The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1897-11-12
AUDITOR MUST DECIDE
ACCEPTANCE OF INSURANCE sECURI-
TIES RESTS IN HIS DISCRETION.
Attorney Generals DecisiOn-DetrOit
cages on Their Home Property.

Scarcely an insurance company endeavors
to be admitted to do business or to organize
in the State that does not raise objection
to the rigorous inspection of securities Of
fered made by the auditor OF state. Mr.
Daily has been extremely careful in the
character of the securities he has accepted
On Wednesday, certain Detroit capitalists
were in the city for the purpose of incor-
porating an accident company to operate in
Michigan, and among the securities offered
were mortgages upon Detroit real estate
Mr.. Daily referred the question of accept
ing them to the attorney general, and at
the same time made a request for a general
construction of the law covering the ac-
ceptance of securities required of insur-
ance companies. The attorney general re-
piled yesterday In the following opinion:
Answering your inquiries in your favor
or the 10th with respect to insurance COM
panles. beg to say, that in my opinion
First-Section f3 of the act of June H. 1882
and Clause of Section of the act of March
8, 1897. amending Section II of the previous
act, being in pari materia, should be con-
strued together. and that solvent stock
would include bonds or mortgages upon
unincunbered real estate. The object of
the section is to furnish the security, not
simply as well, but through bonds and
mortgages, equally with solvent stock
''Second-I can find no limitations in the
be within the State. Undoubtedly govern
ment bond would be acceptable, and yet it
could not be said to be- in a strict sense,
Solvent stock or bonds or mortgages upon
unincumbered real estate
The purpose OF the act is to furnish Sc
curity to those who insure, and the general
word solvent stock must be construed TO
mean those matters that, in common par
lance, are used as affording the security
location of the security other than the
sound discretion of the auditor of state, and
it, in your judgment, the bonds secured by
mortgage in other States afford ample Sc
curity, l think you would be authorized to
accept the same. greater measure of
watchfulneSs and carefulness in investigat-
ing the securities would probably be ex-
pected where the property, which is the
basis of the security is beyond the jurisdic-
ton of the State but if you are entirely
satisfied with the sufficiency of the security,
be accepted, even though the property is
not within the limits of the State My in
formation is that it is quite common in life
and fire insurance companies not to con1ne
their securities to q particular locality, or
even to a particular State.
whether, in determining the sutf1ciency
of a security, the improvements are TO be
considered is a matter within your sound
discretion If property depends for its
value upon its improvements, think 1t
ought not be accepted. nor even II the i'm
provements were Of a transitory or doubt
full character; but If the improvements were
permanent in their nature, and can rea-
sonably be said to add in fact, as well as in
law to the value of the real estate, l see
no reason why such improvements should
not be taken into consideration"