462 GILBERT E. ROE 



VI of the charter of the Equitable Life contains this provision : 

 "The officers of the company within sixty days from the expi- 

 ration of the first five years from December 31, 1859, and 

 within the first sixty days of every subsequent period of five 

 years, shall cause a balance to be struck of the affairs of the 

 company, which shall exhibit its assets and liabilities, both 

 present and contingent, and also the net surplus after deduct- 

 ing a sufficient amount to cover all outstanding risks and other 

 obligations. Each policy holder shall be credited with an 

 equitable share of the said surplus." Then follows a provision 

 for applying the surplus in reduction of future premiums or 

 otherwise, as the policy holder may direct. Then follows this 

 provision: "In case of death the amount standing to the 

 credit of the party insured at the last preceding striking of 

 balance, as aforesaid, shall be paid over to the person entitled 

 to receive the same; and the portion of surplus equitably be- 

 longing to him or her at the next subsequent striking of bal- 

 ance, shall also be paid when the same shall have been ascer- 

 tained and declared." Article VI also provides: "The insur- 

 ance business of the company shall be conducted upon the 

 mutual plan." Section 13 of the charter of the Mutual Life 

 Insurance company contains almost identically the same provi- 

 sion on the subject of the distribution of the surplus as the 

 charter of the Equitable. The charter of the New York Life 

 was slightly different, and provided that dividends should be 

 made annually from premiums earned, after deducting losses 

 and expenses, and that until paid they might at the discretion 

 of the trustees bear interest at a rate not exceeding six per 

 cent per annum. 



The report of the New York Insurance department for 

 the year 1868 contains a reply made by each fife insurance 

 company doing business in the state of New York to the fol- 

 lowing question: "How often does the company declare 

 dividends or bonuses of surplus and when and in what manner 

 are the same paid? And are such dividends made upon the 

 basis of an equal percentage upon the premiums, or how other- 

 wise, and upon what principles?" To this question the Equi- 

 table answered: "Annually — on the contribution system, 

 dividends applied to the increase of policies or in payment of 



