New-York tribune., 1908-11-11
SURETY COMPANY PROBE
INSURANCE MEN MEET.
SeUen State commissioners Take Up
Fidefty Business.

The heads Of seven state insurance departments.
members of tho special COMMITTEES Of nine ap-
pointed at the recent convention OF the Nanonai
Association of Insurance Commissioners 10 invesu-
gate the business of fidelity and surety companies
heean their sessi ,rs Yesterday at the Hotel Man
haitian. The work of the committee is likely 70 re-
suit in report that will recommend some drasuc
changes in the method Of conducting the ndehty
and surety branch Of the insurance business The
members Of the committee present az yesterday
meeting were E z Rftteuh house, chairman. OF COLO
rado: Otto Kelsey. of New York: Joseph Button
OF Virginia: John A Hartfgan. Of Minnesota; j V
Barry of Michigan: T. H. Macdonald, Of Cennecu-
cut and James r Young. Of North Carolina
The committee Is charged with the formulation
Of uniform for the regulation Of the business
and administration of the fidelity and surety FORM
Of insurance This character of insurance is about
fifteen years old. and there are now in the United
States some forty-ve of these companies operating
without the control of any standard Laws Ihe
insurance commissioners have long recognized. the
need laws. and one of the particular mis-
sions of the commissioners is to establish uni
form standard of sovency and system Of liabilities
and assets While Il Is regarded as possible that
some Of the companies will resist any plan sug-
gested for the increase Of the required capital ana
reserve the trustworthy companies recognize, II
was said, the need of more careful and scientific
regulation.
Chairman Rittenhouse said in calling the confer
ence to order that the committee ARE glad TO see
the people get their protection at low cost but we
do not want to the cost low to leopard
ize the solvency OF the companies doing the guar
anteeing" He asked. in his opening address:
Who 1Eaa1t gHqFantees tees the guarantee comPanbesgf bf
engaged In the business Of gisranfeeinr the hon
esty and solvency Of individuals and corporations
sutfng from the dsheDesf9 and insolvency 3 Of
Naturally they have found an enormous de-
nand IL, for such ggaga9tees and t9ey have entsr9d
every community in the Country
In doing this they have assumed liability for
haps oons OF millions and
in order to safely assume this enormous Habil-
Of the utmost Importance that these companies
a 70 the e z 9he FFa a5d
gations-may not be questioned and that they
may Justly enjoy the full confidence and support
Under ths laws OF most states the insurance
eoineney s 9eeo a. VPen b TO certify to the
is grave responsibility The courts. knowing
rssionsr Seldom iooR any T uTfSer IN se
fTa IN ,1S,Sda 10 @ s0grt bends The is
, world In diseharging these duties as supervis-
some Of these companies were not as sound as
they should have been. that their standards Of
porting assets and liabilities we're IN snH nr 9
stances incorrect and lacked uniformity.
Mr.. Rittenhouse quoted some figures showing
that nine ont Of the fourteen largest eopanes had
ret loss Of capital and surplus during the last
four years of $l.s03472 owing 10 low rates result
Ing from keen competition, that only five COM
pantes Indicated ability to make profits under pres
ent conditions
Mr.. Rittenhouse continued:
This unfortunate condition. it j. claimed is due
almost wholly to inadequate rates but we are told
that adequate rates have been restored For how
long? How will IL be before compatftion
again induces md the stronger to underbd the weaker
manenSe? Who guarantees the guarantee com
AS direct representatives OF the public who pat
ronize these companies the members of this com
rittee are glad 70 the people get their protsc
tion al low cost. but we do not want TO see the
companies doing the guaranteeing
The haphaZard methods of determining soIvency
abandoned II Is, perhaps needless to sav that
the recommendation of this committee will he
made In no spirit of unfriendness antagonism
10 the companies No desire 20 try QUESTION: HE
experiments exists and effort to burden the
companies with unnecessary restrictions will be
made The door to further expansion and deyeIon
n1ent must not he closed Vtisb % $780, v,
all that the purpose is not 10 restrct but 10 in
crease the usefulness of these companies bv rails
this COMMITTEES have no hobbies 10 force into the
statutes They simply irving to assist in cor
Tectng situation which is fully recognized as
dangerous and intolerable by company officials s
we'll by others, and they hope have the assist
ance OF the companies
At the continued session this morning representa-
tives of some Of the fidelity and guarantee com
panies will meet the committee and discuss the
proposed reforms from their point view
The committee on laws and legislation Of which
Commissioner c. c. Lemert Is chairman met
yesterday discuss the question of standard pro
visions for fire and accident insurance policies.
At a meeting OF the executive committee OF the
national association also held yesterday Com
missioner Hartigan OF Minnesota was elected sec
retary Of the association. succeed E, J. Brinker-
hon. resigned.