The New York herald., 1921-04-27
UNTERMYER SEES
MONOPOLY in CITY
FIRE INSURANCE
Calls the New York Ex-
change Most Rock Ribbed,
Despotic and Cruel
( Organization
MANAGER is EXAMINED
Admits Control of Risks
With Board Writing ST.
000,000,000 in Policies
Last Year.
Sf8,OOO,OOO IN PREMIUMS
William Schiff, Broker, Testi-
fies to Heavy Penalty I'M
posed for Firms Non
Board Dealings.
Si8,OOO,OOO IN PREMIUMS

The New York Fire Insurance Ex-
change, a membership association COM
posed of insurance companies and
the price property owners in this city
must pay for fire protection, was de-
Scribed as the most rock-ribbed, des-
potic and cruel monopoly in the State
of New York" by Samuel Untermyer.
counsel to the Lockwood committee.
when the committee resumed yester-
day it's investigation into housing con-
ditions in this city. The committee has
been in recess since December.
Mr.. Untermyers characterization Of
the association as a monopoly was
made while Willis o. Robb, its man
ager. was endeavoring to explain that
although the exchange fixes the rate
at which fire insurance shall be ef-
fected within this territory and i'm
poses summary discipline upon any
broker who places insurance in any
company not upon its lists, it is not in
fact monopoly. All of the afternoon
session of the Lockwood committee
was given over to inquiry into fire in
surance as one of the controlling con-
ditions affecting housing in this city.
Constitution of Exchange.
Mr. Robb. called as the first witness
Il. respect to fire risk and insurance
rates. testified that he was manager of
the insurance exchange at a salary while
Tho rest of its officersf are officials OF
member insurance CON, anies who serve
without pay. These N h only direct its
policies and pass upo| breaches of its
rules. Its offices are at 123 William
street and It employs It's clerks and
inspectors and costs from s525.000 to
s550.000 a year to maintain.
The exchange has never been incorpo-
ated but Is merely an association by
agreement and its membership is made
up of eighty insurance companies and
forty agencies and all insurance written
by members or the exchange Is placed
by $500 brokers. Every person solicit
ing insurance In this State Is required
10 take out State license but the
brokers' who place insurance with COM
panies which are members of the ex-
change must also obtain a certificate
from the exchange. Before the certifi-
Gates will be granted the applicants
must sign at least one of two pledges
which the exchange exacts
The first pledge binds them not TO pay
10 or divide commission with any per-
son not holding a brokers' certificate.
and the second requires them not to
place insurance with "non-board" COM
-anies or companies not members of the
exchange until member companies have
been offered the insurance and have re-
fused II.
Mr.. Robb testified that II Is extreme
~ difficult for any broker not on the
exchanges list to live by selling insur-
snce in New York.
Volume OF Business.
In premiums. he said, the various
companies took In about sis.000o last
year through the trokers with whom
they dealt and wrote in all about
5000. 900. 600 worth OF policies on prop
erty within this city. He declared him
self unable TO say what the profits 10
tho companies had been. and was told
70 bring the necessary records with him
to-day. Mr.. Untermyer will attempt to
show that about half the money paid in
premiums is clear profit to the COM
panies.
Mr. Robb, Just before his testimony
ended. admitted that the brokerage firm
OF Schiff, Terhune Il Co. had lost Its
exchange license for six weeks for plac-
ing 100000 worth of insurance with a
'non-board' company at rate one
third lower than the board companies
had fixed and that the insurance brokers
had been disciplined not because there
was anything wrong with the mon
board concern but because they had
dealt with II at all.
William Schiff OF the brokerage firm
testified that for placing a large policy.
as described by Mr.. Robb. with a mon
board company his firm lost It's ex-
change certificate for six weeks and
during the six weeks. which will not
expire until May 10, will receive no COM
missions at all for such insurance as II
brings to the exchange companies
Mr. Schln declared that the fact that
he lost his exchange certificate was pub
lished In several newspapers and
amounted 10 n severe hardship. because
many OF his clients not knowing the diff
ference between a state license and the
exchanges certificates. thought he had
lost his State license for Illegal conduct
Ills final piece OF testimony was 10 the
effect that n broker were 10 lose his
exchange certificate for good and all he
might just as well close his office.
It came out also yesterday that the
compensation department" OF the
Building Trades Council, which absorbs
81 a month from $4,000 workmen, is
stlil functloning but not likely TO perse-
we're.