The farmer and mechanic. [volume] (Raleigh, N.C.) 18??-19??, 1915-08-17
REMEDY FOR EXORBTTANT FIRE
INSURANCE RATES WITH SlAlE
No Relief From Excessive Charges Unless the Commonwealth TX
ercses It's Power of Supervision and Regulation as Sustained
bv the Surrene Court of The United States

u ~ q IiS hof tiiS ~
the territory which it selects have
any control over making the rates
or supervising them, nor any voice in
the establishment of the rates. The
fire insurance rates are fixed arbitra-
rily and are established by the Sou
Underwriters Association Its
board of is composed OF
men of experience in fire Insurance.,
hut they are members Of the COM
panies making the charges and they
represent the insurance companies.
One desiring insurance cannOt go
on the market and seek terms, as he
can go from one merchant to another.
The organization of the strong com
panies into the Southeastern Under-
writer's Association requires them to
charge the same rates for fire insur-
ance. The system of agencies MAIN
aimed by them, and their methods of
doing business, require other COM
panies, not members of the Southeast
ern Underwriters Association, to
charge the same rate. This is true
tor the reason that an agcEC rep
r~eSentlng companies in the South
eastern Underwriters Association and
companies not members of hat as
ISOLATION is required to sign a stipu-
latiOn that it will observe the rates,
rules, forms and regulations CON
| d11t LII liz pIp11CdllOI hHOWI DIS
Standards for Construction. Rates.
Rules, and Forms p" promulgated by
the Southeastern Underwriters AS
ISOLATION. If an agency dOeS not rep
resent any of the members of the
Southeastern Underwriters AssOcia-
ton, but undertakes to do business
solely for the non-board companies.
it finds that it must conform to the
rules promulgated by the Southeastern
I-~l IN
result in its business being taken from
it by the association. Fol instance
when the increase in rates on furni-
ture and tenant houses was prOmul-
gated in May, 1912, there were com
panies doing business in the State,
not connected with the Southeastern
Underwriters Association that desired
to continue in force the old rates and
attempted to maintain them. The
representatives of these companies
was visited by a committee from the
board companies, who forced the
agencies of the companies willing tC
write at the old rate to increase the
rate under threat to "seW up the
town. and the insurance was there
after written at the rate promulgated
by the Southeastern Underwriters AS
ISOLATION. BY the phrase sew up the
} tOWn' it was meant that if the
: agencies did not quit writing insur
ance at the lower rate, the board com.
panies would send their special agents
/ into that community and have then
: write on long-term policies all tn
l business that could be had at Sucl
rates, as would get the business. II
this way the Southeastern Under
s writer's Association enforced the rate
promulgated by it, and it is by sucl
S method the uniform rates is establish
r ~ 49, ~-l 49,
in the fire insurance business exists
When they thus fix absolutely an,
without consulting the insurer or an
q enc of the State, the rates Whic'
o they charge, We may reasonably eX
y pect those rates to be high. Wher
competition enters into trade. the
the rates of the business are fixed b
the law of supply and demand, bu
where a business is controlled b
IS monopoly, of course. competition doe
II not enter, and unless the law ir
e terVeneS to regulate the rate, it is i
the last analysis fixed by the part
n making the rate. This is the cor
e dition which now obtains in Mort
~ Carolina in fire insurance. MonOpol
al fixes the rate. Under such condition
~ we naturally expect to find the rate
4 charged to be unreasonable. If the1
are enterprises or individuals or o.
CARNATIONS in the State in position
Introduce competition, we may expe,
of to find them obtaining more favorab
s. rates than those in a less fortunar
IN position.
n some Have Secured Reduced Rate
ne A study of conditions of fire i
in surance in this State, and the histo1
Of the rates charged and obtainir
r here, discloSes just what we Won
expect to find. Those who have be-
# IN position, by reason of their org;
C nlZatiOn strength. to demand q low.
at rate have succeeded in obtaining
s AS illustrating how this is done
ed combination of large ope j
h tereSts. the cotton milling indust
nd may be cited. Some wears 400 Il
mil mutuals wrote most Of the !
ete SuranCe on cotton mills Qua ho