Evening journal., 1910-05-11
INSURANCE MAN
UNDER ARREST
Agent for Wilmington Con-
Germ Charged With ViOIat-
ing Pennsylvania Laws

PHILADELPHIA. Pa, May u--what
is declared to be the opening Of a vigor-
Gus crusade against the many fake" in
surance concerns that are defraudng
thousands Of poor people by issuing poll
cies that have no legal or financial back
ing, was the arrest yesterday, charged
with ten violations OF the Pennsylvania
insurance laws Of Frederick J. shaeffer.
representing the Public Health and Ac-
cident Association OF Wilmington, Del.
with local offices at No. go Chestnut
street. Shaeffer was held in 5000 bail for
further hearing. after evidence had been
submitted 10 show that policies had been
issued numbering up 10 Goooo, and that
Shsener was himself the association he
oisined 10 represent
The Commonwealth did noi present It's
full case, but showed that victims Of the
scheme were numerous, and had apparent
~ little or no prospect Of realizing any
return on their investment For the State
insurance Department. Deputy Examiner
William II. Hazlitt was its first witness
called by Clinton A. Sewers, acting coun-
sci for the Commissioner. Mr.. Hazlitt tes-
titled that upon several complaints sub
mitted, he began 10 Investigate the Public
Health and Accident Association about
six months ago. lie traced up number
Of cases where the policyhoIders showed
him receipts for first premiums paid to an
agent OF the Association and had never
received any policies therefor.
He then went to the Chestnut street
Office and made Shaener refund the
money in these cases. forwarding the
evidence TO the Insurance Department
/ at Harrisburg. Having warned Shaef-
fer that he had no right to issue poll
cies until given a license by the Insur-
ance Commissioner, and ascertaiuing
that he was keeping up the practice
Deputy Hazlitt then swore out the war.
rant.
Mrs. Celia Unruh, Of Fox Chase, testi.
ned that she had taken out accident
| policies for herself and husband from
Shaeffer over a year ago. with an old
| line company for which he was ther
working When the time came to re-
new the premiums. Shaeffer had trans
ferred the policies. so she alleged. e
the company he now represented. Upor
her discovering this fact she had pr,
tested against the change, but haC
never been able to secure any salts
faction from Shaeffer.
Affidavit and policies from individ
uals in different sections were ther
submitted to the Magistrate by Attor
ney Somers. among the complainant
being Charles A. Johnson, Of Pitts
burg; Dr. James F. Lennon, Of No. 1872
Lombard street, and Thomas F. Wood
of Bridesburg. Magistrate Gallaghe
stated that a prima-facie case had beei
made out, but as Mr.. Somers had othe
witnesses from a distance whom he de
sired to produce, the Magistrate con
tinued the case for one week. .
After the hearing. Shaeffer made tn
, voluntary statement that. as he hai
made application for a license. he be
lieved he had a right to do busines
pending its issuance and was not awar
that he was violating any law. Il
explaining the large number of policie
issued by the Public Health and Acct
dent Association, he said that they ha
begun their enumeration of policies a
No. J0.000 but Mr.. Somers subsequently
produced a policy with No. 2O1s
Deputy Hazlitt. at his Office, No 81
Arcade Building said that he had r.
ceived a large number Of complaint
regarding the operations Of this associs
D ton, all Of which would be produced
e Court. He had further evidence.
claimed that the Public Health and A,
cident Association was only one OF
group of insurance concerns, using
blanket supplied by a similar compar
, in Chicago. leaving a blank space Il
l the name OF the particular concern issl
irg the policy
These policies we're 50 worded that
I was easy for the parties issuing them
= wiggle out Of Inability. and the ben
q nciary had very little 'Aance OF ever 60
% ting anything for his money. While the
n fake concerns usually had a high-soun
Il ing name, It was found on Investigate
/ that they were being operated by in'
viduais without financial responsib
itv.
Among the specific charges I'm I
l. lengthy affidavit presented by the Coz
a monwealth against Shaener are consp
is ing to defraud under the insurance Law
ID use OF false pretenses and soliciting
surance without a license.