After the founding of the Equitable .many other companies were organized. Unfortunately there was the same element of gambling connected with many of these enterprises as with other forms of insurance, and it was not until about 1849 when the stiffened laws regarding life insurance companies came into exist ence that stability was given to the business. These laws were placed on the statute books as a result of a few very prominent failures among the life insurance companies. But of course many companies honestly carried out their obligations from the beginning and were not affected by the disasters which overtook those less prudently and less honestly managed.
In 1844, it is estimated that there were in Great Britain over 140 different assurance companies and societies organized for the purpose of insuring lives.
4. In the United States.—There were probably not one hundred policies, so it is estimated, of life insur ance in force in the United States in the beginning of the 18th century. These were purely underwriter's policies. In 1754 in Pennsylvania, the Presbyterian church organized a society for insuring the lives of its ministers. This society was not organized wholly on strict insurance principles because it depended some what for its income, in the beginning at least, on funds which were given to it in addition to the sums charged the insured. But that phase passed away in due course and this unique experiment in life insurance as it has been called, is still in existence and the company is doing a good work. In 1843, the Mutual Life In surance Company of New York, issued its first policy and that may be considered as the real beginning of life insurance in the United States. The business profited by the experiments which had been worked out or tried in Great Britain, tho many of the new companies did not derive as much benefit as possi ble from this experience. The business, however, started in this country on a foundation that was much more secure than that from which the pioneers in Great Britain had been obliged to work. There was a fairly quick growth down to the beginning of the Civil War. Contrary to expectations, in the period of the Civil War, the business did not decrease, altho the southern part of the country was not available for life insurance work. But beginning two years prior to the panic of 1873, many of the weaker companies began to retire, and from that time until 1880 a process of weed ing out occurred which resulted in the disappearance of some ninety companies. The whole condition was
improved by this clean-up, and from that time until 1905 the business went on from one degree of success to another. In 1905 the Armstrong Investigation took place and as a result of its disclosures the laws of various states were somewhat stiffened—too much so, many think. But every candid historian of the busi ness would probably admit that the legislation of 1906 placed the business of life insurance on so solid a foun dation that its subsequent success has been greater than it possibly could have been without these laws. One result of the crisis of 1906 was the formation in the South and West of a large number of new corn panics; something like two hundred companies have been organized, operating mostly in that field. Very few have come into the middle Atlantic or northeast ern states. As a matter of fact, less than fifty com panies operate in the State of New York. These small companies have accomplished an excellent work. Many of them have made mistakes; many have re tired but, on the other hand, they have done a very useful work in spreading a knowledge of life insur ance. Many have built up a very successful business and are a distinct accession to life insurance.
5. Insurable interest.—In its early days the same difficulty immediately associated itself with policies of life insurance as with those of marine and fire. Peo ple thought it a new scheme for getting rich, and it was possible to take out a policy of life insurance on the life of an individual in whose life one had no in terest and even with whom the beneficiary had no ac quaintance. The illness of any noted individual or sovereign served as an excuse for securing policies of insurance which, of course, were nothing more than gambling ventures. So great an evil did this grow to be that the Gambling Act was passed in Great Britain in 1774. This act expressly forbade anyone taking out insurance on another's life, unless they had an insurable interest therein; it also applied to all other forms of insurance except marine, which had been made subject to a similar rule in 1749.