The farmer and mechanic. [volume] (Raleigh, N.C.) 18??-19??, 1907-12-03

the mos: offensive insurance laws Tor
their own interests against young
companies. That Is the record In the
past And now. when they desire 10
have the securities they hold boosted.
Mr.. Grover Cleveland. chairman y
the Association OF Life Insurance
Presidents. which has heretofore been
very limited in extending Invitations.
invites all the yoHng companies
to attend their meeting At Hotel Bel
mont. III New York. Here Is an eN-
tract from Mr. Cleveland's letter in
yiting insurance men 70 attend this
meeting
The very recent action Of the e&-
ecutive committee II the Association
Of Insurance Commissioners Indicates
full appreciation on their part OF 1he
i-naccuracy and uufairneSs Of Yaluelug
securities on market quotations De-
cember 2lst Of this year. but leaves
for the determination OF Insurance
companies themselves the broad ques-
ton OF what method shall be sub
stituted. The papers TO be presented
VIII discuss methods and point out
distinctions between different kinds
Of securities and between purchasing
and holding for permanent rather
than temporary Investment.
\ this meeting many subjects VIII
be discussed. but perhaps the most
timely topic to be considered WI be
the proper method OF valuation OF
hxed term securities held by life in
Grance companies.
This is the first suueal Of the over
grown companies. Because tie stock
market securises in which they have
been specializing have 50 far dcpre-
1S,.11 H. - -..-4 -, e
their securities much of their surplus
has been wiped out, they come u the
young companies and ask their hciD
i'm getting all the States to allow the
companies themselves to make the
valuation Of their securities instead of
putting them at market value. some
of them have been putting in their
statements the market value when Sc
curities are up and now when they are
down they wish to put their own
valuation on what they paid for The
speculative stuff. They have thus
opened another sore wound in their
body at which the public will see that
reforms have not been what they
should have been. They are in a hole
and want the little Southern and
Western companies they have derided
and tried TO crush to help them deal
with the Insurance Departments of
the different States so as to let them
put an inflated value on their securi-
ties on their published statements.
This is a request that would make a
false impression upon the world, and
one that should not be granted.
If an insurance company is permit
ted to put the market value of it's Sc
curities in its statement when the
highest point is reached and thus
make a showing of mountain high sur
plus, it should be compelled to put
the lowest point the market goes to
when the securities experience a big
drop. But the fair way is not to per-
nents ought to ascertain the mean
v&lue of securities by considering the
market value and the dividends dur
ing a series of years and require such
mean value to be placed in the state
This would do justice to the
managers of the companies and to
the insured 1t would be for the
State to abdicate if these De-
partments permit the companies to
arbitrarily put their own valuations
upon their securities. Naturally the
Will put them up and convey a wrong
impression. If market value was
proper last year, it is proper now, but
the Departments can find a safer
method. Certainly no method is worse
than to let the companies place their
own valuation upon their securities.
This should be done by State officials
after considering every element that
goes into giving value to securities.