A large elderly man labeled “Life Insurance” holds a cornucopia filled with documents labeled “For the Beneficiaries.” Next to him sits a large dog with collar labeled “Supt. Insurance,” and in front is a group of diminutive figures, a woman in mourning, an elderly man holding the hand of a young child, and a nurse holding an infant. In the background are a group of businessmen labeled “Corruption.”
Comments and Context
The indiscretions and reports of corruption common to most large American businesses in 1905, in the midst of the Muckraking Era, reached the insurance industry as well. Public concern was accelerated by the well-publicized orgiastic ball thrown by the heir to the Equitable Life Insurance fortune, the putative next director, James Hazen Hyde. In addition to the public’s reaction to conspicuous consumption and loose moral atmosphere at the ball were rumors that its extravagant expense was charged to the Equitable.
But dissatisfaction with insurance companies’ practices were emerging anyway. The practice of the tontine was under suspicion. Despite reforms over the subsequent century, it is still employed by some companies — basically a system of paying moneys and receiving annuities, but the company’s profits, and unpaid deposit accounts, re-invested into the company’s fund. Many people considered a variety of what became known as a Ponzi scheme.