Page:Encyclopædia Britannica, Ninth Edition, v. 13.djvu/192

180 [LIFE. suicides, is more liberal than a strict application of legal principle, or of the conditions attached to life policies, would require. A few offices have abolished the suicide clause from their policies. A number of others, acting, we think, on a sounder principle, now limit its operation to a fixed period, the extent of which varies in different offices from six months to seven years from the date of issue of the policy. In cases happening within those periods, or when there is no express exemption from forfeiture, offices are usually ready to grant any relief which circumstances may seem to warrant, such as an allowance of the surrender value or a return of the premiums paid under the policy. Indis- The practice of rendering policies indisputable and free from re putable striction as to foreign travel or residence, after a certain period, has policies, tended greatly to simplify the contract between the office and the assured, by setting at rest many points on which difficulty might arise. A declaration of indisputability covers any inaccuracies in the original documents on which a policy was granted, unless these inaccuracies amount to fraud, which the law will not condone under any circumstances. Begin nings of life as- The Amicable Society. The Equitable Society. History. It does not appear that the principles of insurance were applied in any definite form to transactions depending on human life until about the 16th century. At that time, find for long afterwards in England, the private underwriters who carried on the business of insurance sometimes undertook risks upon lives for short periods, to cover contingencies of a temporary character. The premiums were very high, but this was in part necessary for two reasons first, the insurers had no sufficient data upon which to estimate the risk they incurred; and secondly, the transactions were probably not numerous enough to secure anything like a regular average in the occurrence of claims. About the end of the 17th century several " annuity " schemes were formed, notably that of the Mercers Company of London, for the benefit of the widows and orphans of subscribers. These schemes, however, and numerous others of similar characler promoted in the succeeding century, failed for lack of correct data and sufficient knowledge of the principles which should have guided their operations, But the idea of uniting the contributions of a number of persons in order to make a provision available on the death of each had taken some hold on the public mind. Its first practi cal embodiment in the direction of life assurance, but still far short of that system as it is now understood, was the foundation in 1706 by royal charter of " The Amicable Society for a perpetual Assurance Office." The scheme was simply to raise a fixed contribution from each member, and from the proceeds to distribute a certain sum each year among the representatives of those who died during the year. No one was to be admitted under the age of twelve nor above fifty-five (afterwards altered to forty-five), but all were to pay the same rate of contribution. .In 1734 the society made arrangements for guaranteeing that the dividend for each deceased member should not be less than 100. This was the first approach to an "assurance" of a definite sum at death, whenever that might occur. The minimum dividend was afterwards increased, but still the society adhered to the plan of rating all members alike, irrespective of age. It was not until 1807 that the Ami cable, under a fresh charter, began the practice of rating new members " according to the age and other circum stances." But that essential step in the development of assurance had been taken long before in another quarter. The theory of life contingencies had made considerable progress, chiefly through the labours of Halley, De Moivre, Simpson, De Parcieux, and Dorlson, when in 1750 was projected " The Society for Equitable Assurances on Lives and Survivorships." Mr Dodson, wishing to have his life assured, found himself excluded from the Amicable on account of his being more than forty-five years old. This led him to the determination " to form a new society upon a plan of assurance on more equitable terms than those of the Amicable, which takes the same premium for all ages," and he secured the support of various persons who were willing to join him if the intended society could be estab lished by charter. He did not live to see his purpose accomplished. The petition for a charter of incorporation was presented in 1757, and after a delay of four years it was finally refused, whereupon a remnant of the original subscribers set about constituting the society under a deed of settlement, and business was commenced in 1762. The Equitable possessed from the outset all the essential features of a life assurance office. It was to issue policies for the assurance of fixed sums on single or joint lives, or on survivorships, and for any term. Premiums were to be regulated according to age. Lives were to be admitted with due regard to their state of health and other circumstances. Provision was made for the investment and accumulation of the funds, and also (although imper fectly) for the disposal of any surplus that might arise. As may be supposed, the original scheme was defective in many points of detail, but under the teachings of experience there was soon initiated that course of improvement in the system of assurance which lias continued to the present day. More than forty years before the foundation of the Equitable, charters of incorporation had been granted to two companies which have ever since held an honourable position among assurance institutions, the Koyal Exchange and the London Assurance. These included life assurance in their schemes, but appear to have at first transacted it only to a limited extent and in the form of temporary risks such as were taken by the private underwriters. Before the close of last century the labours of .Price and Morgan had developed in an important degree the theory of life contingencies ; the Northampton Table had supplied what was then esteemed a sound basis for such calculations; and the career of the Equitable Society had demon strated the practicability of conducting life assurance business on a large scale. Within the period mentioned other four life offices were established, one of which, the Pelican, founded in 1797, is now in existence. The present century thus commenced with eight offices transacting, in a more or less complete form, the business of life assurance in Great Britain and Ireland. But the success which attended those older societies, particularly the Equitable, soon led to the formation of other offices, and as these increased in number and activity public attention became more and more attracted to assurance, both as a means of employing capital and as an advantageous form of co-operation for mutual benefit. Up to the year 1844 over one hundred and forty companies and societies had been established on a more or less solid footing for the purpose of transacting life business, either alone or in connexion with other forms of insurance, and of these offices upwards of one hundred remained in existence. But abuses had taken place in connexion with all kinds of joint-stock enterprises, and this led to a parliamentary inquiry which resulted in the Joint-Stock Companies Act of 1844. This Act provided specially for the regulation of insurance companies, and among other things imposed upon them the duty of giving in annual statements of their affairs to be placed upon public record. Not many years passed, however, before the attention of parliament was again called to life assurance in consequence of the exposure of certain unwise and fraudulent schemes. A select committee was appointed to make inquiries and they reported to the House in 1853, having examined several public officials and many leading actuaries of the day. They found that the law as it then stood was very defective, that it did not afford the security which was contemplated by the Act of 1844, and that the provisions of that Act had been very imperfectly carried