The morning news. [volume] (Savannah, Ga.) 1887-1900, 1899-11-15
DEPOSIT SHOULD BE LARGE.
INSURANCE MEN DO NOT FAVOR A
REDUCTION.

Dill TO Reduce the Deposit Required
of Companies by the State From
S25,O0O to $4,000 Does Not Appeal
TO Messrs. Hull and Prendergast.
Claimed the Opportunity Is Too
Excellent for "WiIdcat" Compa-
mics to Get I'm Busin ess I'm Georgia.
Citizens Would BE Likely to Be the
LOsers-NO Company Has Ever Yet
Forfeited "A Deposit to Get Out of
Paying a Claim in Georgia.
The belief is entertained In insurance
circles in Savannah that the Duncan bll
which passed the Senate day before yester-
day and now awaits the signature of the
Governor to become a law, will be any
thing but benefit to the state. By 1t the
insurance companies doing business in
Georgia have to put up only 5000 as a
deposit instead of $4,000.
Mr.. r. NJ. Hull is no friend of the bill.
He is quite sure it will cost the people Of
Georgia more than they might gain
through more companies entering business
in the slate. 1t is his opinion that the OPP
portunity win be afforded any company
that might feel so inclined TO repudiate
large claim and forfeit the insignificant
amount that will be required by the state
as a deposit.
The deposit of SIS 900 has been required
of every. insurance company as a pledge
of good faith. and a guarantee that claims
citizens of Georgia may hold against the
companies will be paid. Mr.. Hull holds
that almost any company would prefer
to pay a large claim with a deposit of $685.
600 up rather than lose the money The
difference between the deposit and the
amount of the claim would go, but the
company, Mr.. Hull said, might trust Prov
idence and good luck to make 1t up in the
way of legitimate business.
Temptation is undoubtedly put in the
way of some of the companies by reduc-
ing the deposit, Mr.. Hull thinks. He
knows there are many that would allow
no consideration of the size of a deposit
to interfere with their prompt liquidation
of any claim, no matter what size, but
insurance men look askance upon some
of the concerns that insure life and prop
erty and would bank upon their forfeit
ing a small deposit rather than pay a
large claim. The rest would be easy, for
all the company would have to do to get
out of business in the state would be to
place their policies with some other COM
pany satisfactory to the state officers.
Mr. Hull does not think the number of
companies now doing business in Georgia
Will be augmented if the bill passes and
they are not required TO put up as large
deposits Nor will there be any reduction
of rates in consequence. In Florida there
is no deposit at all required, and insur-
ance rates in that state are now lower
than in this.
A considerable deposit with the state
treasurer is favored by Mr.. Hull. He
thinks the people of state should have
a guarantee of the integrity of a company
and its intention to act in good faith. Be-
sides looking at the matter from the point
of view of citizens, the state would be
benefited in having a market afforded for
its bonds. Mr.. Hull says South Carolina
wanted TO require the insurance companies
TO make deposits of state bonds some time
ago in order to create a market.
Some sixty insurance companies do bus
mess in Georgia. With their deposits in
Georgia and United States bonds the state
has a large amount of its securities in de-
mand. But few companies put up United
States bonds. 1t is believed there must be
81 100000 in the state of Georgia bonds on
deposit now. About $500, 900 would be put
on the market by the reduction of the de-
post required of the companies.
Mr. Charles F. Prendergast was also
asked for an opinion as TO the merits of
the bill. He agreed with that expressed by
Mr.. Hun as to the opportunity 1t would
afford wild cat companies, as Mr.. Prem
dergast called them, to come into the state
and skip out as soon as they found them
selves called upon TO meet some heavy
claim. Mr.. Prendergast regards the de-
posts that have been demanded by the
companies as a great safe guard for the
people of the state. During the twenty-five
/ or twenty-three years the law has been in
4 effect not a single company has forfeit ed a
| deposit, all preferring to pay the claims
/ that have arisen against them. Insurance
/ men trust the record may remain as clean
under the new bin that is about to become
! a law.