The Sun.
London, England, 1847-01-19 00:00:00

PROCEEDINGS of the CLERICAL
MEDIC, AND GENERAL LIFE ASSURA::GE
SOCIETY.

(As reported Januar' Bth, 1847.)
An extraordinary general meeting of the proprietors of
this society was held yesterday at the office in Great Russell-
street, for the purpose of declaring a bonus out of the profits
which have accrued from the general business of the society
during the five years ending June 30, 1846. Amongst the
directors present were Dr. Moore, G. G. Babing, ton, Esq.,
Rev. A. B. Clough, Thomas Davis, Esq., Oliver Hargreave,
Esq., and Clement flue, M.D.
Dr. MoonE having taken the chair, Mr. Pinckard, the
secretary, read the report of the assets and liabilities; the
former of which amount to 639,797/. 6s. 5d., and the latter
to 484,555!. Os. 5d., leaving a surplus of 155,2421. 6s.
The Cmeiamax then stated that his colleagues had au-
thorised him to lay before the meeting the following report :
" In accordance with the provisions of the deed of consti-
slitution, the directors have called the present meeting, for the
purpose of laying before the proprietors and the a.•sured the
result of an investigation of the society's affairs for the five
years ending June 30, 1846.
"Oa that day the society had been in existence twenty-
two years. An investigation of its affairs was made first in
1831, being seven years from the commencement ; a second
time in 1836 ; and a third time in 1841. The fourth inves-
tigation having been just completed, the directors have now
the gratification of communicating the result to the meeting.
"In order to present a clear view of the progress of the
society, the directors will proceed to exhibit the present
amount of its funds, together with their state at the last
quinquennial division.
"I. The society's Income for the year ending with June,
1841, was 97,900/. ; that for the year ending with June,
1846, 116,3001. Thus, notwithstanding the many de-
ductions which are constantly taking place, on account
of policies terminated by death or discontinued from other
causes, there is an increase in the annual income of the
society to the extent of 18,4001.
" 11. The amount of the property of the society, accumulated
from the excess of receipts above payments, was in 1841,
418,903/., and in 1846 has reached 639,797/. Under the
head of payments are included considerable sums paid
for the purchase of policies, and also to annuitants, besides
the amount which has become due from deaths and every
other demand.
" 111. After deducting the sum required to meet the liabilities
of the society, there remains a surplus of 155,242/. ; while
in 1841 the corresponding surplus was only 89,400/.
" This sum of 155,242/., has now to be dealt with, being
the amount of profit realised by the society.
" In conformity with the provisions of the deed, ono half
ofthe profits is to be divided among the assured for life, and
one sixth part among the proprietors; but in order to avoid
inconvenient fractions, the directors have resolved to recom-
mend to this meeting to divide the sum of 154,500. This
will apportion to the assured, for life, 77,250/., and to the pro-
prietors, 25,750/. leaving one third of the said profit, amount-
ing to 51,5001., to be laid by and to accumulate as a reserved
fund.

"This division will give to the proprietors a bonus of 51.35.
per share, and to the assured a sum of 114,0311., being the
equivalent in reversion to the above amount of 77,2501.
" This sum of 114,0311. will be added to the polices, and
be payable at the death of the respective parties, and will
form an addition equal, on an average, to more than 36 per
cent. on the premiums received during the last five years.
" It may be desirable, however, to remind the assured that
they have the option of having any one or more of the
bonuses to which they are entitled applied in reduction of
their future payments of premium.
" For the further information of the proprietors it may be
mentioned that, by the deed of constitution, the Proprietors'
Fund is not to accumulate by the addition of bonuses beyond
50,000/. ; all subsequent bonuses being paid over to the Pro-
prietors.
" The effect of that provision on the present occasion will
be, that of the above sum of 25,7501., 17,000/. will have to be
added to the Proprietors' Fund, which will then have
reached its limit, and the remaining 8,750, being 11. 15e. per
share, will be paid to the proprietors in cash at the end of
March next.
" In estimating the amount of liabilities, it is important to
observe that every Policy, together with all other risks, has
' been valued separately, and with great care ; and there has
been no encroachment upon future prefits ; but that a mote
of valuation has been adopted whereby a larger sum is re-
tained to meet such claims as may arise than is usual
with most other offices. This will appear by the following
examples :

By Offices.
Sums set aside as the value valuing by the By the Mode Difference In
of a Policy for 1,0001.
Northampton adopted by favour of this
Three per this Office. Office.
Cent. Table.
£ s. d. £ s. d. £ s. d.
Effected at the Age of 40,
after 10 years - - 152 3 7 158 8 5 6 410
Effected at the Age of 50,
after 10 years - - 197 17 a 215 2 0 17 4 9
Effected at the Age of GO,
after 10 years - - 282 7 5 326 3 0 43 15 7

