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Persons living within 15 miles of London seeking membership to appear before board personally, and take oath of being in a good state of health, and having been so for six months preceding, except that the court might nominate a person publickly known.
Persons resident more than 15 miles from Lond. might be admitted on certificates from minister and churchwardens as to health, age, business, or occupation of proposed, and that he was a householder paying scot and lot.
Members five quarters in arrear to be pub. in London Gazette. Annual dividends not to be paid until 3 months after death. Blank numbers were to be subject to forfeitures and exclusions in the same manner as filled-up policies. Claimants to allow out of each claim £6 145., or assign blank numbers to the So.
Proof of death to be furnished by means of affidavit and certificate, within 40 days after Lady-day each year. In case of members dying beyond the sea, claimants to give security to the corp.
In the case of claims coming due to infants, guardians to give security.-Under certain conditions members might have double and treble policies.-Lives in policies might be exchanged with consent of directors. In case of lost policies, new ones might be issued on security being given for at least £200 on each number.-Claims under lost policies to stand over one year.
No excluded policy to be disposed of or filled up for the benefit of the corp. but by the consent and approbation of two successive general courts.
Register to be kept of all purchases and securities. Also a register of assignments from and after 25th March, 1733.
No part of the capital stock to be divided except with approbation of two successive general courts, except for dividends on claims. That no more than
profits of the corp.
1 125. p.a. be paid to each contributor or member on each number out of the
That four general courts at least be held every year. Registrar to give security for £2000. Directors to be disqualified if Registrar embezzle more than he gives security for. Money might be lent in advance of claims, on bond carrying int.
The bye-laws were 36 in number, and the preceding abstract of them is very brief. There are one or two which deserve more especial notice. Thus No. 2 reads as follows:
That no person be admitted a member of this corp. who shall live in Lond. or within 15 miles thereof, that doth not appear in person before the court of directors, and there voluntarily make oath: "That he or she is in a good state of health, and hath no distemper, which, according to the best of his or her knowledge, judgment, or belief, may tend to the shortening of his or her days: Except in a case where a list containing not less than seven housekeepers living near each other, or other noted persons living within the bills of mort., shall be proposed to the court of directors for the choice of one: "Except also where it shall be left to the court of directors themselves to nominate a proper person.
And No. 20 shows that the meetings of the So. were regarded as of a strictly private character:
That upon every general court day, the messenger of this corp. shall attend at the door of such place where the court shall be held, from the time of opening the same till the court shall be adjourned; and shall take effectual care that no person be suffered to come into the said court, who has not a power to vote in this Corp.
In 1736 there was pub.: A Short Account of the Rise and Present State of the Amicable So. for a Perpetual Assu. Office, together with the Manner, Terms, and Advantages of their Insurances on Lives.
Maitland, the historian, writing of the So. about this period (1739), says :
It was resolved that of the ann. subs. of £6 4s., the sum of £5 only should be carried into account for annnal division. The bal. was to be improved by granting annuities upon the lives of their own members. By which and other good management the So. have a stock of near £30,000; whereby they are not only enabled to defray all the expences of the So., but likewise to reduce the ann. payment of the members to £5 each; and beside this the So. divide about £700 p.a. or so much thereof as shall be requir'd (when the dividend by a great mort. does not amount to 100 on each claim) to pay each claimant 100, “whereby all reductions are effectually prevented, and the Corp. kept in a flourishing condition."
In the report issued by the So. in the year 1749, it is stated (inter alia) that the good intended by the So. on its formation has been steadily pursued, and the So. found to be a common benefit to mankind. This would evidently appear from a statement of the yearly dividends; from Lady-day, 1710, to Lady-day, 1749, being thirty-nine dividends successively, amounting to the sum of £277, 104 and upwards, on 2,967 claims, so that upon an average the amount of each claim had not been less than £93 3s. 7d.; but they have been considerably more for the fifteen years last past, in consequence of the altered plan of 1734.
In 1757 the accumulated fund of the So. had become reduced to £25,300-about half the amount it stood at in 1720-and it seemed that the So. was suffering in its popularity by reason of the uncertainty attending the sum to be received on the death of a member or nominee. A general court of the members took the subject under consideration, and resolved that each share should not produce less than £125 to the representatives of a deceased member, although it might produce more than that sum. Thus the element of certainty was first introduced.
