The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1913-10-03
KANSAS Warned
Superintendent of Insurance
UnearthS Unusual Conditions.
/. S. Lewis Alleges Fake Fire
Firms i'm This State.
ASSETS OF LESS THAN $1,000
Unpaid Losses, 1t Is Said, Are
More Than Million.
Four Well Known Companies
Mentioned in Report.


Lewis states that there are many com
panies in the state doing business
against the blue sky policy of the
Kansas insurance department. The
department superintendent does not
garb his accusations in doubtful
phrases-he states that they are
/ fakes" offending" worthless and
designates many of their agents as
ignorant and "unprincipled-'
In his warning Superintendent
companies have assets that amount
to only 500 while their unpaid
losses proved to be $1,250,O00. The
department will demand that every
dollar is repaid to the insured and all
licenses will be Cancelled.
Mr.. Lewis explains the sensational
developments in the following inter
view:
For a number of years Kansas has
been cursed on account of the opera
ton of a number of fake fire insur-
ance companies operating from diff
ferent points in this country: some
times it is from Chicago, sometimes
from New York and sometimes from
other points in the east. Recently or
for the past few years there have been
four of these compares that have been
particularly active and about which,
on account of their operatives, this de-
partment has had some knowledge
This we obtained mostly by inquiries
=
instance we have advised them against
these companies. We have warned
the people from time to time to be
cautious in purchasing policies of in
Surance from unauthorized companies
Very little hold, if any, could these
companies obtain in this state were it
not for the fact that a number of ig-
norant and unprincipled agents are
from time to time offering to our cit
liens this kind of insurance Many
Of J,Ie at9o efnT hCn fol y
worthless. have been obtained and
money collected in payment of the
premium and after deducting a high
rate of commission which these agents
obtain. they forward the balance to
these fake operators in the east.
Companies Are Named.
Among the more prominent of these
offending companies that have been
operating in Kansas for the past few
years, are the Home Fire Insurance.
company, the American Fire 1nSur-
ance company and the Mercantile and
Marine Fire Insurance company, all
with headquarters in Dover, Della,
and the other one, the Equitable Fire
Insurance company of Wilmington,
Della.
Recently the operations of these
compa MES became so fragrant that the
authorities took action and the COM
panies were all placed in the hands of
receivers. 1t developed that the total
assets of these companies amounted
only to 500 while their unpaid losses
proved to be s2.25O,000- Most of the
officials of these companies have
left for unknown parts, perhaps they
will again be heard from and be able
to find agents in Kansas who are Will
ing to take the money from their
neighbOrs on the pretenSe of furnish
ing protection. These agents have
not only committed a grave error or
wrong upon their neighbors by taking
their money and leaving them with the
impression that they are protected
against fire, but they are violating a
specific statute of this state, in acting
as agents for Unauthorized companies.
These agents are presumed to be bust
ness men, some of them have licenses
from this department to represent 9TH
er reputable compa MES, and, they GER
tainly should be aware of the viola
lions under our statutes. The penalty
for viola tons of this kind is $500 fine
and imprisonment. This alone would
seem to be a sufficient deterrent. but
what can you say of an agent, know
ing as he should the conditions of these
fake companies. who would for the
sake of a few dollars commission which
he receives, leave his neighbor without
conscience absolutely unprotected or
without the hope of recovering a single
dollar should his home or his business
house be destroyed by fire.
Department Takes Action.
Fortunately the department, through
the authorities in Delaware, has come
into possession of much of the CORE
spondence between these offending
agents of this state and the fake in
surance companies Whereby it is made
possible for us to take action. In the
first place. this department has written
to these various agents and has de-
written, the amount of premium and
the name and address of the insured.
Some of these agents haV brazenly de
MED having any connection with these
fake concerns While the department
has on its desk absolute proof to the
contrary.
In the cases where insurance has
been obtained from these mpanes,
the first demand by the department is
to repay to the insured every dollar
obtained from him as premiums IN
these wildcat concerns In the sec
Ond place, it proposes to cancel the
licenses of these particular agents who
are representing authorized companies
in this state, the department taking
the position that these agents are unfit
to act for any insurance companies;
and, lastly, to check the matter up to
the county attorneys in the various
counties where these agents have been
operating. In some instances the cor
respondence which this department
has before it shows the name of the
insured but does not give the address.
In other instances only the mum Der of
the policy is mentioned. I. therefore,
am not in a position to warn all those
who have socalled policies with these
fake companies but am writing to
those where possible, warning them
that they have absolutely no protec-
ton under these policies and to de-
mand from the agents who secured
the insurance the return of their pre-
MUM.
Request for Publicity.
To my mind it would serve an ex-
cellent purpose if the papers publish
ed in the various towns over the state
would copy this article in order that