"It is clear, then, that the prospects of the policyholders
at future divisions are most favourable, partly from the un-
usually large sum retained to meet claims, as shown above,
and partly from the reserve of so considerable an amount as
51,500/., out of profits thus ascertained.
"These facts, which have operated to a certain extent in
the diminution of former bonuses, will undoubtedly contri-
bute most powerfully to increase the amount of profits to be
appropriated to the assured at alt succeeding divisions.
"In confirmation of this view, the Directors need only
remind the assured of the statement made at the division in
January, 1842, that the two preceding bonuses had averaged
22 per cent, on the premiums ; that the one then divided
averaged 28 per cent., and that the future bonuses were ex-
pected to exceed that amount.
"The most sanguine expectations entertained at that time
have been fully realised by the amount of the present bonus
averaging more than 36 per cent. ; and on precisely the
same grounds the Directors conceive themselves entitled to
assert. with additional confidence, that its further Increase
from time to time is almost certain.
"The large and increasing amount of the Society's busi-
ness, and the proportionate diminution of the expense of
management (which is now only 3% per cent. on the
income), must also be taken into account in the anticipation
of future profits.
" The Directors have only to add, that they have in-
structed the actuary to exhibit to any proprietor or policy
holder, or to any person who may be desirous of assuring,
the details of all the calculations, with a full statement of
the assets and liabilities, and balance-sheets of the Society."
So far as he (the Chairman) was concerned, any comment
was unnecessary, for he believed the report would speak sa-
tisfactorily, both to the proprietors and the assured.—
(Applause.) He would, however, just call the attention
of the meeting to a very distinguishing feature of the Insti-
tution—the economy of its management ; which was not
only well known to the proprietary, but to the public.—
(Applause.) The directors would be happy to answer
any questions which might be put to them, or to attend
to any suggestions which might be offered for the advantage
of the Institution.—(Applause.)
Mr. FOWLER, after expressing his satisfaction at the ex•
plicitness and contents of the report, said he would just
trouble the meeting with one or two observations. The sum
of 155,2421., which was announced to he the surplus arising
from the profits, consisted, he conceived, partly of the reserve
made and announced upon a former occasion. He believed
that these reserves went on accumulating and incorporating
themselves so as to a certain extent to make up this amount.
If the Secretary could state how much of the amount referred
to was composed of the reserve from the former bonus, the
meeting would be able to see more clearly the profit realised
within the last five years.
The SECRETARY said the sum laid by at the last division
(one-third of the profits) was 29,500/. ; and therefore the real
profit realised during the last five years was about 125,0001.
or 126,000/.
Mr. FOWLER—Then it would appear that these surpluses
must have a successive increase, each being made greater by
the reserve from the preceding one.
The SECRETARY replied that it altogether depended on the
continued increase of profits, about which no fears were en-
tertained.—( Hear, hear.)
Mr. FOWLEI wished to know whether any parties had
availed themselves of the opportunity afforded of reducing
their premiums ?
The SECRETARY said that a considerable number of persons
had applied their bonuses in reduction of their future pay
ments of premium.
Mr. WHITEHOUSE apprehended that the sum of 51,5001.,
which formed the reserve fund, was a basis of future accumu-
lations.
The SECRETARY.—CertainIy.
Mr. NEISON (Actuary to the Medical and Invalid Assur-
ance Society) congratulated the directors on the very dis-
tinguished success which had attended the company's opera-
tions.—(Applause.) Perhaps the Secretary could explain
whether the principle of having a reserve fund applied to
other proprietary companies. It was well known that this
was a distinguished feature of several of the mutual com-
panies, and its advantages were obvious. It might be ques-
tioned, probably, whether in the infant state of a company the
assured would consult their own interest by adopting such a
principle ; but in a society so greatly advanced as the present
it formed a very strong recommendation to the assurers. If
it did not exist, the assured would be deprived of a
very large bonus laid out for them in future. There
was another point of great importance in the
report, and that was the mode in which the liabilites of
the Company had been ascertained. He was not in a posi-
tion to refer to individual instances, but he knew that most
serious errors had followed the course of valuation which had
been repudiated by the society. He wished to ascertain
from the Secretary whether in ascertaining the liabilities
attaching to the policies the actual age of the assured had
been taken. There was another point in connection with
the bonus which was deserving of some explanation. Any
holder of a policy might select a reduction of premium in-
stead of a bonus. Now, suppose a person to select the re-
duction of a premium on the present occasion, he wished to
know whether he would be able to select a bonus in addition
on the next, and vice versa.—(Hear, hear.) He believed
the last valuation was made up to the 30th June, 1841, and
was anxious to ascertain the number of policies in force on
that day, and the number at present in existence. He also
wished to know the average age of the assured. He asked
for this information on public grounds—(Hear, hear)—and
could not help thinking that the reports of societies of
this description would be much more valuable if they en-
tered somewhat more into the scientific details by which
their operations are regulated. He considered economy of
management one of the most honest and safe principles to
follow; but in a Company of the magnitude of the pre-
sent, a difference of 1,0001. or 2,0001. a year in the an-
nual expenditure was of little importance compared with
the errors which might be caused by adopting exploded
systems. The sort of information to which he had alluded
would be very useful, and in Germany a noble example bad
been set in this respect. At Gotha, not only was that done,
but they published the lives assured, the number of deaths,
the periods at which the policies were effected, and they
even went so far as to give the names of the individuals.
lle would in conclusion ask one other question—namely, the
number of deaths during the last five years, and whether
there had been any material difference between the actual
number and the number anticipated 2—(Hear, hear.)
The SECRETARY felt great pleasure in answering the
questions which bad been put by the able and intelligent
gentleman who had addressed the meeting. With respect to
the first question, he was not aware of any other
proprietary office which had adopted the principle of
laying by one-third of the profits. There could be no
question that that principle had been a great drawback
to the Company with respect to the bonuses which had
heretofore been declared ; and it was a matter of astonish-
ment to those who were acquainted with these matters how
the Company had got on so well. Notwithstanding this
great difficulty, the Company had done its full share of bu-
siness when compared with other companies which had not
adopted this principle. All difficulties had now been got
over, and the plan of laying by one-third of the surplus
would do more to increase the bonuses on future occasions
than any other that could have been adopted. To prove
that this system had acted beneficially, be might refer to
the report of the Equitable Society, in which, after giving
examples of its large bonuses, he found this statement:—
"Among the causes which have contributed to these impor-
tant results is the reservation at each decennial division of

one-third of the suplua fund for future appropriation." lt