Morris tribune., 1911-12-01
AN OPEN LETTER.
To Gov. Eberhart For Pointing
Out "Fire Waste"

K. Neutson, Secretary of the Pro-
perty Owners Federation of Mime
sofa, has addressed an open letter on
the subject of the recent fire preven-
tion congress to Governor Eberhart
and Insurance Commissioner Preus.
He says
Gentlemen:
As delegate to the Fire Preven-
tion Congress convening in your city
on the 9Th inst. wish to express my
high appreciation of the proceedings
of that body in which you gentlemen
took such prominent part.
The question Of fire prevention is
one of the most important issues that
confronts our state and nation. The
fire waste of our country in general.
and in this state in particu ar, has
been growing, assuming alarming
and burdensome proportions. This
burden, of course, falls on those who
pay the insurance tax and on those
who are caught in confagrations with
out insurance.
The Fire Prevention Association of
this state. which is organized and
. managed by fire insurance interests
and our Federation can well go hand
in hand along the avenue of fire pre-
vention, but at the end of the "Fire
Prevention" lane the aims Of these
two organizations diverge at right
angles. The public leads off for
lower fire tax while insurance inter-
ests are reaching for greater profits.
This is very natur al and, from pure
ly business view, the action of either
party may pass without criticism.
On declining loss ratio. the in
suring public naturally asks for lower
rates. The companies just as natural
ly defer rate reductions as long as pos
sible. and the companies that pay the
highest commissions to agents are,
very obviously, standing for the high
est obtainable rate,. 1t is at this
point that competition among insur-1
ance companies should become effec-
tive in reducing the fire tax to the as
sured. leaving a moderate profit to
the companies. This would be the
case if competition was applied direct
with the assured; but such is not
the case. The local agent CONTROLS
the business and the competition be-
tween the companies is based on agents
commissions: as the Insurance Com
missioner of Massachusetts, states the
case, "The assured is eliminated -
The same Official states that IN his
field commissions on many classes Of
risks have reached as high as 40 per
cent and that the tendency is still up
ward. He also states that in this
country agents commissions amount
annually to ST, 50O,O 900 more than on
the usual commission basis of ten
years ago. The Insurance Commits |
sioner of Illinois, during a recent |
public address. stated that on tnany
classes of risks, local agents com
missions had doubled within the
memory of the present man. The In
surance Commissioner of Kansas has
undertaken to compel the companies
to limit agents commissions to Is
per cent. A former Insurance Com.
missioner of this state suggested limit |
ing local agents commissions by leg
islative enactment. .f
What shall it profit the tax payers
if they spend time and money closing
the fire waste 'FBung" if the expense
"Spigot. - already overly large.
shall be kept running at an increased
capacity.
There should be reasonable limit
to the expense of collecting and dis
tributing the fire tax.
Respectfully submitted,
z Ma,,faox, |