New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1877-02-13
INSURANCE FRAUDS.
FOR THE CONTINENTAL.


"WRECKINGn FOR THE CONTINENTAL.
uNBIUsHING AvowALs OF swINDLING AND LYING
HOW s. u. HAMMOND CHEATED THE POLICY
HOLDERS IN THE WEST AND SOUTH UNDER
LUTHER W. rRosTs MISUNDERSTANDING THE
CALIFORNIA AGENT TO CONSENT TO THE SCHEME
DIVIDING THE PROFITS OF FRAUD.
The Continental Life examination was con-
,i,pos Yesterday before william Allen Butler, at No. ~
Nassau-st S U. Hammond of Cincinnati, ohio' known
among insurance men 81 professional "wrecGer' gave
some testimony that excited much surprise ana interest
He SAID in part:
Twas engaged by l. W. Frost in May, 1874, to buy
poices for the company and went TO Nebraska kansas
California and 70 Man OF insurance
certain reserve Ia left with the insurance oepHl Ti
rseTye i Increased in proportion the amount of the
risks taken in the States The policies weIe i ~ h
sbe "oadinr of this class Of policies Dghtrom
l25 to 1888 per cent-that tney game Sn Which the
loading" was only from % to 80 p@ per cent iNr
BY loading r, mean %aD the "sSrancs Consider
swnde the M frost TO- F %T Mi
me IN Cai0r ma C Sm sc to 500 600 Of the Cali
fornia reserve. offered for the old policy policy ON
the "S pa dra Sa' on Sh the company for the money
paid 40 much in cash aud SO much IN premium IN IN
neT cent OF he reserve which could run or by puI
chasing POLICY, aud this 90 per cent also % my
as is known as the New,Jersey twenty wear plan
ran Of in Nebraska sbont @ oS or SS @ Of
GOO in ali of the States went TO- and understood from
Frost that was to come BACK sns ana as 40 rcp e
The contract made to do tins work was signed ny IL
rcinsnred about $4,000 with the southern Life nsur
ance Company. This company iaiea lew MONIES ys
2S4g sGSd but '' my "R Instructions from
were reiusure in the southern lie lie . anu b;,
o Ie m iS % fost t had little
book when we were in California in which he calculated
that he had made or $1,000 that day FOR the con-
pany asked him If the COMPANY WIS very a re- assoc
GATES had salary; ars dri az Ia inc da ae when
was cut down 900 and 10 per cent ON the amount
of the reserve that of My salary and commissions
in California alone Amounted 70 dc wh99m
wanted TO intimdate" and tell him that the CONT,
he would be willing to sell ont his policy TO e on s
own terms which in case amounted 10 the a9Gn. "
perfectly well that according 10 tne Jaw o dsno If
kcw-York a married woman eOuid not DISPOSE s Ui
S Ssr PO favor 0I the policy was eSGe out write
the face OF it. inns was aecUrahg no bo
policies were made in favor OF married womtn but
had nothing do with this law because was only e
agent of MIR Froyt My first agreement with MI frost
t. purchase policies was in July, lS!4 be1ore tnat
the companys general agent in Cincinnal, he~
AT that time that company pretending 10 De per
fecy solvent here, and was inviting new lsHs, our M
Frost said that they had certain amounts 70 neee a,
We're mateTiaiiy iessened they would be ruined The
professional that is given 10 TINS process 4I re-
There are other for it, such as the sweating
process" inmidating ana more lateiy, , NY6,
companies IN regard to their southern policy holders
Mr. FTOst's plans were, rs understood theln W h
the wrecking process until there was not mucn
liability left against the company, and the, then
to transfer everything to the NeW oSer icy
beginning of this year wrecEng IL New YORK anu a 9e
East My of tie whole job was thar II was TO maze
comnany Ist carried on the freezngout" plan. This
consisted of stopping the notices that WeIe sd"S Se
nyomntr throwing up the Iisk and Withdrawing the re-
serve This been carried ON pretty eAtensVe! ny
'rie idea Of the "wreckng" was to buy off all the pol
cies held by in poor health Two or three persons
policies; remember paIicuiaI. on NAN, ma ha6 10
ian, who very i'll with rheumatism, ana hau 70
SO 600 policy He was very averse to the plan at first
but finally got him 10 agree 10 take oUO ana saer
policy oil the Continental plan on which the premiums
were prepad for some time This thought doing very
well Tor the company, Tor tue man shoruy "o'
slope except 400 800 You donOt pay third so much
term policy ami yet when the 20 years are up the poy
goes out of existence. The reason why unuu a
he told me il would be necessary to do this TO save the
COMPANY. There attempt TO MOB me IN ean
inlet denoulcing me ana the whole plan o. swlndle
H. H. Blake the agent OF the company III San irah
cisco when went there, aud Il was pretty marc 70 prS
him into this arrangement but nndy s9cceoae1 III
doing it, He had 10 be pad $1,000 III gOlu, ana mr.
Frost and g. Hilton Scrlbner Whrn Ie9 MeIe ~ C also
received commission OF 80 per cent Oh the prohs' anu
80 per cent on the new pelnlims.
George W Thomas testified that Luther W. Frost had
drawn $50 600 more in communication fees than his con-
tract with the company allowed This was included in
m entry made by br Thomas in the cash account and
dated Sent 30 1876: ITO commuted commissions,
$4,000"