The Newark star and Newark advertiser. [volume] (Newark, N.J.) 1909-1909, 1909-07-09
FIRE INSURANCE
MEMS eide GIVEN
IN SNhYZE OPINION
CONTINUED from First puge.D

attempts TO escape since the decision Of
Paul VS.. Virginia, are really in the ma
ture Of privileges and franchises. be-
cause they exclude from competition
all companies which cannot attain TO
the legislative standard or comply with
the legislative conditions. These regu-
~lations might indeed amount to priv
ileges and franchises # the State bound
itself not to relax them or not to admit
other companies on less onerous terms:
but there can be no privilege or fran
chise where the State grants nothing
and the restriction Of competition by
means Of these salutary regulations
does rot Inoun TO On agra.nent on
the part OF The State 10 continue them.
The Legislature may today ADOPT reg-
~!afions which would require O company
TO have a capital Of a million dollars,
and after the companies that could do
SO had compiled, perhaps With great
difficulty, with the legislative require
ments, those requirements might be re-
duced and the companies with large
capital would have no redress. Indeed,
the Legislature, far from making these
regulations amount TO the grant Of a
special privilege. has taken pains to
RAOf y A1AoAA viz 0A II MUTUAL
plan and for the formation Of associa-
tons known as Lloyds 6P. L. 1896, 1863,
under which any twenty men of sufh-
Gent substance may insure as indi-
viduals.
What Legislature Can Do.
although our Legislature can deter
mine the conditions on which foreign
companies can do business in the State.
1t ann prevent them from under
writing New Jersey risks il they choose
to do so al their own domiciie. ALL
geyer VS.. Louisiana, 165 L. S. 57s.
1.-THE remedy for the evils supposed
to he due to the compact now con-
demned by the court has been in the
hands of the Legislature ever since the
Newark Fire Insurance Exchange was
formed, in 1902. 1t was simple n re-
quired no litigation to establish its eff
cacy, but the Legislature has failed to
prescribe any additional requirements,
and, as far as the foreign companies
are concerned, has allowed the super
~intendent of insurance to renew their
licenses in each successive year. 1t is
not for the court to add to the legisla-
tive requirements. Such has been the
holding of this court with reference to
the statutory signals required to be
given by railroads; and l think our de-
cision in hat respect is applicable to
the present situation.
THE reason why the Legislature has
failed to act is probably the same
reason which led the Legislature of
Missouri, in passing a statute against
combinations of this character. to ex-
empt from the operation Of the act
cities of more han 100. 600 inhabitants
State VS.. Firemen's Fund, 50 S. W.,
Rep, 595. 1t has a solid basis In the
greater fire hazard in the larger and
more compactly built cities, many Of
which are built of frame structures and
consist of extraordinarily hazardous
risks, where regulations such as thos
of the Newark Fire Insurance Elk
change are peculiarly desirable fer the
public safety. The failure to exercise
the legislative power to forbid the pres
ent arrangement is conclusive evidence
that, in the view of the Legislature, ii
was not inimieal to the public interest
There is no reason why the Legislature
should not have exercised this summary
and extreme power, which is not ap-
.lplicable to the exercise of the same
power by his court. For us to decide
that this business has been continued
Illegally for all these years is to suggest
that the Legislature has failed in its
duty. 1 cannot believe that that accu-
sation is just.
Risks at Company's Discretion.
AN insurance company is certainly
at liberty to reject absolutely and with
out assigning a reason risks which are
too hazardous to De insured at all, or
in which experience has failed to
establish a basis for rates of premium,
or In which the moral hazard is bad.
In such cases the insurance company
must decline TO insure if it is to hold
itself ready to pay natural losses of
honest insurers. The act that the in
surance companies cannot, if the bust
ness is to be successfully conducted,
, insure all who offer is itself enough to
show the error into which the court
has fallen in holding that the business
is one affected with a public interest.
"AIso Free to Advance Rates.
Since the companies are free TO de-
cline all risks, 1 do not see any logical
reason why they may not agree in ad-
vance upon the rates al which they
will accept the risks. In substance
what the insurance companies say is
this: The Exchange will establish
frates: if we moose to do business in
Newark at all, we will do business al
those rates. but it is still open to tbs
companies to accept or decline any
particular policy But for the respect
which 1 entertain for my brethren, ]
should think it absurd to say that an
agreement not to do except on certain
conditions what they are at liberty not
to DO at all, amounts to a merger of the
companies. In fact. as the insurance
business is conducted. the question OF
premium rates must necessarily be left
to skilled underwriters familiar with
the conditions in the particular locality.
All of these companies probably dc
business in many different localities in
many different States under widely
varying conditions of hazard.
Rebates and Life Insurance.
1--WE have been at pains in his State
to pass an act making il criminal to
allow rebates from the premium in the
case Of life insurance, and the Federal