The Washington times., 1902-05-19
Two Men Charged With
Issuing Policies
Illegally.
Mr.. DRAKE TO PROSECUTE
warrants Sworn Out Because Agents, 1t
Us Alleged, Would Not Comply With
New Law and Become Properly
Licensed.

During the past week a brief item ap-
peared in The Times to the effect that
EDWARD NJ. Hodgkins had forfeited col
lateral TO the amount of SO in the Police
Court. II further transpired that Hodg-
kins was charged with being an un-
licensed insurance agent or solicitor.
another charge against Hodgkins and
one against George w. Taylor. of a more
serious Character, are pending in the po-
nee Court. The men are charged with
issuing fire insurance policies Illegally,
and each is under bond for $500 to ap-
pear and answer the charge.
The above is one skirmish in what may
De termed the war which Thomas E.
Drake. Superintendent of Insurance, is
waging against fraudulent and dishonest
insurance companies and associations in
washington. Until the beginning of the
present year the insurance business has
had no supervision in the District. For
that reason 1t has been the Mecca of all
the wild cat" insurance schemes in the
United States. They have fiourished here
without hindrance, and one of the first
duties which Mr.. Drake was called upon
10 perform was to refuse to license GER
tain notoriously bad companies. Several
OF these decamped as soon as the new
department was established, while few
have tried to brave it out and secure
their licenses through the impotence or
carelessness of the department. But these
are one by one coming to grief through
the examinations of actuaries or through
answers TO pointed charges of fraud in
the Police Court.
Counts Are Separate.
Mr.. Drake stated that the warrants
against the two men named had been
sworn out on separate counts for two
specific reasons. One was that neither of
the men would conform with the law so
that they could he properly licensed, and
the other was that numerous complaints
had reached his office, as well as Police
Headquarters, from persons who declared
that they had been defrauded by these
mcn. Mr.. Drake stated that not less
than 100 complaints of this character were
on file.
Mr.. Drake stated that the two men in
question represented what is known as
the Commercial Fire Insurance Company.
OF Wilmington, Del The president of the
company is Amos Cole and the secretary
F. G. Sherman. The Delaware company
was organized under charter obtained
in 1897. the actual capital being s25 600.
The Washington branch. operated by
Hodskins. assisted by Taylor, as So
s.fs -
and Marine Assurance Company. Mr.. !
Drake stated that it was claimed that this
company was organized under the laws
of the District of Columbia. and that its 1
capital was 100000 He said in reality /
the company's charter was granted by the
Legislature of West Virginia, and that the
capital was not more than $4,000. Mr..
Drake explained that this capital repre-
scented a small amount of money and a
bundle Of securities underwritten by the
Wilmington concern, a Chicago and a
Philadelphia insurance concern known to /
be fraudulent.
Law Prevents License.
Mr.. Drake gave the ab0ye facts TO show
that the Washington company could not
be licensed under the law. He also ex-
hibited letters and documents TO show
that the Delaware company is not under =
the supervision of the commissioner of
that State, and that its condition has
been examined and pronounced unsound.
Mr.. Drake said that when he opened
his Office he was literally deluged with
applications for relief from the practices
Of this company. One set of complainants
declared that they could not collect the
losses guaranteed by the policies they had
paid for. Another set complained that
they had been served with notice by the
that their policies had been can
celed for non n-payment Of premium. when
the premium had been paid upon delivery
Of the policy. The nature of the COM ,
plants, MIR. Drake said. made ii evident
hat several hundred people in Washing
ION had been made the victims of
.1im fam game" under the guise Of pro-
.ecting their property from fire.
From the letters on ME in Mr.. brakes ,
,f.ice and at Police Headquarters where ,
he matter was thoroughly siftcd by a
member OF the detective bureau, 1t APP
,ears that the man Taylor was the prin-
,ipal solicitor. He called upon people al
heir homes and induced them to take out ,
insurance on their houses or their house i
lold effects. The policies were delivered
Il rates ranging from 81 to $40. accord
nx 10 the amount of insurance. .
In few instances fires followed, and
when the owners of the property burned /.
iought to collect the insurance they could /.
lot do so. s
Policies Cancelled.
But the most frequent source Of COM (
lain, was that persons who had paid the .
,-emium on their policies were served .
With notice that such premium had not !
,een paid and that the policies were &
hereby Cancelled. Mr. Drake said that :
he purpose OF this notice seemed to be :
o extort a second payment of the premi- I
i'm in rs many cases a3 possible. c
Mr.. Drake could not estimate the full 7
mount of money taken from the people {
4 Washington In this way. He said that S
n the one hundred-odd complaints rn 7
lie about 81 900 was involved. but he said ]
was proper to infer that only small (
her complained. and that the bust y
css would net 5000 a year 70 two good s
oar il they were unmolcsted Expenses. I
IL said, were practicable nothing, md the S
nsacy received for premiums was all !
rect.
Mr. Drake expressed determination to .
n tho District OF all such schemes Of {
nsurauce By whomsoevcr practieed. lie Y
IA the law was sufficient to reach any q
ase md that IT would be invoked un- I
uariugly in the protection Of the people a
rom illegal and unsafe insurance ,
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