712   BEST'S INSL"RANCE REPORTS—FIRE AND MARINE.

MERCANTILE MOTOR INSURANCE EXCHANGE — Continued.

excess of the conference rate, which is higher than the rates Company; William McKinley, attorney at law; Rufus M.
used by the exchange.   Potts, counsel. formerly Insurance Commissioner of Illi-

Savings will be returned annually to subscribers. No nois; Lucius Turner, president Consolidated Insurance
provision has been made to guarantee subscribers against Agencies.

assessment.   A statement as of December 31, 1919, had not been fur-

It is licensed in Illinois only.   nished us when this report went to press.

Advisory Committee.— Archibald A. McKinley, president   In connection with this report, see important article in-

Western Alliance Insurance Company; J. W. Rankin. presi- traducing this section.

dent Binkley & Build: R. M. Ayres, president Girard Oil

MERCHANTS AND MANUFACTURERS' INTER-INSURANCE ALLIANCE, Galveston, Tex.

History.— This is an inter-insurance exchange, which
began business November 10, 1910. It was organized by
I. H. Kempner and B. J. Cunningham, joint attorneys and
managers. Mr. Kempner is president of the Texas Bank
and Trust Company, of Galveston, and Mr. Cunningham is
vice-president of the First Texas State Insurance Company,
of Galveston. Its business is under the supervision of an
advisory committee, consisting of members, which com
mittee also acts as trustees for the association and has
charge of its investments. As of December 31, 1019, it had
3,85.5

subscribers.

Management.— The underwriting management of the ex-
change is in the hands of James E. Quin, who, we are ad
vised, has had over thirty years' experience in the fire in
surance business in general and local agency work in Texas.
He was formerly secretary of the Galveston Local Board of
Fire Underwriters.

Plan of Operation,—The business of the exchange is con-
fined to commercial stocks and buildings and manufactur
ing plants of good rating; it also writes automobile insur
ance.

Tariff rates are charged. Policies issued are regular
New York standard form with some additional clauses
which are usual in the ease of inter-insurance institutions.
Every member underwrites a portion of each policy issued
during the period of his membership. A separate account

is kept with each subscriber. Policies are issued at any
date during the month, and profits or losses are computed
at the expiration of each policy period.

No business is accepted through brokers or local agents.
The exchange employs salaried special agents for Texas and
all business is written upon their recommendation alone.

Each subscriber pays one annual premium deposit and
one additional premium liability is assumed under the
power of attorney signed by each subscriber. A reinsur
ance arrangement with the Merchants and Manufacturers
Lloyds, of which I. H. Kempner and B. J. Cunningham are
attorneys and managers. guarantees subscribers against as
sessment. The premium deposit is based on the rates
fixed by board insurance companies, or by the State rating
authorities.

The attorneys and managers receive 30% commission on
the original -premium deposits, out of which commission all
expenses are paid, except legal and adjustment expenses.

Reserve Fund.—The Advisory Committee is empowered
to set aside a reserve fund of 50% of the net savings of
members until such reserve fund equals the amount of the
last annual deposit of members, after which all savings are

returned to the members annually, in cash, or applied on
account for the next annual premium.

The liability of any subscriber may be terminated at any
time by either party giving the other five days' notice in
writing, and thereupon the attorneys within thirty days
thereafter liquidate the account and return to the sub-
scriber any net surplus and reserve which has accrued to
his account, provided that there are no outstanding un
adjusted claims for losses. The assets of the exchange are
in the custody of R. Lee Kempner, who is also the cashier
of the Texas Bank and Trust Company. This institution
is a State bank and deposits are guaranteed. The attorneys
and managers are not bonded.

Reports to subscribers are made upon request and also
once a year after the annual statement is filed with the
insurance Department of Texas.

The Commissioner of Insurance and Banking, of Austin,
Texas, is authorized to accept service of process binding
upon all of the members in the event of a dispute arising
concerning any claim against the exchange. Losses are
adjusted by the representatives of the exchange, or by in-
dependent stock company adjusters.

It is licensed in Texas only.

Advisory Committee.— (At last advises) John Sealy. of
Hutchings, Sealy & Co., bankers, Galveston; J. H. W.
Steele, treasurer Texas Compress Co., Ocean Freights, Gal
veston; Lasker, of Texas Star Flour Mills, Galveston;
C. H. Moore, of Moore & Goodman Lumber Co.. Galveston:
Lock, Moore, & Co., Lumber Co., Lake Charles, La.; J. S.
Rice, president Bankers Trust Co., Union National Bank,
Great Southern Life Insurance Co.. Houston.

The financial statement includes among the assets and
liabilities an item of $175,060.94, which apparently repre
sents the assessment liability of members.

Its statement as of December 31, 1919, is as follows:
Admitted cash assets: Bonds and stocks owned (market
value), $9,929.60: interest due and accrued thereon, $62.02;
cash in banks and office. $41,66046; premiums or deposits
outstanding not over three months due. $32,445.01; guar
antee fund, $175.060.94: interest accrued on deposits in
banks. $1,050.30; cash in handy of managing attorney. $1,-
050; total cash assets, $261,258.33.

Liabilities: Losses in process of adjustment, $15,000;
unearned premium deposits, $48,348.81: due attorney-in
fact for administration expense, $9,733.50: reinsurance,
$1,622.25: contingent liabilities guarantee fund, $175,-
060.94: total liabilities, $249,765.50; net cash surplus, $11,-
492.83: total, $261.258 33.