Evening star. [volume] (Washington, D.C.) 1854-1972, 1900-02-03
Discussing Bill for Regulating the
Business.
HEARING BEFORE SUBCOMMITTEE
Chairman Smith Of the Board of
Underwriters in Its Favor,
MATTER IN ABEY ANCE

the District. Representatives jenkins. Al
len and Simms of the subcommittee were
present.
This bill was prepared by the Commits
sioners after consultation with the board of
underwriters, and has been published here
tofore in The Star.
Mr.. F. H. Smith, chairman of the board
of underwriters, appeared in favor of the
bill.
while nearly every state has provided
an ample code of insurance laws" said Mr..
Smith, providing in great detail for the
regulation of every class of insurance, the
District of Columbia has to the present
time substantially no legislation regulating
insurance. The result of which has been
to make 1t easy for irresponsible companies
to gain a footing here, with full permits
sion to any person, no matter what his oc-
cupation, to act as broker or solicitor and
to obtain commission therefore
1.-THE custom has grown up as In no other
city for nearly every one of the more than
$50 real estate agents to advertise insur-
ance as a part of his business. And out
side of this. very large number Of clerks
in the departments, clerks in the stores,
and engaged in every occupation, obtain
the control Of lines of insurance which
they peddle about among the companies
and agents, placing the risk with the one
who will give the largest commission. AS
will be readily seen, this condition of af-
fairs Is not only prejudicial to the assured.
who has no certainty OF his insurance be-
ing placed with a really good company.
but as 1t adds materially to the cost OF
transacting insurance business, also adds
to the cost of insurance in the District 1t
increases very largely the difficulties of
companies and of agents who make insur-
ance their principal business, and reduces
the compensation to which they are en-
titled for conducting their business. 1t Is
believed that in no city in the country is
the business of writing insurance conducted
under SO great difficulties as in Washing
ton.
1.-The bill under consideration is intended
to remedy the largest of these evils. Dur
ing the last Congress conferences were had
covering many months with representa-
tives of every class of life and fire insur-
ance and with the Commissioners of the
District of Columbia, and board of trade.
the result of which was reported by the
Senate committee near the close of the
last session, and too late to be acted on by
Congress This bill is substantially the
amended bill reported by the Senate COM
mittee at the last session. "
Functions of the superintendent.
"It provides for the establishment of
department of insurance for the District,
with a superintendent, at salary of 81 500
a year, and one clerk, with a salary of
s., 900. The superintendent is to have su-
pervislon of all matters appertaining to in
fetal orders and associations, subject only
to the general supervision of the Commis
soners of the District of Columbia No
company, agent, broker or solicitor is per-
mitted to conduct insurance without IL
cense from the superintendent Any COM
pany applying for license must furnish
the superintendent copy of its charter or
articles of Incorporation and a full state
ment of its business during the past year,
with evidence that 1t has paid-up cap
ital, which it holds in cash, or securities, of
the market value of at least 100000.
1.-THE superintendent is authorized at any
time to make an examination of the af-
fairs of any company, and to cancel it's Ii
cense IL he should find a shrinkage of its
capital to the extent of % per cent. 1t
must also appoint some suitable person,
resident in the District, upon whom legal
process may be served. The superintendent
Is required to see that a reinsurance re-
serve fund is maintained equal to 80 per
cent of the entire premium on unexpred
risks. The superintendent Is required to re-
port to the District Commissioners annu-
ally the condition and business OF each
company licensed to write insurance Mu-
tual and assessment companies and bene-
ficiary associations or orders are exempt
from the aboYe requirements but are re-
quired to present evidence that their bust
ness is being conducted in accordance with
the conditions of their charters.
Obligations of Agents.
Insurance agents who are the authorized
are held responsible for furnishing the re-
quired evidence in respect to the companies
they represent emitting them to a license,
and each agent must pay the sum of $50 to
entitle him to a license. Brokers who do
not themselves write insurance, or repre-
the agents of the assured, and place insur-
ance which they control with companies
or agents. also pay $50 license fee.
Solicitors who obtain insurance risks for
a Cd I'M n CO
fee. and If employed by an industrial life
insurance company pay 81 license fee.
Nothing in the act is permitted to abridge
the rights Of beneficial orders under exist
ing law, or to prevent any life insurance
company which has discontinued writing
new Insurance from collecting premiums
or dues and closing up Its business.
1.-THE bill provides penalties for the viola
ton of its several provisions, which are to
be enforced by the District Commissioners
in the District courts, all the fines col
lected to eturned over to the firemen's
pension fund in the District and makes an
appropriation for the conduct of the depart
ment during the current fiscal year.
Change in Original Bill.
1.-THE bill originally drawn in the last
Congress made the department an append
age to the assessors office, and the as
SCISSOR superintendent of Insurance. to meet
the objection of creating a new Office But
inasmuch as the bill will add eight or ten
'the District. it does not seem unrea sonable
to provide salaries to the aggregate extent
of $1,000, and it seems essential that the
officer having the department in charge
should be an insurance expert. As orig
inally drawn, very much higher license
fees were provided which. after consulta-
ton, were graded down to meet the re-
quirements of the different interests COW
cred. The bill has been made comprehen-
stve in its provisions, covering every class
Of Insurance, life and fire. to meet the diff
fculty of obtaining separate legislation for
each class.
1.-THE main object is to place the bus
mess of insurance within the control of the
law, with an executive officer authorized to
enforce its provisions. No license fee is
required for an insurance company or for
taxes to be levied on the premiums re-
ceived. the requirements Of existing law
In that respect being considered sufficient
So far as this committee of underwriters
are aware, the bill meets the assent of the
representatives of every class of insur-
ance. although 1t is too much to expect
that single persons will not appear to crit
icise some of Its provisions. We most
earnestly urge that prompt action may be
taken by this committee, and that the bill
may become a law at the earliest possible
eu