The Washington herald., 1907-03-18

open rates and a period Of the fereest
kind OF competition. under the burden Of
which some Of the local FIRE insurance
companies may be hard pressed are
predicted by prominent insurance men of
Washington in discussing the wholesale
cut in rates promulgated Saturday. The
action was taken by the District COM
mittee Of the Middle Department of Fire
Underwriters and followed the withdrawal
from the local board of underwriters of
all the local companies and their agents.
The long smoldering fires Of the conflict
between the local concerns and the agents
OF big Out-of-town organizations have
burst into flame. as it were, and unless
an unexpected truce is patched up be-
tween the warning factions, 1t is expected
that the battle viii be one Of eztermina-
ton
For many years the outside companies
have been trying to have the rates re
duced here. and have succeeded in secur-
ing slight reductions But reduction
of from Is to 30 per cent, such as first
promulgated by the middle department
committee. has always been bitterly
fought by the locals" ana some years
ago they withdrew from the board rather
than submit to the reduction proposed.
just as they have withdrawn on this oc-
casion. At that time there followed a
period of open rates, when agents and
local companies sought and secured bust
ness on whatever rates they chose, cut
throating one another right and left,
until. by force Of circumstances, things
Strengthened themselves and new board
Of underwriters was formed.
Locals TO ReOrEanlhe.
History is expected TO repeat itself.
To-day the local companies will hold a
meeting and organize themselves into
a board of underwriters of their own
Several of the prominent agents are ex-
pected TO join with the locals in the
battle to keep the rates as they were,
or at least make reductions less radical
in character. The withdrawal OF the
locals is not intended as a reflection on
the present local board of underwriters.
The rate reduction was not the result of
action by that body. as announced yes
terday through a misunderstanding of
the facts. The executive committee of
the local board voted seven to two
against the proposed cut but the middle
department committee put the matter
through over the heads of the local board.
The matter never came UP before the
individual members of the board.
The middle department is composed of
special feld men of the different under
writing organizations in Pennsylvania.
New Jersey. Delaware. Maryland, and
the District of Columbia It's headquaT-
tiers are in Philadelphia. Each State has
a committee as has the District, and Il
was this latter body that forced the
action through.
The local companies claim that il is an
attempt on the part Of the big out-of
town companies that have agents here to
force the locals out of business. 1t is al
legged In certain quarters that the for
eign'' concerns seek 10 get the Washing
ton business on their books at the new
low rates. and when they have the field
cornered 10 advance the rates as they
choose. 1t is the contention OF the locals
that the present rates are none too high
and that the wholesale reduction is UNI
called for. They say that the present
rate of 20 cents for brick dwellings is
cents lower than that in Baltimore, and
that the public has made no complaints
about the rates.
Claim Rates Are ExOrbitant.
On the other hand. the agents Of the big
companies say that the rates prior to this
cut were exorbitant and gave opportuni-
ties for traffic in commissions that tended
20 demoralize the business. Il is freely said
among those in position TO know that
under the rates upheld by the local COM
panies there has been practiced operations
that are discountenanced by the majority
of large insurance companies and in some
instances are violations Of Federal law
Il is alleged that the local companies
and many of the concerns having agents
here have been able 10 pay a host of sub
agents commissions as high as 50 and SO
per cent, out of which some of the agents
make a practice of giving rebates to their
customers in order 10 write large num-
Der of policies. This practice, an Illegal
one, could not exist. IL is claimed. were
the rates reduced as promulgated by the
middle department.
II is the consensus of feeling among
the agents of outside companies that the
locals can live and do good business under
the new rates.