428 LIFE INSURANCE crease or decrease of this percentage, .show- ing the acceleration, culmination, and incipient relative decline of this branch of the life insu- rance business: TABLE I. Number and amount of three classes of Policies, and ratio of Endowment amounts to the whole. YEARS. WHOLE LIFE. ENDOWMENT. SIMPLE TERM. Per cent, of endowm't to the whole. Number. Amount. Number. Amount. Number. Amount. 1858... 38,231 44,593 51,230 53,348 71,425 92,OS3 136,565 190,037 262.354 836,257 409,880 475,723 538,812 543,605 570,206 $107,659,465 123,913,596 142,176,279 144,253,449 189,494,396 245,525,587 357.304,512 507,168,417 739,662,035 967,113,546 1,194,620,763 1,379,764,566 1,510,226,564 1,515,433,338 1,574,904,424 278 369 668 846 1,567 3.119 7.007 17,705 44,231 91,566 132,432 165.727 183,847 169,560 178,934 $988,900 1,252,256 1,974,437 2,417,653 3,958,437 8,448,450 18,833,703 46,445,160 119,460,867 284,695,681 832,728,827 399,855,389 418,831,941 380,011.783 404,258,870 3,999 3,645 8,446 2,945 2,90 2,741 2,990 2,767 3,361 3,182 8,557 4,692 4,433 5,552 5,535 $7,833,830 7,574,974 7,148,114 6,267,475 5,810,250 5,751,153 6.431,974 7,030,700 10,990,660 10,898,910 12,650.840 16,527,480 17,385,119 17.952,459 17;489,763 0-85 0-94 1-8 1-58 1-99 8-25 4-92 8-28 13-78 19-35 21-61 22-26 21-50 19-86 20-22 1859 1860 1861 1862 1863 1864 1865 1866 1867 1868 1869 1870 1871 1872 TABLE II. Acceleration, Culmination, and Decline, TEAKS. Gain or loss per cent. TEARS. Gain or loss per cent.
1859 0-09 1866 5-45 I860 ,... 0-35 1867 5-62 1861 023 1868 2-26 1862 0'41 1869 0-65 1863 1-26 1870 0-76 1864 1-67 1871 1-64 1865 .. 336 1S72 0-36 State Supervision. The failures of life in- surance companies in Great Britain, and the necessity of some governmental safeguard against the peculiar facilities for fraud- fur- nished by this business, as demonstrated by Mr. Wilson's celebrated parliamentary com- mittee in 1853, caused the legislature of Mas- sachusetts in 1855 to establish an insurance commission, one of whose duties was to exact and publish annually detailed returns of the assets and liabilities of all life insurance com- panies doing business in the commonwealth. For some years previous it had been required by law in Massachusetts that every company transacting business there should deposit with the secretary of state an annual statement of its assets and liabilities, including the value of its policies. But these returns in some cases (see eighth life insurance report of the insurance commissioners) were very far from being sat- isfactory. Hence the' commission established in 1855 was authorized, though not imperative- ly required, to test the accuracy of the returns by a valuation of the policies. The first three reports of the commission were without the application of any such test. The fact that at least two companies, one of them an English one, were operating extensively in the state with an apparently insufficient reserve fund, induced the legislature in 1858 to make a valu- ation of the policies of all companies obligatory upon the commissioners. Such valuations of the policy liabilities have been made annually ever since, and are on record in the office of the commissioners. An insurance department with similar powers and duties, except that for several years it made no valuations, was established in the state of New York in 1860, by an act dated in 1859. In consequence of the law making it the duty of the commission- ers in Massachusetts to value the policies, one company immediately ceased to issue new policies in the state, and another, being found to possess only a little over one third of the requisite premium reserve, showing a defi- ciency of over $1,000,000, was obliged to re- tire. One consequence of this success in checking fraud was to inspire public confi- dence in the companies that stood the test. .Hence many sought to do business within the narrow borders of Massachusetts, not in the hope of gaining much, but for the sake of the credit which their standing in its reports would give them in other and broader fields. In 1865 the number of companies reported had increased from 13 to 31 ; in 1870, to 64. Since then the number has considerably decreased. As an offset to any benefits of state supervi- sion, it must undoubtedly be set down that it has inspired too much public confidence in the corporations that have passed its ordeal. An- other misfortune is, that what any state does with any appearance of success, especially in the way of increasing offices, every other state must do. Hence state insurance departments have become so multiplied, that the charges on a company whose business extends into many states have become almost insupport- able. From the inception of state supervi- sion the danger of this has been felt; and unavailing efforts have been made to substi- tute national for state supervision, or to con- stitute a single board of impartial and scien- tific experts, whose valuations should be ac- cepted by all the states instead of those of state bureaus. In England those officers of the companies who are responsible for the mainte- nance of the proper reserve fund are generally
