Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1902-10-21
An ILLEGAL COMBINE
Insurance Men Alarmed Over
Mullan's Opinion in the
Burlington Case
ONE CLAUSE OBJECTIONABLE
The Insurance Combine is undoubt-
eddy illegal and the Companies in the
Compact Would Be Unable to En-
force Uniform Rates Except by IL.
legal Agreements.


legal Agreements.
Des Moines, Oct. 21.-The letter sent
to the governor by the business men of
Burlington asking him to make an in
vestigation into the insurance combine
in Iowa to discover its nature and to
determine whether or not it can be pre-.
vented from doing business is awaken
ing some of the insurance men to the
danger of the present situation in Iowa.
Last winter some insurance legislation
ing legalized uniform policy, but the
insurance lobby, the most powerful one
which controlled the legislature, re-
fused to allow any such legislation. The
insurance combine had had men en-
ployed all the year previous at work.
fixing the newspapers and educating
the public on the necessity for no legls-
lation. The action taken by the Bur-
lington business men, If 1T is followed
by definite action on the part OF the
governor like that which he took in re-
gard to the Rock Island reorganization,
will force the matter before the next
The matter has been brew
ing for long time. In 1897 insurance
adopted what is known as
the Iowa uniform policy. which con-
tains clause reading as follows:
"Or in case other insurance is per-
mitted and additional insurance be not
valid and collectable insurance. then
and in every such case it shall be held
to be an election upon the part of the.
insured to cancel said policy, and the
same shall stand Cancelled from the
Of any of the foregoing
events"
1t appears form correspondence and
papers submitted to the governor that
this clause and the entire policy We're
referred to the attorney general IN Aug
ust, 1901, and that at that time Attor-a
ney General Mullan wrote an opinion 10
State Auditor Merriam, in which he
stated that he could place no other con-
struction upon this clause than that II
was an agreement between the compa-
MES that if insurance other than that
authorized in Iowa was taken out the
authorized insurance therefore lmme-
diately. became invalid and uncollecta-
bile. But Gen. Mullan strongly con-
demned the clause, saving:
..The clause is certainly a remarkable
one, and one which In my Judgment
should be eliminated from all fire insur-
ance policies within the state OF Iowa.
/ can see no particular benefits which
will accrue to the insurance companies
nv the retention of the clause, ana
clearly see many hardships which may
be sustained by the policy holders II
the clause is permitted to stand.
But the insurance companies dong
business in Iowa and connected with
the Iowa board Of insurance companies
have retained the objectionable clause.
and are now writing insurance with 1t
Friday business men of Bur
lington. thru one of their number, laid
the matter before Gov. Cumm,ns. They
enclosed a copy of the opinion OF the
attorney general and letter Of the
state auditor, and stated to the gov
ernor that the Iowa standard policy FOR
fire insurance contains this clause,
(which enables the companies licensed
to do business in Iowa to force any one
to use only their companies and run the
risk Of having the insurance forfeited,
and the insurance companies have tax
en- advantage of this to materially in
crease their rates in this state. and
have entered into combination for
that purpose, and they have put II,
the power of one man representing all
the Iowa board companies, Dir. Bennett.
of Cedar Rapids, to raise rate on
every risk that shall be binding upon
all the board companies" The Bur-
lington business men declare they do
not believe the board companies are
justified in raising the rates if justified
that the manner of doing so is con-
trary to law. They therefore ask the
governor to investigate and see If sons
relief can not be afforded.
They enclose a letter received by
them from State Auditor Merriam,
written October H. in which he stated
in regard to this clause:
"'The 10 awuniform policy has never
been approved by this department, but
as | understand 1T, the said so-called
Iowa uniform policy was prepared by
q number of attorneys representing
said board companies and has never
had any approval by this department.
Relating to the clause in said policy
between the lines 81 to 40, will say
that heretofore said clause was sub
mitted to the attorney general, and l
enclose herewith a copy of his opinion
this matter. II you desire to
have policies passed on by this de-
partment we will be glad to do so If
you will forward copy to us"
1t appears further from the letters
Of the Burlington people that they sug-
gest some changes in the clause, which
were not approved by their local
agents.
The matter is now up to the governor
to make an investigation as to whether
Or not the stringent Iowa laws in regard
TO combinations in insurance matters
are in fact violated by the insurance
people, and to Jake action looking to-
ward an ending of the difficulty.
FORMER loWAN DEAD.