Year: 1877

The Wrecked Life Insurance Companies.


The disasters which have overtaken so
many of the Life Insurance Companies of
the country during the past few months, have
fallen upon the people of no state more heav-
lily, in proportion to population and wealth,
than upon the citizens of Maine. Almost
every company which has failed has Dumber-
ed its risks in Maine by hundreds, if>not by
thousands. The Continental, the Security,
the New Jersey Mutual, the Guardian, the
North America, and the American Popular
have followed in mournful procession. and
the thousands and millions of dollars paid
into their treasures by our people have gone
to enrich the favorites and fee the ATTORNEYS
of receivers. Poor, indeed, is the prospect
for the victims of these 'legalzed vampires,'
ever to see again any part of the hard earned
money of which they are being robbed by the
professional insurance wreckers' into
whose hands they have fallen.


The history of the receiverships of the past
is only the story Of the long suffering and
impoverishment of their victims. The Great
Western Company, of which some of our
readers were patrons, yielded after long de-
lay, a dividend of 25 per cent. of the reserve !;
or perhaps one-tenth of the money paid in.
But this was before receivers had fully learn
ed the tricks of their trade. The Great Wes-
tern policy holders were fortunate as compar-
ed with the victims of later receiverships.
The administrator of the Eclectic has recent
iy, after four years of incubation, paid to its
policy holders dividend equal to perhaps one
per cent. of the premiums paid to the COM
pany. A few days since an item in our col
umns stated that already the treasury of the
Continental has contributed no less than
sl2O,539 TO the pockets of the lawyers who
have focked about the dismantled corpora
ton, as vultures swoop down upon carcass
Yer for that company the process has appar.
emily just begun.


It is no wonder, therefore, that policy hold
ers have come to look upon a receivership as
only legal device to wrest from them the
last vestige of the assets they have contrbut
ed to accumulate and in whose distribution
they have right to share. Nor are we sur
prlsed that many of the shrewdest and wisest
among them have sought earnestly to devise
some method by which a company upon the
verge of bankruptcy, perhaps technically in
solvent, may be saved from the sharks thus
waiting with open nav to devour their ma i'm
ed and helpless victim.


Recently such a remedy seems to have
been found and is about to be tested by the
last two companies who have fallen into diff
Guilty. The troubles of the Charter Oak
Company are well and widely known, as well
as the earnest and CONNIE nd able efforts made
during the past two years, and now making,
to save it from the results of the Walkley
mismana cement But now we are told by
the new managers that unaided these efforts
cannot avail, and the terror OF receivership
looms in the not distant future. In the case
OF the other company, the Universal of New
York, application was made for the appoint
ment OF receiver early in July, the appar-
ent insolvency being due solely to the exceed
ingly reduced appraisal placed by the Super
lntendent of Insurance upon the company's
real estate. The company resisted the ap.
plication and for more than two months the
question of the proper valuation Of their
property has been pending before referee.
Meanwhile in both these companies, and SO
tar as we know, in each without the knowl-
edge of the other, the more active and prom.
inent policy holders have devised plan
which if successful will at once avoid the
losses and delays of receivership and yet
secure to each policy holder the full value in
insu rance of his share of the assets of his
company.


This "plan" is simply a temporary reduc'
ton of the liabilities of the company to an
amount which its unquestioned assets are
sufficient to meet, until return ing CONNER
cial prosperity and the recuperative powers
of the company shall enable it to re.assume
the amount of the reduction. This is ac-
complished by an agreement on the part O
each policy holder that part, say 40 or 81
per cent, of his policy shall be forborne un
til the return of strength and the realization
OF doubtful assets shall enable the company
to again assume the burden of the whole.
Meanwhile the premium to be paid the com
pany is reduced in the same prop portion as
the policy and the entire future surplus of the
company is pledged to the restoration of the
policy to its original amount.


The case is precisely that of the tradesman
who, with an indebtedness of twice his ready
means to pay, asks his credi tors tosaccept in
settlement, one half their claims, until ar
improving market shall enable him to realize
upon temporarily deprecated property, OF
till the reception of an assured future income
shall furnish him the means for full payment
In no other respect than that indica ted is the
original policy modified, all of its provisions
as to non-forfeiture, methods of payment
etc., remaining unchanged. 1t is needless
for us further to explain the details of the
scheme. We are informed that it has the
approval of the Insurance Departments O
New York, Connecticut and Massachusetts
1t seems to be sensible, inexpensive and sure