Salt Lake Telegram | 1934-12-29 | Page 5 | Insurance Rate Change Slated

INSURANCE RATE CHANGE SLATED Life Companies May Adopt Lower Basic Reserve Interest Schedule NEW YORK Dec 29 JP-A JP A A numer number num num- ber er of at outstanding life insurance companies com corn panics anies aro arB planning to adopt a lower basIc asic reserve and interest rate sched sched- ule Ic on policies written after January I 1 in anticipation of a continued downward downward down down- ward trend in returns long long- ong term erm investments Policies written I prior to that time will not be affected In computing basic reserves and interest rates rales the mortality table which tells the company with starting startling ing ng accuracy how v many years a policy policyholder policyholder holder older will live plays the leading role roIe The earning capacity of the policy holders holder's premiums invested by the company in interest bearing tics ics tics is the second factor and efficiency effi- effi clency in management the third Besides reducing the interest rate calculated for lor new insurance at the Beginning of the year which in a number of cases will result in an increase increase in- in crease rease in premiums some entirely new forms of insurance have been worked out by the individual companies companes compan compan- ies es and policies have been made more adaptable to present conditions and insurance programs The scarcity of suitable investments on an attractive basis has led many observers to predict that there will be bea a long downward spiral in interest rates ates perhaps terminating around a 2 per cent basis for government obligations and their equivalent