Daily Kennebec journal., 1905-11-09

anu CpItlilutu iliS tcStiIIlOIly On lScn-
nical insurance.
The first witness was Emory Nc
Clintock, actuary of the Mutual Life
Insurance Co, who has been under
examination several days before. Mr.
McClintock submitted, today, state
ment of earnings and dividends Of the
company for five years, which showed
that in 1904 the realized earnings of
the company were s6,624,677. This, the
witness said, was exclusive of any loss
or gain by the decrease or increase in
the market value of securities. The
total dividends for this year were 81
714.549, of which s53S,594 were annual
dividends.
In answer to questions from Mr.
Hughes. Mr.. McClintock said that the
apportionment of dividends for 1904
was estimated and made up in Novem-
Der. 1903, before it was known that the
earnings of 1904 would be $6,G24,677.
The earnings of 1903 We're $5,563, ,S61,
and witness said there was no assumed
amount of increase taken into account
when the dividends were made up. 1t
was arrived at by taking into consid-
Grafton the general run of the business
Assemblyman Cox asked: But why
not give more dividends if the company
can afford it?
I'VE fix the rate with due regard to
the circumstances of the company"
said the witness. IF we can afford it,
we give more: il not, then we give
less"
Mr. MnC1intnoly ~, 81,
old policy holders of the Mutual Life
paid s4,662,055 of the expenses incurred
in securing new business. He said that
the estimated cost of this new business
in 1904 was s9.S4O.753 and that the
amount available toward this expense
was only s5,16S,69S. The old policy
holders paid the balance of the ex-
penses, he said.
The witness could not remember a
case in which the actuary department
has ever been consulted by the officers
of the company as to the amount of
money to be expended for new busi-
ness. He said he had been consulted
as to the commissions of agents. He
thought that the agents commissions
were larger for the endowment policies
than on an ordinary life policy with
annual dividends. The only justifica-
ton which Mr.. McClintock offered for
this method of paying commissioners
was customary. and the liability to dis
rupt the agency force if it were not
followed.
Mr.. Hughes asked Mr.. McClintock:
"In 1903, the amount realized by the
company was $3.50 S61 and the amount
of dividends paid was s735,047 in 1904,
the amount realized was $6,624677 and
the amount Of dividends paid $685.
Why. when the amount realized was
over a million more, was the amount
100000 less?'
Mr.. McClintock said that the reduc-
ton of interest must be taken into ac-
count. He also said that as the esti-
mate for the years earnings was made
in November and the dividends to be
paid were calculated on the estimate. 1t
was impossible to get accurate results.
Mr.. McClintock said the ratio of ex-
pense to the total income of the Mutual
Life Insurance &C. was 20 per cent. Tor
the year 1904. This, he said, is also true
of the New York Life Insurance Co.,
and the Equitable Life Assurance So
ciety. In smaller companies the ratio
was much lower, in some instances as
low as - or IA per cent.
The ratio of expense to the amount
maid to policyholders of the Mutual was
shown to be 40 per cent. In the New
York Life it is the same. while in the
Eouitable it is but 43 per cent. In
z,Y.. ,oynpa pioc ~ ic ac 1nu a q
% and 30 per cent.
Following Mr.. McClintock, John r.
CONTINUED on Page Fve.)