Manchester Democrat. [volume] (Manchester, Iowa) 1875-1930, 1915-10-13
Editors DemOc Graf


I Editors Democrat -
There was published ia the Press
g few weeks ago, an article regard
ing the new Insurance law, and ts in
order to give the public the other
side Of the question, / wish you
would publish this article In your
next weeks issue. Thanking you, I
beg to remain, Yours truly,
w. c. KIRCHHECK.) 81
A number Of Iowa newspapers are
jumping to wrong conclusions as to
the purpose land effect of the new
law for the regulation of fire insur-
ance companies. Some Of these con-
clusions are: That the law was pass
ed at the initiative OF the insurance
companies; that it repeals the anti
compact law; that it gives the COM
panies monopoltstic control OF rates;
that 1t means the perpetuation Of
extortionata rates, that Insurance
Commissioner Emory English played
into the hands OF an insurance
trust" in urging its adoption; that
the law ought to be repealed by the
next legislature. All Of these con-
illusions are founded on information
that certain policy holders or certain
classes have been required to pay
higher premiums than under the old
muddle of unregulated competition.
Not one can be supported under the
ruiz Of reason. $,1 tiia>
The new Iowa law was not pre-
pared and put over by the insurance
companies. It Is a progressive meas
ure, based on the recon mendatt tons
Of special committee appointed by
the national convention of state 1n-
surance commissioned officials
elected by the various states 70 pro-
tect the public from exploitation by
the insurance companies, Iowa was
not alone in adopting legislation
along. this, line. Bils applying the
same principles were passed this
year by the legislatures OF Michigan,
Minnesota, Missouri, Oklahoma and
Pennsylvania. Similar laws had
York. New Jersey. Virginia, North
Texas. South Carolina and West
Virginia. The principle was indorsed
by the state insurance commissioners
from all the states, because. It had
proved successful in the states where
already applied. ..., ..,. :.:f:;
The theory Of the. new statute 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 policy holders in the same
class. The purpose is to render fav-
oritism impossible in the cla:ssifica-
ton jok risks and to prevent rebat-
ino in the form OF cut rates to fav-
|ored districts or policy holders. Prac-
tica1ly, the law applies to the insur-
ance business the ssme anti-discrim-
nation and antf-rebating restrictions
now applied to the railway business
by federal and state Law. To make
sure that the rates shall be scientd-
ficAly constructed ip the hrst place.
the COMPANIES are required to use
rates devised and published by .ex-
pert bureaus. Having accepted and
published . bureau rate. the COM
'pany Is required to ofer It to all
policy. holders just % the railroads
are required to offer the same rste
to- all shippefa. II it is appropriate
that all railroads shall charge the
same rate for a like Service to
all shippers, it must be equally APP
propriate that the insurance compa-
MES, also operating public utility,
shall have uniform rates and apply
them without discrimination to all
policy holders. ss,t /. I. S4 D
Before the new law was passed
the insurance business in Iowa was
thoroughly demoralized. The anti
tooG;pact law forbade ! The companies
to make agreements as to rates or
as to anything else. The result was
la period Of thoroughly unsc1entific
and unfair premium writing. Cut
threat competition ragged. Big pol
icy holders, or policy holders with 2
pull, got insurance below cost, while
less favored policy holders paid rates
that were unreasOna6ly high. There
was q bureau rate that could not be
legally enforced and was observed
only when an insurance agent was
offered no inducement to cut 1t. I'm.
der the operation Of the new law
old board rates we're reduced mater
tally to establish basis for new uni
form rates. I. They were not, however,
made? SO low as the, cut rates which
many pet policy holders were enjoy
ing under, the old rebate plan. Most
IL the early complaints a&aisst the
new law have come from communi-
ties where rate cutting nourished and
from policy holders whose rate was
unreasonable low. To balance these
complaints, there will come express
sions at. satisfaction from policy
holders who had no pull and who
paid the high board rate under the
old law, but who have come In for
tho honofyt ~ thas reduction made