Bismarck daily tribune. [volume] (Bismarck, Dakota [N.D.]) 1881-1916, 1916-09-01

! domestic stock insurance companies
need have a capital stock of only
100000, upon which they may lin.
sure against loss or damage by fire,
lighting, cyclone, tornado or hail, or
transportation, or to make insurance
upon the lives of persons and every
insurance pertaining thereto, and
against accidental injuries, including
the granting, purchasing and paying
of annuities and indemnities, and to
transact fidelity insurance and cor.
porate suretyship." Each and every
one Of the kinds Of insurance above
mentioned may be transacted by a
domestic company with a capital
stock of 100000.
Not only that, but our domestic
companies, other than life, are re.
quired to maintain as a reinsurance
reserve a sum equal to only 40 per
cent of the amount of premiums on
all unexpired risks and policies, while
the New York standard, which is
common to nearly all of the states,
provides for a reserve of so per cent
on one-year policies, with the re.
serve on term business figured on
20 rata basis.
2Ior the purpose Of securing a more
9luate measure of protection to
kakyholders, it is suggested that our
Nbe amended so as to provide for
aWphimum capital stock of 100000,
upon which only a certain designated
kind or kinds of business could be
transacted; and that for each add.
tional kind or class of business desir-
ed to be transacted, an increase OF
capital stock of not less than $4,000
be required. 1t is also recommended
that the reinsurance reserve require.
ment be brought into harmony with
general usage-50 per, cent of premi-
ums on risks running one year or
less, and pro rata for longer terms.
However, this does not apply to life
insurance companies, which are gov
erned by a different reserve standard
of whose adequacy there is no ques-
ton. In lieu of such amendments,
I believe that any degree of impair.
ment of the capital stock of do
nestle insurance company, other than
life, should operate to put the COM
pany in the deemed-to-be-insolvent
class. .. -'.~--.-,
County MutuaIs.
I cannot conclude this report with
out an expression of the peculiar
pride and interest which / feel in the
history, achievements and sound fin
ancial condition of our county mu'
tual insurance companies. 1nsuring
the property of their members
against loss or damage by fire, light
ming and cyclone, their activities are
carried on so quietly, unobtrusively
and satisfactorily withal, that their
Importance is quite lost sight OF.
Practically speaking, no complaints
ever reach this department concern.
ing the methods of these mutuals.
No difficulty is had in connection
With the adjustment of losses, and
claims are paid promptly. This is
the more significant when it is recall
ed that there are 40 county mutuals
in the state, with insurance in force
Of more than $60,000,O00.
One of the chief factors in the
successful operation Of the county
mutuals is the remarkably low cost
of management. In the case Of "old
line" fire insurance, and the allied
lines, nearly half of the premiums
paid by the insured go into the in.
satiable nav Of expenses" In other
words, of every dollar paid in for
insurance, about so cents is paid out
fer salaries, commissions, inspection,
etc.
To bring the matter nearer home,
and to avoid any suggestion of un'
fairness, I have made calculation
of the actual cost Of operating our
six leading domestic state mutual
fire insurance companies during the
year 1915, as we'll as the cost of op-
Grating six of the leading county mu-
tuals for the same period. Compare
tive results are amazing. In the case
of the six state mutuals the amount
of insurance in force aggregated SILL
S36,167, and the Expense element"