Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-09-21
INSURANCE REFORM
PROGRAM IS URGED
Commissioners Told That
Bad Practices Should Be
Promptly Ended.
BY RoLLIN M. CLARK.

Special Dispatch to The Star.
PORTLAND, Greg, September a.
Just as the leading five insurance COM
panies were announcing in the East
that they have organized an associa-
ton to be directed by dictator or
s'czar." George S. Van Setback, super
intendent of insurance Of New York,
was telling the National Convention OF
Insurance Commissioners. in session
here last week. that unless the COM
NAMES cooperate to end bad under
writing practices drastic legislation VIII
be enacted. The creation OF an IN
surance executives association Is likely
to obviate the latter alternative.
No speaker in recent years mas so
aroused the State insurance commits
sioners as cid the New York official.
NSincine no words. he told his coll
leagues from IS States of the Union
that public interest demands elimina-
ton of rate cutting, rebating and the
navment of excessive commissions, now
being done by some insurance carriers
in their competition for business.
Urges Concerted Action.
@The evils of the insurance business,
which are many and widespread, ne
sam
overnight by the concerted action OF
the insurance companies of the United
states. II they have the will to do It,,
they can do more than any legislation,
M matter how drastic. Yet II they
do NOT exert the power they have, 1t Is
clear that legislation, radical ana
sweeping. will become inevitable. PUP.
lie interest demands the elimination OF
the evils"
Mr.. Van Setback made It clear that
he was not bringing in bill OF lnolc.-
,,oe,1t against the entire insurance bust
ness. 'Bv and large there Is no more
able. alert and distinguished group OF
men anywhere than those engaged IN
this outstanding public service" ne oe-
clared. His interest lies in cleaning
tlp a situation brought about py rela-
Differentiation of the business is
preferable to legislation, Mr.. van
Schaick asserted. This warning VIII
unouestionably be needed, for the COM
NAMES themselves are equally oesrous
Of stamping out all unetnlcal piac-
tices. Insurance company executives
present at the Commissioners Con-
vention were as warm in their praise
of Mr.. Van Schaick'S stand as were
the State officials in attendance.
Recent inquiry.
IN the fidelity and surety field the
Insurance commissioners recently MADE
an investigation Of bad practices at
the instisation of a prominent COM
pany official. The committee in charge
of that study has recommended That
the companies exercise close scrutiny
in avoiding unsound risks in mortgage
guarantees and depository bonds and
suggested that the State commission
ers take steps to compel the companies
to refrain from such improper under
writing.
Steps to eliminate rate cutting and
control acquisition costs were advo-
Gated. It was further proposed that an
attempt be made to reinSure the fun
business of any company about to be
liuuidated in order that all claims may
be assumed and paid in full.
With the cooperation and active
assistance of State supervisory ON
Gals, the insurance companies are now
in position to proceed through their
rational organization with a concerted
Yiovement looking toward the removal
OF all causes Of present criticism.
(copyriEht, 1879