Cañon City record., 1907-11-07
FAILS TO COMPLY WITH LAW
LICENSE IS REVOKED

LICENSE IS REVOKED
Denver. Nov. because it failed
to make a report of its losses during
the San Francisco fire and earthquake
to the insurance department the Union
Fire Insurance company of Philadel-
phia, one OF the largest companies In
the United States, yesterday had its
Colorado license revoked. The action
was taken by Commissioner of Insur-
ance Rittenhouse after a thorough ex-
animation into the affairs Of the COM
pany. According to Mr.. Rittenhouse,
the company lost $3.50, 900 in the San
Francisco conflagration. In its annual
report it failed to mention this as one
Of its liabilities. Mr.. Rittenhouse no
ticed the omission of this item and
made a trip to Philadelphia for the
purpose of investigating the company.
He found that the company had with
held the item and he claimed it was for
the purpose of showing a solvent con-
dition in its financial affairs. He imme-
diately returned to the state and yes
terday issued an order revoking its Ii
cense. He desires that the order shall
be in the nature of a reprimand to
this company and as a lesson to other
companies to make their annual state
ments correct. The company is one of
the largest in the United States. Last
year 1t wrote insurance to the extent
of $67, 1926 1855. E. J. Miller is its Denver
agent
In revoking the license Mr.. Ritten-
house says:
The investigation made by this de-
partment shows that this company
suffered losses to the amount of $780,
~" in the San Francisco FIRE. II owed
this amount TO the Pennsylvania Fire
Insurance company On reinsurance
contracts. Inasmuch as the capital
a-d surplus Of the Union company as
reported in the last annual statement
amounted to but SECS. .S0l.36 the above
Indebtedness made the company in
solvent The Union company was
owned by a holding company known
as the General Trust company. This
company contracted to pay the indebt-
edness of the Pennsylvania company
but at the same time made a contract
with the Union company wherein the
latter promises to pay the trust COM
pany the amount of the loss. this in
debtedness to be paid from the surplus
of the Union company on the demand
of the trust company. The trust COM
pany defaulted on its second payment
to the Pennsylvania company which
made the Union stock collateral the
property of the Pennsylvania company
to be sold to liquidate the balance Of
the Indebtedness.
Although the Union company had u
specific contract promising to pay this
Indebtedness and which makes its sur
plus as fast as accumulated the prop
erty of the Trust company the Union
company failed to make any reference
of its liability in its annual statement
to this department notwithstanding
that 1t contained a correct account of
all assets and liabilities. The effects
of this action was to deceive the de-
partment and the public by causing
the department to publish an incorrect
report certifying that the company
had complied with all the laws of the
state.
The Colorado insurance depart
ment has Joined other departments in
adopting a course as lenient as the
law will permit in dealing with the
fire insurance companies which suf-
fered extraordinary losses in the San
Francisco fire. Every company that
has shown a disposition to act fairly
in readjusting its finances has been
given an opportunity to do SO, but this
desire does not go to the extent Of per-
mitting companies to conceal their IL
abilities or to leave them OF their an
nual statement as you have done, nor
does 1t justify the department In over
looking this contract which virtually
forces the impairment of your capital.
In view of these facts I am forced to
conclude that your company has failed
to comply with the law, that II is an
unsafe and impaired company and that
this condition Is such as to render Its
operation hazardous to the public and
the policy holders and your license is
therefore, revoked in accordance with
the duty placed upon the commission
ers In section Is of the insurace Law"
Y ...m
Subject for debate at the next meet
Ing Of the Copperdeld Literary society:
"If our fathers and mothers had mar
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