Summary of Preliminary Report Governor Edward F. Dunne Investigation of Fire Insurance Conditions and Rates in Illinois By RUFUS M. POTTS Insurance Superintendent State of Illinois Insurance Department Springfield To His Excellency, Edward F. Dunne, Governor of Illinois. Pursuant to your directions, I have made an investigation of fire insurance conditions in this State, with especial atten- tion to rates and rate-making systems; and present herewith a summary of the results obtained, in the form of comparative tables of rates in force Jn the States of Indiana, Michigan, Mis- souri, Ohio, Wisconsin and Illinois. These show gross inequali- ties and overcharges against Illinois citizens as compared with other states. The facts and figures given herein are authentic, being taken from the schedules of rates published for and used by the companies themselves, fixing the premiums charged on properties in these states. COMPARISON OF RATES IN CHICAGO AND OTHER CITY. CHICAGO Detroit . . Cleveland Cincinnati Milwaukee St. Louis . State. Protected Cities Outside Principal Cities. Illinois 30 .35 .35 .40 Ohio 25 .30 .30 .35 Missouri .20 .25 .30 .35 (NOTE — This report with accompanying exhibits was presented to the Governor and made public on May 6, 1914. The numerous requests for copies have been partially filled by typewritten copies of a portion of the report, but the demand has grown so great that it is deemed wise to priiit, for general distribution, a summary of the complete report, in- corporating therein a digest of the most important tables of rates and other data originally contained in the exhibits. This will render acces- sible to all Illinois citizens interested in fire insurance the substance of the information contained in the complete report.) LARGE WESTERN CITIES. Annual Dwelling Rates. CLASS. Brick, Metal Roof. Brick. Shingle Roof. Frame, Metal Roof, Detached, less than 25 ft. Frame, Shingle Roof, Detached, less than 25 ft. .1% .27 .30 .675 .75 Detached, less than 10 ft. Detached, less than 10 ft. . 2 .20 .25 .30 .35 . 1 .20 .25 .25 .30 .11/2 .20 .25 .25 .30 . 1 .25 .25 .35 .40 .11/2 .15 .15 .35 .40 2 Omitting Chicago, the average charge in the large West- ern cities for the brick dwelling with standard roof is 20 cents annual. Placing Chicago on this basis would cause a reduc- tion of about 25 per cent in the premiums on this class. Simi- larly, the average charge for the frame dwelling with shingle roof is 35 cents annual. Placing Chicago on this basis would cause a reduction of about 50 per cent in the premiums on this class. The rates for Chicago flats are obtained by adding to the brick dwelling basis, 10 cents for a three story flat, and 20 cents for a four story flat. If these differentials were retained in connection with the reduced 20 cents basis, there would be a reduction in the premiums on this class of about 22% per cent. An even more striking showing is made^ by a comparison with rates in force in New York City, as follows: DWELLINGS. FL\TS. CHICAGO, 1 yr.. ro Brick, Metal Ro« ^ Contents oi o o Frame Ol o o Contents o as w's eaS 36 o Contents Ol o O Frame ? o Contents 3 yrs. . 54 54 100-150 100-150 72 80 100-150 100-150 New York, 1 yr... . 10 16 16 20 15 20 20 24 3 yrs. . . . 25 40 40 50 CO 50 50 60 THE DEAN SCHEDULE. The Dean Schedule, named after its author, Mr. A. P. Dean, is a detailed classification purporting to make rates proportion- ate to the fire hazard involved, on mercantile establishments, factories, etc. The rates at present exacted from the owners of all buildings and contents of these classes in Illinois are fixed by this schedule as applied by the “Illinois Inspection Bureau,’^ which is described later. Dean Schedule rates vary according to the basis tables which are used. The schedule is constructed so that the rates produced with the 100 table are twice those produced with a 50 table. Dean Schedule Basis Tables. BRICK. FRAME. be '3 CA C c o 2 *3 C £ C o Illinois, North QQ 60 o 70 PQ 95 U 100 Illinois, South 70 70 95 100 3 BRICK. FRAME. “ tc c .E Ohio, prior to 1914 eo . 50 o 70 oa 90 95 Ohio, 1914 . 50 60 80 ^ 80 Wisconsin . 50 70 90 90 Kansas . 60 70 95 95 Indiana, Missouri and Michigan.., .• 60 70 95 95 It appears from this tabulation that Ohio and Wisconsin have the lowest rates, and Illinois, the highest. The selection of the general basis tables for a state is governed by two con- siderations, the existing level of rates when the schedule is first applied, and the level of the loss ratio for a long term of years. There is no reason for imposing the highest level of rates on Illinois, except the fact that there has been no legislation in this state to interfere with extortionate practices. The loss ratios for 33 years are : STATE. Illinois . . Indiana . . Michigan Missouri . Ohio .... Wisconsin Loss Ratio. 