North Carolina Mutual Life Insurance Company
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NC Mutual (originally the North Carolina Mutual and Provident Association and later North Carolina Mutual Life Insurance Company) was an American
life insurance Life insurance (or life assurance, especially in the Commonwealth of Nations) is a contract between an insurance policy holder and an insurer or assurer, where the insurer promises to pay a designated beneficiary a sum of money upon the death ...
company located in downtown
Durham, North Carolina Durham ( ) is a city in the U.S. state of North Carolina and the county seat of Durham County, North Carolina, Durham County. Small portions of the city limits extend into Orange County, North Carolina, Orange County and Wake County, North Carol ...
and one of the most influential
African-American businesses Black-owned businesses (or Black businesses), also known as African-American businesses, originated in the days of slavery before 1865. Emancipation and civil rights permitted businessmen to operate inside the American legal structure starting in ...
in
United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...
history. Founded in 1898 by local black social leaders, its business increased from less than a thousand dollars in income in 1899 to a quarter of a million dollars in 1910. The company specialized in "industrial insurance," which was basically burial insurance. The company hired salesmen whose main job was to collect small payments (of about 10 cents) to cover the insured person for the next week. If the person died while insured, the company immediately paid benefits of about 100 dollars. This covered the cost of a suitable funeral, which was a high prestige item in the black community. It began operations in the new tobacco manufacturing city of
Durham, North Carolina Durham ( ) is a city in the U.S. state of North Carolina and the county seat of Durham County, North Carolina, Durham County. Small portions of the city limits extend into Orange County, North Carolina, Orange County and Wake County, North Carol ...
, and moved north into Virginia and Maryland, then to major northern black urban centers, and then to the rest of the urban South. For much of the 20th century it was the largest company run by
African Americans African Americans (also referred to as Black Americans and Afro-Americans) are an ethnic group consisting of Americans with partial or total ancestry from sub-Saharan Africa. The term "African American" generally denotes descendants of ens ...
. The company came to be known as the world's largest African American business in only its first few years and is claimed by its home city of Durham as an important landmark. In the late 1800s and throughout the 1900s, Durham was known as "The Black Wall Street of America." for the progress that African Americans were making within the town. The company's founders, thought to be inspired by North Carolina business tycoon Washington Duke, included John Merrick and
Aaron McDuffie Moore Aaron McDuffie Moore, M.D. (September 6, 1863 – April 29, 1923) was a doctor, medical director, and officer at a bank, hospital, pharmacy, university and insurer serving African Americans in North Carolina. He was born in Whiteville, North Carol ...
, two particularly influential men in Durham's history. North Carolina Mutual and its prosperity brought many good things to Durham's black community, and its founders and organizers were important contributors to social and economic progress in the city and particularly in its African American community. In 2019, NC Mutual encountered financial difficulty that arose from a
reinsurance Reinsurance is insurance that an insurance company purchases from another insurance company to insulate itself (at least in part) from the risk of a major claims event. With reinsurance, the company passes on ("cedes") some part of its own insu ...
transaction in which the assets securing the transaction were misappropriated by an investment manager.
Wake County Wake County is located in the U.S. state of North Carolina. In the 2020 census, its population was 1,129,410, making it North Carolina's most-populous county. From July 2005 to July 2006, Wake County was the 9th-fastest growing county in the U ...
Superior Court placed the company in rehabilitation under control of the
North Carolina Commissioner of Insurance The Commissioner of Insurance is a statewide elected office in the U.S. state of North Carolina. The commissioner is a constitutional officer who leads the state's Department of Insurance. The commissioner also oversees the Office of the State Fi ...
. On October 11, 2022, a court approved the liquidation of NC Mutual effective October 31, 2022.


Origins

North Carolina Mutual was the brainchild of black entrepreneur John C. Merrick in the late 1800s. Merrick was born into slavery as the son of a white man and a former slave in 1859. He grew up in
Raleigh Raleigh (; ) is the capital city of the state of North Carolina and the seat of Wake County in the United States. It is the second-most populous city in North Carolina, after Charlotte. Raleigh is the tenth-most populous city in the Southeas ...
and
Chapel Hill Chapel Hill or Chapelhill may refer to: Places Antarctica * Chapel Hill (Antarctica) Australia *Chapel Hill, Queensland, a suburb of Brisbane *Chapel Hill, South Australia, in the Mount Barker council area Canada * Chapel Hill, Ottawa, a neighbo ...
, two cities near Durham, and he learned various skills such as bricklaying and barbering during his youth. He moved to Durham in 1880 and opened his own barber shop in 1882. His hair-cutting business grew to include several stores, three for whites and two for blacks; the barbers were all black. Merrick himself cut hair for many people. The biggest influence came after John Merrick, along with four other partners, bought the Royal Knights of King David. The society was "a semi-religious fraternal and beneficial society for health and life insurance." In buying it, Merrick learned about insurance and how to relate the insurance business to African Americans. Merrick knew that blacks had short life expectancies and that they generally had poor health, largely due to their low income. These things made the idea of starting an insurance business for African Americans a very risky one, because many people would be expected to die before they could contribute to the success of the business. However, they were also the reasons African Americans needed life insurance to begin with. Industrial insurance had the advantage of a premium collected every week that provided coverage for the following week. There was minimal need for tracking the changes of address of the customers. Merrick decided that the opportunity to help blacks outweighed the risk, and he joined with investors Aaron Moore, William Gaston Pearson, Watson, Shepard, Johnson, and Dawkins to found the North Carolina Mutual and Provident Society in 1898. In the first year, there was a terrible lack of business, and the company lost money overall. Because of this, many
investors An investor is a person who allocates financial capital with the expectation of a future return (profit) or to gain an advantage (interest). Through this allocated capital most of the time the investor purchases some species of property. Type ...
left North Carolina Mutual, and by the time the company was reorganized in 1900, only Merrick, Moore, and Moore's young nephew
Charles Clinton Spaulding Charles Clinton Spaulding (August 1, 1874 – August 1, 1952) was an American business leader. For close to thirty years, he presided over North Carolina Mutual Life Insurance Company, which became America's largest black-owned business, with ass ...
remained. Spaulding was appointed
General Manager A general manager (GM) is an executive who has overall responsibility for managing both the revenue and cost elements of a company's income statement, known as profit & loss (P&L) responsibility. A general manager usually oversees most or all of ...
with Merrick serving as President and Moore as his only other principal. Under this leadership, the growth of the company began.


