193
#1)
41
233 32
;
renewal premiums ? This is an important peint, because part of
the expenses of securing new business will fall on these out-
-standing instalments, and an unfair view of the actual position
will be given if outstanding instalments in one year be treated
as renewal premiums in the next. On the other side of the
account we find commissier en first premiums, and to this item
the same remarks apply. If the unpaid instalments under new
policies are to be included in the Revenue Account, and treated as outstanding premiums, then on the other side the commission
on these, and other special expenses for new business should be
alse included in the Revenue Account although not actually
paid, and should appear as a liability in the Balance Sheet,
but there is no line provided for that liability. As they stand,
therefore, I think the accounts would be liable to cause con-
-fusion, and different Companies would interpret them in differ- -ent ways. As to the Balance Sheet, it seems curious for native
Companies in China to have as the first line in the assets "Mortgages on property within the United Kingdom", and as the second line "Mortgages un property out of the United Kingdom". Probably such Companies have no such United Kingdom investments at all. Would it not be better simply to have mortgages, with
instructions that the countrics wherein the mortgages have
been effected should be named.
3. On the other side of the Balance Sheet wê
have "Claims admitted but not pala" and "Clains in process of adjustment", but I do not see a provision for claims that are known to have taken place but which have not been dealt with. In the British Act a similar ambiguity occurs, and different Companies treat the items in different ways, and there is nothing in the accounts to show exactly what a particular Company has done. I have reason to know that weak Companies have sometimes omitted this liability altogether from the
Balance Sheet, and that is not desirable.
Langfor
Passing to the Fifth Schedule, we have Question 9 asking for the total amount of profit made by the Company