The New York herald., 1921-05-30
Big DROP EXPECTED
in FIRE RISK RATES
Reduction of 10 to 20 ?. C..
Predicted as Result of
Lockwood Probe.
NEW LAWS PLANNED
Untermyer to Urge Bills to
Curb Practices of Insur-
ance Exchange.
MORE EXPOSURES COMING
Stadtmuller, Convicted Of Ex-
tortion, to Tell All He
Knows to Committee.
MORE EXPOSURES COMING

A drop of at least 10 and possibly 20
per cent. in fire insurance rates in
New York State in 1922 is predicted
by insurance men as a result of ex-
posures brought out before the Lock-
wood legislative committee by Samuel
Untermyer. These revelations have
disclosed the existence of system of
regulatory control of the local insur-
ance field, which members of the COM
mittee believe is as complete and has
functioned as we'll as the rings that
factor and the prices OF the various
materials entering into the building
industry. 1t has been estimated that
at least s2O.0OO,000 can be saved to
property owners of the State. based
I on estimated total premiums paid. for
fire insurance in 1920 OF s10o,0OO,o0o.
Insurance experts such as Alfred NJ.
Best, publisher of Best's Insurance
Reports, and a recognized authority on
fire insurance matters, have no hesi-
taton in estimating the reduction they
expect will follow proposed new legis-
lation at 10 per cent. Mr.. Untermyer
and members of the committee expect
1. will be considerably more.
Untermyer Going Abroad.
Mr.. Untermyer will sail for Europe
June Is for a stay of two or three
months. While abroad he will write
his report on the disclosures of condi-
tions revealed by the Lockwood COM
mittee One of the most important fea-
lures of this report will be the sugges-
tion for remedial legislation to be laid
before the Legislature, either at a spe-
cial or the next regular session. On
this matter there is no dissension be-
tween the political elements represented
in the committee
1t may be stated in advance what
these recommendations are most likely
to include, if the insurance companies
themselves and the four so-called ex-
changes controlling New York lState
do not meanwhile voluntarily adopt new
regulations. Committee members say
that sentiment as 1t has so far ex-
pressed itself leaves no doubt that the
remedial legislation to be urged will be
promptly enacted into law. 1t will In
clude, in brief:
/. A bill to fix minimum and
maximum rates within which free
competition must play, or one au-
thorizing the establishment of these
rates by the State Superintendent
of Insurance.
q A bill to compel the insurance
exchanges to admit mutual COM
panies to full membership and privi-
leges of rating information without
abandoning their proft-sharing prin-
ciples.
3. A bill to prohibit exchange in
surance companies from requiring
brokers and agents to handle nsur-
ance for only member companies.
a. A bill compelling the ex-
changes to permit reinsurance be-
tween members and non-members
without discrimination. provided
10th parties to the contract are
solvent.
Expect Speedy Saving.
An immediate saving of per cent
TO policyholders, it Is argued. would
follow the passage of legislation that
would stop the exchanges from making
It profitable for agents to restrict their
business to member companies only. As
II is now, brokers and agents signing
such a stipulation-and the committee
has shown that the great majority OF
them do so-are permitted to charge an
additional per cent. commission. which
is added TO the premium and paid by
the policyholder.
The bill to prohibit this practice prob
ably also will include provision making
II possible for a person desiring insur-
ance to purchase II at company head
quarters at discount approximating
the agents commission. At present this
Ia impossible in New York. Commits
sions paid to agents and brokers aver
age about Fl per cent. OF the aggregate
premiums. and in the case of the stock
companies represent about half the cost
Of doing business. The last mentioned
Is item. In the opinion of the COM
nittee. that would be materially re-
duced If II were possible to buy insur-
ance over the counter and this re-
duction reflected In reduced premiums
for other classes OF insurance
Still another recommendation that
may be made Is one that would inaugu-
rate some sort Of supervision over the
investments of fire Insurance companies.
This is a phase OF the insurance ques-
tion that Mr.. Untermyer intends to pur-
sue when the committee resumes hear
ings tomorrow. Investments in high
ly speculative securities, he believes. has
encouraged stock gambling and the
practice of accommodating unrevealed
profits
In the testimony brought out last
week through Mr.. Best, the reports OF
certain companies showed net loss. In
one case OF n million and a half dollars,
although the company in question paid a
dividend. This paradoxical achieve
nent was made possible by writing
down" investments to meet a depressed
market and the result has been to set
committee members thinking whether
some Government supervision and con-
troll Of investments might not be wise.
The indications are that this week s
programme of the committee is likely to
be disarranged to some extent by Peter
Stadtmuler, former head OF Robert r.
BrindeIl's Dockbuilders' and House
Shorers Union. who was convicted last
week OF extortion and Is TO be sentenced
BY Justice John v. McAvoy on Thurs
cay stadtmuller. who was known in
labor circles as Honest Pete" sobri-
quet tackled on him by Brlndell. has
sent word that he wants to tell his
whole story to the Lockwood committee
and that 1t will include few things
more sensational than anything yet
brought out.
Joseph Moran, who was Brindell's
- az.