Evening star. [volume] (Washington, D.C.) 1854-1972, 1906-02-23
A VERY SPIRITED COLLOQUY


land as to Legislation for
Ignorant Policyholders.
On very much smaller scale than the
New York insurance investigation, or
course. but none the less interesting in
view of The disclosures with reference to
the insurance methods In vogue in the Dis
trict of Columbia, was a public hearing be-
fore the board of Commissioners today.
The hearing was granted at the request
OF Col. E. B. Hay and Mcneil & Mattress,
attorneys. representing the Royal Insurance
Company. and about six others of the So
called smaller assessment companies doing
business in the District of Columbia, the
Whole hearing revolving round the bill re-
Gently prepared by Superintendent In
surance Thomas E. Drake. proposing an
amendment to the present section 653 of the
code of law of the District.
This amendment, in brief, contenplates
the retirement of deposit of from $4,000
to S5O.OO0 IN the registry of the District
Supreme Court, as a security that they
will meet all obligations as the same be-
come due and payable.
The hearing, as it progressed. became
more and more heated, and criticisms, re-
examinations and accusations flew freely
from side to side, one-haIf of the compa-
MES apparently being arrdyed against the
other.
The smaller argued that the larger want
ed to crowd them out of business, while
applause greeted the sally of a represent
ative of one of the larger concerns when
he said, They Uhe agents and officers of
the smaller companies) would not think OF
insuring their lives in their own compa-
Mes
Attorney McNeill Opens.
Discussion was opened by Attorney Nc
Neill who said that he represented the
Globe Insurance Company in particular,
and about six other concerns Were in full
sympathy with the arguments he would
make He said that these companies would
inevitably be crowded out of business if the
provision of the law that they deposit s1O,-
900 on or before December / next should
go into effect and this, he claimed. would
work the greatest sort of hardship on APP
proximately $4,000 poor people, whose saw
ings would thus be swept away at one fell
swoop.
AS counter proposition Mr.. Mcneil
suggested that these companies be re-
quired to deposit q certain percentage
each year, say per cent, and have the
fund thus established as security for the
insured.
After indorsng the statements of Mr..
Mcneil, Col. e. 3. Hay, representing the
Royal Insurance Company, presented a
brief. One part of this he read In 1t
claiming that 1t could not be shown that
one rightful claim had ever been sighted
by the company, and venturing rather
severe criticism of the actions of the
superintendent of insurance with refer
ence to the smaller companies.
He, too, presented a counter PROPOSE
ton. which will be considered by the Com
missioners. In reply to a question OF Com
missioner mcfarland as to the capital of
his company the speaker said $4,000, with
a surplus of 81 ,0O0.'
Mr.. Caves Disclosures.
The disclosures of the day, however,
were made in the course of his remarks by
G. w. Cave of 800 G street northwest, rep
resentatve of the American Home Life In
surance Company Mr.. Cave said, in part:
II am little surprised at my friend, Mr.
Hay, In saying that his company had a
capital stock of 5000. with surplus or
$1,000. The annual statement of his COM
pany, as filed with the insurance depart
ment for the year 1904. shows the COM
pany to have a capital stock of $1,000 and
a cash asset of $254.03; that is sworn to by
Mr.. Hay and Mr.. Evans.
"The companies doing business in the Dis
trict of Columbia have a capital stock of
from one dollar to twenty thousand dollars
They are doing a class of insurance business
states. The state OF Massachusetts will not
permit the existence of such insurance COM
panies as is suggested here today, neither
will they in the state of New York Mary
land requires the deposit of 100000. The
state of Virginia requires deposit of S1O,-
600.
There has been a great deal said by Mr..
Hay and Mr. MCNEIL. but the vital points
have not been touched. This class of bust
ness is bearing upon the poor class of people
of the District of Columbia They are col
lecting from these people. never telling
them they are paying into an assessment
company but to the contrary that they
will have to pay only the twenty cents
week. That | know, as ! am In the busi-
ness. Old line companies that furnish pro-
lection to their policy holders pay back
fifty to seventy per cent of their gross re-
ceipts, and in addition TO that they main
tain an additional reserve to act as
guarantee.
"The benevolent and fraternal organiZa-
lions pay back from 81 per cent to 500
ner cent These kinds OF insurance compa-
MES want to get in under the cloak of the
others. This kind of business pays back
from per cent to p per cent.
Mr.. Macarland's Inquiries.
Commissioner Macfarland asked If that
applied to all of the fourteen companies,
Mr.. cave replying that it did.
Commissioner Macfarland inquired If
that was the rule as to the companies he
represented. Mr. Cave stated that they
ali pay back from per cent TO 70 per
cent.
Mr. Cave continuing said: "The word as
sessment' as applied to these companies is
only used as a means of defeating the law.
The insurance law of the District of Co
lumbia is so vague that anything can do
insurance 1t promises most anything and
guarantees nothing 1t is up to the legis-
latiye body and the Commissioners TO see
that the citizens are protected. Any man
can embark in the insurance business AS
II is there is no protection to the insured.
The company has authority given IL by the
code allowing IL to collect any kind OF
premiums from the people.
.'There Is not one of the gentlemen pres
emit that would insure their lives in their
own companies. IL he was taken sick the
rest OF the men collecting the premiums
would paw the money In their own pockets
If there was an epidemic of one or two
weeks of grip the people could not get
their money. Their only assets Is the
money these people promise to pay. Should
they fail to pay, the people who have paid
have no protection. 1t is wrong to stand
up here and say that they think they need
bill to have per cent of the gross re-
ceipts and that is ample.
If that Is true why collect the other 30
per cent and pay it into their own pockets.
Is this just or Is it right? VIII Congress,
when this matter is brought before them.
give any thought to this class of BUSH