14 BULLETIISr 786, U. S. DEPARTMENT OE AGRICULTURE. 



of these companies operate strictly on the assessment plan and collect 

 from time to time from their members only such amounts as will 

 suffice to pay losses and expenses. 



REINSURANCE. 



• Eight hundred ninety-one of the 1,161 companies returning ques- 

 tionnaires gave replies to the question covering reinsurance. Of 

 these only 67 reported having a part of their risks reinsured, while 

 824 companies stated specifically that none of their risks were re- 

 insured. Suitable reinsurance facilities are among the great needs of 

 many of these companies, a need that only recently has begun to be 

 more generally recognized by them. In one State, namely, Iowa, a 

 special reinsurance company has been organized by the farmers' 

 mutuals, and in Illinois the law was recently amended so as to permit 

 these companies to place reinsurance with one another. Such privi- 

 lege has for some time been granted by the laws of Wisconsin, Iowa, 

 Missouri, Nebraska, Kansas, Kentucky, and Colorado. The Minne- 

 sota law permits the companies to write joint or concurrent insurance 

 in conjunction with other farmers' mutuals, on property located out- 

 side of the prescribed business territory. All State laws on this sub- 

 ject should permit the farmers' mutuals to reinsure a part of their 

 larger risks with one another, and should also permit these com- 

 panies to write policies of joint or concurrent insurance outside of 

 their special territory in order that they may be encouraged b}^ one 

 plan or another to avoid exposing themselves to excessive losses. 



CONCLUSION. 



The preceding summary, while pointing out the prevailing plans 

 and practices among farmers' mutuals, also brings out clearly the 

 variety in such plans and i^ractices. In 16 of the States, associations 

 of mutuals have been organized. These associations hold either an- 

 nual or biennial conventions at which the officers of the member com- 

 panies have an opportunity to compare methods and discuss plans 

 for the improvement of their organizations. Such associations should 

 be formed in all States where farmers' mutuals exist. The National 

 Association of Mutual Insurance Companies, which holds annual con- 

 ventions, is in large measure composed of farmers' companies. These 

 intercompany associations are a powerful influence tending toward 

 the improvement and standardization of the plans and practices of 

 f arrners' mutuals as well as of other mutuals that avail themselves of 

 membership in them. While rigid uniformity may not be desirable, 

 a reasonable approach to uniformity in the plans and practices of the 

 farmers' mutual fire insurance companies, at least within a given 



