The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1877-03-08
LIFE INSURANCE TROUBLES.

LIFE INSURANCE lROO Bills
THE UNIVERSAL LIFE INSURANCE COMPANY TO
BE ExAMINED-oLD STORIES REvIvED-wHo
SHALL BE ENTITLED TO PROCEED AGAINST
THE INSURANCE coMPANIEs-suIrs IN PROG
| REss.
| The insurance Department Is about to begin
animation OF the Universal Life Insurance Company.
against which, together with the North America and
| Guardian companies recent action has been CON-
mencod IN Brooklyn Serious charges and implica'
tons against these companies are made by the COM
pAinant In the action and the Investigation py the
department will DO welcomed by tho policy holders.
After tho Universal IL Is likely that tho Norm
America and tho Guardian will also DO examined.
Tho mutual relation and the combined manage
ment OF the companies has long been mat
perpiexity and suspicion, and the proceedings
against them arc regarded with momentous interest
Tho North America is not claimed be solvent, its
President Mr.. Henry J. Furber, alleging that the
sovepcy insolvency depends entirely upon the valu
that may be made upon tho company's roni es-
tate The case is considered to be very complicated
one and may involve other interests than those now
directly concerned In the litigation.
When years ago the deficiency Of over bali
million OF dollars In the North America was made
good, it was rumored that tho amount Withdrawn
President Furber, in a conversation with the writer
yesterday, denied such statement and said tho
amount was subscribed by private parties and
kept by tho North America for year. He said
tho only security given those parties was the know-
odgc OF tho recupcrative power OF tho corporation,
which having reached certain point would insure
them the return OF their money In relation TO the
mortgages which havebeen transferred in large guam
titles from the North America TO the Equitable, Mr.
Furbcr SAID that they had adopted such mode OF
transfer OF foreclosure they reduced the la
bties of the company, the assets were correspond
,ngy reduced, necessary to dispose Of many
mortgage securities In the spring OF 1876 moro
worth OF mortgages were tEus transferred 10
the Equitable
SUITS AGAINST LIvE COMPANIES
The bill introduced by Senator Wagstar at Albany,
giving all sui.s Tor tho dissolution OF lite insurance
companies the hands OF tho Attorney General has
created great deal oil comment In insurance ana iega
circles in this city The better class OF opinion as
bill; though as might have been expected the propo
sltion IN other quarters provokes great hostility.
ton against insurance companies, and they are par
tcuary nccnsd AZ attempted interruption OF their
sport in its present pamy stage. petition denounc-
holders are requested TO attach their names Such
invitation the policy holders Of the Continental is
certainly considered TO be worry pretty sarcasm.
THE CONTINENTAL EXAMINATION.
Referee William Allen Butler gave another hearing
en- Continental affairs yesterday afternoon, a. No. y
Mr.. Seth G. Chandler, ac.uary Of the company, test
fed that he first learned Of the OF committed
annuities to the officers ia the latter part OF 1872;
made q valuation OF the outstanding policies
OF tho Empire Mutual Lite Insurance Company, but
did not himself estimate tho assets; tho policy abili
ties that company amounted to about 5000 000 beng
5000 900 in excess Of the assets this estimate was
made the beginning OF the year 1872, and by an
other valuation close Of the year. witness found
tho deficiency amounted TO $3.50 900; Justis Lawrence
the President was III at the time and not aware OF ms
| they did not tell Mr. Lawrence; witness said that
both X. G. Frost and G. Hilton Scribner knew OF TINS
deficiency before the contract Tor reinsurance was
made; the policies OF the Empire Mutual rensurcd
10 tho Continental there should be reserve Of about
1926, 600; and the policies still held In the Empire
| tho reserve should amount TO $65, 000
! The referee questioned Witness with regard to
loan OF 100000 made by the Continental 10 the New
Jersey Mutual Lite Insurance Company Witness
that held several conversations upon the sub
jec, with Mr. William G. Whitney, attorney Tor the
| company; these conversations arose from tho TACT
that witness did not consider the loan proper one:
Mr. Whitney told wilness that he would see Mr. Frost
the loan was secured by $4,000 in bonds and
mortgages; witness also had inlerviow with Mr.
Frost relative to this loan and other matters which
| witness considered detrimental 70 the company.
| THE OFFICERS TALKING OF REFORM.
| Witness said that be converted with Mr. Frost in
January, 1870, about the company generally; witness
called his attention to the objectionable character
OF the Blake contract for purchasing poll
| ces; he also demanded access 10 the cash
book which he bad never before had; prior
TO this conversation wtnesstook some provision Tor
replacing mortgages lie had given the CON pany The
conversation with Frost in consequence OF mat.
tcrs communicated 10 witness by Mcssrs. Thomas and
Styles the bookkeeper and cashier; they told witness
about the amount OF paper carried cash and other
irregularities; spoke to Mr.. Frost about the loose
method of keeping the cash account, and Mr.. Frost
replied that It was the custom Of the company; Frost
also said that the condition OF the company could be
much improved By cutting down expenses and otnor
means; Mr. Frost declared to WITNESS bis willingness
| ana IN tention TO assist such u reform.
Witness read n list OF the temporary loans Of the
company, IRON which II appeared that there were
United States bonds among the securities; there were,
as collateral, $685. coo in Empire Mutual stock aud
| $l8 900 in the stock OF tho National Bank
Walker r. Blake, a purchasing agent OF the Cont
mental testified that his contract for netted
him about a. 500 annually his nrst contract was COM
muicd and he aftcrward took two others from the
company the third contract paid witness about
500 600 per annum; he got fourteen per cent on tho
reserve purchased and sixty per cent on new policies
issued.
| MIR. Sanger, director, and MIR. Thomas the book
keeper, atcrward gave some unimportant testimony,
and tho reference adjourned until two T. NJ Friday.
whcn Is positively stated, the evidence VIII be