New York Life Insurance Company (NYLIC) is the third-largest life insurance company in the United States and one of the largest life insurers in the world, ranking #61 on the 2016 Fortune 500 list, with about $550 billion in total assets under management, and more than $21 billion in surplus and AVR. In 2007, NYLIC achieved the best possible ratings by the four independent rating companies (Standard & Poor's, AM Best, Moody's and Fitch). Other New York Life affiliates provide an array of securities products and services, as well as institutional and retail mutual funds.
History
The company was founded in 1845 as the Nautilus Insurance Company in New York City, with assets of $17,000. It was renamed the New York Life Insurance Company in 1849. Its first headquarters were at 58 Wall Street from 1845 until 1846 at which time they were moved to 29 Wall Street. Subsequent addresses included 68 Wall Street, 106 Broadway, and 112-114 Broadway. The first president was James DePeyster Ogden, who served from 1845 until 1847. The current New York Life headquarters was designed by architect Cass Gilbert and completed in 1928. The New York Life Building, at 51 Madison Avenue, was constructed during the presidency of Darwin P. Kingsley. As with other early insurance companies in the U.S., in its early years (1846â€"1848), at the behest of its Southern agents, the company insured the lives of slaves for their owners. These policies were discontinued at the direction of the Trustees on April 19, 1848. The total claims paid on slaves' lives totaled $1,050. Nautilus sold 485 slaveholder life insurance policies during a two-year period in the 1840s. Their trustees voted to end the sale of such policies 15 years before the Emancipation Proclamation.
In 1860, before state laws required it, New York Life developed the non-forfeiture option, the predecessor to the guaranteed cash values of modern policies, under which a policy remains in force even if a premium payment is missed. It was also the first American life insurance company to pay a cash dividend to policyholders, and the first U.S. company to issue policies to women at the same rates as men. Susan B. Anthony was one of their first female policy holders, and her father worked for NYLIC. In 1896, New York Life became the first company to insure people with disabilities and the first to issue a policy with a disability benefit that presumes total disability to be permanent after a predetermined period.
In the late 1990s, New York Life was one of several large mutual life insurers to back a New York State bill that would permit the formation of a mutual holding company (MHC), a corporate structure that could preserve mutuality for policyholders, while providing a company access to capital markets without the full demutualization of the organization. CEO Sy Sternberg himself argued strongly in favor of the bill, which was ultimately defeated. The NYLIC board of directors subsequently reaffirmed its commitment to remaining a mutual, and the company strongly and publicly embraced this decision through a series of advertisements.
Financial crisis of early 21st century
According to their Report to Policyholders 2007, in early 2007 the company's managers became concerned about the state of credit markets, so in February 2007 "based on our belief that the markets were acting irrationally" New York Life decided to move much of its cash flow into safer investments such as US Treasury bonds. "By August 2007, the credit market problems we had feared were front page news," the Report notes.
In November 2008, the company announced it would not participate in the Troubled Asset Relief Program. "The company can meet all of its strategic objectives without government capital, its businesses are strong and profitable, and it is committed to remaining a mutual company operating for the sole benefit of its policyholders," states a company press release.
Theodore "Ted" Mathas, president and CEO in 2008, said at the time of the financial crisis that New York Life is "built for times like these." This phrase became the title for the 2008 report to policyholders. Ted Mathas becomes the company chairman on June 1, 2009.
New York Life maintains "superior" financial ratings from A.M. Best, Fitch, Moody's and Standard and Poor's, all of which have reaffirmed the ratings during the financial crisis of autumn 2008.
It was reported in September 2013 that Dexia had entered into talks with New York Life Investment Management to sell Dexia Asset Management, which was completed on 3 February 2014. In February 2014 Dexia Asset Management renamed itself Candriam Investors Group to help re-establish its identity after being offloaded by Dexia.
Operations
Domestic
The company is owned by its policyholders and has no outside shareholders. As a mutual, New York Life distributes a portion of its earnings to eligible policyholders as annual dividends. As of 2016, the company has paid a dividend every year since 1854.
International
Through Seguros Monterrey New York Life, the company offers insurance in Mexico.
New York Life Insurance buildings
The New York Life Insurance Company has commissioned a number of buildings.
- New York Life Building in New York City
- New York Life Insurance Building, Chicago
- New York Life Insurance Building (Kansas City)
- New York Life Insurance Building, Montreal
- New York Palace (Budapest)
- New York Life Insurance Building (Amsterdam)
- Torre New York Life in Mexico City
- Torre New York Life in Guadalajara City (Mexico)
- New York Life Insurance Reviews And Ratings At A Glimpse
Criticism and controversy
New York Life has been the object of much skepticism and scrutiny over allegedly unethical sales practices and refusal to remit death benefits, notably in the State of California. NYL settled an investigation over negligent business practices in California for $15 million. A similar controversy came to light in 2008 with criminal proceedings in the State of New Jersey. A major class-action lawsuit was filed in 2013 in Indiana, where plaintiffs claimed that employees of the New York Life Insurance Company routinely engaged in Securities fraud, Life insurance fraud and other violations of Indiana State Securities laws.
There have also been numerous complaints issued by employees of New York Life, for encouraging multi-level marketing practices, including lack of base pay, use of high pressure sales tactics, and encouragement on the parts of management to target employees' family members and vulnerable members of employees' communities for sales marks. Some of the confusion in this case may stem from the fact that New York Life is one of a few companies left that have agents, or "agency".
The accuracy of these allegations are questionable, and may be a reflection of one particular office or group within the company, not a reflection of the organization as a whole. New York Life continues to maintain a perfect Comdex rating of 100, the highest possible score. New York Life as a workplace has also received numerous awards for work in the areas of financial strength, human rights, diversity and training, along with being voted one of the best places to work in cities such as Boston and Tampa.
References
External links
- Official website
