted, "a full-time man would soon be a subject for the poorhouse. There would not be prospects enough there for him to live. Consequently we take cashiers of banks, we take school teachers, we will take any reputable man who will devote his time as far as life insurance is concerned exclusively to the company, and we get good results." And he added, "We give him just the same careful training and instructions that we give our full-time men." Concluding on a humorous note, Scott remarked, "I should vote not to abolish them in the country districts, because they help pay part of my expenses to this convention."[xxxix] The delegates chose John W. Whittington of Los Angeles to succeed Edwards, and Ernest Clark became chairman of the Executive Committee. At the close of the convention Clark held a meeting of the group to plan the work of the year ahead. Complying with the provisions of the revised constitution, they formed an "Executive Council," consisting of the president (Whittington), secretary (William A. Waite), Chairman (Clark) and four members (William G. Carroll, William M. Wood, Charles Jerome Edwards and Frank E. McMullen). At the midyear meeting of the Executive Committee on April 10, 1910, at New York's Astor Hotel, Vice President E.R. Nachum of St. John, New Brunswick, reported that the Canadian Association had succeeded in getting its model insurance bill through Parliament. He also reported a remarkable growth in the size and number of the life underwriter associations in the Dominion, giving them a total of 900 members in thirty local associations. The NALU lost another of its pioneer members that year. When the national body convened in September at Detroit's Hotel Pontchartrain, Register (by now, the NALU's senior ex-president), William Scott and Scovel each paid tribute to the late Stephen F. Woodman of Boston. "Hundreds of agents throughout the land stood at attention at thought summoned by the Angelus," Register said, "with bowed heads and in silence when the announcement went forth that Stephen F. Woodman had been called hence, after having completed his life's work." Noting that Woodman began his insurance career at about the same time as he did ("just fifty years ago"), Register observed, "The position of an agent in those pioneer days was no sinecure. There was often a struggle against adverse conditions that do not exist today." Reviewing Woodman's years of service to the National Association of Life Underwriters, Scott told the agents that Woodman first came to a national convention in 1894, in Chicago. He said Woodman was a modest man who never sought office, and even though he had served as Chairman of the Executive Committee three times, Woodman would never allow his name to be put foreword for the NALU presidency. One highlight of the Detroit meeting was the launching of a membership drive, spearheaded by Charles Jerome Edwards, who offered a silver prize for the association showing the largest increase in membership each year. Whittington immediately offered to donate a trophy for second prize, whereupon Colonel Waite, secretary of the NALU, announced that he would provide the prize for the association achieving third place in its annual membership drive. At the next convention at Chicago, held in October 1911, it became clear that some of the more far-sighted leaders in the NALU felt the time had come to broaden membership. Naturally, the pioneers of the association movement were nearly all general agents and managers—the leaders of the field force. If the NALU was to have a real impact on business practices throughout the country and improve the status of agents generally, it was argued, the mass of life insurance solicitors would have to become involved in association affairs. Enlightened members of local associations had come to the same conclusion. This became a point of discussion during one of the sessions, as Life Association News reported in its October issue:
Everyone's attention was riveted on news from the North Atlantic on the morning of April 16, 1912, when members of the NALU Executive Committee assembled in New York's Woodward Hotel for their midyear meeting. Details confirming the incredible loss of White Star liner R.M.S. Titanic on her maiden voyage dominated the front pages of the city's newspapers. Though the Carpathia was steaming toward New York, loaded with the survivors, the names of all who died had not been disclosed. Amid the speculation and alarm, Charles W. Orr, Chariman of the committee, probably had trouble getting the members to focus on the day's agenda. Members heard gratifying reports on the increasing membership of local associations. The sixty-eight affiliates had a combined membership of 2,695. On a less pleasant note, Mrs. Florence E. Shaal of Boston announced the withdrawal of the New England Women's Association from the national body. A committee was formed to confer with Mrs. Shaal in an effort to persuade the group to reconsider their decision. Much of the meeting was devoted to planning the October convention to be held in Memphis. As always, there was concern that everyone would find the annual meetings informative and stimulating. Feeling they heightened interest by involving the delegates in the proceedings, Charles Jerome Edwards strongly advocated giving the five-minute topics a prominent place in the program:
