Burlington weekly free press. [volume] (Burlington, Vt.) 1866-1928, 1900-06-21


miSsioncrS believe, to he the true situa-
ton, the deficit after the wiping out of the
surplus and capital stock would amount
| to t1lj.000
rho statement of the company to the
commissioners, made a S of the first day OF
January 1900 showed surplus Of Sli19-
%, and this result was reached by inClud-
ing i'm the statement assets entirely hcti-
tious to the amount of $1,000, and by fail
ling to include In the reserve liability com
putatiCn "A very large number of policies.
The fictitious items in the assets included
over 81 00 shown on cash slips which re-
pre- sentcd salaries earned by employees
and in fact paid TO them and s25, 40 re-
presenting premium note account,
which the commissioners found to he. and
which was admitted to he, without value.
1t appears that in computing it's reserve
liability the company omitted altogether
the provdcnt endowment policies the
Childron's endowment policies. the provi-
dent life policies. the industrial policies,
and the paidup policies of less than sl,0o.
and on the paid-up policies of $1,000 and
over rcCkoncd the reserve as a one year
term insurance on the amount at risk. 50
that in 2.i6S policies, insuring over $3.50. 900.
on which on the ocmpany's own basis
Creating the first year as term insurance.
there was valuation Of S0S,6il, the COM
pany claimed to the commissioners a val
uation OF s2o76. 1t is not understood that
tho directors Of the company had any
kho"IeuEe OF tncse fActS' put thcE I'M
uoup'oolN peHeVed thal the reserve Was ne-
ing computed in an authorized and lceiti-
mate manner.
In 1885 the computation Of the companvs
reserve hanllltN was mace by David Parks
r"chIPt OF New 1ork an aCtuarN Oh
integrity ana hlGn standing IN ms profess
SlOiI' Inns computation was maze on the
regular basis, no claim being advanced
tndl t'lc Pon'leS Snoulu ne Valuod treating
'ne HISl war as term insurance mere
"lter no independent computation OF the
'"HP"llN reserve was Hldue until Nhe
Pi.H'u' N'"''
~ ''' uihc OF the examination OF the
company III '"Hu"iN. 'houRn inc N"lui-
,I"" VI '"' company Po"''S nad 'nch
pooh Only paruaIIN cohpIet'd' the com
nlsSlonrrs found that on the basis most
IaEorapIe TO 'h' company serious I'M
n,,ii iilt''' VI VIZ COMPANY c"pl'ai cNlSteh'
ms WdS SO l'sarulcsS Oh 'he commissions
81 dt'Ituut "S TO nrst year Term lhSuI-
""c'' a"u Tue 'oiHPletlo'l Oh we reScrNe
computation al'er me reinsurance paced
matters III worse Hght
me commissioners ruilllG AS 10 ONE
year ,eiIH Insurance. even ndu 'He 'oill-
p"uS ue''! III s"ch soiNeht poSluoii as 10
make Such ruHhG OF lhlportahce' was no
reversal Oh any previous ruIlng, ana VAS
so maze as 10 give the company ample
courts. nun the Na'uatlon sheetS were
sunni ttu OH ueHldud OIL the COMMISSION
clS ~ DcCciipei' 1880 ,iI' "ePdt Viiieht hau
10 KNOWLEDGE 'hal me company wrote
any co"'i"C'e CONTAINING 'nc Hrst 9ehi
'eIH INSURANCE ciauSe Vi c'aiiieu ma us
FolcleS SHoulu ne NdIueu tred'lne 'he IlrSt
year as term insurance w men ,he mater
"lu mus coiH' 70 t"e h"O"ieuE' VI me
assurances whatever as to how the policies
would be valued, but the officers of the
CIV" ~ i,'i
rood,. hoor mali ,osnac,iro a co,or,rv
which sod thorntoforo .'nniiod ro,. od,,is
,il,, e. .t CO. ga XXI .hot,. ro,r,,s
~ ott,, ies ii,,'','. , ,l,tro,in,1
~ tton a',os,ia ~, ,,,,.,rr.,1 l., that. oasa
y'o,,Id ha n,ado Whan ,ho ruii,n. ,yae
N,,,1l,. ,,,a a ,,.,, s,,,,fro,.,. h,, IA cow
,ntssiorars tbot the rownon,, a,d ,bo a.
nar,,,,a,t ol,',,,o.ata ~ ,,a,.a DO ,,a,tar
,os,ad e. ~ ao,,r, as w., 1an,,ar,.
,ar,,, =, tho cunra,,,a Gu, hi,,, ,,a,,. 4. :.
oIosn tho oon'n,isaio,,ors ,orond 20 rooLa
thn ,e,,I ,.oIratio,, car,i6a.+as TO- tho
Stata doror,,,a,te st,tirc NO. .ucb ,,al =
nation uos ,nada .,accor5ina 70 tbo A.
tna,ios, 1ahIo Of NIortoit,,, Win intorast
at four nor cont tresting tho erst Goa r
nc to,.r, ireuranoa >. All tbts howovoy. IN
,,io,u 30 tha ract that no 49, oortrart
Of tho comnon,, coutairirg Tho ono year
torn cIoue. MS n,-ttor In Doco,,hor ,v,o
and evop If tha+ wore mo, co In ,.ieu of
tho FAC, mat tho .con,ra,v u,oe honoIoe.I,,
and irrotriev,hlv insolent rad ali Of It's
nolioias haa, ,oi,,od ,raattrr ,ho 60 ,.o,r
DC tam, ;ns,,ranoa n,os ,,7araI,, h,,-,luy
,rodo ,,ea 90 b.. - ,,ro,ido,, -, ~ oon,
NAVY to co,,or nm IT, insoIvo,c,, nv f,,r
nishipc an evcuee 70 tho nubiic for tho
comnon,,,e ra-insuranoa
VALUATION OF FIRST YEARS IN
SURANCE AS TERM INSURANCE..
IN" pu'S'o' was IiS' oiOusht ulcc'iy
10 the attention OF the commissioners IN
september 1872 whlie thev were eNaili''-
ing the polcleS OF " company Oh announcer
oIdte H"k'nE dPpHCdtloH lof incense ~ ~
business III Vermont ooihe Oh the Po'lclcS
''ic" u'u'' 'o''9 'u'i "'ioii oo'''"''eu ~
Ni9lol' III th' '"lu''lOitS o' nv odch u
the INSTRUMENT Aildt uurIhE tlc ~
year the reserve 10 pe coiiiPu'Iu "Hu
charged aE"inSl TINS poIIcS sHa!I ne ti''t
OF yearly term ms uidnVe' "iter wnlcI
the net reserve c"Heu LOT pE the coNioiiieu
experience OF actuar!es taole Oh ihortdity
at one year later thau age Oh entry snall
ne maintained hereoh'
Inc eHect OF inns pToNlSiuu' IL oPerdtiNe'
Is 10 very IarSeIy wipe OUT 'ile reserve Ia
pllty on new business lot the Hr0t Scd''
ana 10 peSln the usual computation VI re-
serves the second year OF the me Oh me
pollcy, treating the poilcy after ltS urot
year FOR purposes OF reserve computation /.
as taken OUT one year later tnah age Oh
entry inns pldcuce appreclahly reuuteS
on any given GATE 'he company ; HapiltS.
the amount OF SuCn TeuucuOn varying