The Pascagoula democrat-star. (Pascagoula, Miss.) 1878-1920, 1897-04-23
NUMBER 10.
IMPROVEMENT ON INSURANCE
LAW.

Mobile Register.
Senator W. n. Hardy, Of Lauderdale,
Is out In a communication recommend.
ing an improvement upon the insur.
ance law passed by the Legislature at
its last session, and which has sue
ceeded in giving general dissatisfac-
tiOn, and in his communication the
Senator outlines what he considers
should be the essential features OF the
insurance law. The substance OF the
Senator's proposed bill is: First, a re.
quiremcnt from every life, fire, marine
or accident insurance company, OF a
deposit OF 10000 upon which the
State shall pay per cent. annually;
secoEd, the deposits to be held by the
State for the protection OF policy hold
crs; third, allowing a valued policy
clause at the request Of the insurer,
conditioned upon the payment OF an
additional premium as may be agreed
upon; fourth, all nonresident com.
panies required to have State agent
before being allowed to legally do busi-
ness in the State; fifth, all companies
to pay tax OF ! per cent. on the gross
receipts Of premiums, to be sworn to
quarterly and reports made to the
State auditor Senator Hardy is OF
the opinion that law such as this
would put half million dollars in the
State treasury by the first OF July.
The Senator assumes that the claim
will be made that the deposits would
be a trust fund and that the State
would have no right to use them.
'This is absurd" he says. "The only
Limitation upon the States right to
use this money is, that II must so use
it that, when legally called upon to
pay it back to the companies or to
their policy holders, it will do So
Aside from improving the insurance
law, the main idea OF Senator Hardy's
proposed law appears to be TO raise
cash fund for the immediate use OF the
State to tide it over its present flnan.
cial dflcultics. The Senator might
have arrived at the same end without
placing in the State treasury large
trust fund upon which large demand
might at any time be made by one or
more companies withdrawing from
business in the State because OF un.
satisfactory business, or from causes
directly affecting the companies. The
undiSputed sentiment OF the State Is
that the State is now 10 need Of large
cash fund to meet immediate wants.
Instead OF the Senator proposing dc.
pOsits in cash, forming trust fund
upon which the State shall pay inter-
est, why did not the Senator propose
that the State shall issue bonds bear
ing 4 per cent. interest in an amount
necessary to cover the full amount OF
deposits required from the insurance
companies? Then the State would
have a cash fund to be used in what
ever manner it might see 1T, and upon
which the State would really have no
interest to pay, since, according to the
calculation of Senator Hardy, the tax
upon premiums would more than Offset
the annual interest. Then, with this
surplus from premium taxes, the State
could accumulate trust fund for the
benefit Of the policy holders, and, II at
any time a company should decide to
withdraw its business from the State,
the State could take up the $4,000 OF
1 per cent. bonds deposited by pay
ments from the accumulated trust
fund if deemed safe or allow the bonds
to run until maturity, just as the
holder OF the bonds might prefer.