Cflmnwnfotitltjr of Utimatfrasttts. SPECIAL REPOET OF THE 1' I INSURANCE COMMISSIONER. « December, 1871. Wright & Potter, State Printers, 79 Milk Street (cor. Federal), Boston. "W.| .A/\ INSURANCE DEPARTMENT. SPECIAL REPORT. >• 0 vO D * The Chicago Calamity. Some of the most intelligent estimates of loss by the recent conflagration at Chicago, reach an aggregate of not less than one hundred and fifty millions of dollars; while others claim a loss of two hundred millions and more. From information gathered upon the spot, and from careful investigation of all the insurance returns and numerous other data thus far accessible, our own estimate falls a little short of one hundred and forty millions, including merchandise and household goods, public and private buildings, and other miscellaneous property usually accumulated in a great and thriving city. Of the whole amount, more than eighty millions, or full sixty per cent., was insured, involving to a greater or less extent nearly two hundred and sixty Insurance Companies, or three-fourths of all the Insurance Companies doing business in the United States. At the date of this Report (December 8th), more than sixty of the Companies thus affected have been forced into absolute failure; while nearly as many more have been compelled to adopt measures for the immediate restoration of capital or assets, often impaired far beyond the minimum limit of solvency. This startling condition of the insurance interests of the country, aggravated by consequent anxiety and distrust, de¬ manded the earliest reliable information relative to the financial ability of all Companies involved in the disaster. To meet this 4 Special Report of the demand, the Commissioner promptly required from every such Company doing business in Massachusetts, a sworn statement of its gross present assets and liabilities, with a separate state¬ ment of its losses at Chicago. Of the whole number of Fire and Marine Companies authorized in Massachusetts, one hundred and five, more than half, were included in the list, twenty-three of them Home Companies. The total reported losses of these Companies foot up nearly twenty-five millions. The publication of the results has been purposely delayed till now, in order to give ample time for investigation, as no official report would possess much value unless based upon the fullest and most accurate data. To the Department Circular issued October 12th, immediately after the fire, most of the Companies have now responded, some of them having made a second return revised from later information ; while a very few have been as yet unable to ascertain the precise extent of their losses. It is more than probable that losses already revised will be in many cases materially reduced by salvages and subsequent adjust¬ ments. From the statements received, the following tabulations have been collated, the losses reported being in a few instances esti¬ mated as nearly as possible, in others based upon partial adjust¬ ments, and in some stated at the full amount insured. These results exhibit the condition of those Companies only which have been involved, no occasion existing for any further enu¬ meration. Massachusetts Companies. name of company. Gross Present Assets. Gross Present Liabilities, in¬ cluding Chi¬ cago Loss. Surplus as re¬ gards Policy¬ holders. Chicago Loss. Bay State, $335,095 $95,140 $239,955 $5,000 Boylston, 947,002 151,266 795,736 13,000 City, .... 420,531 43,715 376,816 15,000 Eliot, .... 730,553 122,496 608,056 12,500 First National, 173,117 69,854 103,262 2,500 Fireman’s, 1,094,190 196,812 897,378 35,000 Franklin, 636,556 208,601 427,955 55,000 Insurance Commissioner. 5 Massachusetts Companies— Continued. NAME OF COMPANY. Gross Present Assets. Gross Present Liabilities, in¬ cluding Chi¬ cago Loss. Surplus as re¬ gards Policy¬ holders. Chicago Loss. Howard, .... $407,025 $81,269 $325,755 $27,500 Lawrence, 294,315 27,621 266,695 12,500 Manufacturers’, 1,439,000 337,442 1,101,558 120,000 Merchants’, 981,683 145,559 836,124 10,000 National, 900,000 665,635 234,365 400,000 Neptune, 974,162 291,989 682,173 60,000 North American, 643,894 100,685 543,210 10,000 People’s,.... 950,000* 615,824 334,176* 300,000 Shoe & Leather Dealers’, 488,058 120,191 367,867 25,000 Springfield F. & M., 1,402,000 787,220 614,780 450,000 Suffolk, .... 293,000 85,500 207,500 23,500 Tremont, 376,912 175,622 201,290 67,000 Washington, . 