The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1869-09-10
FAILURE OF THE ROYAL ALBERT
LIFE ASSURANCE COMPANY.

JOHN BULL has recently been terribly swim
died by the collapse of one of the leading life
assurance companies of England, the Royal
Albert. 1t was started more than thirty years
ago, on nominal capital of 81, 500, 600, and
it has absorbed since that time twenty or
thirty other companies, extending its opera
tions to the East Indies China, Japan, and
the leading towns of the continent of Europe,
and outwardly wearing such an aspect of pros
perity that the directors gave to the share
holders a dividend of seven per cent. per
annum. 1t is now found to be hopelessly
bankrupt, and sixteen thousand policy
holders who have been swelling its revenues
in the confident belief that they were thereby
providing forty millions of dollars for de-
pendent families, find that they have been
the victims of gross delusion.
The British journals, in discussing this
failure, attribute it in part to the reckless or
dishonest course of the Directors in declaring
dividends when the assets were insufficient to
meet impending liabilities, but they think
that it is due, mainly, to the policy of the
company in absorbing many other insurance
concerns, to the rapid increase in the number
of deaths among its policy y-holders, and to the
want of proper governmental supervision.
The British journals say that while life
insurance company is in its infancy there is
little danger that it will become insolvent,
unless it is grossly mismanaged, but that after
it has been in operation fifteen, twenty, OF
twenty-five years, the demands upon it be-
come so frequent that financial rottenness is
speedily exposed. They also recommend the
passage of Parliamentary regulations, re-
guiring the publication of detailed state
ments of the condition of each company, or
the adoption of system similar to that pre-
vailing in New York or Massachusetts.
Although the people of this country are not
directly affected by the failEre of the Royal AL
bert it will serve useful purpose here if it
prompts all our Legislatures to devise effective
safeguards for the protection of policy holders,
and at the same time induces those who seek
insurance to inquire carefully into the reliab-
lity of the respective insurance companies. In
1868, sixty millions of dollars we're paid for
life insurance in the United States and the
expenditure for this purpose is rapidly increas-
ing. Already the companies are liable for
policies amounting in the aggregate to a sum
but little less than the national debt, and while
it is matter of vital moment to tens of thou
sands of dependent families, that when their
policies mature there should be no Royal
Albert failures in our own country, it is evil
dent that only a few Commonwealth have
created effective safeguards against this dan
ger, and that the legislation of PENNSYLVANIA,
in view of the magnitude of the interests in
volved, is lamentably defective.
Persons who insure lives or propertv are
also often wofully negligent in investigating
the standing of the companies to which thew
pay premiums, as well as the stipulations and
restrictions of the policies which are issued
Even where the companies are perfectly sol
vent, there are so many clauses that policy
is sometimes worthless to the heder in conse
quence of restrictions which had escaped hi
notice. Scarcely one man out of ten reads o
understands all the stipulatons of his life o
o. FIRE policies. Some of the parties who ownet
goods in the Patterson warehouses, for in
stance had policies of insurance containing
81 stipulation that they were null and void if
l....