The sun. [volume] (New York [N.Y.]) 1833-1916, 1905-04-13
4 CONNECTICUT fNsTANOE.
How the Phenix I4Fs vas Rescued for
IIl RollaYhnldfra.


TALLY different from that Of the Ph1nix
Mutual Life Insurance Company Of Con-
necticut In 1859. After d thorough In
vestigation and after the Pk9niI's Affairs
had been turned over 10 the polioyholders,
orsamus r, Tyler, Insurance Commissioner
for COhnsotiout, said
TIE company 10 now substantially In the hands
Of Ia pohoyholden. The possibility Of one man
gaining control, and. II so disposed, lootinE its
assets. has happily forever passed.
There were several reasons why the
Phoenix Mutual Life OF Connecticut was
taken out Of the hands Of the old directors
and turned over 10 the policyholders, and
insurance authorities said yesterday that
these reasons were entirely analogous With
the present situation In the Equitable Life
Assurance Society and ought TO furnish
the Legislature at Albany and the Insur-
anoe Department at Albany . sure and safe
method to protect the 900 900 polieyhold-
ers Of the Equitable.
In 1889 Commissioner Fyler Of the Insur-
ance Department Of Connecticut became
satisfied that excessive and illegal dividends
had been declared and paid to the, stock
holders Of the Phoenix Mutual and be is
sued an order forbidding the further pay
! ment Of any sum to the stockholders,
| whether as dividends OF interest, until such
! time as further orders should be made by
him. IL had been made public by the Con-
| nectiClt newspapers some weeks prior to-
/ that time that the president OF the company
had negotiated for the sale Of a controlling
! interest In the capital stock, held by him,
! at price ten times its par value and far IN
excess Of any legitimate value IL possessed'
, The poliCyholders Of the Phoenix became
alarmed at the nature OF the proposition,
! The Charter Oak and Continental Life In
suranoe companies OF Connecticut, then
/ in the hands Of receivers, were monuments
/ Of Encouragement and thievery too re-
Gently erected In the Nutmeg State 10 per-
NIT OF further experiments such az we're
suggested by the proposed sale Of the
| presidents controlling interest In the oapi-
/ tai stock Of the Phoenix Mutual. The his
| tory Of the National Life Association Of the
! United States was another instance where
spectators procured control, and in ways
known only to INSCRIPTIONS and designing
| persons succeeded in a remarkably short
time in freezing out two-thirds Of their
! policyholders, ard in doubling the surplus
Of the company
| The directors Of the PhpniX Mutual Of
! Connecticut representing the minority
stockholders, commercially prompted by
a desire 10 avert q threatened calamity 10
! the company and polioyholders, such ss
was suggested in the presidents offer TO
! sell a controlling interest Of the capital
stock held by him. applied to the Legislat
ure If Connecticut for such relief as would
bsfie and render nugatory the conten-
plated sale Of stock. A resolution amend
| ing the charter Of the Phoenix company,
I having for It's object the retiring Of the
! capital stock under certain conditions,
and making the company in fact as well as
in name a purely mutual company, was
passed by the Connecticut Legislature on
June 2l. 1889.
In order that a clear understanding may
| he had Of the condition Of affairs in the
Phoenix Mutual at this time, the following
facts should be stated
Fight resident directors. soon after
learning Of the contemplated sale, in order
| that it might be possible for the policy
! holders to procure control Of the company
in the event Of the passage by the Connecti-
cut Legislature Of a sufficient amendment
to it's charter, proposed 10 the president
to purchase his stock. The proposal was
ultimately accepted, and a contract entered
! into by which the president agreed TO sell
/ TO the eight directors all his stock. The
stock standing in the name Of the President
al that time was / ,O07 shares. the whole
capital being divided into 1000 shares
| He afterward procured ten shares which
we're not included in this sale. The price
agreed 20 be paid for the stock was $3.50 per
share, or Ave times lite par value. The
contract stipulated that the stock should
be transferred on or before June II, 1889
| The stock when transferred was held in
! trust by one Of the directors. 70 be trans
feTred 10 Insurance Commissioner Fyler
in tru at for the polioyholders. in the event
that they should avail themselves Of the
power granted by the Legislature TO pur-
chase the stock Of the company.
The Connecticut Legislature amended
the charter Of the Phoenix Mutual 80 that
the policyholders could purchase the capital
stock Of the company. All told. there were
4 ,2O4 policyholdes Of the Phoenix Mutual
present OF represented at the meeting
called to purchase the stock Of the COM
pany, A proposition TO make the price
per share $50 instead Of $3.50 was voted
down by the decisive vote Of 4,lB4 TO so. A
motion 10 make the price $50 per share
was lost on a rird Voee vote; and a ballot
was then taken which showed that 4,lSi
NOttu 70 pay sA9V Pol 10 ~ ilooa'
Commissioner Fyler formally approved the
action Of the polioyholders Of the Phoenix
Mutual in purchasing the stock Of the COM
pany On the following day Commissioner
Fyler. exercising the authority vested In
him, appointed six direoton, who were
Of the old board, and he appointed nine
who we're new members Of the directorate
Commissioner Fyler said at the time con-
corning the payment Of excessive and
illegal dividends 70 the old management
that a moral and a legal wrong had been
done the policyholders Of the company
by the payment Of such dividends. The
Commissioner also compelled those stock
holders who had been directors Of the com
pany at the time the dividends In question
we're declared to pay to the company to4. %
on each share Of stock on which they had
received these dividends
From that moment the rehabilitation Of
the Phoenix Mutual Life Insurance CON-
pany Of Connecticut was complete.
ware Damaging CITY Trees
EpvTnp TIM