New-York tribune., 1906-05-16
ASKS LOWER RESERVE.
Miles ~. DascSon Makes Strong
Statement on Fire Insurance.

Washington. May i5="There is not a fire in
surance company i'm this country that knows
whether IL wiz be solvent not when it pays its
San Francisco losses" This statement. coming
as Il did from Miles NJ. Dawson sctuary for the
Armstrong committee of New York somewhat
startled the House Committee on the Judiciary
to-day. Mr. Dawson was discussing the question
OF a model insurance regulation act for the Dis
trict Of Columbia. 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, he said,
TO put most all Of the American companies out
OF business, while not one Of the British COM
panies failed, notwithstanding they paid every
loss they had in that conflagration. Since that
time the British companies had been constantly
increasing their business. This was not because
the English companies had any more money, nor
were any better insurance men, said Mr. Daw-
son, but because the laws of this country re-
Qured American companies to hold reserve
fund amounting to so per cent of their capital.
The reserve Of the British companies was but
30 per cent. This allowed these companies a
larger capital to meet such a loss was Occa-
stoned in Chicago The lesson should have been
learned then that IT was not large legal reserve
that made a company solvent. American COM
panies which could not get into their so per cent
reserves went into the hands of receivers. Brit
ish companies which could use their capital
down to a 30 per cent reserve lived through the
demand.
Mr.. Dawson suggested that the bill should
provide for a 80 per cent. reserve, with fur
ther provision that two-f1fths Of this so per
cent. might be used to meet conhagration losses
Mr.. Dawson went over the Ames bill, sug-
gesting amendments In many places It was, he
said undoubtedly to be desired that this bill
should partake of the nature of a model meas
ure. However, he realized the many difficulties
in the way of this accomplishment
Commissioner O'Brien, Of Minnesota; Repre-
sentative Ames and Major Ashworth were
heard briefly in addition to their statements OF
yesterday.
H j. Messenger actuary for the Travellers
Insurance Company, gave his support TO the
BILL He suggested several changes wnlcn WouIo
be necessary and expressed the bellef tnat the
legislation would be beneficial
Mr.. Lawson finished his observations with the
suggestion that the committee would 90 wen Wen 70
obtain authority from the House 70 commune
its inquiry during the summer months, not Tor
the purpose OF investigating insurance COM
panies, but to investigate insurance laws.
In answer to query by Mr.. Parker as TO VINO
he would suggest to aid the committee, he said
first Charles E. Hughes and second Senator
Armstrong
carefully the question of including in the bill
limitation 20 be placed on expenditures OF COM
panies for obtaining new business ne tnor.
publicity feature, he said. would safeguaro the
interests Of the policyholders as far as it was
possible 20 do So
sis by A A. Welsh. second vice-president and
actuary Of the Phoenix Mutual Life Company;
James NJ Craig, actuary OF the MUTUAL LIE;
J. H. Mcintosh general solicitor OF the Ne"
York Life company.