Daily capital journal. (Salem, Oregon) 1903-1919, 1915-03-17
POLICY HOLDERS MAY
HAVE TO MAKE GOOD
LOSSES OF MUTUALS
Financial Conditions Not Due
To Dishonesty Of Board
Of Directors

fered in an opinion by Attorney General
Brown, Insurance Commissioner Wells.
as receiver for the Horticultural Fire
Relief went into the hands of the re.
ceiver on March l, will probably be
compelled to levy an assessment upon
all outstanding policies in the Horticul.
tural Fire Relief, the Oregon Merchants
and the Pacific Mutual Insurance com.
panies in sufficient amounts to pay all
outstanding losses against the com.
panies which amounts to approximately
$4,000.
Receiver Wells, however is acting
under the directions Of the court and
will take no action in the matter until
it is found necessary to do so. After
making his investigations Receiver
Wells is convinced that TIE financial
condition of the defunct mutual insur.
ance companies is not due to any act of
dishonesty on the part of its officers or
board of directors, but thar 1t was due
purely to the lack of knowledge of in.
surance business and adequate and
competent bookkeeping and accounting
methods. He also holds his predecessor
in office, former Insurance Commission
er Ferguson, blameless for the trouble
in which the policy holders have be.
come involved inasmuch us he acted
solely upon the information received
from the officers of the company and
these showed the financial conditions of
the company sound up to the time of
expert investigation.
According to the correspondence be.
ing received by Receiver Wells from
policy holders some of them who have
suffered losses by fire and whose caimt
have not been paid are in distressfu
I straits and he has some very touching
appeals for help from some of these
In these instances he regrets that he j,
unable to pick out a few of the most
deserving and needy among all of the
claimants to provide them relief as the
law prescribes that all shall be treateC
alike in the settlement of claims.
Some complaints have been received
4 from policy holders who charge thai
assessments were levied and collected
against the policies when the director,
must have known that the finances OF
/ the company were not sound and in one
Of these instances it is claimed that the
company received and cashed a check
for an assessment upon the day whe1
the board Of directors contemplated go
ing into the hands Of receiver.
Receiver Wells, however, is certain
that the directors and officers of the
insurance companies were perfectly
honest in all Of their beliefs and deal
ngs with the policy holders and, in ex
oneration of President B. j. Miles, OF
this city, who was responsible for the
expert examination soon after he was
appointed president, January Is, and
| for learning the true status of the af
fairs Of the companies involved which
led to the application for receiver
and also of former Insurance Commis
sioner Ferguson, and gave out the fol
| lowing statement in the nature Of an
interview with The Capital Journal;
Miles and Ferguson Exonerated.
"Mr. Miles, the new president of the
Horticultural Fire Relief was exceed.
ingly anxious that thorough examin.
alton be made Of the company, and II
was agreed that an expert should 70
through the books. Mr.. Miles has at
all times supplied information and at
one time requested advise him how
20 proceed to reduce the liability on GER
tain classes of business, and after q
O. Inference on this matter he immediate.
ly ordered the liability on frame mer.
camille business in unprotected towns to
b, reduced to a small amount.
"He watched carefully the examin-
alton of Mr.. Chambreau, and when he
disco, cred the true condition of the
company, he Immediately notified this
department and / requested that he
place same before the board Of directors
/ ard arrange to secure sufficient funds
to nut the company on sound financial
hasis. Evidently after consulting the
directors they decided to apply to the
oorrt tor the receiver and am salts.
filj in my own mind the board Of d.
irctors did not realize the true cou-
dnion.
"rt is simply case where they at
tempted to cNrIy on this business with
but little insurance knowledge am
also sure the former insurance commits
sioner was misinformed as to the total
amount Of funds this company had in
ihelr possession and he was led TO be-