Verhovayak Lapja, 1951 (34. évfolyam, 1-12. szám)
1951 / Verhovay Journal
PAGE 6 Verhovay Journal April 18, 1951 VALUATION REPORT HARLEY N. BRUCE & ASSOCIATES CONSULTING ACTUARIES 15“ East Erie Street Chicago 11, Illinois 522 State Theatre Bldg. March 12, 1951 Pittsburgh 22, Penna. Verhovay Fraternal Insurance Association 436-442 Fourth Avenue Pittsburgh 19, Pennsylvania Gentlemen: Your consulting actuaries are pleased to present herein the results of the annual valuation of the Association made as of December 31, 1950, together with our comments thereon. The year 1950 marked a milestone in the insurance history of the Association since during that year the decision was reached to value all 4% and 3%%, as well as 3%, business on a 3% basis commencing December 31, 1950. Certificates have been issued at varying rates in the past depending upon the interest rate it was assumed could be earned on invested funds. Many thousand^ of certificates are in force on a 4% and 31% interest earning assumption. Since today it is very difficult to earn over 3 % on safe, conservative investments. it becomes apparent that more reserves must be established if only 3% is earned, than would be necessary if 31% or 4% interest were earned, since the investment income in either case must be the same in dollars and cents in order to guarantee payment of all claims at death or maturity. Although earnings have been set aside periodically to. enable the Association to make such a 3% reserve valuation, the final establishment of all reserves on such a basis created a fairly large drain on surplus or unassigned funds. This drain on surplus is reflected in the ratio of solvency of thb mortuary funds which declined temporarily from 112.02% in 1949 to 105.53% in 1950. However, this decline resulted merely from the fact that previous!) unassigned funds were set aside for a definite purpose—reserve strengthening. In The future as certificates mature as death claims, or in the event they are surrendered for cash, the then additional reserve which has been set up will revert to surplus. Unassigned funds in the mortuary funds amounted to $584,190.85, even upon completion of the reserve strengthening program. It should be emphasized that the strengthening measures are complete and that no future drain on surplus can result from valuing business on a 3% interest basis. This is true because all new business is on a 21% basis. Mortality rations continued to be very favorable as the ratio of actual death claims to expected death claims on the gross amount at risk in the Senior Department dropped from 57.07% in 1949 to 55.95% in 1950. Combined juvenile and senior experience produced a ratio of 51.78% in 1950 as compared to 53.09% in 1949, indicating an excepitonally favorable juvenile experience. Interest required to be earned on certificate reserves in 1950 amounted to $317,899.19 while $305,726.89 was actually realized. The deficiency of $12,172.30 is an improvement over the 1949 deficiency of $29,734.20. The net rate of interest earned on combined juvenile and senior funds in 1950 was 3.07%, compared with 3.00% in 1949 and 2.95% in 1948. This reflects a consistent improvement and is a tribute to sound investment management. The Investment Profit and Loss Exhibit revealed a net profit from investments in 1950 of $21,688.47, compared with $16,392.84 in 1949. Such profit arises from gains and losses on sale of investments and from increases and decreases in the value of investments. The achievement of reserve strengthening has now' been attained by the Association and the future can be faced by its members with every assurance that utmost caution has been taken by management to ascertain the prompt fulfillment of all benefits in the years to come. Protectively yours, HARLEY N. BRUCE & ASSOCIATES Consulting Actuaries for VERHOVAY FRATERNAL INSURANCE ASSOCIATION By: CHARLES R. KEENE Resident Actuary ANNUAL STATEMENT FOR THE YEAR ENDED DECEMBER 31, 1950, OF THE VERHOVAY FRATERNAL INSURANCE ASSOCIATION I — Balance From Previous Year . 1 2 3 4 5 6 Adult Mortuary Disability Trust * Juvenile Mortuary Expense Totals Fund Fund Fund Fund Fund 9,211,639.48 501,550.36 104,643.77 950,697.16 15,864.61 10,814,395.3S Payments received from members during first Twelve months of benefit protection ot which all or a part is used for expense* ....................................... All other payments or premiums received from members* ............................................,....................... Total received from members ........................................... Deduct payments returned to applicants and members ■Net amount received from members ............................... Gross interest on mortgage loans................................... Gross interest on bonds $294,800.79 less $5,423.28 accrued interest on bonds acquired during the year ................................................................................ Gross Dividends on stock's .......................................... II. INCOME 884.289.10 884.289.10 (3,569.62) 880,719.48 7,152.82 v 185.151.55 185.151.55 (16.20) 185,135.35 168.021.41 168.021.41 (451.97) 167,569.44 57,832.24 227,136.34 284,968.58 (132.33) 284,836.25 57,832.24 1,464,598.40 1,522,430.64 (4,170.12) 1,518,260.52 7,152.82 242,760.92 15,625.68 2,570.85 ------— 2,706.80 28,284.11 289,377.51 2,570.85 Gross interest on liens and loans on certificates of members ........................................................................ Gross interest on deposits in trust companies and banks .............................................................................. Gross interest from all other sources ........................... Gross income from society’s property, including $10,920.00 for society’s occupancy of its own buildings ...............................................................;...... Total income from investments ..................................:... Miscellaneous Income ....................................................... Trust Fund Deposits .......................................................... Service Charges on Cash Surrenders and Loans ...... Withholding Taxes ............................................................. Gross profit on sale of maturity of Bonds ........... Bonds for accrual of discount ......................................... 18,783.54 651.83 407.47 38,475.00 --------.— 310,802.43 15.625.68 7,563.42 1,104.07----.— 554.83 107.86 ------.— 2,814.66 28,838.94 20,853.65 -----— .09 11.28 137.62 19,338.37 759.69 407.47------38,475.00------.— 358,081.71 232.80 232.80------.— 20,853.65 4,832.50 4,832.50 1,667.46 1,667.48------.— 7,563.51------.— 1,252.97 TOTAL INCOME ............................................ 1,200,189.40 200,761.03 23,679.59 196,546.09 291,569.01 1,912,745.12 Amounts carried forward ........................... 10,441,828.88 702,311.39 128,323.36 1,147,243.25 307.433.62 12,727,140.50 III. DISBURSEMENTS Death Claims .......................................... 383,397.15 Additional Accidental Death Benefits ......_.................. • 5,500.00 Permanent disability claims ............................................ .........— Sickness and accident claims .......................................... .........— Matured endowments ........................................................... 30,500.00 Total benefits paid ...................................................... 419,397.15 Surrender values .............. 80,297.86 Refunds to members: Paid in cash Dividends ............................................. .........— Total Benefits and payments made to members 499,695.01 Commissions and fees on payments by members: 1,325.00 2,205.00 386,927.15 5.500.00 2.600.00 145,609.08 30,500.00 571,136.23 95,103.56 2,600.00 145.609.08 ' 148,209.08 1,325.00 14,805.70 2,205.00 2,805.06 18,935.76 2,805.06 669,044.85 14S.209.0S 2,205.00
