Virginian-pilot. (Norfolk, Va.) 1898-1911, 1899-02-12
EXTRACT No. 3 FROM
Report of Nortbyvc>icru Nutunt Life
Insurance Company to it's Policy
Holders.

One OF the principal reasons for the
tremendous lapse of business eXpe-
rierccd by some companies is undoubt-
edly the fact that the business is writ
ten with a large rebate upon the first
premium. Such business is VIGOROUSLY
expensive, is seldom renewed and in
stead of being n source of profit is Il
source of expense TO the company. The
new business written in 1898 was $I2.
sol 400, and adding rcstorations. etc, AS
is done in the official reports of in
Surancc commissioners. the amount of
the business of the company in 1895 wcs
$I5, 676,613, the largest amount ever
written by the company in a single
year. The total number of policies in
force is 1902, an increase FOR the year
of 1850. The insurance in force
amounts to $t51, 112,I3S. an increase of
$Ai ,G3i,36S during 1898. The average
policy OF the company amounts to S.
$50, shaving the Wlde distribution of
the coinrany's business.
ON ana after February I, 1899, all
the new business of the company will
be placed upon the basis of n 3 per cent
reserve. the highest standard of SOL
vency known to the business of life in
surance. This change simply means
that on and after the date specified.
new policies will be upon basis of re-
serve accumulation that, IL but 3 per
cent. is earned upon the assets of the
company. it will be able 10 successfully
carry ont every contract upon its
books. In view of the fact that the
average rate of interest earned upon
the mean invested assets of the COM
pany for the last five years is consid-
erably In excess of per cent. the
change in reserve calculation may
seem to some premature and unneces-
sary. Owing to the fact, however that
of
many years into the future. il has been
thought wise 10 put them upon n basis
of stability which shall be beyond pos
siblc question. The business now upon
the books will not be disturbed since
no question exists as to the ability of
the company to complete its old con-
tracts on the present basis. To change
the old business To n 3 per cent re-
serve basis would require the transfer
from surplus account to reserve ac.
count Of several millions of dollars 4
step OF doubtful propriety unless alb
soiutely required, and certainly no such
necessity exists or is likely TO arise in
the future. The adoption of the per
cent. reserve basis for accumulation
necessitates n slightly increased pre-
MUM 1t is not, however. anticipated
that the average COST of the insurance
for term of years will be increased.
as upon either basis of reserve the sur
plus earnings are returned in the form
Of dividends. and assuming the same
rate. the surplus arising from interest
Will be greater upon n 3 per cent. than
upon a per cent. basis.
Simultaneously with the adoption of
the J per cent. reserve basis. new
forms of policies will so into effect.
These policies, it is believed. will be
found to possess an adaptabilty to
change in circumstances. of the insured
and beneficiary not contained in any
other policies issued. thus covering
CONTINGENCIES not usually embraced in
one contract 1t is the intention to fur
nish to the insured just so far as is
consistent With the safety OF the COM
pany and the general good OF its policy
holders. everything desirable in life In
surance
During the forty years covered by
the operations OF the company the In
terest earnings on the invested assets
have been sufficient to pay all the ex-
pens9of conducting the business and