The times., 1901-05-26
INSURANCE MEN At Odds
Fears That General Rate War
May Be Precipitated.
Board of Underwriters Making
Strenuous Efforts to Get NOn-sIem
bers to Join - The Business Mt
Present Said to BE Improbable


bers to Join - The Business Mt
Present Said to BE Improbable.
Another sharp outbreak in the local fire
insurance situation is threatened. Fears
of a rate war are entertained and caustic
letters have passed already between the
Board of Underwriters and some of the
companies and agents outside the board.
In the opinion of some of the foremost
insurance men in the District, the situa-
ton is rather worse than better than 1t
was year or more ago, before the out
break and the reorganization of the
board. Such cut to or cents or
$780, for preferred risks" is suggested
as possible even.
A letter was sent to the Northwestern
Company by Compact Manager Hamilton
of the board recently, suggesting that the
| Northwestern become a member of the
board. and intimating very strongly that
there will be a general abrogation of rates
in the near future if the outside compa-
MES do not join and live up to the rules
of the organization. Similar letters We're
| sent to other outside companies.
The arguments given by Mr.. Hamilton
make the standpoint of the board clear in
| a nutshell. He asserts that the outside
companies generally refuse to take any
business except preferred risks, and that
! doing this they are able to cut under the
| board rates with safety, thus securing, as
| 1t were, the cream of the business, and
| placing the board concerns at a disad-
| vantage. He states that the insurance
| business is being run at loss in nearly
| all cases in the District. These conditions
he states, will make it necessary to take
| the very unpleasant and costly step of
! throwing the business wide open, abro-
| eating al fixed rates or preferred bust
ness and letting anyone write insurance
/ at any rate and in any such fashion as
| he sees fit, unless the outside companies
are willing to join.
Inc Northwestern Company has not an
| swered the letter, but the statement is
made on the authority of an officer of the
| company that it has no intention of join
ing, no matter what the board may
threaten or do as a result of it's keeping
out.
The Northwestern Company has never
been a member of the board in this city
or of any of the other insurance organiza-
tions throughout the country Some of
the other companies now outside the
board were formerly members. but have
not yet Joined the new organization for
sa3eS wSe5 Se
that it would join only on condition that
all the other companies and agents in the
District became members. AS there are
numerous concerns outside, this company
| still takes its first position. Other concerns
and agents, apparently considering the
position CT the Northwestern a desirable
one, have taken the same frank stand as
the Northwestern, making no pretence of
intending to Join.
w. D. Sullivan, local agent for the Sun
Company of London, and for the Citizens
of New York, is not member of the as
sociation, but 1t is understood that he
may join shortly. Mr.. Sullivan has re-
| maihed outside of the board thus far be
cause of the rule of the organization alb
| rogating all relief measures. In the old
organization ii was rule that an agent
might write business at lower than board
| rates when in competition with a nom
member company under certain restric-
| tions. This rule was thrown over entire
| ly in the reorganization, the theory being
! that although this might work some hard
ships in individual cases, II would be Tor
the general good in doing away with one
! OF the chief loopholes for violation OF the
! board rules Mr.. Sullivan had a consid-
! erable amount of business at lover than
board rates in competition with non
member companies and he wished to con-
| tinue this business al the same low rates.
| This Manager Hamilton has forbidden
The case of the different companies rep
| resented by E. II. Cumpston is particu-
| larry interesting one. He has had several
companies which were not board concerns,
and il is understood that when the new
board was formed the promise was made
! to him that these companies should be
allowed to renew all their ola business AT
| the lower rates on condition that he should
! come into the board and write no new
business at cut rates. Mr. Cumpston was
made agent of the German American Com
| pany, too. and as the German-American
1 has always been a board concern, II was
| supposed that this move was taken TO es-
| tablish him firmly a member. 1t is
| now understood that the association re-
fuses to allow Mr.. Cumpston to write his
| old business at the lower rate, the asser-
! ton of Mr.. Hamilton being that there was
| no written agreement regarding any such
| business and that he knows nothing of
| any such arrangement. Mr.. Cumpston,
| while nominally member of the board, is
| insisting on his agreement, and Is for this
| reason somewhat at odds with the organ
/ izatioL. Mr.. Cumpstons other companies
| are the Teutonic. of Philadelphia, the
! Firemens, Of Baltimore, and the Nation
| al, of Allegheny.
Other concerns that are not members of
| the board are the Milwaukee Mechanics
| represented by James A Cahil, and the
| Traders OF Chicago, represented by X. T.
! L. Yellott.
The fire insurance business of the Dis
| trict, and of the entire country as well,
! has not been paying enterprise for the
| past few years. 1t Is understood that not
! more than one or two at the most of the
! local companies made any money out of
| the business during the past year In the
same way the outside companies doing
| business in the District failed to get any
| return for II in most cases. Throughout
the country the fire losses have been
| growing heavier. for various reasons, one
| of the chief being defective electric wir-
ing it is understood. The reports of ali
the companies doing busiress in America
| showed that during the last year only six
! made any profit.
! 1t is this situation that is at the bot
tom of the trouble in this city, as well
| as in other places Locally 1t is felt that
| rates generally are not high enough, even
| when they are lived up to. There has
| been a general feeling that there should
be a readjustment Of rates on higher
| scale. This, however, could not be ac-
complished without very strong board
| with practically unanimous membership.
| The new organization mad hoped to ac-
| complish this harmony, but as yet it has
not succeeded.
The alternative plan of abrogating
| board rates would not make the business
in Washington any more profitable, but on
the contrary, would make a heavy loss
| certain. The only hope would be that 1t
| would force the non-member companies
either to join the board in time or give up
| their Washington agencies. The
| member companies have made money
| chiefly by writing only preferred risks. on
| which the rates are comparatively high
| and the losses few IT is on this class of
| business, therefore, that the cut of rates
| is proposed. Preferred risks are in gen
! eral terms brick dwelling houses, ii being
found that the percentage of losses in
| these buildings is the smallest. The state
ment Is made that the rates on this class
of business may be cut to or cents a
| hundred dollars This would be only
quarter of the present rate of 20 cents. and
it is not suggested that it would pay for
the fire losses.
The old tendency toward a split between
the local companies and the outside CON
Germs having agencies in the city is being