Page:Encyclopædia Britannica, Ninth Edition, v. 13.djvu/193

LIFE.] I N S U K A N E 181 out. In particular the financial returns bad not been satis factorily made. No special form of accounts had been pre scribed by the Act, nor was there even any authority pro vided by it to compel the returns to be made. As a matter of fact, the Act had been followed by the promotion of a large number of bubble insurance schemes of various kinds. The committee had very fully before them the whole question as to the policy of Government interference in matters relating to life assurance. Their conclusion was that assurance differed so much from ordinary business as to call for separate and special legislation ; and in that view they made certain recommendations (1) as to pre cautions to be taken in regard to the formation of new associations, and (2) as to requiring the publication of valuation returns and accounts giving information on specified particulars. Assurance companies were excepted from the next Government bill relating to joint-stock com panies, but nothing was done in the shape of legislation, such as that proposed by the committee, until the passing e As- of the Life Assurance Companies Act, 1870, in the framing ance O f w hi c h the assurance companies took a considerable share. This Act requires a deposit of 20,000 to be made in the Court of Chancery by every new company proposing to 0. transact life assurance business ; requires (in the case of companies transacting other kinds of business) the receipts under assurance and annuity contracts to be kept separate from other receipts, in order to form a security for the policyholders and annuitants ; prescribes forms for annual accounts and for periodical valuation reports and statements, ta be rendered to the Board of Trade and to be annually laid before parliament; forbids the transfer or amal gamation of companies without judicial authority, which is not to be given until the policyholders concerned have been fully informed as to the nature and terms of the arrangement, nor if policyholders representing one-tenth or more of the total sums assured dissent ; and provides for the winding-up of any company (1) in case of default in complying with the requirements of the Act, or (2) on its being proved to the satisfaction of the court, in view of the contingent or prospective liabilities, that the company is insolvent. In the latter case the court may, if it thinks fit, reduce the amount of the contracts of the company in place of making a winding-up order. It will be seen that the principle upon which the Act proceeds, in so far as it regulates the management of existing offices, is to require full particulars to be furnished as to their financial condition, and to leave all concerned to form their own judgment upon these. The Government attempts no supervision of the com panies further than to see that they comply with the requirements of the Act. But the very publicity now given to their affairs exercises a most wholesome influence, wherever that is needed, on institutions which are peculiarly dependent for their success on the estimation in which they are held by the public. It cannot be pretended that the material furnished by the returns under the Act for forming an estimate of the condition of offices is such as to be wholly intelligible to the mass of those interested in it Nor was this to be expected. The principles of life assurance, which we have endeavoured in some measure to explain in the present article, are such as to require considerable study, and even special training, for their full appreciation. But the material required by the Act is there, to be interpreted by those who have made themselves familiar with its import and bearing, and the public have themselves to blame in great measure if they remain in ignorance as to the real con dition of any offices in which they may be interested. The provisions of the Act in regard to amalgamations and to the formation of new companies have also had their effect. It is now no longer practicable to commence a life assurance company without a substantial guarantee for the good faith of those engaged in it ; and the possibility of ruinous amalgamations, such as those which aided so materially in bringing about the collapse of the famous Albert and European offices, may be regarded as a thing of the past. Unfortunately the provisions of the Act in regard to winding-up have more than once been brought into requisition, but it is safe to say that since it came into effect no one who had sought competent advice need have been involved in loss by joining any of the offices which have thus passed under its operation. On the whole, the Life Assurance Companies Act of 1870, although not without its defects, may bo regarded as in many respects a satisfactory measure. In some un important particulars it has been amended by two subse quent Acts in 1871 and 1872. The year 1870 witnessed the passing of another Married Act which has an important bearing on life assurance. Women s Under clause 10 of the Married Women s Property Act, P r P ert y 1870, assurances may be effected by married women on their own lives or the lives of their husbands, for their separate use, and by married men on their own lives for the benefit of wife, or wife and children, free from the claims of creditors. In 1880 the Scottish life offices pre pared a short bill containing similar provisions in regard Scotch to assurances, but with certain improvements on the Act - English Act. and it was passed into law as the Married Women s Policies of Assurance (Scotland) Act, 1880. The Blue-Books containing the returns made under the Statistics Life Assurance Companies Act afford a vast amount of of1880 - information as to the financial condition of British life offices. From an abstract in Mr White s Insurance Register for 1881 we gather the following particulars in regard to one hundred and seven companies which furnished returns during the year 1880. The premiums received in one year by those companies amounted to 13,174,848, and the interest and dividends on investments to 5,342,988. The sums paid in claims during the same period were 11,149,730; for surrenders of policies 720,406 ; and as cash bonus or in reduction of premiums 763,704. The total amount of funds held by the companies(including, how- ever,6,151,479 of fire insurance funds) was 143,813,793. Of this sum 120,131,541 represented the life assurance and annuity funds. The amount of paid-up share capital embarked in these enterprises was 10,961,744, in addi tion to which (but also included in the above sum of 143,813,793) there were reserve and other funds amount ing to 6,569,029. These statistics include the business of " industrial assurance," transacted by a few offices a system by which small sums are secured on the lives of persons in the humbler ranks of life by the payment of weekly or monthly contributions. The premium income from this source was upwards of 1,600,000; the claims reached fully 600,000 ; and the funds in hand in con nexion with this description of business amounted to up wards of 1,100,000. The Act does not require an annual statement of the existing business of assurance companies, nor docs it render compulsory the publication of the amount of new assur ances annually effected with them ; and, as the companies do not all give those details in their published reports, it is impossible to state with accuracy the amount of assur ance business transacted by the British offices. Of the 107 companies whose accounts are summarized above, 63 reported in the year 1880 new assurances amounting to 22,551,626, including however, in many cases, sums reassured with other offices. It is roughly estimated that the total assurances in force with all the companies amounted in 1880 to 420,000,000.