PRESENT PROBLEMS IN INSURANCE 239 



include accident insurance. As consumers and as taxpayers the 

 vast majority of men will cheerfully contribute their share towards 

 compensating the wage-earner who has become completely or par- 

 tially incapacitated in consequence of an accident for which no one 

 may be responsible. Where such responsibility exists, employers' 

 liability and laws governing negligence can be invoked. 



In view of the many opportunities offered by existing insurance 

 institutions, it is not probable that the state will be compelled to 

 perform the functions of an insurance company to any very great 

 extent. The principle of compulsion, however, will oblige the state 

 to provide insurance for the uninsured residuum, but for no more. 

 Whatever may be required of the state in order to provide for this 

 residuum is fully justified by the important social and economic con- 

 sequences of this form of state action. 



When arguing in favor of more favorable laws governing taxation, 

 representatives of insurance companies generally allude to the phil- 

 anthropic element in insurance, because the companies assume a bur- 

 den which the state would otherwise be called upon to carry in the 

 form of aid and relief for dependents. This argument applies with 

 even greater force to state compulsion and the consequent saving in 

 expenditures for the poor and dependent. Insurance as a preventive 

 and remedial institution cannot be complete without direct action 

 by the state. On a limited scale state action has already been 

 resorted to in municipal insurance of firemen, policemen, and other 

 special classes, and a compulsory law of Maryland has recently been 

 declared unconstitutional. 



Without attempting to establish a hierarchy of insurance problems, 

 in which every question shall succeed every other in logical succession 

 and in the order of its relative importance, next to the problem of 

 making insurance an all-inclusive institution may be placed the 

 problem of the better adaptation of the policy to the policy-holder. 

 Jefferson is credited with having said that a fool can put his coat 

 on better than a wise man can do it for him. A first-class agent 

 sees to it that his client selects none but the best-fitting policy; 

 but it is not difficult to demonstrate that for a considerable part of 

 the agency brotherhood it is assumed as a fundamental and deter- 

 mining consideration that the interests of the agent's pocketbook 

 are in absolute harmony with the interests of his client. Hence 

 we find men hopelessly attempting to carry high-priced investment 

 policies, who would be served much better by purely protective 

 policies. If, after a full, accurate, and truthful exposition, a client 

 deliberately selects an ill-fitting policy, the policy-holder must bear 

 the consequences, for no invention has yet eliminated the fool. 

 But when an agent deliberately talks half-truths or falsehoods with 

 a view to influencing a prospective policy-holder in the direction of 



