66

The whole

gregate capital of the retiring companies was $600,000. number of companies authorized was 128. Of this number 118 conducted a fire or fire and marine insurance, and one was engaged in marine insurance exclusively. Three were engaged in steam boiler insurance, two in plate glass, and two prosecuted fidelity insurance. One combined fidelity, glass, boiler, and personal accident insurance. One hundred and five were joint stock corporations, and twenty-three were mutual. Concerning existing legislation the commissioner observes: Valued-policy laws have introduced a new insurance hazard. Wisconsin in 1874 substituted the wager for the indemnity contract. Gradually this vicious legislation is being incorporated into the statutes of the different states, increasing the cost of insurance by stimulating incendiarism. The essential features of the valued-policy law may now be found in eight states. This unwise legislation offers special inducements to incendiarism, tempting unscrupulous and dishonest owners intentionally to burn their property, and honest men to be indifferent and careless as to its proper protection. It has been shown that in states with the largest experience in this species of legislation, the ratio of losses to premiums received has materially increased since the enactment of such laws. Such laws should be swept from the statutes of every state as immoral and against public policy. Supervising insurance officials in every instance, where experience has been given, have stamped valued-policy laws with their disapproval." "The retaliatory laws were amended and strengthened. The commissioner is now clothed with ample power to meet any unjust discrimination against companies of this state which might arise from legislative action, or otherwise, in another state." In regard to the solvency of casualty and fidelity companies, the report contained the following: "The business of fidelity insurance is of comparatively recent origin, and perhaps is not as well understood as the older forms of insurance. The amount of business transacted by this class of companies is gaining rapidly. 1889, the companies reporting to this department assumed risks amounting to $139,370,475, and received in premiums $870,785:59. The business may properly be subdivided into two classes: guaranteeing the fidelity of employes, and becoming surety on court bonds. It is questionable whether the business as heretofore conducted is strictly an insurance business. The writing of large lines, in some instances half a million of dollars on a single risk, prevents the possibility of arriving at an average upon which to base the premium rate. The business could and should, by law, be reduced to an insurance basis, by limiting the amount on a single risk to a reasonable proportion of the capital stock of the company. Without legislative restriction, it may even be doubted whether the courts will continue to look with favor on corporate suretyship bonds. The bonds furnished by these corporations, if properly guarded by legislative enactments, are superior to, and less subject to the hazards of, individual suretyship. The reserve required to be maintained by this class of companies has been a subject of discussion and contention. No uniform practice has heretofore prevailed in the various insurance departments of the country. In the absence of a statute governing this subject, fidelity companies transacting business in this state will be required to maintain at least eighty per cent. as a reserve on all premiums received on risks in force."

In

Part II of the report, relating to life and accident insurance business in this state, was issued March 20. The corporations authorized or admitted during the year were: Commercial Union Life insurance company of New York, April 1; Provident Aid society, Portland, Maine; and Masons' Fraternal Accident association, Westfield, Massachusetts, April 1; Fidelity Mutual Life association, Philadelphia, May 1: Employers Liability assurance corporation, London, England, September 23; Home Mutual Benefit society, Danbury, Connecticut, September 26; and Rhode Island Mutual live stock insurance company, Providence, Rhode Island, February 21, 1890. The whole number of life and accident companies authorized in the state was fifty-three, twelve of the number being domestic, forty from other states, and one from a foreign country. Nine of the domestic and thirty-three of the foreign offices were devoted exclusively to life insurance; one domestic and six foreign offices to accident; two domestic and one foreign to both branches, life and accident, and one office exclusively to the insurance of live stock. Of the thirty offices transacting life insurance on the system of requiring a fixed or definite premium in advance, seven were Connecticut insticutions, and twenty-three were from outside states. The act passed by the last legislature prohibiting discrimination in life insurance contracts, was regarded by the commissioner as one of the most important of the session. "The law contemplates the suppression of the practice of granting rebates on premiums or commissions. It expressly provides that there shall be no distinction or discrimination in favor of individuals between insurants of the same class and expectation of life, in the amount or payments of premium or rates charged for policies of life insurance, or in the dividends or other benefits payable thereon, or in any other terms or conditions of the contract it may make. It also inflicts as a penalty on the company, or any agent, sub-agent, or broker who allows or pays, as an inducement to accept insurance, any rebate of premium, the sum of not less than one hundred, nor more than five hundred dollars, and the revocation of his certificate of authority for the period of three years. The act became operative August, 1, 1889, and is applicable to domestic as well as foreign companies. I am not informed of any prosecutions under the provisions of this act.” The statute in relation to the investments of life insurance companies permits them to make loans on their policies to an amount not exceeding seventy-five per centum of the reserve which it is required to maintain upon the policy pledged to secure such loan. The legislature also removed the restriction in the law, requiring the approval of the insurance commissioner before a purchase of stocks or bonds could be made, which had not been issued for the period of three years. The advantage to be derived from the modification of the law is that it will permit companies to enter the field untrammeled, and make selection of the bonds of a desirable character when issued, thereby gaining whatever advantage may accrue to large investors and original purchasers. The act concerning the returns of insurance companies received an important amendment. Under the amended statute it will be of little avail to a dishonest officer to set up in defense that the subscribing oath before the notary was not taken, if his signature is properly appended to the statement. The statutes were also amended providing for a quadrennial instead of triennial examination of the insurance companies incorporated by the state, the

