[237a-2] According to Brüggemann (D. Allg. Ztg., 1849, No., 75 ff.), 100 million thalers of an insurance-sum. Actual American legislation prescribes in the case of mutual insurance a minimum number of members of from 200 to 400, a minimum amount of annual premiums of from $25,000 to $200,000, of cash payments on the annual premium of from 10 to 40 per cent. of cash-paid yearly premiums, $5,000 to $40,000; and a maximum amount of premium notes made by a member of $500. (Compare Mittheilungen, 26 ff.)
[237a-3] Hence several mutual companies limit themselves to a maximum liability. Thus, for instance, the Gotha Fire Insurance Company requires from each member a bond that in case of necessity, four times the amount of the presumptive contribution paid in advance shall be paid after; in Altona, six times the yearly premium is the maximum.
[237a-4] In France, every premium-insurance-company has to be approved by the government (Cod. de Comm., art 37), and the approval is not given until 1/5 of the joint-stock capital has been deposited. (Block, Dictionn. de l'administration, Fr. 153.) Many recent American laws require that the shares of insurance companies should be registered with the name of the owner.
[237a-5] The Aix-Munich Fire Insurance Association raised its joint-stock capital[TN 58] after the Hamburg fire from 1 to 3 million thalers.
[237a-6] Usually so that the regular yearly contribution is higher than the average damage and cost of administration; this excess is then returned in the form of a dividend, either immediately at the close of the yearly account, or which is still safer, after several years. In the Stuttgart private insurance company, the reserve must amount to one per cent. of the amount insured, before the premium-surplus is returned. The Gotha fire insurance company, between 1821 and 1842, paid back an average of 46 per cent.; and even in 1842, after the Hamburg conflagration, there was an after-payment of only 98 per cent. necessary. This collection in advance of a fund for extraordinary losses is more secure than borrowing in case of need, and paying back in good years. Thus, the Baden Landes-Brandkasse had a debt in 1837 of 800,000 florins. (Rau, in the Archiv., III, 320 ff.) In a mutual insurance company, where entrance and exit are free, this would be scarcely possible.
[237a-7] Nearly three-fourths of the public insurance institutions insure also against fire caused by war (Mitth., 1874, 85), a matter of importance even as war is waged in our own days, since in 1870-71, the damage from fire by the Franco-Prussian war in France was estimated at 141,000,000 francs. (Mitth., 1873, 33.)
[237a-8] In Prussia, the mutual fire insurance companies, in 1865 and 1866 had an administration outlay of 0.24 and 0.22 per 1,000 of the amount insured; the premium insurance companies of 0.80 and 0.96; the latter doubtless including large assessments for common purposes. (Preuss. Statist. Ztschr., 1868, 269.) In all Germany, the outlay for administration is, for public institutions, 4 per cent. of the contributions; for premium institutions, inclusive of their dividends, 37.1 per cent.; for the more important French private institutions, even 68.8 per cent. (Mitth., 1874, 89, 92.)
[237a-9] German public fire insurance institutions generally have a territory of their own, in which that institution is the only one of the kind. On the other hand, the premium institutions in the whole empire keep about 80,000 agents, i. e., a number 50 times as large as the number of officers of the former, (loc. cit. 90.)
[237a-10] Mutual insurance companies, as they have extended, have sometimes split up into several; for instance, the insurance companies against damage by hail at Lübeck, Güstrow, Schwedt and Griefswald, daughters of that at New Brandenburg.
[237a-11] The founder of the Mutual Fire Insurance Company of Gotha expressed the hope that in it, it would be possible to insure 60 per cent. cheaper than was customary in the joint stock companies of the time. In the system of agricultural Einzelhöfe in Germany, small mutual insurance companies are possible, and insurance then may be very cheap.