The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1905-12-19
CAST
ON EMPIRE STATE
Insurance Inquiry Shows Up the
New York Insurance De-
partment.

New York, Dec. 19.-The absolute
worthlessness of the state insurance de-
partment as a check on wrongdoing IN
the management Of life insurance COM
panies was clearly established at yes
terdays. session OF the Armstrong IN
of three small companies were probed
by the inquisitor, Charles E. Hughes.
The concerns investigated were the
Life Association Of America, the En-
pire and the Provident Savings Life.
1t was shown:
That the small real estate holdings
of the Provident Savings Life have
on the company's books since 1897. By
such methods as these this company has
been enabled to report surplus to the
state insurance department each year,
also the possession of the reserve fund
required by law.
That the only assets of the Empire
Life are $4,000 in New York city water
or $500 of the $4,000 is kept in the far
off island Of Trinidad. The company
has $4,OOO,OOO of outstanding insurance
and 1900 policyholders The state in
surance department in 1903 made a fee
BILE effort to compel the company to
carry a proper reserve fund. The EN-
Rire Life retained. ex-senator Charles
l.
"house Of mirth' fame and as re-
suit the insurance department accepted
the values of the company on the re-
serve fund question.
Queer Deals with Stock.
That Henry P. Townsley, president of
the Life Association of America, and
Eugene Van Schaick, it's counsel, pur.
chased $500 shares of the company 8
! or 4hoSr c.,,I>c -,
by borrowing 100000 from the Came.
WORT bank. Before they could get this
loan they had to deposit the company Is
funds with the bank and give the lat
ter the company's check for the amount
of the loan. The bank liquidated the
loan by using the company's check.
vo Tn1 mHwPs5sy sRf of v So Se6"f
Of the funds of the company and used
this $4,000 as part payment for the
money taken by the GanzevoOrt bank
to cancel their loan.
Henry P. Townsley resumed his tes
timony before the committee today. He
Said that when his company started
business as a stock company, it hae
$268,O0O in it's treasury, which was al
obtained from the sale Of stock.
All in the Family.
President Townsley receives a salary
of $4,000, the treasurer $4,000, thu
medical director $4,000 and the genera
counsel $4,000. G. W. Townsley, son Of
the president, is the secretary and acts
as general agent.
He receives no salary, but receives
commissions, which amounted last yea
to $4,000. The medical director i
George G.. Van Setback, brother O.
the general counsel, who, with the wit
ness, organized the company
Mr.. Townsley said his company hal
about $50 annlal-dividend policies, O.
which about half a dozen had draw
dividends Of Is per cent. The averag
premiums collected on a $1,000 polio,
is about $40. The average reserve i
60 per cent Of the premium after tn
first year. The first it is SO or So
thousand. About half the business
written remains on the books. The re
mainder lapses. " .
Witness said that the payment 0
$4,000 to himself and Eugene Va
Setback, voted by the board Of diree
} tai, came under the notice Of the 1nsul
ance. commission, and this department
referred 1t to the attorney general, VIII
demanded that the money be returne
to the company. The Life Association
of America, witness said, does bushes
in New York Pennsylvania, Maryland
Illinois, Alabama, California and Rhod
Island. The association was debarre
from doing business in New Jersey las