Sessions at the Memphis convention took place in the Convention Hall of the Goodwyn Institute; the closing banquet was served in the dining room of the Hotel Gayso. The delegates elected Neil D. Sills of Richmond, Virginia, to serve as president of the national body for the 1912-13 term. A Canadian by birth and irrepressibly cheerful, this chubby, curly-haired general agent of the Sun Life of Canada was a comparatively new figure to life insurance circles. He had been elected secretary of the National Association at the Chicago convention. For years after his presidency, Sills continued to take an active interest in the affairs of the NALU, serving on numerous committees. Since retiring president L. Brackett Bishop was hard of hearing, Sills had to conduct much of the meeting. The Memphis convention offered many reminders of the NALU's continuing ability to extend its influence throughout the industry, nationally and internationally. "The life underwriters movement is virile and strong," Bishop declared. "We now have a splendid chain of one hundred associations all over the United States and Canada. Visiting so many of the wide awake life underwriters' associations…. was a revelation and opened my eyes to the magnitude of the life insurance business and the importance of the life underwriters' associations as never before." Echoing these sentiments John A. Tory, president of the Canadian Association, added, "It is with pleasure that we look back to the assistance rendered us by the mother association of the United States. While we are to a certain extent independent associations, yet we prize more than anything else the fraternity that exists between the organizations, and the acknowledgement that was made whereby the president of our association becomes vice president of your association and vice versa, goes to build up a greater feeling and better comradeship between the life underwriters of this continent."[xlii] Immediately after Tory's remarks, Bishop introduced a surprise guest, Herbert S. Bishop. "We have a gentleman here," he said, "an insurance man, from South Africa, who traveled 6500 miles form Capetown to Southampton, 3000 miles to New York, and some 1500 miles to Memphis, solely to attend this convention." The young man explained that it was through reading Life Association News, and the proceedings of the annual conventions, which he had been receiving for two years, that he became interested in the association movement and determined to come to Memphis. "You can imagine what it means to me, thousands of miles away from you, getting these papers," he told the delegates. "They stir you up and they set you on, and they have been the source of the greatest inspiration to me." The voyage gave him some anxious moments and he nearly missed the Memphis meeting. Reminding his hearers that the journey from Capetown to Southampton meant seventeen days at sea and the crossing from Liverpool to New York took another eight days, he added, "I only wish that the art of flying would be hustled along so that I might not have such a time getting here." His appearance certainly impressed the Executive committee which voted to send him twenty-five copies of Life Association News each month, "In order that he may sow the seed some more in Africa."[xliii] Among other guests at the Memphis convention were representatives of the two major company organizations. The American Life Convention, composed of eighty-six "younger" companies in the southern, central and western states, was represented by its secretary, Thomas W. Blackburn. Principal speaker on the morning of October 17 was Robert Lynn Cox, general counsel and manager of the Association of Life Insurance Presidents. As a member of the New York legislature, Cox had served on the Armstrong committee. A brilliant young lawyer, he won the admiration of many in the business when he put aside a promising career in politics to serve the life insurance industry. "You are the point of contact between the companies and the people," he told the agents. "It is from you that the executive officers must get most of their knowledge of what public opinion is demanding. Furthermore, you are not only important in this indirect influence you may have on the management of your company, but you are the medium through which the public is given impressions of the companies you represent."[xliv] The agents were very conscious of their role in industry public relations and also of the need to educate the public to a full appreciation of life insurance. A lot of attention was given to the subject of institutional advertising at the Memphis convention. In his opening address, Bishop informed the delegates, "In the matter of advertising, which has never been applied to life insurance as it has to many other lines of business, the life insurance companies, themselves, are considering plans for general advertising, which, if carried out, will educate the pubic and make the selling of life insurance policies easier than ever before." The concept had captured the interest of Association leaders since it was first expounded by the popular author and lecturer Elbert Hubbard at the Detroit convention. Henry J. Powell of Louisville, who was elected president of the NALU at that convention, suggested that local associations advertise in the daily newspapers, "boosting life insurance as an institution, without reference to any particular company." Ad copy, he emphasized , should be "educational and strong in human interest; short, snappy and convincing."