St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1891-07-31
The Insurance Commissioners
Determined the People
Shall Not Be Fleeeed.
Deputy Dearth Makes a Rasp-
ing Report on the Stand
ard Mutual Aid.
He Declares It's Operations to
Be Of a Reprehensible
Character.
The Society May Have Its AZ
fairs Forcibly Wound
UP.


Up.
The insurance department is examin-
| ing various suspected companies with a
| rigid strlctness which is proving dis
astrous to all illegal schemes. The last
concern to be thoroughly ventilated is
the Standard Mutual Aid Association of
st. Paul. Mr.. Dearth, of the insurance
department. has made a thorough in
vestigation into the affairs of this COM
pany and has an anything but flattering
report to make. The men in charge of
the company are in consequence cited
to appear before the insurance COM
| mission at two o'clock of the morning
of August 3, to show cause why their
certificate of authority should not be
revoked, and interesting Developments
may be expected. The report of Deputy
Commissioner Dearth is as follows:
Sowing to the numerous complaints
filed with this department, and III pur
Suance 10 the provisions of the laws of
this state, have made an exhaustive
examination of the affairs and condition
of the Standard Mutual AID aSSOcia-
ton, of st. Paul, Mimi. covering the
period from date of OrganiZa ton to July
%, 1891:
| Total amount collected
from N EN- beers, as
shown by its policy
record. S4,UIl W
| Paid out on account of
indemnity claims ...... S906 90
| Paid out on account OF
expenses .............. 2,925 81 1881 81
Balance on hand. 500 40
ASSETS.
Cash in Germania bank. S239 40
| LIABILITIES.
| Claims adjusted, not due S20S 90
| Claims filed, not yet ad-
justed 500 90 sos 90
| Total policies in force. ................-.S0 SOB
"While the policy register credits
show receipts to the amount of $4,071,
the cash book shows only 1882, being
discrepancy Of $139. l find the plan
and methods of conducting the business
| of this association
Are Reprehensible
| in the extreme. In the first place, the
association issues a certificate contain
| ing conditions which provide that i'll the
| payment of any claims on account of
| same the member must have complied
with the provisions of the bylaws and
articles OF Incorporation; but L was I'M
| able to find any record to show that any
| bylaws had ever been legally adopted
| by the association, consequently all
certificates issued or business transacted
is irregular and illegal. The only evil
! dence to show that there were any by
| laws in existence, as referred to III the
| conditions of the certificates, was
merely an entry in the book containing
records of meetings to the erect that
AT a special meeting of the members
the old code of bylaws was repealed
| and new code adopted There was
10 date to show when such meeting
was held, and nothing to show that
even a single member was present, and
upon being questioned, the secretary
| admitted that no meeting of the men,
| berS had ever been called or held for
the purpose Indicated; and further
more the association never had any
'0ld' bylaws to repeal.
IF the bylaws which the minutes in
| the records refer to, had actually been
legally adopted, there are provisions in
| the conditions of the certificates that
would be
In Direct Violation
| of same For instance. one of the
| articles embodied in SAID bylaws. pro-
vdeS that a member could receive IN
| demnty OH account of sickness for
period of 'tWenty-siX weeks while
| condition in the certificate expressly
| StIpulateS that such sick beneht shall
| be allowed only once i'll each year, and
| then not for a continuance of sickness
| in any previous year. 1t is thus seen
| that under the terms of the certificates
issued by said association. a member
might not be able to receive out one
weeks indemnity, while the said by
laws entitle the holder thereof 10
tweHty-six weeks, thus making the GER
tificates irregular and illegal.
The management OF the association
| is practically all absolute monarchy
| The offices of secretary and treasurer
are both held by one person, in accord
| ance with the provisions of the articles
| of Incorporation; and said officer has
! absolute control of all the funds paid
| into the association, and practically the
| entire management of the business.
| There is no limit as to the amount that
| he may use for expenses, and he pays
| out all monies without the interference
| of the board of directors or any other
! officer, consequently the members
| Have No Protection
whatever. nor are they afforded any as
surance that their claims will be paid.
| However, in Justice to Mr.. Foote, the
present secretary, l find that according
to the records there appear no claims
that are adjusted and due but what
have been paid.
THE association in commencing bust
ness began to number their certificates
at .2OO0,' that is, the first certificate
issued was POOL, and Certificate No.
was POOP, and so on up. 1t is thus seen
how the word deceit was stamped
upon the associations method of doing
| business from the very first.
Il further find that the association is
| transactlng business through active
| agents i'll Iowa. Wisconsin, Michigan,
North Dakota, Washington aud several
! other states, in direct violation OF the
laws of such states, not having single
certificate of authority from state out
side of Minnesota.
Upon the facts as above set forth, it
| becomes your duty as insurance COM
missioner to serve notice upon said
! Standard Mutual Aid association to ap-
pear and show cause. if any there be,
why their certificate of authority to
transact business should not be revoked
forthwith. In justice to the present
secretary and treasurer, Mr.. Foote, /
would say that he did not assume the
duties of these offices until April %,
1901. and therefore is not responsible