It has recently become popular for analysts to adjust the earnings of life insurance companies for the increase in insurance in force which has taken place during the year, and to use these adjusted earnings rather than reported earnings in valuation studies. The problem with this technique is that it has the effect of treating costs which arise every year as nonrecurring, anticipates and takes into current earnings future profits, and disregards the differences in profitability among companies. The proposed solution is a wider use of statutory earnings, which are admittedly conservative in that they do not permit the capitalization of acquisition costs and require generous annual additions to reserves, and valuation with a higher multiplier to take this conservative accounting factor into consideration.