New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1906-02-26
HENDRICKSON HIS DUTY
ASSETS CHIEF CONCERN.
Doesn't Think He Should Look for
DishOnestu and Inability.

Syracuse, Feb 25-Francis Hendricks State
Superintendent of Insurance, tonight furnished
Tor publication the following statement relat-
ing to the recent report of the Armstrong COM
mittee of the legislature:
My attention, of course. has been called espe-
cialy to that part of the report of the Arm
strong committee which criticises the admns-
tration of the Insurance Department. and l de-
sire 10 say few words in reply.
In the public attention which of late has been
almost exclusively directed toward the affairs
OF a few of the large life Insurance companies, I
think the fact has rather been overlooked that
thls department is equally charged with the
examination and supervision of fire, marine,
casualty and credit guarantee corporations, and
business. assessment and fraternal beneficiary
associations, created and operating under sep
arate and widely different provisions of law
At the present time there are about 433 of these
companies, societies and associations transact
ing the business OF insurance within this State
which are subject to the supervision of this de-
9artment.
During the present administration domestic
ire insurance corporations have transacted
business resulting in premium collections OF
SlliSOW0Do with insurance in force De-
ceinber 81 1904 of $I099 000000 Do
mestic casualty corpOrati tions have received in
premiums during the same time over S.,3 1000
ana have assets of over S23.oO0,0O0. Domestic
hre and marine companies and foreign fire and
marine companies of other countries domciled
in this State have collected over Sl45 .tD0,0M in
premiums, and there was in force on December
H. 1904. S15.S21 100000 of insurance These
latter companies have total assets of 81 I23 S40-
ITO. In addition to this. there are the assess
lnent associations and fraternal beneficial orders
which in my opinion are not subject statutes
sufficiently providing proper standards of SOL
vency, and of which the department supervision
under the law is of most limited character.
LARGE AMOUNT OF CLERICAL WORK
A very large amount of clerical work is per-
formed by this department In connection with
the operation of these companies. i'm the way OF
correspondence, preparation and furnishing of
blanks, filing. auditing and publication of
ports. collection of fees and taxes aud the
PREPARATION and issuing of various certificates
and copies of various documents
Outside of this routine workSthe primary duty
Of the department Is and has been a general
supervision by examination and otherwise, for
the purpose of compelling compliance with the
statutes regulating the subject Of insurance, and
the preservation of assets. reserve and trust
funds in such proportion TO liabilities would
insure the full discharge of all obligations to
poQcyhOlders. whether of life fire Insurance.
The statutes of the State in the case of life and
fire insurance companies very largely regulate
the proportion Of these trust and reserve funds
with reference TO securing the safety 10 policy
holders. I'd II is and has been the duty of this
department to watch these funds and the
amount and actual value of assets carried by the
companies as to insure ample resources for the
payment of all policies and to guard against in
solvency.
In my Judgment this duty of securing per-
formance of such obligations to policyhoders
and of guarding against insolvency of companies
doing insurance business is the important duty
contemplated by the statutes of the State and
by the theory of insurance supervision exercised
in ether States and countries well this.
The fundamental idea of insurance legislation
and supervision I'm this Nand other States has
been to require and preserve sufficient assets
and reserve and trust funds in proportion TO
outstanding policies to guarantee the safe and
full payment Of all liabilities to poIicyholders
During my term of office there has been no
insolvency or default resulting in loss to the
rolicyholders. except in the of COM
paratvely small fire insurance company. where
f. there loss to poicyholders OF some - per
cent of the unearned premiums and during the
recent scandals no well informed person has
doubted the entire solvency of the companies
concerned TO meet all of their liabilities to
poltcyhOldeIS
NOT OVERSEER OF DAILY BUSINESS"
Beyond the limits mentioned, 1 do not believe
that IL has been the theory or expectation that
this department would or could exercise daily
/ watch oVei' the acts of officers and directors
with reference to compelling the exercise of or
dinary business ability and honesty in the man
agement of the details of, the business commit
ted to their care While perhaps the Superin
/ tendent of insurance by indirect methods might
influence salaries ana the methods of investing
funds | know OF TO direct provision of law au-
thorizing him to do this, long as the company
: complies with the statutory requirements and
/ does not pair its ability to meet the demands
statutes creating and regulating this department
will, | believe. make IL quite clear that il was
not intended TO be overscer over or admins
traitor of The daily business management of
1t has been the theory OF the management of
corporations that those directly interested i'm
them would insist upon the selection of directors
and officers who were assumed to possess at
least ordinary business saCaCity and upright
/ ness. and that in the first instance the public
department should not he charged with the
spOnsibility of supplying deficiencies I'm these
spacts Maay of the compapies Under the super
vision of this department ave stock companies
whose stockholders are solely Interested in and
entitled to any SURPLUS eyond what may be
necessary to meet the demands OF the policy
holders Such stockholders vested with the
power and charged with the duty of selecting
directors and officers who will manage their
property honestly ard economically and even
in the case OF mutual companies those directly
interested have large powers outside of this de-
partment of protecting their own interests in
| the election of officers and in compelling
countability by them for their acts
This department has no power to punish or
remove directors for improper acts. The sug-
gestion has frequently been made of federal
pervision of these CORPORATIONS. and reference
made to such supervision already exercised over
national banks. | have always understood that
this supervision over the banks had for its
primary and chief purpose 10 secure compliance
with certain statutory regulations and the pres
eryation OF such assets In proportion to liz bill
ties would insure safety to the depositors and
that il was not sought to otherwise regulate In
such institutions,
QUESTIONS WISDOM OF POLICY.
l doubt II II would be wise 10 invest any State
official with the power and responsibility of
overseeing and administering all of the details
or the business management or Insurance COM
panies. in certain quarters IL Is now being
claimed he should do. Some of the Recommended
tions OF the Armstrong committee and many OF
Continued second psge