Iron County register. [volume] (Ironton, Iron County, Mo.) 1867-1965, 1889-03-14
THE INSURANCE INQUIRY.
Report of the Special Committee Appoint
ed by the Legislature to Investigate the
State Insurance Denarfme emit.

ed by the Legislature to Investigate the
State Insurance Department.
The legislative committee appointed to
investigate the Insurance Department
made their report in both the House and
Senate on the ID inst. The testimony ac-
companied the report to the House, and
ON motion of Mr.. Jewett, who presented
it, 5000 copies of the report for the use OF
the House md Senate and for the jour-
nails of the two houses were ordered
printed. The report a synopsis of which
Is given below, is lengthy, containing
about seventy pages of legal cap, and the
evidence covers 420 pages of typewriter
copy. besides copies of reports of the
commissioner on dissolved companies.
The mttee commends the vigorous man
ner in which the present superintendent of the
department has enforced the laws against un
authorized companies and agents, thus protect
ing the people against untrustworthy insurance
organizations. The chief purpose IF the de-
paftment is to protect the people against I'M
sound insurance organizations. The protection
thus Afforded by the enforcement of this branch
OF the law by Mr.. Carr has been of great value
to the people The comm ;ttee think. however,
the prosecutions of the assessment companies,
like the Iron Hall and A. O. U. W., were not
warranted, and the interest of the
old-line companies The committee regret
that they can not commend other features
has failed to enforce the retaliatory features
of the law. This law requires the super
1ntendent of the department to that
high n tax is collected from the companies
organized under the laws of any State such
State imposes on companies other than its own.
Thus Pennsylvania imposes 8 per cent. on
gross premiums and charges So for each certifi-
cate issued to agents. The Missouri law re-
QuireS the same to be charged to Pennsylvania
companies. Instead of enforcing this law, the
superintendent have simply allowed the
Pennsylvania companies to pay the State
per cent. on net premiums and local taxes on
the same basis, and have only charged 81 20
for certificates The committee shows these
Therefore per cent. on gross would be per
cent. on net premiums. The committee find
that from 5000 to IS. 600 have been lost each
year from Pennsylvania companies alone. 'rhe
loss in fees from these Pennsylvania companies
was over 300 in 1887.
The losses from companies organized under
the laws of other States have been great. In
1887 Sc 100000 in premiums were collected in
Missouri. If per cent had been collected on
this amount and this is about average of
what ought to have been imposed under the re-
taliatory law, the tax would have amounted to
$4,000, when in fact only $4,000 (and odd dol
lars) was paid the State by the insurance COM
panies. and the committee think not twice
much more was paid in local taxes: and thus,
probably. $4,000 was allowed to slip away in
1887 by the non-enforcement of the law. The
committee says its figures are only approx
mately correct but near enough tor practical
purposes to illustrate the fact that the insur-
ance companies have escaped thousands OF
dollars tax and the people suffered great loss
because the superintendent has not obeyed the
law.
The committee are very severe in their con-
domination of this failure to enforce the law.
They say the loss of the money is not the worst
feature-that the setting at defiance of the law
by an officer whose duty it was to enforce it. is
demoralizing in its tendency, and destructive
of the rvice.
The committee are also severe on the practice
which has been INDUCED to allow persons in
q n
same time work for the dissolved insurance
companies in charge of the department and to
receive pay therefor. Thus. the deputy
perintendent, Knott. during the past four years,
has received $4,000 as salary from the depart
menu and large sums from the dissolved COM
panfes. making in four years over s6.h0i. thus
receiving over $4,000 in four years when the
law only gives him s., 900 a year for his services
In justification for this, the deputy says that
by the law all his duty consists in taking the
place of the superintendent in his absence, and
that if he does other work he is entitled to pay
therefor. He further cites the fact that while
he was drawing this salary as deputy Judg-
Thayer appointed him commissioner to exam
inc the accounts of L. ". Alexander, receiver
of the Columbia Life Insurance Company, and
made an order to pay him $1,000 for said serv-
ice. The committee say if the deputy's con
struction of the law is correct then it ought to
be amended as speedily as possible. They say
to allow an officer receiving salary, to at the
same time receive in addition compensation for
services in connection with his duties is wrong
in theory and dangerous in practice; that it
would open wide the doors to extravag ance and
serves the severeSt condemnation.
The committee also find that Charles E.
King, chief clerk, has received, to a small eX-
tent, double compensation
The committee are very severe on Mr. Carr
for keeping his son Peyton on the pay rolls OF
the dissolved insurance companies. They say
he was paid -27a5.out of the assets of one com
pany for very trf1ing services: that from an
other he received 1915, for VIII CHI be rendered
no equivalent Xcept the drawing of an occa-
Sional check.
The committee also invest gated the manage
ment of the dissolved companies. They find
that under the management of the receiver the
expenses were enormouS that while hundreds
of dollars were spent for attorneys fees, cler'
hire, receivers salaries, etc. not one-third -
much was paid in dividends: they also find tina
during part of Williams atsministrati on $4,000
belonging o dissolved company was kept on
hand and TO interest was accounted for.
The committee also think that the payment
of 500 rs fee to James L. Blair, under the
circumstances. was a violation of law.
As to the Boar q of Underwr tiers and the To-
cal boar s. the committee think they tend to
prevent the Gu ting of rates.
The committee also condemn the present
superintendent for jncurrirg over 500 of ex-
pcnSe in publishing the assessment law passed
in 1887. They think it a good thing to have the
law published, but that it is the province of the
Legislature to direct how ana by whom ii shall
be published at public expense: The commit.
tee also find the Superintendent has failed to
deposit the fees received in the office in the
State treasury Immediately on receipt OF
same, as the law directs. but that he has kept
on deposit in ST. Louis $1,000 5000 all the
time in violation of law.
The committee. however, find that Mr.. Carr
has never received 81 more than his salary
fixed by law.
The committee found two books. of
which had been used by Superintendent Relf
and one by Superintendent Wilkins, out OF
which leaves had been cut. In one case the
first % pages had been removed and in the
other "a pages. They were old blotters The
committee were unable to find when or by
whom the leaves were removed, Us no one in
the office knew any thing about it.
t. at portion of the report relating to the en-
ployment of Mr. Chris Ellerbe TO prosecute
criminal cases says that while they are not
satisfied that the law provides for the employ
ment of attorney for such purposes Mr..
Ellerbe. in the prosecution of the cases put in
his charge by Superintendent Carr. was eff
cient and energetic in his labors and that he
.arned tn. State every cent paid him.
In conclusion, the committee recommended
that the department he removed to Jefferson
City: that the salary of superintendent be re-
duced to g. o0p: that in addition to his present
duties the deputy be required 10 act as CHIEF
er clerk. such actuarial services as may be
necessary, and for the business of the dissolved
companies only such clerks as the courts shall
in the tirst instance allow and that the basis
of taxation be changed to . per cent. on gross
premiums.
JEFFERSON CITY. Mo-. March 4.-Colon ell
C. P. Ellerbe. of ST. Louis County, was
nominated for State Superintendent Of
Insurance by Governor Francis to- day,
and the Senate. in executive session this
afternoon confirmed the appointment.
"A girl in Rushville. Ill. laid her
lump of chewing gum on her pillow
the other night and went to sleep.
JVhop che owolyo in bn tha