Rock Island Argus. (Rock Island, Ill.) 1893-1920, 1910-06-16
Governor Receives Explanation
from Insurance Commits
sioner on Merger.
HELPS GET BACK MONEY
Executive Holds There Is No Law
Authorizing Head of Department
to Prevent Combinations.

troverSy at Rock Island regarding the
merger of the American Home Circle
and the Fraternal Tribunes, insura-
ance societies, have to say that Mr..
Potter, state Superintendent of insur-
aRce, who liz now in New York, has
made a statement to me in writing,
which l herewith enclose, to be given
out in the event any question is raised
regarding his conduct in connection
Herewith.
direct your attention to two points
in his statement:
First-His contention supported by
the judgment of the courts. in the cases
cited by him, that he could not have
prevented merger, such as took place
in this case, under the present laws.
Second-That he took the initiative,
and it is due to him that the $57 900 in
controversy was recovered.
1t appears that the law requires him
to give notice to the attorney general
in writing, and that instead of doing
so he went personally to the attorney
general on July 21, 1909, and took the
matter up with Mr.. Dempsey. chief as
sistant of the attorney general, and
later with other assistants, as appears
from his report.
Mr.. Potter is a conscientious and ef-
fcient superintendent of insurance.
He has the confidence Of those who
deal with his department and OF insur-
ance circles throughout the country.
Illinois Laws Models.
Since his appointment he has worked
steadily to bring the insurance legis-
lation of this state up to the highest
standard, and the progress he has
made, especially in life insurance legis-
lation, during his administration, has
not been excelled by that of any state
in the union. The Illinois laws have
been regarded as models and copied
by other states.
In view of the fact that the money
involved in the controversy was the
only matter in dispute, was recovered
through his initiative, l do not think
that an erroneous impression should
go out regarding his action simply be-
cause he chose to submit the matter
directly and in person to the attorney
general, when 1t could be done more
fully, rather than to present 1t in a
brief and formal way in writing. From
what / can gather from conversation
with him and the attorney general,
there is no dispute between the two
about these matters, but the reports
which have gone out from Rock Island
seem to present different view.
send you this statement so that, in
the event you are interested, you can
make a more searching inquiry regard
ing the matters mentioned therein and
can publish It or retain it in your files
as you may deem proper.
Your truly, c. S. DENEEN,
Governor of Illinois.
First Notified March 1, 1909.
With reference to the contract of re-
insurance entered into November, 1908,
by the terms Of which the Fraternal
Tribunes of Rock Island, ILL.,. reinsured
the members of the American Home
Circle of Springfield, ILL.,, both frater-
nal beneficiary societies, and the re-
suits of this reinsurance agreement, the
statement has been made by
Insurance superintendent Fred w.
Potter of Springfield:
my attention was called to this con- |
tract of reinsurance. as nearly as can
remember, about March 1, 1909. AS
there is no statute governing reinsur-
ance between fraternal societies, notice |
is not, as a rule, given to the depart |
ment that such proceeding is contem- |
plated, or has been brought about. !
fix this date because at this time of |
the year fraternal beneficiary societies |
are required to make a report to the |
department of the previous years bus |
mess, and the Home Circle did not |
make report at that time. Upon in |
quiry found that it had been reinsur- |
ed by the Fraternal Tribunes.
According to the Interpretation Civ |
en- by myself and attorneys for this de- |
partment of section IL Of the fraternaI |
act, it is the duty of the insurance de-
partment to report any violations of |
the fraternal act to the attorney gen.
eral within 60 days, and not knowing |
of the reinsurance, as before stated, |
until nearly four months after it hap |
pened, it was impossible for me to no |
tify the attorney general within the |
time specified in the act.
No Legal Objections to Contract.
within GO days. however, of the time |
at which | heard of the reinsurance |
agreement, 1 visited the attorney gen.
erals Office and discussed the reinsur-
ance matter with Mr.. Dempsey, first |
assistant attorney general, with special /
reference to the duty of the attorney |
general under section II of the fra !
ternal act, but am quite unable to give /
the exact date of my visit.
Whether or not reinsurance agree
ment between two fraternal benefici- |
airy societies is of itself illegal is a dis |
puted question, and under some cir |
there evidently is no legal /
objection to contract of this kind. |
This department has held, however,
that If in such an agreement members |
are reinsured who are over so years /
of age, the age limit permitted by the !
fraternal act for new members, it is |
- -.