RECOMMENDATIONS. Chapter 167, Public Statutes, directs the insurance commissioner to give in his report, in addition to the abstracts of the statements of insurance companies, "such further information and recommendations in relation to the subject of insurance as he shall deem to be of use to the legislature and the people of the state," and in accordance with these instructions the commissioner feels called upon to inform the people of New Hampshire and the members of the state legislature, that there is an urgent need of additional laws for the better protection of those who insure their property, or their lives, in domestic fire, or life insurance, companies. Within the past five years, during his term of office, as many as six life associations, all organized under our laws, suspended the transaction of business, to the loss of those who held their policies or certificates. A law enacted by the present legislature relating to fraternal associations is the only enactment on our statutes concerning life associations of this state, and to avoid in the future what has happened in the past, some requirements ought to be furnished providing for the organization, operation, and closing up of corporations of this class without subjecting their policy holders to unnecessary loss. The same situation exists so far as regards domestic fire insurance companies; there are no laws for the government of any save those known as the town mutual insurance companies. Companies of other states, organized on the mutual plan when charging a full cash premium, also insert a stipulation in each policy for once, twice, or thrice the cash premium paid, and which has the same effect as a deposit note signed by the insured. When authorized to do business in this state, such companies are required, by our laws, to charge, as a liability, fifty per cent. of the gross premiums received on all outstanding risks. This is called the unearned premium, or the reinsurance reserve. When through the depreciation of their securities, excessive losses, or from any other cause this reserve or unearned premium fund is impaired, it is the duty of the insurance commissioner to call upon the officers of such companies to make the impairment good by an assessment on their policy stipulations, and if, after a rea sonable interval it is not done, to revoke their licenses. This wise and reasonable provision of law does not extend to domestic mutual fire insurance companies charging a full cash premium. If their unearned premium fund is reduced, the commissioner has no power to oblige them to resort to an assessment, and there is nothing to prevent them continuing the transaction of business in this condition until, by good luck, the reserve is increased to the standard, or, by bad luck, the companies are obliged to compromise with their loss claimants. It is not, therefore, a hardship on these companies to require them to comply with the same laws governing foreign companies so far as they relate to the maintenance of the reinsurance reserve. The interests of their policy holders demand it, and on their behalf this recommendation is made. JOHN C. LINEHAN. Insurance Commissioner. |