Delaware gazette and state journal. (Wilmington, Del.) 1883-1902, 1891-02-26
EVADING INSURANCE LAWS
Need For Defining FraternaI
or Benevolent Business.
THE VALUED POLICY ON TRIAL
Unauthorized Insurance to
be- Ousted.
Abstracts from the Biennial Report of
Insurance Commissioner Fools--Bene-
fetal Societies Criticised.


Insurance Commissioner Foolss--Bene-
fetal Societies Criticised.
STAFF Correspondence OF Gazette and Journal
DOVER, Feb. 19.-Insurance Commits
sioner Fooks says, in his biennial report;
believe that there are a large number
of these so-called secret benevolent, chari-
table and fraternal organizations or asso-
Citations doing an insurance business pure
and simple, with grain of the secret
benevolent, charitable and fraternal
thrown in for the sole purpose of evading
theinsurance laws of this State. 1t isa well-
known fact that many of these organiza-
tions or associations issue to their mem-
bers policies of insurance or death benefit
certificates, or promise to pay stipula-
ted sum Of money to some person or per-
sons therein named upon the death of the
member or holder of such policy or certih-
cate, in consideration of the payment OF
assessments by the member or policy
holder made upon him by the home
Office, grand lodge, supreme council, or by
whatever names the head of the chief
office of these organizations or associations
is known. 1t seems to me, that these or
ganizations which have attempted to de-
fine, and which are doing what, as ! have
| already stated believe to be an insurance
business, should, if | am correct in my
| conclusions in relationt to them, be brought
clearly within the scope and meaning of
our insurance laws.
The aggregate amount of insurance car
ried by these organizations in the state is
quite large and the state is being defrauded
Of revenue rightfully belonging to her and
our citizens who have already become
members of these organizations and who
are likely To join them have not had that
protection and safeguard thrown around
them which our insurance laws intended
to give them.
therefore recommend such amendment
of the insurance laws of this State as will
define any secret benevolent, charitable or
| fraternal organization OF association which
shall issue any policy, or death benefit GER
| titicate, or promise Of any kind to pay any
benefit of any kind-other than life bene-
| fits to its members and the burial charges
of deceased members-to be an insurance
company within the meaning of and sub
ject to the insurance laws of the State; and,
in recommending this, am not seeking in
any way to injure the purely secret beney-
olent, charitable and fraternal institutions
of the State. It is only that class of the So
called institutions which have for their
| object and purpose a scheme of life insur-
ance | desire to reach; that class which i'm
sures, however they may protest to the
contrary; that class which at their home
Office provide for making, calling and re-
| ceiving assessments from members at in
tervals and pay to the beneficiary named
in the policy or death benefit certificate,
the sum therein named upon the death of
the member of holder of such policy or
certificate; that class which are nothing
more nor less than assessment insurance
companies.
UNAUTHORIZED INSURANCE.
Under this head the insurance COM
missioner says:
| / am reliably informed that parties re-
eidino ont of tha State i.arrnsn11t ii rtr
Gus kinds of insurance companies and who
are ready to insure anything upon any
terms, frequently effect insurance within
the State and especially is this the case
among quite number of our manufactur-
ing establishments These establishments
represent no inconsiderabie wealth and, sol
far as it is possible to do SO, they should
be protected against the schemes and
false representations of that class of per-
sons and corporations who constantly en-
gage in Illegal insurance business.
There seems to be conflict in the deoi-
sions of the courts as to the Inability OF in
surance companies doing business in states
in violation Of the insurance laws of those
states, and hence our citizens must accept
this class of insurance with uncertainty,
not only as their legal rights to collect
their insurance in case of loss and nom
payment, but they usually know very
little as to the real standing of the COM
panies in which they insure but. in many
instances, are fraudulent and worthless in
stitutions without any solid basis upon,
which to do business.
Inasmuch, therefore, as the insurance
laws are designed as much for the protec-
ton of insurants as for revenue to the
State, every possible means should be used
to prevent all and all manner OF Illegal "
unauthorized insurance within the State.
| would recommend the passage of law
similar to that now in force in Pennsyl-
I'll.
or corporation that shall be unable to PRO-
cure Insurance in any of the companies
authorized to transact business in the state,
to file an affidavit to that effect with the
insurance commissioner, who shall, in his
discretion, be empowered, in such condi-
tions, to license such person, firm or cor
poration to procure insurance in COM
panies not authorized to do business in this
State.
FIGURES FROM THE REPORT.
The report sets forth that SO insurance
companies were authorized to do busi-
ness in Delaware in 1889, and 81 COM
panies in 1890; the latter classified as
follows 50 fire; 1S life; 4 assessment; IL
guaranty, casualty and security; a ac- "a
cident, and live stock. Iu the pre-
ceding year, two steam boiler and one
plate glass insurance companies figured
In the list. The receipts of the office
for fees during 1889 were $2,190.40; the
expenditures, $1S1.31; during 1890 the
receipts were 2,124.40, and the expend-
itures, $t77.95. Besides this, however,
expenditures have been incurred, for
stationery printing, &C., of $1,17o.75; of
which 81 ,087.50 is debited to @. F.
Thomas & Co. The revenue to the
State for licenses and taxes from agents
and companies was 50, ,43S.04 In 1883,
and $12, ,47973 in 1890, The total pre-
miums paid to the companies during
1889 amounted to $223, 3,S9299, and the
total losses incurred by the companies
to S143, ,243.o4. In 1850 the premiums
footed up $22s, ,492.7S, and the losses
$133, ,870.24.
VALUED POLICY. +
The report makes no reference what
ever to the workings of the valued
policy act of 1899. In reference to this
omission, Commissioner Fooks said to
the writer that he preferred to say moth
ing officially at present, preferring to let
the people have two years more trial Of
the law without any interference from
him. In reply to questions, however,
Mr.. Fooks said thai the act had caused