The Salt Lake tribune. [volume] (Salt Lake City, Utah) 1890-current, 1910-06-06
"overheado Fire Insurance

| Overhead Fire lnSuIanC
The published report that the Saltair
| Beach company had placed all OF its fire
insurance with English and Canadian
| companies created but little comment In
| local fire Insurance circles. except In the
| one phase OF It's moral effect on iDsur-
| ancc generally. II Is well known among
| fire Insurance men that Saltair Is and
| always has been classed as one OF the
undesirable risks. and those companies
which have in past years accepted the
| business have taken IL In small lots only
and at a rate fixed by the Pacific board
of underwriters which In comparison with
| other business is somewhat higher. IL IS
| limited by some that the beach company
| has not actually placed any insurance
| abroad, but that the report is a ruse on
| the part Of the Saltalr management. with
the probable object OF bringing local in
| surancc representatives TO time, so to
speak. Be that as II may, however, Of
ficial and public interest in the matter Is.
| as before stated. OF general character
| only, for the reason that II Is merely one
OF number of instances OF alleged plac-
| ing OF insurance In unauthorized com
| panies. Both the local insurance men
and the state insurance department are
| dcsirous of having the state law. cover
| ing such cases. properly enforced, and
| long before this particular instance de-
veloped active work he'd commenced in
| the enforc mont OF the law. There Is no
| denying tkst this overhead writing on
tht part OF certain companies has been
| q. source or cause OF annoyance, as well
| as loss to the state and also to tho in
| surance companies that are complying
| with the law and their local agents. One
purpose OF the insurance code enacted in
| March. 1909. was to put a stop to just
| this sort Of practice.
The difficulty in getting at this mat
| ter has. IL seems. arisen from various
causes, among thom being the fact that
evidence of individual cases is hard to
obtain, There Is, of course, a privacy
observed by the parties involved In such
| transactions, rendering IL almost lmpossi-
| BILE TO secure full information upon which
| to base proceedings. Then there Is the
broad question of the right OF the In
| dividual to obtain insurance wherever or
from whatever company he may chose.
| so long as the contract for this insurance
| is made outside OF the state, and there
| is no one IN the state that can be held
accountable. If IL should develop that
unauthorized insurance is being placed
| in the state. and 1t probably is, the com
| missioner is given power under the law
| TO demand from any company or indi-
vidual an exhibit of all policies OF insur-
ance held. This information can be made
the basis of any further procedure that
| may be taken. The penalty for violation
OF this particular provision is made Dotn
criminal and civil on the part OF the
one who places and the one who accepts
the policy
other questions to be considered and
rcckoncd with Anyone who buys "over-
head" insurance is talking. tremendous
| risks in case Of fire. He is entirely at
insurance. They have NO standing in the
state, no agent. no adjuster, no attorney
upon whom process may be served and;
thescfore. suit cannot be instituted
against them in any state court. In the
event of n fire loss the insured would
be entirely at the mercy OF the company
and his only recourse would be TO go to
the state or county where the company Is
located.
In the case OF Lloyds. or individual
underwriters. there is no actual company
and the insured must depend entirely
upon tho honesty and responsibility OF
certain persons, in order TO get what they
Lloyds have a number OF policies in Salt
Lake and elsewhere In Utah. and 1t is
with this concern the saltair people are
said TO have been negotiating with,
'They wrto anything and everything"
said member OF the local branch Of
fire underwriters, on Saturday. Why
he continued they have been known TO
take insurance on building when 1t was
on fire"
Interesting developments may be ex-
pected soon as the matter will doubtless
be taken up by the state authorities and
the local fire board and brought to an
Issue In tho near future.
The "Twister' Shown Up.
The newspapers. magazines and in
surance journals have had considerable
to say Of late the subject OF twist
ing" that many persons have written In
surance companies and others asking
them TO explain clearly how the ''twister'
dent OF agencies for the Penn Mutual.
has undertaken 10 answer the question
and he explains the thing in way that
life policy holders will have no trouble in
understanding tho facts:
The method pursued is very simple"
says MIR. Lippincott. Amy policy which
or more years. the longer the better. has.
of course. accumulated q reserve, or self
insurance fund. which varies in amount
according TO plan. age, etc, etc; and as,
pp tp pir1tO n fI-lif.
TO demonstrate TO the inexperienced that
he Is paying for insurance which he does
not get For example, y insured his life
at the age of thirty-fivc on the whole life
plan. paying net annual premium of
$Zl.0S per $1,000. AT the end of twenty
years year his policy has cash value OF
who tells a that while he is paying for
$1,000 of insurance me is only insured for
$1,000 minus s327.5S. which equals S6I2,42
This statement is not true The facts
are that A has already paid for s637 OF
patd-up insurance and Is now paying
S2l;OS per annum at the rate of S45.53 per
$1,000 for S463 of whole life insurance
Following such advice, however. he sur
renders his policy for $327,5S. and takes
out new policy for $1,000 for which he
agrees to pay during life n net annual
premium of so453. What has happened?
a has taken from tho insurance company
So? SIS, but he has increased his premium
obligation By S23. IS per annum for life.
Reference to The tables will show that
$32L5S In cash and a life annuity Of S25.45
are exact equivalents. That Is, the value
Of the Increase of the premium is exact
ly equal TO the amount of the reserve
withdrawn. Hence. In exchange for
S32I IS In cash, which 4 probably has
nc immediate use for, ho has increased
his future payments by S24.45 annually.
He has practically borrowed s327.5S on
tho tnstallmcnt plan. II transaction ho
would not think of undertaking except in
extreme necessity.
Several ways have been suggested
to meet such attacks on established
business. but as these arc made in the
dark and frequently culminate III lapse
without notice to the agent Interested.
the first and obvious thing TO do is 10
ascertain who has been approached TO
this end all policy holders insured for
$4,000 and upwards should be promptly
can?assod for additional Insurance. in
the course of which any attempt to twist
may he disclosed. and the opportunity
given TO answer conclusivoly the decep
tive proposition submitted.'
The laws OF Utah mako twisting a
criminal offcnsc. punishable by both fine
and Imprisonment in the county jail