St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1885-02-20
VOICE OF HE PEOPLE.
Insurance Discrimination.


To the Editor of the Globe:
Among the various bills relating to ms ur
anct introduced in the legislature during the
present session none appears to have touched
the subject OF cooperative insurance, the
proper regulation Of which Is due to the pub
lie, and is necessary as an act OF simple JUS
tice to the regular insurance companies. The
public is guarded by the safe and wise pro-
visions OF the insurance laws from the per-
petration Of frauds by the Insurance com
panies doing business in the state, and the
deposit of securities to the amount of 500, 900
with the insurance commissioner is further
required as an absolute assurance to the
patrons of the companies. So far are these
restrictions carried, aud 30 large is the tax
support Of the insurance department, that the
underwriters claim, with some plausibility,
that they are doing business in Minnesota
even at loss.
But a more just cause OF complaint is
made against the inequality of the laws
which, while requiring the strictest guaran-
ties from the regular insurance companies,
statute all companies or associations doing
business on the cooperative or assessment
plan. This is especially injurious to the
public at large, who, while deserving the
best protection against fraudulent insurance,
and relying on the safeguards of the laws,
are in fact often left TO the mercy OF mere
adventures, who enjoy like immunity in
49,. fha ~
capital and the fear of inspection, and by
the payment of their assessments, which APP
pear with great regularity, they wax
rich as their clients grow poor.
| have talked To several members of the leg
islature, and as a rule they are In favor Of
the enactment OF law that shall afford some
security to the public, aud a bill requiring
such companies TO make statement OF their
condition TO the insurance missioner
would meet with general approval. Com
missioner McGill, In his last report, speaks
OF the amount of business done by the Co
operative life associations, aud censures as
unjust a law which requires the regular COM
psuics to pay taxes aud fees while it specially
exempts the co-operatives from all such bur-
dens. He further speaks of laws in other
states requiring these societies TO
pay certain fees, to make reports
of their standing to the state commit sioner
and to submit their books to official inspec-
ton at any lime the supervising officer Of the
state may deem 1t necessary. The passage
Of some such law the commissioner strongly
recommends, but no action has as yet been
taken. The state Of Massachusetts, Is also
without such law, and Commissioner Tar
box, in his report for the year 1888, deplores
the lack Of such an act, aud censures the
methods Of the cooperative corporations
which he characterizes as uuscientitic and
unsound.
In New York the need OF such a law Is
recognized, and by the act Of 1888 co-opera-
tive companies are required to make full
statement Of their business to the insurance
department, aud TO pay certain fees to the
department TO cover the cost Of inspection.
They are not, however, required 10 make a
deposit Of securities. But through The in
surauce department the condition Of such
conf anies and their methods Of doing BUSH
ness are made known to the public.
In Ohio most Of the cooperative sssocia-
lions are brought under the operation Of
similar law but some are expressly excepted
These mpsuies are excluded from doing
business in New hampshire, and in Penn
sylvauia are subject to the general regula-
lions Of the insurance laws.
The instability Of these com panies and the
UNEQUAL manner in which they operate Is
shown BIZ the manner Of their organization.
4 number Of individuals unite 10 q corpora
ton, elect certain officers and pay q certain
amount TO the heirs OF each member at his
death by assessment OF the survivors. Stalls
tics show that the average age Of members at
the time OF the form alton OF the society is 30
years, and as the age VI new members will
average the same, the general ayerag.
Of age In the association must
increase, the deiths will Increase ia
epnseauenee aud the assessments "a a ike
ratio, 30 that incoming members will he bur
dened with much more frequent assessments
than the original incopOraiOrs and in eouse-
aueuee will be deferred from joining and tie
effect must be TO bring the societies 10 a
SPEEDY end. During the Eve years proceed
ing 1851 list Of 1l6 OF these societies that
failed vas published, and olt OF niDety-six If
these associations formed IN Ohio betEeen
1872 and 1850 fftv-six failed. The report Of
the Insurance. com missioner Of Pennsylvania
for the year 1873 shows the business Of
tEeuiv-three OF these societies Their cash
collections amounted TO 1881. SIS, their losses
paid 70 Si4I $40, and their expenses and sal
aries TO sl39. ESQ, or nearly much as the
losses And nOtziihsts DdiDg the fact tina.
the officers received a. much ss the insured
seventeen Of these companies failed 10 the
succeeding Eve yesrs- In MINI several
Of these companies have suspended after their