Golden State Mutual Life Insurance Company
Encyclopedia
Golden State Mutual Life Insurance Company, the largest black-owned insurance company in the western United States, was founded by William Nickerson, Jr.
with the assistance of Norman Oliver Houston
and George Allen Beavers, Jr.
, an insurance salesman and publisher from Texas, arrived in Los Angeles, he was alarmed to discover that most of the 16,000 blacks living in the city were unable to obtain life insurance. Unable to afford an attorney, Nickerson studied law to determine the state's requirements to form a corporation to accommodate this need. He partnered with fellow insurance salesman Norman O. Houston
and businessman George A. Beavers, Jr.
to secure 500 pre-paid life insurance applications as well as the $15,000 deposit required by California. Houston raised the $15,000 and Beavers found 500 blacks that would pay premiums for a company that was yet to be established.
On July 23, 1925 they opened as the Golden State Guarantee Fund Insurance Company in a one-room office at 1435 Central Avenue
, Los Angeles, with few amenities and $17,800 in capital. Within three months the company had outgrown its office and moved to a storeroom at 3512 Central Avenue. By the end of its first year the company had established an office in Oakland, California, had sold more than $260,000 in policies, and had $6,000 in reserves and a surplus of over $16,000. Within three years Golden State Insurance had over 100 employees including sixty agents as well as branches in Pasadena
, Bakersfield
, San Diego and Fresno.
design and labor, they built the two-story Golden State Mutual Life Insurance Building
at 4261 Central Avenue where the firm occupied the top floor while the main floor was rented to merchants. The company remained profitable throughout the Great Depression
in the 1930s. The company began paying out dividends beginning in 1930 and continues to do so uninterrupted to this day. The name was changed to Golden State Mutual Life Insurance Company in 1931, and by the end of the 1930s, assets had grown to $437,000 with $6 million in policies. In 1938 they set up operations in Illinois and in 1944 they opened a branch in Texas. By the end of World War II
assets stood at $2 million, surplus funds at $750,000, and they had nearly $24 million in policies.
As a major institution within the black community, representatives of Golden State Mutual were active in the civil rights movement. They also amassed an extensive collection of art by African American artists, which included works by Richmond Barthe
, Hale Woodruff
, Charles Alston
and Varnette Honeywood
.
In 1948, Golden State Mutual opened a new office at West 1999 Adams Boulevard in Los Angeles, which was designed by Paul Williams
.
However, in the wake of integration
, Golden State Mutual as well as other black owned businesses, began to lose market share and influence. In 1962, when Beavers took on the added role as president of the National Insurance Association
, it was apparent that something needed to be done to insure the continued viability of black owned businesses.
In 1970, Houston's sons, Norman B. Houston and Ivan J. Houston took over active management of Golden State Mutual. While the company continued to succeed, rough financial waters lay ahead.
On September 20, 2009, California Insurance Commissioner Steve Poizner
placed Golden State Mutual into conservation after its surplus funds dropped below required minimum levels. This occurred after six consecutive years of net operating losses.
As the result, the state ordered that Golden State Mutual's policies be taken over by IA American Life Insurance Company. Golden State Mutual was also forced to sell its art collection which was valued in the millions of dollars to help pay off mounting debts.
The selection of IA American Life came as a result of a national bidding process involving more than 40 active life insurers. IA American Life Insurance Company, rated A- by noted insurance rating firm AM Best, was the only bidder that satisfied all key components of the selection criteria. This included the ability to assume 100% of the Golden State Mutual policies, so that policyholders will be fully protected under the transaction while remaining creditors and investors have a much greater potential to be repaid.
William Nickerson, Jr.
William Nickerson, Jr. was a prominent Los Angeles-based businessman and founder of Golden State Mutual Life Insurance Company, which at one time was the largest black-owned business west of the Mississippi.-Early life:...
with the assistance of Norman Oliver Houston
Norman O. Houston
Norman O. Houston was a prominent Los Angeles-based businessman and president of Golden State Mutual Life Insurance Company, which at one time was the largest black-owned business west of the Mississippi.-Early life and career:...
and George Allen Beavers, Jr.
