The Baltimore County union. [volume] (Towsontown, Md.) 1865-1909, 1905-01-21


10. BY far the most important and radical change
from old methods are the elimination of
premium notes and the limitation of the
contingent liability OF members.
These features were adopted from the Mutual
Fire Insurance Laws of Massachusetts. Under
by taking certain percentage Of the amount Of
risk on each item mentioned in the application,
the percentage varying with the hazard Of each
sum total of these percentages made up the
amount of the premium note. AS has been
full amount on the property insured. and was
liable to assessment in whole or In part to meet
losses. The regular annual cost of the policy
was per cent. of the premium note. IL,
Under the new Charter the premium note Is
no Longer taken axe Ii rs Race Is
figure is calculated in exactly the same way as
the premium note was formerly calculated. It
forms the basis upon which the annual cost OF
the policy Is estimated and seToss no OTTER par-
round by taking a certain percentage of the
Full Mutual Premium, the amount of which
By the Board of Directors and is the same for
all policies. The amount of percentage for 1905
is per cent. of the Full Mutual Premium.
To certain extent only, the purposes of the
Uranium notes and the Full Mutual Premium
are identical, they are the means of marshaling
the Of
charge as the annual cost of the policE. Either
the note or the mutual premium is necessary
pany, except the purely assessment companies.
The method of arriving at the Full Mutual Pre-
MUM, its operations and effect are set forth Ia
Section of the new Charter.
The mutual premium differs however from the
premium note in several ways. First, u Is not q
note Second, IL Is not q lien. Third, u Is not
GssessGble as notes are.
Under the new Charter, should the losses in
any year exceed the regular income of the Com
pany the members liability to meet the excess
Of losses Is absolutely limited to twice the annual
cost of his policy. For example, If the annual
cost of 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 sufficient to meet all probable de-
mandsshas been demonstrated by the sixty years.
experience of this Company. This contingent
liability of policy holders is of course the Com
losses. Any unexpended balance in the treasury
at the end Of fiscal year Is the surplus.
BIZ the provisions of The Charter The lien on the
property Of the assured Is confined to The amount Of
the annual cost Of the insurance ana the amount OF
extra assessments that may De teUted not exceeding
the limit. Gb0Ue stated Of ttCics the annual cost Of
the policy. Ofcourse no assessments can be made
so long as losses do not exceed the COmpany's
regular income. 1t is scarcely necessary to say
that q Mutual Fire Insurance Company without
the contingent liability of members is an impos-
sibility and without the lien, which is the means
of enforcing the contingent liability, would be
an absurdity. Both are necessary features of
all Mutual Fire Insurance Companies and are
found in their Charters. The liability can be
limited and the lien circumscribed. This has
been done.