732   BEST'S INSURANCE REPORTS—FIRE AND MARINE.

RETAIL LUMBERMEI'S INTER-INSURANCE EXCHANGE,
McKnight Bldg., Minneapolis, Minn.

History.— This is a reciprocal association which was
licensed by the Minnesota Insurance Department, and be
gan business on January 3, 1917. It is under the same
management as and allied with the Northwestern Lumber-
men's Association and the Retail Lumbermen's Insurance
Association, of Minneapolis. The latter is a mutual as
sociation, Odell was formed in 1894, and writes tornado
insurance only.

Management and Reputation.—The attorney and man
ager of this exchange is Oscar D. Hauschild, with offices in
the McKnight Building, Minneapolis, who for the past
twelve years has been manager of the Retail Lumbermen's
Insurance Association, and who has had twenty-five years'
experience, ten years of which was in a local fire insurance
agency and the last fifteen years with the Retail Lumber-
men's Mutual.

During 1917 the fire business of the Retail Lumbermen's
Insurance Association the mutual company) was taken
over in its entirety by the Retail Lumbermen's Inter-
Insurance Exchange (the reciprocal association). On
January 10, 1918, there was disbursed a dividend to the
old policyholders of the mutual association to the amount
of 10% of their deposit premiums. This was in addition
to the amount credited to them on the books. of the recipro
cal for surplus account, which amounted to 80% of the
deposit premiums. All of the old policyholders, therefore,
on September 1, 1917 (the date of the transfer), were
started in the reciprocal exchange with tlttir deposits paid
in advance and an 80% accumulation thereon, in addition
to which they received on January 10, 1915, 10% in cash.
The exchange has been successful and has accumulated a
satisfactory surplus in proportion to the volume of business
transacted. It is licensed in Iowa, Minn., Okla. and Wis.
At the close of 1919 the exchange had 2,000 subscribers.

Plan of Operation.'—The exchange issues policies cover
ing fire insurance on retail lumber yards only, the owners
of which are members of the Northwestern Lumbermen's
Association or other State associations of retail lumber
dealers, the gross amount written being $20,000, which is
reinsured down to $15,000 net. Not more than one limit
is written in any single city block.

Only members of the Northwestern or other State lum
bermen's associations are eligible for membership upon
approval of the Advisory Committee, which has also the
power to direct the general policy of the exchange.

New business is accepted only upon the inspection or
recommendation of a subscriber. No business is accepted
from brokers. All business is re-inspected annually.

Each subscriber assumes his pro rats share of liability
under all policies issued. Board rates are charged and
each subscriber is subject to an assessment equal to one
original premium deposit.

The attorney receives 15% commission on the premium
deposits. as compensation for paying all expenses of man
agement, other than taxes and legal expenses.

Eighty per cent. of deposits are allowed to accumulate
before savings are returned to subscribers. Any subscriber

may retire upon ten (lays' notice, in which event the ac-
cumulated surplus, or unexpended premium deposit, is re-
turned. No provision has been made to guarantee mem
bers against assessment.

The assets of the exchange are in charge of the attorney
and members of the Advisory Committee. Cash in bank is
subject to signature of the attorney and a member of the
committee. The bonds and other securities are held in
trust by the Minnesota Loan and Trust Co. The attorney
is bonded to the amount of $50,000 for faithful perform
ance of duties and the proper accounting of all assets in
his possession.

Reports are made to members at least annually and at
the annual meetings of the Northwestern Lumbermen's
Association.

The attorney and the Insurance Commissioners of States
where the company is authorized to transact business, have
authority to accept service of process, binding upon all the
members in the event of dispute arising concerning a claim
against the exchange.

Advisory Committee.—J. H. Queal (chairman), presi
dent J. H. Queal & Co., Minneapolis, Minn.; A. R. Rogers
(vice-chairman), president Rogers Lumber Co., Minne
apolis, Minn.; C. E. Greet, director Midland Lumber Co.,
Freeport, Ill.; F. H. Carpenter, president F. H. Carpenter
Lumber Co., Minneapolis, Minn.; B. C. Bowman, vice-
president and general manager S. H. Bowman Lumber Co.,
Minneapolis, Minn.; John A. Bovey, president Bovey-Shute-
Jackson, Inc., Minneapolis, Minn.; Frank W. Annis, presi
dent Jas. A. Smith Lumber Co., Osage, Ia.; C. H. Ross,
secretary and treasurer H. W. Ross Lumber Co., Minne
apolis, Minn.

Its statement as of December 31, 1919, is as follows:
Admitted cash assets: Mortgage loans on real estate,
$179,400; bonds and stocks owned (market value), $510,-
469.50; interest due and accrued thereon, $10,991.82; cash
in banks and office, $33,172.53; premiums or deposits out-
standing not over three months due, $9,403.06; other cash
assets. $3,000: total cash assets, $746,436.91.

Liabilities: Unpaid losses, $3,263.69; unearned premium
deposits. $216.2S7.66; taxes due (estimated) $4,032.84;
total liabilities, $223.584.19; net cash surplus, $522,852.72;
total. $746.436..91.

Cash Income, 1940.—Premium deposits written, gross,
$600.892.72; less return premium deposits, $46,511.96; less
reinsurance, $43,069.57; net, $511.311.19; interest, etc.,
$25,464.11; credit to subscribers surplus, $271,051.61; other
cash income, $6,553.01; total cash income, $S17,379.92.

Cash Disbursements, 1919.—Losses paid, gross, $101,-
246.67; less reinsurance, $24.798.48; net losses, $76,448.19;
paid to attorney-in-fact for administration expense, $86,-
252.37; Advisory Committee expense, $571.75: taxes, li
censes and fees, $6,878.25: savings returned, $279.340.33;
dividends returned, $204,306.91; total cash disbursements,
$653.797.80.

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