Golden State Mutual Life Insurance Company

Golden State Mutual Life Insurance Company, once 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.

Founding
In the mid-1920s, when William Nickerson, 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.

Early years
In 1928, using all African American 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 continued to do until it entered into its terminal decline. 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.

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 continued its expansion. Eventually Golden State Mutual had offices in 14 states with over $4 billion in policies.

In 1949, Golden State Mutual opened its new headquarters at 1999 West Adams Boulevard in Los Angeles, which was designed by Paul Williams.

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 Barthé, Hale Woodruff, Charles Alston, Varnette Honeywood, Charles White, Betye Saar, and David Hammons. Works were displayed in the corridors and offices of the company's building on Adams Boulevard, Los Angeles. The collection was founded in 1965, based on an idea proposed by William E. Pajaud, who ran the company's public relations department and who was made curator of the new collection. Over twenty-two years, the company amassed over 200 works of art.

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.

Economic decline
By the 1980s, Golden State Mutual was struggling to maintain profitability.

The Golden State Mutual African American Art Collection was sold at auction on 4 October 2007 and dispersed.

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.

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- (Excellent) by noted insurance rating firm A. M. 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.