which it was thought best to insert together, that they might readily be pointed out to legislators and to others. Next in order is inserted a valuable paper on the "Fallacies of Life Insurance Laws," and other items of interest connected with this subject, by Dr. T. S. Lambert, who failed to be present on account of the unexpected adjournment of the Convention while he was on the way. Then follows an outline draft of an Insurance law, to be perfected hereafter, and recommended for general adoption. The Conclusion is the "Balance Sheet Blank" for the annual statement of Life Companies, to be used after the present year by the several departments. The experience of the last few years has shown the necessity for more intelligence, more vigilance, closer, and more cordial sympathy, and a better understanding not only among insurers and the insured, but among those who undertake to supervise this great interest. With the hope that it may do something to secure these desirable ends, this little pamphlet is respectfully submitted to the public. By order of the Executive Committee, OLIVER PILLSBURY, Secretary of the Convention. REPORT OF THE Fifth Session of the National Insurance Convention of the United States, WHICH MET IN THE CITY OF DETROIT, SEPTEMBER 2, 1874. FIRST DAY-WEDNESDAY. THE Annual Session of the National Insurance Convention of the United States met in the Council Chamber of the City of Detroit, pursuant to notice, Sept. 2, 1874, at 11 o'clock A.M. Hon. O. W. Chapman, of New York, President of the organization, having called the Convention to order, said it gave him pleasure to meet so many of his brother officers in convention representing the insurance interests of the several States, and that very many subjects of great magnitude and importance to the companies and to the public would demand its earnest but conservative attention. The magnitude of the questions may be partially comprehended when it is realized that the gross assets of the several companies whose supervision it is the special duty of the members of this association to superintend, will reach about eight hundred millions of dollars and the amount of insurance in force ten thousand millions of dollars; in the stability of the life companies alone over five millions of people are directly or indirectly interested, and, including the fire and marine, nearly all the people of our country are interested. It is, therefore, of vast importance that the several insurance departments of the States should meet and exchange opinions, and compare practice with theory, assured that each department may thus become uniform in its decisions and official actions, so that the unanimous resolutions or legislation proposed by this Convention should go forth with force to the Legislatures of the several States for adoption, if by them approved right and manifestly just. The departments, he thought, have materially improved since the first session of the Convention. Several of those recently organized have already brought themselves up to the standards of the oldest and the best. He said that companies which ought not to be admitted were continually knocking at the doors of the departments. If they are admitted the consequence is injurious, not to the public only, but to themselves as well. If they are rejected, they are kept at home where there is a possibility of their success. Sup pose the certificate of the New York department is brought to any other department, it is fairly to be supposed that it presents the facts; but it is not a request of the New York department for the admission of that company to any other State. It is not an expression of the opinion of the New York department that it ought to be so admitted. It may not come up to the standard of other States. Its admission may not approve itself to the judgment of other commissioners. The New York commissioner may not think it best that the company should go abroad until it has gathered experience and strength at home; still he is often obliged to certify to its right to do business in his own State. In the case of such applications for admission, the besieged commissioner should remember that there may be circumstances surrounding the issue of the certificate of the parent State which render it even desirable that admission to other States be for the time refused-refused until the company has demonstrated more fully its right to go abroad. Why not have such mutual understanding and confidence that commissioners can in such cases write to each other? It was important that the reciprocal equitable rights of the several departments of the States should be carefully considered and settled, so that a company having the official certificate of one State, and applying for admission into another, may know what it must expect, and not feel itself unjustly dealt with if admission is refused until it shall receive the examination and approval of the department of the State in which it seeks the right to do business. The question, also, of the nature of the assets that should be held by fire companies especially will come up for serious consideration. It would seem. said the President, to be the result of experience that prudence decides that no over one half the gross assets of fire companies should consist of bonds and mortgages; that at least one half should be invested in immediately available securities; that while bonds and mortgages are justly considered the most substantial of all securities, when properly executed, nevertheless experience has demonstrated them liable, through fraud or perjury, to be the most worthless. The spirit of the Convention should be toward conservatism and the adoption of no untried innovation until its safety was settled beyond question-until experience shall enable the Convention to safely take final action on all the various questions proposed. The minutes of the last session of the Convention being called for, the Secretary, Oliver Pillsbury, of New Hampshire, proceeded to read from the printed report; whereupon Mr. Rhodes, of Massachusetts, moved, that inasmuch as the doings of the last Convention had been published, the further reading be omitted. Carried. Mr. Row, of Michigan, here took occasion to introduce to the Convention a committee of the Board of Underwriters of the City of Detroit. Hon. Mr. Vernon, in behalf of the committee, gave the Convention a cordial welcome to the city, and begged the privilege of making some testimonial of its hospitality. To this end he proposed a steam-boat excursion on the beautiful Detroit River, to the Convention and other strangers present, including ladies