Operating According to Its Mission
Within an industry peer group comprised primarily of large, publicly traded companies, ManhattanLife owns a differentiated position as an independent.
Private and closely held by choice, ManhattanLife is free to make decisions that align with its stated values and core mission — helping policyholders, producers and employees with attaining and sustaining health, wealth and security throughout their lives.
A potential conflict of interest exists within an organization that is beholden to investors and analysts on one hand and policyholders and producers on the other. At best, the required focus on quarterly earnings is a distraction from servicing policies and innovating products. At worst, it could mean prioritizing preserving shareholder value over advocating on behalf of policyholders.
A History of Independence
ManhattanLife has a storied history of conducting business its own way. Founded in 1850, this independent is one of the industry’s oldest insurance companies, has survived multiple wars, plagues, the Great Depression and the Great Recession, and has done so without compromising its values or determination to “do the right thing.” Even when pressured not to.
This was demonstrated early in the Company’s history when the Civil War ended and ManhattanLife sought out the surviving policyholders of the South in order to fulfill their claims. In spite of the federal government’s prevailing opinion that they ignore these claims, ManhattanLife honored the claims because it believed it was morally the right thing to do.
ManhattanLife was “David” to the U.S. Department of Health and Human Services “Goliath” in 2014 when, advocating for producers’ right to sell and policyholders’ right to buy, it sued and won protected access to fixed indemnity health insurance products. At this level, only a true independent has the autonomy to put their money where their mouth is to fight for the rights of their constituents and the ability to serve them.
Free to Create and Innovate
Being an independent can also be about “independence from” — independence from rigidity of thinking, the status quo and herd mentality. This allows ManhattanLife to focus on what matters most — improving upon its product offering and rewarding its valued relationships with producers. The Company embraces the kind of nimbleness, creativity and generosity of spirit that generally cannot thrive within the bureaucratic confines of the large publicly traded insurance companies, known within the industry as “the Bigs”.
With almost 170 years of independently growing its business, today ManhattanLife plays in the space of the market leaders. Yet, as an independent, the Company remains the true alternative offering product breadth and financial strength that can go toe-to-toe with other top carriers. ManhattanLife — all the benefits of the Bigs but better.
America's First Skyscraper
Trailblazers by Design
The history of New York City’s skyline is almost as rich as the city itself. And at the heart of this history rests the ManhattanLife building — the first skyscraper to be designed and constructed in the United States.
Reaching New Heights
The development of the ManhattanLife building began in 1892, when The Company commissioned architecture firm Kimball & Thompson for its design, which would tower 347 feet above Broadway, and 400 feet above the foundation. Such heights had never been reached, so to achieve this, a new type of construction was required – a caisson-type foundation. This design – the first caisson-type foundation used in New York – is commonplace today, but at the time it was considered a revolutionary approach to minimizing the risk of damage to surrounding buildings.
At first, the Commissioner of Buildings was resistant to permitting the groundbreaking structure, but eventually consented asking only that the lead architect George Kramer Thompson give his word that it would work.
A herculean effort, the skyscraper was completed in 12 months and 27 days with no lives lost during its construction. It was reported that enough steel was used in the building to install 100 miles of railroad.
The Talk of the Town
Throughout its development, the ManhattanLife building became a topic of discussion in the newspapers and magazines of the time. Truly innovative, this project captured the interest of New York’s media and citizens, and was called an attempt to “push dem clouds away” as the Insurance Record reported.
The Company moved into its cutting-edge headquarters in 1894 and the building quickly became one of New York’s prime sight seeing attractions, much like the Empire State Building or Radio City Music Hall of today. Guides were available to lead visitors through the nation’s first skyscraper, including the structure’s tower occupied by the Government Weather Station.
A newsworthy moment during the building’s development is tied to the World’s Fair. The Insurance Advocate noted editorially at the time of the fair at the Art Palace that, “ManhattanLife made a good hit when it conceived the idea of exhibiting a model of its elegant new building, now in the course of construction, at the World’s Fair. While taking in the sights of the wonderful exposition, we were convinced of this fact by observing a large number of people admiring that colossal piece of architecture. For The ManhattanLife it is an advertisement par excellence.”
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 170-year history and today. It is this demonstrated core value that has inspired The Company’s new positioning line — Standing by You. Since 1850.
ACA Court Win
Manhattanlife Saves Fixed Indemnity for Industry and Insured
ManhattanLife played “David” to the U.S. Department of Health and Human Services’ (HHS) “Goliath” in 2014 when the Company sued HHS, HHS Secretary Sylvia Mathews Burwell and other members of the Obama administration to protect consumers’ access to fixed indemnity health insurance products.
Prior to the Affordable Care Act (ACA) taking effect, consumers across the country, who were either unable or unwilling to pay for or unable to qualify to purchase major medical coverage, were using indemnity insurance as an effective alternative to help cover a variety of planned and unplanned healthcare expenses.
Once ACA was in effect, government regulators began taking active steps to prevent consumers from purchasing fixed indemnity health insurance unless they could prove they already had “minimum essential coverage” and were only using the indemnity insurance to fill gaps left by the major medical policy.
Taking a Stand on Behalf of Producers and Policyholders
Upon closer investigation, ManhattanLife concluded that the regulators’ actions were challenging the use of “excepted benefits,” as defined by Section 201 of the Public Health Service Act (PHSA), in lieu of major medical coverage. “Fixed indemnity” is clearly among the forms of insurance listed as excepted benefits in the PHSA. The Company believed this was a misinterpretation and that HHS was depriving Americans from a valuable tool to help them maintain their health, wealth and security.
So, under the guidance of CEO David Harris, ManhattanLife stepped forward as the only insurance provider in the country willing to challenge the government’s actions in court.
Judge Royce C. Lamberth, the senior judge of the District Court for the District of Columbia, agreed with ManhattanLife in September 2015, granting an injunction that prohibited HHS from requiring insurance buyers to have minimum essential coverage in place prior to purchasing fixed indemnity coverage.
Keeping Fixed Indemnity in Play
Not at all pleased with the outcome and the precedent it would set, HHS immediately appealed the ruling, with the hope a federal appeals court would reverse the ruling.
A three-judge panel at the District of Columbia U.S. Court of Appeals ruled unanimously in favor of ManhattanLife, and ultimately for producers and policyholders, affirming the permanent injunction originally granted by the district court judge.
“At issue is whether HHS colored outside the lines of its authority. The district court held that it did, and we agree.” Circuit Judge Janice Rogers Brown wrote in an opinion for the panel that heard the case. “At no point does the ACA give even the slightest indication the definition of “excepted benefit” was suddenly debatable; rather, the Act doubled down on the PHSA’s existing requirements.”
The panel determined, as a result of this, that HHS has no authority under ACA to regulate how consumers use fixed indemnity or other “excepted benefits” products.
“HHS lacked the authority to demand more of fixed indemnity providers than Congress required.” wrote Brown.
“Sometimes a situation calls for you to take a stand for what’s fair regardless of what’s in favor,” says ManhattanLife CEO David Harris. “ManhattanLife was in a position to step forward and do what we felt was right based on our commitment to indemnity products being a critical offering for many of our policyholders. I am very pleased that all four judges validated our interpretation of this matter.”