LLOYDS. In the early nineties there were or ganized in the States a large number of fire companies on the plan of the English Lloyds. Most of these companies were located in New York, where a special provision of the insurance law gave them a temporary advantage. A `Lloyds' is neither a joint-stock company nor, in most eases, a mutual eompany; it is rather a partnership with limited liability. it is an un incorporated association of individuals, each of whom deposits a certain amount, and assumes liability for a limited additional amount. In the English Lloyds, where marine insurance is writ ten, each member of the association does his own underwriting, specifying how much, if any, liability he will assume on each risk offered. in the United States companies. on the other hand, the actual management of the business is put in the hands of an attorney, who writes the in surance. Each member of the association incurs liability on every risk written, in proportion to his share in the deposit fund. in ease of loss the deposit fund, and, if necessary. the additional liability of the subscribers, may he drawn upon In meet it. There is no reason in the nature of things why an insurance company so organized should not he as strong as a stock company. As a matter of fact, the stability of the English Lloyds is above question. The essential thing is financial responsibility on the part of the mem bers of the association. in a great majority of
the American companies this has been lacking. Not only was the additional liability assumed by the members usually of no value, hut the de posits themselves were frequently in the form of notes, on it was found impossible to realize in ease of need. In New York the Lloyds survived in large numbers only so long as they were able to escape the supervision of the Insur ance Department. As soon as they were brought under the provisions of the General Insurance Law, most of them disappeared. Of the 125 companies in New York in 1895, not more than 15 were surviving in 1901. During the last few years, however, Lloyds have been appearing in considerable numbers in Chicago under the lax provisions of the Illinois insurance law. A person inclined to seek insurance in the Lloyds, on account of the low premium rates offered, needs to remember that unless the company he organized in a State in which the Lloyds are un der careful supervision by the Insurance Depart ment. he has no assurance of the stability of the association. The actual value of the assets of the company may be far below the nominal value. Moreover, as the association is not a corpora tion, a person having occasion to bring suit against it must resort to the courts of the State in which the association is located.