[xlv] In April 1912, Life Association News had published an article on the need for an organized publicity campaign to stress the value of life insurance as financial protection, extolling the merits of the business as a whole rather than the achievements of a particular company or individual. The delegates approved proposals for launching a campaign that would include educational features, such as lectures, addresses, and courses for younger people. A committee was authorized to conduct this campaign. Headed by Warren M. Horner, general agent for Provident Life and Trust at Minneapolis, this "Committee on Education and Conservation" also included Jules Girardin, Louis L. Hopkins, Hubert H. Ward and Edward A. Woods. Late in the session, the delegates began selecting a site for the next convention. Philadelphia's W.G. Carroll proposed (on behalf of the New Jersey, New York and Philadelphia associations) that they meet in Atlantic City. But J. Stanley Edwards and his colleagues in Denver were also eager to host the NALU in 1913. When all the votes were counted, 20 associations had voted for Denver and 22 for Atlantic City. While the NALU and its affiliates labored to improved public appreciation of life insurance through advertising campaigns, they also found it necessary to keep a vigilant eye on activities that marred the public image of the business. During the years following the Armstrong investigation, local associations found legislators inclined to vote for more effective anti-rebate laws and tighter restrictions on unethical replacement activity. In an atmosphere of reform, with more enforceable laws on the books and more alert insurance commissioners, the associated agents became increasingly active in maintaining the integrity of the business. A week after the Memphis convention, the Philadelphia Association attracted considerable attention by apprehending a "twister," J.F. Kight. Informing its readers about the incident, under the headline J.F. KIGHT MEETS HIS WATERLOO, Life Association News announced in bold type, "Professional Twister Falls to 'Twist' in Pennsylvania—The Philadelphia Association Under the Leadership of its President, Frank D. Buser, Responsible for Kight's Arrest." The article explained that "four weeks ago Mr. Kight….appeared in Philadelphia and began sending out letters to prospective dupes. This came to the knowledge of President Buser of the Philadelphia association, and Kight's movements were closely watched. Mr. Buser also got into communication with Insurance Commissioner [Charles] Johnson and preparations were made to deal with Kight the moment evidence was obtainable that he had overstepped the law." It was the inclusive wording of the Pennsylvania law that got Kight into trouble. "In other states," the editor explained, "the laws had loopholes as convenient as may be for Mr. Kight's escape after being detected. They provide penalties for twisting by agents, and all Mr. Kight had to do to secure immunity was to prove that he was not an agent." The Pennsylvania law, however, included the phrase "or any other person." This is what landed him in Mayamensing Prison. The magazine gave the story full coverage, describing not only Kight's methods, but also exactly how he was apprehended:
The NALU Executive Committee held its midyear meeting at the Astor in New York on April 1, 1913. Despite the inconvenience of poor trunk line passenger service (owing to heavy flooding in Ohio), attendance was good. As chairman of the General Atlantic City Convention Committee, Buser reported on his committee's progress, giving particular attention to railroad fares. Mentioning plans for a reception and ball, he said the afternoon and evening of September 17 would be held open for company meetings, and the annual banquet would be held in the ballroom of the Hotel Rudolph. The committee agreed to the idea of having "a special Associated Press wire installed at the convention hall." Florence E. Shaal told the members that the New England Women's Association was again flourishing and expected to be well represented at the convention. Reporting on the progress of the institutional advertising campaign, committee Chairman Warren Horner said the companies were responding very well in providing the necessary funds. The group had met when the Executive Council held its meeting in November at the Pittsburgh Athletic Club to outline aims and strategies, which won the immediate endorsement of the Council. In their proposals, it is easy to detect the heavy influence of committee member Edward A. Woods, widely known as a strong proponent of insurance education. Advocating "a comprehensive, non-partisan advertising campaign of education and conservation," the committee recommended "that the financial and moral cooperation of the life insurance companies be secured." In addition, Horner said:
