Xx       REPORT OF THE COMMISSIONER OF INSURANCE.


penses, and amount of cash on, hand. Such statements or so
much thereof as said corporation, at its annual meeting, may,
by resolution or otherwise, agree upon shall be read to the
members at such meeting and entered at length upon the rec-
ords. * * *    The company shall also on or before the 31st
day of January in each year make and file such report for the
preceding year with the commissioner of insurance.
CITY AND VILLAGE MUTUAL INSURANCE COMPANIES.
On the whole, these companies show a very favorable loss ratio
for the year. As compared with their past experience, the loss
ratio would indicate greater care in the selection of risks and,
generally, more attention to the business of underwriting. These
companies are now at a point where their business as a whole is
not increasing, and the lack of adequate assets to meet the un-
earned premiums is most seriously felt. The 60% of the board
rate charged by these companies after deducting an agent 's
commission of 25% leaves only 45%o of the board rate for the
payment of other expenses and the losses. As the regular stock
companies figure on losses amounting to in the neighborhood of
50% of the board rate, it follows that the 60%o rate obtained by
the city and village mutuals is insufficient in the long run. It
is really insufficient all the time if proper provision be made for
the return premiums. One, and perhaps more, of the recent
failures can be traced directly to the insufficiency of the pre-
miums collected.
As a rule these companies are conducted economically and' in
the interest of the policyholders. Neither economy nor honest
management will avail unless sufficient premiums be collected to
pay the losses. This implies that only so much of the premiums
shall be used currently to pay the losses as has been earned by
the lapse of time, and that a sufficient part of the premium must
be held as a deposit or as the unearned premium to cover the
share of losses which may occur during the time the policy has
yet to run.
Premiums, especially on dwelling houses, have been lowered
throughout a considerable part of the state during the past year.
Further reductions will inevitably be made. These reductions
will mean a further shrinkage in the premium income of these
companies doing business on a 60% basis. During the last year