Golden State Mutual Seized by Regulators
By Pat MunsonSentinel Guest Writer
After serving the African American community for nearly eight decades Golden State Mutual Life Insurance Company has been seized by state regulators.
State Insurance Commissioner Steve Poizer last week made the decision to step in to prevent further financial loses that could affect policyholders. The historic insurance company has reportedly lost money for the past five or six years even before the current economic meltdown.
Larkin Teasley, Golden State Mutual's chairman and president could not be reached for comment.
However, a message to interested parties was posted on the company's website which stated that "The Insurance Commissioner (the "Commissioner") has applied to the Superior Court in Los Angeles for a conservation order appointing the Commissioner "Conservator" of Golden State Mutual Life Insurance Company (the "Company"). The Superior Court issued the conservation order on September 30. The Commissioner has the responsibility to take these actions whenever a company is deemed to be statutorily impaired."
Statutorily impaired basically means the company didn't have the minimum amount of funds required by law to insure its continued operations.
Golden State Mutual was founded in Los Angeles in 1925 by William Nickerson, Jr., Norman Oliver Houston and George Allen Beavers, Jr. to provide insurance products to the city's black citizens who were denied services elsewhere.
Family as well as community leaders are shocked and saddened at the prospect of losing this important part of our history.
"My grandfather started this company. I had several uncles who worked there. We hate to see it go," said Alden Kimbrough, grandson of founder William Nickerson, Jr. "It was a great institution and the only way Blacks could get insured.
Kimbrough said although he was only eight years old when his grandfather died, he remembers the family's patriarch who moved his wife and eight children to Los Angeles from Houston in search of better opportunities. Due to racism in Texas Nickerson moved to Los Angeles with plans for starting his own insurance business, according to Kimbrough, the designated family historian and keeper of his grandfather's personal and business archives, which he hopes to make available to the public soon.
"He (Nickerson) had a vision and he believed 'you have to do for yourself.' He believed you have to live in dignity and die in dignity and that's one of the reason he started the company," Kimbrough added.
Speaker of the Assembly Karen Bass was also caught off guard by the company's seizure.
"This just came to my attention when Congresswoman Watson made me aware of it and asked me to intervene. It is extremely important to all of our community. Golden State Mutual was around providing services for our folks when no one else would insure us," Bass said. "I think we have, over the last decade, watched many of our institutions wither away and we need to save these historic and landmark institutions that have been here for us when no one else was...We have to fight to save it."
Upon learning of the situation Bass set about pulling together "various parties" to via conference call to try and facilitate a plan that would possibly preserve the company's legacy and keep intact its historic significance. Although Bass did not participate in the conference call on Friday she was hoping for some type of restructuring whereby Golden State Mutual (where Bass' grandfather once worked) would remain African American owned as it has for the past 84 years.
Paul Hudson, President of Broadway Federal and whose father, Elbert Hudson, was a board member at Golden State Mutual for about 10 years, called the seizure a terrible loss.
"We don't have many institutions in our community with the legacy and history of Golden State Mutual," Hudson said. "I hope they can work it out...You can't replace these type of institutions that have been in our community all those years serving our people."
Hudson pointed out that companies like this serve many functions in a community. "They are a source of employment, they donate to community causes and organizations and they are a source of inspiration and pride," he added.
First opened in a one room office on Central Avenue, it grew to become the largest black-owned insurance company in the West, now headquartered on Adams Blvd. Its original office building on Central Avenue was declared a Historic Landmark in 1998.