1,046,314 261,953 784,361 25,000 Totals, • • • $14,533,407 $4,584,394 $10,189,012 $1,668,500 * Not including November receipts, amounting to about $100,000. All these Companies are understood to be paying their losses in full, some of them having instituted prompt measures to increase their cash or guarantee funds where necessary to pre¬ vent possible deficit. The heaviest losers, the Manufacturers’, the National, the People’s, the Springfield Fire and Marine, and the Tremont, show percentages of loss amounting respectively to 8.34, 44.44,*31.58, 32.10, and 17.17 per cent.; yet their in¬ creased assets still indicate liberal ratios of surplus as regards their policy-holders, ranging respectively 326.43, 35.21, 54.27, 78.10 and 114.62 per cent. The surplus held by these and the remaining Companies, the latter sustaining smaller percentages of loss, sufficiently guarantees the security of all present risks. This is still further apparent in the aggregated summary of the whole twenty Companies, in which the average ratio of loss dwindles to 11.49 per cent.; while the surplus of assets rises to 222.25 per cent.—an exhibit, which, without invidious intent, may be regarded with some degree of local pride and satisfac¬ tion. Special Report of the It is indeed fortunate, that only three Massachusetts Com¬ panies have been compelled to succumb to this, the greatest of all the great fires of history. One of them, the New England Mutual Marine, was taking rank as a veteran in the insurance field, having already filled an honorable record of thirty years. The other two, the Hide and Leather and the Independent, both just completing their fifth year, were also anticipating a success¬ ful career. These Companies go into liquidation with the fol¬ lowing exhibit:— Gross Present Assets. Gross Present Liabilities. Chicago Losses. Hide and Leather, .... $392,100 $806,300 $720,000 Independent,. 494,342 1,495,014 1,052,000 New England Mutual Marine, 930,151 1,203,272 950,000 Totals,. $1,816,593 $3,504,586 $2,722,000 It will be seen that in each instance the losses at Chicago alone more than absorbed the entire assets, in one case, that of the Independent, the loss being more than double the assets of the Company, while its gross liabilities appear to have been more than three hundred per cent, in excess. It is expected that the affairs of each Company will be speedily settled, so that all claimants may receive their proportion with the least possible delay. Companies from other States and Countries. Among the Companies from other States and countries doing business in this State, the following suffered losses at Chicago. The data herewith submitted were rendered in their returns to this Department, some of which have been revised by subse¬ quently amended statements ; while, in a few instances, the losses reported by others have been somewhat diminished in the processes of adjustment. Many of these Companies would therefore make a more favorable showing than at first, especially with their accessions from new business which has been large, and from assessments now in process of collection. Insurance Commissioner , 7 Maine Companies. NAME OF COMPANY. Gross Present Assets. Gross Present Liabilities, in¬ cluding Chic¬ ago Loss. Surplus as re¬ gards Policy¬ holders. Chicago Loss. Eastern, .... $312,236 $98,000 $214,236 $7,500 National, 417,798 219,629 198,169 36,000 Union, .... 427,722 169,017 258,705 5,000 Totals, $1,157,756 $486,646 $671,100 $48,500 Rhode Island Companies. Merchants’, $357,909 $125,792 $232,117 $10,000 Narragansett, . 767,521 256,320 511,201 20,000 Totals, $1,125,430 $382,112 $743,318 $30,000 Connecticut Companies. iEtna, .... $6,050,000 $4,975,000 $1,075,000 $3,000,000 Hartford, 3,052,235 2,491,574 560,661 1,500,000 Phoenix, .... 1,756,656 1,390,000 366,656 600,000 Totals, $10,858,891 $8,856,574 $2,002,317 $5,100,000 New York Companies. American Exchange, Citizens’, Columbia, Commerce, N. Y. City, Commercial, . Continental, . Fireman’s, Germania, Guardian, Home, International, . Merchants’, $280,887 $85,500 711,417 179,180 468,595 68,785 253,865 52,322 317,451 62,688 2,847,307 2,136,655 366,924 148,775 1,181,206 554,701 286,984 82,108 4,813,561 3,805,540 1,466,720 958,265 463,864 116,450 $195,387 $58,000 532,237 35,000 399,810 3,400 201,543 26,000 254,763 5,000 710,652 1,200,000 218,149 58,000 626,505 233,328 204,876 45,000 1,008,021 2,139,213 508,458 546,911 347,414 10,000 8 Special Report of the New York Companies —Continued. NAME OF COMPANY. Gross Present Assets. Gross Present Liabilities, in¬ cluding Chic¬ ago Loss. Surplus as re¬ gards Policy¬ holders. Chicago Loss. Mercantile, $294,336 $153,571 $140,765 $112,000 Niagara,. . 