The sun., 1910-06-12

NANNA ~ WAAAAM - ANAANAAl aMNAAA NANH
rousive a commission of 20 per cent. In
addition 20 a contingent commission
q 10 per cent dependent upon the pTuhts
Of the business. President Vail in addi-
ton acts q agent for tho North River
Insurance Company for business csaded
by the Duchess Fire Insurance Company
IN Poughkeepsie Rnd vicinity. ON which
he receives contingent commission
ot 10 per cent. These commissions are
paid 90 Vail. sutton 4 Vail. On February
n, iRiO, the North River paid Mr.. Vail
by check k26O ". u which Mr.. Vail Offered
Si3n tu Mr. Graham. the company's score
tlry. which he refused TO accept, hut
deposited the same tO the credit % the
company
SuW Huchkiss seriously uuestiOns Tho
propriety vt the president oi an insurance
corporation. who rpCeives a liberal com
pensatiOu Tor his ser,iCs'S from the com
pany. acting also ~ an agent Tor his
company and for anuther Insurance orr
pOratiun. thus representing 'iherent
interests and prnfting by N" Influence
which he p,,szesss.s hy virle Of his q RC'
The SuIarntsnLent here calls attention
to a memorandum submitted at a hearing
on this report saying that the direCtorr
knOW u ~ these transactions and ap-
proved IT them ~ In no way impToper
or detrimental tp the interests II the
bltChes- fira Insurance Company.
~" method used FOR reducing agents
balances u condemned bv Mr.. HotChkiss
who finds that the total sum II net bal
an0es due from agents amounts 20
S3.niANe From this S.T79O5, repre-
senung business over three months old
has heen deducted as an asset not ad-
mtted The annual statement to the
department II DeCpmber 81, 1919 shows
the sum IT SlO ieS ~ "a the total amount
oi balances due from agents
IN December n. 1879. the con pany
rrducrd ~ agents balances by making
a note iuT t2s Oaa -. signed by the vice
president indhr-ed by the assistant
SECRETARY and dapu-ited in local hank.
The proce'-ds of which were placed to
the credit " the company and the agents
arrouts reduced 10y the exact amount
~ the note Agents halanOes were hy
this method converted into cash and the
Companv's surplus increased 10y the sum
~ NlAin3 representing balances on
business written prior 10 October |. 1870.
and usually excluded as a non admitted
asset All rpmittapCes from agents whose
aCCounts had been credited by the above
method were placed when received az
tho home office at the disposal of the
president and by him applied In the can
collation. ~ the above mentioned note.
The practice Of reducing agents hal
snce- was used Tor a number of years
by the old and new company II - main
tanned hy the president that these trans
actions represent actual sales of agents
halauc-s ana are itistihsul hecauHs other
companies Use similar methods Nr
lloiChkiss hold- that the facts show that
a bona tide -alc 70 agents balances was
not contemplated
The state Department holds that there
h O. h9lanCe due tn Old company unde-
tho r'tnsurEuCc rrgnggment n So 33l
md has included this sum IN tho new
go ETgny's hHu'hties. u - nls0 alleged
that m transfer ~ securities hy the obi tn
the new Compny they were underNahlrd
m t'e sum ~ - S.vU
lh" facts s',nve outlined were submitted
fp the directors ut he y tchess Fire In
-iIr.uCr tompany oH April p. 1870 with
that /. " iril resign -
president Fnd thSt 'h" new company rltify
the reinsurance arrangement an - fs.-
cent. commission hasis md nav over tr"
'alauc" iu- within ninety Il. ~ The dIreg-
tor, p7 --ed yrt" ~ confidence IN "
Na'l and siyis"d him o. refu-s tp res gn
'ud resolved NOT 90 remove him either -
president rr director Further u Was de-
.I.r-d That there wgs no rrinsurtn0a
|ris' gelr cent uu = - p~r cent commits
-.In b. 80 The intention vas sVpress.-d
'p {. b." thus question 90 the courts Tor de-
.ernu. 'lpn. which he's suoa seen done
A. o. suh~elIen, meeting the credit ~
,io uD from President Nailw rppudi.ted
yd 'he trustees 1T tb.. Duchess Insurance
nmpluy were requested o. cfnCc. u
The -HCrpttrv was instructed - urppa r.
q .rhodyla It the slleged undsryalust -,.-
rrokerage Offices ~ good standing to
pappr9lse PCcurding tu the records IT
in" dTte when the same were taken over
BY ih" DutChe-s Fire Insurance Companv.
I'm Ny ~. 1910 the stockholders voted
'u indurse tho directors IN their differ
inces with the Superintendent II lnsur.
lncc
President Vail and the old officers and
ilr.CtIrS we-. reelected this week with
10" exception of James T. SauIs who
has supported Mr HotChkIss He was
succeeded hv Frank r. IoWn. who ~
.rlCat"d the ola con pany from the dim
rIlu"- 10 the San Francisco disaster
The several acts COmplained II bv Mr.
'iutyhkIss are discussed and approved
U a l'Ugthy statement prepared by County
Judge Hashruuck counsel for President
Vail. which waz submitted "a Supt HOtch-
, I>- at a hearing granted the company IN
\ A.nauv several weeks ago. The amount
ilr Tor commissions on reinsurance fs
gwen a. tl5.OOU instead Of sos Re
.arding the alleged undervaMatiOn u
;, uo1 10 ~ asserted that the securities
transferred by a." DItchoss Insurance,
umpany n the Dutchess Fire Insurance
'onpany we're taken at their true and full
MARKET value az the time Of said transfer .
Tie directors deny that there was any .
such reinsurance cCntract As alleged hy .
be superintendent bat that the amount .
% b. paid Tor reinsurance was not fixed
.uril february /, 1910. when Il vas agrced
Aal Il should be allowed al So On
lienial ~ made pf each and every
ul 'aniial allegation made by the Super
ntoudent. The final destination ~ the
epudidt"d tlO.Uu. it i- stated. will hs
determined IN sgI' pending Tor the
losing up Il the anairs % the old com
ANY With referenoe 10 the sxpen-ss
v organization lie Sgperinteudent
tatsneui ~ facts 10 acUepted A. correct
lu' his conclusion. are denounced a.
rrOneous and false The Representations
90 the Massachusetts department are
ndur-"d a. truthful and letters are quoted
D show that m" departme Vas not
President Walls commis-
l1ns are also Justified. al-o the method
NFN IH rlallhA ak"Ab hdiallNf-N ] ne
apartment report - characterized
s. unfair and untrue
county Judge HaShrouCk said to-
lghi We will prove our contention
hnut this reinsurance contract when We
~ IN a court - justice We deny m toto
le item Il - on for alleged undervaula-
on - -sCuTitie- Al ~ these items IN
izpute will he passed upon in tho suit
hat b. p@nding brought by Allison Butts
% close ~ the AFFAIR." - the old com
any The new company served an
usw"r to-day denying that Il owe.
rher ~ any - these accounts and we
Iil prove u on the trial This will fairly
nd Judicially determine Who j. right