The Waterbury Democrat., 1942-06-24
Blackall Declares
 Banks Act "Unwise''
Demand for War Risk Insurance on MOrtgaged Proper
 ties Called 'PreciptOus" s"-COverage Advisable

Connecticut banks holding mort. gates on real estate have been pre- cipitous and somewhat unwise" in demanding that war risk insurance on property on which they hold mortgages be arranged and com pleted by June 27, State Insurance Commissioner John c. Blackall de- clared today.
 Commissioner Blackall, asked If owners of property free of encum- brances should take out policies, said that the matter was one for. them to decide. However, he points out, 1t has been war of surprises" and it would be unwise for the property owner not to secure such cover- age.
 Said Commissioner Blackall:
 Tt must be remembered that in such coverage, the direct and imme- diate liability Is the liability of the War Damage Corporation, which generally speaking is subsidiary of the Reconstruction Finance Cor poration. Tn view of the fact that every stock, mutual and reciprocal fire company of any substantial i'm portance has entered into an ar- rangement with the War Damage Corporation, the procedure is for the citizen to apply to his fire in- surance agent and this agent will supply him with application blanks on which he can apply through his agent for the insurance. The ap- plication then goes to the agents ordinary insurance company which acts as a fiduciary to the War Dam- age Corporation. Certainly it seems to me that every person who has control of property as trustee, ex- ecutor or administrator owes it as a duty to the beneficiarieS of his trust to have such coverage.
 T have been asked if the banks have a right to demand such in- surance. That depends entirely on the mortgage note. The mortgage note in general use in Connecticut contains clause which says sub stantially that the property used as collateral secruity shall be kept in- sured for the benefit and to the satisfaction of the mortgages. In my opinion. this gives the mortgagee or the bank the authority to request such coverage. Even if such clause is not contained and the note should be a demand note, the bank might have authority to demand the note, if such protection were not added.
 T do think the banks have been precipitous and somewhat unwiSe in dernaning that tine coverage be arranged and completed prior to June 27. It Is true that the auto matic insurance now in force ex- pires on July 1 and that the new coverage must b. effected with the application in and the premium for the first year paid, but on account of the magnitude of the task iil- volved, 1t probably will be physically impossible for the agents of the country to familiarize themselves sufficiently with the program and, for the War Damage Corporation itself to make available the appli- cations so that every one will be covered before July l..
 Tt would seem that while binders are frowned on, sUne method could be used by which the insurance would be applied for and I trust that this will be done. The local agents certainly are to be consid- cred and they should have fair opportunity to take care of their own clients before the banks insist on taking out blanket policies.
 "As to whether an individual who owns any property free and clear of all encumbrances and who owns lt in his own right, owing no duty