The sun. [volume] (New York [N.Y.]) 1833-1916, 1899-02-20
A INSURANCE REPORT.
DEPARTMENT SHOWS AN EXCESS OF
RECEIPTS OF SS0,5O9.

superintendent Pnyn Says That the Porma-
ton OF Mutual Fire Companies should
De Prohibited and Urges the Repeal of
he. Law Under which Live stock In
surance Associations Arc Incorporated.
ALBANY. Feb. 19.-The annual report OF SUI
perintendent Payn of the State Insurance De-
partment shows that. while the work OF the
| department for 8 was largely increased,
there was not a corresponding increase In ex-
penses. In fact. the excess OF receipts over
expenditures last year. which excess was
turned into the State Treasury. was $S6.5O2.
while the number OF examinations into the
affairs OF the various companies coming within
the supervision of the department was 1877, or
nearly three times as many as In 1897.
Mr.. Payn has not changed his views regard
ing mutual fire insurance companies under
existing laws. Upon this subject he says:
Il am OF the opinion that the future forma-
ton of mutual fire insurance corporations in
this State should be prevented by appropriate
legislation. except in so far as the principle of
mutually may exist in the town and county
cooperative fire insurance companies. which
need not be interfered with. The mutual sys-
TEN Of the State is obsolete and untitled to
meet the grave and complex conditions OF mod
ern business. | do not intend by these remarks
to reflect upon any existing company. and the
rights of every such corporation must be care
fully protected in any legislation that may fol-
low. The fact is that while many companies ore
mutual in form they are in reality conducting
their business by the sale Of insurance for cash.
thus ignoring the very essence of mutually.
while unjustly competing upon a wholly made
quate capital with stock companies possessed
of ample means. and while furnishing insur-
ance that is but feebly secured. A moral de-
ception OF the public that inevitably breeds loss
and evil is thus legalized. and it appears to be
the plain duty of those charged with the max
ing and executing of laws to put an end to this
Regarding the valuation Of life insurance
policies. Mr.. Payn says:
protection OF the insured and that there may
be no uncertainty AS to the standard which this
department should adopt in yaluing the policy
obligations OF u company at the time OF an eX,
animation, or at anyOther period, | recommend
the repeal Of the amendment of 1888 aud the
substantial re-enactmeut of section 81 as it
was originally coditied in the Insurance law.
| would amend this section as originally en-
acted, SO that recognition will be given to the
probability of Il company adopting as its stand
ard Of valuation one higher than the actua-
rtes' or combined experience table of mortal
ity. with interest at 4 per cent. per annum. as is
now being done by some OF our companies"
During the past year the department has ex-
amined every assessment insurance corpora
ton and %fraternal beneficiary ordet organized
State. From the result Of these examinations
IL is apparent that a number OF these assess
ton as to require decisive action on the part OF
this department. which cannot be taken until
the law has been properly amended. The most
important amendment suggested by Mr.. Payn
is that when an assessment company is found
to be insolvent the Insurance department may
apply To the supreme Court for the appoint
ment Of Il receiver and the dissolution Of the
company. following. the same procedure as in
the case OF an lnsolvent stock insurance cor
pOratiOn.
OF the seven assessment live stock insurance
corporations examined. but two could stand an
investigation. and they are the only ones nov
in operation. The superintendent recommends
that the provision OF Jaw under which live stock
associations are Incorporated be repealed. be
says the only possible benefit to be derived
from these associations is such as may accrue
to the, incorporat0rs who may be fortunate
enough to control executive positions in the
management thereof.
Mr.. Payn is of the opinion that the State In
surance law should be rewritten ana rear
ranged SO as to provide a concise and com pact
statute. defining the rights and duties Of all
insurance corporations and excluding obsolete.
useless provisions. He therefore recommends
that provision be made for the preparation and
submission to the next Legislature OF a statute
to be- known as the Insurance law, to take the
The report shows that 122of the fire and fire.
marine insurance companies OF this country
and foreign fire insurance companies of other
ness in this state, on Dec. 81, 1897, received
S9.l3o:s.'2 more than they disbHrsed. and 49,
| they received, The disbursements were Sl32.-
33S97S. which was Sl4.523.675 more than in
1891.
The 1S5 fire. fre-marine and marine insur-
ance r3mg s,n sir a tos th 1H sloS Sc Of r, sEs year in f wSre
ception of the New York mutuals tSi. for SlSl.-
So. 8. Il 9.4sa Of PFf riaKs. an " aHSrase Fr re SrrrH
Of 80 for every 500 insured. By these com
panies sl37.O "a ~ was received inrremiums.
for expenses and S7.i63. 7s2 ior dividends
The fire premiums received last year by Joint
and countries and by the ,mutuals OF this and
eo,66er states we're Yer $la;sf4.o3l IRE lo5sSs p2Ia,
The estimated amount of expense for the
transaction Of this business, is SG.62Q.352.
total Of 81 1893. 3O9. showing as compared with
the premium receipts: an, apparent net excess
9 IRE fire premiums aS9 nsnIm 5fsS Sxne 2ysr fire df 81 lo SSs L;
sI5s5 am NJ. Iio o. in r1 ia5 E!ss s3. g5I'! 3ao. z iSg an ia.
$ a$s ,I T. Ss s'sSS s 35%':Sa ,4s 52' an H"n Increase S'Sa;' scot Of
Touching the fire companies the report says:
The surplus Of the fire and iire-marine in
liability on account OF unearned premiums ha.
decreased in, comparison with the amount Of
largely due to the advance in securities owned
and not to the profits Of the underwriting
this class Of business was transacted during
the period, covered by the three years proceed
InG II ~ rstn mas 5n ngnin 1s Les t tRa suf # m a a yemnIfiTmaIa1Ifss-
" necessitate the retirement within a short
time Of some Of our smaller companies, sev;
eral of which have but recently commenced
business. Thus history repeats itself: a limited
term Of prosperity with this class OF Interpretations
seems to begct grossly inadequate rates, and
the loss incident, thereto is usually found to
more than absorb such profits as may have
been accumulated during a prosperous period.
Rates may be reduced at once the time occu-
pied in restoring them II. a proper basis is
necessarily prolonged. With insufficient rates
figure. the public is educated TO the mistaken
idea that the rates first collected must have
been exorbitant. because Of the sweeping 70.
d%uctions. made in them later: Conditions of
this kind must work out their own remedy.
The companies themselves will have to re-
establish rates sufficient to assure tho hazards