JOHN M. PALMER, Governor of Illinois : In accordance with the request contained in your communication of Aug. 1, 1871, I herewith submit to you a report of all matters pertaining to the Insurance Department of my office. In presenting this report to you-it being the third annual report of this office, of the affairs and business of Insurance Companies of all classes, doing business in Illinois-I will confine myself to the presentation of abstracts of the annual statements of the Companies, as filed in my office, for the year ending December 31, 1870, embodying therein all the facts and figures of vital importance to a correct understanding of the condition of each Company; and also the compilation of such tables as will enable the public to compare the figures presented by the Companies soliciting business, and thereby determine which are entitled to public favor and patronage. The year 1870 was one of ill-omen to many Insurance Companies. Its fire-king made many heavy-faced and grievous-to-be-borne numerals upon the debit side of insurance ledgers, to be blotted out only by the very life-blood of the Companies. For years before, continued losses drained the coffers of many Companies, almost to depletion; hopeful underwriters believed and hoped that during 1870 the tide might turn, and that instead of doing business at a loss, a reasonable profit might be realized. Early in the year prospects seemed bright, and the times auspicious; but soon the volume of business, which had assumed gigantic proportions, ceased to increase, and in Life Insurance greatly decreased; the reports of losses came from far and near, and unexpected disaster was imminent to many. Some Companies were unable to successfully continue, and, like vessels unable to combat the storm, sank to rise no more. Whilst the disasters to Companies were almost continuous, I am glad to record the fact that no loss has been entailed during the year, by failures of Illinois Companies, upon the public as policy holders-and that in only two instances has any loss accrued to policy holders by the failures of Companies from other States doing business in Illinois. Many Companies, weak and wavering, have been forced, by the sad experiences of the past few years, to yield and retire from business; and thereby a bitter feeling has been created, so far as rates and competition are concerned, which I hope may improve the financial status of Companies continuing in ursuit of business. COMPARISON OF BUSINESS OF 1869 AND 1870. The Fire and Marine Companies of Illinois received, during the year 1869, in cash premiums And during the year 1870.. .$2,801,787 95 3,091,414 47 Making the total receipts of 1870 exceed those of 1869 by..... Making the total expenditures of 1870 exceed those of 1869 by, $351,355 92 .$1,392,299 72 2,130,332 22 $748,032 50 $1,321,064 36 1,591,948 45 $270,884 09 .$2,713,364 08 3,722,280 67 .$1,008,916 59 To this amount there should be added $292,340 94 of losses accrued, but remaining unpaid on December 31, 1870. The same Companies wrote risks in 1869 amounting to $234,856,722 48, and in 1870 to $273,122,970 98, making the risks written in 1870 exceed those written in 1869 by $38,266,248 50. Of the risks written during 1870 and former years, by Illinois Fire and Marine Insurance Companies, $230,971,726 61 of fire risks remained on December 31, 1870, as unexpired; whilst not one dollar of marine risks remained upon the books of these Companies, as shown by their reports to this office. By comparing business done by all Fire and Marine Companies doing business in Illinois, during the years 1869 and 1870, we find that they wrote risks, received premiums and paid losses, in Illinois, as follows: Making the same estimate-based upon the same percentage of expenses in transacting and for obtaining this business,-we find that the business of 1869 produced a profit of $85,762 77, and 1870, a loss of 513,246 49. Of course our estimate of expenses cannot be accurately correct; but being based upon the same assumptions for both years, it cannot greatly exaggerate the truth, and must be comparatively correct. Viewing these figures, it requires no prophetic eye to see and predict the future of Insurance Companies in Illinois, if the present system of inadequate rates and illegitimate competition is persisted in, by the Companies and their agents. More than one of our Companies have already seen and felt the effects of this course of business, and have turned their efforts and capital in more productive