The total of the "decrease in amortized value during 1910" column should agree with the indented figure in item 47(b) of disbursements, "including $...... for amortization of premiums.

Schedule D-Part 2

The total of" increase by adjustment in book value during 1910" column should agree with item 42(c) of income, "gross increase, by adjustment, in book value of stocks" when added to the portion of the similar column in part 4 applying to stocks.

The total of" decrease by adjustment in book value during 1910" column should agree with item 47 (c) of disbursements, " gross decrease by adjustment in book value of stocks" when added to the portion of the similar column in part 4 applying to stocks.

Schedule D-Part 4

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The total of "profit on sale profit on sale" column should agree with items 41(b) and 41(c) of income, gross profit on sale or maturity of bonds" and "gross profit on sale of stocks."

The total of "loss on sale" column should agree with items 46(b) and 46(c) of disbursements, gross loss on sale or maturity of bonds" and " on sale of stocks."

Schedule E

gross loss

"' column

The total of "balance December 31, 1910 " should agree with items 8 and 9 of assets, "deposits in trust companies and banks, not on interest" and deposits in trust companies and banks, on interest."

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The total of "amount of interest received during 1910" column should agree with item 27 of income, gross interest on deposits in trust companies and banks."

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Schedule F

The total of "amount resisted December 31st, 1910" column should agree with item 15 of liabilities, "claims for death losses and other policy claims resisted by the company."

Schedule J

The total of "amount paid " column should agree with the indented figure in item 15 of disbursements, together with item 28 of disbursements, being the legal expenses in connection with the investigation and settlement of policy claims " and "legal expenses not included in item 15," respectively.

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Schedule P

The total of "total" column should agree with items 33 and 34 of liabilities, "dividends declared on or apportioned to deferred dividend policies payable to policyholders during 1911" and "amounts set apart, apportioned, provisionally ascertained, calculated, declared or held awaiting apportionment upon deferred dividend policies not included in item 33."

Schedule X

The total of "gross income during 1910" column should equal item 34 of income, "from other sources

(give items and amounts)."

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The total of "outlays made during 1910 " column should agree with item 38 of disbursements, other disbursements (give items and amounts)."

MISCELLANEOUS BLANK

The annual statement which the miscellaneous companies are required to file requires no special treatment in so far as schedules A, B, C and D are concerned. The facts connected with the special schedules, however, are as follows:

Schedule H

The total of "value of property received as salvage "column should agree with item 16 (3) of disbursements, being the amount of the salvage deducted from the payments to policyholders for losses.

Schedules J and K

The totals of the "estimated liability December 31st, 1910, per annual statement" columns of these two schedules when added together should equal item 4 (4) and item 5 (4) of liabilities, being the sum of the adjusted, in process of adjustment and resisted fidelity and surety losses.

CHAPTER XXI

Excise Bonds - Special Feature in New York StateExcise Reinsurance Agreement Its Method of Operation Guaranty of Bills of Lading-Other Forms of Guaranteed Certificates.

In one of my previous talks I stated to you that the only forms of insurance which required the insertion of special items of liability in their annual statements were credit insurance and liability insurance. I purposely omitted any reference to the excise bonds which are issued by some surety companies and for which you will find in the blank used by the New York Insurance Department a special item in the liabilities referring, however, not to all of the excise risks, but only to those that are written on liquor dealers in New York State. I desired to refer to this matter in a separate talk and the reason for the special treatment of the New York State excise risks can be seen from the following: You will recall that excise bonds are issued in order that the liquor dealer may be enabled to obtain his license from the State, and the companies guarantee that in the event of any conviction for violation of the excise laws upon the part of the dealer, the penalty of the bond or such part of it as may be demanded, will be paid. Formerly these bonds in New York State were issued in May of each year; in later years and at the present time all of the bonds are issued on October 1st of each year and run to

September 30th of the next year. You will, therefore, see that on December 31st of any year these bonds have been in force only three months, and, therefore, the New York Insurance Department requires the companies to maintain not 50 per cent. of the gross premiums as an unearned premium account, but insists upon 75 per cent. being set aside as a liability. This treatment is in accordance with the actual conditions and is, therefore, not a special item such as were the liabilities applicable to credit insurance and liability insurance, but is simply the logical treatment of the item, and follows the general rule indicated in my treatment of the unearned premium account.

Bear in mind, however, that this applies only to excise bonds issued for liquor dealers in New York State; in other localities the bonds are issued at various times throughout the year, and in consequence the usual 50 per cent. rule will be applicable in those

cases.

Attached to the excise business in New York State are one or two special features to which I would like to direct your attention at this time; the business there is done by means of an association, to which at the present time, I think, ten surety companies are subscribers. In other words, these ten companies have formed a pool and between them handle all of the New York excise business, both State and city. Representatives of these companies have met and have apportioned the business among themselves according to certain agreed ratios. Company A, for instance, has agreed to assume 10 per cent. of the excise risks, will receive 10 per cent. of all of the premiums which will be collected (after deducting the expenses) and