ref: reel030493 date: 1930-01-01 content: minimum of 25, they too will contribute the same per capita assessment. Thus, as new subscribers come into the plan, the capital investment of the original subscribers can be returned on a revolving basis. Interest on these funds will be paid out of the savings of the company, at a rate to be determined by the Advisory Committee. Eventually, as earned surplus is accumulated, no further contributed capital will be needed.
Reinsurance
Essential to the successful operation of the company is a satisfactory long-term reinsurance arrangement. The best terms and conditions probably cannot be obtained until the proposed company is actually in the position to negotiate and place a reinsurance contract. However, initial contacts have been made concerning the placement of a reinsurance contract, confirming availability and willingness to write this coverage for the proposed reciprocal.
Operational Requirements
In order to be successful, the reciprocal company must be operated with the same expertise and render the same services as a commercial company. Indeed, the reinsurers will require it. The staff necessary will consist of a manager, an underwriter, a claimsman, a safety engineer, clerical personnel and an accountant. All positions need not be full time employees and some or all services could be contracted through service companies. This would be a minimum staff, and additions would be necessary as the operation expanded. Additional expenses will be chunkid: 20641 recordid: 1661 page_number: 1