The Bennington evening banner. (Bennington, Vt.) 19??-1961, 1909-06-19
WILL INCREASE ITS DIVIDENDS
Mutual Life Has Excess of Value In
Its Contingent Funds

Its Contingent Funds
New York, June 1S-The contingent
cy reserve of the Mutual Life Insur-
ance company, it was learned yester-
day, has just been marked up from
about 16,5OO,OOO TO $21, $3.50, $50 by or
der of the New York State Insurance
department. Tnis increase in the re-
serve was ordered on the ground that
the Mutual LIES real estate was not
entered in its accounts at a sufficient
ly high figure, as it stood at its book
instead of at its last appraised value.
The result of marking up the res
erve has been to bring it s424,S94
above the maximum permitted by the
new insurance law. II became neces-
sary for the company to apply for spe-
cial permission to maintain this ex-
cess until the next distribution OF div
idends TO the companys policy hold
ers, when this sum will be taken into
account in figuring the amount avail
able for policy holders dividends.
This permission has been granted by
the department.
The Mutual Life Insurance company
in its last report to the Insurance de-
partment in pursuance Of the conser-
vative policy of entering its real es-
tate at its book value instead of at its
appraised value gave $26, l96,029 as
the value of its real estate holdings on
January l. The appraised value ac-
cording to the last appraisal made sew
eral years ago, was $S1 ,S53,07S. This
figure as well as the book and cost
value of it's real estate was shown in
its statement of real estate holdings,
but in it's statement OF conditions the
took vaue vas used in figuring the
resel yes.
The diff srence between the book
value and last appraised value or the
Mutual Life's real estate was S5.657,-
Os9. Some time last month 1t was
learned yesterday the department.
took the stand that this was in affect
a hidden reserve, and that under the
law the company would be obliged to
mark up it's contingent reserve by this
difference. The department also made
an appraisal of the Mutu ll's holdings
of bonds, and its figures showed a sum
about 5000, 900 In excess of the com
pany's figures. This was an in ignif-
icant amount applied to the Mutuafs
total holdings of bonds, but this, TOO,
was ordered added to the contingent
reserve, the two items bringing the re
serve up to s22,O71,779. Under the
Law the contingent reserve must not
amount to more than per cent OF the
reserve held against outstanding in
surance. Under this clause the Mutu-
al would be entitled to a maximum con
tingent reserve Of S21 ,565.SS6 or 1924
s94 less than the amount TO which the
companys reserve was brought up by
this addition TO the stated value Of its
real estate holdings and its holdings
of bonds
1t has not been found practicable TO
distribute this as a supplemental pay
ment to tne policy holders who shared
in last years dividend, and hence spec
ial permission has been granted by |
the department TO the company to con-
tinue to hold this excess Of reserve. At
the end of the year this amount Will
be added to the dividends accruing
from this years operations provided
some reappraisal either of real estate
or securities does not again alter the
contingent, reserve.