John Hessin Clarke

“ The requirements relied upon, of the insurance departments of New York, Pennsylvania and Wisconsin that 'assets as reserves' must be maintained to cover 'all claims,' 'all indebtedness,' 'all outstanding liabilities,' in terms might include the rejected items we are considering; but plainly the departments, in these expressions used the word 'reserves' in a nontechnical sense as equivalent to 'assets,' as is illustrated by the Massachusetts requirement that each company shall 'hold or reserve assets' for the payment of all claims and obliga tions. ”

“ It would not be difficult to suggest conditions under which the statutory permit to deduct net additions to reserve funds would result in double deduction in favor of an insurance company, but such deductions can be restored to income again only where it is clearly shown that subsequent business conditions have released the amount of them to the free beneficial use of the company in a real, and not in a mere bookkeeping sense. If this seemingly favorable treatment of insurance companies is to be otherwise corrected or changed, it is for Congress, and not for the courts, to amend the law. ”

“ Should claimant be charged, as a part of its gross income each year, with premiums collected by agents, but not transmitted by them to its treasurer within the year?
(2) May the amount of gross income of the claimant be reduced by the aggregate amount of the taxes, salaries, brokerage and reinsurance unpaid at the end of each year, under the provisions in both the excise and income tax laws allowing deductions of 'net addition, if any, required by law to be made within the year to reserve funds'? ”