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annual meeting of the company, and shall perform such other duties as the board may assign to him.

(e) DUTIES OF THE TREASURER.-The treasurer shall, under the direction of the board of directors, have charge of all the funds of the company. He shall deposit said funds in the depository or depositories designated by the board, He shall pay all vouchers or orders properly attested by the secretary and the president and shall make a complete and accurate report of the finances of the company at each annual meeting.

(f) BONDS.-The secretary and the treasurer, before entering upon their respective duties, shall each give bond in such sum and in such form as shall be required by the board.

SEC. 6. Committees.

(a) EXECUTIVE COMMITTEE. The president, secretary, and vice president shall constitute an executive committee, which shall exercise such powers and perform such duties as may be delegated or imposed by the board of directors, or as in these by-laws provided.

(b) AUDITING COMMITTEE.-The members shall at each annual meeting elect two competent persons, who, together with a third person selected by the board from their own number not later than December 31 of the current year, shall constitute an auditing committee. Said committee shall audit carefully all books and accounts for that year and report their findings at the next annual meeting. A special audit of such books and accounts by an expert accountant may be ordered by the members at any annual meeting or any regularly called special meeting. Such special audit may also be ordered at any time by the board of directors.

SEC. 7. Salaries.

(a) SALARIES OF DIRECTORS.-Each director shall receive $2 per day and necessary expenses for such time as he actually spends in transacting the business of the company. The compensation for taking applications for insurance shall be equal to the policy fee provided for in section 12, and no per diem shall be allowed directors for such services.

(b) SALARIES OF OFFICERS AND EMPLOYEES.-The officers and employees of the company shall receive such reasonable compensation as the board of directors shall determine: Provided. That no officer who is also a director shall receive pay both as a director and as an officer for the same service.

SEC. 8. Applications for insurance.

(a) RECEIVING APPLICATIONS.-It shall be the duty of the directors, each in his own community, or in such district as the board shall designate, to receive and at their discretion to solicit applications for insurance from all persons of good character and reputation who are the owners of property insurable under the rules and regulations of this company. All such applications must be approved and signed by the director before being forwarded to the secretary and, unless otherwise ordered by the board, must be accompanied by the policy fee and initial premium hereinafter provided for. Before indicating his approval of an application the director shall satisfy himself by means of careful personal inspection and survey that the description of the property is correct and that the risk is in all respects a desirable one; or if serious defects are found he shall see that these are remedied before his approval is given. In case of less dangerous defects that can not be readily remedied, or that the owner is unwilling to go to the expense of removing, the director shall, if it seem to him proper, give the application his conditional approval, accompanying the application with a full and accurate statement of his reasons for such conditional approval.

(b) FINAL APPROVAL BY THE COMPANY.—Ân application reaching the secretary with the conditional approval of a director shall be passed upon by the executive committee before a policy is issued to the maker of such application. An application received with the full approval of a director may, unless the board otherwise orders, be passed upon by the secretary, who, in case no errors or inconsistencies or other reasons for delay or for reference to the executive committee are discovered by him, shall promptly issue a policy on the basis of said application and forward such policy to the applicant.

SEC. 9. Special inspection of property.

At least once every three years the property insured shall be thoroughly inspected by a competent person employed by the company as special inspector. Said inspector shall carefully examine the flues of all dwellings or other buildings wherein fire is used, note the placing and the condition of stoves and fireplaces and the disposition of ashes therefrom, inquire into the system or method of lighting buildings, examine all lightning rods, and ascertain if fences are properly grounded. He shall take careful notice of any and all defects or dangerous practices. He shall also note the presence or absence of means of combating a fire, such as readily available water supply, or chemical extinguishers, and suitable ladders by means of which the top of the roof can be quickly reached. He shall advise with the insured concerning the general improvement of the risks, and shall recommend specific measures for the removal of conditions materially increasing the hazard thereof. He shall report to the company, upon blanks furnished him for that purpose, the condition of each member's risk or risks, together with the recommendations, if any, made by him for the removal of dangerous conditions. Refusal or neglect on the part of the insured to carry out specific recommendations of the inspector may, in the discretion of the board of directors or their representatives, be made cause for the cancellation of his policy or policies.

SEC. 10. General conditions of insurance.

(a) TERM OF POLICY.-Except as hereinafter provided, all policies shall be written for a term of five years, and shall date from the date specified in the application. An application which has the full approval of a director shall cause the insurance applied for to be in full force and effect from the date specified therein, unless and until such application is rejected by the executive committee and notice thereof given to the applicant. An application with the conditional approval of a director shall impose no liability upon the company until approved by the executive committee.

