The Sun.
London, England, 1864-04-26 00:00:00

INSTITUTE OF ACTUARIES,

A paper on the Government Annuities Bill was
read last night by Mr. M. N. Adler, of the Alliance
Assurance Company, before the members of the In-
stitute of Actuaries, at their rooms in St. James's-
square; the president, Mr. Jellicoe, in the chair. Mr.
Adler commenced by saying that under the circum-
stances of the select committee of the House of Com-
mons appointed to consider the bill not being em-
powered to call for witnesses, papers, and records,
it appeared to him desirable that the opinion of the
actuaries of this country should be expressed upon
it. As yet it had received no professional opinio❑
beyond a few words in a paper on " Friendly So-
cieties," lately read before the institute by Mr.
Brown. As regarded the idea itself, it was by no
means a new one, De Witt having at least 200 years
since recommended the Dutch Government to grant
deferred annuities to its subjects, as a means of
adding to its Exchequer. In this country a bill
somewhat similar to the present had been thrown out
by the House of Commons of that day. Dr. Farr,
in the 12th Poor Law Report, had advocated similar
principles to those contained in Mr, Gladstone's
measure. The present bill proposed to fulfil two
objects—the granting of deferred annuities on easy
terms, and the issuing of life policies for sums under
£lOO. He thought great advantages would accrue
to the working classes by the proposed system.
An absurd outcry had been raised that the passing
of the bill would interfere with the rights and
liberties of the people ; but it must be remembered
that te e bill was merely permissive, and not com-
pulsory, and that no one need accept the advantages
held out by it if they did not wish to do so. It had
also been objected that it would interfere with the
business of the insurance companies, but, as it did
not extend beyond £lOO policies, which every one
knew formed the most troublesome part of the busi-
ness of the companies, ho did not think the objec-
tion had any weight, The lecturer then alluded
to the evils of friendly and burial societies, and
considered that the bill would entirely do away
with them. He feared, however, that the
working classes would not avail themselves of the
advantages of the Bill as far as life insurances went
for several reasons. First, the minimum payment
to be made monthly was 25., a sum which bat few
workmen would have the courage to save and pay
into the office. It was a different thing with the
friendly societies, who sent round collectors weekly
for the contributions of the members, which in most
cases amounted only to a few pence. This, however,
might be obviated by making the letter carriers,
collect the premiums weekly. The principal, too,
obtained by these payments was higher than most
working men required. In most instances if a man
could insure to his wife a sum sufficient to bury him
and leave a few pounds over he was satisfied. He,
therefore, thought the majority of insurers would
be clerks and the better class of servants and arti-
sans. Mr. Adler then severely criticised the rules
providing for the return of half the premiums paid
at the end of five years in case the insurer allowed
the policy to lapse, and showed that by continually
doing so he could realise an annuity at a much
cheaper rate than by the means provided in the
other part of the Bill for repaying the whole of the
premiums as well as the principal at the death of
the insurer by raising the rate of premium. Perio-
dical valuations should also be made, and the profits
if large should be converted into a reserve fund. He
thought those who were paid the principal should
not be compelled to take out a probate of letters of
administration, the same privilege being extended
to the survivors of insurers in private offices. He
concluded by expressing his approval of the general
principles of the Bill, and thought the faults he
had pointed out might be easily remedied. In
the discussion which followed, Mr. Brown
said that many difficulties which had been
raised with respect to the Bill had passed away
since its introduction, and he was pleased to
find that most of the English and Scotch companies
approved the project. He quite agreed with Mr.
Adler that the method of house-to-house collection
adopted by small companies was an excellent one,
and the want of such a thing under the Government
system would be found a great obstacle to its pro•
per working. He thought, however, that friendly
societies might be reformed, and he did not approve
their being abolished. The question of small annui-
ties would he felt sure be a great boon to the work-
ing classes, and would do much to foster among
them habits of economy and providence. Mr. Hodge
said that, when looked upon from a professional
point of view, the famous speech made on the bill
by the Chancellor of the Exchequer was anything
but eloquent. He objected to the bill on the broad
principle that the Government had no right to inter-
fere in such matters. Savings banks and the grant-
ing of annuities were simply systems for borrowing
the spare capital of the masses, and as such but little
objection could be urged against them ; but life as-
surance was as much a business as brewing, or any
other industrial occupation ; and he contended that,
although friendly societies worked badly, Govern-
ment had no right to take their business upon its
hands, any more than to turn brewers because bad
beer was brewed. He looked on the promoters of
the bill as being perfectly ignorant of the principles
of life assurance, and he feared that, if it passed, the
system would shortly turn out an utter failure, and
cause great loss to the country. As a rule, working
men were not provident, and they should not be made
so by Act of Parliament. They liked paying their
pence to the collectors of small societies better than
paying a large sum once a quarter, although, by the
former system, they often paid 100 per cent. more than
they would otherwise do. He feared that ietter car-
riers were to collect the weekly premiums it would be
throwing a great temptation in their way. The provi-
sions made for repaying premiums of lapsed policies
were most extraordinary, and if carried out would

be productive of great loss. He could only repeat
that he had no doubt that the system, if carried out
according to Mr. Gladstone's views, would prove a
lamentable failure. A cordial vote of thanks was
then passed to Mr. Adler, and the meeting ad-
journed until November.