Federal, State and Municipal departments is excellent. Ne were also glad to learn that there is no concentrated "ring" of narcotic peddlers operating in our district. We strongly recommend that an educational program se carried out in our junior high schools and high schools, and that this educational program be extended to both counsellors and educators for the purpose of understanding the problem and the best method to cope with it. We further recommend that funds be made available to enable law enforcement officers, the opportunity to attend local seminars and seminars conducted in the close proximity of this district, which deal with the general narcotic problem, drug abuse and the educational and legal means to cope with this growing menace. We heartly commend the law enforcement officers for the work they have been doing in this field and we rely upon their continued vigilence to put an end to the use of dangerous drugs and narcotics. VI. The Grand Jury compliments H. T. "Bubba" Ashford on his 40 years of service to Hinds County as Circuit Clerk and Deputy Circuit Clerk. VII. The Grand Jury strongly recommends to the Court that it charge the March, 1970, Grand Jury in this district to throughly investigate the actions and functions of the Mississippi Probation and Parole Board in this district. We were alarmed at the number of criminal offenses which we have seen during this Grand Jury session, which have been committed by repeaters. VIII. This Grand Jury requests that the Circuit Clerk be directed to send copies of this full Grand Jury report (excluding the exhibits which are attached to it) to each of the following, to-wit: (1) Honorable John Bell Williams, Governor (2) Honorable A. F. Summer, Attorney General (3) Honorable James 0. Eastland, United States Senator (4) Honorable John C. Stennis, United States Senator (5) The five (5) Congressmen from Mississippi (6) Mississippi Insurance Commission (7) Mississippi Highway Commission (8) Mississippi Probation & Parole Board (9) H. T. "Bubba" Ashford IX. All of the members of this Grand Jury inspected the facilities of the County jail. Our unanimous opinion is that they are inadequate, outmoded and constitute a fire trap. The cost of simple maintenance is excessively high because replacement parts are no longer available. We are aware that this matter has been previously presented to the voters and subsequently turned down. We feel in all good conscience it should again be presented to the public. Now having completed our duties, we ask that we be fully and finally discharged. ARTICLES Statement of T. Lawrence Jones, President With Respect to S. 2236, Providing A My name is T. Lawrence Jones and I am President of American Insurance Association, an organization of insurance companies writing all kinds of property and casualty insurance throughout this country. Our member companies have a premium volume of over $7 billion. We are pleased to have this opportunity to appear before the Senate Commerce Committee to present our views on the general problem of insurance company insolvency, and more particularly on S. 2236. This bill, introduced by Senator Magnuson and co-sponsored by Senators Dodd, Hart, Hollings, Inouye, Moss and Pastore, would create a Federal Insurance Guaranty Corporation for the purpose of protecting the American public against insurance company insolvencies. Public officials, legislators and the insurance industry itself have been concerned with the problem of insurance company solvency for many years. As could be expected, the intensity of concern has varied substantially as the number of company insolvencies rose and fell and as reports of insurance company liquidations increased and decreased. Regardless of the understandable ups and downs of public concern, American Insurance Association is convinced that there is a real problem to which a solution must be found. Historical Position of Insurance Industry Some years ago the insurance industry held to the position that all measures by which insurance companies collectively helped, in one way or another, to defray the losses of insolvent insurance companies were unsound. It was argued that these measures put weak companies on a parity with strong ones and tolerated, if not encouraged, bad It was further argued that these plans removed incentives management. on the part of agents and brokers to be sure they were placing their business with responsible and reputable insurance companies. We cannot disagree with the logic of these arguments, but times have changed. Today, such arguments are outweighed by social considerations and we believe the prime consideration is that the public must be protected in the event of an insurance company insolvency. In addition, the nagging insolvency problem damages the industry as a whole and each company suffers in public esteem. 1 The Dimensions of the Problem There has been considerable debate as to the size of the problem. Some have endeavored to treat it as de minimis. It is our view that the figures should speak for themselves, but in any event we have concluded that one insurance company insolvency is one too many, especially if there is no way to reimburse the victims of that insolvency. The only question open for discussion, in our judgment, is what solution will best serve the public interest. Solutions Expansion of Uninsured Motorist Endorsement American Insurance Association has been seeking the 1 See New York Insurance Department Report to Governor Rockefeller, best solution over a period of years and with renewed intensity since the introduction in January 1967 of S. 688, providing for a Federal Motor Vehicle Insurance Guaranty Corporation. 2 Until recently the discussion has centered on automobile insurance. In fact, the earlier bills, such as S. 688, would have provided protection only against the insolvency of automobile insurers. The focus on automobile insurance suggested to some the desirability of expanding the uninsured motorist coverage specifically to include insurance company insolvencies. All states, except Maryland and North Dakota, now have man3 datory uninsured motorist laws. Most of these laws are specifically applicable in cases where the insurer is insolvent but, even in those states where the law is silent as to coverage in case of insurer insolvency, there is a strong likelihood that the laws would be construed to apply. In fact, practically all auto insurers today have voluntarily included provisions in their uninsured motorist coverage making the coverage specifically applicable to insolvencies. American Insurance Association has never regarded the uninsured motorist endorsement with coverage for insolvency as either an adequate or effective answer to insurance company insolvencies. These uninsured motorist laws are confined to automobile insurance and therefore do not provide protection to other claimants and policyholders who may be the victims of an insurer insolvency. similar bill, S. 3919, was introduced in 1965 by Senators Dodd, Clark, Magnuson and Hart. 3See attached American Insurance Association Chart Analysis, October 1969. |