INSURANCE PROFITS.

Evening Star, Issue 18141, 4 December 1922, Page 10

INSURANCE PROFITS.

TO THE KDITOB. Sir, —Under date November 29 a letter appears over the’ signature of Mr P. H. Upton, general manager of the South British Insurance Company, Limited, dealing with the profits of insurance companies. Jlr Upton cannot speak for other insurance companies, but as general manager of the South British Insurance Company, Limited, ho can speak with authority of the position pi }iis pjvOj company, Itii#

competent for him to challenge the following statement of the position ot hie company relating to profits. Tho shares of Hie South British Company ere of the nominal value of £l, on which 2a per share cash has been called and paid by shareholders. Tho sum of 13a p>er share has been credited to shareholders os paid up capital by a transfer from rese-rvo account, making the shares 15s paid up. It is submitted that tho reserve account of the South British Insurance Company, Limited, was built up out of accumulated profits and from no other source. In point of fact, it would bo illegal for his company to reduce tho liability of its shareholders for unpaid capital from any source .than from accumulated profits, by calls, or by special permission of tho court.

For the year ended August, 1922. the company paid a dividend of Is Bdi per share, which is equal to 83.3 per cent, on tho amount of cash actually paid to the company by shareholders, and 11.1 per cent, on tho paid-up capital of 15s per share (which includes transfers from reserves. Lot mo quote from a report of Die annual meeting which appeared in the ‘Now Zealand Herald’ on October 27: “It is an object -lesson to tho British Empire as to what can be achieved by a New Zealand company, and is certainly' a credit to the dominion.’’ These results require no apology from Mr Upton, the company’s general manager, or from myself.— I am, etc., James MTntosk. Public Accountant, Wellington. December 1.