The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1877-07-13
THE UNIVERSAL.
superintendent Smylh Reports this Life
Insurance Company InsoIyent
DEFICIENCY OVER 100000.
A Review Of Its Financial Management and
Its Individual Contracts.

lhe Universal Lie Insurance Company which Is any
Thin: but agreeable 10 the policy holders and far from
complimentary TO the management. The examination
was begun upon the 10th day Of March last,
and there has ever since been variety of
opinion n 10 what would DO its result The
general tendency Of Insurance people was 10 believe In
the company's present sovency, although there had
been periods In its when It's soundness was
matter Of much solicitation ana doubt This report OF
the Superintendent viii occasion no little surprise
nmong even some OF those who were supposed TO be
familiar with the compapy's Affairs.
The report is exhaustive and embraces resumf OF
The companys business experience. with copies OF do
structive contracts. &c. From the statement IL ap-
pears that the Universal Life Insurance Company
organized February 2 1865 as u stock concern with
$780, 900 capital paid in As Inducements 10 insurers
it Is said that rates below the standard OF mutual
companies and the issuing OF policies TO per-
sons of impaired health among the
advertised speciaities On March II. 1874. It rom
sured eighty per cent OF tho risks OF the Guardian
Mutual Lilo Insurance Company. and the Universal
statement Tor the year ending December 81, 1873,
hibitod surplus OF S2l6 900, while at this date tho
Guardian Mutual had deficiency OF $3.50 900 AS the
surplus OF tho Universal was not large enough to
this deficiency tho Guardian Mutual, contracts
entered into between the Vice President OF the Uni
versal Mr.. Henry J. Furper and the CON-
pany. Tho first OF these gave TO Mr.. Furber
commissions OF ten per cent upon premiums
received from the Guardian. and twenty per
cent upon forfeited reserve Guardian policies with
guarantee that the sum should equal $3.50 O00 This
contract the day made assigned TO tho
Mercantile Trust Company in consideration OF the pay
mcnt OF $500 The second conlrac. a SINH
lar the above and guaranteed to Mr.. Flu rbcr
the payment Of s63 coo by April 80, 1874 and 900
per month atcrward This second contract was let
over to j. Smith Homnns Jr, OF Englcwood, N. j.. IN
consideration Of the assignment by him Of several
mortgages to tho Guardian company.
ADRoir rINASciEKlSG.
The Supcrintenden says tho time OF tho contracts
being made with Mr.. Furber that gentleman borrowed
$3.50 600 from tho Mercantile Trust Company and de-
posted the same in the American Exchange Bank, re-
ceivius therefor certified chcck, which Endorsed
by HIN to tho Guardian. within week alter
tins tins check Reimbursed TO tho
Universal. the latter deposng II with the
Mercantile Trust Company, which mad in the
first instance made the loan. the entry on
the books OF the Universal beng Mercantile Trust
Company DEBTOR to cash. T" On Feb ruary 8, 1916,
this credit was cancelled by journal entry Of
"Surrcndcred policies debtor to Mercantile Trust Com.
pany, $780, COO" The bonds aud mortgages OF Mr.. Ho.
mans were released in Ike manner alter they had
been transferred by the 'Guardiau TO the "Univcr-
sui that is by journal entry Of Surrendered poll.
ces debtor 10 bonds and mortgages" IL Is not be-
Eeved by the Superntcnde that inakipa these en-.
tries III the books repaired the impairment OF tho
"Guaruian." 1t was not u transaction made IN good
fatn, nicndcd TO benefit tho policy. hoiders Of the
company 1t u was the ''funds'' would have been
returned until /, was absolutely known that tho cond
tiou OF the company admitted such return. Tho truth
appears 10 DC that the impairment not made
up ANA that the policy holders were. deluded that
they might continue to pay thcir premiums, which
they would not nave done II all tho facts had been
Tue credit gwen " the Mercantile Trust Company
was probably, nay, undoubtedly Understood between
the officers oil that company ana Mr. Furber The
,gagcs OF Mr. Homnns were the Superintendent Is
informed never placed on record, and those given by
him the first instance were OF such qucs-
tonnblc character and value that tho securities
which he substituted Tor them were. second
as collateral on Il $4,000 loan made to Holnans.
