Evening star. [volume] (Washington, D.C.) 1854-1972, 1889-08-03
REGULATION OF INSURANCE.

Suggestions to the District Commission
ers in Reference to the Act Of Congress.
WHAT THE STATES HAVE DONE TO PROTECT THEIR
CITIZENS AGAINST DISHONEST scHEMEs-NEED
OF Efficient EXECUTION OF THE Law HERE TO
GUARD AGAINST wild CAT COMPANIES.
Several days ago the Commissioners received
letter from Mr.. J. H. Lichliter relative to the
regulations OF insurance in the District Of Co
lumbia. In the course Of his letter Mr.. Lich-
liter says: 1.-THE act Of Congress, entitled AN
act to regulate insurance in the District of Co
lumbia.' approved January 20, 1887, is. be-
lieve, the only law in force regulating insurance
in the District of Columbia. That the subject
OF the proper regulation of insurance is one of
great importance in municipal government is
shown by the laws in force in the states and the
plans adopted for their execution. The legis-
lation in the more important states is of an ex-
haustive character and in many of them the
execution of laws is committed to a separate
officer called insurance commissioner or 'su-
perintendent of insurance. and the system of
reports, examinations and superintendent are
OF the most efficient character. The laws of
the states upon this subject have for their
object
in general against dishonest schemes devised
and operated to rob the persons who may be
induced to become insured. This injury con-
sists-First. In the exaction of excessive prem
lums and assessments, as where the premiums
and assessments demanded are greater than is
necessary to meet expenses. policies and a
reasonable profit to stockholders Second. In
the pocketing OF the whole of the premiums
and assessments, as where the policies are not
intended to be paid, and are not paid, at matur-
lty or death. A secondary object may be said
to be the protection of honest companies and
agents and against dishonest companies and
agents.
IN MARYLAND
the work is in charge of an insurance commits
sioner, and the laws and regulations for it's
execution are far-reaching and carried into the
most exhaustive details The forms of state
ments prescribed to be furnished by all the
companies and agents are very complete, each
embracing from twenty-seven to seventy five
items or questions, and all devised and calcu-
lated to disclose full knowledge Of the work
lngs and condition of the companies. These
questions are in relation to l, income; dis
bursements; 3, assets; 4, liabilities. In addi-
ton to these searching statements there is the
further wise regulation that pecimen copies
OF all printed matter issued by the association
designed to exhibit its plans must be filed with
this statement.
IN OTHER STATES
SIN New York and Ohio there are laws similar
to those Of Maryland, carried into effect by
similar forms and requirements. In each of
these states there is a special officer called sl-
perlntendent of insurance. charged with the
execution OF insurance laws. In Ohio the law
requires that the superintendent shall furnish
to companies and agents for insurance forms OF
statements best adapted to elicit from the COM
panles true exhibit of their condition. Thus
in most if not all of the states an earnest effort
is being successfully made to guard the public
pretended companies. The act of Congress OF
January g. 1887 doubtless had the same OBJ
ject in view as the legislation of the states.
WHAT HAS BEEN DONE HERE.
"What your predecessors have done toward
the execution of this law l am not advised ex-
cept in general way. This information indi-
Gates very imperfect plan Of execution. The
law is brief and its virtue is in great part to be
brought out by execution and you are fully
armed with the discretion to make the law pro-
ductive OF good and thus effective of the OBJ
Jects for which it was enacted. The subject of
the regulation of insurance is as important in
the District of Columbia in the states. The
territory and population of the District are
limited in comparison with those of the states,
vet the principle and purpose of insurance
regulation are the same here as in the states.
population of one large city,
INSURANCE IN THE DISTRICT.
'This city is daily growing, and the prospect
of its growth in the future will be more rapid
than in the past With peculiarities in many
other respects, Washington has peculiar char
acteristcs which invite insurance companies
and agents. There are now in operation in the
District of Columbia, as shown by tho records
of your department, II local and l54 foreign
insurance companies. The list includes both
life and fire companies. A competent
authority estimates that yearly the sum of at
least 600 900 is paid out for life insurance in
this District.
ARE THERE WILD CAT COMPANIES HERE?
THAT there are what are called wild cat
insurance companies in this District can be
demonstrated. A little opportunity would
show many persons who have been deceived.
First. By plans appearing honest and fair to
the Ignorant, but which after few years have
been found intricate and false at the loss of all
sums paid in for dues, assessments, &C. Second
By the exaction of excessive premiums and
assessments. Third. By failure to pay the
amounts o. policies that have matured In all
OF these cases the managers and operators of
the companies are the gamers to the extent of
the losses by those who have been deceived
The receptions have been practiced for the
purpose Of securing the gains.
IT Is OF THE FIRST IMPORTANCE
that the system Of insurance regulation in the
District should be wise and thorough 1t is for
the protection of the public and honest COM
panies and the suppression of dishonest COM
panies. This will involve the enforcement of
existing law.
THE CHIEF MEANS OF ENFORCING THE LAW
will be by securing statements showing the true
condition of all companies-that is, showing
whether they are able financially to meet their
policies at maturity and Tin case of assessment
companies) whether they are dealing fairly and
honestly with their members. For this pur-
pose the present form of statement used is
wholly inadequate. No statement will secure
this object unless it requires a full report in
detail upon the character and several sources
OF income and the character and specific OBJ
jects OF disbursements, as well as upon all the
details of assets and liabilities.
The law provides (sec q that everv in
surance company doing business in said Dis
trict must transmit to the Commissioners of the
District statement of its conditions and busi-
ness for the year, which statement must be in
form and state the particulars required by the
blanks prescribed by the Commissioners, and
the Commissioners, or any two of them NAV
at any time require statements from any COM
pany doing business within the District. or
from any OF Its officers or agents, on such
points as they may deem necessary and proper
standings' This is a broad provision
and places the whole subject within your con-
troll.
AN EFFICIENT AND EXPERIENCED sUPERINTEND-
ENr NEEDED.