The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1894-03-25
A California Life Insurance Conn
pany Cannot Pay Its Claims.

a CALIFORNIA Lie insurance OOm-
pany Cannot Pay Its Claims.
The Herald's exclusive story of the
failure of the Bankers and Merchants
Life Insurance company of California.
in which large number of prominent
Utah people were interested, created a
great deal of attention in the matter,
and the following story from Thurs
days issue of the San Francisco Elk
aminer will prove of general interest:
Suaye Alexander Badlam had no
lfestina lente movement in his solicit
ing for membership in the Bankers
and Merchants Life Insurance COM
pany. He brought an extraordinary
amount of business to the corporation
of which he was manager.
This corporation has a romantic his
tory II was started and conducted
without any reference to the laws of
| the state Life insurance companies
| of the kind commonly called "regu-
| lar or "old line" companies are SUBJ
Ject to inspection and control of the
insurance commissioner, and the di-
rection of the business of the company
must be in accordance with the code
| provisions. The insurance organiza-
tons which are incident to fraternal
| societies are not subject to the control
| of the insurance commissioner, but
nevertheless they are responsible TO
the law that applies to their organiza-
ton and management
MIR. Badlam attempted to steer be-
tween the two. His Bankers and Mer-
chants Life Insurance company was
mot conducted on the principle of the
! old line" companies, nor yet was it
an incident of fraternal orgarza-
ton. yet the plan of assessments was
similar to that that obtains in the fra
ternal organizations. Therefore the
company was not within the control
of the commissioner of the laws relat-
ling to insurance companies over which
he has general supervisorial direction,
nor was it within the control of the
laws that relate to fraternal organiza-
ton insurance companies or associa-
lions.
Between the two Mr.. Badlam slipped
He had very bad fall After paying
Iout some quarter of a million dollars
for death losses, many of those who
had taken out policies omitted to pay
their assessments The money that
was coming in for assessments was so
much smaller than the amounts that
had been coming in, that no appor-
tionment of % per cent. to the reserve
fund (as was provided by the rules and
prospectus of the company was made,
all the income being applied to the
payment of death losses and expenses.
CANNOT GET THEIR MONEY.
Suit was brought by the state of
California through the attorney-gen-
eral for forfeiture of the charter of
the company on the ground that it was
doing business contrary to law. The
court forfeited the charter and i'm
posed a penalty of $500 for the viola
ton of the law. Suit was then brought
to recover the $500 penalty, and re-
ceiver was appointed to take posses
sion of the affairs of the company
The total assets of the company in
the receivers hands are $4,000 The
claims for death losses are $4,000, of
which S34, 900 are accepted as claims to
(which there can be no opposition or
contest. For the remainder of the
fclaims, SS0.000 some opposition or liti-
cation might occur. Therefore the
property of the company in the hands
Eof the receiver is only % per cent OF
1.-THE amount claimed to be due for
death losses, and hence there is nc
, fchance of the innocent policy-hOlders
; Ewho paid their assessments and have
5the ill-fortune still to live to recover
fany part of the money that they PAID
, into the company. The receiver holds
that no claims for payment of a policy
: of one insured in the company, who
. died since the charter was forfeited
are valid.
j, The same qualities that made Mr.
Badlam so popular as a politician unit
the time that the frost came to Sar
Francisco were expressed in his labory
for his insurance corporation. He haC
y no trouble. apparently, in obtaining
the business of men who We're not n
all accustomed to look benignly at The
insurance solicitor who calls at hi
office during business hours or at hi
i house when the labors of the day ar
lover.