The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1891-08-15
Insurance Men Assail His Sup
port of Mutuals.
MAKING THE LAW NuGAToRY.
ID. A. Spencer Answers Him and Wants
s the Attorney Generals Opinion
Mutual Companies Sins.

IF Il Is city, Is likely 10 be referred 70 Attorney
I General Jones for an opinion, and may come be-
z fore the courts for settlement
Tie company regarding which the controversy
/ has arisen is the seneca County Mutual Insur-
: anfa COMPANY, of Tffia, o. The granting to
thia com rany by Mr. Weir of license to do
asfaess in this state called forth protest from
TIT representatives. of the stock companies, who
Ella med that il did not come up to the legal re-
an.nments. In Difference to this protest the
certificate OF authority was suspended on June
H halt on August Mr. Weir issued the follow
ing circular reyoking the order Of suspension:
I.eferrfny to order Of this department, dated
June 26, 1891, suspendng certificate of authority
or the Seneca County Mutual Insurance Com
fhafon the oath day OF July following said
s1rder OF suspension was revoked and the com
panY restored to its former condition under the
original certificate OF authorization. This COM
pany was suspended pending inquiry as to the
VA lie Of its assets, aud a demand WIS made for
d certificate from the insurance commissioner of
Ohio upon that point, such demand being in
harmon with the provisions OF our insurance
law as 10 the best evidence of the value of assets
held by any company orgnnizcd outside of tins
state and within tue United States The re-
vocation of suspension was upon a sworn state
sneut Of tile officers and trustees OF the company
as to its assets and liabilities, accompanied by
s satisfactory evidence that owing TO the peculiar
condition Of the company tit having been chart
cred BY law OF that state prior to the establish
ing al their insurance department. ana not be-
ing subject 70 supervision by the insurance de-
partnsent) il could not furnish the certificate de-
nfanced. The matter Is still under Amusement,
fhoweycr, and further investigation win be made
with a view Of obtaining satisfactory evidence
Ms 10 the value OF the assets in question. Pend
5ng this inquiry, the company remains author
i5zed 10 transact business in this state.
This circular provoked a renewed protest from
Mr.. spencer, to which Mr.. Weir replied in the
communication published in Yesterdays Posi-
s1NTgLLIGEscgn MI. Spencer responded iii the
I.sol, h
yesterday:
Recognizing the fact that your ruling regard
ing The Seneca County Mutual Insurance Com
pasg Is intended to be just and fair, must in
sist that Il is Ia conflict with the law, and
fifnty believe against the interests of the prop
efty-owners OF this state.
The business OF insurance is in its nature that
OF a trust, and as !. is not possible for the ind
rtduul to nuke the necessary Investigation of
the character OF the various organizations seek
ing 70 do busness in this state, the legislature
has pissed G law delesating that duty TO one of
the state officers IN that lafy the duties oil the
officers are clearly defined, especially as to the
Snecessary requisites ior IA company from another
70 asking Tor the right 10 issue its policies in
this state Section 3, second aud third clauses
sagss
"ff incorporated under the laws of any other
state or country. copy of its articles OF ncor-
poraton and charter, duly certified by the officer
& having the custody of such articles, that such
accompany Is organized under the laws OF such
State or country. with the amount of capital
stork and assets required by this act; third, IL
mot Incorporated a certificate setting forth the
<nhture and character of the business, the loca-
tion OF the principal Office, the name of the per
#sons composing the association. the amount of
capital employed therein and the names of the
officers OF the association
1his clause, taken in connection with the sec
ond clause OF section 4, which reads; "lf com
pahys corporation or association of any of the
lnited states or territories, when he is satisfied
Lnht The company, corporation or association
nss q paid-np ana unimpaired capital OF $780,
uN, seems 70 me too plain for any mistake.
