Valuation of Investments [Discussion]

This is a valuable and timely contribution to our Proceedings. The facts have been ably presented by Mr. Magrath and the implications to be drawn there from have been left mainly to his readers. He has in my opinion completely justified the action of the National Convention of Insurance Commissioners in seeking to solve the problem of valuation by easy stages even though the solution rested upon a theory of market values that is open to criticism. The line of greatest safety was not along the lines of a narrow conservatism. It seldom is. As for the amortization of bonds it was an innovation, at least for Fire and Casualty Companies, and entirely warranted in the circumstances; but further studies are called for before it can be permanently adopted, such as studies of probable speeds of liquidation of liabilities in relation to income, and probability and effect of catastrophic losses. He has not attempted to lay down hard and fast rules for the future.