New-York tribune., 1921-01-01
Law $ Sought
To Aid Marine
Reinsurance
Removal of Legal Checks
on American Facilities
l. Called For in Report
Made 10 House Committee
Business Goes Abroad
gnsiriclions Under State
:aiutes Make II Hard to
Compete With Foreigners

&Vkii w ft-2 : III
Failure to appreciate the vital i'm.
pcrtance OF reinsurance. toge ,her W tt
existing legal restrictions, is ham-
pering the development of American
marine insurance, according to the re-
vor made TO the House COMMITTEES or
Merchant Marine ano Fisheries and
the Shipping Board, by S. s Huebnor
insurance expert to those bodies.
Heretofore. 1t is stated. American
legislation has prevented, rather than
eucoaragc,i. TIC estaolshnAcn: here OF
scientific system for spreading
liability through successive Insurance.
an tbs III that none but authorized
Insurance companies shall do business
or share in the premiums paid for
indemnity on America risks is to a
certain extent responsible for the con
tro OF this field by foreign capital.
Fecause OF the limited character of
American reinsurance facilities, it is
added, g very large amount of Ameri-
car marine insurance has tound its
way u the foreign market by way of
reins ura1ce In numerous cases the
companies have declared that their re-
Insurance with foreign underwriters
has been due to necessity and not
cheies, because OF the ;Ack Of facilities
here
foreign Concerns Attitude
One Of the diaiculties confronting
our companies in -ompetir on with
tier stronger foreign competitors. "
says the report was the 5act that
gn com pauies. when offered q
.- p
on taking all CT none Such an at
t,trde Z was clearly impossible for
tn sma Iar c0mpan es to take.
In view of the strategic Importance
OF marine Insurance in the upbuilalne-
Of our mere ant marine and our for
eign trade il is unfortunate that 50
many Of CIR states lou'd have made
it unnecessarily difficult for companies
TO eni2 ge their reinsurance facilities
VIII ether American underwriters OF
the Hfs cur supervising jurisdictions.
comprising all states. terrlt ries and
the D met of Columbia, al EXCEPT
ten have statutes governing reinsur-
ance coded 70 cong mics organized in
o.her So tes oT countries. In nineteen
Of tne supervising iuris sdictions it ap-
pear -.iat marine insurance companies
are limited in their search for rein
surance facilities 20 the companies au-
thorlzed t. transact business within
The Jurisdiction invo we'd"
Leg. Station Asked For
To enlarge tie reinsurance oppor-
tunitiez OF American marine insurance
companies tn, following plan is recon-
mended Tor legislative enactment by
stats:
That every insurance OF reinsur-
ance company au horned to transact
.r-t .fr1.
Under consideration be permitted t. re-
insure any part OF IN Individual risK
with al company ice censed in the
state. OF b.. and this IS the important
iear--e. "a company licensed IN any
oth1r te which shows the same
stanEerds of solYency as would be re-
qu'~ei il II we're at the time Of such
reinsurance authorized in the state
1noeT consideration - ins are risks Of
the ssn@ kind as those re4nsured.
"Nnere reinsurance is ceded to
conpanies ether than he two classes
specified no credi is TO be allowed to
the ealing company for the reserve
liability on sach reinsurance. More
ovef. cor e0t of fhe superintendent o.
III rance sfogll be req iirCd in case
tn company desires t. reinscre al Of
rs asks within any one Or more o. the
se' q al classes Of insurance il may
De writing"
.es Check Reinsurance
Gener~. s6optlon Of such ( plan, it
Is stated you / facilitate greatly the
exchange Of Dusiress between corr
panies and WOULD re ove The restric-
tive eject -pon rel u-ance Of the
HVn er.-s state statutes whicN either
pa insurance facilities 70 admitted
tor rrtea, or, Were non-admitceG com
pan may be used, refuse 10 a ced-
4As .l--ter any reduction Of taxes, or
.eftffc l40i'itr. Tor reinsurance C.
-ee,-- F.ta an insurer -. authorized
% '-- 90. eyes iu t0c c.-.te.
~ ie" ot tie vtel Importance Of
enas.ias American Insurance com
S~nies - participate ia foreign mar
assS Gays the It. "it is dific ut
% ln1eis land " y artificial barriers
nae be- raised against the entry OF
I or Companies IN foreign fields. The
10 o." " s1ggcstions are recon-
meneea .or legislative enactment:
inat = 4 domestic company is e.
e.lfe1 p. the FOREIGN nation within
si'ca = tfansacts business to make a
"vppsN the securities OF it's own
IpFefHm' 4. or otherwise. the excess
=, s'rf deposit over the local reserve
s'at.--f nail be allowed as an asset
II tAe cem9any's home statement.
"crid Ch.nne Ncw York Law
nat company operating n foreign
'nafHsfs mould be allowed to include in |
10 s9fn'ttea 4 sets AL agents balances
"a !oreirn countries which are COL
..sr'9le and which re not more than
Ov Gag past due.
na' provision b.. made for the or
YsN'zation of corporations engaged ex-
ss..'iEei IN The writing Of insurance |
toh ne M tiple Inc plan) n foreign
sorhtf'es, the capitsi stock Of which !
,,sofi''alions may be owned by Amer !
-; ;se1 ermp4nleE engaged in the same /
- NJ tntursnce. tnc holding com |
tt~s.'' p, ~ 4iT@n ercdit for the stock |
~ D"aeo at afml,ted 4 9yts when /
49, 'pe'r Nfepcial statomontg.
.l*ch Plan uiii, of course. neccasitate
-. coat1s4r If numerous state |
ss,9tTs, 'nelDdiaX toosc Of guch I'M
y. ~, .@N' ,oles - Ncw York, Pcnnsyl- !
s@s .@s,@s - 'ehiHan, Hi7nesota and Wis I
~, mn cn prohibit an ngurznce (
S,,,npsh1 IRAN owning ztocl IN another
gaatsNy ,fansaetinE the sane kind Of !
s st doneztie company dong
iLsshezs In fofeicr country be al
n"ss 49, ~ inTcst the Funds REQUIRED 10
sssst ~ pb'igatiDns In euch country,
- sg',hfprm'ty With the laws thereof.
fn.st ~ Sams NinGs ~ eccuritics in such