Leadership

John Merrick was the first president of N. C. Mutual, and he served as such from the company's founding until his death in 1919. After Merrick's death, Dr. Aaron McDuffie Moore became president of the company. He was the first African American in Durham to practice medicine. After becoming president of N. C. Mutual, he devoted his full-time to the company until he died in 1923. When Moore died,
Charles Clinton Spaulding Charles Clinton Spaulding (August 1, 1874 – August 1, 1952) was an American business leader. For close to thirty years, he presided over North Carolina Mutual Life Insurance Company, which became America's largest black-owned business, with ass ...
took over as president. Spaulding served on the
board of trustees A board of directors (commonly referred simply as the board) is an executive committee that jointly supervises the activities of an organization, which can be either a for-profit or a nonprofit organization such as a business, nonprofit organiz ...
at
Howard University Howard University (Howard) is a private, federally chartered historically black research university in Washington, D.C. It is classified among "R2: Doctoral Universities – High research activity" and accredited by the Middle States Commissi ...
beginning in 1936. he was active in the
National Negro Insurance Association The National Insurance Association (NIA) is the largest organization representing African American owned and operated insurance companies. History In 1921, 60 men representing 13 African American owned insurance companies met at the home office o ...
and the National Negro Bankers Association in the early 1900s and was one of few African American members of the
New York Chamber of Commerce The New York Chamber of Commerce was founded in 1768 by twenty New York City merchants. As the first such commercial organization in the United States, it attracted the participation of a number of New York's most influential business leaders, in ...
beginning in 1942. He also served on boards of trustees at Shaw University and North Carolina College. He was awarded the
Harmon Foundation The Harmon Foundation was established in 1921 by wealthy real-estate developer and philanthropist William E. Harmon (1862–1928). A native of the Midwest, Harmon's father was an officer in the 10th Cavalry Regiment. The Foundation originally s ...
Gold medal for distinguished achievement in business, and he received honorary Law doctorates from
Shaw University Shaw University is a private Baptist historically black university in Raleigh, North Carolina. It is affiliated with the American Baptist Churches USA. Founded on December 1, 1865, Shaw University is the oldest HBCU to begin offering courses in ...
,
Tuskegee University Tuskegee University (Tuskegee or TU), formerly known as the Tuskegee Institute, is a private, historically black land-grant university in Tuskegee, Alabama. It was founded on Independence Day in 1881 by the state legislature. The campus was d ...
, and Atlanta University.


Recent history

In 2019, NC Mutual encountered financial difficulty that arose from a
reinsurance Reinsurance is insurance that an insurance company purchases from another insurance company to insulate itself (at least in part) from the risk of a major claims event. With reinsurance, the company passes on ("cedes") some part of its own insu ...
transaction in which the assets securing the transaction were misappropriated by an investment manager.
Wake County Wake County is located in the U.S. state of North Carolina. In the 2020 census, its population was 1,129,410, making it North Carolina's most-populous county. From July 2005 to July 2006, Wake County was the 9th-fastest growing county in the U ...
Superior Court placed the company in rehabilitation under control of the
North Carolina Commissioner of Insurance The Commissioner of Insurance is a statewide elected office in the U.S. state of North Carolina. The commissioner is a constitutional officer who leads the state's Department of Insurance. The commissioner also oversees the Office of the State Fi ...
. The investment manager was subsequently charged with a federal crime. On October 11, 2022, a court approved the liquidation of NC Mutual effective October 31, 2022.


See also

*
African-American business history In the US, Black-owned businesses (or Black businesses), also known as African American businesses, originated in the days of slavery before 1865. Emancipation and civil rights permitted businessmen to operate inside the American legal structure ...
*
North Carolina Mutual Life Insurance Company Building The Old North Carolina Mutual Life Insurance Company Building, also known as the Mechanics and Farmers Bank Building, is an office building at 114-116 West Parrish Street in downtown Durham, North Carolina. It formerly served as the headquarters ...
* North Carolina Mutual Building


References


External links


Official website
{{Authority control 1898 establishments in North Carolina 2022 disestablishments in North Carolina Companies based in Durham, North Carolina American companies established in 1898 American companies disestablished in 2022 Defunct insurance companies Financial services companies established in 1898 Financial services companies disestablished in 2022 Life insurance companies of the United States