New-York tribune., 1906-05-10
RATIFY RATE INCREASE
ILLEGAL, SAYS PARKER
Bases Tie5o on Contract Forming
Fire Insurance Erchange.

The New York Fire Insurance Exchange at its
monthly meeting yesterday ratified the increase o,
IRE insurance rates in this city which was voted
At a special meeting last Friday. Yesterdays
meeting was attended by nearly all the members
OF the Exchange ana it was exciting throughout
and stormy at finles.
The vote to increase rates was overwhelming. al
though there was vigorous opposition by some tot
the members Henry Evans. president Of the Con-
tfnentaI Fire Company. led the opposition
and was supported by Marshall briggs, president
Of the williamsburg City Fire Insurance Company.
The only concession they were able to obtain was
that the in rates should not affect risks
I'm buildings where automatic sprinklers are in
stalled. The increases in rates. as affirmed BY the
Exchange yesterday. vary from 10 20 25 per cent,
as stated in The Tribune last Saturday.
Mr.. Evans withdrew the notice he gave after
Fridays meeting that the Continental would with
draw from the Exchange. His decision 10 remain
Was interpreted at first to mean that he would
abide by decision increase rates, but he dis
PEELED that notion by declaring he had decided to
withdraw his notice because he had received an
opinion written by ex-Judge Alton B. Parker that
the increase voted on Friday was illegal and ne
need not abide by It.
Mr. Evans wanted 10 read Mr.. Parkers opinion,
but was prevented by the turmoil which followed
his announcement that he would stay in the EN-
change and fight its increase of rates. Later ne
allowed newspaper men TO have a copy OF MI
Parker's opinion
The opinion OF Mr.. Parker is based on the con-
takes care TO say that he does not pass on the
legality OF the contract nor assert that its pro-
visions could be enforced by resort TO the courts
The main points Of his opinion are the following:
fixed upon a consideration of local conditions m
dcates that establishment Of rates beseo not
cies Of the companies elsewhere. is beyond the
scope and intent Of the contract and in violation OF
Il. We do not wish 10 be understood as holding
that in the establishment of rates of insurance un-
OF business done elsewhere must necessarily De
eliminated. Rates here may be adjusted upon the
basis Of business experience; 10 the END that tne
premium receipts in this locality shall be adequate
and just as compensatlon for the hazard Ear assumed @
or business results elsewhere demonstrate that the
just return for the insurance of property within
this jurisdiction. then such considerations may con-
siitue basis for revision of local rates, for in
such the information gained from business
cation
II appears. however. from the computations OF the
FIRE patrol COMMITTEES OF the New York Board of
Fire Underwriters which you have handed 10 us
ance ia te baeed roI Local .onditons and business
results here for the five years resulted in pre-
oErred dnTipg the same period Of only SIS. 10
and we assume that this profit from the business mess
adequate for the local business. considered with
ont regard 10 business conducted elsewhere. Such
being the case we are of the opinion that an in
crease in rates, based upon the proposition that
The surplus reserves of the various companies
should be increased. and not upon the proposition
purpose OF an adequate and just establishment OF
the relation between premiums and risks in the
scope Of the agreement. and cannot be sanctioned
by its authority.
Acting on the decision, II Is understood that the
Continental will not increase rates. but will defy
the action Of the exchange. Mr.. Evans would not
make any positive statement on the subject yes
terday afternoon but he left it to be inferred that
his action I'm remaining a member of the exchange
would not bind him 10 increase rates.
Mr.. briggs said in the afternoon that he was Op-
posed raising rates. in spite Of the action Of the
exchange. but he would not what course he
would pursue President Sllalcross OF the exchange
said he thought there would be perfect harmony
and that the rates would be advanced by all the
companies.
The exchange yesterday ratified Fridays vote to
down brokerage rates to 10 per cent general
business and 20 per preferred business and
abolish discounts There may be trouble in
forcing this provision because il is understood that
many insurance brokers have special contracts
with some Of the companies.
Chicago May s-'The Tribune to-day saws: