1870
THE HONG KONG GOVERNMENT GAZETTE, NOVEMBER 28, 1941.
Taking the Company as a whole the adverse balance of Profit and Loss has increased from $71,758.42 to $173,954.22, i.e., by a sum of $102,195.80, so that allowing for the increase in surplus of $19,050.65, a net trading loss of $83,145.15 has been shown by the Company during the eight years.
No profits have been divided among policyholders.
In the Valuation Balance Sheet, the item Life Assurance Funds (being reserves for policyholders as per Balance Sheet under Schedule 4)" appears in place of
Life Assurance and Annuity Funds", the reason for this item not corresponding with the similar item in the Valuation Schedule provided for by the Ordinance is that this Company has not furnished Returns of its Revenue Account and Balance Sheet in the form required by Section 12 of the Ordinance.
The Company has, however, submitted statements referred to respectively as Revenue Accounts, Profit and Loss Accounts and Balance Sheets duly audited, from which the Actuary has been able to ascertain the true actuarial position of the Company as at 31st December, 1940, and the results are shown in the answer to Question 9 of the Fifth Schedule under Section 7 of the Ordinance quoted above.
The so-called Revenue Account and Profit and Loss Account if combined would produce the Revenue Account required by Section 12 of the Ordinance, and these two accounts together show a final Balance of Loss" at 31st December, 1940, of $173,954.22 which in fact represents the total of the amounts spent out of Capital to arrive at the so-called Reserve for Policyholders in the Balance Sheet. If these amounts had been correctly shown in the Revenue Account, the Life Assurance Fund as at 31st December, 1940, would have been a negative sum of $9,214.49 (ie., the difference between the Balance of Loss and the so-called Reserve for Policyholders).
The Net Liability being $102,706.01, a deficit (being the amount of the Policy Liability covered by the Paid up Capital) would have been shown of $111,920.50.
The Actuary has assumed a rate of interest in the Valuation of 5% per annum, but from the fact that the total interest earned on the reserves for policy- holders has only slightly exceeded 7% during the last 3 years and much less in the preceding 5 years, it is obvious that the rate of interest earned on the invested assets of the Company must have been considerably less that 5% as the majority of the interest has been carned on the Paid up Capital of the Company.
H. R. STURT, F.I.A., Actuary appointed by H.E. the Governor under Section 18 of the Life Insurance Companies Ordinance, 1907.
18th November, 1941.
L. R. ANDREWS, Registrar of Companies.
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