The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1893-02-19
COMMISSIONS On INSURANCE
Agents of Union Companies Discuss
VeXed Question and Finally Act.
The Is Per Cent Commission Rate Restored
for the Benefit of NEUTRALITY-SUSPICIOUS.
Enjoyed by the Local Companies.
Special to the Indianapolis Journal.

Special to the Indianapolis Journal
LOUISVILLE, KY. Feb. 1S.-The semi-an-
nual insurance meeting Is over. To-day's
session was very lively, and some heated
discussions were indulged in. IL was all
about the Milwaukee case. In the end q
resolution was carried instructing the COM
mittee to which TIE matter had been re-
ferred in the beginning. to 60 to Milwaukee
and make an arrangement among the union
companies agents and the local companies
whereby the unions regular Is per cent.
commissions could be restored. There
were several kickers who objec ted
strenuously to the restoration of
the Is per cent. commission rates.
They argued that it would give the local
companies at Milwaukee undue advantage,
etc. About q year and half ago the North
British Mercantile Insurance Company be-
gan to do business at Milwaukee. and
established salaried agent. The Unions
10 per cent commison rate was then In eff
fect but the English companies had the
advantage by reason Of this. and the Union
declared it agents commissions rate of in
order to successfully compete with the En-
glIsh company's salaried men. Then. too.
two or three local companies at Milwaukee
could afford to pay higher
commission rate. and in this
state of affairs the unions agents
were not in 1t. So whom the Is per cent. re.
strlction was taken off the unions agents
were allowed to enter the tight for business
unhampered. The late losses at Milwaukee
brought about change. The English con-
Germ and local companies were caught for
large amounts, and the situation resulted
in q state which tho union thought justified
q restoration of the Is per cent. commission
rate and ordered 1t month ago. Ii was
DONE but there was q tremendous Kick
from the agents and also mem bers of the
nniOn, who did not think the action was
then justitable. 1t was then brought mp at
this meeting and has been the llveliest
topic touched on. The rate was ordered
restored and the commission Will leave
Monday for Milwaukee to attend to it.
The union allows local agents Is per
cent commission on net premiums. In
several large oitles in the union territory q
large number of local companies are estab-
lished that are not mem bers Of the union,
and having no union obligations they pay
any commission to get business The union
won't stand this and don't intend to be
handicapped by obligations the local COM
petitors ore not under. So in enforcing
required to agree not 10 accept the agency
of any company which pays them more
than tho union. This would not DO neces-
ssry If all companies were In the
sssse tss nassss among
without regard to the agents. But
the fact is that each large city
has several local companies and several
large agency companies not membe of
the union; consequently. If union compa-
MES simply agreed not TO pay more than =
certain rate these nonuniOn companies
would have clear field by paying q
greater rate than union companies allow.
The only way to meet 1t Is to enlist tho CO.
operation of agents by exacting of them q
pledge that they will not represent any
company which pays them q greater rate of
commission than the union permits. That
prevents To some extent. the possibility OF
nonunion com panles bribing union agents
to give them the business which would 9TH
erwise 60 TO union companies. and 1t there
were no local companies the plan would
prove satisfactory.
The local com panes ore backed as rule
by q bank which enables them to give
credit for premiums and each member of
the directory Is really solicitor for the
company in which he is in Interested. In this
way the local companies control O certain
class of desirable business. which it 10 diff.
cult for the union companies to secure.
The local companies are generally oficered
by men who can control business and who
have had no opportunities TO learn the
business of underwriting from q practical
standpoint. Controlling thus q larger vol
ume of desirable business. and writing
little undesirable business. which union
companies are compelled to accept. they
are enabled to pay more for that selected
business than union companies eau afford
to pay for general business. of special
hazards. mercantile risks. etc.
The local companies as q rule employ q
large number of solicitors to whom they
pay Q greater rate OF commission than
union companies allow their local agents.
placing the agents OF union companies at
decided disadvantage. The union has,
from time to time, placed the larger cities
In an excepted GLASS. taking such steps as
they thought necessary to enable them to
compete with the local companies. Louis
willie ia an excepted city. and the commits
sion rule Is therefore imperative.
Assuming the union should decide 20 re.
move Louisville from the list of excepted
cities il must be met by the united opposi-
ton of all agents of the union. because it
meant q reduction In their income. If the
commission was reduced to o minimum lt
would be to the interest Of all agents to
write their business direct. and the net re-
suit would be about the same to them and
o saving to the companies. aud a
consequent reduction of rates to the
public. This would place agents rep
resentinR union mem bers at disad.
vantage with local companies competing
| for the same business unless union COM
panies can secure the cooperation of the
locals, which II very difficult to effect and
makes the condition of affairs decidedly
uncomfortable. The union with it's power
and the combined resources OF the CON-
panies could make ompetitive rates and
drive the locals from the field, but this has
never been the rule OF the union. Ii this
was attempted it would look like con-
splracy. and the public would have no
| sympathy with the union.
Milwaukee, was never an excepted city,
although the union aid agree TO abrogate
the rule as TO commissions. reserving the
right to reinstate the rule when the condi-
tiOn seemed to ustify IL. A majority of
the union members thought it advisable 60
make an increase in rates and to reduce
commissions. Several companies withdrew
altogether. Some will only consent to re-
main provided rates and commissions can
bc regulated.
This morning Mr. +. {. Moore addressed