Evening star. [volume] (Washington, D.C.) 1854-1972, 1906-05-15
CRITICISED BIZ DAWSON


There Is not q nre Insurance company
In this country that knows whether It viii
be solvent or not when 1t pays It's san
Francisco LOSSES" This statement, coming
a. II did from Miles NJ Dawson. actuary
for the Armstrong committee of New York.
somewhat startled the House committee on
the judiciary today. Mr.. Dawson was dis
GUESSING the question OF a model insurance
regulation for tho District Of CclHmbaa-
His argument previously had been confined
to life insurance, but he made this slight
DEPRESSION to point out what he deemed
faulty provisions IN the Ames bill regarding
fire companies
The result OF the Chicago fire was. ne
said. to put most all of the American COM
panies out Of business, while not one or
the British companies failed, notwithstand-
ing they paid every loss they had in that
confiagration. Since that time the British
companies had been constantly increasing
their business.
Money Tied Up in Reserve.
This was not because the English COM
panies had any more money nor were any
better insurance men. said Mr.. Dawson. but
because the laws of this country required
American companies to hold reserve fund
amounting to 80 per cent of their capital.
The reserve of the British companies was
but 80 per cent. This allowed these COM
panfeS q larger capital to meet such loss
as was occasioned in Chicago. The lesson
should have been learned then that 1t was
not large legal reserve that made COM
pany solvent. American companies which
could not go into their 30 per cent reserves
went into the hands of receivers. British
companies which could use their actual
capital Town to 30 per cent reserve lived
through the demand
He suggested that the bill should provide
for a. 50 per cent reserve, with further
provision that two-fifths Of this so per
cent might be used to meet condagration
losses.
Legislation In New York.
On the subject OF life insurance, Mr.. Daw-
son gave the committee the benefit of his
experience with the Armstrong committee.
He drew the first draft OF the Armstrong
insurance legislation, which has just been
enacted by the New York state legislature.
This legislation, he said was not intended
in any sense as model" law, but was re-
stricted In accordance with the conclusion
of the Armstrong committee to correcting
evils which were shown to exist by the tes-
timony taken during the investigation.
In his long previous experience as con-
suiting actuary, he said, he had observed
that federal supervision of the right kind
would be very desirable. State supervision.
with the exception of Massachusetts, and
possibly New York, had proved monu-
mental failure. In New York, he said.
scandals had arisen three times, all of
which were of great magnitude.
Amendments Suggested.
Mr.. Dawson went over the Ames bill.
suggesting amendments In many places. 1t
was. he said. undoubtedly to be desired
that this bill should partake Of the nature
of model measure. However, he realized
the many difficulties in the way OF this ac-
complishment
Prior to hearing Mr.. Dawson, Commits
sioner O'Brien of Minnesota, Representa-
tive Anes and Maj. Ashworth were heard
briefly in addition to their statements OF
yesterday.
III. ]. Messenger, actuary Of the Travel
ers insurance Company, gave his support
to the BILL He suggested several changes
which would be necessary and expressed
the belief that the legislation would be
beneficial.