Arizona republican. [volume] (Phoenix, Ariz.) 1890-1930, 1893-08-25

der the combine known as the Pacific
Insurance Union
OFFICE OF GENERAL MANAGER
PACIFIC INSURANCE UNION,
FAN FRANCISCO, Aug. q, 1893
Whereas--the expense of transacting the
business OF fire insurance In Arizona has been
increased by the law passed at the last session
of the territorial legislature which imposes a
license tax upon each agent doing business In
said territory,
feet on and after September /, 1898, an add
tional charge, equal In amount to ten per
cent of the premium, shall be added as q
specific tax to be collected and RENTED by the
agents.
The above rule applies also to all policies
written to replace policies Cancelled after the
date of this circular
Though some OF the local managers
were aware that the union contemplat-
ed an action OF this character, many
had had no advice OF it, and the cir.
cular was received with surprise, and 1t
may be added, With dissatisfaction,
since the unions course, if persisted in,
| is likely to create q revolution in the
insura nee business in the territory.
The actionis regarded as retaliatory
upon an act OF the late legislature, and
the animus of retaliation is shown more
clearly in that clause which declares
that the 10 per cent additional charge
shall be considered specific tax" to
Offset, presumably, the license tax i'm.
posed upon the agents. This careful
and unnecessary differentiation of the
increased premium is likely in itself TO
arouse opposition among policy holders
who might consent to the increased ex-
pense, but would never pay the increase
| il it were regarded as penalty imposed
on account Of the shortcomings OF the
legisl ature.
| The legislation to which reference is
made is the following clause OF Act SO,
an act to amend par. z, 239, r. S.:
All persons, firms or corporations, or agent or
agents of such persons, firms or corporations,
doing or conducting in this territory any in
surance business, or who insure against l0ss by
fire, shall pay quarterly license tax OF $40 per
| quarter.
| It is said that the rate per cent by
which the Specific tax" is to be raised
| is based upon careful estimate of the
business written by the Union on one
hand and the aggregate amount OF Ii
cense tax to be collected by the territory
from the agents Of the companies in the
Union on the other, the purpose being
to equalize the amounts. 1t will be re-
membered that bill was introduced
into the council during the last legisla-
ture to compel foreign insurance COM
panies to give bond for the payment of
losses. This bill was defeated, but the
! indignation of the insurance companies
| was aroused, circumstance which may
account to a slight extent for the ap-
pearance OF the circular.
The present rate of insurance as es-
tablished by the union lie graduated
| from so cents to 81 90 on each 800, &C.
cording to the nature of the risk, though
there is still higher rate OF $40 on
500 on hay or grain in stacks. 1t will
easily be seen that the "specitic" tax
will add a weighty burden to certain
class Of policy holders.
Local agents in the territory
are non.committal concerning the
circular, though some Of them
say that the insurance business
even before the fixing Of the license tax,
was not profitable, 80 that nothing was
left the companies but to either meet
this additional expense by the specific
tax or to retire from the territory.
The agents regret that this added
rate has been made necessary, but they
are disposed to lay the blame upon the
legislature.
The course of the union leaves to
policy holders in the territory only
three things to do; to either pay the
tax, 20 without insurance, or organize
local companies. The insurance bust
ness on the coast is absolutely without
com petition in the matter of rates, and
every company now doing business in
the territory is represented in that
circular, 60 whether the object OF the
union is to REIN burse itself or to ac-
cumulate unearned profita, it may be
easily seen that it has 'cinch."
The insurance combine is becom-
ing closer in the east and at
tempts have been made within
the past year to increase the
rate. In some cities the effort has
been successful, though in others, the
companies which declare themselves to
be son the square and out of the ring, I"
have been sufficiently numerous to hold
the rate down
Four months ago, an increased rate
was declared by the boards Of under.
writer's, in the cities OF Omaha, st.
Joseph and Kansas City. The dsclara-
ton was met by quiet withdrawal of
business by patrons on the maturity OF
their policies and corresponding in
crease of business among the outside
companies. In those cases, various
pretexts were assigned for the proposed
| ipcrooca and in ono coua odvarpa Lar,