The Meeker herald. [volume] (Meeker, Colo.) 1885-current, 1901-01-26
FIRE INSURANCE IN COLORADO

FINE INSUhANCC IN OULUnhUV
Remarkable Figures In Governor ThenaS
Msssass-ssys comPaniss Are rsk1ss
Five Millions Annually Out 81 ~
0tats-His Deductions Thoroughly Mis-
leading.
The message of Governor Thomas
to the Legislature, while an able docu-
ment in many respects is convincing
In the fact that his figures as to Fire
Insurance In Colorado are based upon
Information SO erroneous as to be actu-
ally ridiculous.
We quote from the Governors mes
sage:
INSURANCE ASSESSMENTS" '.''
The insurance companies doing busi-
ness In this state are by law required
to pay into the treasury two per cent
in excess Of the premiums annually re-
ceived over losses and ordinary ex-
penses incurred within the state. the,
estimated income from this source for
the present biennial period is $l9b,6U
or 1877 500 per annum. The actual re-
ceipts for the last two years exceeded
$215, 200. This means that the receipts
of the insurance companies from policy
holders are annually over $5,OOO000 IN
excess of losses and expenses, the
great bulk of which is taken elsewhere.
The percentage paid to the state from.
this enormous income, which is largely
profit, n insignificant. l am reliably
informed that the average specific IN
surance tax throughout the union y
over three per cent. An increase OF
one per cent on insurance receipts WILL
give an additional 100000 to the state
for the next two years, and the added
burden to the companies will be scarce
ly perceptible."
In another part Of the message the
Governor writes: Ia.
II have referred to the states euor-
nous insurance business. Over 5000
600 in excess of losses and expenses
are paid annually to these companies.
by far the greater part of which are
foreign This tribute constitutes
! tremendous drain upon our people. III.
The est mated premiums on fire In
| surance paid by the citizens of Denver.
from April, 1900, to December, 1900. 10
| 500, 900: losses by fire, $3.50 .629. As; ,
balance, S339, 37055."
Where the Governor got HIS figures
or his ideas as to the law is unknown,
and his deductions make a very untrue
| and unfair statement when he attempts
to figure from the amount of taxes
paid the apparent profit, as he even
eliminates the item of expenses.
The facts are that for 1899. the last
| year of Official reports at hand, the
total premiums paid for fire insurance
| for all companies combined. in Colo
RADIO, were 81, 705, 295. Losses paid were
$1,O72, 1853 or e. $40 per cent. Ex-
penses average 40 per cent. or $6S2.11S.
showing losses and expenses to be $1,-
754,787, or net loss to the business
In Colorado of s49, 1872 during that year.
The law taxing profits has been chang
ed and now the conpapies pay a per
cent tax on gross premiums, which in
cludes taxing losses and expenses. 1t
II safe to say that expenses average
| ) per cent higher in the mountain field
than In the more compactly built east
ern territory, owing to long distances
and high railroad and hotel fares.
We find that for twenty years the
average loss ratio in Colorado has ex-
ceeded forty-seven per cent. Figuring
expenses at forty-three per cent leaves
an apparent profit OF only ten per cent,
which is not high. considering the
hazardous nature Of the business and
constant liability to CONGREGATIONS like
those that visited and destroyed Grip
pie Creek twice and Victor.
The Governor, as quoted above, 10
evidently at sea as to profits when he
says the estimated premiums on IRE
insurance paid by the citizens of Den
yer from April. 1900. to December,
1900. are 100000; losses by IRE, $780,
s2s.45; balance. s339,37O55, emitting
entirely any allusion to expenses OF
1901 900, most Of which is spent IN the
state for taxes. commissions. travel
ing and loss adjusting expenses.
It IL a solemn fact that through CON-
petition, adverse legislation, and losses
and expenses the business of fire insur.
ance has not yielded one-half of one
per cent net profit In the United States
for all surviving companies for the
cycle Of 20 years, and that there have
retired or failed over three hundred
stock companies-the number Of mu-
tual companies that have failed being
beyond computation.
1t IL also fact that fire insurance
companies do not pay any losses or ex-
pens<A They are simply clearing
houses for the collection and distribu-
ton Of the fire insurance tax. They
put up capital for carrying on the busi-
ness. The policy holder must pay the
entire bill, and no matter how ap-
parently burdensome the legislation IN
made against the corporations the pre-
MUM payer pays the entire cost