ref: reel030494 date: 1930-01-01 content: office space, stationery and supplies, telephone, travel, bureau and association dues, premium taxes and audit. This has been estimated for the first year of operation at $335,000 or approximately 10% of estimated premium. In addition, claims service has been estimated at 14% of losses, or in the projections shown, (Appendix D, on page 20) $128,000. There will be other nominal expenses.
Obviously, a method must be created or adopted to carry out these operations. As mentioned above, this can be done by contracting with one of the insurance management companies to take over the entire management of the company for a fee. These fees vary from 10% to 35% depending upon the services to be rendered. If this course is decided upon, it should be recognized that the management company may have brokerage connections which would create a conflict of interest in the placement of reinsurance.
The other alternative is to organize a corporation to act as the Attorney-in-Fact to be wholly owned by UML. The Attorney-in-Fact would be controlled by an Advisory Committee elected by the subscribers. This corporation would then staff itself as outlined herein, all expenses being reimbursed by the reciprocal.
Operational Projections
Using the premium and loss expectations developed by our preliminary survey along with anticipated reinsurance costs, a projection has been made of expected savings and the development and growth of policyholders' surplus over a three year period. chunkid: 20642 recordid: 1662 page_number: 1