The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1910-02-24
WILL TEST THE LAW.
Insurance Companies Will Resist Cut
in Rates.

Immediately following the announce
ment of Superintendent Barnes. of the
state insurance department, that the
fire insurance rates on residence pro-
perty had been ordered lowered 1412
per cent. comes the news from a reli-
able source that the insurance COM
panies have decided to bring suit to
test the constitutionality of the law.
The companies will bring the suit in
the federal court, just as the national
bankers brought suit to knock out the
guaranty law. The bankers were sue
cessful in their suit. 1t remains TO be
seen what the insurance companies VIII
accomplish.
The new insurance law was passed by
the last legislature and has been IN
effect nearly a year. The superintend-
ent had to proceed slowly in his ap-
plication of the law. He has just be-
gun his work of actual reductions IN
rates as promised by the friends or
the law when it was passed. The law
gives the superintendent of insurance
power to fix insurance rates and in
creases his former DO .Ters of superVis-
ion over the companies. 1t requires that
all companies file their schedule of rates
in his office in order that he may pass
on them before they are put into ef-
feet.
The companies will allege in their
application for an Injunction to re-
strain the superintendent from enforc-
ing his recent reductions in the rates,
that the new insurance laws give him
powers not allowed by the constitution
and will pray that the insurance law
be declared unconstitutional
1t is expected that the suit will be
fled this week. The western compan-
les had about decided to give the law a
fair trial but the New England cJm-
panies are up in arms over the recent
reductions ordered anG have decided to
fight to a finish against state control
of their business.
Supt. Barnes had Just issued a state
ment that he had ordered reduction
of 141S per cent in the rates on all res
idence property not located or farms.
tc take effect March 10. He had pre-
E.ously ordered a reduction of 1212 per
cent in the rates on all business pro-
perty.
It had been claimed by many per-
sons who had made protests against
the new law that it was just What the
insurance companies wanted, but the
proposed suit to have the law declared
Invalid will put a stop to all this talk.
Governor Stubs and Attorney Gen
eral Jackson are both firm in their con-
srdence in the new insurance law, If 1t
is properly administered. Since Sup
er1nteudent Barnes has got his office
machinery in working order he has
been getting pronounced results from
the new law. In his report made few
days ago he showed a saving of $780,,
COO per year to the policyholders under
the new law.
1t is barely possible that the insur-
ance companies will yet back out and
not bring the suit. but it is known that
they have made all their legal prepare
tons to file the papers at once. The
superintendent of insurance, by get
ting out his last reduction order We'd
nesday night, acted in time to avoid
being served with Injunction papers. 1t
is easier TO prevent a reduction order
from being made than it is to stop the
effects of that order. once put into eff
feet. 1t is expected that the compan-
les Will act in time to get an injunc-
tion, if possible before March 10, the
date at which the reduction order goes
into effect. The suit will be watched
with close interest by all classes OF
citizens in the state.
A half dozen other western states
have asked for copies of the Kansas
law with the Intention of enrolling the
same insurance law on their statute
hOnlxS