ROANOKE TIMES 
                      Copyright (c) 1997, Roanoke Times

DATE: Tuesday, February 4, 1997              TAG: 9702040092
SECTION: BUSINESS                 PAGE: B-6  EDITION: METRO 
SOURCE: MAG POFF STAFF WRITER

INSURANCE CHIEF SEES NEED FOR LEGAL FEE REFORM

THE PRESIDENT OF Cincinnati Financial Corp. is visiting Roanoke's sales agents, clients and securities brokers.

Casualty insurance companies have a difficult problem making coverage available at affordable prices when they have no control over its costs, according to the president of Cincinnati Financial Corp.

Robert B. Morgan, who this week is making a two-day visit to the Cincinnati-based company's Roanoke sales agents, clients and securities brokers, explained that insurers cannot control the price of medical treatment, vehicle repairs or legal costs - insurance payouts which, in turn, determine the premiums for casualty policies.

The legal system exacts a price that might be reduced, but, said Morgan, "trial attorneys are very powerful."

The public, he said, "understands the need for legal reform, but there's a kind of feeling that filing a lawsuit is like winning the lottery."

Morgan said insurance companies favor eliminating the contingent fee system, under which lawyers are paid a share of judgments that they win for clients. Only Spain and the United States have such a system, he said, and their insurance premium costs are the highest in the world.

The casualty insurance industry has recently been buffeted by charges that it has redlined certain geographical areas where it would not sell policies.

Morgan said that Cincinnati Financial has always used independent agents and encouraged them to write policies for everyone at affordable prices.

Agents cannot go in safety to some inner city neighborhoods in major metropolitan areas, Morgan said, but, in communities like the Roanoke Valley, that is not a problem.

Independent agents are proactive in the community and do business everywhere they can make a profit.

Cincinnati Financial is represented locally by five agencies: Chaney Thomas Stephenson Hill Inc., Haynie & Associates Insurance Inc., James A. Scott & Son Inc., and Richardson-Johnston-Wynn Inc., all of Roanoke, and Goodwin Insurance Agency Inc. of Salem. The company has 7,000 policyholders in the Roanoke Valley.

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