WEST

INSTRUCTIONS TO BE OBSERVED IN MAKING THE DIAGRAM.

Use Red ink for BRICK or STONE, and Black for FRAMES. Márk distances between buildings, and give all exposures within 100 feet. Mark FIRE WALLS with a Heavy Red Line. Indicate Shingle Roof by a cross [X], Composition by a dot [.], and Slate or Metal by a star [*].

N. B.-If risk and exposures are correctly shown on Ins. Map, Agent need not make Diagram. OCCUPATION of building. State particularly (unless risk is a dwelling.)

BASEMENT for

FIRST FLOOR for

SECOND FLOOR for

THIRD FLOOR for

FOURTH FLOOR for

Is there a public hall in building?.

y on the Agent for all facts material to the risk, morally and physically.

such as real estate, banking, and the practice of law. In the larger cities the business is of sufficient volume to occupy all of the agent's time. But it must be understood that these local agencies do not necessarily represent a single company; they may have contractual relations as agents with a half dozen or more companies. They are often in business to write all the insurance of their locality, and if their customers have preferences as to the companies with which they wish their insurance placed, will endeavor to place the same as desired. Much of this kind of business, especially in large cities where business is congested and property values high, is placed by insurance brokers who act as middlemen between the insured and the company/ Although a person may be both an agent and a broker, it is to be noted, that when acting in the capacity of a broker, he is regarded in most states as the agent of the insured and not of the company as regards all matters pertaining to the application for insurance and the writing of the policy.)

In view of the many agents employed, and the many important matters which must be entrusted to their care, it is essential that the companies have a systematic way of checking up their work. To facilitate the writing of insurance, the local agents are supplied with blanks, unsigned policy forms, books of record, printed clauses, and other necessary equipment. Among these blank forms is what is called the 'daily report' which has probably done as much as any other one thing to perfect the organization of the agency system. (See Fig. 2.) This report is filled out each day by the local agent and mailed to the department of the district in which he is located. It contains an abstract of all the policies written by the agent during the day, including in full all the written-in or descriptive portions of the policy. By this means the general agent or department head is enabled to keep in close touch with the work done by the local agents, and can much more readily rectify errors than could be done

under reports rendered at longer intervals. A monthly account of all the premiums received is also sent by the local agent to the department of his district. (See Fig. 3.)

But scarcely less important than the frequent reports of the agents are the so-called fire maps. These are prepared by experienced engineers, and companies often spend thousands of dollars in their careful preparation. They contain a minute and careful description of the fire district of a given locality, indicating the nature of all the risks, and showing the surrounding exposure hazard and fire protection facilities. By their aid the company or its general agents can at a glance obtain a fair description of any risk which any of their local agents may have insured.)

Local agents are compensated by a commission of about 15 per cent of the premium income derived from the business they secure or renew. In return for this commission they are required to promote the interests of the company in every possible way. (Their activity in nearly all cases is con

fined to the securing and filling out of applications, the writing or cancellation of policies, the collection of premiums, and the giving of service to the insured.) (The settlement and payment of losses, however, is generally delegated to special agents who travel from place to place, or where the companies are so large as to require the constant service of some one to adjust losses, special experts are employed for this purpose.

When the daily reports of the local agents arrive at the company's office, they are taken in hand by special examiners, and carefully reviewed with a view to discovering errors in the wording of the contracts or defects in the risks which may make it desirable to charge a higher premium, or reject it entirely. If such errors or defects are found the agent is instructed to cancel the policy or have it changed to meet the wishes of the company. These examiners require a careful training and extensive experience for their work. To judge

risks properly it is necessary that they should be conversant with the nature of different classes of property, with the importance of different classes of exposure hazard, and with the valuation of property. It is needless to say that in this respect the examiners are materially aided by the use of firemaps.

After the (daily reports have been passed upon and accepted by the examiners, they(go to clerks and statisticians, who compile from them the reports which the company requires for its own information or which are necessary to comply with the statutory requirements for a detailed annual report. The financial accounts of the agents are also carefully checked by auditors and bookkeepers, and afterward sent to clerks for compiling.

Another division of the company's organization is the loss department. It is the business of this department to take charge of the settlement of all losses, and for this purpose, as already stated, special agents or adjusters are employed who try to effect a settlement of each loss as soon as it is reported to the general office. Careful accounts are kept by the department of all the losses and all information pertaining thereto, and the complete reports are then tabulated in the general office and compared with the premiums received. (By this means a mass of statistical information is accumulated by which the company is able to measure the relative hazard involved in various classes of risks, and to obtain a knowledge of the cost of different risks, sufficiently accurate upon which to base a correct and just schedule of rates.)

Located at the home office of the company and co-ordinating all the different departments, and with a general oversight over all, are the president and other officers of the company. Their duty is to map out and be responsible for the plan of campaign which the department managers and agents are expected to execute. They determine the general policy of the company and exercise general supervis

ory powers. The board of directors, on the other hand, concerns itself chiefly with the banking and investment features of the business. The importance of fire-insurance investments may be appreciated when we reflect that the combined assets of the joint stock companies in the United States, exclusive of premium notes, in 1909 amounted to $570,911,883. (The wise and conservative investment of these vast funds requires financial and business ability of a high order.)(But the insurance business, proper, requires technical skill and training, and for this reason is left to the care of officers and

employees who are acquainted with its details.)

Local Mutuals.-The county and town mutuals of the United States are exceeding numerous, approximately 1,500 being now in operation. In most instances they have developed as a protest against the high rates charged by the ordinary stock company. Their plan is to furnish insurance on the payment of a small cash premium, and in case losses exceed their income to depend for the balance upon some system of assessments. The policy-holder, in addition to the payment of the cash premium, is required to assume an extra liability in the form of a note. The liability of the members is usually fixed by the laws of the state or by the charter and by-laws of the company. Ordinarily the cash premium amounts to about one fourth of the premium charged by stock companies, and the note required from the policy-holder is for usually three or five times this sum. In case the company finds it necessary, this note is subject to call. The total liability of each policy-holder may, however, be much larger than the notes which he gave. Thus, according to agreement, the policy-holder may be liable for his share of all the liabilities of the company, or, as is most generally the case, for only a stipulated amount, i.e., a certain percentage of the amount of insurance carried, or a multiple of the amount of premium notes given.

In most instances local mutuals are organized by a group