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If the life assurance fund is, in accordance with section 4 of this Act, a separate trust fund for the sole security of the life policy-holders, a separate balance-sheet for the life branch may be given in the form contained in Schedule 2. In other respects the company is to observe the above form. See also note to Second Schedule.
The following sections of the Act also relate to accounts :
9. The Board of Trade, upon the application of or with the consent of a company, may alter the forms contained in the Schedules to this Act, for the purpose of adapting them to the circumstances of such company, or of better carrying into effect the objects of this Act.
10. Every statement or abstract hereinbefore required to be made shall be signed by the chairman and two directors of the company, and by the principal officer managing the life assurance business, and, if the company has a managing director, by such managing director, and shall be printed; and the original, so signed as aforesaid, together with three printed copies thereof, shall be deposited at the Board of Trade within nine months of the dates respectively hereinbefore prescribed as the dates at which the same are to be prepared. And every annual statement so deposited after the next investigation shall be accompanied by a printed copy of the abstract required to be made by section seven. 11. A printed copy of the last deposited statement, abstract, or other document by this Act required to be printed shall be forwarded by the company, by post or otherwise, on application, to every shareholder and policy-holder of the company.
The Board of Trade is to lay before Parl. annually the "statements and abstracts of reports deposited with them under this Act during the preceding year." We understand that the accounts before being presented to Parl. are to undergo the process of examination by an Actuary specially selected for the purpose. In making this appointment it is of the utmost consequence that the selection should fall upon a man enjoying the widest confidence.
It seems desirable to draw attention to the fact that the provisions of the Companies Act, 1862, relating to Ins. Asso. have not been repealed; and sec. 44 of that Act requires that (inter alia) every Ins. Co. and Deposit, Provident, or Benefit So. regis. under that Act, before it commences business, and also on the first Monday in February and the first Monday in August in every year in which it carries on bus. shall make a statement in the following form, or as near thereto as circumstances will admit, and a copy thereof shall be put up in a conspicuous place in every office and branch office or place where the bus. of the Co. is carried on. Penalty on director or manager of Co. failing to comply, £5 per day. Copy of statement to be supplied to shareholder for sixpence :The cap. of the Co. is shares issued is
which the sum of
each. The number of . Calls to the amount of £ per share have been made, under has been received.
The liabilities of the Co. on the 1st of January (or July) were :-Debts owing to sundry persons by the company: On judgment, On specialty, On notes or bills,
On simple contract, £ On estimated liabilities,
This return will therefore have to be made as heretofore.
Under ACTUARIAL REPORT we have detailed the other returns required under the "Life Assu. Cos. Act, 1870."
ACCOUNTANT-GENERAL OF CHANCERY is an officer appointed by Act of Parl. to receive all the money lodged in Court. He keeps his account with the Bank of England, which is responsible for all sums lodged there by him. This is the officer with whom the Deposit required under the "Life Assur. Cos. Act, 1870," (sec. 3) is to be made. [DEPOSIT.] ACCRUE. To grow to, or to arise. As an "accruing bon. ;" viz., the next bon. which is to be declared. ACCUMULATED FUNDS OF Life Offices.-The accumulated fund of a Life Asso. should at all times be sufficient at least to re-insure the outstanding risks under its various classes of Annuity, Endowment, and Life policies, together with any Bonus additions already declared or guaranteed. In the case of a Co. having a proprietary capital, the accumulated fund should be sufficient for the purposes just indicated, plus the paid-up capital and all accumulations thereon. This subject will be dealt with very fully under Finance of LIFE INS. The "surplus funds" will be only the portion of the accumulated funds, beyond the purposes already named. In the case of a small office, liable to fluctuations in the actual, as against the expected, number of deaths, and also in the amount of the policies affected by such deaths, prudence will suggest the necessity of the accumulated fund being kept at a higher standard than that here indicated. The fund should never be lower.
ACCUMULATION.—For statutory limitations as to the period during which trust monies and property may accumulate, see THELLUSSON ACT.
ACCUMULATIVE LIFE Assu. Co., founded in 1853 on the proprietary plan. The Earl of Devon was stated to be one of the promoters. In the same year of its birth it became united with the Anglo-Australian, and by other amalg. its surviving pols. ultimately merged into the European.
