New-York tribune., 1908-01-03
MUTUAL R ESERVE FIGHT
PRESIDENT UP IN ARMS.
Says Assessment Company Is Mts-
taken for an old Line Concern.

Archibald C. Haynes, president of the Mutual
Reserve Life Insurance Company, said yesterday
that if Attorney General Jackson should agree with
the report Of the examiners of the state insurance
Department deciding the legal questions involved
against the company and declare 1t insolvent. he
would hight the UP 10 the Supreme Court OF
the United States,
This company is not insolvent,' he said 1T
has been treated as If it old line or legal
reserve insurance company and not assess
ment company. The examiners have made their
report that basis. and. regardless of what the
Attorney General may decide do not believe that
the Supreme Court of the United States Will permit
any such report to stand"
1t conceded by President Haynes that the re-
port of the exsmIneIs declared the company in
solvent Otto Kelsey State Superintendent Of In
surance practically made that statement when ne
wrote a polcyhoder of the Mutual Reserve that
the report disclosed a serious impairment OF It's
financial condition" The report fled with the
Attorney General that he might pass on certain
legal questions.
Mr. HAYNES referred to decision of the Supreme
Court of 2 1907, which in effect declared
that when the Mutual Reserve was Tencor2orateo
and permitted to carry old line insurance as
well as assessment insurance the character Of the
company assessment company was not
changed, but that its scope was merely enlarged
Now" Mr.. Haynes said, despite this decision
Nelson B. Hadley and Charles Hughes. examiners
of the State Insurance Department, made their
report on this company on the basis OF ils CeIns
entirely an old line company. OF our tolai pusi-
ness about 60 per cent is assessment business anu
the remaining 40 per cent old limo or leSi reserve
business Under the insurance law we should have
a reserve Of approximately s1,5ooco TO cover our
old line noicies This company to-day has from
"a GOO m TO 5000 600 in assets. every dollar CT WHICH,
If necessary could be used legal reserve 1of our
old line business. Furthermore, unoer lhe 'iiSui
ance law we need not have one dollar 10 cover Io
assessment business If we had Sloo'VV'VVo ou'-
standing Of assessment insurance ana si'''''oV' ~
death claims on assessment policies due ana hor hor
ono dollar to nav them under the law we woulo
sin have six months to levy assessment on ou'
assessment polcyholders with when 10 pay '"o
death claims -. -, +Lo
r the nreIirninarv report the condition ol ute
company which made to superintendent =
sey on August so the valuation of the coinP"iiS >
,oa,obo,s an ;ts building at No. 500 Broadway was
nl.ced at s447 600 Mr. Haynes said, at which Vdlua-
ton the Insurance Department had accepieH Il Il"
previous years. ,,or.
got IN work on their final report they broughi III ia
an outside appraiser, who valued our 'edaeiol0'
-,ybts st $50 200 This final report was dated NO
| yernber 81 1901 In other words, IN less llidn III
months and without any depreciation III L'e ieAs'
we receive from the building or its value II was
graded down from $4,000 TO $4,000. Now, conid
]
and mt them to work appraising buildings from
the Battery to this street, and they Woud dller as
! much as 1000 per cent in their appraisals'
In sDeaking of the liens levied by the Mutual
Eeserve on its assessment policies Mr. Haynes SAID:
.'Jrnder the law an assessment insurance company
has the right and. in fact, must levy Hens against
its assessment policyholders. What is wrong with
! that?'
| The Mutual Reserve has about forty-seven thou
sand poicyholders. OF these about thirty thousand
| hold assessment policies and seventeen thousand
old line or legal reserve policies. superintendent
| Keisey's letter the policyholder who wrote to
him asking for information the condition of the
| company is follows:
I beg to advise you that the report of Nelson
! B. Hadey and Charles Hughes, examiners, of their
| examination into the condition and affairs OF the
! company, consisting of two parts, one a prelml-
! final report dated November 2I 1907 was, after
/ due hearing granted to such company, filed De
cember 81, 1907, and dtscloses d serious impair
! ment of the company's financial condition Upon
his consideration of matters included in said re-
| mort transmitted to him IN connection
! herewith such report of the department examfn-
ers is withheld from publication.
1t was said yesterday that the report would show
the Mutual Reserve TO be insovent by s,7o0Go. at
least. The question that remains to be settled
! is whether or the Attorney General will agree
! with President Haynes in his contention that the
examiners have treated the Mutual Reserve If 1t
| were purely an old line company, and whether. if
such be his decision, the company can win It's
/ fight in the higher courts.