The Washington times., 1914-04-24
ASK BILL FOR SAFETY
IN INSURANCE HERE
Commissioners Send to Con-
gress Measure to Protect
Holders and Investors.

with a request for its enactment, the
District Commissioners sent 10 Congress
today a bill to provide for the additional
protection of policyholders and stock
holders in insurance companies operat-
ing in the District of Columbia. The
measure was drafted by Charles F.
Nesbit, superintendent of insurance.
after q careful consideration of the in
surance laws of several of the States.
The authority of the superintendent in
the supervision of insu:anc companies
is greatly increased under the proposed
law.
Among its principal provisions are
that every insurance company hereafter
organized in the District. before solicit
ing any subscriptions to the capital
stock, first shall submit its plan of or
ganization to the superintendent OF IN
surance and obtain his written approval
That every insurance company shali
distinctly state in its literature, adver-
tisements or circulers issued for the
tisements or circulars issued for the
the per centum of the capital allowed
for the purp ose Of securing STOCK SUD-
scriptions. and that under no cfrcum.
stances shall it exceed ten per cent OF
the par value fthe stock.
No Unearned Dividends.
That no insurance company shall pay
any dividends to its stockholders unless
they are paid from the actual earnings
Of the company, and not from subscrip-
ions either to the capital stock or sur
plus, or from any enhanced aPpraise-
rnent or valuation Of real estate.
That no person shall be an officer or
director in any two companies engaged
in competitive insurance or In like kinds
of insurance.
That no officer or director of any in
surance company shall be Interested In
any company, firm or corporation hold
ing or having any underwriting con-
tract with said company Persons hold
irg such dual relations are required TO
such dual relations are required 10
sever their connections with the under
writing agencies within ninety days
after the passage of the act.
That no insurance company shall
hereafter invest more than Is per cent
Of its capital and surplus IN real estate.
and this amount shall be invested only
in real estate to be used as the principal
or home office of the company in the
District This is not to be construed,
however. as prohibiting the renting or
subletting of a portion of the premises.
II is further provided that the super
intendent of insurance may require In
surance companies now holding real
estate not in accordace with the pro-
Visions of this section, to dispose CT II
within three years from the passage of
the act.
Commenting on this section. the Com
Dissioners say: "Unquestionab!y a few
companies now owning home offices
will feel Il a hardship that they must
sell their property. 1t is all. however.
IN the best interest of sound insurance.
Gives Control Over Expenses.
The bill provides also that every in
surance company in the District shall
include in It's annual report a complete
statement of its expenses, including the
rates of commission used In securing
business, and the salaries paid to each
of its officers. directors or agents so
as to enable the superintendent TO ascer-
managed carefully, prudently. economic
ally and safely" II he finds that the
company is not so managed, the super1n-
tendent is authorized to order such
changes and reductions in expenses and
salaries or methods of doing business
as. in his judgment, are necessary and
proper. The failure Of any company to
comply within three months Of the order
of the superintendent regarding such
changes. shall be sufficient grounds for
In reference to this section, the Com
SnissioDers say: THE superintendent
should have the power clearly stated
IN the law to regulate expenses which
are OdIBSrOUSly nlRn ana
reductions of expenses in any insurance
company organized in the District which
are clearly eXtravagant and unneces-
sary. Such regulation is 4 protection
10 the stockholders and to the insuring
public and Is opposed TO the selfish in
terests of individuals whose Judgment is
frequently warped by the desire for
gain"
Policy Holders Guarded.
The bill provides that if the report
or examination of any fraternal bene-
hcial order or association. in the Dis
trict shows unpaid death claims not
IN litigation or judgment which re-
main unpaid six months after notice
Of death has been received, ii shall
he the duty of the superintendent to
order such association to levy an ad-
dttional assessment or its members
sufficient to pay all claims, and if the
claims have not been paid within sixty
DAYS After. to apply to the courts for
receiver, or to cancel the license of
the association, or both.
The superintendent Is authorized also
TO cancel the license of any insurance
company, more than three years old,
whose unpaid death claims are greater
m amount that the net sum applica BILE
70 the payment of death claims dur
ing the preceding year, and 70 ask for
. receiver for such company or as