10       REPORT OF THE COMMISSIONER OFl INSURANCE.


THE INVESTIGATION COMMITTEE S PLANS.
The plan for rate-making proposed l)y the legislative investigat-
ing committee contemplated making use of the present sysf em by
requiring co-operative action by the companies in providing rea.
sonable and equitable rates for the people of the state. Briefly,
every cormpany must Co. operate in making its rates through one
or more bureaus. Such bureaus were to accept any or all com-
panies eholosing to come in as members. upon equal terms, and
were to he subject to examnination. Complaints as to discrimina-
tions were to be heard by the commissioner of insurance, with.
the right to order the proper correction. The question of
whether rates for the state as a whole were excessive or discrim-
inatory was to be reviewed by a special commission of experts
appointed for that purpose. Each company wNias to change the
rates fixed by its inspection bureau. Provision was: made for
the fullest co-operation between the companies on the condition
of the fullest publicity.
The effect of this legislation, if enacted would have been the abo-
lition of rate-making by.boards of local agents which is peculiar to
the state of Wisconsin, and the giving to the companies the full-
est freedom to co-operate in adjusting their rate to the actual
hazard in every ease, and in economizing in expenses and the
betterment of their service in fire prevention.  This legislation
failed for reasens which were wholly outside of the merits of
the plan proposed.
INSURANCE AND FIRE PREVENTION.
Reductions in. losses sufficient to show that the same a-re not
mere ordinary fluettations in. the loss ratio must inevitably be re-
flected in the rates charged for insurance. Sound business man-
agement on the part of ompanies demands that the rates should
be reduced as such reductions are warranted by decreased losses,
and unless promptly and fairly made, reductions will be enforced
through the competition of other agencies, such as. mutual com-
panies, inter-insurers or Lloyds associations, or through direct
supervision or regulation of the rate-making agencies or of the
rates themselves.