Wood County reporter. [volume] (Grand Rapids [i.e. Wisconsin Rapids], Wis.) 1857-1923, 1877-10-11
PREMIUM NOTES, OUTSTANDING AND De
FERRED PREMIUMS. ETC,

fifth OF Us entire assets Prior to 1879
+ the company accepted somewhat more.
than one-third of Its premiums in thai
class of securities. These notes have
t been personally examined and verified,
and have been found in every instance
to appertain to policies actually in force,
and are therefore y secure and valid
asset both as against the policies them
selves and their computed premium re-
serves.
/ IN this connection the company'S
loans on policies in force have been in
variably found to cover only limited
/ portion of the reserve in each case, and
are therefore equally secure.
/ 1t Is also found that all premium notes
with accrued interest, if any, thereon,
are deducted from policy claims when
/ hct latter become payable, such usage
| being of itself and additional guaranty
of the represented value of the notes,
as also of the observance of good faith
towards all the members of the COM
pany.
The outstanding and deferred pre-
MUM accounts have been examined.
item by item, and their correctness fully
verified. 1t is proper TO add that no in
stance appears in which the reserve on
any policy is not largely in excess of the
premium notes; deferred premiums and
accrued interest, when the latter oc-
cur; nor Is 1t believed that the notes are
in any case in excess of what the com
pany computes as fair surrender
value.
PREMIUM RESERVE, SURPLUS DIVIDENDS,
ETC.
The net premium reserve, computed
by the actuaries' table of mortality with
interest at four per cent, on policies in
force June 30th, amounts to S15. 900 ,2249,
or about six times the current yearly
premium income. As this reserve and
other assets of the company are invest
ed at an annual average interest OF
about eight per cent, the surplus inter
est beyond the S612,000 required on
four per cent. reserve, this being the
standard followed by the company, will
probably aggregate for the present year
nearly or quite 100000. On a four and
a-half per cent. reserve, the standard OF
Maryland. Wisconsin. New York, Penn
sylvania, Ohio, and many other states,
thesurplus will be measurably increased,
showing total as regards policy holders
of about 81, 100,00000 more than the
exacting valuation here repOrted-a fact
which will probably receive due consid-
Grafton by policy holders resident in
those states.
After making all proper allowances
for depreciation i'll values, and exclud-
ing every asset of questionable worth.
the company's present surplus, as re-
CARDS policy holders, is $685., 2S5.62
over a four per cent. reserve; and on
four and a-haf per cent, reserve, such
surplus would be increased to about
So, 907 1856. 62-an amount which very
conclusively exhibits its financial status
and ability.
Nearly half of the surplus is annually
set apart to be distributed as return
premiums or dividends to policy hold
ers. In consideration of the many pos
sible contingencies liable to occur in any
year, such as unusual mortality, uneX-
} pected losses, reduction of income, etc.,
the division of surplus seems to have
, been as liberal as prudence and equity
4 would waTant-the dividends actually
paid on individual policies appearing to
, be unusually large.
The number of policies in force at
the date named was $3.50 covering
an aggregate risk of 500, 832 ,O62. The
premium reserve on these policies has
} been so carefully computed under our
direction by experienced actuarles,
not connected with the company, that
there can be no question as to It's &C
curacy.
As matter of information, it may be
proper to state here that in July, 1875,
this company assumed the risks of the
Minnesota Mutual Life Insurance Com
pany, amounting to 81 100000, on some
twelve hundl ed lives Every policy
holder included in this arrangement
{ assented thereto, and every policy 50
assumed has been valued as of age and
, date of issue, and its original conditions
: and all rights accruing i'll connection
Herewith have been faithfully oh
served.
. INCOMES, EXPENDITURES, ETC.
s The gross income of the company for
the first six months of the current year
D was S1,729,379, the average annual
amount for the last five years having
3 been S3,914, 568. About fve-eights Of
the present income accrues from prem
ium receipts, and the balance from in
| terest and rents As indicating the
, character of the company's invest
ments and the large interest thereon, it
may be mentioned that the interest re-
ceiptS have been much more than suffi-
cient to pay its death losses and work
, ing expenditure for several years past.
A little more than one-tenth of the
annual income Is absorbed IN the work
: ing expenditure of the company. With
; the very moderate compensation paid
; to agents, and the absolute ownership
: by the company Of forty-one per cent.
, of its business on which commissions
have been extinguished, the cost of col
lection is reduced to a minimum ratio.
, The compensation of agents, including
: travelling expenses, as well as commits
sions and salaries, amounts to about
{ eight per cent. of the premium receipts,
the commissions alone averaging but a
fraction over six and a half per cent.
These percentages include old and new
business. But the ratio of the entire
working expenditure of the company
to its gross income shows higher tig-
, ure, the increase accruing largely from
the wide distribution of its loans, judici-
ously placed, as We think, in compare
lively small amounts, for greater secur-
ity and more profitable investment, the
expenses of travel and examination be-
ing thereby greatly enhanced.
4 careful examination of the com
pany's books and accounts, covering a
period of six or seven years, has shown
that only reasonable salaries are paid to
its officers and employees, and that no Off
Ger receives, directly or indirectly, any
compensation whatever, contingent on
the business done, or by way of com
Z nt1