648 



Co-operative Live Stock Insurance. [no'v., 



country, each with 200 cows, might be considered sufficient 

 for a satisfactory start. 



To this committee applications are made by each of the 

 affiliated societies for the re-insurance of half or quarter of 

 their total risks under the conditions already laid down in the 

 rules for the local societies. If the applications are ac- 

 cepted, half or quarter of the total premiums are paid over 

 to the central re-insuring union, which undertakes to pay 

 half or quarter of the total net losses. These premiums re- 

 ceived from the societies, and any interest accruing on them, 

 and any annual receipts from honorary members, form the 

 ordinary resources. 



The reserve fund consists of the excess of receipts over 

 expenditure at the end of every year, together with subscrip- 

 tions for life membership, gifts, legacies, or subventions from 

 the State. Ordinary resources must always be exhausted before 

 the reserve is touched. The reserve must be invested in 

 proper trust securities. 



The premiums of such a central society will be found 

 sufficient to enable it to pay for losses up to 4 per cent., but 

 as its risks are so widely spread, the payments are always 

 nearer the average. Such a union will be able to pay its 

 share of heavy losses in any individual society, and even to 

 help by loans societies temporarily hard hit. 



With the demand for affiliation the union receives a copy 

 of the rules of the society, a list of its committee and officers, 

 the number of its members and of the cattle insured, and has 

 full powers of investigation to enable it to verify the correct- 

 ness of the amount of premiums and the regularity of the 

 management, and can decide to accept or refuse the applica- 

 tion. 



The central union does not interfere with the autonomy 

 of the societies, and is not responsible for bad management, 

 though it inspects, advises and audits. Like the societies, 

 it is not responsible beyond its resources. Societies which 

 fail to observe the rules are liable to forfeit their share of re- 

 insurance indemnities, and societies detected in fraud or at- 

 tempted fraud or concealment forfeit all indemnity. The 

 reserve fund of the central union is put to the credit of the 

 individual societies in proportion to the amount of their con- 