(b) LIMITS TO THE AMOUNT OF INSURANCE.-The directors of this company shall exercise due care to prevent the insurance of any property for more than three-fourths or less than one-half of the cash value of the property: Provided, That until the company has $500,000 of insurance in force no single risk or group of property subject to one and the same fire shall be insured for an amount greater than $1,500, nor shall such maximum single risk exceed $2,000 until the company has $1,000,000 of insurance in force, nor shall it later exceed two-tenths of 1 per cent of the insurance in force: And provided further, That the insurance placed on live stock shall not exceed an amount per head of $200 on horses, $60 on cattle, $15 on hogs, and $10 on sheep.

(c) LIABILITY OF THE COMPANY.-This company shall in no case be liable for loss or damage from other cause than that of fire or lightning, nor for more than the actual cash value of the property at the time of the loss, nor shall it be liable for loss caused directly or indirectly by invasion, insurrection, riot, or civil war, or by order of any civil authority. If a building or any part thereof fall, except as the result of fire or lightning, the insurance

by this company on such building, or on its contents, shall immediately cease. (d) LIABILITY OF THE INSURED.—The liability of the insured shall be limited to his pro rata share of the losses and expenses of the company, plus a reasonable contribution to the reserve.

(e) JOINT OR CONCURRENT INSURANCE.-Property insured in this company shall not be insured in other companies except with the written consent of this company. Where joint insurance is permitted, this company shall be liable only for such part of the loss as the insurance carried in it represents of the total insurance carried on the property, whether the insurance carried in the other company or companies is valid or not.

(f) INSURANCE TO BE SPECIFIC.-Buildings shall be separately described, and the value of each building and the amount of insurance thereon shall be stated in the application and in the policy. The value of each class of other property and the amount of insurance thereon shall be similarly stated. (g) FALSE STATEMENT BY APPLICANT.-A false description of the property by the applicant or any false statement by him, either in regard to ownership or relative to any other material fact, shall render the insurance on the property in question void.

(h) SALE OF PROPERTY AND TRANSFER OF POLICY.-The sale of insured property shall immediately suspend the insurance thereon, and unless application for transfer of the policy is received and accepted within 10 days after the date of sale, the policy shall be canceled. A policy may be transferred or assigned by obtaining the consent of the company and paying a fee of 50 cents.

(1) REMOVAL OF PROPERTY AND CHANGES IN FORM OR USE.-The permanent removal of personal property, or any change or alteration in the form, occupancy, or use of a building affecting it as a risk by increasing the fire hazard, shall render the insurance thereon void, unless the consent of the company has been previously obtained for such removal or change.

SEC. 11. Reduction and cancellation of insurance.

(a) ACTION BY THE INSURED.-A member may at any time, upon written request to the secretary and the payment of all valid claims against him, have his policy canceled. He may also, upon showing cause, have the amount of his policy reduced.

(b) ACTION BY THE COMPANY.-The company may, upon five days' notice, for refusal to remedy dangerous conditions, or for any other cause deemed sufficient by the board of directors or their representatives, cancel any policy or any part thereof.

(c) RETURN OF UNEARNED PREMIUM OR ASSESSMENTS.-When cancellation takes place at the request of the insured the company shall return such part of the premium or last regular assessment as remains after the deduction of one-eighth thereof for each month or major fraction of a month that has elapsed on the current policy year: Provided, That should the pro rata cost of insurance for such period exceed the short-term rate above prescribed, the actual pro rata cost shall be deducted. When cancellation takes place at the initiative of the company, such part of the premium or regular assessment shall be returned as is proportional to the unexpired part of the current policy year.

SEC. 12. Fees and assessments.

(a) POLICY FEE AND INITIAL PREMIUM.-A policy fee of $1.50 and an initial premium to be fixed by the board shall be paid by the applicant, or satisfactory security for their payment shall be given by him, at the time of making application for insurance. For additional insurance a member shall be charged,

in addition to the initial premium, a policy fee of 75 cents when the additional insurance applied for is $500 or less, and $1.50 when the sum applied for is greater than $500.

(b) REGULAR ASSESSMENT.-Not later than October 20 of each year the board of directors shall determine the rate of assessment for that year, basing such rate upon past experience as to the needs of the company. Said assessment shall be due on or before November 30 of the same year. Policies written on or after December 1 of the previous year and before June 1 of the current year shall be subject to the regular assessment of the current year and to three succeeding regular annual assessments. Policies written on or after June 1 of the current year and before December 1 of the current year shall be exempt from the regular annual assessment of that year, but shall be subject to four succeeding regular annual assessments.

(c) SPECIAL ASSESSMENTS.-Should unexpectedly heavy losses occur which can not be met by the funds on hand, supplemented at the discretion of the board of directors by a sum not exceeding two-tenths of 1 per cent (%) of the insurance in force, which may be borrowed, a special assessment shall be levied on all policies in force at the time of such loss or losses.

