Evening star., 1931-12-10
INSURANCE REPORT
BASIS IS CHANGED
Conflicting Statements to Be
Filed on Valuation of
Securities Held.
BY ROLLIN NJ. CLARK.
nj Dispatch to The Star,

Special Dispatch to The Star.
NEW YORK, December 10.--As the
result of action taken at an executive
session OF the national convention Of
insurance commissioners here, partici-
pated In by insurance supervisory off,
cials of 26 States, many fire and casual
ty insurance companies will be required
to file two conflicting annual state
ments at the end of this year. e..
In most States the companies will be
permitted to evaluste their security
holdings on the basis of June 80, 1881,
quotations as representing a fair aver
age market value throughout the year.
In Connecticut, and possibly several
other States, 1t seems certain that clos
ing prices OF December 81 must be used.
BY vote of % to 3 the state COM
missioners adopted report of their
committee on valuation of securities,
headed by the New York superintendent
Of insurance, George S. Van Schaick.
This resolution, recommending the
change from the ordinary basis of De-
cember 81 values, had been before the
commissioners for several weeks.
Dissent Expressed.
When the report was first filed, How
ard P. Dunham, insurance commits
sioner of Connecticut, member of the
committee, raised dissenting voice. II
was this lack Of unanimity that resulted
in discussions lasting over the better
part of two days at this weeks meeting
here. Col. Dunham maintained his po-
sition consistently to the end and after
the session declared, he would insist
on the use of December 81 values re-
gardless Of the attitude of other States.
The purpose OF the resolution Is to
make 1t possible for the fire and cas-
ualty companies to meet the emergency
situation, caused by low market quota
tons for the securities in their port
folios, without resorting generally to q
decrease In capitalization In order to
maintain an adequate surplus. The
viewpoint of the majority as expressed
by Mr.. Van Schaick, is that to require
the use of values at the end of the year
under the unprecedented economic and
financial conditions now prevailing would
be unfair and inequitable to companies
where the business of insurance Is pros
porous, the management competent and
honest and the investments of high
character"
The plan adopted by the convention
lis not mandatory. Each State may &C
cept or reject it, and even those follow
Al6 Az nlC &tFNl SSiCll1AA III SdoCo "AAIA .
current claims require the liquidation Of
securities to provide funds for payment.
Cites Connecticut Law.
In such cases December 81 values will
probably be required in the annual
statements. Likewise, bonds which have
defaulted in principal or interest since
June 80 and stocks and bonds of corpo-
rations in receivership since June 30
will be valued on the exchange quota
tions OF December 81
The Connecticut commissioner con-
tends that he is required by State law
to insist upon the use of December 81
values. He argues that the values of
June 30 have disappeared and that the
1881 annual statements should reflect
the true condition Of the insurance COM
panies. It Is rumored that some COM
paniesf may withdraw from Connecticut
and others may transfer some of their
capital to surplus. One Connecticut
company has just taken the latter step.
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