The herald., 1898-12-22
NEW SYSTEM OF SUPERVISION
FOR GERMANY
LOCAL REAL ESTATE REVIEW
Lessons Of the New York Fire-The
Sky-Scraper's Risk-The Death
of J. G. Edwards
OFFICE OF The HERALD
Los Angeles, Dec. 81, 1898.

Few official documents have been scanned
with greater interest than the authorized
draft of the bill (received in this city day
or so ago), says the New York Evening
Post, providing for the supervision of insur-
ance in Germany. Great interest has been
taken in the preparation OF the measure,
owing to its bearing on American life COM
panies abroad, but little has been known re-
specting its exact provisions, which have
engaged the attention of experts for years
past. The translations have not yet been
completed, but well-known official who
has studied the draft in German pronounces
1t more comprehensive and consistent than
any law now in force governing the super
vision Of insurance. Since the bill has been
supported by the ministry OF the empire there
seems little doubt that it will be accepted
by the rcichstag.
The measure seemS to have been inspired
by the same notions of paternal government
as are embodied in the laws of New York.
Massachusetts and other states. 1t vests
in government officers power to meddle with
private contracts when these relate to in
surance in a degree, it is said, to which no
free government NEEDLES with any other
branch of private business. The bill,
however, is far from going to the extent
that our laws do in many respects. The
supervising officers established by the law
arc to be members of the government of the
highest standing and are appointed for life
There will therefore be no chance for petty
politics in the administration OF the Of
flee, and no such thing as giving office to
mere politicians as n reward for party SER
vice. The measure does not require the
created by law in computing their pre-
miums or reserves. The imperial govern
mcnt has no thought, it seems, OF enacting
table OF mortality or forcing rate of
interest as an assumption, but provides that
the companies must make their own as
sumption and satisfy the authorities with
respect to the safety of their operations.
The measure expressly forbids the officers
to withhold from any company license to
transact business on any ground except its
inability to carry out its contracts. 1t there
fore puts an end to all arbitrary interference
with the rights of a company, and renders
impossible such abuses as have made neces-
sary appeals to the courts in various sections
of the United States (notably in Kansas,
California, etc. during the last year or two.
The measure also provides that even ii a
company fails to maintain its strength it
need not be wound up in bankruptcy or its
assets wasted; but the supervising authori
ties are given power to reduce its risks and
change its management in such way as
to preserve whatever remains for the bene-
tit of policy holders and the public. No de-
posits with the government are required or
permitted; the funds are to be kept by the
company but under strict regulations with
regard to investment and management. The
bill on the whole is thought to be liberal in
its provisions, and thus far has been we'll
received.
The draft is accompanied by long argu-
ment setting forth with great emphasis the
Inconvenience to which the companies are
now subject from the fact that supervision
is attempted by each separate state. Under
the present system concessions have to be
obtained from each different state and since
each has its own standard and method of
supervision, the difficulties and expenses OF
the companies are multiplied and insurance
is made expensive. The publication of the
measure by the imperial government at a
time when friends of national supervision
in this country are considering the posi-
blity of congressional action in the same
direction will be of unusual interest to in
sirance men generally. The companies are
thoroughly sick of the spois system of SUI
pervision now in vogue, and will do almost
anything to rid themselves of its burdens
The position of superintendent or commits
sioner of insurance is coveted by politicians
flor reasons best known to themsefves)
more than almost any other state office, and
the abuses have become so intolerable that
certain Wal-known insurance men sem bent
upon heroic efforts at Washington this win
ter to obtain relief of some sort.
The Coast Review Loss
The death of j. g. Edwards, who was for
many years editor and proprietor OF the
Coast Review, the leading insurance author
ity on this coast, will be widely regretted
in the large circle OF friends which he had
made during his long and prosperous career.
Mr.. Edwards was recently elected a men,
her of the state board of equalization, and
his death leaves another vacancy to be filled
by Governor Budd before his, retirement
from office.