68       REPORT OF THE COMMISSIONER OF INSURANCE.
older and larger exchanges have made application for admission
and upon such applications the above examinations have been
made.
GENERAL PLAN OF INTER-INSURERS ASSOCIATIONS AND METHODS
OF TRANSACTING BUSINESS
Inter-insurers associations transact their business in quite a
similar way to the primitive, Lloyds associations, but they are
unlike the Lloyds associations of to-day in the fact that the
members do not conduct the business of insurance for profit. An
inter-insurers association is purely mutual. Various citizens hav-
ing a similar line of risks or property exchange contracts of insur-
ance with each other, that is, each member of the exchange agrees
to accept a certain reciprocal amount of liability on any one risk
with all of the other members in the exchange, but no member
underwrites his own risk. They may or may not write their
names under the contract of insurance. Usually an attorney-
in-fact is appointed to act for them. at some central locality and
subscribes the names of the underwriters to the contraet, or
issues a contract without the names of the subscribers attached.
The latter form is the one in general use. Some exchanges di-
vide the members into classes according to the liability which
they are willing to assume. There are members who assume a
risk of $500, others of $1,000, and still others of $1,500 or $2,000.
A member of the exchange belonging to the $500 class is only
liable for that amount on any one risk. This liability is sever-
al and not joint, and he cannot be held for the failure of any
other subscriber to pay the amount that he assumes upon the
risk. However, the amount of insurance in each class is recipro-
cal. If a member in a $2,000 class assumes a risk upon a mem-
ber belonging to the $500 class, the $22,000 member cannot be
held for more than the amount assumed by the member of the
$500 class, that is, the liability of the members of the $2,000
class would be limited to $500 on any one risk written for a
member of the $500 class. The sam~e principle holds true in
regard to the other classes. In other exchanges there are no
classes and each member assumes a liability which is equal to
his deposit premium or some multiple thereof. In other associ-
ations, the subscribers or underwriters, in addition to their
premium deposit, are required to make a cash deposit of a cer-