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BEST'S INSURANCE REPORTS — FIRE AND MARINE.   671

AUTO OWNERS PROTECTIVE EXCHANGE,

190 East Merchant Street, Kankakee, Ill.

History.— This is an inter-insurance exchange which be
gan business April 1, 1915, as the Auto Owners Fire Pro
tective Exchange, and which early in 1915 changed to its
present title.

Management and Reputation.—The attorney-in-fact is
the Auto Owners Insurance Agency, incorporated under the
laws of the State of Illinois. AC. F. Brandenburg is the
secretary and manap er.

The superintendent of agents is Frank O. Omer, pre
viously, for five years, agency inspector for the Forest City
Life Insurance Company, Rockford, Ill.

Plan of Operations—This exchange insures owners of
automobiles against loss or damage by fire, windstorm,
collision and theft, liability and property damage.

The manager advises that an excess cover of $15,000 is
provided to reinsure the exchange over a net retention of
$5,000. The liability of the subscribers is limited by the
subscriber's contrast to extra or special assessment not to
exceed the regular annual premium. No extra assessments
have ever been levied.

No business is accepted through brokers.

The accounts of subscribers are kept separate and are
open to inspection through the Advisory Committee, which
is elected by the subscribers. This committee consists of
five members of the exchange.

The exchange does not write business at manual rates.
The premiums charged are based on the loss ratio and
reserve requirements. In ease of cancellation of policy the
unearned premium is returned upon a short rate cancella
tion basis. The first, or ipitial payment, is composed of
a life membership fee of $7.50 and an advance deposit
which pays the subscriber's insurance for a period of from
three to five months.

The attorney-in-fact receives as compensation for his ser
vices all of the membership fee and in addition 20% of all
premiums paid by the subscribers, including the advance
deposit. Out of his compensation the attorney pays all
agents' commissions, office rent, clerks hire, advertising
expense. and such other item€ as may be incurred in de
veloping the business.

The subscriber's contract provides that any premiums

collected which may be in excess of the amount required
for the payment of losses and for the maintenance of the
required reserve account may be pro rated and returned to
the subscriber.

The Insurance Departments of the States of Illinois and
Oklahoma made a joint examination of this exchange as
of December 31, 1918, the report being dated August 18,
1919. This report found the institution in good condition
and the books and records well kept.

The exchange is licensed in Illinois, Indiana, Kansas,
Michigan, Missouri and Oklahoma.

lts statement as of December 31, 1919, is as follows:
Admitted cash assets: Bonds and stocks owned - (book
value), $6,500; interest due and accrued thereon, $57.30;
due from attorney-in-fact, $142; cash in banks and office,
$30,259.07; premiums or deposits outstanding not over three
months due, $7,741.88; assessment accrued on losses and
expenses incurred, $5.734.91; total cash assets, $50,435.14.

Liabilities: Unpaid losses, $4,519.61; unearned premium
deposits, $10,440.76; due attorney-in-fact on uncollected as
sessments, $2,095.71 ; unpaid reinsurance, $750; total lia
bilities, $17,806.08; net cash surplus, $32,629.06; total,
$50,435.14.

Cash Income, 1919.— Premium deposits written, gross,
$33,442.60; less return premium deposits, $78.45; less re-
insurance, $1,426.80; net, $31,937.35; gross assessments
levied, $48,957.94; fees, $42,371.88; dues, $343.28; interest,
$542.79; deposits for general loss fund, $387.50; total cash
income, $124,540.74.

Cash Disbursements, 1919.- Losses paid, gross, $34,-
420.89; less salvage, $829.36; net losses, $33,591.53; paid
to attorney-in-fact for administration expense, membership
fees and dues, $42,206.17; expense of adjustment, $4,385;
legal expense, $413.2.3; taxes, licenses and fees, $3,237.77;
20% account of earned assessments advance deposits, $14,-
418.67: expense of levying and collecting assessments, $1,-
815.69; uncollected assessments charged off, $4,954.40; total
cash disbursements, $105.022.46.

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

AUTO PROTECTIVE ASSOCIATION OF INDIANA,
State Savings & Trust Bldg., Indianapolis, Ind.

History.-- This is a reciprocal exchange which began
business on March 20, 1919, and was licensed under the
Reciprocal Law of Indiana, which became effective May 15.
1919.

Management and Reputation.--The attorney-in-fact is
the Capitol Brokerage Company, a corporation organized
under the laws of Indiana, with a paid-in capital of
$25,000.

The officers of the attorney-in-fact are: President,
Charles J. Murphy; vice-president, State Savings & Trust
Co.; treasurer, Dick Miller, president City Trust Company;
secretary, Otto L. Klauss, auditor of State of Indiana.

The directors, in addition to the above officers, are:
James A. Houck, treasurer of State Savings & Trust Co.;

William M. Jones, secretary State Board of Agriculture;
M. M. Badhelder, attorney; Wm. A. Roach, Secretary of
State; Harry E. Daugherty, president Hoosier Veneer Com
pany; \V-m. H. Kershner, insurance, all of Indianapolis,
and Earl E. Iiouck, of Terre Haute, Ind.

Plan of Operation.—The exchange issues policies of in
demnity on automobiles against fire, theft, liability, prop
erty damage and collision.

The rates at which the exchange writes business are two-
thirds of those of the conference companies.

The compensation of the attorney-in-fact is 35% of all
premiums, out of which it pays all expenses, with the ex
ception of the cost of adjustments.

Under the Indiana State Reciprocal Law the association