page 203 note * Dear Sir,—I have just received your favour of the 19th ult. relating to the surrender-value provisions of the Massachusetts insurance laws, and their effect in restraining the companies to which they apply from prosecuting certain plans of the business.
In order to make the discussion more consecutive and complete, the comments i n Report for 1897 to which you allude should be taken in sequence to those in report of next previous year, which I venture to forward by same mail.
It will he observed that this law applies only to companies incorporated in this State, leaving their rivals from other States wholly untrammelled, and this i s the hardship complained of.
The five companies to which the law applies are the Berkshire, John Hancock Mutual, Massachusetts Mutual, New England Mutual, and the State Mutual.
The detailed exhibits of these companies, as appear in the Report of 1896, show that the first and third of them had in force a relatively small amount of endowment business; the second about an equal amount with life; while the last two pursued the endowment plan almost exclusively. When the 5 per-cent relief clause was repealed in 1896, allfiveof the companies decided to discontinue as far as possible the issue of this plan of business, an d refrain from it until such time as relief could be attained through change of the statute. Any further motion for a change should properly come from the companies, as the Commissioner feels that, in his various reports to the Legislature, he has put the case as urgently as official propriety would justify.
The hint in 1896 Report, as to the fair basis of surrender-charge, was suggested by your Mr. Crisford s thesis to the Institute in 1872, I think. And opinion among the Massachusetts companies seem to be generally crystalizing to that theory, so that it is probable that a change, when one is made, will be urged along that line, although it must be said there are at the present time no indications of any early attempt at securing a modification of the statute.
Respectfully yours.
Fredk. L. Cutting,
Insurance Commissioner.
