St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1896-01-11
PHRASE MIGHT MIsLEAD.
A minneapolis Insurance Company's
Scheme in Suspicion.

Scheme in Suspicion.
Attorney General Childs yesterday
modified his opinion given in regard
to the advertised contingent fund of
the Mutual Fire Insurance Company
or Minneapolis. He then stated that he
believed 1T would not be improper for
| the company to advertise it in the
phrase, contingent safety fund not re-
CURED by law" He now inclines to the
belief that the company should state
definitely the character of the fund.
Yesterdays opinion is as follows:
At the instance of counsel for one of the in
surance companies of this state, l have re-
examined the question considered in my COM
munication to you under date of the 9th ult
touching the right of the Mutual Fire Insur-
ance Company Of Minneapolis to advertise a
contingent safety fund.
In my former communication you were ad-
Vlsed that the erection of said fund will be
wholly gratuitous on the part of the persons
who are to contribute to it, as 1t is not within
the contemplation of any provision of the
the fact that great caution should be exer-
clsed in providing against deception tending
to mislead the public
With view 10 affording a proper safe
guard, then suggested that the company
should advertise the facts pertaining to such
fund as they actually existed and approved
the use of the following words upon their ad-
vertisements: Contingent safety fund not
required by law
1t has, however, been earnestly urged that
the use of such words will not afford proper
protectlon to the public against deception;
that inasmuch as the law does not authorize
certain companies to create and maintain
contingent safety and reserve fund over
which the insurance department has right
to, and does exercise, supervision and con-
troll it is apparent that any other company
which is permitted to advertise hold itself
out as having contingent fund not bearing
the least resemblance to it would be per-
mltted, under the sanction Of the insurance
department, to perpetuate a palpable fraud
upon the public, to the injury not only of the
public, but to the injury of the companies
which have under the law and in accordance
with Its provisions created and maintained a
legal contingent safety and reserve fund"
Ii is further urged that the public will have
no method of ascertaining or determining
whether the parties who signed the agreement
then referred to are solvent and responsible.
L recognize the force of the foregoing con-
tention, and am not satisfied with the ad-
vice given you in the former communication.
IL is true, as above suggested, that the pub
lie will assume to a greater or less extent
that the fund thus advertised consists of act
uaI available assets, whereas, in fact, the
assets will consist only of notes signed by
certain parties unknown to the public and to
your department. While it might be as
sumed that the company in question will Sc
cure the notes only of responsible parties, it
must be remembered that if this right is to
De accorded to that company, it must be ac-
corded to all other companies requesting it.
In this connection we should not overlook the
provisions or section Al authorizing mutual
marine insurance companies to provide in a
manner strikingly similar to that proposed
by the said company. AS to that class of
companies, however, they are prohibited from
doing business until the amount of 5000 900
shall have been subscribed and a certificate
signed by the president and majority of the
directors has been deposited with and ap-
proved by the insurance commissioner. These
provisions are indicative of the precaution ex-
ercised by the legislature in guarding the
public against deception or injury arising
from worthless subscriptions. While they ap-
ply to companies only doing a marine bust
ness, they properly serve a guide to the
course which should be pursued by your de-
partment in determining the rights of an
other class of companies requesting to be al
lowed to provide a fund in similar manner.
Undoubtedly you would decline to assume
the responsibility either of being the custo-
dian of such notes and obligations, or of pass
ing upon the solvency and responsibility of
the makers thereof.
l am, therefore, of the opinion that the use
of the words contingent safety fund not re-
quired by law" will not be a sufficient safe
guard against deception and imposition AS
heretofore stated, the company should ex-
press the fact as it actually exists by the use
of terms so plain and explicit that the ordi-
nary insurer would not be misled by them.
Gents White Shirts, 1Oc; Ladies' Shirt
Waists, 10c; Collars and Cuffs, each, L.
Merrills Laundry, 407 Rice. Telephone TAT.
Murphy & Co., proprietors.