New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1921-08-14

MOT in boastful spirit but
with deep satisfaction it may
be stated, believe, that no
business has played larger or more
generous part in the economic de-
velopment Of the United States
than stock fire insurance, and ever
since coordination for the purpose
of rating was accorded public APP
proval and given widespread legis-
lative endorsement, achievements in
Safeguarding America Against Fire
have been signally successful.
1t is to the public's interest to
pay fair rate for fire insurance
and to get the best possible indem-
nity-that which is as nearly certain
as human foresight can make it.
Poor or uncertain insurance is
worse than none at all This series,
therefore, has been specific in its
references to "stock" fire insurance
companies, which are those with
paid-in capital stock, adequate re-
serves (required by the laws of the
several states), and surplus accu-
mutations held to make your indem-
nifty the more certain-the COM
panies that are regulated by the
most rigid laws, whose standards of
solvency are the highest and whose
measure of security for your pro-
lection under all conditions is the
greatest.
In introducing this sketch mention
was made of the marked development
that has followed public approval of
coordinated effort. The modern sys-
tenn Of fire insurance rating, into which
the loss experience of 95 per cent of
the insured property of the country Is
now gradually being injected, can in no
sense be classed as a trust or a mo-
nopoly. Our business, today, is con-
Quoted to prevent discrimination be-
tween insurants, to keep down the cost
of the service to the public and at the
same time to offer immediate induce
ments in lower rates to those who
safeguard their property from fire,
thus giving them voice in making
their own rates.
In the old days all rating was done
by officers and field representatives of
the companies themselves, but in later
years the work has passed into the
hands of trained men, experts, indepen-
dent in a large measure from both
stock companies and agents, because of
the intense competition in the business
between the various companies and
their representatives in every hamlet,
village and city in the United States.
No other result could be expected
Just how rating is drifting away
from direct company control is told in
the report of the Illinois Legislative
Commission appointed to investigate
the whole subject. "The work Of con-
structing basis schedules" the report
says, instead of being performed by
secret conclaves of underwriters them
the public has been led to believe. ap-
pears from our testimony to have
passed out of their hands almost en-
tirely into the hands Of trained ex-
perts. The testimony shows that ire
companies have little or nothing to do
with the construction Of schedules. The
schedulc-maIer in fire insurance today
occupies a position analogous to that
Of the ac-uary in life insurance. lie IS
expected to deal with fire hazards By
analysis and classifcations Of clemen~
tary parts
Coordination among companies to re-
duce costs and prevent determinations
between insurants; schedule rating
subject to basic review by the State If
desired; and adequate insurance to
value, point touched upon briefly in
a previous sketch-these elem entails,
contend. together with limitation on
the maximum distributaole profit to be
realized on the net transactions Of the
companies, form the safest and sanest
method yet devised for the economic
administration OF any business Of
quasi-public character. This, indeed,
is the present day basis on which stock
fire insurance companies are operat-
ing.
Our agreement with the National
Convention Of Insurance Commission
ers to limit the profits to be derived
from net underwriting operations was
effected last spring alter years Of nego-
tiations It is based on fve-year aver
ages, defines confagrations and covers
also the relationship between states
all factors Of vital Importance.