Evening star., 1927-11-23
AUTO INSURANCE
LAW HELD SOUND
But Surety Firms Withhold
Approval, Pending Results
in Massachusetts.
BY WILLIAM ULLMAN.
Automobile Editor of The Star.

BOSTON, Mass, November 23.-As
Individual citizens interested in social
welfare and progress, officials of insur-
ance companies operating under the
Massachusetts, compulsory liability In
surance law 1nofficially admit that
the statute is basically sound. AS IN
surers whose business life Is mex.
tricably bound up in the operation OF
the law, they still have to be con-
vinced, however. At least, they 90 on
certain phases of the law.
The volume of business has grown
enormously. They admit that. But
this new insurance has been written
at greatly reduced rates, as much as
% per cent for passenger cars in BoS-
ton, a city notoriously difficult to me-
gotiate in an automobile. Previously.
their business was written strictly on
a quality basis: now, quantity holds
sway. Will this quantity which has
greatly increased their administrative
costs as we'll as the number and va
riety of risks, pay on the lower pre-
MUM basis?
Admit Ignorance.
Frankly, they do not know. They
can only wait for time to answer the
question and, to their credit, most OF
them seem willing to do their best In
the meantime with conditions not or
their own making and concerning
which they have had a skeptical attl'
tude.
In the main, interviews with execu-
tives Of insurance companies Indicate
that after nearly IL months of operat-
ing under the law, this attitude OF
waiting to be shown it's economic vir-
tues is general. Here. as in every
other quarter in which he conducted
his inquiries relative to the strength
or weakness Of the law, the repre-
sentative of The Star found perfect
frankness. Insurers admitted dis
approval Of the law when it was pro-
posed, and told of their keen fight
against it's enacement, but declared
with equal readiness that now it has
been passed, they are trying to make
the most Of it.
William J. Constable, secretary OF
the Massachusetts Automobile Rating
and Accident Prevention Bureau, the
central agency established by the COM
panies to facilitate their part in apply
ing the law, summed up the attitude Of
the individual insurers when he de-
clared that experience to date is in
adequate for the formation of definite
conclusions with regard to its eco
nomic aspects.
Results Not Known.
Among the most disconcerting Of
the factors developed from the COM
panies' point Of view is the necessity
Of operating for two years at the orig
nal premium rates, something that
was not anticipated when these were
promulgated by the insurance COM
missioner. However, when 1t became
necessary to consider revision Of the
schedules during September, the COM
missioner decided that the experience
available at the time was inadequate
to dictate either an upward or down.
ward trend in the premium levels.
Thus, the insurers knowledge of
how he Is faring under the present
rates may be deferred a year longer
than he anticipated.
Apart from their present uncertain.
ty with respect to their loss or gain,
the insurance companies opposed the
law originally on two grounds-flrst,
that State or peoples fund insurance
was likely to be the result of making
this coverage compulsory and, second.
that supervised rates always are in
clined to inequity in favor Of the pol
icy holder.
Today. however, underwriters are
doing everything in their power to
forestall popular demand for State
insurance. They have lent full coop
Grafton to Wesley B. Monk. insurance
commissioner, and Frank A. Good
win, State register of motor vehicles,
and establishment Of the rating bu.
reau was one of their most significant
contributions. In addition to serving
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