Burlington weekly free press. [volume] (Burlington, Vt.) 1866-1928, 1914-05-28


by the company Soon after the commits
sioners were furnished with an opinion of
ex-Chlef Justice John w. Rowell which
was to the same legal effect as that of
Mr.. Fifeld. Later Acknowledgement
Brown advised the commissioners that in |
his opinion the transaction had the effect
claimed. During this time the Hon. Guy
w. Bailey and myself, as lawyers and in
surance commissioners, made an examina
ton of the law upon the subject and we
were satisfied that the transaction had the
effect claimed for It, that no funds were
being withdrawn from the company and
the company was thus again put into a
position of solvency with a capital stock
ST approximately s3so,ooo.
REQUESTED NEW BOND
On January 8, 1914, Governor Fletcher
by letter requested a cancellation Of my
bond and the substitution OF another and
stated that he based his request upon
information furnished him by mo as In
surance commissioner. At that time tho
question concerning the surrender and
cancellation of stock was under con-
sideration by the encouragement. I re-
piled that felt the Information furnished
by ME did not warrant such a request
II the stock matter had the effect claim
ed by the company and that I felt the
commissioners should assume that it had
that effect until we had received an
opinion from the attorneygeneral to the
contrar". Under date OF January 10 he
renewed his request and stated that If
! did not comply with his request with
II ten days he should assume that I
decline 20 do so. and for the first time I
learned that he claimed that / had fall
ed to make disclosure of a material fact
which was that three OF the four re-
inSur.ng companies We're not admitted
to do an insurance business In the State
at the time they were accepted as sure
ties on my bond. And in that connection
he stated that he would not have &C
cepted them had he known the facts
AS courteously as ! knew how 1 denied
that l had tried to suppress informa-
ton, and suggested that our law did not
require reinsuring companies to be ad-
mtted to do business in the State, that
their obligations were contracts of in
demnity and not of insurance, were so
| treated by our law and so recognized
by other States. But told him in my
| reply that l would try to bring about
the admission of the non-admitted rein
surfing companies so that the situation
| might be exactly as he said he supposed
It to be when he approved my. bond.
Since that time two of the reinsuring
| companies have been admitted 10 the
State, and as the third company which
is indemnifying the American Fidelity to
the extent of $1,000 has declined to apply
| for admission | have asked the American
| n ba hN
pany admitted to the State secure the
performance of this $4,000 undertaking.
When that is done the situation will
be as Governor Fletcher states he sup
posed 1t was so far as the relnsuring
companies are concerned when he APP
| proved the bond.
INFORMED GOVERNOR.
| In subsequent correspondence | gave
Governor Fletcher information which he
had requested concerning the American
| Fidelity company. and he ad been In
close touch with the commiss ioners con-
tnuously from July, 1918. And informed
him that desired to comply with all law
full requests coming from himself as Gov
ernor and so had asked the attorney-gen-
eral for an opinion touching my duties In
the matter. The encouragement replied
that the Jurisdiction of the Governor over
my bond had ceased when he approved It,,
and that thereafter no official or board
had any control over 1t, and the attorney
general so advised the Governor upon the
latter's request for an opinion.
| Had there been any real occasion for
any change In the bond I would have pro-
cured further security to the State but as
the commissioners in January, 1914, found
the American Fidelity company solvent,
and that it was conducting its business
at that time in way to maintain a con-
tinuing condition of solvency, there was
no reason for a change. The company
April 30, 1914, had assets of nearly 81, 200 00O,
and surplus as to policyholders Of more
than $4,000, which means that after set
ting aside assets sufficient to meet all
liabilities of every kind there remained
an unmpaired capital of $3.50 80 and
funds IN addition of s93. 90 making s73.-
P8.20 with which to meet any extraordi-
nary losses which may occur While he
company is not as large as formerly It is
now financially sounder than at any pre-
vous time in its history, barring possibly
the first few years Of it's existence.
COMPANY STRENGTH.
Our law provides that foreign surety
company coming into this State for busI-
ness must have an unimpaired capital OF
$4,000, 1t will thus be seen that the
American Fidelity, the only Vermont
company engaged In this line of bust
ness, has nearly double the amount re-
CURED for foreign companies This com.
pany is also doing business in Massa-
chusetts, Connecticut, New York and
, more than twenty other States wbera