Harrisburg telegraph. [volume] (Harrisburg, Pa.) 1879-1948, 1916-06-22
.TOBLD INCREASE RATBS A THIRD
TEXANS OPPOSE THE RAISE
--Bt . cosbTsa md l.
Nate-h
INTER-INsURANCE
ms so

The average businessman, it may
be said, pays less attention to his in
surance contracts than to any other
detail of his business; he procures
policies covering the various hazards
of which his business or property is
exposed, pays his premiums and files
the policies away feeling that he has
done all that is necessary and is fully
protected. AS to the obligations of
his insurance carrier on the one part,
and of himself on the other, as parties
to a contract involving many thou
sands of dollars, he usually has a Woe
full lack of knowledge or appreciation.
The premium charge-what the in
surance costs in this or that company
is his principal concern, and from
that viewpoint he regards the cheap
est as the best. Such vital considera-
tions as the solvency of the insurance
company, it's fundamental plan of op-
Grafton on which depends its ability
to survive and meet it's obligations,
rgesent and future, the financial Sc
crrity and stability back of the insur-
ance contract, the character of its
management and the custody and dis
bursement of its funds, etc, are mat
ters of relative unimportance.
This general ignorance on the part
of those who purchase insurance eX-
plains, in a measure, the ease with
which businessmen of known integrity
and responsibility are induced to en-
dorse and place their names back of
questionable insurance enterprises. A
most notable example of this is the
endorsement by the Automobile Club
of Philadelphia of the Pennsylvania
Indemnity Exchange, of this city, rec
ommending that insurance scheme as
strong, sound and past the expert
mental stage" Insurance in the In
demnity Exchange, however, is not
n hers M n
bile Club, but is issued to anyone de-
string to participate in it's operations,
and, accordingly, the activities of the
Exchange throughout the State now
mike it a matter of public concern to
examine it from practical insurance
standpoint.
Briefly stated, it is an unincor-
porated association of automobile
owners, authorized under the Act of
June, 1918, for the purpose of eX-
changing insurance among the men,
hers, termed "inter-insurance" or re
ciprocal' insurance. The business of
the association is conducted by an at
torney-in-faC the Pennsylvania In
demnity Company, corporation cap
italized at $4,000, each member OF
the association executing an unlimited
power of-attorney to that corporation
to act for him in all matters pertain
ing to his participation in the insur-
dllCE anu Il IOOdIu Ol lTuStecS is aD-
pointed, ostensibly in the interests of
the policyholders, and to exercise con-
troll of the funds of the association.
Twenty-Five per cent. of each premium
is paid to the attorney-in intact in con-
sideration of its agreeing to act for
the subscribers.
The classes of insurance written are
automobile fire, theft, property dam
age and collision, and personal injury
liability; each member is subject un-
der the law to an unlimited assess
ment liability to pay the losses under
all policies concurrent with his own;
new members, however, may not be
assessed on account of losses incurred
prior to their becoming members.
1t is readily seen that a scheme of
this character, If the policyholders' in
terests are to be duly considered, must
follow carefully-conceived and prac-
teal insurance lines, and the rights of
subscribers on the one hand and of
the attorney-in-fact on the other, be
clearly defined and controlled; in
other words, the management of the
business, care and custody of the
funds and all the fundamental requis-
ties of the successful conduct of an in
surance business must be scrupulously
observed. After a careful inYestiga-
ton, however, we fail to see where the
policyholders of this Exchange are to