George A. Beavers, Jr.
George A. Beavers, Jr. was the board chairman of Golden State Mutual Life Insurance Company, which at one time was the largest black-owned business west of the Mississippi.- Life and career :...
Founding
In the mid-1920s, when William Nickerson, Jr.William Nickerson, Jr.
William Nickerson, Jr. was a prominent Los Angeles-based businessman and founder of Golden State Mutual Life Insurance Company, which at one time was the largest black-owned business west of the Mississippi.-Early life:...
, an insurance salesman and publisher from Texas, arrived in Los Angeles, he was alarmed to discover that most of the 16,000 blacks living in the city were unable to obtain life insurance. Unable to afford an attorney, Nickerson studied law to determine the state's requirements to form a corporation to accommodate this need. He partnered with fellow insurance salesman Norman O. Houston
Norman O. Houston
Norman O. Houston was a prominent Los Angeles-based businessman and president of Golden State Mutual Life Insurance Company, which at one time was the largest black-owned business west of the Mississippi.-Early life and career:...
and businessman George A. Beavers, Jr.
George A. Beavers, Jr.
George A. Beavers, Jr. was the board chairman of Golden State Mutual Life Insurance Company, which at one time was the largest black-owned business west of the Mississippi.- Life and career :...
to secure 500 pre-paid life insurance applications as well as the $15,000 deposit required by California. Houston raised the $15,000 and Beavers found 500 blacks that would pay premiums for a company that was yet to be established.
On July 23, 1925 they opened as the Golden State Guarantee Fund Insurance Company in a one-room office at 1435 Central Avenue
Central Avenue (Los Angeles)
Central Avenue is a major north-south thoroughfare in the central portion of the Los Angeles, California metropolitan area. Located just to the west of the Alameda Corridor, it runs from the eastern end of the Los Angeles Civic Center south, ending at Del Amo Boulevard in Carson...
, Los Angeles, with few amenities and $17,800 in capital. Within three months the company had outgrown its office and moved to a storeroom at 3512 Central Avenue. By the end of its first year the company had established an office in Oakland, California, had sold more than $260,000 in policies, and had $6,000 in reserves and a surplus of over $16,000. Within three years Golden State Insurance had over 100 employees including sixty agents as well as branches in Pasadena
Pasadena, California
Pasadena is a city in Los Angeles County, California, United States. Although famous for hosting the annual Rose Bowl football game and Tournament of Roses Parade, Pasadena is the home to many scientific and cultural institutions, including the California Institute of Technology , the Jet...
, Bakersfield
Bakersfield, California
Bakersfield is a city near the southern end of the San Joaquin Valley in Kern County, California. It is roughly equidistant between Fresno and Los Angeles, to the north and south respectively....
, San Diego and Fresno.
Early years
In 1928, using all African AmericanAfrican American
African Americans are citizens or residents of the United States who have at least partial ancestry from any of the native populations of Sub-Saharan Africa and are the direct descendants of enslaved Africans within the boundaries of the present United States...
design and labor, they built the two-story Golden State Mutual Life Insurance Building
Golden State Mutual Life Insurance Building
The Golden State Mutual Life Insurance Building was built in 1928 and for many years housed one of the city's most successful African American-owned businesses, the Golden State Mutual Life Insurance Company. The building was designed by James H. Garrott and Louis Blodgett in the Mission Revival...
at 4261 Central Avenue where the firm occupied the top floor while the main floor was rented to merchants. The company remained profitable throughout the Great Depression
Great Depression
The Great Depression was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in about 1929 and lasted until the late 1930s or early 1940s...
in the 1930s. The company began paying out dividends beginning in 1930 and continues to do so uninterrupted to this day. The name was changed to Golden State Mutual Life Insurance Company in 1931, and by the end of the 1930s, assets had grown to $437,000 with $6 million in policies. In 1938 they set up operations in Illinois and in 1944 they opened a branch in Texas. By the end of World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
assets stood at $2 million, surplus funds at $750,000, and they had nearly $24 million in policies.
