REPORT OF THE COMMISSIONER OF INSURANCE.


67


assumed the liability, under the body of the policy, as was the
custom of the Lloyds associations, and hence they were called
"subscribers" or "underwriters, " presumably for the
same rea-
son as their more ancient primogenitor. The effect of this prac-
tice, however, was to make the policy a very formidable docu-
ment, when the names of the merchants were shown as being
responsible for the integrity of the contract.
The inter-insurers associations were left practically undis-
turbed for a number of years until the Richards-Sherer investi-
gation *of 1895, the Edgecomb, of 1902, and the John L. Train,
of 1909, made by the New York department of insurance. The
report of Mr. Train was an exhaustive and complete exposition
of the organization and methods of transacting business both of
the Lloyds and the inter-insurers associations in the state of
New York. However, as the inter-insurers were treated in the
report in the same category as the Lloyds associations, many of
the evils described in the report were likewise attributed to the
inter-insurers. No greater mistake could have been made, as
the report does not comment adversely on inter-insurers associa-
tions. They were classified in the report as being legally enti-
tled to transacet business,.
The movement spread to other states, and Kansas City, Alis-
souri, became one of the chief centers for this form of insurance.
The owners of large mercantile houses and manufacturing plants
adopted the inter-insurers plan quite generally, and inquiries
in regard to the nature of these associations becante frequent
and persistent. This aroused the interest of insurance mnen ,
and a more careful study of their plan of operation was under-
taken. On the other hand, exchanges were being formed that
were not of the same high financial standing as the original ones,
and the officials of the more important exchanges began to feel
the need of the protection of the various departments against
these new associations. At the same time, investigations were
proving that the leading exchanges were transacting a legitimate
business and were saving large sums for their subscribers. As
a consequence, there has been a movement by the inter-insurers
associations to come under the supervision of the insurance de
partments. In 1913 the, state of Wisconsin passed a law making
provisions for their admission to transact business in the state
and for their government and supervision. Under this law tho