A FARMERS’ MUTUAL FIRE INSURANCE COMPANY; aS 
FEES AND ASSESSMENTS. 
A reasonable policy fee, or membership fee, should be provided 
for in the by-laws. This fee is usually large enough at least to com- 
pensate the representative of the company who takes the applica- 
tion and makes a survey of the risk. 
Apparently many of the farmers’ mutuals, in their early history, 
followed the plan of levying assessments after each material loss, 
and a few companies still adhere to this plan. It has been found, 
however, that after a company has reached a fair size this plan proves 
needlessly burdensome to the officers and also involves unnecessary 
expense in notifying members of their assessments and in receipting 
for these assessments when paid. The members themselves fre- 
quently find it annoying to be called upon for small assessments several 
times during the year. Other companies have adopted the plan of 
borrowing money with which to pay losses as they occur, and levy 
an assessment sufficient to repay the loans at the close of the busi- 
ness year. 
An increasing number of farmers’ mutuals, however, are adopting 
the plan of requiring the prepayment of an initial premium at least 
equal to one year’s average cost and then collecting at the beginning 
of each succeeding year of the policy term an annual assessment in 
advance. This plan not only obviates frequent assessments but also 
eliminates much of the trouble occasionally experienced in enforcing 
payment by delinquent members. The fact that a reasonable amount 
of money is always on hand in the treasury of the company further 
tends to inspire confidence in the organization both on the part of the 
members and on the part of business men with whom the company 
or its policy holders may wish to deal. 
Where the annual prepayment plan has been adopted the initial 
premium as well as the successive annual assessments should be based 
on a liberal estimate of the needs of the company for the coming 12 
months, taking into consideration any funds already on hand. 
Should it be found, however, that the funds have become exhausted 
some time before the next regular assessment, the management should 
not hesitate to make good the deficiency by levying a special assess- 
ment upon all risks insured at the time of the occurrence of the 
unusual losses that exhausted the company’s funds. | 
In the case of special assessments, as well as in the case of all 
regular assessments when levied in arrears, it is important that the 
payment of all dues be enforced in a businesslike manner. Several 
companies have suffered loss of reputation, and subsequently of mem- 
bership, because of their failure to take prompt and effective meas- 
ures to enforce their assessments. Once it is understood that the 
management of the company means what it says in its assessment 