The law does most emphatically exclude
4 lnntuh fire insurance companies, and the legis-
lafure fully intended that IL should, the ques-
ZION was tully discussed in committee It was
the sense OF the legislature that the main result
60 be secured was the protection Of the property
owners OF this state without making the CON
aitions too hard SO whilst most other states
Frequired paidup cash capital OF $4,000 the
accompanies of this state were permitted In do
&gusiness upsn paid-up capital OF 5000.
accompanies from other states were. however. en-
3 powered 10 enter this state upon satisfactory
'aefs1ence that they had a paid-up and unin-
<pnlred capital of flo0,0o0. In other words. that
the capital must be free from all liability for re-
alstfanee reserve, LOSSES unpaid, or, in fact any
spiber Indebtedness created by the laws or fact
Vow, take the case of the Seneca Mutual
AS shown by their report in the IN
Saurance Year Book. They had on December
,ist last slSs3 admitted cash assets and .sl9 81
ueposlt notes The amount OF cash premiums
Tecfised lii loyO was $7S,96s, upon which their
lAabiiits Tor reinsurance reserve. under the laws
#oi this state, would be s3l, $751; or S775t more
than the admitted cash assets How much in
Enrance they have In force is not stated and IN
kAhe actual amount of Insurance reserve required
4rannot be given. But admitting. Tor the ssk.
OF argument that today the cash assets were
&SlWuW over ali Liabilities. 10 is not eanftal and
may be distributed in dividends totoorroyy II,
Hsct, with this company they claim 10 be BEYOND
supervisor and may do what they please
a The disastrous ending OF a large nurnfer of
eeemlngly prosperous mutual eolnoauies withln
fhe past six months. shows the necessity pf eau
3aon. ana many q our good citizens have been
81 These failures We're brought about by the ex-
#minations OF various insurance commissioners
who found that the companies did not have the
;HelnSUranee reserve required by the laws OF the
various states, aud no capital whatever
Now, fully recognize the fact that YOU are
Epnstruing the law rs You read It, and think
you will understand that also desire that the
Jaw shall be construed according TO its intent
AAnd meaning That the question may be freely
tcsted, suggest that Nou refer our correspond
aence 10 the attorney general Tor an opinion.
& Mr.. Spencer supplemented this reply in an in
ferview with Posr lNrELLIGENcER reporter. in
(which he said: "Mr. wcir's statement that the
sssook of companies organized in this state coz
xists of negotiable notes, mortgages etc may he
z1n sonlc degree true but far as those notes are
absolutely good they are cash assets. The de-
Aosit OF mutual companies are notes given for
premiums by the assured and usually run for
ssive years with a stipulation that not more than
I certain percentage of each note shall be called
S-ar at any one time. In other words. they are
not negotiable paper and could Rot in any sense
&he considered cash assets.
# William NJ Calhoun said OF Mr.. Weirs rul
reg: According TO his own circular Mr. Weir
.zans r IT complied with the law in his treatment
sos this case for he granted the certificate and
then, after receiving n protest, suspended il
1entang an inquiry as 20 the company assets:
an Inquiry which the law requires him to make
acfose granting the certificate. He proceeds to
sas taat further investigation Will be made
with a view OF obtaining satisfactory evidence
as 20 she value of the assets in question, thus
sssnitting tina. Inc has not even Yet obtained the
fviGt ace which the law requires him 70 obtain
oefor4 issuing his certificate. Meanwhile this
cesr,any may do business in this state snd prop
erfy-c wncrs may be induced IL insure with it
IN a. the impression that, having Mr. Neirs
49, cate it meets the requirements of the state
sw
'eqi c ground upon which a protest was en-
o. against the granting OF the certificate was
& "a u that this company has not Il paid-up
Z saQ impaired capital of sIO0.eo' rs required
q as ton oi the law. This does not mean n
4 paid in notes, unless those notes were So
a. lghly secured that they would ho imme-
M'}S- negotiable and would be equivalent 70
s'' it means a capital paid up In cash or iiS
"a dent This is evident from section =.
7ist SAYS
" pom the written representation Of three
tss1fS 8 and belief oi the commissioner that any
kialN ny organized outside OF this state has less
Z hen be paid-up uninpaired cash capital re
Z lire hy this set, II shall be the duty oi tAe
%f4lm isSioncr To make such investigation or re-
sutFe such PROOF as shall be satisfactory 10 him
I teece5nins the financial condition OF such cont
LAZY
y That the Seneca County Mutual has not the
az paid-up cash capital required by the law
- 81 yn by the Insurance Year Book OF 1881.
Ace ling 81 this authority il has sass cash
Aa in a