The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1908-02-03
KELSEY COULD
NOT SEE THINGS
New York Superintendent of
Insurance Severely Criticised
IN Report to Gov. Hughes.
ALL AROUND INEFFICIENCY
SUBJECT OF REMOVAL AGAIN
COMING UP.

Albany, n. Y. Feb. 1.-The adminis-
tration of the state insurance depart
ment by its present superintendent.
otto Kelsey, who was appointed by the
lafe Governor Higgins, is severely critf-
cised in the report of Matthew =
Fleming, the special commissioner ap-
pointed by Governor Hughes to investi-
gate the department under the author
lty OF an act of the last legislature Ad-
dluonal interest attaches to the reDort
because of the senate's refusal last
spring to remove Superintendent Kelsey
upon the governors recommendation
and the widely prevalent belief that che
recommendation will be renewed at the
present session,
Charges originally filed with the gov
ern0r against superintendent Kelsey by
a New York newspaper form the basis
of the investigation and they include
separate counts, which are given in de-
tail.
"NyIic" to Continue.
The attorney general has advised that
"Nylic," an organization of New York
life insurance agents. be permitted to
continue as to all agents who We're
members of it when the insurance
amendments went into effect and who
are still complying with "Nylic" con-
tracts. Other matters which Mr. Flem-
ing virtually dismissed as not sustain
ed are those of alleged injustice to
small policy holders in the waiter of
loans lying advertisements, refusal of
information to policy holders, and fail
ing TO take action on industrial insur-
ance. This last, Mr.. Fleming points
out, is one for legislative action.
AS to the charge, that of failure to
r. EJaV-f siT17a a- T1Tf to.
hold office in any insurance corpora
ton, Mr.. Fleming says:
1t does not appear that under the
law Mr.. Kelsey could take any action
in the way of disqualifying Mr.. Harri-
man from holding office in any insur-
ance corporation"
keIsey's Blindness.
Mr.. Fleming's principal stress is laid
upon the alleged inefficiency of Mr..
Kelsey's control of the department, vio-
lations and evasiOns of law which were
not discovered; discrepancies in reports
of companies which went unnoticed !;
failure of the superintendent to act up
| on what MIR. Fleming regards as i'm
proper connection of department en-
ployes with insurance companies; tardy
compulsion of action in compelling COM
panies to make complete reports of fl
nancial transactions.
'"The failure of the actuary's bureau
to detect the Washington LIES fraud
ulent lapses of its posicies,' Mr. Flem-
ing says, has not been followed by
any discipline therefor, and no instruc-
tons whatever have been issued by that
bureau to be on the lookout for similar
practices"
Continuing on this line, Mr.. Fleming
says: The department has done moth
ing in the way Of looking into the i'm
pOTtant questions affecting dividends to
policy holders.
Mutual Life Overlooked.
1.-THE statistician who overlooked the
Mutual Lies failure to report its prof
its from the sale of ledger assets in
1904 neglects in 1907 to detect or report
investments which on the face of the
reports filed in February are Illegal, ac-
cording to the superintendent ruling,
and accepts without confirmation a
company's statement as to the value of
securities on which it loans large sums
of money. Such a departmental super
vision of investments seems to be
worthless.
Attention has already been called to
the fact that up to about Nov. 1, 1907,
the department was ignorant of the fact
that the ProVident Savings nad sofa
many of its securities In January and
February of that year, and had deposit
ed the proceeds of these sales in finan-
ciaI institutions controlled by its Off
GERS This ignorance was due TO the
fact that no effort was made by the de-
partment to obtain periodic reports Of
the financial transactions of insurance
companies"
The Colorado Report.
Mr. Fleming says that ON Oct. n,
1907 following correspondence with
Commissioner Rittenhouse of Colorado,
regarding this company, the examiners
of the New York department began
work. The Colorado report. Mr.. Flem-
ing says, has been published. and the
report of the chief examiner of the New
York department. verified Jan. IL. 1908,
has been served upon the company,
which has asked for the hearing TO
which it is entitled before publication.
"These two reports" Mr.. Fleming
adds, "criticise most severely the man
agement of the company. with the ex-
ception of the actuarial department .
PRESIDENT OF MORT