New-York tribune., 1874-10-16
INSURANCE MISREPRESENTATI TIONS.

THE STATEMENTS REGARDING THE IMPAIRMENT OF
THE CAPITAL OF LIFE INSURANCE COMPANIES
EXPLAINED.
Statements have recently been made assert
ing serious impairment Of the capital Of certain we'll
known life insurance companies The effect OF tho
charges IL widely circulated, would lead to general
dsrus Of the companies to which they relate since no
particulars accompanied the statements to show the
cause and no figures indicate the exact status OF the
companies were given. In order to ascertain the truth
OF the matter and il necessary. obtain explanation
OF the alleged deficiencies, TRIBUNE reporter made
Inquiries yesterday In several life insurance Offices
some OF which involved in the charges and others
not.
The Secretary OF the Chamber OF Fire Insurance stated
that the charges based upon the tables OF the last
annual report Of the Insurance Commissioner OF Massa
chusets under the head Of Per cent Of capital ab-
sorbed" and that the figures were reached upon the
Massachusetts, standard Of per cent valuation which
that State allows that, In summing up the assets all
loans on personal securities cash In hands Of agents.
and certain other amounts, are unadmitted; and that
while the actual paid In capital Of the companies with
which they started business is comparatively small the
real working capital lie large and 10 every Of those
named the surplus regards policy holders" s quite
sucient and satisfactory to all concerned and that all
these companies. or nearly all. are firmly established
and prosperous He said that insurance men and nsur
ance Journals severely criticised the In which
the Massachusetts report was made up as calculated
10 mislead those unfamiliar with the subject. and mis-
the Companies In NowYOrk the standard OF
interest Is a per cent, which makes large difference
p estimates and ratios with Companies whose business
s large while the average actual interest which the
Companies sreceive 10 over pert cent They also re-
gard their personal securities as safe others and
count them among their real assets.
following facts learned at the 0ices or the
several Companies and embodied In the annual re-
port Just published OF the New York superintendent Of
the Insurance Department:
The surplus regards policy Of the Atlantic
Mutual Life is el35&7e IL the capital actually paid up
in cash. elI0000 leaving net surplus OF e25,476 H.
With the reckoning the basis OF per valuation
according to the Massachusetts, standard, and with
$4,000 Of admitted assets which is the estimate OF the
same standard, the capital would technically be I'm.
pared but not so under the NewYOrk standard
The surplus regards policy yh0lders Of the Brooklyn
Ie Is t2s63S S. the capital actually paid up In cash.
Sl25 the net surplus, 363s S. Besides reducing at
per cent the Massachusetts, standard counts 0O
ard thus the alleged Impairment of capital.
The Charter Oak is o striking example, Its surplus as
regards policy holders, 10 el5s6 on actually paidup
capital t20000O the net t5l67S6 o. But the
unadmitted assets OF the Massachusetts, Standard
amount TO over t2i6yoo0., OF which t2l9O00 are
loans personal security, and regarded perfectly safe
by the Company The actual average interest which II
receives upon ITS investments Is 6 6-l0 per cent.
Other companies claim to be misrepresented in q sim
liar manner. The Secretary OF one OF the prominent
companies included the charges said that II was
not unusual thing for the capital OF young Insurance
companieslo be impaired subjected to tests Of
sting plans. but that impairment IN most cases did
not mean insolvency by any means and did indi.
cate even that the company was weak or tho manage
me