New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1911-01-27
Protest Against Vote of Eastern
Union to Decrease Commissions.
EXCHANGE STANDS IN WAY
Exciting Conflict Between Two
Bodies Expected When New
Rule Goes Into Effect.

The Eastern Union OF Fire Insurance
COMPANIES has voted 20 put into erect On
April its rules for diminished comm'S-
sions 10 local agents. and yesterday morn
ing the agents in this city received idenu-
al notes from all their companies. asking
them TO see that the Insurance Exchange
Of this city put itself In harmony Win inc
new terms. Under the rules Of the union
the brokerages that may be paid in the
greater city aye less than those authorized
Nv the exchange. As no change in such
fundamental rule Of the exchange as this
can he adopted without a unanimous vote
trouble is expected.
The Eastern Union companies are under
g pledge not t. support any local associa-
ZION that does not adopt its new rules. H.
therefore there IS a single vote IN the eN-
change against adopting these reduced
brokerages, the old problem about what
would happen If an irresistible body came
in contact with an immovable one was the
subject OF interesting discussion IN ire IN
aurance circles yesterday.
Another condition Of the Eastern Union
"a that not more than per cent interest in
The profits OF a local agency may be pald
20 the agent in addition to the direct com
mission paid TO such agents. This is a ma
terial dminuticn Of the share Of prohts
that has been received by many of the
agents, and already there Is great bitter
ness EXPRESSED toward the companies
Agents yesterday were saying that OH
GERS OF their companies had gone ahead
secretly and made these arrangements
without giving the agents any opportunity
formally OF informally TO state their case
and areue for their own interests. one
agent who has been successful in keeping
5he losses on the New York business oil MS
companies down to low figures said
You can see that the companies make
no difference between an agent who has
worked, first, last md all the time, Tor his
companies and the scaawag agent, who
mas written every risk. good or bad, that
came along and that would swell his pre-
miums. and thus his commissions. Very
well, As am not TO be allowed TO share to
any extent the profits Of my companies, II
make up for it. by writing risks which l
rave all the time been declining. II can
zet profits can get commissions
II is believed that this sentiment of dis
loyalty will be influential upon the agents
4 the new rules actually 40 into force:
Outside Of New York the companies that
are members Of the union viii have rivals
20 deal with. The managers Of the CONT
mental the Fidelity-Phenix and the F1del-
ftv Underwriters. the last-named being a
foInt policy 10 which both tie former named
rompanies are parties the whole making one
II the most powerful fir, underwriting com
nnations I'm the world have informed their
agents everywhere that an agent who
wishes 10 accept the low rates Of commits
sion 10 he enforced by the Eastern Union
NAV auuly those rates OIL business written
FOR the Continental, so that the agents
may continue 10 retain the agencies of the
companies named
This is necessary. as the union Will en-
force what is called separation" that is
ro say, an agent cannot represent COM
ranies i'm the Eastern Union and also rep
resent other companies not bound by its
rates Of commission. Tho Continental-Fi-
delitv-PheniX combination has Informed its
agents that if they wish 10 continue or
the present basis OF compensation from
those companies. and are thus forced 10
resign other agencies. the Continental and
rs associates will take all the business Of
such local agents Tie union Is thus con-
fronted al the very outset with the risk
NJ breaking mp the Insurance Exchange Of
New York and Of arousing the active hos
tility Of scores OF agents who will retain
the agency Of the Continental and its as
ISOLATED underwriters.
Elijah r. Kennedy Of Weed & Kennedy.
who are New York City agents for com
panies OF other states, said he was not
ready 10 discuss the situation created by
the new terms TO be enforced 10y the union.
lie did say. however. that these rules, II
actually enforced in New York. would cut
Gown the rates Of commission received by
several thousand brokers on especially de-
sirable business.
What q remarkable time II would be"
Re added. TO start a new company that
would not he bound by these rates in New
York. but would operate upon the basis
q fair treatment Of all, including even its
agents and its brokers. who virtually con-
troll all the business Of New York city"
other agents In this city. representing
large companies IN the Eastern Union and
outside. said that the subject was complex.
and until they bad chance to get more
information they preferred 70 say nothing
One or two. however, ventIred confident
ally 10 say that the Insurance Exchange
Of New York probably would accept the
new rule, there being no alternative. Any
way. they said. they had plenty Of time
in which 10 act on the rule, a. r. did not
20 into effect until April /.
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