Hon. A. S. MIKE MONRONEY,

SERVICE FIRE INSURANCE COMPANY OF NEW YORK,

New York, N. Y., March 1,1957.

Chairman, Automobile Marketing Practices Subcommittee,

United States Senate, Washington, D. C.

DEAR SENATOR MONRONEY: Set forth below are our answers to the first supplemental interrogatories recently submitted to us which I discussed with Mr. Busby when I was in Washington last Thursday:

1, 2. I told Mr. Busby we have never had occasion to compile such data and to do so at this time would involve considerable time and money. As you can appreciate, in the course of any business, only those statistics are compiled that are useful and necessary to its operation. For us to have made a compilation of risks and classifications by car years and States would have served no purpose in our business. Any need for compiling data for ratemaking and allied functions is obviated by our membership in the National Automobile Underwriters Association, which handles that function. Individual data cards are transmitted to that organization, as statistical agent, from time to time.

3. Refunds were made by us in all States except those hereinafter specifically mentioned. No refunds were made in Louisiana, New Hampshire, or Virginia, because those States had no rating plans calling for classification. No refunds were made in California, Delaware, Idaho, Maine, Oregon, or Utah for the following reasons: The possibility of misclassification of collision policies was indicated by a National Automobile Underwriters Association convention examination; and the implementation of a survey to determine whether or not there was misclassification was within the jurisdiction of the individual States. The problem of misclassification was not uniform, and there were different plans in the various States at different times. The insurance departments of each of these States informed us that a survey would be unnecessary unless we were advised to the contrary. These departments had apparently determined either that no problem of misclassification existed in their respective jurisdictions, or that they were making a continuing study of the situation.

Sincerely,

J. PAGE RISQUE, Vice President.

SERVICE FIRE INSURANCE COMPANY OF NEW YORK,
New York, N. Y., April 1, 1957.

DAVID BUSBY, Esq.,

Automobile Marketing Practices Subcommittee,
United States Senate, Washington, D. C.

DEAR MR. BUSBY: This will confirm our phone conversation at noon today in which I provided you with the information requested in your wire of March 28. Set forth below are our net direct collision premiums written on private passenger car business for each of the years 1950 through 1955:

As I had explained to you Friday, and again today, these figures were not immediately available and had to be broken out of total writings. The figures have. therefore, been developed by the elimination, on as accurate a percentage basis as we could ascertain, of premiums for classes of business and kinds of coverage not pertinent to your inquiry.

You asked whether similar figures were available for New York State alone. I indicated to you that I doubted it very much if they were, but that I would check and let you know. I have made such a check and am able to tell you definitely that such figures are not available, and, to the extent that tabulation cards are available for the early years, could only be developed through extensive and costly statistical runs.

Sincerely,

J. PAGE RISQUE, Vice President.

SERVICE FIRE INSURANCE CO.,

APRIL 16, 1957.

Care of Paul Weiss, Rifkind, Wharton & Garrison,

New York, N. Y.

DEAR SIRS: During the subcommittee's recent hearings, we requested that you send additional information to complete the subcommittee's record.

Also a few supplementary questions have presented themselves. You will find these contained in the enclosed interrogatory which we hope you will answer expeditiously.

In your acknowledgment of this letter please indicate whether any part of the data requested is presently unavailable and let us know how long it will take you to develop it. Do not delay the submisison of any part of this information because of the unavailability of any other part.

Very truly yours,

A. S. MIKE MONRONEY,

Chairman, Automobile Marketing Practices Subcommittee.

SUPPLEMENTAL INTERROGATORY NO. 2

1. Please list your total direct collision premiums written in New York State on private passenger cars excluding fire and theft and other coverage for each year, 1950 to 1956, inclusive.

2. Please state your net worth, net income before taxes and net income as a percent of net worth before taxes for each year since 1939. (Net worth should include paid-in capital plus surplus unless otherwise designated; net income should include net underwriting profit or loss, net investment income and other investment gains or losses unless otherwise designated.)

3. Please submit a copy of your latest convention examination report.

4. Please submit any statistical data which you have submitted to any State insurance authority showing your collision writings by class for any year 1950-55 or part thereof.

Hon. A. S. MIKE MONRONEY,

PAUL, WEISS, RIFKIND, WHARTON & GARRISON,
New York, N. Y., May 2, 1957.

Committee on Interstate and Foreign Commerce,

United States Senate, Washington, D. C.

DEAR SENATOR MONRONEY: I am enclosing herewith material prepared by Service Fire Insurance Co. in response to supplemental interrogatory No. 2, enclosed with your letter of April 16, 1957.