Their statement is significant. The committee's activities were to exercise considerable influence over the next few years, involving the industry as a whole, and the NALU in particular. They became the springboard for NALU projects affecting not only the public's attitudes toward life insurance, but also for enlisting the companies' support and recognition in the academic community of the value of informed marketing practices. Ultimately, they enabled the NALU to produce a series of insurance textbooks and launch a program for agent education. In addition to the funds elicited from company sources, over forty associations contributed to the Committee's subscription drive. One-fourth of the $22,000 raised went to the national campaign and three-fourths for advertising at home. Pointing to the effects of the NALU's efforts in this area, Donald F. Barnes, in The National Association of Life Underwriters: Fiftieth Anniversary history of the Association, observes:
At Atlantic City that September all sessions were held in the ballroom on the Steel Pier, but the Marlborough-Blenheim Hotel served as a center for most of the social life of the convention. The convention was very well planned. Obviously the New York and Philadelphia associations worked beautifully together. The slate of new officers included names that have become legend in NALU history: Ernest J. Clark of Baltimore, (president); John Newton Russell Jr. of Los Angeles and Edward A. Woods of Pittsburgh (vice presidents). Canada was represented by J.B. Morisette of Quebec, who became third vice president. Buser was elected secretary of the national body. Clark, Woods and Russell formed the great triumvirate of Association leadership for the decade. Russell and Woods continued to serve as vice presidents through 1915. Woods became president in 1915 and Russell was elected the following year. Convinced that it was the only way to elevate the art of life insurance soliciting to a respected science, they persisted in seeing that the National Association give first place to agent education. Born at Newtonville, Ohio, and a graduate of Lebanon University, Clark had early won the respect of everyone in the business as the highly successful general agent of John Hancock Mutual for Maryland and the District of Columbia. He represented the best type of the professional agent. Prominent in the Baltimore business community, well-know in political circles and a dedicated Association leader, Clark brought impeccable credentials to the office of NALU president. An engaging and persuasive personality, he was a strikingly handsome man who, at forty-one, presented a youthful, energetic and commanding figure. The topics dominating much of the proceedings at the Atlantic City convention were institutional advertising, agent education and the impending federal income tax law. A resolution against proposals to tax refunds, or so-called dividends returned to policy holders, was telegraphed to President Wilson. As a result of this and other telegrams, plus personal visits to the President by some of the NALU's officers, the exemption was written into the bill at the last moment in an unprecedented procedure. Reporting on the incident in a 1914 issue, Life Association News, commented:
Ways of restraining the rising tide of taxation in various states were also discussed, and the delegates wholeheartedly endorsed the projects outlined by the Education and Conservation committee. Reflecting on the work of the convention, Clark said, "A new era has been ushered in—one of education and conservation: education involving a higher and more scientific training of agents, and systematic instruction in the fundamental principles and necessities of life insurance for the benefit of the insuring public; conservation in its relationship to the laws of health, the enormous waste from lapsation and surrender of insurance, the unnecessary borrowing on policies, and the reduction of burdensome and unjust taxation by several states and federal government, now costing the policyholders in this country many millions of dollars per annum."[l] Foreword by Alan Press, 1988-1989 NALU President Preface by Jack E. Bobo, 1989 NALU Executive Vice President 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 Chapter 3 The NALU's Extension of Activity The Agents Move for Recognition Chapter 4 Annual Conventions and Midyear Meetings The NALU Celebrates Its 50th Anniversary Chapter 5 The NALU Joins the Industry in Legislative Battles The NALU Establishes the National Quality Award Chapter 6 Controversies and Schisms (1946-1956) Chapter 7 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 The NALU Issues Statements on AIDS The NALU Combats a New Wave of Attacks The NALU Celebrates a Century of Service [xxxi] Op. Cit., p. 2. [xxxii] Op. Cit., . 199. [xxxiii] Ibid., p. 202. [xxxiv] Proceedings, 1908, pp. 41-43. [xxxv] Proceedings, 1909, pp 49-50. [xxxvi] Op. Cit., p. 201. [xxxvii] Proceedings, 1909, pp28-29. [xxxviii] Ibid., p. 88. [xxxix] Ibid., p. 96. [xl] Op. Cit., p. 5.. [xli] Proceedings, 1912, p.48. [xlii] Ibid., 1912, pp18, 34. [xliii] Ibid., pp. 19-21. [xliv] Ibid., p. 125. [xlv] LAN, March 1911, p.7. [xlvi] Cf. LAN, November 1912, pp. 9-12. [xlvii] Proceedings, 1913, p. 44. [xlviii] Op. Cit., pp. 26-27. [xlix] LAN, January 1954, p. 46. [l] LAN, September 1913, p.2. © Advisor Today 2008. All rights reserved.
|
|
