The aegis & intelligencer. [volume] (Bel Air, Md.) 1864-1923, 1905-01-20
To the Members of the
Mutual Fire Insurance Company
In Hartford County.

I ! OTHER PURPOSE WHATEVER. The an
nual cost of the policy is found by taking
a certain percentage of the Full Mutual
Premium, the amount of which percent
. age is fixed at the beginning of each year
; by the Board of Directors and is the same
for all policies. The amount of percent
age for 1905 is 4 per cent. of the Full
Mutual Premium.
: To a certain extent only, the purposes
of the Premium Notes and the Full Mr-
tual Premium are identical-thev arc the
means of marshalling together the differ
ent classes of property so as to enable
the imposition OF 4 uniform interest
charge as the annual cost of the policy
Either the Note or the Mutual Premium
is a necessary feature of every Mutual
Fire In suranCc Company, except the
purely assessment Companies. The
metho of arriving at the Full Mutual
Pre- MUM, its operations and effect, are
set forth in Section of the New Charter.
The Mutual Premium differs, however
from the Premium Note in several ways
First, IT Is NOT NOTE; second, IT is NOT
\ LIEN, and third, IT IS NOT AsSEsSAHI.E
AS NOTES ARE.
Under the new Charter, should the
losses in any year exceed the regular in
come of the Company, the members liza
bihty to meet the excess of losses is abso-
| lutely limited to twice the annual cost of
his policy. For example, if the annual
cost of a policy be $500, the most that
can be collected from the policy-holder in
any one year is $1,000 additional. That
this limit of liability is more than suffi-
! Gent to meet all probable demands has
been demonstrated by the sixty yearse
I perience of this Company. This Contin-
/ gent Liability of policy holders is Of
course the Company's capital, its Sect
! rity for the payment of losses. Any I'M
| expended balance in the treasury at the
end of the fiscal year is the surplus.
By the provisions of the New Cha rter
the lien on the property OF the assured is
| confined to the amount of the annual
cost of the insurance and the amount of
extra assessments that may be levied,
not exceeding the limit. as above stated,
of twice the annual cost OF the policy
Of course, no assessments can be made so
long as losses do not exceed the Com
pany's regular income. 1t is scarcely
| necessary to say that Mutual Fire In
Surance Company without the Contin-
gent Liability of Members is an impossi-
bility, and without the lien, which is tie
means of enforcing the Contingent Liza
bility, would be an absurditv. Both are
necessary features of all Mutual Fire In
surance Companies and are found in
their Charters. The liability can be linn
tied and the lien circumscribed. This has
been done.
Having approved the New Charter,
the members have also adopted New
Cons titution and Bylaws, which pro- |
vide the details for carrying out the pro- |
visions OF the Charter. New forms of ap- |
plicatiOns and policies are being used.
In addition to the changes above men |
toned, the Board of Directors has |
adopted a New Schedule of Rates i'll |
which an effort has been made to more |
accurately fix the relative hazard of diff |
1erent classes OF property.
Under the New Schedule the cost of in
surfing some kinds of property is reduced |
and in other cases increased. At the an
nual meeting i'll January, 1904, the men,
bers ordered that the rate on barns be in
creased to 60 cents on each 500, it hav-
ing been shown that the losses on barns
were greatly in excess of the income from
that class OF property and that the rate
of AZ cents was totally inadequate. The
New Schedule of Rates contains the barn
the New Rate Schedule the Board of Di-
rectors adopted the plan employed by
several of the most successful Mutual
Fire Insurance Companies of this State
that of a higher premium rate and a
lower interest rate, the cost of insurance
being the same. For instance, whereas
under our former plan the premium rate
on n building would be s per cent. and
the interest rate per cent, making the
cost of insurance rs cents on the 500,
we now have a premium rate of ~ per
cent. and an interest rate of per cent,
producing the same cost. 4S cents.
The object of this change is to give
certain degree of fiexibility to the Com
pany's regular income. At the end of
fiscal year. when they are able to esti-
mate the Company probable needs, the
Board of Directors in fixing the interest
rate for the coming year can slightly in
crease or diminish the rate, as in their
Judgment may be necessary. The object,
of course, being to collect from the men,
berS only sufficient money to meet losses
and expenses. By the operation Of this
system it is hoped that the necessity for
an extra assessment will be forever
avoided.
Because of the increased rates on sew
eral classes of property and particularly
because of the higher barn rates. the cost
of insurance for 1905 for majority of
our policy-holders is increased.
This situation has given an opportu-
nifty to the more energetic Agents of
Stock Companies to come to the rescue
and prescribe the only remedy at their
commando Stock Company Policy.
Some of these gentle men, in their zeal tor
the welfare of the people, have under
taken to explain" the provisions of our {
New Charter and other regulations.
They tell policy-holders that we are
now taking mortgages and judgments
on their property, and are making other
assertions equally ridiculous. system
attic effort is being made to convince peo-
pie that the Premium Note has been re-
placed by lien of so drastic nature that ,
no prudent man can insure in this Com. :
pany. That as result of the change of
method the last stage of our members is
worse than the first. Whether such I
explanations" are due to total igno- |
rance of the principles of Mutual Fire In
surance or are willful Misrepresentation
made with a deliberate attempt to de-
ceive, the result is the same-the mislead- J
ing of the people
All we ask of the people is that in dis
cussing The Hartford Mutual with Agents I
of Stock Companies, do not mistake anx- {
ietv to make commissions for real inter- I
est in your welfare.
The officers of The Mutual Fire Insur- =
ance Company wish to say to the men,
bers of our Company and to the public.
every change that has been made in our
methods of business has been made only {
after full and careful consideration, hav-
ing in view only the interests and welfare
of the people of Hartford and Baltimore
counties.
We are trying no experiments on our
members, but the only new features in
into our Charter, Constitu- I
ton, Bylaws and Regulations are those {
which the experience of other successful
Mutual Fire Insurance Companies has S
shown to be wise and beneficial to the I
policy-holders. Our Company is in bet
ter position today to properly serve the {
people than at any time in its history.
We assert, without fear of successful |
contradiction, that we now have the |
best Charter of any Mutual Fire Insur- {
ance Company in the State and that the |
policies we now write are more liberal in
terms and afford better protection to the S
assured than the policies of any Stock
Fire Insurance Company now doing bust
ness in Maryland
Our Schedule of Rates is as low as can
safely be charged by any Insurance Com {
pany which has the ability and intention )
to pay fire losses.
Whenever in the applications of the
new rates to old policies errors have been !
committed, prompt correction has been !
and will be made