The Nonpartisan Leader Newspaper, September 7, 1916, Page 12

e e v » C. TAYLOR, North Dakota commissioner of insurance, .who retires from office next January, in his last official report to Governor Hanna, just issued, makes a strong plea for state regulatxon of fire insurance rates. “It is ridiculous,” declares the com- missioner, “to assert that regulatxon by * the state of the rates charged by insur- ance compames doing business therein— by permission, not by inherent right— is unjust interference with the rights of private enterpmes. Decry it as the partisans of fire insurance may, and do, the supreme court of the United" States defined the principle upon which rate regulation rests when it declared that ‘the business of fire insurance is so far affected with public interest as to justify _ legislative regulation of its rates.’” “encountered by the project. . an ¥ “I MANY TOWNS COMPLAIN OF RATE INEQUALITIES Mr. Taylor states the. chief reason for regulation in North Dakota as follows: “This intolerable situation - exists: Many property owners in this state believe that the premiums they are com- pelled to pay for fire insurance are excessive; others believe they are dis- criminated against most unjustly—that che rates they have to pay are altogether out of proportion as compared with the rates charged on risks of like character and subjett to the same measure of hazard; there are towns and villages in this state which have been re-rated, fol- lowing the installation of costly systems of fire protection, and in which the rates have . been - raised notwithstanding. Thus the village clerk of Maxbass wrote ]tl;:s4 department under date ‘of May 4 1 “‘We have had two fire engmes in this town for about two years, and _when we". purchased them we understood that they’ would cause the fire insurance rate to | | ; premlums pald by the msured go nt the- .. In other words, of every. dollar pai or j out for salaries, commlssmns, mspectm'n, sioner Taylor’s report (Editorial in Christian Science Momtor) After suffering losses for several years through inability to withhold their - crops from glutted markets in which they were at the mercy of speculators and compelled to accept "any -_price offered, the farmers of Saskatchewan, in 1911, determined to seek relief through legislation which would enable them to erect under the cooperative elevators for the storage of the annual surplus yield of wheat. Opposition of the bitterest character was at once When the bill incorporating the Saskatchewan Co- operative Elevator company, an organ- ization almost wholly composed of grain raisers, was introduced - in the legisla- ture of the province-it was pronounced ° by one of its leading opponents, who . - ‘was.algo- a party leader,-as “‘a mass of -7 undigested: sentences.” 5 " as “a worthless and useless’ ‘attempt” of . “ the provincial goyvernment -to deal with important- subject. The ' company " which it was-intended should be created under the proposed legislation was called-’ It: was described: an “organized mob.” The scheme was pronounced . “unworkable.” Tt would ‘lead only to financial and industrial con-.. fusxon. Said the -opposition spokesman, say - quite frankly that I am opposed to the bill, that I am opposed to the principle of the bill,- that I am opposed to the way in which the bill has ‘been brought down to the house, and that T am opposed to the way in which this large subject has been' dealt w1th' by. the government. ~I am opposed to the solution ‘of the- questxon niow- desu'ed or sought to be given.” - This, we beheve, will be consldered system - High Premiums and Inequalltles Between Towns Call for Supervision by the State be lowered, but instead of that, the rate has been ralsed in that time.’ “Similar complaints come from New Rockford,- - Harvey, - Devils Lake, McHenry, and other points. _Of course, these things prove nothing, They may be susceptlble of logical explanation. The point is, the persons who feel them- selves-aggrieved have no means of legal redress. They are helpless—and it is precisely this sense .of helplessness and - of the futility of making complaint that inspires the too prevalent feeling of Walter C. Tw%r, ~State - Insurance =T Commlssloner ; nsatiable maw urau_ce, -about hostility. toward fire insurance companies. . 'The virus of this hostile sentiment has spread, until the whole structure of insurance has come to be looked upon with suspicion, and threats of drastic and punitive legislation are heard on + every hand.” COUNTY MUTUAL COMPANIES CUT INSURANCE COST By comparisons with mutual com- panies operating in North Dakota, Commissioner Taylor shows how exces- sive the present costs of doing business are of the old line stock fire insurance companies. These excessive costs, as everyone knows, are the cause of high insurance rates, for the companies must charge enough premiums to pay these costs of doing business, pay all fire losses and make a good profit besides. Mr. Taylor intimates that legislative action regulating the amount of money insurance companies may charge up as " “costs of doing business” may be the only remedy : On this score the report says “One ‘of the chief factors in the suc- cessful operstion of the county. mutuals is the remarkably low cost of manage- ment; In the case of ‘old line’ fire insur- ance, and the allied lines, nearly half of the premiums paid by the insured g0 .