THE CENTRAL CO-OPERATIVE BANK 



and cattle (26 December 1910). By this law there was created a State 

 institute of insurance of which the financial management, namely the 

 reception of premiums and payment of insurances, 'was by article 19 

 entrusted to the Central Bank, which fonned for such purpose a special 

 section called the insurance section. 



Previously to this law, in the years from 1896 to 1903, the insurance 

 of agricultural products was effected by the State itself in accordance with 

 the law of 20 December 1895. This insurance was compulsory in the case 

 of all lands excepts prairies, forests and tobacco plantations. The owners 

 of the lands subject to insurance were obliged to pay, as insurance premiums, 

 a tax equal to 5 per cent, of the land tax. On lands exempted from the land 

 tax a special and equivalent tax was paid. The fund formed by the 

 insured was increased by State grants at the rate of 500,000 francs a year. 



If the premiums paid by the insured and the State grants did not suf- 

 fice to compensate for all damages caused by hail the amount of the indem- 

 nities was reduced. 



The working of this institute did not give satisfactory results. The 

 losses due to hail in the years from 1896 to 1903 were valued at 40,275,500 

 francs while the premiums paid by landowners amounted only to 7,560,370 

 francs and the State grants to 4,000,000 francs. 



The indemnities to be paid were therefore reduced by 75 per cent, 

 and the insured received only 10,636,275 francs instead of 40,275,500 francs. 



The law of 1895 was repealed in 1904 ; and on 26 December 1910, 

 after long study, the new law was passed as to the insurance of agricultural 

 products against hail and the insurance of cattle. 



The principles of this law as regards insurance against hail are the 

 following : 



The insurer is the State itself. The insurance is optional, every farmer 

 having the right either to insure or not. The fund needed for the payment 

 of indemnities is made up of premiums paid by the insured and State 

 grants. The State pa^'^s into this fund once for all 1,000,000 francs as a 

 foundation capital, and also 500,000 francs a year (article 12). The pre- 

 miums to be paid by the insured are fixed by a special commission composed 

 of State employees and of the insured. They vary with crops, the position 

 of lands, yield, risks, etc. The year begins on i March and ends on 

 28 or 29 February. Premiums may be paid up to the end of September. 



Premiums are fixed : when once they have been established at the be- 

 ginning of the year they cannot be increased or diminished. If the total 

 amount of the premiums and the State's annual grant exceeds that of the 

 losses caused by hail the excess is appropriated to the reserve fund. If on 

 the other hand this amount is insufficient to compensate the insured to the 

 extent of at least 80 per cent, of their losses the needed sum is taken from 

 the reserve fund, until this has been reduced by 50 per cent., when any 

 further sum required is obtained as credit from the Agricultural Bank (ar- 

 ticle 13). Such calls may not however be made upon the Agricultural Bank 

 if a debt previously contracted has not been extinguished. In point of fact 



