The morning news. [volume] (Savannah, Ga.) 1887-1900, 1897-02-25

dividends and consequent decrease in the
cost Of insurance on policies renewed in
1897.
Surplus.
We call attention to those items from
which it is possible to derive a surplus,
and to the manner in which they have
been applied during the year, with pre-
liminary word of explanation
We agree to pay certain sums on the oc-
currence of a certain event. To do this
we must have premiums large enough to
pay running expenses, the current death
claims, and provide a reserve for the
greater mortality that will come with the
increasing age of the business. We can
earn interest on that reserve while we
hold it. So we assume maximum death
rate, a maximum expense rate and a min
imum rate of interest, and calculate our
premiums and the reserve to be laid aside
out of them on those three assumptions If
the death losses and expenses are less than
we assumed we save the difference from
the premium; il the interest is more, we
save that also. There are sundry other in
cidental items. Here is an exhibit Of the
operation of these several factors in the
Connecticut Mutual in 1896
Part of premium provided
for expenses, etc ........$ 957,256
Interest and rents in excess
of rate assumed ...........1, 060722
Balance, profit and loss 80. 5O14
Saved from expected death
losses OBSERVATION-DISCLOSURES. 4S6,6S9
Saved from reserve on sur
rendered policies .......... 12975
SundrieS ....................... 5,437
Total 81, $3.50 004
This total OF items applicable to ex-
penses, dividends, etc. has been applied as
follows;
Expenses of arrangements SS6,716
IaXeS ACKNOWLEDGEMENTS. 336, 49l
Decrease in market value
of bonds and stocks 80. 92,556
$1,265,763
Dividends paid .............$1,27 4,659
Additions to accumulated
dividends .................. 62,541
Increase in surplus ....... 57,041
1,394,2n
S2,66O,Ool
The only item in this exhibit which does
not explain itself is probably the saving
from the reserve on policies surrendered
or not renewed-$129, 759 This grows out
of lapsed and surrendered policies Cess
those reinstated) for S., 500 703, the reserve
upon which was $96l,577, of which amount
$S31 S1S, or about 81 per cent, was return
ed to the policyholders in paid-up insur-
ing mentioned $129,759. This saving covers
some policies which had not been in force
long enough to have a value; but it is
principally made up of a small necessary
charge made upon each surrendered poll
cy to help in replacing the business so
lost, to cover the cost of the change, and
to protect the company against the i'm
paired vitality caused by the voluntary
withdrawal Of sound lives.
Let it be noted that were we doing a
tontine or speculative Investment" bust
ness, the whole $96l.5T of reserve and all
the surplus it had accumulated would
have gone into the pool"
A similar exhibit Of the items available
for expenses, etc, and their application for
say, the last fifteen years, will be interest
ing in this connection.
Part of prem. provided
for expenses, etc. ....$ l4,7 has
Int. and rents in excess
Of rate assumed 80. 14,49S,5s7
Bal profit and loss.... S097l6
Saved from expected
death losses .......... 6,S64,729
Saved from reserves on
surrenders, etc. 80. l,2s,Ss5
Inc In market values
of bonds and stocks. 1904
SundrieS .......,...,..... 7l,OlS
- $sS, 1851
This has been applied as follows:
Expenses of manage
ment ..........'.........SllOSo ,6O
Taxes ..................... 4156,S26
- sl5,si2,4 1876
Dividends paid .......$1s 039 965
Increase in accumulated
dividends .............. 5iO,4H
Increase in surplus ..... 3765,72J
- 22,3i6,l21
$3s, 1851
Here. again. the only item needing ex-
PLANTATION Is the saving OF 81 ,23S6 SS in the
fifteen years on lapsed and surrendered
policies. These amounted TO $40. $50 go: the
reserve on these was 81, 3S7, 131, Of which
amount $40 COS lQ6 or "A hout so nor cant