- into_ the insatiable maw- of - expenses . In ather words, of every dollar pald in - for .insurance, about fifty cents ‘is, paid _-out for salanes, commlsswns, mspectxon,’ - ete.. AT ; “To brmg the matter nearer home, and : : ~to avoid any_suggestion of unfairness, T have ‘made- a calculatmn of the actual cost of “.operating, ' our _six' leading. tic ‘state mutual~ fire msurance 'early half of the- sulficxently compg;ehensxve to exlnblt the na’ture and Scope - of ‘the opposition- to the’ measure.. interests that wanted the markets to have free swmg at the expense of the 'producer. : & That was five years ago. hard to raise. That was after a period in: which” speculators had fattened easily upon the utter helplessness of the wheat _raiser profitably “to store his surplus until' the markets were ready to absorb - it. ‘There = were " elevators, = pnvnte they afforded considerable storage-faci “meonopolistic-.system, -and were. al terms-to-their pattons, an i yx for the armers, but it"has’ aecumulated a big working. capital of its own. It is contem| plating. the erection of a terminal ‘at the head of the Great lakes that will It ‘'was not desired by the : That; was ‘after a period in which the Saskatch® ewan ‘farmer' could never tell whether" he would ' be ‘compelled, practically, to 5 sacrifice the crop he was struggling so hope thaf but they were conducted on the * - “been followed by overproductlon, and-that vast fortunes for md:vxduals who have- ‘no real concern in their affairs, ‘short time ago attempt was made to lain the _scandalous’ advanees. in the rice- of gasolme ordered. by ‘the oil monopohsts of ‘the United States - Thy were ‘being’ pumped dry; the: oil fields were being - ez_:hausted there whs‘ little of ‘the interior, vast quan- ‘tltxes of crude” oil ‘were stored in - the" ;‘_tanks of th ;venous St:mdard 0il comi- . elevators, at that time, of course, and - " the supply on their own ‘now reported that the last ox:y f age_raised by the Standard this may lead to a decline in pnces whlch will dxsastrous o the that prices should 20 .up. The ojl wells - 7 bu. for every. Regulate Insurance Urges Taylor companies during the year 1915, as well as the cost of operating six of the lead- ing county mutuals for the same period, Comparative results are amazing. In the case.of the six state mutuals the amount_of insurance in force aggregated $11,836,167, and the ‘expense element,” or cost of - operation for the year, was $68,977.83." In the case-of the six county Mmutuals the amount of insurance in force -was $24,582,482 and the expense of management for the year was $6,898.82. “I realize that certain arguments might be adduced as tending to show that the conditions under which the two classes of companies operate are dis- similar, and that 'the companson is unfair. Such arguments. may minimize but they cannot destroy the force of the illustration. In -the case of state mutuals, consolidation would seem to be the proper remedy; while in the case of the stock companies, REDUCTION OF THE PRESENT HIGH EXPENSE RATIO BY LEGISLATIVE ENACT- MENT IS PERHAPS THE ONLY | SOLUTION. INSURANCE LAWS t‘ANTl?QUATED”; > IN NEED OF OVERHAULING Commissioner Taylor present insurance laws, governing life indurance, are ' “anti- quated and incomplete.” He recom- mends the appointment of an insurance code commission to draw up an entirely new code. “The insurance laws of North Dakota need a thorough overhaulmg ” he says. “We should have a niew, modern and complete insurance code. We ‘have some excellent laws, those relating to the ‘organization, regulation, and control -of . life insurance companies “being quite, adequate In general, however, the insurance laws are antiquated and incom- . plete. For example, there is not: the slightest prowsxon in our statufes for automobile insurance of any kind, fire, accident, theft, collision, etc. No author- ity is extended for the operation of a declares the except those . mutual automobile fire insurance corpor- “ation; of a title and credit guaranty cor- *"poration; of a stock or mutual employers’ llabxhty corporation. Whether assess- ment life associations, Lloyd’s under- wnters, inter-insurers and the like may. lawfully be authorized to transact busi- ness in this state is a question for attor~ neys-general to guess about—and- they do : not always guess alike. '“The appomtment of an insurance ‘¢ode™ commission is' most - urgently reéommended 44 The report to the govemor recom- ; mends legxslatxon creating_a state office of ' actuary in connection with the insur- ance department. Without such an experienced official it is impossible to make an effective examination of all . forms of lifensurance policies. Mr. Tay-" lor acknowledges indebtedness to A. L. Dern, actuary of the Pioneer Life Insure ance company of Fargo, for expert help along this line, rendered to the: state without charge. STICK TO THE FACTS detor Nonpartlsan Leader: - There is one thing that I belieye has a great deal to do with the price: of - Wheat going down in the fall just' when most of the farmers have to sell. That- is the fact that the farmers themselves ex:fsgerate hen sendmg in threelnnk : & . ng 1 have notxced a]rea.dy thls year . ports "of 15 to° 18 bu. per ac - One quarter of wh of light wheat. . When the .man’gets his check for " Svheat he will’ prolsably get pay for 6 _-Beeded. stuff to grade up for seed there on’s - be much left for the miller: " But. still the miller counts on 13 bu. to_ th and up. ; ¢ re that he aetuany o ‘When he takes - out two bu. o this k “ E2% e, P - e - £ v . | (7 x bl I