180 Urdahl—The Present Fee System in the United States. 
E. ABUSES CONNECTED WITH INSURANCE FEES. 
The vicious practice of allowing insurance commissioners or 
some other official to retain some or all of the insurance fees, is 
still continued in some states. * 1 Another custom, in favor of 
which no good reasons can be given, is the practice of allowing 
the examining official to receive directly from the company for 
his own use, the fees which are supposed to cover his actual 
expenses 2 during the time consumed in the examination. Very 
often these are defined by law to be mileage, at ten cents per 
mile, and a certain amount per day for the time spent in mak¬ 
ing the investigation. In the first place, this method may 
yield a salary out of all proportion to the salaries of other state 
officials. 3 Then the examiner may grant or refuse a permit to 
transact business. If he is at all corrupt, he may use this 
power to extort huge bribes from those companies which are 
doing business on an unsound basis. Furthermore, the fee 
which he is allowed to receive directly from the company, may 
easily be increased by the company into a direct bribe to cor¬ 
rupt and destroy the efficiency of a corruptible official. This 
temptation might be partially removed, by requiring all fees to 
be paid directly into the state treasury and by forbidding any 
official to receive any gift or fee, under any pretense whatever,, 
from an insurance company. 
rily have to increase their premiums to cover the extra outlay. This would 
be true if a fee of several thousand dollars were collected annually from 
each company, but none of the fees are actually so high as to produce 
any change in the price of policies. 
1 Indiana allows the state auditor to retain twenty-five per cent, of the 
fees collected, besides his office expenses. 
2 Delaware, New York, Minnesota, and many other states have such pro¬ 
visions. 
3 Suppose the examiner in one of the North Western states receives an 
application for examination from a half dozen companies in New England, 
and from several on the Pacific coast. As soon as it is convenient for him 
he travels to Boston, and leisurely examines all the companies who apply 
from that section of the country. The actual expenses which he collects 
from each company will them include mileage, which alone may amount 
in this way to several thousand dollars in the course of a year; while the 
real expenses of the examiner will be but a small fraction of the amount 
collected. 
