The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1915-04-21
State Issues Order for Mutual
Live Stock Firms.
A Fifty Per Cent Premium Re-
serve Is Required.
AFFECTS z Topeka COMPANIES
Rule Will Necessifate Most
Careful Management.
Means Insurance ON More Sub
stantiaI Basis.

Three Kansas mutual live stock in
surance companies, two of them 1ocat-
ed in Topeka, are affected by an arbi-
trary ruling today by Carey Wilson,
state Superintendent of insurance, in
which a sc per cent premium reserve
is required. Wilson's order compels
the companies to set aside at least ~
per cent of their premium income for
reserve every month until the full re-
serve is established.
The Wilson ruling is not based on
a statutory provision and is made to
meet a situation not covered by the
general insurance laws of the STATE
There is no law in Kansas specifically
referring to mutual live stock lnsur-
ance companies, according to Super1n-
tendept Wilson, who investigated the
matter carefully before making his
ruling The companies affected are
chartered under the general insurance
laws of the state which were made TO
apply to joint stock companies only.
Because of the situation, it was diff
ficult for the insurance department TO
find a basic for the solvency OF the
1nutuals. AS a SO per cent premium
reserve is required under the general
insurance laws. Wilson decided a SINH
lar provision would put the live stock
cop,nanies in good standing. For
that reason the order was made. 1t
mean trouble for the insurance COM
panies for a time, but under careful
management, the insurance Superln-
tendent anticipates no serious ol1tl-
Guilty.
All of the companies affected by the
mutual have assured the insurance de-
partment that they will stay In the
game.
wilson's ruling was handed down
on the heels of an investigation into
the affairs of the Topeka Mutual Live
Stock. The company showed hapll-
ties aggregating about $4,000 Whep
a premium reserve of some s3o,ooO
was charged against the company
Losses Out of Own Pocket.
There were no assets As matter
of fact, ]. H. White, president OF the
company, had paid about soo,Ogo out
of his own pocket to meet losses
White has not been reimbursed.
general agency contract was assigned
to him some time ago.
BY terms of an agreement with the
insurance department, Whites claim
will be held in allegiance. 1t will re
main a suspense liability until such
time as the company can pay 1t WITH
out impairing its full reserve and
losses Whites company will create
the reserve required by the Wilson
ruling and will continue to do bust.
ness.
and the Kansas Mutual of Wichita
will feel the effect of the Wilson order.
1t is claimed that neither of these
companies have maintained the re-
serve required under the new ruling.
Both companies are expected to COM
ply with the order without serious diff
ficulty.
Creation of the new reserve must
begin May 1. 1t is probable that the
requirement will result in an increase
in live stock insurance rates among
mutual companies in the state. In re-
turn, however, it is urged that the
companies will be placed on a more
substantial financial basis and will
operate under the provisions of the
state insurance law-at least until
some legislative action is taken.
The Stockmen's company of Topeka
will not be affected by the Wilson
order. Recently George A. Bailey be-
gan the liquidation of the Stockmen's
company. The retirement of the COM
pany from active business was due to
the recent death of Curtis s. Bailey
and the poor health of Mrs. George A.