The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1910-06-10
In Explaining His Suit Attor-
ney General Says These
Rates Are Dictated in In
surance Combine.
RONEY CASE PROVES
HIS CASE HE SAYS
He Says Local Agent Was
Forced to Submit to Com
bine's terms or lose Much
Valuable Business.


indianapolis, Ind, June 10.-One OF
the most important. If not the most
in Indiana is the one in which AttOr-
ney General Bingham is engaged in
now. 1t is an action which he filed
some months ago to break up the al
legged combine of fire insurance com.
panies in this state. Mr.. Bingham
made an exhaustive investigation of
the insurance situation in the state
and made up his mind that the COM
panies were in a trust. So he filed
the suit against 129 companies.
Mr. Bingham outlines the system un-
der which the insurance combine OPP
crates. About sixty or seventy of the
companies belong to what is known
writer's. The state agents of these
companies belong to the Indiana AS
sociation of Fire Underwriters, and
the state agents for the on-unionu
companies belong to the Indiana
League of Fire Underwriters. which
Is essentially the same kind Of organi-
cation as the association.
Board for Each City.
In addition to all Of this. the local
agents in each city are members of a
local board which is in complete con-
troll Of the insurance business in the
town. Before this suit was filed each
local board maintained local inspec-
tor who scrutinized each policy issued
by any agent and saw to it that the
business was not written at cut rates.
Since the filing of this suit. how
ever, these local inspectors have been
abolished, and the policies are sent
direct to the home Office of the COM
pany by the agent.
Mr.. Bingham says he found that all
of the companies joined in the mainte-
nance OF a central inspection bureau
in this city, which inspected all insur-
able property in the state and made
the classification on which the rate
was based. This made the rate uni.
form for all companies. In other
words. 1t meant that when the inspec-
ton bureau inspected building and
gave it it's classification a rate on that
risk was established in accordance
with the scherule adopted and followed
by all OF the companies, and every
company doing business in the state
would ask the same rate for issuing
policy on that building. Mr. Bling.
ham concluded that this was a trust.
Maintenance Of Boards.
He found also that the combine was
maintained and kept alive by fear on
the part OF the local agents.
If a new company wishes to come
into Indiana and do business" said
Mr.. Bingham, ut must, Of course, have
agents. II 1t is an independent com
pany 1t will not pay any attention to
the rates established by the combine
If 1t does 1t will be put out of business
II an agent takes the company he will
have hard time to get a business
built up. If an agent takes the com.
pany who represents also union com
panies the special agents of the union
companies call and inform him that
unless he gives up the new company
they will take their companies away
from him. This was done in Rich.
mond, where an agent named Roney
who had taken an independent com
pany, was forced to come into the
union or give up his other companies
thus throwing him out of business. l,
was testified in court that Rooney was
forced to agree that he would not rep
resent any company that wrote bust
ness at cut rates. If an independent
agent refused to sign such an agree
ment the union companies started a
rate war and drove him out of bust
ness and compelled him to come tc
their terms.
Do As They Please.
Thus 1t is easy to see that the
companies in the combine were able tc
do as they pleased about rates.
found also that present rates were toe
high, and that the companies were
making enormous profits on all of the
business written in Indiana Some OF
NhSih AiuhS GO lhuSA itIlS per cent
annually on their capital stock.
found that the rates in Indiana were
ON an average fifteen percent higher
than they should be. The total
amount Of fire insurance premiums
collected in Indiana during year
amounts to something like $1,000. 0OC
so ii can force the companies to re
duce their rates fifteen per cent. i,
will mean saving of at least million
dollars to the people of the state. This
is the idea l have in mind. and it was
what caused me to file this suit to en-
join the companies from continuing to
use uniform rate in this state The
result will effect every property own
err in the state"