G68   BEST'S INSLRANCE REPORTS   FIRE AND MARINE:.

AUTOMOBILE LNSURANCE EXCHANGE—Continued.

the Exchange Operators, Inc., a corporation organized un-   The attorney-in-fact and all division managers are

der the laws of Pennsylvania, with an authorized capital

of $25.000.

The officers and directors of the attorney-in-fact arc:
President, R. J. Mullen; vice-president, C. A. Porter, Jr.;
treasurer, Harrison Townsend : assistant treasurer, Wm. A.
Mitchell; secretary, Harry S. Bradley. The directors in
addition to the above officers are: Frank Hardart, of
Horn and Hardart; P. F. Moylan, physician; Myles Hig
gins, attorney; Samuel L. Clement, Jr., attorney.

The manager has had over fifteen years experience iu
casualty underwriting.

The remuneration of the attorney-in-fact is 25% of the
premium deposits, which covers all expenses except losses,
return premiums or dividends, state and federal taxes and
claim expenses.

The loss ratio for 1919 was very reasonable.

The estimated percentage of savings to members since
organization as compared with manual rates was 22.484%.

Plan of Operation.—The exchange issues policies cover
ing fire, theft, collision and property damage on pleasure
and commercial automobiles.

The exchange writes generally- all classes of commercial
automobiles and as it does not write liability insurance it
eliminates the greatest hazard.

The liability of the subscribers under each policy shall
be a sum which is the same proportion of the aggregate lie
bility thereunder as the subscribers' premium deposit prior
to the aggregate of annual premium deposit of the exclaims,
under all policies in effect on the 3d and 15th elate of the
calendar month next subsequent to the payment of any
loss.

The subscribers are not subject to assessment for any
purpose. Upon failure of the attorney-in-fact to maintain
full reserves. as required by law, it is agreed that all funds
of the association shall be forthwith applied under direction
of the Insurance Commissioner to the purchase of reinsur
ance upon all outstanding policies.

A guarantee fund of $100,000 is held under trust corn-
parry trusteeship to preclude assessment.

No assessment has ever been levied.

Subscribers are liable for losses incurred during the
period of their membership and withdrawal from the ex
ohange does not release them from liabilities previously-
incurred.

Subscribers are admitted upon the recommendation of
the attorney-in-fact.

Business is written at rates charged by the conference
companies.

Detailed reports of the operation of the exchange are
made to subscribers annually.

Subscribers may retire from the exchange on the let or
15th of any month by giving five days' notice of subsequent
withdrawal.

The maximum net liability assumed by the exchange on
any one risk is $2,500. the exchange having excess cover
up to $40.000.

AUTOMOBILE INSURANCE ASSOCIATION,

Jacksonville, Ill.

   This is a reciprocal insurance exchange which operates   report upon its plan of operation, etc. Its financial state-

   under license from the Illinois Insurance Department. It   ment as of December 31. 1919, furnished us by the Insur-

began business in 1917.   ance Department of the State of Illinois, showed: Cash

   It writes fire, theft and collision insurance on automobiles.   assets, $2,250.25: liabilities, $1,075.17; income, $19,430.40;

   It does not answer our inquiries, and we therefore cannot   net. losses, $9.232.04; total dlisburSements, $18.269.53.

bonded.

The exchange has no advisory committee, but has an
agreement with a trust company, which provides that with
drawals must be made only for the purpose of payment of
losses and claim expenses, for the refund or return pre
miums, or for the payment of dividends at the close of the
year. The guaranty fund shown in the assets is available
under a trust agreement. for the purpose of reinsurance in
the event of a loss exceeding the cash reserve of the
exchange.

Service of process may be made upon the attorney-in-fact
or upon the Insurance Commissioners of any State in which
the exchange is licensed to operate.

Business its secured through a sales farce in the employ
of the attorney-in-fact, and no business is accepted through
brokers.

It is licensed in Pennsylvania, Michigan and Maryland.

Its statement as of December 31, 1919, is as follows:
Admitted cash assets: United States Liberty bonds, $10,-
188.70: interest due and accrued thereon, $836.23: cash in
banks and office, $39.374.28; premiums or deposits out-
standing not over three months due, $49.589.97; salvaged
automobiles held for sale, $2,500; deduct insurance for
factors of safety and theft preventatives. —$422.12: guar
antee fund. $93,000; total cash assets. $245,067.06.

Liabilities: Unpaid losses, $26,794.10; unearned premium
deposits, $136,206 OS; total liabilities, $163,000 15: net cash
eurpius, $82,066.SS: total, $245,067.06.

Cash Income, 1919.— Premium deposits written. gross,
$442,599.01; less return premium deposits, $73,035.55; net,
$369,563.46; interest, etc., $941.18; guarantee fund,
$18,000; other cash income, $31.18; total cash income,
$388.535.82.

Cash Disbursements, 19lit—Losses paid, gross, $203,-
187.67; less salvage, $15,360.20; less reinsurance, $S80;
net losses, $186.947.47: paid to attorney-in-fact for ad-
ministration expense, $92,347.24: unused premium deposits
returned to subscribers, $50.877.39: total cash disburse
ments, $330,172.1.0.

9'ransactions Since Organisation.— Premium deposits re
ceived, gross, $1.02.8.273.26: less return premium deposits,
$187,202.13; net premium deposits, $841,071.13; interest
received on investments and bank deposits, $2,904.72;
guarantee fund, $178.005,18: accrued interest, $836.23;
other cash income, $31.44; total cash income, $962351.70.
Losses and adjustment expenses paid, gross, $409.730.53;
less salvage, $26,146.30; less reinsurance, $880; loss and
adjustment expenses paid, net, $382,704.23; commissions
paid to attorney-in-fact for administration expenses. $210,-
320.19; guarantee fund withdrawn for replacement, $25,-
008.19: total expenses paid, $618,032.60; returned in cash
to members, as savings, $99,752.04; total cash disburse
ments. $717.784.64.

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