The San Francisco call., 1898-02-01

bate discount, commission, abatement, pecu- niary or other valuable consideration shall be sured person, firm or corporation, or to his or their agent, or to any person not: authortzeds by the terms of this constItution to receive it., r. Penalty-"For each violation of this section the penalty shall be the cancellation of. the policy or policies. and the prohibition to write or place within one year the risk or risks GOV: cred, E.. =;
 And stipulation 3 of the agreement which you require each broker to sign is as follows <: :: count commission or abatement of premium to any person, firm or corporation .Whatso-~ ever directly or. indirectly, nor make or offer any pecuniary or other valuable inducement to obtain business ?, = .. :-::.s . s F These provisions are intended to prevent the insured obtaining the benefit of any rebate satisfactory to himself and the broker. This to to my mind is is wrong The money M when earned and what the broker sees fit to do with his own money does not seem to me to be any affair either of the association or its constitu- ent companies .::,.: . ':.....:-+: :;
 It Is mainly in the city and county of San Francisco that the system of brokerage pre- walls. Throughout the interior of the State of California the brokers place is supplied by the local agent, whose compensation. is a certain percentage of the premiums received. The same prohibition against relating Is placed the same agreement: is exacted from him. The same objection applies to this prohibition. as to that placed on the broker and It's abroga- tfon is likewise required. '.:....:.
 Under present conditions no benefit is se- cured to the insured by dealing directly with T the company, whether placed through broker or. directly by the insured, is the same: If placed by ~ t broker the company n pays W m him 10 sured no allowance is made, but that part of the premium estimated for brokerage is con stunned by the company in addition to the amount originally set aside in the rate for its profit. Absolutely no justification exists for this. The only attempted excuse offered for it Is that to allow the l5 per cent to the policy holder would jeopardize and interfere with the business of the broker There should be and Is dfSDOSttiOn hiring A broker to place his insurance if he so desires. At the same time if there exist persons seek ing insurance, who, from economical other motives, desirous of transacting their own insurance business, common justice requires originally set aside to pay for the service they are rendering. It seems to me that the mere statement of this proposition Is It's own vindi- cation. Some plan should be devised to ob-. vate this injustice
 In conclusion permit me to assure you that the suggestions made herein are ones believed by me to be for the best interests of the people of the State, and If acted upon by your asso- citation it will afford me the greatest pleasure to cooperate with you in an endeavor to se- cure reasonable rates of premium for insur- panies to make fair profit on their invest ment, which should be all that they desire Respectfully yCdrs, ANDREW J. CLUNIE,
 Insurance Commissioner.
 The letter was sent on January p, and no answer has been received there to. The Commissioner believes that by this long silence the underwriters have broken faith with him. He now con- siders himself released from all ob1iga- tions to make any concessions to what he terms ''this insurance trust" He declares his intention of using every power of his office to work its dissolu- tion.
 The order made by Commissioner Clunie last Saturday declared invalid and insufficient not only the bonds of the foreign companies, from whom the larger amount is claimed for back taxes, but also those of the different American companies mentioned, and until these bonds are renewed these companies stand in the same position as the foreign companies. which the Commissioner declares are doing busi- ness here illegally. and upon their ap- plications for renewals of bonds all the questions before raised and also the legality of their membership in the board will be tested.
 The attitude of the Commissioner is further shown by his statement made last evening that he will to-day accept in renewal bonds from the Continental Insurance Company of New York, the Merchants Insurance Company of New Jersey. the American Insurance Company of Boston, the Northwestern National Insurance Company of Mil waukee, none of which are with the underwriters and which are pledged not to join.
 The determination of the Commis- sioner to carry the war into Egypt was no doubt intensified by the position of the insurance companies which are under his d1spleasure. The Board of