In a letter to Attorney General Joseph E. Warner, Rep. Birmingham criticized Warner for inaction on combatting auto insurance fraud, which was pushing up rates, despite expressing “indignation and promised actions” during last fall’s election campaign, according to the Springfield Republican (April 5, 1929, pp. 1, 16).
Birmingham also attacked Republican Governor Frank Fuller for not taking action, despite requesting as lieutenant-general that Commission Monk allow the rates on compulsory auto liability insurance to remain at the present levels until further data was collected.
“Why doesn’t Gov. Allen take definitive steps now to relieve the situation if he held such views before election?” Birmingham asked.
Frank A. Goodwin, former registrar of motor vehicles who was ousted by Gov. Fuller, denied rumors that he wrote the letter sent by Birmingham to Warner. Before leaving his post as registrar, Goodwin had compiled a list of around 80 cases in which no accident report was made but later a claim was filed for personal damage insurance. In some of these cases, the lawyers had filed the claims without the operator’s consent.
In response to Birmingham’s letter, Warner referred to the report he made to the legislature in which he determined that information given to him by Monk was insubstantial and did not warrant prosecutions.
Below is Birmingham’s letter addressed to Warner in full:
Hon Joseph E. Warner, attorney-general for the state of Massachusetts, State House, Boston, Massachusetts:
Dear Sir: As a representative of the people, I feel it my duty to interest myself in the present compulsory automobile insurance law and am writing to you as you have shown interest in it to the extent of promising a complete investigation of the corrupt practices of lawyers and doctors in presenting fraudulent claims—an alleged reason for the higher rates. I dissented, as a member of the rules committee on the resolve presented by the committee on insurance that a special commission be appointed to study these insurance rates in the future. The time to look into them is now. If this vital question is longer postponed, the people will protest actively against their slow moving public officials. Most earnestly do I desire to be quick to defend the people of this commonwealth; and, therefore, I am going to ask you to give the results of your investigation.
First let me quote some of the fervent official denunciations of these rates, made, it is true, in August 1928, when the Republication party was seeking votes.
You, yourself, said in your letter to Commissioner Monk in August 1928 that you “would act as prosecutor to the rights of the people of the commonwealth in an investigation of the connection between ‘quacks’ and ‘shysters’ and insurance rates.”
Gov Fuller was also aroused to state on August 21, 1928--
“Large numbers of people have made fraudulent claims under the law and were aided and abetted in this contemptible practice by doctors and lawyers alike to a point where the insurance commissioner is going to make a complaint to the Bar association that certain lawyers notorious for practice in this regard should be disbarred. It is well known that certain doctors have collaborated in offering evidence for fraudulent claims and this matter the state board of registration in medicine has already taken up.”
Was this indignation and promised action a gesture? If not, why is it all so soon forgotten? What was the outcome of your investigation? The people of this state should not be penalized to uphold the practices of dishonest lawyers and doctors. If these frauds were perpetrated, by all means let us have the matter brought into light. If the statement of Commissioner Monk had no foundation, then this feature which contributed so largely to the adopting of higher rates should be corrected, and the rates correspondingly lowered.
The present silence after such a storm of protest makes those anxious to clear up this situation feel that something has been hushed up. Was Commissioner Monk fair with the people? Let me remark here that I understand that he is now holding a position with an insurance company which pays him about $15,000 a year.
Commissioner Monk also stated that approximately $6,000,000 was held in reserve for the settlement of 13,000 odd cases. This was in August 1928. Now, in April 1929, it is still maintained that the same amount and the same number of cases are still outstanding. Has none of the cases been settled by the court procedure? It is strange that this large sum of money does not decrease, nor the cases reach conclusion.
Our present governor, then Lieut-Gov Allen, injected himself into the issue and on August 25, 1928, he requested Commissioner Monk to allow the present rates on compulsory automobile liability insurance to remain as at present until at least further data had been received. Why doesn’t Gov Allen take definitive steps now to relieve the situation if he held such views before election?
Lieut-Gov Youngman was so deeply interested as to file a bill against this unjust legislation, but what has he done to further corrective measures? His voice so often raised on the platform election time was silent when an opportunity came for him to pursue tangible policy. Does he oppose the dilly-dally policy of the Republican legislation, or is he a party to it?
On the Republican party rests the responsibility of these rates and they must assume the responsibility. Now in April 1929, just in August 1928, these office-seekers must clear themselves in the eyes of the people of this state. They must do something—now. Next year the insurance companies, fattening on the easy money of the present tax, will seek and obtain another larger tax. Let us seek to make one rate for the zoning law, and that one the minimum and not the maximum rate. Let up take up the fight as earnestly as the Republicans promised to do before election, and let us accomplish this vital reform without further delay.
I have risen as a representative of the people of this commonwealth to bitterly oppose a further postponement of this question. As you have in the past professed a deep interest in the subject, will you join forces with me in the present to settle this subject of insurance rates by giving me details of your investigation?
May I have a speedy reply to this important matter?
Very truly yours,
Rep. Leo M. Birmingham