New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1886-07-16
FRAUDULENT INSURANCE.
WHAT SUPERINTENDENT MCCALL DID,
HOW HE BROKE UP THE BOGUS BUsINEss-Mk.
MAxwELL's LACK OF vIGOR.

|
ance companies and brokers' They freely charge that
though exactng heavy license fees and additional
over aud above the regular OF the department
yet he has practically turned them insurance
| pirates whose operations have been exposed In THE
TRIBUNE The brokers pertnenty ask what 10 the use
OF their paying license fee OF 5000 and tax OF per
cent for the privilege OF placing insurance In out0E
town companies when he permits horde of sars to
settle down In NewYork and solicit their trade for
fraudulent companies In defiance OF law and without
paying either license fee The law under which this
taxation is eIaced is acknowledged by all to DO
celent ono II the department enforcss 1t equitaby.
Nobody objects paying the tax only these irregular
and dishonest practices stopped In 1885 less
than 1000 paid In license fees alone, anc for the
fiscal year ending In 1886 much $4,000 will Dc
collected in per cent taxes This means that
policy holders have paid out through authorized brokers
not less than 100000 in premiums to legitimate out
SIDE companies from which the state has derived It's
proper It is hard estimate the irregu-
lar business has amounted to- but Is believed that
much more has been done In defiance Of law.
The law permitting property-owners TO insure in out
side companies tho subject OF much discussion and
adverse criticism by OF doubtful reputation in
the business before 1t passed. In 1884
They all anxious to break 1t down now. and they
know that the surest its repeal 10 have
its penal terms violated with impuDity they can 90
business without paying special taxation and II their
representation Of fraudulent companies goes unpublished
they know that lawabding brokers will refuse TO DAY
these taxes. AMI thus the law will be nulaed. Mr..
Maxwell, It s declared, Is aiding their schemes
much II he actually espousinz the cause
OF bogus Insurance. The law was passed
chiefly through the efforts of superintendent Mccall,
while he In Office, and was largely the result OF
conversation held In 1884 between Mr.. Mccall and Dis
trrc,Atuorney Oney. The Distrct-Attorney said that
violations Of the insurance law were nos an indctsbo
offence and therefore not within his Jurisdiction. He
declined prosecute Them and SAID they must be prose-
cuted at the personal and expense OF the supern
tendent Of some person outside OF tho departments
residing New York city, who would consent 60 enter
complaints and conduct prosecutions As neither OF
these schemes feasible. NJ Mccall
secured the passage OF bill enabling
the superintendent be made the attorney to accept
In behalf OF foreign companies and making the
procuring OF policies in companies not licensed mis-
demeanor. 1t was felt that this might curtai tho
lines Of Insurance needed by New.Yorx and Brooklyn
merchants and, therefore, the law was amended so as
permit the superintendent to issue to citizen OF this
State a license for 800 annually. permitting
| him agent TO insure tho prop
erty OF his customers in outside companies
upon the condition that he should make affidavit
that he Is unable to place that amount Of insurance IN
authorized companies. He is required to give bond
for 900 violate any provision OF the act anu
must pay to the State per OF the premium
charge his policyholder. And 1t Is provdeda fact
not generally known and OF the utmost Importance to
property-owners-that policies in outside companies not
obtained by ompance with the act shall be null and
void and Of no force or effect whatever"
THIS law was experiment and grew out of the ripe
experience OF sixteen years which Mr. Mccall had had
In the Insurance Department II properly enforced It
would accomplish four greatly desired results. IL
would give the public ample field in which to obtain
adequate insurance. 1t would keep IN the city all but
the surplus risks those for which there was not su
cient insurance capital. It would insnre the public
against raids OF the bogus agents and dishonest
| md
to enable the department TO look after the knaves
| The law snapped up by the Insurance
Departments of Illinois. Ohio and Massachusetts quickly
and corporated in their criminal codes and III those
States where 1t is being vigorously enforced, t is re-
ported to be efficient all the objects 1t had IN Wow.
| Mr. Mccall had been greatly troubled with the Wild
before he the passage OF this penal pro-
vision and so soon it enacted he selected an old
and tried clerk In the department who had been there
nearly long as himself j. j. Haggsrty by name, and
lean and Mr. Mccali Democrat 6at under his admin
istraton the civil Service law the rule In his de-
est confidence IN Mr. Haggaty and often refers to him
nowadays a. being man OF great ability and OF some
ness with which hs was familiar.
Mr. Haggarty was chosen to come TO New-York the
delicate mission OF knocking out the frauds not only
because Of his knowledge OF their methods bu because
Mr. Mccall did not care to trust "a ordinary aeteetre;
and get list Of the losses sustained IN any mes that
persons who held policies and learned IN what com
panes they were insured. He had bern made deputy
power to arrest. Whenever he found that an outside
company had got business irrssuHry Mcc III
communicated with the company. advising
1t to keep away DO ts business here wi thin the law
Wherever a company found Of doubtful reputation
It gated. and when fraud was ascertalned 1t
agent irresularly he was arrested Indicted and
tried II the company for which he was acting was
stop any further Illegal proceedings, ne usually got of
lightly often without trial But II both principal and
yictons Of this kind were obtained. Mr. Haggarty
worked 50 IND anu tina, se rsn. we're
effectively cleaned out Most OF them qnist!y dropped
backbone of illegal operations here and he left his in
valuable detective Mr. Haggarty, as legacy 10 Super
intendent Maxwell together with tho evidence in SOW
era cases in which he was about 10 proceed
Mr. MsxweIrs course aoon excited the distruss 81 In
garys evidence and much buster cleaning out tue
faithful and efficient Republican clerks who had been
for years department than taking action agsinss
the fraudulent agents and ooeus companies VINO were
carrying on their Expectations IN Nss iGr. ani brooS
Ign. When School Superintendent Rugge' wa. let out
IN the cold by the election OF his successor Mr. MAY
well TOOK him in a. second deputy at 5000
discharged Mr. Clifford and Mr. wetmoro. two Repnb
psrticnlar work In a few weeks Mr.. Hasgarty. too.
was dismissed. The excuse for discharging MIN was
without Permission but needed 10 great penetration
this was only an excuse and ia the light OF
as we'll With Mr.. Haggsrty's retirement all pretsnce
Of following up and Furnishing tn. frauds In Nsw.YorK
Tho frauds found that out quito a. soon as any
body else, aud they are bao. again In horde There
brokers who openly hawk about the policies
OF ythca companies. insuriDg In any sum whatever,
and at almost any rate and agreeing 70 deliver
policies in faraway companies ~ an hours
notice. These policies are AL written In their own
Offices.
group OF insurance mea were talking about this
yesterday at Broadway AMI Wall street, aud one OF
them said: M.1welfs aegect OF duty Ia This partcu
lar is scarcely worse ignorance OF insurance
law BY chapter 23o OF tue laws OF 1888 foreign mrs
insurance company Is prohibited from making . home
office statement. Tais IS done 20 compel them 10
transact their American business upon their Amer
ieau capital They cannot parade their big
figures subscribed capital before the American pub
nc eyes bat show only their paid up capital
fund for American risks In order TO compete
with our domestic companies Now on the otner hand,
chapter the OF lS49 compels foreign marine
companies doing business here TO advertise and report
their whole assets OF every kind In fact, 1t 10 made