$614,954.66. Its admitted assets have increased during this period from $1,108,821.32 to $1,785,700.10, and its liabilities, except capital, which has remained constant, from $672,204.53 to $734,128.65. The significance of these figures is, that while the assets of the company have increased, the liabilities have borne a gradually diminishing ratio thereto. The growth of the company, therefore, has added to its financial stability. During the past three years, economic conditions, in so far as they affect the business of credit insurance, have been unusually favorable. Insolvencies have been below normal, and consequently losses, against which commercial enterprises insure, have been considerably reduced. In addition to these favorable business conditions, the company has profited by improved underwriting methods. Its experience on various trade groups has been carefully compiled, the risk according to the hazard on commercial ratings insured has been ascertained and the premium has been adjusted to the risk assumed. In view however of the inherently fluctuating and hazardous nature of the business of credit insurance, a company carrying on this branch of business should accumulate out of the profits of its prosperous years a large free surplus, which will serve in addition to the company's reserves to protect the policyholders and stockholders during times of stress and economic upheaval. It is this contingency which experience shows is ever recurring that should be kept in mind in the formulation of any policy or course of action affecting the affairs of a credit insurance company. The setting aside by the company of a voluntary reserve fund for possible future losses in excess of normal evidences the fact that precautionary measures have been deemed essential because of the uncertainties of this class of business. However, as this fund represents no tangible liability it has been included in general surplus and only such reserves for losses have been reported as were established by the rule incorporated in the annual statement blank. The increase in surplus, therefore, of $301,571.45, as shown by this report, is due mainly to the elimination of the voluntary or additional reserve fund of $312,097.08. CAPITAL CITY SURETY COMPANY ALBANY, N. Y. Examined to ascertain condition December 31, 1918. Organization The Capital City Surety Company was incorporated August 9, 1912, under the provisions of section 70, chapter 28 of the Consolidated Laws of the State of New York and is authorized to transact fidelity and surety insurance as defined in subdivision 4 of the above section. The authorized and paid-in capital is $100,000, and $50,000 was paid into surplus on organization. The officers of the company are: President, John J. Ryan; vice-president and secretary, Frank P. Dolan; treasurer, Edward Murphy, 2d. Business Transacted This company's business from the beginning has been confined almost entirely to the issuing of excise bonds in the State of New York. It formerly wrote these bonds as an independent company, but always acted in harmony with the companies that were members of the Excise Reinsurance Association, charging the same rates and acting through the same agents. The company is now a member of this association under the 1917-1918 and 1918-1919 agreements. It participates under each agreement to the extent of 1114 per cent of all New York excise premiums written by the associated companies and assumes a like share of all losses and expenses. During the year 1918 no bonds other than excise have been issued. Financial Statement The following statement shows the assets and liabilities as of December 31, 1918: Ledger Assets Book value of bonds.... Cash in banks not on interest... Equity in funds held by New York State Excise Reinsurance Ledger assets as per balance... $240, 983 10 2,313 61 68, 178 60 $311,475 31 Excise premiums in force $75,190.22; unearned at 75%.... Estimated amount hereafter payable for federal and state taxes Notes payable Total liabilities .... $20,944 22 56, 392 67 4,633-73 43, 875 00 $125,845 62 Underwriting and Investment Exhibit The following exhibit covers the operations of the company during the three-year period, January 1, 1916, to December 31, 1918, and shows the source of gains and losses and resulting change in surplus since the last examination: The experience of this company in its excise bond business has from the beginning been very favorable. Beginning with 1913, dividends have been declared each year at 12 per cent, except for the year 1916, when the rate was 10 per cent. There has been for several years a gradual decrease in the number of liquor licenses issued in New York State and a consequent reduction in the volume of premiums on excise bonds. With the coming into effect of national prohibition the whole of this excise bonding business will cease. CONTINENTAL CASUALTY COMPANY Examined to ascertain condition June 30, 1918. Report dated September 5, 1918. Examiner: C. A. Wheeler. Joint examination with Indiana, Illinois and California. History and Organization The Continental Casualty Company was chartered under the laws of the State of Indiana in 1897 under the name of the Continental Assurance Company of North America. was changed to its present one in 1900. The name The capital stock of the company was originally $100,000. It was increased in 1898 and 1900 to its present amount, $300,000. The original charter of the company was issued under the Indiana Insurance Act of June 17, 1852, and limited the business to be transacted to that of accident and health insurance. In 1909 the company took avail of an act of the State of Indiana, approved March 6, 1909, permitting existing insurance companies which desired to do a casualty business to reincorporate under the General Casualty Act of that State, approved March 9, 1903. It thereupon amended its charter to conform to the provisions of the 1903 act and by such amendment became empowered to transact the following classes of insurance: Accident and health, liability, burglary and theft, plate glass, steam boiler and elevator, automobile, sprinkler, credit and title. In 1914 it again amended its charter, limiting the classes of insurance it might transact to accident and health, liability, burglary and theft, plate glass and automobile. There has been no change in the charter of the company since 1914. At the present time, therefore, it has a capital of $300,000 and is chartered under the Indiana Act of 1903 to transact the business of accident and health insurance, liability insurance, burglary insurance, plate glass insurance and automobile insurance. Prior to 1915 the company engaged in no other lines of the insurance business than that of accident and health. In that year it commenced to transact the business of liability and automobile insurance. It has not as yet engaged in the business of burglary insurance or plate glass insurance, although chartered so to do. The Continental Casualty Company is licensed to transact business in all the States of the Union and also in Canada. It is transacting an accident and health, liability and automobile insurance in thirty-two States. In the remaining sixteen States and Canada it is transacting only an accident and health business. Financial Statement The following statement shows the assets and liabilities as of June 30, 1918: Ledger Assets Book value of real estate.. Mortgage loans Book value of bonds.. Book value of stocks.. Cash in office . Deposits in trust companies and banks not on interest.. $75,000 00 740,990 00 833,773 52 376,740 00 7,264 72 5,386 21 234,600 34 |