In a case arising out of the affairs of this Co., it was held by the Court of Common Pleas, King v. Accumulative, etc. (tried 1857), that a contract to pay a pol. out of particular funds did not amount to a contract to carry on bus., nor a contract not to hand over the funds to other persons; and that a pol.-holder whose pol. is not due cannot support an action for damages which he fears he will sustain, but which possibly he will not. [AMALGAMATION.]
ACCUMULATIVE INSURANCES.-See DEPOSIT INS.
ACHILLES BRIT. AND Foreign Life Assu. Asso. AND LOAN BANK, founded in 1840, with an authorized cap. of £500,000, in 20,000 shares of £25. The prospectus spoke of the inestimable benefits of Life Ins., but estimated that only 88,000 persons had at that date availed themselves of its advantages. The loan feature was put forward as affording to the policy-holder a means of advantage while living. The general features of the scheme were reasonable and good. Mr. Adolphus Courvoisier was the first Sec., and afterwards Mr. George Henry Brown became Superintending Director. In 1844 the bus. was trans. to GT. BRIT. MUT.
ACHILLES INS. Co. for Life, Fire, Loans, and Annuities, was projected in the first instance under the title of the Indisputable; and was founded in 1853 under the title above given. Its authorized cap. was 100,000, in 10,000 shares of 10. The prospectus estimated the number of persons whose lives were ins. at 200,000. Its policies were "strictly Indisputable except in cases of intentional and proved fraud." One-third of prems. were allowed to remain unpaid. The fire bus. was not long continued. The Co. at a later date took up the bus. of Fidelity Guarantee, and the ins. of Impaired Lives. Mr. Edward Miall, M.P., the eminent Nonconformist, became Chairman of the Co. Mr. H. B. Taplin was its Sec. In 1858 the life bus., which was considerable, was trans. to City of Lond., and so passed on to the Eagle, to the great advantage of the policy-holders. ACKNOWLEDGMENT OF NOTICE.-An admission by the chief or other duly authorized officer of an Ins. Co. of the receipt of a notice affecting the interest in a Life Policy. is under the Po. of Assu. Act, 1867 (30 & 31 Vic. cap. 144, sec. 6), obligatory on an Office to give such acknowledgment on payment of a fee of 5s.; but this fee is not always insisted on. The acknowledgment is to be conclusive evidence against the office of the receipt of the notice. Notices rank in order according to the order of their receipt by the Office.
ACKWORTH, YORKS. : Its salubrity. See mort. observations under date 1767. ACLAND, REV. JOHN, Rector of Broad-Clist, and one of His Majesty's J.P.s for the County of Devon, pub. at Exeter in 1786, "A plan for rendering the poor independent on public contribution; founded on the basis of the Friendly Societies, commonly called Clubs." To which is added, a Letter from Dr. Price, containing his sentiments and calculations on the subject. ACQUIESCENCE.-Consent either expressed or implied. Questions of acquiescence arise not unfrequently in cases of amalg. and also in reference to the acts of agents. The subject is ably discussed in Bunyon's Law of Life Ins. [AGENTS.] [AMALGAMATION.] ACQUITTANCE.-In law, the discharge in writing for a sum of money due. An acquittance not under seal is admissible only in evidence, and is not pleadable. An acquittance in full of all demands is an answer to all debts, except such as are in specialty. ACTION, conduct, something done; also the form prescribed by law for the recovery of
one's due, or the lawful demand of one's right. In French, an action signifies a share in a public Co.; and the shareholder is termed an "actionary." ACTIONS UPON POLICIES OF INS. Many nice and curious legal questions from time to time arise when it becomes necessary to sue upon a policy of ins. ; or rather did arise, for recent legislation has done much in this direction. As this is not a treatise upon the law of Ins., no more will be said upon the subject than is necessary to the general understanding of the points which either did recently or do still arise, when a policy of ins. has to be sued upon in a court of law.
