Evening star., 1941-03-07
Mutual Of New York
Sets Up Reserves
For Depreciation
$30,950,O00 Funds
Included in e-Point
Douglas Program
Special Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK, March IA nine
polno program for the future, in
tended, among other things, to pro-
vide new investment outlets, improve
investment yields, rehabiIitate i'm
paired assets, provide independent
annual audits. develop improved
types of policies and make provision
for the write-doWn of mortgages,
real estate and other assets to real
istlc values, is outlined in the 98th
annual report of the Mutual Life In
surance Co. of New York, which is
being mailed today to the company's
850,000 policyholders.
The report, which Is the first to
be issued under the administration
OF Lewis w Douglas, former United
States budget director, who became
president of the company on Jan
uary l, 1910, is unusual in several
respects.
1t is divided into two parts, the
hrst Of which is a brief, orthodox
report of the financial results of the
years operations, intended. MI
Douglas states, for those who read
while they run" The second part
is a detailed and candid report on
the Company's operations and cur
rent problems. together with a state
ment of policy and program for the
future.
1t is therefore q departure from
previous practice, and represents,
Mr.. Douglas states, "an attempt to
satisfy one of the essential require
mentS of responsible management
under a system of private enter
prise"
Audits Provided.
Another unusual feature of the
report is that it contains financial
statements audited by certified pub
lie accountants, practice not gen.
orally followed by life insurance
companies. The report states that as
a supplement to the triennial exam
nation of the State insurance de-
partments, independent audits of
this sort will be conducted annually
henceforth "as an additional check
upon management and upon the
value of assets that are not subject
to precise measurement"
New insurance issued in 1910 by
Mutual Life of New York totaled
S193, ,449 ,925, and the total of insur-
ance IN force on December 81, 1910.
was S3,705 9l1,798, as compared with
S3,740, 731 ,467 year earlier On the
same date the company's total ad-
mitted assets were 1,484 ,904, PIG,
which represents an increase of
$40 436,594 over the preceding year
end. Benefit payments to policy
holders and their beneflciarieS. the
report reveals, totaled S107 ,233, ,223 in
1910
The audited statement of income
for 1910, as submitted to policy
holders, is on an accrual basis for
the first time. This and other
changes in accounting presentation
adopted to reflect the company's
condition more clearly make it diff
cult TO compare 1910 figures accu-
rately with figures for earlier years.
Income of the company in 1910
was S186 ,677,575, which was S57,439,-
168 in excess of outgo for benefit
claims and operating expenses. This
balance was increased to S58, ,282 600
by an excess of profits over losses
on the sale or redemption of bond
holdings and sale of foreclosed real
estate.
Applied to WritedOwn.
OF the amount remaining after
provision for operating expenses
and benefit payments, s1O964,262
was applied to a writedown in the
value of the company's invest
ment5: 1868, ,809 to an increase
in policy reserves, and s24935 to
an increase in miscellaneous re-
serves.
These adjustments and a decrease
of S940000 in reserves for income
taxes OF prior years, left the COM
pany a final excess of S2O,581 ,594
of income over all expenses and
charges for the year. Of this
amount $7,244,154 was added to
surplus, leaving S13,337.44O avail
The report states that the audit
of the companys assets indicated
that on a realistic basis, the value
of mortgage loans and real estate
holdings was less than the amount
at which such assets were being
carried
Because of this, $23,3000O0 of
surplus funds we're set aside as
special reserve for mortgage loans,
and S6,65O,0O0 as a special reserve
against real estate held. In addi-
Jion another s1,OOOOOO was ear
marked for the purpose of adding
to the reserves for annuities. After
provision for such special reserves
in. the amount of $30,950,000, sur
plus on December 81, 1910. totaled
$27,7l7636, and surplus and special
reserves amounted to $58 667, ,636,
on the same date, as compared with
S5l ,423 ,432 a year earlier.