1,412,024 546,141 865,883 233,140 Phoenix, .... 1,870,077 836,403 1,033,674 350,000 Republic, 682,382 394,743 287,639 208,140 Tradesman’s, . 403,044 128,135 274,909 30,000 Totals, $18,120,644 $10,309,962 $7,810,685 $5,293,132 Pennsylvania Companies. Fame, .... $218,348 $35,000 $183,348 $5,000 Franklin, 3,255,169 1,858,723 1,396,446 500,000 Ins. Co. of No. America, 3,262,308 1,781,000 1,481,308 550,000 Union Mutual, 256,940 101,000 155,940 22,000 Totals, $6,992,765 $3,775,723 $3,217,042 $1,077,000 Ohio Companies. Home, .... $665,479 $442,000 $223,479 $300,000 Suiiy • • • • 334,000 230,000 104,000 170,000 Totals,. $999,479 $672,000 $327,479 $470,000 California Companies. Fireman’s Fund, $682,211 $499,687 $182,524 $350,000 Union, .... 1,034,288 720,204 314,084 500,000 Totals, $1,716,499 $1,219,891 $496,608 $850,000 Grand Totals, . $40,971,464 $25,702,908 $15,268,549 $12,868,632 In addition to these Companies, some of the following have rendered only partial statements of present assets and liabilities; others none; but their published losses at Chicago are stated herewith. The foreign Companies are also included in this connection :— Insurance Commissioner. 9 COMPANIES. Chicago Losses. Alemannia, Cleveland, Ohio,. $175,000 00 Andes, Cincinnati, Ohio,. 850,000 00 Commerce, Albany, N. Y., . . • . . . • . 400,000 00 Corn Exchange, New York City,. 55,000 00 Fireman’s (Fire), New York City,. 15,000 00 Hanover, New York City,. 250,000 00 National, New York City, . 37,500 00 Relief, New York City, . 40,000 00 Commercial Union,*. 65,000 00 Imperial,* . 150,000 00 Liverpool and London and Globe,*. 3,500,000 00 North British and Mercantile,*. 2,000,000 00 Royal,* . . 100,000 00 Total, . . . % . $7,637,500 00 * Foreign Companies. As in the preceding tabulation of Massachusetts Companies, present financial ability for the security of policy-holders only is shown in the case of others which have furnished the proper data, such being deemed sufficient for the purpose of this Report. The thirty-three Companies from other States which have thus responded to the Department Circular, report an aggregate loss of 31.41 per cent , and a surplus of 59.40 per cent, in excess of their liabilities. In all cases when impaired capital is restored to the requisite standard by assessment, or when capital is in¬ creased, an official examination will be made, under the direc¬ tion of this Department, at home offices, in order to verify the result and determine the true condition of every Company per¬ mitted to remain in the State. Companies which have Suspended. In consequence of their extraordinary losses, resulting in im¬ pairment or insolvency, the following Companies which were represented in Massachusetts at the date of the Chicago fire, have been compelled to suspend business. Certificates of 2 10 Special Hepoit of the authority granted to these Companies or their agents, to trans¬ act business in this Commonwealth, are therefore necessarily revoked. Name of Company. Location. Name of Company. Location. iEtna, New York. Lamar Fire, . New York. Albany City, Albany. Manhattan, . New York. American, . Providence. Market Fire, New York. Astor Fire, . New York. Merchants’, . Chicago. Atlantic Fire, Brooklyn. Merchants’, . Hartford. Atlantic F. & M., Providence. North American Fire, . New York. Buffalo City, Buffalo. North American Fire, . Hartford. Buffalo F. & M.,. Buffalo. Norwich Fire, Norwich. Capital City, Albany. Pacific,.... San Francisco. Charter Oak, Hartford. People’s, San Francisco. City Fire, . Hartford. Providence JVashington, Providence. Connecticut Fire, Hartford. Putnam Fire, Hartford. Enterprise, . Philadelphia Roger Williams, . Providence. Excelsior, . New York. Security Fire, New York. Fulton, New York. Washington,. New York. Hope, . Providence. Western, Buffalo. Irving, New York. Yonkers and New York, New York. The Lorillard of New York and the Occidental of San Fran¬ cisco voluntarily withdrew from the State, and the Lycoming of Pennsylvania retired under a revocation of authority, soon after the Chicago fire. The following are also specially named as not authorized in Massachusetts ; and others in the same catagory will be publicly noted as occasion may require. New York Plate Glass Insurance Company. National Life Insurance Company of Chicago. North-Eastern Mutual Life Association of Vermont. This Department has recently been forced to take special cog¬ nizance of a growing evil in connection with the admission of Insurance Commissioner. 