Friday, July 04, 2014

Is There a Way We May Blame Obamacare for This?

Edna J. Carmean. The Blue Eyed Six. Lebanon, Pa,: Sowers Printing, 1981,

This book describes, including many details taken from court trial transcripts, of what was likely the first case of murder for insurance payments in U.S. history. It was also noted for being the first case with six first degree murder charges stemming from one indictment.

This case involved a type of life insurance known as assessory insurance or cooperative cooperative or was known as “graveyard” insurance. It was designed to insure that someone with little financial means would have the means for burial. A benevolent association was created. When an insured died, the association members who pay the person holding the insurance claim. There was no legal requirement that the association member pay a death benefit or an assessment and thus could leave the association at any time. When members left as association, other members often soon followed in also leaving. It was frequently that only those who received benefits early in the process who gained from holding such a policy.

Pennsylvania created its state Insurance Department in 1873. State law prohibited the Insurance Department from any control over “graveyard” insurance. All that was required was the assessment company had to obtain a state charter.

Insurance Commissioner J.M Forster was opposed to graveyard insurance. He declared “It is claimed that the system is analogous to the system of Mutual Fire Insurance which had been so successful in this state. There is no real resemblance between the two. The one is insurance against a remote and improbable event, the other is based upon an event certain to happen...In a mutual fire insurance company, the policy holder has the guarantee of premium notes, which can be converted into a lien upon real estate. In cooperative life insurance, the insured have no other guarantee than the said faith of an associates who may be unknown to each other.”

Forster tried to have the law changed so that cooperative “graveyard” insurance could be legally regulated. A law was passed in 1876 yet special interests reduced what Forser sought such that there was little practical oversight. The law only required that at least ten people be required to form such an association and that the association required the approval of the Attorney General and the Governor.

In 1878, there were 19 assessment life insurance companies in Pennsylvania. The Insurance Department noted they had poor bookkeeping records.

Israel Brant, Charlie Drews, George Zechman, Henry Wise, and Josiah Hummel took out graveyard insurance policies on Joe Raber. They were then accused of having him killed, with assistance from Franklin Stichler, order to collect the insurance money.

The trial attracted much media attention. As each defendant had blue eyes, they were labeled “the blue eye six.” A physician testified that Raber was found drowned with no violent marks on his body. He found no evidence that anyone drowned Raber. Joseph Peters claimed he saw Drews and Stichler drown Raber.

The defense argued that Peters was upset because Stichler had an affair with his wife. They further argued that Peters, an Army deserted, could not be trusted to tell the truth.

The six were convicted and sentenced to death. Zechman’s conviction was overturned on appeal. Some jurors stated they believed Zechman was guilty yet felt the death penalty for Zechman was too severe.

Drews and Stichler later confessed. Stichler’s confession, printed after his death, claimed all six as well as others were involved in the scheme. The five convicts were hung.


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