Bismarck daily tribune. [volume] (Bismarck, Dakota [N.D.]) 1881-1916, 1914-12-02
SECOND ANNUAL REPORT
OF STATE HAIL INSUR-
ANCE DEPT.
EXPLAINS CANADIAN IDEA
Is Convinced That State Hail In
surance Department Is
Feasible.

Feasible.
Insurance Commissioner w. G. Tay'
nual report of the state hail insurance
departm mt to the governor In this
report Mr.. Taylor tells Of the work OF
this department, the only state depart.
ment of it's kind in the union, and
suggests the Saskatchewan idea as an
alternative to, the pres ut plan in use
in this state.
Mr.. Taylor's report reads as fol,
lows:
'tNorth Dakota is the only state in
the union which has undertaken the
operation of hail insurance depart
ment, and he ventura is therefore not
only unique but highly important as a
test of the theory Of paternalism in
atfails of government, and Of the abil'
ity Of the state, from practical stand
point, to compete with privately owned
and managed enterprises.
80, Four Years Old.
This apartment has now been in
operation four years, and in order that
you may lave before you complete
record OF its transactions with respect
to premiums received, losses paid, and
expense of management, | have col
cluded to incorporate in this report
financial statements for each year OF
the four-year period. These show, in
brief, that losses incurred III 1911 were
settled OH the basis of seventy cents
on the dollar. in 1912 tifty-fye cents
on the dollar; in 1913 lightweight
cents and in 1914 siXty-five cents Oh
the dollar.
''On it's face this showing is decid.
edly unfavorable. Applied to mutual
hail insurance company, for example,
it would mean that the members would
be required to contribute, in addition
to the regular premium, extra assess,
ments respectively Of 80, As, IL and 81
per cent-and by that time the mem.
bers would have had quite enough Of
mutual Insurance.. However, in ana.
lying thesresnats of This venture iato
the hitherto unexplored realm of state
hail insurance certain facts and fac.
tors need to be -aken into account.
During the years 1911 and 1912 the
rate charged by the state was twenty
cents per acre.. or 21a to per cent on
the dollar. The state insured one hun.
dred and sixty acres of grain for
thirtytwo dollars, and fixed the loss
maximum limit at $1,2S0. The old
line companies insured the same acre
age for not less than siXty-fiVe dollars,
with a loss maximum limit of $1,000
In other words, the state gave the in
sured twenty-eight per cent grea- -er
value to his crop than did the old-line
company, While the actual cost was
very much less in the former than in
the latter, based upon either total or
partial loss At the same time the
loss paying power Of the state, based
upon premium income, was insignifi
cant from comparative standpoint
State hail insurance reached high tide
in 1912, when the premium income
amounted to SG4,S40.l5. At the same
time the premium income in this state
Of seven old-llne companies averaged
in excess of $l52,000 each.
''Nor is that ALL The stock com
panies will accept the hazard of only a
certain limited amount of insurance in
each section or each township, while
the state takes the risk of the entire
farm, even though it embraces sew.
eral contiguous sections. Finally
nearly all of the old-line companies
write hail insurance in several states
and this wide diffusion of risk natural
ly minimizes the chance of loss.
THUS it will seen that the state
has labored under the disadvantage
of comparatively low rate, small in,
come and extreme chance of loss for
reasons above noted On the side of
expense of management, the adval.
tage is decidedly in favor of state in,
surance; but even this advantage is
largely theoretical on account of the
small volume of business transacted
Two Amendments.
"The Thirteenth Legislative Assem-.
bly, amended tie state hail insurance
law in two important particulars: The
rate was increased from 20 cents to
30 cents per acre; the adjusting of
losses was taken out of the hands of
county commissioners, and they were
authorized instead to appoint an 'sof.
fetal adjuster'' in each county. Just
what effect the increase of rate had is
a matter of speculation, but the fact
remains that during the first two years
under the 2O-cents-an-acre rate the
premium income was $90,945.O1. while
during the succeeding two years under
the 3O-cents-an-acre rate the income
was only $54,986yO9. 1t is reasonable
to assume that the marked falling OIL
in business was at least due in par!
to the fact that the 1911 losses were
settled on the basis of 70Scents on the
dollar, aad the 1912 losses on the basis
Of 50 cents on the dollar. This show
ing did not make for confidence in the
scheme of state hail insurance. How
ever, the fact that the stock compan
les also wrote greatly reduced vol
alme of hail business in this state in
1918 should be taken into account.
Suggests Improvement.
while the; present method of ad
1 justment is undoubtedly an improve
CONTINUED on page six