In connection with the answer to question 1 of the supplemental interrogatory, you will note the important qualification with respect to the accuracy of the figures. This is made necessary by the fact that the figures are based upon estimates and not upon precise statistical material, which Service Fire does not have.

Question 2, we assume, is designed to supply the financial information that was discussed in connection with the testimony of Mr. J. Page Risque on March 20, 1957. We would respectfully request that if this information is placed in the record, the entire chart we have prepared in answer to question 2 be used since otherwise we do not believe a fair financial presentation would result.

We regret that it has not been possible to submit this material earlier. In part this has been due to the time required to prepare the financial estimates and other data requested and in part to my involvement over the past week in a pressing litigation.

Yours very truly,

Enclosures.

91018-57-pt. 1——19

ADRIAN W. DEWIND.

ANSWERS OF SERVICE FIRE INSURANCE CO. TO SUPPLEMENTAL INTERROGATORY NO. 2

Answer to question 1:

Estimated total direct collision premium writings in New York State on private passenger cars

NOTE. The company does not have the actual statistics requested, for the reasons given the committee on previous occasions. The company's closest possible estimates, however, are set forth above with the thought that they may be of assistance. Despite our best efforts, these estimates may be subject to substantial error.

Answer to question 3: A copy of the latest association report on the examination of Service Fire Insurance Co., as of December 31, 1954, is attached. Answer to question 4: No such statistical data has been submitted by the company to any State insurance authority.

ASSOCIATION REPORT ON EXAMINATION OF THE SERVICE FIRE INSURANCE COMPANY OF NEW YORK AS OF DECEMBER 31, 1954, BY THE STATES OF NEW YORK, FLORIDA, PENNSYLVANIA, AND TEXAS

NEW YORK, N. Y., March 1, 1956. To: Hon. George A. Bowles, Commissioner of Insurance, Chairman, Committee on Examinations, Chairman, Zone 2, National Association of Insurance Commissioners, Richmond, Va.

Hon. Joseph A. Humphreys, Insurance Commissioner, Chairman, Zone 1,
National Association of Insurance Commissioners, Boston, Mass.

Hon. Walter D. Davis, Commissioner of Insurance, Chairman, Zone 3, Na-
tional Association of Insurance Commissioners, Jackson, Miss.

Hon. Garland A. Smith, Life Insurance Commissioner, and Chairman of the Board, Chairman, Zone 5, National Association of Insurance Commissioners, Austin, Tex.

Hon. Leffert Holz, Superintendent of Insurance, Albany, N. Y.

SIRS

In accordance with your several instructions, an association examination has been made, as of December 31, 1954, into the condition and affairs of the Service Fire Insurance Company of New York, and the following report thereon is respectfully submitted.

SCOPE OF EXAMINATION

The examination was conducted at the home office of the Service Fire Insurance Company of New York, 1 Park Avenue, New York, N. Y., and in the following branch offices: Detroit, Mich.; Chicago, Ill.; Salt Lake City, Utah; Cincinnati, Ohio; St. Louis, Mo.; Memphis, Tenn.; Yonkers, N. Y.

The examination was made in accordance with statutory requirements of the New York insurance law and included a determination of the financial condition of the company as of December 31, 1954, investigation of the conduct of its affairs and a review of transactions since the last statutory examination, made as of December 31, 1951.

Tests and analyses were made to the extent deemed necessary of the income and disbursements and other records for the period under review. No detailed audit was made of income and disbursements except as was necessary to verify assets and establish liabilities.

The Service Casualty Company of New York, under the same ownership and management, was examined concurrently.

The results of the examination of Service Fire Insurance Co. are shown in the following statements:

I. Financial condition December 31, 1954;

II. Reconciliation of ledger assets-December 31, 1953, and December 31, 1954;

III. Underwriting and investment exhibit for the 3-year period from January 1, 1952, to December 31, 1954.

The uniform accounting bureau of the New York Insurance Department conducted an examination and made a uniform accounting report on examination as as of December 31, 1954, dated November 17, 1955, which has been accepted and filed.

HISTORY

The Service Fire Insurance Company of New York was incorporated under the laws of the State of New York on May 6, 1929, and began doing business on October 1 of the same year. The company was organized by the Intertype Corporation, of Brooklyn, N. Y., to provide fire and transportation insurance on printing machinery either rented or sold on the deferred payment plan.

In March 1938 the Knickerbocker Corp., a holding company organized in the State of Delaware, acquired the capital stock, with the exception of directors' qualifying shares.

The stock owned by the Knickerbocker Corp. was purchased in February 1939, and that of the directors in December 1940, by the Commercial Investment Trust