PREFACE On numerous occasions the members of my office staff have evidenced a desire to consult reference books which would enable them to obtain information on points connected with their examining and their auditing work; my inability to direct them to proper sources of information led me to institute a system of brief talks upon the topics connected with their work. During the summer of 1910 I was asked by the New York State Civil Service Commission to participate in the oral examination of candidates for the position of Assistant Examiner of the Insurance Department of the State of New York. Many of the answers given by the candidates indicated the same need for information which had been expressed by my own assistants. Department and company officials to whom I happened to mention these facts, suggested the advisability of putting these talks in some permanent form, so that they could be of use not only to the members of my own staff, but to Departmental Examiners and to assist the accounting departments of companies in the solution of the numerous problems which arise in connection with their annual statement work. In conformity with that suggestion, I offer this book to those who may need it, and wish merely to state that it was not my intention to prepare a learned treatise on the practice and theory of supervision and accounts, but merely to give to my fellow-workers the benefit of the rules which I have found advantageous in the large number of examinations and audits with which I have been connected. It will be noted that it has been my attempt to impart the knowledge by suggestion rather than by direct statement. In this way, the reasons for the various treatments have been developed and the logic of the situations has been shown more clearly. Whenever it became necessary in my talks to refer to specific statutes, the sections or parts of sections applicable were read; I have reproduced them in this book in the form of appendices rather than to cumber the text with extensive quotations. 165 Broadway, New York, N. Y., December, 1910. S. HERBERT WOLFE. Mortgages - Limited to percentage of value of property-Abstract Appraisal Fire insurance policies "Purchase money mortgages - Notice to mortgagor - Guaranteed mortgages - Transfer of tax Bonds - Different forms of bonded indebtedness - Railroad bonds- Registered and coupon bonds-Directors not to be interested in sales or Difference between bonds and stocks - Danger in stock investments Preferred, common and guaranteed stocks - Collateral loans -" Win- dow dressing". - Collateral loans contrasted with policy loans..... Cash in office and in bank - Percentage of cash to invested assets tificate from banking institutions - Interest bearing and non-interest bearing accounts - Policy loans - Liens and their sources -Premium balances Deferred premiums- Uncollected premiums - "Paid for" and "written" bases- Uncollected assessments of fraternals........ -- 53 Loading on uncollected and deferred premiums - Disallowed or non- admitted assets-Loans on capital stock-Supplies and printed matter-Commuted commissions Cash advanced to officers - Excess credits Depreciation in securities - Premiums outstanding Surrender values claimable-Different forms of death claim liabilities Resisted claims - Accident and health claims - Contingency reserve.. Fire losses - Plate glass losses - Fidelity and surety policies or bonds distinguished — Inability to keep track of issues - Suggested remedies Special liabilities - Credit policies - Definition - Methods of treating accounts with insolvent debtors Liability policies distinguished from workmen's collective policies - New York and Michigan methods of Miscellaneous liabilities - Special or advisory board contracts. Taxes Commissions on uncollected premiums Dividend liabilities of life com- panies - Annual and deferred dividends - Restrictions placed on dividends by New York statutes - By Ohio statutes - Items of divi- dend liability in statement blank - Tontine policies Sources of |