Catoctin clarion. [volume] (Mechanicstown, Md.) 1871-1940, 1920-11-04

business for his own account and risk,
either himself or through an author
ICED underwriting agent the general
practice being for several members, In
association but not in partnership. to
carry on their business through sim
gle agent, who underwriters and acts
for the whole group.
Managed by Elected Committee.
The corporation affairs of the soci-
ETY.. rs distinguished from the indiVid-
ual underwriting businesses of the
members, are managed by the commit
tee of Lloyds, which is elected from
and by the general body of members
New members are chosen by the com
mittee, which inquiries into the status
and financial responsibility of every
person nominated as candidate FOR
election. Every member is legally lia-
BILE to the full extent Of his means
in other words, his liability is uniim-
tied. The following statement de-
scribes the financial responsibility OF
members. as given out by one of the
officials of LlOyds:
"All candidates for admission to un-
delwriting membership have to depOs-
1t with the committee such security
for their underwriting liabilities as
the committee, in its discretion, may
think fit to require. The security,
which Is always in the custody of the
committee, consists of approved first
class investments. These investments
amount, at the present time. to up
ward Of f40O0,OOO Approximately
$20,00O.0OO) and are supplemented
by guarantees in accordance with the
requirements of the (governmenD
board of trade. The investments are
held by trustees, of whom the society
itself is one, and are subject to trust
deeds which make them exclusively
available for the discharge of under
writing liabilities contracted ut
Lloyd'S.
I'm addition to a members own
means and to the security which he
has furnished, holders of Lloyd's poll
cies are further protected by the fact
that every member of LlOyd's must
furnish annually to the committee
certificate by a public accountant APP
proved by the committee Tin form mp
proved by the board of trade) that his
underwriting assets and security are
sufficient to meet his liabilities, and
that his premiums are placed in trust,
in accordance with the provisions of a
trust deed approved by the board of
trade. Since 1910 these obligations
have been imposed by the assurance
companies act. 1909, upon all members
who transact any fire or accident In
surance business, but they were IN
force at Lloyd's before the passing of
that act. The form of audit certif-
cate is set out In the rules made by
the board of trade under the assur-
ance companies act, 1909.
Until July l, 1910, when the as
snrance companies act came into
force, the legislature had imposed no
statutory restrictions or conditions to
the carrying on of fire or accident in
surance business, Life assurance and
employers liability insurance business
had been subject to such restrictions
and conditions, the former since 1870
and the latter since 1907: the require
ments being briefly the furnishing Of
security in the form of an Invested de-
posit the publications of accounts and
the like.
What Assurance Companies Act Did.
"The assurance companies act of 1909
repealed the previous acts and CONSOLE
dated all the regulations In one act.
1t provided that underwriters engaged
in fire, accident and other nOn-marine
business should furnish the following
securities In respect to each separate
years business:
81. Unlimited personal liability of
the underwater.
"2. sum of money secured by
trust deed and certified by indepen-
dent auditors at the end of each year,
sufficient, In the light of experience,
to satisfy the liabilities undertaken by
the underwater in that year.
20. separate guaranty or cash de-
post for an amount equal to the ag-
gregate amount of the premiums re-
ceived in that year on fire and other
nonmarine business to be available
for the payment of claims thereon
should the above trust funds and all
other assets of the underwriters be-
come exhausted. This guaranty is not
a running guaranty for each year. The
guarantors are Lloyd's underwriters,
who are Jointly and severally liable up
to the full amount of their subscrp-
tons, the amount of each guarantOr's
subscriptions being limited by regula-
tons of the committee"