amended law being as follows: "The insurance commissioner shall at least once in four years visit each life insurance company incorporated by this state, thoroughly examine its financial condition, and ascertain whether it has complied with all provisions of law."

"The examinations of the year embraced the following companies: Connecticut Mutual Life insurance company, Phoenix Mutual Life insurance company, Connecticut General Life insurance company, Hartford Life and Annuity insurance company, and the Mutual Benefit Life company. The result of the examinations was published from time to time as made. It is due to the companies and to the state from which they derive their origin, to say that probably no more thorough and searching examination of the books, business, and assets, including the real estate, has ever been made of life insurance companies, than those submitted to during the past year by the companies mentioned. At the date of publication of the last annual report, the Connecticut Mutual Life insurance company was undergoing an examination. It will be recalled that the examination was precipitated by the defalcation of a financial correspondent at Indianapolis. The opportunity was seized upon by rivals and by some insurance journals, to impair public contidence in the stability of this corporation. It is to be regretted that, in pursuing this unwise course of defaming the character and reputation of one of the model insurance institutions of New England, a state insurance department should have been found willing to use its great power to further weaken public confidence, by a threatened investigation of its affairs, before reasonable opportunity had been given for inquiry and investigation by the insurance department of this state. It will be found in the report of the examination of this company, that circulars were sent to each mortgagor, stating the amount of his loan and interest due, and from the replies received, only one discrepancy ($200) had appeared. It was afterwards found that the loan had not been paid, as evidenced by the borrower making payment of the sum. The inquiry was continued until December without disclosing further irregularity. The total number of circular letters sent to borrowers to perfect this part of the investigation was 17,961. It is cause for congratulation, after a year of severe tests and adverse criticism, the company has been able to make a moderate gain in assets and in surplus over all liabilities. The commissioner believes he risks no reputation in pronouncing this corporation morally and financially sound. He renders such opinion cheerfully and it is based on the result of his examination.

Connecticut Life Underwriters' Association: Monday, October 27, representatives of life insurance companies in Connecticut held a meeting at the Allyn House in Hartford in response to a call issued by Messrs. H. R. Hayden of The Weekly Underwriter and C. M. Ransom of The Standard for the purpose of organizing a Life Underwriters' Association in that state. Messrs. George N. Carpenter, president, and Benjamin S. Calef, chairman of the executive committee of the National Association of Life Underwriters were present from Boston, B. F. Peabody from Providence, Rhode Island, and James E. Johnson from Springfield, Massachusetts. The meeting was called to order by H. R. Hayden, and the object in calling it explained by Messrs. Ransom, Carpenter, Calef, and Johnson. It was voted to organize an association,

and the name selected was "The Connecticut Life Underwriters' Association." A constitution and by-laws were adopted, and officers elected for the ensuing year. Alfred T. Richards of Hartford was chosen president; H. E. Harrington of Hartford, first vice-president; Heman A. Tyler of Hartford, second vice-president; F. Willson Rogers of Hartford, secretary; A. H. Bond of Hartford, treasurer. The executive committee elected were Alexander Harbison of Hartford; L. W. Moody of New Haven; Joseph Schwab of Hartford, Eli D. Weeks of Litchfield, and M. C. Rogers of Bridgeport. The constitution and by-laws are appended:

CONSTITUTION.

ARTICLE I.-Object.- The object of this association shall be to advance as we may the great interests of life insurance.

ARTICLE II.- Officers. The officers of the association shall consist of a president, two vice-presidents, secretary, treasurer, and an executive committee to consist of five members, all of whom shall be elected by ballot, to hold office for one year or until others are elected in their places.

ARTICLE III.-Duties. The duties which usually devolve upon the president, vicepresident, secretary, and treasurer in all organizations of this nature shall be considered as belonging to officers of this association. The executive committee shall have the direction of all business brought before the association, and all matters shall be referred to them for reports and recommendations, and they shall recommend to the association programmes for future meetings and whatever they deem important for action by the association.

ARTICLE IV.- Membership.— General agents, managers, or the principal representatives of any life insurance company doing business in the New England States shall be eligible to membership, and may become active members by vote of the association, and by signing the constitution.