By 1770 the accumulated fund had reached the sum of £33,300; and there was then set apart by order of a general court the sum of £4000 consols and £11,000 reduced, together with all future savings arising from the sale of blank numbers and otherwise, as a fund for augmenting the shares of deceased members to the full sum of £150, whenever they might fall short of that sum under the dividend directed by the charter. The effect of this alteration was for several years to increase the number of members, and therefore the amount to be divided in those years. This will appear from the following table:
Table of sums realized per share to the members of the Amicable dying in the following
Some of these recent changes in the plan of the So. were doubtless due to the circumstance of the founding of the Equitable Life in 1762. In comparison with the scheme of that So., the orig. scheme of the Amicable appeared particularly crude and unsatisfactory. It was about this time that the subs. was reduced to an actual cash payment of £5 per share.
The So. now issued a prospectus, a modification of its earlier one, which shows that Life Ins. even yet had hardly come to be regarded so much as a means of making provision for a family, as for temporary business purposes. The advantages (it says) proposed for members of this So. are principally as follows:
To clergymen, physicians, surgeons, lawyers, tradesmen, and particularly persons possessed of place or employments for life [PLACES FOR LIFE], whose incomes are subject to be determined or diminished at their respective deaths, who by insuring their lives, by means of this So., may now leave to their families a claim or right to receive £150 at least for every £5 annually paid in, and many times a larger sum, as appears by the preceding account. To married persons, more especially where a jointure, pension, or annuity depends on both or either of their lives, by ins, the life of the persons entitled to such annuity, pension, or jointure. To dependents upon any other person entitled to a salary, benefaction, or other means of subsistence, during the life of such person, whose life being ins. in this So., either by themselves, or upon the person on whom they are dependent, will entitle them to receive, upon the death of such person, a claim or claims as before mentioned. To persons wanting to borrow money, who by ins. their lives, are enabled to give a collateral security for the money borrowed. To creditors entitled to demands larger than their debtors are able to discharge, may by a like insurance upon the life of the debtor, secure to themselves the principal sums at the death of the debtor. The above-mentioned advantages are offered chiefly with respect to perpetual ins. of life; but temporary ins. may find no less advantages from this So., as may plainly appear from the following instance.
Some examples are then given :
A.B. has agreed for the purchase of an office or employment, but wants £300 or £400 to make up the purchase-money. He is willing to assign a share of the profits or income of his office as a security or pledge for the repayment of the principal with interest, but cannot obtain a loan of that sum without insuring his life till the whole is repaid, which he is enabled to do by the help of this So. He purchases three blanks or vacant numbers, on each of which he ins. his life, and thereby his assigns become entitled to their several claims at his death, which claims will probably not be less than £150 each, and may amount to more. He assigns and deposits his policies with the lender. He pays to the So. beyond the admission money, for the yearly contributions on the three numbers, no more than £15, which is at the rate of £3 65. 8d. p.c., and the terms easier than any other offices do insure at, who insure for one year only, and after that are at liberty to refuse any further assistance. Whereas in the Amicable the ins. continues till exclusion for the non-payment of the quarterly contributions.
Dr. Price pub. his Observations on Reversionary Payments, etc., in 1762. thereof appeared in 1773, and therein, speaking of the Amicable, he says:
The 3rd ed.
This So. was estab. in 1706, and is the only one I am acquainted with which has stood any considerable trial from time and experience. The ann. payment of each member used to be £6 4s. payable quarterly; but it has lately been reduced to £5. The whole ann. income hence arising is equally divided among the nominees or heirs of such members as die every year; and this renders the dividends among the nominees in different years more or less according to the number of members who have happened to die in those years. But the So. now engages that the div. shall not be less than £150 to each claimant, although they may be more. None are admitted whose ages are greater than 45, or less than 12; nor is there any difference of contribution allowed on account of difference of age.
This So. has, I doubt not, been very useful to the public; and its plan is such that it cannot well fail to continue to be so. It might, however, certainly have been much more useful, had it gone from the first on a different plan. It is obvious that regulating the dividends among the nominees by the number of members who die every year is not equitable; because it makes the benefit which a member is to receive to depend not on the value of his contribution, but on a contingency; that is, the number of members that shall happen to die the same year with him. This regulation must also have been disadvantageous to the So.
At the time of the institution of the Amicable Corp. the int. of money was at 6 p.c., and as they admit all between 12 and 45, the mean age of admission cannot prob. be so great as 36. It appears therefore that had they avoided the error now mentioned, and gone from the first on the plan I have described, they might have all along paid to each nominee £172, besides raising a cap. much greater in proportion to the number of members than that I have specified, by the help of the excess of their ann. payments above £5, and some other advantages they have enjoyed. Indeed, I cannot doubt but that with these advantages they might before this time have found themselves able to pay at least £200 to each nominee, and at the same time restricted themselves, as they now do, to an ann. payment of £5. I have already mentioned an instance in which the plan of this So. is not equitable. Another instance of this is their requiring the same payments from all persons under 45, without regard to the difference of their ages: whereas the ann. payments of a person admitted at 45, ought to be double the ann. payments of a person admitted at 12.
