Virginian-pilot. (Norfolk, Va.) 1898-1911, 1899-01-06
LIFE INSURANCE PROFITS IN
VIRGINIA.
Richmond. Va, Jan. s. 1899.

|. VIRGINIA.
Richmond. Va, Jan. s, 1899.
To the Editor of the Virginlan-P Pilot:
Only within the last few days have
seen copy Of your issue of November
9th. containing an editorial relative to
Life Insurance Profits In Virginia." in
which you make the statement that
the Auditors report for the year end
ing December 31st, 1897, shows that
thirty-three foreign life insurance COM
panies received from all sources in the
State, $2,461, 60S.4S. and paid out in the
State. N.264,523 leaving total profit
of S1.196,0S4.50 for that year"
1t is evident that you have made a
serious oversight in making the above
statement. to which I trust you Will
permit me to call your attention, since
in the same editorial you refer to the
Virginia business of the company of
which l am general agent In this State,
which you represent rs having col
lected last year in Virginia, s2SS,776 and
paid out but S94,992. and carrying out of
Virginia the sum of S193.7s4.
The fact Is. that this company car
ried out of the State less than $4,000,
or about one-fourth Of the sum stated
by you.
BY reference to the Auditors report,
from which you obtain your figures,
you will see that the premium receipts
Of the various companies are required
10 be stated in gross, without any de-
duction for losses, dividends. commits
sions or other expenses" A very care
ful estimate of these items, in the case
OF the company to Which you refer, has
been made. and they are found to be
over $4,000. Furthermore, a consid-
cradle sum- amounting to about $4,000.
was paid for surrendered policies, and
the further sum of nearly 5000 was
loaned to policy holders in the State.
Considering these figures 1t would seem.
therefore. that the amount actually
Withdrawn from the State by this COM
Pany was less than $4,000, instead of
Sl9S,O00, as was assumed and stated in
your editorial
me form of report required by the
Auditor to be returned by the life in
surance companies doing business in
virginia simply calls for the amount
OF losses and claims on policies paid
during the year" which is understood
TO include only death losses and
matured endowments. Accordingly, we
reported S94992 so paid In 1897; but the
sum of s2SS,776 was the gross amount
OF our premiums. without taking into
consideration either the amount of
dividends used by policyholders to-
wards payment of premiums. or paid
TO them In cash, or other items of com
missions, expenses, taxes or surrender
values.
The above will Indicate to some OK
tent the error into which you have fall
len in assuming that the difference be-
tween the gross premiums of all COM
panies in the State last year-s2 4si.-
6OS.4S-and the amount paid out in the
STATE Tor losses and claims alone
l,264, 523. 9S-leaves n total profit of
Sl,l96, 0S4.50. If the experience of this
company may be taken as a fair aver
age the sum actually withdrawn in the
state by all companies would be only
ABOUT $3OO,O0O, or about ~ per cent. of
the gross premiums. Those familiar
with the principles of life insurance.
furthermore, will ut once understand
that even this amount does not rep
resent a profit" but simply the
amount laid by as n reserve by rea-
son OF the increased liabilities, arising
from the years business. to provide for
future payments on Virginia business.
In reference to that portion of your
article abiding to the loans of this
company. l would like to say that our
management has made an earnest effort
to loan. not only the amount of its re-
ceipts In Virginia in excess of all dis
bursements, but as much more as possi-
Bile. 1t employed n loan agent in Vir-
ginia, under a salary, from June. 1895.
to September. 1896, with the result that
less than $4,000 in loans was taken.
although freely offered, according to
the company's uniform loan regulation.
at per cent. on small loans, with n
decreasing rate for larger loans. No
discrimination was made. either in rate
of interest or In any other respect as
compared with other States. The de-
mand for loans upon THE SECURITY
WE ARE REQUIRING and obtaining
elsewhere was not sufficient to Justify
the company in the expense of n loan
agency, which was therefore discon-
tinued. This company and others have.
however, invested a very large amount
IN the bonds of the cities and counties
OF virginia. Respectfully,
Il. "A CARY, General Agent
northwestern Mutual Life Insurance.