New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1872-12-24
he will repeat it In another field. till tho belief
is irresistibly forced upon us.
NEW INSURANCE LEGISLATION.

NEW INSURANCE LEGISBAIl Ohs
Since the Boston fire the Massachusetts
Legislature has had under careful consldera-
ton q bill relative to insurance companies,
which very recently became o law. Great IN
terest attaches to it, as it may be said to rep
resent so far as it goes the lessons of the fire.
Not only has every point in it received the
most thorough investigation at the hands OF
legislators, who have devoted to it in Its IN
cipent stages of amendment and alteration,
an amount of discussion unusual with
measure so technical in its character, but the
advice and suggestions of prominent actuarles
and men who represent large insurance inter
csts have been freely rendered, and may be
considered as forming the basis of every I'M
portant idea embodied in the bill. For q
while the addition of numerous amendments
and the vigor of discussion they called FORTH
seemed likely to endangcr the fate OF the
measure itself. It's passage is really matter
for cOngratnlation.
The total failure Of most of the Boston fire
insurance companies, and the crippled condl-
ton of the remainder, had placed them with
but a few exceptions outside the pale of new
business Meanwhile there was an immense
amount of new business to be done, for all
the risks held by the suspended companies
had to be reinsured. 1t is safe to say that
three-fo urths of all the insurance of the I'M
burned part of Boston had to be replaced
and very large portion of all the insurance
elsewhere in the State. OF course If the local
companies could not do it, outsiders, from
other States and from abroad, must seize the
business. 1t became absolutely necessary to
call in legislative aid to facilitate the forma-
ton of new companies at home. just here
came the difficulty to make it easy TO form
insurance companies, and yet to throw such
safeguards around them that not even the
recurrence of such a fire as that just expert
enced could ruin them. This delicate problem
is in great part solved by the new measure.
The general conditions of the act have fea-
lures in common with our own insurance sys-
TEN, which do not call for notice. 1t enables
any ten or more persons to organize COM
pany without special charter, by compliance
with its provisions. The lowest limit or cap
ital for Joint stock fire company Is S2OOOOO
if In Boston, and 100000 if elsewhere. An
other 100000 must be added if marine risks
are also to DO taken. Mutual fire companies
may organize on 100000 guarantee capital;
but if they add marine business, their perma-
nent fund must be not less than 100000.
Purely mutual fire Insurance companies must
start with q subscription of 100000. In the
case Of mutual companies with guarantee cap
ital, excess of profits to the extent of five per
cent on all assurances, after paying SIX per
cent dividend semi-annually, must DO with
| held as O reserve fund.
| The most noteworthy of tho novelties in
this act is a method of limiting the amount
of risk which companies can take within a
defined area. That something of this sort
was desirable, has long been evident to all
who have given much thought to fire insur-
ance The act is to accomplish the object
by having all the cities and towns Of the
! Commonwealth divided by the local authori-
ties into fire insurance districts, the division
TO be subject to the approval OF the Insurance
Commissioner. No company is to be allowed to
take in any ono of these districts risks on
property other than dwelling-houses, farm
buildings and their contents, TO an amount
exceeding the compaDy's net assets available
for payment of losses. In case such excess
! siye proportional risk should be attained by
losses or otherwise, the company must reinsure
it, or cancel policies to that amount, after no.
tice to polcy-holders. This is an exceedingly
important step in the right direction. 1t is an
! ingenious endeavOr to counterfeit what we
have frequently poioted out in these columns
as the greatest danger to which fire insurance
companies are subjected. 1t is possible that
| there may arise some unseen difficulties In car
rying out this programme, but we hope for its
success. We recommend consideration OF 1T
| to our own State Superintendent of Insurance.
This or something like it ought to be EN-
bodied in o measure to be introduced into our
Legislature this Winter, to apply to all fire
insurance companies doing business in this
| Cfota