The Bolivar bulletin. (Bolivar, Tenn.) 1888-1946, 1903-11-06
Tennessee Insurance Laws.

IL is clear and logical statement on
insurance laws and conditions exist
ing in this State, and was prepared ex-
presssly for me by Hon. Reau e. Folk,
State treasurer and ex-officio insurance
commissioner, hence authoritative on
every point. Mr.. Folk has gone into
the minutest details of the subject,
and has presented it in such manner
that it cannot fail to be interesting.
This article should be read by every
person in Tennessee, and then filed for
future reference. Mr.. Folk says:
THE most important consideration
for citizen in making a contract for
insurance, whether it be for fire, life
or accident indemnity, is the absolute
reliability of the company with which
he makes the contract. Too much care
cannot be exercised by the citizen to
protect himself from fraudulent and
questionable insurance concerns.
1T is easy enough for an individual
or company to execute a promise to
pay. That is what an insurance con-
tract is. 1t is a promise to pay a stip-
ulated sum on the occurrence of some
contingency. Unless there is financial
responsibility behind this promise to
pay, when the contingency arises the
contract may be only valuable as
decorative piece of paper and worth no
more than the paper would intrinsical-
ly be worth upon the paper market.
Because of the fact that an insur-
ance contract is founded so entirely
upon confidence, the various States of
the country, in their laws, exercise
most rigid watch care and supervision
over every insurance company permit
ted to make contracts with their cit
liens. Practically all of the States
now have these supervisory laws and
some official is charged with their eX-
ecution. Before the inauguration of
the supervisory laws, the insurance
business, being of such a nature as to
offer an inviting field for fraud, num-
berless instances of dishonesty and in
solvency arose.
''It is practically impossible for the
individual citizen to know or ascertain
for himself whether any company To-
Gated outside of his community is sol
vent and reliable, or whether its state
ment to him of its financial condition
is founded on fact or is part OF a base
purpose to deceive. The State, there
fore. properly assumes to secure for
the citizen this knowledge which it is
not possible for him to procure for
himself. By statute certain standards
calculated to secure safety and sol
vency are set up. Every company de-
string to do business in the State must
make application for authority to do
so and must obtain license before 1t
can legally make any contracts in the
State. The State treasurer of this
State is eX-officio insurance commits
sioner, and is charged with the duty
of granting license on behalf of the
State, and he is required to see to 1T
that before license is issued every
company fully comes up to the stand
ard set up by the statute, and that
every company is in sound and sol
vent condition. The closest watch care
is necessary in order to prevent the
coming into the State of unsound com
panies. Whenever any company op-
Grating in the State becomes insolvent,
it becomes the duty of the insurance
commissioner to require it to at once
remedy it's impairment or revoke its
license.
Severe penalties are provided by
statute to be inflicted on the officers OF
any insurance company or any person
found in the State representing unau-
thorized companies.
Despite the closest scrutiny on the
part of the insurance department
| fraudulent concerns in various ways
are constantly seeking to inveigle cit
| liens into making contracts with them
| These irresponsible companies are
commonly called wild cats One OF
their favorite methods is through the
medium of the mails. They send out
circulars purporting to give state
ment of financial condition, which, IN
many cases, is founded entirely in the
| imagination of base minds in their eff
| forts to deceive. They offer insurance
at any premium which may be OBJ
tanned, calculating that every dollar il
receives is so much made, for the rea
son that they pay no losses. When
| these frauds use the mails to solicit
business the State is pOwerless tC
make any arrest, for the offenders are
| beyond its borders. An effort is now
being made to induce congress to deny
the use of the mails to any concern
purporting to do an insurance busl
ness which has not complied with the
| laws of its own State.
Sometimes these fraudulent con
Germs send smart agents into the State
who hope to write a number of con
| tracts quickly and get out of the State
| before they can be arrested.
| Another method on the part Of these
| fraudulent insurance concerns is tt
secure the names of insurance agents
| in small towns and authorize then
through the mails in the hope of find
ing some unwary or unscrupulou
agent who, having more insurance t.
place than the authorized companie
which he represents will take, or hav
ing applications for insurance on extr;
hazardous risks which the authorized
companies refuse to take, will plac
such surplus or extra hazardous risk
with them.
Sometimes well meaning men ie
norant of the law, are induced to be
come agents of these concerns. 1t /
one of the purposes of this article t
warn such men, for when they are dc
tected they must suffer the penaltie
of the law just as the most wanton vic
| lator.
Every man who acts as the agent @
any company should demand fror
that company certificate of authorit
from the insurance commissioner @
the State, authorizing him to act 70
that company. Too great care canno
be exercised by the agent in this r.
gard, for, under the law, if he repre-
sents any company whatever withou
having in his possession this certif
cate of authority, he is guilty of mii
demeanor In addition to demaDdin
this certificate of authority, wheneve