Laws" adopted by the Supreme Court modifying and varying the terms of the original agreement. 6. That the officers of the society refuse to recognize any liability under the certificates issued to members until one year after the date of issue, notwithstanding the fact that the members are solicited by circulars and letters stating that the insurance benefit becomes immediate on the payment of twenty dollars and the additional five dollars for appointment as medical director. Interpretation as made by the officers of the society shows fraud is being attempted. The Department construes this contract to fix an immediate liability thereunder. 7. That the society is violating the Insurance Laws relating to the organization and operation of this class of societies inasmuch as it was organized primarily as a means of profit or gain to the organizers and promoters as appears from the excessive salaries and expenses which consumed all moneys paid in by members since organization and a deficit appearing as of the date of this examination. 8. That the Society is discriminating between members. It agrees to make those members who become medical directors sharers in the "surplus earnings of the order after the second year of appointment as medical examiners in an amount not to exceed the sum of two hundred dollars in any one year," and furthermore it can only make agreement with its "members" to pay benefits in case of "sickness, disability or death;" so that the society attempts to do what cannot lawfully be done under the Insurance Laws. 9. That the officers of the society have no appreciation of the responsibilities of trust imposed upon them in that the provisions of the constitution and general laws drawn to guard against misfeasance of any one officer were modified in a separate resolution passed at the same meeting when the constitution and by-laws were adopted. And further that no modification of such resolution has been sent to the members, and it seems from this procedure that it was the intention of the officers that the members should not have knowledge of this most important modification. Respectfully submitted, JOHN L. TRAIN, Assistant Examiner. John L. Train being duly sworn deposes and says that the foregoing report, subscribed by him, is true to the best of his knowledge and belief. NEW YORK OFFICE, 165 BROADWAY Hon. WILLIAM H. HOTCHKISS, Superintendent of Insurance, Sir.-Acting under appointment No. 2330, dated January 31, 1910, and annexed hereto, we have completed the examination of the Buffalo German Insurance Company of Buffalo, New York. This examination was made for the purpose of verifying the financial condition of the company as shown by its annual statement filed with the insurance department for the year ending December 31, 1909, on a proposed increase of "Guaranty Surplus" and "Special Reserve" funds. We find the financial condition on December 31, 1909, to have been as follows: The income and disbursements from January 1, 1909, to December 31, 1909, were as follows: Balance December 31, 1908 (per company's records). INCOME $2,342, 560 74 66 66 *This item includes a guaranty surplus fund" of $200,000 and a special reserve fund" of $200,000. Attached to this report as Exhibits "A" and "B" are schedules of collateral loans and bonds owned on December 31, 1909. The financial statement differs from that filed by the company for the year ending December 31, 1909, in the following particulars: Market value of bonds increased over book value in the sum of $2,839.95 and the unpaid losses decreased in the sum of $765, making a total increase in the company's surplus of $3,604.95. The salaries of officers authorized for the year 1910 are as follows: At a meeting of the board of directors held on January 11, 1910, the following resolution was unanimously adopted: Resolved, That the Board of Directors of the Buffalo German Insurance Company desire and intend, and do hereby approve and re-enact the declaration of such desire and intention heretofore by resolution duly expressed, to create and establish a guaranty surplus fund and a special reserve fund as provided in and by sections 130, 131 and 132 of the Insurance Law of the State of New York, and to do and to transact the business of said company pursuant to said sections and do hereby extend, enlarge and increase each of said funds from the profits of said company earned since the said funds were originally created and established, from the present amount of two hundred thousand to the amount of three hundred thousand dollars, and do hereby determine to continue to do and transact the business of said company pursuant to the sections aforesaid. "That the president and the secretary of the company be and they hereby are directed to deposit securities representing the said one hundred thousand dollars set aside for the special reserve fund with the Superintendent of Insurance and obtain the certificate of the said superintendent that the requirements of section 130 of the Insurance Law have been complied with." It is apparent that the financial condition of this company is such that the " Special Reserve" and "Guaranty Surplus" funds may be increased as provided in sections 130, 131 and 132 of the insurance law. Richard A. Elmer and W. H. Nangle being duly sworn depose and say that the foregoing report subscribed by them is true to the best of their knowledge and belief. Subscribed and sworn to before me on the 24th day of February, 1910. KATE F. CAHILL, [L. S.] RICHARD A. ELMER Notary Public New York county |