The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1908-02-03
KELSEY UPHELD IN
SPECIAL REPORT
Special Commissioner Ex-
amines officials Record
MANY CHARGES RECORDED
Special Commissioner Fleming Practi-
caIly Exonerates Kelsey From Ac-
cusations Made Against His
Work in State Office.
MANY CHARGES RECORDED

Albany, N. Y. February 1.-The admin
istration of the state insurance depart
ment by its present superintendent, Otto
Kelsey, who was appointed by the late
Governor Higgins, is severely criticised in
the report of Matthew C. Fleming, the
special commissioner appointed by Cover
nor Hughes to investigate the department
under the authority of the so-called More
land act of the last legislature. Addition
al interest attaches to the report because
of the senate's refusal last spring to re-
move Superintendent Kelsey upon the
governors recommendation.
Mr. Fleming practically exonerates Su-
perintendent Kelsey in several matters.
These were alleged injustice to small pol
icyholders in the matter of loans, lying
advertisements, refusal of information to
policyholders and failing to take action
on Industrial insurance. This last, Mr..
Fleming points out, Is for legislative ac-
ton. AS to the last charge, that of fall
ure to brand Mr.. Hartman as disquali-
fed to hold office in any insurance COR
poration,' Mr.. Fleming says:
ut Adoes not appear that under the
law, Mr.. Kelsey could take any action in
the way of disqualifying Mr.. Hartman
from holding office in any insurance COM
pany.'
The other charges are considered at
length and Mr. Fleming's principal stress
is laid upon the alleged inefficiency of
Mr.. Kelsey's control of the department,
violations and evasions of law which were
not discovered. in reports of companies
which went unnoticed; failure OF the SUI
perintendent upon what Mr.. Fleming re-
CARDS as improper connection of de-
partment employees with insurance COM
panies; tardy compulsion of action in
compelling companies to make complete
reports of financial transactions.
Under the head of "Inefficiency," Mr..
Fleming calls special attention to num-
Der of alleged lapses.
THE failure of the actuary's bureau to
detect the Washington LIES fraudulent
lapses of it's policies" he says, 'has not
been followed by any discipline therefor
and no instructions whatever have been
issues by the bureau to be on the lookout
for similar practices"
Continuing on this line, Mr.. Fleming
says:
THE department has done nothing in
the way of looking into the important
questions affecting dividends to policy
holders, and does not seem to have en-
forced the provisions of subdivisions of
the insurance law insofar as a number
of companies are concerned.
1.-THE statistician who overlooked the
Mutual Lies failure to report its profits
for the sale of ledger assets in 1904 neg
lects In 1907 to detect or report invest
ments which on the fact of the reports
filed in February are Illegal according 10
the superintendents ruling and accepts
what confirmation company's statement
as to the value of securities on which it
loans large sums Of money"
Mr.. Fleming also calls attention to the
case of the Provident Savings Life As
surance society.
mr.. Fleming says that on October q,
1907, following correspondence with Com
missioner Rittenhouse of Colorado, re-
garding this company, the examiners of
the Now York department began work.
The Colorado report, Mr.. Fleming says.
has been published and the report of the
chief examiner of the New York depart
ment verified it January 10, 1908. has been
served upon the company, which has
asked for the hearing to which 1t is en-
titled before publication"