50.5% 52.2% 52.3% 59.0% 52.1% 50.4% It thus appears that Illinois has been the most profitable state of the group for a period of 33 years, except Wisconsin. The volume of premiums in Illinois is equal to that of Mich- igan, Missouri, and Indiana, combined, and exceeds that of Wisconsin and Ohio, combined. Moreover, taxation is least in Illinois and there are no anti-compact, anti-coinsurance and valued policy laws such as prevail in the other states. Accord- ing to insurance logic, by reason of this exemption from inter- ference, the cost of operation should be the least in Illinois, and rates the lowest. The rates in the following tabulation were obtained by ap- plying the basis tables, co-insurance credits and term conditions to an example given on page 97a, of the Dean Schedule. 4 Rates for Building and Contents. Five Story and Basement, Brick, Wholesale Dry Goods. BUILDING. CONTENTS Chicago, Central Dis., Class 1% . . 1 Year. .66 3 Years. 2.64 1 Year. 1.305 Chicago, Outside Cent. Dis., Class 2. . .70 2.80 1.25 Chicago, average .68 2.72 1.28 Cleveland, Class 1 .47 1.41 .91 Ohio, Class 2 .525 1.57 .96 Milwaukee, Class 1 .73 2.19 1.24 Wisconsin, Class 2 .525 1.57 1.01 St. Louis, Class II /2 .59 1.77 1.10 Danville, 111., Class 2 .63 1.89 1.13 Showing Percentage Reductions of Dean Schedule Rates Neces- sary to Place Chicago on the Same Basis as the Cities Listed : 5 yr. Building. 1 yr. Contents. Rate Reduces. Rate Reduces. Chicago equal to Cleveland 50% 30% i i i i “ Ohio, 2d Class 44% 25% i i C i “ Wisconsin, 2d Class 44% 21% i 1 { ( “ Milwaukee, 1st Class 20% 3% ( ( { c “ St. Louis, Class 1% 35% 14% < ( i i “ Danville, 111., 2d Cl. 30% 11% These percentages apply to all rates made in Chicago by the Dean Schedule. At this date, the Dean Schedule has not been applied in Chicago to the outlying small risks, but the rates in force upon these risks are apparently on a line with those that would be fixed by the Dean Schedule. The National Druggists’ Fire Insurance Company reports that about two-thirds of its Illinois business is placed in Chi- cago, with very little in the down-town district. This company uniformly takes 25 per cent off the Board rate to fix its own rate. The experience in Illinois on the premiums thus reduced shows the original rates could be reduced 45 per cent and still leave a fair margin of profit. The two Illinois companies which write small retailers and grocers throughout Illinois show loss ratios upon their total business since beginning of only 35 per cent. This indicates that there is a general practice of overcharging small dealers. While these specialized companies are supposed to select busi- 5 ness and therefore to show a better loss ratio than the Board companies can obtain, it is still a fact that the rates upon this class can be reduced 25 per cent and show a profit for the aver- age quality of business handled by the Board companies. The Chicago rates established by the Dean Schedule were the climax of a series of increases beginning with February, 1894. UNDERLYING CAUSES OF THESE OPPRESSIVE CONDITIONS. The why and wherefore for the existence of these unjust discriminations can best be understood by a consideration of the organizations and combines existing between the fire insur- ance companies and officials. It appears that practically all the stock fire insurance companies doing business in this state have found it to their great advantage to form various inter- locking organizations, through which they work jointly in the adoption and enforcement of certain insurance systems, methods of operation, rate-making schemes and agency dis- cipline. In fact, every person engaged in the business from the heads of companies to local agents is either persuaded or drafted into some insurance organization, and stock fire insur- ance is effected and applied through these bodies. I now de- sire to describe briefly the National Board of Fire Underwriters, the Chicago Board of Underwriters, the Western Insurance Bureau, and the Union, commonly known as the Western Union, these being the most powerful of such organizations in Illinois. THE NATIONAL BOARD OF FIRE UNDERWRITERS. The National Board of Fire Underwriters is an organiza- tion composed of one hundred and twenty-eight stock fire in- surance companies operating throughout the United States, which companies control more than 85 per cent of the entire stock fire insurance business of this country. In the earlier years of its existence, this Board attempted to regulate rates and commissions, but this function has been abandoned. It is the statistical bureau, and the representative of the combined stock fire interests. It is the central and controlling body with whom all must confer on questions of public policy. At the request of the Fire Committee of the National Con- G vention of Insurance Commissioners, made some months ago, the National Board appointed a committee to assist the Com- missioners’ Fire Committee in correcting the over-charges, in- equalities and other evils existing in the fire insurance business. While this Board Committee is equipped with every possible advantage that could be useful to such a body, yet it presented a report to the Fire Committee of the National Convention on the 14th of April, 1914, which was an absolute confession of either its entire inefficiency or lack of good faith in carrying out irs undertaking and purposes. This sterile report was not received with favor by the Commissioners’ Fire Committee, and the ‘‘Board” Committee was requested to make