The Old Reliable
From Young Resilient to Old Reliable
In its eleventh year in business, the ManhattanLife insurance company was thriving despite strenuous circumstances. Its team of field agents had grown to 464, with representation expanding from New York to across the country as far as California and Texas. With assets over $1 million, The Company had persevered through the Yellow Fever Epidemic of 1853 and the Panic of 1857 which had resulted in the suspension of New York City banks. However, it would soon face its greatest challenge, and an epic and defining milestone, with the attack on Fort Sumter on March 12, 1861 and the resulting four years of Civil War.
Operating During War Time
The battle between the North and South presented operational challenges to The Company, which a special meeting of the Board was called to address. ManhattanLife’s field force in the North needed to increase to compensate for the loss of business in the South due to the war. There was also the issue of granting permits to policyholders volunteering for Union military or naval service. The Board voted to grant permits at adjusted rates provided they made applications within 10 days of entering service. Policyholders not wishing to pay the extra premium for war risk were allowed to let the policies lapse with the provision they would be reinstated at the end of the war with their demonstration of good health.
A Moral Versus Legal Interpretation
Operating during wartime presented philosophical challenges as well. The Company’s Claims Committee had to weigh the question of whether to honor claims based on a moral evaluation rather than a purely legalistic interpretation. Some Board members expressed the opinion that insured policyholders had not taken ordinary precaution in the payment of war premiums without a permit from The Company and therefore were not eligible to make a claim. Upon review, the Directors eventually discerned that the servicemen had acted in good faith and given their lives to their country, leaving their families in financial hardship. The decision was made to honor these claims, a motion proving ManhattanLife’s leadership were men of compassion.
In 1863, an incontestability clause was introduced to ManhattanLife’s Applications Committee for consideration. The clause would essentially eliminate potential loopholes and ensure The Company’s accountability to policyholders. The motion was seconded but lost on a vote. A champion for the clause, the Chairman of ManhattanLife’s Claims Committee reintroduced it citing both the advantages and objections to the policy feature as well as its success in the practice of European insurance companies. To date, no American insurance company had ever offered policyholders the protection of incontestability. The key language in the clause read “This policy is incontestable, after five years from its date, for or on account of errors, omission, or misstatements in the application, except as to age.” The motion passed and a copy of the resolution was sent to all policyholders and the clause was included in all future policies.
Post War Restoration and Restitution
In the spring of 1865 following the end of the Civil War and the assassination of President Abraham Lincoln, ManhattanLife set about two major initiatives — reestablishing its Southern agencies and searching out the Southern policyholders and beneficiaries with whom The Company had lost contact during the time of war. Communications and monetary transactions across battle lines were mostly suspended therefore policyholders were unable to pay their premiums. Legally, the policies were considered lapsed. ManhattanLife could either rigidly abide by the terms of its contracts, or, take a liberal rather than legal view and pay the claims minus the amount of unpaid premiums. It chose the latter, and soon word spread throughout the South earning the Company the moniker of “The Old Reliable”. And as ManhattanLife reestablished its presence in Virginia, Kentucky, Georgia, Mississippi, Alabama, Louisiana and Texas, agents found this compassionate approach to claim settlements and policy reinstatement and the earned reputation of reliability were some of The Company’s most valuable assets.
ManhattanLife’s founding Directors unanimously agreed The Company should always operate according to the good faith interpretation of its word — not just the minimum of what was contractually required. Whether making decisions based on what is believed to be morally right or implementing a self-governing clause to protect policyholders — fairness and reliability have consistently been cornerstones of the ManhattanLife brand throughout its -year history and today. It is this demonstrated core value that has inspired The Company’s positioning line — Standing by You. Since 1850.