channels. In order that the volume of the business of fire and marine underwriting may be seen, I give herewith A COMPARISON OF THE BUSINESS OF ALL COMPANIES IN THE UNITED STATES, COMPLYING WITH OUR LAWS, DURING THE YEARS 1869 AND 1870. FIRE, MARINE AND INLAND NAVIGATION INSURANCE COMPANIES—HERETOFORE DOING BUSINESS IN ILLINOIS-WHICH HAVE FAILED TO COMPLY WITH OUR LAWS SINCE THE DATE OF LAST REPORT. The following Companies of sister States have not complied with our laws for the year 1871, and are therefore not authorized to do business in Illinois: And the following Companies-incorporated by the State of Illinois-have ceased to transact business since January 1st, 1871, and have reinsured their risks and retired from the field of competition: Alton Mutual and Savings, Alton, Garden City, Chicago, Lamar, Chicago, And now, an unofficial report reaches me that the Reaper City, of Rockford, has reinsured its risks and ceased business. All these Companies have reinsured their risks in responsible and reliable Companies, and no loss will, in any wise, occur to any policy-holder, by their discontinuance of business; but I cannot say the same with regard to stock-holders. Serious charges of mismanagement and fraud have been made, concerning the retirement of the Lamar Insurance Company, by many of its stock holders; but its affairs are about to be made the subject of judicial investigation, and I therefore desist from any remarks in connection therewith. The capital of the Sangamo Insurance Company was seriously impaired, on December 31, 1870. Upon request of the Board of Directors, and after a personal examination of its affairs, and upon payment by the stock-holders of $8,480 into the treasury of the Company-this sum being necessary to make an unimpaired cash capital of $100,000-I authorized a reduction of the capital of the Company to $100,000, by the following certificate: STATE OF ILLINOIS, I, Charles E. Lippincott, Auditor of Public Accounts of the State of Illinois, do hereby certify that upon request of the Board of Directors of the Sangamo Insurance Company, of Springfield, Illinois, approved by all the Directors of said Company, according to law, I examined the affairs of said Company, for the purpose of permitting a reduction of the paid up capital of said Company to the sum of one hundred thousand dollars, and I found the condition of said Company to be as follows: Real estate....... Cash in office THE ASSETS THEREOF TO BE $450 00 556 98 12,167 16 75,552 97 4,500 00 45,210 00 755 94 838 72 Cash in hands of agents.. Loans on bonds and mortgages, with less than one year's interest due.. U. S. 5-20 bonds, cash value... Interest accrued and due.... Interest accrued but not due.. Bills receivable-all good and secured Amount due for premiums-estimated worth Office furniture and safes. Total assets.. 8,284 05 1,000 00 3,000 00 $152,315 82 THE LIABILITIES THEREOF TO BE $22,618 01 17,851 00 20,181 32 $60,650 33 Losses unpaid, including those resisted. Amount due First National Bank of Springfield Amount necessary to reinsure outstanding risks of the Company. Total liabilities.... And whereas, I found a call had been made upon the stockholders of the Company, by the Directors, and that eight thousand four hundred and eighty dollars upon said call had been paid into the treasury of the Company, and is now possessed by the Company, invested as follows: Now, therefore, the paid up capital of said Company, being reduced and impaired by losses to the extent of more than twenty-five per cent. thereof, and being satisfied that the interest of the public will not be prejudiced by permitting said Company to continue business with a reduced capital, I do hereby authorize and permit the said Sangamo Insurance Company to continue business with a paid up capital of one hundred thousand dollars. Given under my hand and seal, this February 2d, A. D. 1871. C. E. LIPPINCOTT, Auditor Public Accounts. [SEAL.] The "Sangamo" continued business for several months thereafter, but its assets being greatly reduced by heavy losses, the Directors concluded to re-insure the outstanding risks of the Company, and cease business. LIFE INSURANCE COMPANIES HERETOFORE DOING BUSINESS IN ILLINOIS, WHICH HAVE FAILED TO COMPLY WITH LAW SINCE THE DATE OF LAST REPORT. The following Life Insurance Companies of sister States have not complied with our laws for the year 1871, and are not authorized to transact business in Illinois: American Popular, New York City, Great Western Mutual, New York City, |