New-York tribune., 1908-02-03

qualified to hold office in any insurance corpora
| ton.
| GOES OVER KELSEY TESTIMONY.
Mr.. Fleming was appointed August 20 by
| the Governor. under the executive law, to in
vestigate the department. He went over the
! testimony of Superintendent Kelsey before the
Governor last year. the records of the proceed
ings before the Senate Judiciary Committee in
the removal hearings. the testimony before the
legislative Investigating committee, reports of
the department and department records and
papers, supplementing all this with examination
under oath Of the Superintendent, his deputies
and numerous department employees
As a result of all this he disposes briefly OF
number of charges as not well founded The
'Nylic'' fund for agency directors he finds has
been distributed but under ruling of the At
torney General ''Nylic' for agents is continued
for a Il who were members when the 1906 amend
ments went into effect It appeared that the
Netrorolitan Life had broken its rule the
subject Of loans TO pocyholders, but the viola
ton was due to errors of clerks and was being
corrected. The charge that lying advertisements
were inserted was not substantiated nor that
that Mr.. Kelsey refused information to policy
holders The charge that he failed to take ac-
tion on industrial insurance was nos sustained,
since this a subject for legislative activity
As to his alleged failure to mutualize insurance
connpauies this power is secured to the policy
holders tv law It does not appear that the
Sflperintendent under the law could have dis
qualified Mr. Hartman from holding Office In
any insurance company
The report then gives an elaborate ANALYSIS of
the personnel of the department and the duties
of the department and each empoye. 1t notes
that the duties of the cashier require his pres
ence al the department five days a week also
that Mr.. Kelsey was mistaken when he told the
.
C-innen the statistician. verified the market
values OF securities held by the companies Va
rious defects in the system in the actuarial bu-
raa,, are noted In speaking of the work of the
examining department the report says;
The examination Of the Excelsior Fire insur-
ance Company in August, l9O'' prior 10 V1 lIcoI
poration and again IN November l'V t
q REGULAR situation. In the August eXamina,
tior the examiners accepted as conclusive PROOF
Of tine ia vrent of 100000 capital ana -1pp'oVo
e1lrrIus OF that company the certihcates Oh the
.a-Lia-s of the Oriental Bank and the Borough
ponk each to the effect that there vas on ue
post in his bank the sum OF SI9o,ooV peIoiis-.'5
to the Excelsior Fire insurance coIiipaiiy -iIu
- +heec certificates the company was author
led TO transact business In NoVenlpei' nov
- afte- the failure of the Borough BANK, l'S
..,s5,ier testified under oath that il was under-
stood that the deposit in his bank should not
he reduced below $137,500 until certain loans 10
the incorporators Of the insurance company
were paid
r-,eD the report takes up the charge OF faiiuie
IA reorganize the department, observing that the
c,,,r,arinrauGent's power Of removal was pract-
.ell,- pnbampered. only three of his employees
l,eire- veterans. Mr. Kelsey took office Wheh
,,,,Flic opinion was aroused, it goes on. and ne
,,,,et have known that more than ordinary
-,,,,ira administration was demanded of him.
He told the Governor IL February of last year
that he knew the department needed reor-
eauization but says now that at that time he
had no idea of what changes TO make. and since
then has not~''had time TO go s!euthing 10 take
advantage of past misconduct past mis-
deads a" and is satisfied with the services or the
men he has kept An investigation of the failure
of the Mutual Life to report its profits from the
sa, ,e of ledger assets in 1904 or the Washington
Iife's fraudulent Iapses and restoratons in 1910
10 1903 or the connection of David II. Keefer'
assistant actuary of the department. with the
Security MUTUAL. of Binshamton. The report says,
r,ignt. have been profitable. All these things
were called to Mr.. Kelseys attention specifically
bv Governor Hughes in February, 1907. Mr..
Kelsey says he never has questioned the statls-
tician about the failure of the Mutual TO return
uroper reports; that TO the Washington Life
lapses perhaps the statute then did not lead
now Mr. Paterson admits that ne should have
noticed the company's practice from the policy