Originally actions on marine policies were brought in the POLICIES OF INS. COURT, founded with a special jurisdiction in 1601-reign of Elizabeth. Marshall says, that these policies being marine contracts, the law which regulates them is considered in most of the commercial states of Europe as a branch of Marine Law; and, therefore, where no commercial tribunal is estab., questions arising on this contract generally belong to the jurisdiction of the Court of Admiralty. In Scotland such actions are in the first instance a subject of Admiralty jurisdiction. It does not appear that in England Courts of Admiralty have ever had jurisdiction in questions of insurance; and since the abolition of the Policies of Ins. Court, actions upon policies are brought in our common law courts. Courts of Equity have no special jurisdiction in cases of Ins., although they will afford relief where their special interference becomes necessary; and in case of disputes between the members of such Asso. themselves, the Courts of Equity alone have jurisdiction.
When it is necessary to enforce payment of the sum assured in a Court of Law, the answer to the question, against whom the action is to be brought, will depend upon the constitution of the particular office, and the form and provisions of the policy upon which the demand arises. Since the Common Law Procedure Act, 1852, the form of action ceases to be essential; but the question, who are the proper defendants, is equally important as before.
When the Co. is incorp. either by Royal Charter or Act of Parl., the policy will be under common seal, and the action must be brought against the corp. as such, in which case it must appear by attorney authorized under the common seal; and execution can be levied upon the partnership property alone.
When the policy is issued by a Co. estab. prior to the Ins. Stock Cos. Regis. Act (1844), the action may be brought against the Directors signing the policy, as if upon a covenant or undertaking by them.
When a private Act has been obtained, it will be convenient to proceed in accordance with its provisions; but unless the terms of the Act are imperative, it does not follow that a claimant must do so: on the contrary, he may still proceed against parties executing the policy, or against any individual shareholder.-Bunyon.
Where a pol. is not under seal, an action may be maintained against the subscribing, or any other Directors or members. But when a pol. is under seal, those only who are parties to it can be sued upon it. Thus the Directors or Trustees signing must be sued; and their having resigned office before the action be commenced will not stay the action. In Equity also the Directors subscribing the pol. will, in the first instance, be the proper parties to represent the Co. either as plaintiffs: as when a bill is filed praying that the pol. may be delivered up as cancelled; or as defendants, upon the refusal of the Co. to satisfy a claim thereon.
In the case of a Co. registered under the Cos. Act, 1862-that is, Lim. Liability Cos.all actions must be against the Co. in its own name, according to the provisions of the Act.
Prior to 1833 no interest could be recovered on a principal sum sued for under the pol. of ins. Since the passing of the 3 & 4 Wm. IV., c. 42, s. 29, in that year, a jury may now add interest, after the time stipulated for payment in the pol. has passed, at their discretion. In the case of lost pol., upon which in consequence the Co. refuses to pay, no interest will accrue.
Where the pols. sued upon have been assigned-See ASSIGNMENT OF POLICIES. Where the Co. is plaintiff, matters are much more simple. The action is brought either in the name of the Co. itself, or its proper officers, or as its own constitution or the law may direct. What we have already said will be a sufficient general indication of the points to be considered. [See ARBITRATION.] ACTIVE LIFE ASSU. LOAN, ENDOWMENT, AND REV. INT. Co., founded in 1839, with an authorized cap. of £500,000, in 10,000 shares of £50. Its promoters endeavoured to popularize Life Ins. by proclaiming as a fact that "not more than one head of a family out of 62, or in all only about 80,000 persons, have as yet adopted the means presented to them of providing by Life Ins.," etc. They estimated that 500,000 possessed the pecuniary means of availing themselves of Life Ins., and their not doing so "affords a striking view of the improvidence of mankind." The managing Director was Mr. James Wemyss; the Actuary, Mr. N. Welton. The prospectus further stated that "the only data upon which life contin. can be calculated may, and probably will, become progressively inapplicable through the efforts of advancing civilization and improvements in physiological science." This was not encouraging to proposed insurers. In a word, the management was too clever, and their bantling became abortive.
