The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1871-09-30

A crsupd,s.s cs.rro As,.' ast The Amers;
can Life Insurance sys e@'
The Post Magazine an insurance pap pub
lished In England. replying to the complains
of correspondent who holds ten thousand
dollar policy in the New York Life Company
and has been disappointed In his dividend,
seeks to throw discredit upon all American life
insurance companies. The principal reason
alleged is that the accounts furnished by our,
corporations ara SO incomplete as to make if
impossible to ascertain their real financial
status
BY such statement the Post Mdgosine NOT
only betrays much ignorance Of the system as
carried out in this country, but also shows that
1t is lilly informed Of the changes which have
already taken place In the English insurance
laws, as well as of the opinions expressed by
the highest authorities in England of the supe-
rIority of the American code as establishing
public confidence in the institutions under its
supervision.
We have previously alluded to the remark OF
Mr.. Sprague, Vice President Of the Institute
of Actuaries in London, that America possesses
exactly what Is required in England-namely,
q fixed standard for the valuation of policies,
so that there can never arise dispute on the
important question Of whether . company is
solvent or otherwise. For the benefit of the
Post MGgasine we must explain that this fixed
standard gives every life company in America
the means of Satisfying its policy holders,
under the supervision of the State Insurance.
Department, that 1t possesses intact, and in
vested in the best and most available securi-
ties, sum of money which will insure to them
the reinsurance of their policies if necessary,
or, what is more to the purpose, will be suhi!.
cient, with the current annual premium and
Improvement ct interest, TO meet every
claim as It becomes due. The recent
excellent insurance law of 1870 in
England, the text of which must have escaped
the observation of the Post Magazine, is in
imitation Of the American plan of governing
insurance companies but in order to give it its
full value it Will be necessary to adopt our
system of fixed basis for the mathematical
calculation of value, or the liability of COM
pany in regard to Its outstanding claims.
The remark of the Post Magasise, that high
interest ''means great risk with frequent fuctu-
ations," is applicable only when more than the
legal rate is exacted but we must remind that
journal that the charters--of American compa-
MES do not permit such investments, nor would
they be possible under our present usury laws.
We may venture to add that the assets of such
leading institutions as the Equitable, New York
Life and Connecticut Mutual are as well and
safely invested as those of any European life
Office, being limited to advances on first class
bonds and mortgages and to the purchase OF
government and State bonds. - 70 i
To sum up the whole matter, the object Of
our English contemporary is evidently to draw
attention to an unusual mortality in the recent
experience of the New York Life, which has
properly acted as check upon too liberal
division of the surplus. But such attacks are
to be deprecated, as they tend to place too
much in the background the first grand princi-
pie of life insurance, which is, not paying div
idends, but securing to the policy-holder, be-
yond all contingencies, the sum for which he
is assured. ,.e