(d) NOTICE OF ASSESSMENT.-Not later than November 1 of each year the secretary shall, by letter directed to the post-office address given in the application, or to the latest address, if he has been informed of a change, notify the member of the amount due from him. He shall also include with this notice such information bearing upon the business of the company as may be considered of practical interest and value to the member. Should the member continue to neglect or refuse to pay such assessment for 10 days after the assessment has become due, the secretary shall send by registered mail a second notice, adding 25 cents to the assessment to cover the extra work and expense occasioned by the member's neglect.

SEC. 13. Suspension, forfeiture of membership, and reinstatement.

(a) SUSPENSION OF POLICY.-The sending of the two notices described in paragraph (d) of section 12 shall constitute legal notice, and unless payment is received within 10 days after the sending of the second notice the policy in question shall stand suspended until the assessment is paid. The company shall not be liable for any loss suffered by the holder of such policy during the period of suspension, nor shall the later acceptance of the full assessment render the company liable for such loss. The part of the assessment correponding to the cost of insurance for the period during which the policy was suspended shall be considered a penalty for delinquency.

(b) FORFEITURE OF MEMBERSHIP.-One month after the second notice, a policy still remaining suspended shall be canceled, and the holder shall be dropped from membership in the company. Such cancellation shall in no way release

the former member from any debt already incurred to the company.

(c) REINSTATEMENT.-A person having forfeited his membership under the provisions of paragraphs (a) and (b) of this section may, at the discretion of the board of directors, upon proper application for reinstatement, the payment of past dues, if any, the acceptance of a new policy, and the payment of the regular policy fee and initial premium, have his membership restored. SEC. 14. Classification and rates.

(a) CLASSIFICATION.-Property insured by this company shall be classified as follows, the contents of buildings taking the same classification as the

1 Where the State law specifically provides the manner in which the insurance liability may be terminated and no suspension of a policy is provided for, direct cancellation without previous suspension may be necessary.

building in which they are kept: Provided, That the board of directors shall have power to prescribe rules under which kinds of property not specifically hereinafter enumerated may be placed in one or the other of the following classes, or in additional classes created by the board.

Class A.-Brick or stone dwellings with roof of slate, metal, or other noncombustible material, when properly rodded against lightning.

Class B.-Brick or stone dwellings with wooden roof, when properly rodded. Wooden dwellings with roof of noncombustible material, when properly rodded.

Unrodded brick or stone dwellings with roof of noncombustible material. Class C.-Wooden dwellings with wooden roofs, when properly rodded. Unrodded brick or stone dwellings with wooden roof.

Unrodded wooden dwellings with roof of noncombustible material.

Granaries, corn cribs, and hog houses located not less than 100 feet from the dwelling, nor less than 50 feet from the barn, such buildings being properly rodded in all cases where the insurance applied for is $200 or more.

Live stock not pastured during the summer months except where all fences are properly grounded.

Class D.-Barns properly rodded.

Unrodded wooden dwellings with wooden roofs.

Granaries, corn cribs, and hog houses located nearer the dwelling or the barn than as specified for Class C, or lacking the lightning protection required for that class.

Live stock pastured during the summer months where fences are not properly grounded,

1

Class E.-Unrodded barns and other property deemed to be of similar hazard. (b) INITIAL PREMIUM RATES AND BASIS OF ASSESSMENT.-The rates of initial premium for the various classes of property shall be determined by the board of directors, and shall be so adjusted as normally to cover one year's cost of insurance together with a reasonable contribution to the reserve. Assessments shall also be determined by the board, shall be based on the initial premium, and shall constitute a fixed percentage thereof, being equal to, greater, or less than 100 per cent, as the needs of the company may require.

SEC. 15. Losses.

(a) PREVENTION OF LOSS.—It shall be the duty of the insured to cooperate with the company in making his property as safe from loss as may be reasonably possible. In case of fire he shall use his best endeavors to save his property and to protect from further damage such parts thereof as are not destroyed.

(b) NOTICE OF LOSS.-A member incurring a loss shall immediately notify the company, and the latter shall promptly provide for the adjustment of such loss. (c) STATEMENT OF LOSS.-It shall be the duty of the insured, when so required by the company, to make a complete and sworn statement of the loss incurred by him. Such statement shall include a complete list of the property 'lost or damaged and the value thereof before the loss occurred, and shall indicate the time of the loss, the member's knowledge or belief as to the cause of the loss, and if by fire, his knowledge or belief as to how such fire originated. (d) SETTLEMENT OF DISPUTED CLAIMS.-In case of disagreement between the adjuster or adjusters and the member sustaining the loss, the company and the insured shall each select one person, not an officer or director of the company nor a relative of the insured, and the two so chosen shall select a third. These three shall constitute a board of arbitration, and their award shall be

1 Suggested rates for the classes of property above outlined may be found in the application form (p. 30) under "Summary."

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