The New Orleans crescent. [volume] (New Orleans, La.) 1866-1869, 1869-03-18
ICommunicsted-l
OUR INSURANCE COMPANIES.

A writer in the Times newspaper has been
edifyng its readers lately, by series of articles
on the insurance companies of New Orleans,
which are calculated to mislead the public and
cast undeserved opprobrium on the Board of I'm
derwriters. The articles alluded to are written in
strong partisan spirit under the pretence of pro.
tecting the commercial public against grasping
monopoly, which monopoly exists only in the i'm.
agination of the Times writer. If this gentleman
had made inquiry into the origin and history of
the board he would have learned that it was or.
ganized altogether In the interest of the CONNER
cial community instead of in opposition to il; its
objects being to fix and maintain such rates Of
premium as would insure the maintenance of the
capitals of the companies intact for the security
of the insured and to fix those rates uniformly so
that every commission merchant or factor might
be perfectly assured when they returned their
account of sales to their consignors, that the
charge for insurance was the same as that made
by all the houses in the same trade, no matter In
what Office the insurance was effected. IL is
well known TO every well informed. rejecting
merchant, that the competition which works
such good results in all ordinary business is often
most disastrous in its effects upon underwrit-
ing, causing reduction of rates, in order to
obtain custom, TO ruinous points Of depression,
and ending by the gradual dissipation of the CAPT.
tai and the destruction of that security for which
the pubic pay their premium. and TO afford which
the companies created. 1t may be that In their
desire to preserve nviolate this security on which
the public now so securely rests, a special risk or
class of risks may be charged higher than neces-
sary; but when such case is made known to any
member of the board an examination is immedi.
ately instituted, and if the complaint proves well
founded the tariff is amended and the evil com.
planned of remedied. In the business of under
writing, dealing as it does with such uncertain
elements as FIRE, wind and water. the same uner.
ring accuracy cannot be arrived at as can be OBJ.
tanned il other branches of commerce, where the
subject dealt with is entirely under the control Of
the dealer. But hazard nothing 10 asserting that
it has always been the earnest desire of the men,
bers of the Board of Underwriters to bring all their
experience and skill honestly to the work fadapt
ing their rates of premium to the character of the
risks insured, and that in the main they have been
successful in their endesvors to do so.
With respect TO the tariff on risks to and from
Upper Red River, which appears to be the par
ocular grievance of the Times writer that tariff
was the result Of long experience of the dangers
OF navigation on that river and the impossbty of
getting possession of property from wrecked
boats after disaster bad happened. A boat
load OF cotton, when accident occurs to it in any
part of the river below Shreveport seldom loses
more than few bales totally, the remainder being
recovered either in a sound or damaged condition
and brought down 10 the city; but If boat is
wrecked in Upper Red River, what cotton is sound
IL carried OF into the woods the bagging stripped
eff so that it cannot be identified. and the under
writer is compelled to pay total loss TO the fac
tor who insures II. For some time past, owing, /
presume, TO the high premium which former heavy
losses compelled underwriters TO charge on them,
the boats have generally run without insurance;
greater care is manifested in their management in
consequence, and disasters have been of such
rare occurrence that the Board of Underw rters
intended on the annual revissl of the general tariff
next May to lower the rates on risks TO and from
the Upper Red River, when other changes will
also be MADE 70 meet the improved character of
other risks provided for in the tariff.
The gentleman of the Times is much exercised
about the effect OF high premiums upon the com.
MERGE OF the city, as tending to drive it into other
channels, and argues that the enormous dividends
declared by the insurance companies show that
the business is carried more with a view to
large profits than for the public benefit. The
gentleman seems to forget that the companies are
working upon the mutual principle, and that
these dividends are not paid to stockholders
but are simply q diminution premium, as
they are paid to the parties who have
themselves paid tie premiums out of which
the dividends are made, or to their repre-
sentatives 80 that, il the company divides 40 per
cent at the end of its fiscal year, every per cent
of premium charged Is reduced to 60l00ths of
per cent. In other words, every dollar paid as
premium which is not required TO pay losses and
actual expenses is returned TO the party that pays
1t in scrip bearing per cent interest, which
scrip is paid of from time to time as the accumu-
lated funds OF the company warrant 1t.
With this explanation, it will be seen that there
is no danger of the Board of Under writer's becom.
going trade of New Orleans by their extraysgant |
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