BEST'S INSURANCE REPORTS — FIRE AND MARINE.   667

AMERICAN MANUFACTURERS INSURANCE EXCHANGE—Continued.

eciprocal Fire Insurers, reported upon elsewhere in this
olume. So far as we are advised, his underwriting ex
erienre is limited.

Although, as advised above, the exchange previously is
ued policies without requiring a signed power-of-attorney,
he management states that now in each case signed power
f-attorney is obtained.

The manager has advised us that only metal workers
nd clear space lumber is written at board rates or the
prevailing" rates used by stock companies. The maxi-
sum policy accepted is $5.000 subject to one fire, of which
2,500 is carried net.

The agreement signed by subscribers provides that a
eparate account be kept with each subscriber. and that the
ubscriber shall deposit annually an amount equal to the
stablished prevailing tariff premium. As losses occur,
soh subscriber's account is charged in the proportion that
is premium deposit bears to the total premium deposits of
11 subscribers. If the money to a subscriber's credit at
ny time be insufficient to defray his proportion of a loss.
e shall at once deposit the additional sum necessary. called
Supplementary Deposit." The liability of each sub
criber on any one risk is limited by the agreement to. an
mount equal to one additional premium deposit. There
4 no limit to the number of assessments which may be
?vied.

The exchange has a Governing Board of three members,
5ho are elected annually by the subscribers. This board
as supervision of the management and has custody of the
sbseribers' funds, as trustee.

The manager's compensation is 25% of the premium de
osit.s, out of which ,he pays all expenses except adjust
ients, legal expenses, taxes, and expenses of the Governing
oard, which items are charged to the subscribers' iu
ividual accounts.

The power-of-attorney provides that at least 50% of the
wings effected under a subscriber's policy shall be re
irned to him annually in cash, the balance to be placed
0 his credit in an individual surplus account until such
irplus equals twice the amount of one premium deposit.
ereafter, the entire saving over any amount needed to
plenish such surplus shall be returned annually.

The clause in the subscribers' agreement with reference
cancellation, reads as follows: "This application and
Teement may be cancelled by ten. (10) days' written
tice by registered mail whereupon all liability of what
er nature shall cease and all deposits, together with any
rplus accrued or accruing to the credit of the sub-
•iber's account, shall be returned."

We were advised in January, 1919, by the Superintendent
of Insurance of Illinois, that when the exchange received
its license to commence business, January 4. 1919, it hact
applications from 102 members, which made a total of
insurance in force of $455,400, and that from the various
subscribers they had collected $3,547.99, this money be-
longing entirely to the subscribers, the manager having de-
ducted his compensation.

The unearned premium liability is small in proportion to
the net premiums written during 1919. and the net cash
surplus is but $6,672.10, also small.

This exchange is licensed in Illinois only.

The Advisory Committee, as of October 16, 1919, was as
follows: A. L. Castle, treasurer Channon Emmery Stove
Co., Quincy, Ill.; E. P. Compton, vice-president Quaker Mfg.
Co., Chicago, Ill., and E.. F. Frazer, president W. S. Frazer
Company, Elgin, Ill,

Its statement as of December 31, 1919, is as follows:
Admitted cash assets: Bonds and stocks owned (market
value), $7,150; interest due and accrued thereon. $6.13;
cash in banks and office, $2,42S.S9: premiums or deposits
outstanding not over three months due, $7,547.80: total
cash assets, $17,132.82.

Liabilities: Losses, adjusted. due, $467.38; not due,
$300; total, $767.38; unearned premium deposits, $7,687.62:
due attorney-in-fact for administration expense, $1,938.22;
reinsuranee, $67.50; total liabilities, $10,460.72; net cash
surplus, $6.672.10; total, $17.132.82.

Cash Income, 1919.—Premium deposits written, gross,
$50.561.10; less return premium deposits, $14,637.46; less
reinsurance, $481.25; net, $35,875.39: interest, etc., $17.59:
total cash income, $35,892.98.

Cash Disbursements, 1919.—Net losses paid. $9,904.03;
paid to attorney-in-fact for administration expense, $8,-
613.40; legal expense, $60.59; taxes, licenses and fees,
$179.35; other disbursements, $202.44: total cash disburse
ments, $18,960.41.

Transactions Since Organization.— Premium deposits re
ceived, gross. $50,561.10; less return premium deposits,
$14.637.46: less reinsurance, $48.25; net premium deposits,
$35,875.39; interest received on investments and bank de-
posits, $17.50; total cash income, $35.892.98. Losses and
adjustment expenses paid, net, $9.993.56: commissions paid
to attorney-in-fact for administration expenses, $8,613.40;
other expenses paid, $269.52; total expenses paid, $8.882.92;
returned in cash to members, as savings, $83.93: total cash
disbursements, $18,960.41.

In connection with this report, see important article in
troducing this section.

AUTOMOBILE INSURANCE EXCHANGE,
925 Chestnut Street, Philadelphia, Pa.

Iistory.— This is a reciprocal exchange which was li
sed by the Insurance Department of Pennsylvania under
title of the Automobile Owners' Indemnity Exchange
I began operation April 1, 1915, writing fire, theft, col-
on and automobile property damage, on pleasure auto
biles for its members. During 1918 this exchange was
rged with the Commercial Automobile Insurance Ex
nge, which was under the same management, and wrote
, theft, collision and automobile property damage on

commercial vehicles for its members. The above title was
adopted at that time. While the two exchanges are merged
they will continue to operate as separate branches, one
writing pleasure automobiles and the other commercial
automobiles.

Both of these exchanges have been successful in their
operations, having returned in cash as savings to members
since organization $99,752.

Management and Reputation.—The attorney-in-fact is