New-York tribune., 1912-02-29
FIGHT INSURANCE BILL
Liability Concerns Aroused at
"Big Tins" Measure.
ETNA LEADS OPPOSITION
Says Proposed Law Limiting
Rates and Commissions Is
Socialistic.

The H1tna Life Insurance Company
which has an accident and liability de-
partment. has taken up in behalf of the
small liability companies and the agents
and brokers of such insurance the fight
against the bill recently introduced into
the Senate by big Tim" Sullivan seeking
TO limit rates Of commission and the per-
centage of expenses 20 income on liability,
steam boiler, flywheel and sprinkler leak
age insurance. Other big liability compa-
MES like the Casualty Company Of Amer
lea, rather favor such legislation as di-
rected against the smaller and newer COM
pauies scrambling for a foothold. The
HJtna opposes It, however, on the broad
ground that 1t is socialistic, paternalstic
and an unwarranted meddling of the pub
lie in private business.
Vice President Rowe OF the Htna has
sent broadcast to insurance men through
out the state ten thousand copies OF cir
cular issued in the name Of HIS company
vigorously attacking the proposed legisla-
ton, which has already passed two read
ings and gone to committee. He is plan
ming to send out to-day to the same men
ten thousand copies of the bill with note
from the IEna calling attention to its OBJ
jectionabe features. Already brokers,
agents and small companies are rallying
10 his standard, a constant stream Of them
seeking him yesterday at his office in Will
lam street to express their sympathy and
offer their support.
Says Hotchkiss Originated Idea.
The A1tna circular blames ex-superin-
tendent Hotchkiss for the inception of the
idea contained In the bill 1t quotes his
last annual report as follows:
AT present the gross cost. i. e.. the pre-
MUM paid, is roughly speaking, disposed
OF in three WaYs-for losses and reserves,
for management and for commissions. The
question is whether the amount now pmd
for insurance. particularly in the ire ana
casualty fields. is not in its expense factor
greater than the service performed by nome
Office and field representatives, is economic
ally worth. Why may not government set
limits on the expense factor, either arbl-
trarily, as was done in the life field, or,
after investigation, by departmental regu-
latiunY'
II goes on to say:
With all due respect to Commissioners
Hotchkiss the occasion which called forth
a law limiting commissions and expenses in
the life field finds no parallel In the cas-
ualty and fire business.
The law affecting llN insurance tolHlille-
sions and expenses was inspired primarily
for the protection Of life insurance policy
holders entitled to PARTICIPATE IN the earn
ings Of the company. Furthermore whlle
such law limits the expense and commits
sions payable for new life insurance
whether participating or non-partclpating.
such limitation is not without reaSonaOie
elasticity and il does not attempt 10 Hmt
the administration expenses of any life
insurance company that tranSacts solely
participating business.
1t is Indignantly denied that casualty and
fire insurance companies as class are
guilty of extravaganza in administration
the contention being that competition, plus
the interests of the stockholders, Is an
absolute guarantee Of economical manage
ment. Mr. Rowe said yesterday that few
of the smaller liability companies were eX-
periencing trouble at the present time be-
cause of the drastic changes In the en-
ployers' liability law in the last year, but
! that aside from this temporary. as he
/ deemed IL, stumbling block in the path of
sound, conservative insurance, there eX-
listed no call for interference at this time
with the lines of insurance enumerated in
the Sullivan bill.
! The circular goes on:
The Htna objects to this kind Of legisla-
| tiOn because IL is pdleTndllSllC anu sOCldl-
| istic. because it is an interference with the
| right and freedom to do as we will with our
/ own without doing wrong; because we hon
estly believe 1t is against public policy
Sees Harm to Companies Here.
Mr. Rowe pointed out yesterday that the
proposed law forbade the states granting a
state license TO any company, foreign or
domestic, which paid in or out Of the state
1 II hoy no rp-
scribed or whose expenses of administra-
ton, not only in New York, but wherever
II operated, exceeded the percentage Of pre-
MUM income set down in the statute. This,
he said, would allow a dozen or more COM
panies operating in the Western Held which
did no business in New York to take their
Western business away from the companies
doing business here. On this point the cir
cular says:
Should we protest or encourage the state
| of New York to tell us by law That we must
not pay over a certain percentage OF com.
| mission or incur over certain per cent or
| expense for business-in missouri OF, CaIl-
! fornia-thereby tying our hands while our
pockets are o3Ssq 6sng states Ssefh that do not hap
| pen TO be licensed in New York State?
The final argument which the opposition
| puts 1OTtn Is LUdl IL itBlSihtiO'h VI N'''"
| character IL once enacted 1t will only be
ouestion Of time before" all other lines
Of insurance are similarly affected, IF,
indeed. personal accident, surety, fire, plate
| glass, burglary and other casualty Tines
arc not made the immediate subject Of the
same legislation as has been suggested for
dealing with liability business"
To all OF this Edwin T. De Leon, presi-
dent of the Casualty Company Of Amer
| lea. replied yesterday that he thought
law reasonably regulating rates of com
mission and percentage Of expense 10 in
come would help the older and larger
companies against their smaller and less
secure rivals. and that rates Of commits
sion were too high here at present. AS
| for competition in the West he thought
| that the number and size Of companies
not doing business in New York was so
negligible as not to constitute menace to
the business there Of the big concerns.
Mr. Rowe admitted that rates of COM
mission in New York City were too high
but in other parts Of the state they were
not. he said, and they would not remain
so here as soon as the brokers perfected
their local organization. In any case he
| contended, the brokers should be allowed
20 regulate these things themselves.
|
MAY RAzE CRIMINAL COURTS