11 new insurance competitors from other States. Companies ap¬ plying or contemplating application for admission to the State, frequently resort to an illegal practice which of itself might justify their exclusion, viz.: the appointment of agents in vari¬ ous cities and towns with instructions to commence business, even before their application has been filed or their financial condition investigated. Several instances have occurred in which Companies thus operating have proved financially defi¬ cient and otherwise unworthy of public confidence; while agents, in accepting risks in their behalf, have rendered them¬ selves liable in severe penalties which may be at any time en¬ forced upon complaint of parties cognizant of the facts. Those who heed the warning will act wisely. Companies Authorized in the State. For the better protection of those desiring insurance, refer¬ ence may be had to the following list of Companies, which, in addition to Home Companies, are at present authorized to do a fire and marine business in this Commonwealth:— iEtna, .... Alemannia, American Fire, American Exchange, Andes, .... Arctic, .... Atlantic Mutual, Brewers and Maltsters, . Citizens’, City Fire, Columbia Fire, Commerce, Commerce Fire, Commercial Fire, . Commercial Mutual, Continental, . Corn Exchange, Delaware Mutual Safety, Equitable Fire and Marine, Eastern, .... Fairfield County Fire, . Fame, .... Fireman’s Fund, New York. New York. New York. New York. New York. Philadelphia. Providence. Bangor, South Norwalk, Ct. Philadelphia. * Sau Francisco. Philadelphia. New York. Cincinnati. New York. New York. New York, New York. New York. New York. Albany. Cleveland, O. Hartford. 12 Special Report of the Fireman’s,. New York. Franklin Fire, .... Philadelphia. Germania Fire, .... New York. Glenn’s Falls, .... Glenn’s Falls, N. Y. Great Western, .... New York. Guardian Fire, .... New York. Hanover Fire, .... New York. Hartford Fire, .... Hartford. Hartford Steam Boiler Inspection, . Hartford. Hoffman Fire, .... New York. Home,. New York. Home,. Columbus, 0. Hope, ...... New York. Insurance Company of North America, Philadelphia. International,. New York. Mercantile Fire, .... New York. Mercantile Mutual, .... New York. Merchants’,. New York. Merchants’,. Providence. Narragansett,. Providence. National Fire,. New York. National,. Bangor. Newport Fire and Marine, Providence. Niagara Fire,. New York. Orient,. New York. Phoenix Fire,. Brooklyn. Phoenix, ...... Hartford. Relief Fire, . ... New York. Republic,. New York. Standard Fire, .... New York. Star,. New York. St. Nicholas, . . New York. Sun,. Cleveland, 0. Tradesmen’s Fire, .... New York. Union, ...... San Francisco. Union, ...... Bangor. Union Mutual, .... Philadelphia. Watertown Fire, .... Watertown, N. Y. Westchester Fire, .... New Rochelle, N. Y. Commercial Union, London, Eng. Imperial Fire, .... London, Eng. Liverpool and London and Globe, . Liverpool, Eng. North British and Mercantile, . London and Edinburgh. Queen,. Liverpool, Eng. Royal,. Liverpool, Eng. Insurance Commissioner. 13 This list will be revised from time to time as changes occur, and citizens enclosing a stamp for postage will be furnished with the information, thus enabling them to escape the imposition of worthless and fraudulent insurance. Such publication becomes necessary because of the large amount of bogus insurance which is being illegally effected within the State in irresponsible Com¬ panies, or Companies which have not passed the test of a Mas¬ sachusetts examination. Any information resulting in the con¬ viction of parties implicated in these fraudulent operations, will be liberally rewarded. Cooperative Insurance. The annexed decision of the Supreme Judicial Court of the Commonwealth, became accessible too late for publication in the Massachusetts Life Report recently issued. As a matter of public interest and importance, especially in the department of life insurance, it may appropriately have place in these pages. The case in which the decision was rendered, was that of the Commonwealth v. George R. Wetherbee, an agent of the Con¬ necticut Mutual Benefit Company of New Haven. The Com¬ pany had twice applied for admission to do business in Massa¬ chusetts, but was refused because of its financial inability to meet the requirements of law, and also because of the utter worthlessness of its so-called cooperative scheme. While soliciting insurance without authority and in defiance of law, Wetherbee was