Continued growth and expansion
When the company's founder William Nickerson, Jr. died in 1945, Houston became president and Beavers was elevated to board chairman. Under the new leadership the company contiuned its expansion. Eventually Golden State Mutual had offices in 14 states with over $4 billion in policies.As a major institution within the black community, representatives of Golden State Mutual were active in the civil rights movement. They also amassed an extensive collection of art by African American artists, which included works by Richmond Barthe
Richmond Barthé
James Richmond Barthé was an African American sculptor known for his many public works, including the Toussaint L’Ouverture Monument in Port-au-Prince, Haiti and a sculpture of Rose McClendon for Frank Lloyd Wright’s Fallingwater House.Barthe once said that “all my life I have be interested in...
, Hale Woodruff
Hale Woodruff
Hale Aspacio Woodruff was an African American artist known for his murals, paintings, and prints. One example of his work, the three-panel Amistad Mutiny murals , can be found at Talladega College in Talladega County, Alabama...
, Charles Alston
Charles Alston
Charles Henry Alston was an African-American painter, sculptor, illustrator, muralist and teacher who lived and worked in the New York City neighborhood of Harlem. Alston was active in the Harlem Renaissance; Alston was the first African American supervisor for the Works Progress Administration's...
and Varnette Honeywood
Varnette Honeywood
Varnette Patricia Honeywood was an American painter, writer, and businesswoman whose paintings and collages depicting African American life hung on walls in interior settings for The Cosby Show after Camille and Bill Cosby had seen her art and started collecting some of her works...
.
In 1948, Golden State Mutual opened a new office at West 1999 Adams Boulevard in Los Angeles, which was designed by Paul Williams
Paul Williams (architect)
Paul Revere Williams, FAIA was a Los Angeles-based, American architect. He practiced largely in Southern California and designed the homes of numerous stars including Frank Sinatra, Lucille Ball/Desi Arnaz, Lon Chaney, and Charles Correll...
.
However, in the wake of integration
Racial integration
Racial integration, or simply integration includes desegregation . In addition to desegregation, integration includes goals such as leveling barriers to association, creating equal opportunity regardless of race, and the development of a culture that draws on diverse traditions, rather than merely...
, Golden State Mutual as well as other black owned businesses, began to lose market share and influence. In 1962, when Beavers took on the added role as president of the National Insurance Association
National Insurance Association
The National Insurance Association is the largest organization representing African American owned and operated insurance companies.-History:...
, it was apparent that something needed to be done to insure the continued viability of black owned businesses.
In 1970, Houston's sons, Norman B. Houston and Ivan J. Houston took over active management of Golden State Mutual. While the company continued to succeed, rough financial waters lay ahead.
Economic decline
By the 1980s, Golden State Mutual was struggling to maintain profitability.On September 20, 2009, California Insurance Commissioner Steve Poizner
Steve Poizner
Stephen Leo "Steve" Poizner is an American businessman/entrepreneur and conservative Republican politician, who was elected State Insurance Commissioner of California in November 2006, and concluded the 4 year term in January 2011...
placed Golden State Mutual into conservation after its surplus funds dropped below required minimum levels. This occurred after six consecutive years of net operating losses.
As the result, the state ordered that Golden State Mutual's policies be taken over by IA American Life Insurance Company. Golden State Mutual was also forced to sell its art collection which was valued in the millions of dollars to help pay off mounting debts.
The selection of IA American Life came as a result of a national bidding process involving more than 40 active life insurers. IA American Life Insurance Company, rated A- by noted insurance rating firm AM Best, was the only bidder that satisfied all key components of the selection criteria. This included the ability to assume 100% of the Golden State Mutual policies, so that policyholders will be fully protected under the transaction while remaining creditors and investors have a much greater potential to be repaid.