New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1891-01-17
A TECHNICAL IMPAIRMENT.
THE COMPANY IN GOOD CONDITION.
OFFICIALS OF THE FIDELITY AND CASUALTY

NOT AT ALL ALARMED.
Considerable interest was aroused Yesterday by the
notification Of the report made by examiners Of the
state Insurance Department showing that the capital
OF the Fidelity and Casuatf Company. No l4O bTod'
way had been impaired about 100000.
Michael shannon one Of the examiners. read the
statement Of George F. seward, viceples dent Of the
Fidelity published in The Tribune yesterday, ana
said that he believed that if the company should 20
into liquidation the stockholders would get 5000
share. lie said that there was considerable truth
in Mr.. Stewards statement. but for himself he woum
say that lie would admit that in the companys
100000 Of unearned premium liability there would
be 100000 Of profit. He had no discretion, for the
law defined what the should be. aud in en-
amining both fire and casualty companies he computed
the reserve by the same method. The stockholders,
however, would not be called on TO pay an assess
ment in consequence Of the Impairment because u
was not 80 per cent Of the capital
The company can proceed with or without making
up the Impairment, Can reduce the capital to not
less than 100000. Efforts made Yesterday to
learn what action the directors Of the company would
take. some individual expressions were obtained
II was said that those who are Interested IN the
Baltimore concern are Lying mighty low and
watching their chalcc TO grab the fldeltys valuabie
charter.
The Offices Of the company their usual appear
ance OF activity, and evidence could I've seen OF
any anxiety caused by the report that the capital hda
become impaired. To a Tribune reporter who spoke
TO George f. seward, the vice president the statement
was made that the difference between the compauy's
accounts and those Of the eXaminer was mainly
technical The examiner lad calculated the reserve
fund on monthly basis, while the company had taken
the annual so per cent basis. The rule Of the law
In nearly every state In the Union Is the Latter Inc
New-YOTk law both for fire and casualty companies,
as it appears, contains ample justification for the ap
plicatloW of the monthly rule, although al companies
rtnlp nd in-ur
partmcnts of this and all other states accept their
annual statements made up. The difference against
the company arising amounts 10 upward Ol 9oVOOo'
There is a farther difference arising from assets
which are commercially good but not admitted by the
New-Yorl Department. as not complying strictly with
the requirements Of law. These items amount 10
about $4,000. There are stn further differences con
seouent upon larger estimate by the examiner of the
amount of losses outstanding, the examiner, ds l.
proper, having made his estimate, large enough 10
cover al emergencies. lie followed his best judgment
In doing
Mr.. Seward contends, however, that the company
itself can better judge Of its liability for outstanding
losses since 1t is continually dealing with losses ana
since its business, both in It's fidelity and casualty
branches, is peculiar There IS a SIN further DIFF.
ference arising somehow out of the fact that the &C
counting, of examiner gave credit for the com
panys December business, although good deal of the
December utsOes incurred.
is being prepared December 81, and VIII show that
On the 80 per cent basis there is 10 Impairment but
surplus Of about $4,000. lie called attention TO tn
examiners remark that in all probability there VIII
be d very large profit in the amount held in tn I'M
earned premium reserve "Our reserve on the 80
per basis, OF December 81, VIII be- he said
about 5seO.00o. We fully believe that 80 per cen,
OF this will all losses and expense attending to
business until the risks run OF. Our margin IN
it is therefore. about 100000 This with
estimated surplus of $4,000 is $4,000 and with
our capital Of $250OC0, we have Il fund OF
$4,000 over and above our liabilities. Tile com
pany will 80 work to put its affairs in such
shape that 1t will be subject to criticism for
a nominal impairment. Meanwhile lis patrons and the
public through whose favor the great growth of the
company has occurred, will find in this statement
evidence that lis management has not only been
vigorous, but eminently successful. lts stock was
worth to lquidate three years ago about $50. To-day
1t is worth 800"
The directors Of the company are George :. COe.
j. S. I. stIanahan. Alexander L. Orr q. q. Williams.
J. Il. Maxwell. A. l.. Hull. H. y. liurlbuit j. D. Yer
miye. John L. Rlker. J. q. Mccullough, Y. &. Low,
William IL. Male W. +. Richards and George F Seward
such OF these were yesterday did not appear
to themselves seriously with the affairs OF tie
association, but all were ready 10 express satsac non
with its management 1t was thought likely that a
special meeting OF the Board would be called to CON
sder the situation. but nothing Of the sort was done
The regular monthly meeting takes place next Nech,
and by that time the annual report of the company
will be ready for submission.
q. e. Williams said: The examiners report may
result In a reduction of the COmVany's capital 10
100000 AIN perfectly satisfied with the business
conduct Of the concern We shall do everything that
is duty to do, and If necessary shall make up the
deficiency and 90 right along with the business"
=. Gee sorry 10 see the pull shed state
ment that the company was in trouble. and positively
denied it embarrassed in the slightest degree,
What seems impairment OF capital" he said. is
simply technically. The company is in no tIoable.
Its business has increased el.uaAy, and of IT. sol
vency there can be no question: have no criticism
10 make OF the mana cement OF tho company
j. O.. Mccullough said: Eve prepared TO make
everything good and cOntnue the business. am glad
the examination was made. and should like to have
such made Oftcner have fears for the company.
MIR seward. whose shoulders the burden OF tie
Fidelity and Casualty rests formerly United States
Minister at the Court OF Pekin.