Evening star. [volume] (Washington, D.C.) 1854-1972, 1957-03-21
nsurance Firm
P|edgesRefunds
On0vercharges
Company Official
Explains Mixup
To Senate Group

An official of the Industrial
Insurance Co. testified today
that steps would begin next
week to make refunds on auto
mobile insurance overcharges in
the District and seven States.
AT a Senate Automobile Mar
keting Places Subcommittee
hearing. William Cobb. company
vice president, acknowledge that
until the spring of 1855 all its
applicants for policies were au-
tomatically placed in a higher
priced Glass II category unless
approved for cheaper rates at
the outset.
Today'S testimony followed a
charge yesterday that the Dis
trict insurance superintendent
diSsuaded the Better Business
Bureau from publicizing the fact
that some car-owners were en-
titled to refunds which insurance
firms admitted overcharging.
Questioned by MonrOney
Subcommittee Chairman Mon
Ironey questioned Mr.. Cobb. whose
New Jersey corporation has
headquarters in Des Moines
Iowa.
He asked if it were not true
that company representatives
were under instructions from
you for others in the company
to charge higher rates unless
advised otherwise
Yes" Mr.. Cobb replied.
He added that after the spring
of 1855 when State insurance
departments began scrutinizing
the rates more closely. Industrial
Insurance Co. reversed its policy
and placed all applicants in
Glass / unless it was shown per-
sons IS years of age or younger
drove the car.
Yesterday Leland S. Nc
Carthy, director. and William j.
Mawhinney. associate director,
lof the Washington Better Bust
ness Bureau. testified District
Supt. of Insurance Albert F.
Jordan persuaded them not to
issue a press release warning the
public about insurance over
charges.
In the hearing before the
Senate Automobile Marketing
Practices Subcommittee, Chair
man Monroney. Democrat Of
Oklahoma. and Senator Payne
Republican of Maine, suggested
the District could have done
more about informing policy
holders as to their rights to re-
funds on overcharges.
X Refunds totaling S9,536 were
made to District policyholders by
the Service Fire Insurance Co.,
New York. because of over
charges. Involved is the high
price Class II collision insur-
ance, applying to such drivers
as those 25 years or under. and
costing IS per cent more here
Mr.. Mawhinney testified that
when he went to Mr.. Jordan
August % about the press re-
lease, he was told the revela-
ltion might cause a commotion
among the public to learn OF
such a matter" Mr.. Mawhinney
said Mr.. Jordan assured him
the company had paid back
money to policyholders of other
States and that the situation
/ here was under control.
Taking the stand. Mr.. Jordan
said that following negotiations
between his Office and the in
lsurance company, the firm sent
out letters TO policyholders. Out
Iof ZIG replies, ITS indicated the
need for adjustment.
Laid to Errors
Mr.. Jordan said he believed err
.rors and carelessness caused the
Iovercharges, not a deliberate at
tempt to cheat. Questions were
raised by the subcommittee as
to how the company could be
sure it had notified all policy
holders involved, and whether
those entitled to rebates could
be aware of this from the diff
.ficult language of the letters.
Some committeeman said II
might be "a good idea for the
District Insurance Department
to supplement the company's
efforts with other letters to the
Ipolicyholders. Mr.. Jordan said
this might raise a suspicion
about the company and would
be fishing for information"
Vice President j. Page Risque