Urges Losses to be Paid After 60 Days
Following a special executive committee meeting of the National Board of Fire Underwriters, fire insurance companies were advised to exercise their rights to wait sixty days before paying fire loss claims. This advice was given at the time of bank holiday but now the National Board recommends that the practice be made permanent except in the case of losses of $100 or less and for claims that followed the California earthquakes of March 10. The following resolutions were recently adopted:
“Whereas, It has been demonstrated In this and previous periods of economio depression that an unusually large number of suspicious losses have occurred; and
“Whereas, It is evident that the customary immediate payment of losses in such circumstances tends to encourage arson, incendiarism and fraud and so is against the public interest; and
“Whereas, It is the public duty of insurance companies to discourage such criminal activity; and
“Whereas. From time immemorial the necessity of a period for investigation of losses has been recognized in insurance contracts; now, therefore, be it
“Resolved. That the National Board of Fire Underwriters deems it advisable that the payment of all losses on all classes of risks in excess of an agregate loss to assured of $100 be withheld for the period of sixty days aftor proof of loss unless otherwise provided by the printed conditions of the policy or by statute.
“It is not. however, deemed advisable that this practice apply to losses arising out of the catastrophe in southern California on March 10, 1933.”