The Detroit times., 1908-08-27
PUBLIC ROBBED OF
s6O,000,000Y YEARLY
IN PREMIUMS
ExTRAvAGANT EXPENSE Ac-
COUNT OF FIRE UNDERWRlT
ERs HAS BOOSTED RATES OUT.
RAoEoUsLY.

That fire insurance companies, by
their excessive expense disbursements,
are taking s60.000.000 year more
from the American people -thaa they
shoulc Is the charge made by insur-
ance Commissioner Eugene J. Nc.
Givney. OF Louisiana, in the eGnven-
ton OF insurance commissioners and
actuaries In the Hotel Pontchartrain.
He advocates uniform laws n the
various states regulating the expendi-
lures OF fire Insurance companies and
preventing extravaganza and ravorit-
ism.
The fire insurance companies claim
"a be acting -as-tax agents, In @ way
SAWS Mr.. McGivney. They collect
premiums and pay Are losses, distrib-
uling the loss throughout the business
population. They are entitled to a
fair profit.
But their expenses amount to 40
per cent OF all the money collected.
which is far too much. This should
be cut to 33 per cent. The same laws
that control life insurance companies
could. with notifications, be adaptef
W TIC vi III = Ahohi "hNS NO'aA
panies and the American people would
be benefited by millions"
Mckinney contends that the records
of the fire underwriters show thar,
Notwithstanding the San Francisco
and other big fires, the loss percSnt-
age IL not greater than 1t was score
OF years ago when the expense items
began to swell and premiums to grow.
Cost Higher Than Formerly.
Before the conception of graded
and contingent commissions and other
devices OF favoritism and extrava-
gance," he says. "the companies fur
nished insurance indemnity al an
average cost to the assured OF II
cents cheaper on each hundred dollars
OF risks written than the average rate
the companies have been charging
the assured for the past five years.
This q cents advance In the average
rate based on the gross premiums col
lected for the year 1906, produced
about $50, OO0, 900 from the pockets or
the assured"
He gives the average dividends OF
FIRE insurance companies at II per
cent, while some have declared diVi-
dends as higfrr as 40 per cent.
This paper produced a considerable
effect on the convention and action
may be taken by the proper committee
during the year to draft suitable laws.
Grouse Is New President.
BENJAMIN F. Grouse. OF Maryland.
was elected president OF the associa-
ton. Commissioner Fred w. POTTERY
of Illinois. was made vice-president.
and Actuary J. j. Brinkerhoff. OF ILL
nuis- rs secretary fer the coming year.
The next convention will be held In
Colorado Springs. and Commissioner
Rittenhouse. of Colorado. was there
fore made chairman of the executive
committee. the other members OF
which are: Otto Kelsey. New York;
IT. II. Mcdonald, Connecticut; j. A.
Hartigan. Minnesota, and Joseph But
ton. Virginia.
The fraternal insurance committee
reported in favor OF the associations
working with the National Fraternal
Congress and the Associated Fraterni-
ties to secure laws by which fraternai
comranies shall not charge less thal
the Fraternal Congress rates. IL was
stated that, IL the fraternities be re-
Qtlired to charge the Same pIeHiuHn
as the old-line companies, they should
give the same non-forfeiture and
values in the provisions OF their con-
tracts. The investigation OF the GER
tifeates OF all fraternal companies by
the insurance departments was recon-
mended.
The legislative committee reported
that Michigan, Ohio, Tennessee and
West Virginia have adopted some OK
the bills recommended. while Mary
land is revising her insurance laws.
A radical departure In valuing the
securities OF insurance companies
was recommended in the suggestion
that the president of the association
appoint committee Of three to value
securities each year after Jan. l and
that the various state departments
adopt this valuation in investigating
the solvency OF companies. This IL
made necessary by the fact that mar
ket values have been a poor criterion
7 OF reat vafues during the past year
The insurance commissioners de-
sisted from labor Thursday afternoon
CONTINUED ON Page Six.)