Wilmington journal. [volume] (Wilmington, N.C.) 1844-1895, 1870-02-11
For the Jou11l sL IA
rn,uranee company Deposit Law -


protect the holders Of Insurance, RoAciesI
ia this State" The bill, fequites Comra71
mics doing business in this State, If it, be
Fire Insurance, TO deposit $40, 900 ip bonds
of the State at par value in the TreasRrys
and if it be Life Insurance to, dcpositi
$4,000 for the better pgoteotioH.-. Of
/ Policy holders.
/ Is this really ana in truth the object Of
this bin Why is this sudden anxiety to.
Better protect the holders Of Insurance
Policies? Has any Northern Insurance.
| Company, doing business In North Caro-
lina-and there are about fifty such Com
panies represented by Agencies ia this
State-failed to pay It's legal Obligations to
every Policy holder. think may safely
DEFY any man to adduce one instance where
any Northern Company las f~ilod to meet
its legal obligations woen the same have
been ascertained. Immense sums Of money
! have been paid by Insurance Companies
since the war to Policy holders in this
State for Fire, Marine ana Lilo policies,
and not one Siagle case Of default, where
the obligation was either acknowledged or
declared legal by the Courts.
! Now is it not strange, with this some
what remarkable record for these times,
that our Law makers should De seized with
this sudden anxiety to better protect Policy
holders Believe me, Policy holders ask
no better protection-they are exceeding
ly we'll satisfied with their Policies and
with the strength and responsibility Of the
Companies issuing them.
It is understood. however, that this bill
is sought to be enacted into law in def
erence to the wishes of certain Stockhold-
ers in one or two of the puny Insurance
Companies which boast OF being g home
enterprises" ana that the title of the bill
might moro properly be Ito better pro
tect the holders of stock in certain Insu-
rance Companies in this State"
This assault upon foreign Insurance
Companies comes with slngularly bad
grace from the '' homo cnterprize8 - So
called, when we remember that the only
Insurance Companies failing to afford am-
pie and sure protection to their Policy
holders Of late years, were Home Compa-
MES and Of this our citizens have been
frequently reminded of late by receiving
some unpleasant notices Of assessments
from tho assignees Of some Of these de-
! funct companies.
really increase the protection Of the Policy
holder, at least one very material obiec-
ton so the bill would be removed. I
maintain, however, SO far from doing this,
it will really tend to lessen security.
Under the provisions of this bill any
Northern Company, Which can raise $50,
600, and any Company, even if on the eve
Of insolvency can raise that sum, has only
, to make this deposit to as stabiish its c}aimt
= to sOlVency beyond all cavil. Then may
such Company distribute their policies
+ broadcast through the State and reap q
rich harvest from the premiums of the IN
wary. But let one single disastrous fire
occur, and the whole OF this deposit is
swept away and the Company stands strip
, ped OF its perchance borrowed capital,
!, while thousands of policy-holders in the
State are left unprotected, entrapped and
impOtently indignant. Bear ia mind this
$50, 900 deposit in State bonds is only
worth some $1,000 cash and it would not
require very serious connagration to ab-
sorb SO trifing a capital.
It has been we'll said upon this subject,
"The deposit does not Ob8truct the On
. trance Of unsOund Companies on the
contrary, it affords o field for their unob-
structed operations. Fifty thousand dol
lars deposit even. is not 30 large q sum
that half a dozen operators cannot put it
up when the return il to be the fleeing Of
a whole State full of insurants. Where the
deposit IS adopted, IL alone becomes the
shlbboleth, the certificate Of trusG-wOrthi-
nee5. Having MQt, q Company needs moth
ing moro as passport to the confidence
Of the people, and a Company whose whole
capital does not exceed the prescribed de-
pOslt, can thus come III successful cOMpe-
titIOn with one that counts its millions Of
capital. This IS direct encouragement
for inferior insurance, u premium upon
both comparative and positive insecurity,
an lndQcement for legallZGd imposition
: and inevitable fraud"
But there is another view Of this subject
which, in our present unhappy condition
OF impccuniOsitY and lcanness Of State
finances, should make our Legislators hest
tate before passing this bill, even were it
not s. Objectionable in itself-and that is,
it ETill have the effect Of materially rGduc
ing the revenue.
Most of the Insurance Companies now
doing business in North Carolina will
withdraw and with them will DO lost the
taxes, fees, advertising, subsidies to Fire
Departments, and all the other sources OF
income to which sucE Companies now 50
largely contribute. Prudent Companies
will refuse to make tAls deposit, fret be-
cause the investment required is in securi-
ties which daily huctuate IL value, and
pay no Interest, aud secondly, be
cause the investment of 800, 600
at par value, would in fact yield only about
50, 900 in cash, should it be Necessary or
desirable to realize assets ard may posi-
bly have no cash Uayuc should the repudia-
ton views of certain politicians be success
full.
[ trust I shall not be regarded as disIoyal
to my S,aco in suggesting tins inquiry why,
il deposit law IS enacted, North Carolina
State Bonds Should be prescribed ? l.
there q Eeatcr security, " better protection .
i'll item th4n IL New York State Stocli or
Unitod State5 Bonds ? Or are Mey pre-
scriDed because certain parties wish to
create Il market for unprofitable bonds nov
held by them
Why deposit in tie State Treasury OF
North CaroliDa rather than in that of New
| York
Is our Treasurer more competent or
! moro honest than tho State treasurer OF