JAEMERS' MUTUAL TIRE INSURANCE COMPAE"IES. 11 



special agents when as a matter of fact it would have been equally 

 true to state that this service was performed by certain directors or 

 officers. For this reason it is believed that the plan of securing busi- 

 ness through responsible officials of the companies is even more com- 

 mon than the above figures would indicate. Many of the companies, 

 it may be mentioned in this connection, pride themselves upon the 

 fact that their history indicates a steady and healthy growth cover- 

 ing a number of decades and that every member of the company has 

 been admitted as a result of a personal application on his part and 

 without any effort or expense on the part of the company, "^lile this 

 passive attitude toward the growth of the company has worked ex- 

 ceedingly well in certain communities it is by no means universally 

 applicable. 



Only 232 companies reported making efforts to secure business 

 through advertising, while 892 stated specifically that they did not 

 advertise. Thirty-seven companies did not reply to the question. 

 Of the companies resorting to advertising as a means of promoting 

 the growth of the company, 112 reported the use of newspapers for 

 this purpose. Forty-nine reported using special circulars only ; and 

 42 reported using both newspapers and special circulars. Twenty- 

 nine companies merely replied that they did some advertising without 

 specifying the method employed. 



Seven hundred twenty-two companies reported compensating their 

 representatives for the solicitation of business by means of a fixed 

 fee per application taken. The maximum of such fee reported by 

 any company was $4 and the minimum was 25 cents. The average 

 fixed fee allowed was $1.28. Only 32 companies reported such fee 

 in excess of $2, while 78 companies reported a fee of less than $1. 

 Fifty-six companies paid both a fixed fee and a small cormnission 

 based on the amount of insurance written, while 82 companies re- 

 ported paying for services in soliciting business on a per diem basis. 

 No information concerning the cost of getting business or the method 

 used in compensating for this service was given by 170 companies. 



One hundred thirty-one companies reported compensating their 

 officials or agents for the solicitation of business strictly on a com- 

 mission basis. The average commission allowed by these companies 

 amounted to $0,027 per hundred per year of the insurance written. 

 Only 18 companies allowed a commission equivalent to more than 5 

 cents per hundred per year, and 62 companies paid such commission 

 equal to less than 2 cents per hundred per year. ^ 



The fixed fee plan of compensating solicitors of business in these 

 companies may thus be said to be the current practice, being followed 

 by more than three-fourths of the companies. This plan eliminates 

 all temptation on the part of agents either to encourage or to permit 

 overinsurance. 



