Farmers Mutual Has 



Best Year in History 



OPRINGFIELD, Jan 26 — Geo. F. Tul- 

 ^ lock of Rockford, president of the 

 Farmers Mutual Reinsurance Company re- 

 ported to members at the 15th annual meet- 

 ing here today total fire, windstorm and 

 hail insurance in force of $174,695,541.00. 



In the annual report submitted by Man- 

 ager J. H. Kelker a marked improvement in 

 fire loss experience during the year was 

 noted. Income from premiums and policy 

 fees totaled $625,089.45. Losses amounted 

 to $195,899.92, commissions, adjustment, 

 fire inspection and operating expense totaled 

 $198,562.6.S or a total expense of $394,- 

 462.55. Net above losses and expenses 

 totaled $230,626.90 on the year's operations. 

 Net income added to surplus $219,184.28. 

 Assets at the close of the year were $733,- 

 265.05, and surplus $484,390.21. 



During the year 1937 the company wrote 

 the largest volume of growing crop hail 

 insurance in its history or approximately 

 $18,000,000. 



To conform to the new insurance code for 

 Illinois, the company on January' 1, joined 

 a licensed rating bureau and adopted stand- 

 ard rates on fire and windstorm insurance. 

 Rates are now guaranteed on all except 

 growing crop hail insurance. The contin- 

 gency or assessment feature has been re- 

 moved from all fire and wind insurance 

 contracts. 



Losses paid during the year were as 

 follows: fire $151,124.70 (premium .15291,- 

 086.95), windstorm loss $20,702.35 (pre- 

 mium $93,100.54), growing crop hail in- 

 surance $20,466.81 (premium $237,366.38). 



Favorable weather conditions together 

 with the company's continued campaign of 

 fire prevention were cited by the manage- 

 ment as the reason for unusually low losses. 



A contest developed over the election 

 of three directors to fill the vacancies 

 created by the expiration of the terms of 

 L. E. Lingenfelter, Ullin, Geo. Lenhart, 

 Georgetown, and George F. Tullock. Rock- 

 ford. The nominating committee brought 

 in a report recommending the election of 

 the same three directors. Albert Hayes, 

 Chillicothe, E. E. Houghtby, Shabbona, 

 and W. A. Dennis, Paris were nominated 

 from the floor. At the election held in the 

 afternoon Tullock. Hayes and Houghtby 

 were chosen to fill the vacancies. 



Resolutions (Contd.) 



Selection of Delegates 



RESOLVED, that Sections 9 and 11 of 

 Article I of the By-Laws of Illinois Agri- 

 cultural Association be amended to read as 

 follows: 



Sec. 9. Delegates. The members of this 

 Association in each county shall be repre- 

 sented in all meeting of the Association by 

 voting delegates. The voting delegates from 

 each county shall consist of the President of 

 the County Farm Bureau in such county and 

 one other voting delegate, together with one 

 additional voting delegate for each five hun- 

 dred (500) members in the county engaged 

 in the production of agricultural products, 

 or major fraction thereof. Voting delegates, 

 other than the President of the County Farm 

 Bureau, shall be elected from and by the 

 members in good standing in such county 

 engaged in the production of agricultural 

 products, in connection with the annual 



lAA Auto Insurance 



To Pay Greater Dividends 



A. E. RICHARDSON 



"The Company ia in a strong financial 

 condition." 



meeting of the County Farm Bureau, except 

 that the members present in such meeting 

 may provide that such delegates shall be 

 elected by the Board of Directors of the 

 County Farm Bureau. Due notice of such 

 election shall be given. The Vice-President 

 of the County Farm Bureau shall serve as 

 alternate for the President of the County 

 Farm Bureau and alternates for the other 

 delegates may be selected by the members or 

 in such manner as the members may author- 

 ize. An officer of the County Farm Bureau 

 shall furnish proper credentials to the dele- 

 gates. The President of the County Farm 

 Bureau shall serve as a delegate during his 

 incumbency of such office and other voting 

 delegates shall serve until the election and 

 acceptance of their duly qualified successors. 



