Business News, The Crash of 1929 and its Effect on Life Insurance
He had a broad and intimate knowledge of the entire insurance business, having previously served as Counsel to the New York State Insurance Department. He brought to his duties not only a keen analytical mind but also a warm sympathy for the men in the field, and special enthusiasm for the social service program of the organization. When, in March 1936, Mr. Ecker became Chairman of the Board of Directors, Mr. Lincoln succeeded to the Presidency, continuing the policies of his predecessor in office.
Frederick H. Ecker became president of the company at a period which then looked to many like a "Golden Era." All business was at a high peak, and the Metropolitan shared in the general prosperity. Toward the close of this period many people seriously believed that a new order of living had arrived in America and that prosperity, along with low cost life insurance, was to go on forever.
One measure of this buoyant state was the rise in prices of common stocks, particularly those dealt in on Exchanges. Under such promising conditions, it is not surprising that common stocks were seriously urged as suitable investments even for life insurance companies; and one or two companies not subject to the restrictions of the New York Law purchased sizable blocks of well selected common stocks for their portfolios.
It was at this juncture, in September 1929, that President Ecker, in an address before the National Association of Life Underwriters at Washington, analyzed the proposal that life insurance funds be put into common stocks, and took a firm position against such "investments" by the life insurance companies. There were some who challenged his position; but not long after Mr. Ecker's address had been published and put into circulation there came, in October 1929, the first of the Stock Exchange crashes. His judgment as to the dangers of common stock investments for life insurance companies was vindicated almost overnight.
The full import of this disaster was little understood at the moment. It was not for weeks and months that the country came to understand that its entire economy had suffered a shock which could not be overcome for years. As the first overturns in the Stock Exchange deepened into a well defined national depression, the life insurance companies shared the difficulties of the times with other financial institutions.
Large numbers of people lost their savings on the Exchanges. Many banks closed their doors, foreclosures increased rapidly, and employment began to drop sharply. As a consequence, many people borrowed on their policies, whether it was individual health insurance or life insurance to obtain the cash which they could find through no other source. This situation was further complicated by moratoria on policy loans and surrenders enforced in a majority of the States-limitations which were not sought by the Metropolitan.
The company continued to make all payments where no restrictions existed, and met every obligation as soon as the curbs were lifted. During the decade from 1930 to 1939 the Metropolitan paid out well in excess of $5,000,000,000 to life insurance policies or beneficiaries. These payments saved from the ignominy of public relief many thousands of individuals who had set up their own protective plans through insurance during more prosperous years. Contemporary with the efforts of the Federal Government to afford relief to the destitute members of the population, they certainly lightened the public burden.
Related Tags: individual health insurance, life insurance policies, low cost life insurance
Your Article Search Directory : Find in Articles
Recent articles in this category:
- Law Articles - Public Criminal Records on the Net
If you're looking for the safest place to be with this time, you may have some difficulties doing so - Law Articles - Selecting a Criminal Defense Lawyer - The Do's and Don'ts
In basketball, they say that a good defense is the best offense. The same goes when you have to go t - Christianity Articles - Mighty Acts are here and Psalm 150
1 Praise the LORD! Praise God in His sanctuary; Praise Him in His mighty firmament! 2 - Government Articles - Lito Atienza For Manila Mayor - Vote For Someone Prolife
In the approaching Manila elections, a prospect with supreme pro life advocacy has indicated his des - Government Articles - Real ID - Great Idea or Bad Idea?
Real ID Act of 2005 is calculated to fight terrorism, identity theft, and other problems by strength - Christianity Articles - Remember the Law of Moses (Malachi 4:4)
The Philadelphia Trumpet magazine article, Remember the Promises, presents itself as offering some g - Environment Articles - How will the world be affected by the outcome of the Copenhagen climate plan?
December 2009 saw Copenhagen welcome more than 40 world leaders and an additional 20,000 delegates - Christianity Articles - Taking a Stand for the Temple Mount!
On many political and religious forums I post and participate on (just google David Ben-Ariel and se - Christianity Articles - Alternative to United Nations
The hypocritical UN, that diseased body of the dysfunctional family of nations, is worthless except - Spiritual Articles - The Realities of 2012
As with most serious problems in our country, only a crisis of major proportions generates action. B
Most viewed articles in this category:
- Lost on a Couch
"Lost on a Couch" - the psychological reasons for the US defeat in Iraq In many ways the de - Why Should We Fight the War Against Terror?
The War on Terror is getting a lot of attention these days. Most people either strongly suppor - Is George Allen's Political Career Over?
In the wake of George Allen's defeat by Jim Webb, let's not write Allen's political obituary just ye - Freakonomics, a Book Review
If the thought of a book on economics is about as exciting as watching your toenails grow, or you ar - The Basics of Government Auctions
A government auction is a good place to buy quality or unusual merchandise at a bargain. Government - Controversial Treatment Gives Patient Higher Quality of Life but Takes Away Self Dignity
In Seattle, a 9 year old girl named Ashley is affected by a disease called static encephalopathy. T - Organic and Fairtrade Baby Food
Organic baby food has been around for a number of years but the first Fairtrade baby food was launch - The Greening of America's Cities
The Greening of American Cities Today, merely collecting the garbage, running a bottle recyclin - What to Expect from Schwarzenegger's Health Care Plan
After successful body building and acting careers, Arnold Schwarzenegger decided to attack the world - What is Bird-Flu?
Over the past year, Bird Flu has been pasted on the headlines of every major media outlet