The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1899-10-24
AN INSURANCE RATEWAR
LOCAL BOARD OF UNDERWRITERS
MAY BE DISSOLVED.
State Board Failed to Help Settle the
situation I'm
indianapolis.

Indianapolis may experience an insur-
ance rate war. The conditions seem 10
point TO the dissolution Of the local board
of underwriters over the commission ques-
ton. The Indiana State Board Of Fire
Underwriters met yesterday, but failed TO
reach any agreement as to the best course
for the Indianapolis agents TO follow. The
matter did not come before the board prop
er, but the situation in the State was free
~ discussed in a special meeting OF the
committee Of the whole. Indianapolis is
outside Of the jurisdiction of the state
board, but the individual members are all
vitality interested in the local conditions.
Last week a petition TO the company
managers was prepared and signed by a
majority OF the local agents asking that
indianapolis be made an excepted city"
The state BOARD was asked TO encourage
and assist in bringing about the desired
end. A strong opposition developed, how,
ever. and the friends of the excepted city
plan did not have strength enough pledged
TO secure the Endorsement of the board. 1t
was decided to hold the matter over until
some further data can be secured from
cities now operating under the excepted
city plan. Milwaukee has just reorganizeo
its local board and a committee Of Indianap-
oils underwriters will probably visit that
city this week. The majority favor the
change, but the minority control a strong
influence with company managers.
TO avail themselves of an increased rate
of commission agents must represent only
companies which formerly were pledged to
a 10 per cent. agreement. Fifteen per cent.
was the highest commission allowed on
any cIaGQ of riSE ubila unAar tho IN rt,Ia
as high as % per cent. is allowed for pre-
fer. ed business. In many agencies there
are a number OF high-commission compa-
MES represented. These must be dropped
or the agent will only be entitled to 10
per cent. by the stronger union companies.
The rule of separation went into effect Oct.
], but lone of the Indianapolis agents nave
taken action as yet. fearing the conse-
quences. For, If the high-commission com-
panies are thrown out of an agency. they
this can only be accomplished by cutting
rates. Nonboard agencies will be estab-
lished and a general demoraiizatiOn pre-
cut by a high-commission company the cry
Of protect the business would go up and
a disastrous rate war would result. The
friends of the excepted city plan contend
that a rate war would be averted by adopt
ing their ideas. but opponents of the
scheme contend that a commission as we'll
an eXcepted city the local agents would
govern themselves and fix upon a certain
basis of commission.
A prominent local underwater, in COM
menting upon the situation, said to a
Journal reporter that only conservative and
unsclfish action by the individual agents
can prevent an outbreak in Indianapolis.
The situation is in a very critical con-
dition," he said. 'Wesare confronted with
the prospect of a commission or rate war
either way we turn, and 1t VIII take per-
Cnnal sacrifices RI carry nG fhr0nah the
storm. 1 believe that the local board or
underwriters is strong enough to manage
its own affairs, and / hope that the men,
bers will keep in line. / have built up a
fair business in this city and l certainly
do not want to see IL wiped away in a day
or two. Rate wars are the ruination OF
owners absurdly low rates for insurance
during a limited time, but they put the
agents into bankruptcy. In Illinois and
Wisconsin rates were thrown off In several
cities and the insurance agents lost all OF
their business. Failures were numerous.
and failures always affect the prosperity
of a city. We all hope TO get through the
present crisis without a split, but If the
worst does come ii will be goodbye to the
insurance business in this city for the next
nHe yfanS the rHe w sstne and IndianapoIis
would be made al example or. Company
managers would make ii a hot fight. so
wars. Look at indianapolis The feeling
IS rather intense and policies would prob
ably be given away. OF course the insur-
ing public would like these low rates but
there Is a great danger In rate wars. In
surance companies must get an adequate
premium for every risk carried In order to
promptly meet their obligations. If they
do not they will fail. A rate war is, there
fore. not in the best interests OF the city.
A settlement will probably be reached be-
fore the first of next month. But the local
agents i'm indianapolis will not sleep We'll
until all the clouds of war have blown away
and sweet peace reigns-'