The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1897-12-24
% me Law Requires That the Secretary of
State Have an Examination Of Them Made
From Time to Time.

Nh 3teGr requesting an eAdihiHdtlon
~ their financial affairs. In one office
- went through the farce of copying
q few figures from the balance sheet;
q Another he did not take time for
60 that much pretence; in neither did
Il s6sk to see the securities In the
&Sgd he asked for the securities and
his eye hastily over them. In each
ne he made a demand for $25 and
travelling expenses. Evidently this
1s6V road agent wanted to make q trip
4t6m Raleigh to Baltimore at the ex-
mse of cur local fidelity companies.
I'D instead of being taken by the neck
ID heels and thrown out of each door
my he succeeded in his purpose. II
us sort of brigandage is to become a
S4cognized profession on the part of i'm
H6Eunious clerks and shyster lawyers,
Ne sooner the companies band together
cor self-protection, the 'bet0er-Balti-
sore Underwater December 16.
The above was shown to Secretary OF
State Thompson last night.
8 II did in November he said, "com-
mission r. W'P. Bachelor, who for
sixteen years had been chief clerk in
this office, to make an examina ton of
fhe affairs of the United States Fidelity
and Guaranty, the Fidelity and Deposit
Company, and the American Bonding
and Turst Company, OF the city of Balti-
more, all of them licensed to do bus.-
ness in the State of North Carolina. Mr..
1ntchelor made his report to this office
!. under date of November Is. 1897. in
which he states that he made careful
examination as to the financial condi-
{ Gon of these compan MES and also an in
yestigatipn as to the basis and methods
Of their business. The. examination
1 would have been made a few weeks
earlier than it was, but for the reason
Sat Mr. Bachelors private business
slade If impossible fer him no under
take ii. 1t was made not later than
November for the reason that the ac-
eeptanee Of no surety company as
guarantee upon an official bond is obi
gatory under &oHr law, unless accom-
panied by tue certificate of the Secretary
of State. after an examination of the
affairs. Of the company stating that such
company is solvent. to the amount of not
less than 100000.
'sThis examination, so far as ! know.
was not objected to by any of these
three companies; and / understood from
the general agent in this State of one
Of the companies that his COM
pany courted investigation OF its
eaethods and affairs. Whether,
a such examination were ea agree
able or otherwise, is a matter of indif-
ference to this department, acting under
che laws of North Carolina. The bust
mss of guaranteeing bonds and contracts,
official and otherwise, is comparatively
q new one and rests for its practice
largely upon experiment instead of well
determined data such as underlie the
BUSINESS of life and FIRE insurance. If
/ have seemed meddlesome to some who
believe uncertain fortunes of an insur-
ance company of more sacred regard
than q statute of the State of North
Carolina, / can only say that / have not
been nearly so meddlesome as | might
have been, nor half so much so as the
laws of North Carolina contemplated
that / should be.
.'Section 2, chapter 800, of the laws
Of 1S95-an act in regard to the execu-
ton of bonds and other instruments by
surety companies-says, among other
things that the Secretary shall examine
into the solvency of said corporation,
and shall, if ne deem it necessary, at
the expense of such corporation, cause
an examination to be made, at the home
office of such corporation, of ifs assets
be made, from time to time, whenever
the Secretary of State shall deem it
necessary. After such examination shall
have been made, the certificate Of the
Secretary of State that the said COR
poration is solvent to an amount not
less than one hundred thousand dollars
shall be, and the same is, until such
certificate is revoked by him, hereby
made equivalent to the justification of
sureties by law"
Mr.. Bachelor, who made the exami-
nation, was also seen. He said:
'In the case of one of the companies
l found that an examination had just
been made by the department of Mary
land and / took that as accurate. In
the other two companies l made a suf-
fciently full examination to be certain
that heir financial condition fully met
the North Carolina law. in all cases
I directed special attention to an in
vestigation of the basis of the business,
the methods by which it was conducted,
the amount reserved for reinsurance
and whether or not there was a suffi-
Gent experience to base the business
upon. This because / was satisfied that
the business is as yet thoroughly ex-
perimental.
s'Two of the companies had specially
requested an examination of this kind
from the Secretary of State and the
third expressed qualification that it was
made. / might have prolonged the
examination several days, but this would
only have added expense to the companies
and have caused them greater inconven-
fence. All the companies were notified
fn advance what the fees would be, for
the special purpose that they might OBJ
ject il they so desired.
"As to the charge that the examina-
ton was made to get my expenses for
a trip to Baltimore, ] just simply wish
to say that / went to Baltimore at great
personal inconvenience and because DIR.
Thompson desired me to make the ex-
Summation"
Colonel Paul b. Means, of Concord