Evening star. [volume] (Washington, D.C.) 1854-1972, 1900-06-04
Its PRONUNCIATION by Fire Under
writer's Causes Friction.
SEVERAL COMPANIES SUSPENDED
Statement of View From Each oil
Contending Forces.
RATE WAR PROBABLE

~
comply with the new regulation. The OBJ
ject of the new rule it is claimed by its
opponents. is to limit the number of agents
representing each company in this District
and that this is sought to be accomplished
by placing tax of IL per cent upon the
revenue of the company, or not more than
$25 per year for a single agent. For COM
panies having more than two agents, SIS
for the first and $50 for the second, SIS for
the third and 800 for every agent in addi-
ton to three maintained by any one local
company nonresident company. Here
tofore there has been no such limit on the
number of agents, and the result is that
the number varied from one to ten or more
for each company
1t is claimed that similar condition does
not exist in any other city, and that the
local companies especially. which do
large percentage of the local business are
suffering from the effects of the system.
The amount Of business done directly by
the companies is said to be comparatively
small. the great bulk coming through
agents. who are paid commissions The
rule of the board of fire underwriters. 1t is
stated was decided upon last February, to
go into effect IN May. but It's enforcement
was postponed and finally the date when 1t
should go into operation was fixed as June i.
The Potomac Insurance Company of this
city and several outside companies refusing
to comply with this rule, have been sus-
pended, stated. The immediate cause of
the enact .nent of the rule is said to have
been due to thu action of the Potomac Com
pany which had placed eighteen agents in
the local field.
Those suspended from membership were
Mr.. e. N. Waters. secretary. and Mr.. Alex.
K. Phillips. assistant secretary, of the Po-
tomac Insurance Company of the District
of Columbia: Messrs. Arms & Drury. Chas.
e. Banes. Jos. II. Bradley Chas. f. Hood.
Davidson & Davidson, Decide & Co.. Fitch,
Fox & Brown. Heiskell & McLeran. D. B.
McCary. Nauck & Nauck. D. l.. Reynolds.
& Fairfax, ]. S. Swormstedt the B. II.
Warner Company. the Washington Loan
and Trust Company and Wescott Wilcox
& Hieston. agents Of the Potomac Insur-
Son and Phil W. Chew, agents of the
Georgia Home: Messrs. Heiskei & Nc
Leran. agents of the Hamburg-Bremen and
the Rochester German: Mr.. a. S. Caywuod.
Swormstedt and Fitch, Fox & Brown,
agents of the Westminster Insurance Com
pany of New York
Statement by President Cohen.
President Myer Cohen of the Association
of Fire Underwriters in an interview with
a Star reporter today said:
THE Association of Fire Underwriters OF
the District of Columbia is purely voiun-
tary body. whose corner stone Is the faith
and honor existing between its members.
Up to Friday last it had one hundred and
forty-six members. who were the represent
tatlves of a total number of 100 COM
panies, either as agents in the case of nom
resident companies or secretaries and as
sistant secretaries and agents for local
companies. OF this total company repre-
sentation there were twelve local companies
and one hundred and eight companies or
ganized under the laws of other states and
countries. The expenses of the association
q YtYn 70 to
sessment upon the amount Of premiums re-
ceived by each company from its business
done in the District Of Columbia.
Last August there was held in the city
of Buffalo q convention of local fire insur-
aEce agents. numbering about seven hun
dred. who came from all sections of the
United States. to attend tits the fourth
annual gathering. This association of
agents has accomplished many reforms IN
the conduct of the insurance business, all of
them TO the betterment of general cOndi-
tons There IT was resolved that the sys-
TEN of multiple agencies should be con-
demned. and a request was sent to every
company that in towns of one hundred
thousand Inhabitants each company should
have but one agent; and in cities of a
greater population a reasonable number, de-
pendent on circumstances. This idea WAS
the subject of much consideration by vari-
Gus insurance men in this District during
the winter, and in response to almost
unanimous feeling our association adopted
of the expenses of the association from
a percentage assessment TO a graded tax,
dependent upon the number of agents that
each company maintained. This law was
adopted by an Overwhelming majority of the
members of the association and was to be-
come operative May l. but for various rea
sons the date of compliance was extended
from time to time. until June l WIS the
date finally set
Committee of Twenty-Seven.
"Coincident with this action on our part.
Il committee of twe1ty-scven composed Of
the leading insurance managers and pres-
dents of companies. held meetings in the
city of New York, having in mind the gen
eral Improvement of the business. That
committee may no: complete its work until
late In the fall. They are virtually a unit,
however in agreeing to limit their agents
in every city of the United States to one
agent"
Thus it will be seen that the action that
our association has taken is in the direc-
ton. on the one hand, of meeting the ex
pressed sense of the greatest body of insur-
ance agents ever organized in the United
States. and. on the other, responds to the
wishes of the managers of the great insur-
companies who conduct general bust
ness everywhere
1T became necessary on June 1 to sus-
pend the secretary and assistant secretary
of one of the local companies and its sew
enteen agents, and but five nonresident
companies. 1t is true that there are other
nonresident companies whom 1t may be
necessary within short time to suspend
from the association for the reason that
they have not complied with the new law
In its entirety; but at the present date
every other company out of a total of 100
have complied with the law either entirely
partially, except but six companies. Our
association. like most American institu-
lions, is government Of majorities, and
much as we may regret whatever ensues,
1t is the general belief that the step taken
by the association is in the right direction
and meets the approval of those who take
a broad view of the situation.
'If general rate war results, it will be
brought about by the fact that these six
companies have not complied with the law.
and they must bear the odium of being the
cause of great suffering to every fire in
surance agent doing business in the Dis
trict and great financial loss to all COM
panies. and especially the stockholders of
the local companies"
Regarded as Practically PrOhibitOry.
Mr.. John T. Arms the president OF the
Potomac Fire Insurance Company, said to-
day to Star reporter in regard to the sus-
pension from the board of the representa-
tives of his company:
THE Potomac feels that the new rule of
the board is practically prohibitory and
that it would be impossible to maintain
agents on such terms, as the company has
but recently entered the general field of