New-York tribune., 1921-04-27
Grip of Fire
Risk Bureau
In City Barred
tconslrucd from page one,

such exchanges throughout the state,
Fnown as the Suburban Exchange of
Long Island. the Buffalo Association Of
Fire Underwriters, at Buffalo. and the
Association of Fire Underwriters of
New York State.
IL was testified that the exchange
mere issued schedules to its members
on the basis of which the rates were
hXed These rates were uniform for
an members. 1t was the contention of
Mr. untcrmyer that this acted undulv
TO boost premiums on fire Insurance.
and thus add to the cost of housing
IT was testified that where it was pos
slnle to place insurance in isolated
cases with firms not members of the
exchange the rates were on an average
OF 20 per cent lower. One case of a
slash of 33 1-3 per cent lower was cited.
Brokers Have to Sign Pledges
Mr.. Robb testified that insurance
brokers' had to sign pledges to observe
the rate schedule and to bring business
ohly TO ilrm which were members of
tne association Violations OF these
Piedges rendered the broker liable to
heaVy llnes or expulsion. The suspen-
SION or expulsion of a broker. of whom
mere were $500 in the city, it was tes-
tined, practically put him out of bust
ness, as no member tirm of the ex
change was permitted to pay commits
sions TO brokers who did not have a
ccrt'flcate from the exchange permit
ting him to do busines with exchange
members.
:. Firms violating the rule pertaining
10 10 dealing with brokers not within
hn
rates, it was declared, were also liable
to expulsion. and so deprived of the
avenue of placing reinsurance.
isn't this the most despotic and
rock-ribbed monopoly in the State Of
New York; asked Mr.. Untcrmycr of
Robb.
mo, it is not" he replied.
ou tel us that members of your
exchange fix rates, that they are uni
form. ana that brokers can't do bust
ness with your members unless they
OBTAIN certificates granting them the
right to do SO, and yet you say this
is not despotic ?"
Robb said that brokers had a right
to do business without these certifi-
Gates under the state license. but that
firms would not give them commits
slons for business brought by these
brokers to them unless they had ex-
change certificates"
Ife American Druggists Fire Insur-
ance Company was one of the few firms
clted, not members of the exchange
Who did business with brokers not rec
ognized by the exchange. This firm.
1t was testified, granted insurance at a
rate 20 to 25 per cent lower than that
of the exchange members.
Cites Case of Disciplinine Firm
The fire insurance brokerage firm Of
Schiff e. Terhune was mentioned by
Robb as having been recently disci-
plined for giving business to the Lum-
bermen's Mutual Fire Insurance Com
pany, where the Schiff firm obtained a
rate 33 1-3 per cent lower than the rate
regularly charged by exchange mem
bers. The Schiff firms certificate was
revoked.
You knew it ended tbs Schif firm s
ability to do businessI dVn't you?"
queried Mr.. Untermyer of Rob.
yes" he replied.
There was no appeal from your ex-
change, was there?"
NO. We could make the exclusion
last for ever, but we don't 1t was re-
voked for six weeks during which
Ierlod 1T got no commissions for it's
business
"And yet this firm has a license from
the state to do business" added MI.
Untcrmyer.
1t developed here that the state had
no authority to limit rates on fire in
surance so long as there was no dis
elimination to householders. Robb said
that the premiums of the exchange
members in 1920 amounted to s4S.-
100000, upon which about $1,000, 900
Of
Mr.. Untermyer said that the companies
earned from 60 to 70 per cent on their
capital stock under the protection of
the exchange system. In 1919 The pre-