The sun. [volume] (New York [N.Y.]) 1833-1916, 1906-10-22

amount in securities. in the aggregate not ex-
ceeding $4,000. as II corporations. had been
separately formed for such purposes"
A reference to section III OF the insurance
law shows that a credit guaranty corporation
to carry on that branch OF business alone
must have with the department q deposit
Of 500. 900. Under the proposed amendment
a corporation will have the privilege OF
carrying on all the branches OF casualty
insurance specified In the second, third,
fourth. eth. sixth. seventh n eighth sub
divisions. with the business OF credit guaranty
insurance added to the fourth subdivision.
This extension Of business with or without
an additional deposit with the Insurance
Department is not in the line Of protecting
the interests Of policyholders.
The proposed bill Is contrary to the pro-
visions OF section I7s OF the insurance law.
amended by chapter lao. Laws Of 1898. so as
to expressly prohibit companies doing a
credit guaranty business from advertising
any assets not held at the exclusive risk
OF such business. In the event OF this
amendment taking effect a casualty company
would be authorized to do a credit guaranty
business and necessarily would be allowed
to advertise its casualty assets. thus defeating
the very object OF the act above referred to.
At the present time there are only two
companies in the United States doing a credit
guaranty business out of ive which were In
active operation a few years since. Three
Of these companies nave failed. IL IL to he
presumed that had the policyholders in such
companies been made aware Of their real
financial condition, as the law now In force
requires. they would have been saved that
loss which followed the failures.
II may be well to consider the question OF
taxation. Certainly il will relieve this class
Of corporations hereafter organizing from
the payment OF their capital stock tax on
---GI- VT-I.- al. a~EaN2.. lawv n
surety company would have to capitalize
with sIOO. 900. a credit guaranty company
with $3.50. 600, while under the amended law
these two lines OF business would be con-
solidated with a capitalization OF but 100000.
There does not appear to be any good or
sufficient reason for this proposed amend
ment to the insurance law. The bill, in the
judgment Of this department. is improper
and defective. and as such meets with my
.disapproval. I might add that a similar
bill, though not as vicious. was disapproved
by me two years ago and vetoed by Gov.
Black. Yours respectfully.
LoUIs F. PAWN. Superintendent.
MAY 10. 1899.
The Mr. Appleton mentioned in Mr..
Payn's memorandum is Henry d. Apple
ton, Second Deputy Superintendent OF In
surance. Ford's insurance bill was a thirty
day bill, just as Ford's franchise tax
bill as passed was a thirty day bill. Ford
was induced to vote for the amendments
making the franchise tax bill operative
and constitutional and the extraordinary
session adjourned May rs. Ford's in
surance bill, which Mr.. Payn as Superin-
tendent Of Insurance had excoriated, was
signed by Gov Roosevelt on May rs, the
day that the Legislature passed the amend
ments making the franchise tax law con-
stitutional INC operative. The amended
franchise tax law was signed by Gov.
Roosevelt on May 20.