The New York herald., 1921-08-28
IAN you visualize the distrust

3A among policyholders-equiva-
lent almost to panic-that would
have followed the San Francisco con-
flagration of 1906, with its unprece-
dented loss, had it not been for the con-
fldence OF the people, everywhere, in
the good faith and financial integrity
Of stock fire isnurance companies?
During three days time that disaster
J wiped out insured property values
greater by some sixty or seventy millions
Of dollars than the aggregate surplus of
all the stock companies then licensed
to do business = California;
Was this ccr--tdence Of the people
misplaced? NJ As stated in one Of
the earlier Sku's nes, the company
failures were negligible and stock
I holders promptly responded to the call
for the restoration Of depleted capital
and surplus Golfers.
Stock fire underwriting, quite az
much as if not more than banking, is
dependent on the confidence Of the
public, and that which destroys con-
fidence works almost irreparabe dam
age, SO insidious is the progress Of
calumny and so difficult is it to over
take and refute.
Until fire comes a policy contract
seems Of but little importance and often
is tucked away and forgotten. Hence
it is of first importance that those who
buy fire insurance to protect their
property interests, and assure the peace
of mind which leaves them free to
prosecute their own business affairs,
should have nothing but the best the
market affords Any form other than
stock" fire insurance puts the policy
holder in the insurance business him
self, with all its hazards and response
bilities, and merely creates for him
new liability; not relief from one already
existent.
In the public conception, all branches
and classes Of companies are too often
Jumped together, even though they
have nothing in common and are vastly
different in organization requirements,
methods, practices and operation. The
impression exists only because they are
all called insurance companies.
Let me divide the groups of COM
panies first into those indemnifying for
4 l1) property damaged or destroyed; ~
accidents and injuries to people; 90
failure in surety or fidelity; and a.
death, naturally or accidentally. They
are known broadly as fire and marine,
casualty surety, and life insurance
companies. Again these are subdivded
4 into classes-stock and mutual.
Each branch, and each class in each
i branch, is governed by separate insur-
ance statutes Of the several states and
d in every case, except life, the reserve
requirements for stock companies are
1 the highest and their standards of SOL
vency the most rigid. In life insurance
4 alone-an entirely distinct service and
4 with no relationship whatever to other
I branches stock and mutual COM
panies are required to reserve under
identical standards.
This explanation is made in answer
to inquiries that have developed since
the publication Of these Sketches was
/ undertaken. | am, Of course, speaking
| only for stock fire insurance companies
and am trying to make plain that few
4 principles and few statutes applicable
i to other branches properly could be
applied TO them. The functions and
emergency requirements in our branch
and class are peculiar to us alone.
You will have observed in these ar
ticles, Of course that no attempt has
\ been made, except by mere reference, TO
touch upon outward and visible services
Of fire underwriting such as the adjust
mant and payment Of fire losses. You
I meet that every day, and know all about
4 it. | can say, however, with the GER
tainty Of expressing no more than exact
] truth, that every stock fire insurance
company seeking the confidence of the
n public earnestly desires to pay its losses
promptly and honestly and in accord
ance with the policy provisions. The
4 honest man has nothing to fear, ever,
l as every legitimate company will gladly .
assist him in getting his Just due when
A loss comes.
The policy contracts issued TO yos,
which guarantee indemnity for loss ~.
the property specified. are more fH
your protection than ours. For many
4 years these contracts have been pre-
! scribed by statutes Of New York and I
many other states both as to insuring !
conditions and restrictions, and TO size .
\ Of type. They are Standard Policies"
in fact as well as in name, the pro- 4
visions for our common protection hav-
ing been clarified by court decisions
until there is no doubt Of their intent.
Before loss occurs, as previously
stated, a policy Of fire insurance seen~
l ingly Is Of little Importance but after
\ that event il becomes a document OF
great value Then the contracts 70
which the stock fire insurance COM
panies put their names and guarantees
are, to all intents and purposes. sight
] drafts within certain contractual limita-
tions, OF course. but still sight drafts
/ upon the makers in favor Of honest
claimants. These guarantees are
backed by capital, surplus and the
statutory reserves previously explained.
They constitute Insurance within the