The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1897-01-29
HERE is THE EVIDENCE OF 1T.
NJTNNESOTA,s EXPERIENCE IN AL
Iovs7Tzc: UNAUTHORIZED COMPA-
MES TO DO BUSINESS HERE.
HURTING THE STATES REVENUE.
A Section of the Act Which Cannot
Stand Test-NO Other state
Has 1t.

been adjusted at SOS, 600. OF the insurance on
the property, the New York central 1ioyus'
which recently suspended, has $1,000; the syria
cuse Mutual which is also reported as having
closed its doors, has $780, the Iradesmen
Mutual of Philadelphia, which failed last
week has 81, zoe, and the Protecuoh' dlso ie-
ported as suspended, has $2,ooo
This little item appeared in the MIN
neapolis Journal Tuesday night. III
the facts contained in it be true, ana
there is little doubt but what they are,
these eight lines furnish meat for leg
is,ative thought. If the story were
written differently, without changing
the facts, it would be something IKE
this:
Miunesota's experience in throwing down
the bars so that any old insurance company
can write business in the state without under
going an examination at the hands OF Ine
state department to show that II Is proDaDly
able to pay any claims that may Thereafter
arise is proving costly to those people VINO
are buying that kind of insurance Whlle
the state is losing by the TRANSACTION
That is exactly what the Journal
item means. 1t indicates that the City
Elevator company, because it had
chance to do so, assumed one risk TO
protect itself from another 1t suffered
a double action and got squeezed ooth
ways. 1t didn't have to pay so much
for it's insurance by a few hundred
dollars: it doesn't draw as much in
srrance by several thousand dollars.
1t cannot collect anything here that
these companies do not care to, or are
unable to pay, because the companies
have nc authorized agents in the state.
If they are insolvent, a fight is useless;
if they can pay, they will have to be
made to do so in their home state, and
that wouldn't pay for the trouble. The
nan who wrote the insurance in these
companies is held, under the law, to
represent the assured not the insurers,
consequently he has done his part
when he has got his pay from the as
sured The state itself is protected
t. the extent of per cent of the bust
ness written by bond, which the City
Elevator company gave when it Sc
cured permission to write in author
lied companies, but that is all. There
is no getting at them for any retalia-
ton tax the companies are practically
Insurance outlaws, so far as the state
insurance authorities are concerned.
They have been allowed to take pre-
MUM moneys out of the state, the
man who wrote the insurance got his
pay out of it, and there you are.
This is Minnesota insurance law, as
it now stands. No other state, so far
as Insurance Commissioner Dearth
knows, has such a law; no other state
in the Union, so far as anybody knows,
wants such a law.
Two years ago, when the law, under
which insurance companies are now
operating in Minnesota was passed, the
following section was included and is
section % Of the insurance laws:
Section 50. Notwithstanding any other pro-
visions of this act it shall be lawful for any
TO obtain insurance in foreign
panies not authorized to do business in this
state, and it shall be lawful for such foreign
companies to issue policies upon property
situate in this state, but only in the manner
provided in this section Any person who
desires the right to obtain such Insurance.
either on his own property the property
of a firm or corporation in which he is in
terested, shall apply to the insurance COM
missioner for license and file with him a
bond, as hereinafter provided. Thereupon the
commissioner shall issue to said applicant a
license good for one year, authorizing him to
procure for himself, or his firm or corporation,
such outside insurance And all insurance
procured or issued under said license SHALL be
lawful and valid and all provisions in such
policy Of insurance relating to coinSurance or
other insurance, shall be construed and held
to be in accordance with the standard policy
by this act prescribed, any provisions in such
policy of insurance to the contrary notwith-
standing and nothing in this act shall be
construed as preventing or abTidging the right
of any company issuing such insurance to en-
ter this state for the purpose of inspecting
the property insured, ADJUSTING any loss
performing any act necessary or proper to the
right conduct of its business and all matters
pertaining thereto. But provided that the
bond Of such applicant shall be in such reas-
enable sum as the insurance commissioner
shall determine, with suretIes residing in this
state, who shall satisfy the commissioner
Of their responsibility; the bond shall be ap-
proved by the commissioner, filed in his Off
ce, run to him for the use and benefit of the
state of Minnesota, and conditioned that the
applicant will comply with this section and
fiOD OP coi5
to the said insurance commissioner for the
state OF Minnesota a tax of two per centum
upon the net premiums paid by such license
or ms sald nrm or corporation. And such
bond may be sued and enforced by said com
missioner IN MS own name in any court hav-
ing jurisdiction. Each person so licensed
shall keep a separate accurate account of all
business done under such license and shall
on the thirty-frst day Of December and the
thrtieth day OF June Of each year, file with
the insurance commissioner a sworn state
Hent OF the aggregate premiums paid and
return premiums received for and under such
policies. H"0-4
Another section provides for the imposition
OF a tine If these reports are not fled
Who conceived this section of the
law isn't known, although it has long
since been suspected just how and
where it had it's origin. The state in
surance department did not give if in
dorsement; in fact, the department was
opposed to it from the first. But If
had friends and it slipped through. 1t
is strictly a Minnesota production
which originated in the minds of a cor,
tain few in Minneapolis No other state
had ever heard of it, and it's passage
puts Minnesota in a position which All
the laws of other states have contin-
ually fought against.
New York has a, law which allows
a man to write insurance in commands
other than those allowed to dc husi-
ness in the state, but only on the condi-
ton that the individual or company.
that SO desires to buy such insurance.
files an affidavit that the desired
amount of insurance cannot be secured
from the companies authorized to do
business in the state. Other states
have a similar law, or others aimed at
protecting those wanting Insurance.
from being robbed by unreliable com
panles because they can get the in
surance at q cheaper rate.
So while other state legislatures ara
framing up protective laws. LITTLE
coterie of Minneapolis men come in
and knock down all the protection
thrown around Minnesota. Contrary
TO the advice Of the insurance deDart-
ment, the last legislature passed this
law, with the result that hv
one big building burning since
the passage of the law on
which insurance had been writ
ten in unauthorized companies, the as
sured has suffered a double loss The
first by fire and the second by his in
ability to collect some Of the insurance
The former elevator fire in MINNEAPOLIS
disclosed the fact that a lot of the
business had been written in LLOYD
companies. How many of these failed
to pay their policies is not known. for
the manager of none of the companies