Whenever a member has vacated a position which entitles him to regular membership he may continue as an associate member by vote of the executive committee, provided he continues in the business of life insurance, or immediately connected with its interests.

ARTICLE V.- Payment of Membership Fees.- Members elect must pay their proper dues within ten days after their election by the association, and failures to do so shall render their election void.

BY-LAWS.

ARTICLE I.- Vacancies. If the office of president or vice-president shall become vacant, the executive committee may call a special meeting of the association to fill such vacancy. If any other vacancy shall occur, the same may be filled by election from the members of the association, at a meeting called for that purpose, upon due notice.

ARTICLE II.-Membership.-Nominations for membership shall be made in writing to the executive committee, and, if approved by them, shall be reported to the associations by the names of candidates being placed on the notice of the next meeting after such approval, and such names shall be balloted for at the next meeting for election, with ball ballots, and if not more than one black ball appears against a candidate, he shall be elected; but, if two or more black balls appear, he shall be excluded from admission.

ARTICLE III.- Annual Meetings.-The annual meeting shall be held on the second Tuesday in February, at which time the executive committee shall make a full report of their proceedings during the past year, and shall recommend such measures as they deem advisable.

Order of Business at Annual Meeting.-1. Reading of minutes of previous meeting. 2. Report of executive committee. 3. Balloting for new members. 4. Annual reports from various officers. 5. Election of officers for the ensuing year. 6. Any further business that may regularly come before the meeting,

Order of Business at the Regular Meeting.-1. Reading of minutes of preceding meeting. 2. Report and recommendations from the executive committee. 3. Balloting for new members. 4. Any further business that may regularly come before the meeting.

ARTICLE IV.- Fees.-The regular membership fee shall be five dollars for each member on joining the association, and there shall be an annual assessment, thereafter, of five dollars per member, payable in advance at the annual meeting. Failure to pay any annual or other dues for thirty days shall cause a forfeiture of membership.

ARTICLE V.-Invitation of Guests.- A member wishing to invite a friend connected with the life insurance business to attend a meeting of the association, may do so on receiving permission from the executive committee and paying the proper charges; but

no guest shall be present at consecutive meetings, except by special invitation of the executive committee.

ARTICLE VI.- Associate Members. The association may elect as associate members parties who are connected with the life insurance interests, but such associate members shall not be allowed to vote at the meetings. They shall be elected in the same manner as regular members, and shall be required to pay one-half the ordinary dues within the same time and under the same conditions as provided in Article V of the constitution and Article IV of the by-laws for regular members.

ARTICLE VII.-Forfeiture of Membership.-Any member may present to the executive committee written charges subscribed by him against any other member, and if it shall appear to the executive committee, on inquiry after notice to the member so charged, and an opportunity given him to be heard in his defense, that his conduct has endangered or is likely to endanger the good order, welfare, or character of the association, or is at variance with the requirements of the constitution and by-laws, the executive committee shall report to the association, which may, by vote of two-thirds of its members, suspend such member or declare his membership forfeited.

ARTICLE VIII.— Amendments.- No alteration shall be made in the constitution or by-laws excepting by a two-thirds vote of the members present at any meeting, due notice having been given in writing at a previous meeting of the association, of the intention to propose such amendment or amendments.

ARTICLE IX.- Quorum.-Ten members present at any meeting shall constitute a quorum. The president, secretary, and treasurer of the association shall be members of the executive committee, ex officio.

Courts, Insurance in. [See accident, fire, fraternal benefit orders, life, marine insurance, etc.]

Covington, John I., June 1, became contributor of Insurance News and comment to the Price Current of Cincinnati, succeeding his father, S. F. Covington of the Globe insurance company, who died December 31, 1889.

Cowardin, William L., president of the Virginia Fire and Marine insurance company of Richmond, died Tuesday, Feb. 11. Elected secretary of company in March, 1856; president, May, 1858; had served as president of the City's Board of Underwriters of Richmond; president of the Virginia State Board of Underwriters; and was member of National Board of Underwriters. In March, Wm. H. Palmer elected Mr. Cowardin's successor.

Crane, John M., appointed superintendent of agencies for The American Casualty insurance and security company of Baltimore, assuming the duties of the position November 1, resigning the metropolitan agency of the Union Mutual Life insurance company. Mr. Crane was formerly secretary of the Fidelity and Casualty insurance company.

Cummins, J. C., appointed secretary of the Equitable Life insurance company of Des Moines, Iowa, in December. Mr. Cummins resigned the secretaryship of the State insurance company of Des Moines to accept the new appointment.

Cunningham, Alex. T., appointed general agent of the Mutual Life of New York at Atlanta, Georgia, succeeding E. C. Benedict in April. Robert F. Shelden appointed assistant.

Cushing, John, president of the Associated Firemen's insurance company of Baltimore, died October 6. The deceased became president of the company in 1872, retaining the office until the time of his death.