Year: 1878

division among claimants whose policies were
not wholly earned by the company when 1t
failed. The Court decided that these demands
should only be paid when several OF them
were presented together, and that the costs
of Court, In the event of payment, would De
25 per cent.


In the case of fire insurance companies
THE TRIBUNE heartily recommended two OF
three years ago, the Safety Fund Law of tins
State, passed for the express purpose of keep
ing such concerns from ruin in the event OF a
very great fire, and of paying promptly the
pOlicy-hOlders who might suffer thereby.
Companies are permitted, but not compelled,
to adopt the plan; five of them since the law
was passed have accepted its provisions. I'M
der it, instead of dividing their annual surplus
among their stockholders they retain halt OF
it, and deposit the other half at Albany.
Their stockholders are only allowed z per
cent interest. This process goes on until the
reserved funds equal the original capital, at
ter which the stockholders may do what they
please with additional earnings. When
great fire takes place, and the loss of the COM
Dany exceeds its assets it will pay out all its
capital and the surplus which it has III hand,
promptly, so far as that may go to meet the
claims against it. But the fund reserved at
Albany is to be used only to keep up the or
ganizatiOn of the company and meet debts
accruing after the great fire. The plan has
practically several great advantages. 1t
causes an accumulation of funds that would
otherwise be divided among stockholders. In
a., oc oil fire. thp pOiipy-
holders whose property is burned make their
settlement with the company instead OF re-
ceiver-thaU is, in sixty or ninety days instead
Of two or three years or more. Other policy
holders in the company, whose property may
burn after the great fire, are still insured.
The saving of money by keeping the organlza-
ton out of bankruptcy, will count with large
corporations by hundreds of thousands of
dollars.


So far as tried the act has served well in
causing companies to lay aside funds that
would otherwise have been disSipated in
dividends. 1t is now proposed, in bill yes
tcrday reported to the Senate, to amend the
law so as to provide for further contingencies
One point is, to have an official examination
of the company when it announces that its
d
The most important feature of the proposed
amendment is to provide against two great
fires following closely one upon the other.
For this purpose it is proposed to permit the
process of accumulation to be carried on be-
yond the original limit, and One-half the
extra funds thus reserved are TO be held at
Albany as a nucleus and for additions to pro-
vide against new disaster. So obviously
is such a measure the dictate of prudence,
and for the interest of pOlicy-hOlders burned
or "unburned,n that it should scarcely need
the defence of argument. 1t has, however,
been attacked by a single opponent of more
energy than repute. No new objections are
brought forward against the act, or the pro-
posed amendments the old ones, which were
fully answered in The TRIBUNE three our
four years ago, are Tevamped. Chief among
them is that the unbumed pOicy-holders are
better provided for under the ordinary law.
Theoretically they may be, but practically the
process of recovering their pro rata portions
of uDexpired premiums is so slow, that most
of them sell their claims at heavy discount
To the receivers near friend or brOtheT-in-
law. If their property burns after the COM
pany fails they cannot recover the insurance.
Most people would be delighted in such case
to find that the company had reOrganized, and
that their risk was still covered. The amend
ment to the bill is calculated to extend this
kind of security. 1t will also add to the
strength and pernanence of the companies
which have accepted the terms Of the law;
result that its one or more opponents do
not, probably, desire.