New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1874-01-19

much surplus. The stockholders having ioss
the accumulatiOns Of previous years, and IN
many instances having been called upon for
assessments equal to their original invest
ments. insisted upon receiving their apparent
gains for several years, until confidence In INC
profit of the insurance business had been SLOW
" restored. only to be suddenly swept away
by some new calamity.
Thus there has been perpetual c0nfiot pc
tween the necessities of tho public and the
desires of insurance stockholders, which mas
made the history Of fire underwriting that OF Il
succession of alterations between modera'c
protit and immOdcrate loss, with this advah-
tage in favor Of the companies, that wheh
there was profit the stockholders received IT,
and when there was immOdorate loss the pup
lie. in many cases. had to bear 1t.
Whatever will correct this, whatever plan
will provide in the years of plenty tor the
years of adversely that are sure to come, Is
quite az much to the advantage OF stockholm
ers-roluctant although they are to perceive IL
as for the present security of the policy
holder.
Now, q bill was introduced into our Legs
lature at its last session, by the Supermtend-
ent of Insurance-but at 80 late date that IL
failed to become a law - which contemplated
the very thing desired 1t was intended TO
establish tho stability OF the companies,
and their ability to meet extraordinary losses;
and not only these, but the certainty, under
wholesome management. of ultimately bet
ter, because a moro secure profit, to the capi-
tai invested. And this was to be done so
fairly and wisely as to put an end to the con-
fict between Insurance stockholders ana the
patrons of Insurance Companies to ADJUST
equitaby, and hold IN proper cquip0ise, tue
relations between insurers and their insured.
The essence of Superintendent Chapmans
proDosition was that stockholders should receive
IN cash only simple interest upon their capitals
and earned profits, until surplus at least equal
to the capital should be accumulated. This
surplus was to be divided into portions, one
of which should constitute the stockholders
share of the profits of the business, not to be
divided in cash, but by some proper provision
to be so reserved as to secure the Company
from destruction by any one fire; tho other
portion to be irrevocably pledged to the pro-
lection of the policy holders III case OF losses,
great or small.
The advantage of this is manifest The IN
sIred get 80 much the better security IN re-
turn for the premium they are compelled to
pay The stockholders by such fOrbearance
are themselves insured against the probability
of call upon them in some emergency for
additional contributions to keep alive the
Company-its machinery in motion and lts
outstanding risks in force. During the carrier
wears. such a rule would of course be less at
tractive to stockholders; but the increased
solidity of Company so outstanding its
profits, and the fairness of its action, would
attract the best business and that most willing
to pay adequate charges for insurinS.
Intelligent property owners will cheerfully
nav the premiums necessary to purchase UNI
questionable indemnity; but they have the
right to demand. and when they come to I'M
derstand their rights they wiH demand, that
their sufficient premiums shall buy the best
security that can be furnished.
The policy holders who do not suffer loss
by "A great fire, like that of Chicago or Bos-
ton, are to be benefited BY the adoption OF
this plan they will be saved the necessity,
after such a fire, of remaining for many days
in doubt of their insurance, or the worse
alternative of seeking new insurance in an
unknown Company, at any rate OF premium
which the stress of the occasion may enable
il to exact.
TO the policy holder who suffers by such
wholesale burning, the advantage is equally
plain Inste of having the capital only OF
the insurer to rely upon, he has IN addition
whatever surplus the Company has been able
to lay aside under this beneiicent provisional
surplus which, without some such provision,
would not have been accumulated. He is
hedged about and secured not only by the
pledge of the original capital, but by the past
earnings of the business. The Company
having before it the prospect of continued
existence, would be thereby compelled to
promp, and honorable dealing with its patrons.
We earnestly hope that Mr.. Chapmans bill
will be reintrOduced, and that at IA date early
enough to secure a fair and full discussion of
its merits The Insurance Companies, if they
are az far-sghted AZ they should be. will not
object to it. But whether they do or not, the
interests of the public demand the protection
that some such measure will give, and the duty
of the Insurance Superintendent and of the
Legislature seems clear
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Elaborate and careful observations have recently