INFORIMATIOX KliLATryO TO TXSITIAXCT-: AND THRIl-T 33 



by a newly incorporated fire insurance company until it has filed with the 

 Insurance Department a list of those subscribing for its insurance and such 

 other information as the Insurance Commissioner may require, and until 

 its president and secretary have certified on oath that every subscription 

 on the list so filed is genuine, and have agreed with every subscriber that 

 he will take the policies for which he has subscribed within thirty days of 

 the time at which the Insurance Commissioner grants to the company a 

 license to issue policies. This law has practically put an end to false sub- 

 scription lists. 



These laws prevented certain abuses but did not prevent a second al- 

 though less grave crisis which occurred about 1915 because new mutual fire 

 insurance companies were incompetently managed. The new companies 

 in question were able to show that their proceedings for incorporation had 

 been legally carried out, and that each of them had secured, as the statute 

 requires, more than 400 applications for insurance within the Commonwealth, 

 covering more than $1,000,000 of insurance, and had not accepted any appli- 

 cation bringing the value they insured beyond 10 per cent, of their net as- 

 sets as defined by statute. 



It became necessary to forbid the issue of a license to transact business 

 to a new company until it had adopted a proper system of accounting, en- 

 gaged a competent accountant and a competent and experienced underwri- 

 ter, and freed itself from any liability incurred on its behalf. In the case 

 of a stock company the liability for capital stock was however excepted 

 from the prohibition. 



The following table shows the condition of twenty-four of the oldest 

 mutual fire insurance companies in Massachusetts — some of them were 

 founded sixty, eighty or even a hundred years ago — in 1894, that is to 

 say before the first crisis," and on 31 December 1916. 