accompanying attendants upon the Convention, whenever it would be most convenient. The President referred this proposition to the Executive Committee, which recommended that the invitation be accepted: adopted. On motion of Gen. Smith, of Kentucky, the Convention adjourned to meet at 2 o'clock P.M. AFTERNOON. The Convention met according to adjournment, the President in the chair. Mr. Rhodes, in behalf of the Executive Committee, submitted the following report, which was accepted and adopted: The Committee respectfully report the following States as regularly represented in this Convention. Hon. Joshua Nye, Insurance Commissioner. Maine, New Hampshire Oliver Pillsbury, Insurance Commissioner. Massachusetts, New York, 66 Stephen H. Rhodes, Deputy Insurance Commissioner. Orlow W. Chapman, Supt. of Insurance Department. Peter Doyle, Secretary of State, and ex-officio Com. of Ins. William Morrow, State Treasurer, and ex-officio Ins. Com. Your Committee also report that credentials were presented from the State of Pennsylvania, but the person named therein being ineligible to membership under provision of Art. 2 of the Constitution, which declares that no member shall be connected with any Insurance Company as agent, officer, or otherwise," your Committee are unable to report that State as represented. Respectfully submitted, STEPHEN H. RHODES, GUSTAVUS W. SMITH. Executive Committee. Letters were also received by the Secretary from Insurance Officials of the following States: Joel M. Spencer, R. I.; John Page, Vt.; Henry C. Kelsey, N. J.; Charles A. Wailes, Md.; W. F. Church, Ohio; W. L. Goldsmith, Ga.; and John W. Foard, Cal.; expressive of their interest in the objects of the Convention, and regretting their inability to be present. The President announced the following Standing Committees for the ensuing year: On Blanks for Annual Statements; Messrs. Row, Rhodes, Steadman, Nye, and Doyle. On Assets and Investments; Messrs. Nye, Rhodes, Steadman, Russell, and Morrow. On Rate of Mortality, Rate of Interest, and Re-insurance Liability; Messrs. Smith, Pillsbury, Morrow, Barnes, and Steadman. Or Taxation, Deposits and Fees; Messrs. Pillsbury, Doyle, Steadman, Rhodes, and Russell. On Legislation ;' Messrs. Smith, Row, Rhodes, Nye, and Russell. On Miscellaneous Questions; Messrs. Rhodes, Smith, Morrow, Barnes, and Row. The Secretary submitted the following letter from the President of the Association of the North-West. Hon. Oliver Pillsbury, Sec. National Ins. Convention. S URBANA, OHIO, Aug. 21st, 1874. DEAR SIR:--Your circular of the 6th, calling attention to the next Annual Session of the "National Insurance Convention," to be held in Detroit, Mich., Sept. 2d, is at hand, and I have the pleasure of informing you that R. J. Smith, Sec. of the Traders' Insurance Co. of Chicago, and late President of the Fire Insurance Association of the North-West; C. E. Bliven, of Toledo, Ohio, General Agent of the Howard Insurance Company of N. Y., Secretary of the Association; and E. C. Preston, General Agent of the Detroit Fire and Marine Insurance Company of Detroit, Mich., are duly authorized and empowered to represent the "Association of the North-West," in said Convention. Trusting that you may have a harmonious and profitable session, resulting in great good to the vast interests committed to your care, On motion of Mr. Row, it was voted that any persons who may have papers prepared upon any subject relating to Insurance, or who may desire to be heard, be invited to give notice to the Secretary to that effect, and that opportunity be given such persons to be heard, whenever it may suit their convenience. Gen. Smith introduced Mr. McClintock, Actuary of the "Northwestern Mutual Life Insurance Company," who submitted a paper entitled a "Proposition for ascertaining the Real Cost of Life Insurance," as follows: State supervision has for its chief object, after making sure of the solvency of the companies doing business, to furnish trustworthy information concerning those companies to the insuring public. Solvency secured, the cheapest insurance is the best; and the numerous tables and ratios annually published have really no other object than to inform the intending applicant for insurance where the desired commodity can be purchased at the lowest cost. Is this aim realized in practice? To a certain extent, undoubtedly, it is. There is still much to be desired. The multiplicity of "ratios" is so great that people become bewildered. In one way or another, the weakest company can extract consolation from the official reports, while the confusion is such as to enable opponents to throw some discredit on the claims of the strongest. I do not know that I can illustrate the tendency of current opinion better than by quoting, as an extreme instance, the following paragraph from a late number of an insurance journal opposed to State supervision; a paragraph which, while much too sweeping in its censure, nevertheless reflects, in the main, what appears to be a wide-spread sentiment in this regard : "So far from being useful, all "comparative statements" and "official tabulations of ratios," to show the relative condition of life insurance companies, are pernicious to the last degree, and for these reasons: "1st. Commissioners of different States differ as to methods and rules for valuation. 2d. Commissioners, actuaries, and officers of companies differ in opinion as to what constitutes assets and liabilities. 3d. Different companies have different methods of combining assets and liabilities for the construction of balance-sheets, by which essentially different results are obtained from essentially similar premises; or essentially similar results are obtained from totally dissimilar premises. "Therefore, when these figures undergo a process of combination which is satisfactory to one able mind, it is unsatisfactory to, and called inaccurate by, another equally able mind. Then the farce of assertion and contradiction begins, and no man is any wiser when it ends." The suggestion I would make to meet this state of affairs is as follows: Let there be required yearly from each company a statement of the actual premiums and dividends on certain sample policies, and also of the actual reserve and undivided surplus. From these data the commissioner can form comparisons, the pertinency of which no company will dispute, and whose value to the public can hardly be over-estimated. These comparisons would be made on a very simple principle, viz., that the actual cost for insurance and expenses in auy policy year is to be found by taking the sum in hand at the beginning of the |