The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1929-07-08
FIRE POLICIES CAN
REPLACED CHEAPER
SAYS Commissioner
Plan Fought in District Court by
Agents Federation Would
Save $4,000, He Holds
100000 WASTED so FAR
Head Of Department Asserts He
Is Acting to Economic on
Lawmakers Neglect

Contending that there is no breach
Of law, order or ethics involved III
the plan Of the state insurance de-
partment to allocate reinsurance on
public buildings to three private COM
p.nies, Insurance Commissioner S. a..
OlsnesS today issued an explanation
of the plan which he has inaueurated.
The idea Of the insurance depart
ment to award this business to the
three companies in return for a re-
duction, or deviation from the reg
ular insurance rate on such property,
has been attacked by the Insurance
Federation Of North Dakota and a
hearing will be held July 30 in the
Burleigh county district court. In
5urance agents. in all injunction ac-
ton. commended that the proposed
plan is illegal and unfair to them.
THE primary principle involved is
that Of getting the most value for the
taxpayers dollar" Olsness said. I'VE
feel that II we can save money for
the people of North Dakota by re-
ducing the cost of insuring their pub
lie buildings 1t is our duty to do so.
THE impression which has been
given out in press reports that We in
tend to place this insurance in VIOLA
ton of the law is erroneous. The
three insurance companies with which
we have contracted are strong, re-
liable and fully capable Of carrying
this reinsurance according to law.
They have a large agency force
through which the business will be
written in full compliance with statu-
tory requirements.
Gets Reduced Rates
If these companies can give the
state fund the benefit of a deviation
from board rates, even though partly
at q sacrifice to themselves and partly
to their agents, we fail to see why
the department should not accept.
Neither do we understand why there
should be such a furore about it.
THE experience of the state insur-
arce fund during the last ten years
warrants this deviation in rates. and
the companies involved recognize a
good business proposition when they
see it. Their agents likewise appre-
ciate that they get a large volume OF
business handed to them without So
licitation, so why shouldn't they be
willing to accept a reduced commits
sion?
There is no breach of law, nor
order. nor ethics involved in this
proposition. It Is simply the applica-
ton of the recognized wholesale or
brokerage principle to business on a
large scale.
The state board Of administration
buys direct from wholesalers and
manufacturers through It's supply de-
partment and the retail dealers make
no protest. We are attempting to OBJ
tain for the taxpayers the benefits Of
the same system applied to the in
surance Of public buildings.
Another thing to be remembered
is this: The law ~prescribes that REIN
surance on public buildings shall be
placed through local agents in the
counties in which the property is To-
Gated. but 1t makes NO mention Of the
commission to be paid to such agents.
It may be either the regular commits.
sion Of Is per cent or any other fig
ure down to nothing"
Seeks $2,O0O,O0O Surplus
The plan Of obtaining reduced rates
on reinsurance placed by the state
fire insurance fund with private COM
panies was evolved by Olsness after
the legislature refused, last winter. to