a further report. In compliance with this last request, the “Board” Committee made another report, but their only promised relief is expressed in the following words : “Knowing the deep interest felt fin the subject of rate-making by the various heads of insurance depart- ments, it gives us pleasure to assure you that the sub- ject will be persistently followed^ until a conclusion has been reached — either that rate-making, from actual underwriting experience, is impracticable, or that the outlines of a plan have been agreed upon from which we may confidently expect eventual success.” It is obvious when this committee, representing an organ- ization controlling more than 85 per cent of the entire stock fire insurance business of the country, does not give any better assurance of assistance than indicated in this report, that this organization cannot be relied upon to voluntarily grant relief or provide a remedy for existing oppressive conditions. It is a settled fact, then, that this relief must come from affirmative action upon the part of the State of Illinois. It is further ap- parent that no relief is in sight, by means of the work of this “Board” Committee, from a proclamation made by it before the Insurance Commissioners’ Convention to the effect that all past experience of the fire insurance companies is worthless in rate-making, and that this committee would now have to begin to accumulate experience upon which rates might, at some time in the distant future, be based. This position is remarkably inconsistent with that assumed by the companies heretofore. In all past legislative investiga- 7 tions of fire conditions, conducted by the various states, fire ex- perts of national reputation have invariably been produced by the companies. Their testimony ever consisted of voluminous compilations of ‘‘results of experience,” presented for the sole purpose of proving and sustaining the companies’ contentions. In fact, the position of the companies as to rates has always been based upon “Experience.” Two propositions persistently maintained by the “Board” Committee, first, that no experience except that coupled with individual company management could be relied upon as of any value ; and, second, that past experience is worthless in provid- ing for the future, were considered and passed upon by the Supreme Court of the United States in the recent case of the German Alliance Insurance Company of New York v. Ike Lewis, Superintendent of Insurance of the State of Kansas, the decision in which was announced on the 20th day of April, 1914. Regarding the first proposition, the complainant company set up in its Bill that this Insurance Superintendent : “Could not have the requisite technical and mathematical training to determine whether a basis rate or an actual rate as applied to any particular risk was or was not reasonable.” Regarding this contention, the Court said: “It would indeed be a strained contention that the government could not avail itself, in the exercise of power it might deem wise to exert, of the skill and knowledge possessed by the world.” Regarding the second proposition, the same position was taken by the company in this suit, — that past experience in fire insurance is of no value, and the Court aptly states : “The Bill asserts the contrary. It in effect admits that there can be standards and classifications of risks, determined by the law of averages. Indeed, it is a matter of common knowledge that rates are fixed and accommodated to those standards and classifications in pre-arranged schedules, and, granted the rates may be varied in particular instances, they are sufficiently definite and applicable as a general and practically constant rule.” This decision by the highest court of the nation fully sus- tains the right of any state to regulate the rates charged by 8 fire insurance companies. The decision is comprehensive and very important, and establishes a principle which all states will sooner or later follow in dealing with the business of fire in- surance. THE CHICAGO BOARD OF UNDERWRITERS. The Chicago Board of Underwriters is a corporation chart- ered in 1874 by a special act of the legislature of this state. This Board has usurped entire jurisdiction over the stock fire insurance business in Cook County, and exercises enormous powers which it does not legally possess-. It establishes tariffs and publishes rates, which are mandatory upon its members. By the operation of the so-called ethical rules, and strict es- tablished rules of this Board, the result is a powerful combina- tion for fixing rates, preventing competition, and in restraint of trade. The membership of this Board is so interwoven as to unite companies, agents and brokers in such a manner as to make competition by non-board companies in Cook County al- most impossible, and results in giving the Board entire control of the stock fire insurance business in Cook County, rendering relief to the general public by individual effort a hopeless un- dertaking. While the expressed purposes set forth in the charter of this corporation are such as might imply public good, and some of the purposes of this Board in fact do operate for the public good, yet its grasp upon the entire stock fire insurance business in Cook County is of such a character that its resultant opera- tions are manifestly injurious to the insuring public ; causing inequitable and excessive fire insurance rates. THE ‘‘UNION’’ AND THE “ILLINOIS INSPECTION BUREAU.