The number of members engaged in the 

 production of agricultural products in any 

 county shall be determined by dividing the 

 total number of dollars of membership dues 

 (excluding dues of associate members) re- 

 ceived from such county during the im- 

 mediately preceding fiscal year of the As- 

 sociation by five, provided that in no case 

 shall such number exceed the book member- 

 ship of such county (excluding associate 

 members), as recorded in the books of the 

 Association at the close of such fiscal year. 



Sec. 11. Voting by Delegates. The vot- 

 ing delegates from each county shall repre- 

 sent the members of the Association within 

 such county and shall vote on all matters 

 before the annual meeting or any special 

 meeting of this Association including the 

 election of directors and officers as herein 

 provided. The delegates of any county shall 

 be entitled to cast as many votes, jointly or 

 divided equally between them, on any pro- 

 position including the election of directors 

 and officers, as there are members engaged 

 in the production of agricultural products 

 in the county determined as provided in 

 Section 9 hereof. 



A NEW dividend schedule to become ef- 

 **• fective April 1, 1938 with payment of 

 a dividend of 10% on all auto insurance 

 policies which have been in force continuous- 

 ly for 21/2 years, and 20% on policies in 

 force for a period of five years, was an- 

 nounced by President Earl C. Smith at the 

 annual meeting of the Illinois Agricultural 

 Mutual Insurance Co. held in the Elks Club 

 BIdg., Springfield, Jan. 26. 



This action, Mr. Smith explained, is pre- 

 dicated on the theory that as, if and when 

 the premium on any kind of coverage or 

 group of cars shall not be sufficient to pro- 

 vide and maintain the surplus at 75 per, 

 cent of the annual earned premium of the 

 company, then the premium for such class 

 or group shall be adjusted accordingly. 



A careful study of the question as to the 

 proper amount of surplus the company 

 should maintain led to the conclusion by the 

 directors and management that if the sur- 

 plus of the company, aside from contingent 

 reserves, was maintained at 75% of the an- 

 nual earned premium, that amount would be 

 adequate. 'Thus the average policyholder 

 is required to contribute 20% of an annual 

 premium for 2I/2 years and then 10% for 

 21/2 years more. In five years he will have 

 contributed 75%? of the annual premium and 

 thereafter he will receive a dividend of 

 20% of the piemium. 



The president's report revealed that ac- 

 cidents had gained in frequency from 18.8 

 of the policyholders in 1933 to 40% in 1937. 

 Total premium written during the year was 

 $1,186,367.50. Earned premium was $1,- 

 127,336.99 and total losses incurred were 

 $734,699.48. The loss ratio for the com- 

 pany during the year was 65.2%. Operating 

 expense was only 98% of earned premium 

 which compares with 20 to 30% in the early 

 days of the company. 



At the close of the year there were 60,- 

 378 auto and truck policies in force, 2531 

 farmer employers liability policies, and 1705 

 4-H calf club policies. Assets totaled $1,- 

 684,993.20 and surplus $825,719.95. 



Out of 24,197 claims filed during the year 

 1937, 23,875 were closed out by the end of 

 the year. A reserve of $424,162 was set up 

 to take care of claims not settled at Dec. 

 31, .1937. 



Manager A. E. Richardson traced the 10 

 years history of the company citing the 

 changes which had been brought about in 

 motor cars, traffic conditions, speed of driv- 

 ing, number of accidents, laws affecting 

 motorists, also the experience gained by the 

 company in surveys to determine the cost 

 of insurance in the different classifications 

 and for cars of varying price range. 



He asserted that "the policy of the board 

 of directors in requiring proof of the ade- 

 quacy of the loss reserve and a careful com- 

 putation of the unearned premium reserve 

 is one of the most important steps taken by 

 them to assure the members of the Farm 

 Bureau that the Company is in a strong 

 financial condition." 





Bond County Service Company returned 

 $4,042.41 in preferred and patronage divi- 

 dends at the annual meeting in Greenville, 

 Dec. 18, following its first full year of oper- 

 ation. 



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L A. A. RECOBD 



