The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1909-01-31
INSURANCE LEGISLATION.

The recent failure of number Of FIRE
insurance companies doing business in
Utah calls for action on the part OF the
legislature to protect the interests OF
the citizens and taxpayers and the buy
ers OF insurance. a few months ago the
National Mutual of Omaha expired,
greatly TO the distress Of the salt Lake
school board and other trusting policy
holders. Some time later. the Ohio Ger
man Of Toledo went into the hands Of
a receiver, and wholesale frauds were
developed. again greatly to the discom-
fort of the school board and others.
Then the Walla Walla. company or
gained largely on personal notes and
generally distrusted by the keeniy OBJ
serving, was detected in its operations
and put out of business, the public
schools and others suffering thereby.
Then the Guardian of Pittsburg merged
with the Southern of New Orleans, and
the Southern was Investigated, result
ing in failure and reputation. The
Cosmopolitan OF New York and the
Hamilton of New York, the latter es-
peciauy having sought strenuously to
avoid payment of honest losses, went
out Of existence. All told, the innocent
purchasers of indemnity bought insur-
ance amounting to millions Of dollars
which was worthless.
The deputy secretary of state, who is
acting as insurance commissioner, has
sought to dodge responsibility for per-
sonal and official endorsements Of these
insolvent companies by claiming that
the funds at his disposal were INSULT
oient for him to gain any information,
and therefore he has endorsed all COM
panies which would pay the state fee,
greatly TO the sorrow of trusting prop
erty owners. Wideawake insurance
men. by the payment of $40 to $50 a year
for reports and insurance journals.
have been able to gain the information
necessary to protect their clients, while
the state officials have gone or tacitly
or actively recommending fraudulent
and insolvent concerns.
The crying need now seems to be for
a measure which viii make proper pro-
vision for competent and honest inves-
tigation and for reporting on and con-
trolling insurance companies seeking to
do business in this state
The subject should be approached
carefully. and should be studied thor
oughly. Too much consideration should
mot he e-fx-a., q, tho ,g., 1,4s-t,.l g..
suranee giants. who are complacentIy
secure in their position. on the other
hand, weak and uncertain companies
should be barred absolutely from the
state
The legislators should not rush to ex-
tremes either way. It must be remem-
bered that the insurance companies.
properly administered. are merely tax
gatherers. They levy on the entire pop
ulation of premium-payers to provide
fund 20 take care Of the necessities Of
the unfortunate. Anything which goes
10 increase their burdens means the
levying of an additional tax on the
public. on the other hand. the COM
panies should be properly restricted.
One measure which is likely to find
favor with the unthinking, but which
viii not stand the test of intelligent
scrutiny, is the valued policy" law.
Incorporated I'm the bill introduced by
Senator StoOkey. This. in effect. de-
elares that If a man. by fraud or other
wise, can persuade an insurance COM
pany to enter into a contract of fnsur-
ance for sum many times the actual
value OF the property. in case of fire
the company must pay the full sum
mentioned in the policy, no matter what
the actual loss may be. Il a measure
were especially designed TO foster fraud
and incendiarism. it could not be more
effectively drawn. And the honest buy
ers Of Insurance would pay the penalty
in increased rates.
1t is to be hoped that the legislature
viii approach the subject in a spirit of
fairness and honesty. and will pass a
measure which will protect the public.
without being unjust to the companies
A capitol building would look right