ACTIVE SERVICE.-The engagement in operations against an enemy by persons in the naval, military, or allied forces. All Life offices refuse to ins. officers and others in the army and navy during "active service" at the ordinary rates; and many offices appear to reject such risks altogether. We may here notice a few of the more notable exceptions to this last rule. The first we have met with was that of the Crown Life. In its orig. prosp. (1825) it announced that it had acquired the requisite data "for calculating a scale of prems. proportionate to the add. risks arising from actual service, and from sea and climate," and intended to charge "moderate and corresponding rates " for such risks. [CROWN LIFE.] The Royal Naval and Military Life (1837) also made a special feature of the acceptance of risks of this class--see details in our hist. of that office. During the Crimean War the Accidental Death Co. ins. officers against death in action, at a special rate of £5 5s. p. c. Many offices which do not accept lives likely to enter upon active service, will yet quote a prem. to cover the risk in the event of the insured being called into service. The extra prem. in such cases is necessarily high. [WAR RISK]. ACTS OF PARLIAMENT.-We believe every Act of Parl. bearing upon the subject of Ins. in any of its branches or incidents will be found quoted in this work. We had intended giving a schedule of them; but they number many hundreds, and space forbids. task of reading, classifying, and condensing them all has been very great; but the result we think worthy of the labour. The hist of Ins. could never be written without this being done. We generally append the chronological date in citing an Act, which we believe will be found of great convenience.
ACTUAL SERVICE.-See ACTIVE SERVICE.
ACTUARIAL.-Pertaining to the profession or occupation of an Actuary.
ACTUARIAL ESTIMATES.-In 1859 Mr. Charles Jellicoe brought before the Institute of Actuaries a paper On the rationale of certain Actuarial Estimates. The purpose of this paper was to show that while there is always a difference between the purchasable and saleable values of properties held for life and in reversion, such difference is not to be regarded as merely arbitrary; but is based upon reasons and principles which are well understood, and should be uniformly acted upon. Assu. Mag., vol. 8, p. 310. ACTUARIAL INVESTIGATIONS.-An Actuarial Investigation is the process employed periodically in the conduct of the affairs of a L. or Annu. Asso., with a view either to test its bare solvency, or more generally and more happily, to ascertain what surplus there may be for distribution after every proper provision has been made for the outstanding liabilities of all kinds.
The reasons why such investigations are necessary, as distinguished from their objects, arise out of the peculiar nature of L. Ins. contracts, and the lengthened period over which they generally extend. Dr. Farr says: "The commercial balance-sheet, in the most correct form, fails to present a correct view of the condition of a L. Office transacting ordinary bus. ; as its liabilities are distant, contingent, and every year vary in value" -hence a special mode of treatment has been devised which it is our present purpose to explain. Mr. Neison says: "No balance-sheet that I am capable of comprehending would be available for the purpose of showing the actual condition of an office in the same manner, as such a thing would be in the case of a banking house." Mr. Finlaison declares that "From the largest office in England to the smallest benefit club there is no certainty whatever in relying upon any Tables without periodic investigations." Mr. Morgan observed, in one of his eloquent addresses, what signify premiums, however correctly computed, "if no means are provided for ascertaining, at proper intervals, the real state of the inst., and for disposing of its profits without endangering its security, either by a direct or an indirect invasion of its capital?"
Actuarial Investigations are now made compulsory under sec. 7 of Life Assu. Cos. Act, 1870. We detail its requirements under ACTUARIAL REPORT. [BONUSES, mode of ascertaining.] [VALUATION for SURPLUS.]
In the U.S. the Ins. Commissioners or Superintendents of the several States have specific or assumed power to investigate the affairs of the various offices transacting bus. within those States. We may quote a sec. from the Ins. Law of California, passed 1868, as furnishing a type of the powers given :
SEC. 5.-The Ins. Commissioner shall have power to investigate and inquire into the bus. of ins. transacted in this State; and if any person engaged in the bus. of ins. shall refuse to give to the Commissioner full and truthful information and response in writing to any inquiry or question made in writing by the Commissioner relating to the bus. of ins. as carried on by such person, then such person so refusing, and for each refusal, shall forfeit and pay to the people of this State the sum of 500 dols. The collection of such forfeitures and payment thereof may be enforced by the Commissioner, and for that purpose suits may be instituted in the name of the people of the State of California, in any court of competent jurisdiction.
