Stock dividend In addition to the cash dividend, the company also declared a stock dividend of $150,000 to be distributed on the basis of six and one-tenth of a new share for each share of stock held. The distribution of the stock dividend was examined by the Department of Banking and Insurance of New Jersey as per report dated November 8, 1918. Dividends to policyholders This is the amount distributed to policyholders in accordance with endorsements attached to policies. The plan of payment is explained later in the report under the discussion of liabilities. Gain and Loss The following is a statement of the gain and loss for the year 1918: Increase in profit-sharing reserve... 34,545 74 Income, capital stock and personal property taxes paid Net gain to surplus... Surplus as per this report as of December 31, 1918. 1, 828 40 366,978 81 $82,452 77 $211,006 95 Increase 128, 554 18 $82,452 77 Division of Business The premiums written in the various lines bear the following percentages to the total business written: The following ratios have been computed from the Gain and Profit Sharing With Policyholders Prior to July 1, 1918, in the states of New York, New Jersey, Maryland and Pennsylvania, the policies of the company provided by an endorsement for an equal division of the underwriting profit with the holders of workmen's compensation policies. In the states of New York, New Jersey, Maryland, Connecticut and Rhode Island, similar endorsements provided for a division of profits with holders of automobile liability policies. This profit was to be determined according to a specific formula set forth in the endorsement. Since July 1, 1918, the profit sharing on automobile liability policies has been discontinued and the profit sharing agreement on workmen's compensation has been changed to read: "The employer shall be entitled to an equitable participation in the net underwriting profits of the company in the state to which this policy applies; such distribution shall be made by the company only in accordance with the insurance law and the charter and by-laws of the company." The specific formula in the endorsement provides for the classification of the risks by groups in each state, by periods beginning July 1st of each year and ending June 30th of the succeeding year. It provides that the computation shall be as follows: From the earned premiums there shall be deducted: 1. For losses-Either the estimated amount of incurred losses or the percentage of earned premiums required by the annual report of the company to insurance departments to be reserved for losses, whichever shall be the greater. 2. For expenses-A fixed percentage of 20 per cent, of earned premiums. 3. For reinsurance- A percentage varying from 4 per cent. to 5 per cent. The endorsement further provides for a first computation and payment of dividends in February of each year for profits determined as of December 31st of the previous year on all groups of policies issued during the year ending June 30th of the previous year. This computation and payment is made on an incomplete experience and there is no provision made for a return of payments made in excess of profits actually earned. The following exhibit has been prepared to show earnings and payments for all dividends paid to December 30, 1918: It is apparent from the foregoing schedule that dividend payments have been made that were not earned, and it is recommended that first payments of dividends be deferred until six months after the expiration of all policies in a group, and that second and final payments be made one year later, and that no payments of dividends be made without the approval of the Commissioner of Banking and Insurance of New Jersey. In computing dividends to policyholders December 31, 1918, war profits or excess profit tax that this company may be required to pay to the United States Government on 1918 profits have not been deducted, the company considering such taxes should be paid out of the company's share of the profits. Underwriting The company's rates are determined as follows: Workmen's compensation: Rhode Island and Connecticut-30 per cent discount from the manual. New York, New Jersey, Pennsylvania, Delaware and Maryland-manual rates with merit reductions. Liability: In all States 25 per cent discount from manual, except for contingent liability. Teams property damage: Fifty per cent of rates charged for liability, which is the regular rate. Association Membership The company is a member of the following: Compensation Rating and Inspection Bureau of New Jersey, 571 Broad street, Newark, N. J. Compensation Inspection Rating Board, 135 William street, New York, N. Y. Pennsylvania Compensation Rating and Inspection Bureau, 507 Morris Building, Philadelphia, Penn. National Workmen's Compensation Service Bureau, 11 Park row, New York. Officers The officers of the company are: President.-A. E. Williamson. Vice-President.-E. S. Holman. Vice-President.- DeWitt Van Buskirk. Vice-President.- Samuel H. Dodd. Vice-President.- Fred Atwater. Secretary and Treasurer.- John G. S. Johnson. year. Conclusion The company has just completed a successful and profitable Its business shows a large gain over that of the previous year. Its underwriting profit is considerable. Its expenses are low. Its reserves are adequate. It maintains over thirty hospitals at the plants of its larger risks and at other convenient points for the prompt medical treatment of injured employees. |