(b.) The profits are distributed to the participating policyholders according to the number of years each policy has been in force prior to the date of valuation.

The Table of Mortality used was the "Carlisle " Table.

The rate of interest assumed throughout the whole of the calculations was three per-cent.

The whole of the "loading," i.e., the difference between the premiums payable and the net premiums, has been reserved as a provision for future profits and expenses.

All participating policies in force at the date of the declaration and opened prior to the date of valuation are entitled to share in the profits.

The results of the valuation show that—

The total amount of profit made by the company during the ten years of its existence is £11,372 18s. 9d.

The amount of profit divided amongst the policyholders is £9,098. 7s. Od., and the number of policies which have participated 2,461, the amount assured under these being £909,594.

The following table exhibits specimens of bonus allotted to policies for £100 effected at different ages and in force for specified periods with the amounts apportioned under the various modes in which the same might be received.

Consolidated Revenue Account for Ten Years, ending 31st December

DR.

£ s. d.

60,759 19 0

5,573 8 7 17,798 13 4

66,596 19 11

4,617 4 9

92,702 17 0

£248,019 2 7

Summary and Valuation of the Policies (see p. 283).

Valuation Balance Sheet as at 31st December 1872.

£ s. d.

71,323 15 1
11,379 1 11

The average rate of interest at which the Life Assurance Fund has been invested each year since the commencement of the company, was £4088 per-cent.

The Company has no table of Minimum Surrender Values, but a surrender value is allowed on policies effected for the whole term of life, after they have been three years in force, the amount being 30 per-cent and upwards of the premiums paid, according to the circumstances in each case. Endowment Assurances are dealt with in a The company has not issued Endowment Policies. Policies on unhealthy lives are dealt with as at the advanced ages corresponding to the premium paid.

similar manner.

EAGLE INSURANCE COMPANY.

Established 1807.

REPORT OF THE DIRECTORS

For the Year and Quinquennium ending 30th June 1872.

The Report which the Directors have to make to the Proprietors embraces not only the events of the year just expired, such as are laid before Annual General Meetings, but also the position of the Company at the close of its 13th Quinquennium-being the sixty-fifth completed year of its existence.

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In regard to the Quinquennial Period, the Directors now beg leave to draw the attention of the Proprietors to the financial position of the Company.

The Life Assurance Companies Act requires several full statements to be sent in to the Board of Trade, and it allows nine months after the closing of the Quinquennium for this purpose. The whole of those statements, which before long will be made public, necessarily require more time than has elapsed since the close of our Quinquennial Period, on the 30th June last; but two have already been prepared, and are annexed to this Report, and as these are the most important for the present information of the Proprietors, the Directors invite attention to them as affording the means for arriving at an accurate conclusion as to the condition of the company's affairs.

The first statement exhibits in full detail the whole number and amount of the company's assurance and annuity risks, and the liabilities under them. The calculations required in compiling it have been made on the basis of the Carlisle table of mortality, and interest at the rate of 4 per-cent; and the reserve for future expenses, for divisions of surplus, fluctuations in the rate of interest, and other contingencies, is obtained, after providing for some guaranteed bonuses on one class of assurances, by a reduction of 24 per-cent from all future premiums on participating, and of 12 per-cent from those on non-participating policies. The statement also shows the amount of reassurances effected with other companies, and the premiums payable on account of them, with the value of such amounts and premiums respectively. The final result shown by the Table is a net liability, after making the provisions mentioned, of £2,749,223.

The second statement appended to this Report is the BalanceSheet of the company, in the form required by the Act of Parliament, and it will be seen from it that, after providing for the Proprietors' capital, and for the liabilities which had accrued and which were about to mature, this document exhibits a balance in favour of the company of £2,937,599.

In the form then of the valuation Balance-Sheet prescribed by the Act, we have to the credit of the company

The Life Assurance and Annuity Funds, as per Balance-Sheet. £2,937,599 Less the net liability under Assurance and Annuity transactions

2,749,223

The Surplus being

£188,376

Out of this surplus, the Directors propose to divide on the present occasion the sum of £184,654, leaving £3,722 to be carried to the next account.

The time has not sufficed to furnish a tabular statement of additions in particular cases, but it has been approximately ascertained that the additions to the sums assured under participating Policies of twenty years' standing will probably be on the average at a rate of £45 to each £1000 assured, or about 30 per-cent of the Premiums paid during the last five years.

The remaining returns required by the recent Act of Parliament to be furnished to the Board of Trade are now in course of preparation, and will contain all the additional information which can be desired in relation to the company.

It appears from the Balance Sheet that the Shareholders' capital paid up is £167,867. 108.

The following additional particulars are extracted from the returns under the Fifth and Sixth Schedules of the Life Assurance Companies Act 1870

The principles upon which the valuation is made and the profits distributed are determined by the Directors. The value of the annual office premiums, less the deductions mentioned below, is subtracted from the value of the sums assured, the difference constituting the Company's liability. The proportion of profit allotted to the participating policyholders is eighty per-cent, and it is distributed in the ratio indicated by the amount of the "loading" paid by each policyholder since the foregoing division.

The provision for future expenses and profits is made by a deduction of twenty-four per-cent from the future annual participating premiums, of twelve per-cent from the future annual non-participating premiums, and of fifteen per-cent from the future annual premiums payable in respect of the special class of assurances with guaranteed Bonus. CONSOLIDATED REVENUE ACCOUNT for Five Years, commencing 30th June 1867, and ending 30th June 1872.

Claims under Policies after deduction of sums Reassured 1,525,363 13 6

SUMMARY and VALUATION of the Policies as at 30th June 1871.

From these premiums are excluded the permanent abatements made by application of bonuses (£2,564 : 15: 6), and the premiums commuted (£1,387: 0:11), together £3,951 16:5 per annum. The extra premiums (£924 : 12: 6 per annum) are for climate and other like risks, and were excluded from the valuation.