Further. The plan of this So. is so narrow, as to confine its usefulness too much. It can be of no service to any person whose age exceeds 45. It is likewise far from being properly adapted to the circumstances of persons who want to make assu. on their lives for only short terms of years.
He goes on to state that all these objections were removed by the plan of the Equitable. The So. had divided from its foundation until 1774 the sum of £425,060 14s. 41d.
among 4,150 claimants.
The cost of each policy at this date (1774) was 6s. 6d., by
reason of an increased stamp duty.
In 1775 Mr. Charles Brand, who had then become the registrar of the So., pub. A Treatise on Assu. and Annuities, with several objections against Dr. Price's observations on the Amicable So. and others, etc. Confining ourselves here to his answers concerning the Amicable, we shall note them as briefly as possible.
The So. never was intended for the benefit of a person of the age of 12; nor could it be any advantage to a person of that age to become concerned in a scheme of that kind. The prob. of the ages of persons who are supposed to apply to this So. are those between 20 and 40; therefore not so much difference in the real value of the age, as the goodness of the life is particularly attended to upon admission, as it draws near to the limited age.
That this had not always been the practice of the So. may be gathered from his remarks in another part of his vol., viz. :
Had the So. for Equitable Assu. on lives experienced the losses which have been sustained by the Amicable So., a very little time would have declared them unable to perform their undertakings, unless by a recourse to those calls mentioned in their D. of Sett.; which were they necessitated to do, they would find it not only injure the credit and reputation of the so. but even subvert its constitution, by the refusal of those who would be found liable to the payment of such calls, notwithstanding all the arguments the Doctor might have in his power to advance for their support.
He sums up his answers to the learned Doctor in these terms:
To these several objections I beg to add, that it plainly appears Dr. Price has not only misunderstood the constitution and intention of this So., but likewise made several objections against it which are of themselves contradictory, and intended to mislead those who might not have either leisure or inclination to examine them.
The Amicable So. was founded upon that very laudable principle of making a proper provision for a family which might suddenly be deprived of its support; and has been experienced to have answered the intent by the surprising dividends made for the several years past; owing to the care which has been taken by the directors in supplying the vacant numbers with such good lives as continue in the So. upon an average of 16 years (and where the proportion of the life of a woman compared to that of a man may be computed). This judicious conduct in the management of the So.'s affairs has brought it to such an estab. as not to be shaken, but by a gross alteration of its principles; and it is not to be doubted but that in a few years longer under such directions the So. will arrive to the complement prescribed by the orig. charter, when such numbers as may afterwards become vacant will bear very high prems.
Some of his remarks we shall notice more at large under FEMALE LIVES and SELECTION. In 1778 there was pub. by Mr. Brand: A Table of the Durations of Lives in the Corp. of the Amicable So. for a Perpetual Assu. Office. See AMICABLE SO. MORT. EXPERIENCE. The orig. plan of the So. has been subjected to a good deal of criticism. We propose to record the observations of a few of the leading authorities; and it will accord better with our plan to take them in their chronological order.
One of the earliest writers who drew attention to the defective constitution of this So. was a non-professional one-Mr. Weskett, a city merchant and writer on Marine Ins. He said (1781):
It is obvious that regulating the dividends among the nominees by the number of members who die every year is not equitable; because it makes the benefit which a member is to receive to depend, not on the value of his contribution, but on a contingency; that is, the number of members that shall happen to die the same year with him.
He also pointed out that the regulation was disadvantageous to the So. itself, and showed how and why, in which we need not follow him now.
On the occasion of the promoters of the Westminster So. applying to Parl. for an act of incorp. in 1789, this So. opposed the Bill, and employed counsel for the purpose. [LIFE INS., HIST. OF.]
In 1790 (30 Geo. III.) an additional charter (the 3rd) was obtained, which recites that the So. is desirous of extending its plan, for the benefit of those who might thereafter be admitted members. Permission was therefore given as follows: The number of members might be extended so as not to exceed 4000 in the whole. New members to pay £7 10s. each on admission, and the £6 4s. ann. subs. As former members died out, the new members were to take up the orig. 2000 shares in the order of the admission of such new members. There then follows this important modification: £5, part of the £6 4s. ann. contribution of all the members, is to be divided upon death; the remainder with improvements at interest, to be reserved. Members joining at the later quarters of each year must pay the back quarters. Registrar was to be paid an increased salary according to increased number of members.
