The Leon reporter. (Leon, Iowa) 1887-1930, 1915-10-28
NEW INSURANCE LAW.
State Insurance Commissioner Re-
plies to Inquiries About Rates
Says New Law Does Not Per-
nit Monopoly.

great ucdl VI CuSSluS DelLS luuulScu
in by policy holders in Iowa over the
new Insurance Law which went into
effect in Iowa July 4th. Many policy
holders who have had occasion to
have their policies renewed since that
date have found that there is big
increase in the amount of premiums
which they have to pay. State Com
missioner of Insurance Emory II.
English defends the new law and
says it is not understood as yet, and
everybody will admit that it is pref
ty hard to make man understand
the virtues of law which COM
pels him to pay double or treble
what he was paying for insur-
ance before the law went into effect.
Up at Denison, Iowa, there is a Lot
of kicking, and we have heard some
kicking right here in Leon. Senator
G. l.. Caswell, editor of the Denison
Bulletin, recently received the fol-
lowing communication from Commits
sioner English, which we republish
for the benefit of people who buy in
surance:
Insurance Department of Iowa.
Des Moines, Oct. ~, 1915.
Hon. G. l.. Caswell, Denison, Iowa.
Dear Senator:-Just before my de-
parture for the west, complaint was
filed with the department that the
principal rating bureau operating un-
der the provisions of the law was is
suing rules, forms for pe:mlts, rid
ers, endorsements, etc., with instruc-
tons to agents that same should be
adhered to without variance there
from. In order to correct this mis-
application of the law, l made and
issued the following ruling:
*"The new rating law being in addi-
ton to and not repeating any former
Legislation it is held by the commits
sioner of Insurance that all forms,
rules, permits and endorsements as
filed by rating bureaus under which
the hazard of the risk is not affected
as indicated by the rate, can be adj
visory only as the mandatory use OF
such filing would be in conflict with
the provisions of the law prohibit
ing any company, agent or emplOye
from entering any agreement as to
the manner of transacting business.
''Under the new law companies are
permitted the services of rating bur-
eaus in determining the hazard of a
risk and fixing a rate thereon. Dis
elimination is also prohibited.
"Under this decision, companies
are allowed to use such of these
forms, permits, rules or endorsements
as they see fit Gall printed endorse
ments being subject to approval by
the commissioner and regardless Of
any filing or PRONUNCIATION as may
have been made by the rating bureau
with which they are affiliated, the
only restriction being that to avoid
discrimination any form or permit al
lowed under one policy must be al
lowed on all others covering property
of the same class"
This correctly interprets the law
and the intent of the legislature en-
acting it, and encourages the element
of competition. In this respect the
law is being subjected to unmerited
criticism, and have corrected the
misapprehension that seems to exist,
wherever I meet it. Some of the news
papers are charging that all competi-
ton between fire insurance compan-
les has not only been eliminated, but
actually prohibited.
The inverse of this is the fact.
While the new rating law takes the
power and authority to make rates
away from the local agent and re-
quires rates of companies to be filed
through rating bureaus, there is wide
latitude in organizing and operating
bureaus, even to the point OF any
authorized company operating it's own
bureau and making such rates as its
loss experience may indicate proper
or it's officers NAV desire,
Even were there requirements OF
all companies to use rates of one
bureau (Which is not the case) ample
provision for competition between
companies is made in Section Five OF
the Act (Code Supplement Section
175S-n) wherein any company may
vary from the rates of the bureau Of
which it is a member. The only re-
striction upon this action is that II
shall be made public and not secret
and fifteen days notice of the varia-
ton be filed with the insurance de-
partment and the bureau, and that
all property in the same class be en-
titled to enjoy the same rate. 1t is
repugnant to all sense of fairness
that one citizen should be allowed a
concession at the expense of other
-
now prohibited.
The law does not create or permit
a monopoly. It is not true that no
company can write fire insurance in
Iowa at less than the bureau rate.
The fact is, a company can charge
any rate it sees fit, provided the rate
is the same for all risks of the same
character, and is on file with the
Estate insurance department.
AS an added precaution against a
monopoly or unjust rates, the law
confers upon the state the right to
review any. rate of either company or
bureau, for the purpose of deter
mining whether the same is discrim-
inatory or unjust. Thus the same
authority is given over fire insur-
ance rates that the state assumes
and enjoys over railroad passenger
and freight rates, or the city over
gas and electric light or street rail-
way rates.
You are aware that the theory of
the law is that rating of properties
Tin the state should be properly based
upon construction, exposure hazard