The Bennington evening banner. (Bennington, Vt.) 19??-1961, 1914-05-28

months the mlNnf came ul ~ one
form or another until had procured
from ms su -e'Y agreements Of the ~
insuring companies permitting tae
Stale of Vermont a. pruccCd against
the rcirsuring companies directly in
case the surety should become insol.
vent whoa ! might be I'm default
these agreements we're taken 40 my
suggestion 10 avoid an awkward situa
ton which occurred Ia the state OF
New York when a depository bank.
ard IS surety failed az the same time
and was in accordance with a prose.
dure adopted by the State OF Tennes.
see In a similar case. and this inior.
nation came 10 me while 7 VAS per
forming my duties as insurance com.
missioner. J am not able 10 fera'l all
OF the matters discussed bu' I gave
The Governor the fullest information
csncerning what supposed 10 BE- ma
tcIial facts and in frank and direct
manner and an can SAY Is that
Whatever statements I made 10 him
wee true. As 20 what Inquiries Re
may have made ! have no knowledge
but assumed that during the four
months he was giving the matter
such attention as he supposed iis inn
portance required. aud attempted to
do everything he suggested should be
done. and suggested such things as
occurred TO me as proper to protect
the interests OF the state. And un-
Gerstood that the Attorney Genc-al
gave the matter his consideration. in
fsct at Governor Fletcher request I
submitted the reinsurance ar.ee.
inents 10 Attorney General drown for
The latters consideration.
At the time the bond was present.
ed for approval no question had arts.
en- concerning the solvency o. The
Anne lean Fidelity Company or o. any
OF the reinsuring companies. As I
was continuously engaged with The
session OF the Legislature from Ocio-
Der until late In February and .mme.
diately thereafter in the preparation
and trial OF the railroad appraisals
before the Board OF Appeals 1t was
not until April 1913 that had an CD
portunity TO examine into the Affairs
OF the American Fidelity Company
Al that time | found that on account
OF large losses accruing in the bust
ness OF insuring employers against
injuries to their workmen that the
stockholders OF the company we're H.
able TO suffer some loss on their IN.
Nostment although the interests of
polieyholders and creditors were no;
IN jeopardy ! advised my co-commis.
sioner. Hon. Guy w Bailey. concern.
ing the situation. and was assured BY
the company officials that the situa.
ton would be taken in hand. and I
was following the situation when in
July Governor Fletcher called the i'm.
surance commissioners together and
inquired for information. At the sue.
gestion OF MIR Bailey we proceeded TO
make a thorough examination of the
company, the last one prior to that
time having been made by the insur.
ance departments of New York. Mass
achusetts and Vermont in January
and February, 1912. In August. 1913.
the commissioners found an impair.
ment OF capital to the extent of $50.
GOO in the S750OO0 capital and called
upon the company to make good the
impairment forthwith. Thereupon
several conferences were had with
representatives of the company and
with other insurance departments
and with Governor Fletcher until De.
cember, 1913, when the stockholders
IN order to handle the situation as Il
then existed voluntarily surrendered
and had cancelled practically one.
half OF the shares of capital stock.
The elect of such a transaction was
Immediately brought forward for con
sideration, a hearing was held by the
insurance commissioners with the AT
torney General at which time a legal
opinion In writing was submitted by
Hon. B. f. Fifeld to the effect that
the transaction had the effect claim.
ed FOR II by the company Soon after
the commissioners were furnished
with an opinion OF Ex.Chief Justice
John w Rowell which was to the
same legal effect as that of Mr. III.
Held. Later Attorney General Brown
advised the commissioners that i'm his
opinion the transaction had the effect
claimed. During this time Hon. Guy
W. Bailey and myself, as lawyers and
Insurance commissioners made an ex.
animation of the law upon the sub.
Iect and we we're satisfied that the
transaction had the effect claimed for
1t, that no funds were being with.
drawn from the company and the
company was again put into a posi-.
ton of solvency with capital stock
of approximately $3SO,O0O.
On January 8, 1914. Governor
! Fletcher by letter requested a cancel.
lation of my bond and the substitu.
ton of another and stated that he bas
ed his request upon information fur
nished him by me as insurance COM
missioner. At that time the question
concerning the surrender and cancel
lation of stock was under considera-
ton by the Attorney General. | re-