At this date the accumulated funds of the So. reached the sum of £64,300, in 3 p.c. annu., together with some property in houses. Out of this amount the sum of £30,000 stock was appropriated in aid of the future mortuary dividends.
After the changes of this year a similar rise in the div. occurred from the admission of so many new members to that which occurred after the changes of 1770; but these effects were temporary only. The increase of members brought the increase of liability; but those who died in the interregnum were benefited. In these instances the So. operated like a tontine reversed. Those who died earliest gained the most.
In 1807 (48 Geo. III.) a new charter was obtained which in a great measure remodelled the working, without changing the constitution of the So. It obtained power by means of this charter to admit into the said body corp. any number of persons to be members
thereof, and contributors thereto, for so many shares upon the life of each person, and upon such greater or smaller payments, by way of prem. and ann. contribution for each share, according to the age and other circumstances of the person so to be admitted, and the conditions of their respective pol., as the said So. should, by bye-laws, rules, or orders, to be made in the general courts thereof, direct, order, or appoint, so that no greater number of persons should be members of the said So., or any greater number of shares be existing, than 8,000 members or shares, at one and the same time. The So. was further authorized to grant annuities in lieu of payment of claims, and to purchase pol. for surrender, etc.
The number of shares to be granted to any one member was afterwards fixed by a general court at 12. It was also resolved to admit members between the ages of 8 and 67, at graduated rates; and the entrance fee was considerably reduced, and also graduated according to age. The whole of the ann. contributions for every share granted previous to this charter, and seven-eighths of the contributions on shares subsequently granted, were to be divided every year amongst the claimants by deaths, which happened in that year; and the corp. then engaged that each share, although it might be more, should not produce less than £180.
The following is an abstract of the table of entrance money and ann. rates then adopted: Prem. on Admission. Ann. Payments. 15.........£1 11 6.........£3 10 6
20......... I 14
Age. Prem. on Admission. Ann. Payments. 45.29 0. ..£7 7
6......... 4 0 6
2 13 O......... 8 12
6 10 4 0
6 4 19 0
6.5 II 6
The payments were to be made half-yearly; the first at the time of admission. It appears to have been provided that the reserve fund necessary for the security of the guarantee of £180 p. share should be improved for the benefit of all the members according to their respective interests; and that no division of the cap. was to be made without the consent of two successive general courts of the members of the corp. But the So. became enabled to effect ins. for any number of years, or on the joint continuance of lives, or on survivorships, or any other contingency of life.
About 1811 Mr. John Pensam, the then registrar, compiled from the books of the So. its mort. experience, which was found to be more favourable than that shown by the Northampton Table. [AMICABLE SO. MORT. EXPERIENCE.] Mr. Francis Baily, writing of the So. at this date, speaks of its plan as being in many respects exceedingly defective, absurd, and inequitable.
In 1823 (4 Geo. IV.) the So. obtained an add. charter-the 5th-authorizing an increase in the shares, from 8000 to 16,000.
In 1825 Mr. Babbage wrote-referring to the regulations of 1807:
This So. used to divide seven-eighths of the annual payments of the members amongst those who died in the course of the year; but this arrangement having caused considerable inequalities, they have recently taken an average of five years.
In 1836 (6 Wm. IV.) the So. obained an add. charter-the 6th and last-extending the number of shares to 32,000. This charter contained (inter alia) some important provisions regarding valuation and dividends. The actual div. for every share which should become a claim was increased to £200, and the So. was empowered to effect ins. for specified sums on joint lives, or on the life of the last survivor of two or more persons, etc.
In 1837 at a general court held 29th Nov., all the former bye-laws were repealed, and 53 new ones were enacted to meet the requirements of the new charter.
Prof. De Morgan, writing of the So. in 1838, described it as founded rather upon principles of mut. benevolence than mut. ins. as understood at a later period.
In 1841 there was pub. :
Tables of Mort. deduced from the Experience of the Amicable So, for a Perpetual Assu., during a period of 33 years ending April 5, 1841. To which are added comparisons of the mean duration and probabilities of life according to the Amicable So. experience, with some other tables. By Thomas Galloway, M.A., etc., Registrar of the So. Printed for the use of the members of the So. by order of the court of directors. [AMICABLE So., MORT. EXPERIENCE OF.]
Farren, in his Historical Essay on Life Contingencies, 1844, says:
From the above details it is obvious that such regulations did not constitute a Life Assu. Asso. in the modern meaning of the term, but rather what may be called a mortuary-tontine, in which an annual produce was to be divisible among the nominees of the deceased in place of among the survivors, as in ordinary tontine cases. The denomination "perpetual assu. office" was probably, therefore, simply employed in a legal sense to signify that the destined 2000 original contracts or nominee shares, in place of becoming finally cancelled by death, would, like land or real estate, be perpetually "assured" or "conveyed" to various successors.
