Evening star. [volume] (Washington, D.C.) 1854-1972, 1900-06-26
THE PROBABLE OUTCOME
ACTION BY INSURANCE
MIDDLE DEPARTMENT.

1t Is expected that the committee of seven
representing the Fire Underwriters Associ-
alton Of the District which went over to
Philadelphia yesterday to have an inter-
view with the officers of the Middle Depart
ment, an insurance organization that was
in session yesterday in that city, will
turn home this evening. The outcome of
the visit, 1t Is thought. will be that repre-
sentatives of the Middle Department, which
Is the ranking organization of the local
board, will come to this city and confer
with those interested in fire insurance bus
mess here.
1t is believed the local situa ton will be
gone into very thoroughly with the view
of devising some remedy for the existing
troubles The nature of the latter Is pref
ty well understood here, where for some
time past there has been good deal of
friction.
All Is not peace between the representa-
tives of what are known as the foreign or
agency companies and the local companies
The former claim that an undue share of
what is known locally as preferred bust
ness-touses and furniture-is obtained by
the home companies because of the control
of such business which they exercise by
their directors and stockholders and by the
payment of high commissions. AS a rule
the agency companies favor a reduction of
the present rates on preferred business. On
the other hand, the local companies insist
that the rates on commercial risks. which
are paid mostly to agency companies. are
too high and ought to be reduced.
Then came the question of limiting the
number of agents of each company, upon
which there was a difference of opinion and
the Potomac Company and several others
were lately suspended from the local or
ganizatiOn, the former insisting upon such
Limitation.
Action of Local Board.
When an attempt was made by the local
board to force a reduction of rates in the
v,rafa hrtSi tha tu,a1
panies decided to withdraw from the assoc
citation II that should actually be carried
out.
In addition to these outward causes of
disturbance in the harmony OF the fire in
surance underwriters of the District there
is the underlying difficulty in the present
financial condition of the local companies
the official figures showing that in some
cases the expenses of operation exceed the
receipts from premiums. the deficit being
made good by the earnings Of investments.
In the opinion Of some who have given
study to existing conditions there are at
proviso of either liquidation or consolida-
ton. or both, should be at once begun, so
that companies of large earning capacity
could be substituted for some of those now
in existence.
Three of the local companies are now
engaged in writing insurance outside of the
District, as 1t is believed the purely local
field is too limited to sustain so many COM
petitors.
After these and other phases of the local
situation are laid before the representatives
of the Middle Department. In the event
they should institute an inquiry of this
sort, 1t Is believed a new organization will
be formed by the various companies which
will take the place Of the present board,
which is merely voluntary organization
of insurance agents. The visitors will also
probably be reminded that the board COM
panies have to contend here with an ag-
gressive cut-rate company. and so, for this
and other reasons. 1t is thought that the
aim will be to establish here as strong an
organization as is possible. This will be
in the nature Of compact between the
companies. with a representative here
known as a compact agent, who will have
fact the agent will have the functions of
the present board but much ampler powers,
SO that his orders can be enforced.