Evening star., 1927-10-30

able. During the fve-year period
under consideration there was paid in
premiums by the people of the
District SO, 0,247, 900, and there was re-
ceived by them as reimbursement for
losses, S3,900,000. Had the premium
rates charged in the District been re-
! duced 30 as to produce the ratio of
losses to premiums that obtains
throughout the country, the total
premiums collected would have been
! approximately $7,014 400. which would
have been a saving of $3,232 800.
Thus the companies are collecting
over 100000 annually as excess
premiums in locality where the cost
of doing business is low.
: States Establish Rates.
Some of the States have insurance
departments that by law are given
authority to adjust rates and in one
state all rates are made by a State
board rather than by the board Of
underwriters or rating bureaus. 1t
seems highly desirable that the in
surance department in the District
should have legal authority to control
rates so as to prevent Determinations
as between similar risks and to pre-
vent Determinations against all Dis
trict risks as compared with the rest
OF the United States. Coupled with
the authority to control rates, author
ity should also be given the superin-
tendent of insurance to supervise the
adjustment of losses
The bureaus report was prepared
by V. q. Croissant and John Payne,
two of its investigators, and was
transmitted to the commissioners by
Herbert d. Brown, chief of the bureau,
with an offer to render any assist.
ance toward carrying out the recon-
mendations.
The report at the outset points out
that the insurance laws of the Dis
trict are inadequate and out of date
1t further declares that while the
primary function of the department
of insurance is the protection of
policyholders through a careful eX.
animation of the records of life in.
aurance carriers by accountants and
actuaries. there is only one employe
IN the department with sufficient
knowledge Of insurance and account
ing 10 make satisfactory accounting
examination. Also, it said, there is
no one in the department who can
make an actuarial examination.
Actuary Is Suggested.
without adequate examinations
there is no assurance that the com
panies are solvent and therefore in
condition to pay claims as they arise, :"
the report added. If a company be
comes insolvent the company's license
may he revoked. However, company
may become hopelessly insolvent with
consequent heavy losses TO the policy
holders before the department learns
OF the insolvency because the depart
,nent is not equipped TO make an
actuarial examination"
In view of this condition, q recon-
nenda ton was made that the eX-
animation of the District companies
be strengthened, and that an actuary
be added to the personnel OF the in
surance department.
The report also suggested that it
Is possible that people are selling in
surance in the District without
license, and that insurance is being
placed by District agents and brokers
in companies that are not licensed IN
. the District AS both of these prac-
tices are in conflict with existing law,
the bureau urged that legislation be
sought to give the superintendent
power to revoke licenses for dishonest
or fraudulent practices and false ad
Vertising by companies, agents, brok-
= ers and solicitors.
The insurance department at pres
ent. the report explained, can prevent
the selling of insurance without
licenses, but it has no power to ex-
anime the records of agents or brok'
ers, so that there is no way to stop the
placing of insurance In unauthorized
&mpanies.