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Rh serious problems for companies which carried large amounts of invested funds over considerable periods of time had not insurance officials applied new standards which took into account the intrinsic worth rather than the market price of the securities.

At the beginning of the war considerable direct insurance and reinsurance was carried by the American branches of alien enemy companies. Even after the entry of the United States into the war these companies were permitted to write business. It soon became evident that their activities must be checked, largely because their operations enabled them to acquire and convey to the enemy vital commercial information. At the end of 1917 these companies ceased writing new business and were taken over by the Alien Property Custodian. This change necessitated a new distribution of insurance in the American market and resulted in an increase in business for American companies and for those of friendly nations.

Coöperation of Insurance Carriers.—The years 1910-21 showed a remarkable increase in the acceptance of the principle of coöperation among insurance carriers. Problems involved in the control of new lines of business, in the meeting of new conditions in old lines, and in general the recognition of common interests by insurance executives all have contributed to the growth of coöperative organizations. These organizations have as their chief purposes education of the public, control of legislation, making of premium rates, adoption of uniform contracts, discouragement of bad practices, provision of reinsurance facilities, suppression of fraud. All this is a part of the growing recognition that the business can no longer proceed along the old individualistic lines.

Governmental Regulation.—During 1910-21 there were also notable advances in the regulation of insurance in the interest of the public. Perhaps the most significant is the growth in importance of the National Convention of Insurance Commissioners, an organization of regulatory officials from the various states in the interest of promoting sound and uniform methods of regulation. Discussions at the meetings of the Convention, and the work of its several committees, each of which deals with some one aspect of the insurance problem, have served to improve the quality of state regulation and to increase the respect with which state departments are regarded by state Legislatures, as well as insurance executives and the public. Among specific accomplishments in the general field of regulation may be mentioned: coöperation in the examination of insurance companies, the uniform valuation of securities for insurance purposes, regulation of the appointment and practices of agents and brokers, prohibition of discriminatory acts, and the adoption of uniform standards of practice.

Insurance Education.—There has been a marked increase of interest in insurance education. Some universities have departments of insurance with classes for college students and for men engaged in the business, and many other colleges and universities have devoted some attention to this subject. The Insurance Institute of America and its constituent societies have developed education among employees of the companies. The Casualty Actuarial Society was organized in 1914 for the purpose of furthering scientific research and education in casualty subjects.

United States Chamber of Commerce.—Recognition of insurance as an independent business activity of major importance was evidenced in the creation of an Insurance Department in the organization of the United States Chamber of Commerce.

Expansion of Operations Abroad.—In 1918 the American Foreign Insurance Association was organized to transact fire, marine and allied branches of insurance in all parts of the world with the exception of North America. The association was in 1921 composed of 16 leading American companies and had an extensive system of branches and agencies.

Extent.—In 1921 life insurance still held its place as financially the most important type of insurance with assets of 253 companies at the end of 1920, as given in the Insurance Year Book, of nearly $7,400,000,000, a total income during 1920 of nearly $1,800,000,000, and disbursements of over $1,200,000,000. These figures represent

a growth of over 100% since 1909 when the same items for 189 companies were, respectively, about $3,500,000,000, $750,000,000, and $500,000,000. Consideration of the reports of companies subject to the jurisdiction of the New York Insurance Department shows that the increase of business during the 10 years was somewhat irregular. The total number of policies in force increased from slightly over 5,750,000 on Dec. 31 1909 to nearly 14,000,000 on Dec. 31 1920; insurance represented by these policies from over $11,000,000,000 to nearly $27,000,000,000. At the same time the size of the average policy increased from $1,930 to $2,055. There were substantial increases in the amount of new business written in each of the years 1910 to 1913 inclusive, a slight decrease in 1914, further increases in 1915 to 1918 inclusive, and an immense increase in 1919 which was exceeded in 1920. The amount of new business written in 1920 was more than five times the amount written in 1910. Practically all this new business represented an increase in the business of old companies. At the beginning of the period there were 35 companies operating in New York and at the end 37. In the whole United States the number of companies operating increased in the same period from 189 to 253, but nearly 85% of the business was carried by companies operating in the state of New York.

It is impossible accurately to assess the importance of each of various reasons for the immense increase in the life-insurance business. The following are probably the principal causes: (1) Inflation and high prices, making necessary a larger amount of insurance to achieve the same real protection. (2) Increased willingness to pay for insurance out of high wages and profits due to the war. (3) Education in the desirability of life insurance through widespread application of the governmental war-risk scheme. (4) Development of life insurance to cover business risks, inheritance taxes, and other contingencies.

One result of the Armstrong Investigation of 1906 was an attempt to limit the new business which individual companies might write in any one year. The impracticability of the limitations originally imposed soon became evident and modifications in the law caused their almost complete elimination.

The following table from the Insurance Year Book presents in detail the record for 1910-20 of new business written and insurance in force for companies reporting to the New York Insurance Department:—

Mortality.—The registration area of the United States showed a decrease in general mortality from 14.7 per thousand to 12.8 per thousand for the years 1910 to 1919 inclusive. Investigations of mortality of insured lives showed a similar trend. This favourable mortality experience was interrupted by the influenza epidemic. It was at its height during the winter of 1918-9, resulting in such an increase of deaths that the mortality of insured lives reached approximately 100% of the American Experience Table, although normally it is expected to reach only about 55 to 75% of that table according to the age of the company. A well-known actuary has said that the net effect on the general body of policy-holders in participating companies was the loss of approximately one year's dividends. Fortunately the epidemic was brought under control and no insurance company was unable to meet its liabilities to policy-holders on account of it. A few small companies were seriously embarrassed and some were forced to reinsure; but the large old-line companies, although they found it necessary to reduce dividends in some cases, were at no time in danger of becoming unable to meet their obligations.

Mutualization.—In the years 1910-21 the Metropolitan Life Insurance Co. and the Home Life Insurance Co. passed from the stock form of organization to the mutual. The Equitable Life Assurance Society and the Prudential Life Insurance Co. practically did so although they were in 1921 still technically stock companies. With these changes the mutual form of organization became the ruling force in life insurance, nearly all of the large companies in 1921 being operated on the mutual plan. A large majority of the smaller companies were stock corporations.