Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1881-01-10
INSURANCE LEGISLATION.

.
which ought long since to have been
dropped. Among such bad bills must be
classed that introduced by Senator John
son on the subject of insurance. We
can recall no controversy in which more
conclusive demonstration has been had
of the Objectionable character of proposed
law than that which year ago eliminated
in the rejection of Mr.. Johnson's insurance
Act Yet he brings it forward again, as
though the question was new and open
one, and there are not wanting indications
that the old attack upon the foreign or
outside insurance companies is to be re-
newed as vigorously az ever. 1t is impos-
sible to allege any public demand for legis-
lation of this kind, for the interests
of the public are Numerically opposed
to it, The public are the insurers.
What they require is the widest
possible choice in the placing of
their risks. There can be no such thing
az protection to local insurance companies,
compatible with protection of the local
public, for the only guarantee insurers can
have for the validity of their policies is the
vide distribution of the risks held by the
companies with which they insure. The
idea that local insurance companies can be
built up by excluding foreign companies,
without imperilling the property of their
customers, is wholly fallacious. 1t is not
for the good of the community that local
companies should carry heavy local risks.
If they do there is always danger that
some extensive confagration may at once
ruin them and their customers. But this
is not all that has to be considered We
showed during the last session of the
Legislature that the California insurance
companies were already carrying risks
far in excess of prudence. They were
at that time pledged for claims
thirty eight times the amount of their
aggregate capital, and it was clear that
they were doing an unsafe business. We
pointed out at that time that if any legis-
lation was had in the premises it ought to
be for the purpose of compelling these
companies to protect their risks better,
or to curtail them. We have no evidence
that they have done either, but we find
them coming again before the Legislature
and asking for laws which have been
proved to be most emphatically against
public policy. There is no excuse for this,
and it ought to be rebuked by the Legis
lature The people of California do not
want any such legislation as is proposed.
They know when they are well off, and
they have no fault to find with the
insurance situation as it exists. What
they think of the relative advantages of
insurance in home and foreign companies,
is shown in the fact that they do five
seventies of their insurance with the latter.
The reason OF this is on the surface. The
foreign companies possess an immense
aggregate capital, and their risks are care
fully and widely distributed. They do
not carry all their eggs in one basket, like
the home companies, and therefore they
are more trustworthy. What the insurer
wants is a guarantee for the payment of
his policy in tie event of loss. He be-
lieves that the foreign companies give him
a better guarantee than the local ones, and
SO he goes to them. His belief in this
regard is founded upon experience, and
it is justified. The local companies now
propose that the guarantee of the insurer
shall be taken away from him, and that
he shall be compelled to place his risks
where the hazard is too great for safety.
It is plain that the very last thing
thought of in this proposition is the public
interest. The Legislature is supposed
to be the agent Of the people, but
the local companies ask it to sacrifice the
clearest inter, SITS of its principals in order
and unreasonable demand, and it ought not
to be entertained. 1t is not at all ques-
ton of friendship for the foreign compa-
MES, moreover II they or any of them
were in the position of the local corpora
tons, the arguments which apply to the
latter would apply to them. If they did
not afford guarantee to their customers it
would be in order to compel them to do so,
or to 90 out of business in the State. But
the question is mainly, We might almost
say wholly, one of the public welfare.
When it is proposed that foreign insurance
companies shall be Disseminated against,
and in any way discouraged from doing
business in the State, what is
really proposed is that the people
of California shall be deprived OF
the protection of insurance. There is no
class to be benefited by such legislation
but the few persons interested in the local
insurance companies All the interests Of
the property owners are the other way
aud the great mass of property owners,
who are the insurers, are also the voters
and the taxpayers of California These
resent and protest against the insurance
legislation now proposed nor can the Leg
lsiature pretend TO any regard TOR the
public welfare if it enacts such laws. The
people want all the competition in insur-
ance they can have, provided it is safe.
They do not want monopoly, and least
of all can they afford to tolerate local
monopoly. It is to be hoped therefore
that all bills of the kind referred to will
be promptly voted down, if they are not,
which would be still better, killed in com.
mittee.
THE CASs OF CANNON.