Borrowed Money Included in the liabilities as borrowed money is $2,000 and interest thereon, which the president states will not become au ultimate liability. Claim Against Globe Indemnity Company The society has a claim against the Globe Indemnity Company for $377.88 under a fidelity bond issued on a former employee of the society, which the president states will ultimately be paid. No credit has been given the society therefor in this report. Officers The former secretary and treasurer of the society have both resigned, but the secretary's resignation had not been acted upon by the board of directors on August 27, 1919. The president of the society is James F. Egan, Rochester, New York. Insurance in Force There are about 1,800 certificates in force, carrying insurance in the aggregate amount of about $1,250,000. Conclusion It is apparent from the above report that this society is in an insolvent condition. The president is anxious to merge or reinsure in another organization. This should be done at once, with your consent, if it is possible to do so on any equitable basis. In any event, action should be taken by the Insurance Department to hasten the termination of the society's existence. NATIONAL TEMPERANCE LIFE INSURANCE SOCIETY BROOKLYN, N. Y. Examined to ascertain condition as of December 31, 1919. Examiner: J. F. Tucker. Financial Statement The financial condition of the society as of December 31, 1919, was found to have been as follows: date: U. S. Government Liberty Loan: 1st, 32%, 1932-47 2d, 4%, 1927-42 4th, 44%, 1933-38 The following bonds were owned by the society on the above School District of Dubois Borough, Pa., Borrowed Money I find that the society has borrowed money for which it is liable in the sum of $850, with accrued interest amounting to $8.50. As security for this loan it has hypothecated one of the Liberty Loan Bonds of the fourth issue amounting to $1,000. Unpaid Bills Included in the statement of liabilities as an unpaid bill is a claim made by Mr. W. H. Gould, consulting actuary, for services rendered. The payment of this bill is being resisted, the officers alleging that the services rendered were not for the benefit of the National Temperance Life Insurance Society, but for another corporation in process of organization, and for which the said society is in no way responsible. Funds The funds of the society have never been separated, but all moneys received have been thrown into a common fund, out of which all claims have been paid, regardless of whether they were death benefits or bills covering expense of management. At the time of the last examination of the society, made as of December 31, 1917, it was found that the insurance reserves of the society had been impaired by the use of benefit funds for expenses, and, as a result, such impairment was more than made good by the officers and directors paying in the equivalent of approximately $1,500 in excess thereof. It was recommended in the report of said examination that thereafter the benefit funds should be maintained in accordance with the provisions of the by-laws, which provide for a proper segregation of all funds received according to the purpose for which they are collected. Nothing has been done to correct this, however, and since the society is to discontinue business no calculation was made as to the exact status of each fund. Reserves The reserve on outstanding certificates is set forth in the statement of liabilities of this report, viz.: $24,008.64 is the amount computed by Consulting Actuary Miles M. Dawson, which the society should have on hand as the present value of certificates outstanding, covering all insurance features provided for in the contract, less deferred assessments, valued on the American Experience Table of Mortality at 4 per cent interest, covering the life insurance feature, and a table of reliable experience, covering the disability feature. Mr. Dawson states that the rates being collected for all the insurance features carried in the certificates are insufficient to provide for the maturity of the life insurance feature and also the disability features, and, as a result, he had to include, in calculating the amount which the society should have on hand as measuring the present value of the contracts as a whole, a deficiency reserve. Income and Disbursements The income and disbursements for the year ended December 31, 1919, were as follows: Balance, ledger assets December 31, 1918... Income $13, 529 05 Organization and Business in Force This society was authorized to transact the business of life insurance under the provisions of Article VII of the Insurance Law on September 11, 1914. Prior to the issuance of a certificate of authority it was necessary for the society to have at least 500 applications for insurance amounting to at least $1,000 each. The annual statements show the number of certificates and insurance in force as of December 31st of each year as follows: As of December 31, 1919, the records of the society show 256 certificates in force, representing insurance in the amount of $326,500. Reinsurance Under date of December 31, 1919, this society entered into a contract of reinsurance with the American Life Society, under the terms of which all the outstanding certificates of the National Temperance Life Insurance Society are to be reinsured as of the said date, covering the life insurance feature only, by the said American Life Society, in consideration of the transfer of the remaining assets of the former society to the latter and the continuance of the payment of the same rates of assessment by the members transferred. Under this contract the American Life Society agrees to assume the payment of all death claims accrued on or before December 31, 1919, and thereafter as the certificates are kept in force by the members. The latter society also agrees to be bound by the terms of the certificates of the National Temperance Life Insurance Society in respect of withdrawal equities to the extent that the same may be protected by reserves computed by the American Experience Table of Mortality and 4 per cent interest, and until any deficiency in said reserve accumulation is fully restored, the reinsuring |