The Washington herald., 1911-06-26

"A lew Gays ago q poor WorldIi
In Washington who had been pay
ing weekly assessments in a So
called insurance company endeav-
ored to collect 500 upon her
mothers death, and was told that
she could get S. or nothing- She
took the SIS. Inquiry by The
Washington Herald reveals the
fact that the situation in Washing
ton regarding wildcat insurance
companies is deplorable, and that a
fight is now being waged by the
authorities to secure legislation to
put these companies out of exist
ence and protect the people who
are their victims.
The bill, which makes drastic
amendments to the District code,
has already passed the Senate, and
if it can be gotten through the
House, despite the efforts which are
being made to defeat it, a crusade
against these companies will i'm
mediately commence. They must
either go out of business or reor-
ganize their methods and submit to
stringent supervision.
WHAT THE Law WILL DO.
When enacted into law, the measure
will drive at least a score Of small
fry companies out Of business. 1t strikes
at the very heart of the system under
which they have thrived and hourished.
and which has enabled them to solicit
business without capital. without reserve,
without emergency funds, and without
supervision Of any authoritative char
acter Whatsoever.
The present law regarding incorpora-
tion and the operation Of life and indus
trial concerns is without exception the
loosest to be found in any Of the States
and Territories. It permits companies
to conduct business without any real
supervision from the District superin-
tendent OF insurance. It does not re-
quire them to pay taxes, under q deci-
sion rendered by Justice Robb, OF the
District Court Of Appeals, in 1908. It
does not require them to have more
than 800 capital, TO submit reports to
the supervisor of insurance which are
real reports, nor to have reserve or
emergency funds of any sort to meet
the claims of policy holders.
victimise Poor People.
Thousands Of poor people, including
day laborers, servant girls, &C. are
paying q weekly toll Of 10 and 20
cents for health, accident, and life pol
icies to companies which have hardly
a penny Of assets. and which frequent
iy strain every nerve to bulldoze the
poor and the ignorant out Of just claims,
which they present.
Frequently the agent Is the company.
An insurance solicitor connected with
some older company decides to 60 In
business for himsslf and the law cam
not prevent him. He can secure a IL
cense with 800 of capital stock. Of which
only 10 per cent must be paid In. He
can demand a license under the law IL
he is refused one. and assert his right
In court.
This is not an extreme or theoretical
situation. There are scores of agents
here operating IN just this manner among
the colored people and the slum districts
They collect dimes by the thousand,
and the occasions which they are forced
to pay out the benefits they promise are
rare indeed. Most Of them, 1t should
be said. stay within the letter OF the law
and do not lay themselves open to crimi-
nal prosecution
Present Law Imperative.
They are In a position to defy the
supervisor Of insurance II he makes a
real attempt to supervise them The law
is so loosely drawn. 50 fHll of loopholes
that the courts have practically made IT
imperative. It's deathbldw was sounded
when Justice Robb decided that life and
Industrial Insurance companies are not
required to pay cent of taxes under It.
As q result not single concern licensed
in the District of Columbia has paid
taxes since 1901. This does not include
the old-line companies, incorporated In
other States, doing business here. 1t
does include, all life and Industrial COM
panies licensed N Washington. Of which
there are many.
Operate without Reserve Funds.
Section e6s Of subchapter 4 Of chapter
IS Of the District code has caused al
the trouble. 1t provides for assessment
companies" 1t does not require them to
have more than 500 capital stock, Of
which not more than 10 per cent is to be
paid IN. It states that regular reports
regarding the business must be made to
the District supervisor OF Insurance. but
does not give the latter authority 10 en-
force the provision in any manner. It
declares that q reserve or emergency
fund. must be created with the follow
ing clause. which makes the ioophole:
Whenever the constitutions or by-lawe
Of said companies provide for such
funds." This clause has always puzzled
Insurance men. and Its eject has been to
allow Insurance companies 70 operate
here whose only capital, assets. or re-
serve funds conslgt of the furniture and
stationery IA their oflcea. and IN some
instances they Go Tot have even that
The amendment 70 section o3 Of the
District code covers every one Of these
points. and IL salient features should b