Business: Insurance Assembled

Last week U. S. Insurance was assembled in Manhattan. The Association of Life Insurance Presidents, representing 55,000,000 policyholders, $18,000,000.000 of assets and 87% of all insurance in force, was holding its annual convention. The presidents learned that the total of U. S. insurance in force had dropped 5% below the $100,000,000,000 mark which it set three years ago but that total distributions (exclusive of policy loans) would set a record in 1933—$3,100,000,000. New business was increasing, the demand for policy loans was subsiding, restrictions imposed after the March banking moratorium had been lifted in the chief insurance states.

But insurance men last week were worried by something which threatened the very institution of life insurance—Inflation. The companies themselves would neither benefit nor lose because their assets and their liabilities were both fixed in dollars. But the savings of policyholders would dwindle rapidly if the dollar really took wing. Claiming that they represented all U. S. policyholders, the convention plumped for: 1) the gold standard; 2) prompt stabilization of the dollar and 3) assurance "that there will be no experiments with new monetary systems."

The assembled presidents kept an eye skinned on another insurance convention in Manhattan last week. The presidents might plump and deplore, but the National Convention of Insurance Commissioners makes the rules of their game. Chief question up before the State commissioners was valuation of securities for annual statements on Dec. 31. Last year the commissioners allowed their companies to price their security holdings at "convention values" instead of rock-bottom market prices. A pleasant fiction, the convention value was either the average price for the five previous quarters or the price on June 30, 1931. Last week the commissioners voted to continue this practice but using (with various technical variations) an average of last year's convention value and the price on Nov. 1.