The San Francisco call., 1898-02-01
IT IS NOW
 4 " AR TO THE KNIFE. Commissioner Clunie. :. Out for the U Under-
 writers. ... He Says the Insurance People Broke Faith
 . With Him.
 '..: :: # -------- - ---- =: =. The Letter to President Haven That Precipitated the .. : ..:..' Trouble .=:... <. : : WON'T RENEW LICENSES. D.. |. . .:.... ::,:. :. Outside Companies to Be Authorized - -. to Transact :Busin ess Inn. :... .. ::. :. ..:.*c ymediately. .... - :.
The Letter to President Haven
 That Precipitated the .. Trouble. :.5:.-
WON'T " RENEW LICENSES.
Outside Companies to Be Authorized
 to Transact Business Inn :. :. | .::: :.: ....::. ~r1ediately. 7 -. -

: Insurance Commissioner Andrew J. Clunie has at the present time a big fight with the insurance companies and particularly with that. organization or compact as he calls it, known as the Board of Fire Underwriters of the Pa :cific. :. The fight began about five months ago, when letters were sent by him to the seventeen New York com panies doing business here, calling their; attention to the fact that under the laws of New York certificates of au- thority issued to companies organized under the laws of States, other than New: York, and doing business there, absolutely expired at the end of a year from the date of their issuance. Also that by such laws entire discretion was vested in the Insurance Commissioners of New York as to whether any such: company should be permitted to. do business in that State; and that the effect of the retaliatory law of Cali fornia was to subject New York com, panies doing business here to the same obligations. Notices: of a somewhat similar nature were also sent. to local. agents of Pennsylvania and Connecti- cut companies. Fl: =. =. :. :.
 From their knowledge of the feelings of the Commissioner they evidently felt that these regulations were direct. ed at the compact" and were fearful of making applications for annual H. censes, apprehending that the same would be denied on account of their utilization with the compact" and in stead set about to arrive at an amicable understanding with the Commissioner. ":.> As a result Attorneys T. C.. Coogan. the Board of Underwriters as the board S representatives, with full power and authority to represent the organization. = .....
 To this end negotiations were carried on for some time, finally resulting in an agreement embodied in the follow ing letter written by the Commis- sioner to President Haven, with the assurance of MT. Goodfellow and MT. Coogan that the same would be accept ed by: the Board of Underwriters:
 Office of the Insurance Commissioner, State of;
 California-San Francisco. Jan. p, 1898.
 Charles b. Haven, President Board of Fire Underwriters of the Pacfc--Dear Sr: Shortly after my assumption of the duties of this office take investigation as to the reasonableness of rates Of premium charged" for insurance against loss by fire throughout this State, with a view, if possible, to secure some relief for property owners should it be found that the rates were more than compensatory to the companies engaged In the business. :.: .: that there existed in this State an association the the Pacific GO composed of most of the companies authorized to do a fire insurance business in
 this State and Of ThGh s she set forth in article II of its constitution, as follows: : :..:. :.... "...
 lis function shall be the regulation of:
 l. Rates of premium and policy forms, ex- cepting rates of premium on property located
 2. Prevention of rebates. 5:ei: g. Compensation for business. ..-<. :: :. 4. Premium collections =: :. B. Agency appointments ..,. =:
 In the following districts: ..:..'-. -:
 District A-San Francisco ...[.s -...+..":: : District B-California except that part in- cluded in Districts. A and O. Nevada and Alaska : District C-southern California, comprising the Counties of Santa Barbara, Ventura, Los Angeles, San Bernardino Orange. Riverside and San Diego and Arizona.
 District Dooregon, Washington and Idaho. % District E-Montana. :......:s
 District F-Utah. ;.'t. i, s.is This association virtually controls the entire fire insurance business of the State, and In the fixing of rates its power is absolute. Under its rules no member is permitted to effect insur- ance except at board rates. and obedience to this rule Is enforced through heavy penalties. ties of the insurance business this combination compact, judged from the constitution and
 
 its objects. viewed from the same standpoint. appear to be those usually had in view by the organizers of trusts to force from those re- qulring the articles governed by the trust all the traffic will bear.
 On the part of the organizers of this asso- citation it is claimed that its maintenance Is essential to the protection of the interests of both the insurer and the insured; that by means of 1t the expense of fire insurance writ ing is reduced to minimum; that through 1t data obtainable essential to be had in order to fix rates upon any proper basis. and that as a result of the combined experience of its members and the data thus obtained the fixing of rates of premium will in the future be based upon scientific principles; and am moreover assured that it Is the intention of It's mem bers to so fix rates as to ultimately secure to the insured the desired protection at the lowest rates possible in order to effect reasonable compensation to the company for the risk in- volved.
 These statements appear fair and reasonable upon their face, and If the workings of the association on these principles 1t may be that much good can be accomplished for all concerned.
 Various conferences have been held between representatives of your association and my self, and while respective views of the powers and duties of this department are we act together in the establishment of rates. that careful study be made by me of the constitution. rules and transactions of the sociation and that when able to understand ingly do so I make such recommendations concerning the reductions of rates of premiums throughout the State to may seem right, with the understanding that such recommen- datons. if made in a spirit of fairness and supported by facts warranting their con- clusions shall be adopted.
 I have already been furnished by you with copies of the constitution. rules and appendix of the association, and have made somewhat thorough examination of each and have found therein several features which I believe to be inimcal to the interests of the citizens of the State. and not compatible with the designs of the association as represented to me by its organizers. These matters call for immediate correction as preliminary condition to any concerted action between this department and your association.
 One of the constituent clements going to make up the rate of charges for premiums on all fire risks now in force In the city and county of San Francisco Is a certain percent age for brokerage. The amount at present between 10 and l5 per cent of each premium no rf of he