Public ledger. [volume] (Memphis, Tenn.) 1865-1893, 1879-03-03
LAWS.
The Tendency Toward Reckless Legis-
latiOn Concerning Insurance.


EEkNAa ~ @NA - NANEk1AAAAA
to hamper and harass the insurance
interest whenever opportunity offers
and, where the opportunity doesn't
offer, inventive enterprise opens the
way all the same. This winter, all
over the country, there has been a
violent eruption of this sort of hOstil-
to the insurance companies. What
with the burthens of taxation, deposit
requirements, local license e~xtortions,
enactments to override or interfere
with policy contracts, prohibitions
carrying suits into the Federal
courts, and all sorts of codiied crudi-
ties, the underwriters certainly appear
to have already a rather hard time of
it. The anomalous feature of the case,
moreover, is that the fewer and weaker
a States own companies are, or the
more Improbable the business within
its borders, the surer is such State to
make things warm and worrisome for
the companies of other States whose
managers show any willingness to sell
a trustworthy indemnity. The idea of
protecting" a States citizens from
possible loss by systematic efforts to
harass and drive away the better class
of insurance companies from the State
is essentially absurd. Yet this, in
is what the average legislator in
certain of the Western States-nota-
bly, Tennessee, Wisconsin, Ohio and
Missouri-scems bent on doing.
Tennessee made a narrow escape
last week from being left without any
insurance worthy of the name. Ii
her governor had not vetoed the
+" valued policy" bill passed by the
legislature, there would have been a
hegira Of other State and foreign in
surance companies from that State
which would have made Tennessee
property owners howl with terror and
have left her merchants as bankrupt
of credit as Memphis herself. But
right on the heels of the odious law
which has been vetoed, the same
legislature has passed another, which,
if not strangled by a veto, will give all
other State and foreign companies
Just as good reason as before to leave
Tennessee in a body. This last en-
actment proposes to compel all compa-
MES from outside to deposit 5000
in United States bonds with the State
treasurer, and topay an annual license
fee Of $1,000 to the State as
the condition of authority to
issue policies to citizens of Ten
nessce. If the State of Tennessee
was in a prosperous condition as to
credit and finance, or if, like many
other States, she presented a promis-
ing field Of profit for insurance COM
panies, there might be some slight
pretext for imposing rational condi-
tions upon the privilege Of doing bust
ness there. But, in point of fact, NO
State in the Union is really so depend
ent for safety and credit upon sound
insurance companies, and, as the
statistics prove, no State is less inviting
as m insurance field. In 1877, the
outside companies doing business there
were able to net only $l5,092 profit
upon q gross premium income Of SS44SS1,
81, and in 1878 they actually paid out
about $4,000 more than their pre-
MUM receipts in loses and expenses in
that State. Yet, in the face of facts
and figures like these, her legislature
has the assurance to try to extort from
each outside company $4,000 as an an.
nual license fee and a deposit Of
$5O,0OO-by way of guaranty, we must
assume, that no company shall try tC
get away from so proftless a field.
1t would seem as if the expansive
power of the human cheek could
have no better Illustration than this.
But apart from the iucongruity OF
legislation Of this kind by a Common-
wealth in Tennessee's condition, this
deposit and license law is absurd and
inequitable on general principles. In
fact, the whole system of insurance
deposit laws, as between the several
States of the Union, is wrong in the
DRY and fallacious in practice. For, il
every State had these laws, a company
with less than $4,000, 900 to make de-
pOsits with would be unable to do an
agency business covering the entire
field and, even then, after making
the required deposits, would be likely
to need another 100000, at least,
wherewith to make its credit good at
home and make its policies of any sort
Of value to the holder. In the Ten
nessee case there is the manifest alb
surdity of compelling every company,
little and big, to make the same deposit
and pay the same license fee-wbether
the company has $1,000, 600 or 500,
900 capital, and whether it does a bust
ness in the State Of $4,000 or $1,000
per annum. AS to security, tho de-
posit in this instance, az ..lways, tends
rather the other way, ainoe an insur-
anco company must obviously be
stronger when having its assets in
aggregate at home and under its own
control, tnan II these assets are drlb.
lctcd around the country in the dub.
GUS custody Of the average State treas.
urer.
II Tennessee is anxious 10 make the
number Of igsgIancc compotitrs con.
%venipptlN small (for t~hemselves). ant
so secure advanced insurance rates
less revenue from a diminished mum
Der of companies, and a deficiency o
insurance protection fof their citizen.
why, all that need be done TO brIn,
tbese thjngs about is that Governo.
Marks shall put his signature TO thi,
bill The legislature has done Il,
sbare of tho mischief, and the o.
ornor can complete the work by
stroke of his pen. Upon the who'll
we doubt if he will care to take I'll.
responsibility. And yet, somehow W,
arc inclined to wish this game of ga
might be played all tly Nav through
luSt Y S,V6 Vac insurance companies
good excuse for teaching Tonnossoo