The Bemidji daily pioneer. [volume] (Bemidji, Minn.) 1904-1971, 1910-07-22
Insurance Commissioner Views.

)
IN former Bulletin we quoted our state 1nsur-
ance commissioner as having declared against the .
high expense charged by the fire insurance COM
Panles tor collecting and distributing the fire in.
surance premium tax, stating the expense ratio of
OF the American companies to be about As cents
out OF every 81 of premiums collected, also that
agents commissions was the largest item and he
adds:
lt the companies unable to reduce the CON-
missions to a reasonable figure, it would seem
that it can be done only by legislative enactment,
and this may prove 10 be necessary in the very
future"
Commissioner Hardison of Massachusetts makes
the same suggestion and aaixes the following:
''That 40 cents out of every $500 in premiums
should go to agent for his commission in placing
policy seems rather large amount when COM
pared with the 90 cents which goes to the COM
pany for paying losses and all the other expenses
To be sure, not all premiums are subject to so
large commission, but the tendency is in that
direction. Commissions have advanced on the
preferred class of business 40 per cent in some
cases at the present tlme with tendency still up
ward"
The Massachusetts commissioner further states that
the increase in agents commissions now amounts TO
more, anually than on lower commission basis of ten
years ago. Then he gees on with the following terse
conclusion. The black type is ours:
Now, this is all a very natural outgrowth of the
method of carrying on the business on commission
basis. The companies want the business and their
demand works up the commission instead of lowering
the premiums Were the business done direct with
the customer the natural way for the companies to
Oof + inc .l.1.--
iums and thus the competition would inure to- the in
sured's benefit But as the business is done through
agents. who have come,to control itthe competition
of it must be in form attractive to the agent. The
assured is eliminated"
Our Federation has, in mild way, charged the in
surfing public with being ASLEEP at the SWITCH and
here comes an insurance commissioner from one of
the most staid and conservative commonwealth aof
the Union, making the emphatic assertion that the
premium payer instead of being asleep has been eli.
minated" from the fire insurance business This is a
condition we'll understood in the inner circles of fire
underwriting but the Massachusetts, commissioner
haa only told half the story This elimination of the
assured factor in fire insurance not only gives
free rein to agents commissions but the incendiary
peculator is treated by the public with courteous in
difference.
When the unreasonable and unnecessaryex-
pense which now attaches to the stock company
''System" is "eliminated" and healthy check is
applied to incendarism by vigorous punishment of
that crime, and equitable rates applied we can cut
off two-thirds more of the present fire tax in the
smaller cities and towns.
The Property Owners Federation is endeavoring
to bring the public to realization of these unruly
conditions. AS secetary of this Federation have
published many stubborn, ugly facts that have
met with defense from the representatives of
the stock companies. There IS no defense. Relief
can come only by a change in the system and that
change when it comes will ''eliminate" the local
commissioned agent, and it is plain that the 'sys-
tenn" will fight, and fight hard for its life.
Calummy is Not Argument
Having no legitimate weapons of defense the
system" has turned polecat, Judge Lindsey put
it, in his recent article in Everybody's magazine and
is making attacks the writer's personal character
in effort to eliminate him to impede the pro.
gress of the work of our Federation.