The aggregate capital invested in California companies is $4,276,300, 

 and their total assets amount to more than $22,000,000. The older of the 

 companies operate extensively throughout the country and in the island 

 possessions of the country. The more recently organized companies are 

 reaching out aggressively for new business and exploiting new fields. They 

 bring vast wealth into this State, which must be invested in accordance 

 with the laws of this State, and thereby encourage California enterprises 

 and activities. Five of these companies own buildings aggregating in value 

 $1,500,000, and besides, several buildings are owned by companies of other 

 States and countries. 



The greatest returns are reported in the fire and life phases of the 

 insurance business. Of the $24,000,000 of premiums received annually, 

 fire and life represent more than 80 per cent, about evenly divided. Many 

 large institutions are placing all the insurance possible with companies 

 authorized to transact business in California, and are unable to secure all 

 the indemnity they desire, and are compelled to send their premiums out 

 of the State. This is unfortunate, not merely because of the fact that no part 

 of this business profits anyone in California, but also because, under the 

 laws of California, insurance placed in companies not authorized to transact 

 business in the State is null and void, and the insurer may be deprived of his 

 indemnity when a loss occurs. 



A "surplus line law" was drafted by the Insurance Department of 

 this State to remedy this evil, and introduced at the last session of the 

 Legislature, but unfortunately failed of passage. 



Notwithstanding the disadvantages under which the life insurance 

 business was transacted during the year, on account of the scandalous 

 developments in New York, 32,730 new policies were written by the regu- 

 lar companies in California, of which 12,588 are to be credited to the 

 California companies. The premiums received therefor were nearly 

 $500,000. 



The total amount of insurance in force in California on December 31st, 

 1905, from the reports made by all the companies transacting business in 

 the State was over $288,000,000, representing 130,075 policies. These 

 figures do not indicate the amounts of insurance held by fraternal insurance 

 companies, for the reason that they are not under the jurisdiction of the 

 Insurance Department of California. 



Of the miscellaneous companies, the title insurance business, which 

 is confined entirely to San Francisco and Los Angeles and a few suburbs, 

 is more intimately concerned with the development of our wealth. They, of 

 course, do not operate outside of the State, and they give stability to in- 

 vestments by guaranteeing owners of property against possible flaws in 

 titles. Every phase of insurance business, with the exception of marine, 

 shows constant improvement each year. 



Generally speaking, however, the Insurance business In California is 

 extremely satisfactory. As the State continues to advance in material 

 prosperity, the business of the companies increases, and the security given 

 by insurance companies stimulates the growth and development of the 

 State. There is room for more home companies in California, but the 

 insurance business calls for a highly specialized business skill and in- 

 genuity, and satisfactory returns can only be looked for by capitalists when 

 they succeed in securing properly equipped men to handle this highly im- 

 portant and technical phase of business activity. 



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