The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1918-03-18

NIP A RATE hike
Insurance Companies Not AL
lowed To Increase Rates. -
C. j. Wilson Rules Against Pro-
posed Blanket Plan.
PLANNED A 10 Per CENT RAISE
Insurance Department Holds 1t
Is Violation of Law.
Increased Cost of Living and
Patriotism Into Argument,


planned to increase rates 10 per cent
today have received orders from
Carey J. Wilson, state superintendent
of insurance, to continue operations
urder the old rates. The increase
was proposed in a letter sent out by
c. E. Eldridge, official filing agent
On March IS, Eldridge mailed
bulletin to all insurance agents recon-
mending a 10 per cent hike on all
fire and tornado business with the
exception of farm property and auto
mobiles, the raise to become effective
today. The increased cost of opera
tions during the war was given as a
reason for the increase. He notified
Wilson March 16.
Wilson Raises Objection.
Wilson Immediately notified Ell
drid-s that such an increase would
not be permitted and advised him to
notify the companies of the insur-
ance departments orders. This FL
dredge has done.
Eldridge explains that the increase
would not have been a rate hike but
a sur-charge to care for increased
cost of operations. Wilson holds that
to raise rates under Eldridge's plan
will be looked upon sas a direct viola
ton of law. Wilson, in his letter to
Eldridge, says:
Wilson's Letter.
Inquiries have been addressed to
mo by agents of fire insurance COM
panies from different parts of the
state relative to a bulletin you have
| sent out to agents advising them to
make flat increase of 10 per cent
on the present rate of insurance on
| all property insured against fire and
| tornado save farm property and auto
| mobiles. 1t is dated March 10, 1918,
and is made effective March 49, 1918.
LAS filing and distributing agent
| for large number of the insurance
comp anies, you have this date filed
with me notice of the increase of 10
PEI cent.
Your attention is respectfully
| cumstances can the increase become
effective on March IS. 1918. under the
| provisions of the rate regulation stat
ute. and you will favor the companies
and their agents by warning them
| that any charge they make for insur-
ance, which includes the said 10 per
cent increase, will, in the absence of
approval by me, be direct violation
| of the law ond subject the agent and
company offending to the penalties of
| section 1872 of the General Statutes
| of 1915. "
Doesn't Approve Raise.
1T am not now disposed to approve
| the increase and some of the reasons
advanced in the circular for the in
crease appear to me puerile and not
worthy of consideration. note among
| the reasons given for the 10 per cent
| increase are:
| Capital stock tax.
| Corporation income tax.
| Premium tax. which you state are
in addition to the federal. state and
| last named items amount to 6 per
cent of the premiums received; and
also increase in letter postage.
| Railroad fares.
Pullman charges
Telephone, telegraph and express
charges.
Salaries.
"Office supplies.
| Travelling expenses.
Cost of material in making good
| partial losses.
'I wish to call your attention to the
fact that the companies have provided
for the 6 per cent tax you mention in
the schedule of rates now in force. The
! capital stock and corporation income
| tax present, to my mind. no burden
| imposed upon insurance companies
| that is not borne in common with
| other corporations. When the matter
of the increase was first proposed to
| me by one of the company managers.
the excess profit tax was also included
| as a reason for the increase.
Injccts Patriotism.
ct am amazed that the companies
have taken the attitude they have.
| Why should the insurance companies
be permitted to charge all of the ex-
penses of the war to the assured
Are they less patriotic than the mass
of the people? There is no reason
why companies should not operate at
q ricjS
officer and employe in governmental
agencies are uncomplainingly meeting
the increased cost of living due to the
crisis
1.-THE 1 per cent tax in lieu of the
stamp tax, it is claimed. will wipe out
the average underwriting profit OF
1857 per cent and make an average OF
.433 OF 1 per cent of a loss on every
dollar of premium received. The cir
cular does not show that for every
dollar of premium tax collected the
company proposes to collect $50. II
other words, for every dollar of pre-
MUM tax collected for the United
| States government the company will
charge and retain for its own purposes
| so cents. The iniquity of the proposal
needs but to be stated to be seen
Furthermore, the companies have
| been ordered to show cause why GER
tain changes in the schedule of rate.
!, looking to more equitable distribu
ton OF the insurance burden and tC
II eliminate certain discriminatory rate.
now existent. should not be made. Ont
session has been had already The
companies contend that the order is
sued by. me is very decided reduction
| in rates and upon their request the,
were given time to prepare thei1
showing. The hearing was postponed
to April 9. The justice of the order
I have made and the adequacy of the
rates have proposed will at that tim,
be taken into consideration
I'm view of the proceedings pend
ing before me touching fire insurance
| rates am induced to look with som,
, indignation on tins attempt of tn
| compa MES to inject, under the guis
of a war stress, an issue that is S,
u Intimately connected with what is nov