arrested at Worcester in the spring of 1870, and held for trial before the Superior Court, from which, upon conviction, the case went to the Supreme Court on ex¬ ceptions, the Company claiming to be a purely benevolent insti¬ tution, and not an Insurance Company. The case was argued before Judge Gray, at the October term of the Court, in the same year, Attorney-General Allen appearing for the Common¬ wealth. The opinion of the Court, recently filed, is as follows:— “ A contract of insurance is an agreement by which one party, for a consideration (which is usually paid in money, either in one sum, or at different times during the continuance of the risk), promises to make certain payment of money upon the destruction 14 Special Report of the or injury of something in which the other party has an interest. In fire insurance and marine insurance, the thing insured is property; in life or accident insurance, it is the life qr health of a person. In either case, neither the times and amounts of payments by the assured, nor the mode of estimating or securing the payment of the sum to be paid by the insurer, affects the question whether the agreement between them is a contract of insurance. All that is requisite to constitute such a contract is the payment of the con¬ sideration by the one, and the promise of the other to pay the amount of the insurance upon the happening of injury to the subject by a contingency contemplated in the contract. The contract made between the Connecticut Mutual Benefit Company and each of its members, by the certificates of membership issued according to its charter, does not differ in any essential particular of form or substance from an ordinary policy of mutual life insurance. The subject insured is the life of the member. The risk insured is death from any cause not excepted in the terms of the conti*act. The assured pays a sum fixed by the directors, and not exceeding ten dollars, at the inception of the contract, and assessments of two dollars each annually, and of one dollar each upon the death of any member of the division to which he belongs, during the con¬ tinuance of the risk. In the case of the death of the assured by a peril insured against, the company absolutely promise to pay to his representatives, in sixty days after receiving satisfactory notice and proof of his death, ‘ as many dollars as there are members in ’ the same division, the number of which is limited to five thousand. The payment of this sum is subject to no contingency but the in¬ solvency of the corporation. And the means of payment are derived from the assessments collected, upon his death, from other members; from the money received upon issuing other certificates of member¬ ship, which the by-laws declare may, after payment of expenses, be ‘ used to cover losses caused by the delinquencies of members,’ and from the guaranty fund of one hundred thousand dollars, established by the corporation under its charter. “ This is not the less a contract of mutual insurance upon the life of the assured, because the amount to be paid by the corpora¬ tion is not a gross sum, but a sum graduated by the number of members holding similar contracts; nor because a portion of the premiums is to be paid upon the iTncertain period of the deaths of such members; nor because, in case of non-payment of assessment of any member, the contract provides no means of enfoi*cing pay¬ ment thereof, but merely declares the contract to be at an end, and all moneys previously paid by the assured, and all dividends and Insurance Commissioner. 15 credits accrued to him, to be forfeited to the company. The fact offered to be proved by the defendant, that the object of the organi¬ zation was benevolent and not speculative, has no bearing upon the nature and effect of the business conducted and the contracts made by the corporation. “ The ruling that this association was an insurance company, with¬ in the meaning of the statute upon which the defendant was indicted was therefore correct, and his exceptions must be overruled.” The decision of the Court is in accordance with the ruling of this Department ever since the irresponsible brood of cooperatives , so called, first sought to practice their confidence game upon the public. With this and the statute of 1870, (section 5, chapter 349,) such deceptions ought to pass under the ban of perpetual condemnation, as not one of them can bear for a moment the test of financial scrutiny or common prudence. JULIUS L. CLARKE, Insurance Commissioner.