^’ Illinois rates, outside of Cook County, are under the con- trol of a fire insurance organization composed of companies which are members of the National Board, called the Union, also known as the Western Union. By an arrangement with the Western Insurance Bureau, a kindred organization of compan- ies not belonging to the National Board, all rating functions are under the jurisdiction of the Union. It is contended, however, by the companies that the services of an independent rating 9 bureau, the Illinois Inspection Bureau, enter into down-state rate-making, but this is a subterfuge and so recognized by all persons acquainted with the inner workings of the insurance combine. The Union is unlike the Chicago Board of Under- writers in its organization, but somewhat the same in its re- sultant operations, and affects the down-state in a way very similar to that produced in Cook County by the Chicago Board of Underwriters, although perhaps to a lesser degree. The power of the Illinois Inspection Bureau in regard to rates is unlimited. Thus, the companies composing the Union and the Bureau, controlling over 90 per cent of the business, are able to arbitrarily fix the price of insurance without appeal, and Illinois citizens can either pay the price demanded or go without insurance. However, commercial conditions are such that fire insurance is necessary. in many cases in order to obtain credit. There never has been a time when any person, com- pany or combination could safely be trusted with the power to arbitrarily fix the i)rice of anything which they practically con- trol. Neither my department nor any other of the State govern- ment has any control or authority over fire insurance, and, under our present laws, we are helpless to protect our citizens from, overcharges. MEANS FOR OBTAINING RELIEF. The result of my investigation shows clearly that Illinois is entitled to immediate relief against burdensome fire insur- ance conditions, and I have discovered nothing that forecasts voluntary concessions upon the part of the companies, or relief through the medium of existing insurance organizations. I am of the opinion that, in order to obtain this relief, it is neces- sary that affirmative action be taken by this Department against the Chicago Board of Underwriters, The Union, The Western Insurance Bureau, The Illinois Inspection Bureau, and such other like organizations as may be operating in violation of the law. The courts of this state have repeatedly held that a combi- nation preventing competition or restraining trade is illegal, and detrimental to the public welfare; and they have also specifically held that a combination or agreement to fix insur- ance rates is unla wful ; that the business of insurance is a pub- 10 lie necessity and stamped with a public interest. I am satisfied that the operations of these organizations are in violation of the, laws of this state, and unless these organizations shall re- form their organized bodies, including their constitutions and by-laws, ‘‘ethical” rules and “curb-stone” understandings, in such a manner as not to be in violation of our laws, anti-trust suits should at once be brought against them. REDUCTIONS OF PREMIUMS. Comparison with rates charged in other states, similarly situated, shows that stock fire insurance companies in this state should at once grant an immediate reduction in premiums, which would amount to the following totals : Chicago. Dwellings •....$ 650,000 Dean Schedule Risks 750,000 Sprinklered Risks 50,000 Total $ 1,450,000 Illinois, Outside of Chicago. Dwellings "...$350,000 Dean Schedule Risks 600,000 950,000 Thus,, the total amount of immediate re- duction in premiums recommended for. the entire State is . '. $ 2,400,000~ The reduced rates herein asked are only for temporary re- lief, but should continue while the state is being re-rated upon a non-discriminatory, equitable and scientific basis. As the re- rating is completed, further reductions will follow. By this plan, millions of dollars will be saved annually to fire insurance purchasers in the state, without injuring the stability of stock fire insurance companies. It is well known that, when a state demands a premium re- duction, the organizations controlling the fire insurance busi- ness at once insist that if any reduction is granted it must be taken from the agents’ commissions. The shifting of this bur- den to the agents is not done in good faith, but to arouse them against any premium reduction. For example, in the State of Illinois there are about thirty thousand licenses issued annually to fire insurance agents. While an agent may represent more 11 than one company, yet the number of licenses issued gives an idea of the army of agents that is distributed throughout the state; and if this premium reduction should be taken from their commissions, it would mean that these