EXTENSION OF ASSURANCE.—SOCIETY FOR ASSURANCE AGAINST PURGATORY.—COMMERCIAL CREDIT COMPANY.—GUARANTEE SOCIETY.—MEDICAL, INVALID, AND GENERAL.—AGRICULTURAL COMPANY.—RENT GUARANTEE.—RAILWAY PASSENGERS.—LAW PROPERTY, AND INDISPUTABLE SOCIETIES.—DISPUTED POLICY.

It has been found that there are unchanging principles which regulate commercial losses; that the lives which are sacrificed by railway accident have similar conditions; that the storm which levels the wheat has its defined courses; that the murrain which devastates the cattle is as fixed in its movements as the disease which destroys humanity. To meet these casualties, societies have been started, founded on laws originating in the doctrine of probabilities, and regulated by tables to show the chance of their occurrence. Nor is there any reason against—nay, there is every reason to believe in—their success, provided only their promoters apply themselves with diligence to collect sufficient data whereby to rule their operations. Of one society only may a doubt be evinced and a smile raised at its presumption, and this is the

SOCIETY FOR ASSURANCE AGAINST PURGATORY!

for supposing the threepence per week paid by the credulous peasant be sufficient to satisfy the priest, yet there is every reason to doubt that the prayers and masses of such mercenary pastors will be sufficient to satisfy God. There is something half-grand and half-grotesque in this impudent provision against an indefinite future.

THE COMMERCIAL CREDIT MUTUAL ASSURANCE SOCIETY

is characteristic enough of a mercantile people. Prior to the foundation of such an institution, it is obvious that there must have been some important statistical information connected with commercial losses.

This was submitted to Mr. Finlaison; and his opinion being that the plan contained the strongest element of success, the society commenced business; and now any person supplying a number of traders with goods may secure himself from loss, 90 per cent. of which is paid to the assured party, the remaining 10 per cent. being placed as a reserve fund. There is also an annual charge for management, out of which the interest on the shareholders’ capital of 50,000l. is paid. There are many collateral advantages in connexion with the company, not the least of which is information concerning the trading community, so that a subscriber may ascertain the character and credit in the money-market of a new customer. All legal expenses are borne by the management commission fund; and there is something very amusing in the indifference with which any person insured in this society must attend a meeting of creditors; for while others look with bent brows and anxious faces, he may remain utterly careless about its proceedings. It is easy to suppose that this feeling may raise a spirit of recklessness in some; but the promoters have wisely interested this class, if such there be, by the deduction of the 10 per cent. on all losses, and by other wise arrangements which stimulate the careful and deter the careless. One half the surplus of the year’s premium will be applied to the reduction of the next payment of those whose losses have not equalled their annual premium; and as a similar society has been in operation in France for the last five years, which has met with signal success, there appears every reason to believe that this society will prosper. Within the first nine months, insurances have been effected of more than 3,000,000l. The theory of chances is as applicable to commercial transactions as it is to life. The close observer will not have failed to notice that the periodical epidemic—whatever form it may have assumed—has its representative in the commercial crisis. Every six or seven years, mercantile epidemics—analogous to the cholera, the influenza, or the typhus of an unhealthy season—which seem to defy all calculation and to level the lofty as well as the low, revolutionise our money system. So fixed have they become in their appearance and re-appearance, that they have ceased to be exceptional; and there is now plenty of information on which to base some estimate of the annual losses of special classes from bad debts.

GUARANTEE SOCIETY.

When this company was first started, in 1840, for the insurance of loss against the dishonesty of clerks, there was a great objection raised. It was thought one of those vague and speculative undertakings of which England has seen so many, and one which would necessarily fail, because the master would hesitate to take an assistant who could only give the security of a commercial company. “The moral security is wanting!” was the exclamation of all. It was vain to answer, that this objection pointed both ways, as the relative would often give the desired bond, which a mercantile institution would refuse. Still the parrot reply was heard, and the solemn shake of the head was followed by “The moral security—where’s the moral security?” and was deemed sufficient to crush all argument derived from mere statistics.

Time passed, and it was discovered that because a banker’s clerk gave the security of a company, he did not become a rogue, but he did become independent. It was found, too, that the master could make his claim good on the company with far more promptitude than he could on a relative. It was nothing to say to a board of directors, “I will have justice and my bond;” but it was something to say to a broken-hearted parent, “Your son has ruined you as well as himself—discharge your obligation!” It is well known that bankers and merchants have often foregone their due rather than thus reimburse their losses: and it has been found that, notwithstanding the fact of the “moral security” being wanting, the societies which guarantee the master from loss by the servant have been very successful, are very serviceable, and are on the increase.

THE MEDICAL, INVALID, AND GENERAL.

Almost the only objection which could be brought with justice against the offices prior to 1841, was the habitual practice of refusing delicate and doubtful lives. Having, in the early part of their career, taken all who came without inquiry, they rushed into the opposite extreme, and refused all who were not undeniably strong. There were indeed a few offices which professed to insure invalids; but they had no statistical information; and they rarely, if ever, accepted a life unless it was obviously a good one. In 1833, Mr. Gilbart wrote, “We may hereafter have tables that shall show the expectation of life, not only in regard to people in health, but also to those afflicted with every kind of disease;” and in 1841 Mr. Neison established the above office, the success of which has confirmed the opinion entertained of his great ability.

AGRICULTURAL INSURANCE COMPANY.

In the year of the South Sea bubble, a wit of the day epigrammatised the proposal to insure horses and cattle, little thinking it would ever be carried out. Yet that some such institution was necessary may be gathered from the number of local clubs of this character established all over the country. These will probably merge in some agricultural insurance company like the above; and did this institution not take human life into its business, it might be more successful. The laws relating to life and to farming stock are very different, and a company devoted to the latter would be wiser than one which blends the assurance of agricultural property against disease, accident, fire, lightning, and the hailstorm, with ordinary life assurance.

