New-York tribune., 1876-12-15
THE sECURITY's FAILURE.

a.xcp supFRISTENpENTs-sTAT SUPERVISION
To BE RIGIDLY APPLIED THROUGHOUT THE
COUNTRY.
Another life insurance company has been de-
cared iusolyent and placed in the hands OF receiver
The security Life and Annuity organized In January
1862 aud began business the haltnote pian-tnae
a half the premums were paid in cash and half iu notes.
This was one OF the systems OF which there were many
few years ago. devised to attract business proNeu o
ruin of the company II was abandoned aoou' ioui
years ago. but the stpulatiOns in the OLD poees co
nelled the company TO renew them from year
10 wear on the same terms. When poll
cies lapsed half the accumulated reserve on
them became waste paper, and the very thihs
which strengthens other companies by diminishing
their liabilities proved source OF weakness 10 the secu
49,, when the perod of widespread distrus Of life in
companies came many cash policy OF the
Security rensured stronger companies, but the note
policyhoders rule held because they could OBTAIN
the same terms nowhere ese The commissions TO agents
were paid in cash, on premiums half oil Wmen were un
productive
The officers have been aware of the virtual insolvency OF
the company nearly two years, but hoped Tor better
times They preparing to 60 into voluntary oanN
yupey at the close Of this month when Acting Insurance.
superntendent Smyth stepped In The investigator
was begun about IL days ago Mr. Smyth was tOu thh'
tho comnapy was nsolyent by the President, and bal
ancesheet for the first months Of the year was placed
in his hands, showing that the disbursements exceeded
the receipts by $14742 s0 aud the payments for death
lOesaR
puities exceeded the gross cash premiums py
S11b 400 CO. The company .was at once directed 10
eeas, doing business, and an examination was Degun
which has not yet been concluded Ihe company
aworn statement the Insurance Department. ast Do
cember gave its assets as $3737,570 40 (ot wmch
81 633 2O5 40 was in premium notes) ana lts hao'eS'
"a 16s 152 25 THIS was more favorable to the COM
many than the facts warranted but the Olncers ci"
that It was not falsfed more than such sta'e-
poents usually are-that is, the company gave isei
hon
not been returned as renewed they were put do"n as
Ionsed TINS diminishing required reserve though III
many cases they afterward came in renewed, having
been detained in the hands of agents Mr MCCALL S'u
very emphaticaly yesterday that no funds hau peen
sappropriated by any of the officers; they had played
alosing game and their fault had been IN conceahR
their condition from the public The President ROBERT
L. Case and the vice-Pfesdent, Theodore H. "etmore
were large owners OF the cOmpanys STOCK Whch VeJ
boueht at 80 to so per ce premium and when they
did not sell to save themselves 1t believed thaI they
will come out of the company poor men,
Application was made yesterday morning to Judge
Brady in Supreme Court, Chambers, by the Attorney
General for an order for the dissolution OF the security
Company and the appointment OF receiver 0uuse
Brady refused TO grant the order e1 pde but gave an
order TO show cause returnable at 2:3O p m'' why
such an order should be made AT 2;3o At
torney-General Fairchld returned, and X Ii. Oh-
derhill appeared for the company. Mr. Unuer-
bt said that he wished at least brief adournmeht
consult the St0cknONefS. NclhA"lOb 1h" WV
President said that he would prefer to have receiver
appointed at once. The company was insolvent ana
the matter should be ended. Mr. Underhn then with
drew his opposition Several names were suggested lor
receiver Mr. Falrchild presented the following STATE
lnent, prepared by Mr. Mccall;
ASSETS .,on mn
Real estate above incmbrance Sl3g009 33909
SSd and STATE and & OOon
Albany '''''''''- 40 COO
Uneoiected and deferred premiums. 100000
ro,,, asset. .si,s48OOO
lO'h "''0'' u1BiiIlFs. 80 ooo ooo
Reinsurance reserve So, 2OOo0O
Unpaid losses resisted and Otherwise) )..'".. l4OoOO
Total liabilities to policy holders St9o0S St9o3S
Total liabilities.
Mr. Farchd explained that the great item OF assets
the premium notes. the present state OF affairs were
almost worthless Judge Brady, after half hours con-
alteration selected from the names submitted william
H. wiekham for the receiver, and directed MIN 10 give
in the ccmpanys last published statement there are
Columbia and south Carolina bonds, while IN Mr. Nc
Calls statement there are only $4,000 IN bonds OF an
difrence and Mr. Mccall declined to 60 into any par
e9ars until mis- gePUI S%y was TO- the court unless
compelled to do in order TO ahord Dass LOT nAns
The present action of the insurance department md
Gates change Of policy and s Is t6e of New
York and other States under which II Is generay ne
eyed that nnmoerSe we Oh ddrn A ~ The last few wears
SIe fee1 esnecaIly severe upon life insurance
panes, and those which were not esIaDs9eu an
have had TO struggle hard Tor Gxlstehee
kuStan the Weak 81 whole principle Of life insurance
should be brought into dsreputei ana the
urged TO give them every chance Ior 10 @
Superintendent Chapnan II IS SAID DeeVea tnat e Vas
Scne i'm the best interest of nsul and insured by CIV
ing feeble companies opportunity to correct tne eTIols
of management and to recover from their ehoardsS IN
nents Acting Superintendent Smyth followed the pohcy
chef But the condition OF the insurance Dus
ness has not improved and the companies Wbicn were
f.xuv arg gnaOar re
yond the hope of cure. The failure of the Continental
sfrong comnanies are coming the opinion that the
Weedng out of mOrlbund companies VIII De 70 thS au
vantage Of those whicRIenan. These views nave Deeh
Impressed upon the insurance superntendehts anu COM
missiOners OF the several States. -. -. -. 1900
Ine insurance department OF six states were repre-
sented inv their chief officers in York nearly all OF
last week. Messrs Smyth OF NeW-foiK hlOues ol
Massachusetts, Row of Michigan, stdnan oi Sonect
cut, Foster OF PeDnsylyenla aud spencer Oh hnoae
Island consulted together Tor SIX DAYS, anu
though their consultations were private anu secrecy
reached, 1t is understood that State supervision
OF Insurance Is about 10 become much more IlgIa
reality has been for several years past ana tnat
the reports year by the departments OF these
States Will fewer statements than heretofore Of
the correctness OF which the saperntendenls VIII NOT
have some better authority than the word OF the officers
Sly lie companies are freely talked OF in insurance
circles as next undergo investigation, and doubts are
freely expressed whether five OF these can STAND the est
10 which thew will be subjected. 1t is said that
pany whose surplus the close OF last year was only
little more than half million, Will have more than
$1OOOOOO endowmeniS lA aue w.'hI 'S a. nv he,;Svei
by well Informed insurance officers, that 0uIlng
the next few weeks or mouths there VIII De sncn
it's merits, and not be grouped IN pSpu1ar
estimation as now TIC Importance OF aVeItnE sh az @ @
doubted strength TO ask the department. 70 examine
them thus the fact that company Is UNDERGOING an
examination viii not be hDputatOn upon It's SOUND
ness.