Hon. A. S. MIKE MONRONEY,

Baltimore, March 14, 1957.

CALVERT FIRE INSURANCE CO.,

Chairman, Automobile Marketing Practices Subcommittee,

Senate Office Building, Washington, D. C.

DEAR SENATOR MONRONEY: In line with my telephone conversation of today with Mr. David Busby, counsel to the subcommittee, and with further reference to Mr. Van Horn's letter of March 4, 1957, the following explains why we are unable to answer your specific interrogatories 5, 6, and 7 with respect to the number and amount of refunds sent policyholders by State in connection with our general circularization made to determine and correct whatever misclassification that had previously occurred.

As pointed out in Mr. Van Horn's letter, beginning in December 1954, upon our receiving a request to issue a new policy of insurance, irrespective of the data received by us which grew out of the related automobile sale, we immediately wrote the individual insured to verify his classification status. If his reply showed that a different class from that originally indicated was the proper class, a correction was immediately made and his premium immediately adjusted. This was a continuing routine program during 1955, 1956, and even is today. We did not and do not consider these immediately made premium adjustments to be any part of the refunding program that resulted from our general circularization to which we understood your interrogatories were directed.

As I explained to Mr. Busby, it is a practical impossibility for us to segregate this type of immediate verification adjustment from the refunds as to which inquiry was made. As a very rough estimate, we feel we can guess that not more than 50 percent of the total adjustments effected by us during 1955 resulted from the refund program in connection with our general circularization and this figure would approximate $600,000.

We believe, although we have no way of knowing, that the remaining amounts adjusted in 1955 and all of 1956 were as a result of our immediate verification program.

The attached exhibit lists by State and by policy year for 1953, 1954, 1955, and 1956 the total of all adjustments made. As pointed out in Mr. Van Horn's letter, the 1953 and 1954 refunds certainly resulted from our general circularization. We estimate that approximately $600,000 of the 1955 refunds similarly resulted from the general circularization. We believe the remaining adjustments were all the result of our routine immediate verification which necessitated a change from information initially furnished us.

In view of the character of the attached exhibit, we would request that the information disclosed thereon be evaluated in the light of the facts above recited, and that it be treated in confidence.

Sincerely yours,

J. FRANCIS IRETON, Secretary.

AUTOMOBILE MARKETING PRACTICES

Statement of changes resulting from immediate policy verification and refunds resulting from general circularization as of Dec. 31, 1956

CALVERT

1 Adjustment.

2 Collision classification law did not become effective until Dec. 1, 1955.

Statement of changes resulting from immediate policy verification and refunds resulting from general circularization as of Dec. 31, 1956-Continued

Statement of changes resulting from immediate policy verification and refunds resulting from general circularization as of Dec. 31, 1956-Continued

1 Adjustment.

CALVERT FIRE INSURANCE CO.,

APRIL 16, 1957.

Care of Muecke, Mules and Ireton,

Baltimore, Md.

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 submission 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 NUMBER 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, 1950-56, 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 195055 or part thereof.

5. Please list refunds made in each calendar year 1950-56.

MUECKE, MULES & IRETON,

ATTORNEYS AT LAW,

Hon. A. S. MIKE MONRONEY,

Baltimore, Md., April 24, 1957.

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

DEAR SENATOR MONKONEY: This will acknowledge the receipt of your letter of April 16, 1957.

We regret exceedingly that there has been a delay in submitting to you certain additional information which you desire and which is available.

The following schedules are enclosed:

No. 1: Net collision premiums written in the State of New York for the calendar years 1950 to 1956, segregated as to private passenger and commercial business.

No. 2: Net collision premiums written in the United States for the calendar years 1950 to 1956, segregated as to private passenger and commercial business. No. 3: Collision return premiums allowed both as a result of correction of errors in classification and as a result of confirmatory program for the years 1955 and 1956, segregated by policy year.

Schedule No. 2 confirms the information which was given your Mr. Busby over the phone. We direct your attention, however, to the fact that at that time the segregation between private passenger and commercial business was not available, so he was given the total. This schedule shows the breakdown for all except the 2 earlier years, which is not extant.

We are also submitting to you a copy of Calvert's convention report completed as of December 31, 1955, for the 4 prior years. This was under the direction of the Pennsylvania Insurance Department in collaboration with the representatives of two other States.

Calvert is in the process of compiling some additional information which will be submitted to you as promptly as possible.

Yours very truly,

MUECKE, MULES & IRETON,

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91018-57-pt. 1—27

By J. FRANCIS IRETON.