agents, through a spirit of self defense, would be aroused to uphold the premium rates now in force. It is true that the commissions of fire insurance agents may in the future be properly reduced, but this reduc- tion must come concurrently with the enactment of an agents’ qualification law, which will require fire insurance agents to have a professional knowledge, which the importance of the business urgently demands. ATTITUDE OF COMPANIES TOWARD STATE REGULATION. The persistent refusal of stock fire insurance companies and organizations to voluntarily grant concessions to the in-, suring public seems to me to be, absolutely indefensible, and the concerted resistance of these companies to the enforcement of laws enacted in Missouri, Kentucky and Kansas, indicates the extent of the ‘‘mutual understanding” existing between all companies on public questions, and shows the firmness with which they will resist all public demands for relief, or any at- tempt upon the part of the state tn control rate-making. Stock fire insurance companies have for the past half cen- tury, without right or title, assumed to possess a vested right in this country, to manage, own and control the fire insurance business, and, 'with a spirit of hypocritical martyrdom, chal- lenge the right of the state and the public to be heard on ques- tions of rate^making, and deny their right to investigate insur- ance systems and methods. The recent decision of the United States Supreme Court referred to above conclusively establishes the right and power of the state to interfere in behalf of its citizens and regulate the fire insurance business, and entirely disposes of this “vested right” assumption. The notorious practices of such companies in resisting pro- gressive laws and methods of regulation of the fire industry are exemplified by the attitude of the companies in the Kentucky situation. In a recent circular issued by the Fire Board of the State of Kentucky, the following statement is made : 12 “Inasmuch as the law regulating fire insurance companies in Kentucky has caused so much discussion and because the insurance companies through a joint agency in Chicago, their “Publicity Bureau,” owned jointly by the various companies and officered by offi- cials of the companies, are fiooding the state with un- signed printed articles regarding the situation which are far fetched, distorted and misleading * * * * * * * * companies through misrepresenta- tions have induced their local agents to believe, and through them the insuring public to likewise believe, that the condition now prevailing in Kentucky has been brought about by some drastic action upon the part of the Board, when, in fact, no order of the Board has ewer been put into effect that was not agreed to by the companies before its promulgation, so that the con- dition in Kentucky is chargeable alone to the concerted action of the insurance companies instead of the Board.” This statement further shows that in Kentucky, where con- ditions for underwriting profit are much less favorable than in Illinois, the lowest earnings of any period have been twelve per cent upon the capital stock of the companies, with an average of sixteen per cent for the past twenty years. It is a well known fact that in addition to the underwriting profit reported by the stock companies, there are. also large interest earnings on premium deposits and investments, the amount ^of which is not reported as a part of their profits. COERCION CANNOT CONTROL ILLINOIS. It has been the practice of stock companies, when legisla- tion is adopted regulating fire insurance rates, to attempt to coerce the state by a concerted withdrawal. While I do not now ask for legislation, yet should legislation be necessary to remedy existing evils, I do not anticipate any such action by the stock companies doing business in Illinois. The amount paid for fire insurance in this state during the period of one year is almost equal to the combined premiums for the same period of the states of Missouri, Kansas, Kentucky and Texas, wher.e such tactics have been adopted in resisting state regula- tion. However, should they, withdraw from this state, it will create but little disturbance in the Illinois business. This im- mense volume of insurance constitutes a field of operation of 13 such magnitude that Illinois alone can, fwith reasonable safety, through domestic institutions, furnish its own insurance. Our diversified systems of insurance, backed and encouraged by Illinois capital and citizens, would soon supplant the withdraw- ing companies with safe insurance institutions. By subscrib- ing a small per cent of the monthly premium collections to a state conflagration fund, all Illinois* insurance institutions would soon reach a point where their safety could not be ques- tioned. We are so situated that we do not have the high winds of some states; we are outside the earthquake zone; free from forest fires, and many other extra hazards that increase fire losses in other states. The largest city of this state is given, by the National Board of Fire Underwriters, the highest rank in its fire protection. In order to meet commercial requirements