In 1845 the So. obtained a special Act of Parl., 8 & 9 Vict., c. viii., "An Act to enable the corp. to lend money upon mortgage for the purpose of investment, and also to confer other powers upon the said So." Of these other powers, the most important were connected with the mode of transacting business, valuations, and the division of profits, viz. The profits or loss to be taken upon an average of seven years until 1852, and to be continued thereafter at the like periods. Assu. might be effected on single lives for
specified sums, provided that no person should, in respect of any such assu., be or become a member of the said So. A bonus fund to be estab., that is, the representatives of persons assu. might receive in lieu of the actual div. the guaranteed sum of £200 for every share comprised therein, and also add. sums to be periodically added by way of bonus to the account of such guaranteed sum.
Mr. W. T. Thomson has already pointed out (1856) that by means of the new charter of 1836, and the last-named Act, the So. became an ins. office "very nearly on the usual plan."
In 1854 the So. obtained another special Act, 17 & 18 Vict., c. xii., containing add. powers for the purposes of investment.
The accounts of the So. on the 4th April, 1854, showed the following to be its financial position :
Present value of ann. contributions on the various classes of policies, viz. : 1. Single lives ins. for whole term with profits
11,645 13 2
641,560 о II
The fixed div. per share at this date was £225 85.
Mr. F. Hendriks, writing upon the So., at this date, says :
£1,415,805 4 8
Without entering into details of the changes in plan which about a century and a half of time necessitated, the account of its estab. as given by the Amicable on the occasion just referred to (1719-20), is sufficient to show that on its orig. formation it was not a life ins. so., but a benefit inst. for the creation of a corp. purse, by means of the contributions of members, all subscribing a like sum, and settled portions of the contents of which purse were to be divided from year to year, and in equal proportion between the representatives of those contributors who might happen to die within each business year for the time being.-Assu. Mag. iv. p. 301.
Notwithstanding the increased Parl. powers, the So. made no progress—indeed, it was retrograding. Its day had gone by, and the managers were among the first to discern the fact. Instead, therefore, of a protracted dissolution, the modern idea of an amalg. was put forward and embraced. Negociations were in 1864 opened with the Economic, and they so far matured that a bill was laid before Parl. seeking the proper authority.
In this said bill the following statements regarding the position of the So. were contained (inter alia):
That the subsisting pols. granted by the So. were of three classes, one entitling the holder to a dividend according to the said recited charters; another entitling the holder to a bonus according to the recited Act of 1845; and the third entitling the holder to a fixed sum, without participation in the profits; and the first class were usually distinguished by the term "charter policies," the second by the term "bonus policies," and the third by the term "policies for specified sums." That the total value of the liabilities of the said Amicable So. by virtue of its said several policies on the 1st day of September, 1863, was the sum of £604,500. That with the exception of the said pol. and the unpaid claims on policies on lives now deceased, and the current expenses of its office, and certain small payments to retired officers, the individual liabilities (if any) of the So. were of insignificant amount. That the total value of the funds and property or assets of the So. on the said 1st day of September, 1863, amounted to the sum of £625,000 and upwards. That the bus. of the said Amicable So. had of late years greatly decreased, principally from the constitution of the So., which from its mode of assessing dividends on the said charter pol. and the restricted amount of bonus which it could declare upon its bonus pol., placed it at a disadvantage in the eyes of the public with other offices established on a more modern and less fettered system.
This last was a candid admission, but it was true. The arrangement with the Economic was not carried through, and we could well appreciate the observation of the N. Y. Ins. Superintendent in his next official report: “We on this side of the Atlantic, out of regard for the general interests of Life Ins. in both hemispheres, may well ask that such a venerable monument of the permanence and perpetuity of the system should be allowed to remain undisturbed." The prayer was not to be granted.
Shortly afterwards negociations were opened up with the Norwich Union Life. These matured into a scheme which was laid before Parl. and received its sanction and authority by means of 29 & 30 Vict., c. cxxxv. The terms of arrangement, as embodied in this Act, are as follows:
It is recited that the profits of the Amicable did not admit of the payment of £250 on every share; that the amount of each share under the charter-policies had on the average of 25 years subsequent to 1841 averaged £223 135. 2d. Also that the system of the Amicable was orig. estab. 160 years ago, "as the first experiment in life assu., and therefore in the absence of all experience of the principles upon