New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1891-08-06
AGAINST THE FLOUR CITY LIFE.
A ROCHESTER ASSOCIATION ACCUSED OF FRAUD
IN REPORTS TO THE HEAD OF THE IN
SURANCE DEPARTMENT.


SURASCE DEPARTMENT.
Albany, Aug. 5.-Below is given the substance OF
the two reports submitted TO Attorney General TABOR
by superintendent Pierce Of the state Insurance De
partment upon the examination into the affairs OF the
Flour City Life Association OF Rochester made By the
Departments examiners. In his letter to the Az
torney-General regarding these examinations. The
superintendent SAYS he Is satisfied that t5is as
ISOLATION has been eo1ductlng its business frauduenty
and mas JAILED 10 comply with the provisions OF te
General Assessment Insurance low, Therefore ne
has asked the Attorney General to take such legal
stops would dissolution Of the charter OF
the association IL the facts disclosed in the reports
should, In the opinion OF the Attorney General require
such action The company has, IL is said. been guilty
OF other questionable methods these not being
specified In the reports the Super ntenden said to-
day that he did not think II judcous 10 make them
public at this time These caSes however. the super
intendent added. have been referred TO the District
Attorney Of Monroe County, who has already secured
an indictment against the president Of the ass0cia-
ton on two counts.
There viii be hearing before the Attorney Gen
eral at p. m. on Thursday, on the reports Of the
examiners, at which the officers Of the company are
expected to be present.
The first report says that since the organization Of
the association, in December, 1856 its affairs have
been under the control Of its board of directors self
perpetuating body. Certain persons had formed a
cOpartnershlp for the purpose Of furnishing funds.
ETC. to meet the general expenses Of the association
until IT should become selsustsning when they were
to share and share alike in the net profits. /" That
this contract agreement continues the report.
was of value to the parties thereto has been proven
by the fact that at different times persons holding
interest I'm the same have sold such Interest," The
history Of the changes in this cOpartnershlp is then
given. and the report describes the negotiations
sulting in the purchase the Flour City Association
by the Life Union Of NewYork. Reference is made
TO an alleged Illegal meeting Of the Flour Clty's
directors April %, 1891 at which the designations
of eleven members Of the board were acted upon and
the board was left without quorum, the remaining
members, however, proceeding to transact important
business. The report says in conclusion:
We respectfully submit that since the meeting OF
April %, when the board Of directors left With
present voting upon the designations OF members not
present and their resignatons the Flour City Life
Association has been tTnsactlng its business with
board OF directors who were elected directors In
accordance with the General Cooperative statute. and
all business conducted by the persons who have called
themselves It's board OF directors has been irregular and
illegal.
The second report says in part:
In the report OF the Flour City Life Association,
dated June II, 1891. statement was made of the
Of ecctng the directors and Of the status Of
Of directors as a selfperpetuating body That the
members Of socalled assessment association orCani-
10 those Interested should be vOceless in the election
OF body which was 70 and did control the manage
u.
sufficient to cause certain amount Of distrust ANY
suspicious which may have mad OF general rreg-
ularites in its management at the time we were
control of the Flour City by the Life Union to report
the facts in such transaction to You, have been more
than sustained. At various times before the sale
above referred to, other persons purchased supposed
interests from the parties claiming To and control
the association and paid thousands OF dollars for
same, the money paid in such purchase being divided
among the clque In control such actlOns when
considered in connection with the sworn testimony Of
Some Of the parties making these sales, SAVIOR of CON
hdence game.
Your attention is called to the following irrsgu-
larities:
Flrst-That funds belonging TO mortuary accounts.
amounting To thousands Of dollars have been misap-
prOpTiated and msippled.
Second-That extravagant salaries have been paid,
resulting in part I'm such msepproQriatOn Of funds
Thrd-That the last statement filed In the De
partment is not true statement OF its condition and
FOurth-That officers have been benefited by other
sources OF income than their salaries from moneys
properly belonging 10 benefciancs.
Fffth-That benefciares have been defranded out
Of MONEYS ard by the records Of the association larger
amounts appear as having been paid than actually
Sxth-Thqt officers of the association are under
indictment and arrest for forgery.
-eventh-Thst all papers relating m losses paid in
several III ST questionable cases nave disappeared from
the files OF the association
Eichth-That poor class.of risks have been taken,
trusting to the fact that every claim when filed could
Einth-That speculative insurance on unnsurable
risks By persons connected with the association a.
officers and agents has been conducted.
Tenth-That the bylaws have been Systematically
violated.
EIeventh-hat pools have been irreCularly and dis
Tweifth-That records have been falsifed.
Threenth-That the association has been doing onsl-
ness through agents in other state without authority
Fourteenth-That this association has been reckessly
and dishonesty managed.
All these charges treated in detail In the report