The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1909-01-04
TWO MILLIONS
LIS Excess of Insurance ReceiDts
Over Losses.
Attorney General jackson
Makes Recommendations.
ILLINOIS LIFE CASE.
Urges More Explicit and Strict
Laws.
Should Deposit Securities Be-
fore Doing Business.

Attorney General Fred s. jackson to-
day made public his report for the leg
1slation on insurance in which he sets
forth the workings of the present laws
and makes recommendations for strict
er legislation as regards foreign com
panies.
The suit of the Illinois Life to with
draw its securities from the state to
escape taxation is gone into and a law
recommended making it impossible for
any such company to do business in
the state with the deposit of security
The alleged rating bureau of the fire
insurance companies is also discussed
and a state rating bureau is urged as
solution of the problem. The attorney
general is convinced that such a bu-
reau would save the people of the state
thousands of dollars every year
The attorney general gives a few fig
ures in fire insurance that are start
ling to say the least. They show that
in Kansas in 1907. over two million dol
lars more than they paid out in fire
losses.
The report and observations are as
follows:
"At the time 1 entered the duties of
the office, there had been submitted to
the circuit court of the United States
for the district of Kansas a case in
pany had sued by suit in mandamus to
compel the state treasurer to deliver
to said company certain securities held
by the state treasurer and which had
been deposited with him by the Kansas
Mutual Life Insurance company, un-
der the direction of the superintendent
of insurance prior to the absorption of
said Mutual company by the Illinois
Life Insurance company. This suit was
shortly afterward determined by Judge
Pollock in favor of the state treasurer.
lrr%n-
by writ of error to the~circuit court of
appeals.
Securities of 5000. 600 Involved.
''The controversy involves the ques-
ton of whether securities amounting to
over 100000 now held by the state
pfaihtiff cornpanyss and removed from
the state- ----or-feft where they were
originally deposited for securing the
Kansas policyholders. The principal
reason given by the insurance COM
pany for seeking this change is that
said securities as now deposited are
taxable under the laws of Kansas; and
it claims that under its contract with
the Kansas policyholders, the said
policyholders must be made to bear
the burden of said taxes. 1t is matter
in which the insurance department has
taken great interest We have care
fully briefed the case and it will be
argued as soon as reached on the court
docket. L see no reason why the Judg-
ment of the circuit court should not be
affirmed. If the laws providing Tor the
assessment and taxation of such securi-
ties operate .unequally as to this COM
pany and it's policyholders. compared
with other companies and their policy
holders the legislature should remedy
that inequality.
State Law Is Inadequate.
"The briefing and argument of this
case has revealed the fact that there
is no law at the present under which the
aY1iz
the purpose of carrying on the business
of life insurance, can be compelled or
be permitted to deposit securities with
the state treasurer for the benefit of its
poIicyholders, as foreign companies do
in the states of their organization.
AS Regards Foreign Companies.
''There is a growing sentiment in
Kansas that too much money is being
paid to insurance companies OF other
states as premiums on life insurance
and this fact, taken with the increase
in the wealth and population or the
state will no doubt result IN the Or
ganization of many life insurance COM
panies in Kansas in the near future
Without the law referred to, such COM
NAMES would be at a great disadvan-
tage in transacting business as COM
pared with foreign companies. 1 rec
ommend, therefore, that the law exist |
ing prior to 1905 on this subject, or
similar one be re-enacted and compan- |
les organized under the Kansas laws
he required to deposit with the state |
treasI1rer securities equal in value to
the net present value of the policies is
sued by them, as computed under the
present state laws.
ct also recommend that a law be en-
acted prescribing the time in which
r1roceedings in error in the supreme
court NAV be prosecuted from judg-
rnents rendered in the district courts of
the state against insurance and. surety
companies, and that such limitation be
fixed at 90 days.
Fire Insurance.
shortly after my assumption of the
duties of this office the attempt on r
the part of a large number of fire
insurance companies, who were tran
sacting business in this state, and who
were subscribers to rating bureau
known as the Eldridge Rating bureau,
to increase the rates of insurance
brought to light the fact that an ar
existed among those who
were subscribers to said rating bu-
reau, which in my judgment constitut
ed a violation of the antitrust laws of
the state. 1t was charged that the
attempted increase was due to the at
tempt on the part of the fire insur-
losses in the San Francisco conf1agra-
ton With the assistance of the Su-
perintendent of insurance, / collected
such evidence as was possible and in
stituted a suit against said companies
IN the district court of Shawnee coun-
" Kansas, to enjoin the companies
from further use of the new rates and
said rating bureau. The trial of this
suit has convinced me that it is de-
be gathered concerning the nature of
-ba differeDt risks IID0u which fire in |