Who Owns the Auto Club?

You may be an Auto Club member, but you’re definitely not in the driver’s seat.

The Automobile Club of Southern California is not a publicly traded company, nor is it a private corporation. Unlike mutual insurance companies such as State Farm, the Auto Club is not owned by its policyholders. And unlike stock insurance companies such as Allstate, the club is not accountable to shareholders.

Technically, the Auto Club, like other American Automobile Assn. member organizations, is a not-for-profit mutual benefit organization, which means it pays taxes but does not have to disclose key financial information, such as how much money its executives make. Other mutual benefit associations include membership retailer Fedco, public broadcasting corporations and many golf and county clubs.

The Auto Club collects money from membership dues, investment income, travel services and fees from operating its insurance arm, the Interinsurance Exchange of the Automobile Club. It spends money on salaries and benefits, emergency roadside services, maintaining its offices, taxes and other overhead costs. Any money left over after paying expenses is either spent on improving club services or added to the club’s Membership Protection Fund, a cushion used to generate investment income and fund expansions. Profit from the insurance arm is typically returned to policyholders as dividends or added to the insurance arm’s reserves.

The 12-member board of directors is self-elected--a subcommittee of board members nominates people to the board, and the board itself, rather than the membership, votes on the nominations. Any member who wants to challenge the board membership can call for a general election by gathering 1,200 member signatures, said spokeswoman Carol Thorp. Members can also submit a letter and resume to the board if they want to be considered.

Thorp said, however, that no one in recent memory has either requested nomination or collected signatures for an election.