The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1897-05-12

ance there are a few questions that appear
pertinent at this stage.
F1rst-ls the Mutual Life solvent or in
solvent? From the receivers report an alb
stract of which was published on Tuesday,
1t would appear to be insolvent, as he re-
ports the assets to be $3.50. 658 and the la
bilities $249,62S. But how does the receiver
know? The question of the solVency OF a
legal reserve mpa cannot be deter
mined until there has been a valuation OF
all the policies, because the principal Item
on the liability side of the ledger you'd
be the reserve or net value or the pohcles
according TO the American experience the
ActuarleS or some other standard IaDle
of mortality and an assumed rate or IN
terest. This is the work of an actuary. Is
the receiver an acLuary IL NOT, ala ne
employ one? We think not. ana for a very
simple reason. There are, we are told, about
1900 policy accounts on the BOOKS OF the
company. An experienced ~actuary, with a
competent assistant, could not go through
the books, take off these accounts, make
the necessary calculations ana IootlhSS IN
less than three weeks time, and II might
take six weeks owing to the manner IN
which the books We're kept. The receiver
was appointed on the evening or May 3.
Assuming that he at once went 10 work he
has had six days in which TO make his
examination and report, which would be
barely SUFFICIENT to make O. nasty survey
of the books without touching the valua-
ton of policies at all. 1t is clear TO the
writer that there has been no valuation of
policies made or attempted, yet this is the
very first thing that should have been
done. OF course, there may be other liabil-
ALAND NNSNN NA1 A20 x NAAGG G
that is sure to be the principal Item.
Again, 1t is not probable that there has
been any very thorough examination OK Sc
curities to ascertain their value. If there
are many rea1-estate loans, an appra1se-
ment of each piece of property mortgaged,
and an examination Of the title as Wen as
an inspection of the account as 1t STANDS on
the books is necessary ana that would re-
quire a good deal more time than has
elapsed since the receiver was appointed.
There probably has been no such appratse-
ment and examination, therefore L feel
not know at this time because he could
not know absolutely that the company is
inSolVent.
Seconds the company stock or mutual?
In other words. is the organization under
the present charter regular and valid, or
is it void? If the former, unless the re-
serve value of policies has been impaired,
then the policy holders have no voice in
the management, no share IN the surplus
except as the managers MAJ choose to al
low. But they nave a right to be protected
in the reserve value of their policies. Here
again, the valuation becomes necessary in
order to find out with certainty how much
OF. the assets is reserve and how much sur
plus. so that the line may be clearly drawn
between what belongs to the policy holders
and what belongs to the managers. II, on
the other HAND the issue OF stock is in
valid and the company is a mutual COM
pany, then the assets all belong to the
policies is a necessity in order TO deter
mine the solvency or insolvency of the
company. 1t is strange that the judge or
some of the attorneys who represent policy
holders do not see the necessity of a valua-
ton of policies as one of the first and most
important things to be done. coUc
IndianaDoIis Nav II.