and economic necessities, fire insurance has become practically compulsory. Consequently, the refusal of stock fire insurance companies to furnish this protection, by their concerted withdrawal, would create a duty upon the part of the state to conserve the welfare of its citizens, and fully justify the State of Illinois in adminis- tering a State Fire Insurance Fund. I am ever mindful that fire insurance, like all insurance, is subject to certain fixed and inherent laws controlling the cost of insurance, which cannot be neutralized by state legisla- tion. This normal cost cannot be disregarded by insurance insti- tutions and solvency maintained, and, in applying a remedy for the many ills flowing from present conditions, there should not be brought about a greater evil, — that of forcing upon the pub- lic insolvent insurance institutions. I am also ever mindful that fire insurance companies and systems should not be dis- turbed by needless investigations and prosecutions, and that no action should be taken by this Department unless such ac- tion is fully justified and the relief sought is imperatively de- manded. FIRE INSURANCE PROFITS. I am thoroughly convinced, however, from the investiga- tion I have made and evidence I have accumulated, that the underwriting profit in fire insurance and earnings in Illinois 14 accruing to the stock fire insurance companies is large, being in excess of that of many other states ; and that the premium reduction I am asking can be granted without in the least dis- turbing the stability of this branch of insurance. Also, if a proper premium reduction is not voluntarily made and the re- lief granted as herein outlined, this Department should take such steps in behalf of the insuring public as conditions demand. During the last year, in the United States, thirty-nine stock fire insurance companies surrendered their charters and went out of business. This cessation, however, cannot be charged to a lack of sufficient underwriting profit. A few com- panies were driven from business by competition; a small per- centage failed from imperfect management; and the remaining ones were re-insured or absorbed by larger companies through the so-called ‘‘Underwriters’ Agency” scheme. The purpose of the larger fire insurance companies seems to be to cro wd out the smaller ones, and to discourage new capital from entering the business, which will ultimately result in the centralization of the business in the hands of a few companies. At the pres- ent time, less than one-fourth of the stock fire insurance com- panies do more than three-fourths of all the stock fire business. “UNDERWRITERS’ AGENCY” SCHEME. Another practice adopted by stock fire insurance companies, that should cease at once, is the issuance of what is known as “Underwriters” policies. The “Underwriters’ Agencies” is- suing such policies are simply fictitious concerns created by in- dividual companies, or two or more companies acting jointly, for business-getting purposes only. The policies' themselves are deceptive, used as make-shifts, and reflect a marked dis- regard for legitimate business methods by the companies par- ticipating in the practice. CONCLUSION. When company supporters are confronted with facts re- lating to their business, they immediately fall back, for lack of better argument, on a stock of exceedingly elastic and am- biguous technical phrases, such as “National Experience,” “Conflagration Hazard,” “Soundness of Insurance,” “Moral Hazard,” “Inspection Service,” etc. Each of these expres- 15 sions means something in fire insurance, and a definite some- thing, but they should not be made to mean anything and everything and used as they are as a means of mystifying listeners and a justification for excessive premium rates. The time has arrived when all fire insurance companies must make the fire insurance business of this state an open book. They must take the public into their confidence in all operations, and thus secure public co-operation in all future fire rate-making, which re-rating should be done under the di- rect supervision of a body representing the People of the State. This public co-operation will likewise bring new and improved methods of fire prevention which will result to the great perma- nent benefit of both the insuring public and all insurance insti- tutions. The excessive rates and unjust discriminations imposed by the fire insurance companies on citizens of Illinois through the medium of unlawful “combines” and organizations, with their accompanying train of evils, should be forever eliminated. The companies should be required to correct these injustices and abandon their unlawful practices. If they will not do so volun- tarily, then every resource of the executive, the judicial and legislative branch of the state government should be invoked to remove these evils. It would be a confession of weakness to fail to do this, particularly since the late decision of the United States Supreme Court has invalidated the companies’ claim that fire insurance rates were not subject to regulation by the state. Respectfully submitted, RUFUS M. POTTS, Insurance Superintendent. May 6, 1914. I