New Orleans daily crescent. [volume] ([New Orleans, La.]) 1851-1866, 1859-03-12
Mth 0rleans Bully Gresttut.
lCOmmunicat0Q.
THE BOARD OE UNDERWRITERS.


90
Eds. Crescens.-I thought the nature and objects |
OF the organization known as the "Board OF Under
writers in this city were by this time thoroughly
known and appreciated by the community, and that
the preudices which formerly existed against it had
given way to convictions Of its great utility in simp
flying and strengthening the whole machinery Of in
surance and making it, what it ought to be, per-
cty reliable security against loss of the subject in
sured 1t seems, however, from recently published
articles in the city papers on the action OF the Board
that have been mistaken in this thought, and that
sensible, well informed men, are still in the dark In
regard to its Objects and if you will allow me small
space in your columns will endeavor to enlighten
| them.
Competition, principle generally so useful in the
business Of life, has in the business Of insurance been
everywhere found to produce injurious effects by the
cheapening process which results from it. In the
affairs of individuals, where superior sagacity inge-
nuity industry and other favorable elements combine
to give person advantages another, and en-.
able him to drive his competitors from the field by
better or cheaper productions the public is benefited
| and only the individual suffers from the contest
With insurance companies it is altogether different
competition among them, instead of beneftting the
public must njure it most fatally, for it produce
but one result, viz the reduction Of premiums, and
the granting ofinudicous privileges and indugences,
in order to procure business until the premiums
to be remuneratve, the capitals of the companies
gradually absorbed in the payment of losses, and, in
stead of being substantial reliable buwarks for the
public protection, they dwindle into candidates
for premiums for the purpose of keeping their doors
open until they are compulsorily closed by their in
ability to pay the jnst claims upon them.
Now the first object of the Board OF Underwri.
tiers " is to guard against the possibility of such
deplorabe state Of things growing up in this COM
munity, by the formation and annual revision of
tariff of premiums, with accompanying rules and regu
ations, founded upon data drawn from long series
of observations and comparisons carefully record
ed and thoroughly anayzed and dgested in order that
proper connection may be preserved between the risk
insured and the premium charged for it, carefully
maintaining such scale of rates as will insure the
preservation of their capitals in all their integrity
while they not so high as to act detrimentaly on
the commerce of the place. / do not pretend to say
that the present tariff" perfect, but can, with
all truth assert that the only object aimed at by the
Board in adopting it is the protection of their cap
tails for the security of the public for whose services
the companies created and at the annual revis-
ions to which it is subjected reforms introduced
as time and experience point out their necessity.
If the insurance business of the city was conducted
on the old fashioned, almost exploded joint stock
system, by which the whole of the profits were
divided among the loaners Of the stock, the public
would have just cause to complain when the divi
dends averaged more than full and fair return fol
the of the capital employed, and the risk attend
ing such an employment of it but under the mutua
system, which returns to the persons insured ever.
- dollar of their premium in scrip bearing interest
which, at the end of the year. has not been required
pay the losses and necessary expenses of the year
business, there does not to be any ground fo
1t such complaint, although admit that it is right
keep the premiums as low as possible consistent witt
the al-imporaut principle of safety to the capitals
= which must be preserved intact, the whole matte
!, Of insurance becomes a farce
e But the duty of the Board OF Underwriters wou
be only performed if it merely provided tariff o
Is premiums without prescribing for the government o
a the companies composing it, such rules and regula
tons as experience and good judgment point ou
as necessary adjuncts to make the tariff effective
Among these regulations is one having reference t.
m . insurances out of New Orleans, which some day
ss since called forth some denunciatory remarks from
writer in your journal. 1t is known as the countr
Or clause and is applied to all insurances on stores
country towns, limiting the liability of the compan
issuing the policy to one-half of any loss that ma
oSSui w euS PAoPeA'y AHus, II u NouuI
- merchant has an average stock of $4,000, he ha
only to insure and pay premium on $4,000, that beip
the extent of liability which the underwater is vii
ing to incur; and if his whole stock of $4,000
destroyed by fire, he RECEIVERS the whole $4,000, o
re which he has paid premium-that being half til
to amount of his loss Is there anything more fair tina
I'd this? Bat say the objectors to this rule why lin
your liability to one.haf the loss? The reason
this: country towns are generally composed
wooden buildings in such close proximity as to caus
IN danger of one burning another in the event of
lagration occurring in any Of them, and they al
most generally without any organization for the e.
tnguishment of fires. If the residents were perm
ted to protect themselves fully from the consequence
of fires breaking out among them, the usual effect
the feeling of perfect security would manifest itself
relaxation of that and vigilance which it is IL
for object of this regulation to enforce and keep up,
=. making the owners of property bear half the ris
themselves, and thus become joint underwriters wi
nd the insurance companies, and vglant watchers
their common interests. 1t may seem hard that
nee man cannot have his property wholly insured b
,r;. long experience has proved that premium th
could be asked would be adequate for these count
risks if they were unprotected by this regulation.
The great advantage and convenience to the CO..
. mercial community of regular insurance tariff, en-
NC mating from the Board OF Underwriters and faithful
adhered to by its members, must be evident to eve
one interested in insurance matters. Wnh it t
IDLE merchant, with copy of the tariff before him,
-" only to send memorandum of the risk he wishes
nsure to the Office which insures him, and he kno
Top he will be charged precisely what every other m
UT chant charged by his insurer throughout the city
~. similar risk. IV1thout it, he would have to wa
hours in visiting each of the ten or twelve insurar
- offices, every time he has insurance to effect,
tate order to make the best bargain he could and after
ing his labor he would not know whether not his ne
dny Dor and competitor in business had been charged
see lower rate, obtained advantageous ter
k of than himself.
,aid, Ieoud point out many other conveniences and
rsog vantages to the public which obtained by
de- atng the insurance companies together in the fo
ola Board of Underwriters, but am reminded th.
at have already extended my remarks to nconyeni
ary length for newspaper communication, and will th
IS. fore close with the simple assurance that the Bo
If was originally organized, and is continued in OPP
tion solely with view to the public interests, and
the day it is dissolved will be day to be ever reg
UR ted by the whole commercial community of New
r,h I'll leans. One OF THE BOAR