New Orleans daily crescent. [volume] ([New Orleans, La.]) 1851-1866, 1859-03-14
THE BOARD or UNDERWRITERS.

Eds Crescent. Il thought the nature and objects
Il the organization known as the tsBoard of Under
Nritels1 ii this city were by this time thoroughly
known and appreciated BY the community, and that
the preadices which formerly existed against had
gwen way 70 convictions Of it's great utility in simple
1ying ard strengthening the whole machinery Of in
nrance. and making it, what it ought to be, per-
etly reliable security against loss Of the subject in
sured. II seens, however, from recently published
articles ii 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 asma
space IN jour columns will endeavor to enlighten
Mem.
Competition principle generally so useful in the
business Of le has in the business Of insurance beer
everywhere found to produce injurious effects BY the
eheapening process which results from it. In the
nais 81 individuals where superior sagacity, inge
1pity industry and other favorable elements combine
% give person advantages over another, and en-.
nble him to drive his competitors from the field by
better Or cheaper productions, the public benefited
and only the individual suffers from the contest
With insurance companies il is altogether different
competition among them, instead Of beneftting the
public mnat injure Il most fatally for it can produce
but result VII the reduction Of premiums, and
the granting Of injudicions privileges and ndulgences,
n order TO procure business, until the premiums cease
% be remnneatve the capitals Of the companies are
gradually absorbed 10 the payment Of losses, and in
ltead Of being substantial, reliable buwarks for the
Hnblic protection they dwinde into candidates
tbr premiums for the purpose OF keeping their doors
open until they are compusorily closed by their in
ability to pay the inst claims upon them.
Now the first object Of the /" Board OF Underwri-
1ers il to guard against the possibility of such a
1eplorsble state Of things growing up in this COM
nunity, BY the formation and annual revision Of a
iarof premiums, With accompanying rules and regu-
htions, founded upon data drawn from long series
q observations and comparisons carefully record.
e and thoroughly ansysed and dgested in order that
aproper connection may 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 are not 80 high to act detrimentay on
the commerce Of the place. do not pretend to say
that the present tariff is perfect. but can with
all truth, assert that the only object aimed at by the
Board 10 adopting IT. is the protection Of their CAPT
tails for the security Of the public for whose service
Me companies are created, and at the annual revs-
inns to which i is subjected reforms are introduced
o time and experience point out their necessity.
II the insurance business Of the city was conducted
"a tie old fashioned, almost exploded Joint stock
system, BY which the whole Of the profits were
divided among the owners Of the stock, the public
would have just cause to complain when the diyi.
dends averaged more than full and fair return for
ihe use Of the capital employed and the risk attend
ing such ~ employment Of III but under the mutual
system which returns to the persons insured every
collar Of their premium in scrip bearing interest
which ct the end Of the year. has not been required
% pay the losses and necessary expenses Of the years
business, there does not seem to be any ground fol
such complaint, although admit that it is right te
keep the premiums as low as possible consistent with
the alimportant principle Of safety to the capitals
which must be preserved intact or the whole matter
Of insurance becomes farce.
But the duty Of the Board Of Underwriters would BIZ
emily partially performed il it merely provided tariff
efprcmiums without prescribing for the government
Of the companies composing IT, such rules and regula
tions ~ experience and good judgment point on
q necessary adjuncts to make the tariff effective
Among these regulations 10 one having reference t
insurances ont Of New Orleans, which some days
since called forth some denuncatory remarks from
writer ID your Journal II Is known as the country
clause and is applied to all insurances on stores in
country towns limiting the liability Of the company
Issuing the policy to onehalf Of any loss that may
occur to the property insured Thus, II country
merchant has an average stock of SIC, 600, he has
only to insure and pay premium on $50O0 that being
the extent Of liability which the underwater ia will
ing 70 incur and II his whole stock Of $4,000 ia
destroyed BY fire, he RECEIVERS the whole 5000. ON
which he has paid premium--that being half the
amount Of his loss Is there anything more fair than