Regulation of Insurance Company Investments

March 21, 1941

Report Outline
Proposals for Federal Control of Insurance
Growth and Volume of Insurance in Force
Portfolios of Leading Insurance Companies
Life Insurance in the National Economy
Special Focus

Proposals for Federal Control of Insurance

In Presenting the recommendations of Securities and Exchange Commission staff members on the subject of life insurance to the Temporary National Economic Committee, Commissioner Sumner T. Pike specifically refrained from urging direct federal regulation or control of the insurance business. He pointed out, however, that state regulation has proved inadequate in a few cases, and recommended that a new federal agency should be established to the end that:

The federal government assist the states in their efforts to strengthen their existing regulatory machinery by giving advice, disseminating information and exercising some slight supervision over certain primarily interstate aspects of the business. The federal government should render such assistance without supplanting the basic jurisdiction of the states.

Rep. Hobbs (D., Ala.) on March 4 introduced a bill which would make violation of state insurance laws a federal offense through banning the mails to any company which did not comply with the laws of every state in which it solicited or carried on insurance business. The Hobbs bill would also require all insurance companies engaged in interstate commerce to secure permits from the Securities and Exchange Commission. The proposed permit requirement goes considerably beyond the S. E. C. staff recommendations, and there has been no indication as yet that the Hobbs bill will have administration support. It is probable, in any case, that some legislation tending toward federal supervision of the insurance business will be considered by Congress at its present session. Former Governor Alfred E. Smith, a director of the New York Life Insurance Company, said on January 30 that he had “definite information” that the federal government would soon take steps toward regulating insurance by placing “public directors” appointed by the President on boards of directors of the life insurance companies.

ISSUE TRACKER for Related Reports
Insurance Industry
Oct. 11, 1996  Insurance Fraud
Dec. 21, 1990  Is Insurance Going the Way of the S & Ls?
Dec. 06, 1985  Liability Insurance Squeeze
Feb. 11, 1977  Casualty Insurance: Troubled Industry
Jan. 19, 1949  Insurance Investments and Economic Stability
Mar. 21, 1941  Regulation of Insurance Company Investments
Insurance Industry
Investment and the Stock Market
Regulation and Deregulation