Evening star. [volume] (Washington, D.C.) 1854-1972, 1905-12-12
better LAWS NEEDED
Insurance Legislation W anted
in the District.
BILLS IN CONGRESS
LOCAL COMPANIES OPPOSE sENA-
TOR GALLINGER's MEASURE.
Tempest Stirred Up Among Organiza-
tons Doing Business Here-Su-
perintendent brakes Views.
BILLS IN CONGRESS

While the eyes Of the insurance world
are fastened upon New York, absorbing all
OF the interesting revelations incident to the
comprehensive inquiry now going on there
II he's become more and more evident to
interested Washingtonians that the District
OF Columbia, too bids fair to be consider
aDly exercised over questions growing out
or insurance during the ensuing winter.
Not that general investigation is either
imminent or deemed necessary but because
an earnest effort Is to be made before the
present Congress to secure more emphatic
legislation on the subject. A small-sized
tempest even now is raging beneath the
surface, and the office of the superintendent
OF insurance, in the Columbian Law build
Ing 9th street, is almost in a state of
siege dozens of hackers and officers of
local insurance companies being In rare
haste to discover the why's and wherefores
OF certain proposed legislation.
The whole insurance question has long
Deen IN state unsatisfactory to the au-
thorities, and on several occasions some OF
the companies and the superintendent OF
insurance have been in the courts each
seeking to uphold Il different Interpretation
OF the statutes. Supt. Drake of the insur-
ready some time during the present session
o. congress measure for amending the
code, and, while the bill has not yet been
drafted, the general ideas advanced for in
corporation into it have the approval of the
Commissioners.
The prevailing sGuall over the local insur-
ance field, however, has grown out of an
entirely different matter of proposed legis-
lauon. Another matter of some concern
too, is the status of the Congressional
Lie insurance Company" notice of whose
incorporation was published q few days
ago, with the information vouchsafed that
Its capital stock consisted OF 100 shares OF
value of one cent each.
Senator Gallinger's Bill.
Storm No. 1, as it might be labeled, is
gathering around a bill introduced in the
Senate on December @ by Mr.. Gallinger,
While storm No found it's inception in
the minds of critics Of the company whose
capital is in inverse ratio to the resonance
of its name. incidentally. go officials in
the District insurance department assert.
II VIII ultimately be found that similar in
terests are concerned in both matters.
The bill introduced by Senator Gallinger
proposes an amendment to the insurance
laws of the District by striking out sec
ton 653 and substituting in lieu thereof
another section G53," by the terms of
which every life, health and accident in
surance company in the District doing
s
a condition of license, file annually with
the superintendent of insurance a sworn
statement setting forth that they are nav
Ing, and for the twelve months next pre-
ceding have paid, the maximum amount
named in their policies or certificates of
membership when the same became due
and payable and that one assessment
upon their members Is sufficient to pay the
maximum amount of any certificate or pol
icy issued by them, and that they have a
capital or guaranty fund, fully paid up in
cash, of not less than 100000; - provided
that all such companies or associate
Incorporated, licensed, authorized to do or
doing business in the District of Columbia
prior to the passage of this act shall have
not less than $4,000 in cash or invested In
securities within two months after the
passage of this act, and shall add to the
same not less than 5000 on or before the
31st day of December of each year there
after, until each shall have in trust the
sum of 100000. And any such company
or association neglecting or refusing TO
comply with the aforesaid requirements
shall have its license TO do business in the
District of Columbia revoked"
Local Companies Stirred.
Since the fact of the introduction of this
bill bcclme generally known, and the i'm
port of its contents was fully. absorbed
Superintendent Drake has been besieged by
the heads of nearly all of the smaller local
would rest content until they were assured
that such an act would not be passed until
they were given opportunity for hearing
II this measure becomes a law 1t is claimed
that many of these insurance associations
Will be forced out of business.
1t is absurd, said a highly excited Of
hcer of one of these companies yesterday
IN the presence of q Star reporter. why
VINO would think that an intelligent body OF
men could presume 10 entirely disregard the
rights of 50,o00 insured people In the Dis
trtct of Columbia. And If such law is
passed II viii be proven unconstitutional"
NO very great unea siness regarding the
passage of the act mentioned evidently is
felt by the members of the Congressional
Ilfe insurance Company" because in a re-
cent interview one of the stockholders of
this concern Is reported to have said that
1t was their intent to engage In regular
life and accident insurance business in the
District of Columbia, provided Senator Gal
fingers bill does not become a law and the
speaker seemed sure that it will not pass
stating as his reason that all the local com
panfes are hard at work IN opposition.
When asked whether Superintendent Drake
would issue a license to company with
only 81 capital, this stakeholder is quoted
its saying that the insurance superintendent
could not help himself. because he is bound
to follow the law and has no discretion in
the matter; that the law as ii now stands
compeis him to issue a license to any and
all applicants, irrespective of their condi-
ton financially, morally or intellectually
Concerning the capitalization at 81 only,
this man is further quoted to the effect that
under the prevailing law and practice
when companys capital becomes impaired
to the extent of the limit mentioned in the
code, the. company, by the consent of the
superintendent of insurance, must take the
necessary legal steps to reduce Its capita
to correspond In amount to the cash on
hand, thus keeping within the letter of the
law; that by capitalizing at 81, which is
permissible under the code the expense and
embarrassment incident to reducing the
capital stock is obvlated as the necessity
therefor could not possibly arise.
Need Of Legislation.
Commissioner Macfarsand was asked
concerning the legality of the incorporation
of an insurance company with small CAPT.
tai and said that he believed under the code
, such a thing is easily possible "LegtsIa-
ton for the purpose of more fully regu-
lating the conduct of insurance In the Dis
f IT,