THE RENT GUARANTEE SOCIETY.

This is another instance of the extension of insurance to a purpose which at one time would have been pronounced Utopian; and which, addressing itself exclusively to landed proprietors, promises to collect their income without trouble and without loss. When a tenant knows that his rent will be rigorously demanded, he feels that he must provide the money or pay the penalty. There are no qualms of conscience in companies; and though a man might try to play upon the easy good nature of his landlord, such tricks would be vain against them. Determined habits of thrift are thus engendered, property becomes more valuable, the landlord receives his rents regularly, and business proceeds like a machine. It may be said that the kindly feeling between landlord and tenant disappears beneath the iron sway of a public company; but however this may be regretted, it is only an inevitable consequence of the changes of capital and the consequent transfer of estates.

RAILWAY PASSENGERS ASSURANCE COMPANY.

We owe to Mr. Glyn, when chairman of the London and Birmingham Railway, the first light on the subject of railway accidents. He proved that they were far less by the iron road than by the coaching system, and that the loss of life, in proportion to the number which travelled, was incomparably less. When the yearly railway reports were published, it was at once seen that a society like the above would have a fair chance of success. Some of the railway companies have refused their aid, thinking it would cause a decrease in railway travelling. Others, again, have assisted, on the broader principle that such an institution was sound. This company has been severely tried; but it has been productive of an incalculable amount of good, and the character of the directors gives a perfect solidity to the concern. In many cases it has been very effective in mitigating the distress which sudden death so often entails on survivors.

ACCIDENTAL DEATH INSURANCE COMPANY.

There are hundreds of thousands who cannot afford to be run over; to whom a lingering illness would be misery; and whose death would scatter or starve their families. A serious or severe accident would probably deprive a clerk of his situation, and a small tradesman of his business, leaving them with no home but the hospital, and no hope but the grave. The statistics of general accidents are difficult to arrive at, but a small annual premium would be an ample safeguard against such a casualty. There is one point in which both this and the Railway Assurance Company are wanting, and yet it would be scarcely possible to amend the error. There is in neither of them any inquiry as to the health of the party assuring. Now it is obvious that the very life of a confirmed invalid would be shaken out of him where a strong and hale man would receive no injury.

LAW PROPERTY ASSURANCE AND TRUST SOCIETY.

Of a somewhat similar character to the Rent Guarantee is the above; and this is another admirable idea if it can be carried out. Defective titles, being assured, are rendered absolute and perfect by it. The actual repayment of loans and mortgages is guaranteed, while copyholds, lifeholds, and leaseholds are made equal to freeholds for all purposes of sale or mortgage.

THE INDISPUTABLE LIFE COMPANY.

There is a principle involved in the title of this Society which is much too important to be briefly dismissed. The eagerness with which all companies claim indisputability for their policies, is a significant sign of public feeling on the subject. But the term indisputable at present means nothing. To be effectual, it should be absolute; and it is doubtful whether it would not benefit the whole of the offices to adopt indisputability as their motto. There is great evil, and there is often great wrong, in a disputed claim; but it seems sometimes a necessity. Where there is conspiracy, fraud, or concealment, it is manifestly unjust to pay a policy; but it costs far more to resist it: and it is a point worthy mature consideration whether an insurance so effected should not be treated as a fraud, and punished criminally. It might be taken as a rule, that where the policy is in the possession of any one who has assisted in the fraud, it should not be paid; but when it has fairly passed into the hands of a third party, such a course might be honourably avoided. It has been said by its opponents, that at present there is no company which issues policies really indisputable; that which is so called, being only indisputable according as the conditions on the face of the policy are maintained, and that their title is open to dispute.

There is, however, one merit due to this company. It has opened a most important question, and one that will eventually lead to indisputability in its most extended form. It will also render other offices more cautious in entering a court of justice, and it can never hope to enter itself with success.

That the power of a company is often vexatiously and unjustly stretched to its utmost limit, in order to escape the payment of a policy, the following will prove. It is in itself a strong argument for indisputability.

When railway travelling was in its infancy, one John Scott, of Birmingham, being compelled to journey by what was thought a dangerous conveyance, was urged to insure his life as a provision for his family. He offered himself to the Norwich Union, answered all their questions, was examined by their medical man, and reported as perfectly sound. So good a life was he, that the agent of the Imperial urged him to abandon his proposition with the Norwich, offering him such inducements that he consented, though it cost him six pounds to void his nearly concluded bargain. He then went through all the forms necessary with the Imperial, was reported again as a perfectly sound life, and gladly accepted in May, 1840; the policy being for 2000l. From 1840 to 1842, he worked with an untiring energy and an incessant labour utterly incompatible with failing strength, and in that year he became a bankrupt. So excellent was his health, that his assignees would not pay any more premiums until they had ascertained that its market value was equivalent to the payment, and they then sold it by public auction to Mr. Beale for 135l., the Imperial itself bidding up to 100l. The next premium was paid by Mr. Beale in May, 1843; and in the following December, Mr. Scott died.

The discharge of this policy was contested with a determination sadly at variance with unsophisticated justice; but because the Imperial had a witness to prove that Mr. Scott had suffered from an ulcerated sore throat in 1836, they refused to pay. And when on the first trial the jury returned a verdict against the company, they obtained a second trial on technical grounds, which again they lost, and yet another, which was once more decided against them; though so great were the expenses to the claimant that he gained nothing by his public purchase of the policy granted on the faith of a respectable company.

With a case like this, and there are many like it, is not an indisputable company desirable?

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