The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-10-23
MAY IGNORE WAR IN
INSURANCE FIGURES
Big Companies Plan to Use
Stock Values Of June 80
in Reports.
GETS STATES APPROVAL

Acting under the authority Of prscti-
cally all the State insurance departments
In the country. with the possible excep-
ton Ut Massachusetts, the insurance COM
penias. life. Are. indemnity and others,
may Ignore the drop In security prices
caused by the war and value their as
sets FOR the year ending December 81.
1914. on TIE bosis ot the prices that
existed on June go OF this year.
These prices range from 1 TO points
higher than the prices on December 81.
1919.
II tho prioes at the close OF the stock
market on July 80 were taken IA tho
basis for valuation the insurance com
loss OF from 2 TO 7 points In general
range on frst class bonds, including con-
vertibles and losses OF from to Is points
on leading stocks.
As the market prices OF securities now
being made on the unofficial curb mar
ket are ranging from 70 10 points below
tho July 80 prices OF the Stock Exchange
tho insurance companies will be able TO
carry their Investments on much higher
level than any ruling at present
Would Endanger surpluses-
II valuation we're fixed on present mar
ket prices some OF the surpluses OF tho
weaker companies would be ENDANGERED
and all would be seriously depleted For
this reason the question OF the basis OF
valuation for the huge amounts OF insur-
snos company securities Ia a very serious
one In the opinion OF the financial COM
munity.
The total value of stoci. and bonds
held by insurance companies IN tho oouR-
try 10 approximately S2,Soo.o 900. 900.
Though the prices of Juno 80 are con-
81. .t,,a
emit market prices, important bankers who
discussed tho prospective ruling OF the
insurance commissioners valuation com
mittee approved II as sound conserve
ton OF insurance company assets.
Tho assets of the life insurance COM
panies are not 20 extensively affected by
any decline OF bonds, as many securities
are reckoned on an amortized or fixed
basis
Ii was learned yesterday that seven OF
the nine State Supertntendents of 1nsur
anoe who compose tho committee on
valuation appointed by tho national con-
vention of State Insurance Commissioners
early in September heartily approve Of
June 80 as a right basis of prices Sug-
gestion for this date was advanced by
Frank Hasbrouck. Superintendent OF the
New York State Insurance Department.
Negotiations have been going on through
correspondence with the result that APP
prevail IL expressed by Edward II. Deavttt
Vermont: Rufus NJ. Potts, Illinois; Charles
johnson, Pennsylvania: Emory II. Eng
fish. Iowa: Charles c. Gray. Rhode Island.
and William Heating. Montana Burton
Mansfield, the Connecticut commissioner.
will probably agree 20 the June 80 date
IL a majority OF the other commissioners
do. but favors postponesnent OF action
until December ! to await developments.
The date. however. must be set before
November 1.
Await Massa on usetts Action.
outside of New York States position the
opinion OF Massachusetts IL regarded In
insurance circles as carrying strongest
weight Final determination Of the date
10 be accepted for a valuation. therefore.
will be postponed until Frank II. Hardi-
son. commissioner for Massachusetts,
gives his decision. Mr.. Harrison favors
the July 80 closing prices as the closest
TO market values that should be put into
force. but he Is OF open mind on the June
80 proposition.
I'VE have practically fixed upon June
40 as the date for valuation" said Deputy
State Superintendent OF Insurance James
]. Hoey yesterday. because we believe
in a Sane and reasonable Interpretation n,
the laws direction 20 FIX market valua-
! ton. We do not believe that Il is reason
able 10 estimate the values of securities al
this time In the possession or the insur-
ance companies as fixed by tho temporary
/ condition of the war. These companies
keep their securities for long terms. They
are almost permanent investments. with
numbers of issues kept until maturity
What Is more, the State picks out fol
the insurance company the classes of re-
curiles II Ia permitted to purchase and
therefore should see that II is reasonably
protected. The State has selected the
best We believe that for the most par
the intrinsic values OF thess securities will
be maintained over a period OF time.
The safe and reasonable view Ia thai
present conditions are only temporary
II may be true that for several years fol
lowing the war new capital will brinl
higher interest returns and therefore
bonds bought under old conditions will
have a comparatively lower value. Blu
the bonds the insurance companies hav,
of this nature viii certainly return Z,
former market prices."