The question of fires and fire insur ance in Shanghai has been brought prominently before the public by several recent eases in the Law Courts and by the strictures passed on the alleged proper way in which insurance compan conduct their business. In H. M.
Supreme Court on July 14, during the hearing of the case of Toong Son-yuen 1". The Royal Tnsnrance Company, which was a claim on a fire insurance policy, Mr. Morgan Phillips said: "[n the judgement of the French Mixed Court) comments were mate on the way the insurance companies do basines, and the Magistrate of the International Mixed Court has commented on the practice of the insurance companies here, the easy way in which they accept risks and the greedy way the premiums of people who wish to insure are taken without making any proper inspection, and it seems to me that in this way they place a premium on incendiarisra."" Mr. Phillips proceeded to give a picture of what he said happened when s fire occarred, and related how the representa tives of the insurance companies ''wanton the heels ofthe fire engine with Inspector McDowell bawling arson' and oh, do inveil the Kerosene.' It is obvious with regard to the latter remark that if the presentatives of insurance companies were guilty of such conduct, decreased business would result; bat there is another point: insurance men are not allowed within the fire lines.
The comments of Mr. Pao Yi, above referred to, and a letter addressed to the Council by him dealing with the evils la his opinion resulting from the manner in which the basines of fire insurance is conducted, have been considered by the Committee of the Shanghai Fire Insurance Association and the correspondence has been published in the "Manicipal Gazette." The Committee acknowledges that fires are numerous in the Settlements, bat pointe out that " large number arise from accidental causes and are attributable to over-crowding, the greater use of kerosene oil, and many trades and handicrafta requiring "It is, however, that a large proportion of outre the result of incendiarism and it is to these latter that the Magistrate's attention is directed." The Committees also points out that in all communities there will be found unserupalons persons desirous of obtaining money fraudulently from insurance com-but that the companies are quite to the necessity of avoiding each persons ud take all steps in their power to prevent the evils arising from ance, but to eli it entirely is practically impossible. Insurance in a mercantile community necessity and the destruction by fi of the property of uninsured persons generally means their financial mi The surance companies pay hundreds of thousands of taels anonolly in Shanghai for fire losses and if this money were not forthcoming many large firms would be rained. The insurance companies are here to pay legitimate claims ing from accidental fires, and the reduction of the namber of fires be considered s normal pumper is the excellent work done by the police. Public investigation into the cause of fires is bound to act as a great deterrent to incendiarism. En passant it may be pointed out that endiarism is not infrequently resorted to by managers of Chinese hongs, not to recover the iusarance money for their employers, bat to cover their own defalcations.
On the question of the conduct of insurance business in Shanghai the Committee of the Fire Losurance Association points out that: " Business in Shanghai is usually transacted through third parties, for the Chinese prefer to obtain s policy through broker. These brokers are not paid by Insurance Companies, but are romunerated by commission upon the business secured. Naturally, they are active, but, it must be remembered, all sach business is first submitted to the compradore for approval; thus a check is placed upon any mal-practice of the broker". We are informed that the Chinese and foreign insurance cow-panies have done all in their power to get rid of these brokers, but it is found that in many cases the applicant will not insure without " broker because he thinks that in cases of loss he cannot get his money unless a broker intervenes. The Committee says: "The Mixed Court Magistrate is apparently under the impression that insurance companies grant insurance tasse for it la the practice of all well-ithout dus inquiry. This is not the
managed companies to inquire into the standing of the applicant, and to investigate the value of the property to be covered, either by personal inspection or in some other way; and as all policies contain a clause (la Chinese) attached thereto, prohibiting further insurance without consent, undoubtedly acts as " preventive to To the course of the hearing of the case of Toong Sun-nusn versus the Royal Tnsarance Company which was decided yesterday by Mr. Justice Bourne—tho doctrine of uberrima fides was referred to by counsel. While it is impossible to be frequently checking man's goods and the insurance companies have to trast to the insared's good faith, yet they do not treat a man who wishes to be insured with that "boundless confidence" which leads to their failing to inspect property at least before the policy is issued. It ie of course obviously impossible for insurance companies to make a valuation of goods before granting an insurance policy. The legal charge for ralaation is from four to five per cent on the value, which is considerably more than the rate for insurance, and it would require " small army of apprainrs to undertake the work. Even it m valuation was possible before the granting of a policy, it is evident that it would afford little indication of the value of the goods before the fire, as cargo is constantly being shipped' or sold and new goods coming in, hile the market value frequently changes. In no circumstances will an insurance company admit fixed values in their contract, at louse are settled on market values only. The insurance companies while endesvourin, to satisfy themselves as far cable of the bona fides of the undoubtedly to trust to a great to the reputation and honesty of the insured. Clearly, property mast be viewed; otherwise how is a company to determine the rate of premium which must be paid to them on the risk? This applies equally to foreign and Chinese premises and the only precantion possible for the insurance company to take is that the amount insured should approximate the possible maxim-tum value of goods for which the policy is taken that be stored on the premises. If, in taking Chinese basi-nese, honesty bad to be considered as non-existent to-day, then the withdrawal of insurance companies from Shanghai must result. What the insurance companies insist upon, however, is that when a loss occurs a correct valuation of the goods on the premises immediately before the fire shall be farnished to them and this valuation mast be supported by proofs from the insured's
Text read from the printed page and cleaned; old type leaves the occasional error.