Polk County observer. (Monmouth, Polk County, Or.) 1888-1927, 1910-08-09
INSURANCE TOO HIGH
COMMISSIONER SAYS RAIEs
SHOULD BE REDUCED.
Submits Figures Showing Oregon Is
Paying Extravagant Price for
Protection from Loss.

Protection from Loss.
l. Fire insurance premiums in Oregon
4 should be materially reduced, is the
opinion of Insurance Commissioner
q S. A. Kozer.
This opinion is based on an exhaus-
tive study of rates which has been
! carried through practically every state
in the Union and embraces premium
charges under the direction Of every
company and every rating bureau in
the United States. He has made an
investigation into rates covering near
ly half a century of fire insurance
business and basing his belief on aver
age loss ratio, compared to premiums
paid. he believes that a rating bureau
in the State of Oregon could make
radical changes which would be high
ly beneficial to policy holders.
He has given out statement cover
ing his Investigations and the reasons
which lead him to believe that lower
rate could be secured, and should be
! secured. Mr. kOZer says.
Rating Bureau Needed.
The question of rates is one which
is now receiving much attention, espe
cially in the states of the Mississippi
Valley and those bordering on the
Gulf of Mexico. Two years ago the
Legislature of Kansas gave to the Ii
surance Commissioner authority to
adjust rates, and while that official has
oi1lrlcG some changes in the rates
y hich shall be charged by insurance |
companies in tIat state, the result has
been nothing more than a general re-
adjustment without any reduction in
the @cneral average charge.
1T occurs to me that in view of the
fact that the experience of the entire
country for a long term of years is be-
fore the companies, the fixing of
rate by the rating boards or bureaus
in the different states is a mere matter
of adjustment between the particular
states or sections of the country, after
taking into consideration local, physi-
cal. climatic and other considerations
which materially enter into the deter
mining and adjustment of the rate
The rate cannot be based on the expe-
'ience of state alone, as I believe :
he tendency is in some of the states
It the present time, but must be upon |
he entire country in order to secure a |
air average for all conditions
Bureaus Work Outlined.
"A rating bureau for state or any n
ortion of the country must stand in r.
he same relation as a board of equal Y
zation to state, its province being
lerely to promulgate fair and equita-
lie rates for that particular section
relation as the experience of that re
9ction bears to the experience of the zi
ntire country in which the compa- II
les are doing business, and a rating r.
provided for by the state
'uld not exercise further functions
ian to ascertain whether the rates HI
promulgated were fair and just to hi
e different localities. or
IAN analysis of the figures which ~,
ow the different rates which have
evailed in the states of the Union
a given term of years, and the loss
ito in proportion to the premiums in
llected during similar period, leads MI
to the conclusion that Oregon has In
t, in the past, been accorded fair "A
d equitable treatment in regard to q
s question. For example, the aver sp,
e rate charged in the states of the en-
ited States and Canada covering ne on1
DIS ranging from seven to AZ years ma
approximately $1,08 per 500 of in an,
ance, while the average loss ratio hes
premiums received covering the sal
ne experience has been about 55 per
t. In Oregon, on a basis of 27 =
RS experience which has been in 125
heu III securing the foregoing re- fro
IS, we have been paying an aver gon
rate Oh $z.lo on loss ratio of 40 will
cent These figures convince me of
the hazard in the state is such as
a corresponding reduction Fro
he average premium charge which S
e citizens and property owners III.
nld be required to pay to afford Pill
indemnity against loss by fire as bac
r needs may demand for the pro- boil
ion of their property and mainte- now
ce of their credit owe
rhe law enacted in 1909 prohibits by
pacts or combinations for the pur.
of governing or controlling the r
charged for fire insurance within day
state, and was undoubtedly intend iani
s direct rebuke to the Board of yet
erwriters of the Pacific of San com
lcisco, which body somewhat arbi- hear
ly promulgated therates for all al n
Pacific Coast States up to that sum
The statute. however, as now In
:, permits the general agents of
1anies doing business in the state N,
rm surveyors bureau for the is ac
use ol promulgatlng tair and eq- Rem
ne rates on the insurable prop Clau
III 'he state winch rates are re- write
d to be sold to any person who mont
desire to purchase them. The battle
al agents OF some is or 20 of the FoIe,
mpanies operating in the state at large
me formed bureau. as provided He 8
W. immediately upon the new act value
ming effective. which bureau Sta fri
that time has been engaged in
feying and rerating the different
and towns Of the state having r,.
as a basis the rates -
forced by the Board Of Under. se1.,'
5 OF the Pacific. IeO','
e result of the enactment of the en-
equiring the rates to be home -
is. indeed. apparent, for the av '"'e"
rate has been reduced from
for the year 1908 TO Sl.TO per Au'
n Insurance for the year 1909. On ,ne
is to be hoped that further re- VI 'h'
ms viii be speedily made by the lueuut
bureau in order that the rates sreat u!
rged in Oregon may be propor- peace
with the rates charged in other 'erhieN
where similar conditions exist.
not be expected. however. that The
a rate can prevail in ore,,oD a. ed 10
$ In many OF the Eastern and pastur'
and more thickly populated only
l.