Rocky Ford enterprise., 1909-10-01
INSURANCE MATTERS.
Commissioner Clayton Issues Warn
ing to Citizens.

ing to Citizens.
Bulletin No. II of the State Insur-
ance Department, just issued, con-
tains the following information that
is worthy the careful perusal of every
citizen of Colorado:
United Insurance Company, Chi
cago.-This company is being organ
lied with a capital of $Io,ooo,ooo and
surplus of $4o,ooo,ooo. The real pro-
moter, who is directing its operations
and whose name does not appear, was
forced out of the management of a
life company for improper business
methods; wrecked another life COM
pany in thirteen months and forced
said company into the hands of re-
ceiver; and secured $II8.724.ss in
commissions out of $33o5I7.5o. col
lected from the stockholders of a
third company, virtually leaving the
company in an impaired condition be-
fore it started to write insurance. In
view of the foregoing the Depart
pany to our citizens.
A large number of insurance COM
panies are being promoted with capi-
tai stock ranging from 100000 to
100000, and the public is solicited
by means of attractive literature and
through the efforts of statesmen. The
simple placing of capital stock does
not guarantee the success of an in
surance company. 1t requires many
years of hard work by experienced
underwriters and fnanciers to guar
antee the success of an insurance
company. In practically all cases at
least twenty-five cents of every dol
lar paid into the company by invest
ors goes for promotion purposes, and
in many cases as much as fifty cents
of every dollar is so used. The citi-
zens of this state are warned against
vcstigating the company. The De-
partment will gladly aid the Colorado
public in determining the merits of
the respective companies and invites
inquiry.
The Colorado laws do not permit
any life insurance company to oper-
ate in this state which issues special
or board contracts. 1t is noted that
number of the new companies or
ganized outside of Colorado are plac-
ing, or have recently completed. their
issues of such contracts. Applications
for admission to this state from such
companies will not be favorably re-
garded.
Western Life & Accident Company,
Denver.-An examination of this
company was recently conducted to
ascertain whether or not certain i'm
proper practices. for which the man
agement was heretofore criticised,
had been corrected. These abuses
consisted of payment of salaries to
parties no longer connected with the
company and the failure to collect the
interest on 4 mortgage loan given by
4 director. While the records indi-
cate that these matters have been cor
rected, it was found that the salaries
of two of the officers had been in
creased considerably, and that the
payments referred to were being con-
tinued by these officers as individ-
uals. 1t is clearly an evasion and the
wrong consists in the fact that the
company is a mutual assessment as
sociation, wherein all profits are sup
posed to accrue to the policyholders.
Fraternal Bankers of America, De-
catur, lllinois.-This order was ad-
mittcd to Colorado as fraternal as
sociation July 7, 1903. At that time
the Department took issue with its
officers because of the unusually
heavy expense ration. In May, 1909,
the President, with the Board of Di-
rectors, which he admits was abso-
lutcly under his control, transferred a |
large portion of its membership to |
another order, namely: The Ameri-
can Patriots of Springfield, Illinois. |
and he further states that he is to re-
ceive commission OF $4,000 for
such transfer. The Fraternal Bank
ers of America has ceased business,
leaving a number of unpaid claims |
Its former State Agent. and its for
mer President, are now endcavoring
TO transfer the Colorado policyhold-
crs to the National American League,
fraternal order which has just been
organized by the former President of
the Fraternal Bankers of America.
The Department has refused to license
the National American League on ac-
count OF the record of its President,
believing that it will not be hone silly
managed or conducted for the bcne-
n. nF ,ts h.. b;e