In the States of Illinois, Iowa, Massachusetts, Michigan, Missouri, and New York, the investigation may be carried so far as to value every life policy issued; and in some cases it is even compulsory on the department so to value the policies at stated periods. ACTUARIAL MAGAZINE.-In 1868 Mr. Herschel Filipowski commenced the pub. of a periodical under this title. It purports to contain orig. Tables relating to life contingencies, vital statistics, int. and discount, and kindred subjects not before pub. The following is a list of the contents of the numbers which have already appeared; the Tables being numbered consecutively :
I. Showing the annual from the single prem. for an Assu. of £100. From 3 to 10 p.c.
II. Deferred annuities on single Lives. Equitable experience, 3 p.c. By Benjamin Hall Todd.
V. Single prem. for an Endow. Assu. of £1. English Life Table II., 3 & 4 p.c. H. Filipowski.
VIII. Logarithms of the present value of £1 Annuity +1. Carlisle 4 p.c.
IX. The present value of £1 annuity + 1, interpolated for months. Carlisle 4 p.c.
X. Showing the age at which a policy may become payable in consideration of an annual bonus of £1, for quinquennial periods. Carlisle 3 p.c.
XI. & XII. Artificial logarithms, showing the amount of reversionary bonus in lieu of an Endow. Assu. Carlisle 3p.c.
XIII. D and N columns and Annuities. New experience tables 3 p.c. Ungraduated.
XIV. Annual prem. for an Endow. Assu. of £100. English L. Table III., 34 p.c.
XV. The value of a policy the premium just due, after being in force from 1 to 50 years, with monthly corrections. Carlisle 4 p.c. By Mr. Filipowski.
XVI. The value of a policy as above.
XVII. The value of a policy as above.
XVIII. Money Exchange of all Nations. H. Filipowski.
XIX. The value of a Policy of £100, after being ins. any number of years not exceeding 65, by increasing prems. Experience 34 p.c. Mr. J. E. Leyland.
XX. The value of a policy of £100, after being in force any number of years and months, including part of prem. for the unexpired months. Equitable experience 3 p.c. Mr. B. Hall Todd. XXI. Mort. Table of the New experience, as adjusted by Mr. Filipowski.
XXII. Commutation Columns, Annuities, Single and Annual Prems. for Assu. New experience 3 p.c.
XXIII. The same, according to the graduation of Mr. Filipowski.
ACTUARIAL REPORT.-The Assu. Cos. Act, 1870, by sec. 7, provides as follows:
Every company shall, once in every five years, if established after the passing of this Act, and once every ten years if established before the passing of this Act, or at such shorter intervals as may be prescribed by the instrument constituting the company, or by its regulations or bye-laws, cause an investigation to be made into its financial condition by an actuary, and shall cause an abstract of the report of such actuary to be made in the form prescribed in the fifth Schedule to this Act.
The 5th Schedule of the Act is as follows:
STATEMENT respecting the VALUATION of the LIABILITIES under LIFE POLICIES and ANNUITIES of the , to be made by the Actuary.
(The answers should be numbered to accord with the numbers of the corresponding questions.) 1. The date up to which the valuation is made.
2. The principles upon which the valuation and distribution of profits among the policy-holders are made, and whether these principles were determined by the instrument constituting the company, or by its regulations or bye-laws, or otherwise.
3. The table or tables of mortality used in the valuation.
4. The rate or rates of interest assumed in the calculations.
5. The proportion of the annual premium income (if any) reserved as a provision for future expenses and profits. (If none, state how this provision is made.)
6. The consolidated revenue account since the last valuation, or, in case of a company which has made no valuation, since the commencement of the business. (This return should be made in the form annexed.)
7. The liabilities of the company under life policies and annuities at the date of the valuation, showing the number of policies, the amount assured, and the amount of premiums payable annually under each class of policies, both with and without participation in profits; and also the net liabilities and assets of the company, with the amount of surplus or deficiency. (These returns should be made in the forms annexed.)
8. The time during which a policy must be in force in order to entitle it to share in the profits.
(1.) The total amount of profit made by the company.
(2.) The amount of profit divided among the policy-holders, and the number and amount of the policies which participated.
(3.) Specimens of bonuses allotted to policies for £100 effected at the respective ages of twenty,
The forms required by the preceding Schedule are the following:
CONSOLIDATED REVENUE ACCOUNT of the
£ s. d.
Claims under policies (after deduction
Premiums (after deduction of re-assur
Consideration for annuities granted
Interest and dividends
Other receipts (accounts to be specified)