The daily Gate City. [volume] (Keokuk, Iowa) 1855-1916, 1915-11-01

Some of the MISUNDERSTANDING of
the new Iowa fire insurance law are
| cleared up in the following editorial
in the Sioux City Journal
"a number OF Iowa newspapers are
jumping to wrong conclusions as to
the purpose and effect Of the new law
for the regulation of fire insurance
companies; that it repeats the anti
compact law; that 1t gives the COM
panies monopolistic control OF rates:
that 1t means the perpetuation of ex-
tortionate rates; that Insurance Com
missioner Emory English played into
the hands of an insurance trust" in
urging its adoption; that the law
ought to be repealed by the next legis-
lature. ALI OF these conclusions arc
founded on information that certain
policyholders Of certain classes have
been required to pay higher premiums
than under the old muddle of unregu-
lated competition. Not one can be
supported under the rule Of reason.
THE new law was not prepared and
put over by the insurance companies.
1t is q progressive measure, based on
the recommendations Of special COM
mittee appointed by the national con-
vention Of state insurance commission
ers-officials elected by the various
states to protect the public from ex-
pIoitation by the insurance companies.
Iowa was not alone tn adopting legis-
lation along this line. Bills applying
the same principle were passed this
year by the legislatures Of Michigan,
Minnesota, Missouri, Oklahoma and
Pennsylvania. Similar laws had been
in force in Massachusetts,, New York.
New Jersey, Virginia, North Carolina,
Kansas, Montana, Kentucky. Texas,
South Carolina, and West Virginia.
The principle was endorsed by the
state insurance commissioners from
all the states because 1t had proved
successful in the states where already
applied.
"The theory of the new statue is
that insurance rates on different
classes Of property shall be based on
the degree of hazard involved and
there shall be no discrimination be-
tween policyholders in the same class.
The purpose is to render favorttism
impossible in the classification OF
risks and to prevent rebating in the
form of cut rates to favored districts
or policyholders. Practically, the law
applies to the insurance business the
samo anti-discrimination and anti-re-
batting restrictions now applied to the
railway business by federal and state
law. To make sure that the rates
shall be scientifically constructed in
the first place, the companies are re-
quired to use rates devised and p;lb-
1ished by expert bureaus. Having ac-
copied and published bureau rate.
the company Is required to offer 1t to
all policyholders, Just as the railroads
are required to offer the same rate to
all shippers If it is appropriate that
all railroads shall charge the same
rate for like service to all shippers,
it must be equally appropriate that
tho insurance companies. also operat-
ing public utility, shall have uni.
form rates and apply them without
! discrimination to all polfcyholders.
Before the new law was passed,
the insurance business in Iowa was
| thoroughly demoralized. The anti
compact law forbade the companies to
make agreements as to rates or as to-
anything else. The result was per
iod of thoroughly unseientific and I'M