11. Working its general fea tures an insurance company does not differ from any other corporation. The chief officer is usually a presi dent, and a foreign company doing business in this country has a resident manager here. There are vice presidents, secretaries and treasurers. The officer of primary importance is the one in whom is vested the control of the underwriting. The corporation is in the business of selling policies. To sell its policies it must assume risks. The one who determines the lines along which the risks are to be assumed is the underwriter. He may or may not be the president. He may or may not be the one who takes the chief care of the investment features—but he is the one upon whom the success of the company will ultimately de pend. In due order, after the executive officers, there will come the adjusters, the inspectors and the special agents. The latter cover a certain territory, which may be j part of a state, a whole state or several states, according to the business done. They keep in touch with the local situation and aid the local agent.
12. Local agents.—The business of fire insurance is transacted largely thru agents. There are thousands of agents; some companies have as many as ten thou sand. The business, it must be remembered, is a retail business, not wholesale, and so the large num ber of salesmen, as they might be called, are neces sary. The agent performs, of course, many services for the insured, but he is the "business-getter" for the company in his locality. He is the one whom the in sured is most likely to know, since the insured will very seldom come in contact with any of the officers of the company or even with the special agent.
13. The broker.—Between the agent and the com pany has arisen a class of brokers who represent spe cifically the interest of the insured. They are more numerous in New York City than in any other part of the country, and are found only to a limited ex tent in the smaller towns. In New York City, for instance, the insured is far more apt to know the broker whom he employs than to know the company.
14. How the business transacted.—We shall have little difficulty in understanding how a fire insur ance transaction is effected if we consider in their regular order the six steps involved: (a) Application for insurance (b) Inspection of the risk (c) Making of the rate (d) Writing of the policy (e) Collection of the premium (f) Settlement of the loss 15. contract of insurance may be terminated at any moment after it has gone into ef fect. Hence an oral acceptance makes a good con tract of insurance. In many of the smaller towns a large amount of the business is applied for and ac cepted in this way, and the policy goes on in due course. This method, however, would not do for the large centers; in such cities a contract called a binder is used.
It is necessary only to remark that a contract is limited to fifteen days, but that it is a very sound and simple form of contract.
Each of the undersigned companies, for itself only, insures the prop erty above described for the amount set opposite name until the issue of its Standard Policy on the same in place hereof, or until twelve o'clock noon of the next business day after the risk is declined, by notice to the insured or to the representative of the insured placing the risk; provided, however, that if the address of a mortgagee-payee or of a representative thereof is given above, such notice must also be sent to that address in order to terminate the insurance as to such mort gagee-payee. But in no event shall this insurance be in force over fifteen days from the date of commencement of liability hereunder.
If thpolicy is already in existence and it is neces sary to change it without writing a new policy, there is issued what is called the indorsement agreement, which reads as follows: Each of the undersigned companies, for itself only, agrees to make the foregoing indorsement on its policy or policies designated below, provided said policy or policies shall be presented for that purpose within fifteen (15) days from the date of its signature hereto, otherwise this agreement to be null and void; and this agreement at any time prior to the making of said indorsement will terminate at twelve o'clock noon on the next business day after notice of such termination to the insured or to the representative of the insured requesting the indorsement; pro vided, however, that if the address of a mortgagee-payee or of a repre sentative thereof is given above, such notice must also be sent to that address in order to terminate this undertaking as to such mortgagee payee.
The making compulsory of signed applications by the would-be insured has been frequently recom mended by those interested in the fire-prevention movement. Mr. J. Grove Smith, of the Canadian Commission of Conservation, has suggested legisla tion invalidating any policy or contract of insurance when issued without the written signed application of the insured or his or their duly appointed agent. It is generally considered reasonable that there should be an authentic declaration of the values to be insured. The fire insurance contract is one of good faith and as one of theparties to the contract gives a written agree ment as a matter of course, there is no reason why the other party should not do likewise. The enforce ment of written application would act as a deterrent to any who are criminally inclined. The onus of hav ing signed applications, however, rests with the com panies.