New-York tribune., 1910-12-17
PROBE INSURANCE RATES.
| eoisIative Committee Discovers
That They Are High.
COMPANY PILES UP SURPLUS
One Member Thinks This Is Done
to Offset Demand for Lower
Premiums.

The legislative investigating committee
took up The most of its thirty-thrd p1oiic
hearing yesterday in an examination OF
Frank Lock, the American manager for the
Atlas Fire Insurance Company, of London
AZ the morning session Mr- Lock ex-
plsined TO the committee how dlmcut IL
vas to get capital interested in the fire IN
surance business because Of the tremendous
hazard TO which II is subject Questioned
On the subject of rates. MIR. Lock declared
that any body OF state officials charged
with the duty of fixing rates would be like
X TO reduce rates here in New York simply
because the loss record was low, when the
companies might he badly in need of
higher premium rates because of some con-
1lagration elsewhere
Wisconsin for instance, had successfully
objected to any advance OF insurance rates
following the San Francisco fire. he said
and that was. of course. unfair.
Assemblyman Foley developed an interest
-hen IN the profits of the company which
Nr Lock represents. and he got from him
end into the record the fact that the Atlas
had paid a % per cent dividend last year
end that its surplus had grown in twenty
years from s2eo,e0 to $4,000 This 20 per
cent dividend, it appeared, was paid on
8 g56010 worth of stock, and Mr.. Foley
seemed to take the position that a company
which was paying such dividends and lay
ing UP such a surplus could well afford to
lower rates.
Also. Mr.. Foley seemed 10 view the sur
plus as being, in part, at least, trans
9e-rinc Of assets TO reserve rather than to
stockholders in the form of dividends. Mr.
lock admitting that the surplus was just
os ,l Sfn
- their dividends IF q company should
show dividends Of loo per cent there'd be
complaint by policyhoiders wanting their
premium rates lowered 1 suppose, COM
-7,ented the ASSemblyman.
Nj Lock informed the committee that
~. losses I'm Great Britain were much less
than the American losses This he attrlo-
srted in part 10 better building construction
ana IN part to the national characteristics
a fire over here is quick and sharp. like
Americans he explained, while a fire
over there just seems tc wait till the boys
come along and put it out"
John ]. Hartigan. Insurance Superintend-
ent OF Minnesota, took the stand at the
afternoon session. He advised the COM
Tnittee that he would advocate. as the best
Eolution OF the rate problem. the estab-
lishrnent Of a state board or court OF ap
peal, TO which policyholders with COM
plants on their rates would appeal from
the rate fixed by the exchange. To the often
raised objection Of the insurance men that
only an expert in fire insurance could sit in
Judgment on such q case Mr.. Hartigan said:
Judges have to PASS on technical ques-
1icus every day. questions on which they
could have no previous knowledge. and
after they hear the opinions OF experts and
she testimony given they are competent to,
and 90. pass upon such questions
Mr.. Lock returned TO the stand then with
the statement that he had come in the
morning on the request OF the committee
and resumed the stand al his own request.
3Ie had learned that legislation concerning
5re Insurance might ensue from the COM
r1j.tee-s Investigation. and be therefore
brought the suggestion that the state
should ny law enforce q risidly ffreproof
building construction code, but not inter
1ere with the making OF rates
As % the question Of the companies
stand on the "a vment Of losses. Mr.. Lock
aaid: The companies simply tumble over
cre another in their eagerness 10 pay
losses" He had several other recomrnenda-
ions for proposed legislation. which COW
cred the field thoroughly from the point OF
view of the insurance companies.
lsidor /. Daniels, who oVrns house at
70. = Sheriff street, told the committee
hat his premium had been increased from
81 20 $3.50 for the same amount Of insur-
s-Ce. and with no apparent change in
either the risk or It's surroundings.
Judge Bruce chief counsel 70 the com
rattee, said he expected TO examine
Charles H HYDE the present City Cham
fsrlaiu, who was formerly connected with
the racing interests on Monday or Tues
da~. He had no word directly from Mr..
HYDE. who is out OF the city at present.
hut the Chamberlain's secretary had as
Su-od the committee that he would COM
r7unicate with him as soon as he returned.
Mr HYDE will ne the last witness on the
racing inquiry and the committee has ap-
Tsrentlv given up hope OF bringing out
ANYTHING definite concerning the huge
libby fund which Robert II. Elder testified
had been raised by the racing associations.
7 Is expected that the public sessions viii
r0d next week.