This collateral loan mortgages represent.
ing be Tor 1907 900 which had transferred to
tn. Guardian, Nv Homuns to make good, IN part the
Se5O,0O0 deficiency, and additional mortgages OF
$225, 900. making s4a2. 900 IN ali wnich ha1 been
gwen to the Universal on December 81, 1874, by a
journal entry This journal entry, 10 the judgment Of
officers OF the UNIVERSAL was proper basis IN It's
gets instead OF like amount Of tnadmissiLe items.
LII tho month OF June following 100000 gwen
back by an entry OF Surrendered policies debtor
bonds and cages, and 500 900 transferred call
loans additio nal security tor the $4,000 advanced
to Homans.
VERY LIBERAL COMMISSIONS.
The motives or purposes oil the Universal officials,
says the SUPERINTENDENT Ia having their institution
saddled with The RISKS and deficiency OF bank
rupt company may bc dIicult fancy; but
The following entry IN the books OF the Universal
may explain tho real character OF the transaction.
The commission account Of inc Vice Presidant, Henry
j. Furuer; the Secretary, John II. Bcwicy anu Aciu-
nry. G. /. Montague IRON March, 1874, 10 December
81, 1876, shOws:-
PAID IL. j. Furbcr on account commits
SONS. 1921 ,42S IL
rad H. Bewley on account COMMISSIONS 60,65O o.
Paid G. l.. Montague on account cuinmIs-
sions. W S9b "
To'al. S4@2, $40 III
O der
two contracts oil which hereafter gwen AMI
10 Acssrs Bewlcy and Montague under resolution Of
the Board vi Directors, copy OF which not gwen,
Us the superintendent was informed that the
minutes oil IKE company was lost during the removal
oil he Universal from Broadway to Warren street.
The commission paid McssrA Bewey and Montague
was ut the rate OF two-thirds OF per cont OF
net premium receipts; and the commission to Mr.
Furbcr III accordancc with an agreement was Two
nail per cent on the net premium receipts, addi-
ton 70 salary OF So, 900 per annum. 1t should DC
ncmUcrcd that the COMMISSIONS paid Mr. Furbcr
TO this contract are IN addition to $3.50 900
"paid" under the Mercantile Trust Company iransac
ton; but II Is evident that Mr.. Furber did
not profit In TIM, matter, tho latter sum
being SIMPLY receptcd for 10 extinguish u
bank creut that had no existence in reality
II was discovered In the course OF the that
In addition 10 the reserve on the Guardian's policies,
WHICH was turned over 10 the Universal ''prc-
num- aud constituted large portion OF the receipts
upon which was based the ABOVE ssion accounts,
there Was included as premium income the sum OF
xo39 3os So being the amount Of reserve on policies
surrcndercd and paid Up policies taken In lieu thereof
this reserve being treated US premiums TO pay Tor the
new policies. Tho superintendent says that
tho commission has been paid It would
be matter OF simple justice tor Mr. Furber aud his
colleagues TO return 10 tho Universal their pros
The Sl4l4, 52j ~ OF the S3s4S 900 reserve or pre-
iums' wnicn was re urned 10 the Guardian because
those gentlemen as officials OF the Guardian, were
anabc 10 carry out contract which they were in
strumenal III making with themselves rs officials oil
the Universal.
soME Personal ACCOUNTS.
How the management Of tho Guardian was changed
SO 10 admit the gentlemen OF the Universal, the
superintendent says IS matter not SHOWN IN tue
records vi either company, but Tho following entries
description oil them will serve 10 throw light
on The subject:-lt was found that during the year
1874 there was advanced 10 Mr. Furbcr, aud charged
10 him personally, $4,000. He was credited IN
December, 1874, ut the time oil making tue annual
statement with having paid THIS IN cash, and in
making UP the cash account Tor the statement, 1t
returned as cash IN the Commercial Warehouse
Company. Some months aiterward the "Oommer-
cia," was credited with an entry, 'CaIi loan
debtor to the Warehouse Company" and II Is
found that the call loan then went the univer-
sal company's books as "Guardian stock, and ut
the date OF subsequent statement was charged 10
croft account. reality. for the