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mediately to get coverage. Given 30 days whic :standard cancellation-notice period, to shop ar hey didn't want to take what was offered becau price was too high.

ybody has this possibility of shopping, and they se there is more than one place to go and it is p ticular company would sell it cheaper than anoth might not be much difference, but the agent that or the official of the bank who is looking for new c ould shop around and get it as cheaply as he can ROXMIRE. Get it immediately if you are willing to rice?

K. Well, I don't think I would be able to answ a general basis of that sort. I think I would have t nditions were and the circumstances. We know t big cities you have specialists in the field of selling aks and savings and loans. There are big national a ge houses readily available. Of course, you also h presence of branch offices of large companies w n large cities. This might not be as easy for bank unity where a local agency may have to work t -city office and find out what he can get, the time ved in it there.

r issue that was raised by Mr. Schnider's stater I found rather astonishing also.

PROXMIRE. Yes; I would like to have your view d happen if the Federal Home Loan Bank Board er, as was suggested? I would like to get the rea ur industry on that because that would be quite


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not be necessary. We would handle this hypoblanket bond on two bases: Either the company overage that was the original company that ld seek out two or three or five other surety comerhaps they would like to be a cosurety on the take a portion of the bond, and they would be eir appropriate amounts on a first-level basis; y would place the risk in a reinsurance treaty mmercial market which would in effect do the › risk among other insurance companies who act


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overnment involved in reinsurance would be We have plenty of reinsurance facilities to back be within the private sector of business. There is hic potential of the type we talk about in either energy, and so forth. This is a totally unneces

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think Mr. Schnider was thinking in terms-I ing in terms-of a direct insurance facility = we believe is not

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Well, the first impression I get as a layman is o reduce the cost of the insurance, keep it from n extent. But actually all it would really do is r resources the Government has. The Federal of course, enormous resources.



I don't

ve the resources. No problem. Banker blanket started, of losses in the last 10 or 15 years, that deals in the whole economic community because or the coverage.

One could make the argument, I suppose, rge was so great that it would make it difficult,


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ter all, if the bank is going to go to the trouble of n nvestment, which on the basis of the evidence w tial, but it is pretty convincing, that this does red obberies-they ought to get some break in their r Yes. Let me tell you how this does operate actu picture. If the bank does have a bad loss expe s to its interest to install protective devices, sonic, ver it might be, then by virtue of the installation t letely reverses itself, they will get a credit, the ra e will drop.

OXMIRE. So they don't have to pay the penalty?

- That's right. There will no longer be a penalty. T . So in effect this is handling the reverse situatio as made in the testimony which you have made, I o: that it should be handled on a merit basis, that elf immediately should have some effect on the r people have been looking at that. I am frank to t - where it stands at the moment.

ROXMIRE. Does the bank purchase its robbery insura rate under almost all circumstances?

. Well, this is all part of the banker's blanket-bon think they can purchase at a reasonable rate. ROXMIRE. Can you give me an example of what it all institution which might be considered vulneral protective devices?

. I am sorry, I can't. I have no familiarity with th

PROXMIRE. I wonder if you could give us that f

K. I will be glad to. I will be glad to furnish yo nual for the record.

Canceled and unable to buy any insurance? You

Is there anything they can do? Say their insur-
esumably the firm that cancels their insurance
y: "We are not going to insure you again." Are
wouldn't say that or they might turn them down

mpany they had the coverage with would cancel
f market to go elsewhere to get the coverage.
Is there any ultimate recourse? Do you have any
appeal to any group of insurance companies?
e is no pool, there is no

You say the competitive situation is such they

And you would like to have instances where-
ald like to know, yes, sir, if there has been this
d out where there has been a market problem or

Rates would go up under those circumstances, of mum rates 200 percent higher than your regular record of loss?

me clarify that. All I was doing was affirming the previous witness. The rates could go that t sure what the maximum is, and I am not sure But I am only speaking in terms of the factThe rates could go higher in that event? ssible. If the record is bad enough it could go nce, Lloyd's of London carries many of the very ect that the surcharge there many times is in

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