'Inter-insurer* or ureciprocal underwrit ers* associations resemble factory mutuals in some respects, but in others are similar to Lloyds organizations. According to this plan each insured member is also an insurer, i.e., the members become insurers of each other's property. An attorney-in-fact usually conducts the business for the association and has authority to bind each member for a cer tain amount on the risk of each other associate. Only selected risks, well equipped with fire pre ventive appliances, are accepted. Periodic in spections are also maintained, and usually the regular rates are charged with the idea of returning unused balances in the form of divi dends. These associations, it may be added, originated chiefly because of the difficulty many large property owners had in procuring enough insurance from companies authorized to trans act business in the particular locality.
While all of these types of underwriters are important in their respective spheres, sight should not be lost of the fact that probably over 80 per cent of the nation's total fire in surance is carried by joint-stock companies. In return for a certain premium these com panies make a definite promise, and, unlike mutual concerns, do not reserve the right to collect assessments. As a rule, they operate over a large territory and therefore require a large and intricate organization. They assume all types of risks and are necessary since many classes of property are not acceptable elsewhere.
Owing to the miscellaneous nature of the risks underwritten, these companies have found it necessary to use science in the determination of their rates, to organize in underwriters' as sociations for reasons already indicated, and to apply the most highly organized methods in both field and office. No type of under writer is so well fitted to assume the con flagration hazard prevailing in American cities. Moreover, during the last quarter of a cen tury American stock companies have pursued a policy of building up a large capital and surplus (over and above their legal reserve liability), thus greatly increasing the security back of their contracts.
Bibliography.—Huebner, S. S., 'Property (New York 1911) ; Riegel, R., 'Fire Underwriters' Associations in the United States' (New York 1916) ; American Academy of Political and Social. Science, (Modern Insur ance Problems' (Philadelphia 1917) ; Zartman, L. W., 'Yale Insurance Readings in Fire Insur ance' (New Haven 1909) ; Insurance Year Book (Fire Volume) (New York 1917) ; Amer ican Academy of Political and Social Science, 'Insurance' (Philadelphia 1905) ; 'Report of the Illinois Fire Insurance Commission' (Springfield 1911) ; 'Report of the Joint Com mittee of the Senate and Assembly of New York on Fire Insurance' (Albany 1911).