New York Times Article from 1910 Provides a Glimpse into Insurance Issues Facing the Nation 100 Years Ago
On November 24, 1910, The New York Times ran an article titled “Committee Learns Insurance Secrets”. Curiously, I wondered what insurance secrets were being shared nearly 100 years ago.
As way of background, in early spring of 1910, the New York Department of Insurance was reviewing fire insurance companies because of allegations that certain insurance companies were providing funds to influence legislation in the great state of New York.
I gathered additional details of the investigation from Best’s Insurance News.
Founded in 1899 by Alfred M. Best Company, this periodical was published monthly, and, in 1910, an annual subscription cost $2.00.
According to Best’s, the New York Department of Insurance commenced a inquiry to ascertain whether “fire insurance companies had made any corrupt use of money for the purposes of influencing legislation in this State.” This was a public investigation of the expenses spent by insurance companies from 1900-1910. Apparently, by April of 1910, the investigation had encountered difficulties. During an examination of one insurer, there appeared to be an “intimate relation between the president of that company and legislation affecting fire insurance companies during the last decade.”
A Best’s 1910 editorial states:
In short, while absolute proof showing the transit of money from the bank accounts of an insurance company into the bank accounts of a legislator is lacking, the record of the investigation as thus far made up warrants the statement that during the last decade, particularly in the first five years of such decade, a system of bill killing and law getting has existed which is a reproach to the people of the State.
The editorial goes on to mention that the chief witness frequently refused to answer questions and made himself liable for contempt. During the examination of Phoenix Insurance Company of Brooklyn, the committee learned that “very considerable sums of money had been paid by a large number of domestic fire insurance companies and disbursed by the president of Phoenix in promoting or retarding legislation”
William Bament, a general adjuster for Home Fire Insurance Company, one of the witnesses who testified during the investigation, was quoted in the New York Time’s article.
In an attempt to understand fire insurance from the viewpoint of the policyholder, the committee began to ask questions about the claims process, but, before the committee could probe the Bament in detail, he avoided giving straightforward responses. Particularly, when Bament was being asked about the carrier’s response to valued policy law, he changed the focus from the acts of the insurer and shifted the blame to the public insurance adjusters in New York. That’s right, public adjusters were advocating for insureds during the very early 1900’s.
Bament was asked whether Home Fire would be pulling out of states with valued policy law, Bament said no, but complained that there were just too many public adjusters in New York and they made too many claims too high.
It is interesting that during an intensive investigation into the actions of the fire insurance carriers in 1910, one insurance carrier refused to respond and another blamed the representatives of the claimants. Things haven’t changed too much in the past 100 years.
Nice post, very interesting. I too often enjoy reading through articles, court documents etc. from 1880s-1920s, as I find it very interesting, that the issues during this time are so similar to the issues we are involved with today. I am always suprised when I read of problems/disputes during that time period are Still problems/issues of today.
With that being said, I urge insurance claim professionals to study their industry's past, and as they say, history repeats it self.
Just as the military studies wars of the past to improve on their strategies of today, we can get much insight from our "forefathers" who were fighting the same "war" so many years ago.
Hi Contents Claims-
Thanks for reading and posting. I am glad that others like to read about the olden days too.
I also think it is important to understand the past and the lessons learned or at least, the lessons that should have been learned.
I was a little surprised to find public adjusters were mentioned in the New York Times Article. If you have found a partcularly interesting source from the past, I would be intersted in reviewing it too.
I find it even more interesting that it was considered problematic for there to be an “intimate relation between the president of that company and legislation affecting fire insurance companies during the last decade.”
Things do change; it would seem unusual if the insurers weren't cultivating such relationships now.
There is a book in the Baker library of Harvard University that is copyrighted 1900, which details the memorises of an Insurance Agent circa the late 1800s. Its a very interesting book that outlines a wide range of insurance topics in the perspective of one individual and his experiences.
I found it entertaining to hear this individuals opinion on "public adjusters", sharing the typical cynical view held by "company guys/gals" today. It is remarkable how there is written documentation dating over a century ago, discussing a Public Adjuster as preying on insureds, going after all of the carriers proceeds, making the company adjusters life miserable, etc etc. A true classic.
This book even goes into the public adjuster demanding appraisal; the author being very worried, as appraisals end up with the insured getting twice what he/she is entitled to!
I recommend reading this book, although it counters our perspective, it is very insightful and deserves respect, as it is truly a piece of history.