Newark evening star and Newark advertiser. [volume] (Newark, N.J.) 1909-1916, 1912-03-13
BILL TO END
PRU CLAIM
TO EXEMPT
Contemplated Legislation Would
Give Newark Deferred
Dividend Tax.

One of the most important measures
for Newark introduced this year in the
Legislature was presented by Assem-
blylnan Linnenkohl. of Essex, yester-
day. If the bill passes the Prudential
Insurance Company will be compelled
to pay taxes to the city on its deferred
dividend fund, amounting to more than
$23,0 600, 900 in 1911, and increasing an
nually.
The bill was prepared in the office
of City Counsel James r. Nugent. The
Prudential paid taxes on the fund in
1910 after a long legal fight, which
was finally won by the city.
Taxes were levied on the fund by
the board of assessors in 1911, but the
insurance company on the basis of the
new classification of it's assets and
liabilities by the commissioner of bank
ing and insurance again fought the
assessment and the issue is still pend
ing in the COURTS
The deferred dividend fund is made
up of money set aside to meet divi-
dends on a certain class of policies
and therefore, it is contended by the
Prudential. is a liability. The city
holds that it is a contingent liability,
as the sums so set aside may never
have to be disbursed to p~olicyholders.
The bill specifically provides that in
surance companies like the Prudential
shall not he allowed exemption or
deduction for any debts or liabilities
not fixed or~not certain in amount
and capable of accurate ascertainment
by calculation. Nor shall they DE al
lowed exemption or deduction for any
contingent liabilities depending upon
the happening or non-happening of
any future or uncertain event, except
liabilities upon policies outstanding, as
hereinafter provided. Such associations
or corporations shall be allowed an eX-
emption and deduction from the
amount or value Of their property, as
their liability on their outstanding poll
cies, the net reserve to meet the face
amount insured by their outstanding
policies at The maturity thereof as
annually computed by the commission
er of banking and insurance of this
State according to law.
N other liability on policies what
soeVer shall be exempted, deducted or
allowed and the amount of surplus
annually apportioned to deferred diVi-
dend policies, with the interest, earn
ings and accretions of such fund ascer-
tanned and set apart under and by
virtue of the provisions of the act en-
titled "An act to require an annual
ap-portiOnment and accounting of sur
plus of life insurance companies" APP
proved April Is, 1907, shall not be con
sidered or taken as a debt or liability
or a liability on policies within the
meaning of this act, and shall not be
deducted or exempted from the amount
and value of the property of such as
%soeiations or corporations to be as
sessed and taxed under and by virtue
of the provisions of this act
The bill further provides that no g
duction shall he made for non-taXable
or exempted securities and that the
capital stock, for the purposes of the
proposed law, shall not be regarded as
a liability.
A statement shall be made annually
by the companies affected to the State
commissioner of banking and insur-
ance setting forth the full value of al
the property of such association.
The bill is framed so that none of IT:
provisions shall apply to n fraterna
insurance order.