9. Rate of a brick rate is based on the Universal Mercantile Schedule ; the building has but one tenant, who is a wholesale dealer in drugs.
It would be possible to make a substantial reduction in the rate of insurance on this property by correcting the skylights, for which a charge of .15 gross is made. This would not be a difficult or expensive thing to do. It should be noticed that the charges which build up the schedule are specific amounts, while the credits are percentages.
10. Analytical schedule.—The universal schedule probably owes its completion to the energy and per sistence of Mr. F. C. Moore. The analytical schedule is equally indebted to Mr. A. F. Dean. The base rate in this schedule is founded on the town conditions. Towns are divided into some seven classes. No. 1, the highest, is one which has everything the under writer could desire in the shape of water supply, fire department and civic conditions which favor a low fire record. No. 7, the last, shows a complete absence of these, especially of water supply and fire-fighting force. The schedule from this point on is different from the universal in that it makes all charges as well as credits percentages of this base rate. The theory on which this is founded is that there is a relation be tween the defective conditions of buildings and the town in which they are situated. For instance, if there is a town which is in grade 7 and in that town there is a building with a defective chimney, the charge for the defective chimney will be a certain percentage, say ten. Now if the town improves so that it grades in class 3, the charge for the defective chimney will still be ten per cent of the base rate. That is, the same relation will exist between the chimney and the base rate of the town then as that which existed be tween the chimney and the town in the first instance. This shows the schedule as a system of relations be tween all the forces which make for good or poor con ditions in fire matters. The credits are based on a percentage system.
The charges for occupancy are divided into three parts, ignitibility, combustibility and susceptibility. It carries the analysis of the occupancy to a finer point than the universal schedule in that it does not lump the two first conditions into one charge. The first and
second charges are percentages, but the third charge, susceptibility, is a flat fixed charge and is based on the principle that when fire has started, the contents have a certain susceptibility to damage which is not affected by their environment.
The treatment of the exposure is very highly devel oped, the tables providing for something like eighty different conditions. This schedule has been applied over a great extent of property and probably with more uniformity in its application than any other that has been made. The universal schedule is not copy righted and so it can be changed. With but few ex ceptions, it has not been used in its true form, but has been adapted more or less by the local boards. The analytical schedule, however, is copyrighted and can not be changed without the consent of the copyright holders. This provision of the copyright is an ex cellent feature since it has enabled the business of fire insurance to have a fair test of the schedule over a wide extent of territory. It has been used in approx imately seventeen states.
As a general rule, conditions governing the conduct of the fire insurance business, and the establishment and maintenance of rates, are on parallel lines in Can ada and the United States, but the attitude of the people to insurance rating associations has been much more demonstratively hostile in the United States than in Canada. As a consequence, legislation of one kind or another has been general thruout the United States, and while much of it has been wholesome, some of it has been ill-advised.
11. Rate-making control in Canada.—The Ontario legislature early in 1917, had under consideration the matter of the control of rate-making, and of rating organizations. Mr. E. P. Heaton, the fire marshal of Ontario, submitted the following instructive mem orandum to the Attorney-General of the province: 1. The business of fire insurance is of such commercial importance that it ranks with banking, railway, express and telegraph service, and public interests demand that the insti tution should be preserved; that its usefulness should be increased, and that its capacity for efficient public service should be unimpaired.